When you bite down into that hamburger, do you know what's in it? Well, the new mystery meat is the massive financial black box(what's inside is anyone's guess!)world of derivatives and credit default swaps.
Finally, the New York Times writes a detailed article, What Created This Monster, and exposes even world leading economists do not know what derivatives are or in most cases, the details of how they work.
These products are virtually hidden from investors, analysts and regulators, even though they have emerged as one of Wall Street’s most outsized profit engines. They don’t trade openly on public exchanges, and financial services firms disclose few details about them
Folks we have the most despicable, Karl Rove propaganda tactics of upside down causality. Corporate lobbyists, with their journalist tools are now claiming offshore outsourcing jobs and labor arbitrage create jobs.
If you ever noticed how magically no-bid contractors sprung up upon the decision to invade Iraq or how conveniently the residents of New Orleans were bused out after Hurricane Katrina and the 9th ward was never rebuilt...how that little something isn't quite right fly buzzes in the back of your brain while you returned to economic survival of your own, I have a must read book for you.
Klein has identified a new corporate strategy of using natural and man made disasters to push through corporate profit driven privatization and other agendas while the general public are disoriented, confused and thus have no ability to resist.
She calls Disaster Capitalism the rapid-fire corporate reengineering of societies that are reeling from shock.
Guess what? Now there are two economies, one for the investors, super elites and the real one for the rest of us. We should not pay attention to the paper economy according to financial advisers, it's just the place where the super elites create investment vehicles, derivatives, hedge funds, bonds...and all of that stuff which is simply the trading of paper. Nope, the real economy is just fine. The trouble is this paper economy.
Industrial production plunged in February as net imports continue to hammer US production
Two economic reports today give further evidence the economy is in a recession with precarious and dangerous conditions unlike any past experience. The Federal Reserve reported today that Industrial production plunged by -0.54% in February. This sharp decline comes after an even worse decline (-0.58%) in October left a quarterly decline from Q3 to Q4 of 2007. That is, overall Industry output in February is below levels reached last July. It is worse for the Manufacturing sector with an output decline in Q4 and a -0.24% decline in February, plunging production now back to levels lower than last June.
Bloomberg
reports that the Fed over the weekend cut the discount rate 25 pts but also on Tuesday might cut rates as much as 1 pt!
The Fed lowered the discount rate to 3.25 percent from 3.5 percent, narrowing the spread with the federal funds rate to a quarter point from a half point. From tomorrow, primary dealers will be able to borrow at the rate under a new lending facility, to be in place for at least six months, the Fed said.
The actions are ``designed to bolster market liquidity and promote orderly market functioning,'' the Fed said. ``Liquid, well-functioning markets are essential for the promotion of economic growth.''
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