Rob Dawg(Supercalifragilisticexpealodocious) writes: \tFrom the pigs moutrh to the dawgs ears. \t Rob Dawg | \t \t \tHomepage | \t12.18.08 - 9:17 pm | #How did you hack your rating?
Serious question here: So the Fed is getting in to quantitative easing. One fear is that this will be inflationary because the Fed will not be able to sell the assets fast enough should inflation appear. It occurred to me that the Fed might not be able to sell the assets for what it paid for them, if for no other reason than because interest rates have gone up. The creation of money by buying assets might be irreversible if the assets go down in value.
Let alone if they were crappy, overpaid-for assets to begin with.
Does the Fed have any mechanisms, besides selling its own debt and raising the Fed funds rate, for forcibly contracting the money supply?
Does the Fed have any mechanisms, besides selling its own debt and raising the Fed funds rate, for forcibly contracting the money supply? Original Eric | 12.18.08 - 9:33 pm | #
WTF?! Trimmed compared to when? 11 days to go in the Q4 redeeeemmmption song. Then lag effect on reporting. And the obfuscation and lying in unison until you can no longer get away with it. And the arbitrary changing of redemption gates and misc other refusals.
I thought idled automobile manufacturing plants were a good thing. They can be re-tooled quickly to manufacture bicycles, since we won't have any money to buy gas at any price.
In a way it is ironic, you look at 1970's video of Chinese people on bicycles while we drove 5500 lb US manufactured tanks. I'm afraid in a few years they will get the last laugh.....
From his own web site:Currently, Dan Quayle is Chairman of Cerberus Global Investments, LLC (Cerberus), President of Quayle & Associates, and serves on the boards of directors of IAP Worldewide Services, Inc., K2, Inc and Aozora Bank, Ltd in Tokyo . He makes frequent public appearances and speeches, and writes a nationally syndicated weekly newspaper column.
Dan Quayle joined the Cerberus Advisory Board in 2000, and currently serves as Chairman. Cerberus is one of the world's leading private investment firms, with over $16 billion in committed capital and offices in New York, Chicago, Los Angeles, Atlanta, London, Baarn,(The Netherlands), Frankfurt, Osaka,and Tokyo. As Chairman of Cerberus Global Investments, Dan Quayle has been actively involved in new business sourcing and marketing for Cerberus in North America, Asia and Europe. His extensive global network of public sector and private sector decision-makers, combined with his investment expertise, have significantly contributed to the growth of Cerberus. Dan Quayle has offices in New York and Arizona; He regularly travels throughout the US, Europe and Asia to meet with the heads of investment banks, corporations, buyout shops, potential investors, and other business leaders. His responsibilities include (1) ensuring that Cerberus stays at the forefront of deal flow activity, (2) facilitating Cerberus' entry into new markets and industries, and (3) fostering potential transaction partnerships.
Cerebus owns extreasury secretary Snow.
What a relief for Mexico as production increases there as plants are torn down in the USA. I read that mexican workers are paid $3 per hour. Whew, what a relief to know my car will be built by starving third world people. No worry about the airbags now.
I just read the following paper and found it quite informative and relevant. I'd strongly recommend it to anyone who's got some spare time to do some reading:
Oh Gee
He has to bail-out to be fair to Ford whoopee.
Lots of airlines were faced with competition in Ch.11.
But Ford couldn't compete. Well they could choose BK.
What does it take to buy a bank? All the little georgia drecksters could be had for a song.
Or maybe if you have a finacing arm like Sears would that be enough.
OT was it on this blog that someone pointed out that Starbucks has > 100000 employees plus I am sure a carload of suppliers. Is it too big to fail??
Well, now the Mexicans have no reason to come here. This will benefit the economy by allowing students to cut grass and do landscaping during the summer.
GM and Chrysler are headed towards an eventual bankruptcy. Either an announcement will be made in coming weeks, or - after throwing taxpayer money down a rathole - it will occur in the next year.
I don't think Chrysler will survive until March. If/when the factories re-open and the UAW's walk outside the jobs bank blinking in the late winter sun, they are going to find the economic landscape has changed.
Conjure Clock says it will be so. We will have hit 12:00 on the Global depression clock and the bond clock.
Just think of it.
December will be remembered as "the good times." So pop a champagne cork, or pour a single malt. It's getting late.
"Bob_in_MA writes:
"The Treasury ...may lend to the automakers through their credit arms... to avoid having other industrial companies line up for access..."
Boy, that should fool a lot of those industrial companies! "
What stops any business including mom & pops from starting a credit "division" to qualify for TARP?
This is the part of the hospital stay where the harvest team is in the operating room, and anesthiology is pumping the patient full of pressors and fluid in an attempt to delay multi-organ system failure. Kidneys, liver, heart,pancreas and brain all failing, but technically still alive. Just long enough to harvest the corneas and bones at this point.
Long wooden dowels inserted into the legs and arms to give structure for the coffin.
BTW the PDF I linked to above discusses Sweden's use of heavily regulated credit markets as well as its efforts to direct credit to specific sectors of the economy.
This is the part of the hospital stay where the harvest team is in the operating room, and anesthiology is pumping the patient full of pressors and fluid in an attempt to delay multi-organ system failure. Kidneys, liver, heart,pancreas and brain all failing, but technically still alive. Just long enough to harvest the corneas and bones at this point.
Long wooden dowels inserted into the legs and arms to give structure for the coffin.
The outcome is not in doubt anymore.
