The headline on offer in the American financial press is that according to the National Bureau of Economic Research (NBER), the Recession ended in June ’09. That was the bottom and since then things have been getting better.
Of course unemployment is a ‘lagging indicator’ in this analysis as is house building, house buying, foreclosure rates and levels of personal debt, commercial real estate and levels of National debt. But just because none of the aspects of the economy which effect you are doing better, and are in fact going to have to get MUCH worse under austerity measures, don’t let these details deflect you from the feel-good message. Wall Street and those who trade there are experiencing a rally of triple digit gains and that is what matters to those who matter.
Charles Munger who is Warren Buffet’s partner at Berkshire Hathaway had this to say at a recent discussion at the University of Michigan, to those not yet sharing in the Wall Street recovery – and I quote, “Suck it up and cope.” Mr Munger is is a billionaire and speaks for the 1% of America which owns 34% of the wealth. He was speaking to the 80% who hold a mere 7%. And of whom about 20 million have lost their jobs as a direct consequence of the bankers’ and speculators’ crisis. He also said people should, “thank God for Bank Bailouts.”
I put it to you that this quote is eerily reminiscent of Edward Teller’s (Father of the H-bomb and the real Dr Strangelove) famous cold war belief that, “People should love the bomb.” Referring of course to the atom bomb. He really did say that. He said it to me personally. And he meant it.
That was the Cold War. When we were collectively forced to waste trillions of dollars and rubles and pounds on weapons of mass destruction and the most obscenely immoral creed ever uttered by human kind, namely Mutually Assured Destruction. Which said because two groups of utterly arrogant shit heads didn’t like each other, it was perfectly fine for them to contemplate and engineer the end of a world inhabited mainly by people who did not care for and may not even have heard of EITHER of those groups.
Imagine if it was two groups of deranged Muslim fanatics who would rather slaughter us all rather than live under the other’s version of Islam, and had arsenal of weapons to assure they wouldn’t have to. How does that sound?
Anyway I digress.
Now we have the much colder war of austerity and debt indenture. In which we “should thank God for bank bail outs.” You heard the man. Get thankful and humble, and grovel while you’re at it! And get good at it because it’s going to be the new normal if we continue to let people like Mr Munger have power over us.
Get grovelling or get angry.
Ah yes those old chestnuts about lagging indicators. That may have been true in olden days but we now have a 'jobless' recovery. Corporation are exporting jobs for a start.
Another factor is the fixed term debt. I reading I think the Evening Standard about how to lose your shirt with commercial properties. These are some goodies yet to come. When these mature in the next couple of years folk will find that the loan is more, much more in fact than the value of the property. There was a story of how some property in London was sold at about 40% loss, but the consensus was this was a good deal as later on it will be much worse when everyone dumps their assets.
How that will play out for the man in the street I don't know. Does anyone here have an idea how that sort of commercial problem will bounce back and hit us?