Barack Obama: From Frying Pan To Fire

Obama’s domestic agenda is clearly ambitious and will undoubtedly be an aggressive repudiation of the policies of the past eight years. It is an agenda heavily dependent on tax increases from higher-income earners, which should be supported by a like-minded. However, Obama’s aspirations may be constrained by external factors beyond his control. Even with expanded Democratic majorities in Congress, the political reality is that the financial crisis will likely dominate his playing field, hampering to some degree his ability to tackle the other pillars of his domestic agenda.

As the federal government responds to the credit crunch and growing recessionary pressure, Obama will need to dedicate significant federal funding to expedite recovery, thereby siphoning money from other priorities and increasing pressure on the national deficit and debt. The final 100 days of the Bush administration have been a churning cauldron for the President and the markets, and Obama will quickly learn what it is like to go from the frying pan into the fire.

No Matter What They Tell Us ...

And here's what the world's top leaders and economic brains have to say about the global meltdown. Read on ...

We are right now teetering on the verge of panic: George Soros, billionaire investor, head of Soros Fund Management

The government's intervention is not intended to take over the free market, but to preserve it: George W Bush, president, US

It's wrong to ask teachers, farmers and small-business owners to fill the gas tanks of the helicopters of Wall Street tycoons: John McCain, Republican presidential hopeful

Washington has to recognise that economic recovery requires that we act not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America: Barack Obama, Democrat presidential hopeful

The Masters of the Universe have bitten the dust, the same dust that is now in the mouths of the rest of us. The impact on the developing world would be profound. Projects are already stopping because of the lack of liquidity and financing. The debt crisis would become worse. The decline in commodity prices and exports would hurt the developing world: Nirupam Sen, India's permanent representative at the UN

Who Wants To Be The D-e-p-r-e-s-s-i-o-n President? Obama or McCain?

What a load of bull! The worst isn’t over – not by a long shot. We’re going to see runs on small-town banks, as people steamroll each other to get their money out while they still can. We’re going to see more “safe” money markets worth under a buck a share. And mark my words, we’re going to see several more big names go belly-up, as the politicians finally realize they can’t stop this panic with smoke and mirrors.

The truth about the economy is so bad that Barack Obama and John McCain might be changing their minds right about now. I’m betting neither one of them is looking forward to being tagged as the next Depression President. That’s right. D-e-p-r-e-s-s-i-o-n.

Even just typing the word makes me shudder. But at this point, the Americans would be foolish not to own up to the very real possibility. Wall Street understands. Year-to-date, Lehman Brothers is down 99%. American International Group is down 95%. Washington Mutual, Fannie Mae and Freddie Mac, down 94%, 98% and 99%, respectively.

These are not sniggering little companies. These are giants. These are some of the very pillars of American finance. Throw in Merrill Lynch, Citigroup and Bank of America, and it’s very plain that the foundation of U.S economy is crumbling. And as far as the average Joe or Jane is concerned, the economy is already in shambles.

And it’s going to get a whole lot worse. Worse? Yes, unemployment soared to 6.1% in August. That came as a surprise to economists. Home prices are down some 16% year over year. The magnitude of the drop surprised economists. Retail sales fell 0.3% in August. They were revised down 0.5% for July. Both numbers came as a surprise to economists.

Are you starting to see a trend here? All the eggheads and government wonks have consistently underestimated the depth and breadth of economic troubles. They said the housing problems would be “short-lived.” They said their financial system was “resilient and strong.” They said the stock market would “recover by the end of the year.” None of that is happening. And if you hold your breath waiting, it just might be the last breath you ever take. 2009 is going to be a devastating year for Main Street and Wall Street.