Lets keep in mind what the intention is ? Does BLS really want to let people know the reality - or is better to give an approximate number which gets revised down later on ? Just like - Bernanke does not want people to think that we will enter a recession, for if people knew that there was going to be a recession this year, it would probably turn out much worse than if they thought that there would be slow growth.
Bernanke does not want people to think that we will enter a recession...
I think it's more the Whitehouse. Last year when the Fed said the changes in the credit markets would be "contractionary", I took that to mean they were saying a recession was coming.
It looks like everything is going to be revised downward (except of course, unemployment). My guess had been that the recession started in January or February. However, maybe it really did start early in the fourth quartere of '07.
Now I can quit worrying about CR and Tanta being too far out front and being subject to discipline from Paulson etc. The New York Times is on board. A consensus builds.
My personal recession tell: the fortune teller down the road cut her price for tarot readings to ten bucks. That's probably the next thing that somebody figures out how to outsource to India.
Mr. Levkovich argues that the sectors most affected by the credit crisis like bank, brokerage firm and housing stocks have already suffered, clearing the way for them to rebound like a coiled spring in the second half of this year.
Phew...
I'm glad we've already got all the losses out in the open!
All the banks losses are out in the open and profits are turning up nicely. Looks like clear sailing from here on out.
Housing is definately bottomed. We're seeing clear signs of recovery in units sold per month. Inventory is clearing and we'll quickly see an uptick in prices soon.
Wages and employment have turned the corner. We have over-shoot in the savings rate and as that returns to 6% we'll see an increase in consumption that should create a virtuous cycle.
With large savings cushions, households credit worthiness is generally recovering. Household debt-to-income ratios are have come down nicely.
And China! Trade is almost balanced and the US is running a trade surplus with Europe! Dollar should be turning the corner soon.
Of course, the wrench in the works may be the Fed who will need to raise rates in, maybe March?, because of all the signs we've turned the corner.
The credit crisis is really a crisis in confidence amongst the banks because the banks do not have a true picture of what is going on within our general economy or within their competitors balance sheets. A part of this crisis in confidence involves the destruction of credibility of data coming from the government. No one believes the numbers are accurate, no one knows which banks will fail.
The government is willfully providing inaccurate date regarding our economy. They took away the M3 Statistics. Now they are getting rid of the government economic data website due to "budgetary constraints." Its no wonder our credit system has locked up.
Government data, sounds a bit like 1984, doesn't it.
Rosy numbers are trumpeted far and wide, only to be recast or recanted several months later, (when they're off the front pages,) and more than likely only available to intrepid researchers like CR.
Yea! Productivity is UP, because we slashed a bunch of jobs and divided by a smaller number.
We believe in a strong Dollar, when compared to a fourth-world economy with 8000% inflation.
Government data writes:
The credit crisis is really a crisis in confidence amongst the banks because the banks do not have a true picture of what is going on within our general economy or within their competitors balance sheets.
I think the credit crisis is because they DO know.
I posted this yesterday but its more fitting here...
CA is going down....
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say.
Here's more evidence that California is losing its struggle against recession: The state shed 20,300 jobs in January, more than the other 49 states combined for the month, a government report showed Friday.
Before we get too excited about depressions, remember this story is reported by Gretchen who has been, shall we say, less than accurate in the past.
Does the track record for trimtab go back further than 2006? What does the track record show in less atypical times? I would suggest the last 8 years have been atypical in job creation (i.e. the "jobless" recovery from the 2001 recession)
quote from article
Back when homes were everybodys favorite A.T.M., mortgage equity extraction propelled the TrimTabs consumer indicator. Beginning in late 2004, quarterly comparisons with year-earlier periods shot up; they peaked at a growth rate of 17 percent in the first quarter of 2006. During that period, consumers had $1.69 trillion to spend; equity extraction accounted for $191 billion then, TrimTabs said, its peak amount.
The economy surged in 04 and 05 and the early part of 2006 because of money coming out of real estate, Mr. Biderman said. The economy was stronger than the government showed.
17% increase in YOY consumer spending. Wow. I just got very very confident in my short positions.
Is it just possible that by denying we're already in a recession we can eventually point to a "very short" recession by forwarding its eventual birth?
Absolutely. That was the plan for the "sub-prime" crisis that emerged last year. Initially, we heard from authorities that it didn't exist. Until evidence emerged confirming that it did. Okay, so there is a problem after all, but it is "contained". Until evidence emerged that it was impacting mortgages everywhere and these new fangled derivatives called CDO and MBS, whatever the heck those are. Then we learned what mortgage-backed securites and Alt-A and no-doc and all sorts of other things were causing problems. Okay, we learned, "contagion" can be more broadly defined to mean anything related to mortgages. But we'll have a "kitchen sink" quarter wherein everything that's bad will be marked as a loss. But then we learned ...
Mr. Levkovich argues that the sectors most affected by the credit crisis like bank, brokerage firm and housing stocks have already suffered, clearing the way for them to rebound like a coiled spring in the second half of this year.
Oh I think he's got the right idea, but maybe we're looking at more like 2011 for our coiled spring.
Uh, guys, let's keep the paranoia under control. The BLS uses a benchmark model which it clearly discloses has limitations. Eventually it will correct the data - years later, but it will. The model both underpredicts and overpredicts, so it is not likely to be some government conspiracy. Nor are the BLS statisticians likely to be involved in one. They are not mall ninja types.
And let's face it, people know whether they have jobs or not.
The economic indicators website only links to the other websites. It is not as if the data won't still be published.
There is definitely some merit to at least cross-checking the BLS data with Treasury data. It helps correct for the known BLS survey weaknesses.
I don't believe in any great conspiracies. I just get discouraged that those "in the know" so to speak either choose to ignore the flaws in such statistics and use the false data to either mislead or be misled.
I sure see alot of articles pointing out the obvious mistakes both Greenspan and Bernanke have made in uderstanding where we are and where we are headed.
I distinctly recall the outrage and wonderment I had in Oct of 06 when Greenspan called the bottom in housing. It was similar to the dismay I had with Bernanke's "no spillover" claims.
When the average joe sees the obvious he either thinks those that should know better are lying or are stupid. Neither is very comforting.
Mom please dont ever post anything about mall ninjas again... I just lost ten minutes of my life and I'm really nervous I might go back for another few paragraphs....
Holy sh*t I still dont believe what I was reading!
Uh, guys, let's keep the paranoia under control. The BLS uses a benchmark model which it clearly discloses has limitations. Eventually it will correct the data - years later, but it will.
Yes, but that makes them less statisticians and more historians.
While the birth/death model may tickle a statisticians fancy and be more accurate over-all they are less accurate at the turning points.
Since the guy up front seems to believe he can drive the bus based on those numbers, it makes me rightly nervous. I don't care so much if the new model can keep the bus 1-2 centimeters closer to the middle of the road over the whole trip if they misses the turn by 10-20 feet.
Bong water, wider than a mile,
I'm stuck in a shit pile, today.
Oh, Bern-anker, you coin spanker,
you don't have much room left, for rate cuts, you see;
Two drifters bankrupting the world;
There's such a monoline for me.
We're after the same rainbow's end--
waiting 'round the bend,
my Bernankleberry friend,
Bong water, and me.
I never heard much about how the BLS could overstate employment at inflection points from those who wanted to dismiss the housing bubble or were justifying the DOW at 14000.
All I heard were giggles, and all I saw were rolling eyes everytime a Schiff or Roubini called these stats into question.
It's not limits in the data that get people so upset. It's those who fail to point it out as they roll it out for all to see why they are right and you are wrong.
Woot,the Mall Ninja stories!! I frequent a couple of gun sites and boy,does that bring back memories. Thanks for the laugh today MOM. It really is sad that people are that delusional...
I was just reading Buffet's letter to shareholders. Did anyone find the put writing to be really bizarre? They wrote puts that expire in 2019 and 2027, and can't be exercised sooner than that, on the S&P 500 with a strike price at the time the options were written!
Who in the world would have bought those? I admit there are some doomsayers around here who seem to have the right sentiment, but they're unlikely to have had the $4.5B purchase price.
If things really get bad enough to exercise that option, we'll be living a Mad Max movie and it will be pretty hard to collect.
Conjure expects the PMI to print substantially below the Dow-Jones and Blomberg consensus tomorrow. If it does, Goldilocks might not have a very good day.
I'll have to do more digging! that will clean up my investments significantly!
the tax system really is an uber-complicated disaster.
The other problem with CEF: it's a passive foreign investment company (PFIC)... so if you have it out of a retirement fund you have to make sure you elect it as a QEF every year. (I think it's IRS form 8621). that's not such a big deal so long as you never forget.
at least that's what CEF tells me every year.
but it's good to know that I don't have to pay collectible taxes!
Nades, if people are going to be paranoid and delusional they should be paranoid about delusional mall ninjas. Now that is a great piece of performance art.
Average Joe, I agree. But that is why CR is so good. We don't just get the stats, we also get the background and meaning and revision history - we get the context here.
I think the credence given to the official stats is largely because of the way they are reported in the news. It's not that BLS says they are what they're not - it's that they are represented in the press as something they're not which leads to all the confusion.
I just watched a lengthy video where the speaker did an excellent job of describing the unprecedented nature of the California housing bubble of 2003-2005.
The presentation was made in February 2006, but the video went up on youtube only 3 weeks ago. The entertaining speaker was Christopher Thornberg, senior economist at UCLA's Anderson School of Management.
I realize it's long, but I would highly recommend this to anyone seriously interested in the subject. Also, he has lots of graphs and charts and at times sounds like what CR must have been saying then (when I wasn't reading this blog):
I've been invested in CEF since 2002 and use it basically as my cash account. I expect it to serve as such for a while longer... not forever though!!
The key to the preferred (non collectable) tax treatment is the PFIC declaration. As long as you do that every year you should be fine. It becomes a little more of a drag if you trade in and out a lot.
RE, that is good news regarding the economic indicator website. I don't think our situation is as dire as some predict, however, it doesn't help when the appearance of transparency is opaque at best. When our faith in government and corporations is restored, I do believe our economy will come back stronger than ever. Technology will lead the way. The United States is still the best country in the world in terms of economic freedom and upward mobility. Take a trip to China or India and you will see what I am talking about. I have faith in our country and economy for the long term, we just need to take some medicine.
Calling inflection points is inherently difficult. A lot of stuff goes on a lot longer then seems possible. And then is doesn't. Of course every one already knows that.
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say."
A sharp analyst with a copy of the state budget and the governor's proposed 10-percent-across-the-board cut in mind could probably do a pretty fair estimate on the resultant state and local job losses. Some thousands, I'm sure.
The same analyst could easily project losses in property tax income -- and sales tax income -- and project further impacts on local government. There'd be a lot.
