"[W]e are on the cusp of a renewed deceleration in growth."
Hmmm...so growth at statement is 0. Ah, going backwards then. Well that's a positive...all is well...stock pop on this on monday...erm...this has that illogical feel...brain cell number 3...you there pal...
Consumers will be facing price hikes of up to 15 percent on holiday goods, from toys to European luxury handbags. Many retailers had resisted passing along higher prices to consumers, but escalating costs fueled by rising energy prices, higher labor costs in China and a weak dollar are forcing stores, from warehouse clubs to high-end merchants, to pass more of the burden to shoppers.
THE IMPACT: The price increases could make shoppers buy fewer holiday gifts to keep to a budget. That could mean a serious hit for the economy, since consumer spending accounts for two-thirds of all economic activity and for the holiday period, which accounts for about 40 percent of merchants' profits and 50 percent of sales.
Asphalt for Christmas (in stockings)
2008...Mooohawhahahahahaha
A shortage of asphalt is playing havoc with Broken Arrow street projects, and frustrated residents can blame "Old Man River."
"Most of the asphalt materials Oklahoma utilizes come from Iowa," said city spokesperson Keith Sterling.
SemGroup, a Tulsa-based asphalt supplier, filed for bankruptcy, and the Rogers-based DECCO Contractors is scrambling to find another source of asphalt to finish four city road projects. The city council will meet at 10 a.m. today to vote on awarding more funding for the project.
Mayor Steve Womack said the city had the option to hold DECCO to the contract and to the price the company had quoted, but Womack also said DECCO is not at fault for the asphalt problem and shouldn't be penalized for it.
"Americans are driving less, cutting into federal fuel taxes, which help pay for maintenance of highway and mass transit systems," said American Association of State Highway and Transportation Officials Executive Director John Horsley. "The cost of construction materials -- steel, concrete, asphalt -- is skyrocketing and at the same time that people are driving less, and that means less revenue. We're in a double whammy."
Others blame more than just a lack of money.
"Lack of vision, lack of leadership and lack of investment. Infrastructure is something that's been easy to ignore," said Urban Land Institute senior Resident Fellow for Sustainable Development Ed McMahon.
It's especially easy to ignore if you consider the latest estimates on how much it would cost to repair all 590,000 in America: $140 billion.
Goldman is just trying to get a bonus for a few people; look for a stock repurchase and more option grants, dividend cut, share dilution and death by cash burn.
The head of the U.S. Dept. of Transportation stated on 15 August 2007 that about 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to other, unrelated uses.[5] However, revenues from other taxes is also used in federal transportation programs. Fuel taxes in the United States - Wikipedia, the free encyclopedia
Newsletter Writer (The Hat Trick) Jim Willie makes an interesting point:
The selective enforcement of restrictions on shorting bank stocks sticks out... In fact, one can easily make the argument that price controls have finally come into the open... For the financial sector, price controls elevate prices of various securities. The Plunge Protection Team routinely rescues the S&P500 stock index, while JPMorgan routinely lifts the price of USTreasury Bonds... The price controls, now in the open, will gradually find toeholds of political support in the tangible economy, like with gasoline and heating oil, if not natural gas. The issue of survival is critical, for home heating, as shutoffs are not acceptable. The upcoming widespread price control movement is a cinch... It ensures grand grotesque shortages to be suffered in the USEconomy, resulting in eventual rationing. The forced ration programs will invite violent response, growing disorder, and eventual chaos...as the nation gradually slides into conditions leading to martial law. The irony in my view is that the US public will beg for martial law in a return for order.
"A famous suggestion is that the cusp catastrophe can be used to model the behaviour of a stressed dog, which may respond by becoming cowed or becoming angry. The suggestion is that at moderate stress (a > , the dog will exhibit a smooth transition of response from cowed to angry, depending on how it is provoked. But higher stress levels correspond to moving to the region (a <
Then, if the dog starts cowed, it will remain cowed as it is irritated more and more, until it reaches the 'fold' point, when it will suddenly, discontinuously snap through to angry mode. Once in 'angry' mode, it will remain angry, even if the direct irritation parameter is considerably reduced."
Somewhat related-unrelated news: The House passed legislation on Wednesday that would automatically enroll new federal employees in the Thrift Savings Plan and set their contributions at 3 percent of basic pay. The funds from automatic enrollments would be invested in the stable government securities fund to insulate new participants from any potential large losses. The original version of the legislation would have invested those funds in the TSP's life-cycle funds, which begin with a more aggressive mix of investments and switch to a more conservative portfolio as an employee approaches retirement. Employee advocates had expressed concern that investing automatic enrollment funds in the lifecycle funds would expose employees to more risk than they might be comfortable with.
Yes, lets force government employees to keep funding Wall St and Govt treasuries...
Doug Noland at PrudentBear has been bearish for some time, but always seemed to hold back from calling an imminent collapse. He has hedged, warning that credit creation was still growing at a rapid rate, thus giving a chance that reflation would levitate markets for an unpredictable time to come.
In tonight's piece, he seems to throw his hat in the doom-here-and-now camp, noting that the upper and middle-upper class are now being sucked down.
Mortgage lender Residential Capital LLC's value in the credit markets is like that of a company on the verge of taking its last breath.
ResCap, parent GMAC LLC, and General Motors Corp, which holds a 49% stake in GMAC and reported abysmal earnings Friday, are also under duress in the $62 trillion derivatives market.
