Black Monday update: AIG tries to borrow its way out of debt

By Michelle Malkin  •  September 15, 2008 12:40 PM

Yes, the fit is still hitting the shan.

MarketWatch now reports that AIG has won approval to borrow $20 billion in assets from subsidiaries to try and bail itself out.

Just keep my money out of it!

Next in line to beg for a fed handout: Washington Mutual.

Watch your wallets.

***

What I’ve been saying for the past year: It’s all a vicious cycle of their own making.

***

Why worry? Re. Lehman:

Lehman’s collapse will send deep and painful ripple effects across the markets. The firm sat on $33 billion of commercial real-estate assets and $13 billion in residential mortgages at the end of August; a liquidation could mean forced sales of those and other assets, which could knock down the value of other firms’ holdings.

Lehman is also deeply intertwined in many other markets — most notably the vast market for credit-default swaps, in which it is a top-10 player. Even as they were holding the line about being involved in funding a rescue, Fed staff members over the weekend were working with Wall Street credit traders to help sort through their positions with Lehman in this market. Officials also were involved in discussions during the weekend of brinksmanship that brought agreement Sunday night on the sale of Merrill to BofA.

Fed officials have some confidence that they are better prepared to deal with the fallout from a failure than they were when Bear Stearns failed, and the Fed arranged a shotgun wedding to J.P. Morgan Chase & Co. The emergency lending facilities it set up after Bear could help cushion the blow to the market if Lehman now fails. But some areas, like swap trading, are still a huge source of uncertainty.

…Officials worry that the collapse of an investment bank could send problems cascading through the financial system by way of this market. The Fed has been pushing Wall Street to create a new clearinghouse to diminish that risk, but it isn’t in place yet.

Sorting out Lehman’s CDS positions promises to be difficult and time-consuming, because many of the contracts have different terms and maturity dates. In a survey last year by Fitch Ratings, Lehman was listed among the 10 largest CDS counterparties by number of trades and the amount of debt to which the contracts were tied.

Posted in: Subprime crisis

See what others have said

Note from Michelle: This section is for comments from michellemalkin.com's community of registered readers. Please don't assume that I agree with or endorse any particular comment just because I let it stand. A reminder: Anyone who fails to comply with my terms of use may lose his or her posting privilege.

Trackbacks

Trackback URL

Comments

  1. #1
    On September 15th, 2008 at 12:43 pm, sonofdy said:

    Well since its down less than 4% wouldn’t it be more like a grey monday? or a partly cloudy monday???

  2. #2
    On September 15th, 2008 at 12:44 pm, sonofdy said:

    Actualy its down 2.5% right now. Why the big panic?

  3. #3
    On September 15th, 2008 at 12:47 pm, John Ansell said:

    These people make Donald Trump look good.

  4. #4
    On September 15th, 2008 at 12:48 pm, Goldwater Knight said:

    Obama blames it all on McCain.

  5. #5
    On September 15th, 2008 at 12:49 pm, conservativesRus said:

    Just a mite puzzled here - what approval do you need to borrow money from your own subsidiaries?

  6. #6
    On September 15th, 2008 at 12:50 pm, playblu said:

    Hey, WaMu holds my mortgage. Does that mean I’ll get my house for free?

  7. #7
    On September 15th, 2008 at 12:50 pm, sonofdy said:

    Well actualy it is Darth Malkins fault. (Insert manaical laughter here)

  8. #8
    On September 15th, 2008 at 12:51 pm, wrcnossen said:

    Looks more like time to buy then time to cry.

  9. #9
    On September 15th, 2008 at 12:52 pm, sonofdy said:

    OMG the market is down 2.5% like it has been THOUSANDs of times since the dow was started…. panic!!!! aaaarrrgghhhh blame bush!!!!

    /liberal freakout mode off.

  10. #10
    On September 15th, 2008 at 12:54 pm, Goldwater Knight said:

    Looks more like time to buy then time to cry.

    Oh yeh, I’m watching local housing data like a hawk.

  11. #11
    On September 15th, 2008 at 12:55 pm, josetheguerilla said:

    Wow, what a mess!!! What constitutional amendment guarantees Americans a handout?

  12. #12
    On September 15th, 2008 at 1:00 pm, Rob said:

    I got this off the CNN web site. Liberals are so stupid they WANT to be taken care of…


    “It amazes me that people think govnerment should not be an active partner in solving our problems, especially when they create most of the problems.”

