Is there another "perfect storm" on the horizon?

[Joe Fields]

If I were the president, I would be thinking about moving up the time table for spending the rest of the stimulus package. Why do I say this? Because it looks like he may have to ask for another one from congress. This next time, I'm not so sure we will have the means or the inclination to grant another givaway.

All indications are that a second wave of home foreclosures is upon us. With massive job losses, foreclosures will hit prime borrowers hard this time around. The real estate market is expected to drop approximately 13% over the next year. On top of this, jobless claims went up this month, to over 500,000, a significant spike.

The first stimulus allowed several holes in the dike to be plugged. But newer and larger leaks are beginning to appear. Will we be able to plug these, as well? No job growth, an upswing in the jobless rate, we are on the 3rd unemployment extension, I believe, the treasury is drained, support for another stimulus will be marginal at best, this time around, the republicans will pounce, saying that Obama's recovery was a failure...

And next year is an election year.

I said from the beginning of this stimulus plan that 50% of the stimulus money should have gone toward a WPA style program. We have a lot of roads, bridges, parks, etc...that need repair and maintenance. We could be "greening" all federal, state and local government facilities. Real people getting back to work, doing things that need to be done. Only 1 1/2% of the funds have been earmarked for jobs programs. Not nearly enough, when 500,000 people a month are no longer able to afford to live in the United Rapes of America....

Many many major distractions for this administration. Two war fiascos, healthcare, gay rights issues, international fence mending, regulatory issues, to name a few.

But, if I were the president, I would keep in mind what Bill Clinton did. It's the economy. It's jobs. We need the stimulus money for jobs now, and we are going to need much much more than is earmarked.

The only reason we haven't seen widespread chaos, with roughly 20% real unemployment, is because of the unemployment benefits extensions. Sooner or later those will run dry. What then? We are not horses. We cannot live in a barn and eat hay.

I have heard estimates of as high as 5 million more home foreclosures in the next two years. One in five homeowners now have homes that are worth less than they borrowed for.



Right now this country reminds me of a prize fighter who is knocked out on his feet, maybe still standing, but staggering all over the place, not knowing who he is or what he is doing. Round two is coming, and is just around the corner.

This time we were saved by the bell. Can we be so certain we will survive the next round?

[Barack_America]

1. Step 1: Generate anger against the banks.

Check.

If he's going to have to ask for a second stimulus, he's going to need to convince Americans that the banks shortchanged the first one (which they did, by refusing credit).

[scheming daemons]

3. You're confusing the Stimulus with the TARP program. They aren't the same thing.

NONE of the Stimulus money ($787 billion package signed by Obama) went to banks.

The TARP money ($700 billion package signed by Bush) is what went to banks.

[Barack_America]

4. No, not really.

But Obama is going to have to confuse the two if he wants a second stimulus. Anger at the banks is really the only chip he has to play. And there is overlap, particularly with the banks being hesitant to help reduce foreclosures. Mortgage rescue was part of the stimulus.

[notesdev]

8. Hard to play that chip when he's in bed with them

His #1 donor: Goldman Sachs

His Treasury Secretary - right from the NY Fed.

All those advisors in Treasury? From Goldman Sachs, Citibank, and so on.

The director of his economic council? Larry Summers, the guy who lost Harvard $2 Billion in interest rate swaps (guess who got the money?)

Senator Obama's vote on TARP? "Yea".

At what point are you going to figure out that he's on THEIR side not OUR side?

[AllentownJake]

10. Oh no you didn't

:toast:

[slipslidingaway]

18. +1 n/t

[Barack_America]

23. He's a skilled politician.

The safe bet would be on his ability to pull it off.

We'll see.

[notesdev]

24. He's a skilled campaigner

as we are finding out, he totally sucks as a President. He's making Carter look like Churchill.

[AllentownJake]

25. +1

[SammyWinstonJack]

34. +2

[SammyWinstonJack]

33. Rose colored glasses and all that jazz.

At what point are you going to figure out that he's on THEIR side not OUR side?

:thumbsup:x3

[Joe Fields]

5. I think we already get that. The banks have been demonized plenty,

and for many good reasons. The banks simply thumb their noses at us.

[Mind_your_head]

2. The president better be sure not to be lured into being/believing "stacey" under the garage door

:eyes:

"Stacey" might be very, very wealthy (or not)....but she was 'no fool' (until she got killed by the garage door, of course).

[Joe Fields]

6. I'm sorry. That obscure reference was lost on me. Please explain.

[notesdev]

7. The perfect storm

comes when the rest of the world realizes that we never intend to pay back this bill we're racking up, and stops buying our debt. All that other stuff is peanuts compared to the moment that happens.

