It's Raining Bailout Money! The Banks are saved!

I for one really wish that all of those telling the world that the recession is over and that good times are around the corner were correct, that times are getting better, the contrary unemployment level gobbledygook notwithstanding. Some of the big financial centers may have had a good Thanksgiving but I fear many of the regional banks that are still afloat are starting to take on water.

I don't believe that the critical issues have been really thought out, or maybe they have been and nobody dares to tell anyone else.

The first is oil- Or the lack thereof. 35 years ago we were an oil based economy with then US oil and gas production satisfying somewhere around 65% of our energy needs. Alaska was pumping oil into Valdez through the Trans Alaska pipeline and life was good. Microchips were being developed and the personal computer was in its nascent stage. Microsoft wasn't even a household name at that point. GM, Ford and Chrysler were the three world kings of automobiles and muscle cars were still in high demand in spite of the 1973 oil crisis. Japanese cars sounded like sewing machines and rusted out in a few years.

Jimmy Carter at that time was preaching to the choir when he said that we must find alternative energy sources and reduce oil consumption. He was the only US president to really wave that flag up to that point. Car makers response? Build SUVs- Can't make 'em fast enough.

Well, here we are 30 years later and we are no longer an oil based economy- Lack of oil tells the story. Us car makers are going belly-up since they never retooled to supply a frugal oil consuming line of vehicles like the car manufacturers did in Germany, France, Italy and the rest of Europe. We pony up and pay the Arab nations and the rest of the oil cartel for the 70% of oil we consume that we don't produce at home. Anybody see a pattern here? T. Boone Pickens is attempting to rally an alternative energy focus instead of oil as the go to energy source. His big push is for natural gas to replace gasoline as it has in a good part of the world and then to heavily promote wind power as a long term solution. Go T. Boone!

Good thing our buddies the Chinese are willing to shovel a continuing supply of US Treasuries into the reserve closet even though they hardly pay any interest. If they didn't buy our treasury bonds we couldn't pay our bills. The ridiculous levels of leveraging are just starting to hit with a slew of banks biting the bullet every month. Are the bailouts over? I fear not. What we have seen so far is just the tip of the iceberg. Several research organizations this past week informed us that one in four mortgages are under water. Twenty-five percent of all mortgaged properties aren't worth the paper held by their lenders! Gee I wonder what happens in the event some of those unemployed are trying to pay back those mortgages.

The health care industry is getting messier all the time. It is true that we are the victims of our own technology- Tests that were only prescribed in dire cases are now on every doctors prescription pad. How could they not be? The doc that doesn't prescribe a test and something goes sour will be reading their name in the lawsuit lists. CAT scan equipment 10 years ago was only approved for a very few health centers. It seems that every medical practice has their own CT offices now. People that were considered on the fringe 15 years ago that promoted health care rationing are once again being listened to.

All this expense and the health care outcomes for US citizens aren't even in the top 10 nations anymore. This is world leadership? Check the World Health website for some real eye opening stats. It's true that we don't have to be on a long waiting list to have a procedure performed and we can't be refused medical care but the 20 some percent without health coverage almost certainly need to declare bankruptcy should a serious medical condition arise. You might say, "Let them buy insurance!" Shades of Marie Antoinette. Maybe these folks might be some of the newly unemployed that have underwater mortgages. Hmmm.

Boggles the mind. Economists estimate that it could take 10 years to reduce unemployment to pre sub-prime mortgage days. I'm not sure what happens to all those water logged mortgages in that scenario. What about the reduction in property taxes as a result of property values being lower? Does this mean a possible reduction in public services like police, fire, EMS, education, roads, parks and of course health care? Naw- Couldn't happen. Right.

As I started out writing this blog I said that I applaud the efforts of the soothsayers predicting all will be well in a year or so but I truly fear that they are whistling in the dark. Our standard of living will face severe trials in the next dozen years or so.

I don't think many of us will like that. Then again, maybe I'm too much of a pessimist.