Yes, we are in year one of the five year downturn.
We have that much debt to unwind, and if it unwinds at the same rate that it unwound in the Lesser Depression, it will take five years to unwind such in this Greater Depression.
We are unwinding really fast here... Rocket freaking speed. I can't imagine any one that is still highly leveraged will be left standing for more than a year from this point. [ except those blessed with gov't interventions ]
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
White Americans could immigrate to India and China to learn what real work is
//Ponyless in NJ writes:
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
Is money real? What is it's function? What is the purpose of government? Does your life have any meaning or purpose, other than what you make of it?
//Ponyless in NJ writes:
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
Ponyless in NJ | 11.28.08 - 1:41 am |// #
You get a credit card and can max it out in a day. However, if you pay the minimum payments it takes years to pay off. Same goes here -- digging out could easily take a decade.
Throw in the demographic & energy issues we're facing and we'll be lucky if things turn up by the 20's.
I am a delusional canuck.. Everything is fine in our great land...our banks are the envy of the rest of the world.. we are ubermensch.. oops have to go and suck some brit c**k
Really it's about being able to see around the next bend in the road...except in this case there's a cliff, isn't there? I find myself repeating the mantra..every thing's gonna be alright..every thing's gonna be alright..thank God for Bob Marly in times like this.
thank you, no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
I am an engineer by trade. My first inkling that things were horribly wrong in the US economy was when my piers started leaving solid engineering and science jobs to work in real estate, finance and consulting. We are about to see a fundamental shift in our economy away from FIRE into, well, who knows. It will be every bit as traumatic as the shift from manufacturing, perhaps worse.
Just accept that the true purpose of money is to keep the world from killing each other. Accept that debts are not repayable and periodic debt forgiveness is necessary.
Comrade Bear (tj & the bear) writes:
Think about it.
You get a credit card and can max it out in a day. However, if you pay the minimum payments it takes years to pay off. Same goes here -- digging out could easily take a decade.
Throw in the demographic & energy issues we're facing and we'll be lucky if things turn up by the 20's.
Comrade Bear (tj & the bear) | 11.28.08 - 1:53 am | #
satan, you mean like getting my hands dirty in some god forsaken factory with a bunch of third world people getting paid peanuts for working 12 hour days 6 days a week? Nah... Why don't we reeducate the real estate agents and financial paper pushers to be colonial administrators and let them loose on the world in the footsteps of the colonizing US military?
Recession can never touch our economy, as we are invincible. Ignore the fact that it is a commodity based/ manufacturing economy heavily dependent on the US... Perception rules..
uke, yep. the readjustment is going to be painful. only problem is that i don't see what jobs are out there right now for real estate agents to learn to do... it might be a generational thing but i don't see the adjustment yet in what people are learning in college.
Somewhere in "Empire of Debt" I believe there was a passage that talked about how TPTB have to extend just the right amount of credit to the masses else things will come apart. Too little debt and the masses are not tied to their jobs; too much and they'll self-destruct.
Apparently our leaders were out of class that day.
Western (white majority) societies are in decline. Throughout history, the intelligentsia of declining societies have always rationalized their downturns as natural, global , inevitable and understandable. The common thread through such declines has always been the belief that "we have reached the peak of human achievement and it is downhill for every human from here on". History suggests otherwise. However this phenomenon has never hit western societies on this scale and scope- until now.
Gold based or strict credit economies cannot create the infrastructure and technological breakthroughs we are accustomed to. We are quite pathetic at predicting the effects and potential of any any new innovation/ product or service- nothwithstanding the beliefs of of famous and clever white (and asian) men who have proved so wrong about the future of the areas in which they were considered to be experts. Rationing money for innovation would be rather similar to the soviet practise of command economics. In any case it is possible to employ 30-60 people for the total yearly income of an average mid-level investment banker who plays paper games, misjudges opportunities, screws over innovators and also loses your investments.
"thank you, no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
bgates | 11.28.08 - 1:55 am | #"
Bingo!
And on Shiller - his response to every risk is to come up with a social insurance policy to cover that risk. In Shiller's ideal world, we would bear no personal consequences for doing financially risky things. Society at large would pay the freight. I think he drastically underestimates the long term consequences of moral hazard allowed to run rampant.
That is what I was alluding to in my rant yesterday. I think that society will unravel if we go down this road for more than a year or two- maybe less.
//Somewhere in "Empire of Debt" I believe there was a passage that talked about how TPTB have to extend just the right amount of credit to the masses else things will come apart. Too little debt and the masses are not tied to their jobs; too much and they'll self-destruct.
Apparently our leaders were out of class that day.
Comrade Bear (tj & the bear) | 11.28.08 - 2:03 am | #//
Just accept that the true purpose of money is to keep the world from killing each other. Accept that debts are not repayable and periodic debt forgiveness is necessary.
Nice. But there are people who hold guns and gold. Guns are the reverse of the first statement, and I'll bet gold is the reverse of the second.
I have thought of the problem of what to do with laid off real estate agents. My (former) engineer friends can go back to designing packaging equipment and paint products. The others, not so much. The skills needed to work in agriculture or in a factory are easily translated to other "hands on" jobs (most machinists I've met can also fix cars, appliances, do construction work, etc). What transferable skills do unemployed investment bankers possess?
"I think he drastically underestimates the long term consequences of moral hazard allowed to run rampant."
that, and he has no sense of fun. risk is supposed to be fun. as a gringo, immigrating to this country is a risk, so we're all supposed to be somewhat good at it.
Gold is not money anymore than a seashell is money.
It is in your head. Money is something we imagine is real.
To borrow a line from the Matrix Trilogy- "It is a creation of the human mind, to justify an existence that is without meaning or purpose- as artificial as the matrix itself."
"Gold is not money anymore than a seashell is money."
Nor is petroleum money. But I find it useful.
Satan, have you ever held a canadian maple leaf coin against the sun and enjoyed the reflections? Or tried heating up a bullion coin on an open candle? Gold is cool stuff.
Living here is sunny Guam, I am insulated from the day to day drama of the mainland. However, my father told me many of his piers are in a panic over the recent crisis. Growing up in Greece in the 1940's, he has seen his share of hard times. He attributes this sense of doom to leverage. In the past (prior to 1980), the average American saved about 10% of income. We are heading into a prolonged recession with no savings. At the very least, it should make for great garage sales.
You are correct. My dad is a physicist and told me the one of the largest employers of physicists and mathematicians in the US is Wall Street. It will be nice having those guys working on new reactor designs as opposed to derivatives or exotic securities.
no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
There are few jobs safe if society unravels. I'm a pharmacist and won't ever have to worry. A lot of people who were not even banksters or handmaidens will lose their jobs. They will sit on welfare until the checks stop coming and from there they will riot
For the first time in history, caucasians will immigrate out of America to find work. The countries where they move will not have welfare, do not waste money on green energy, and have a smarter harder working population as competition. They will also face retribution for their hundreds of years of racist policies that still dominate Western culture today
Yes, I have heated it in a fire and read the fiery tengwar inscription sin the black speech of mordor.
My precious.. no one can take away my precious....
//Satan, have you ever held a canadian maple leaf coin against the sun and enjoyed the reflections? Or tried heating up a bullion coin on an open candle? Gold is cool stuff.
bgates | 11.28.08 - 2:13 am | #//
You said it before -- gold has value simply because people think it has value, and have for thousands of years. It's human instinct at its most basic level, and there's nothing practical about it.
I plan on buying a Hummer for a couple thousand dollars. Not to drive. I plan on keeping it in my garage and then donating it to the Smithsonian for their "stupid ages" exhibit.
Yes, Dent and a few others have presented data suggesting that we'll be in a demographic decline from approximately 2010 to 2020. Pretty compelling stuff.
Unfortunately, Dent's 2009 monster boom prediction didn't provide for the Fed spiking the punchbowl a few years early.
If you wanna play that game, be prepared for the possibility that no person on this board who I have identified as a canuck will ever be able to post again without being spoofed.. get it canuck a**hole.
/satan writes:
There are few jobs safe if society unravels. I'm a pharmacist and won't ever have to worry. A lot of people who were not even banksters or handmaidens will lose their jobs. They will sit on welfare until the checks stop coming and from there they will riot
For the first time in history, caucasians will immigrate out of America to find work. The countries where they move will not have welfare, do not waste money on green energy, and have a smarter harder working population as competition. They will also face retribution for their hundreds of years of racist policies that still dominate Western culture today
satan | 11.28.08 - 2:19 am | #//
Is anyone else paying attention to the decline of Western (white) civilization? The world works in cycles and its the white man's turn to be the indentured peasants
I see people talking about a credit bust, but the real problems are fundamental culture flaws. They just expect everything to be handed to them
The world of the last 100 years has been somewhat different from the previous 4,900 years. Mass consumption supports our economy and society. A gold standard cannot support anything more than a late 19th century existence.
Fundamental culture flaws? I don't know that they're so much cultural as innately human. The same story plays over and over again, just in different parts of the world.
" A gold standard cannot support anything more than a late 19th century existence."
I certainly agree that fiat currencies belong squarely in the 20th century, along with genocide, radiation, seko, marcos, peron, stalin, mao and the originating document of PNAC
Unfortunately, Dent's 2009 monster boom prediction didn't provide for the Fed spiking the punchbowl a few years early
Nobody can know everything. Dent's been the single best predictor of anyone else I've read, including Roubini, James Davidson or Schiller.
His 1993 book seemed insane at the time, and he predicted the current situation to within a year or two fifteen years before anybody knew who Paulson or Bernanke were.
There are anomalies in his predictions but overall, he's been had the closest mapping between prediction & reality over the greatest time period.
Bubbles are not bad... as long as they create something that is of value and in short supply. The telegraph, railroad, oil and dotcom bubbles created a lot of useful infrastructure.
The housing bubble on the other hand was a massive misallocation of resources.