Derivatives investors are now paying $7 million up front to insure $10 million of ResCap's bonds, plus $500,000 annually for five years based on credit-default-swap levels. This high cost is extreme but not out of context considering the going value of ResCap's bonds outstanding.
ResCap's junk-rated 8.375% notes due in 2010 were valued at all of 29.5 cents Friday. Other bonds, such as the 8.5% notes due in 2012 and the 8.875% bonds due in 2015 traded as low as 25 cents on the dollar, according to KDP Investment Advisors.
It must not be fun being Ben and Hank, not being able to enjoy your weekends these days!
Why do we have to cancel the 2nd half recovery? It was predicted with no foundation in reality; why should allow reality to intrude now? Can't we just make up a "core" GDP index and exclude losses? And maybe use a larger multiplier (no rationale for the multiplier, I just needed something to make the numbers bigger.)
Busloads of tourists are allways welcome at Leftys. But due to the Clorox products price increases, use the bathroom on the bus. And remember our only rule at Leftys, No Vomiting Inside.
Easy to fix:
- pass another housing bailout bill
- send more stimulus checks
- never EVER foreclose
- eliminate firings
- change the accounting rules so there are no losses
This was, by far, the single worst loss I've ever experienced. Just thinking about it makes me want to slash my wrists and do push-ups in alcohol. I've gone through seven straight years of watching my Timberwolves get knocked out of the first round. None of those losses even touches this one.
All season long, this Broncos team was fearing a situation in which Plummer had to make plays in the second half to win a game for them. The Pats were one more quarter away from making that happen. And they blew it. Aaaaaaargh. I can't talk about it anymore.)
The TiVo Award for Best Three-Second Delay in Real Life
To the back judge who whistled Asante Samuel for pass interference, the worst anti-Patriots call since Ben Dreith saved Oakland's season by whistling Ray "Sugar Bear" Hamilton for an unconscionable roughing the passer penalty in the 1976 playoffs. Not to break out a batch of sour grapes, but ...
Man this is simple. Whenever anybody goes bankrupt, is laid off, or has to pay more for anyting, just ISSUE MORE US TREASURIES! You guys make this stuff so complicated...
Cramer: Yes, The Market Has Bottomed... Bad News Knocks Stocks Down
Just an accident - kind of - HuffPo strings together headlines for different major articles as teasers for its focus pages. But amusing. And it is true the market was down the day after Cramer called bottom.
I am croggled by the GDP deflator variance QoQ...nominal decline of -11.6% QoQ with rate of change for annualized 'real' GDP growth rate of 111%! BEA source docs cited on my blog.
I am having a gut level reaction to this - best described as emesis. Any insights appreciated.
disclaimer: the person in question probably has a higher IQ than me but has completely sold out. He simply needs to get back to his roots of "questionable" trading.
"Anyone have a collection of quotes promising recovery in 2H 2008?"
How about Jim Cramer in january stating that financials had hit bottom and recommending Goldman Sachs.
From Bloomberg in Feb:
"While the risk of a recession is now even, growth will accelerate to a 2.5 percent annual rate in the final three months of the year from 0.6 percent last quarter, according to the median forecast of 62 economists polled by Bloomberg News from Jan. 30 to Feb. 7."
and from same Feb 08 article:
"We're actually starting to see tell-tale signs by the market that it expects the economy to be in recovery in six to nine months,'' said James Caron, head of U.S. interest-rate strategy in New York at Morgan Stanley."
CSC - yo that was aiiite - people just don't get satire anymore I guess.
Spatch - Jerry in purple, nice.
Wait a minute, if Goldman says "Second Half Slowdown Ahead" does that mean the bottom is in and it's time to go long? Now I'm more confused than ever...
Great, now CR has a flashing ad for Viagra, Cialis, and Levitra. I can do all my Christmas shopping for Ben and Sheila without leaving my favorite web site. I figure if Ben and Shelia they had more "personal life" they could do less damage in mine.
Sheila walks warily down the street
With her hat pulled way down low
Ain't no sound but the sound of her feet
Pizzas ordered to go
Are you ready? Hey, Are you ready for this? Are you hangin' by the edge of your seat?
Out of the hotel, the agents rip, hit the ground! It's the FDIC
Another bank bites the dust!
Another bank bites the dust!
And another ones gone another ones gone, another bank bites the dust
Hey! They're gonna get WaMu, another one bites the dust
I am croggled by the GDP deflator variance QoQ...nominal decline of -11.6% QoQ with rate of change for annualized 'real' GDP growth rate of 111%! BEA source docs cited on my blog.
I am having a gut level reaction to this - best described as emesis. Any insights appreciated."
Oil import price goes up, the GDP deflator goes down.
Imports enter GDP with a negative sign, so they work backwards. Import prices enter inverselt into the deflator.
And it's not the government making stuff up - that's how GDP is defined.
The magnitude of the effect suggests the methodology may require review or modification rather than a mechanistic application and unthinking acceptance...or alternative macroecnomic measures...was looking for some thoughts on the matter.
Currently Smoking: Jon Lajoie is a funny guy. I heard he got picked up by a network but I'm not sure which one (HBO maybe?)
suecris: the video that CSC put up is satire. Note the way that Jon Lajoie has this monotone rap and is all dorky with horrible clothes, and the "tag" behind him says "fake". overall I think he's kind of funny, but a lot of the Gen-Y and later crowd think he's hilarious.
here's another one of his videos (his latest) which is more appropriate in this situation IMO. and also you'll realize that he's a comedian.
