Are You Ready for the Madness Yet? Detroit Better Be.

If you are already aware that amid their mind-bending historical incompetence, the Rethugli-Cons are best (if you consult history) at the (well-planned, but accidental-looking) screwing up of the incoming administration elected to fix their "handiwork" before the new guys actually get control, then you are ahead of the game. And they are working overtime after this election. The recent trips that Bush has made to South America, the G-20 and the Middle East (not to mention his meeting with Olmert) couldn't be more suspicion laden for a President who knows so little about foreign policy and economics, oould they? Some have been so bold as to suggest that this is another "hand off the catastrophe" moment with the chosen recipient (the smooth marketing strategy) being the "nicest" guy in the room (who is quite busily choosing the old team to aid him in his change program already). As the bad times exacerbate (starting next week!), it may turn out to be "change we can bereave in" according to Mickey Z (a guaranteed maverick) who has a three-step program (which no one believes will ever be implemented) to blunt the Depressive effects: "1. Cut the military budget by 75% 2. Eliminate corporate welfare 3. Return the corporate tax rate back to where it was in the 1950s" I shrink from believing it after such good, positive vibes during the election, but I hate surprises (like another Great Depression (and I detest the Rise of the Clintonistas* - who are unindicted co-conspirators in the main and nothing they did in the 90's benefitted me or anyone I know)), so I'll stick my neck out here. Oh, and to straighten out your confusion at the sight of the leading Democrats letting the auto industry go up in smoke, relax. The Chinese have already been recruited to take over the industry. And, once again, what is too difficult for U.S. business to accomplish stateside will be handily embraced by the grateful-for-the-opportunity Chinese. After all, GM is now worth less than Mattel and the Chinese can purchase it and Chrysler for petty cash (with its $2 Trillion in currency reserves)! And you didn't think the crashing market was benefitting anyone (let alone a company founded by Mao Zedong), now did you? Also, if you still have investments, you might want to take a gander at Treasury Yields Drop to Record Lows as Recession Concern Rises "with two-year notes dropping below 1 percent for the first time, as global stocks slumped and a deepening recession drove investors to the safest assets . . . . 'It’s the continued meltdown of the financial system, lack of action by Washington' . . . . 'There’s no white knight coming to save us.'" (And Joe Galloway agrees.)

Yields have hit record lows since Treasury Secretary Henry Paulson said on Nov. 12 he would abandon plans to use the Troubled Asset Relief Program to buy mortgage assets from banks. The London interbank offered rate has spiked 11 basis points in the three days after Paulson’s shift. Before Paulson’s announcement Libor, which banks charge each other for three- month loans in dollars had fallen for 23 straight days. “Changing the terms of the TARP as suddenly as he did undermined investor confidence,” said Richard Schlanger, a bond fund manager in Boston at Pioneer Investments, which oversees $44 billion. “It’s a frightening situation.” Investors erased more than $33 trillion from global stock markets this year as the U.S., Europe and Japan slipped into recession. . . . Breakeven rates, which show the difference in yields between inflation-linked and nominal bonds, suggest traders are betting the U.S. economy may face deflation over the next two years. The two-year U.S. breakeven rate was minus 4.09 percentage points. “You have the cloak of a declining inflationary environment,” said Tom Tucci, head of U.S. government bond trading in New York at RBC Capital Markets, the investment- banking arm of Canada’s biggest lender. “People are denying it, but we are mirroring the whole Japanese situation and if that’s the case interest rates are going to go a lot lower.”

And then we have this tidbit:

Paul Krugman appearing on Rachel Maddow told the straight unvarnished truth, urging Congress to overcome lame ducks' "not our problem" mentality and confront the immediate need for a bridge loan to keep Detroit's Big Three solvent until a more responsible Obama Administration takes office. Krugman noted that even if it were okay to allow the companies to fail during good economic times, it made no sense to allow them to go belly up and put at risk 1 to 3 million jobs right in the midst of a severe recession. The effect, he added, would be like a huge reverse stimulus, dragging the economy down. Commenting on Congress' willingness to leave the decision to a stupid game of "chicken" with the White House, Krugman added, "We're on the verge of an irreversible decision taken almost in a fit of absence of mind." Of course, the auto execs' flight to DC in their private jets added up to "stupid theatrics," but "that's not the point." Would you want to lose 1 to 3 million jobs and their health benefits just to punish twelve senior exectives? Krugman's right. The Republicans and this White House are perfectly willing to devastate the economy and imperil millions as one last gift to a President Obama, especially if they think they can kill the auto workers union in the bargain. As MSNBC explains, this is also "north versus south" again, in which Jeff Sessions argues that employees in Alabama who don't have health insurance should not be asked to bail out those with health insurance in Michigan. But what that means is that those with insurance should be forced to fail so that everyone can not have health insurance. Brilliant logic, Jeff.

It's gonna be a long two months. Suzan * From Rise of the Vulcans ______________________________________________