Debtors Revolt in the Offing - Check Local Listings

A debtors revolt is coming and, ironically, the dozen or so Too Big Too Fail (TBTF), systemically important financial institutions which control the bulk of about a trillion dollars of unsecured credit card lending, and which so generously received and in many cases still show on their balance sheets copious amounts of taxpayer capital borrowed from China, are now enacting the very policies which will be the cause of said revolt.

JPM Chase is leading the way, sending letters to cardholders who have locked in low "teaser/promotional" interest rates of 3.99% or 4.99%, mostly through balance transfers from other higher-rate credit cards which promise these low rates for the life of the loan unless you default (the technical term for doing something really bad) by making a late payment, going overlimit, missing a payment, paying less than the required minimum payment, forgetting to call your Mom on Mother's Day, and so on. Chase, and other debt-pushers, now the beneficiaries of the lowest interest rate environment since ever (they can borrow from Uncle Ben at the Fed for about a half percent, p.a.), aren't squeezing enough profits from these promo-rate cardholders, but now they've found a way.

Chase recently notified tens of thousands of cardholders it is raising the minimum monthly payment to 5 percent from the old industry-standard we'll-make-you-a-debt-slave-for-life-and-since-we-rewrote-the-bankruptcy-rules-good-luck-with-that minimum monthly payment of only 2 percent. Starting August 1, Chase cardholders who received these letters (see this link at Consumer Affairs and this link at Daily Kos for some real-life examples of the impact of this change), now will need to pony up 150 percent more each month to keep the low, low teaser/promotional rate. So if you just did a balance transfer for $20,000.00 (!) and were starting to feel pretty good about consolidating your debts into a manageable $400.00 minimum montly payment, surprise!, your convenient new minimum monthly payment jumps to$1,000.00.

Chase, of course, which recently did repay its $25-large Uncle Sugar equity infusion (and therefor never should be eligible to receive another bailout, TBTF or not), says it's merely following recommended federal (Office of the Comptroller of the Currency) guidelines in hiking the minimum monthly payments to 5 percent, but it (and probably all other card issuers who will follow) is rushing to change any and all credit card terms while it can before new regulations prohibiting such changes go into effect next year. The Clearly Intended Effect, of course, is, by making the new minimum monthly payments two-and-a-half times higher in one fell swoop, carholders unable to comply with the new $1,000.00 payment will default, which then gives Chase the ability to jack a cardholder's interest rate into the stratosphere, or at least 25 percent to, yes, incredibly, 39.99 percent, from the low, low, life of the loan 3.99 percent the cardholder was deceived into accepting. (And, insult-to-injury-wise, the cardholder probably paid a 5 percent balance transfer "fee" to boot - another grand for a $20,000.00 transfer.)



Marshall Auerback raises the same issue of a debtors revolt in his new deal 2.0 piece "Risk of Major Social Upheaval Likely if Bank Bonanza Continues," albeit triggered by different circumstances, and as the only remaining form of protest available to citizens of a new and dangerously armed police state (forget marching, as in Iran), but the effect will be the same.

When most of the home owning voters cannot pay their major debt or have no
incentive to pay their mortgage debt, there will either be a debtors revolt that
society will sanction or there will be a bailout of such a magnitude that mega
moral hazard will affect private lending forever. Once these things happen, you
will no longer have the social rules for private risk based lending. In other
words, financial markets will be unlike anything ever seen before in private
economies. Is this really what Wall Street wants, let alone American society as
a whole? (emphasis mine.)

When U.S. debt-slaves decide they have nothing left to lose, when neither marching in the streets nor bankruptcy is an option, the former due to personal status/safety issues and the latter because that game is already rigged in favor of the lenders, when minimum monthly payments are more than doubled specifically to create an opportunity-by-default to spew interest rates into the 30 percent range, the time will be at hand. Maybe not this year, but soon. Naturally no one in the finance-captured main-stream-media has picked up on this story, much less the widespread implications in a consumer-driven economy (Update One, 06/30/2009 Via Bloomberg: JPMorgan Raises Minimum Monthly Payments on Credit Cards to 5%).