  13. #13
    On September 15th, 2008 at 1:00 pm, sonofdy said:

    BTW a comparison

    Black monday 1987 -29%
    Black thrusday 1929 -17%
    crash of 1907 -50%

    slightly grey monday 2008 -2.5%

    ;-)

  14. #14
    On September 15th, 2008 at 1:01 pm, On-my-soap-box said:

    To put this in perspective:

    $20 billion / 305 million people (population of US) = $65.57 from every man, woman and child.

    WTH???

  15. #15
    On September 15th, 2008 at 1:02 pm, uhangtight said:

    yeah, i just don’t know what all the whinning is about. other than obamitler’s minions trying to make this now about the economy stupid, after his luncheon with BillyBoy a week ago or so, but, i don’t think they can handle this new found campaign strategy as the GDP is still good.

    So long as unemployment does not go over 6.5% and the GDP start slipping downward the fundamentals of the economy are basically firm, until these two elements of the economy GDP and Employment start going awry. Stock markets go up and down, isn’t that what has been happening for decades. Oh, yeah, only during Billyboy’s reign did they go up, up and up (fraudlent laddering) until the bubble burst in late 1998 early 1999. Just in time for BillyBoy to leave office.

    What goes up, must come down, spinning wheel gotta go round….

  16. #16
    On September 15th, 2008 at 1:04 pm, Drews2Cents said:

    No worries, the Saudis got our back…

    Obama blames Bush-McCain. McCain says we need more regulation. It still amazes me that our choice for POTUS is between two members of a congress with the lowest approval rating in history…

  17. #17
    On September 15th, 2008 at 1:10 pm, sonofdy said:

    Michelle I understand the problems, however based on the market results this is not a “black monday” as of 11:07 mdt. I understand that it could be but lets not add to the liberal hyperoverreaction on this. This doesn’t mean that a black tuesday or wensday will not happen.

  18. #18
    On September 15th, 2008 at 1:14 pm, TooMuchTime said:

    “It amazes me that people think govnerment should not be an active partner in solving our problems, especially when they create most of the problems.”

    Duh! Get the government OUT of everyone’s business, and they wouldn’t be able to create the problems in the first place!

    Two things that will help the world’s poor more than any others - Ban Socialism and un-ban DDT.

  19. #19
    On September 15th, 2008 at 1:14 pm, AlohaGuy said:

    Wow, what a mess!!! What constitutional amendment guarantees Americans [and illegal aliens] a handout?

    There.

  20. #20
    On September 15th, 2008 at 1:16 pm, desertdweller said:

    Just corporate Darwinism at work here.

    Unless someone can display why congressional policies and practices have forced some unavoidable bad management decisions, I’m inclined to just watch them try digging back out of their own hole.

  21. #21
    On September 15th, 2008 at 1:16 pm, AlohaGuy said:

    The whole capitalist upside, socialist downside is annoying. For helping rescue AIG (and Lehman and…) I want shares of stock. And I want the CEO fired with a lead parachute.

  22. #22
    On September 15th, 2008 at 1:17 pm, AlohaGuy said:

    How does any of this helps Obama’s brother?

  23. #23
    On September 15th, 2008 at 1:17 pm, sonofdy said:

    Since Obama has promised to cut taxes on 95% of the population when 40% of the population pays NO tax, what he is in fact doing is promising to increase payments to 40% of the population and add millions more to the list of those who don’t pay taxes. And he is going pay for nationalised medicine HOW???

  24. #24
    On September 15th, 2008 at 1:19 pm, Goldwater Knight said:

    And he is going pay for nationalised medicine HOW???

    easy, top hat and a magic cane.

  25. #25
    On September 15th, 2008 at 1:20 pm, sonofdy said:
    And he is going pay for nationalised medicine HOW???

    easy, top hat and a magic cane.

    Will there be white rabbits and card tricks as well???

    :lol:

  26. #26
    On September 15th, 2008 at 1:20 pm, b-cat said:

    “They call it Stormy Monday”…

  27. #27
    On September 15th, 2008 at 1:23 pm, sonofdy said:

    BTW Black monday is RACIST!!!!!