GS are a bunch scumbag crooks. They pause till after the qtr starts & their desks have a chance to position and give their high net worth clients a head start. Smartest guys on the street? Everyone knew this in Q1. They are just ripping off the 401k stooges that got the OK to go back into the water. Did cramer work for GS? Fuckin crooks.
That is exactly how the mechanics of the GDP deflator work, and thanks for your cogent bit of absurdity by extension - if oil just goes high enough we will have a 'real' growth rate like China!
With a clear defect in how we measure the growth rate of 'real' economic activity, what is a better measure?
Would it be a suitable backdrop for this statement to be accompanied by a clip of the big finale in "Poltergeist" as the skeletons erupt from the earth and the whole house collapses on itself? Or do we need to wait a bit longer?
"MLM writes:
Oil import price goes up, the GDP deflator goes down.
Do you have an explanatory link for that bond guy?
Doesn't that mean that with oil at $1000 per barrel we would really be doing well? Who knows, maybe we'll get our shot."
I'm only working from memory from what I saw in some economic research pieces. Probably anything that covers the GDP definition (Wikipedia does) will tell you that it's net exports that go into GDP. Net exports means that it is exports - imports, thus imports have a negative sign.
I've never tried to model/simulate the GDP deflator, so I am only passing along what I remember of the calculation, which does match my mathematical intuition. Not sure whether the BLS (?) publishes much on their methodology.
As for the implications, the effect really only shows up when you examine things like quarterly data. If people want to multiply any noise in the data by a factor of 4 (which is what happens when you annualize quarterly data), you get hit by silly effects like this.
It can't have too much of a long term impact. Since oil prices go into domestic energy prices, the domestic price indices will rise, and this will mean that the GDP deflator will go up. The notion that rising import prices pushes down the deflator holds - all else equal. But not all else will be equal - retail and wholesale gasoline prices will go up, and that will eventually overpower the import effect. You generally only see the effect in the short term - the rise of domestic prices is delayed to a later quarter (and muted by margins & tax).
But this is why the GDP number is not a market mover (at least in sensible markets like forex or fixed income). It is a useful summary measure, but it gets heavily revised over time and is effected by nonsense like this. And you probably need access to a fair amount of economic research to dissect whatever special factors showed up in the numbers.
It's difficult to measure accurately all transactions in the economy (never mind issues like the underground economy), so my view is that people should not get too excited about wiggles in the numbers one way or another.
Love the sensible markets line - while equities get the headlines they are a distraction in comparison to forex and bond markets - aka the short bus riders.
From what I can tell, the GDP low GDP deflator makes absurd sense.
GDP measures DOMESTIC product. The more we import, the lower this product. Right?
The GDP deflator therefore measures DOMESTIC prices. Import prices cannot factor into it.
OK, let's put the two statements above together. We cannot subtract NOMINAL imports to get REAL domestic product. We have to deflate them first. That means we can't also include import prices in the DOMESTIC deflator. Therefore, the bigger the import price deflator, the smaller the domestic deflator.
The above is a long way of saying that most -- roughly three quarters -- of the inflation in the economy in 2q came from imports. Is this calculation right? Yes, as far as it goes. But by being right, it raises a much more important issue.
Import prices, to my knowledge, are less subject to statistical manipulation (i.e. hedonics, substitution) than domestic prices. If you underestimate domestic inflation and strip out from them an accurate estimate of import prices, then what you are left with is a low number.
"David Pearson writes:
The above is a long way of saying that most -- roughly three quarters -- of the inflation in the economy in 2q came from imports. Is this calculation right? Yes, as far as it goes. But by being right, it raises a much more important issue."
The problem is that the weight of "domestic" transactions are retail and services, that have small inflation rates. Even retail gasoline price changes are buffered by profit margins and taxes. But imports are pretty much raw commodity prices (although the numbers swing less than futures prices). They have had a much greater short-term rate of change, which makes them dominant in the short term.
This is why you really have to be careful about annualizing data - you magnify noise.
US investment bank Morgan Stanley has begun hiring again, with the appointments of several executives in key posts expected to be announced over the weeks to come.
The firm, which has cut 4,800 jobs over the past 12 months in reaction to the downwards pressure of the credit crunch, has now said that the programme of reductions has come to an end.
Morgan Stanley has been one of the worst-hit of the Wall Street firms by the crunch, having suffered around $14 billion of asset writedowns.
Commenting on the move, spokesperson Jeanmarie McFadden said: "We feel that right now, for these markets, we are right-sized."
However, Morgan Stanley might continue to cut in the future if the crunch tightens still further, she added.
"We don't rule anything out. We'll continue to monitor the situation, and we'll adjust as needed."
US banks have cut around 75,000 workers since the onset of the credit crunch last summer.
"Whenever anybody goes bankrupt, gets laid off, or has to pay more for anything, just ISSUE MORE US TREASURIES You guys make this stuff more complicated."
If you haven't noticed, they have already done this.
I've had my conspiracy thoughts about them for a long time - they seem to be the arms dealer for the Federal gov't.
There are days I think Paulson or Bernanke puts a call in to Goldman and triggers market moves up. Goldman then puts on a straddle to cover. Goldman also has become the voice of America when it comes to giving bad news.
It just sounds better coming from a company called Goldman that the second half of the year will be slow.
Now if Merrill or Lehman said that, their stock price would be halved as investors would take it out on them.
"renewed deceleration in growth" - Is that anything like a reverse acceleration to the upside?