[Joe Fields]

13. you may be right, but I wouldn't call the other stuff peanuts, even in

comparison.

[AllentownJake]

16. I think us doing another stimulus package

and sending out Timmeh to sell bonds might precipitate such an event.

[dysfunctional press]

9. it's not just home foreclosures that are coming in the next BIG wave...

if your area is anything like ours- there are an awful lot of empty storefronts in a lot of the fancy and not-so fancy strip malls- and commercial properties have mortgages to meet, too.

[AllentownJake]

12. Unlike mortgages

Most of those are fully financed (i.e. have absolutely no money down, not just a little).

[amborin]

14. yes, it's the commercial paper that's set to implode

commercial vacancies are hovering around 18% in many parts of so cal

the commercial mortgages are much harder to refinance and will all be coming due very soon

[Joe Fields]

15. good call. yes, so true. I see it everywhere. No areas of my city

are immune. The death knell of a suburb is when the shops leave and the pawn shops, payday loans and goodwill shops move in.

[AllentownJake]

11. Great idea!

Let us take on more debt while the dollar is falling! I'm sure all those foreign investors who hold dollars will love the idea that we are taking on more debt and buy more dollars.

:sarcasm:

We blew our load on stupid things like saving the rich and the states. It's over.

[Joe Fields]

17. What the hell are you talking about. I was saying that the president

needs to spend the rest of the stimulus, and spend it now, not later. Those funds have already been marked for expenditure.:eyes:

[AllentownJake]

19. My apologies

I read your thread wrong.

Problem is that it takes about 3 months to set up a government program the likes of which you are proposing and the states have all counted on those expenditures going where they are going for their 2010 budgets. Moving the money around now would bankrupt about 60% of the states in this country.

[Joe Fields]

20. I see what you're saying. If that's the case, then the timing of how this

will all play out will not only NOT benefit the country, but it can only hurt the democrats, come election time.

On edit, I feel certain that the administration will be forced to go ask congress for another bloated stimulus pkg.

[AllentownJake]

21. Oh yeah we are fucked

and in a lot of ways we deserved to be fucked. The President is about to learn the hard way the Clinton economic team is never about the American people or long term prosperity.

[amborin]

26. what krugman was afraid of, way back:

<http://krugman.blogs.nytimes.com/2009/06/25/what-i-was-afraid-of/>

[AllentownJake]

27. On a second stimulus

Really bad idea, shopping the debt for a second stimulus will further deteriorate the dollar and might precipitate a total collapse of our currency.

[Joe Fields]

28. I hear you. But, don't you believe that asking for another stimulus is inevitable?

And, if so, you would have to wonder what kind of deals, concessions would be made to coerce China to take on more of our debt...

[AllentownJake]

29. We could sell them Taiwan

Other than that, I really don't see how we could convince the Chinese to take on more of our debt. Preliminary talks have already begun about replacing the dollar amongst the European nations (except for England), the Arab states, and the BRIC nations.

After the Iraq war they are a little sick of our cowboy foreign policy and their thinking is the best way to avoid any future unpleasantness is to weaken us economically so we can't afford our military.

[notesdev]

30. They can't be that sick of it

after all, if they didn't lend us the money for these overseas adventures, we wouldn't be able to do them at all. They cut us off and our troops in Afghanistan have to hitchhike home.

I'd wager they like how these wars weaken us. Well, up to the point where we spend so much money on them that we can't afford to buy their slave-labor-made consumer goods that their economy depends on...

[AllentownJake]

31. Actually

They aren't too happy about Pakistan or Iran.

Pakistan is a key ally to China against India and China isn't to keen on us crossing the border and destabilizing their ally.

China has significant involvement with the Iranian government for oil contracts.

Lastly China is looking for a way to sell their cheap crap to their own emerging middle class.

[Joe Fields]

32. We always find suckers to take on our debt, though.

Granted, going forward I wouldn't want to put any money down on that possibility, but up 'til now, yeah, we've always found someone to buy our debt.

You may be right. Maybe it is a new day and this is the turning point for our leadership in the world.(as far as influence and currency are concerned.

Still, I get a feeling of inevitability, when talking about a second stimulus.

[Hubert Flottz]

22. We need to create jobs and fix our broken infastructure...

I agree!

[rhett o rick]

35. We can not avoid the coming "perfect storm". I dont believe Pres Obama can prevent it.

The stimulus package only bought some time.