Sep 16 2008

Obama’s Doom & Gloom Fiasco Is Borderline Treason

Published by at 8:57 am under 2008 Elections,All General Discussions

This nation is very strong an resilient. We have not only survived but risen above many events in our history. The Obama campaign is attempting to scream fire in a crowded theatre (when there is no real fire but simply another event we have to work through). It is a cynical and dishonorable effort to create fear for votes. It would make Joseph Goebbels proud in that it is trying to create a panic to gain power.

The fact is we have seen these corrections many times and survived just fine. The Dow lost around 500 points yesterday, equivalent to 4% of its value. Does anyone remember the crash of 1987? Very few do, but that year, on what is called Black Monday (which no one remembers), the markets took one of the largest hits on record – also a 500 point drop:

In financial markets, Black Monday is the name given to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short period. The crash began in Hong Kong, spread west through international time zones to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1739 (22.6%).[1] By the end of October, stock markets in Hong Kong had fallen 45.8%, Australia 41.8%, Spain 31%, the United Kingdom 26.4%, the United States 22.68%, and Canada 22.5%. New Zealand’s market was hit especially hard, falling about 60% from its 1987 peak, and taking several years to recover.

The difference being the value of the market oin 1987, where the Dow was sitting at 2247. Today, even after the drop, it ended up around 11,100. Yesterday was not the second coming of the Great Depression, as Obama likes to scream. It is only a small fraction of the 1987 – which no one remembers. Why? Because we worked through it.

9-11 also gave us a huge jolt, but because it was an act of war it had even more emotional impact, and took more wind out of the sails of the economy than the simply drop in the level of the Dow. It was a lack of confidence that did the damage. A lack of confidence Obama is trying to instill in the nation so he can win an election. There is nothing lower than working to destroy the wealth of this country in order to win an election.

The following chart shows a logrithmic representation of the Dow Jones Industrial Average. The second one shows the actual values (reference). You can clearly see he 1929 crash, but the 1987 and 2001 losses are not readily visible. If Obama was a true leader he would be instilling confidence in the market and making sure we don’t hurt ourselves over an uncalled for panic. Instead, being the power hungry man he is, he is running around claiming the sky is falling, hoping panic can fix his ailing campaign.

Obama became famous trying to lose the Iraq war to al-Qaeda. Now he is trying to win the presidency by instilling panic and destroying our country. Is this the kind of ‘change’ America wants or deserves? Clearly not.

19 responses so far

19 Responses to “Obama’s Doom & Gloom Fiasco Is Borderline Treason”

  1. dave m says:

    OK, this doesn’t quite belong here, but AJ, you might want
    to comment on this threat.
    The Snippett is from whom I find pretty dam credible
    on news on the war on islamic terrorists.

    Tuesday, 16 September 2008 Daily Pk Pakistan in unequivocal terms has said that it would halt supply of oil and other commodities to NATO in Afghanistan if the US troops continue to violate country’s border. Private TV Channel quoted government and defense sources saying Pakistan would also hold fresh talks on agreement struck between Former President Pervez


    Now to me, that would seem to put Pakistan firmly in the terrorists’ camp?
    Now to me, I would go in and disarm them from having nuclear weapons.
    Non? A couple of months after Nov 4? So many terrorists – so little time !!!

  2. WWS says:

    I wouldn’t dismiss the situation as insignificant. You know I’m no Obamacan, but he’s not the only one saying this is the worst financial crisis since the great depression – Alan Greenspan has said the same thing, and I can guarantee that every one of the governor’s at the Fed. Reserve and Sec. Paulson are tearing their hair out at nights trying to stop the next great crash.

    What is important is to look at the policies the candidates propose – which is better? I remind readers that Hoover’s response to the initial downturn was to raise tax rates, in order to keep government income up, and to raise tarrifs on imported goods dramatically in an attempt to save jobs. These are exactly the policies that Obama and the Dem’s are proposing in response to this crisis. How those worked in practice – increasing taxes in a depression destroyed disposable income, which destroyed consumer spending, which destroyed jobs. Increasing tarrifs destroyed foreign trade when other nations did the same in return. The net result of these two policies was 25% unemployment and a great depression that ended in world war. These are Obama’s proposals today.

    We really do have a once in a lifetime financial crisis on our hands, as Greenspan and many others have said. Our vote has a great impact on the economic future for this country. If Obama is able to implement his policies, it really will be 1931 all over again.

