The political pressure to pass the BOTW was enormous, even though
nobody could clearly state what the BOTW would do.
I haven't been hearing things like "The bailout will prevent the
entire financial system from melting down."
Now what they're saying is, "The bailout will make the recession less
bad."
And the recession is getting real. There's bad news every day, such
plummeting manufacturing numbers and plummeting employment numbers in
just the last couple of days.
And that's just in the U.S. One big indicator of worldwide trade is
the Baltic Dry Index, which measures demand for shipping of dry
goods. Here's the current graph:
http://investmenttools.com/images/wfut/crb/bdi.gif
Note: The above graphic will change with time.
The BDI has surged to bubble levels over the last few years because
of the Chinese economy bubble. But with the end of the Beijing
Olympics, the Chinese economy bubble is also deflating, and the BDI
is falling with it.
The bailout bill vote in the House of Representatives has been
worldwide news. People around the world have been following the vote
with rapt attention, as their economies run down. The concept is:
"The Americans did this to us with their worthless mortgage-based
securities, so now we expect American money to help us out."
That's going to be a good trick. The Fed and other central banks
have already injected a trillion dollars of liquidity, and things
have continually gotten worse, so it's hard to see how a few hundred
billion more is going to turn things around.
I hear comments from pundits and politicians like, "I feel people have
a positive view of the future," and "The economy is biased toward
growth." That's sort of true, but when they give examples, the
examples are always from the 1990s (the dot-com bubble) or 2003 (the
credit and real estate bubbles).
What they refuse to understand is how drastically people have
changed. The massive fraud and deception that was commonplace up
till the beginning of 2007 -- thanks to the lethal combination of the
stupidity of the Boomers and nihilism of the Generation-Xers -- has
now been reversed. Mutual trust has been replaced by mutual
suspicion. Mutual tolerance has been replaced by mutual
condemnation.
These are massive attitude and behavioral changes of generational
behavior. Everyone seems to expect that the Bailout of the World
bill will cause these massive attitude and behavioral changes to
reverse. Why would they believe that? Because they're thinking of
the Unraveling era, the 1990s, when the motto still was, "Whatever
feels good, do it."
John