All, is the IE problem fixed? I'm on my wireless connection and it doesn't use IE.
Best to all.
An upturn in the downturn ?
A number of the financial blogs I visit are not fully loading(CR,theoildrum,the big picture, etc).
I was only able to get here by going to the site and clicking "stop" before the page fully loaded.
Should I be jacking my own Super Colander into a independent generator?
get firefox and be done with m$ft
I'm also guessing there won't be a vista rally this year either.
No problems surfing on my iPhone beyond fat finger syndrome
Oriental trading co reported today that millions of customers have returned their novelty rose colored glasses.
I guess Goldman just completed their short positions...
All, the problem is with sitemeter code. It doesn't work with IE (OK with Firefox, Opera, and Safari).
I just removed the code.
Best to all
IE users could just kill sitemeter in their host file's.
or add it to the blocked website list in IE's options.
I just forced myself to check in IE7 and I had no problems, but I am still on XP service pack 2.....
What in the hell are you people talking about?
Anyone have a collection of quotes promising recovery in 2H 2008?
Thanks for the quick tech support CR.
Leftys Liquors writes:
What in the hell are you people talking about.
they just want to know what "conjure bag" in form mp thinks is the next bubble is:
software updates or "alternanative energy urban transportation and infrastucture solutions"
I guess it depends on what your definition of "what the next bubble is, is"
apologies is to what the english speakers is.
Goldman is talking their book.
It's my book also so it is OK.
Explorer failing to load. Glad they weren't at Rourke's Drift!
ZULU
Let's see if we can translate this phrase, this mangling of the language
"[W]e are on the cusp of a renewed deceleration in growth."
into proper English:
Damn, That Jason Bay makes me look not so good
"[W]e are on the cusp of a renewed deceleration in growth."
Hmmm...so growth at statement is 0. Ah, going backwards then. Well that's a positive...all is well...stock pop on this on monday...erm...this has that illogical feel...brain cell number 3...you there pal...
Cheers,
Explorer just said no can load
To Eng-101:
How about "Where are we going, and why are we in this handbasket?"
KindaScared - I can't get into the Drhousingbubble.com website tonight
To Manny--
I love you, man.
Explorer: Lock and load. Load and lock?
Just push the red button.
Consumers will be facing price hikes of up to 15 percent on holiday goods, from toys to European luxury handbags. Many retailers had resisted passing along higher prices to consumers, but escalating costs fueled by rising energy prices, higher labor costs in China and a weak dollar are forcing stores, from warehouse clubs to high-end merchants, to pass more of the burden to shoppers.
THE IMPACT: The price increases could make shoppers buy fewer holiday gifts to keep to a budget. That could mean a serious hit for the economy, since consumer spending accounts for two-thirds of all economic activity and for the holiday period, which accounts for about 40 percent of merchants' profits and 50 percent of sales.
2nd half recovery, my a$$.
This is going to be " 2nd great depression"
Eng-101,
"[W]e are on the cusp of a renewed deceleration in growth."
into proper English:"
Clank, Clank, Clank...
Put your hands in the air...AHHHHHH!
BYW...the roller coaster analogy assumes accelleration.
Cheers,
Asphalt for Christmas (in stockings)
2008...Mooohawhahahahahaha
A shortage of asphalt is playing havoc with Broken Arrow street projects, and frustrated residents can blame "Old Man River."
"Most of the asphalt materials Oklahoma utilizes come from Iowa," said city spokesperson Keith Sterling.
SemGroup, a Tulsa-based asphalt supplier, filed for bankruptcy, and the Rogers-based DECCO Contractors is scrambling to find another source of asphalt to finish four city road projects. The city council will meet at 10 a.m. today to vote on awarding more funding for the project.
Mayor Steve Womack said the city had the option to hold DECCO to the contract and to the price the company had quoted, but Womack also said DECCO is not at fault for the asphalt problem and shouldn't be penalized for it.
Gee, Grinch
You think we are importing inflation.
"They" are using our money to bid against us for primary inputs.
"They" also want to be compensated for rising food and energy prices.
"US" Wally World is in a heap of hurt.
You don't even need to steal Christmas, Grinch. Ain't gonna be one.
"Americans are driving less, cutting into federal fuel taxes, which help pay for maintenance of highway and mass transit systems," said American Association of State Highway and Transportation Officials Executive Director John Horsley. "The cost of construction materials -- steel, concrete, asphalt -- is skyrocketing and at the same time that people are driving less, and that means less revenue. We're in a double whammy."
Others blame more than just a lack of money.
"Lack of vision, lack of leadership and lack of investment. Infrastructure is something that's been easy to ignore," said Urban Land Institute senior Resident Fellow for Sustainable Development Ed McMahon.
It's especially easy to ignore if you consider the latest estimates on how much it would cost to repair all 590,000 in America: $140 billion.
Ross,
Don't bother hanging a stocking, cause your gonna need to wear it!
Grinch,
Ed McMahon is a homeless person. Foreclosed last month.
So go back to MacAdam roads.
We're up to get down.
Our cusp has a cavity.
Goldman is just trying to get a bonus for a few people; look for a stock repurchase and more option grants, dividend cut, share dilution and death by cash burn.
Grinchipooh,
The Federal fuels excise taxes have not been dedicated to highway infrastructure since the mid 1980'.
We are all a unified budget now.
Ross, wrong Ed, but maybe they both are on the streets?
