It's the Infrastructure Stupid
Obama used his weekly radio address to discuss some of the infrastructure measures he intends to implement. Improve roads, energy efficiency and public safety while creating jobs. Finally, we are going to be getting some bang for our buck.
I really like the way this guy is thinking. This is the perfect time to spend obscene amounts of money to achieve things we need to achieve. It supports the economy much better than the handouts to date, it builds jobs, it gives us a foot up on our future and it solves - or at least helps to solve - multiple problems at once. Wish I had thought of that.
I do think we need to support - massively - development in this country of alternative energy concepts. If we come up with the best batteries, the best solar panels, the best wind turbines, the best algae farms, the best nuclear energy technologies, etc. then we have developed high end export opportunities. We can become the country that others come to for their energy needs. It will take time and money (that we will spend either way) but it is a good thing to try to achieve. As they say - win/win.
In the interest of full disclosure, I have all of a few hundred dollars invested in an algae company.
http://change.gov/newsroom/entry/the_key_parts_of_the_jobs_plan/
Don't get me wrong here; infrastructure and other spending will drag on for years and will by no means be a quick fix. I don't mind this at all because - you can quote me on this - ain't no quick fixes to the mess we are in. This is going to hang on for the long run and a fix that makes jobs in the long run is a good thing. We have spent a bit too much time focusing on putting out fires and we should focus more on the medium and long term issues.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWVkfEb8G6z0&refer=home
While I think the plan makes sense as it addresses the problem from the bottom up, all things said, there is not a whole lot the government can do. We a reverting to mean on a variety of fronts and trying to prevent that from happening is folly. The best the government can do is try to deal with collateral damage and seek to avoid utter chaos. One off solutions to problems as the arise - such as the car industry going under - will be a necessary evil. But any thought that some grand scheme for spending trillions will correct the problem is nonsense. The truth of the matter is that the problem is in the process of correcting itself. Sometimes we don't like the taste of our medicine, but we still need to take it. Hold on to your seatbelts, however, as this problem was building for long time and will take a long time to correct. Hunker Down!
Such as the Car Industry Going Under . . .
I read today that the car industry is getting $15 billion. Less than half of what they wanted, but enough to keep them from running out of gas (pun intended) this year. My suspicion is that Congress wants to keep their feet to the fire. Let them know that they need to do whatever they can on their own and that Congress is not going to just rush in and save them. Not a bad approach overall. It gives the car companies leverage to negotiate with their creditors and unions, but on the flip side it makes third parties more hesitant to lend them credit or otherwise take a risk with them. Let me scratch that last point. Anyone with a brain is already hesitant - to say the least - to lend them credit. Heck, AAA rated companies can't get credit today, so who is going to lend to GM. Double heck, I can get more credit today than GM. So, just scratch my last comment. Let me just revert and say Congress is right to keep their feet to the fire. And other companies in the furture seeking handouts should get the same treatment. No more handouts with no strings attached to companies paying bonuses and dividends. Been there, done that and it does not work.
23 and Counting
Another Friday, another bank. The 23rd bank to go under this year is a small one in Georgia. Not a big deal. Absent some political reason, these are always announced on Fridays. I am a bit surprised we are only up to 23. The FDIC did a good job several months back, I believe in the summer for the most part, expanding offices and hiring new people, as well as bringing back retired people, to get ready for a crunch. They did have a few big ones, like IndyMac, and a few monsters that were close, like Washington Mutual and Wachovia, but overall they have been spared the worst of what they anticipated. Don't relax yet though, there is plenty more to come.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZaygdnrdX5U&refer=home
Tanta's Mortgage Pig
One of the authors of Calculated Risk, a very good blog on the real estate/mortgage/credit market died last Sunday of cancer at 47 years of age. This link leads to items she and others created to benefit cancer charities.
http://shop.ebay.com/merchant/bombtostick
Three Last Names
I provide this article because my blog is about educating and giving food for thought. The motto here is that knowledge is power. I simply seek to pass on the former. The attached is by a Brit, Ambrose Evans-Pritchard, the man with three last names as his name. Parts I agree with and parts I don't, but either way, a piece worth reading and developing your own take. He does make a good comment on deflation, which we are starting. Fixed requirements like fixed mortgage payments are heavier burdens during deflationary times. Then again, other prices like gas go down to offset that burden, so go figure.
Late, Tired, Bed, Later . . .
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