Anybody want to call it? Doctor Detroit | 12.18.08 - 9:51 pm | #
Obama is probably getting real time info fed continously by people doing CYA and manuvering for position. Obama, at this point, is probably more in the loop than Bush ever was or wanted to be.
ova writes:
My guess is Chrysler and GM still stiff their suppliers....
Sounds likely and it appears someone higher in my food chain realizes this, out back, where masses of cars would wait, a large and increasing contingent of supplier container trailers has formed...so far I would guess at current reduced production maybe a month or more of parts...
Interesting. I wonder if Toyota and others are working the phones with suppliers? Trying to make sure they are at the top of the list... As in "Look, we both know they are going to screw you so take care me..."
I don't believe Bush will offer it in a way GM or the UAW will accept. ------------------
I agree. Since GM and the UAW have so many other offers to choose from, they can afford to be picky about the terms of the deal. Kyle | 12.18.08 - 9:39 pm | # being picky about the price of a life raft turned out real well for dick fuld and lehman brothers.
ac,
I like the Denmark model prior to the The Anders Fogh Rasmussen Government,
and minus the royal family.
rps
FWIW not knowing much about Sweden I always kind of had the impression that it was an example of a "successful" socialist country.
The paper above seems to indicate that during it's heavily socialized, centrally planned phase (which included heavily regulated credit markets and mandatory savings plans) Sweden's economic performance was poor compared to other industrialized countries, and this was part of the reason the move toward socialism was abandoned.
It makes me question why such policies are being advocated as a solution to the problems we currently have.
popeye, thats too bad. i really wish there were other theories discussed here other than doom and gloom. How can you tell when the apocalypse has subsided if everyone you talk to is sealed up in a bunker and is sure the apocalypse is permanent? Good luck.
What is the moral hazard here? Oh wait, let's see... An end game where US Auto Manufacturers sell below costs - subsidized by gubmint? Consumers like me who never, ever buy an "American" (re: UAW, Big 3) car ever again? Why would I ever pay twice for a crappy product - first time with a gun to my head (taxes), second time by choice (on the lot)? No thanks, let the Big 3 sink.
Have to wonder about the quality of the last 6 months or so of Chrysler vehicles. It's not like they were ever tops of the JD Power, but towards the end of any dying company, or one headed for BK / restructuring things get weird employee-wise.
Like going to eat at a restaurant that is about to close for good. I'd be uneasy in a 2008 PT Cruiser, myself Indy Jones. Or any Chrysler vehicle.
Good luck with that jo6pac, those workers are going to be outsourced. This ain't got crap to do with helping the workers anymore then bailing out the banks had to do with helping Herby Homowner.
Once again I find myself amazed by Schumpeter's ability to predict current events back in the 1940s:
In his vision, the intellectual class will play an important role in capitalism's demise. The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for which they are not directly responsible and able to stand up for the interests of strata to which they themselves do not belong. One of the great advantages of capitalism, he argues, is that as compared with pre-capitalist periods, when education was a privilege of the few, more and more people acquire (higher) education. The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets and private property, even though these institutions are necessary for their existence. This analysis is similar to that of the philosopher Robert Nozick, who argued that intellectuals were bitter that the skills so rewarded in school were less rewarded in the job market, and so turned against capitalism, even though they enjoyed vastly more enjoyable lives under it than under alternative systems.
Paulson, quoted by Reuters: "President Bush has been pretty clear that, since Congress has failed to act, he wants to take steps to avoid a failure," Paulson said at a Business Week forum. But, he added: "If the right outcome is bankruptcy, then it's better to get there through an orderly process."
And what could be more orderly than various high level officials mumbling various possible vague scenarios to the press, rather than presenting a final plan as a fait accompli? Honestly, these people are going to be screwing things up right until their very last day. 'Act to fail,' indeed.
good point about the cars now being put out by chrysler prob not having the best build quality, In normal times the standard is not to buy a car on monday or friday. Now, I would think every day was a day to get drunk.
The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets
An interesting blanket statement which automatically condemns any disagreement.
It's worth noting that, in the recent results from the Insurance Institute for Highway Safety, Chrysler was the "only major manufacturer without a Top Safety Pick. Chrysler and Dodge models are among those that would have been Top Safety Picks if their seats and head restraints had also earned Good ratings."
So even when they're built to spec, I'd rather be riding in something else.
"The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets"
An interesting blanket statement which automatically condemns any disagreement.
Broward Horne
As I understand it, Schumpeter wasn't condemning anything. He was trying to make an argument that capitalism would inevitably transition to socialism.
I think his position has merit simply in as much as it describes a starting condition, a process, and an outcome that can be validated or repudiated by real world events.
I.E. his theory can easily be addressed scientifically.
In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........
they probably all will need to be reglazed........
also, on The PBS NewsHour someone mentioned that 25% of Chrysler customer's can't get financing....
well, they probably shouldn't have been able to get financing previously....
since GM needs 4 billion thru Dec31, and only owns 49% of GMAC, I hope the guys at Tsy have figured they need to double the payment to GMAC.make it $8billion , hank.
ac writes:
"Once again I find myself amazed by Schumpeter's ability to predict current events back in the 1940s:"
Not to knock Schumpeter, but I don't think he was predicting. I think he was observing what was going on around him at the time. Based on stories my father told me, what we are going through now is not unprecedented, and rhymes with the 30s and 40s in many ways. The "isms" had different names back then, but the (fewer) people who thought seriously about this sort of stuff were seeing similar manifestations of human nature and social organization.
Efforts by GMAC LLC to turn itself into a bank suffered a sharp setback Thursday after Pacific Investment Management Co. declined to tender its bond holdings as part of a massive debt restructuring at GMAC, a person familiar with the matter said.