There is nothing new under the sun. Also, if you have traveled extensively in foreign lands, you will find they are just as f***** up us us (sometimes more so). My wife is Chinese (born and raised), and I have learned that every culture has its strengths, flaws and popular mythologies.
Looking back a thread or two, we had people commenting on what they were seeing in the real economy. I believe we had anecdotal evidence in regards to Mall sales, trucking volume, etc. To add my own little piece to the puzzle:
My father has been in the car business for the last 25+ years, and until this year, he would say that the '84-'85 market was hardest he handled. (Un)Fortunately, 9/2008 -> Now is the most difficult market he has ever seen when it comes to selling cars.
He handles financing at a dealership that sells one of the successful Japanese brands, and he has seen his monthly earnings drop by 80+% over the last 6 weeks. Banks aren't providing financing to anyone who isn't a member of that bank with a high (750+) score. For the most part, they all just cut the tap. No warning; no Plan "B". Even the Japanese maker's finance arm won't touch anyone unless they have been a great previous customer with equity in their car or money down.
Good customer, good credit score, but have a few blemishes: Nope.
Good customer, fair credit score, but no blemishes: Nope.
In my area, we've had 5-8 dealerships close up shop since mid-September. Sales at his particular dealership are down from the summer highs of 500+ units to ~200 units if they are lucky over the TG Day weekend.
The other dealerships selling this brand of car are much worse off than his dealership to provide some comparison.
Someone in the past thread commented on consumers waiting in the wings 'cause they smell blood in the water. In the auto sales business, some of them actually vocalize that line of thought, and those customers are in a waiting game with the dealers--assuming they have the money to actually make the purchase...
Yes, you are right. Hubris is both universal and my favorite sin.
/Comrade Bear (tj & the bear) writes:
Fundamental culture flaws? I don't know that they're so much cultural as innately human. The same story plays over and over again, just in different parts of the world.
Comrade Bear (tj & the bear) | 11.28.08 - 2:30 am | #/
The demographic trends perfectly fit the long-wave economic theory from a psychological standpoint, too. It's part of why I've been so certain about the coming depression for years now.
" A gold standard cannot support anything more than a late 19th century existence."
This is demonstrably false. The gold standard was in use during the Industrial Revolution of 1873-1893, a period very similar to the Internet boom period.
It's part of why I've been so certain about the coming depression for years now
I've combined Dent's theory with other items and my own experiences. I was using the S-curve for technology trend analysis before I read Dent's book.
But Dent is a big reason that I formulated the concept of a Pivot Period from 2009-2012. People are more receptive to new ideas under stress and the time to seed new ideas is now, as they'll probably peak in circulation within the next one or two years.
If they have validity, they should have a significant shot at influencing our long-term direction over the next few decades.
thats only true if you think everybody is coming along for the ride
but what if the OWNERS and the digital guys decide to deal the unwashed masses out of the game
someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
Canada is the most likely location for a bank closing this week. My family tried to immigrate there once and their racist policies denied my family because we're Indian, but it was for the best because now we rent and operate a laundromat in Seattle. The lack of industrious immigrants coupled with european-like innovation is how Canada will fail ultimately, and this crisis should start exposing the cracks in the wall. I don't have any statistics but all the pre-wwii white Canadians are due for one.
In my experience with canucks, only white canadians whose ancestors came to canada before WW2 (canucks) have such uncritical belief in their "superiority".
Almost everyone who came to canada post WW2, especially since the 1960s has a rather dim view of canada and canucks. This dim view of canada is shared by many immigrants irrespective of color or language. They range from well educated brits, US citizens, east-europeans, russians, chinese, taiwanese, indians, south-americans and the list goes on and on. Some of worst critics of canucks are brits who moved to canada in the 1960s-and 1970s.
To have a feeling of accomplishment that is not delusional, one must have some real accomplishments. The book of canadian accomplishments worthy of note is rather small- if it exists.
Of course between the media, textbooks and public discourse, canucks believe in that c**p more that north koreans believe in Kim Jung.
Now go back to raping haitians and drug-running in cyprus (canuck "peace keepers").
Either that or bankers get guided tours of incinerators in about 1-2 years from now.
//JimPortlandOR writes:
Shiller makes great sense to me. Obama/Volker should have him on their Econ. Recovery Advisory Board from day one. A New New Deal, indeed.
JimPortlandOR | 11.28.08 - 2:44 am | #//
No, money is trust. Who would accept a form of payment that they didn't trust stood for something? A basic history of money from shells to the Yap stone wheels shows that the only function of the hard currency we call money is to show that trust in tangible form. It is easy to destroy that currency by counterfeiting or any number of ways, but once you have lost that trust, the money is no good. The only way to destroy the historical trust in gold is to discover a lot more "AU 79" for you sci-fi fans.
Ya, how much did the industrial revolution benefit the average person on the street
Commodity prices in many thing (like wheat) plummeted. Manufactured goods exploded in number. The average workweek dropped from 60 hrs week to 48 hrs weeek.
The "gold can't do this" is a fantasy promoted by fiat economists who choose to believe that history is irrelevant.
Lucifer, sorry and no offense intended, but I think you've got an attitude problem. It wasn't a racist society that put an African-American in the White House.
Not to say there isn't racism in America, there is. There's racism everywhere.
Anyway, have a good night, all. It's been a long day and I still have several files to go through.
Yes, that is correct. The only way you can survive such a change is rephrase what society, work and jobs means..
I have to also inform you that there are no OWNERS in this game. The biggest human delusion is the delusion of control. Humans (even the richest ones) have as much control over their destiny as that ant I walked over today.
//mock turtle writes:
lucifer
thats only true if you think everybody is coming along for the ride
but what if the OWNERS and the digital guys decide to deal the unwashed masses out of the game
someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45 am | #//
Is that why malnutrition was widespread in the western world right upto the late 1940s? When did the 48 hr week come into existence- on a large scale?
//Commodity prices in many thing (like wheat) plummeted. Manufactured goods exploded in number. The average workweek dropped from 60 hrs week to 48 hrs weeek.
The "gold can't do this" is a fantasy promoted by fiat economists who choose to believe that history is irrelevant.
Broward Horne | Homepage | 11.28.08 - 2:49 am | #//
Ya, how much did the industrial revolution benefit the average person on the street. Did it give them better clothes, better medicines, better homes, better sewage treatment plants.. Face it, until the 1900s- the lifestyle of a average person in a western country was no better than what you see in the slave factories of china... wait the chinese slave laborers actually have a much better lifestyle than pre-1900 people in the west.
//This is demonstrably false. The gold standard was in use during the Industrial Revolution of 1873-1893, a period very similar to the Internet boom period.
Broward Horne | Homepage | 11.28.08 - 2:33 am | #//
Why should you? You're living the life of a congressman!
I wish.
I'd rather be doing something worthwhile but I'm blocked. Whether it's my hubris, or cultural obstruction or outsourcing or the economy or women, or whatever, I finally decided I can't fix it.
The next best alternative is doing something that's fun or at least easy and non-annoying.
It seems pretty obvious that the "recovery" is years away, and mostly likely quite weak.
HEATHER SCOFFIELD
Globe and Mail Update
November 27, 2008 at 4:10 PM EST
The federal government is showing the slimmest of surpluses for next year and the year after, and warns that any fiscal stimulus package would likely put it over the edge into deficit territory for the first time in 12 years.
North American stock markets will leap back off the mat next year, a bank economist predicted on Wednesday.
Double-digit stock value increases were forecast during a Burlington Community Foundation forum held at the Burlington Convention Centre.
A slow economic recovery and declining housing prices were also forecast at the event featuring three TD economists.
Senior vice-president TD Waterhouse Canada Patricia Lovett- Reid, who also hosts the Money Talk television show, interviewed two colleagues about next years financial outlook.
Against this backdrop of extreme pessimism, stock markets will go much higher in Canada and the United States, said Bob Gorman, chief portfolio strategist. There will be returns in the teens in 2009 on both sides (of the border).
//
The second myth is: Canadian Banks Are As Safe As, Well, Banks.
The Canadian Bankers' Association likes to boast that the last bank to go belly up in this country was the Home Bank, in 1923. True. However, until 1923, Canadian banks were a good deal more unstable than those of the United States, which have a deserved reputation for shakiness. Economic historian Tom Naylor has calculated that between 1867 and 1914, losses to shareholders in Canadian banks ran at three-and-one-half times the American rate, and concludes, "The record of stability of the Canadian banking system is alarming, and the myth of stability sheer propaganda."
Canadian banks were shaky right until the time the system came to be dominated by a handful of firms, which brings us to the third myth: Canadian Banks Are Competitive.
Well, they are, in a way. They compete in the entertainment stars they hire to push their products, in branch locations, and there are even a few banks where the pens work. But for the most part, in the words of economist John Chant, "Competition is something that has never been tried in Canadian banking."
The banks do not compete where it counts most--in pricing. To an overwhelming extent, they buy money at the same rate, and sell it at the same rate. Always have and, if they can help it, always will. The prime rate, of which the banks are so proud, is merely the outward and visible sign of their sameness. They mount a "common front" that should make Quebec unions green with envy.
Banking in this country is dominated by the "big five"--the Royal, the Commerce, the Bank of Montreal, The Bank of Nova Scotia, and the Toronto Dominion. Among them, these five hold more than 90 per cent of all the assets in banking. The Toronto Dominion, the smallest of the "big five," holds oneand-a-half times more assets than the sixty other banks in the system rolled into one. This is a classic oligopoly, and it behaves the way you would expect an oligopoly to behave, which is to say that, while shouting the praises of competition from the rooftops, it avoids the unpleasantness of competing on every possible occasion.//
//Canada's housing boom has ended, but the shift to a buyer's market is no reason for alarm, according to an analysis by one major bank Thursday.
Another big bank contended that even the recent 10 per cent fall in Canadian housing prices is significantly overstated.