  3. dave m says:

    Why should I care about a bunch of Wall Street Hipsters that went
    They’ve been selling crap investments to people they didn’t care
    doodly squat about for years.
    All they cared about was whether the Porsche was serviced, they had
    a sixpack of champagne, and a hot chick for the night.
    The rest of the world could go to hael.
    Let them fail. They deserve it.


    Same with every home make over nut that assumed the price of
    houses was going up like forever, even when it was obvious the
    situation was unsustainable because no young couple could enter
    at the bottom of the housing ladder.

    This collapse is made of pure Wall Street greed and pure City Mile Greed.
    Let ’em stew in it. Of course Obama can make it worse. But I don’t
    think it’s that bad to begin with. All those traders, let them find a real job.
    If any of them had the sense to sock away most of their income while
    the going was good, they won’t have to work again for the rest of their
    lives. Boo Hoo.

  4. VinceP1974 says:

    Obama the Marxist must make people think they are living in the worst times, so that he can swoop in and fix the emergency.

    Just like every other dictator

  5. WWS says:

    The reason you should care, Dave, is that the Feds are going to end up nationalizing large parts of the banking, insurance, and mortgage industries. Well, the mortgage industry was already nationalized a week ago, when Fannie Mae and Freddie Mac were taken over. This week it’s AIG’s turn. By December it will probably be Ford, GM, and Chrysler’s turn.

    This is going to result in a French-style economy where our own government owns huge positions in huge and important parts of our economy. I think that’s something worth caring about.

    Why would this happen? Because there may be no other choice.

  6. dave m says:

    I see your point.
    But I’m not too worried if our government owns some industries,
    particularly energy ones, if it finally drives a stake through the heart
    of that monster called “globalization”.

    I’m a Republican, but I ain’t no Free Trader.

  7. VinceP1974 says:

    How is any of this Constitutional?

  8. WWS says:

    Good question, Vince, because there’s a very ambiguous little clause which Congress uses to justify almost all of it’s ambitious legislation.

    Article 1, Section 8, last line:

    “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers,”

    Congress claims that every new law is “necessary and proper” in order to carry out it’s other powers. Voila! Almost anything becomes consitutional. THAT’s how the fed. govm’t has justified it’s expansion ever since FDR.

    About the only way to defeat this is to find something in the bill of rights that expressly forbids Congress to take a certain action.

    Sadly, no court, not even the Supreme Court, pays attention to the 10th amendment anymore. It’s been informally written out of the consitution, which is a huge error.

    Tenth Amendment:

    “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

    They got around this by claiming that the “necessary and proper” clause trumps the 10th amendment. As I said, a huge historical error.

  9. Terrye says:


    I think Greenspan is trying to point fingers elsewhere, there are after all a lot of people out there who think he is responsible for this.

    But in truth, the Bush administration has been trying for years to get the Democrats in Congress to either increase oversight or give it to the Federal government. Their attitude was crisis, what crisis?

    This started about a decade ago when the Clinton administration and Democrats wanted to make it easier for minorities and poor people to buy property. That lead to 100% loans and poorly regulated markets. There is enough sin to go around here, but this is not the end of the world.

    The Dow is up about 150 today.

  10. Terrye says:


    You sound like Hugo Chavez.

  11. WWS says:

    market is betting that Paulson will bail out AIG. He probably will, because to not do it would collapse a big part of the economy. A bailout will be good in the short term – but no one can know the long term effect of effectively nationalizing a large part of the insurance business.

    Latest I’ve heard is a proposal to put AIG in a “conservatorship.”
    No one knows what this means, since it’s never been done on this scale before.

    The reason there is so much concern about AIG is that if AIG defaults, it could be the trigger in a long line of banks that would then fail like dominoes. Maybe not, but does Paulson want to take that risk?

  12. Redteam says:

    Dave, I feel pretty much like you do. (except I am in favor of globalization). Just as I didn’t feel sorry for those at Enron that made a living driving up energy costs for the people, I don’t feel sorry for those at Lehman, etc that are making a living by driving up housing costs for the rest of the planet. I’ll bet when all the stones have been turned over, you’ll find that superrich such as George Soros are the ones that deliberately created this situation, for two reasons, make money and get obama elected so that it will be even easier to control things in the future. I don’t agree that the government bailing out companies, such as GM, Ford by guaranteeing loans creates an ‘ownership’ by the government. I know that when I had a home loan, I didn’t feel like the mortgage company had any say in running my house. I never have understood how all this mortgage ‘repackaging’ works anyhow. One company gives a mortgage (to someone that can’t afford it) then re-sells that mortgage to another company. Doesn’t that second company even look at the fact that the person that has the mortgage can’t afford it? I don’t understand all that.
    One thing I’m wondering. Let’s say these companies ‘write off’ these terrible loans (that they shouldn’t have made in the first place), does that mean the people that got the loans, don’t owe any money? I would think that if I had a home loan at a bank and they told me they wrote it off as a loss, that I wouldn’t owe them. What do you think?

