until we get to negative CPI for a whole year, it is price Disinflation
however, in the monetarist sense, we are undergoing massive Deflation (printing by the Fed has no chance of keeping up with the massive destruction in shadow money - think hedgies, leverage, asset values, etc)
This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena.
What?! You don't consider a $350B bailout substantive on the employment and productive endeavor arena?! Mon dieu.
How many of us were shouting from the rooftops that the money would be much needed once the wheels fell off. Well, the wheels fell off and that money is up in smoke.
yearning,
I think somewhere between. The key for me is wages. If they aren't moving up or down, then we are seeing price changes, not deflation of inflation. I suspect we are probably having wage declines now but because the aggregate total are affected by job losses. It feels more like the deflation side than the disinflation side.
One thing I do know: sitting in cash is the most profitable investment right now.
Can we get an updated VMT chart? VMT year-to-date is at 2003 levels. And it is headed a LOT lower. Probably to 1995 levels. Expect the stock market to follow VMT down...
The number of U.S. workers filing new claims for jobless benefits surged last week to their highest level in 16 years, Labor Department data showed on Thursday, as a harsh economic environment forces employers to cut back on hiring.
Gold is a hedge against inflation. Gold wont go up until we are back in an inflationary environment. We might not get back to an inflationary environment any time soon, though they are trying.
Iconoclast421, wrong. Gold is a hedge against confidence in FIAT currencies, principally the US dollar. The US is on a road to default or printing. Either of which are toxic to the dollar. No longer a question of IF the dollar tanks, but when. An unsustainable synthetic short squeeze is all that's keeping the greenback afloat.
Bottom calling is a fool's game, but its not the time to buy stocks. Even if we're at the bottom, we will be bouncing around it for some time and we still don't know which stocks are going to be cheap vs. which will become worthless. Will probably know more by late next Spring.
The Fed will never accept deflation. That is essentially suicide for them, but they have no tools to fight it.
Globalization has unleashed massive deflationary pressures in rich Western economies. For this reason, old-school inflationary measures won't work because wages are going nowhere.
Productivity gains will probably water down the effects of fiscal stimulus like infrastructure projects.
Bottom line- the Fed is going to have to learn some new tricks and there is no stability till those are revealed.
But deflation is suicide for companies that have a lot of debt.
Do you want to spend your cash on companies that have debt in a deflating environment? Hello! It's not an "investment" if they need all the cash to perform debt servicing!
Yes, no? That's the way I look at this. Until we get inflation than our economy is in trouble... and maybe even with ZIRP we still might get massive deflation because everyone has too much debt!
Problem is, if people understood this they would be hitting the sell, sell, sell button!
Scooby,
We agree that the Fed cannot fight deflation, at least short to mid term, in spite of everything Bernanke once believed. Without wage increases all we would get is a price bubble and I absolutely do not see wage increases on the horizon anywhere for anybody.
cd - the Great Depression was the great deflation - thats why it occurred. Happening now, but wont last more than 12 months so dont bet on it long term. You'll see - not even Jas can stop inlfation when they start giving money away which is what they will do to fight deflation if they have to.
I agree. In the midterm (2 years) deflation is just consequence of debt. This cycle will be vicious.
Particularly vicious because the debt-levels of average Americans so far exceed serviceable levels that we are talking about wiping out both the creditors and debtors...
As CR observed earlier before TARP was barfed-up, RTC II is the way to go...just not this administration, not on their watch...
Say we do reach a bottom at some point. High probability of that, right?
In the past many people have told J6P to just buy an index fund and have a beer. And following these sort of epic crashes that has been damn good advice. Buy and hold for 5 years and you will do quite well.
But now we have Ultra and Triple ETF's for the indexes? I'm thinking of parking half my money in those once this mess is over and trying to out do that with my other half. The volatility issues should be greatly reduced after we get through this. Thoughts?
Noting there is a Very Temporary Deflation camp which believes in inflation being the way out...
I'm not sure I disagree with the over-all viewpoint, but, and this is very important--the unforeseen consequences of massive inflationary event trashing the USD at the same time we are borrowing/printing to inflate must be recognized--this is removing a tumor with a shotgun. Maybe you'll survive with the tumor.
The industry that provides you with the leveraged ETFs will not look the same at the end of all this. It's not clear that they survive (or at least, at a reasonable price point.)
12th Percentile: I'm not sure how those ultra ETFs work, but it seems to me that you can't really get 3x over the market advance. Say the market went down 50%, all the ETF could do is go to zero, not -50%. If you're protected on the downside then I figure there must be a limit on the upside also, otherwise you're getting something for free which we know never happens.
Iconoclast421, real gold is up, near if not over $1,000/oz. Paper gold traded on the COMEX for example for which there is no available gold backing is the gold price reported. There are now two gold markets. Same holds true with Silver. Eventually they will connect but at much higher prices. Try and buy a gold coin and see what happens.
BubbleVision commentators now all sound like Cramer. Yesterday, after close, they called it capitulation day. It is beyond their hair-trigger dipper personalities to envision a capitulation week or month.
One of them even proposed invading Canada to add stimulus.
0% interest rate predicted
Canada's TD Bank compares today's financial market to the Great Depression.
The coin supply should ease up shortly as the mints are ramping up production considerably. There is no conspiracy, just the free market at work (for a change). As the supply grows, premiums should drop considerably as well.
This month, the sprawling Atlantis resort in the Bahamas laid off about 800 workers, citing low occupancy rates. Baha Mar Resorts Ltd. laid off about 40 employees at its Sheraton Resort in the Bahamas and 40 more at the Wyndham Nassau Resort. The Bahamas Hotel Catering and Allied Workers Union has called a demonstration Thursday to demand government aid.
"I've been in the business 38 years. I have seen the impact of the Gulf War. I have seen the recession of the '80s. Certainly Sept. 11," said Robert Sands, senior vice president of external affairs at Baha Mar. "But nothing has been of a global nature, which makes the current financial situation we're in much more worrisome."
In Puerto Rico, the Caribe Hilton laid off more than 50 people this month because of rising costs and sluggish occupancy rates. The last time the hotel had to lay off workers was after the Sept. 11 attacks, General Manager Jose Campo said.
"What worries me is that this will last longer," he said. "We are mounting an aggressive campaign, but the situation is what it is."
Even the normally busy holiday season is expected to be relatively quiet.
recession inflation deflation disinflation hyperinflation depression
none of you know what the hell your talking about do you?
look... just wire me some cash and i'll handle this mess........ promise.
Inflation is not the way out. What's lost is lost. However, deflation will cause considerable additional damage and moderate inflation will guard against that. Hyperinflation would also be a disaster but, unlike deflation, that doesn't happen accidentally. I will admit that Bernanke has suggested things in the past that could lead to hyperinflation, and suggested it in a context that indicates he didn't realize that.
I'm not sure which is worse - deflation or hyperinflation. Given that we could and probably would switch to alternative monetary instruments in a hyperinflation, I think deflation is worse. We have an economy very dependent on credit and if it disappeared I think we'd see a total collapse. But I'm open to discussion. Of course Bernanke can, and should, avoid both.
Major American retailers report declining sales and greatly diminished profits. At Home Depot, for example, profits were down 31% in the just completed third quarter. At Target, they were down 24%. Chinese exports hit record levels last month, but the slowing of the American economy (and a similar slowing of the Japanese economy) has had dramatic repercussions in China. Thousands of factories have closed and millions more people are now out of work.
Chinas government was due to lift the minimum wage, but that has been postponed out of fear that such a rise would further squeeze factory operators and put more workers out on the street. Like central banks in the U.S. and Europe, Chinese authorities have already cut interest rates, hoping to stimulate lending and business investment.
Some economists see Chinas economic slowdown as an opportunity to make much-needed adjustments. They say this is an opportunity to foster greater domestic consumption and to make Chinas economy less dependent on export-led manufacturing. China needs, they argue, to increase employment in the service sector.
These are compelling points and Chinese leaders accept the need for economic restructuring. But leaders were already worried about the challenges posed by the need to rebuild areas devastated by the May earthquake. Now they also fear that rising unemployment will generate protests. Even before the quake and expanding layoffs, polls showed that nine out of ten Chinese felt the gap between the nations rich and poor was a big problem. Most of those polled (78%) also felt that corruption among officials was a big problem. (Click here for more poll data.)
Large protests have become commonplace in China. Many are driven by anger over perceived official insensitivity to workers left without pay or to communities harmed by polluting factories. On Monday, a different spark triggered a large and violent protest in Longan, a city in northwest China. The incident began with non-violent petitioning by three dozen people who feared that relocating government offices would negatively affect the value of their land and businesses. Before long an estimated 2,000 people were using bricks and pipes to attack city offices and the police sent to quell the unrest.