"We argue against taking an overly alarmist view to domestic housing prospects,"said Adrienne Warren, economist and real estate market specialist at Scotiabank. "This is not a U. S.-style bust caused by over building, speculative buying and imprudent lending, but rather a cyclic slowdown accompanied by a valuation adjustment in several large centres where booming demand conditions and temporary supply constraints led to an overshooting in prices."//
//On a day when Canadian stocks saw their biggest drop in more than five years, the B.C. Liberal government held firmly to the view that British Columbia will avoid a recession.
"Our economy is strong relative to pretty much every other jurisdiction in North America," Finance Minister Colin Hansen said Thursday after introducing legislation meant to help stimulate the economy.
"Nothing on the horizon would lead us to believe that the province is at risk of going into recession," he added.//
Is that why malnutrition was widespread in the western world right upto the late 1940s? When did the 48 hr week come into existence- on a large scale
A function of knowledge, not consumption.
48 hr work week came into use informally between 1873 and 1893. At the start of the 1873 recession, skilled workers in manufacturing saw their work hours drop from 60 to 48, but unskilled workers remained the same. During the 1893 recession, the two groups merged back together into a single 48-hr week. During the Great Depression, the 40 workweek was already sporadically in use in 1929, and formally adopted as a standard in 1935 with new labor laws.
The evidence for the 1873-1893 shift is piecemeal and poorly documented but there's no question that overall workhours declined and that the workweek was 48 hrs leading into the Great Depression.
Production == Consumption.
The more you produce, the more you have to consume. In order to consume more, you need more time.
A robotic worker revolution would most likely lead to a significantly higher standard of living and more free time to do other things.
It takes a while for societies to adjust, though, and a lot of pain.
The number zero.
The concept of zero as a number, and not merely a symbol for separation is attributed to India. In India, practical calculations were carried out using zero, which was treated like any other number by the 9th century CE, even in case of division.
Canucks will probably think they invented that one too =)
There's more xenophobia in Asia and Europe than here..by a long shot.
Canada has a skills test for its immigrants - stands to reason they would have above average education and motivation. The Indian immigrating to North America is not the average guy on the street of Calcutta - same with the Chinese immigrant.
I've been to China - plenty of uneducated people there - plenty of silly superstitions too. They believe all whites are educated/rich because all they see are businessmen and movies.
Just ignore that the world does not tremble before you. Pay no attention to facts and news canucks
//
Canadian among dead in Mumbai
Canadian Press and Associated Press
November 28, 2008 at 2:01 AM EST
MUMBAI Foreign Affairs Minister Lawrence Cannon says a Canadian has been killed in Mumbai, where terrorists have staged a series of deadly attacks that killed at least 119 people and wounded hundreds more.
In a teleconference statement early Friday, Mr. Cannon did not identify the dead Canadian or provide details concerning the circumstances surrounding the death. The victim's family has been notified.
Mr. Cannon said consular officials in Mumbai have been in contact with two other Canadians who were wounded during the terror attacks. He said one had been released from hospital and the other is in stable condition.
Earlier reports had said six Canadians were unaccounted for in Mumbai, and possibly being held hostage or in hiding.//
My family tried to immigrate there once and their racist policies denied my family because we're Indian
Uh, yeah.
Q: What body of water separates China from India?
A: The south arm of the Fraser River
There are places in the Lower Mainland with a higher density of curry shops than Mumbai. That "racist" immigration policy has, in the past 15 years, turned a former Brit enclave into a white-minority Asian mini-mixer.
This is NOT a complaint - the Lower Mainland was a Dullsville populated by loggers and burnt out draft dodgers before the immigration floodgates with Asia opened up.
I read the article, and some of the postings. I paste this one, because it
is a ground perspective I haven't seen yet:
From a soon to be former small business owner of 30+ years.
I am very frustrated by the banking system today and I really wish I could go back in time to my college days of the 1960s, when I could meet and talk to a real banker with local expereince and authority at a bank like the old United Bank of Denver, in down town Denver, Colorado
Today, after several decades of sterling credit, my credit score is junk, and as any owner of a small business knows, if you owe a small business your credit is the businesses credit which is why I have always owned used cars, and live in a mondest home, which is smaller than the homes owned by most of my employees, as I never wanted to pile on any personal risk that might kill the business..
SInce banks started merging all over the place, which meant that never again any one of then 5 local banks who knew who I was, where I lived, and could drop by and see me and my 26 employees, hard at work running a business and, of course paying off the revolving loans that provided partial working capital for the business.
Over the years as the five local banks merged into monster multi state operations, I ended up with a revolving door of bankers who had no clue as to what we were and what we did. As a result, I could not either get or renew the business loans we used to get to run the buisness.
In there place all we were offered was credit card style loans.
So the old pile of commercial loan paperwork, the visits, and the once in a while local banker dropping off with a couple of donuts and cups of coffee to chat with me and my partners totally dissappeared and in its place was a pile of credit card style configured loans that were administered by computers in far off places, and by call center people who were 12 hours away in Asia and India, who had no clue that we run a business that employed between 25 and 30 employees and their families and sold products that were wanted by our customers all over the US..
What has happened of late?
We are getting strangled slowly and painfully like what some kind of psychotic concentration camp commandant would come up with to slowly torture prisoners to death.
I know that our business is going to die sometime next January / February / March, and not because our sales are off
In fact our sales have held steady and from our orders, it looks like our orders appear ready to move up.
We are dying slowly and painfully becasue every time I pay down the credit card style lines, the banks, the banker computers and the call center staffs lower the total limit on the lines.
As a result of this turn of events, when I attempted recently to fix that comptuer + far off in other parts of the world administrative staff mess, so we could keep the lines where they were, I was told no way as our credt scores have declined so no increase back to what we had was possible,
But I the nice bank call center people in Asia and India read their scripts,as they were trained to do, and cheerfully told me thank you, you are a valued custer, and we appreciate your business..
So each and every month, we end up with less and less ability to borrow and run the business.
At this rate we figure by March we will be dead and just as dead as any passenger on the Titanic who could figure out after 11:15 PM on April 15th, that there were not enough lifeboats, the ship was going down and the North Atlantic would freeze you to death in no more than a couple of hours and there was no escape, and it was only a matter of time.
What am I doing tommrrow?
Friday after Thanksgiving Im meeting with my lawyers to start the process to put the business in liquidation early next year.
I expect by the time the layers get their end, the creditorrs get paid off, the land lord gets his building back, and I write thank you notes to customers of several decades, and after I toss in my house, as I already tossed in my pension, for working capital, even though I got wacked on taxes, I will in my early 60s be flat ass broke just like I was in 1972 when I started the firm.
I want to take this time to thank Congress for allowing the bank merger mania, the Community Revitaliztin Act, the securitizing of loans into the credit card configured programs, the creative bankers who turned on us by merging to death and then for now, even though I have never missed a payment in 36 years, screwed up my credit and the credit of the business with their new computer models, that arbitrarily shortened our credit lines, which we did have the ability to pay for, and the wonderful, not always understanding English as spoken in the US, bank call center employees in Asia and India who will not have the experience of seeing the tears in the eyes of 27 employees and their roughly 100 or so dependents when I tell them after Christmas that it is over.
Thank you Barney Frank and your congressional comrades for turning banking into this mess by allowing merger mania banking, with the devils bargain for the soul price paid by the banks who did not understand your mendacity in the form of your social engineering in your Community Reinvestment Act whcih forced bankers to extend credit to those who never in their wildest dreams and imagineed Power Ball lottery dreams or riches could ever pay off the homes they bought.
Unfortunantly we will be out of work, but your district keeps relecting you out of stupidity..
Hey Barney, will you take the time to take some of your fat cat Congressional pay and send food baskets and canned goods to my soon to be former employees around the middle of February?.
Thank you Barney Frank and your congressional comrades...
--dutch renter
Man, if you're dumb enough to blame your problems on Barney Frank, how the heck did you run a business since 1972?
And if you voted for GWB, and get your knowledge of the world from Sean Hannity and Rush Limbaugh (which sounds likely, since they are the ones pointing fingers at Frank), well, you got exactly what you deserved.
"someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45 am | #//
lucifer | 11.28.08 - 2:51 am | # "
Hannah Arendt wrote a classic text, "The Human Condition", that discusses man's definition of himself through is labors and the impact on his Psyche when machines performs all manufacturing. Excellent. Good read.
I was checking on something from my credit card and was surprised to hear that the prime was at somewhere north of five percent. Using faulty memory, some please provide the link to the prime? But that's a heck of a spread, you might call it your kind of place.
Interest rates are headed up. Hold onto your hats.
There's a very simple solution that would get us out of the recession. If we balanced trade through Warren Buffett's Import Certificates ( ESR | October 20, 2008 | How Warren Buffett can save the economy ), there would be plenty of demand for American products.
If you're not watching Fox for Kicks, you're missing a great opportunity. Just saw the bimbo, inside an open store (mall) descibing 'lines of people', 'streaming out the doors, 'If the consumer is suffering, we're not seeing it here.'
The studio bimbo made the mistake of asking if the store where she was was open. Yes, well let's see what's happening there. Nada, wait, fucus further, there! There's one coming now.
Couldn't help but think, let's do an interview, person on the street sort of thing. A fiftyish African American female wandering up the aisle. They didn't do it, although I wish they had as I could only imagine:
Fox: What brings you out today, ma'am?
Lady: I'm lookin' for my old man, I told him we were not spending any money on this bullshit this year. And when I find him, we're gonna have us a big old return engagement.
Fox: Really, returning him home?
Lady: Hell no, returning him to the home right after we return the merchandise. He must be crazy, crossing me like that.
If only they would. Yesterday the really pretty blond bimbo temp worker stared blankly in the screen and spoke about the complicated script being run in Mumbai. She said some treaty in place between Pakistan and Ind was the result of an argument between them. Too good.
I was checking on something from my credit card and was surprised to hear that the prime was at somewhere north of five percent. Using faulty memory, some please provide the link to the prime? But that's a heck of a spread, you might call it your kind of place.