In the meantime, Chase's action (and likely all other cardholders which will follow suit) will KILL what remains of the withering, green-shootless retail economy, no question, as cardholders are forced to shut down any and all discretionary spending to divert funds to credit card payments. Either way, kiddies, it'll be a lean Christmas (or Hanukkah or Kwanza or whatever) this year, so don't expect much under the tree (or menorah or whatever).

Your tax dollars at work. (Well, not Chase, but for BofA and Citi and Wells Fargo and...)

TARP Repayment Terms MUST Preclude Future Support

The "Gang of 19" and other U.S. banks which accepted hundreds of billions of TARP recapitalization funds - taxpayer money borrowed from our BFF China - since October 2008 now are growing impatient to return the money to Uncle Sugar. Stress tests were graded Pass-Pass last month after fantasy Q1 earnings were reported and accommodating capital markets have allowed the largest of the "Too Big to Fails," (TBTFs) with a couple notable exceptions, to bring debt and equity offerings fast and furious to a newly eager investor crowd. Even the much-heralded PPIP (really, MLEC 3.0) designed Rube-Goldberg-like to extract toxic waste from bank balance sheets and fob it off on an unsuspecting public, replete with more-than-generous fee comps for the "managers" now is DOA, having recently been euthanized by the FDIC as no longer necessary.

The Anecdotal Economist is all in favor of now-healthy financial institutions, courtesy of bogus Q1 earnings (huge wind assists from AIG derivatives unwinds, trading profits, mark-to-make-believe and the best, right Citi?, theoretical discounted debt buy-back gains), repaying the government and getting on with the business of fleecing credit card customers and mortgage refinancers and a rapid resumption of unrestricted, astronomical pay and bonus plans, but the fine print of the TARP repayment term sheet must contain one vital provision:

Any bank repaying TARP funds must forever be barred from receiving any and all similar government aid in the future.

TARP, if repaid, has to be an one-off for the TBTFs. When If the economy continues to head down the crapper, if the green shoots turn out to be weeds, if the green shoots get scorched, if home foreclosures double - again, if credit card default rates hit 20 percent, if personal and business bankruptcies double - again, if unemployment reaches 12 percent, if states, counties and municipalities go broke and tax revenues at all levels evaporate, well...boo-frigging-hoo, too bad for you.

Are you listening, Government Sachs? Did you catch that, Jamie? Taking notes, Kenny? If you pay back the TARP - THAT'S IT. No more government rescues again, ever.

So if, in future quarters, your metrics go south and you begin to report crappy results - again - and the shorts come after you with a vengeance - again - and it turns out 2009 earnings really were make-believe, do not demand expect another gift from Timmy, Ben and Sheila (and Larry and Bob).

If there needs to be a next time, to again save the TBTFs, the U.S. economy and the world from financial armageddon and meltdown, we respectively request it be done the old-fashioned way: Failing banks must be seized, management and boards must be dismissed, common and preferred stockholders and unsecured bondholders wiped out, toxic waste removed and new, solvent institutions re-opened. The FDIC has done this for billions of years. It can do it again.

Executive Summary: We Are Screwed

“Never make predictions, especially about the future,” baseball legend Casey Stengel once observed. Despite his admonition we make our guesses anyway, extrapolating our current moods and worldviews as far into the unknowable future as can be tolerated with straight faces by polite company. As such, optimists of America’s 21st century often see a rosy future of bunny rabbits and rainbows, where energy is unlimited, money is unnecessary, the world’s population is smaller, well-fed, educated, civilized and healthy, and future generations enjoy long lives of ease, comfort and wealth thanks to the extraordinary beneficent progress of science, medicine, technology and government.

Modern-day pessimists, on the other hand, foresee a future far more dismal than the crumbling present reality, teetering on the brink of anarchy and collapse and fraught with the vicious animal spirits arising from our reptilian brain stems as bipedal inhabitants of an over-populated planet violently compete for ever-scarcer resources and future generations are imperiled thanks to the extraordinary destructive progress of science, medicine, technology and government. Since pessimists merely are optimists with better information, and inasmuch as there is none so zealous as a convert, one can be forgiven the newfound realist zest of a former optimist whose eyes have opened to view the precipice at which we, as a nation and a species, now stand. Predicting major changes to a complex system, however, much less its collapse, is an exercise fraught with indescribable futility, subject as they are to sightings of Black Swans, that elusive species whose arrivals are unknowable and unpredictable, unlike the buzzards which still return every March 15th to Hinckley, Ohio.