Chinese leaders hope increased public spending will keep the economy expanding and keep social discontent localized and manageable. Among the planned projects: a railway linking Lanzhou in the northwest with Chongqing in the southwest. The $8.6 billion project is largely funded by loans from China Construction Bank and the Industrial and Commercial Bank of China. Many American investors are indirectly part of the effort as well. On Monday Bank of America announced it was investing another $7 billion in China Construction Bank, giving it a 19% share of Chinas second largest bank. Goldman Sachs purchased a share of the Industrial and Commercial Bank of China for $2.6 billion in 2006.
The intricate and elaborate intertwining of the Chinese and American economies and the challenge and opportunity posed by the financial crisis will be examined on December 2 at USC by economist Calla Wiemer. Her initial assessment of the Chinese governments economic stimulus plan appeared last week in the Asian Wall Street Journal. We hope you will join us for her presentation. You can learn more about our economic ties via the Tensions over Trade segment of our documentary. You can see it at US-China Institute or at our YouTube channel YouTube
- USChinaInstitute's Channel
The standard, I believe will not be in the final analysis whether we deflate or inflate, but whether we fully employ, or unemploy. Inflation/deflation will not matter if jobs exist in either scenario to meet basic needs of food/shelter after this bubble is de-putrefied.
And either form historically can take place in high unemployment environments.
My two cents, but whatever scenario I'll prefer employment. But it seems that much of the monetary discussion is Death by Murder.
People have gone underground whilst the financial atomic bomb unleashes the devistation above. There is panic because no one knows when the fallout will clear, or if it will. They also have no concept of how much of the surface landscape will be left or what it will look like. These are not interesting times but defining times. Good luck.
someone was lamenting about selling SKF way below current prices.
Don't beat yourself up...you have to do the best you can in the situation you are in. As long as you are putting $$ in your pocket it's a success. I sold out of all of my C puts when it was $10.....they are worth 60% more today. Do I think I screwed up..yes but I'm not going to loose sleep over it. I booked an almost 400% profit on them. Could have been substantially more...that's life.
Re-focus your attention on forward opps. and not reliving what might have been.
We are in a toilet bowl after the toilet has been flushed. But, the flapper is stuck and the rancid water is swirling around and around and backing up.
The fiscal policies we take to adjust to our losses and hopefully minimize unemployment and other wastes of resources are obviously critical. However, monetary derangements can cause massive damage; a hyperinflation or hard deflation would probably cause more damage than we've already had. Essentially they make it impossible for the market to coordinate economic activity and it's hard to overstate the harm from that.
Market collapse due to a lack of ethics? You mean like the high standard of ethics the Church Inc.holds themselves too? Aren't they the biggest landowner on earth?
*SOMALIAN PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN INVESTMENT,' WILL PAY OFF
*KASHKARI SAYSSOMALI PIRATES ARE 'FUNDAMENTALLY SOUND' '
*Moody's upgrade Somali Pirates to AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD VERY LOW' PARTICIPATION
* SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED AGREED OCT. 29 TO TAKEWHATEVER STEPS' NEEDED FOR SOMALI PIRATES
Rolls-Royce, the aerospace engineer, has announced further job cuts of between 1,500 and 2,000 around the world during next year, with 140 earmarked to go at its assembly and test facility in Derby.
The redundancies bring the number of jobs lost by British companies since last Wednesday to more than 22,000 worldwide. Rolls-Royce has largely completed a round of 2,300 job cuts announced in January for 2008. ...
Not trying to overstate exasperation. Intelligent discussions are clearly happening in this forum.
In a another world, the political class recognizes the severity of the misallocation of capital toward non-productive endeavors, dislocations in the financial markets, and engages in austerity programs, clearly articulated to the citizenry, defining the risks and the rewards, legislating into effect, effective programs which employ and hedge against rancid deflation/rapid inflation, choosing to take a longview which will exceed the 8 year term limit--in other words FDR had consensus and time to slowly correct the excesses and address the damage...functionally this timeline is artificially short.
...we "like" cheap TVs and printers, but don't NEED them...a return to "Made In The USA - Buy It!"...Is that too simplistic in today's "Globalistic" trends?
blackhat writes:"This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena."
Treasury (my son Hank) said in his best Eric Cartman voice "screw you guys, I'm going home".
At least you have the Saudis running to the rescue:
NYTimes
Saudi Prince Increases Stake in Citigroup
Saudi Prince Alwaleed bin Talal said Thursday that he planned to increase his stake in the banking giant Citigroup to 5 percent.
Skip to next paragraph Add to Portfolio
Citigroup Incorporated
"...Prince Alwaleed, who currently holds less than a 4 percent stake, has been buying shares of Citi believing that they are undervalued and that the bank has been taking necessary steps to improve its operations amid the credit crisis..."
It's a bit, well, hilarious that we shoveled huge amounts of green paper rectangles to them in exchange for black goop, and then we help them burn the green paper rectangles afterward.
And I see her come up to me
Her dress red
Like a rose on a thorn bush
Like all the colors of a royal flush
And she's pealing off those dollar bills
And slapping them down
One hundred
Two hundred
And I can see those fighter planes
And I can see those fighter planes
Across the mud huts where the children sleep
Through the alleys and quiet city streets
Up a staircase to the first floor
I turn the key and slowly unlock the door
A man breathes into a saxophone
Through the walls we hear the city groan
Outside it's America
Outside it's America
'So I'm back in my hotel room,
With Johnnie Coltrane and the love supreme,
In the next room I hear some woman scream out,
That her lover's turning off,
Turning on the television,
I can't tell the difference between :-
ABC news, Hill Street Blues
And some preacher in the old time gospel hour
Stealing money from the sick and the old
Well the God I believe in ain't short of cash Mister !!!!!!!!!!!!!!!!
See across the view
See the sky ripped open
See the rain pounding the women and children
Who run
Into the arms of America......
There's a fairly long list but, in the broadest terms, US has accommodated integration of supply lines with the rest of the globe - we're both dependent and depended upon and not, at the moment, structured for isolationism.
Global economic downturns do chill international trade - that was one aspect of both 1870s and 1930s much commented on in econ histories. I'd expect to see something similar becoming measurable now.
As part of my civic duty, I am sending Rice Krispy treats to the Treasury for the upcoming "Save the Economy" bake sale. I hope my fellow CRs will find it in their patriotic hearts to do the same.
"Somali pirates would be inhibited from recruiting top talent in a very competitive industry which is why Paulson has rejected the Executive Compensation provision," unnamed sources noted.
In a another world, the political class recognizes the severity of the misallocation of capital toward non-productive endeavors, dislocations in the financial markets, and engages in austerity programs, clearly articulated to the citizenry, defining the risks and the rewards, legislating into effect, effective programs which employ and hedge against rancid deflation/rapid inflation, choosing to take a longview which will exceed the 8 year term limit
Another world indeed. Sigh. In ours, they stopped talking about preventing any recession only about 2 weeks ago. As an example, in all the discussion of auto bailouts, I have yet to see one proponent address the need to reduce overcapacity. And Bernanke still seems to be fantasizing about using monetary policy to undo past damage. It's certainly frustrating that what you propose so lucidly is not even on the table for the decisionmakers.
I'd like to say that equating the Somali Pirates to Wall Street is one of the funniest things i've seen on CR. And accurate. I hope someone on the Daily Show steals it so it gets a wider audience.
CONGRESSIONAL REPUBLICANS DEMAND THAT PREVIOUSLY AUTHORIZED EFFICIENT WEAPONS LOAN BE MODIFIED. REFUSE TO APPROVE MODIFICATION OF TARP TO PROVIDE SOMALI PIRATES WITH AN ADDITIONAL $25 BILLION.
I don't understand why, if the problem is simply a lack of liquidity the government doesn't create a few hundred billion dollars via seigniorage (that is simply printing currency or minting coins without worrying about backing it with anything) and hand it out. Give everyone $10,000. Don't worry about paying it back. The money simply comes from reducing the value of the currency. Repeat if necessary. I'm pretty sure doing this would encourage people to spend and get the inflation rate positive again pretty fast.
My outside eye agrees with mp, while my other eye imagines a glass of bourbon in my hand...
I think the cash-burn models are based on static rates, not accelerated rates of reserve draw-down. There is borrowing aspect, revolving credit, short-term financing not brought in, and if I guess correctly, there is sh*t off the books that will be realized soon, and surprisingly so.
would somebody please tell Gottelfinger to stfu. Nobody cares about the UAW except for the UAW. They are leaches. Congrats to them that they negotiated benefits that were so good that they bankrupted the company. Waaaay to go. Now time to sleep in the bed they helped make.
How about they torch their benefits in exchange for a bunch of stock. Guaranteed they won't take a deal like that because they want to leach off the company, not own it. Somebody take that dog to the vet and have it put down please.
@fair_economist:
"Bernanke still seems to be fantasizing about using monetary policy to undo past damage."