  13. WWS says:

    Redteam – no, the debtor doesn’t keep the property in a writeoff. That would be insane – why would anyone pay off any loan if that were possible? What the lender does is foreclose, seize the property and evict the borrower. Then the lender resells the property. The problem is that some markets have fallen so far (Florida, California, Arizona, Nevada) that when the property is resold, the lender will only recieve 50 cents on the dollar for the loan amount. For example, a house in Las Vegas with a $500,000 loan from 3 years ago can be sold for about $250,000. And prices are still dropping as more and more foreclosed houses are being dumped on the market. And of course, as prices drop more and more people choose to default. Who wants to keep making $500,000 note payments on a house that is now worth only $250,000? Most people will not.

    What banks are doing is to write these loans down to zero on their books, reflecting the reality that they don’t know what the actual value of these loans are. Then they go through the foreclosure process and resale process, and they can book the final return as income. 50 cents on the dollar is a pretty good return these days on the high end loans. But writing down the loans and realizing the losses knocks many banks capital below regulatory required amounts, which is when the FDIC steps in and the bank fails. Several prominent banks (WaMu for one) are only staying solvent by intentionally ignoring how many of their loans are bad. The second they face up to reality is the second they fail. The FDIC knows they should go after the banks they know are bad, but they are scared of starting a widespread banking panic.

    in other news:

    rumours have it that Bernanke and Paulson tonite have decided that a failure to bail out AIG will result in a 1929 style “great crash” within days. Which is why there will be a megabillion dollar bailout. Of course, all of this money from the taxpayers will be gone for good.

    If you haven’t been watching this closely, it’s easy to underestimate how serious this situation. I can guarantee you that this is the most serious financial situation any of us have ever seen in our lives. AIG is the largest insurance company in this country, and the way things are tied together if AIG fails many other financial companies could fail in turn. AIG is one of the foundation cards in a very big house of cards, and if they fail everyone who depends on them could fail.

    Is this similar to 1929? Yes it is, but the outcome doesn’t have to be the same. Very bad decisions were made 80 years ago which resulted in a depression – those mistakes don’t have to be repeated. But even the right decisions are going to be very, very expensive to the taxpayers.

  14. MerlinOS2 says:

    Yes it is concentrated around the fallout in the financial sector and that is a valid issue.

    But when you look at the big picture and scale it out this really still fits in the area of a market correction and not the meltdown some wish to play it as.

    Spinning the news…I’m shocked I tell you…shocked!

    I have hundreds of indicators I watch and what I am seeing now is a unwinding of some bad positions that needed to be trashed long ago but many areas of solid opportunity out there.

  15. WWS says:

    if you don’t mind, I’m curious what you think are areas that are undervalued. For example, I think Nat Gas companies have been beaten down far below any reasonable valuation over the last few weeks. The way they have acted has given me the suspicion that some very large players are liquidating positions frantically.

  16. VinceP1974 says:

    I hate these people, i really do

    Pelosi: Dems bear no responsibility for economic crisis
    By Klaus Marre
    Posted: 09/16/08 04:14 PM [ET]

    House Speaker Nancy Pelosi, when asked Tuesday whether Democrats bear some of the responsibility regarding the current crisis on Wall Street, had a one-word answer: “No.”

    Pelosi (D-Calif.) ripped President Bush’s “mismanagement” of the economy and a lack of regulation that led to the current situation.

    “I think the American people have had it with this situation where the middle-income people in our country are not protected from the ramifications of the risk-taking and the greed of these financial institutions,” Pelosi told MSNBC.

    When asked whether the Democrats “deserve some responsibility” regarding the economic crisis, Pelosi responded: “No.”

    “John McCain said that this is a result of overregulation by the Democrats in Congress,” she added. “Either he doesn’t know what he’s talking about or he’s misrepresenting the facts as he knows them. But it’s simply not true.”

    Republicans responded quickly, pointing out that a Congress led by Democrats had not helped the economy.