In short, the public sector job losses, in California and elsewhere, have yet to show up. But they're coming. And in California at least, they'll be massive.
U6 is a better measure IMO and also better when comparing the US with other countries and when the monthly releases come out - one due this coming Friday, you can find it in Table A-12 Table A-12. Alternative measures of labor underutilization
with First Call reporting that analysts now foresee an 18.6 percent jump in earnings in the third quarter, and a hard-to-imagine surge of 51.9 percent in the fourth quarter. from the NYT acticle
I didn't know Thompson's allowed their analysts to sniff glue at their desks. I want one of them to stop by my office and take a look at my projections and budgets.
Even though our area of Washington state has not had a collapse in home prices, (despite a significant runup the last five years) I'm seeing early indicators of a significant construction slowdown stemming from the national (global?) credit crunch. I won't be surprised to see a very slow local construction season and a significant rise in local unemployment rates from current near-record lows. The construction slowdown will also hit the public treasury.
Actually the original internet was developed at four universities in the late 1960s, but the program was funded by the military for its own purposes. The rest, as they say, is history.
Bob: Regarding the Buffett puts, they were disclosed last year and the year before. They are on the S&P and 3 other international indices.
He said 15 and 20 years, and mentioned 2019 as an expiration date. That would mean they were writted as early as 2004 -- at least the 15 year contracts.
As far as who would buy them, it would have to be someone that simply can't book a nominal loss.
Also, they were paid $4.5 billion and are currently booked at $4.6 billion.
Yahoo! 404 - Page Not Found Trucker Robert Griffith is on the road three weeks out of four, pulling oversize loads like crane booms, railroad ties and air conditioning ducts. One of his biggest worries: How he'll find the money to buy his daughter a prom dress.
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As the cost of diesel doubled over the last four years, his take-home pay has plummeted, from $50,000 to $11,000
trimtabs says job losses started in October? Nice to see a little more confirmation to my predictions from last spring(trouble starting October, depth & duration unknown.)
Right now, depth looks to be shallow but deepening(I thought the stimulus plan would make for a double dip, but I no longer think that), duration should be til March 2009. This comes from the idea that it'll take 2 months to work off every month of credit crunch(from August 07) starting from the start of the downturn(Oct. 07) and that the confessional will be open thru April.
IOTW, a WAG with a little rationale behind it. I don't think a further steepening of the yield curve will help at this point.
Calling inflection points is inherently difficult. A lot of stuff goes on a lot longer then seems possible. And then is doesn't. Of course every one already knows that.
I dunno. The jobless claims seem to do a good job of this.
In fact, I'd argue they're calling an inflection point now.
Though I think in this cycle they underestimate job losses the claims data is, nonetheless, suggesting changes are afoot.
OT: Should I go long or short on companies that make "feel happy" drugs? It's unbelievable how many people are mentally crushed by being unable to live an unsustainable lifestyle. I'd go long, but general recession fears scare me.
MoM thanks for the Mall Ninja link.I have run across these people at Gun shows,and occasionally at the range,but never at any of the classes I took.I wish I could afford the time to shoot 400 rounds a week,let alone 400 a day!BTW I have only seen thigh holsters used a couple of times at classes,both times by men who were ex rangers,one was on the sheriffs SWAT team,and the other had just taken a BG job in the Green Zone.Neither one carried "state of the art" weapons,they both went for simple and reliable.
The BLS has UNACKNOWLEDGED it, removing that note from their web page, just as the economic conditions that make the birth/death model worthless kick into obvious view.
The old speakwrite machine at the MOT was used to remove it.
"OT: Should I go long or short on companies that make "feel happy" drugs? It's unbelievable how many people are mentally crushed by being unable to live an unsustainable lifestyle. I'd go long, but general recession fears scare me."
There's a moderately substantial case to be made for the idea that Prozac and some other anti-depressants don't work much better than placebos. There's a lot of press about that right now. Go to Google news and poke around, you'll find it straight away.
The only things I consider recession-proof are toilet paper, cheap beer, and potatoes.
I've been living outside the USA for quite a while, and IMO the english Al-Jazeera provides much better and more in depth coverage than BBC.
Hapsburger
OT yup I too watch Al-Jazeera in English sometimes - haven't got into a habit of doing so - in fact I used to joke that if the HOA (Home Owner Assocation ) complained about my 90cm satellite dish that I'd worked so hard to put up, I'd point to various Fed regs and just to piss them off tell them - "and I want to watch Al-Jazeera and this is the only way I can get it and so its allowed per Fed regs"; To add further colour and scuttlebutt to what you said - Al-Jazeera English got started up when Auntie Beeb cut back it Arabic world service( Karimeh Bishouti, where are ya ? ) and there were many job losses - many of the BBC refugees joined the Al-Jazeera English Startup. Also, there are some difficulties for Al-Jazeera English at the moment :
Al-Jazeera's English news service has made concessions that Nigel Parsons, its managing director, hopes will prevent an exodus of expatriate staff from the fledgeling television station.
Mr Parsons has been struggling to contain a staff revolt after the Qatari owners of the 24-hour news service insisted on integrating it with al-Jazeera's Arabic channels.
"... Yields on 30-year U.S. bonds that fell to a record low of 4.10 percent this year are forcing pension funds to favor equities, corporate debt and commodities in an attempt to cover unfunded liabilities and meet return objectives of about 8 percent. Even the federal government's own Pension Benefit Guaranty Corp. said on Feb. 19 that it plans to shift $15 billion to stocks from debt.
``The reality is there's not a lot we can do'' other than buy high-risk securities to close a pension shortfall in a short period, said Chris McDonough, chief investment officer of the Philadelphia Pensions Department. The sixth-largest U.S. city will probably also issue debt, he said. ..."
Analysts also cry foul on Fed chief's testimony that some small banks will close
By Riley McDermid, MarketWatch
Last Update: 3:20 PM ET Feb 29, 2008
NEW YORK (MarketWatch) -- The Federal Deposit Insurance Corp. is trying to rehire 25 former employees specializing in bank insolvency, but the agency that insures bank deposits said it does not expect a surge of failures in the industry.
Federal Reserve Chairman Ben Bernanke raised some eyebrows this week when he suggested during congressional testimony that the U.S. will likely see some banks fail in upcoming months due to the ongoing credit crunch and a weakening housing market.
Philadelphia's $4 billion pension deficit is causing the city's retirement-fund manager to shun Treasuries at a time when the Bush administration needs him most.
I love articles like these.
Pension funds holding back and a flood of supply is causing the price of treasuries to shoot up.
One thing I've discovered in the past year and a half is that treasuries are the most hated securities out there.
``The reality is there's not a lot we can do'' other than buy high-risk securities to close a pension shortfall in a short period, said Chris McDonough, chief investment officer of the Philadelphia Pensions Department.
Completely retarded.
Man, are we facing a pension shortfall nightmare. When did pension plans become casinos?
Under Pension Protection Act, all DB plans have to have assets equal to 100% of liabilities (discounted present value) gradually, over next decade. You don't think this isn't going to be a massive hit to corporate earnings going forward?
MarketWatch reports data from TrimTabs Investment Research and the Barclay Group released in July estimating a $32 billion outflow of funds from the hedge fund industry was incorrect, according to an update and apology from the firms Wednesday. TrimTabs and Barclay now say there were $39.1B of inflows. For August, the companies estimate $8.9B of inflows into the $1.9 trillion hedge fund industry. TrimTabs and Barclay said the July estimate was calculated incorrectly, since adjustments were not made for funds of hedge funds, and funds were included in the estimate that reported performance updates but not of their assets under management. "The monthly hedge fund flow data is a new service and the changes we made to our methodology will ensure that our current and future estimates are as accurate as possible," commented TrimTabs CEO Charles Biderman. Concerns over hedge funds suffering huge redemptions over the summer were seemingly exaggerated. However, TrimTabs' and Barclay's latest estimates show August hedge fund inflows totaling $8.9B were the lowest since $7B in January.
Sources: MarketWatch"
Bill - You're right about market returns - in part. If you look at the SP500 from the start of 1995 to today - you're talking about a 9.5% return without dividends. But all of the gain took place from 1995 to the end of 1999. Since 2000 - the return on the SP500 has been slightly negative. So all you've had is a paltry 2% or less dividend yield. No question bonds have been the better investment for the last 7+ years (and 7 years is a long time in my book).
This kind of math is especially important for retired investors - who are told they can withdraw 4% from principal every year and do ok. If you withdrew this 4% starting in 2000 - you'd be deep under water in terms of equities today.
FWIW - the best non-leveraged investment I have ever owned is long zero coupon bonds bought in the 80's - and sold in the 90's. Better returns than even the bubble Nasdaq over a period of a decade or so.
I am kind of simple-minded in terms of approaching health care. We spend over 14% of GDP on health care. Which means that we - on average - have to spend 14% of gross income to pay for that health care to break even. With my generation starting to go on Medicare - the costs will undoubtedly rise. So we will probably pay more (Medicare used to be a bargain - it is much less of a bargain these days) - and probably get "less". Although - as we can see looking at other countries - "less" is not necessarily "less". Do we really want to spend $100,000 on a drug that extends the life of a cancer patient by 8-12 weeks? Or $3 million on a 9 ounce baby who will probably grow up brain-damaged? Most half-way intelligent people make at least half-way intelligent decisions when it comes to most purchasing decisions at least half of the time - but - when it comes to health care - we often seem to throw common sense out the window.
BTW - in terms of Medicare - there are rules about medical care you can get - and under what circumstances you can get it. And if Medicare says you can't get it - you cannot buy the services yourself from a provider who participates in any way, shape or form in Medicare. Which is the way most socialized medicine systems work in other countries (except Medicare is more generous than most of them).
I approve of the Medicare restrictions in terms of what it pays for - but I think people ought to be able to pay out-of-pocket for unapproved treatments and procedures. Although it may not be in the general public interest - or make any sense - to pay that $100,000 so a terminal cancer patient can get a few extra weeks of life - perhaps a particular patient might want to spend his or her money that way (instead of spending $100,000 on a final fling trip to Paris). It's your money - you should be able able to spend it how you want to spend it.
It's not my business to tell people how to spend their own money. But I also note that my husband and I had 3 parents (ages 79, 84, and 84) who died expensive painful deaths - kind of the norm in the Medicare system these days - and I don't think the quality of their lives in their final weeks/months was worth warm spit. As soon as their doctors agreed - we put them on morphine drips - so they at least spent their final days in peace.
Alec - Re Obama and financial markets. Markets don't like uncertainty - and Obama is a big blank. I am not sure about Hillary Clinton. I didn't like Bill Clinton - but I loved his economic policies. Which are best summed by a statement made by James Carville (more or less - if I die and am reincarnated - I want to come back as the bond market - because it's the most powerful thing I've ever seen). Anyway - I just watch what is going on - and govern myself accordingly. If Obama is elected - and raises taxes (which seems to be a certainty) - it will hurt you younger people who are doing ok more than it will hurt me (because - as a retired person with large retirement accounts - I can manage my income to stay in lower tax brackets).
