Friday, March 6, 2009

The Big Black Bailout Hole....


Update: This is in reaction to the assumption that by not supporting "The Bailout", we are setting ourselves up for a total manufacturing failure here in the U.S.

Please explain to me how banks failing would affect manufacturing. Keep in mind that manufacturing of products that depend on "buzz" or "marketing" are already at a standstill, as there is no "credit" to be had.

If there is an actual need for something, and there is a way to pay for it (credit is already gone, ask any LLC or PLLC - or any corporation for that matter - operating on a P&L statement line), then things will get made because of actual demand, not an artificial demand - the artificial products that most companies market and depend on people (falsely) needing.

(Guess what? You don't need a new car. Or expensive designer clothes. You need food and water and a place to live.)

We are extending and deepening the damage. The dollar will devalue and businesses that trade in artificials such as derivitive investments will fail anyway, no matter how much worthless, unbacked pieces of paper or electronic blips we throw at them and they absorb. The later they fail, the more they take with them.

My guess is that this has already gone from a two year recession into a 4-5 year depression. Continuing the policies that are being dictated by AIG and Goldman Sachs will turn this into a 7-10 year depression.

To rehash, those businesses operating off of bank loans based on either a P&L statement or inventory will have a tough time of it. Those companies making goods that are needed and those with cash reserves accumulated through good business sense AND making a needed product, will have a much better chance of surviving. Those selling "services" will have a tough time of it, even with reserves.


On the "stimulus package": so far it is a play to pass partisan government programs. Both Emanuel and Clinton have been quoted using the same basic language: "never waste a good crisis". We're getting the bailout just like we got the "Patriot Act". Both were reactionary, the difference is that the P-act can be repealed, but the cost for the bailout is with us always, or at least until the death of the dollar.

Again, our government policy is being dictated by AIG and Goldman Sachs. We are being led down a big black hole BY the big black hole.

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Our government is an accurate reflection of the majority of citizens. And those of you who take this post seriously are in the minority.


Simply, there is too much debt and not enough savings.

The big difference between Right Now and the last twenty years or so is this:

In Good Times, people believe what is called "marketing", and a large percentage of them rush out to buy that which is "marketed". In Bad Times, they take a second look at the "marketing" and ask themselves "Is this something I really need?" The worse the times, the less "things" people really need and as economic realities set in the less subjective need becomes.

The idea that people acting sensibly is bad for the economy is the normal BS from the same people who came up with the "derivative investment". (If the majority of our purchased goods were manufactured in the U.S., then it would be different.) We are all learning that acting like it is Bad Times whether the economy is strong or weak is GOOD. If we all act like it is Bad Times all the time in relation to our personal finances, then we all have a better chance to experience financial Good Times all the time.


On lay-offs:

If your company makes a product that looks old, but isn't, and has much less intrinsic value than you charge for it, and really isn't a "one-of-a-kind work of art", is this not bound to happen - and sooner, rather than later? It amazes me that these companies survive for the amount of time that Longaberger has. What surprises me even more is that they expect to thrive when in reality they should die a quick death.

Outside of the short-term "buzz" marketing that succeeds only in Good Times, any company that produces product that nobody really needs cannot stay in the market.

We forget that NEED always trumps a faux created "demand". Don't confuse real demand or NEED, with "marketing". Marketing without good product to back it leaves you dying or dead. If you don't provide something that people NEED to make their lives easier, then you better get out now and get into a business grounded in the reality of need.

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