My question is, if I send paperwork and $50 to GMAC for an account, will they give me a car?
Seriously, WTF are we supposed to do here?
EVerything, and I mean everything, is now officially a craps game. And Bennie and Hank are sanding the corners of the dice to keep the house afloat.
On one hand, I'm glad that something was given to the automakers if for no other reason than giving a little credence to the lie that they (Fed/Treasury) actually care about mfg as well as financials. But this is Terry Schiavo territory as the money is a pittance and good 'til March while they're throwing Billions more at AIG.
Beaver writes:
"In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........"
So they finally found a use for El Toro that the locals will agree to?
It should have been Orange County International Airport, but the real estate developers and the NIMBYs put a stop to that...
Sev writes:
good point about the cars now being put out by chrysler prob not having the best build quality... Now, I would think every day was a day to get drunk.
Old GM employees would tell of stories of how the assembly line worker would place a bottle of Jack in the car as it went down the line... everyone would take a shot...don't worry about Monday or Friday...worry about cars made after 4 hours into the shift
I.E. his theory can easily be addressed scientifically.
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
It's an issue of degree, though, so it's difficult to prove one way or another.
There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency.
OTOH, I question the overall value of efficiency these days, too. Other things can be more important.
[You market-timing gamblers just gotta
share, huh]
I guess counting cards on a 21 table is still technically gambling. About the same kind of ganble as taking the other side on ~300DOW pts on the day before OpEx with a few unresolved issues that might somehow get addressed just before the bell.
I learned last year in Oct how to count cards after Ben snatched away a limit down open after an Asia beating @9A on OpEx.
ac writes:
"The intellectual class is then able to organise protest and develop critical ideas against free markets"
Except sometimes the 'movement' gets a little out of control and thugs just shoot the intellectuals and throw the bodies in mass graves (a la-1920s & '30s Russia, Germany, Austria, Eastern-EU)...
sm_landlord(Unrated) writes: \tBeaver writes: "In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........" So they finally found a use for El Toro that the locals will agree to? It should have been Orange County International Airport, but the real estate developers and the NIMBYs put a stop to that... sm_landlord | 12.18.08 - 10:54 pm | # Just wait until a solidly Democrat Congress gets the next round of BRAC recommendations.
If your wondering why the administation delay with GM and Chysler bailout. Look at the Ford plant of Brazil.... Great Video last 30 seconds is priceless.
Bernanke and Paulson's Opex shennanaigans are going to work up until the day that they don't. Who knows when they stop working, but one of these days an opex save is going to turn into LLD. I'm sure this time it will work, but bullshit, smoke and mirrors stops working when the market stops believing.
That's when an orderly move down in the market turns into a water-fall.
"Old GM employees would tell of stories of how the assembly line worker would place a bottle of Jack in the car as it went down the line... everyone would take a shot...don't worry about Monday or Friday...worry about cars made after 4 hours into the shift"
As an ex-mechanic for Ford I can verify that, piston's with no rings, coke bottles in the doors and that was back in the late 70's. somethings never change.
RE Insurance Companies and Investment results. They're regulated on a state level and required to maintain a certain level of capital to reserves and premiums. The capital levels can be threatened several ways -
Extremely poor investment results
Extremely poor loss history resulting in higher levels of loss reserves than anticipated.
Fortunately, the NAIC (National Assn of Insurance Commissioners) today ruled that life carriers can ease their capital requirements.
Lousy investments? No problem, you really don't have to have the previously acceptable level of capital.
Gee. Inadequate capital levels supporting a structure. Hoodathunk?
Frankly, if there's a major pandemic, my last conscious act will be to short the hell out of Met Life.
LAM writes:
"If your wondering why the administation delay with GM and Chysler bailout. Look at the Ford plant of Brazil.... Great Video last 30 seconds is priceless."
I'm sorry, your video has been censored for political correctness, and your post has been logged to your permanent record...
--Central Scrutinizer.
Oh no. It was quite painful. I remember that emergency 50bpts OpEx rate cut like yesterday... complete with all the ear-2-ear grins on bubblevision. bearly | 12.18.08 - 11:11 pm | #
Oh, I thought you were referring to the shorting holiday. I remember that painfully.
\tJapanese auto giant Toyota is likely to suffer its first-ever operating loss in the year to March 2009 due to a stronger yen and a global industry slump, news reports said Friday.
Toyota Motor Corp., which slashed its annual net profit forecast by more than half in November, is expected to downgrade its projections again at a year-end news conference on Monday, the Tokyo Shimbun said.
It would be Toyota's first operating loss since it began releasing earnings figures for the year to March 1941, the Nikkei business daily said.
"There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency."
Anyone watch Hanity Colmes tonight, Witney Tilson who was on 60min last Sunday. Was on Fox tonight explaining again in JSP terms how the next wave of real estate failures will be huge.
ha ... the auto workers got nothin' on the steel workers of the by gone days
big hoagie and a 6pack in the cooler ... belly up in an out of the way corner of the mill ... fall asleep on the john for a few hours ... then walk out with anything not bolted down at the end of the shift ...
From Jesse's Cafe' Americain: "Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.
Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations. "
Here's the thing - if they loan money and those guys still go BK, the Big Kahuna gets paid back first and certainly. This means a Federal loan moves somebody else down the ladder. Would you buy stock or bonds or loan money or even extend 30 day payment terms to them knowing this???
Very odd, I would have expected Asia to rocket-shot on this GM/Chrysler news. Hasn't happened yet. I guess they're gonna wait till 8:30am to put the boot on the throat of the short-sellers.