Monetary policy is analagous to neck reigning a horse. As long as the horse is calm, the touch of a leather strap will turn a 1200 lb animal. When that animal spooks, whether for good or for poor reason, the only way to turn his head is to pull hard, but not too hard, lest the animal go down. A show rider (monetarist) may or may not be able to work that pull.
A root problem here, as someone identified upthread, is faux credit and financing for financing sake (think levered buyouts at inflated terms), now being destroyed.
While there never was enough pure credit in the first place for productive needs, the damage to the banking function of the world's banking institutions wrought by their participation in the faux credit orgy has made monetary policy completely ineffective.
The horse is running away, and running toward a cliff, and the rider's best case scenario right now is that the horse goes down.
Nothing positive in this; in an hour I'll be back and may be a little more so.
It seems to me that the market is either way overpriced, or way underpriced right now. Are GM, F, Chrysler, Citi all really about to go BK? In that case, all hell is going to break loose in the markets.
Are they going to survive somehow? get bailed out? Can they kick the can a couple more months? If so then we're going to see a powerful rally.
Meh, just like the first round of the TARP. They had bi-partisan support then or so they said. No way they had enough time to stuff any bill with enough pork to get it through.
OT
Am I late to the party, or have you seen this? A short excerpt:
Advance Knowledge
So, for the time being, the clearest path to making money in the public markets is to know in advance what the government plans to do next with which companies, and when -- and then trade on it. Let there be no doubt: Plenty of people with access to such inside information are enriching themselves this way now. My guess is none of them is named Mark Cuban, and that the Securities and Exchange Commission will never sue any of them.
It's long been cliche to say the securities markets are a giant casino. This notion hasn't been explored enough. Aside from the free drinks, the only reason a rational person would play a slot machine in Las Vegas, aware that the house controls the outcome, is because of the mindless entertainment it promises. For ordinary folks with money to burn, this might be the last, best reason to invest in the U.S. capital markets, too.
Good luck.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
UAW contracts not that much worse (better) than the German unions--the problem was product and legacy costs. Healthcare overhaul will be too late to save the industry--and the US becomes a banana republic militarily as well as economically. Many of Lockheed's and Boeing"s suppliers are heavily into the auto industry.
Look, I am not saying that I agree with all of the management decisions made by the Somali Pirates in the last few years.
But the overall quality of their pillaging is up, as many independent surveys demonstrate, and if we don't inject fiscal stimulus right away I am afraid of the consequences to the "real" economy.
I'm talking overall market. Not car manufacturers. I think stocks will rally after Thanksgiving for a few months and then reality will likely set in again.
I agree, insider trading, I thought exactly that when they surged a half hour ago for no apparent reason. GRRRR wish I had my etrade account funded, this should be an easy swing.
This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena.
blackhat | Homepage | 11.20.08 - 10:59 am | #
Your comment is grim, concise, and unfortunately, convincing.
Elvis writes:
I'm talking overall market. Not car manufacturers. I think stocks will rally after Thanksgiving for a few months and then reality will likely set in again.
Elvis | 11.20.08 - 12:34 pm | #
I agree that we're likely to see a rally, but I don't think we've sold off enough yet for it to happen. If we had one more wave of panic selling, with Dow into the ~7,000 to 7,500 range, I would be right with you. As it is I think we're in limbo.
By KEN THOMAS
Associated Press Writer
Document
\tGovernors' letter seeking federal help for auto industry (PDF)
Multimedia
\tThe Cars That Made Chrysler Famous
Latest News
Ford shuffles manufacturing executive lineup
GM to temporarily stop production at Thai plant
Ford hopes to regain car traction with new Fusion
Mazda buys back chunk of own shares from Ford
Ford to slash Mazda stake to raise cash
Ford introduces 2010 Mustang at LA Auto Show
GM shows 3 new models for China
Buy AP Photo Reprints
Interactives
\tBringing Home the Bacon: Congress and Earmarks
Latest News
Bipartisan group works to revive auto bailout
Stevens gives last Senate speech as staffers weep
Waxman topples Dingell for key panel chair
CIA report raises questions about 2001 shoot down
Longtime Senate spending leaders departing
\tBig Three market share drops
Your Questions Answered
Ask AP: Space noise, building where hurricanes hit
WASHINGTON (AP) -- Aides to a bipartisan group of auto-state senators say they have reached a compromise to speed emergency loans to Detroit's Big Three car makers.
Republicans and Democrats plan to present the proposal at a mid-afternoon news conference Thursday. But it was not immediately clear whether the compromise plan could draw enough support to get through a reluctant Senate.
It temporarily would divert to troubled automakers money from a program that currently finances the development of fuel-efficient vehicles. The aim would be to cover their immediate expenses.
UNITED SOMALI PIRATE WORKERS ABDULLAH NOTES THAT SECONDARY PIRATE SUPPORT INDUSTRY AS WELL AS PIRATE SUPPLIERS COULD FAIL WITHOUT ADDITIONAL FUNDS CAUSING ECONOMIC HAVOC.
No details are available, Levin aide Tara Andringa said in an e-mail. Levin and colleagues Debbie Stabenow, a Michigan Democrat, George Voinovich, an Ohio Republican, and Kit Bond, a Missouri Republican, scheduled a 2:30 p.m. news conference in Washington.
Congressional leaders haven't said whether they support the plan.
Please note that this is a rumor issued by the offices of two Michigan congresspeople, one Ohio congressperson and one Missouri congressperson.
Given public sentiment against a bailout, which by all report is running high, I find it unlikely that the big 3 CEO's were sucessful in their panhandling.
SOMALI PIRATES ANNOUNCE EQUITY BUYBACK PROGRAM. ANNOUNCE THAT THEIR RECENTLY FILED 3Q 10K INDICATES THEY POSSIBLY ARE ONLY PROFITABLE ENDEAVOR ON THE PLANET.
PIMCO'S BILL GROSS AGREES, AND ANNOUNCES LARGE COMMERCIAL PAPER BUY.
sanity clause writes:
So they just walked into Congress and voted while no one was looking?
No vote yet. Bipartisan agreement on how to release $25B promised for Greening to be used as operating capital instead. Sociopath Shrub could still veto.
Comrade Kristina,
I got my first real job in 98. Someone asked me to buy "Rouge Wave". I held that stock for almost a year with 0% returns. I finally invested 3K in Commerce One. The rest is history.
Looking back, I'm glad i lost my commerce one investment.
Anonymous, I know, I just meant to point out that without a vote this doesn't mean a whole lot. That said, if the plan is simply to redirect the "green" $25 billion it should pass. Hatred of the environment should surpass hatred for Detroit among House Republicans.
Stuart writes:
Iconoclast421, real gold is up, near if not over $1,000/oz. Paper gold traded on the COMEX for example for which there is no available gold backing is the gold price reported. There are now two gold markets. Same holds true with Silver. Eventually they will connect but at much higher prices. Try and buy a gold coin and see what happens.
Stuart | 11.20.08 - 11:32 am
Are people paying $1,000/oz at the moment for gold? Sure...they are also dumb. Just because the under capitalized are paying a huge premium for physical doesn't change reality for the capitalized. If you have the capital real gold is 2% above spot. I could buy it today...and so could you.
I am for a bailout of Autos. much more sensible thna wallstreet bailout. If we do not rebuild our industrial base we will be stuck in bubble land unitl the economy completely melts down.
Looks like grounds for a rally to me.
I have seen some arguments about whether or not we are currently in DEFLATION or DISINFLATION.
thoughts?
What recession? Oh you mean the one we are ignoring and hope goes away.
CR,
This isn't trending down, this is crashing.
IMO, depression is baked into this cake.
This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena.
I have seen some arguments about whether or not we are currently in DEFLATION or DISINFLATION.
thoughts?
Yearning to Learn | 11.20.08 - 10:55 am | #
Suggest you provide precise definitions of those two.
until we get to negative CPI for a whole year, it is price Disinflation
however, in the monetarist sense, we are undergoing massive Deflation (printing by the Fed has no chance of keeping up with the massive destruction in shadow money - think hedgies, leverage, asset values, etc)
the second issue is much bigger than the first
Y2L:
"We are all deflated now."
& I believe the Fed is accepting this fact.
Look for zero or near zero interest rates
& a massive restructuring of our economy.
Yearning to Learn,
What argument do you need?
Real wages going down, real prices dropping like an anvil on Wile E. Coyote's head.
Look for deflation into the 2010/11 and then overshoot with massive inflation 2012-2015.
This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena.
What?! You don't consider a $350B bailout substantive on the employment and productive endeavor arena?! Mon dieu.
How many of us were shouting from the rooftops that the money would be much needed once the wheels fell off. Well, the wheels fell off and that money is up in smoke.
Why the heck isn't gold jumping amid all this?