FWIW - one of Obama's major tax proposals is to eliminate income taxes on all seniors who earn less than $50k a year. How does that sit with those of you trying to raise a family on $50k? Roby
I think that long-term treasuries are the real bubble at this point. The present returns were only made possible because of duration matching in a so-called low inflation environment.
As pension funds are forced out into other investments, these yields will have to adjust to reflect the reality of future inflation expectations. A 4.10% return on a 30 year is simply ridiculous.
Chas. Biderman: ...The big picture is: the amount of money people have to spend, which includes money on real estate transactions, is plummeting, and it started to break down in October...
The data that the NBER business cycle dating committee uses to date recession starts started turning south in October: employment (household survey), industrial production, and real disposable income; only retail sales was still in the black.
I say our recession, which will smartly proceed to depression, began in October.
Do we really want to spend $100,000 on a drug that extends the life of a cancer patient by 8-12 weeks?
I think we as a nation should be asking what is being consumed that requires a $100,000 cost in the first place. Medical services are chock-a-block with rentiers with their hands in the till, worse than the public safety mafias.
one of Obama's major tax proposals is to eliminate income taxes on all seniors who earn less than $50k a year. How does that sit with those of you trying to raise a family on $50k?
People raising a family (married/2 kids) on $50K aren't paying Federal income tax already.
Money not taxed from seniors helps out the next generation one way or the other. All that is important is to tax that which should be taxed first, namely, taxes on rents and resource severances.
I don't know when the recession starts, and I don't much care. I'm not even focusing on GDP that much.
What I'm focusing on mainly is U.S. corporate earnings, and I see nothing positive on the horizon, for a long time.
I think we've entered an earnings winter. It is masked, in part, by 50-100 big, relatively strong U.S. mega-caps with global exposure. Take them out of the equation and it's as bleak as can be, for a long time to come.
So, you just want to be short everything but the mega-caps with int'l exposure.
"Nikkei down 4%. Emergency rate cut in the morning?"
Sure! How much? Maybe the Fed can PAY participants to play at the TAF?
The market is in a corner 10000000 ways. Goldilocks is having epileptic fits. I think we're in for one hell of a slump over the next week, testing Jan lows and breaking through. We'll see.
Troy - For some reason (karma - smile) - we wound up with a taxable income this year (after deductions and everything else) of just about $50k (I'm sure we didn't get to that number the way most people do - but that's the number). And our taxes are a little over $6000.
I don't have the time to run the calculations tonight - but I doubt an average family that earns $50k pays nothing in income taxes. And if that family earns $75k (with mom and dad both working) - which might bring them down to that $50k in taxable income) - they're still paying income tax - not to mention big dollars in FICA. And at $75k for a 2 income family - you're not talking about people with high end jobs.
I think this proposal of Obama's is pure pandering to elderly people - who tend to vote in greater numbers than younger people. And even though I am one of those older people - I realize that most of us are a lot better off than younger people.
Heck - people in my generation and my parents' generation bought our first waterfront properties for under $70k - stuff you'd have to pay at least $700k or more now for. We paid peanuts for FICA and Medicare (particularly in my parents' generation).
On my part - it is in my financial interest to suck younger people dry - but it is not in my interest as a citizen of the US to see us turn into a second or third world country because younger people can't make it here. If all I wanted was to live cheap - and buy servants for peanuts - I would have been gone a long time ago. But - having traveled in the second and third worlds - well I don't want to live that way - a person with some money living behind barbed wire to protect myself against a majority of people who have nothing - and nothing to look forward to - in any other country - or here. I want to see that people 40 years younger than I am have a reasonable chance to live successful productive lives. Pandering to the elderly buys votes - but it doesn't make this country better. Just my 2 cents. Roby
Thank you Robyn for your post.
The question is who is going to write the law that allows Society (say in the guise of a hospital committee) to pull the plug? Would such a law clear THIS SCOTUS?
We have been beating up on the Alt-A no equity crowd. But the Great Teat in the Sky (GTINTS)or voodoo economics came out of the West with Reagan. It pervades our society. Its like a corollary of Gresham's Law ..Bad economic ideas drive out the Good ones.Can't pay charge it. Can't face a severely impaired kid? Force society to cough up the million bucks
I hope we have a severe recession in this country. Maybe that will put the silver stake through the heart of Raganomics bring us to our senses and spend only what we earn in taxes...or maybe we will invade Canada for their raw materials(is there enough of an army to beat them???)
Malabar - I don't know about a bear market (I'm reluctant to put labels on markets). But I do currently hold some coupon and zero treasuries - in the 10-15 year range - and am looking for an attractive exit point. Last time I sold treasuries - they were shorter term - was maybe 2002 (?) - when YTM was less than 2%. It's really hard to be enthusiastic about anything with a YTM of less than 2%. Roby
Anonymous - We in Florida have of course the most famous (ridiculous) case - Terri Schiavo. I wish our Congress critters had paid as much attention to matters of national security and Iraq as they paid to Ms. Schiavo.
In most cases though - like those of our late parents - people - including legislators - overly aggressive doctors - etc. - pretty much leave you alone. At least that was (thankfully) our experience. It is only the occasional case that develops into a cause celebre - where outsiders try to interfere with reasonable family decisions. Which is as it should be.
BTW - there is now a recognized medical specialty area called palliative care (although I don't think it's a boarded medical specialty yet). The gist is to make people really comfortable when you know they're fixin' to die. Generally involves a lot of opiates - which many doctors are afraid of dispensing. In my FIL's skilled nursing facility (where he lived for over 2 years before his death - it was his home) - they weren't afraid - and he died peaceful as anything after his birthday on December 20 - Christmas - and his daughter's birthday day after Christmas. I think he hung on for these milestones - in kind of a painless haze - and passed away day after his daughter's birthday.
FWIW - IMO the concept of "pulling the plug" only obtains in a hospital setting - and - at some point - when you're dealing with a terminal patient - they should be out of the hospital - and back in their home (wherever their home happens to be at the time). All of our 3 deceased parents died at home (2 in their houses - 1 in an excellent skilled nursing facility). I luckily don't know about younger people who die - but - with older people - the handwriting is usually written very big on the wall - and the goal is home comfort - not hospital heroics. Roby
definitely $1000 gold this week (and big headlines), at least for a moment. It is too close, it really can't fail to get there.
What it does after that is anyones guess but my money is that it falls back and thinks about it for a while - gold will need to see steady drip drip of the bad news before being brave enough to stay above $1000 and look for new horizons. It has gone parabolic a tad too quickly.
"you just want to be short everything but the mega-caps with int'l exposure."
Does anyone know of any good mutual funds that specialize in these companies? Are these companies likely to get hammered in the near term or will they benefit as people abandon other stocks? Any thoughts?
Robyn | 03.02.08 - 9:50 pm | Heck - people in my generation and my parents' generation bought our first waterfront properties for under $70k - stuff you'd have to pay at least $700k or more now for. We paid peanuts for FICA and Medicare (particularly in my parents' generation).
On my part - it is in my financial interest to suck younger people dry - but it is not in my interest as a citizen of the US to see us turn into a second or third world country because younger people can't make it here. If all I wanted was to live cheap - and buy servants for peanuts - I would have been gone a long time ago. But - having traveled in the second and third worlds - well I don't want to live that way - a person with some money living behind barbed wire to protect myself against a majority of people who have nothing - and nothing to look
Robyn,
Appears what you want is to hang on to an apparently smart buy of water front property, and ensure you have servants at a reasonable rate, without being behind a (barbed wire) gated community.
Good luck.
sbarrkum
"...without being behind a (barbed wire) gated community."
In warm climes, Conjure Bag suggests razor wire (barbed wire is too humane), followed by a piranha-filled moat, followed by a dog run.
His logic is that, if one of those poor people makes it through the wire, enough blood will be running to attract the piranha. The dogs will clean up the bones.
My spouse is a palliative care physician and blanches at the Terry Schiavo case when mentioned. Whole thing was a trainwreck.
You're correct in that most docs are not terribly well trained in pain control; study some years ago in which group of docs were asked about their opinion of their ability to control pain - their response was "high" while the subsequent objective test of what they actually knew was "low".
Fortunately, more and more hospitals are pushing palliative care and this is a burgeoning subspecialty. Would rather still die at home or at least in a hospice, however.
My concern about healthcare rationing is this. At what point does society think that it's alright for someone to die? Because of their age (i.e. "they've had a good life")? Because they engaged in reckless personal behaviour (a sexually promiscuous individual with multiple partners practicing unprotected sex)? Because they opted for a personal choice of smoking for years before finally quitting? And once that line is crossed, at what point does it end?
I'm sorry about your folks but glad they were able to be in their own surroundings. My father died several years ago in the local hospice; actually, the one in which my spouse works (she wasn't his doc though). My plan is to have very specific outlines of when I no longer wish to have heroic measures pursued; the legal paperwork in most states is adequate but still is not terribly clear in many instances. Leave some concrete examples for your family and docs to use.
The yen's strength, which hurts Japan's vital exporters by making their products more expensive abroad, has also helped push Japanese stocks lower. The benchmark Nikkei 225 index was down more than 4 percent Monday.
To give some context to this, do look at the meetings that have been held in the past to consider:
"Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks."
Tracking that LatAm dustup closely, direct personal impact in addition to the energy implications...hopes are that is the usual Hugo bluster, the downside risk is that Hugo is in a much more desperate situation than MSM realizes due to recently imposed food rationing, and his recent electoral rebuff when he tried to collect all the reins of power. Also caught an interesting rumor that Ven may be declared a sponsor of state terror and have funds seized...history is replete with political leaders who have ginned up a war to redirect internal political disaffection with their rule.
Rationing ain't the half of it. If government controls your health, they control your life -- what you eat, what you drink, etc.
I always found it ironic how the AGs attacked the tobacco industry over the costs of treating smokers, since until the Federal Government mandated it there was no obligation to treat them.
p.s.: It was also hilarious how the AGs conveniently ignored data suggesting there was a net savings to SS & MC due to smoker's shorter lifespans.
Matters to be Considered:
1. Personnel actions (appointments, promotions, assignments, reassignments, and salary actions) involving individual Federal Reserve System employees.
This is gonna be like War Of The Worlds, with banks getting zapped one by one and markets will go into shock, we need leadership ASAP versus denial!! SOS!!
Just look in India, they feel the same as I do, holy cows!
Viewing the recent fluctuations in the sensex with concern, BJP suspects that some anti-national elements, including terrorists, may be manipulating the stock markets and wants a probe to ascertain the antecedents of investors.
