Category: bush

Gearing up for Obama-Rama-Palooza in DC

Yesterday, sitting here in Sweden and emailing my friends back home in Washington, DC, is when the adrenaline-pumping excitement really hit me (for the second time — this was the first).

We are at:

  1. The end of a dark era that spread fear, turned “us” against “them,” and “we” into “me.”
  2. And the beginning of a new era!

While I know it won’t be easy, I believe Obama and his team represent the best — by far — that we could hope for right now.  It’s a tough job, and I know it’s not possible to please everyone inside America, let alone also outside America, but I believe he can/will do better than any of the others could have.



USA Bailout: So, How Much Is $700+ Billion, Anyway? And What Would Sweden Do?

UPDATE #1: See the comments to this post for updated numbers and links.

UPDATE #2: See updates and articles on my 2009-2-12 blog post. Also see this New York Times graphic: The tab is now $8.8 trillion, equivalent to the second largest economy in the world, behind USA at $13+ trillion.

The chart above shows the world’s largest economies (measured by GDP), ranked by size.  Assuming the US bailout is only $700 billion, the bailout is larger than all the economies highlighted in yellow.

Note: The bailout is actually already well over $950 billion if you count $150 billion stimulus package (checks to individual tax payers this spring), Bear Stearns, FannieMae, FreddieMac, and AIG.  If you add in the cost to bail out insured bank depositors and all the others who are lining up, it’s going to be well over $1 trillion. But let’s just call it $700-$800 billion for now.  How much is that?

As shown on the chart above (Wikipedia page here), it’s about the size of the Dutch economy, the 15th largest economy in the world (it shows as #16 on the list because the list counts the EU as #1). That’s a lot of “coffee”!

Remember, GDP (the “economy”) is the total value of ALL goods and services produced by ALL people and entities in a country in a year. All that money, down the drain.  Well, not actually down the drain, but into the pockets of those who profited on the way up (privatize the profits) and will profit and/or not lose as much on the way down (socialize the losses).  Nice.  Ok, I better nip that rant in the bud ’cause I gotta hop in a minute.

Real quick, lets say the bailout cost climbs to $1 trillion, how much is that? Larger than Mexican, Australian, and South Korean economies, getting close to the size of Inda’s and not far from Rusia, Brazil, and Canada.

Yeah, it’s that big…


Quick Updates: Stock Market, London, BuzzPal, Nouriel Roubini

2008-9-24 UPDATE: See here for pics and a complete debrief of me week in London.

Some interesting events since my most recent post (“The End of an Era“) and market update, when I said “it’s time to allocate some [brain] CPU and bandwidth, primarily for the purpose of monitoring the sentiment as it works towards its next extreme (and reversal).”

This is exactly what happened.  Unfortunately (for my trading), BuzzPal and I were in London for Seedcamp week, where we went to events, held meetings, and co-sponsored the first-ever TechCrunch Tech Talk, which was a smashing success and a great party, including after hours with some people you might recognize (see pic, below).


The End of an Era

Just a quick post to note today’s taxpayer bailout of Fannie Mae and Freddie Mac, which was inevitable given the system of corruption, which has been discussed on this blog since its inception over four years ago, such as in this April 2004 post, where I said:

What we have here is the greed-fed denial of a flawed system whereby real estate sales people, mortgage brokers, appraisers, Fannie Mae, Freddie Mac, and investment banks are driven to originate volume, earn their fees, and pass off the risk to others. It’s a great game in a booming market, but after markets boom there is another phase that ain’t so pretty.

One day this will unwind and besides creating some surprised and upside-down homeowners and burnt bond and asset-backed securities investors there could easily be enough carnage to carry beyond Capitol Hill and to U.S. taxpayers. Could even be enough to make the S&L crisis of the ‘80’s look like child’s play.

The man who said it best, and who thinks and articulates most clearly, is Nouriel Roubini:


What Happens Next to Fannie and Freddie?

Insolvency of the Fannie and Freddie Predicted Two Years Ago. What Happens Next? Or How to Avoid the “Mother of All Bailouts”
By Nouriel Roubini

A pretty good article from Nouriel Roubini. A choice quote below, then on to the article.

“Privatizing profits and socializing” losses may dominate the policy outcome. Financial institutions love a system where they gamble recklessly, pocket the profits in good times and let the fisc (taxpayer) pay the bill when their reckless behavior triggers a financial crisis; this is socialism for the rich. That is why you already hear the whole Wall Street Greek chorus moaning for a bailout of the GSEs.


“Must Read” Article And PDF

This essay is a “must read,” which is a phrase I can’t remember the last time I used. It’s 15 pages and I can’t even give it a proper introduction, you simply must read it, IMHO. And then ideally do something. I leave it to you to decide what. Here is the link to an introductory article on the NYT website, where you can find other links. And here is a link to the essay by Erik Camayd-Freixas.

Some excerpts and then on to the article:


Iraqi Refugees Find Sweden’s Doors Closing Immigrants Overtax System, Critics Say

I thought people and countries were supposed to clean up their own messes? I mean since when can you go into someone else country, destroy it, displace the occupants, and then expect other people to fix it, help those displaced people, and pay for it? It makes no sense, yet that’s what George Bush is doing with his Iraq war mess. Sweden is one of the countries stepping up to help the fleeing refugees, but the flow is too heavy.:

Sweden, which has one of the world’s most welcoming refugee policies, has become the new home of 40,000 Iraqis since the war began in 2003. Last year alone, more than 18,000 Iraqi refugees came to Sweden. According to the State Department, the United States has taken in roughly 6,000 Iraqis in programs for refugees and translators. If the United States accepted as many people per capita as Sweden, a nation of 9 million, he said, it would have taken in 500,000 refugees. If the United States accepted as many people per capita as Sweden, a nation of 9 million, he said, it would have taken in 500,000 refugees.

Iraqi Refugees Find Sweden’s Doors Closing Immigrants Overtax System, Critics Say

By Mary Jordan
Washington Post Foreign Service
Thursday, April 10, 2008; A01

SODERTALJE, Sweden — Behind the wheel of his old Ford Escort, Oshin Merzoian puttered happily along snowy streets. Back home in Baghdad, he said, he always drove at crazy speeds to avoid killers and kidnappers.

But here in “Little Baghdad,” as this city that has accepted roughly as many Iraqi refugees as the entire United States is called, Merzoian is enjoying the luxuries of living in peace. He doesn’t strap on a gun for protection, and he notes that Swedish police worry more about seat belts than roadside bombs.