Thanks, that what I was thinking. They will further leverage until they are bankrupt from investment losses or expenses. Unless they get bailed out too.
It's got me more than a little spooked to think that in a few months, I"m going to look back at this Conjure Clock stuff and remember that at first I thought it was a joke, then a tiresome repetitive bit, then foreboding, then ominous and finally give in that the narration was happening all along.
Those updates have become like the Tell-tale Heart for this blog's floorboards.
"...at first I thought it was a joke, then a tiresome repetitive bit, then foreboding, then ominous and finally give in that the narration was happening all along."
Conjure says, "It's all of the above, don't you think?"
"Part of the never beginning or never ending now."
"I use Ontario all the time and think it is head and shoulders above LAX."
--sportsfan
I'm glad to hear that someone is using it. No doubt it is vastly superior to the LAX experience. Ontario does have considerable air cargo traffic. I use Long Beach or Burbank when possible to avoid LAX. And I live about 8 miles from LAX, the other airports are considerably farther away. The last serious commercial service at Palmcaster just shut down a few months ago due to lack of traffic.
I am looking at air services that fly light planes now for travel around California and Nevada. Anything to avoid LAX, but there is no other real choice for international flights.
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
I don't believe in simplistic free market theories because I believe free markets are inherently complex.
I work with complex systems too. Professionally I have been tasked with the job of providing "central management" for an existing complex system.
I've worked for companies whose entire purpose was to provide "central management" for existing complex systems.
In general my experience is that if the system is too complex or wasn't designed to be managed as a whole it can't be done. Everything has to be rebuilt from the ground up to support this type of configuration.
This is my view of the current situation in the US economy - yes the government can productively enforce rules and attempt to set goals, but they cannot coordinate and control the myriad of economic actors in such a way to generate a specific outcome in the aggregate economy.
I think the micromanagement techniques they're currently trying will fail, based on my experience.
The only thing I believe they can do is create some compelling collective goal (like a war for survival) that causes the individual economic actors to be motivated toward its achievement.
By free markets I don't mean markets with out rules; I mean markets where the participants make decisions (while following the rules) instead of the government.
I believe in free markets simply because I do not believe that the government has the ability to make better decisions than the individuals that make up these markets.
The knowledge needed to make these decisions is too specialized. The breadth and depth of this specialization is vastly beyond the capacity of the government to analyze and act on intelligently.
Lam
Interesting vid. Have any ideas on why UAW would not want this type of a plant? seems like it would need less people, but why don't they want the suppliers on the same line?
Broward Horne writes:
OTOH, I question the overall value of efficiency these days, too. Other things can be more important.
Broward Horne | Homepage | 12.18.08 - 10:57 pm
Resiliency will trump efficiency in this kind of environment.
Hank better have a lot of yarn to spin in the AM because so far the futures are not responding as expected. The buysiders won't be pleased if he lets a perfect tee-shot get sliced.
Adam Smith is not simplistic. Who the heck said that? His words on governance, institution, markets and the rule of law and look revolutionarily left compared with what we see today in practice.
As I understand it, Schumpeter wasn't condemning anything. He was trying to make an argument that capitalism would inevitably transition to socialism.
I think his position has merit simply in as much as it describes a starting condition, a process, and an outcome that can be validated or repudiated by real world events.
at 1057
you broward Horne responded with
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
It's an issue of degree, though, so it's difficult to prove one way or another.
There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency.
latetotheparty @ 11:19
WTX are you talking about?
Broward Horne @ 11:22
If you want teams of people to coorindate well, you need certain intersection of knowledge and a certain separation.
80/20 rule exists in nature for a reason.
I'm curious, which one are you?
Nate? Kurt? One of the wiccans?
Why do you torture yourself?
Move on.
Broward Horne
latetotheparty now says:
what the heck are you saying?
What is your point?
Do you agree with ac that Schumpeter describes a process where capitalism leads to socialism?
The problem with calling the end of the world is that you're only going to be right once in a million years and when your time comes, no one will be around to party with you.
The only good for which the free market model works flawlessly is the widget.
I have never complained about the salary of a baseball player. His performance is all public, his stats udpated daily. Even the "intangibles" are fairly obvious. But the guy who got $100 million from Merrill Lynch over the last few years, only to discover the profits were illusory? We can't afford to wait long enough for the market to make that correction. Clawback is a bitch.
Angry Customer
Im incensed, the 52-year-old Palo Alto, California, resident said. I feel like theyre making a calculated decision to make me go away as a customer.
The make me go away as a customer is the whole idea. I got my AT&T Universal bill this month with a notice in it saying they were going to raise the interest rates to 29% or something like that. If I dont like it I needed to opt out and they would close the account.
Well I have had the card for more than fifteen years and never carried a balance. I just said to myself this is whats coming for the folks who do carry a balance.
bearly writes:
[I do not think Ben can do that. It would have been Cox, I think]
Oh no. It was quite painful. I remember that emergency 50bpts OpEx rate cut like yesterday... complete with all the ear-2-ear grins on bubblevision.
bearly | 12.18.08 - 11:11 pm | #
I remember it like it was yesterday myself. I learned real quick what the new game in town was!
Tomorrow a set of equities options and futures contract expire. Many participants have expectations that a market absent rigging and jolts by administration officals is a more level playing field, and should be continuing to tumble with the fate of the economy. It's true.
But you can expect otherwise when you gamble in a rigged casino.
"The knowledge needed to make these decisions is too specialized. The breadth and depth of this specialization is vastly beyond the capacity of the government to analyze and act on intelligently."
