Category: Economy

Fueling the Fires of War and Discontent: $100 Oil and $3 Gas on the Event Horizon

This is troubling, not because it is unexpected but more due to the fact that many have predicted it and watched as their dire predictions came true. From CNN Money:1

With oil prices setting records over $90 a barrel – and $100 looking ever more likely – experts say there’s a good chance drivers will see $3 gasoline before the end of the year.

“Three dollar gasoline in this market is unavoidable,” said Stephen Schork, publisher of the industry newsletter the Schork Report. “At this rate, we’re going to see $4 a gallon.”

If you think that’s bad, make the jump and read more…

CA and NOLA

PROLOGUE:
My hear truly goes out to those suffering as California burns.

My husband lived there, and agrees that it is one of the nicest pieces of real estate on Earth.

This essay was originally a response, and got trashed as unsympathetic.  It is not.  But a comparison needed to be made here folks.  Not all are rich and white, but one has to wonder if the response would be as quick in the slums or barrios of LA, as it is up in LaJolla, Del Mar, or San Diego.

This is about GWB’s administration, FEMA and the response.

My heart still bleeds for thousands in danger in California, but I still have to offer this food for thought.

Shocking: Dem candidates have leftist economic ideas!

the Financial Times (Europe’s main English-language business paper), writing about the US presidential campaign,  is shocked – shocked! – that leftwing politicians in the US _dare_ have leftwing programmes:

The grab for a job: Democrats turn protectionist in a drift to the left

Does this mean the Democratic party, which is generally (although not universally) anticipated to be heading to both congressional and presidential victory next year, is abandoning the centrist economic legacy of the Bill Clinton years? The rhetoric, if not always the fine print of the various plans that the candidates have rolled out, would suggest that it is.

Ooh. Abandoning centrism. That’s a criticism hurled at the right all the frigging time right?

(Bubbles) Greenspan: “Oops”

Greenspan alert on US house prices

US house prices are likely to fall significantly from their present levels, Alan Greenspan has told the Financial Times, admitting that there was a bubble in the US housing market.

Now he tells us! Now that, after encouraging the bubble, blowing it out of proportion, and claiming that it was not possible to tell if there was a bubble, said bubble is blowing in our faces as many observers have predicted for a number of years now, he claims that it was obvious all along.

What a lying piece of shit.

Exclusive to DD!

Want to see something scary?

Check out this very major piece of banking news that is currently flying under the radar, for the most part:

Fed Bends Rules to Help Two Big Banks

Excerpt:

NEW YORK (Fortune) — In a clear sign that the credit crunch is still affecting the nation’s largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup (Charts, Fortune 500) and Bank of America (Charts, Fortune 500), according to documents posted Friday on the Fed’s web site.

The Aug. 20 letters from the Fed to Citigroup and Bank of America state that the Fed, which regulates large parts of the U.S. financial system, has agreed to exempt both banks from rules that effectively limit the amount of lending that their federally-insured banks can do with their brokerage affiliates. The exemption, which is temporary, means, for example, that Citigroup’s Citibank entity can substantially increase funding to Citigroup Global Markets, its brokerage subsidiary. Citigroup and Bank of America requested the exemptions, according to the letters, to provide liquidity to those holding mortgage loans, mortgage-backed securities, and other securities.

Summary: In contravention of the current rules, the Fed is letting two ginormous banks lend a total of up to $50 billion to their brokerage subsidiaries.

For some analysis on what this might mean, see this thread:

Ticker Forum – Oh oh – Banks in MAJOR trouble

Or from the left, if you prefer:

Democratic Underground – Fed Bends Rules

Serious talk of major panic and financial disruptions… Bank runs and government seizures even… Or at the least, dozens of billions of dollars in handouts to some of the ultra-rich  investors who might otherwise become just a little less rich over the next few months.

Personally, I don’t know enough about banking and finance to say whether this is basically a nonevent economically, or the beginning of the next depression.

But one thing this tells us for sure: The Fed is absolutely, 100% in the pockets of the richest folks in the world — all at the expense of the taxpayers.  Maybe that’s not huge news, exactly, but at this particular juncture in our economy, it is quite disturbing.

Probably worth contacting your congressperson about, at the very least.

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