For Black Swans are the harbingers of both good and evil, and, as such, are apt to make one’s future view of the world both amusingly irrelevant and dangerously outdated mere moments after their sighting. Undaunted, and with full foreknowledge of the hilarity with which some of these prognostications will be viewed after 2012, herewith I submit my forecast for the future.

Executive Summary

We are screwed.

Rationale

We have ruined our endgame. Our children are screwed. Their children and the posterity of humankind are screwed. Humans, as a species, have screwed up a really good gig on this planet and, at some point, some miserable centuries hence, likely will be evolutionarily selected, as were dinosaurs, to cease to exist. Other species will survive and thrive, however, if only bacteria dwelling far undersea or underground, and perhaps, in the four or five billion years before the eventual decomposition of our solar system’s star into a red giant engulfs the orbit of this planet, another form of conscious, self-aware, communicating, tool-using life will escape the evolutionary chains in which it now is entrapped. All of which will occur well-after 2012, but in the meantime, here’s what to expect between now and then:

Black Swan Alert

December 21, 2012, as every student of apocalypse knows is reset day of the current Mayan 5,125.36-year “long count” calendar, as well as culmination of a fifth long-count great cycle and beginning of a new great-great cycle of 25,626.8 years which roughly coincides with the earth’s axis-wobbling precession of equinoxes cycle. It also represents a point at which the sun will cross the elliptic plane of the galaxy at the same time all its planets are aligned behind it away from the galactic center and the day on which Thomas Friedman will realize, belatedly, everything he ever thought or said was wrong and dogs and cats will be living together and…

Well-before 12/21/12, however, an unknowable, unpredictable black swan – the tipping-point event – will occur, setting into motion a cascading chain of unstoppable events which leave humanity forever changed and slipping, eventually, into evolutionary obscurity, just one of many accidents of DNA which didn’t quite work out. These forecasts, these dark musings, focus more on the immediate aftermath of the tipping point event (TPE), and the longer-term repercussions for the United States and the world. As another commenter recently observed, two of the four horsemen of the apocalypse already appear to have been untethered: Demand Collapse, in the form of sharply reduced consumer spending, reduced debt levels and increased savings, and Systemic Failure, via the collapse of AIG.

In 2009, however, a strong case can be made that these seals only partially have been broken, as consumer demand is falling, but has not completely collapsed, and the systemic failure of AIG has been tempered by the unlimited amount of borrowed government/taxpayer funds which have been shoved into the gaping maw of the AIG transfer conduit, only to be parceled out among some of the nation’s, and world’s, largest unindicted co-conspirator institutions, whose own day of reckoning looms near. In the nearer term, clearly the current policy of the United States government, regardless which persons or political party officially are wielding power (or the oligarchs behind them), is to insure the grand game continues unmolested, that no financial bubble ever is popped and no economic reset button ever is pushed. The Treasury Department and the Federal Reserve, therefore, in coordinated fashion, have become, and will continue to be, the financial backstop and lenders of only resort, setting up the scenario which will culminate in the actual “financial Armageddon” of which we were warned, boy-who-cried-wolf-like last September, but in orders of magnitude far beyond the worst nightmares of even the most pessimistic among us.

This next year-to-three-plus-years represents the final “blow-off” stage of our financial evolution, from our meager origins on the slime-lined shores of metal coins to the sophisticated velocity of electronic money, mere electrons, circling the globe at the speed of light. And it will be to those ancient metal coins and a much larger, rounder, colder world (sorry, Tom Friedman), at some point in our bleaker future, to which we will return. Whether good-intentioned or ill – it’s immaterial - the U.S. government/Federal Reserve will be enabled to become the final Ponzi-finance bubble of humanity’s electronic era, and in doing so will again replicate the oft-repeated outcome of all paper (fiat) currencies.

The last giant bubble shall burst on that day – not in 2009, but within four years – when:

· We will have bailed out, rescued, backstopped, guaranteed and thrown money at every major business, corporation, industry, state, city, bank, insurance company, automaker, retailer, airline, factory, shopping mall, commercial real estate company, pension fund, mutual fund, money market fund and a good portion of the population, ballooning our national debt to incredible, historic, bubblicious proportions, mostly via funds borrowed from international creditors.

