OpEdNews » History Book's New D-Day: 11/07/07

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November 8, 2007 at 06:57:01

Headlined on 11/8/07:
History Book's New D-Day: 11/07/07

by Michael Fox Page 1 of 1 page(s)

www.opednews.com

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Mark your calendar! 11/07/07 - Today is D-Day, the date the history books will record the start-date of the new Depression. Ironic - those "lucky numbers". It's not hyperbole, and here’s why (never mind the 400 point Dow drop, that’s happened before):

The Chinese had begun a sell-off of their US securities. They have dollars held by their government and, separately by their treasury (like the Fed).

Today, that entity has made clear that they will be unloading some $400 billion, which they already began in August (according to the China Daily, they sold off $9 billion - without buying any new debt in that month alone) in an attempt to divest of American Government securities. (They still hold over a trillion dollars of, well, other dollars – stock, corporate paper, etc)

The Japanese, not to be outdone, sold off some $24 billion in US treasuries in August.

Today, GM posted a loss of $40 billion in the 3rd quarter, because they had so much anticipated income from anticipated tax credits that they had opted to show as possible income FOR THREE YEARS in order to minimize the appearances of real losses – that they now had to suck it up and stick it all on the balance sheet for this one quarter, even though – at selling cars, they made a profit in that quarter! Can you wrap your mind around LOSING 40 BILLION DOLLARS IN 3 MONTHS? There are many nations that don’t have that number for a GDP, annually. This is America’s great manufacturing giant. And, as they used to say, what’s good for GM is Good for America.

So, America, let’s just all write-down our losses in the third quarter and move on, shall we?

Today, Washington Mutual (the one hitherto considered clean), got nabbed on CRIMINAL charges by Andrew Cuomo, Attorney General of NY for their mortgages (specifically for defrauding Freddie Mac and Fannie Mae with bundled mortgages).

Today, the Europeans (as I pointed out in my January 07 letter, not published on SC - everyone else thought they were safe) are suffering too. BMW and LVMH both took large hits on their stock values, as they realize that all that entry-level luxe crap - that foolish Americans were mortgaging the floorboards to buy - will no longer sell (3-series BMWs are where the money is, but that market just slammed shut, similarly Louis Vuitton, which has opened dozens of mall stores to sell items that used to be exclusive, may as well close those doors, because the market will revert to the rarified air it used to breathe, and all those middle class gals who've been buying $1200 purses will do so no more, because you can't mortgage a house after it's been foreclosed.

Today, like when banks began to fail in 1932, we know who's in charge, and how his policies got us here. We’ll survive until we have a new president, and we will begin again. And the good news is that from here out, we will be in a rebuilding phase. The dinosaurs have failed themselves and us, but we will build a new and better economy. I'll tell you all about it...

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8 comments

Bruce is 46 year-old father of one, stepfather of three and grandfather of two, who left a lucrative law practice at a large national law firm to work, advocate and write for social justice and equality and find a way to incorporate a spiritual life into the material world. He now struggles along to make a decent living while holding true to his deepest principles in Portland Oregon.
Bruce Allen MorrisBruce is 46 year-old father of one, stepfather of three and grandfather of two, who left a lucrative law practice at a large national law firm to work, advocate and write for social justice and equality and find a way to incorporate a spiritual life into the material world. He now struggles along to make a decent living while holding true to his deepest principles in Portland Oregon.

I Hope . . .

Your concluding thoughts are correct. I fear we are looking at another 4 years of Republican executive rule before we learn our lesson and get back on track.

I hope by then its not too late.

Anyway, thank you for your work and insight.

by Bruce Allen Morris (34 articles, 0 quicklinks, 10 diaries, 48 comments) on Thursday, November 8, 2007 at 10:32:49 AM

I Hope . . .

Your concluding thoughts are correct. I fear we are looking at another 4 years of Republican executive rule before we learn our lesson and get back on track.

I hope by then its not too late.