    :lol:

  28. #28
    On September 15th, 2008 at 1:27 pm, On-my-soap-box said:

    I thought is was only racist if you called it “black hole” Monday? :roll:

  29. #29
    On September 15th, 2008 at 1:28 pm, sonofdy said:

    It is only racist if the word black is used in a negative light.

    /offended liberal snob mode off.

  30. #30
    On September 15th, 2008 at 1:34 pm, WarEagle82 said:

    This is one reason I still can’t bring myself to vote for McCain. This goes right back to LOTE.

    Obama will dig the economy into a hole with a steam shovel. But, McCain will do it with a thousand shovels (mostly employed by illegal aliens).

    In the end, the hole gets deeper and “conservatives” will get blamed even though McCain is an economic liberal.

    80% of the government simply needs to be shut down. Stop digging the hole deeper and you will resolve a lot of problems with the economy.

  31. #31
    On September 15th, 2008 at 1:35 pm, Mister P said:

    I want to see the flow of money from Lehman lobbyests to politicians (and back). I want to see who turned the other way and how they benefited. I want to see all the criminality exposed. I am sure glad I believe in karma :-)

  32. #32
    On September 15th, 2008 at 1:36 pm, Rob said:

    This is one reason I still can’t bring myself to vote for McCain.

    Just do what I am going to do. I am going to vote for Palin and hope she gets to be president VERY soon…

  33. #33
    On September 15th, 2008 at 1:37 pm, Mister P said:

    BTW: I am convinced we are just seeing the beginning. Soon it will be the cities declaring bancruptcy. We will see pension funds like the Illinois Govt Pension fund just dry up. Those who felt the most secure, will soon lose their life savings and jobs.

  34. #34
    On September 15th, 2008 at 1:39 pm, emjem24 said:

    A lot of these brokerage firms, like Lehman, need to be held accountable for abuse of power, fraud, and mismanagement. When you cloke your financial statements in mortgage-backed securities, instead of investigating where all the bad debt will end, you’ll have nothing but a faulty house of cards in the end.

    The Federal government should have let Bear Stearns go belly up just like Lehman. Both these entities were part of the wink, wink, nudge nudge open secret that there was big time profit off of shady loan deals that deeply enveloped both the financials and the economy as a whole.

    On the campaign trail, McCain mistakenly said that Americans weren’t partly responsible for this mess. I disagree. Many Americans, especially shady borrowers, contributed to this mess.

    I find it laughable that many Americans decry the “evil rich” yet they put their hands in the till (treasury) for their bailouts (stimulus checks) thinking they “deserve” it. This is what makes me mad the most. There was greed at every level of American society and we, as a society, need to own up to it, not make excuses such as it’s Pres. Bush’s fault when both political parties were to blame.

  35. #35
    On September 15th, 2008 at 1:40 pm, Utah Transplant said:

    Down fewer than 300. This could be a lot worse. This decline is not a crash. It’s controlled and absent of panic.

  36. #36
    On September 15th, 2008 at 1:40 pm, sonofdy said:

    Just do what I am going to do. I am going to vote for Palin and hope she gets to be president VERY soon…

    A very real possiablity. Not trying to be mean, but McCain is old and has health issues.

  37. #37
    On September 15th, 2008 at 1:41 pm, Hangfire said:

    Everybody, puh-leeese don’t worry!

    Two weeks after Obama is elected, there will be another government surplus. Just like the Clinton surplus that disappeared 5 minutes after Pres. Bush was elected.

    The MSM will tell us all about it.

  38. #38
    On September 15th, 2008 at 1:42 pm, mdt said:
  39. #39
    On September 15th, 2008 at 1:43 pm, Excessive Moderate said:

    The Fed is considering cutting rates again, so don’t forget that a direct bailout isn’t the only way these crapweasels will have their hand in your wallet. By printing more money they’ll just rob you with inflation instead.

  40. #40
    On September 15th, 2008 at 1:49 pm, RetFireman said:

    Just looking at the current numbers on the Dow…it is far from the end of the world, and it has fallen FAR lower than this in a single day in the last 10 years. Not gonna start fearing the sky falling down just yet. My stocks are stable and doing just fine.

  41. #41
    On September 15th, 2008 at 1:53 pm, Mister P said:

    Just looking at the current numbers on the Dow…it is far from the end of the world, and it has fallen FAR lower than this in a single day in the last 10 years. Not gonna start fearing the sky falling down just yet. My stocks are stable and doing just fine.