Prime is at 4%. Every time the Fed has cut rates, the prime rate has moved down the same.
My prime minus .5% HELOC now costs 3.5%! Wish I had several.
Don't know where I find the hubris to take exception to the excellent Shiller, but I must say I was struck by the impracticability of establishing insurance for falling house prices, however much I appreciated his proposal to make a workout mechanism part of original mortgage documents so as to head off current MBS technicalities.
He proposes, if I understand him, some entity whether public or private willing to assume the risk of home valuation in a housing downturn as a means for rationalizing mortgage finance in real, varying markets. But a private insurer would either raise the premium or default in the market we're experiencing today: the mortgage payment may remain rational, but the insurance costs would still land at the door of the homeowner or simply vanish.
And if the program is mooted by way of public guarantees, the general taxpayer inherits the bill.
How is this different in terms of outcome from our situation today? The details are indeed different but, under stress, either borrowers get escalating expenses or government passes on those costs to the electorate.
Shiller used the term group think as a part of all this. His basis for faith in his proposal resides in his confidence in the system which he proposes to save. He must be thinking, "If only more people thought like me.....". And such a consumptive manner cloaking a massively driven intellect. I wager he didn't play sports in high school.
As for hubris, check out his. I ain't saying, I'm just saying. We must all know how to challenge authority, not from superiority, rather from the assurance they never become so.
....seems people make things tougher than they need to. Getting back to basics has always worked - though it's much easier to sit around, try and invent a replacement for hard work & resolve, and until that is done, lets just hope it goes away or someone else comes up with an easier plan of action.
burnside writes:
Don't know where I find the hubris to take exception to the excellent Shiller, but I must say I was struck by the impracticability of establishing insurance for falling house prices,
good thing you weren't around when they were establishing insurance for sinking ships and their cargoes
of course its going to take awhile to get out of this,it didnt happen overnight. therefore it cant get fixed on january 21,2009.
its much like getting fat,you dont balloon or shrink. takes time sometimes long time.
all this stuff is sort of like "lose weight instantly" aint going to happen.you are just going to have to stop eating as much and start watching what you eat.
omg treasury/fed/fdic are doing diets!
It is sad to hear your work over so many years coming to an end. I am sure your customers will be very sorry to lose you.
But I have a question: If you had seen the change in the economy is there anything you could have done differently in your business? Could you have saved up your profits into "operating reserve" to reduce your need for the outside credit line?
Americans have tens of thousands of dollars in forced savings that make nothing, social security, while the banks make a fortune off the mortgage ballance.
If social security accounts could be used to pay down responsible mortgages it would provide instatnt capital to the mortgage companies and save tens of thousands of dollars on the average mortgage in interest over the life of the loan. Thus, both homeowners and financial institutions delverage together.
Further, if subsequent SS and 401k contributions went towards finishing off the mortgage, homeowners would save tens of thousands more in interest thay would stimulate economic growth over the next few decades. With increased cash flow from responsible borrowers the underperforming loans would be diluted and some cram down could commence without government bailout capital.
And of course by making one's SS available for a downpayment (provided the loan is 3.5 x documented income) that would immediately turn the real estate slump around.
Once out from under the mortgage, which would be in less than 10 years for most everyone, intense retirement savings can begin and go for decades.
As many younger people believe their SS is gone anyway, this might prove quite popular. I know that would add to the deficit, but at least it would be straightforward debt, no convoluted loans that my or may not get paid back. I think as long as the government is going to provide financial relief to banks, it should go through the hands of responsible homeowners so that hundreds of billions in interest that would go into the financial sector would go elsewhere in the economy.
"What transferable skills do unemployed investment bankers possess?"
Well, it depends on the banker, but here are some of the common ones: financial analysis, sales, spreadsheets, lobbying, legislation, travel reservations, recognizing oppportunities for personal gain, working long hours, dogged pursuit of a goal, dealing with foreign companies, dealing with foreign governments.
So where are those skills particularly useful? If you told a dozen top investment bankers that they could each get a million dollar bonus for doubling the exports of their US manufacturer clients, several of them would succeed.
There is also a fairly large group of technical people in banking who would have been physicists and engineers if the money in banking hadn't been so big.
"someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45
Nah, the anti-white sentiment here by lucifer, satan, and his various other monikers isn't trolling.
It is the delusion known as left-wing progressivism. Go to any progressive left-wing site on the net. DailyKos, Metafilter, and others. They all can't wait for the fall of America, whites, and capitalism.
Leftists have always been driven by the same hatreds that right wingers have: racism, envy of the privileged, and just plain old rage.
It's funny how leftists are the main anti-racist activists, but will decry whites (and jews) at the tip of a hat. Hypocritical much?
If you don't believe it go ask your progressive friends, if you have any, what they'd do if they were in a room with a white male wall street banker that was tied to a chair.
I'd place good money on the fact they'd say they'd kill him, or at the very least torture and beat him.
Such is the way of leftists.
They have a veneer of tolerance and peacefulness, but they hold the same ugly ideologies that led to the slaughter of millions in the 20th century.
But they have it coming. If there is a collapse of society they too will be wiped out. It won't be an egalitarian "back to nature" communitarian utopia that they hold in their heads. It'll be horrible, protracted, and violent.
I for one am welcoming such an environment, because for the last eight years we've seen what right wing extremism can do when taken to its idiotic limits. I look forward to the next eight years as leftists make a mockery of their principles as well, which they will given the racist bullshit coming from people like lucifer and satan.
really?
Yes, we are in year one of the five year downturn.
We have that much debt to unwind, and if it unwinds at the same rate that it unwound in the Lesser Depression, it will take five years to unwind such in this Greater Depression.
Very easy to see a priori.
First?
Or not..
We are unwinding really fast here... Rocket freaking speed. I can't imagine any one that is still highly leveraged will be left standing for more than a year from this point. [ except those blessed with gov't interventions ]
If we don't fix this problem with some creative thinking, we won't have a functional society with a year or two!!!
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
Yep, 3 1/2 years down in the Lesser Depression (Sep. '29-Mar. '33), and six years up before back to normal ('39).
Five years down in the Greater Depression ('08-'12), and nine years up, from a lower trough, before back to normal ('21).
Here comes our 'Lost Decade.
Good night, all.
White Americans could immigrate to India and China to learn what real work is
//Ponyless in NJ writes:
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
...unless it doesn't.
Is money real? What is it's function? What is the purpose of government? Does your life have any meaning or purpose, other than what you make of it?
//Ponyless in NJ writes:
satan, ok. what is the core problem that needs fixing? Is it that the the US economy is based on consumption by highly over-leveraged and over-payed soon to be unemployed masses with job skills that at this point are useless? How do you fix that with creative thinking?
Ponyless in NJ | 11.28.08 - 1:41 am |// #
Think about it.
You get a credit card and can max it out in a day. However, if you pay the minimum payments it takes years to pay off. Same goes here -- digging out could easily take a decade.
Throw in the demographic & energy issues we're facing and we'll be lucky if things turn up by the 20's.
Hi,
I am a delusional canuck.. Everything is fine in our great land...our banks are the envy of the rest of the world.. we are ubermensch.. oops have to go and suck some brit c**k
Really it's about being able to see around the next bend in the road...except in this case there's a cliff, isn't there? I find myself repeating the mantra..every thing's gonna be alright..every thing's gonna be alright..thank God for Bob Marly in times like this.
wheeee
"Throw in the demographic"
thank you, no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
"thank God for Bob Marly in times like this"
I think "Crazy Baldhead" was actually written about a young Hank Paulso
Satan. I kinda agree with you.
I am an engineer by trade. My first inkling that things were horribly wrong in the US economy was when my piers started leaving solid engineering and science jobs to work in real estate, finance and consulting. We are about to see a fundamental shift in our economy away from FIRE into, well, who knows. It will be every bit as traumatic as the shift from manufacturing, perhaps worse.
Just accept that the true purpose of money is to keep the world from killing each other. Accept that debts are not repayable and periodic debt forgiveness is necessary.
Comrade Bear (tj & the bear) writes:
Think about it.
You get a credit card and can max it out in a day. However, if you pay the minimum payments it takes years to pay off. Same goes here -- digging out could easily take a decade.
Throw in the demographic & energy issues we're facing and we'll be lucky if things turn up by the 20's.
Comrade Bear (tj & the bear) | 11.28.08 - 1:53 am | #
satan, you mean like getting my hands dirty in some god forsaken factory with a bunch of third world people getting paid peanuts for working 12 hour days 6 days a week? Nah... Why don't we reeducate the real estate agents and financial paper pushers to be colonial administrators and let them loose on the world in the footsteps of the colonizing US military?
I mention it here every once in a while, but few people seem to realize it's the monster still lurking in the closet.
Nuke,
Just remember that someone else is using my name at the moment..
"satan, ok. what is the core problem that needs fixing?"
IMO, the core problem is that Americans think they can have their cake and eat it, too.
Recession can never touch our economy, as we are invincible. Ignore the fact that it is a commodity based/ manufacturing economy heavily dependent on the US... Perception rules..
uke, yep. the readjustment is going to be painful. only problem is that i don't see what jobs are out there right now for real estate agents to learn to do... it might be a generational thing but i don't see the adjustment yet in what people are learning in college.
Try as I might, I am just not smart enough to understand why someone would lend money at a zero or negative interest rate.
Somewhere in "Empire of Debt" I believe there was a passage that talked about how TPTB have to extend just the right amount of credit to the masses else things will come apart. Too little debt and the masses are not tied to their jobs; too much and they'll self-destruct.
Apparently our leaders were out of class that day.
mp,
Everyone can do that within limits of reason. It is when we allow our greed to dominate reason that things go to hell.
//IMO, the core problem is that Americans think they can have their cake and eat it, too.
mp | 11.28.08 - 2:01 am | #//
Western (white majority) societies are in decline. Throughout history, the intelligentsia of declining societies have always rationalized their downturns as natural, global , inevitable and understandable. The common thread through such declines has always been the belief that "we have reached the peak of human achievement and it is downhill for every human from here on". History suggests otherwise. However this phenomenon has never hit western societies on this scale and scope- until now.
