Wednesday, December 31, 2008
End of Year Recap: The Cows Came Home
2008 was tumultuous. It was the year that the global debt bubble imploded, beginning with the crashing real estate market, and spreading through the massive $600 trillion derivatives market, leading to the destruction of (at least) $60 trillion in stocks, bonds, real estate, and other assets. World trade tottered, then collapsed. Early on, as US financial institutions wobbled and eventually sank, those in government and the MSM assured everyone that things were contained, that the economy was sound, and other rubbish. (You may note that some of these speakers are ostensibly in charge of the US Treasury and Federal Reserve, added to that the ridiculous cheerleaders on CNBC). These are the same people who are now exclaiming that "no one could have foreseen" the looming credit crunch and real estate implosion. The US Empire and the world got a first taste of reality, but are now poised to enter a global depression, perhaps lasting for many years. Perhaps the trigger this year for the implosion was the skyrocketing price of oil, which shot up to $146.00 US per barrel, engendering the usual stupidities, the more so since a ridiculous presidential campaign was in full swing. In the end, fecklessness carried the day, as both parties pandered furiously by embracing the "drill here, drill now" mantra, never mind the pure mendacity of it all. Thirty years of energy illiteracy and ignorance were not to be shoved aside for an electorate with the maturity of six year olds. At any rate, the price of oil soon subsided, then collapsed along with all other commodities, as global demand cratered, revealing the sheer unsustainability of the endless growth and consumption of ever-scarcer resources paradigm (well, it revealed it to some discerning readers, at any rate). After the first deluge, things were looking grim. Even the savior of the US economy, the monstrous orgy of consumerism known as the holiday season, could not salvage the wreckage, leading to early bankruptcies of several major retailers. The domestic automakers, vulnerable to begin with, were perfectly ill-positioned to take a broadside of weakening demand. Already reeling from the rejection of their ridiculous monster trucks and oversized SUVs caused by the price of $4.00 gasoline, softening demand and frozen credit proved to be the last straw. All three went hat in hand, to beg for "free" federal money. At this writing, Your Federal Reserve has figured out a way to use taxpayer money to lend to people with terrible credit to purchase these vehicles, the better to juice up the economy. As a symbol of the cluelessness regarding the economy exhibited by those in power, this is beyond peer. 2008 also saw the demise of the dinosaur SUVs, which, though still produced in limited quantities, will never again roam the planet in such numbers as years past. Again, as symbols, these silly vehicles had no equal, so we here at the Edge will miss them. As actual transportation vehicles, they were completely absurd, catering to the reptilian portion of the brain, which seems to be the dominant decision-maker in the case of the US public.
Top Stories of the Year:
1. Price of oil delivers yet another wake up call to US public; no one wakes up. SUV and monster truck sales turn upwards in December. Gas tax? What?
2. Real estate bubble pops completely, taking down the markets. The use of refinancing to go shopping is gone forever.
3. Paris Hilton produces a more coherent energy policy than the two presidential candidates.
4. Corn ethanol is revealed to be the total scam and boondoggle that it is, yet somehow can't be touched. Ethanol producers line up (along with everbody else) for a government bailout.
5. Endless mindless shopping comes to an end, not because anybody became enlightened enough to voluntarily stop it, but because everyone ran out of (borrowed) money.
6. The US is revealed to be bankrupt, deeply in debt, and has no prospects for growth for a long time. Nonetheless, all those in the MSM (Hi Paul Krugman!) and government officials advocate spending vast sums of future earnings to sustain the endless spending spree.
7. Credit started to disappear. Those used to financing their lifestyles with plastic were out of luck, now and forever.
8. A person who appears to have a brain was elected leader of the US, and was handed a poisoned chalice by the incumbent.
Well, there you have it, readers. 2008 proved to be a most interesting time to be alive and paying attention; Chaos hopes you were. Predictions and prospects for 2009 will be covered in tomorrow's post.