The Urban Land Institute
Lost? According to Ed McMahon, a senior resident fellow at the Urban Land Institute, you have plenty of company.
The unique special character of the small towns and rural areas in America is disappearing faster and were losing our sense of place, he said.
Wait 'til next year? CR, are you a Raider Fan?
The head of the U.S. Dept. of Transportation stated on 15 August 2007 that about 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to other, unrelated uses.[5] However, revenues from other taxes is also used in federal transportation programs.
Fuel taxes in the United States - Wikipedia, the free encyclopedia
"...were losing our sense of place, he said."
I agree with that. No heimat.
That sentence was written by Bush, IMHO
Re: " However, revenues from other taxes is also used in federal transportation programs."
WTF?
Newsletter Writer (The Hat Trick) Jim Willie makes an interesting point:
The selective enforcement of restrictions on shorting bank stocks sticks out... In fact, one can easily make the argument that price controls have finally come into the open... For the financial sector, price controls elevate prices of various securities. The Plunge Protection Team routinely rescues the S&P500 stock index, while JPMorgan routinely lifts the price of USTreasury Bonds... The price controls, now in the open, will gradually find toeholds of political support in the tangible economy, like with gasoline and heating oil, if not natural gas. The issue of survival is critical, for home heating, as shutoffs are not acceptable. The upcoming widespread price control movement is a cinch... It ensures grand grotesque shortages to be suffered in the USEconomy, resulting in eventual rationing. The forced ration programs will invite violent response, growing disorder, and eventual chaos...as the nation gradually slides into conditions leading to martial law. The irony in my view is that the US public will beg for martial law in a return for order.
Oh, boy.
Grinchi,
Small towns and rural areas losing 'duh' special character?
Super phychobabble.
I still eat eggs and grits at Mables on Saturday mornings. Only the price has changed.
We need to get back to the garden. something like that
YouTube -
Goodnight and may your stockings be empty!
Our cusp could behave like an angry dog:
"A famous suggestion is that the cusp catastrophe can be used to model the behaviour of a stressed dog, which may respond by becoming cowed or becoming angry. The suggestion is that at moderate stress (a >
, the dog will exhibit a smooth transition of response from cowed to angry, depending on how it is provoked. But higher stress levels correspond to moving to the region (a < 
Then, if the dog starts cowed, it will remain cowed as it is irritated more and more, until it reaches the 'fold' point, when it will suddenly, discontinuously snap through to angry mode. Once in 'angry' mode, it will remain angry, even if the direct irritation parameter is considerably reduced."
Catastrophe theory - Wikipedia, the free encyclopedia
For your rock blogging enjoyment:
YouTube - Show Me Your Genitals
A lot of chicks say I remind them of this guy. Not to brag or anything...
Forget that lump of coal (prices skyrocketing) in your stocking it will have to be wood chips!
Jimmy W. made a good call on the US public.
quick question??
Q: At the current rate of failure (per week), how many months supply of banks do we have?
Please, please help: Send replies to Kona or Grinch
unirealist,
"Newsletter Writer (The Hat Trick) Jim Willie makes an interesting point:"
Yep read that regularly. Always a good read.
Another Jim Willie reader.
This thing ain't gonna end well.
Cheers,
must give them, GS management at least some credit, they run their enterprise extremely well, given market conditions, Etc.
Grenchigreen,
Boy do I have a deal for you.
Half acre sandy loam plots with access to a deep pond for irrigation. Lots and lots of horsy and cow dung and some wheat straw.
I can only offer 70 of these plots. Terms: $250 per season each and a landlord 1/8th override on products.
It'll feel good being a sharecropper. I was wondering when you city folks would come back.
I can get a group rate at Mabels for breakfasts.
CSC,
Well, kinda funny. But you want us to think like this clown.
Guess it's all a mirror thang.
Cheers,
Misean: Actually, a belly full of Pacifico makes everything seem funnier. It's the end of the world as we know it, man...time to get sideways.
CUSP= Could-U Spare-a-Penny?
I'm all out of celer-ation.
CSC,
Well if all you wanted was a link...that's easy...
Just ask:
YouTube - Hey There Delilah It's the End of the world as we know it..And I DO still Love YOU, Yes I DO
Cheers,
I guess the whole text of the GS research note is only for subscribers or clients?
@CSC - against my better judgment I clicked your link. Got as far as "women are stupid" before I x'ed it out.
Somewhat related-unrelated news:
The House passed legislation on Wednesday that would automatically enroll new federal employees in the Thrift Savings Plan and set their contributions at 3 percent of basic pay. The funds from automatic enrollments would be invested in the stable government securities fund to insulate new participants from any potential large losses. The original version of the legislation would have invested those funds in the TSP's life-cycle funds, which begin with a more aggressive mix of investments and switch to a more conservative portfolio as an employee approaches retirement. Employee advocates had expressed concern that investing automatic enrollment funds in the lifecycle funds would expose employees to more risk than they might be comfortable with.
Yes, lets force government employees to keep funding Wall St and Govt treasuries...
2nd half recovery my A$$.
2nd great depression, yes.
suecris: It was just comedy....and rad comedy at that.
My feminist wife just heard the song and told me to be nice to my hand tonight. She has no sense of humor..what is she talking about?
Doug Noland at PrudentBear has been bearish for some time, but always seemed to hold back from calling an imminent collapse. He has hedged, warning that credit creation was still growing at a rapid rate, thus giving a chance that reflation would levitate markets for an unpredictable time to come.