    Mine have fallen 25 percent in less than 1 year. In 10 years the DOW is now just where it was. It has not grown one bit. Meanwhile the value of the dollar has fallen about 50 percent. Therefore the total value of the DOW is down (allowing for inflation) about 50 percent for the decade.

  42. #42
    On September 15th, 2008 at 1:54 pm, shanimal said:

    Thanks Bill!

    President Clintons National Homeownership Strategy

    Making It Easier to Qualify for Mortgage Loans. The FHA has eliminated unnecessary and overly strict requirements under its loan program that made it difficult for many families to qualify for mortgage loans. It has also given lenders greater flexibility to make homeownership possible for more nontraditional borrowers, and has clarified certain underwriting requirements so they are not applied in a discriminatory manner

    http://clinton6.nara.gov/1997/10/1997-10-23-vp-announces-record-homeownership-level.html

  43. #43
    On September 15th, 2008 at 2:00 pm, Ahh a Lion! said:

    These bailout are financed through blatant inflation. This hits every American taxpayer much harder as it makes the prices we pay for everything go up.

  44. #44
    On September 15th, 2008 at 2:04 pm, walterc said:

    I would suggest that if you are going to bury your savings in a mason jar, you convert it to precious metals first.

    If the world economy collapses, the U.S. dollar (along with any other paper money) will be worthless, but gold and silver will still have commodity value.

    And to stock up on ammo, food & water.

    something to be said about the Boy Scout motto. . . .Be Prepared.

    In the words of John Fogarty . . . there’s a bad moon on the rise.

  45. #45
    On September 15th, 2008 at 2:05 pm, right_on said:

    Just out of curiousity, I wonder how much money AIG, Lehman Bros., Merrill Lynch, et al, have contributed to political campaigns since 2002? Assemble a list, and then let’s compare that list with those members of the House and Senate that vote for, or support any bails out.

    Should these contributions to political campaigns be returned by the politicians who have benefitted from them (at the expense of the investors)? I would say “yes” regardless of party affiliation.

    It would also be nice to have laws passed making it illegal for businesses to “invest” in political campaigns. In all likelihood, those relied upon to enact a law like this will not butcher this cash cow.

  46. #46
    On September 15th, 2008 at 2:06 pm, WarEagle82 said:

    It is curious that the government feigns indignity when they find corporations like Bear Stearns, Lehman Brothers, Enron, Freddie Mac and Fannie Mae cooking their books.

    The simple fact is that you cannot even conduct a meaningful audit of most agencies of the US Government. Nobody has any idea of how much money is spent by the US government or how it is actually spent.

    http://www.marketoracle.co.uk/Article327.html

  47. #47
    On September 15th, 2008 at 2:10 pm, Rogue Cheddar said:

    On September 15th, 2008 at 1:20 pm, sonofdy said:
    Will there be white rabbits and card tricks as well???

    There you go again! Injecting color into the conversation, you racist you!

  48. #48
    On September 15th, 2008 at 2:28 pm, vickisoup said:

    Thank you, especiallly to sonofdy #13 and soap #14. I admit to complete ignorance when it comes to money matters, and I benefit from their having provided some context.
    :oops:

  49. #49
    On September 15th, 2008 at 2:38 pm, sonofdy said:
    On September 15th, 2008 at 1:20 pm, sonofdy said:
    Will there be white rabbits and card tricks as well???

    There you go again! Injecting color into the conversation, you racist you!

    Ohhhh hell. How long in the stocks this time? ;-)

  50. #50
    On September 15th, 2008 at 2:41 pm, sonofdy said:

    Thank you, especiallly to sonofdy #13 and soap #14. I admit to complete ignorance when it comes to money matters, and I benefit from their having provided some context.

    No problem, the key advantage of capitalism is that the bad managers fail and go away, which is bad for them but good for us in the end. Rewarding bad performance gets you, tada, more bad performance.

