Wednesday, April 15, 2009

Industrial Output The Lowest Since World War II

Remember our discussions long ago about the risks in utility stocks? When the world was in love with them? Amongst more detailed remarks we wrote they were "The biggest bubble in their history".

Have you ever heard of deregulation in the utilities business - an opportunity for utility companies to partake in asinine business ventures using substantial amounts of debt? Ventures where utility executives generally had no clue as to what they were doing? Yet banksters and the bond markets (really banksters as well) were more than willing to lend large sums of money to management that had no experience in what they were doing? Ever heard of Enron? Sort of sounds familiar eh? Like our rantings on deregulation of the finance industry while the world was partying hard. Funny thing about deregulation. And, why did wholesale deregulation happen? Ask your friendly Washington politician. I'm sure they have a better answer than lobbyist and political donations by special interests. I guess I'm just not capable of understanding the highly intelligent debates we had in our country about what deregulation was good for the American people. You remember debates on substantive issues? They are used in a democracy to determine the path of society. You know. Like how to move forward in dealing with this crisis using methods other than throwing trillions at the banksters courtesy of those same politicians.

And, what happens when the core business of utilities is no longer generating enough cash flow to cover these obligations for these asinine adventures? Possibly due to a substantial drop in, hmm, let's say industrial production? Just a thought. Don't be fooled by the foolish commentariat of Wall Street fools. This is not a housing crisis or a banking crisis. This is a permanent shift in the underlying economy as we have written ad nauseam. There are plenty more parties to attend.
posted by TimingLogic at 9:39 AM