Gold based or strict credit economies cannot create the infrastructure and technological breakthroughs we are accustomed to. We are quite pathetic at predicting the effects and potential of any any new innovation/ product or service- nothwithstanding the beliefs of of famous and clever white (and asian) men who have proved so wrong about the future of the areas in which they were considered to be experts. Rationing money for innovation would be rather similar to the soviet practise of command economics. In any case it is possible to employ 30-60 people for the total yearly income of an average mid-level investment banker who plays paper games, misjudges opportunities, screws over innovators and also loses your investments.
"thank you, no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
bgates | 11.28.08 - 1:55 am | #"
Bingo!
And on Shiller - his response to every risk is to come up with a social insurance policy to cover that risk. In Shiller's ideal world, we would bear no personal consequences for doing financially risky things. Society at large would pay the freight. I think he drastically underestimates the long term consequences of moral hazard allowed to run rampant.
"Everyone can do that within limits of reason. "
Do what? Have their cake and eat it, too? How does one go about that?
mp,
Here's hoping they take the news (that they can't) better than I expect them to.
That is what I was alluding to in my rant yesterday. I think that society will unravel if we go down this road for more than a year or two- maybe less.
//Somewhere in "Empire of Debt" I believe there was a passage that talked about how TPTB have to extend just the right amount of credit to the masses else things will come apart. Too little debt and the masses are not tied to their jobs; too much and they'll self-destruct.
Apparently our leaders were out of class that day.
Comrade Bear (tj & the bear) | 11.28.08 - 2:03 am | #//
Just accept that the true purpose of money is to keep the world from killing each other. Accept that debts are not repayable and periodic debt forgiveness is necessary.
Nice. But there are people who hold guns and gold. Guns are the reverse of the first statement, and I'll bet gold is the reverse of the second.
Ponyless,
I have thought of the problem of what to do with laid off real estate agents. My (former) engineer friends can go back to designing packaging equipment and paint products. The others, not so much. The skills needed to work in agriculture or in a factory are easily translated to other "hands on" jobs (most machinists I've met can also fix cars, appliances, do construction work, etc). What transferable skills do unemployed investment bankers possess?
"What transferable skills do unemployed investment bankers possess?"
They can join the pirates in Somalia!
"I think he drastically underestimates the long term consequences of moral hazard allowed to run rampant."
that, and he has no sense of fun. risk is supposed to be fun. as a gringo, immigrating to this country is a risk, so we're all supposed to be somewhat good at it.
Nah, pirates have standards.
Gold is not money anymore than a seashell is money.
It is in your head. Money is something we imagine is real.
To borrow a line from the Matrix Trilogy- "It is a creation of the human mind, to justify an existence that is without meaning or purpose- as artificial as the matrix itself."
i don't see the adjustment yet in what people are learning in college.
Yep, way too many "over-educated" (although some would argue about that) students who aren't actually qualified for anything productive.
FD: BS, JD
"Nah, pirates have standards."
That's right, they don't eat their own.
They could be used as fuel for coal burning plants- in the right ratio with coal.
//mp writes:
"What transferable skills do unemployed investment bankers possess?"
They can join the pirates in Somalia!
mp | 11.28.08 - 2:10 am | #//
satan,
You might as well say gold is no more money than FRNs. However, unlike FRNs, people don't need anyone to tell them gold has value.
"Gold is not money anymore than a seashell is money."
Nor is petroleum money. But I find it useful.
Satan, have you ever held a canadian maple leaf coin against the sun and enjoyed the reflections? Or tried heating up a bullion coin on an open candle? Gold is cool stuff.
Living here is sunny Guam, I am insulated from the day to day drama of the mainland. However, my father told me many of his piers are in a panic over the recent crisis. Growing up in Greece in the 1940's, he has seen his share of hard times. He attributes this sense of doom to leverage. In the past (prior to 1980), the average American saved about 10% of income. We are heading into a prolonged recession with no savings. At the very least, it should make for great garage sales.
uke, investment bankers probably have pretty decent analytical abilities. There is gotta be a job for that... Real estate agents, not so sure.
Nuke,
No doubt. Here in LA they got all the toys, so I expect it'll be a city-wide flea market.
Why does gold have value? Why not silver? or platinum?
IMHO, in an energy based civilization like ours natural non-enriched uranium is a better standard.
Unique physical properties, density, and only one use.
PS- Non-enriched uranium is not too radioactive, and about as poisonous as lead.
It is in your head. Money is something we imagine is real.
Money=trust. If one is not real, neither will the other.
Ponyless,
You are correct. My dad is a physicist and told me the one of the largest employers of physicists and mathematicians in the US is Wall Street. It will be nice having those guys working on new reactor designs as opposed to derivatives or exotic securities.
no one every mentions the perfect overlay between boomer average earnings and the economic growth and general prosperity of the past 15 years... or the negative corollary
Harry Dent - Wikipedia, the free encyclopedia
Harry Dent published "The Great Boom Ahead" in 1993.
Nuke- it's 'peers' as in peers of the realm and all. It mars your otherwise fine contributions.
There are few jobs safe if society unravels. I'm a pharmacist and won't ever have to worry. A lot of people who were not even banksters or handmaidens will lose their jobs. They will sit on welfare until the checks stop coming and from there they will riot
For the first time in history, caucasians will immigrate out of America to find work. The countries where they move will not have welfare, do not waste money on green energy, and have a smarter harder working population as competition. They will also face retribution for their hundreds of years of racist policies that still dominate Western culture today
Yes, I have heated it in a fire and read the fiery tengwar inscription sin the black speech of mordor.
My precious.. no one can take away my precious....
//Satan, have you ever held a canadian maple leaf coin against the sun and enjoyed the reflections? Or tried heating up a bullion coin on an open candle? Gold is cool stuff.
bgates | 11.28.08 - 2:13 am | #//
sdtfs,
My apologies. I blame the years at sea.
satan,
You said it before -- gold has value simply because people think it has value, and have for thousands of years. It's human instinct at its most basic level, and there's nothing practical about it.
"Why does gold have value? Why not silver? or platinum? "
uh, all three have value, though i think silver makes the weakest case relative to current pricing.
platinum and gold are both genuinely rare items with truly incredible properties.
this is especially true with pt, which is a bitch to mine and is really only found in abundance in one place (RSA).
gold is just amazing stuff - you can hammer the tiniest blob of it over a full-size mansion ballroom floor.
and if you believe in the monotheistic God, he likes it too, just read hebrews 9:4.
Ahem, have you been reading the news of late? Trust in the system is dead!
//Money=trust. If one is not real, neither will the other.
sdtfs | 11.28.08 - 2:16 am | #//
TJ,
I plan on buying a Hummer for a couple thousand dollars. Not to drive. I plan on keeping it in my garage and then donating it to the Smithsonian for their "stupid ages" exhibit.
"My precious.."
you mock, but really, your disparagement is a bit like hearing a mormon explain why the idea of a $20 bottle of wine is absurd.
Broward,
Yes, Dent and a few others have presented data suggesting that we'll be in a demographic decline from approximately 2010 to 2020. Pretty compelling stuff.
Unfortunately, Dent's 2009 monster boom prediction didn't provide for the Fed spiking the punchbowl a few years early.
If you wanna play that game, be prepared for the possibility that no person on this board who I have identified as a canuck will ever be able to post again without being spoofed.. get it canuck a**hole.
/satan writes:
There are few jobs safe if society unravels. I'm a pharmacist and won't ever have to worry. A lot of people who were not even banksters or handmaidens will lose their jobs. They will sit on welfare until the checks stop coming and from there they will riot
For the first time in history, caucasians will immigrate out of America to find work. The countries where they move will not have welfare, do not waste money on green energy, and have a smarter harder working population as competition. They will also face retribution for their hundreds of years of racist policies that still dominate Western culture today
satan | 11.28.08 - 2:19 am | #//
To say Gold is not money exposes your ignorance.
The worlds central banks and governments count upon it as a bedrock reserve. It has been money for 5000 years.
It is the most liquid of all money.
It is at all time highs in the pound, Australian dollar, euro, canadian dollar, ruble, etc.
You must have had too much to drink at the Thanksgiving dinner table.
The countries where they move will not have welfare, do not waste money on green energy, and have a smarter harder working population as competition.
I am not moving to Mars.
Broward,
I hear the woman are all on Venus, and they're pretty hot.
I am not moving to Mars.
Broward Horne
Why should you? You're living the life of a congressman!
Is anyone else paying attention to the decline of Western (white) civilization? The world works in cycles and its the white man's turn to be the indentured peasants
I see people talking about a credit bust, but the real problems are fundamental culture flaws. They just expect everything to be handed to them
The world of the last 100 years has been somewhat different from the previous 4,900 years. Mass consumption supports our economy and society. A gold standard cannot support anything more than a late 19th century existence.
Fundamental culture flaws? I don't know that they're so much cultural as innately human. The same story plays over and over again, just in different parts of the world.
" A gold standard cannot support anything more than a late 19th century existence."
I certainly agree that fiat currencies belong squarely in the 20th century, along with genocide, radiation, seko, marcos, peron, stalin, mao and the originating document of PNAC
Unfortunately, Dent's 2009 monster boom prediction didn't provide for the Fed spiking the punchbowl a few years early
Nobody can know everything. Dent's been the single best predictor of anyone else I've read, including Roubini, James Davidson or Schiller.
His 1993 book seemed insane at the time, and he predicted the current situation to within a year or two fifteen years before anybody knew who Paulson or Bernanke were.
There are anomalies in his predictions but overall, he's been had the closest mapping between prediction & reality over the greatest time period.
satan, you see a lot of societies of indentured servants with nukes?
Bubbles are not bad... as long as they create something that is of value and in short supply. The telegraph, railroad, oil and dotcom bubbles created a lot of useful infrastructure.
