Weather Report: Banks, “The Plan”, Toilet Paper (Something You Can Do Something About!)

BANKS : “Large U.S. banks on edge of insolvency, experts say” is the title of the article in the International Herald Tribune this 2/13/09.

“Some of the large banks in the United states, according to economists and other finance experts, are like dead men walking.”

A sober assessment of the growing mountain of losses from bad debts measured in today’s marketplace, would overwhelm the value of the bank’s assets, they say, “The banks, in their view, are insolvent.” Nouriel Roubini (NYU Prof at the Stern School of Business and “right on” economic prognosticator of our financial crisis) and Adam Posen (a senior fellow at the Peterson Institute for International Economics) are among those holding this view.

“THE PLAN”: “Will Stimulus Bill Work? Yardeni: Experts Say No” says the NewsMax headline of 2/13/09.

“I think (doing) nothing would have been better,” said Ed Yardini, an investment analyst who’s usually an optimist, in an interview with McClatchy Newspapers. He argued that the plan “…fails to provide the right incentives to spur spending.”

William Galston, a senior fellow at the center-left Brookings Institution and a former Clinton White House adviser, warned Thursday that a bank-rescue plan being finalized will make the $789 billion look like “pocket change.” and “While the stimulus bill is a necessary condition for economic stabilization and recovery, it is hardly sufficient…”

“Harvard University economist Martin Feldstein, former adviser to President Ronald Reagan, was an early supporter.  He said …the compromise falls short of what’s needed”.

From “The Daily Reckoning” (dailyreckoning.com) of 2/09/09, Bill Bonner notes in a piece entitled “The Real Cost of the Bailout”, “If there is evidence to suggest that these bailout plans will work we haven’t heard of it. In the two instances (we assume the Great Depression and Japan during the ’lost decade”) in which they were tried, they failed. Plus, there is no theory that makes any sense to us explaining why or how they SHOULD work. Bad bets don’t get better when you lend the bettor more money. They just become more expensive.”

TOILET PAPER (SOMETHING YOU CAN DO SOMETHING ABOUT!): We here at PrudentHome skipped a day of posting during the middle of the week because almost all of the news was about the technical machinations going on in congress concerning the ‘bailout’ and that’s just not worth our readers time: interesting to some perhaps but not constructive.

Here’s something constructive, important, and hopefully interesting too: toilet paper.

During a time in your home when you’re under more-or-less ordinary conditions, mark the inside of a roll of toilet paper with your begin-usage date. Do this for each of the bathrooms in your house. When you’re ready to replace a roll. Note and mark the end-use date. This process will enable you to calculate the rate at which you use toilet paper in your home under normal circumstances.

If your using a roll of toilet paper in a bathroom every three days for example, then you’ll need to have 10 rolls to get you through a month of normal use in that bathroom.. Now check your stores. If you don’t have 10 rolls stored for that bathroom and there’s an emergency, you’re in a mess of trouble. Think that’s too far fetched? Think about the recent western Kentucky ice storms.

Until a little later in the week then, lets think about the positive and constructive things we as families can do during these trying times and keep our eyes on the horizon.