· Under this illusion, we will have returned to some semblance of pre-2007 “life as we knew it,” albeit with new, improved price-deflated consumer goods, but also a renewal of free-flowing credit for consumers and businesses and cities and states and a restored, growing (if illusionary) economy.

· Just when things are looking up and Obama is running for re-election, with a prevalent, growing perception of hope and a “big bullet” dodged, the TPE occurs (unexpectedly, of course), say, yet another derivatives bomb (hey, there’s a quadrillion of ‘em…) which threatens the extinction of yet another too-big-too-fail financial institution. This time, however, the “financial Armageddon” cry-wolf ploy fails to engage our international patrons, as they previously have read about John Law and know the movie’s ending (like “Titanic:” it sinks every time).

· America, belatedly, will realize we have gone “a bailout too far,” which will end as badly for the Allies as did the movie “A Bridge Too Far.” (Note: by definition, the Black Swan TPE will NOT be a derivatives eruption, because that is already a “known unknown.” The Black Swan TPE will be a Monty-Python-esque “And Now For Something Completely Different” occurrence, which may, in fact, detonate a derivatives bomb. As such, it shall be henceforth, for the purposes of this commentary, be referred to as “the Black Swan TPE Which Cannot Be Named,” or BSTPEWCBN.)

· America’s international creditors, including “friendlies” like Japan, Britain, Canada, Brazil, and others, immediately and en masse, become unwilling to lend the United States, at any rate of return or rate of interest, save the pledging of U.S. gold reserves and/or deeding over of real, physical assets. The “Full Faith and Credit of the United States” overnight becomes regarded as some sort of ironic joke.

· Our international suppliers of energy, on which we foolishly still are dependent for two-thirds of our minimum daily requirement, no longer will accept our paper IOUs, again only gold or the deeds to other real, physical assets.

· The U.S. dollar no longer is accepted for any form of payment outside the country, much less is deemed the world’s reserve currency. In its place, a hastily arranged basket of other currencies is created to isolate the financial damage to the U.S.

· U.S. dollar-denominated global trade and commerce grind to an abrupt halt, ships at sea stop, divert or return to ports of embarkation (if headed to the U.S.), pending delivery of goods to alternate buyers or arrangement of payment in forms which are not the U.S. dollar.

· Resolutions are introduced to the United Nations to require the United States to stand down its military everywhere in the world, in recognition of our new status as a banana republic with nuclear arms. The U.S. naturally vetoes this resolution in Security Council. U.N. member representatives approve a measure to immediately relocate U.N. headquarters to Switzerland.

· After the failed U.N. resolution, our overseas armed forces are ordered by host countries to immediately vacate their garrisons or face forcible ejection, including troops based in active theaters of conflict.

· Post-Katrina-New-Orleans-like, widespread hoarding of cash, food, water, medicines, alcohol, batteries, candles, fuel, arms and ammunition occurs within hours of the BSTPEWCBN, rapidly escalating into regional episodes of violent theft, robbery, burglary and looting which overwhelms local law enforcement.

· Our remaining domestic armed forces and national guard units are ordered into U.S. streets, with authorized use of deadly force, to support local and state law enforcement in quelling protest, looting and violence, to enforce 24-hour curfews and, for the third time in our nation’s history, to enforce martial law. Armed forces and local law enforcement conduct house-to-house weapons sweeps, under the auspices of local force majeure ordinances (in violation of the Second Amendment and Fourth Amendments), and based on NCIS gun-purchase records and state concealed-carry permits, as applicable.

· In short, we transform ourselves from unilateral superpower to international pariah in a matter of a few weeks. Martial law, curfews and restricted movement and travel remains in place for months as essential services and commerce are allowed to recommence under strict rules and regulations.

Then what? The process begins anew under an entirely different reality, an entirely different set of criteria, but the process remains the same: Denial, Anger, Bargaining, Depression, Acceptance.
Denial will evaporate rapidly at a pace which coincides with full establishment of the new world order, and Anger, having flourished briefly and violently on our streets and in our neighborhoods, will be severely, perhaps painfully, curtailed in a previously unimagined militarized manner. There will be no Bargaining, for there is nothing left to bargain for, or to bargain with. What was, was, and what now is, is, and for the first time in the post-WWII era, possibly longer, the United States of America no longer will call the shots in the assemblage of nations. Depression, arising from a lifestyle lost, and Acceptance, of a new, much lower, standard of living, will be the most difficult segments to live through.