Party President Rajnath Singh said his concern stems from the fact that up to 40 per cent of investments in the stock markets were by the Foreign Institutional Investors (FIIs) through PN (Participatory Notes) system.
"What kind of money, whose money, what colour is it? There is no information," Singh said in an interview while referring to the recent crash in the stock market leading to losses worth crores of rupees to small investors.
My quick recession anecdote... my son working at Mall of America says the place is shedding retail jobs like crazy right now. More than the usual seasonal shed.
He has had his hours cut and where his SO works has had 2 or 3 managers fired (in series) for not making numbers. The current guy hasn't even been a manager anywhere before... moved him up and soon they will move him out.
The store my son works at is actually up YOY but not up to plan (they were given a very aggressive forecast to beat - aren't doing it but are close... the only major store in the whole region anywhere near plan).
I see the whole spectrum in my calls... companies feeding machines into or servicing commodity industries are booming (ag equip mfgrs are so far above plan as to be almost silly). Companies serving discretionary consumer spending are getting smacked down hard.
I certainly can see how folks would think we are in recession - looking more like it all the time - but it is still a lot like a microwave frozen burrito (CR's analogy)... only this one is now more frozen than cooked...
My guess is Ben will hit the reheat button one more time this spring, probably in March. Burn up more chunks of that sorry burrito in an effort to thaw out some of that ice.
There is a 62 percent chance the Bank of Japan will cut its 0.5 percent benchmark interest rate by 25 basis points by December, according to calculations by JPMorgan Chase & Co using interest-rate swaps. The odds were 28 percent a week ago.
You know what I find entertaining? The yield curve; Paulson, Ben & GW have that thing set up like a rocket headed for the moon; I just wish they could get in and go! No one on the globe is buying that "curve", it looks as fake as a no doc loan with a Fannie derivative package!
It's about time they sent their man out with an explanation. Ip from the WSJ:
So why is the Fed more worried about growth than inflation? First, it thinks run-ups in commodity prices explain the increases, not only in overall inflation but also in core inflation: higher energy costs have "passed through" to other goods and services. Core inflation rose and fell with energy inflation between early 2006 and mid-2007, and the Fed thinks the same thing is probably happening now. If energy and food prices stop rising -- they don't have to actually fall -- both overall and core inflation should recede.
So far, they're still rising: wheat, oil and gold hit nominal records last week. But Fed officials don't think the latest jump can be justified by fundamental supply and demand. U.S. inventories of crude oil and gasoline are plentiful. Strong demand from China isn't new and should have been factored into prices long ago. A more likely explanation: investors, perhaps alarmed by the Fed's dovish stance, are pouring money into commodity funds and foreign currencies as a hedge against inflation.
Yep -- if you look at every other local paper in California, you're going to see stories about projected budget cuts. No more reassessments to higher values. In fact, the reverse.
It's going to be worse some places than others; overextended new bedroom communities with limited resources could have it as bad as the inner cities.
For example, a lot of the Central Valley towns are going to get hit worse than the coastal towns because they didn't charge developer fees for each new house, which seems incredibly stupid in the post-Prop 13 reality, but there you go. I know Modesto didn't.
I work at a UC campus, and our department head just told us to expect cuts -- and challenged us, with her usual bright and fixed smile, to find ways of doing a great job despite them. Dead ringer for Hilary Clinton, even has the accent.
mp: "In warm climes, Conjure Bag suggests razor wire (barbed wire is too humane), followed by a piranha-filled moat, followed by a dog run."
Personally, I recommend the 20,000v alarmed electric fence outside the razor wire, as it gives one time to pour a glass of Cognac before going outside to enjoy the show.
I have it from expert authority that Pirhanas in a feeding frenzy aren't dangerous, at any rate, but they do produce a rather pleasant bloody "froth." Well, it's much more pleasant than Greenspan's market froth, anyway...
The EADS' (mostly French) air tanker contract win on Friday ensures that our USAF will soon be flying Airbus. Thats a $35-100 Billion deal and a loss of ~9000 American jobs for Boeing. (Don't try to say the EADS front, Northrup Grumman will get equal jobs). What are we thinking? Why not Aeroflot? Or better yet - the Chinese -- we might have gotten Boeing planes made with cheap Chinese labor!
The most significant potential drawback ... is that time series modeling assumes a predictable continuation of historical patterns...
Well this nation has quite a history of financial crises and depressions (presumably that's the price of rapid growth).
So the BLS should be good to go.
Hi CR, thanks for featuring the vid. I wonder how many figured out who was being punked.
Lets keep in mind what the intention is ? Does BLS really want to let people know the reality - or is better to give an approximate number which gets revised down later on ? Just like - Bernanke does not want people to think that we will enter a recession, for if people knew that there was going to be a recession this year, it would probably turn out much worse than if they thought that there would be slow growth.
Welcome to the dark side
do we have to be the dark side? can't we be reality? not the goldilocks fairy tale thing that everyone was touting over the past year
Bernanke does not want people to think that we will enter a recession...
I think it's more the Whitehouse. Last year when the Fed said the changes in the credit markets would be "contractionary", I took that to mean they were saying a recession was coming.
Maybe I misinterpret.
It looks like everything is going to be revised downward (except of course, unemployment). My guess had been that the recession started in January or February. However, maybe it really did start early in the fourth quartere of '07.
Now I can quit worrying about CR and Tanta being too far out front and being subject to discipline from Paulson etc. The New York Times is on board. A consensus builds.
My personal recession tell: the fortune teller down the road cut her price for tarot readings to ten bucks. That's probably the next thing that somebody figures out how to outsource to India.
i think Shnaps has too much thyme on his hands...
Mr. Levkovich argues that the sectors most affected by the credit crisis like bank, brokerage firm and housing stocks have already suffered, clearing the way for them to rebound like a coiled spring in the second half of this year.
Phew...
I'm glad we've already got all the losses out in the open!
All the banks losses are out in the open and profits are turning up nicely. Looks like clear sailing from here on out.
Housing is definately bottomed. We're seeing clear signs of recovery in units sold per month. Inventory is clearing and we'll quickly see an uptick in prices soon.
Wages and employment have turned the corner. We have over-shoot in the savings rate and as that returns to 6% we'll see an increase in consumption that should create a virtuous cycle.
With large savings cushions, households credit worthiness is generally recovering. Household debt-to-income ratios are have come down nicely.
And China! Trade is almost balanced and the US is running a trade surplus with Europe! Dollar should be turning the corner soon.
Of course, the wrench in the works may be the Fed who will need to raise rates in, maybe March?, because of all the signs we've turned the corner.
Is it just possible that by denying we're already in a recession we can eventually point to a "very short" recession by forwarding its eventual birth?
Any way you cut it, it doesn't bode well for Gorge W. Botch's legacy, does it. Starts off a recession; ends on a similar note.
Bacon, that was actually funny. I'm still LOLing.
As I pointed out in a huge commentary yesterday:
http://www.azleg.gov/jlbc/mfh-feb-08.pdf
16% YOY drop!!!
And we had the superbowl at the end of Jan!
Recession for the nation, depression for Phoenix!
Someday this war's gonna end...
BLS: Glorious Department for the Generation of Meaningless Numbers.
I was going to say "pass the bong this way, Kicker," but it gives me headaches. Funny as hell.
What I'd like to know is, if we have a recession, do I get a smaller pony?
If we have inflation, do I get a bigger pony?
And if we have stagflation, will my pony have antlers? That could be really cool.
The credit crisis is really a crisis in confidence amongst the banks because the banks do not have a true picture of what is going on within our general economy or within their competitors balance sheets. A part of this crisis in confidence involves the destruction of credibility of data coming from the government. No one believes the numbers are accurate, no one knows which banks will fail.
The government is willfully providing inaccurate date regarding our economy. They took away the M3 Statistics. Now they are getting rid of the government economic data website due to "budgetary constraints." Its no wonder our credit system has locked up.
Government data, sounds a bit like 1984, doesn't it.
Rosy numbers are trumpeted far and wide, only to be recast or recanted several months later, (when they're off the front pages,) and more than likely only available to intrepid researchers like CR.
Yea! Productivity is UP, because we slashed a bunch of jobs and divided by a smaller number.
We believe in a strong Dollar, when compared to a fourth-world economy with 8000% inflation.
Lather. Rinse. Repeat.
Government data writes:
The credit crisis is really a crisis in confidence amongst the banks because the banks do not have a true picture of what is going on within our general economy or within their competitors balance sheets.
I think the credit crisis is because they DO know.
Oooossshhh...Kesssssshhhh.
"Economic Collapse, I am your father!"
-Credit Bubble
I posted this yesterday but its more fitting here...
CA is going down....
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say.
Here's more evidence that California is losing its struggle against recession: The state shed 20,300 jobs in January, more than the other 49 states combined for the month, a government report showed Friday.
State's job losses fan recession fear - Los Angeles Times
But most still say the economy is healthy.... odd....
Anonymous, "dark side" was a joke. I agree with you - a realist would view the economy as in or at least near recession.
Best to all.
Before we get too excited about depressions, remember this story is reported by Gretchen who has been, shall we say, less than accurate in the past.
Does the track record for trimtab go back further than 2006? What does the track record show in less atypical times? I would suggest the last 8 years have been atypical in job creation (i.e. the "jobless" recovery from the 2001 recession)
quote from article
Back when homes were everybodys favorite A.T.M., mortgage equity extraction propelled the TrimTabs consumer indicator. Beginning in late 2004, quarterly comparisons with year-earlier periods shot up; they peaked at a growth rate of 17 percent in the first quarter of 2006. During that period, consumers had $1.69 trillion to spend; equity extraction accounted for $191 billion then, TrimTabs said, its peak amount.
The economy surged in 04 and 05 and the early part of 2006 because of money coming out of real estate, Mr. Biderman said. The economy was stronger than the government showed.
17% increase in YOY consumer spending. Wow. I just got very very confident in my short positions.
Is it just possible that by denying we're already in a recession we can eventually point to a "very short" recession by forwarding its eventual birth?
Absolutely. That was the plan for the "sub-prime" crisis that emerged last year. Initially, we heard from authorities that it didn't exist. Until evidence emerged confirming that it did. Okay, so there is a problem after all, but it is "contained". Until evidence emerged that it was impacting mortgages everywhere and these new fangled derivatives called CDO and MBS, whatever the heck those are. Then we learned what mortgage-backed securites and Alt-A and no-doc and all sorts of other things were causing problems. Okay, we learned, "contagion" can be more broadly defined to mean anything related to mortgages. But we'll have a "kitchen sink" quarter wherein everything that's bad will be marked as a loss. But then we learned ...
And so on and so forth.
YouTube - John McCain & Miss Teen SC on Economics
John McCain & Miss Teen SC on Economics
excuse me, I should have characterized Gretchen's past work as "less than credible."
