Monday, March 22, 2010

April Showers, Bring May Flowers...

The Health Care Bill was passed by the House last night. Nancy Pelosi praised the legislation as patriotic. She admonished the Senate to pass the changes, and from the sound of the shills in the MSM, they will. Obama is itching to sign it.

Nancy tells us that the bill has a lot of problems, but once passed, they can then work on legislation to fix those problems.

It's oft said, "We don't have time to do it right, but we have time to do it twice." And in every place where that was the rule, we ended up doing it thrice... We never got around to doing it right.

This bill will be no different. If they try to fix, it, they'll just make it more onerous.

This bill, when passed, will drive up the personal bankruptcy rate and the foreclosure rate. Why? Because it guarantees that everyone will have insurance by demanding that they buy it. Never mind that they probably can't afford it. If you can't afford it, the IRS will come after you. That likely means that your wages will be garnished, and you'll find yourself unable to pay your bills and mortgage.

The insurance execs need more palatial summer homes and yachts. You and I are going to buy those for them. It's our patriotic duty. At least that's what Nancy Pelosi seems to be telling us.

But don't worry, this really will create jobs. The IRS will have to expand in order to work as a law enforcement agency, to make your that we pay our Insurance Taxes. These collections agents will make much larger salaries than folks in the private industry. Further, the taxpayers will pay their Insurance Taxes for them.

I myself, am very worried about how much I will have to pay in Insurance Taxes. Already my co-pays are going up. I assume they will continue rising forever. In the mean time, business is slow and I'm earning less money than i did last year.

I'm on a private plan with my employer, but I can't afford to put my wife on the plan. She has a pre-existing condition. If we put her on the plan, then we wouldn't have money for her medication and medical bills. There is a very real concern that she would be hospitalized or die, before the time period for the pre-existing period ran out.

If we have to pay Insurance Taxes, I worry that we will be unable to buy her medication.

That does this have to do with April Showers and May Flowers? Well, I'm still calling for a crisis in May. This new Insurance Tax that is going to be enacted, will be another straw on the camel's back. but we still have cresting crude prices, record bankruptcies, and unemployment numbers that are showing no signs of subsiding.

In May, we'll be in the middle of the second quarter. That will be plenty of time for the first quarter's numbers to be corrected and for the euphoria of the government's fibs to wear off.

I'm hesitant to predict a market crash. This isn't because I think the market is healthy, but because I think it's effectively doing a 'Weekend at Bernies'. I do not believe that small investors or institutional funds are driving it anymore. Instead i believe that the market values are driven by the money presses. The taxpayer is borrowing monies, that are being funneled into Wall Street to enrich the wealthy and keep the markets afloat.

So long as Wall Street remains the world's fattest federal welfare whore, the markets may well stay up. We could well see a dip and profit taking, but I expect a quick rebound when this occurs. After all, the Federal Reserve can conjure seemingly infinite quantities of money out of thin air through their magical fiscal powers. There's no reason why they couldn't inject trillions of dollars into the markets to keep them afloat. After all, you and I have good credit and we're always happy to pick up the bill. Right?

So what kind of crisis do I expect? I expect an increase in the number of failing banks. I expect a series of large layoffs from major manufacturing firms. I expect the airline industry to experience a crisis. I expect more emergency sessions in congress and bailout talks. In general, I expect a lot of things to begin breaking over a short time span.

Then again, remember, I'm mainly basing these ideas on the fact that world oil production is in decline. World energy production is also likely in decline. Because of this, there is irresistible pressure, forcing our civilization to power down a notch. No economic stimulus can stop the forces of nature. Because of this, it's my opinion that the world economy will crack a bit this coming quarter.

I could well be wrong. We could in fact go several more quarters without hitting a criticality. Each quarter we go will see the pressure increase. Each quarter without a correction increases the damage we'll experience when this breaks.

We don't have much longer to wait, to see how this turns out.

And remember, I'm just some guy on the internet. I'm not your stock broker. I'm not accredited by any institution to give financial advice. The complete extent of my advice is to reduce your debts if you can and take up gardening. It relieves stress and provides you with tasty food to supplement your diet with.