In tonight's piece, he seems to throw his hat in the doom-here-and-now camp, noting that the upper and middle-upper class are now being sucked down.
Good read.
404 - Error: 404
I can get a group rate at Mabels for breakfasts
Can we get a group rate at Lefty's for happy hour ?
From the WSJ$
"ResCap Under Duress in Derivatives"
Mortgage lender Residential Capital LLC's value in the credit markets is like that of a company on the verge of taking its last breath.
ResCap, parent GMAC LLC, and General Motors Corp, which holds a 49% stake in GMAC and reported abysmal earnings Friday, are also under duress in the $62 trillion derivatives market.
Derivatives investors are now paying $7 million up front to insure $10 million of ResCap's bonds, plus $500,000 annually for five years based on credit-default-swap levels. This high cost is extreme but not out of context considering the going value of ResCap's bonds outstanding.
ResCap's junk-rated 8.375% notes due in 2010 were valued at all of 29.5 cents Friday. Other bonds, such as the 8.5% notes due in 2012 and the 8.875% bonds due in 2015 traded as low as 25 cents on the dollar, according to KDP Investment Advisors.
It must not be fun being Ben and Hank, not being able to enjoy your weekends these days!
Oops, for those with access to WSJ$, here's the link:
ResCap Bonds Command Pricey Insurance
ResCap Bonds Command Pricey Insurance - WSJ.com
Why do we have to cancel the 2nd half recovery? It was predicted with no foundation in reality; why should allow reality to intrude now? Can't we just make up a "core" GDP index and exclude losses? And maybe use a larger multiplier (no rationale for the multiplier, I just needed something to make the numbers bigger.)
Yo Bennie! Tell me how my shorts taste!
sdtfs,
I'm sure if we would just officially adopt the Wright B model everything would be just peachy.
Busloads of tourists are allways welcome at Leftys. But due to the Clorox products price increases, use the bathroom on the bus. And remember our only rule at Leftys, No Vomiting Inside.
Is this report mean the stock market's hoing higher?
I'm just gonna soak up the sun. Cuz SC is hawt, and I have to work.
Enjoy:
YouTube - Sheryl Crow - Soak Up The Sun
Night...
Cheers,
Rescap, Chrysler, Mervyn's, how long until Hank bails Cerberus out? Who are rescaps counter parties?
Easy to fix:
- pass another housing bailout bill
- send more stimulus checks
- never EVER foreclose
- eliminate firings
- change the accounting rules so there are no losses
Tim
They left town last week.
I think this second half stuff needs to be discussed more in game terms, e.g:
"The Patriots ran all over the Colts in the first half, to the tune of 19 carries for 85 rushing yards. The second half? Five carries for 8 yards.
I think Bernanke is gonna get his ass kicked in the second half and get pulled from being QB
Re: "Second Half Slowdown Ahead
"The Worst Game. Ever."
New England Patriots - "The Worst Game. Ever."
This was, by far, the single worst loss I've ever experienced. Just thinking about it makes me want to slash my wrists and do push-ups in alcohol. I've gone through seven straight years of watching my Timberwolves get knocked out of the first round. None of those losses even touches this one.
All season long, this Broncos team was fearing a situation in which Plummer had to make plays in the second half to win a game for them. The Pats were one more quarter away from making that happen. And they blew it. Aaaaaaargh. I can't talk about it anymore.)
The TiVo Award for Best Three-Second Delay in Real Life
To the back judge who whistled Asante Samuel for pass interference, the worst anti-Patriots call since Ben Dreith saved Oakland's season by whistling Ray "Sugar Bear" Hamilton for an unconscionable roughing the passer penalty in the 1976 playoffs. Not to break out a batch of sour grapes, but ...
But due to the Clorox products price increases, use the bathroom on the bus.
Leftys Liquors
Rock n' Roll Rule #1: Never shit on the bus.
Does this include GS stock price?
Man this is simple. Whenever anybody goes bankrupt, is laid off, or has to pay more for anyting, just ISSUE MORE US TREASURIES! You guys make this stuff so complicated...
Dubyaa
2nd half slowdown possibly, but no recession.
O-Joe
"We are on the cusp of a renewed deceleration in growth."
Darn. I was not even aware that the deceleration in growth had slowed down, (or is it sped up since it is deceleration instead of acceleration?).
Great new toy:
HotPads - Map Search for Real Estate, Apartments & Houses for Rent, Foreclosures and Homes for Sale
Perhaps atrophy of the economy will pave the way for recovery of humanity.
Amusing teaser for the HuffPo business page:
Cramer: Yes, The Market Has Bottomed... Bad News Knocks Stocks Down
Just an accident - kind of - HuffPo strings together headlines for different major articles as teasers for its focus pages. But amusing. And it is true the market was down the day after Cramer called bottom.
Cannibis...left hand no good...just get sideways
FE,
I am croggled by the GDP deflator variance QoQ...nominal decline of -11.6% QoQ with rate of change for annualized 'real' GDP growth rate of 111%! BEA source docs cited on my blog.
I am having a gut level reaction to this - best described as emesis. Any insights appreciated.
Oh, and I meant to throw in CRAMER IS AN IDIOT!
disclaimer: the person in question probably has a higher IQ than me but has completely sold out. He simply needs to get back to his roots of "questionable" trading.
"Anyone have a collection of quotes promising recovery in 2H 2008?"
How about Jim Cramer in january stating that financials had hit bottom and recommending Goldman Sachs.
