Here is a snapshot, with my iphone (sorry not a 3gs quality image) of Kohl standing in front of December / January 2008.

It is amazing to read some of the words of these reporters as they scrambled for the best descriptions of the panic.

AIG is an insurance company. They write insurance for lots of stuff.  Good insurance for many years.  But then they started writing insurance policies on vapor (CDO, Lehmann Bros risk, Real Estate leverage.) Bad idea even IF AIG has the money for claims.  But, guess what?  They DIDNT HAVE THE MONEY and the claims started to flood in!   Tip of iceberg claims in the billions of dollars from sub-prime mortgages!!!  Your kids future taxes had to be used FAST (see headline on web page of picture below) or we would have seen an iceberg that would have paralyzed the world.  No SH*T! 

You heard of the $700B TARP?  “Where did the first $350,000,000,000 go????”  On a big quarantine friend, a $350B quarantine .  Think of it of it this way.  Wall Street cheated the principles of investing (unsustainable leverage on CDOs) and took out risk insurance from AIG.  AIG then cheated because not only did they cover the false shyte, they never had the money to pay the claims.  Needlesstosay, someone had to pay.  Not a choice. Hence welcome to the TARP.

If the GOV did not pay those claims with TARP (future tax) the AIG insurance policies would have defaulted causing “systemic risk.” Some say we are lucky because we are ONLY feeling the effects of about 10% of what could have happened.     Crazy I know!

Things to think about:

• The picture was taken by some chap on Flickr.  He claims he got the flyer (holding) in the mail from AIG the same day our kids were taxed $85,000,000,000 just for AIG!
• AIG was a great company just a few years ago
• If TARP was not used, the greed of Wall Street would have dwarfed The Great Depression
  
• Only a fraction of AIG employees (350) brought these $ TRILLIONS of DOLLARS $ of losses
• If you have a mortgage, AIG  is probably some how connected to yours
• This mess would have created the “so called” world economy to stop, not crash, stop
• AIG insurance fraud makes the Tyco, WorldCom, Madoffs, and Enrons of the world look like Saints

If you are still reading, check out a rare interview on 60 minutes with the Fed Chairman, B.Bernanke or if still interested, check out the reaction when the market tumbled in Sept 08 with Paulson.

HOPE:

Remember, this is the greatest country in the world for so many reasons, and whatever you think about our government & economic situation, get some perspective by clicking here.

Photo: [flickr]

Economists we follow: Gietner, Paulson, Bernanke, Summers, Greenspan, Volker,  Godfather of Capitalism Friedman, A.Hamliton, A.Smith ….”careful not to step on all the names dropped.” Niles Crane ~ Fraiser hahahha…. sorry A.D.D. kicking in….

Economists I say to follow: Your favorite farmer, fisherman, miner, or forester.
WTF? Farmer??? Like a Corn Farmer?  Get that corn out of my face!

OK.  I might be crazy, but yes, people who dont live in LA or NY are very wise.  I feel a farmer is wiser than all of those other economists combined.  Serious.  Lets think about the farmer and what he knows about principles and how NYC missed that wisdom.

Farmer knows best.

God gave us the earth to receive goodies and daisies through Farming, Forestry, Fishing, and Mining.  These are called primary producers. Now remember, everything we as employees do, that are not farmers, are built on these producers, hence “non-farm payroll.”  Think about it.  EVERYTHING from Wall Street to Circuit City is layered on top of primary producers.  For example:

And on and on and on….so the foundation of the economy is built on Farming, Forestry, Fishing, and Mining.

Principle: Harvest what you sow.

Farmers have learned over the years that you harvest what you sow.   So when farmers put too much seed in the ground or they over water their crop or take the easy way out, not work hard, sleep in, cheat, not harvest at the right time, their crop yield is terrible.  So the principle is, if you are honest with what you have been given (land/soil), put the correct amount of care, seed, water, time, sunlight, etc. you will yield an expected crop.

Summary: Greed stepped on the ant

AIG, Bear Sterns, Lehmann Bros are harvesting what they sowed.  They sowed FAKE crops.  Just vapor, or what they call “leverage.”  The “Street” over-watered vapor, there was no sale of a crop, such as… AIG just sold “insurance on leverage.” WTF IS THAT?   No crop, nothing to hold in your hand….sold it over and over and over again. They sold $ billions $ of stock of, yes… nothing.  These billions of dollars of stock are tied to billions of dollars of other billions of dollars.  So, when the principle of harvest what you sow came knocking, it had to collapse.

So why oh why did no-one that knew to “watch the ant” stop the insanity?!? Ah….the power of greed over principle.

Today we found out 651,000 folks filed for unemployment during Feb ’09 in the US.  Who are these people?  Are these bad people that cheated the system?  Or are they people who have been cut in a terrible bear trap of company greed or as Greenspan labeled “irrational exhuberance” ?  Whatever the reason, most of these people have families who love them, count on them, or just want them to find a job.

There are a few bright points of this jobless mess:

1. College enrollment has skyrocketed
2. People have got out of their comfort-zones and have tried a more challenging career
3. The numbers could have been much worse (Today: 8.1%, 1933: 25.2%)

If you know someone who lost their job, don’t just pray for them, remove an obstacle to make their life a little easier.