Mr. Levkovich argues that the sectors most affected by the credit crisis like bank, brokerage firm and housing stocks have already suffered, clearing the way for them to rebound like a coiled spring in the second half of this year.
Oh I think he's got the right idea, but maybe we're looking at more like 2011 for our coiled spring.
Uh, guys, let's keep the paranoia under control. The BLS uses a benchmark model which it clearly discloses has limitations. Eventually it will correct the data - years later, but it will. The model both underpredicts and overpredicts, so it is not likely to be some government conspiracy. Nor are the BLS statisticians likely to be involved in one. They are not mall ninja types.
And let's face it, people know whether they have jobs or not.
The economic indicators website only links to the other websites. It is not as if the data won't still be published.
There is definitely some merit to at least cross-checking the BLS data with Treasury data. It helps correct for the known BLS survey weaknesses.
MOM,
Good points,
I don't believe in any great conspiracies. I just get discouraged that those "in the know" so to speak either choose to ignore the flaws in such statistics and use the false data to either mislead or be misled.
I sure see alot of articles pointing out the obvious mistakes both Greenspan and Bernanke have made in uderstanding where we are and where we are headed.
I distinctly recall the outrage and wonderment I had in Oct of 06 when Greenspan called the bottom in housing. It was similar to the dismay I had with Bernanke's "no spillover" claims.
When the average joe sees the obvious he either thinks those that should know better are lying or are stupid. Neither is very comforting.
Mom please dont ever post anything about mall ninjas again... I just lost ten minutes of my life and I'm really nervous I might go back for another few paragraphs....
Holy sh*t I still dont believe what I was reading!
Uh, guys, let's keep the paranoia under control. The BLS uses a benchmark model which it clearly discloses has limitations. Eventually it will correct the data - years later, but it will.
Yes, but that makes them less statisticians and more historians.
While the birth/death model may tickle a statisticians fancy and be more accurate over-all they are less accurate at the turning points.
Since the guy up front seems to believe he can drive the bus based on those numbers, it makes me rightly nervous. I don't care so much if the new model can keep the bus 1-2 centimeters closer to the middle of the road over the whole trip if they misses the turn by 10-20 feet.
Sung to the tune of "Moon River""
Bong water, wider than a mile,
I'm stuck in a shit pile, today.
Oh, Bern-anker, you coin spanker,
you don't have much room left, for rate cuts, you see;
Two drifters bankrupting the world;
There's such a monoline for me.
We're after the same rainbow's end--
waiting 'round the bend,
my Bernankleberry friend,
Bong water, and me.
Rob Dawg made me do it.
Yearning to Learn,
From prior thread.
CEF does not have to get the collectable tax treatment. It is a little more work during tax season but actually quite manageable.
Here is a reference to an article by Alan Abelson at Barrons regarding the issue:
Comparing the Central Fund of Canada to the Gold and Silver ETFs
Another point about statistics:
I never heard much about how the BLS could overstate employment at inflection points from those who wanted to dismiss the housing bubble or were justifying the DOW at 14000.
All I heard were giggles, and all I saw were rolling eyes everytime a Schiff or Roubini called these stats into question.
It's not limits in the data that get people so upset. It's those who fail to point it out as they roll it out for all to see why they are right and you are wrong.
MaxedOutMama | Homepage | 03.02.08 - 1:46 pm |
Woot,the Mall Ninja stories!! I frequent a couple of gun sites and boy,does that bring back memories. Thanks for the laugh today MOM. It really is sad that people are that delusional...
Chris
The Economic Indicators site will not be shutdown after a lot of protest:
Economic Indicators.Gov
The U.S. Department of Commerces Economics and Statistics Administration (ESA) has decided to continue the economicindicators.gov website.
I was just reading Buffet's letter to shareholders. Did anyone find the put writing to be really bizarre? They wrote puts that expire in 2019 and 2027, and can't be exercised sooner than that, on the S&P 500 with a strike price at the time the options were written!
Who in the world would have bought those? I admit there are some doomsayers around here who seem to have the right sentiment, but they're unlikely to have had the $4.5B purchase price.
If things really get bad enough to exercise that option, we'll be living a Mad Max movie and it will be pretty hard to collect.
Conjure expects the PMI to print substantially below the Dow-Jones and Blomberg consensus tomorrow. If it does, Goldilocks might not have a very good day.
They wrote puts that expire in 2019 and 2027, ...Who in the world would have bought those?
A pension fund, perhaps?
I have complete coinfedence in the fEderal reserve and the goverment...they are wery smart persons who know FOR Sure what they are doing.
Now what would happen if one day that chnages?
The Economic Indicators site will not be shutdown after a lot of protest:
They'll just start using a computer program to randomly generate data that looks legit but isn't nearly as scary as the real thing.
RE:
Thanks for that info!
I'll have to do more digging! that will clean up my investments significantly!
the tax system really is an uber-complicated disaster.
The other problem with CEF: it's a passive foreign investment company (PFIC)... so if you have it out of a retirement fund you have to make sure you elect it as a QEF every year. (I think it's IRS form 8621). that's not such a big deal so long as you never forget.
at least that's what CEF tells me every year.
but it's good to know that I don't have to pay collectible taxes!
Nades, if people are going to be paranoid and delusional they should be paranoid about delusional mall ninjas. Now that is a great piece of performance art.
Average Joe, I agree. But that is why CR is so good. We don't just get the stats, we also get the background and meaning and revision history - we get the context here.
I think the credence given to the official stats is largely because of the way they are reported in the news. It's not that BLS says they are what they're not - it's that they are represented in the press as something they're not which leads to all the confusion.
MOM:
Your mall ninjas just ninjitsued 15 minutes of my time and 2 keyboards.
O MY GOD.
I just watched a lengthy video where the speaker did an excellent job of describing the unprecedented nature of the California housing bubble of 2003-2005.
The presentation was made in February 2006, but the video went up on youtube only 3 weeks ago. The entertaining speaker was Christopher Thornberg, senior economist at UCLA's Anderson School of Management.
I realize it's long, but I would highly recommend this to anyone seriously interested in the subject. Also, he has lots of graphs and charts and at times sounds like what CR must have been saying then (when I wasn't reading this blog):
YouTube - Economics Roundtable: California Housing Crisis - Boom or Bubble?
Yearning to Learn,
I've been invested in CEF since 2002 and use it basically as my cash account. I expect it to serve as such for a while longer... not forever though!!
The key to the preferred (non collectable) tax treatment is the PFIC declaration. As long as you do that every year you should be fine. It becomes a little more of a drag if you trade in and out a lot.
RE, that is good news regarding the economic indicator website. I don't think our situation is as dire as some predict, however, it doesn't help when the appearance of transparency is opaque at best. When our faith in government and corporations is restored, I do believe our economy will come back stronger than ever. Technology will lead the way. The United States is still the best country in the world in terms of economic freedom and upward mobility. Take a trip to China or India and you will see what I am talking about. I have faith in our country and economy for the long term, we just need to take some medicine.
RE writes: The Economic Indicators site will not be shutdown after a lot of protest:
What's the likelihood of that happening if Al Gore hadn't invented the Internet?
Calling inflection points is inherently difficult. A lot of stuff goes on a lot longer then seems possible. And then is doesn't. Of course every one already knows that.
OT: For people who take an interest in global current affairs (and there should be many more of them):
BBC America now has a 1 hour weekly edition of "Newsnight" on Fridays 8 pm MOUNTAIN and repeated on Sundays 6am Mountain.
I used to watch Newnight all the time when I lived in the UK and respected it for its global coverage and commitment to depth and accuracy.
Back to regular scheduled programming.
-K
"CA is going down....
The state added just under 15,000 positions in 2007 and January saw another shrink in employers' payrolls. Training programs and other initiatives will be pursued, officials say."
A sharp analyst with a copy of the state budget and the governor's proposed 10-percent-across-the-board cut in mind could probably do a pretty fair estimate on the resultant state and local job losses. Some thousands, I'm sure.
The same analyst could easily project losses in property tax income -- and sales tax income -- and project further impacts on local government. There'd be a lot.
In short, the public sector job losses, in California and elsewhere, have yet to show up. But they're coming. And in California at least, they'll be massive.
Since we are talking BLS and employment/unemployment statistics I'll get on my soapbox again and point out that there 6 measures of unemployment
Unemployment - Wikipedia, the free encyclopedia
U6 is a better measure IMO and also better when comparing the US with other countries and when the monthly releases come out - one due this coming Friday, you can find it in Table A-12
Table A-12. Alternative measures of labor underutilization
-K
with First Call reporting that analysts now foresee an 18.6 percent jump in earnings in the third quarter, and a hard-to-imagine surge of 51.9 percent in the fourth quarter. from the NYT acticle
I didn't know Thompson's allowed their analysts to sniff glue at their desks. I want one of them to stop by my office and take a look at my projections and budgets.
The U.S. military invented the internet. Al Gore helped provide financing for private companies to utilize the internet superhighway.
Even though our area of Washington state has not had a collapse in home prices, (despite a significant runup the last five years) I'm seeing early indicators of a significant construction slowdown stemming from the national (global?) credit crunch. I won't be surprised to see a very slow local construction season and a significant rise in local unemployment rates from current near-record lows. The construction slowdown will also hit the public treasury.
Actually the original internet was developed at four universities in the late 1960s, but the program was funded by the military for its own purposes. The rest, as they say, is history.
Bob: Regarding the Buffett puts, they were disclosed last year and the year before. They are on the S&P and 3 other international indices.
He said 15 and 20 years, and mentioned 2019 as an expiration date. That would mean they were writted as early as 2004 -- at least the 15 year contracts.
As far as who would buy them, it would have to be someone that simply can't book a nominal loss.
Also, they were paid $4.5 billion and are currently booked at $4.6 billion.
More signs of a recession
Yahoo! 404 - Page Not Found
Trucker Robert Griffith is on the road three weeks out of four, pulling oversize loads like crane booms, railroad ties and air conditioning ducts. One of his biggest worries: How he'll find the money to buy his daughter a prom dress.
ADVERTISEMENT
As the cost of diesel doubled over the last four years, his take-home pay has plummeted, from $50,000 to $11,000
trimtabs says job losses started in October? Nice to see a little more confirmation to my predictions from last spring(trouble starting October, depth & duration unknown.)
Right now, depth looks to be shallow but deepening(I thought the stimulus plan would make for a double dip, but I no longer think that), duration should be til March 2009. This comes from the idea that it'll take 2 months to work off every month of credit crunch(from August 07) starting from the start of the downturn(Oct. 07) and that the confessional will be open thru April.
IOTW, a WAG with a little rationale behind it. I don't think a further steepening of the yield curve will help at this point.