From Bloomberg in Feb:
"While the risk of a recession is now even, growth will accelerate to a 2.5 percent annual rate in the final three months of the year from 0.6 percent last quarter, according to the median forecast of 62 economists polled by Bloomberg News from Jan. 30 to Feb. 7."
and from same Feb 08 article:
"We're actually starting to see tell-tale signs by the market that it expects the economy to be in recovery in six to nine months,'' said James Caron, head of U.S. interest-rate strategy in New York at Morgan Stanley."
Economy Rebounds Before Election, Treasuries Show (Update3) - Bloomberg.com
The last few paragraphs are full on comedy.
John Stark writes:
To Eng-101:
How about "Where are we going, and why are we in this handbasket?"
Theme music -
YouTube - Grateful Dead - Hell In A Bucket - 06-26-94
At least I'm enjoying the ride ....
CSC - yo that was aiiite - people just don't get satire anymore I guess.
Spatch - Jerry in purple, nice.
Wait a minute, if Goldman says "Second Half Slowdown Ahead" does that mean the bottom is in and it's time to go long? Now I'm more confused than ever...
ac writes: Perhaps atrophy of the economy will pave the way for recovery of humanity.
Joseph Campbell: When the Angel of Death approaches, he is terrible. When he reaches you, it is bliss.
As all these genius analysts begin to predict dire straights ahead, judging by their recent records, shouldn't we expect sunny skies?
Great, now CR has a flashing ad for Viagra, Cialis, and Levitra. I can do all my Christmas shopping for Ben and Sheila without leaving my favorite web site. I figure if Ben and Shelia they had more "personal life" they could do less damage in mine.
Sheila walks warily down the street
With her hat pulled way down low
Ain't no sound but the sound of her feet
Pizzas ordered to go
Are you ready? Hey, Are you ready for this? Are you hangin' by the edge of your seat?
Out of the hotel, the agents rip, hit the ground! It's the FDIC
Another bank bites the dust!
Another bank bites the dust!
And another ones gone another ones gone, another bank bites the dust
Hey! They're gonna get WaMu, another one bites the dust
<a href="http://www.youtube.com/watch?v=hMenB9Ywh2Q>Musical accompaniment
"energyecon writes:
FE,
I am croggled by the GDP deflator variance QoQ...nominal decline of -11.6% QoQ with rate of change for annualized 'real' GDP growth rate of 111%! BEA source docs cited on my blog.
I am having a gut level reaction to this - best described as emesis. Any insights appreciated."
Oil import price goes up, the GDP deflator goes down.
Imports enter GDP with a negative sign, so they work backwards. Import prices enter inverselt into the deflator.
And it's not the government making stuff up - that's how GDP is defined.
Do you have a Plan B for your life?
We are building a community. A solution for peak oil, financial and economic meltdown, climate change and happiness.
Sorry. Page not found.
Misean--surely you have 4 or 5 extra
brain cells. Why don't you give that 3rd one a rest since it seems kinda wobbly.
Great central scrut!!!!
bond guy,
gee thanks for...nothing!
The magnitude of the effect suggests the methodology may require review or modification rather than a mechanistic application and unthinking acceptance...or alternative macroecnomic measures...was looking for some thoughts on the matter.
Currently Smoking: Jon Lajoie is a funny guy. I heard he got picked up by a network but I'm not sure which one (HBO maybe?)
suecris: the video that CSC put up is satire. Note the way that Jon Lajoie has this monotone rap and is all dorky with horrible clothes, and the "tag" behind him says "fake". overall I think he's kind of funny, but a lot of the Gen-Y and later crowd think he's hilarious.
here's another one of his videos (his latest) which is more appropriate in this situation IMO. and also you'll realize that he's a comedian.
YouTube - Not Giving a Fuck!
FWIW:
the above video is how I am going to make it through the second half "recovery"
Oil import price goes up, the GDP deflator goes down.
Do you have an explanatory link for that bond guy?
Doesn't that mean that with oil at $1000 per barrel we would really be doing well? Who knows, maybe we'll get our shot.
GS are a bunch scumbag crooks. They pause till after the qtr starts & their desks have a chance to position and give their high net worth clients a head start. Smartest guys on the street? Everyone knew this in Q1. They are just ripping off the 401k stooges that got the OK to go back into the water. Did cramer work for GS? Fuckin crooks.
so the upturn is contained??
MLM,
That is exactly how the mechanics of the GDP deflator work, and thanks for your cogent bit of absurdity by extension - if oil just goes high enough we will have a 'real' growth rate like China!
With a clear defect in how we measure the growth rate of 'real' economic activity, what is a better measure?
Big surprise, right?
The economic recovery is like chasing rainbows.
Would it be a suitable backdrop for this statement to be accompanied by a clip of the big finale in "Poltergeist" as the skeletons erupt from the earth and the whole house collapses on itself? Or do we need to wait a bit longer?
If there's a case for all this vitroil re Goldman Sachs, I'd like to know what it is.
"MLM writes:
Oil import price goes up, the GDP deflator goes down.
Do you have an explanatory link for that bond guy?
Doesn't that mean that with oil at $1000 per barrel we would really be doing well? Who knows, maybe we'll get our shot."
I'm only working from memory from what I saw in some economic research pieces. Probably anything that covers the GDP definition (Wikipedia does) will tell you that it's net exports that go into GDP. Net exports means that it is exports - imports, thus imports have a negative sign.