At 12:59 PM, Blogger Bukko Canukko said...

Weas, I've read your comments before pertaining to your wife's health problems, and I'm sorry you two have to live in the United States.

The term "pre-existing conditions" -- a bullshit euphemism for ILLNESS! -- does not exist in Australia or Canada. If you were citizens there, your wife would be getting cared for with no worries (financially, at least) because she is sick and she is a member of society. She might have to deal with a clunky bureaucratic system, but it would be nowhere near as bad as a health "insurance" system that actively fights against you because it makes money when its customers die quickly. From what I've seen and hear from patients in Oz and Canuckrainia, once you actually get the system's attention; when you hook in with a specialist and appointments and everything, you're "in like Flynn" and get good care.

Your wife has enough to worry about with her physical health. It's inhuman that the U.S. makes you two worry about money on top of that.

As for when the crisis comes, that's a head-scratcher. It's seemed like it should have hit long ago, by any sense of logic. But many prognosticators far smarter than me -- "Stoneleigh" is one -- have been wrong-footed when they stepped out on a limb with specific timeframes. "Extend and pretend" has a long shelf life...

At 7:37 PM, Anonymous Anonymous said...

Hello Weaseldog,

Ditto Bukko.

The health care bill is a great big nothing burger. It is just a tax increase on the uninsured and the overinsured but does little else to reform the system. They have left the usa health care system as one more snare, one more pitfall to make people bankrupt. I would expound into a rant about preferring a cyanide capsule to usa medical treatment but you've read that rant before.

Best to you and your wife as always.


At 7:37 PM, Anonymous Anonymous said...

This comment has been removed by a blog administrator.

At 9:48 AM, Blogger Weaseldog said...

Bukko, Stoneleigh and Ilargi view the relationships between energy and money a little bit differently than I do.

As I understand it, they believe that the effects of energy are temporarily eased because demand has dropped. So for a time, we can focus on finance and economics without worrying overmuch about how our energy problems intersect them.

At least I think they see it this way. No matter how I paraphrase what Ilargi tells me, he says I've got it wrong.

I've gotten the predictions wrong a few times. I really thought we'd be at war with Iran by now.

I was unable to call the timing of that last crash. Of course, you can pick dates all over the calendar for that if you're looking at different sectors. That crash really took place over a couple of years.

I did get it right on the bailouts. Edgar remembers how I was angering the trolls on Clusterfuck Nation a few years ago, saying Bush would bailout the banks at a cost plus basis, and then let them foreclose anyway. I even got it right in predicting that the government would buy up the mortgages at inflated prices.

I did miss the AIG payouts and the stock trading shell game. But those are icing on the cake.

Back in 2000, I was calling for a second quarter crash in 2001. January of 2001, I sold almost all of my stock. I essentially walked away at the top.

It's that pattern I see repeating now. The economic landscape differs a bit now. The 2001 crash changed the way the gov deals the markets. It's very hands on now. Further, the small investors and day traders have been radically reduced in numbers and influence. So I'm not sure it will crash so severely this time. The gov may well be willing, to dramatically increase the deficit to keep it buoyed up.

But something has to give. Our world economy is getting crushed by declining energy availability. A restructuring will be forced upon us.

At 9:51 AM, Blogger Weaseldog said...

Actually, Edgar, wasn't I saying on Clusterfuck Nation that the banks would make a claim on their mortgage insurance for the foreclosures?

At 2:12 PM, Anonymous Anonymous said...

This comment has been removed by a blog administrator.

At 2:14 PM, Anonymous Anonymous said...

Hello Weaseldog,

We were both lambasted for years for saying essentially what happened over the last two years. We both got banned from tf for saying the fed would bailout anybody and everybody. mish's crowd said it was too big to bail. jhk's crowd was arguing that a stock market crash could not be prevneted by any means. You and I were the moist righteous dudes on the tubez during the entire housing bubble and were ridiculed for it by intellectually inferior bloggers.

Weaseldog and edgar to the blogsphere: Eat our dust!


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