Calling inflection points is inherently difficult. A lot of stuff goes on a lot longer then seems possible. And then is doesn't. Of course every one already knows that.
I dunno. The jobless claims seem to do a good job of this.
In fact, I'd argue they're calling an inflection point now.
Though I think in this cycle they underestimate job losses the claims data is, nonetheless, suggesting changes are afoot.
Parties in foreclosed homes:
404 - Page not found
Ooops. I suppose I should have used Holoscan's "Ah wuz jus' funnin'" tag.
OT: Should I go long or short on companies that make "feel happy" drugs? It's unbelievable how many people are mentally crushed by being unable to live an unsustainable lifestyle. I'd go long, but general recession fears scare me.
The latest BEA job numbers should be up for the last fortnight, has anybody posted the diff. between it and the BLS #s from Q2 07?
I'd do it myself, but I'm on a phone from BFE Spain.
sk writes:
OT: For people who take an interest in global current affairs (and there should be many more of them):
BBC America now has a 1 hour weekly edition of "Newsnight" on Fridays 8 pm MOUNTAIN and repeated on Sundays 6am Mountain.
Just my 2 cents, but BBC is kinda like of CNN with an accent.
I've been living outside the USA for quite a while, and IMO the english Al-Jazeera provides much better and more in depth coverage than BBC.
MoM thanks for the Mall Ninja link.I have run across these people at Gun shows,and occasionally at the range,but never at any of the classes I took.I wish I could afford the time to shoot 400 rounds a week,let alone 400 a day!BTW I have only seen thigh holsters used a couple of times at classes,both times by men who were ex rangers,one was on the sheriffs SWAT team,and the other had just taken a BG job in the Green Zone.Neither one carried "state of the art" weapons,they both went for simple and reliable.
ac.....
I'm already assuming that we are in a recession. The betting on instrade is 60 so.
Intrade Prediction Markets
A recession is almost conventional wisdom at this point.
Hapsburger said: "Just my 2 cents, but BBC is kinda like of CNN with an accent."
You're being very generous.
ac.....
I'm already assuming that we are in a recession. The betting on instrade is 60 so.
Seems like a lot of smart peoples are saying it started in December.
"The BLS had acknowledged this weakness"
AU CONTRAIRE!!
The BLS has UNACKNOWLEDGED it, removing that note from their web page, just as the economic conditions that make the birth/death model worthless kick into obvious view.
The old speakwrite machine at the MOT was used to remove it.
"OT: Should I go long or short on companies that make "feel happy" drugs? It's unbelievable how many people are mentally crushed by being unable to live an unsustainable lifestyle. I'd go long, but general recession fears scare me."
There's a moderately substantial case to be made for the idea that Prozac and some other anti-depressants don't work much better than placebos. There's a lot of press about that right now. Go to Google news and poke around, you'll find it straight away.
The only things I consider recession-proof are toilet paper, cheap beer, and potatoes.
Sorry, I meant BED rather than BEA in my above post, too many acronyms y cervezas.
I've been living outside the USA for quite a while, and IMO the english Al-Jazeera provides much better and more in depth coverage than BBC.
Hapsburger
OT yup I too watch Al-Jazeera in English sometimes - haven't got into a habit of doing so - in fact I used to joke that if the HOA (Home Owner Assocation ) complained about my 90cm satellite dish that I'd worked so hard to put up, I'd point to various Fed regs and just to piss them off tell them - "and I want to watch Al-Jazeera and this is the only way I can get it and so its allowed per Fed regs"; To add further colour and scuttlebutt to what you said - Al-Jazeera English got started up when Auntie Beeb cut back it Arabic world service( Karimeh Bishouti, where are ya ? ) and there were many job losses - many of the BBC refugees joined the Al-Jazeera English Startup. Also, there are some difficulties for Al-Jazeera English at the moment :
Al-Jazeera's English news service has made concessions that Nigel Parsons, its managing director, hopes will prevent an exodus of expatriate staff from the fledgeling television station.
Mr Parsons has been struggling to contain a staff revolt after the Qatari owners of the 24-hour news service insisted on integrating it with al-Jazeera's Arabic channels.
Al-Jazeera in fight to retain expat staff amid internal tension - Times Online
-K
Alec, the Q2 2007 BED release is here.
241,000 net new jobs in the quarter.
Prior quarter 438,000. Q2 2006 was 416,000.
"A recession is almost conventional wisdom at this point."
Very much so. I saw a banner in front of a Phoenix Carl's Junior store today advertising a "Recession Relief Menu". That's pretty mainstream.
Bush Deficit Widens to Record as Treasuries Deter U.S. Pensions
"... Yields on 30-year U.S. bonds that fell to a record low of 4.10 percent this year are forcing pension funds to favor equities, corporate debt and commodities in an attempt to cover unfunded liabilities and meet return objectives of about 8 percent. Even the federal government's own Pension Benefit Guaranty Corp. said on Feb. 19 that it plans to shift $15 billion to stocks from debt.
``The reality is there's not a lot we can do'' other than buy high-risk securities to close a pension shortfall in a short period, said Chris McDonough, chief investment officer of the Philadelphia Pensions Department. The sixth-largest U.S. city will probably also issue debt, he said. ..."
http://custom.marketwatch.com/custom/myway-com/news-story.asp?guid={18D803BB-9452-4691-96B8-482F142E543B}
FDIC doesn't see bank failures surging
\t
Analysts also cry foul on Fed chief's testimony that some small banks will close
By Riley McDermid, MarketWatch
Last Update: 3:20 PM ET Feb 29, 2008
NEW YORK (MarketWatch) -- The Federal Deposit Insurance Corp. is trying to rehire 25 former employees specializing in bank insolvency, but the agency that insures bank deposits said it does not expect a surge of failures in the industry.
Federal Reserve Chairman Ben Bernanke raised some eyebrows this week when he suggested during congressional testimony that the U.S. will likely see some banks fail in upcoming months due to the ongoing credit crunch and a weakening housing market.
I see where Bloomberg's median estimate for job creation in February is 25,000, close to the 'Wall Street' number of 30,000.
I wonder if the estimators are estimating what they think really happened or what they think BLS will report.
Also, the median on initial jobless claims is listed at 363,000, that being 10,000 less than last month.
It's hard to reconcile increasing job losses with reduced initial claims for unemployment.
Hiring May Have Cooled, Factories Slowed: U.S. Economy Preview - Bloomberg.com
Philadelphia's $4 billion pension deficit is causing the city's retirement-fund manager to shun Treasuries at a time when the Bush administration needs him most.
I love articles like these.
Pension funds holding back and a flood of supply is causing the price of treasuries to shoot up.
One thing I've discovered in the past year and a half is that treasuries are the most hated securities out there.
Everybody gets mad when treasury yields go down.
Nikkei down 416 at the open.
Plant,
Are you in Bemidji?
Yen about to break 103!
Completely retarded.
Man, are we facing a pension shortfall nightmare. When did pension plans become casinos?
Under Pension Protection Act, all DB plans have to have assets equal to 100% of liabilities (discounted present value) gradually, over next decade. You don't think this isn't going to be a massive hit to corporate earnings going forward?
Curling capital of the United States.
Uh-oh. Nikkei down 532.
Ben had better start warming up the helicopter.
cd
We're in the first inning of the wreckage as a result of borrow and spend republican policies.
Ben had better start warming up the helicopter.
The helicopter is backfiring -- it only inflates oil and food prices.
Seriously...TrimTabs? The same outfit which made a $60+ billion error in hedge fund asset flows estimates?
Wall Street Breakfast -- Seeking Alpha
"Initial Estimates of Summer Hedge Fund Outflows Incorrect
MarketWatch reports data from TrimTabs Investment Research and the Barclay Group released in July estimating a $32 billion outflow of funds from the hedge fund industry was incorrect, according to an update and apology from the firms Wednesday. TrimTabs and Barclay now say there were $39.1B of inflows. For August, the companies estimate $8.9B of inflows into the $1.9 trillion hedge fund industry. TrimTabs and Barclay said the July estimate was calculated incorrectly, since adjustments were not made for funds of hedge funds, and funds were included in the estimate that reported performance updates but not of their assets under management. "The monthly hedge fund flow data is a new service and the changes we made to our methodology will ensure that our current and future estimates are as accurate as possible," commented TrimTabs CEO Charles Biderman. Concerns over hedge funds suffering huge redemptions over the summer were seemingly exaggerated. However, TrimTabs' and Barclay's latest estimates show August hedge fund inflows totaling $8.9B were the lowest since $7B in January.
Sources: MarketWatch"
Response to messages in other threads:
Bill - You're right about market returns - in part. If you look at the SP500 from the start of 1995 to today - you're talking about a 9.5% return without dividends. But all of the gain took place from 1995 to the end of 1999. Since 2000 - the return on the SP500 has been slightly negative. So all you've had is a paltry 2% or less dividend yield. No question bonds have been the better investment for the last 7+ years (and 7 years is a long time in my book).
This kind of math is especially important for retired investors - who are told they can withdraw 4% from principal every year and do ok. If you withdrew this 4% starting in 2000 - you'd be deep under water in terms of equities today.
FWIW - the best non-leveraged investment I have ever owned is long zero coupon bonds bought in the 80's - and sold in the 90's. Better returns than even the bubble Nasdaq over a period of a decade or so.
I am kind of simple-minded in terms of approaching health care. We spend over 14% of GDP on health care. Which means that we - on average - have to spend 14% of gross income to pay for that health care to break even. With my generation starting to go on Medicare - the costs will undoubtedly rise. So we will probably pay more (Medicare used to be a bargain - it is much less of a bargain these days) - and probably get "less". Although - as we can see looking at other countries - "less" is not necessarily "less". Do we really want to spend $100,000 on a drug that extends the life of a cancer patient by 8-12 weeks? Or $3 million on a 9 ounce baby who will probably grow up brain-damaged? Most half-way intelligent people make at least half-way intelligent decisions when it comes to most purchasing decisions at least half of the time - but - when it comes to health care - we often seem to throw common sense out the window.
BTW - in terms of Medicare - there are rules about medical care you can get - and under what circumstances you can get it. And if Medicare says you can't get it - you cannot buy the services yourself from a provider who participates in any way, shape or form in Medicare. Which is the way most socialized medicine systems work in other countries (except Medicare is more generous than most of them).
I approve of the Medicare restrictions in terms of what it pays for - but I think people ought to be able to pay out-of-pocket for unapproved treatments and procedures. Although it may not be in the general public interest - or make any sense - to pay that $100,000 so a terminal cancer patient can get a few extra weeks of life - perhaps a particular patient might want to spend his or her money that way (instead of spending $100,000 on a final fling trip to Paris). It's your money - you should be able able to spend it how you want to spend it.
