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Short Credit Crunch Story in 1:30; Clusterf__k Nation's Jim Kunstler on "The Party That Wrecked America", China, MCD, Oil, Russia and

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August 13, 2008 – Comments (10) | RELATED TICKERS: MCD , GM , FNMA

I AM in 5TH PLACE in Points!  

Short Credit Crunch Story
 

 

If you get tired of dwot, alstry and I Blogging bearish Comments about the market, you can take a step up to the Major Leagues with Clusterf__k Nation by Jim Kunstler.

Kunstler writes like no one else. He is the author of the Long Emergency about Peak Oil and the effect on the US.  He is extremely intelligent and BEARISH. Even if you do not buy into Peak Oil etc.... I think it is worth your time to understand the position and have a FIRM understanding of the arguement due to the fundamental significance to the impact here and abroad.

Read the entire Blog and the Comments are worth read also:

Shoulder Season

       This sort of euphoria is actually an alarming pre-crash symptom, in this case of a patient (the US) entering the terminal phase of sclerosis. Our society and all its playerz -- especially the appointed communicators -- just can't fathom the reality of the threats we face, which are 1.) the loss of primary energy resources, 2.) the loss of technological potency, and 3.) the loss of a comfortable standard of living.

On Russia and Georgia:

The US might talk tough about this threat to the status quo, but what is it going to do? Pull troops out of Iraq and Afghanistan to mount a land war against Russia in a landlocked region of its own neighborhood? Fuggeddabowdit. Notice, the Europeans are not making so much as a peep -- because when the time comes that Russia does control that pipeline, the Europeans will do anything to keep the contents flowing toward them. Europe may be organized as a trade-and-currency confederation, but not as a military power. NATO is strictly a US auxiliary, not a power unto itself. The result of all this will be that Russia, already the world's leading oil producer, even as it has entered depletion, will now possess a potent geopolitical-and-financial weapon with control of that pipeline. A collateral effect will be Europe's inclination to bid more desperately for Middle East oil -- the oil that comes via the Suez Canal -- which can't help but boost the price-per-barrel that the US is forced to pay.    

On Credit Crisis     

With Wall Street on vacation at its various beaches, the idea has taken hold that the so-called credit crisis is mostly over. In fact, we're still in the first quarter of that classic. The big move before the investment bankers packed their snorkels and baggies was Merrill Lynch selling off a batch of its fraudulent securitized debt bundles for roughly five cents on the dollar. That pretty much marked-to-market the similar garbage that every other big bank or pension fund or hedge fund has hidden in its closet. My guess is that some of them will just declare "game over" without even bothering to haul their garbage out and hang a "for sale" sign on it. Fannie Mae and Freddie Mac are essentially there now.

On China GM, and MCD, 

     It was fascinating to watch a CNBC report Sunday night about the progress of General Motors and McDonalds Hamburgers in China. It sure makes one wonder about the current mood of Sino-triumphalism -- the favorite car of the Chinese elite is... the Buick, a product that even demented old ladies in Columbus, Ohio, will not touch with a stick. It appears that China has succeeded in turning Peking and Shanghai into simulacrums of Atlanta and Dallas, complete with glass office towers and all the on-and-off-ramps they'll ever need -- a pretty stupid project when you consider how little oil of its own China actually has. One can only say, with a shudder, that they got into the Happy Motoring game a bit late, and wish them "good luck."
      The Mickey-D phenomenon appears to be a mere fad, a toy that Chinese trade officials tossed to its people in the euphoria of ramping up the world's last manufacturing economy. For starters, China doesn't have enough groundwater or grain to feed the necessary steers (and hogs) that McDonald's uses for it's "meat products" there.
      The most amusing part of the CNBC segment was the deportment of the smarmy American executives representing those companies: Rick Waggoner of GM, who was depicted in the full flower of a campaign to hose his Chinese "partners," blowing smoke up their asses as if he were some kind of a human walking-talking bong, and the two necktied creeps from McDonalds' Asian office scheming on camera about opening tens of thousands of so-called "restaurants" across the ancient kingdom. These were all perfect representatives of people stuck in a paradigm already bygone. When the Olympic mania ends, China will find itself in a new reality, too. Its single advantage, as far as I can see, is that it holds a lot of US dollars in various formats, and I don't know that this is much of an advantage given the imminent tanking of American finance. Yes, China has become the world's factory. But if the world's leading shopper is shopped-out and busted, this might not be much of an advantage. Beyond that, as suggested above, they face huge problems with oil, water, and food, not to mention over-population and environmental degradation at a scale we can barely imagine here.  

Read the Full article here:

http://jameshowardkunstler.typepad.com/ 

10 Comments – Post Your Own

#1) On August 13, 2008 at 9:57 PM, Tastylunch (29.39) wrote:

"the Buick, a product that even demented old ladies in Columbus, Ohio, will not touch with a stick"

what the eff man. Kustler just totally dissed my city for no good reason. I'm angry.

