The socialists and the Austrians are at opposite ends of the spectrum of views on inevitability. Socialists believe that the government can turn on a dime, veering away from economic collapse towards a socialistic paradise simply by giving the right person the authority to print money. And how would the Benevolent One accomplish this feat? According to the Debt Virus Theory, it is as simple as printing money and spending it directly into the economy, rather than buying Treasury Bills. On the other hand, the Austrians believe that a “distortion-reversion process” is inevitable. Credit expansion is unsustainable and this, apparently, is true no matter how benevolent the chairman of central bank may be and no matter what he spends newly created money on, whether on social programs or in the discount of good bills, at not more than sixty days’ date.
Is hyperinflation the inevitable result of inflation? This is the question I address.
On April 23, the Fed released audited financial statements which included financial statements from a few of the super “structured investment vehicles” that it created in 2008. The Fed called them “Special Purpose Vehicles”. Yeah, right, we know what “Special Purpose” means. Here’s a hint: giveaway. AIG and third-party counterparties to AIG's CDS received the largesse with Maiden Lane II & III. Just like Maiden Lane I, with a stroke of the pen tens of billions of dollars of “toxic assets” were lifted from AIG’s and other financial conglomerates’ balance sheets and transferred to the Fed’s balance sheet.
Background
Please note, that I am having trouble locating detailed financial statements for Maiden Lane II, LLC. The financial results have been consolidated onto the Federal Reserve Bank of New York’s financials but the details were lacking.
NAR new home sales were released this morning, completing the troika of housing data for that month. Generally 2009 sales volume is steady so far, although prices of course are nowhere near a bottom.
General Motors Corp., facing the threat of a bankruptcy filing if it can’t meet a June 1 U.S. deadline, will preserve the GMC truck line and drop its 83-year- old Pontiac brand as part of a government-led recalibration of its business plan, people familiar with the decision said.
The Detroit automaker will keep the GMC, Chevrolet, Cadillac and Buick brands, after a review that included profitability with the Obama administration’s automotive task force, said the people, who asked not to be named because the decisions have not been announced. GM may reveal next week the end of the make that produced the Grand Prix, Bonneville and Firebirds, they said.
So, is the Pontiac a political casualty to green jobs? The reason I ask this is the quote:
On April 23, the Fed released audited financial statements which included financial statements from a few of the super “structured investment vehicles” that it created in 2008. The Fed called them “Special Purpose Vehicles”. Yeah, right, we know what “Special Purpose” means. Here’s a hint: giveaway. JP Morgan Chase got a sweet heart deal with the help of Maiden Lane. With the stroke of a pen $30 billion in assets were moved from Bear Stearns balance sheet to the Feds.
Background
The Fed (Federal Reserve Bank of New York) wanted to help out JP Morgan Chase purchase The Bear Stearns Company. Does Jamie Dimon, CEO of JP Morgan Chase serve on the Board of Directors of FRBNY? No conflict of interest there! But Bearn Stearns had a “toxic asset” problem.
Yahoo Finance is reporting that the 1st Quarter profits of UPS are down 55% as revenue dropped 13%, compared to a year ago.
The results missed Wall Street expectations, and UPS provided an outlook for second-quarter earnings that was below analysts expectations. UPS shares fell.
"Clearly, these are extraordinary times," Chief Financial Officer Kurt Kuehn told analysts in a conference call.
The first-quarter profit was 40 cents a share, compared to year-ago earnings of 87 cents a share.
I would expect that things will continue to slowly spiral downward as the recession and the deflation we are now experiencing continues to deepen. The only positive here is that the falling volumes will further reduce our demand for imported oil.
Just saw on the Dow Jones Newswire that some sort of agreement has been made for Chrysler to enter Chapter 11 Bankruptcy. Not sure if the deal was struck between the company and auto-task force and with the bondholders or the company/auto-task force and the UAW. More to come.
The source of the problem is crystal clear - the banking bailouts are costing too much.
(Bloomberg) -- U.K. government support for the banking system has risen to 1.4 trillion pounds ($2 trillion) and may climb higher as the financial crisis spreads to building societies and economists warn lenders may need more aid.
The amount invested in, loaned to or pledged to back bank assets now equals Britain’s gross domestic product, or 22,800 pounds for every person in the U.K.
The amount of money spent propping up the British banking system is unprecedented, and unaffordable. There comes a time when this sort of deficit spending hits the wall, when the number of interested buyers simply runs out.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3.0 percent to a seasonally adjusted annual rate1 of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.
You'll probably read in most places how existing home sales were "down" again. True, but there is a big "BUT..."
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