It's not my business to tell people how to spend their own money. But I also note that my husband and I had 3 parents (ages 79, 84, and 84) who died expensive painful deaths - kind of the norm in the Medicare system these days - and I don't think the quality of their lives in their final weeks/months was worth warm spit. As soon as their doctors agreed - we put them on morphine drips - so they at least spent their final days in peace.
Alec - Re Obama and financial markets. Markets don't like uncertainty - and Obama is a big blank. I am not sure about Hillary Clinton. I didn't like Bill Clinton - but I loved his economic policies. Which are best summed by a statement made by James Carville (more or less - if I die and am reincarnated - I want to come back as the bond market - because it's the most powerful thing I've ever seen). Anyway - I just watch what is going on - and govern myself accordingly. If Obama is elected - and raises taxes (which seems to be a certainty) - it will hurt you younger people who are doing ok more than it will hurt me (because - as a retired person with large retirement accounts - I can manage my income to stay in lower tax brackets).
FWIW - one of Obama's major tax proposals is to eliminate income taxes on all seniors who earn less than $50k a year. How does that sit with those of you trying to raise a family on $50k? Roby
silver=$20!!!
ac,
I think that long-term treasuries are the real bubble at this point. The present returns were only made possible because of duration matching in a so-called low inflation environment.
As pension funds are forced out into other investments, these yields will have to adjust to reflect the reality of future inflation expectations. A 4.10% return on a 30 year is simply ridiculous.
idoc,
Where do you see silver at 20? I see spot at 19.81.
Chas. Biderman: ...The big picture is: the amount of money people have to spend, which includes money on real estate transactions, is plummeting, and it started to break down in October...
The data that the NBER business cycle dating committee uses to date recession starts started turning south in October: employment (household survey), industrial production, and real disposable income; only retail sales was still in the black.
I say our recession, which will smartly proceed to depression, began in October.
Do we really want to spend $100,000 on a drug that extends the life of a cancer patient by 8-12 weeks?
I think we as a nation should be asking what is being consumed that requires a $100,000 cost in the first place. Medical services are chock-a-block with rentiers with their hands in the till, worse than the public safety mafias.
one of Obama's major tax proposals is to eliminate income taxes on all seniors who earn less than $50k a year. How does that sit with those of you trying to raise a family on $50k?
People raising a family (married/2 kids) on $50K aren't paying Federal income tax already.
Money not taxed from seniors helps out the next generation one way or the other. All that is important is to tax that which should be taxed first, namely, taxes on rents and resource severances.
melt
it hit $20 earlier at one pt.
yen broke 103, 102.96
Robyn,
Wall Street loves the ultimate big blank of uncertainty, Mitt Romney. Mitt Romney doesn't even know where Mitt Romney stands. Just try and ask him.
So much for the wisdom of the 'financial markets.
yen broke 103, 102.96
I hope they start lunch soon.
Well, more important than silver nearing $20 or yen breaking 103, the Nikkei is just plummeting. Testing 13000.
Damn I sold some PUTS Friday hoping for a rally tomorrow.
Pool bet: August for the start of the recession but the data won't come in for quite a while.
CR had a recession start bet a long time ago at the very beginning of his blog. He may soon have to dig out who actually might have won, if anybody.
I don't know when the recession starts, and I don't much care. I'm not even focusing on GDP that much.
What I'm focusing on mainly is U.S. corporate earnings, and I see nothing positive on the horizon, for a long time.
I think we've entered an earnings winter. It is masked, in part, by 50-100 big, relatively strong U.S. mega-caps with global exposure. Take them out of the equation and it's as bleak as can be, for a long time to come.
So, you just want to be short everything but the mega-caps with int'l exposure.
Nikkei down 4%. Emergency rate cut in the morning?
"Nikkei down 4%. Emergency rate cut in the morning?"
Sure! How much? Maybe the Fed can PAY participants to play at the TAF?
The market is in a corner 10000000 ways. Goldilocks is having epileptic fits. I think we're in for one hell of a slump over the next week, testing Jan lows and breaking through. We'll see.
Robyn, you participated in one of the biggest bond bull markets in recent memory. Zero coupons were an excellent vehicle.
I think the probability that bull lives further is less than it becoming a bear.
Troy - For some reason (karma - smile) - we wound up with a taxable income this year (after deductions and everything else) of just about $50k (I'm sure we didn't get to that number the way most people do - but that's the number). And our taxes are a little over $6000.
I don't have the time to run the calculations tonight - but I doubt an average family that earns $50k pays nothing in income taxes. And if that family earns $75k (with mom and dad both working) - which might bring them down to that $50k in taxable income) - they're still paying income tax - not to mention big dollars in FICA. And at $75k for a 2 income family - you're not talking about people with high end jobs.
I think this proposal of Obama's is pure pandering to elderly people - who tend to vote in greater numbers than younger people. And even though I am one of those older people - I realize that most of us are a lot better off than younger people.
Heck - people in my generation and my parents' generation bought our first waterfront properties for under $70k - stuff you'd have to pay at least $700k or more now for. We paid peanuts for FICA and Medicare (particularly in my parents' generation).
On my part - it is in my financial interest to suck younger people dry - but it is not in my interest as a citizen of the US to see us turn into a second or third world country because younger people can't make it here. If all I wanted was to live cheap - and buy servants for peanuts - I would have been gone a long time ago. But - having traveled in the second and third worlds - well I don't want to live that way - a person with some money living behind barbed wire to protect myself against a majority of people who have nothing - and nothing to look forward to - in any other country - or here. I want to see that people 40 years younger than I am have a reasonable chance to live successful productive lives. Pandering to the elderly buys votes - but it doesn't make this country better. Just my 2 cents. Roby
Thank you Robyn for your post.
The question is who is going to write the law that allows Society (say in the guise of a hospital committee) to pull the plug? Would such a law clear THIS SCOTUS?
We have been beating up on the Alt-A no equity crowd. But the Great Teat in the Sky (GTINTS)or voodoo economics came out of the West with Reagan. It pervades our society. Its like a corollary of Gresham's Law ..Bad economic ideas drive out the Good ones.Can't pay charge it. Can't face a severely impaired kid? Force society to cough up the million bucks
I hope we have a severe recession in this country. Maybe that will put the silver stake through the heart of Raganomics bring us to our senses and spend only what we earn in taxes...or maybe we will invade Canada for their raw materials(is there enough of an army to beat them???)
Malabar - I don't know about a bear market (I'm reluctant to put labels on markets). But I do currently hold some coupon and zero treasuries - in the 10-15 year range - and am looking for an attractive exit point. Last time I sold treasuries - they were shorter term - was maybe 2002 (?) - when YTM was less than 2%. It's really hard to be enthusiastic about anything with a YTM of less than 2%. Roby
Nikkei down 4%. Emergency rate cut in the morning?
Lot harder to justify with $102 dollar oil and collapsing dollar.
$1000 gold this week? Certainly $20 silver.
Anonymous - We in Florida have of course the most famous (ridiculous) case - Terri Schiavo. I wish our Congress critters had paid as much attention to matters of national security and Iraq as they paid to Ms. Schiavo.
In most cases though - like those of our late parents - people - including legislators - overly aggressive doctors - etc. - pretty much leave you alone. At least that was (thankfully) our experience. It is only the occasional case that develops into a cause celebre - where outsiders try to interfere with reasonable family decisions. Which is as it should be.
BTW - there is now a recognized medical specialty area called palliative care (although I don't think it's a boarded medical specialty yet). The gist is to make people really comfortable when you know they're fixin' to die. Generally involves a lot of opiates - which many doctors are afraid of dispensing. In my FIL's skilled nursing facility (where he lived for over 2 years before his death - it was his home) - they weren't afraid - and he died peaceful as anything after his birthday on December 20 - Christmas - and his daughter's birthday day after Christmas. I think he hung on for these milestones - in kind of a painless haze - and passed away day after his daughter's birthday.
FWIW - IMO the concept of "pulling the plug" only obtains in a hospital setting - and - at some point - when you're dealing with a terminal patient - they should be out of the hospital - and back in their home (wherever their home happens to be at the time). All of our 3 deceased parents died at home (2 in their houses - 1 in an excellent skilled nursing facility). I luckily don't know about younger people who die - but - with older people - the handwriting is usually written very big on the wall - and the goal is home comfort - not hospital heroics. Roby
ac,
How about a surprise rate cut that gets obliterated by a bad ISM? Wouldn't that be interesting...
definitely $1000 gold this week (and big headlines), at least for a moment. It is too close, it really can't fail to get there.
What it does after that is anyones guess but my money is that it falls back and thinks about it for a while - gold will need to see steady drip drip of the bad news before being brave enough to stay above $1000 and look for new horizons. It has gone parabolic a tad too quickly.
tj- "How about a surprise rate cut that gets obliterated by a bad ISM?"
Conjure thinks the ISM-PMI will print significantly below consensus.
Fed meeting: FRB: Advance Expedited Notice of Board Meeting on March 3, 2008
Nice catch, AZ_C!
They are quickly running out of ammo. Will they have enough at the Fed until Nov 7 or will they run out well in advance?
Can't take credit. Saw it over on Denninger's board.
Damn nice catch, indeed! Wow, this is getting interesting!
There I was, worried they were asleep at the switch. Shwew, rally on!
Well, any emergency rate cut will shoot gold past $1000, that's for sure.
"$1000 gold this week? Certainly $20 silver."
Gold at $980 even as we speak, up six bucks since Sydney opened. Wouldn't be much of a stretch.
Uh, I just read that "expedited meeting notice" for the Fed board that AZ_Cowboy was so kind as to provide a link for....
$1000 gold this week? NO PROBLEMO!
The more interesting questions is where exactly it will shoot the dollar. In the kneecap seems like good odds.
Bob Dobbs,
After reading that Fed notice I'm thinking tomorrow!
"you just want to be short everything but the mega-caps with int'l exposure."
Does anyone know of any good mutual funds that specialize in these companies? Are these companies likely to get hammered in the near term or will they benefit as people abandon other stocks? Any thoughts?
500 points on the nikkei, and they call an emergency meeting.
Wow.
I am stunned. Time to buy calls tomorrow morning!
Once again dear friends, once again, into the breach!!!
Someday this war's gonna end...
Robyn | 03.02.08 - 9:50 pm |
Heck - people in my generation and my parents' generation bought our first waterfront properties for under $70k - stuff you'd have to pay at least $700k or more now for. We paid peanuts for FICA and Medicare (particularly in my parents' generation).
On my part - it is in my financial interest to suck younger people dry - but it is not in my interest as a citizen of the US to see us turn into a second or third world country because younger people can't make it here. If all I wanted was to live cheap - and buy servants for peanuts - I would have been gone a long time ago. But - having traveled in the second and third worlds - well I don't want to live that way - a person with some money living behind barbed wire to protect myself against a majority of people who have nothing - and nothing to look
Robyn,
Appears what you want is to hang on to an apparently smart buy of water front property, and ensure you have servants at a reasonable rate, without being behind a (barbed wire) gated community.