--ac
Agreed. And a related observation: if a system is too complex to manage or understand, it is probably worth re-engineering - if for no other reason so that the people who re-engineer it can understand how it works. Sometimes there are opportunities to distribute responsibility to make it work better. Almost never do you discover that central management can do a better job than distributed control.
Perversely, many politicians seem to understand this, yet they are drawn into the illusion that temporary micromanagement can solve the problems.
If we start seeing serial municipal bankruptcies or worse, forcible rebonding Conjure can press the red button. There's nothing that says he can't press it again when California fails to bailout CalPERs (down at least 25% since June).
Three dressed squirrils quartered. One quart salted boiling water. Add 3 minced garlic cloves and one medium onion roughly chopped. Cut one celery stalk into quarter inch pieces. Add all ingredients and simmer for 3 hours.
Prepare 12 ounces fettichini with butter and cracked pepper. Strain simmered pot and disgard stock. Place on noodles. Serves four.
Do you agree with ac that Schumpeter describes a process where capitalism leads to socialism?
Also note that earlier in this thread I recommended reading a paper argues that Schumpeter's process may not represent reality based on the events that took place in Sweden.
So I'm not making any kind of blanket endorsement of his ideas.
That said the paper argues most of his ideas were validated (in this case) by real events - just not the final outcome.
"Tomorrow a set of equities options and futures contract expire. Many participants have expectations that a market absent rigging and jolts by administration officals is a more level playing field, and should be continuing to tumble with the fate of the economy. It's true."
Read tickerforum.org on opex stick-save days and you will read about the "chrysler building up *ss" and other choice phrases.
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True?
The only good for which the free market model works flawlessly is the widget.
There's no doubt that free markets are flawed. They're just the collective decisions of flawed human beings (and trading programs) after all.
The real question is whether free markets are more or less flawed than centrally managed markets (again, by "free market" I don't mean markets without rules; I mean markets where the participants set prices, not the government).
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Furthermore it seems to me that the evidence is strongly in support of the contention that the current problems we have are precisely due to attempts by the government to intervene in the credit markets to set prices and protect risk takers from consequences, thereby encouraging insane risk taking behavior.
The problems we have today are not due to free markets.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
We have witnessed yet another catastrophic failure of central management. This is not a failure of free markets because we do not have free markets for credit.
That which has always failed in the past has failed again.
Yes, but free market purists say the invisble hand is always right. Clearly, we'd be better off with a system that didn't allow individuals to waste such valuable resources. The problem is where to draw the line.
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True? 1 currency soon [yogi] | 12.18.08 - 11:54 pm | #
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
ac, assuming the problems we have today are merely symptoms or effects of the original management efforts, when do you think the attempts to centrally manage the growth of the economy began?
By which I mean what year or what administration?
Clearly they have been building for quite a while and some might even say they predate the Fed.
Dec. 18 (Bloomberg) -- Credit-card companies, facing an increase in defaults and a decline in consumer spending, are raising some rates, adding fees and cutting credit lines as the Federal Reserve makes the most sweeping changes to the industry in 30 years.
The provisions, approved by the Fed today and effective July 1, 2010, may curtail lenders ability to raise interest rates on current balances, require they apply payments to charges with higher interest rates first and extend the time customers have to pay bills before incurring late fees. The Office of Thrift Supervision, which regulates savings and loans, and the National Credit Union Administration approved the rules today.
Man, when Conjure speaks, people click. It took me 10 minutes to get a response from the Bloomberg web site...
On the topic, the main reason I use credit cards rather than debit cards is for the "protection" against fraudulent vendors. I never carry a balance, so I really do not know or care what the interest rate is on my cards. But when I see spurious charges, I complain, and if they are not removed, I cancel. What I mean by spurious is any charge to me for the use of the card.
I have had a couple of interesting discussions with CC companies in the last year. One of them stopped sending me statements, and I had to call every month to get the statements faxed out so that I could pay the balance. This went on for five months. Other CC companies have resorted to mailing the statements a few days before the due date. In these cases, I have had to do wire transfers to pay the balance on or before the due date.
It's getting to be a real PITA avoiding the fees, and I'm thinking about canceling some of these cards, but I don't want to screw up my FICO score in case I want to actually borrow money in the future.
The CC companies are in danger of putting themselves out of business. Yes, I know I am a "deadbeat" in their eyes, but they made the rules, and I am trying to play their game. What will they do if they stop getting a 2-3% cut of transactions? I'll just shift to commercial terms with the companies that I patronize if necessary, and they'll be out of the loop. The CC companies will be left with nothing but the bad risks if they keep playing this game.
RockyR writes:
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True?
1 currency soon [yogi] | 12.18.08 - 11:54 pm | #
The real question is whether free markets are more or less flawed than centrally managed markets (again, by "free market" I don't mean markets without rules; I mean markets where the participants set prices, not the government).
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Furthermore it seems to me that the evidence is strongly in support of the contention that the current problems we have are precisely due to attempts by the government to intervene in the credit markets to set prices and protect risk takers from consequences, thereby encouraging insane risk taking behavior.
The problems we have today are not due to free markets. ac | 12.19.08 - 12:02 am | #
Man, the people who argue that what is happening is a free market problem that needs centrally managed solutions are either confused or being purposefully manipulation. What we have had in America in recent history is not a free market. What we have had is a corrupt system of cronyism and half-assed socialism. Cronyism is not capitalism. Free markets can't thrive if political pull, connection, and influence are rewarded at the expense of talent and ability. Free markets can't thrive when corruption and thievery are allowed to go unregualted. In other words, free markets can't exist without rules.