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#2) On August 13, 2008 at 9:57 PM, Tastylunch (29.39) wrote:

oh and congrats on 5th place, to be hoest I'm suprised you aren't higher :-)

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#3) On August 13, 2008 at 10:22 PM, abitare (88.86) wrote:

Tastylunch,

Good to hear from you.

What is going on in Detroit? I heard average sales price for a home is 20k?

I over trade this account because CAPS is primarily a stock screener, second is the commitment to the "playing CAPS". I was late to begin point chasing with this account.

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#4) On August 13, 2008 at 11:39 PM, jahbu (85.75) wrote:

On Russia and Georgia:
The US might talk tough about this threat to the status quo, but what is it going to do? Pull troops out of Iraq and Afghanistan to mount a land war against Russia in a landlocked region of its own neighborhood?

How old are you Ares?  There are more options.  Like hmmm a draft!  All this doom and gloom wont be so fun predicting then.  I am seriously spooked.  This is far past war profiteers stealing from tax payers.  Do not underestimate babyboomers fear of the Cold War.   This stuff in Georgia is big. And the politicians will use it to their full advantage.

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#5) On August 14, 2008 at 4:05 AM, abitare (88.86) wrote:

jahbu,

"I am seriously spooked"

We are seriously spooked. It is amazing to me that the stock market is holding up? 

"This stuff in Georgia is big."

Yes, it is, very big.... 

I am old enough to "participate" in a draft.

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#6) On August 14, 2008 at 8:46 AM, Gemini846 (56.83) wrote:

Tastylunch.. Columbus? Who would ever drive in Columbus. I just got back from there and it was $20 a day just to move my car from the hotel. What the heck is up with that?

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#7) On August 14, 2008 at 9:27 AM, Tastylunch (29.39) wrote:

AresFinancial

D-Town is awful. Worst city in America, hands down. If America isn't careful it could be showing us what the future could be.

I don't know what is driving this particular latest spiral (beyond the fiasco with Mayor's trial) but it's been a progression over the last 5-6 years and really the last 10+ .

As you probably know Southern Michigan's economy is nearly dead. It's been in a recession for 5 years. The latest hurt on the big 3 only make this much worse. Detroit has a particular problem in that the ciy has the infrastructure for 2 million people but they now have about 900,000 taxpayers. So everything is falling apart. The city has nowhere near the money to upkeep roads and city services. This creates a spiral where the city has to shut keep shutting things down and residents leave as a result.

Throw in a Mayor who acts like a thug and you have basically a prototypical example of white flight (sad to say but D-town definitely has a race/socio-economic problem). The only problm is that literally no one wants to move there, so there are no buyers at all for property no matter the neighborhood (even the old money'hoods ae not immune). So you have massive massive oversupply.

Everyone who can get out of D-Town more or less has. A lot of people just leave with their homes unsold just to be gone. Usually when I ask new customers the two most common places they say they came to Columbus from are Cleveland and D-town. The D-Town customers scare me a little as some of  them talk about it almost as if they were refugees...

I'm very very glad I live in Columbus and nowhere else in this region.

Gemini846

Man that is really weird. What hotel did you stay at? Was it near downtown? That is not at all typical for most Columbus hotels.

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#8) On August 14, 2008 at 10:02 AM, Gemini846 (56.83) wrote:

Doubletree across from the Veterans Monument. If I had driven my rental car every day I would have paid more to move it than I would have paid for it. In hindsight I would have just gotten a cab from the airport, but you never seem to know that kind of thing unless you've been there before. A car was very useful in Nashville but rather un-needed in Atlanta due to the MARTA.

Every urban area I've been to before had parking for the hotel you were staying in. (My list is rather limited but includes Denver, Nashville, Atlanta, Tampa & DC). The hotel even had the nerve to charge 9.99/night for internet access in your room, but they would let you use thier business center downstairs with slow computers for free.

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#9) On August 14, 2008 at 1:21 PM, Tastylunch (29.39) wrote:

Gemini846

Ah ok so you were downtown.

According to their website the 20 bucks fee was for unlimited in and out parking. If they were charging 20 bucks every time you moved your car you should absolutely complain. You should have only pay once per stay.

as far as having to pay to park, ever big city downtown hotel I've ever stayed in  (San Francisco, Atlanta, Chicago New York, Dc, Seattle, LA, St Louis, Cinncinati, Cleveland etc etc) charges you to park. Stinks but that's downtowns for you not just Columbus.

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#10) On August 15, 2008 at 9:18 PM, lquadland10 (< 20) wrote:

Bush said to Russia you can't be a bully to other another country that hasn't done anything to you after we put in the plans for the anti air craft missile plans after we invaded Afghanistan and Iraq and Oh let's not forget Iran and the Ships we are now pulling into the region. Bush is worse than Russia right now.  I say it is a case of the Pot calling the Kettle black. But then again from the pres of Georgia's mouth he did say that (not exact)  look at what Russia is doing to a country of the New World Order. So...... I say how come this came right after we granted funding for Russia through Fan and Fred? After all they do own 1/4 of all USA houses. What will we do if they call in the loans? Now for the other side of the story you won't see in the news. And the truth lies somewhere in between.

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