Bond Risk Soars to Record as Markets Return to ‘Crisis Mode’ - Bloomberg.com
CAD @1.29, AUD @ .61, still crashing.
yearning,
I think somewhere between. The key for me is wages. If they aren't moving up or down, then we are seeing price changes, not deflation of inflation. I suspect we are probably having wage declines now but because the aggregate total are affected by job losses. It feels more like the deflation side than the disinflation side.
One thing I do know: sitting in cash is the most profitable investment right now.
Anonymous @ 11:02am,
Yes. We agree.
I'm unboxing my Mad Max gear.
Has anyone seen my boots?
Welcome to The Great Recession!
The market is trying to rally.
Why the heck isn't gold jumping amid all this?
It is, if you measure it in something other than USD, which is also jumping. CAD and AUD continue to plunge.
Can we get an updated VMT chart? VMT year-to-date is at 2003 levels. And it is headed a LOT lower. Probably to 1995 levels. Expect the stock market to follow VMT down...
glod won't move too much until the dollar and bonds get pummeled.
you won't have capitulation without a low VIX.
Dont know if this was posted on earlier threads:
UPDATE 1-US weekly jobless claims surge to 16-year high
| Reuters
The number of U.S. workers filing new claims for jobless benefits surged last week to their highest level in 16 years, Labor Department data showed on Thursday, as a harsh economic environment forces employers to cut back on hiring.
....
The dooms day scenario is rapidly playing out....
Scary stuff....
market going up..is reggieM covering here?
Gold is a hedge against inflation. Gold wont go up until we are back in an inflationary environment. We might not get back to an inflationary environment any time soon, though they are trying.
with a material downsizing to come of the automotive sector, this index is going ALOT lower...
The green does ease the nerves a bit
Maybe we can export our surplus labor back to Mexico.
Rally mode ON
Note: Market can go up 900pts in a day. It will still go down 2000pts in a month.
This is your money.
This is the deflationary neutron bomb.
Any question?
Iconoclast421, wrong. Gold is a hedge against confidence in FIAT currencies, principally the US dollar. The US is on a road to default or printing. Either of which are toxic to the dollar. No longer a question of IF the dollar tanks, but when. An unsustainable synthetic short squeeze is all that's keeping the greenback afloat.
I still figure out where the buying is coming from--are the oil potentates that foolish?
Couple points:
Bottom line- the Fed is going to have to learn some new tricks and there is no stability till those are revealed.
Just when they report the stock market is back postive from todays lows, Mr. Market goes right back down.
more Viagra please!
Scooby: Deflation isn't suicide for the Fed. Hyperinflation is.
PPT team has now given up
Watch out below
PPT resuming actio
UAW press conference coming up per CNBC
PPT is overrated
Bottom in.
Time to go home.
But deflation is suicide for companies that have a lot of debt.
Do you want to spend your cash on companies that have debt in a deflating environment? Hello! It's not an "investment" if they need all the cash to perform debt servicing!
Yes, no? That's the way I look at this. Until we get inflation than our economy is in trouble... and maybe even with ZIRP we still might get massive deflation because everyone has too much debt!
Problem is, if people understood this they would be hitting the sell, sell, sell button!
Scooby,
We agree that the Fed cannot fight deflation, at least short to mid term, in spite of everything Bernanke once believed. Without wage increases all we would get is a price bubble and I absolutely do not see wage increases on the horizon anywhere for anybody.
Should we just call it "The great deflation" then...
If there ever was a PPT they are bankrupt by now.
In all this talk of ZIRP don't forget NIRP.
Stuart, if what you say is true then gold would be up. It isnt, so.... add 2 plus 2
The second EU member to seek IMF aid in crisis:
UPDATE 2-Latvia second EU member to seek IMF aid in crisis
| Reuters
Well, 15 years of unmitigated outsourcing to China will do that.
Dow 8,025.39 +28.11 +0.35%
And the insanity continues...
cd - the Great Depression was the great deflation - thats why it occurred. Happening now, but wont last more than 12 months so dont bet on it long term. You'll see - not even Jas can stop inlfation when they start giving money away which is what they will do to fight deflation if they have to.
ndk writes:
CAD @1.29, AUD @ .61, still crashing.
Backwards the USD is at 1.2848 CAD, CAD is at .7738 USD.
The USD is rising against commodity based currencies like CAD, AUD, and NZD.
wally,
I agree. In the midterm (2 years) deflation is just consequence of debt. This cycle will be vicious.
Particularly vicious because the debt-levels of average Americans so far exceed serviceable levels that we are talking about wiping out both the creditors and debtors...
As CR observed earlier before TARP was barfed-up, RTC II is the way to go...just not this administration, not on their watch...
CR, it is not news unless it is '...lowest since the Great Depression.
OT
Say we do reach a bottom at some point. High probability of that, right?
In the past many people have told J6P to just buy an index fund and have a beer. And following these sort of epic crashes that has been damn good advice. Buy and hold for 5 years and you will do quite well.
But now we have Ultra and Triple ETF's for the indexes? I'm thinking of parking half my money in those once this mess is over and trying to out do that with my other half. The volatility issues should be greatly reduced after we get through this. Thoughts?
OT-do we run the currency markets..is thier a ppt on currency too that's bigger than we all know..Silver just seems to be way to reasonable here..
Not spewing conspiracy just befuddled on why $ is so strong...
Without wage increases all we would get is a price bubble
That has been my dumbass crackpot analysis all along. Deflation.
Noting there is a Very Temporary Deflation camp which believes in inflation being the way out...
I'm not sure I disagree with the over-all viewpoint, but, and this is very important--the unforeseen consequences of massive inflationary event trashing the USD at the same time we are borrowing/printing to inflate must be recognized--this is removing a tumor with a shotgun. Maybe you'll survive with the tumor.
is thier a ppt on currency too that's bigger than we all know
ummm. central banks?
1134 writes:
The second EU member to seek IMF aid in crisis:
Page Not Found | Reuters.com
c...K63937920081120
I always thought the race to expand the EU and NATO with dodgy Eastern Bloc countries was a bit counterintuitive.
How about the Potash bubble for a throw in..
POTASH CP SASKATCHEW Share Price Chart | POT - Yahoo! Finance
I find it hard to go long anything except hope....
Thoughts?
The industry that provides you with the leveraged ETFs will not look the same at the end of all this. It's not clear that they survive (or at least, at a reasonable price point.)
12th Percentile: I'm not sure how those ultra ETFs work, but it seems to me that you can't really get 3x over the market advance. Say the market went down 50%, all the ETF could do is go to zero, not -50%. If you're protected on the downside then I figure there must be a limit on the upside also, otherwise you're getting something for free which we know never happens.
Iconoclast421, real gold is up, near if not over $1,000/oz. Paper gold traded on the COMEX for example for which there is no available gold backing is the gold price reported. There are now two gold markets. Same holds true with Silver. Eventually they will connect but at much higher prices. Try and buy a gold coin and see what happens.
Oh my accursed lack of pig.
Oh my accursed lack of pig.
I think we should all go long pork-bellies, probably in honor of Dan Ackroyd.
One of them even proposed invading Canada to add stimulus.
So where is my recession?
Inflation- an increase in the money supply
Deflation- a decrease in the money supply
Why does everyone seem to forget the basic definitions?
Just because de leveraging is occurring, does not mean we are experiencing deflation.
The monetary base has expanded by 38% in the last 12 months. That's inflation, forget prices. They will lag until it's too late.
Stuart: Looks like kitco has Gold Maple's in stock at $808
stuart,
The coin supply should ease up shortly as the mints are ramping up production considerably. There is no conspiracy, just the free market at work (for a change). As the supply grows, premiums should drop considerably as well.
brihome: ~5-6% premium... that's a reasonable markup for ounce gold.
Now's a great time to buy ....in!
This month, the sprawling Atlantis resort in the Bahamas laid off about 800 workers, citing low occupancy rates. Baha Mar Resorts Ltd. laid off about 40 employees at its Sheraton Resort in the Bahamas and 40 more at the Wyndham Nassau Resort. The Bahamas Hotel Catering and Allied Workers Union has called a demonstration Thursday to demand government aid.
"I've been in the business 38 years. I have seen the impact of the Gulf War. I have seen the recession of the '80s. Certainly Sept. 11," said Robert Sands, senior vice president of external affairs at Baha Mar. "But nothing has been of a global nature, which makes the current financial situation we're in much more worrisome."
In Puerto Rico, the Caribe Hilton laid off more than 50 people this month because of rising costs and sluggish occupancy rates. The last time the hotel had to lay off workers was after the Sept. 11 attacks, General Manager Jose Campo said.
"What worries me is that this will last longer," he said. "We are mounting an aggressive campaign, but the situation is what it is."
Even the normally busy holiday season is expected to be relatively quiet.
So when does citi cry uncle? They're about to be on the delisted express.
recession inflation deflation disinflation hyperinflation depression
none of you know what the hell your talking about do you?
look... just wire me some cash and i'll handle this mess........ promise.
Why does everyone seem to forget the basic definitions?
