It is a weird world on Wall Street. The GDP gets revised downward, and the stock market goes way up! I must be missing something, because this is the second time that the growth rate of the US economy has gone down. Bernanke says that next year growth will pick up. Maybe, maybe not. I keep CNBC on 24 hours a day, because my TV goes crazy when it cools off, probably from living in a FEMA trailer saturated with formaldehyde fumes for 2 years while waiting for a hurricane Katrina government grant. (Normally, I wouldn’t take government money, but my house was flooded by DEFECTIVE government built levees that failed, so I made an exception. And yes. I am still very mad about it, because Congress ordered the Corps of Engineers to protect New Orleans from flooding, after hurricane Betsy flooded parts of the City in 1965. They couldn’t get the job done in 40 years!) Anyway, I have never seen such a parade of experts, and wealthy individuals, who are saying that things don’t look good. They keep raising the probability of a double dip. The US economy needs a 2% rate of growth in order to keep the unemployment rate from going up. The fact that a speech by Ben sent the maket up, with a growth rate of only 1.6 %, shows how the stock market has become a trading game. Emotion and computerized trading programs run it, not fundamentals of the economy. I am shocked at how many people think that business investment is the problem. Some insist that the banks aren’t lending. They sure aren’t, because businesses see no reason to borrow money to expand. Demand drives the economy. It isn’t there. Without enough demand for goods and services, the economy will contract and unemployment will increase. That is exactly what is happening.
That may be a fundamental flaw in the economic system. Can it function without growth? I’m not smart enough to figure that one out. We won’t be around long enough to worry about the answer to that question, because most of the world is still far from fully developed. The chief economist for MarketWatch said that the US Government should have sent all US taxpayers a debit card with money on it to be spent within a certain period of time. That may have stimulated demand enough to put people back to work, at least for a while. What the Government did was only a billionaire family bailout. I think that we will soon discover that shifting all those losses onto the Government, instead of letting the super rich take the huge hit, was a bad idea.
The Hindenburg skin was covered with a coating of aluminum and iron oxide powder. That is the mixture that they burn in a ceramic form in order to weld railroad rails together in the field. The aluminum steals the oxygen atoms from the iron oxide and liquid steel is formed. Trace elements in the mixture form a strong, flexible steel alloy weld. It is a hard chemical reaction to get started, but releases a huge amount of heat once it gets going. The aluminum metal powder combines with the oxygen taken from the iron oxide, to form aluminum oxide that floats to the top of the mold. Aluminum oxide is a VERY stable molecule. That is why making aluminum is so expensive a process. You need vast amounts of electrical energy in order to break the strong chemical bond between the oxygen and aluminum atoms in the aluminum ore. If you can discover a cheaper way to break that chemical bond, you could become the richest person on Earth. That is also how aluminum flashpowder firecrackers work. An ultrafine aluminum dust is combined with oxygen by being burned using powerful oxidizers, like potassium perchlorate, (KClO4) or dangerous potassium chlorate (KClO3) that rapidly yield oxygen at high temperature. The powerful explosion you get can be thought of as rapidly getting back the energy you had to expend to break the oxygen-aluminum bond when you made the aluminum metal from the ore. That process took hours, but you got most of your energy back in microseconds in a white hot fireball. The smoke is aluminum oxide dust. It will last for millions of years.

Here is an amazing statistic from the New York Times, US Section. In a nation of 310,000,000 people, the USA, how many new banks have been started, so far, in 2010? Answer, 1 in Lake Charles, Louisiana. That is in a country with thousands of banks of various sizes.

@ Bill Simpson: Enjoyed your rant on how to make spot welds on railroad rails!

No GDP Growth Brings Huge Problems:
Intuitively, I think that you really know what would happen in a country when there is no growth; you answered your own question . . . yeah, it takes a GDP growth of about 2.5% annually, just to employ those who are entering the work force each year; and no GDP growth brings huge social problems, not the least of which is rising unemployment.