I've never tried to model/simulate the GDP deflator, so I am only passing along what I remember of the calculation, which does match my mathematical intuition. Not sure whether the BLS (?) publishes much on their methodology.
As for the implications, the effect really only shows up when you examine things like quarterly data. If people want to multiply any noise in the data by a factor of 4 (which is what happens when you annualize quarterly data), you get hit by silly effects like this.
It can't have too much of a long term impact. Since oil prices go into domestic energy prices, the domestic price indices will rise, and this will mean that the GDP deflator will go up. The notion that rising import prices pushes down the deflator holds - all else equal. But not all else will be equal - retail and wholesale gasoline prices will go up, and that will eventually overpower the import effect. You generally only see the effect in the short term - the rise of domestic prices is delayed to a later quarter (and muted by margins & tax).
But this is why the GDP number is not a market mover (at least in sensible markets like forex or fixed income). It is a useful summary measure, but it gets heavily revised over time and is effected by nonsense like this. And you probably need access to a fair amount of economic research to dissect whatever special factors showed up in the numbers.
It's difficult to measure accurately all transactions in the economy (never mind issues like the underground economy), so my view is that people should not get too excited about wiggles in the numbers one way or another.
We are falling off a cliff in slow motion.
Doesn't mean we won't land.
Matt
"Joseph Campbell: When the Angel of Death approaches, he is terrible. When he reaches you, it is bliss."
THE POPE SAT UP IN BED
For R. S.
And so they both walked toward the river,
The angel Death and Pope John Paul,
Mortality and Luciani
One was great in form and wore
A robe and hood that covered over
Deaths alarming face
A face that is not terrible to see
When time has come to stand
Towards immortality
The other smaller, since to draw
Much closer to the glory of the Lord
Requires modesty, humility
Behind them was the tomb of Peter,
Indistinct ahead there stood
The flowing Tiber
He saw them both, a friend, in sleep -
As daylight rose from dawn, the Pope
Sat up in bed
The Pope sat up in bed and died
To greet his mighty visitor
And to rise up and go
\t\t\t\tPavel
\t\t\t\tJuly 17, 2008
bond guy,
Love the sensible markets line - while equities get the headlines they are a distraction in comparison to forex and bond markets - aka the short bus riders.
CR, could you possibly post the rest of the text for this research note? I do have limited access to GS but can not find this particular quote.
Energyecon,
From what I can tell, the GDP low GDP deflator makes absurd sense.
GDP measures DOMESTIC product. The more we import, the lower this product. Right?
The GDP deflator therefore measures DOMESTIC prices. Import prices cannot factor into it.
OK, let's put the two statements above together. We cannot subtract NOMINAL imports to get REAL domestic product. We have to deflate them first. That means we can't also include import prices in the DOMESTIC deflator. Therefore, the bigger the import price deflator, the smaller the domestic deflator.
The above is a long way of saying that most -- roughly three quarters -- of the inflation in the economy in 2q came from imports. Is this calculation right? Yes, as far as it goes. But by being right, it raises a much more important issue.
Import prices, to my knowledge, are less subject to statistical manipulation (i.e. hedonics, substitution) than domestic prices. If you underestimate domestic inflation and strip out from them an accurate estimate of import prices, then what you are left with is a low number.
"David Pearson writes:
The above is a long way of saying that most -- roughly three quarters -- of the inflation in the economy in 2q came from imports. Is this calculation right? Yes, as far as it goes. But by being right, it raises a much more important issue."
The problem is that the weight of "domestic" transactions are retail and services, that have small inflation rates. Even retail gasoline price changes are buffered by profit margins and taxes. But imports are pretty much raw commodity prices (although the numbers swing less than futures prices). They have had a much greater short-term rate of change, which makes them dominant in the short term.
This is why you really have to be careful about annualizing data - you magnify noise.
US investment bank Morgan Stanley has begun hiring again, with the appointments of several executives in key posts expected to be announced over the weeks to come.
The firm, which has cut 4,800 jobs over the past 12 months in reaction to the downwards pressure of the credit crunch, has now said that the programme of reductions has come to an end.
Morgan Stanley has been one of the worst-hit of the Wall Street firms by the crunch, having suffered around $14 billion of asset writedowns.
Commenting on the move, spokesperson Jeanmarie McFadden said: "We feel that right now, for these markets, we are right-sized."
However, Morgan Stanley might continue to cut in the future if the crunch tightens still further, she added.
"We don't rule anything out. We'll continue to monitor the situation, and we'll adjust as needed."
US banks have cut around 75,000 workers since the onset of the credit crunch last summer.
"Whenever anybody goes bankrupt, gets laid off, or has to pay more for anything, just ISSUE MORE US TREASURIES You guys make this stuff more complicated."
If you haven't noticed, they have already done this.
The problem is that nobody is buying it.
It has to get worst before it gets better.
@dutchtrader
It has to get worse before it gets much worse...
Only Goldman could get away with stating this.
I've had my conspiracy thoughts about them for a long time - they seem to be the arms dealer for the Federal gov't.
There are days I think Paulson or Bernanke puts a call in to Goldman and triggers market moves up. Goldman then puts on a straddle to cover. Goldman also has become the voice of America when it comes to giving bad news.
It just sounds better coming from a company called Goldman that the second half of the year will be slow.
Now if Merrill or Lehman said that, their stock price would be halved as investors would take it out on them.
Goldman? Up.
good news for Democrats, unless the election is cancelled in the interest of national security.