Good luck.
sbarrkum
Note the Fed meeting is the Board of Governors (discount rate), not the FOMC. Probably driven by the muni crisis.
Either that or I wonder if CFC goes under tomorrow?
Stunning if that is the case?
Bets, gentlemen?
lol.
Cowboy- FOMC doesn't need to provide notice.
CFC is the most likely point of failure.
BofA may not have sufficient regulatory capital to make it work.
Is this for real (meeting) or a hoax?
Note that the meeting notice was released on last Thursday, the 28th.
"...without being behind a (barbed wire) gated community."
In warm climes, Conjure Bag suggests razor wire (barbed wire is too humane), followed by a piranha-filled moat, followed by a dog run.
His logic is that, if one of those poor people makes it through the wire, enough blood will be running to attract the piranha. The dogs will clean up the bones.
Ven vs Col = oil will be a $120 by next week.
The Federal Reserve's rescue has failed
The Federal Reserve's rescue has failed - Telegraph
Robyn:
My spouse is a palliative care physician and blanches at the Terry Schiavo case when mentioned. Whole thing was a trainwreck.
You're correct in that most docs are not terribly well trained in pain control; study some years ago in which group of docs were asked about their opinion of their ability to control pain - their response was "high" while the subsequent objective test of what they actually knew was "low".
Fortunately, more and more hospitals are pushing palliative care and this is a burgeoning subspecialty. Would rather still die at home or at least in a hospice, however.
My concern about healthcare rationing is this. At what point does society think that it's alright for someone to die? Because of their age (i.e. "they've had a good life")? Because they engaged in reckless personal behaviour (a sexually promiscuous individual with multiple partners practicing unprotected sex)? Because they opted for a personal choice of smoking for years before finally quitting? And once that line is crossed, at what point does it end?
I'm sorry about your folks but glad they were able to be in their own surroundings. My father died several years ago in the local hospice; actually, the one in which my spouse works (she wasn't his doc though). My plan is to have very specific outlines of when I no longer wish to have heroic measures pursued; the legal paperwork in most states is adequate but still is not terribly clear in many instances. Leave some concrete examples for your family and docs to use.
The yen's strength, which hurts Japan's vital exporters by making their products more expensive abroad, has also helped push Japanese stocks lower. The benchmark Nikkei 225 index was down more than 4 percent Monday.
AZ_Cowboy writes:
Fed meeting: Board of Governors of the Federal Reserve System
To give some context to this, do look at the meetings that have been held in the past to consider:
"Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks."
Federal Reserve Board Meetings
I won't be reacting to this data.
-K
crispy,
Tracking that LatAm dustup closely, direct personal impact in addition to the energy implications...hopes are that is the usual Hugo bluster, the downside risk is that Hugo is in a much more desperate situation than MSM realizes due to recently imposed food rationing, and his recent electoral rebuff when he tried to collect all the reins of power. Also caught an interesting rumor that Ven may be declared a sponsor of state terror and have funds seized...history is replete with political leaders who have ginned up a war to redirect internal political disaffection with their rule.
homedad43,
Rationing ain't the half of it. If government controls your health, they control your life -- what you eat, what you drink, etc.
I always found it ironic how the AGs attacked the tobacco industry over the costs of treating smokers, since until the Federal Government mandated it there was no obligation to treat them.
p.s.: It was also hilarious how the AGs conveniently ignored data suggesting there was a net savings to SS & MC due to smoker's shorter lifespans.
CNN - Nikkei down 4% in early trading
Business, financial, personal finance news - CNNMoney.com
Matters to be Considered:
1. Personnel actions (appointments, promotions, assignments, reassignments, and salary actions) involving individual Federal Reserve System employees.
FRB: Notice of Closed Board Meeting on March 3, 2008
Benny wants a raise inflation is eating him up.
Bush should declare the election to be held March 11th and thus resign. The economy will melt by this time next year!
Awe hell sk, just when we were ready to get lathered up into a frenzy. Oh well...
Bob Dobbs,
Did you see that recent Mish post on Sacramento?
This is gonna be like War Of The Worlds, with banks getting zapped one by one and markets will go into shock, we need leadership ASAP versus denial!! SOS!!
wheat farmer - what the hell are you talking about, Sean Hannity says the economy is great.
Can't take credit. Saw it over on Denninger's board.
That explains a lot.
crispy,
Just look in India, they feel the same as I do, holy cows!
Viewing the recent fluctuations in the sensex with concern, BJP suspects that some anti-national elements, including terrorists, may be manipulating the stock markets and wants a probe to ascertain the antecedents of investors.
Party President Rajnath Singh said his concern stems from the fact that up to 40 per cent of investments in the stock markets were by the Foreign Institutional Investors (FIIs) through PN (Participatory Notes) system.
"What kind of money, whose money, what colour is it? There is no information," Singh said in an interview while referring to the recent crash in the stock market leading to losses worth crores of rupees to small investors.
My quick recession anecdote... my son working at Mall of America says the place is shedding retail jobs like crazy right now. More than the usual seasonal shed.
He has had his hours cut and where his SO works has had 2 or 3 managers fired (in series) for not making numbers. The current guy hasn't even been a manager anywhere before... moved him up and soon they will move him out.
The store my son works at is actually up YOY but not up to plan (they were given a very aggressive forecast to beat - aren't doing it but are close... the only major store in the whole region anywhere near plan).
I see the whole spectrum in my calls... companies feeding machines into or servicing commodity industries are booming (ag equip mfgrs are so far above plan as to be almost silly). Companies serving discretionary consumer spending are getting smacked down hard.
I certainly can see how folks would think we are in recession - looking more like it all the time - but it is still a lot like a microwave frozen burrito (CR's analogy)... only this one is now more frozen than cooked...
My guess is Ben will hit the reheat button one more time this spring, probably in March. Burn up more chunks of that sorry burrito in an effort to thaw out some of that ice.
Oh boy, this makes me wanna plant more wheat too!
There is a 62 percent chance the Bank of Japan will cut its 0.5 percent benchmark interest rate by 25 basis points by December, according to calculations by JPMorgan Chase & Co using interest-rate swaps. The odds were 28 percent a week ago.
You know what I find entertaining? The yield curve; Paulson, Ben & GW have that thing set up like a rocket headed for the moon; I just wish they could get in and go! No one on the globe is buying that "curve", it looks as fake as a no doc loan with a Fannie derivative package!
Pre-Market: Stock Trading Before the Markets Open from CNNMoney.com
TAF anyone?
It's about time they sent their man out with an explanation. Ip from the WSJ:
So why is the Fed more worried about growth than inflation? First, it thinks run-ups in commodity prices explain the increases, not only in overall inflation but also in core inflation: higher energy costs have "passed through" to other goods and services. Core inflation rose and fell with energy inflation between early 2006 and mid-2007, and the Fed thinks the same thing is probably happening now. If energy and food prices stop rising -- they don't have to actually fall -- both overall and core inflation should recede.
So far, they're still rising: wheat, oil and gold hit nominal records last week. But Fed officials don't think the latest jump can be justified by fundamental supply and demand. U.S. inventories of crude oil and gasoline are plentiful. Strong demand from China isn't new and should have been factored into prices long ago. A more likely explanation: investors, perhaps alarmed by the Fed's dovish stance, are pouring money into commodity funds and foreign currencies as a hedge against inflation.
For the Fed, a Recession -- Not Inflation -- Poses Greater Threat - WSJ.com
Darn! It sure did have all the makings of a panic meeting.
Thanks for ruining our conspiracy theory party, ac!
a quote from the telegraph uk article... fed plan has failed
that crisp&cole pointed us to.. (11:34)
"We are becoming increasingly concerned that the authorities in the world do not get it," said Bernard Connolly, global strategist at Banque AIG.
"The extent of de-leveraging involves a wholesale destruction of credit. The risk is that the 'shadow banking system' completely collapses," he said.
For the first time since this Greek tragedy began, I am now really frightened."
no amount of cowbell is gonna stop the train. its not about interest rates anymore.
"tj & the bear writes:
Bob Dobbs,
Did you see that recent Mish post on Sacramento?"
Not until you mentioned it -- thanks.
Yep -- if you look at every other local paper in California, you're going to see stories about projected budget cuts. No more reassessments to higher values. In fact, the reverse.
It's going to be worse some places than others; overextended new bedroom communities with limited resources could have it as bad as the inner cities.
For example, a lot of the Central Valley towns are going to get hit worse than the coastal towns because they didn't charge developer fees for each new house, which seems incredibly stupid in the post-Prop 13 reality, but there you go. I know Modesto didn't.
I work at a UC campus, and our department head just told us to expect cuts -- and challenged us, with her usual bright and fixed smile, to find ways of doing a great job despite them. Dead ringer for Hilary Clinton, even has the accent.
And that's before any state budget cuts.
False alarm on the Fed? Oh well. Gold's still at 982 for now. The week should be interesting in any case.
My trading platform shows gold futures at 986.00, silver at 20.27 -- with both still climbing.
Silver over $20, gold heading for $1000
Wouldn't it be somehow fitting if non-US trading pushes the USD below 1/1000th of an ounce of gold for the first time ever?
"America wakes to $1000/oz Gold"
tw
Nikkei drops over 4%, now below 13000
Over/under on what time Bernake is awoken by a phone call from Cramer?
68 visitors- where are the comments?
Doh- browser wasn't updating latest article
mp: "In warm climes, Conjure Bag suggests razor wire (barbed wire is too humane), followed by a piranha-filled moat, followed by a dog run."
Personally, I recommend the 20,000v alarmed electric fence outside the razor wire, as it gives one time to pour a glass of Cognac before going outside to enjoy the show.
I have it from expert authority that Pirhanas in a feeding frenzy aren't dangerous, at any rate, but they do produce a rather pleasant bloody "froth." Well, it's much more pleasant than Greenspan's market froth, anyway...
cd
""We are becoming increasingly concerned that the authorities in the world do not get it," said Bernard Connolly, global strategist at Banque AIG."
Someone correct here, isn't Banque AIG a subsidiary of AIG proud owners of an 11 billion dollar writedown just a few short days ago?
This is sort of like someone from Hindenburg engineering complaining about air safety standards.
There are none so holy as the newly converted.
The EADS' (mostly French) air tanker contract win on Friday ensures that our USAF will soon be flying Airbus. Thats a $35-100 Billion deal and a loss of ~9000 American jobs for Boeing. (Don't try to say the EADS front, Northrup Grumman will get equal jobs). What are we thinking? Why not Aeroflot? Or better yet - the Chinese -- we might have gotten Boeing planes made with cheap Chinese labor!