Our system isn't broken because there are still people left here who want a freer market.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
ac, assuming the problems we have today are merely symptoms or effects of the original management efforts, when do you think the attempts to centrally manage the growth of the economy began?
By which I mean what year or what administration?
Clearly they have been building for quite a while and some might even say they predate the Fed.
sportsfan | 12.19.08 - 12:08 am |
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Further back, look at how the 1927 rate cuts caused insanity in the markets.
"On the topic, the main reason I use credit cards rather than debit cards is for the "protection" against fraudulent vendors. I never carry a balance, so I really do not know or care what the interest rate is on my cards. But when I see spurious charges, I complain, and if they are not removed, I cancel. What I mean by spurious is any charge to me for the use of the card."
I had my visa debit card stolen and had 10k in charges run up in a single night. Including one shop apparently thinking that someone purchasing 4 1k cash advances @ 11pm at night all within 15 minutes didn't require a call to Visa to verify.
I only carry bank cards now that specifically do not allow Visa charges on them. Trust me it's a LOT easier to fight fraudulent charges on a credit card then dealing with it after the fact including massive overrage charges on your bank account.
ac: They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
You're absolutely right...starting w/ Greenspan the markets were not allowed to make its own adjustments 'cause the fed thought it knew better...now we're hosed.
"The problems we have today are not due to free markets.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
We have witnessed yet another catastrophic failure of central management. This is not a failure of free markets because we do not have free markets for credit.
That which has always failed in the past has failed again.
Why can't we learn?
ac | 12.19.08 - 12:02 am | #
ac
much of what you say , in my humble opinion, is spot on
but i have to disagree with you when you fail to give weight to the...
old west capitalism, with the deception, opacity, and fraud that has taken place here in the USA and without a sheriff in town
free markets run wild and without regulation is a significant part of the problem, more than 50%
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Ross - too funny. But the squirrels in this part of Maryland are too damned skinny to do anything with except boiling up for stock. Could be ok on couscous. I'm thinking misery and a .22 might be a better combination.
Actually, this is not a frivolous question, what do cardinals eat? We've got some really scrappy ones around here and I wonder if it's about lack of food.
And what do those helicopter convoys overhead eat? Must be quite nutritional cos they keep on keeping on.
1 currency soon [yogi] writes:
By far the largest government intervention in the marketplace is the limited liability of corporations, and the protection of bankruptcy.
For those of us who aren't lawyers, please explain,
The corporate structure, called a "legal fiction", allows the corporation to violate the law, or default on its debts, while protecting the assets of the individual owners. Bankruptcy is welfare.
"I had my visa debit card stolen and had 10k in charges run up in a single night. Including one shop apparently thinking that someone purchasing 4 1k cash advances @ 11pm at night all within 15 minutes didn't require a call to Visa to verify."
--Pissed Off In California
Every time I put more than $5K on my Discover card or even $2500 on one of my Visas or Mastercards, I get a phone call from the issuer asking for confirmation. As embarrassing as that can be at certain times, I appreciate it. I would rather get called on a charge than get billed for a fraud.
Oddly, Amex never calls. Might have to cancel that one in self defense.
The entire history of law and civilization is an attempt to correct the waste of the free market, usually for the greater good.
Replace "free market" with "human behavior" and I agree. "Free market" is really just a specialization of "human behavior".
But my point is that we don't attempt to correct these problems by having a bureaucrat following every person around telling them how to live their lives.
We have laws and consequences for breaking them.
We grant people free will but punish them when they do something harmful.
Central management proposes to take away that free will because you as an individual are nothing more than dumb brainless cattle with destructive intentions and your decisions must be replaced with those of brilliant and morally enlightened bureaucrats like George W. Bush, Hank Paulson, and Ben Bernanke.
nova writes:
Obama is probably getting real time info fed continously by people doing CYA and manuvering for position. Obama, at this point, is probably more in the loop than Bush ever was or wanted to be.
nova | Homepage | 12.18.08 - 9:58 pm | #
I absolutely agree.
The Bush administration was about 'creating reality' not dealing with it.
Having said that, what can really be done at this point other than to reduce the pain by assuming crash position?
I also get calls with large purchases on my actual Visa card. Hmm, wonder why they didn't care so much when the money came directly out of my bank account?
Oh well, they ended up eating the whole amount in any case.
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Both Greenspan.
You could also add the 2002-03 cuts.
All Greenspan.
Do I detect a pattern here?
sportsfan | 12.19.08 - 12:22 am |
No... it happened in 1980s Japan. 1920s America. It happened prior to the depression of 1893.
It's been going on all over the world in recent years. Look at all the bubbles in Spain and the relation to ECB interest rate policy.
Our Dear President continues to build houses of cards on top of older houses of cards. His efforts to dump this on the next administration are understandable but somewhat callous in that he is probably burying our economy in debt so deep that we cannot get out in two or three generations. What a legacy! I really don't think he should build a library. A huge printing press would be more useful.
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Just last week, a number of people found they were short $50 billion due to a free market economy. If you read history AT ALL, you'd know that before 'centrally managed markets,' banks went bust all the time, as did insurance companies, and their creditors got nothing. The land was awash with patent medicine salesmen whose wares were inert or toxic. Actual free markets in most everything have been tried at one time or another and, as another poster alluded to, widgets are the only thing where the outcome was remotely beneficial or fair. Asymmetrical information, bargaining power and intelligence dooms most 'free market' transactions in sophisticated goods/services to being an inequitable transfer of wealth from the less sophisticated party to the more sophisticated party. I tire of armchair Friedmanites/Heinlenites who believe some sort of Über-Consumer-Reports could even this all out in the absence of government controls. Want to know what an ideal free market would have had in store for you? Picture yourself broke and illiterate.
