Depression is Over

It has been officially announced by a self proclaimed Wall Street financial guru that the economic depression that the nation is suffering is "OVER". Jim Cramer of Mad Money on CNBC announced this m0rning on Morning Joe, "The Depression is over". He did clarify his point though, the recession is not over by far.

Cramer sited the automotive industry as the foundation to his claim in the fact that production was up by over 25%. That and banks like Citi Group are starting to turn around and actually make some money. In other claims, Cramer also declared that the federal reserve is doing everything right as well as the treasury. Basically, our leaders in charge of freeing the nation from the depression have taken the playbook of President Hoover and done the exact opposite.

According to Cramer, unemployment numbers will lag by about three months before they turn around and head nowhere but up. Housing starts... Ditto.

I hope Jim Cramer is right, I really, really do!

Papamoka

Panic and the Economy

I'll just let this CSPAN video speak for itself but back in September of 2008 their was in fact a run on the banks here in the States and the Treasury shut down the electronic transfer of funds after pumping in $105 Billion to the banks when they found it happening. $550 Billion was drained out of money market accounts in one hours time and if the draw continued it would have collapsed the world economy. If they did nothing it could have amounted to $5.5 Trillion being drained out of our banking system that would have caused panic all around the world. Check out the video and what Rep. Paul Kanjorski has to say...

Video Link



I'm wondering if the Treasury investigated why there was a run on the banks electronically in such a short time span? That was the first question in my mind! Is the Congress investigating this. If they are not, then why not? If they are, then what did they find out? Or is this Congressional member full of crap? Or could the world as we know it really have ended on September 18, 2008? Two plus weeks before the election of President Obama and on George W. Bush watch, makes you wonder doesn't it?

As always, we follow the money and not the messenger... Thank you Memeorandum for the news tip!

Papamoka

Obama Slams Bailout Bankers

Finally, common sense has arrived in Washington D.C. and its just in a nick of time. While the rest of the nation is trudging through the economic crisis and hoping that their job and paycheck will not be pink slipped, Wall Street executives that accepted billions in bailout money have been passing out record bonuses. President Obama is putting the breaks on that practice and it makes perfect sense to do so. You don’t beg someone for gas money and continue to drive a car getting four miles to the gallon.

Over at the Worcester Telegram they have this to say about it from the Associated Press…

Thursday, February 5, 2009
Obama caps pay of bailed-out execs
Company limits won’t apply retroactively
By Jim Kuhnhenn THE ASSOCIATED PRESS

WASHINGTON — President Barack Obama yesterday imposed a $500,000 cap on senior executive pay for the most distressed financial institutions receiving taxpayer bailout money and promised new steps to end a system of “executives being rewarded for failure.”

Obama announced the unusual government intervention into corporate America at the White House, with Treasury Secretary Timothy Geithner at his side. The president said the executive-pay limits are a first step, to be followed by the unveiling next week of a sweeping new framework for spending what remains of the $700 billion financial industry bailout that Congress created last year.

The pay limit comes amid a national outcry over huge bonuses to executives who head companies that seek taxpayer dollars to remain afloat. The demand for limits was reinforced by revelations that Wall Street firms paid more than $18 billion in bonuses in 2008 amid the economic downturn and the massive infusion of taxpayer dollars. - Worcester Telegram

I believe it was the President of Ford Motor Company that stated he would accept no pay till his company is out of these troubled times. Have you seen even one of these Wall Street fat cat executives make that same pledge? Since they are reluctant to belly up to that particular bar, President Obama is doing the right thing by insisting on reduced pay for those banks willing to drink from the U.S. Treasury in the form of bailouts.

Nothing pisses off the regular folks more than seeing a company that just took several billion in taxpayers money to stay afloat and then see that the same company went on or is planning on an expensive junket. Same rule applies when you have a failed institution like Merrill Lynch, and the CEO demands a $10 million dollar bonus for his actions in the collapse of the company.

Kudo’s by the way to Wells Fargo for canceling its pay for performance junket to Las Vegas and making its first quarterly dividend payment ($371.5 million) on the money it borrowed from the Treasury.

Papamoka

Quote of the Day

“This is worse than a divorce, I’ve lost half my net worth and I still have my wife.” - Author Unknown