Anyway, thank you for your work and insight.

by Bruce Allen Morris (34 articles, 0 quicklinks, 10 diaries, 48 comments) on Thursday, November 8, 2007 at 10:33:02 AM

Michael Fox is a writer and economist based in Los Angeles. He has been a corporate controller, professor, and small business entrepreneur. After a life-altering accident, he spent five years learning more about medicine and the healthcare industry than he ever intended. In addition to writing about economics and related geopolitical issues, he is passionate about the performing arts and writes theatre, film, and opera criticism.
Michael FoxMichael Fox is a writer and economist based in Los Angeles. He has been a corporate controller, professor, and small business entrepreneur. After a life-altering accident, he spent five years learning more about medicine and the healthcare industry than he ever intended. In addition to writing about economics and related geopolitical issues, he is passionate about the performing arts and writes theatre, film, and opera criticism.

Because it must be

It's unacceptable to merely point out the alarming news without looking for some solutions, which I will provide in my next column. It isn't just "hope" - there is no alternative. the American people will have to pick up the pieces of the mess we've been left and build a new economy.

by Michael Fox (47 articles, 0 quicklinks, 4 diaries, 34 comments) on Thursday, November 8, 2007 at 1:19:51 PM

SW Texas ultra-liberal
john riggsSW Texas ultra-liberal

as the boy scouts say be prepared

I suggest you all stock up on storable foods before the deisel hike is reflected at the supermarket. 2o pound bags of Casserole brand pinto beans may be bought at wal-mart and Doguets brand fancy rice also 20 lbs. both are Texas products and of the highest quality. I then put them in clean 5 gl. buckets with gasket seal lids (get em from the doughnut shop) Gallons of cooking oil,salt,sugar,spaghetti and noodles will have good shelf life. Canned goods are ok but check the expiration dates. When the caca hits the Kelvinator I will trade a pound of beans for a Kruggerand.

by john riggs (0 articles, 0 quicklinks, 0 diaries, 426 comments) on Thursday, November 8, 2007 at 5:06:55 PM

Jim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines.
Jim FreemanJim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines.

THE SAVING GRACE OF THE CAPITALIST ECONOMY

is that it can't really be 'managed' in the sense that this administration has tried to manage it. It comes undone.

I have commented elsewhere that the Fed has made the same mistake as the Forestry Service in putting out small fires. The Fed intervened in the S&L scandal, intervened during the Dotcom burst, is intervening again in the current sub-prime disaster.

Like the national forests, these continual 'small interventions' keep the underbrush of greed and bad investment decisions from getting cleared away by small recessional fires. Thus we almost assure ourselves of a stock market inferno on the scale of Yellowstone (if not 1929).

The Chinese, along with most of the alternative investors in our continual deficits, have tired of making 10 yr loans, paid back on the due date with dollars worth half the original investment. Who can blame them.

I live in Europe on a social security check that has been devalued by half in the past six years. Those who warn against depending upon ss for retirement might add the disclaimer that it's even tougher to live on 1/2 ss.

I have been declaring an imminent market crash for 20 yrs, but the likes of Alan Greenspan and Henry Paulson have been able to douse the small fires. Now even Paulson can't stop the Chinese from their self-interest.

I look forward to Michael Fox's next piece.

by Jim Freeman (108 articles, 51 quicklinks, 221 diaries, 382 comments) on Thursday, November 8, 2007 at 7:33:27 PM

.
TomK .

The fun begins

It takes two to tangle. In this case, the US is tangling not only with China but also product exporting Asian countries and certain Arab oil exporting countries. These exporters know the US consumers will buy their stuff until they are bankrupt. It a replay of the opium being imported into China during the 19th century, which of course uttlerly bankrupted both China and its people. That's why these exporters have steadfastly refused to float their currencies up to reflect trade gap. They know full well US currency must therefore drop in response, and they will be hurt too. But there is difference. It is the American people who are smoking opium, not the exporters.

