The Schmooze: Below is a great (and very depressing) article from Rick Shwartz. I wish I could say I disagree with Rick…I really wish I could.

Are You Prepared for the Meltdown? Door #1 or Door #2

Morning Folks!!
We are at a dire point economically and the worst part is the fallout from all the closing and layoffs have yet to be felt. If 1/2 million people get laid off THIS WEEK it takes months before that really impacts the system. Some will impact immediately. The vacation, the eating out, the gifts, and then the important stuff follows later. You can’t put a happy face on this. We are in the midst of a total economic and banking meltdown that will melt everything in it’s path like lava flowing as a river after the volcano explodes. I watch this day by day and the events that are happening are so big and happening so furiously fast that the news can’t even keep up with it. Each passing day things are exponentially worse. With taxes right around the corner, the pain is about to be compounded.

So we are left with a couple of doors. If you think things will turn around by summer, then door #1 is for you. If you think things will be fixed by summer but you are not sure which YEAR that summer will occur in then door #2 is for you. I am a door #2 guy because I have yet to see anything to give me CONFIDENCE.

I remember in 2000 and using the word “Collapse” to describe what was to come. Most thought that was much too strong a word. It wasn’t as we look back. Today we face something much more serious and “Meltdown” is the new word and I could only hope to have been content with collapse. 2008 was a collapse and 2009-2010 is going to be the meltdown. I believe day to day life as we know it is in jeopardy and that is something I have NEVER seen before. Never felt before. Never had an indication of before.

Privately I started to write about this last summer. I am sure at that time even my closest confidants thought I exaggerated things. Looking back they know I got it right. I said early on that Main St. and Malls and every town in America was going to look different. Well, it is only a few months later and here we are.

Today for the first time I am using the word meltdown to describe what I see coming. But this meltdown could become political as well as economic as we have seen in peaceful Iceland. This meltdown may not send a “Coming soon” note. It may just show up on our doorstep one day when you wake up in the morning.

All you can do to prepare is to pay every bill you have off and make sure that your monthly “Nut” is as low as it can possibly be. If the common wisdom is to hoard cash, then your job is to question the common wisdom. Your job is to always question the common wisdom. The “Experts” keep being “Surprised.” How the hell can an “Expert” be “Surprised?” He is paid to be in front of things not be surprised by events and be behind the curve.

There are things a government can do to help. There are also things a government can do to make things exponentially worse. The problems are so deep, so systemic, so out of control, that you really have to stretch your thinking to believe this can be fixed in a short time.

567 Circuit City stores are about to be vacated and empty. 371 Linens and Things. Hundreds of other stores with every brand you can think of will be shrinking. Macy’s closing at least 12 stores. When do you think these properties will be occupied again? By summer???? I see more of you going over to door #2. Smart move if you ask me. I can’t even describe what I see coming. You can’t say this stuff out loud. But that won’t stop the lava.

Have a GREAT Day!

Rick Schwartz

Tweet This Post 

If you enjoyed this post, make sure you subscribe to my RSS feed!

NOTE: The following is an article I wrote about 3 years ago (ignore the citations). I think it is still very applicable today, and probably will be for a long time.

What is bias? Bias is a preference or an inclination, especially one that inhibits impartial judgment. It is also an unfair act or policy stemming from prejudice. What is media? It is a means of mass communication. Radio, newspapers, and television are all forms of media that dominate our everyday lives. They provide us with news, information, entertainment, and an overall picture of the world we live in. Media is perhaps the most influential aspect of the global community we all share. With that in mind, it would be naïve to neglect the existence of bias in the media. However, the question of the overall nature of the bias, is it liberal or conservative, is a much harder concept to fully grasp and make conclusions about than the simple existence of the bias itself. The only certainty that can be concluded is that there is bias in the media, and it is both liberal and conservative.

In an atmosphere of constantly changing issues, how is it possible to measure, scientifically, the treatment the issues receive in the media (Alterman, p. 15)? The answer to that question is that it is impossible to scientifically formulate a conclusion as to which side the bias in the media swings. There are strong arguments that the media overall is a liberal leaning entity. There are counter arguments that the majority of media outlets are run by a select few corporations, thus as a whole making media reflect the conservative views of big business. Both arguments are substantial and deserve to be dissected and reflected on.

According to Noam Chomsky, one of the leading left-leaning critics of government, media, and society for several decades, we live in a country based on a five-tier propaganda model, or set of news “filters” that inevitably lead to a conservative bias in the media. These filters include: the size, concentrated ownership, owner wealth, and profit orientation of the dominant mass-media firms; advertising as the primary income source of mass media; the reliance of the media on information provided by government, business, and “experts” funded and approved by these primary sources and agents of power; “flak” as a means of disciplining the media; and agents of power; “anticommunism” as a national religion and control mechanism (Herman & Chomsky, p. 2). When considering Chomsky’s argument Read the rest of this entry »

Tweet This Post 

If you enjoyed this post, make sure you subscribe to my RSS feed!

It is now widely agreed that the US financial market, along with the world’s banking institutions, are in a serious crisis that will not be eluded easily, quickly, or without enormous cost to the American taxpayer.  Bear Stearns was given away in a fire sale to JP Morgan at the expense of the American taxpayer.  Lehman Brothers, a 158-year-old investment juggernaut went to its knees, reached out its begging hat, and then went belly-up (pardon the cliches).  Merrill Lynch saw the writing on the wall and jumped onto one of the few ships that isn’t sinking like the Titanic and conceded to Bank of America’s wishes.

But why is it that when Secretary of Treasury Paulson and most of the financial analysts on your evening newscast are asked about the cause for the current calamity, they most often site the sub-prime mortgage crisis and the plummeting housing market?  Could all this really be the fault of loose-lending, outright mortgage fraud, and too many Americans buying more houses than they could realistically afford?  True, I have heard it mentioned, in a matter-of-fact tone, that these investment banks made enormous and clearly bad gambles on mortgage-debt backed securities. But what allowed them to enter into these convoluted schemes, highly leveraged, whereby they could lay claim to 100 times (probably more) the bad debt, than the actual capital they possessed?  Were these investment firms always so free to design their own ruin (and the ruin of their shareholders)? Is this present situation really just such a phenomenal perfect storm that no one could have foreseen?

THE ANSWER IS NO!!!!!

This country seems to be a poor student of its own history.  This latest catastrophe puts the final stake in the heart of the myth long-propagated by financial market execs and their legislative branch, also known as lobbyists.  That myth, which should breathe its last breath and tagged “Do not resuscitate”, is that of ”market self-regulation.”  Here we are nearly 80 years after the great-depression and its dawning day, Black Friday, talking about rampant speculation, like this is a new challenge for the government to regulate.

This wonderful and informative article by Mark Tran at the Guardian will tell you all you need to know about the true underlying causes for the meltdown.

One word to chew on: Deregulation.

Tweet This Post 

If you enjoyed this post, make sure you subscribe to my RSS feed!