  51. #51
    On September 15th, 2008 at 2:43 pm, conservativesRus said:

    On the subject of AIG and NY allowing the bridge loans - wasn’t it the state of NY suiing AIG recently for all sorts of stuff - probably both real and imagined?
    That’s why NY “allows” it - so NY makes sure NY gets it’s piece

  52. #52
    On September 15th, 2008 at 2:51 pm, sonofdy said:

    WWWAAAYYY off topic but I just have to share. I work in customer support as a programmer, I just closed a call where the clients problem was that they literaly had a screw loose. They had a screw in thier printer and when they banged on the printer enough it came out. Now they print fine.

    Problem: Client has a loose screw.
    Resolution: Screw removed.

    This is one of my best stories ever, right up there with the computer not being pluged in. :lol:

  53. #53
    On September 15th, 2008 at 2:57 pm, Southpaw said:

    “Socialism For the Rich” :

    http://www.minyanville.com/articles/lehman-bank-of-america-bac-LEH/index/a/18960

    At the expense of the American sucker taxpayer.

  54. #54
    On September 15th, 2008 at 3:05 pm, Peejz said:

    How much of this mess is tied to Global Warming and the venture capitalists that tried to force crude up so that we would buy into their carbon schemes?

  55. #55
    On September 15th, 2008 at 3:06 pm, Peejz said:

    On September 15th, 2008 at 2:51 pm, sonofdy said:

    =))

  56. #56
    On September 15th, 2008 at 3:06 pm, WarEagle82 said:

    Big government is the cause of government corruption. If the federal government did not have TRILLIONS OF DOLLARS to spend they couldn’t influence the economy.

    Return the federal government to its constitutionally limited roles and these problems would go away.

    Allow Bush, McCain, Clinton and Obama to spend TRILLIONS OF DOLLARS and these problems will continue.

    BIG Government is the root cause of the problem.

  57. #57
    On September 15th, 2008 at 3:28 pm, Ahh a Lion! said:

    On September 15th, 2008 at 1:02 pm, uhangtight said:

    yeah, i just don’t know what all the whinning is about. other than obamitler’s minions trying to make this now about the economy stupid, after his luncheon with BillyBoy a week ago or so, but, i don’t think they can handle this new found campaign strategy as the GDP is still good.

    So long as unemployment does not go over 6.5% and the GDP start slipping downward the fundamentals of the economy are basically firm, until these two elements of the economy GDP and Employment start going awry. Stock markets go up and down, isn’t that what has been happening for decades. Oh, yeah, only during Billyboy’s reign did they go up, up and up (fraudlent laddering) until the bubble burst in late 1998 early 1999. Just in time for BillyBoy to leave office.

    What goes up, must come down, spinning wheel gotta go round….

    When the federal government just nationalized the mortgage industry, do you think the ‘fundamentals of the economy are basically firm’? Also the GDP numbers are an absolute joke. The government has vested interested in seeing them positive and have cooked their books to make it seem that way. Example: the 3.2% GDP growth reported last quarter assumed that inflation was at 1.2%. If anyone believes inflation is at 1.2% they are retarded.

  58. #58
    On September 15th, 2008 at 3:45 pm, txvet2 said:

    On September 15th, 2008 at 3:28 pm, Ahh a Lion! said:

    When the federal government just nationalized the mortgage industry,

    They nationalized the mortgage industry decades ago - or weren’t you aware that both Fannie Mae and Freddy Mac were originally established by the federal government? The populist in me says that they had a point - it’s had a role in the huge post-WWII expansion in home ownership. The conservative in me says that most of that would have occurred even if the government hadn’t been trying to encourage it.

  59. #59
    On September 15th, 2008 at 4:01 pm, MagnumOpus said:

    As a conservative, former plaintiff’s personal injury attorney (yes, I know, we are a very small club), it gives me no end of joy to see AIG take it on the chin. They made lives for some of my clients a living hell with improper delay, denial, obfuscation and distrust.

  60. #60
    On September 15th, 2008 at 4:24 pm, Ahh a Lion! said:

    They nationalized the mortgage industry decades ago - or weren’t you aware that both Fannie Mae and Freddy Mac were originally established by the federal government?

    Very much aware - also aware that LBJ privatized them so that the government didn’t have to keep them on the books. Granted they’ve always had a government backstop, but it has never been used (as they acted like private companies should - responsibly). Now, during an absolute financial mess, we nationalize the industry, but unlike during LBJ’s time, we’re going to keep Fannie and Freddie off the books.

    The conservative in you is right - American people make the American dream real, not the American government.