But muddle through we must. As always, younger children will adapt most easily and most quickly to our reduced means and living arrangements. They will , however, grow weary of the endless stories of how wonderful and amazing American life used to be, as told to them by their aging Baby Boomer, Generation X and Generation Y elders.

Now my head hurts…time for some scotch, which I will sorely miss, someday.

Starve the Beasts - Start the Revolution

It is apparent now there remains only one way for ordinary Americans who love their country and want at least some of what's good about it to be preserved for future generations: We must kill the FIRE Economy beasts (FIRE: Finance, Insurance and Real Estate).

Recommended method of choice: Starvation - suitably slow and painful.

We're the victims in a hostage situation, if you didn't know, held captive and mesmerized by the soft, flat-panel-TV glow of the FIRE Economy, which depends on our sheep-like conformity and Stockholm-syndrome-like admiration of our captors, but it's NOT too late to regain our senses, if only for the benefit of our children and grandchildren. Even if it is only wildly exaggerated - and it isn't - that the Systemically Important Too Big To Fail (SITBTF) institutions completely have captured our flag, our capital, our political parties, our "democracy" and our very lives, we as regular, hard-working, country-loving J6Ps have only this one remedy remaining, as all others woefully have failed.

We've tried writing letters to Congress, but they fell on deaf ears attached to bodies sated with the addictive, lobbyist-supplied narcotics of perks and favors and clothed with garments filled with finance-industry campaign contributions. One might feel good having written a letter, but unless you're one of the someones stuffing their pockets with cash, it's wasted effort. We've tried voting out the "ins" in the Capitol Building to no avail, either. Once the DC Kool-Aid has been consumed by elected Representatives and Senators of BOTH parties the fix is in. It's all good fun in Washington; ask anyone who has done the peoples' business in Babylon for even one lousy two-year congressional term and they will concur: it's a great gig if you can get it, and better if you can keep it as long as possible. As such, they always will cater to the whims and needs of the purveyors of campaign cash who can insure they remain as Courtiers at the Castle in Emerald City.

Last year we fell for the whole "change you can believe in" campaign gimmick but somehow the candidate elected in November has pulled off in many ways an astonishing, seamless transition from his predecessor, of which his administration's dealings with Wall Street, AIG, Fannie/Freddie, SITBTFs and the economy are only a few, validating once again that immutable fool-most-of-the-people-most-of-the-time law of the universe. (Which, in and of itself, should be all the evidence necessary to prove, beyond any doubt, the entirety of Wall Street's now-not-so-behind-the-scenes direction of public policy, and government's role as the FIRE economy's stooge and enforcer.)

We have only one option remaining to fix this ourselves, to starve the beasts, and it is, simply:
Stop Doing Business With Them.

If you are banking with a SITBTF bank, start by closing your checking account. Move it to a smaller community bank which offers the same features such as bill payment services, payroll depsosit, automatic debits and the like. Close your savings accounts, your CDs, your money market deposit accounts and move them to one or more community banks, and introduce yourself to an actual banker and branch manager (it will be handy someday to personally know someone).

You still will have ample FDIC deposit insurance, regardless of the institution's size and you still will have nationwide ATM capability, so shut down those SITBTF accounts NOW. If you own or manage a business, and are so empowered, close your business deposit accounts and move them to a financial institution not considered part of the current problem. It's a lot of effort, and it's not easy, but your future generations will thank you.

DO THESE THINGS, and, one, we will get someone's attention when they begin to notice a measurable increase in closed accounts and a rapidly falling deposit base (worst-case scenario for a SITBTF), and two, we will begin to starve the beasts via an orderly "run" on these giant messes masquerading as solvent, responsible financial institutions.

Next, open new IRA and investment accounts - not that you have much left in them, which makes the timing opportune, and you weren't getting any useful advice or guidance anyway - at regional or online brokerage firms NOT owned by or associated with any other FIRE economy player, including the giant mutual fund industry. Starve the beasts!

