Yes that’s right. One of McCain’s economic Advisors thinks
we’re [not] on the brink not of recession, but of accelerating prosperity.
You think I’m joking?
The guy saying it today in the Washington post is Donald L. Luskin chief investment officer of Trend Macrolytics LLC. He says in the op-ed:
Full disclosure: I’m an adviser to John McCain’s campaign,
This is, well, INSANE.
Business Week: Wall Street’s Perfect Storm
This weekend:
- Lehman Brothers disappears in a poof of smoke. 4th largest investment bank.
- Merrill Lynch is in a forced sale to BofA.
- Wachovia, 3rd largest investment bank, speculated to be next.
- ~1800 of 8500 FDIC insured banks expected to fail in the coming year. FDIC is underfunded to protect against this many failures.
- AIG in dire straits. Just as an example of how pessimistic Wall Street is: Excuse, me: AIG just failed while I was writing this blog entry. Along with National City and Fifth-Third banks. WAMU is expected to go into receivership before the end of the week.
As of Friday’s close, AIG had a market capitalization of $32.99 billion. AIG generated $33.96 billion in revenue during the first half of 2008, 45 percent less than the $61.8 billion generated during the first half of 2007. [AIG's value is LESS than their revenues for 1/2 a year!]
Last 1-2 weeks:
- Fannie Mae and Freddie Mac, accounting for more than 1/2 of ALL mortgages, are insolvent and need bailout.
Last month:
- Indy Mac fails: 3rd largest bank failure in history. Over a dozen other major bank failures in the last 6 months.
- July inflation rate at 0.8% in one month.
- August unemployment is at 6.1%, the highest since 2002.
Last six months:
- 463,000 jobs lost so far this year (July, Bureau of Labor Statistics)
- Countrywide fails and is bought by BofA
- Citibank bailed out by Saudi sheik.
- Bear Stearns, 5th largest investment bank, fails and is bought by J.P. Morgan with assistance from the Fed.
- American Home Mortgage up in smoke.
- Numerous other smaller mortgage companies fail
Last several years:
- Unprecedented deflation of the U.S. dollar
- Unprecedented increases in the cost of commodities. Copper up ~400%, Aluminum up ~200%, Rice up ~300%
McCain’s advisor is right about one thing. We’re not on the brink of recession. We’re on the brink of depression.
John McCain? He thinks the economy is just fine.
