Sunday, September 14, 2008
While most Americans sat watching NFL football games on a hot Sunday afternoon their nation fell to pieces. American oil refineries in Texas are just now discovering how badly damaged they are from Hurricane Ike's visit on Friday. Lehman Brothers, a 150-year old major bank is about to declare bankrupcty. AIG, one of the nation's largest insurance firms, is about to crumble. Merrill Lynch, a huge brokerage house, slipped away under the wing of Bank of America.
Even if you don't know much about the names Lehman Brothers, Merrill Lynch, or AIG, what happens to them will still impact you, in some way. These firms are huge and tied-in to the money your pension fund has invested. Don't have a pension fund? Watch as your 401k dwindles to a much smaller pile. Don't have a 401k or any retirement plans whatsoever? You were in deep trouble before today anyway.
Work for the government? They don't have any money to pay your salary any more, read on and see why.
Any dollars left in your pocket today will buy far less tomorrow, count on it.
Never On Sunday?
It was a Sunday, right? How did the U.S. economy crumble on a Sunday?
It didn't. It started crumbling years ago when the government borrowed more money than U.S. citizens could ever repay. Another major reason our country is in pretty bad shape is related to the huge pile of credit card statements you have in the desk where you keep your bills. The nation fell apart some more when mortgage brokers sold you or a neighbor or somebody in Florida or California more house than they could afford. Foreclosures, where people lose their house and any money they had invested in it, are now happening at a record pace.
Lehman Brothers is just a really big bank run by very greedy people. These people paid themselves over $5 billion dollars in bonus checks at the end of 2007. Now they are going bankrupt like so many ordinary Americans and small business owners. So, instead of paying taxes these people will be claiming huge losses on corporate or personal tax returns.
Merrill Lynch gave themselves nearly $10 billion in bonuses last year, as did another banker, Morgan Stanley. The rude thing is that these extra payments were for doing deals that are now causing their banks to fail. And they want you, Mr. and Mrs. Taxpayer to bail them out.
Nobody is giving back a penny of those bonus checks either. That money is theirs to keep though many of their jobs may be gone tomorrow.
The real weird thing is that much of this money tied up in all this mess is Chinese money. Your government borrowed and spent huge amounts of money in the hopes that these very rich institutions would be making large tax payments on profits this year. That tax money is never getting paid. The U.S. owes so much money to China that most of what the government spends is actually a Chinese loan.
How is your household doing? Got an extra $60,000 to send to the Communists in Beijing? That's about what you owe them, thanks to the loans your politicians took out over the years to buy bombs and bullets and other essential household items.
The house of cards came crashing down today, a Sunday. Hope your team won the big game. They would be about the only winners in the U.S. today.