30 Days Of Night

Chrysler is furloughing all US plants for 30 days as of the last shift on Friday. The interesting reason behind the shutdown? No credit for people to buy cars.

"Chrysler dealers confirmed to the company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing," the carmaker said in an announcement. "The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation."

Auto sales have been hit hard by tight credit and the struggling economy. Overall auto sales in the United States were down 37% last month compared with November 2007. Chrysler's situation was especially bad. Its sales dropped 47%.

Chrysler's financing arm, Chrysler Financial, has tightened lending terms for buyers and earlier this year, it announced it would no longer offer leases.

Remember, just over two months ago, the President assured us that everything was fine, and the recession was just all in our heads. Chrysler's all but done, as is GM. An entire American industry is now on the brink and the government has pledged trillions and trillions of dollars to fix the problem over the last nine weeks or so. Trillions.

It will not be the last industry facing extinction. America a few years from now is going to be a very different place, like the difference between 1928 and 1932. We're going to have to reinvent our entire economy from scratch. Many of the old industries and jobs they represent will vanish for good over the next few years.

Our consumer consumption economy is dying before our eyes. What will replace it? That is Obama's true test...and Bush's true legacy of disaster.

You Think I'm Depressing?

I'm not depressing. Now, James Boyce is depressing.

It will start with the housing market which will, once again, be determined by issues like the number of people living in a market, incomes and rental prices.

How far will housing prices fall? To the historical mean, which is another 20-40% down, depending on where you live. This graph is shocking for two reasons. One, how it disproves the basic belief that a house is a good investment, it's not. And second, how we should have seen a correction in 2002, but post 9/11, all we saw was a bubble. Currently prices are down 20% from the top that was shown in this graph, but clearly, they still have a long way to go.

Will housing prices return to historical averages? Yes. But what's going to happen first? Here's the view of Whitney Tilson who was on 60 Minutes on Sunday and one of the few who predicted the mortgage disaster.

"We had the greatest asset bubble in history and now that bubble is bursting. The single biggest piece of the bubble is the U.S. mortgage market and we're probably about halfway through the unwinding and bursting of the bubble," Tilson explains. "It may seem like all the carnage out there, we must be almost finished. But there's still a lot of pain to come in terms of write-downs and losses that have yet to be recognized."

The housing bubble will deflate slowly, unfortunately for our recovery because now people are just pulling their houses instead of selling at a loss. "I'll wait till the market comes back" you here but it's not coming back, any more than lightbulbs.com stock is going to be worth $100 a share anytime again ever.

In real dollar terms, in our lifetime, housing prices will never be what they were in 2005 and 2006. They may never even get within 25% of that false peak. In the next 100 years.

Problem is, I don't see anything wrong with his logic.

Dear America:

"There's no such thing as a moderate Republican. A moderate Republican is a liberal."

--Rush Limbaugh

(And people wonder why the Dems are in charge now.)

Da Troof

Balloon Juice's John Cole on the GOP and Obama's patriotism:

In fact, an argument could be made that questioning the Obama’s patriotism was the only growth industry of the last twelve months.

Nuff respect due.

Zandar's Thought Of The Day

1000 posts. I think I shall call Dad.

Man Of The Year

Time Mag's Man of the Year of course is Barry. No brainer, even for these guys.

Score that as follows: one imploding economy, one deteriorating war in an impossible region and two versions of Armageddon — the bang of loose nukes and the whimper of environmental collapse. That's just for starters; we'll hear the unabridged version shortly.

But first, there is a bit of business to be dealt with, having to do with why you are reading this story in this magazine at this time of the year. It's unlikely that you were surprised to see Obama's face on the cover. He has come to dominate the public sphere so completely that it beggars belief to recall that half the people in America had never heard of him two years ago — that even his campaign manager, at the outset, wasn't sure Obama had what it would take to win the election. He hit the American scene like a thunderclap, upended our politics, shattered decades of conventional wisdom and overcame centuries of the social pecking order. Understandably, you may be thinking Obama is on the cover for these big and flashy reasons: for ushering the country across a momentous symbolic line, for infusing our democracy with a new intensity of participation, for showing the world and ourselves that our most cherished myth — the one about boundless opportunity — has plenty of juice left in it.

In the Lord Voldemort category of "great but terrible things" that qualify a person for runner-up, we have Sarah Palin (for destroying the GOP) Hammerin' Hank Paulson (for destroying the economy), Chinese film director Zhang Yimou (for the terribly great Beijing Olympics opening orgy) and French President Sarkozy (for being terribly, terribly great at being French.)

Go fig.

StupidiNews!

• NASA scientists warn that 2 trillion tons of polar ice is melting at a much faster rate.
• A federal appeals court in New York has struck down yet another part of the PATRIOT Act as unconstitutional.
• More than nine out of ten Illinois voters say embattled Governor Rod Blagojevich must go.
• OPEC ministers are meeting to consider a record supply cut to boost oil prices above $75.
• The Bush administration continues to try to block the release of the NSA's internal arguments over wiretapping.