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alstry (36.13)

Soon You Will Understand Alstry

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October 15, 2009 – Comments (6)

When it is the policy of your government to encourage and reward Wall Street for writing bad loans....pretty soon bad loans infect every inch of our economy.  While you are loaning out the money, it is one hell of a party as everyone is spending.

After, 9/11 it was policy to loan the private sector trillions of dollars per year to spend in the economy.  Borrowing drove spending and generated huge profits for Wall Street and taxes for government which drove even more spending and job creation.

For the past few years, policy has changed and we have started to cut off credit and raise interest rates to the private sector.  As a result, private sector spending has collapsed and so has tax receipts to government.

Government and swap backed Wall Street companies have picked up the slack borrowing unprecedented amounts of "junk" debt.  This borrowing has generated much of the profits of our banks and spending in the economy.  Could you imagine the contraction to GDP if government wasn't borrowing/printing $2 Trillion per year deficit.

How do you think that can ever be serviced against a backdrop of evaporating revenues?

Guess who funded the debt issuance???  Now our pension funds and mutual funds are infected with a pile of junk debt and equity that is very vulnerable to the underlying debt collapsing.  So are our personal accounts and mutual funds.

Our cities, counties, states, schools, and hospitals are all burdened with massive debt....same with our corporations and families.....now that revenues are imploding and jobs and wages are being slashed.....most of our economy is subject to massive default.

Check out the rising foreclsoures this quarter.....AGAIN.  Same with rising vacancies and rising CRE defaults.  How about collapsing sales at Harley and Polaris......none of this is hard to see if you look.

The question is how will government let you know that it was policy to infect our nation with an unsustainable amount of junk debt........and in the end, only bail out the bankers and let the citizens fail?  Our pensions will be bust, same with our municipalities and entities within......and few are prepared for the fallout.

What is strange is how can a community who is so focused on investing not appreciate that our economy is simply a Ponzi economy of junk debt against a backdrop of evaporating revenues?????  And if the debt is junk......what do you think the equity is worth?

And in the end, it was government policy to drive this ponzi scheme and bankrupt the nation??????

 

6 Comments – Post Your Own

#1) On October 15, 2009 at 9:57 AM, alstry (36.13) wrote:

The easiest way to destroy a nation is loan it more money than  it can ever pay back....same with a family, business, city, county, or state.

In the last eight years, America borrowed or refinanced over $25 trillion dollars...more than twice the total amount borrowed over the past 200 years.

And if you are the Pension Fund buying that debt....guess what  happens to the fund  when the debt  defaults?

Calpers reviewing fees paid to outside manager

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#2) On October 15, 2009 at 10:12 AM, Rasbold (91.54) wrote:

Markets are up, UI down.....looks like the start of a recovery to me. The deficit is unreal, but not unheard of....where is the crash???

 

I like reading your stuff, but I see no indication of any MOAP or 'feeling the pain', whatever. Where is the action? Where is the extreme pain? and gnashing of teeth?

 Foreclosures? Yeah, I live in a nice mountain top spread that they told me was worth half a mil in 2006. I didn't get that high on my mortgage, but I am still underwater more than 100K; I should walk away and add to the foreclosure list myself!

 Things are looking better, unless we find out for sure that the re-employment process is not happening, which people speculate about, but don't know.

Gold is going GREAT, which is nice because I am a miner in California. BUT I WOULDN'T BUY ANY AT THIS PRICE!!!!

 

 

Good Luck and May Your Dow Never Jones

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#3) On October 15, 2009 at 10:17 AM, alstry (36.13) wrote:

America has an unusual economy....it requires massive employment to fund Social Security and Medicare....combined about 10% of GDP spending.

By cutting off credit to the private sector....the private sector economy, employment and wages are evaporating...especially higher paid workers like architects, pilots, and real estate sales.

As a result, medicare and social security revenues are evaporating and  health care is directly in front of the eye of the  strom to feel the brunt of the force:

Now, Pfizer Inc. employees must wait for the painful part.

The New York-based pharmaceutical giant's $68 billion deal to acquire Wyeth Pharmaceuticals has cleared its final regulatory hurdles in the United States and Canada, Pfizer said Wednesday, and the megamerger is expected to close today.

But that's not the end of the story. The real question now: How many of Pfizer's 5,000 employees at its research-and-development campuses in Groton and New London will remain after the combined companies complete an expected 19,500 layoffs related to the merger?

At some point...you cut the wages and fire enough people....there really is not much of an economy left.

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#4) On October 15, 2009 at 11:00 AM, leohaas (31.36) wrote:

"America has an unusual economy....it requires massive employment to fund Social Security and Medicare....combined about 10% of GDP spending."

There is nothing unusual about that. Most developed nations have similar programs and require a similar percentage of GDP to fund those programs.

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#5) On October 15, 2009 at 11:53 AM, booyahh (< 20) wrote:

blah blah blah
same rant since March

"Dow 5000 by the end of the summer"
"9.09 will teach us all"

he just gets angrier the more the market goes up

 

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#6) On October 15, 2009 at 3:58 PM, alstry (36.13) wrote:

Actually,

Alstry gets angrier as America shuts down.......and few give a damn

US Foreclosures Continued to Rise in Third Quarter

Capital One Credit Card Defaults Rise in September

Harley Davidson to End Buell Line - 180 Job Cuts

Foley & Lardner - 39

Louisiana State Department of Education - 50

Yuba Community College - 56 Layoffs Coming?

Update: Boeing Flight Test Staff - 200 - 300

Summit Holdings - 70

Golf World Magazine - 10?

Mayor Lombardi ( RI) - Looks to Cut 35 Total Positions

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