Because not everyone is using the same definitions.
Could someone explicate if there is any chance of C surviving ?
This month, the sprawling Atlantis resort in the Bahamas
That is the one currently promising "a free dolphin swim" with every stay in their ads.
Sam Dimond,
That's a fine point. But there is not 38% more capital available. It's not there, it's not productive, it cannot be put to use.
/pirate voice
Go find ye productive capital if there be such...arrrr.
/tips three cornered blackhat
Sam Dimond | 11.20.08 - 11:34 am | #
Sam you are talking to the wall. Definitions? We don't need no stinking definitions...
Theory:
TARP billions given to banks spark fear of inflation due to increased money supply.
Fear of inflation influences general behavior of gov't, business, public.
Banks don't lend money due to lack of confidence in debtors.
Actions to guard against the inflation that never comes because money is tied up in the banks encourages deflation.
Banks notice deflation.
Banks realize that the debt they are owed plus the TARP money are much more valuable in deflationary environment than otherwise.
Banks continue hoarding money.
Vicious cycle.
It looks like the Phily index hit 60 at the very end of the last two major recessions.
dryfly,
That reminds me of Back to the Future:
Where we're going, we don't need roads.
Only, where we're going, we won't have them either.
Inflation is not the way out. What's lost is lost. However, deflation will cause considerable additional damage and moderate inflation will guard against that. Hyperinflation would also be a disaster but, unlike deflation, that doesn't happen accidentally. I will admit that Bernanke has suggested things in the past that could lead to hyperinflation, and suggested it in a context that indicates he didn't realize that.
I'm not sure which is worse - deflation or hyperinflation. Given that we could and probably would switch to alternative monetary instruments in a hyperinflation, I think deflation is worse. We have an economy very dependent on credit and if it disappeared I think we'd see a total collapse. But I'm open to discussion. Of course Bernanke can, and should, avoid both.
Backwards the USD is at 1.2848 CAD, CAD is at .7738 USD.
Sorry, a little frazzled today, just citing the crosses the way they're most frequently used.
re: China. From newsletter put out by USC US-China Institute
USC U.S.-China Institute Weekly Newsletter
Talking Points
November 19 - December 3, 2008
Dear xxxx,
Major American retailers report declining sales and greatly diminished profits. At Home Depot, for example, profits were down 31% in the just completed third quarter. At Target, they were down 24%. Chinese exports hit record levels last month, but the slowing of the American economy (and a similar slowing of the Japanese economy) has had dramatic repercussions in China. Thousands of factories have closed and millions more people are now out of work.
Chinas government was due to lift the minimum wage, but that has been postponed out of fear that such a rise would further squeeze factory operators and put more workers out on the street. Like central banks in the U.S. and Europe, Chinese authorities have already cut interest rates, hoping to stimulate lending and business investment.
Some economists see Chinas economic slowdown as an opportunity to make much-needed adjustments. They say this is an opportunity to foster greater domestic consumption and to make Chinas economy less dependent on export-led manufacturing. China needs, they argue, to increase employment in the service sector.
These are compelling points and Chinese leaders accept the need for economic restructuring. But leaders were already worried about the challenges posed by the need to rebuild areas devastated by the May earthquake. Now they also fear that rising unemployment will generate protests. Even before the quake and expanding layoffs, polls showed that nine out of ten Chinese felt the gap between the nations rich and poor was a big problem. Most of those polled (78%) also felt that corruption among officials was a big problem. (Click here for more poll data.)
Large protests have become commonplace in China. Many are driven by anger over perceived official insensitivity to workers left without pay or to communities harmed by polluting factories. On Monday, a different spark triggered a large and violent protest in Longan, a city in northwest China. The incident began with non-violent petitioning by three dozen people who feared that relocating government offices would negatively affect the value of their land and businesses. Before long an estimated 2,000 people were using bricks and pipes to attack city offices and the police sent to quell the unrest.
Chinese leaders hope increased public spending will keep the economy expanding and keep social discontent localized and manageable. Among the planned projects: a railway linking Lanzhou in the northwest with Chongqing in the southwest. The $8.6 billion project is largely funded by loans from China Construction Bank and the Industrial and Commercial Bank of China. Many American investors are indirectly part of the effort as well. On Monday Bank of America announced it was investing another $7 billion in China Construction Bank, giving it a 19% share of Chinas second largest bank. Goldman Sachs purchased a share of the Industrial and Commercial Bank of China for $2.6 billion in 2006.
The intricate and elaborate intertwining of the Chinese and American economies and the challenge and opportunity posed by the financial crisis will be examined on December 2 at USC by economist Calla Wiemer. Her initial assessment of the Chinese governments economic stimulus plan appeared last week in the Asian Wall Street Journal. We hope you will join us for her presentation. You can learn more about our economic ties via the Tensions over Trade segment of our documentary. You can see it at US-China Institute or at our YouTube channel YouTube
- USChinaInstitute's Channel
SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
Fair Economist,
The standard, I believe will not be in the final analysis whether we deflate or inflate, but whether we fully employ, or unemploy. Inflation/deflation will not matter if jobs exist in either scenario to meet basic needs of food/shelter after this bubble is de-putrefied.
And either form historically can take place in high unemployment environments.
My two cents, but whatever scenario I'll prefer employment. But it seems that much of the monetary discussion is Death by Murder.
Thaksin writes:
SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
Hire 'em. At least they're competent
google: tinfoil hatters gold trap to get my view on gold.
Is there a survivor bias to this manufacturing data? If a firm goes belly up, do they just add in a new, better-performing firm? Just curious.
The monetary base has expanded by 38% in the last 12 months. That's inflation, forget prices. They will lag until it's too late.
Got a link? The Federal Reserve
reports M1 was 1443 million Nov. 3 2008 and 1365 Nov 1 2007, which is about a 6% increase, not 38%.
People have gone underground whilst the financial atomic bomb unleashes the devistation above. There is panic because no one knows when the fallout will clear, or if it will. They also have no concept of how much of the surface landscape will be left or what it will look like. These are not interesting times but defining times. Good luck.
PAULSON: TARP PIRATE EQUITY IS AN `INVESTMENT, WILL PAY OFF
someone was lamenting about selling SKF way below current prices.
Don't beat yourself up...you have to do the best you can in the situation you are in. As long as you are putting $$ in your pocket it's a success. I sold out of all of my C puts when it was $10.....they are worth 60% more today. Do I think I screwed up..yes but I'm not going to loose sleep over it. I booked an almost 400% profit on them. Could have been substantially more...that's life.
Re-focus your attention on forward opps. and not reliving what might have been.
Ciao
MS
The Pope's financial prophecy:
Pope Had `Prophecy' of Market Collapse in 1985, Tremonti Says - Bloomberg.com
KASHKARI SAYS `SOMALI PIRATES ARE FUNDAMENTALLY SOUND
We are in a toilet bowl after the toilet has been flushed. But, the flapper is stuck and the rancid water is swirling around and around and backing up.
Piracy vs. Private Equity:
Piracy v. Private Equity: A Comparison - Deal Journal - WSJ
MS--I would not call that screwing up:)
Thaksin,
The pirates also are sitting on a large chunk of oil. There must be some tax write-offs for that as well.
Thaskin - won mi LOL HARD
MOODYS REAFFIRM AAA ON SOMALI PIRATES`
Meanwhile, America is simply stuck with the Pittsburgh Pirates, who are going to need TARP any day now.
blackhat -
The fiscal policies we take to adjust to our losses and hopefully minimize unemployment and other wastes of resources are obviously critical. However, monetary derangements can cause massive damage; a hyperinflation or hard deflation would probably cause more damage than we've already had. Essentially they make it impossible for the market to coordinate economic activity and it's hard to overstate the harm from that.
PSgirl-
With the benefit of hindsight I should have kept a few of them.....but you don't have that when making the decision.
So In essence I think I made a mistake by not doing that however as I stated before it's not something I will loose sleep over...what's done is done.
Ciao
MS
Pavel Chichikov writes:
The Pope's financial prophecy:
Bloomberg.com refer=europe
Market collapse due to a lack of ethics? You mean like the high standard of ethics the Church Inc.holds themselves too? Aren't they the biggest landowner on earth?
*SOMALIAN PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN INVESTMENT,' WILL PAY OFF
*KASHKARI SAYSSOMALI PIRATES ARE 'FUNDAMENTALLY SOUND' '
*Moody's upgrade Somali Pirates to AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD VERY LOW' PARTICIPATION
* SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED AGREED OCT. 29 TO TAKEWHATEVER STEPS' NEEDED FOR SOMALI PIRATES
You mean like the high standard of ethics the Church Inc.holds themselves too? Aren't they the biggest landowner on earth?
No, they're not.
All the properties have been confiscated by States long time ago (in Italy it's this way).
...dumb question follows:
What is the downside to the US becoming "isolationist" in regards to foreign trade in hopes of rebuilding our manufacturing base?
