Comments on: Roubini: For unemployment "the worst is yet to come" http://www.creditwritedowns.com/2009/11/roubini-for-unemployment-the-worst-is-yet-to-come.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: RSDallas http://www.creditwritedowns.com/2009/11/roubini-for-unemployment-the-worst-is-yet-to-come.html#comment-57634 RSDallas Thu, 19 Nov 2009 21:18:00 +0000 http://www.creditwritedowns.com/2009/11/roubini-for-unemployment-the-worst-is-yet-to-come.html#comment-57634 Here we go again. Why is everyone in the current administration and most of the press shifting their focus to yet another symptom of the real problem? 1st: The consumer is re-trenching and not spending (the symptom) so let's lower rates and try to blow the balloon back up. 2: #1 is not working so some bright fellow in Washington suggested that it would help if +-20% of our workers could get a job. Now we'll subsidize jobs and create some tax incentives for the business sector in an attempt to increase employment (another symptom). Let's go back to symptom 1: The consumer is not spending. Why? He doesn't have the capacity to spend anymore because he can't find the necessary cash to do so. Why can't he find it? It no longer exists. Can't borrow against the home anymore, his credit card is maxed out, his credit limit has been dropped, he is just to scared to CHARGE or spend anything because he wonders if he will have a job in the next 6 months or better yet that America is going to collapse due to its debt level. So how do you make the symptom go away or at least just subside? Concentrate your policies on how to lower the public and private sector's DEBT! The only way to create purchasing power is to CREATE WEALTH (make more money) or lower the debt level so you can FILL THE TANK BACK UP. Hopefully only ½ full. The problem is too much DEBT. I’m getting sick to my stomach every time I read or hear from our great leaders that those darn banks just need to start lending more!!! What????? Wake up AMERICA; we are in this situation because we have taken out to much DEBT. Debt STEALS from the economy, it doesn’t create wealth. Now don’t get me wrong, very low debt can be a good thing. Just look at which sector has not had to be bailed out. TECHNOLOGY! Why? Just look at these companies balance sheets. Many of them do not have ANY debt. Now look at which companies our SMART government gave yours and my money to: Auto & Financial – Both rely on their customers to BORROW! America needs to CREATE wealth, NOT FABRICATE it! So what do you do? Concentrate on speeding up the deleveraging process. Get out of the way and let the system clean itself up. There are still trillions of dollars out there in our economy. The defunct assets will find a home. Here we go again. Why is everyone in the current administration and most of the press shifting their focus to yet another symptom of the real problem? 1st: The consumer is re-trenching and not spending (the symptom) so let’s lower rates and try to blow the balloon back up. 2: #1 is not working so some bright fellow in Washington suggested that it would help if +-20% of our workers could get a job. Now we’ll subsidize jobs and create some tax incentives for the business sector in an attempt to increase employment (another symptom).

Let’s go back to symptom 1: The consumer is not spending. Why?
He doesn’t have the capacity to spend anymore because he can’t find the necessary cash to do so. Why can’t he find it? It no longer exists. Can’t borrow against the home anymore, his credit card is maxed out, his credit limit has been dropped, he is just to scared to CHARGE or spend anything because he wonders if he will have a job in the next 6 months or better yet that America is going to collapse due to its debt level. So how do you make the symptom go away or at least just subside?

Concentrate your policies on how to lower the public and private sector’s DEBT! The only way to create purchasing power is to CREATE WEALTH (make more money) or lower the debt level so you can FILL THE TANK BACK UP. Hopefully only ½ full. The problem is too much DEBT. I’m getting sick to my stomach every time I read or hear from our great leaders that those darn banks just need to start lending more!!! What????? Wake up AMERICA; we are in this situation because we have taken out to much DEBT.

Debt STEALS from the economy, it doesn’t create wealth. Now don’t get me wrong, very low debt can be a good thing. Just look at which sector has not had to be bailed out. TECHNOLOGY! Why? Just look at these companies balance sheets. Many of them do not have ANY debt. Now look at which companies our SMART government gave yours and my money to: Auto & Financial – Both rely on their customers to BORROW! America needs to CREATE wealth, NOT FABRICATE it! So what do you do?