The housing bubble on the other hand was a massive misallocation of resources.
Satan,
There is nothing new under the sun. Also, if you have traveled extensively in foreign lands, you will find they are just as f***** up us us (sometimes more so). My wife is Chinese (born and raised), and I have learned that every culture has its strengths, flaws and popular mythologies.
OT:
Looking back a thread or two, we had people commenting on what they were seeing in the real economy. I believe we had anecdotal evidence in regards to Mall sales, trucking volume, etc. To add my own little piece to the puzzle:
My father has been in the car business for the last 25+ years, and until this year, he would say that the '84-'85 market was hardest he handled. (Un)Fortunately, 9/2008 -> Now is the most difficult market he has ever seen when it comes to selling cars.
He handles financing at a dealership that sells one of the successful Japanese brands, and he has seen his monthly earnings drop by 80+% over the last 6 weeks. Banks aren't providing financing to anyone who isn't a member of that bank with a high (750+) score. For the most part, they all just cut the tap. No warning; no Plan "B". Even the Japanese maker's finance arm won't touch anyone unless they have been a great previous customer with equity in their car or money down.
Good customer, good credit score, but have a few blemishes: Nope.
Good customer, fair credit score, but no blemishes: Nope.
In my area, we've had 5-8 dealerships close up shop since mid-September. Sales at his particular dealership are down from the summer highs of 500+ units to ~200 units if they are lucky over the TG Day weekend.
The other dealerships selling this brand of car are much worse off than his dealership to provide some comparison.
Someone in the past thread commented on consumers waiting in the wings 'cause they smell blood in the water. In the auto sales business, some of them actually vocalize that line of thought, and those customers are in a waiting game with the dealers--assuming they have the money to actually make the purchase...
Yes, you are right. Hubris is both universal and my favorite sin.
/Comrade Bear (tj & the bear) writes:
Fundamental culture flaws? I don't know that they're so much cultural as innately human. The same story plays over and over again, just in different parts of the world.
Comrade Bear (tj & the bear) | 11.28.08 - 2:30 am | #/
Broward,
The demographic trends perfectly fit the long-wave economic theory from a psychological standpoint, too. It's part of why I've been so certain about the coming depression for years now.
" A gold standard cannot support anything more than a late 19th century existence."
This is demonstrably false. The gold standard was in use during the Industrial Revolution of 1873-1893, a period very similar to the Internet boom period.
a medium of exchange is what ever the most number of the most powerful people say it is
lately, um, 10,000 years or so gold has been near the head of the line , backed by popular demand
of course that could change...it doesnt have to be that way
but for the foreseeable future the prospects for gold and several other PMs look like they will, as ever, rise and fall, but not go away
my next door neighbor told me he thinks ammunition will be money in the near future
Nuke,
Some stupid canuck a**hole is spoofing me. While I do not think whites are any better than other, neither are they any worser.
It just happens that they are the ones who will take the biggest fall this time.
It's part of why I've been so certain about the coming depression for years now
I've combined Dent's theory with other items and my own experiences. I was using the S-curve for technology trend analysis before I read Dent's book.
But Dent is a big reason that I formulated the concept of a Pivot Period from 2009-2012. People are more receptive to new ideas under stress and the time to seed new ideas is now, as they'll probably peak in circulation within the next one or two years.
If they have validity, they should have a significant shot at influencing our long-term direction over the next few decades.
lucifer
thats only true if you think everybody is coming along for the ride
but what if the OWNERS and the digital guys decide to deal the unwashed masses out of the game
someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
Canada is the most likely location for a bank closing this week. My family tried to immigrate there once and their racist policies denied my family because we're Indian, but it was for the best because now we rent and operate a laundromat in Seattle. The lack of industrious immigrants coupled with european-like innovation is how Canada will fail ultimately, and this crisis should start exposing the cracks in the wall. I don't have any statistics but all the pre-wwii white Canadians are due for one.
In my experience with canucks, only white canadians whose ancestors came to canada before WW2 (canucks) have such uncritical belief in their "superiority".
Almost everyone who came to canada post WW2, especially since the 1960s has a rather dim view of canada and canucks. This dim view of canada is shared by many immigrants irrespective of color or language. They range from well educated brits, US citizens, east-europeans, russians, chinese, taiwanese, indians, south-americans and the list goes on and on. Some of worst critics of canucks are brits who moved to canada in the 1960s-and 1970s.
To have a feeling of accomplishment that is not delusional, one must have some real accomplishments. The book of canadian accomplishments worthy of note is rather small- if it exists.
Of course between the media, textbooks and public discourse, canucks believe in that c**p more that north koreans believe in Kim Jung.
Now go back to raping haitians and drug-running in cyprus (canuck "peace keepers").
Either that or bankers get guided tours of incinerators in about 1-2 years from now.
//JimPortlandOR writes:
Shiller makes great sense to me. Obama/Volker should have him on their Econ. Recovery Advisory Board from day one. A New New Deal, indeed.
JimPortlandOR | 11.28.08 - 2:44 am | #//
ecessity is the mother of invention...this is so true especially now...
No, money is trust. Who would accept a form of payment that they didn't trust stood for something? A basic history of money from shells to the Yap stone wheels shows that the only function of the hard currency we call money is to show that trust in tangible form. It is easy to destroy that currency by counterfeiting or any number of ways, but once you have lost that trust, the money is no good. The only way to destroy the historical trust in gold is to discover a lot more "AU 79" for you sci-fi fans.
Ya, how much did the industrial revolution benefit the average person on the street
Commodity prices in many thing (like wheat) plummeted. Manufactured goods exploded in number. The average workweek dropped from 60 hrs week to 48 hrs weeek.
The "gold can't do this" is a fantasy promoted by fiat economists who choose to believe that history is irrelevant.
Lucifer, sorry and no offense intended, but I think you've got an attitude problem. It wasn't a racist society that put an African-American in the White House.
Not to say there isn't racism in America, there is. There's racism everywhere.
Anyway, have a good night, all. It's been a long day and I still have several files to go through.
Yes, that is correct. The only way you can survive such a change is rephrase what society, work and jobs means..
I have to also inform you that there are no OWNERS in this game. The biggest human delusion is the delusion of control. Humans (even the richest ones) have as much control over their destiny as that ant I walked over today.
//mock turtle writes:
lucifer
thats only true if you think everybody is coming along for the ride
but what if the OWNERS and the digital guys decide to deal the unwashed masses out of the game
someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45 am | #//
Is that why malnutrition was widespread in the western world right upto the late 1940s? When did the 48 hr week come into existence- on a large scale?
//Commodity prices in many thing (like wheat) plummeted. Manufactured goods exploded in number. The average workweek dropped from 60 hrs week to 48 hrs weeek.
The "gold can't do this" is a fantasy promoted by fiat economists who choose to believe that history is irrelevant.
Broward Horne | Homepage | 11.28.08 - 2:49 am | #//
Ya, how much did the industrial revolution benefit the average person on the street. Did it give them better clothes, better medicines, better homes, better sewage treatment plants.. Face it, until the 1900s- the lifestyle of a average person in a western country was no better than what you see in the slave factories of china... wait the chinese slave laborers actually have a much better lifestyle than pre-1900 people in the west.
//This is demonstrably false. The gold standard was in use during the Industrial Revolution of 1873-1893, a period very similar to the Internet boom period.
Broward Horne | Homepage | 11.28.08 - 2:33 am | #//
ite tjatb
tj, have a good night.
More OT:
The Worst Is Yet To Come: Anonymous Banker Weighs In On The Coming Credit Card Debacle
The Worst Is Yet To Come: Anonymous Banker Weighs In On The Coming Credit Card Debacle - Executive Suite Blog - NYTimes.com
Technological progress without an increase in the consumption/benefit of the products/services created by the new technology are meaningless.
Nope, the real problem for bankers is people burning them alive
/The Worst Is Yet To Come: Anonymous Banker Weighs In On The Coming Credit Card Debacle/
Shiller makes great sense to me. Obama/Volker should have him on their Econ. Recovery Advisory Board from day one. A New New Deal, indeed.
Why should you? You're living the life of a congressman!
I wish.
I'd rather be doing something worthwhile but I'm blocked. Whether it's my hubris, or cultural obstruction or outsourcing or the economy or women, or whatever, I finally decided I can't fix it.
The next best alternative is doing something that's fun or at least easy and non-annoying.
It seems pretty obvious that the "recovery" is years away, and mostly likely quite weak.
HEATHER SCOFFIELD
Globe and Mail Update
November 27, 2008 at 4:10 PM EST
The federal government is showing the slimmest of surpluses for next year and the year after, and warns that any fiscal stimulus package would likely put it over the edge into deficit territory for the first time in 12 years.
Wheee...
North American stock markets will leap back off the mat next year, a bank economist predicted on Wednesday.
Double-digit stock value increases were forecast during a Burlington Community Foundation forum held at the Burlington Convention Centre.
A slow economic recovery and declining housing prices were also forecast at the event featuring three TD economists.
Senior vice-president TD Waterhouse Canada Patricia Lovett- Reid, who also hosts the Money Talk television show, interviewed two colleagues about next years financial outlook.
Against this backdrop of extreme pessimism, stock markets will go much higher in Canada and the United States, said Bob Gorman, chief portfolio strategist. There will be returns in the teens in 2009 on both sides (of the border).
canuck uber alles. Ignore this bad man..
//
The second myth is: Canadian Banks Are As Safe As, Well, Banks.
The Canadian Bankers' Association likes to boast that the last bank to go belly up in this country was the Home Bank, in 1923. True. However, until 1923, Canadian banks were a good deal more unstable than those of the United States, which have a deserved reputation for shakiness. Economic historian Tom Naylor has calculated that between 1867 and 1914, losses to shareholders in Canadian banks ran at three-and-one-half times the American rate, and concludes, "The record of stability of the Canadian banking system is alarming, and the myth of stability sheer propaganda."