Totally Manipulated Markets:
A number of years ago, the stock market stopped running on fundamentals, when the so called “big investment banks” got even bigger, and decided to get more creative (and therefore more profitable). They figured out how to “move” the market where they wanted it to go, by using their synthetic products as well as futures. A simple example here: by making large purchases of stock futures (e.g. Dow futures, S&P futures, Nasdaq futures, etc.), these clowns can easily move the overall market up on very, very small volume; the upward movement in futures lifts the price of the “cash” Dow (i.e. today’s Dow).

Russian Roulette on Wall St:
Using “new” financial math models, they created more exotic ways to significantly increase their leverage (and hence, their profit margins) by creating and then trading “synthetic” financial products not only to other financial institutions and traders but also between each other. A few examples of these derivative products include interest rate swaps, mortgage derivatives, collateralized debt obligations, synthetic derivatives that track commodities (e.g. like cocoa, coffee, or gold, etc.), stock market derivatives, interest rate derivatives, etc. This business is now so large that many of these big banks are placing huge bets with each other that are in the tens of trillions of USD; some of these big banks now have a total collective exposure in the hundreds of trillions of dollars.

Total Derivatives Exposure is Now Over $700 Trillion USD:
This crazy casino game on Wall St. is now totally out of control, and within a year or so, will definitely bring some financial institution down (i.e. one of the many players who “loses” and has a risk exposure of “just” a few hundred billion USD). And that will be The End Game, because this casino is so tightly interconnected between big buyers and seller, between big bettors and big counter-parties, that a single failure would be akin to the fall of the first domino within a long string of dominoes. So, yeah, the really bad news is that they’ll all go down, since the BIS estimates that the total derivatives exposure is approx. $700 trillion (yes, trillion!). For an interesting, yet easy-to-understand read on this topic, go here:
http://www.moneyandmarkets.com/derivative-monster-alive-and-kicking-despite-reforms-39519

Yes obewon, Warren Buffet didn’t call them WMDs for nothing. They may be why Paul Farrell on the MarketWatch site, keeps writing that another collapse is coming soon. He worked on Wall Street, so he probably understands both how dangerous they are, and how exposed the big banks are to them. Some guest is discussing the need for international banking regulation, on CNBC World, from London, right now.
What is really amazing to me, is how many people here in the USA fail to recognize what would have happened if the Government had just sat back and watched, after Lehman collapsed. No one thinks that their bank web page can ever read, ‘Temporarily Closed’. That is what worries me about the recent ‘no more bailouts’ US political movement. The anti-interventionists might get more than they bargained for during the next crisis, should some form of rapid government action be needed, yet nothing get done. As they say, “Be careful what you wish for.” Maybe if we can just get Mr. Bernanke to give a continuous series of reassuring speeches from near beautiful Yellowstone National Park, everything will be fine. I’m still trying to figure out how global warming hasn’t melted those glaciers since I was first in Jackson Hole, during the early 1980’s. Whenever I start to envy those living in Jackson Hole, I force myself to think of one word – winter.

@Bill Simpson:
Here’s my take on the so-called “Global Warming” meme.

As an electronic engineer over the past 35 years, I have many friends and acquaintances in a variety of scientific disciplines. Several years ago, several friends told me that there really wasn’t any “global warming” in the true sense of the word. They said that this was all a conspiracy by a very small group of scientists who were being paid big money to falsify the data and to eliminate data pertaining to those periods when the earth went into a “cooling cycle”.

I found that story rather hard to believe at first, but then after the “news leaks” about the UK scientists, I did a lot more checking . . .

Bottom line: “Global warming” was fabricated to create a new carbon tax trading system and trading exchange. Lots more I could say here. IF you want more info, email me (obewon86@yahoo.com), and I’ll send you some links.

The derivative is the greatest threat to America and the world. When the CBA (Crooked Bankers Association) is allowed to increase the total derivative debt to $700 TRILLION+ this is like a 17,000 ton meteor crashing into earth at 17,000 miles per hour. GOODBYE WORLD!!! There is a simple solution send all CBA officers to Guantanamo for daily waterboarding until they confess then introduce them to the Cuban firing squad. BAN ALL DERIVATIVES NOW!!!! START ROUNDING UP ALL AIG EXECUTIVES TODAY!!!! These terrorists have attacked us!!!