Concentrate on speeding up the deleveraging process. Get out of the way and let the system clean itself up. There are still trillions of dollars out there in our economy. The defunct assets will find a home.

]]> By: NorthenSoul http://www.creditwritedowns.com/2009/11/roubini-for-unemployment-the-worst-is-yet-to-come.html#comment-57618 NorthenSoul Tue, 17 Nov 2009 02:45:00 +0000 http://www.creditwritedowns.com/2009/11/roubini-for-unemployment-the-worst-is-yet-to-come.html#comment-57618 "The Obama Administration is doing the opposite. They seem to have received the ‘deficit reduction comes first takeaway’ from recent state elections in Virginia, New Jersey, and New York instead of the ‘jobs come first takeaway.’" That anyone in the Administration could believe such a thing is beyond me. Since when such an abstract concept such as the "deficit" will be deemed of paramount importance to voters in a time where jobs are either scarce, non-existent or very insecure, health care costs keep rising and rising and rising, taxes not going lower, and services inflation (education anyone?) keep heading north and the value of their main asset (house) keep going down? Perhaps this has to do with the fact that there are 40%+ multimillionaires in Congress and the Senate, (versus 1% in the general population) while lotsa people in the White House are not exactly in the poor house either. These people have the luxury to think about the deficit, because circumstances of life that profoundly affect ordinary Americans are alien concepts to a significant number of our political elites. If Obama stay on this "must fight the deficit track" we are all toast. But so will he in 2012: he should get up to speed about the 2nd wave of credit crisis that is coming soon as related on NPR Fresh Air today. http://www.npr.org/templates/story/story.php?storyId=120391729 "Private equity firms buy undervalued or underappreciated companies, impose short-term improvements and sell them for a fast profit. Some of the companies they've bought include Hertz, La Quinta, Dunkin Donuts, and Toys R Us. Josh Kosman, a private equity expert, says that the way the firms have been able to buy these businesses — through leveraged buyouts — means the majority of the money for the buyout has come from loans that the firms dump on the company they're supposedly fixing. Now burdened with debt, many of those companies owned by private equity firms are in danger of defaulting. In a new book, Kosman writes that it's likely half of the 3,188 American companies bought by private equity firms between 2000 and 2008 could collapse. His book is called The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis." “The Obama Administration is doing the opposite. They seem to have received the ‘deficit reduction comes first takeaway’ from recent state elections in Virginia, New Jersey, and New York instead of the ‘jobs come first takeaway.’”

That anyone in the Administration could believe such a thing is beyond me. Since when such an abstract concept such as the “deficit” will be deemed of paramount importance to voters in a time where jobs are either scarce, non-existent or very insecure, health care costs keep rising and rising and rising, taxes not going lower, and services inflation (education anyone?) keep heading north and the value of their main asset (house) keep going down?

Perhaps this has to do with the fact that there are 40%+ multimillionaires in Congress and the Senate, (versus 1% in the general population) while lotsa people in the White House are not exactly in the poor house either. These people have the luxury to think about the deficit, because circumstances of life that profoundly affect ordinary Americans are alien concepts to a significant number of our political elites.

If Obama stay on this “must fight the deficit track” we are all toast. But so will he in 2012: he should get up to speed about the 2nd wave of credit crisis that is coming soon as related on NPR Fresh Air today.

http://www.npr.org/templates/story/story.php?storyId=120391729

“Private equity firms buy undervalued or underappreciated companies, impose short-term improvements and sell them for a fast profit. Some of the companies they’ve bought include Hertz, La Quinta, Dunkin Donuts, and Toys R Us. Josh Kosman, a private equity expert, says that the way the firms have been able to buy these businesses — through leveraged buyouts — means the majority of the money for the buyout has come from loans that the firms dump on the company they’re supposedly fixing.

Now burdened with debt, many of those companies owned by private equity firms are in danger of defaulting. In a new book, Kosman writes that it’s likely half of the 3,188 American companies bought by private equity firms between 2000 and 2008 could collapse. His book is called The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis.”

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