Tuesday, June 21, 2011

A Thaw Before the Storm? How the Debt Ceiling Could Shock the U.S. Economy With Another "Lehman Moment"

Lawrence G. McDonald

Almost three years ago crushing debt brought Lehman Brothers, a 158-year-old investment bank to its knees. It was a bankrupctcy bigger than any our world has ever seen. Lehman's failure was 10 times the size of Enron. If fact, its demise was bigger than the spectacular failures of General Motors, Chrysler, Worldcom, Delta Airlines and Enron. Combined!

The event caused one of the most severe, heart stopping shocks to our global economy. The pain is still being felt (just ask the people of Greece) and will be for years to come. Within 4 months of Lehman's collapse the US economy lost more than 3 million jobs and the Dow Jones Industrial Average shedded more than 4,000 points. 401k's became 201k's, the wealth destruction was profound. Anyone reading these words felt it.

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  1. just raise it by around 300 billion-temporary spending lift-then a month later raise it again...and again...this could be the new way and form of the new debt ceiling...just kicking the can and whistling past the grave yard. it would also serve the greater purpose of allowing politico's to appear on camera and before podiums everywhere and state their spiel and basically run for reelection now and ongoing-every month the new ceiling is raised-whether elections are soon or years out yet

  2. The US is failing and the sooner you baby-boomer ID10ts see it the better for you. Oh, and how was growing up in a free country like? It must have been wonderful at those drive ins. It must have been wonderful courting that special someone. It must have been wonderful before you useless jerks let the country become as crazy as it is today. Hopefully, it all crashes and you loose 75% (including your pensions) of what you made while things were different. You MFs....

  3. I'm a Baby Boomer

    When I was a kid, EVERYTHING was "Made in America".

    The cars were from American Motors and GM, Ford and Chrysler. No one in their right mind would ever consider buying one of those "Jap" cars!

    Made in America;
    - TV
    - Toaster
    - Electric Carving Knife (a relic of the past)
    - Record Player
    - Radio
    - Reel to Reel tape deck (how about that for home technology)
    - Timex wrist watch
    - Levi's were still made in San Francisco
    - Electric shavers from Remington
    - All trusted firearms were Made in America (Colt, Ruger, Remington, Smith & Wesson and the rest.
    - Colman camping gear, all Made in America
    - Made in America, Cobra CB Radios
    - Harley Davidson (no longer 100% USA parts and labor)
    - Schwinn bicycles
    - Kodak film was all we bought, we had no confidence in that "imported" stuff.
    - My Buck knife, that is still as sharp and useful now, 40 years later.

    Need I go on?

    As an Aerospace Machinist, I was involved in the Space Program, manufacturing the McDonnell Douglas Delta rockets that launched stuff into orbit, long before that American Made thing called the "Space Shuttle" even began production.

    So the Baby Boomers are "useless jerks"?

    As a "useless jerk" baby boomer, believe me, I had no vote in the matter of sending our jobs to China and India and Vietnam and all the other slave labor countries on the planet.

    May I venture to say that by the time it became possible to own a home, simply by filling out a "Stated Income" application (meaning you could lie about your income and the bank would not verify your statement), the "Boomers" for the most part had bought their homes decades before.

    The country is about to collapse and that fact can not be denied. The pukes in the Federal government do not want to the the ones named in future history books as those who were in office when the country died, so they raise the limit and kick the can down the road.

    One bit of good news here in Kaliforniastan, is the pukes in Sacramento just got word that they will have to work for free (no paychecks) until they produce a responsible, balanced budget. They have already started crying and whining. Perhaps they never thought that voters were serious when we approved this action in the last election.

    Now it's time for Congress to get cut off.

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