Black Star Ranch writes:
...dumb question follows:
What is the downside to the US becoming "isolationist" in regards to foreign trade in hopes of rebuilding our manufacturing base?
...(possible) dumb counter-question follows:
If we isolate ourselves from the rest of the world, who is going to pay for the rebuilding process?
Can someone tell me why exactly the market turned around at around 10:20 today morning? $50 oil?
*CNBC: SOMALI PIRATE ABDULLAH GAMANAH RUMORED TO BE OBAMA'S NEXT TREASURER
Aerospace hitting the skids
Rolls-Royce to axe up to 2,000 workers
Rolls-Royce to axe up to 2,000 workers - Times Online
Rolls-Royce, the aerospace engineer, has announced further job cuts of between 1,500 and 2,000 around the world during next year, with 140 earmarked to go at its assembly and test facility in Derby.
The redundancies bring the number of jobs lost by British companies since last Wednesday to more than 22,000 worldwide. Rolls-Royce has largely completed a round of 2,300 job cuts announced in January for 2008. ...
I agree with you Fair Economist.
Not trying to overstate exasperation. Intelligent discussions are clearly happening in this forum.
In a another world, the political class recognizes the severity of the misallocation of capital toward non-productive endeavors, dislocations in the financial markets, and engages in austerity programs, clearly articulated to the citizenry, defining the risks and the rewards, legislating into effect, effective programs which employ and hedge against rancid deflation/rapid inflation, choosing to take a longview which will exceed the 8 year term limit--in other words FDR had consensus and time to slowly correct the excesses and address the damage...functionally this timeline is artificially short.
...we "like" cheap TVs and printers, but don't NEED them...a return to "Made In The USA - Buy It!"...Is that too simplistic in today's "Globalistic" trends?
C about to enter the 4 dollar range. Hey rich did you get your F? I'm thinking of going in also.
*SOMALI PIRATES UNION (SPU) THREATENS TO BEGIN BUILDING AUTOMOBILES UNLESS TARP FUNDS RELEASED IMMEDIATELY.
GM's Wagoner has stated his willingness to resign.
blackhat writes:"This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena."
Treasury (my son Hank) said in his best Eric Cartman voice "screw you guys, I'm going home".
At least you have the Saudis running to the rescue:
NYTimes
Saudi Prince Increases Stake in Citigroup
Saudi Prince Alwaleed bin Talal said Thursday that he planned to increase his stake in the banking giant Citigroup to 5 percent.
Skip to next paragraph Add to Portfolio
Citigroup Incorporated
"...Prince Alwaleed, who currently holds less than a 4 percent stake, has been buying shares of Citi believing that they are undervalued and that the bank has been taking necessary steps to improve its operations amid the credit crisis..."
It's a bit, well, hilarious that we shoveled huge amounts of green paper rectangles to them in exchange for black goop, and then we help them burn the green paper rectangles afterward.
Bottom Dweller-Land,pedophiles and of course wars..
U2 sums it up well her in this lyric..
U2 Bullet The Blue Sky lyrics
And I see her come up to me
Her dress red
Like a rose on a thorn bush
Like all the colors of a royal flush
And she's pealing off those dollar bills
And slapping them down
One hundred
Two hundred
And I can see those fighter planes
And I can see those fighter planes
Across the mud huts where the children sleep
Through the alleys and quiet city streets
Up a staircase to the first floor
I turn the key and slowly unlock the door
A man breathes into a saxophone
Through the walls we hear the city groan
Outside it's America
Outside it's America
'So I'm back in my hotel room,
With Johnnie Coltrane and the love supreme,
In the next room I hear some woman scream out,
That her lover's turning off,
Turning on the television,
I can't tell the difference between :-
ABC news, Hill Street Blues
And some preacher in the old time gospel hour
Stealing money from the sick and the old
Well the God I believe in ain't short of cash Mister !!!!!!!!!!!!!!!!
See across the view
See the sky ripped open
See the rain pounding the women and children
Who run
Into the arms of America......
Some U2 rock bloggin for the day....
YouTube - Bullet The Blue Sky (Rattle and Hum)
Black Star Ranch writes:
Is that too simplistic in today's "Globalistic" trends?
Black Star Ranch | 11.20.08 - 12:01 pm
Again, I don't think you are being simplistic, but I ask, "Who is going to pay for this restructuring?"
Our financial institutions and manufacturers are broke. Our consumer base--who would "Buy America"--is also broke. Our government is helluva broke.
I like your thinking, but again, who can foot the bill?
WARREN BUFFET : BUY SOMALI PIRATES, I BOUGHT YESTERDAY.
BECKY, WHERE ARE YOU ?
Has anyone notices how each of the indexes are moving the same exact way (S&P, DOW, NAS)
Is this because the selling (and buying) is so uniform and widespread?
.....
"Prince Alwaleed, who currently holds less than a 4 percent "
Was it 3.99% and now he is going to make 4.99%? Is this just PR?
COMPENSATION FOR TOP SOMALI PIRATES CANNOT BE SLASHED OR TARP NOT EFFECTIVE, PAULSON SAYS
7900 we hardly knew ya...
GM's Wagoner has stated his willingness to resign.
Several layers need to go at GM, or at least put through the fire/rehire wringer.
Black Star:
There's a fairly long list but, in the broadest terms, US has accommodated integration of supply lines with the rest of the globe - we're both dependent and depended upon and not, at the moment, structured for isolationism.
Global economic downturns do chill international trade - that was one aspect of both 1870s and 1930s much commented on in econ histories. I'd expect to see something similar becoming measurable now.
TREASURY SHOULD HELP SOMALI PIRATES WHO LOSE THEIR BOATS: FRANK PAULSON
As part of my civic duty, I am sending Rice Krispy treats to the Treasury for the upcoming "Save the Economy" bake sale. I hope my fellow CRs will find it in their patriotic hearts to do the same.
BARNEY FRANK
/I'll pile on
"Somali pirates would be inhibited from recruiting top talent in a very competitive industry which is why Paulson has rejected the Executive Compensation provision," unnamed sources noted.
blackhat writes -
In a another world, the political class recognizes the severity of the misallocation of capital toward non-productive endeavors, dislocations in the financial markets, and engages in austerity programs, clearly articulated to the citizenry, defining the risks and the rewards, legislating into effect, effective programs which employ and hedge against rancid deflation/rapid inflation, choosing to take a longview which will exceed the 8 year term limit
Another world indeed. Sigh. In ours, they stopped talking about preventing any recession only about 2 weeks ago. As an example, in all the discussion of auto bailouts, I have yet to see one proponent address the need to reduce overcapacity. And Bernanke still seems to be fantasizing about using monetary policy to undo past damage. It's certainly frustrating that what you propose so lucidly is not even on the table for the decisionmakers.
I'd like to say that equating the Somali Pirates to Wall Street is one of the funniest things i've seen on CR. And accurate. I hope someone on the Daily Show steals it so it gets a wider audience.
HANK PAULSON BOWING DOWN TO NANCY PELOSI : PLEASE SAVE SOMALI PIRATES
FOX: SOMALI PIRATES FORCED TO DOWNSIZE TO WEATHER 'ECONOMIC STORM'; 100 SWASHBUCKLERS 'WALK THE PLANK
Heavy buying into GM. Made up 1/3rd of todays losses in 10 mins.
"Several layers need to go at GM, or at least put through the fire/rehire wringer."
Well, that's all fine, but I think his statement infers a certain level of desperation.
At their current level of cash burn, they may not make it until Congress reconvenes to consider a loan.
CONGRESSIONAL REPUBLICANS DEMAND THAT PREVIOUSLY AUTHORIZED EFFICIENT WEAPONS LOAN BE MODIFIED. REFUSE TO APPROVE MODIFICATION OF TARP TO PROVIDE SOMALI PIRATES WITH AN ADDITIONAL $25 BILLION.
GWBUSH : WE NEED MONEY OTHERWISE SOMALI SUCKER COULD GO DOWN
EESA Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by Somali pirates.
I don't understand why, if the problem is simply a lack of liquidity the government doesn't create a few hundred billion dollars via seigniorage (that is simply printing currency or minting coins without worrying about backing it with anything) and hand it out. Give everyone $10,000. Don't worry about paying it back. The money simply comes from reducing the value of the currency. Repeat if necessary. I'm pretty sure doing this would encourage people to spend and get the inflation rate positive again pretty fast.
SOMALI PIRATES HIJACK FED, TREASURY
$700B ransom demanded for Bernanke, Paulson
Dow soars 30%; Ron Paul: “A step in the right direction.”
SOMALI PIRATE LEADER OFFERS TO RESIGN
SOMALI PIRATES AIMS MERGER WITH GOLDMAN SACHS TO BECOME "TOO BIG TO JAIL"
Citigroup (C) \t338,010,270 \t5.17 \t-1.23 \t-19.18
Amazing that we were under 300 million volume for C yesterday, and already at 338 million at lunch EST today.