Every time I put more than $5K on my Discover card or even $2500 on one of my Visas or Mastercards, I get a phone call from the issuer asking for confirmation. As embarrassing as that can be at certain times, I appreciate it. I would rather get called on a charge than get billed for a fraud.
Oddly, Amex never calls. Might have to cancel that one in self defense.
sm_landlord | 12.19.08 - 12:26 am | #
In the UAE, a lot of people had their credit card limits reduced without notice in the last couple of weeks.
They found out when their cards were rejected at the till.
BTW, the calls from your credit card company when you charging pattern changes are not acts of altruism.
Credit card companies are held to strict liability laws; the law limits consumer liability for credit card fraud to $50 and many credit cards, including all Visa and MasterCard credit cards, now have zero liability policies (your liability for unauthorized transactions is $0). In addition, if you notice suspicious charges on your credit card statement such as double billing or an incorrect charge, the credit card company is obligated to investigate if you send in a written request within 60 days.
For debit card fraud, your liability is $50 if you notify the bank within two days of noticing the fraudulent charges. After two days, your liability increases to $500, and up to your entire account balance after 60 days.
No doubt there are idiot bureaucrats, and there is no guarantee that a planner won't be corrupt, greedy, lazy... (There are hedge fund managers with those traits) In theory though, the planner's actions are controlled by the democratic process, which is why we have public hearings whenever the electric company wants to raise rates. We have laws that say the electric company can't deny you service because they don't like you, and they must take careful steps before cutting you off. Maybe the operation of our banking system or our auto industry is too important not to regulate as a utility. Baseball can stay a perfect competitive model.
Now till Jan. 20th is a scary time. Bush is 50/50 likely to revert to his animal torturing youth and coke/booze snorting 20s, and enact a big FU on the economy. Nothing to prevent it, and his history tells us it could happen. It is certain the Cheney wouldn't stop him, and nobody else can.
As far as I can tell, the $350B is completely unaccounted for and the other $350B could be gone in a day - with no court review possible according to the law Bush/Paulson demanded.
Bush could buy a bank, TARP loan that bank $350B and then wire the proceeds offshore in one day.
Balance of Powers, our ass. An a Fed that is completely out of control of any branch of government - with the possible exception Congress could abolish it, but never would.
Ah, yes, the Panic of '93 (which would be before the Fed). I always wanted one of those last Carson City dollars.
I agree the centralized management concept has been around a very long time. One might say it's almost an essential aspect of most governments in one form or another.
Control of the individual has always been the goal of government, as it was also for the spiritual leaders of different epochs.
Markets are the new opiate of the masses.
Follow the ticks, up and down. They're mesmerizing, aren't they?
Balance of Powers, our ass. An a Fed that is completely out of control of any branch of government - with the possible exception Congress could abolish it, but never would. Hang on suckers, it's going down. - JimPortlandOR | 12.19.08 - 12:36 am | # If Congress made the bed we are lying in then the Fed stuffed the mattress.
Jim - as one among many that wasted too much time writing his elected representatives, I think you're missing around 535 parts of the problem, give or take.
Dec. 19 (Bloomberg) -- The Bank of Japan cut its benchmark interest rate to 0.1 percent and introduced new ways of pumping money into the banking system to bolster the ailing economy
Dead serious about contracts. Why waste all that money with lawyers, judges, courtrooms. Just a bunch of bureaucratic parasites. You have your market remedies: self help or never do business with the other party again.
Compounding matters, weak labor markets and tight credit aren't the only factors depressing demand. Using a new measure of house prices, the Fed now says consumers have lost a staggering $7.1 trillion in net worth since the third quarter of 2007. That drop exceeds the $4.2 trillion decline after the 2000 stock market collapse, and more losses in the fourth quarter could lift that total to more than $10 trillion.
the absence of any element of an "insurable interest" when writing credit default swap "insurance" is a prime example of the free market run amuck
capitalism becomes a casino and capital becomes mis-allocated into non-productive but handsomely rewarded endeavors without some degree of management or regulation
i believe in markets, i believe in entrepreneurial risk taking and profit, i believe in capitalism...that is moderated by social democratic principals..
otherwise my friend the game ends like it always has...
with an incredible concentration of wealth and power... a concentration far beyond that we face now
could lift that total to more than $10 trillion Is that a lot? MLM | Homepage | 12.19.08 - 12:46 am | # Depends on whether it is being quoted in old dollars or the new pesobucks.
"By free markets I do not mean markets without rules."
Recall the Wealth of Nations friends. Adam Smith said you can't have functioning markets without property rights and protection from fraud. Trust would be shattered. Sound familiar?
We are headed to either a global currency and central bank or regional trading blocs headed towards a 3rd World War. Take your pick....
Ah, yes, the Panic of '93 (which would be before the Fed). I always wanted one of those last Carson City dollars.
The 51st congress attempted to boost the economy by engaging in inflationary policy.
Sound familiar?
Is it coincidental that inflationary monetary policy precedes all these catastrophic economic events?
Or is it the free markets? Which out of sheer baffling coincidence only blow up when some government agency attempts to promote economic growth with credit expansion.
1 currency soon [yogi] writes: Dead serious about contracts. Why waste all that money with lawyers, judges, courtrooms. Just a bunch of bureaucratic parasites. You have your market remedies: self help or never do business with the other party again.