Canadian banks were shaky right until the time the system came to be dominated by a handful of firms, which brings us to the third myth: Canadian Banks Are Competitive.
Well, they are, in a way. They compete in the entertainment stars they hire to push their products, in branch locations, and there are even a few banks where the pens work. But for the most part, in the words of economist John Chant, "Competition is something that has never been tried in Canadian banking."
The banks do not compete where it counts most--in pricing. To an overwhelming extent, they buy money at the same rate, and sell it at the same rate. Always have and, if they can help it, always will. The prime rate, of which the banks are so proud, is merely the outward and visible sign of their sameness. They mount a "common front" that should make Quebec unions green with envy.
Banking in this country is dominated by the "big five"--the Royal, the Commerce, the Bank of Montreal, The Bank of Nova Scotia, and the Toronto Dominion. Among them, these five hold more than 90 per cent of all the assets in banking. The Toronto Dominion, the smallest of the "big five," holds oneand-a-half times more assets than the sixty other banks in the system rolled into one. This is a classic oligopoly, and it behaves the way you would expect an oligopoly to behave, which is to say that, while shouting the praises of competition from the rooftops, it avoids the unpleasantness of competing on every possible occasion.//
See, I told you, we are safe.. whee
//Canada's housing boom has ended, but the shift to a buyer's market is no reason for alarm, according to an analysis by one major bank Thursday.
Another big bank contended that even the recent 10 per cent fall in Canadian housing prices is significantly overstated.
"We argue against taking an overly alarmist view to domestic housing prospects,"said Adrienne Warren, economist and real estate market specialist at Scotiabank. "This is not a U. S.-style bust caused by over building, speculative buying and imprudent lending, but rather a cyclic slowdown accompanied by a valuation adjustment in several large centres where booming demand conditions and temporary supply constraints led to an overshooting in prices."//
Don't understand the Canada trolling.
With that- g'nite.
We are saved
//On a day when Canadian stocks saw their biggest drop in more than five years, the B.C. Liberal government held firmly to the view that British Columbia will avoid a recession.
"Our economy is strong relative to pretty much every other jurisdiction in North America," Finance Minister Colin Hansen said Thursday after introducing legislation meant to help stimulate the economy.
"Nothing on the horizon would lead us to believe that the province is at risk of going into recession," he added.//
Is that why malnutrition was widespread in the western world right upto the late 1940s? When did the 48 hr week come into existence- on a large scale
A function of knowledge, not consumption.
48 hr work week came into use informally between 1873 and 1893. At the start of the 1873 recession, skilled workers in manufacturing saw their work hours drop from 60 to 48, but unskilled workers remained the same. During the 1893 recession, the two groups merged back together into a single 48-hr week. During the Great Depression, the 40 workweek was already sporadically in use in 1929, and formally adopted as a standard in 1935 with new labor laws.
The evidence for the 1873-1893 shift is piecemeal and poorly documented but there's no question that overall workhours declined and that the workweek was 48 hrs leading into the Great Depression.
Production == Consumption.
The more you produce, the more you have to consume. In order to consume more, you need more time.
A robotic worker revolution would most likely lead to a significantly higher standard of living and more free time to do other things.
It takes a while for societies to adjust, though, and a lot of pain.
sdtfs,
Vindictive losers who spoof others get their rewards.. for example - canucks
anybody buy into the 2012 theroy about "social awakening"...just thought i would stir the pot...
i meant to say "social reallignment"
2012...
Delusional whites like mp, PissedOffInCalifornia and others will awaken early each morning to clean my house and prepare breakfast
//Barakuda writes:
anybody buy into the 2012 theroy about "social awakening"...just thought i would stir the pot...//
"Delusional whites like mp, PissedOffInCalifornia and others will awaken early each morning to clean my house and prepare breakfast"
You're rather bland and uninteresting as a troll I must say. Good trolls mix up their message, add a bit of humor etc..
Unfortunately you're more of a yawner as far as trolling goes. A lot of effort and not much results sadly.
The number zero.
The concept of zero as a number, and not merely a symbol for separation is attributed to India. In India, practical calculations were carried out using zero, which was treated like any other number by the 9th century CE, even in case of division.
Canucks will probably think they invented that one too =)
There's more xenophobia in Asia and Europe than here..by a long shot.
Canada has a skills test for its immigrants - stands to reason they would have above average education and motivation. The Indian immigrating to North America is not the average guy on the street of Calcutta - same with the Chinese immigrant.
I've been to China - plenty of uneducated people there - plenty of silly superstitions too. They believe all whites are educated/rich because all they see are businessmen and movies.
Perspective is a good thing.
Just ignore that the world does not tremble before you. Pay no attention to facts and news canucks
//
Canadian among dead in Mumbai
Canadian Press and Associated Press
November 28, 2008 at 2:01 AM EST
MUMBAI Foreign Affairs Minister Lawrence Cannon says a Canadian has been killed in Mumbai, where terrorists have staged a series of deadly attacks that killed at least 119 people and wounded hundreds more.
In a teleconference statement early Friday, Mr. Cannon did not identify the dead Canadian or provide details concerning the circumstances surrounding the death. The victim's family has been notified.
Mr. Cannon said consular officials in Mumbai have been in contact with two other Canadians who were wounded during the terror attacks. He said one had been released from hospital and the other is in stable condition.
Earlier reports had said six Canadians were unaccounted for in Mumbai, and possibly being held hostage or in hiding.//
wow the ten year is charging over wednesday's late morning highs...
incredible, will we spike all the way down to 2.6%?
My family tried to immigrate there once and their racist policies denied my family because we're Indian
Uh, yeah.
Q: What body of water separates China from India?
A: The south arm of the Fraser River
There are places in the Lower Mainland with a higher density of curry shops than Mumbai. That "racist" immigration policy has, in the past 15 years, turned a former Brit enclave into a white-minority Asian mini-mixer.
This is NOT a complaint - the Lower Mainland was a Dullsville populated by loggers and burnt out draft dodgers before the immigration floodgates with Asia opened up.
yagij,
http://executivesuite.blogs.nyti...ard-debacle/? em
I read the article, and some of the postings. I paste this one, because it
is a ground perspective I haven't seen yet:
From a soon to be former small business owner of 30+ years.
I am very frustrated by the banking system today and I really wish I could go back in time to my college days of the 1960s, when I could meet and talk to a real banker with local expereince and authority at a bank like the old United Bank of Denver, in down town Denver, Colorado
Today, after several decades of sterling credit, my credit score is junk, and as any owner of a small business knows, if you owe a small business your credit is the businesses credit which is why I have always owned used cars, and live in a mondest home, which is smaller than the homes owned by most of my employees, as I never wanted to pile on any personal risk that might kill the business..
SInce banks started merging all over the place, which meant that never again any one of then 5 local banks who knew who I was, where I lived, and could drop by and see me and my 26 employees, hard at work running a business and, of course paying off the revolving loans that provided partial working capital for the business.
Over the years as the five local banks merged into monster multi state operations, I ended up with a revolving door of bankers who had no clue as to what we were and what we did. As a result, I could not either get or renew the business loans we used to get to run the buisness.
In there place all we were offered was credit card style loans.
So the old pile of commercial loan paperwork, the visits, and the once in a while local banker dropping off with a couple of donuts and cups of coffee to chat with me and my partners totally dissappeared and in its place was a pile of credit card style configured loans that were administered by computers in far off places, and by call center people who were 12 hours away in Asia and India, who had no clue that we run a business that employed between 25 and 30 employees and their families and sold products that were wanted by our customers all over the US..
What has happened of late?
We are getting strangled slowly and painfully like what some kind of psychotic concentration camp commandant would come up with to slowly torture prisoners to death.
I know that our business is going to die sometime next January / February / March, and not because our sales are off
In fact our sales have held steady and from our orders, it looks like our orders appear ready to move up.
We are dying slowly and painfully becasue every time I pay down the credit card style lines, the banks, the banker computers and the call center staffs lower the total limit on the lines.
As a result of this turn of events, when I attempted recently to fix that comptuer + far off in other parts of the world administrative staff mess, so we could keep the lines where they were, I was told no way as our credt scores have declined so no increase back to what we had was possible,
But I the nice bank call center people in Asia and India read their scripts,as they were trained to do, and cheerfully told me thank you, you are a valued custer, and we appreciate your business..
So each and every month, we end up with less and less ability to borrow and run the business.
At this rate we figure by March we will be dead and just as dead as any passenger on the Titanic who could figure out after 11:15 PM on April 15th, that there were not enough lifeboats, the ship was going down and the North Atlantic would freeze you to death in no more than a couple of hours and there was no escape, and it was only a matter of time.
What am I doing tommrrow?
Friday after Thanksgiving Im meeting with my lawyers to start the process to put the business in liquidation early next year.
I expect by the time the layers get their end, the creditorrs get paid off, the land lord gets his building back, and I write thank you notes to customers of several decades, and after I toss in my house, as I already tossed in my pension, for working capital, even though I got wacked on taxes, I will in my early 60s be flat ass broke just like I was in 1972 when I started the firm.
I want to take this time to thank Congress for allowing the bank merger mania, the Community Revitaliztin Act, the securitizing of loans into the credit card configured programs, the creative bankers who turned on us by merging to death and then for now, even though I have never missed a payment in 36 years, screwed up my credit and the credit of the business with their new computer models, that arbitrarily shortened our credit lines, which we did have the ability to pay for, and the wonderful, not always understanding English as spoken in the US, bank call center employees in Asia and India who will not have the experience of seeing the tears in the eyes of 27 employees and their roughly 100 or so dependents when I tell them after Christmas that it is over.
Thank you Barney Frank and your congressional comrades for turning banking into this mess by allowing merger mania banking, with the devils bargain for the soul price paid by the banks who did not understand your mendacity in the form of your social engineering in your Community Reinvestment Act whcih forced bankers to extend credit to those who never in their wildest dreams and imagineed Power Ball lottery dreams or riches could ever pay off the homes they bought.
