WHAT A WEEK!

MCR

All things considered, the appointment of Tim Geithner as Treasury Secretary was probably the best-possible choice. That's not because he's Tim Geithner. He'll have a mixed record I'm sure. That's not the point. It's because he's the current Chairman of the NY Fed, which is the real seat of economic power in many areas. He knows the NY Fed and that's important because it's become totally apparent that no one else knows what the heck to do. He will bring some stability which is essential for all of us. It's much easier to build lifeboats when the mother ship is a little steady on the way down. Hillary at State doesn't scare me that much either. She could be very useful there. Holder at Justice isn't frightening. Waxman chairing the House Energy Committee is a great windfall!. Those who would call me a Clintonophile missed the first three years of FTW. They should go back and check it out before they diss me in comments. Hillary's asset is the degree to which she is trusted in so many countries; all of which are panicking at the moment. Though I never really cared for her, she has shown some heavy and classy chops and gained a lot of gravitas after the campaign. She is formidable. What we all have to see is whether Barack Obama will be holding the reins and guiding the team or not. These people see that the world is falling apart. They also see that they are going to be judged on how they handle it and they will know -- for a change -- that accountability will be sure and swift.

All of the economic signals indicate chaos rising; a new Zodiac sign I think. Citigroup is toast. I just love that Prince Alwaleed had to up his stake in Citi (see Rubicon and FTW). This confirms again that "the unwinding" [Great title for a Jack Nicholson movie] is out of control. The Saudi kingdom might soon be looking as unsteady as Pakistan. World leaders are freaking that things will get out of control everywhere. Soon enough. Soon enough. -- One or more of the big three will likely go down in December or early January. All of the unemployment numbers are exploding. States and cities are failing. Deflation is setting in. Retail and manufacturing are imploding. And I just heard numbers predicting three million more foreclosures next year. -- Oh yes, and Christmas will be a disaster of course.

Picture a nice Brooks Brothers suit on a handsome guy. (Me for example.) Now picture that while I am standing still, every piece of stitching, every inch of thread, suddenly vanishes. If I stay perfectly still things might be OK. But as soon as I start to move, the sleeves, lapels, lining, etc will start falling off. All that is happening at the moment with the economy is that the stitching is coming out. A couple of frays may have shown and maybe a pocket is dangling but that's it. Suze Orman (Will someone please explain Peak Oil to her?!) is still getting it right... up till the collapse thing. She said today that the stock market and the economy are two different things. Right on! What happens on Wall Street doesn't hit Main Street for months. Main Street hasn't felt the full effects of what happened in September yet.

And we are still nowhere near a bottom. I have not seen a single"credible" expert even suggest that we might be. This economy is in a power dive.

We have yet to see where Bill Richardson will land. He's been at Energy once before. We could do much worse. We could do better. Too bad Matt Simmons isn't interested.

Today's announcements were essential for Mr. Obama. The 500-point rally at the close was perfectly understandable -- if futile in the long run.

Next week will be a contest between cascading economic disasters, and the hope inspired by today's appointments and the faith the market shave in them. Any bets? -- Oh yeah, and I picked up a bit that the former chairman of Citigroup, Sandy Weill, is forming a new venture cap firm to go after "overlooked" (I think it was) industries. (Iwrote a lot about Mr. Weill and his Citigroup in FTW.) Yeah, like blacksmithing operations maybe; or how about small local foundries and metalworking operations. I think the real elites -- their self-sustaining castles and fiefdoms as secure as they're going to get-- have disengaged enough that we are seeing a "clean up" crew. My guess is that half or more are suckers. But all of them will have to perform and before long they will comprehend the stakes.

In the meantime all eyes await Mr. Obama's demonstration of what kind of president he will be.

RECOMMENDED READING from the FTW archives:
http://www.fromthewilderness.com/free/ww3/120104_world_burns.shtml

AND HERE'S a couple of recent stories very much worth reading too. It'sapparent from the second story that Bush-Cheney (remember them?) are full speed in their end game.

http://www.cnn.com/2008/POLITICS/11/20/global.trends.report/index.html
http://www.latimes.com/news/nationworld/nation/la-na-environmental-rules21-2008nov21,0,6868742.story

Have a good weekend... I'm going out on a boat tomorrow.
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JO

This is an era in which calamities don't get fixed; they are simply superceded by even bigger calamities. Nothing surprises us anymore but it is still possible to be left breathless by quotes such as the following:


From the day of its founding in 1913 to September 24, 2008 the Fed’s assets – the aforementioned cornerstone capital for the US financial system – grew to $1 trillion. By November 14, 2008 the amount had grown to over $2 trillion. And in a speech in Texas, the head of the Dallas branch of the Fed said he expected the total to reach $3 trillion by year-end. www.dailyreckoning.com


We re-read the paragraph. Yes, in the seven weeks that ended last Friday, the fed's assets grew by the same amount which had previously taken 95 years. And even as we speak, the Fed is doing the same trick again.

It feels like becoming aware of how fast the earth is spinning beneath your feet. You feel a little off balance, about to fall, which indeed you are...