  61. #61
    On September 15th, 2008 at 4:29 pm, uhangtight said:

    #57..i guess you read the market watch article today. you’re better off reading the WSJ as it was a little more balanced. gross domestic product is still higher than anywhere else in the world. other global economies do not have even half of our GDP. sooo.. you’re point? the sky is falling cause?? gdp is not has high as say… what or inflation is really what? we are out producing all other economies. i guess my point is that our economy is still stable. at least far more stable than every other economy.

  62. #62
    On September 15th, 2008 at 4:48 pm, Ahh a Lion! said:

    I’ll have to start reading market watch - the WSJ has really become a cheerleading publication. This statement is the crux of our disagreement:

    we are out producing all other economies

    We are out-consuming all other economies. We lost our production base long ago - our GDP is based mainly on consumption and our service sector. We can look at China as the production powerhouse, and their GDP has been growing at a staggering rate. They are also the main holder of our government’s debt. Which brings us to another point - our government has been spending extravagantly and financing it with debt and inflation, which will destroy our currency. This banking crisis is just bringing us closer to the edge with our foreign creditors. Why anyone trusts the US government to be a steward of the dollar is laughable.

    All the government can do right now is hold off the deleveraging. They are failing at that as well - soon all the Fannie and Freddie toxic waste will have to be liquidated with newly printed dollars. Soon our foreign creditors will balk at the notion of the dollar peg or buying more treasuries. This will sink the country into hyper-inflation.

    The sky is falling my friend - best to be prepared.

  63. #63
    On September 15th, 2008 at 5:03 pm, FamilyMan said:

    It’s THE WAY IT HAS TO BE Monday
    stupid politicians

  64. #64
    On September 15th, 2008 at 5:08 pm, Ilovemycountry said:

    How come Alan greenspan hates America?

    “Greenspan: Country Can’t Afford McCain’s Tax Cuts

    Alan Greenspan says the country can’t afford tax cuts of the magnitude proposed by Republican presidential contender John McCain — at least not without a corresponding reduction in government spending.”

  65. #65
    On September 15th, 2008 at 5:19 pm, Mister P said:

    Here start the job cuts. HP just announced layoffs. Obviously just about everyone at Lehman is out of a job.

    I use to study chaos theory. We are seeing a set of vortexes, like tornados. Eventually some vortexes turn into black holes, sucking up all capital. One never knows how the system will reorganize. But don’t be surprised to see changes in society we could never have anticipated. Some may be for the good.
    First Wall Street, then Main Street, then the Capital.

  66. #66
    On September 15th, 2008 at 5:24 pm, Ahh a Lion! said:

    On September 15th, 2008 at 5:08 pm, Ilovemycountry said:

    The US has 10 trillion in funded debt, 52 trillion in unfunded obligations? Greenspan is right on this front and McCain will have to raise taxes - I promise you that. The funny part of this is that Greenspan really is the cause of the subprime meltdown - blame him for that, not for an intelligent and realistic statement regarding fanciful campaign promises.

  67. #67
    On September 15th, 2008 at 5:51 pm, Mister P said:

    Greenspan, wasn’t he involved with the Keating 5? Anyway his policies lead to cheap loans and runaway housing prices. Add the black holes created by Congress (Fannie Mae, Freddie Mac, FHA Loans) and you have a mess.

  68. #68
    On September 15th, 2008 at 5:59 pm, uhangtight said:

    GDP is gross domestic product, which includes not just manufacturing or actual products produced but is the output of goods and services. if it were only the production of goods, you might be right. GDP is not based upon just the manufacturing of goods. if that were it, then yes, China is fast approaching at our heels.

    GDP is not based on consumption but on the output of..

    Real gross domestic product — the output of goods and services produced by labor and property
    located in the United States — increased at an annual rate of 3.3 percent in the second quarter of 2008,
    (that is, from the first quarter to the second quarter), according to preliminary estimates released by the
    Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent.
    The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in
    imports, an acceleration in exports, an acceleration in PCE, a smaller decrease in residential fixed
    investment, and an upturn in state and local government spending that were partly offset by a larger
    decrease in inventory investment.

    and,

    Real exports of goods and services increased 13.2 percent in the second quarter, compared with an
    increase of 5.1 percent in the first. Real imports of goods and services decreased 7.6 percent, compared
    with a decrease of 0.8 percent.

