Forever.
A Recession is two quarters of decline, we are in the sixth.
All that has gone half through is the insurance on sub prime housing.
We have been living off of equity loans in a housing bubble, that ended.
Lack of buying lead to layoffs, more lack of buying, more layoffs.
That lead to a cut in credit card limits, which lead to defaults in payment.
Retail sales are way down, even with price cuts, more layoffs.
Now comes the biggies, housing is still falling, most owe more than it is worth at market, half of all market investments are gone, which is the Capital in Capitalist.
The richer you were, the more you lost.
Next to come are hotels, dead, office buildings, who needs them, shopping malls, history, car dealers, sales down over 50%.
These are the big ticket Commercial loans, about twice all of the financial losses. Most were short term finance, five to seven years, no one wants to refinance in this market, for your $50 million hotel might be worth $20 million.
2,000 shopping malls will close. Circuit City just vacated several square miles of big box stores.
This will finish off the largest banks.
So far the government has spent $2.8 Trillion, and approved $10.3 Trillion, to bail out the financial sector, which is only partly the banks. $10.3 Trillion equals our national debt.
One fifth of the States have hit 10% unemployment, and we are still losing 20,000 jobs a day.
The banks can fail in an orderly manner, in the 1990s 1,384 were closed, so far only 38 in the last few years, but this is much worse than the 1990s.
No one can care about the losses in apartment buildings, office buildings, retail space, hotels, that is private losses. Banks are only being supported for long enough to unwind the world debts, then they can fold.
The focus is to keep Wall Street, the Stock Exchange alive, so that we have a place to re-start from.
We bailed out AIG so it could pay it's British and European debts.
Basically we have $10 Trillion, and then have to just print money, as no one wants our Bonds.
The loss is over $200 Trillion.
The most optimistic,, who also work for the government, have said the economy might stop falling in nine months, but most say three years as all the commercial debt falls.
Unemployment usually peaks a year after the recovery starts, so four years of rising unemployment to go.
This still does not answer the problem of most Americans, who own a house now worth half what they owe, and soon, perhaps a third.
The Dow Jones is likely to drop to the 6,000 range by summer, and stay there for three or four years.
At 10% per year, it will recover in another twenty years.
Another problem is we are Post Industrial, we do not make anything, we sell Financial Services to the world. There is a shortage of demand.
Another major problem is the cheap war in Afganistan, with less than a third of the troops the Russians lost with. We lost three quarters of the country, all Commanders said the same, we cannot win this war, it calls for a political solution. Now Obama talks of winning.
The truth is if we do not send more troops, our puppet will lose the summer election in a landslide of bullets, the usual Afgan vote of choice. Fighting has reached Kabul.
Our plan, one Government of our choice, with a big paid army, will rule. That is the one thing that all the tribes will fight. Afganistan is Tribal Areas, always has been, always will be. Making war on the tribal areas of Pakistan has united the tribes. The British did that twice. That the hated British are back has brought up round three of lets kill the British.
There can be no political deal for in the last one Reagan told the Taliban they could rule the country if they defeated the Russians, which they did. As the rightful government of Afganistan they had training camps, we do to, and Clinton attacked without declaration of war or warning, with cruise missiles.
What could they do about a Big Bubba? 9/11, a cruise missile attack on a coward of an enemy, and ex pretend friend.
We invaded Afganistan and called all men with guns enemies, they went to Pakistan, and took over. There we have a General in a bunker saying over and over, I am in charge! The country is run by men who made a honorable peace with the Taliban, and have kept it through hard times. Before them they have India, not the best of neighbors, behind them, they cannot have enemies.
This will get very expensive. Afganies never lose, for they never quit, their enemies will die of old age if nothing else. Alexander the Great hated them. Gengis Khan passed to the north and sent gifts, He only passed through to erase some Persian Cities, and everything alive. Tamerlane and Balbor avoided angering them, the British were the world's best army, both times they lost, and the Russians were on home ground with three times the troops.
We are uniteing the Stans, and not as our friends. A hundred years is nothing in Afganistan. The most likely outcome I see is restoring the Khanate.
This will delay the economic recovery.
28 Mar 2009, 6:32 pm
