Wednesday, January 20, 2010

Change we can believe in!!

Hallelujah, the Messiah and savior of the world B. Hussein Oduma, blessed be his name, have issued a decree stating that all is well in the land of the not-so-free and cowardly. Apparently his holiness has seen the future and based on upward going GDP numerals we are sure to look ahead at the sacred year of 2010 with blessed feelings.

This prophecy from the loving and caring Kenyan is based on such divine signs as:

Sales of businesses in LA County fell 32% last year from 2008 which in turn had fallen 17% from the year of 2007. And California is facing a deficit of $41.6 billion - nearly half of projected revenues

CPI measurement show 2.8% with practically Zero interest rates

Real unemployment figures show 17% with no signs of going down and the employment-participation rate fell to a 25-year low 64.6% from 64.9%, the largest decline in nearly 15 years.

During 2009 it was only one sector that really showed growing figures; Military expenditure and shipments. And US arm sales hit a record last year thanks to the sales to the oil rich Arab states... And the Messiah himself is spending more money on military than any president in history, except for Roosevelt during WW II. (A plus for GDP numbers you know…)

The deficit is closing in on two trillion dollars. During the coming 5 years or so the US government needs to conjure up close to 14 trillion extra dollars.

The American stock market is around 50% overvalued on the best long-term measure, which adjusts profits to allow for the economic cycle. They are trading on the presumption that GDP will go up 4-5% each year, and they’ve been doing so for a long while now.

The American economy is over 70% consumer based.

Another 800+ billion has just been approved to (AGAIN!) bail out Fannie Mae and Freddie Mac at the same time as a multimillion-dollar compensation packages for the top 12 executives at the two firms are in line to receive up to $42 million in 2009 alone.

Over 140 banks closed down during 2009, every single one of them had docked the books showing overvalue up to 60% (!!!).

And the banks are STILL approving loans with DTIs over 40% and, in many cases, with layered risks.

Treasury debt has a serious duration problem - nearly half (about 40%) has a maturity of one year or less. This means that Treasury must roll over that debt - about $3 trillion worth - "or else."

Commercial real-estate is a rapidly down-moving market with lots of leases up for renewal during 2010 and NO ONE is renting, everyone is getting out.

And the list goes on and on and on…

And his righteousness pronouncement of the magical GDP-numbers is surely to make any doubting soul to put his trust in the holy city of Washington.

This is how GDP normally is calculated.

GDP = private consumption + gross investment + government spending + (exports − imports), or,
GDP = C + I + G + (X − M)

What the equation tells us, among other things, is that if Government spends more, GDP goes up. And it doesn’t matter what the money is spent on. It can be daycare, roads or flowers, it does not matter. According to GDP-calculation it is beneficiary to have people dig holes in ground, fill them up again, and do this over and over. So the trillions that has been borrowed, printed and spent to pay for necessary things like sandier beaches along the East Coast, weather measure stations, subsidies to farmers, bail-outs to failing firms, and youth camps - will increase GDP.

So I hope you can sleep safely now, your soul is in good hands. The ‘moral compass’ of the beloved leader and sanctified manifestation of B. Hussein Oduma with his miraculous Nobel Peace Prize have blessed us all. 2010 will truly be a magnificent year…

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