Unfortunantly we will be out of work, but your district keeps relecting you out of stupidity..
Hey Barney, will you take the time to take some of your fat cat Congressional pay and send food baskets and canned goods to my soon to be former employees around the middle of February?.
Thank you Barney Frank and your congressional comrades...
--dutch renter
Man, if you're dumb enough to blame your problems on Barney Frank, how the heck did you run a business since 1972?
And if you voted for GWB, and get your knowledge of the world from Sean Hannity and Rush Limbaugh (which sounds likely, since they are the ones pointing fingers at Frank), well, you got exactly what you deserved.
No sympathy here, sorry.
But it's too bad about your employees.
JD writes:
Try as I might, I am just not smart enough to understand why someone would lend money at a zero or negative interest rate.
JD | 11.28.08 - 2:03 am | #
...........that's a real dumb conjecture , JD..........
This is all playing out like a game of Monopoly. The game ends when one player gets all the money. To be followed by?
.........right,EE....just like electronic circuits , until the potential energy ,i.e. battery ,is all used up ........
"someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45 am | #//
lucifer | 11.28.08 - 2:51 am | # "
Hannah Arendt wrote a classic text, "The Human Condition", that discusses man's definition of himself through is labors and the impact on his Psyche when machines performs all manufacturing. Excellent. Good read.
Regarding part III, isn't the solution called RENTING?
If we don't fix this problem with some creative thinking, we won't have a functional society with a year or two!!!
satan | 11.28.08 - 1:37 am
satan, hi. Couldn't agree more. Watched all three vids. Riveting speaker, not sure I agree with his conclusions.
Hey, do you read this guy?
Smoking Mirrors: The Budget Economy and Deluxury Package Deals.
RE: Prime rate.
I was checking on something from my credit card and was surprised to hear that the prime was at somewhere north of five percent. Using faulty memory, some please provide the link to the prime? But that's a heck of a spread, you might call it your kind of place.
Interest rates are headed up. Hold onto your hats.
good morning all hope everyone had a good thanksgiving.
Wow, Jas is having a blinder tonight.
How was the wedding?
C
There's a very simple solution that would get us out of the recession. If we balanced trade through Warren Buffett's Import Certificates ( ESR | October 20, 2008 | How Warren Buffett can save the economy ), there would be plenty of demand for American products.
Howard Richman
Trade And Taxes
If you're not watching Fox for Kicks, you're missing a great opportunity. Just saw the bimbo, inside an open store (mall) descibing 'lines of people', 'streaming out the doors, 'If the consumer is suffering, we're not seeing it here.'
The studio bimbo made the mistake of asking if the store where she was was open. Yes, well let's see what's happening there. Nada, wait, fucus further, there! There's one coming now.
Couldn't help but think, let's do an interview, person on the street sort of thing. A fiftyish African American female wandering up the aisle. They didn't do it, although I wish they had as I could only imagine:
Fox: What brings you out today, ma'am?
Lady: I'm lookin' for my old man, I told him we were not spending any money on this bullshit this year. And when I find him, we're gonna have us a big old return engagement.
Fox: Really, returning him home?
Lady: Hell no, returning him to the home right after we return the merchandise. He must be crazy, crossing me like that.
If only they would. Yesterday the really pretty blond bimbo temp worker stared blankly in the screen and spoke about the complicated script being run in Mumbai. She said some treaty in place between Pakistan and Ind was the result of an argument between them. Too good.
Prime is at 4%. Every time the Fed has cut rates, the prime rate has moved down the same.
My prime minus .5% HELOC now costs 3.5%! Wish I had several.
rich
lucifer, what do you call an Indian terrorist? Bin Drinkin.
Don't know where I find the hubris to take exception to the excellent Shiller, but I must say I was struck by the impracticability of establishing insurance for falling house prices, however much I appreciated his proposal to make a workout mechanism part of original mortgage documents so as to head off current MBS technicalities.
He proposes, if I understand him, some entity whether public or private willing to assume the risk of home valuation in a housing downturn as a means for rationalizing mortgage finance in real, varying markets. But a private insurer would either raise the premium or default in the market we're experiencing today: the mortgage payment may remain rational, but the insurance costs would still land at the door of the homeowner or simply vanish.
And if the program is mooted by way of public guarantees, the general taxpayer inherits the bill.
How is this different in terms of outcome from our situation today? The details are indeed different but, under stress, either borrowers get escalating expenses or government passes on those costs to the electorate.
Keyword: economic doomsayers
Baltic Dry Index (BDI) -18 715
Shiller used the term group think as a part of all this. His basis for faith in his proposal resides in his confidence in the system which he proposes to save. He must be thinking, "If only more people thought like me.....". And such a consumptive manner cloaking a massively driven intellect. I wager he didn't play sports in high school.
As for hubris, check out his. I ain't saying, I'm just saying. We must all know how to challenge authority, not from superiority, rather from the assurance they never become so.
Why is EEV so low and going lower?
....seems people make things tougher than they need to. Getting back to basics has always worked - though it's much easier to sit around, try and invent a replacement for hard work & resolve, and until that is done, lets just hope it goes away or someone else comes up with an easier plan of action.
...btw, good morning...
burnside writes:
Don't know where I find the hubris to take exception to the excellent Shiller, but I must say I was struck by the impracticability of establishing insurance for falling house prices,
good thing you weren't around when they were establishing insurance for sinking ships and their cargoes
life insurance is dicey considering everyone dies
disasters happen, there's one happening right now
shiller thinks we should be going long on it
of course its going to take awhile to get out of this,it didnt happen overnight. therefore it cant get fixed on january 21,2009.
its much like getting fat,you dont balloon or shrink. takes time sometimes long time.
all this stuff is sort of like "lose weight instantly" aint going to happen.you are just going to have to stop eating as much and start watching what you eat.
omg treasury/fed/fdic are doing diets!
The trolls are out in force I see.
privateer gerkinov
i do hope that you do not think that i am a troll.
that last post was my outlook on our sitution.
@Dutch_renter,
It is sad to hear your work over so many years coming to an end. I am sure your customers will be very sorry to lose you.
But I have a question: If you had seen the change in the economy is there anything you could have done differently in your business? Could you have saved up your profits into "operating reserve" to reduce your need for the outside credit line?
MurrayR writes:
Keyword: economic doomsayers
MurrayR | 11.28.08 - 8:44 am
The "Tinkerbelle" economy?
We GOTTA BELIEVE!!!!
These comments by Shiller are the most thoughtful I've seen by any economist in several years. Well worth listening to and thinking about.
Creative thinking:
Americans have tens of thousands of dollars in forced savings that make nothing, social security, while the banks make a fortune off the mortgage ballance.
If social security accounts could be used to pay down responsible mortgages it would provide instatnt capital to the mortgage companies and save tens of thousands of dollars on the average mortgage in interest over the life of the loan. Thus, both homeowners and financial institutions delverage together.
Further, if subsequent SS and 401k contributions went towards finishing off the mortgage, homeowners would save tens of thousands more in interest thay would stimulate economic growth over the next few decades. With increased cash flow from responsible borrowers the underperforming loans would be diluted and some cram down could commence without government bailout capital.
And of course by making one's SS available for a downpayment (provided the loan is 3.5 x documented income) that would immediately turn the real estate slump around.
Once out from under the mortgage, which would be in less than 10 years for most everyone, intense retirement savings can begin and go for decades.
As many younger people believe their SS is gone anyway, this might prove quite popular. I know that would add to the deficit, but at least it would be straightforward debt, no convoluted loans that my or may not get paid back. I think as long as the government is going to provide financial relief to banks, it should go through the hands of responsible homeowners so that hundreds of billions in interest that would go into the financial sector would go elsewhere in the economy.
"What transferable skills do unemployed investment bankers possess?"
Well, it depends on the banker, but here are some of the common ones: financial analysis, sales, spreadsheets, lobbying, legislation, travel reservations, recognizing oppportunities for personal gain, working long hours, dogged pursuit of a goal, dealing with foreign companies, dealing with foreign governments.
So where are those skills particularly useful? If you told a dozen top investment bankers that they could each get a million dollar bonus for doubling the exports of their US manufacturer clients, several of them would succeed.
There is also a fairly large group of technical people in banking who would have been physicists and engineers if the money in banking hadn't been so big.
"someday soon the majority of tasks that can be done by ordinary people will be replaced by machines that dont need sick leave or want a vacation or a living wage
mock turtle | 11.28.08 - 2:45
I'm breaking into song now...
YouTube -
why does everyone say that VERY FEW PEOPLE saw it coming? thats very complacent for the ones who didnt, but the truth is MANY people saw it coming
Nah, the anti-white sentiment here by lucifer, satan, and his various other monikers isn't trolling.
It is the delusion known as left-wing progressivism. Go to any progressive left-wing site on the net. DailyKos, Metafilter, and others. They all can't wait for the fall of America, whites, and capitalism.
Leftists have always been driven by the same hatreds that right wingers have: racism, envy of the privileged, and just plain old rage.
It's funny how leftists are the main anti-racist activists, but will decry whites (and jews) at the tip of a hat. Hypocritical much?
If you don't believe it go ask your progressive friends, if you have any, what they'd do if they were in a room with a white male wall street banker that was tied to a chair.
I'd place good money on the fact they'd say they'd kill him, or at the very least torture and beat him.
Such is the way of leftists.
They have a veneer of tolerance and peacefulness, but they hold the same ugly ideologies that led to the slaughter of millions in the 20th century.
But they have it coming. If there is a collapse of society they too will be wiped out. It won't be an egalitarian "back to nature" communitarian utopia that they hold in their heads. It'll be horrible, protracted, and violent.
I for one am welcoming such an environment, because for the last eight years we've seen what right wing extremism can do when taken to its idiotic limits. I look forward to the next eight years as leftists make a mockery of their principles as well, which they will given the racist bullshit coming from people like lucifer and satan.