Need home, car, business or life insurance? Well, don't get insured through any subsidiary of any SITBTF company, especially one which has used its past-life AAA rating for evil, not good, and now has been seized by our government stooges and enforcers, not to rescue it but to co-opt it as a money conduit to pour tens of BILLIONS of dollars borrowed from China into the balance sheets of other, well-connected domestic and foreign (!?!) SITBTFs, one of which has the initials "GS."

Finally, methodically begin to terminate your borrowing relationships with the SITBTFs. This is the difficult part. Start by paying down and paying off your credit cards - all of them. Start consuming with CASH whenever possible. Yes, cash, Benjamins, coin of the realm and all. Besides, cash transactions have that certain, quaint, pleasing quality of anonymity so lacking today in our every-waking-thought-is-now-monitored cyber-world. Close them as soon as they are paid off and don't fall for that FICO-score crap that your credit rating will decline if you - YOU - voluntarily close a credit card account. If it does, so what. For god's sake, it's your option and your choice. Perhaps we all should shoot for no FICO score (or, zero, as Dave Ramsey boasts).

If enough of us begin voluntarily closing our revolving credit card accounts and paying with cash, the saps at FICO will be forced to change their secret statistical recipes which have worked so well the last 30 years to keep millions of us enslaved with debt. If that happens, if FICO is forced to change its magic algorithms, then voluntarily closing a paid-off account would IMPROVE a credit score, but our goal should be to not have a score at all - that'll show 'em. By then it won't matter. FICO will be going away soon enough as the discredited, flawed, theoretical mathematical formula it is, one, like so many financial models of the last generation, which worked right up until it didn't.

So, got an AmEx card? Pay it off and cut it up. Ditto for Discover. Mega-Bank Visa or MasterCards - flush 'em. What's in your wallet? Forget Capital One and get reacquainted with some dead presidents. For those credit-card-is-required transactions, use your debit card, the one attached to your new checking account at a small, solvent community bank. Starve the beasts! Take back our country! Car loans are trickier, but, again, an auto loan from a smaller community bank will help starve the beasts. The same for home loans - starve the beast by doing business with anyone else. We can do it.

Since Washington clearly will not DO ANYTHING to help ordinary people, only the monied interests, WE MUST. This is war, it's revolution, a fight for our future, but it's bloodless and LEGAL. We must declare our independence from the tyranny of the FIRE economy and the Systemically Important Too Big To Fails. We have the right to take these matters into our own hands because the heads of our elected and appointed leaders are crammed so far up the exit chutes of the titans of Wall Street and the Main Streets where the SITBTFs are headquartered there is NO OTHER SOLUTION.

If you agree "too big has failed," you have great company. Kansas City Fed President Tom Hoenig delivered a speech (as a private citizen, not necessarily reflecting the view of his Federal Reserve Bank) in March entitled "Too Big Has Failed," suggesting the time was right to break up the financial cartels. Hoenig testified before Congress April 21 and reiterated that view (his written statement here), going as far as saying "when you have banks that are too big to fail, you will get oligarchs." (Yes, oligarchs.) Simon Johnson, former IMF economist and now MIT professor, posting at The Baseline Scenario recently authored a must-read "The Quiet Coup," in the May issue of The Atlantic. William Black, a former regulator who led the cleanup of the Savings & Loan mess in the early 1990s and blew the whistle on the massive fraud and corruption in that scandal, recently told journalist Bill Moyers on PBS that CEOs of some of these SITBTFs, in order to increase their own personal income, have deliberately set out to make bad loans - pure fraud. He would know: the title of his recent book is "The Best Way to Rob a Bank is to Own One." And don't forget Nobel Laureate Joseph Stiglitz, who has been out spoken in his belief that no bank should be too big to fail.

There are countless more of us, without a public forum, who feel the same way, and we have the power to do something about it. The time is right, the time is now. Take back our country. Let's make SITBTF no BFD and RIP. It'll take a decade, maybe longer, but this is the only way to end our present hostage situation and we have the power. All we need is the will to make it happen. Start today. Stop doing business with our tormentors - all of them. Stop patronizing our persecutors. Are we stupid? HELL NO.

Stop the madness - starve the beasts. If we don't, WE are part of the problem and we deserve what we are getting and what is happening, now and in the future, because it WILL happen again if we let it.