After the crash, the US economy will be deeply downsized, inflation rampant, and the USD will no longer be the sole reserved currency. Kinda like Argentina. But the exporters will be able to salvage a large portion of their foreign reserves by moving them to other leading currencies (which is exactly what's happening now). Then the fun starts - they will use the diversified reserve to buy up a good piece of a very cheap US - real estate, promising technology companies, you name it.

Hay haven't we seen this before? You bet. After the USD was devalued 35% in the mid-1980's, along with a deep recession, Japan, who held a huge USD reserve, came in and bought up all the crashed US consumer electronics companies. Go to Best Buy now and look around - every single consumer electronics high tech is pure Japanese. An entire industry disappeared in US. Today, American kids look to Japan for technology and product guidance, confident that when they grow up there will be absolutely no career in high tech electronics.

So what will disappear this time around? Ah yes - Japan will take over the entire US auto industry. And China - no China won't come in and buy up things in US soil - that will cause great political problems. China will simply buy up all the American companies operating in China!!

by TomK (0 articles, 0 quicklinks, 0 diaries, 217 comments) on Friday, November 9, 2007 at 12:25:33 AM

KEVIN STODA has been blessed to have either traveled in or worked in nearly 100 countries on five continents over the past two and a half decades. He sees himself as a peace educator and have been a promoter of good economic and social development--making him an enemy of my homelands humongous spending and its focus on using weapons to try and solve global issues."I am from Kansas so I also use the pseudonym 'Kansas' when I write and publish. I...

to see more of bio, click on member name
ALONEKEVIN STODA has been blessed to have either traveled in or worked in nearly 100 countries on five continents over the past two and a half decades. He sees himself as a peace educator and have been a promoter of good economic and social development--making him an enemy of my homelands humongous spending and its focus on using weapons to try and solve global issues."I am from Kansas so I also use the pseudonym 'Kansas' when I write and publish. I...

to see more of bio, click on member name

Dark side

Well, it is true that the usa has been in an economic spiral for years. It has simply been kept from a big big fall for sometime by Japan, China, Oil Kingdom governments and some big banks in the USA and around the world.

The only bright side is that as the dollar falls more people will visit the states and buy up cheap businesses and stocks at some date in the future--to keep things even again.

In addition, the ability of America to sell products abroad will increase.

However, most Americans--unless they give up their homeland and move abroad to work--will not be able to afford overseas vacations for a long time....as the worth of the dollar begins to reflect the bad priorities of military and other poor spending decisions creating bad debt and bonds to be paid off.

by ALONE (130 articles, 1 quicklinks, 4 diaries, 282 comments) on Friday, November 9, 2007 at 11:18:26 AM

Justin Soutar is a Roman Catholic freelance writer from Ohio. Since 2005 he has published twenty-five articles on pro-life issues, the Pope & his message, American politics and elections, terrorism, the Middle East, and other topics in a wide variety of Internet and print publications.

I was born and raised a devout Catholic and a patriotic, conservative-leaning, Republican American. Early on I acquired a keen interest in politics. At age 10 I memorized parts of a 1996 presi...

to see more of bio, click on member name
Justin SoutarJustin Soutar is a Roman Catholic freelance writer from Ohio. Since 2005 he has published twenty-five articles on pro-life issues, the Pope & his message, American politics and elections, terrorism, the Middle East, and other topics in a wide variety of Internet and print publications.

I was born and raised a devout Catholic and a patriotic, conservative-leaning, Republican American. Early on I acquired a keen interest in politics. At age 10 I memorized parts of a 1996 presi...

to see more of bio, click on member name

Approaching Depression

Michael Fox, thank you for this brief, interesting, and informative article. I agree that we're headed for a Great Depression even worse that the one my grandparents lived through. The banks, corporations and government have been playing lots of tricks to stave it off, but we can't avoid it forever.

by Justin Soutar (6 articles, 0 quicklinks, 1 diaries, 25 comments) on Friday, November 9, 2007 at 12:24:52 PM