Obama, Can You Spare a Dime?

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Something for a weekend.  A variant on the song of the First Great Depression, Buddy Can You Spare a Dime.  It seemed timely in regard to the terrible economic news that came out this week:

1.  AA- -Credit rating firm reduced the United States Credit Rating to AA-.  Here is why

Egan-Jones said it believes the Fed’s third round of quantitative easing,  which sent stock prices surging on Thursday, “will hurt the U.S. economy and, by  extension, credit quality.”

The firm said that while the program should boost equity markets, issuing  additional currency and depressing interest rates through purchasing  mortgage-backed securities will hurt the value of the U.S. dollar and cause a  painful increase in commodity prices.

“In our opinion, QE3 will be detrimental to credit quality for the U.S.,” Egan-Jones said.

At the same time, Egan-Jones warned that the cost to finance U.S. debt will “slowly rise” as the global economy rebounds and the Fed scales back on its  purchases of Treasury securities.

The ratio of U.S. debt to gross domestic product soared to 104% in recent  months from 66% in 2006 and will likely increase to 110% in a year, the firm  said. By comparison, Spain’s debt-to-GDP stands at 68.5%.

2.  Median Income-Under Obama Median income per household has fallen to $50,054.00.   When adjusted for inflation this is the lowest median income per household since 1995.

3.  Industrial Production-Down-US industrial production fell 1.2% in August pointing to a slowing economy.

4.  Unemployment-Fed analysts estimate that unemployment will not reach 7% until 2014.

The bottom line is that we have a pig of an economy, and that Obama’s policies have made it worse.  It is not going to recover as long as he is President.

 

11 Responses to Obama, Can You Spare a Dime?

  • T. Shaw says:

    Note to self: “Send resume to Egan-Jones.”

    A voice of reason is James Grant of “Grant’s Interest Rate Observer.”

    Steve, Agree!

    This crowd will destroy everything.

    Worse yet, the regime has driven millions into desperation and destitution; and these dependents likely will vote for more of it.

  • “Worse yet, the regime has driven millions into desperation and destitution; and these dependents likely will vote for more of it.”

    I doubt it T.Shaw. The elites in our society are in for the greatest shock on election day that they have experienced since election day 1980.

  • T. Shaw says:

    Mac,

    I sincerely hope you are correct.

    Pray and work for the best. Prepare for the worst.

    President Reagan was also behind (in lying, liberal media polls) the Carter wrecking machine in 1980.

    Does anyone besides me see the parallel with Carter in the current ME cacophonies?

  • bill bannon says:

    About the painful rise in commodity prices, open a brokerage account and buy the following etf’s:
    silver… buy SLV
    gold…buy GLD and
    gold miners…buy GDX. (best in past week because miners were undervalued)
    basic materials…buy IYM
    gas & oil….buy DIG (2x leveraged)
    if oil goes down for permanent reasons….buy DUG (shorts oil)
    Do a chart of these at bigcharts dot com. Hate the down days? Put a 1 or 2 or 5% stop loss on each position. Computer will sell them automatically but most do not do it unless the downward motivator is new and permanent. Better to just keep track of the macro trends and not watch the daily nonsense.

  • philip says:

    T. Shaw. The supporters of Obama will still be wearing their rose colored glasses as they stand in endless lines to purchase a rationed 5 gallons of gasoline at $12.00 per.
    They will rejoice, saying; It is good to be dependent upon the State.

  • Mary De Voe says:

    “This is what we get for letting the unions control education in this country.

    It may be too late to fix it. But thankfully, our real hope does not lie in this world.”

    Our greatest asset is our consitutional posterity. WE have to fix it. Take control of our schools by being there. Government cannot forbid any parent from being in the classroom with their child. State kidnapping.

  • Richard E says:

    I like hearing the ‘snake charmer’ keep telling is his plan is working (affraid it is as many did not understand what his plan was) and that we have nothing to worry about. When government tells us we have nothing to worry about, that is the time to start worrying.
    shard this post on my FB line with note to listen to the song.

  • T. Shaw says:

    Richard E.,

    The plan is working.

    Two August statistics: 173,000 new American food stamp enrollments; and 96,000 new American jobs.

    The plan is income redistribution and centralized control/collectivism, not job creation and prosperity.

    And, the plan’s working fine. You got to break eggs to make an omelet.

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