Starve the beasts - start the revolution.

Presidential Humor, Deficit Spending Edition

Official: Obama wants agency spending cut by $100M

At first we thought it was a misprint on the headline: Surely it should have read $100B, as in "Billion."

Then we checked the calendar, thinking it might still be April 1st. But no, the president intends to ask his cabinet, in its first official meeting today, April 20th, to find ways to cut $100 million of government spending this fiscal year.

Cost-cutting optimists might call that "a good start," but the more cynical among us call it a "rounding error."

Not to press the issue, but in the hour President Obama and his cabinet will discuss ways to save $100 million, the federal government will have spent $228.3 million more than it has taken in.

Yes, a FY2009 projected deficit of $2 trillion means our federal government of the people, etc., etc. is spending nearly $5.5 billion a day more than it collects in tax revenue, which is $228.3 million an hour.

Surely the president and his advisers can think of more important things to do than waste another $228.3 million trying to find ways to save $100 million.

Do they think we can't do the math? Or can't be bothered? And haven't we been told repeatedly for months that, in a deep recession, ALL government spending, even when spending taxpayer dollars borrowed from our BFFs China, et al, is GOOD spending.

Helps the economy, and all since consumers without jobs can't or won't spend and businesses without consumers can't or won't spend.

Don't worry about the waste, we'll address that some other day when the economy is running on all four cylinders.(And by the way, what metaphor will we use when we switch to electric cars? Maybe we'll be running on all "thousand volts" or something.)

Mr. President, please, for $100 million, don't waste everyone's time.

Partial text of linked story:

WASHINGTON (AP) -- President Barack Obama convenes his first formal Cabinet meeting Monday and will ask department and agency chiefs to look for ways over the next 90 days to cut $100 million out of the federal budget, a senior administration official said.

Back from his fence-mending trip to Latin America and the Caribbean, Obama will be reminding the panel that American families are having to make tough financial decisions and need to know the government is spending their money wisely, too.

The official discussed Topic A for the session on grounds of anonymity because it will be behind closed doors.

A second senior official, also speaking anonymously, said Obama will point to cuts already being proposed.

The Veterans Affairs Department has canceled or delayed 26 conferences, saving nearly $17.8 million, he noted, and will be using less expensive alternatives, like video conferencing. The Agriculture Department is working to combine 1,500 employees from seven office locations into a single facility in 2011 - saving $62 million over a 15-year lease term. And the Homeland Security Department has estimated it can save up to $52 million over five years by purchasing office supplies in bulk.

The federal deficit for March alone was $192.3 billion, and $100 million would represent about one-twentieth of 1 percent of that. Obama has brought forward a $3.6 trillion budget for the 2010 fiscal year, beginning Oct. 1, a proposal that would produce $9.3 trillion in deficits over the next decade.

Creative Q1 Accounting, Systemically Important Department

Wells Fargo projects record $3 billion 1Q profit

Of the four remaining major national banks (Chase, Citi, BofA and Wells), Wells Fargo and Citi have a far lower amount of loss reserves as a percentage of loans than do JPM and Citi.

Notwithstanding, in conjunction with newly restored "mark-to-make-believe" accounting from their friends at FASB (who were bribed by the Fed and threatened by the SEC), the banks likely will report stellar Q1 earnings, by design, meaning the feds (that seamless Bush-Obama transition) implicitly will allow them to now under-reserve for bad loans, thus dramtically improving net income and capital ratios.

Combined with "stress tests" to be graded, not "pass/fail" but "present," the entire exercise appears to have been created to dupe private investors into buying new issues of common stock offered by the banks, such as Goldman Sachs' upcoming issue, to "prove" capital markets are functioning again.

Add the PPIP government-sanctioned looting of what little taxpayer money yet can be borrowed from China and we will be able to call off Depression 2.0.

(Pay no attention to those unemployment numbers, or tent city numbers, or mass shootings numbers because, HEY!, the banks are OK!)

Which will, of course, prop things up for 6-12 months and lift the stock market sufficiently for Wall Street insiders to "distribute" their remaining equity holdings to the rube small investors who mistakenly believe the government has solved all our problems.

And which, of course, sets up the "big one" sometime in 2010. The big what? I don't know, but it's coming.

Check local listings, but stay tuned...