Wake Up Little Sheeple, Wake Up!

Greek Unemployment Trend
Deleveraging at Work

You might wonder why I am leading off with a chart of Greek unemployment.  Well, the way deleveraging works is it breaks one weak link, then another and another, until it cracks a link so large and so crucial that it brings down most of what was chained to it, as well as many links distantly connected. That’s what happened in the 2008 financial meltdown.  In the investment banking world, first it was Bear Stearns, then Fannie Mae, then Freddie Mac, then Lehman, and if it had not been for massive and controversial interventions, the next failures would have been Merrill Lynch and Morgan Stanley, and even ultimately, JP Morgan and Goldman Sachs.  In the commercial banking sector major banks like Wachovia, WAMU and Countrywide disappeared along with hundreds of regional and community banks, and zombie too-big-too-fail banks like Citibank and Ally (nee GMAC) were put on continuous life support.  Financial sector collapses seeped into the general economy, causing the worst recession in generations and morphing, with a big assist from the Obama administration’s economically antagonistic policies, into the weakest economic recovery in decades. 

Now in Europe we are beginning to see the impacts of more profoundly damaging countrywide (actual countries, not the bank) deleveraging, with Greece taking the lead.  Meanwhile, US debt is building to Greek proportions.

Obama doesn’t see any crisis, no cause for concern.  Young people, Barack Obama could not have made it clearer yesterday that he doesn’t give a damn about you or your future.  He is going to roll the dice, mortgaging your future, betting everything on the here and now.  Obama’s goal is to build a false prosperity, certain to collapse, structured on debt burdens that stretch into your pockets for decades to come.

The United States is roughly $17 trillion in debt, but President Barack Obama says there’s no reason to worry.

Speaking with ABC News correspondent George Stephanopoulos this week, Pres. Obama downplayed concerns of an impending financial catastrophe, claiming quite to the contrary that the country is on track to turning the economy around.

"We don't have an immediate crisis in terms of debt,"Pres. Obama told Mr. Stephanopoulos during an interview that aired Wednesday on the television program Good Morning America.

"In fact,” added the president, “for the next 10 years, it's gonna be in a sustainable place."

This isn’t rocket science.  The only way to avoid deleveraging is to not pile up the mountain of debt in the first place.  Say no, and whatever hole you have worked your way into, work your way out of it.

Greek Stock Market
Residue of Deleveraging

Obama says not immediate?  When forced deleveraging is an immediate threat it is far too late to react in a productive way.  Look at the unstoppable reckoning that ensues.  Greek unemployment hit 26.2 percent last quarter.   For Greecian youth the jobless rate is an astounding 57.8 percent – a metric defining a generation that is not merely lost but utterly destroyed.   In pre-crisis years (when the debt crisis was inevitable if not immediate to use Obama’s irrelevant adjective) Greece’s unemployment rate was comparable to unemployment in the US today.  As for older folks who saved and invested for retirement, there’s no Easy Street for them either when countrywide deleveraging kicks in.  The Athens stock market index is down by more than 80 percent from pre-recessionary levels. Yes, no immediate crisis today -- nothing but economic desolation and destroyed lives in the future.  That’s Barack Obama’s legacy to the next generation.