Following C in the Amazing (Volume) Race are funds that track financials. I wonder what took those holders so long...
Man, you guys are going to LOVE National Talk Like a Pirate Day next year.
My outside eye agrees with mp, while my other eye imagines a glass of bourbon in my hand...
I think the cash-burn models are based on static rates, not accelerated rates of reserve draw-down. There is borrowing aspect, revolving credit, short-term financing not brought in, and if I guess correctly, there is sh*t off the books that will be realized soon, and surprisingly so.
SOMALI PIRATES TO USE SWAG, PIECES O' EIGHT AS COLLATERAL IN FEDS LENDING FACILITY
BERNANKE SAYS REVEALING WHICH PIRATES HAVE RECEIVED MONEY WOULD "NOT BE PRODUCTIVE."
Jim writes:"SOMALI PIRATES HIJACK FED, TREASURY"
That happened a long time ago.
india took down a somali pirate mother ship (how funkadelic)
Indian Frigate 1, Pirate 'Mother Ship' 0
Indian Frigate 1, Pirate ‘Mother Ship’ 0 | Danger Room | Wired.com
perhaps to let out aggression for -
Indias rupee closes at record low as investors pull money out
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=255591&version=1&template_id=48&parent_id=28
C is now 4.96
Pork Sec. 317. Seven-year cost recovery period for Somali motorsports racing track facility
SOMALI PIRATE LEADER SAYS PIRATING AN 'ESSENTIAL PART OF THE GLOBAL ECONOMY FOR 500 YEARS'; SAILS TO D.C. IN PRIVATE YACHT TO BEG FOR BAILOUT
SOMALI PIRATES MUTINY OVER DECISION TO INVEST GOLD BARS IN LAS VEGAS CONDO HOTELS.
"Heavy buying into GM. Made up 1/3rd of todays losses in 10 mins."
Any idea why? I heard Rick Wagoner's interview on public radio yesterday, and he didn't sound too confident to me.
would somebody please tell Gottelfinger to stfu. Nobody cares about the UAW except for the UAW. They are leaches. Congrats to them that they negotiated benefits that were so good that they bankrupted the company. Waaaay to go. Now time to sleep in the bed they helped make.
How about they torch their benefits in exchange for a bunch of stock. Guaranteed they won't take a deal like that because they want to leach off the company, not own it. Somebody take that dog to the vet and have it put down please.
SOMALI PIRATES LEADER MAKE SPEACH AT S20 DINNER AT MOGADISHU
and some thread music for all the pirate mother ship's out there -
YouTube -
Wooden arrows are doing fine now...
RANSOM MARKET IS OVERSOLD, SAYS SOMALI BLOGGER
SOMALI PIRATES VISITING DC SHOULD GET BAILOUT: SEN REID
CALPERS SEEKS FUNDS FROM SOMALI PIRATES
Auto bailout compromise reached...."allegedly"
BARNEY FRANK: TARP SHOULD BAILOUT HALO SCAN.
Somali & Pirates 500 Index is losing its head and shoulders.
Nosmo King writes:
Auto bailout compromise reached...."allegedly"
Nosmo King | 11.20.08 - 12:22 pm
Link?
Link ? Look at SOMALIPIRATES STREET JOURNAL
Arrrggghhh...Ye Haloscan is make me mad, matey. Arrrrggghhhh.
yagij - reporter just said it in the Q&A with UAW president on CNBC. Been looking for confirmation in a story but cant find it.
Bloomie reports Sen Bond states bi-partisan auto bailout plan reached. Press conf. at 2
"Heavy buying into GM. Made up 1/3rd of todays losses in 10 mins."
"Any idea why?"
Bottom feeders.
@fair_economist:
"Bernanke still seems to be fantasizing about using monetary policy to undo past damage."
Monetary policy is analagous to neck reigning a horse. As long as the horse is calm, the touch of a leather strap will turn a 1200 lb animal. When that animal spooks, whether for good or for poor reason, the only way to turn his head is to pull hard, but not too hard, lest the animal go down. A show rider (monetarist) may or may not be able to work that pull.
A root problem here, as someone identified upthread, is faux credit and financing for financing sake (think levered buyouts at inflated terms), now being destroyed.
While there never was enough pure credit in the first place for productive needs, the damage to the banking function of the world's banking institutions wrought by their participation in the faux credit orgy has made monetary policy completely ineffective.
The horse is running away, and running toward a cliff, and the rider's best case scenario right now is that the horse goes down.
Nothing positive in this; in an hour I'll be back and may be a little more so.
SPIBOR SWAP SPREADS EASE 50BP based on auto bailout news
GM in the green. Giddy up boys
GM is flying high, guess the rumor has some meat to it.
LOL. GM now at 3.05, up from its intraday low of 1.70
It seems Somali jailout is finally working.
UPDATE - NAR'S YUN TO JOIN SOMALI PIRATES, REITS GAIN ON NEWS
$25B split 3 ways, or $8.33B each is one quarter of expenses and realized losses.
If released today, it might kick the can into 2 quarter 2009. might and then what. Will unemployment recover, wages inflate?
No. sigh.
It seems to me that the market is either way overpriced, or way underpriced right now. Are GM, F, Chrysler, Citi all really about to go BK? In that case, all hell is going to break loose in the markets.
Are they going to survive somehow? get bailed out? Can they kick the can a couple more months? If so then we're going to see a powerful rally.
How to play this?
Meh, just like the first round of the TARP. They had bi-partisan support then or so they said. No way they had enough time to stuff any bill with enough pork to get it through.
OT
Am I late to the party, or have you seen this? A short excerpt:
Advance Knowledge
So, for the time being, the clearest path to making money in the public markets is to know in advance what the government plans to do next with which companies, and when -- and then trade on it. Let there be no doubt: Plenty of people with access to such inside information are enriching themselves this way now. My guess is none of them is named Mark Cuban, and that the Securities and Exchange Commission will never sue any of them.
It's long been cliche to say the securities markets are a giant casino. This notion hasn't been explored enough. Aside from the free drinks, the only reason a rational person would play a slot machine in Las Vegas, aware that the house controls the outcome, is because of the mindless entertainment it promises. For ordinary folks with money to burn, this might be the last, best reason to invest in the U.S. capital markets, too.
Good luck.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
UAW contracts not that much worse (better) than the German unions--the problem was product and legacy costs. Healthcare overhaul will be too late to save the industry--and the US becomes a banana republic militarily as well as economically. Many of Lockheed's and Boeing"s suppliers are heavily into the auto industry.
the news seems to be a rumour
but by the way it has been leaked
congress is forced to implement
otherwise circuit filter on NYSE for sure
Look, I am not saying that I agree with all of the management decisions made by the Somali Pirates in the last few years.
But the overall quality of their pillaging is up, as many independent surveys demonstrate, and if we don't inject fiscal stimulus right away I am afraid of the consequences to the "real" economy.
"How to play this?
Gavshire Hathaway"
Buy now and sell in April.
GM: why buy something that in better case will get diluted?
Elvis, are you serious? So you don't think those guys are at "the end" yet?
Insider trading on GM. It ticked up 30 mins b4 bailout announcement. Senate leaked
I agree with Ned. You buy now, you will buy at the wrong time. The wrong time is defined as any time that you buy.
Buy now, get diluted. Buy later, get diluted then wiped out.
UNITED SOMALI PIRATE WORKERS's ABDULLAH WARNS THAT ONE OR TWO SHIP MAKERS COULD COLLAPSE WITHOUT IMMEDIATE ASSISTANCE
I'm talking overall market. Not car manufacturers. I think stocks will rally after Thanksgiving for a few months and then reality will likely set in again.
In the current credit state, 40% loss of auto sales looks permanent. 16mm to 10mm cars per year. Bridge or no bridge,
someone is going to be toast.
I agree, insider trading, I thought exactly that when they surged a half hour ago for no apparent reason. GRRRR wish I had my etrade account funded, this should be an easy swing.
IMO, depression is baked into this cake.
This is happening too fast, and the government is doing too little that is substantive on the employment and productive endeavor arena.
blackhat | Homepage | 11.20.08 - 10:59 am | #
Your comment is grim, concise, and unfortunately, convincing.
just fyi, especially for those tempted to be long non specific pm stocks.
i think the bottom will be beyond generational memory -
World economic confidence index falls to 20-year low
World economic confidence index falls to 20-year low
Insider trading on GM. It ticked up 30 mins b4 bailout announcement. Senate leaked
This one stinks. Even if the senate has a deal, it still needs to pass through the house meatgrinder.
Now if GM becomes TARP worthy, that might be another story.
Ford bouncing off day's lows.
Up 50%+!
Get in now or be priced out forever.
Gimme an F...
If it's a depression, do we get free Zoloft now that the Dems are in charge?
