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November 10, 2008
Mixed Messages
Yesterday, the euphoria generated by a young new President’s calm assurances that his administration will will soon reveal coherent plans for dealing with the problems that will inevitably be left behind by his predecessor was already being dampened a bit by the realization that the recalcitrant Bush Administration will remain in charge until January 20, and several timely decisions may have to be made before then to prevent further damage to a badly wounded American (and global) economy.Adding to the woes of the housing debacle were revelations that not only had deregulated banks and other institutions been creating highly questionable “derivatives” from the sub-prime mortgages that had been aggressively marketed to buyers with questionable credit, those exotic debt instruments had been insured by an insurance industry that is also in trouble because they had underestimated the magnitude of those commitments. Although a recent rapid reduction in interest rates by the fed had created liquidity, that money was still (hopefully) within the system because borrowers are afraid to borrow and lenders afraid to lend.
In the meantime, life marches on, as I was poignantly reminded when yesterday’s newspaper turned out to be heavier than usual; it was from the ads that traditionally herald Black Friday. Another omen, heard on NPR, was a report on the sudden increase in elderly retirees being stressed by collapse of the market for the houses they had planned to sell to finance entry into (recently constructed) retirement communities, themselves suddenly in trouble because sales are off so sharply... and so forth.
Against that backdrop, the threatened simultaneous bankruptcy of the Big Three American auto makers early next year takes on a new urgency; and the Bush Administration may have to be involved in any emergency bailout.
Finally, Sixty minutes had a segment on the cozy relationship between cheating American recyclers claiming to be “green,” while illegally dumping e-waste to be recycled by desperate workers in the thriving, but increasingly toxic, industrial zones China has been creating to catch up with the American consumer lifestyle.
All of which would seem to guarantee continued success for another illegal market: the one for inhaled cannabis, America’s safest, most effective, and least acknowledged anxiolytic.
Doctor Tom
Posted by tjeffo at November 10, 2008 05:43 PM