The UnderNews Blog

Citibank, oh Citibank, we want to mourn for thee,

Your brutal death, bankrupcy distress,

Destruction we would see.

But since you’re backed by the US government,

Since your theif executives are free,

I hope that folks would just use the freedoms allotted to them by the free-market system,

And switch to First Republic Bank with me.

Generally, UnderNews does not feel that it should involve itself in matters of complaints against corporations, because that never gets us anywhere. However, since CitiGroup has recently received word that the government will inject an extra 20 billion, on top of the 25 already promised, and will insure as much as 316billion dollars of risky debt, we though that’s we’d write a poem. UnderNews sincerely hopes that Citibank still has an opportunity to fail miserably, and that the government should not have any hand in supporting a business with such welcoming business practices as: Fee per check paid, Fee for using overdraft protection, Putting money from your overdraft protection automatically into your account, charging interest up front, and not telling you they did it, on top of tons of other free (fee*) goodies you’ll never know about until they charge them.

Due to reasons like these, UnderNews wanted to tell anyone who wants to break the shackles of their current banking institution and go somewhere slightly more pleasant that its behind you all the way.

Nouriel Roubini, a weekly columnist for Forbes maganize has complied a list of 20 items concerning the fact that we as Americans are not consuming enough. UnderNews thinks that his 20 reasons are ample to realize that we shouldn’t care about politics, at least for the time being, or about Obama’s cabinet picks, and need to spend our free internet time getting some jobs on the side to save some money. So when you’re done reading this… please ignore the impulse to Google “Obama News” or “Sarah Palin Porn” and instead go to craigslist and get yourself a job….now. Before, you know….it’s too late.

Oh and find the location of your nearest soup kitchen, it might come in handy soon.

Full Text Here

Some excerpts:

2. The U.S. consumer is savings-less, as the already low household savings rate at the beginning of this decade went to zero/negative by 2006 and now has to rise to more sustainable levels.

3. The U.S. consumer is debt-burdened, with the debt-to-disposable-income ratio having increased from 70% in the early 1990s to 100% in 2000 and to 140% in 2008.

9. Consumer confidence is down to levels not seen since the 1973-75 and 1980-82 recessions.

11. The Fed is reaching zero-bound on interest rates as the economy gets close to deflation, given the slack in goods, labor and commodity markets. Deflation means consumers will postpone consumption as future prices are lower than current prices, as real rates are positive and rising and as debt deflation increases the real value of households’ nominal debts

13. Tax rebates of over $100 billion failed to stimulate real consumption earlier in 2008. Only 25% of the rebate was spent as U.S. consumers are worried about jobs and needed to use funds to pay off their credit cards and mortgages. The tax rebate was supposed to boost consumption all the way through September 2008: In reality, real retail sales and real personal spending rose only in April and May, while starting in June and all the way into July, August, September, October and now the holiday season, real retail spending and real personal spending have been down month after month. Thus, another general tax rebate would be as ineffective as the first one in boosting consumption.

14. The 1990-91 and 2001 recessions were not global; this time around, the IMF is forecasting a global recession for 2009.

17. With consumption being over 71% of GDP, a sharp and persistent contraction of consumption all the way through at least the fourth quarter of 2009 implies a more severe recession than otherwise. Consumption did not fall even a single quarter in the 2001 recession and one has to go back to 1990-91 to see a single quarter of negative consumption growth. But the worsening balance sheet of U.S. consumers in 1990-91 (debt ratios, debt servicing ratios, employment contraction, wealth effects of housing and stock markets) was much less severe than the current downturn.

20. To bring back the household savings rate to the level of a decade ago (about 6% of GDP) consumption will have to fall–relative to current GDP levels–by almost a trillion dollars. If all of this adjustment were to occur in 12 months, GDP would contract directly by 7% and indirectly (including the further collapse of residential and corporate capital expenditure in a severe recession) by 10%, an exemplification of the Keynesian “paradox of thrift.” If such an adjustment were to occur over 24 months rather than 12 months, you would still have negative GDP growth of 5% for two years in a row with a cumulative fall in GDP from its peak of 10%. (Note that in the worst U.S. recession since WWII, such cumulative fall in GDP was only 3.7% in 1957-58). One can only hope that this adjustment of consumption and savings rates occurs slowly over time–four years, say, rather than two.

Even in that scenario the cumulative fall of GDP could be of the order of 4% to 5%, i.e., the worst U.S. recession since World War II. Note that the cumulative fall in GDP in the 2001 recession was only 0.4%–and in the 1990-91 recession only 1.3%. So, the current recession may end up being three times as long and at least three times as deep (in terms of output contraction) than the last two.

November 19, 2008

Today is a very important day in legal precedent. Washington State has agreed to pay a man $300,000 for genitals lost in prison due to flesh-eating bacteria. After consulting our legal expert (neither legal nor an expert), UnderNews has concluded that this amounts to a precedent which states the price of a man’s penis and one testicle.

Because this case did not finish trial, there are not enumerated costs for the penis and the testicle, though the award might have been higher. The victim of the violent bacterial attack decided to settle for this amount.

UnderNews does wish that the case would have finished trial, and at least attempted to have a judge put a price on a man’s genitals, if not on his dignity, because it is about time that the courts weighed the holding tank of genetic material (um…you know) versus the expandable pipeline along which this genetic material is delivered (yes, you know this one too).

Real news here (via UPI).

Cartoon roughly about the subject matter, but not really at all. (UnderNews did not wish to put up pictures of Penis-Eating Bacteria).

Why Barack Obama needs to explain to me why he would ever support Georgia in the Russia-Georgia conflict; and why he needs to explain himself to the world, before they lose this “hope” thing.

Thanks for the BBC, UnderNews is able to pass along to you what could have actually happened in Georgia and South Ossetia. Unfortunately for the truth, this situation had the unfortunate timing of being in the middle of a US election process, in which the truth has nearly as much value as “those lies of evolution” have to um…you know….Americans.

You may or may not have heard what happened, and may or may not have heard it from the mouths of the presidential candidates at the time. Without giving any responsible citations for this, I’ll recap from memory. Sarah Palin loosely suggested that she may want to attack Russia for attacking Georgia, an American ally. That now-President-Elect guy said that , “I have spoken to President Saakashvili, and conveyed my deep regret over the loss of life, and the suffering of the people of Georgia. ” Via Community Blogs On BarackObama.com

Thanks Barack Obama for extending your regret and consolations for the suffering. In the future, please feel free to console the Palestinians for the razing of the houses of terrorists (as if they weren’t expecting it.) Also, apologize to the Taliban for killing fighters not directly associated with 9/11.

I can only imagine how this conversation with Saakashvili may have sounded, “I’m sorry that the Russians stopped you from carrying out blood libel on your neighbors. Is there a way that the US and other international organizations can stop justice from being brought upon your murdering neck? Oh, and deliberately targeting citizens? It’s cool, we do it all the time.”

Dear UnderReaders, this treatise on Proposition 8 warrants your views. There isn’t sarcasm, parody or humor here.Just watch.Thanks,Administration

Colorado voters today decided that their Constitution should be amended to say that human life begins at conception.

Washington voters chose to allow doctor-assisted suicide.

Those are the only news worthy of reporting.