UAW chief: One, two auto makers may collapse by year end
http://www.marketwatch.com/news/story/UAW-chief-One-two-auto/story.aspx?guid={D3223BB5-E2D4-407F-92EA-D89037888A2A}&dist=hplatest
Thanks on the F tip. I have never seen a 50% profit in 1 hour
Weeeeeeeeeeeeeeee
Elvis writes:
I'm talking overall market. Not car manufacturers. I think stocks will rally after Thanksgiving for a few months and then reality will likely set in again.
Elvis | 11.20.08 - 12:34 pm | #
I agree that we're likely to see a rally, but I don't think we've sold off enough yet for it to happen. If we had one more wave of panic selling, with Dow into the ~7,000 to 7,500 range, I would be right with you. As it is I think we're in limbo.
so buy buy buy?
12:37 is for Rich.
Blah blah blah:
Bipartisan group works to revive auto bailout
By KEN THOMAS
Associated Press Writer
Document
\tGovernors' letter seeking federal help for auto industry (PDF)
Multimedia
\tThe Cars That Made Chrysler Famous
Latest News
Ford shuffles manufacturing executive lineup
GM to temporarily stop production at Thai plant
Ford hopes to regain car traction with new Fusion
Mazda buys back chunk of own shares from Ford
Ford to slash Mazda stake to raise cash
Ford introduces 2010 Mustang at LA Auto Show
GM shows 3 new models for China
Buy AP Photo Reprints
Interactives
\tBringing Home the Bacon: Congress and Earmarks
Latest News
Bipartisan group works to revive auto bailout
Stevens gives last Senate speech as staffers weep
Waxman topples Dingell for key panel chair
CIA report raises questions about 2001 shoot down
Longtime Senate spending leaders departing
\tBig Three market share drops
Your Questions Answered
Ask AP: Space noise, building where hurricanes hit
Multimedia
\tPick-Your-Own-Parts Salvage Yard
\tCadillac Queen
WASHINGTON (AP) -- Aides to a bipartisan group of auto-state senators say they have reached a compromise to speed emergency loans to Detroit's Big Three car makers.
Republicans and Democrats plan to present the proposal at a mid-afternoon news conference Thursday. But it was not immediately clear whether the compromise plan could draw enough support to get through a reluctant Senate.
It temporarily would divert to troubled automakers money from a program that currently finances the development of fuel-efficient vehicles. The aim would be to cover their immediate expenses.
"Dow into the ~7,000 to 7,500 range, I would be right with you. As it is I think we're in limbo.
Gavshire Hathaway"
My guess is it will happen before Thanksgiving, if it does.
UNITED SOMALI PIRATE WORKERS ABDULLAH NOTES THAT SECONDARY PIRATE SUPPORT INDUSTRY AS WELL AS PIRATE SUPPLIERS COULD FAIL WITHOUT ADDITIONAL FUNDS CAUSING ECONOMIC HAVOC.
If "Nuclear bomb dropped to NY by Russians" newsline appeared on Google, how dow will react? +50%?
That's silly.
There has to be a bailout. Among other reasons the industrial capacity of the country is at stake. Banana republic indeed, otherwise.
No bailout: banana republic.
Bailout: wooden arrows republic.
WTF, F?
REbear, you must have never played the pennies back in the dotcom days...1000 percent in a day was not unheard of...
Rumors from NY: bailout passed, bipartisan.
I fail to see why a rally is in order even if bailout does pass. Does that change the fundamentals in this market even an iota?
p.s. let me say: Americans, what a joke your sistem is.
So they just walked into Congress and voted while no one was looking?
Hi Kristina, nice to see you again.
A fundamental-based market would not be @8000dow, nowadays, IMHO.
What are the conditions of the bailout? Are they as flimsy as the TARP?
The fight for the status quo continues. Do you suppose that at some point anybody will figure out Mr. Consumer who supports all this stuff is DOA.
"Does that change the fundamentals in this market even an iota?
Comrade Kristina"
Yes. It creates a surge in demand from buyers and instantly creates engineering advantages over the Japanese.
What about all the tough talk over the last few days by CONgress?
Warning!! Rumors not confirmed yet.
That agreement may be an agreement to provide DIP financing, which would just kill the stock(s). Caution.
LOL Elvis, I stand corrected.
Hello again Ned!
If there is a bailout, short horse carriage manufacturer stocks.
U.S. Senators Reach Bipartisan Agreement on Aiding Automakers:
U.S. Congress Puts Off Automaker Rescue to Next Month (Update5) - Bloomberg.com
U.S. Congress Puts Off Automaker Rescue to Next Month (Update5) - Bloomberg.com
A group of U.S. senators has reached a bipartisan agreement on aiding U.S. automakers, said an aide to Democratic Senator Carl Levin of Michigan.
No details are available, Levin aide Tara Andringa said in an e-mail. Levin and colleagues Debbie Stabenow, a Michigan Democrat, George Voinovich, an Ohio Republican, and Kit Bond, a Missouri Republican, scheduled a 2:30 p.m. news conference in Washington.
Congressional leaders haven't said whether they support the plan.
Warning!! Rumors not confirmed yet.
So far all we have is an email from a Congressional staffer that a bipartisan agreement in the Senate has been reached.
I'm assuming that the House is going to roll over?
DIP financing means Chapter 11.
Please note that this is a rumor issued by the offices of two Michigan congresspeople, one Ohio congressperson and one Missouri congressperson.
Given public sentiment against a bailout, which by all report is running high, I find it unlikely that the big 3 CEO's were sucessful in their panhandling.
I may be proven wrong however . . .
SOMALI PIRATES ANNOUNCE EQUITY BUYBACK PROGRAM. ANNOUNCE THAT THEIR RECENTLY FILED 3Q 10K INDICATES THEY POSSIBLY ARE ONLY PROFITABLE ENDEAVOR ON THE PLANET.
PIMCO'S BILL GROSS AGREES, AND ANNOUNCES LARGE COMMERCIAL PAPER BUY.
All this talk about the "Big 3." Lame! The big auto news is that Fiat bought Yugo. Now THERE'S synergy.
If its Levin then it is free money! No way the Michican crook does anything else
Next crisis please...
sanity clause writes:
So they just walked into Congress and voted while no one was looking?
No vote yet. Bipartisan agreement on how to release $25B promised for Greening to be used as operating capital instead. Sociopath Shrub could still veto.
There is no bailout yet, they just have a "plan". No vote yet.
ew Little 3 thread.
Somali pirate leader candidate for head of Homeland Security.
more money wasted... sad
My (imaginary) money is on CH 11. But I wouldn't place any real bets. I'll only gamble if I think I have an edge.
The only argument you can make here is expected value.
CH 11: 80% chance of a "0"
Bailout: 20% chance of a 5x return
And that would only get you to breakeven EV. Unless you think the odds/returns are better, stay away!
The "agreement news" was leaked so the suckers would buy.
That is how it works in a casino.
Comrade Kristina,
I got my first real job in 98. Someone asked me to buy "Rouge Wave". I held that stock for almost a year with 0% returns. I finally invested 3K in Commerce One. The rest is history.
Looking back, I'm glad i lost my commerce one investment.
RING RING
%#$@%@$#@#$ - tell 'em I'm busy
RING RING
Ok... HELLO
Yes comrade er sir.
No I wasn't responsible for that.
No sir all the suitcases are empty and I am following orders.
Well it is sort of funny.. no I don't think it is funny
sorry
Yes the 'borrowing' facility is working fine.
OK good bye
grumble grumble
mutters to self (found a couple suitcases under the sink to paint that S&P 776.76 ya stinkin' %$!$@%@$#$%!)
Anonymous, I know, I just meant to point out that without a vote this doesn't mean a whole lot. That said, if the plan is simply to redirect the "green" $25 billion it should pass. Hatred of the environment should surpass hatred for Detroit among House Republicans.
Stuart writes:
Iconoclast421, real gold is up, near if not over $1,000/oz. Paper gold traded on the COMEX for example for which there is no available gold backing is the gold price reported. There are now two gold markets. Same holds true with Silver. Eventually they will connect but at much higher prices. Try and buy a gold coin and see what happens.
Stuart | 11.20.08 - 11:32 am
Real gold is not over $1,000/oz. Go to GOLD SILVER EAGLES US BULLION DEALERS AMERICAN EAGLE COINS BARS
and you'll see real gold is spot plus $14.95/oz for a kilo bar of 0.9999 pure. If you can buy in a 33 oz quantity real gold is $770/oz.
Are people paying $1,000/oz at the moment for gold? Sure...they are also dumb. Just because the under capitalized are paying a huge premium for physical doesn't change reality for the capitalized. If you have the capital real gold is 2% above spot. I could buy it today...and so could you.
I am for a bailout of Autos. much more sensible thna wallstreet bailout. If we do not rebuild our industrial base we will be stuck in bubble land unitl the economy completely melts down.