Friday, March 21, 2008

The state of the U.S. economy

The roof has collapsed... the walls are full of holes... and ole' Johnny Mac is saying, "no no, it's fundamentally sound! We just need to put a few patches here and there, that's all!".

If you want to know what all the rate reductions by the Fed are doing: The core thing they do is drive down the yield from bonds and savings (since there is now a flood of money, thus no need to pay for much money), while driving up the yields from stocks (since if you can't make money on bonds, might as well buy some stocks with it). In short, it's a give-away to the stockholding class. Or at least that's how it's supposed to work. The problem is that lenders aren't lending because everybody is tapped out to their credit limits and can't repay any more loans no matter how cheap the money, while people look at the stock market and see potential collapse and loss of principal... so they're keeping their money in very low-yield investments, while waiting to see what happens.

My personal investment advice: Shotgun shells and seeds.

-- Badtux the Economics Penguin


  1. even's a giveaway to the very wealthy...the multi-million guys who started the whole thing anyway...

  2. Lots of cash available to bail out the rich guys, but ask for a few billion to provide health insurance to kids and "that costs too much money."

  3. Shells and seeds, I'm there. So how are you doing with that?

  4. shells, seeds, and horsepower from fucking horses.


Ground rules: Comments that consist solely of insults, fact-free talking points, are off-topic, or simply spam the same argument over and over will be deleted. The penguin is the only one allowed to be an ass here. All viewpoints, however, are welcomed, even if I disagree vehemently with you.

WARNING: You are entitled to create your own arguments, but you are NOT entitled to create your own facts. If you spew scientific denialism, or insist that the sky is purple, or otherwise insist that your made-up universe of pink unicorns and cotton candy trees is "real", well -- expect the banhammer.

Note: Only a member of this blog may post a comment.