    This is from the bureau of economic analysis. Your comments do not relate to your cry of inflation. Nor do the facts back up your entire argument of consumption. Consumption refers to the Gross Domestic Purchases and not Gross Domestic Product. What does factor into GDP is personal consumption expenditures and PCE is a factor in GDP. The actual upturn in GDP was due to the increase in exports. To state that the entire GDP is based on consumption is blatantly false. It is a factor in GDP but not the entire baseis of GDP. At face value your argument appears to sound good, however, after close scrutiny of the facts your argument not so much.

    I know everyone cries about the value of the dollar, however when other currency values are closer related to the dollar other countries tend to buy our products, because they can afford them. It is a catch 22 for manufacuterers. Having been in the manufacturing industry and having relatives still in the manufacturing industry, this is their main concern. Business is booming with the low value of the dollar and able to sell their product all around the world.

    You can cry about the value of the dollar, but most manufacturing business owners are not they are exporting their goods.

  69. #69
    On September 15th, 2008 at 6:10 pm, Jim M. said:

    For the record, I am lodging an official complaint over the use of the term, Black Monday. It has racial overtones. I propose to protest this insensitivity by waterboarding lgm, nyk, sausage, and a couple of other liberal members of this board (who no doubt will be more than willing to participate in such a worthy expression of protest) until such time as our hostess makes a public act of contrition.

  70. #70
    On September 16th, 2008 at 4:48 am, greenLibertarian said:

    Borrowing to escape debt is, sadly, the new American way for many. And those few of us who instead save and spend pay the bill, as MM has often and fully observed.

  71. #71
    On September 16th, 2008 at 9:00 am, moonsbreath said:

    Can someone please explain this to me? Cavuto said only 2-3% of mortgages were in default, meaning 97-98% of us pay our mortgages. How on earth does 2-3% of defaulting mortgages cause all these financial behemoths to go belly-up?

    We need FAIR TAX. Stop penalizing individuals and companies for making money and go to a consumption tax. All the businesses that moved to China and India and other parts of the world will come back. Perhaps they’ll bring other companies along with them. Why this isn’t proposed is beyond me.

  72. #72
    On September 16th, 2008 at 9:45 am, Mister P said:

    We need FAIR TAX.

    Unfortunately the Fair Tax is not fair. It is double taxation. Those of us who have saved after paying income tax will get taxed once again (28 percent) when we spend it.

  73. #73
    On September 16th, 2008 at 9:47 am, Mister P said:

    You can cry about the value of the dollar, but most manufacturing business owners are not they are exporting their goods.

    Of course, but my retirement savings is taking the hit as I must have more to pay for more expensive goods.

  74. #74
    On September 16th, 2008 at 3:09 pm, right_on said:

    My wife’s retirement is through an AIG retirement subsidiary called VALIC. They wasted no time in sending out emails, stating that their investments are not at risk, because they are “a separate entity from AIG.” Right!!!

    I am unable to log on the the website now…

    Curious…another retirement fund, CALPers is also separate from the State of California, but that hasn’t stopped the California Legislature from raiding it to balance the state budget in the past. Worried? Yes. Believe VALIC? No.

You must be logged in to post a comment.

The Fannie and Freddie debacle: An autopsy

July 7, 2009 09:57 AM by Michelle Malkin

60 Comments | 21 Trackbacks

What is Barney Frank up to now?

July 1, 2009 12:13 PM by Michelle Malkin

69 Comments | 8 Trackbacks

And next: A Fine Print Czar

June 30, 2009 06:00 PM by Michelle Malkin

75 Comments | 12 Trackbacks

After the “Special Master of Compensation”

June 9, 2009 04:39 PM by Michelle Malkin

82 Comments | 16 Trackbacks

Making Government Motors official

May 19, 2009 04:52 PM by Michelle Malkin

114 Comments | 12 Trackbacks

Washington can’t meet the Cheerios Standard

May 15, 2009 09:07 AM by Michelle Malkin

79 Comments | 16 Trackbacks

California wants a piece of TARP

May 14, 2009 08:41 AM by Michelle Malkin

49 Comments | 6 Trackbacks


Categories: Subprime crisis



Pundit & Pundette

» Is the tide turning?

Weekly Standard

» Anchor Men