    “The Pelosi-Obama Congress has failed to pass an all-of-the-above energy plan, failed to stop earmarks, and failed to break the partisan gridlock that plagues Washington,” RNC spokesman Alex Conant said. “If Pelosi thinks the Democratic Congress is doing a good job handling the economy now, then just imagine how bad our economy would be if Democrats controlled the White House, too.”

  17. WWS says:

    Good News! Paulson has agreed to give AIG $85 Billion of your money! The economy survives, at least until the next bailout.

    And you, the taxpayer, now own 80% of the biggest insurance company in the country.

    But don’t say we’re socialists. We believe in the free market! (except when that belief gets too inconvenient)

  18. Redteam says:

    Good News! Paulson has agreed to give AIG $85 Billion of your money! The economy survives, at least until the next bailout.

    WWS, you seem to be saying it would be much better news if we were announcing a ‘great market crash’.

    So, on your comment from above, when it is all settled, AIG will recover about 50% after all the lawsuits and they will then be able to pay the government back.

    I agree with AJ’s assessment from above, one year from now when you look back at the Dow, you won’t even see this blip. (assuming John McCain won) I remember thinking ’87 was big at the time, now I can’t see it in the chart.

    and the economy, my portfolio is worth more today than it was a month ago. while the dow has gone down 18%, I’ve gone up 6% love those bond funds at times like these.

  19. WWS says:

    you are doing well to be in bond funds – everything else is being unwound. Hope yours are all government issued – and I suppose you do realize that a bet on bonds is a bet that the general stock market is going to tank. (which is why you are up. I think you will continue to be up, so congratulations)
    As far as seeing the blip – look back at the NASDAQ in 2000 – I think you can still see that “blip”. What’s happening now is much, much bigger. That was just dotcoms – what’s falling apart today is the glue that holds the world economic system together. It’s not really the government’s “fault”, and if it is it’s only to the extent that it’s the fault equally of every government, every company, and every investor in the world, who all got comfortable with ignoring the ridiculous amounts of risk that were built into the system. All of those bad assumptions are coming due, now.

    Why I think it’s important to face the current situation directly is that anyone who doesn’t will be shocked to the core as the failures continue, and as each failure begets more failure. Whistling past the graveyard is not a viable strategy and will not result in any future credibility. Those (and there are many) who have been saying nothing is fundamentally wrong have a very difficult time explaining why we were forced to kick $85 billion into a private company and take a major ownership stake in the largest insurer in the country. That is the biggest intervention the US has *ever* undertaken, and it comes barely 2 weeks after we nationalized the mortgage industry. These are truly unique times.

    AIG’s losses – my 50% number was about direct mortgages. AIG didn’t make direct mortgages – AIG insured bonds made by people who bought mortgages from people who brokered mortgages from – well, who knows where they came from originally – and bundled the really bad ones into securities that were impossible to quantify. Then AIG used this phony capital as security for almost all of the city and state run workers comp programs in the country, among a lot of other things, like a lot of company-run health insurance plans. (All of those crater if AIG craters) Merrill Lynch sold a bunch of those about a month ago at 22 cents on the dollar, and since they were early that was probably a better price than AIG will get.

    AIG (which we now all own) will be lucky to get back 10 cents on the dollar for it’s investment portfolio. That’s why no one else would buy it at any price. Only someone willing to take a $100 billion loss could touch it. I know they say $85 billion. There’s another $20 billion on reserve when the $85 bill runs out in a week or two. You know what they say, a billion here, a billion there, and pretty soon you’re talking about real money.

    What do I think we should have done different? There was nothing else we could have done this late in the game. Allow me to point out just one big way that this crisis is not like 1987 – you did not see the Fed nationalizing the mortgage industry and the insurance industry then, did you? In fact we have now already gone past the measures that were put in place in the 30’s. This alone should tell you that not just myself, but that the head of the Federal Reserve and Treasury Secretary Paulson agree that these are extraordinary times that have never been seen in this country before.

    It’s been said that a year from now you won’t even notice this blip. I believe that 100 years from now, every World History book will include a full chapter on the events of 2008. Why World? Because it’s not just the American markets that are in trouble. Russia’s market has crashed and is closed, the European markets are tanking, Brazil is tanking, Japan is tanking, China is down 60% on the year already, the Isreali market is dropping like a rock, and so is the Australian market. This is not just an American story; the entire world is taking a nosedive, everyone at the same time. That didn’t happen in 1987 either.

    But that’s not to say that it hasn’t ever happened before.