Geez, yogi, don't you think national and international commerce might take a hit or two if contracts could not be enforced except by breaking knees or shunning the evildoers?
From the pigs moutrh to the dawgs ears.
What?? On OPEX day?? They would never do a thing like that!!!
3?
Rob Dawg(Supercalifragilisticexpealodocious) writes:
| \t12.18.08 - 9:17 pm | # 
How did you hack your rating?
\tFrom the pigs moutrh to the dawgs ears.
\t Rob Dawg | \t \t \tHomepage
"Bush said he doesnât want to âdump amajor catastropheâ on his successor, Barack Obama."
Now that's some funny shit.
cd
Just how many depth charges are currently descending and will blow in late January, Q1,2....
C
"The Treasury ...may lend to the automakers through their credit arms... to avoid having other industrial companies line up for access..."
Boy, that should fool a lot of those industrial companies!
Clearly, the Bush administration is going to keep to the bitter end the muddled thinking that's worked so well up to this point.
Every day I move a little further into Nassim Taleb's camp: the worse is yet to come.
'Bush said he "doesn't want to dump a major catastrophe" on his successor, Barack Obama.'
Now that's some funny shit.
cd
Rob Dawg(Supercalifragilisticexpealodocious) writes:
| \t12.18.08 - 9:17 pm | #
\t Rob Dawg | \t \t \tHomepage
How did you hack your rating?
jus me | 12.18.08 - 9:19 pm | #
It's in Ken's source code. I'm amused.
I guess Cerebus/Chrysler's threat to shut down now called the admin's bluff!
Well, I'm all for an orderly reorganization.
I don't believe Bush will offer it in a way GM or the UAW will accept.
I gather my current share is some $26,000
Where in the world are our bailout dollars going?
Sorry. Page not found.
that I've agreed to pay as a taxpayer to bail out everyone richer than me to date.
If I just send the Federal Reserve Private Bank my personal check for that much, can I be exempt from any further taxes?
If not, anyone want to plan a meeting at Boston Harbor over tea sometime soon?
Now Cerebus is a bank Wahoo!
If not, anyone want to plan a meeting at Boston Harbor over tea sometime soon?
me
Let's wait until hotel rates in Boston have crashed...
Isn't Dan Quayle part of Cerebus' brain trust?
from Bloomberg:
"The talks have been difficult in part because Treasurys expertise is in banks, not manufacturers, the person said."
Why does this remind me of Willie Sutton?
Mr Bush; The Enabler
This is good. Life is good. Nobody needs to read anymore economics blogs until early March.
Serious question here: So the Fed is getting in to quantitative easing. One fear is that this will be inflationary because the Fed will not be able to sell the assets fast enough should inflation appear. It occurred to me that the Fed might not be able to sell the assets for what it paid for them, if for no other reason than because interest rates have gone up. The creation of money by buying assets might be irreversible if the assets go down in value.
Let alone if they were crappy, overpaid-for assets to begin with.
Does the Fed have any mechanisms, besides selling its own debt and raising the Fed funds rate, for forcibly contracting the money supply?
Comments?
Does the Fed have any mechanisms, besides selling its own debt and raising the Fed funds rate, for forcibly contracting the money supply?
Original Eric | 12.18.08 - 9:33 pm | #
Jack up the reserve requirements?
cd
From the "It was the Acid what Wrote the Headline" Department:
Bloomberg: Hedge Funds Trim Losses in 2008...
Hedge Funds to Stem Losses in 2009, GFIA’s Peter Douglas Says - Bloomberg.com
WTF?! Trimmed compared to when? 11 days to go in the Q4 redeeeemmmption song. Then lag effect on reporting. And the obfuscation and lying in unison until you can no longer get away with it. And the arbitrary changing of redemption gates and misc other refusals.
Far. Frkn. Out.
C
Right you are. Can the Fed do that without triggering another credit crisis?
I thought idled automobile manufacturing plants were a good thing. They can be re-tooled quickly to manufacture bicycles, since we won't have any money to buy gas at any price.
In a way it is ironic, you look at 1970's video of Chinese people on bicycles while we drove 5500 lb US manufactured tanks. I'm afraid in a few years they will get the last laugh.....
Dan Quayle:
From his own web site:Currently, Dan Quayle is Chairman of Cerberus Global Investments, LLC (Cerberus), President of Quayle & Associates, and serves on the boards of directors of IAP Worldewide Services, Inc., K2, Inc and Aozora Bank, Ltd in Tokyo . He makes frequent public appearances and speeches, and writes a nationally syndicated weekly newspaper column.
Dan Quayle joined the Cerberus Advisory Board in 2000, and currently serves as Chairman. Cerberus is one of the world's leading private investment firms, with over $16 billion in committed capital and offices in New York, Chicago, Los Angeles, Atlanta, London, Baarn,(The Netherlands), Frankfurt, Osaka,and Tokyo. As Chairman of Cerberus Global Investments, Dan Quayle has been actively involved in new business sourcing and marketing for Cerberus in North America, Asia and Europe. His extensive global network of public sector and private sector decision-makers, combined with his investment expertise, have significantly contributed to the growth of Cerberus. Dan Quayle has offices in New York and Arizona; He regularly travels throughout the US, Europe and Asia to meet with the heads of investment banks, corporations, buyout shops, potential investors, and other business leaders. His responsibilities include (1) ensuring that Cerberus stays at the forefront of deal flow activity, (2) facilitating Cerberus' entry into new markets and industries, and (3) fostering potential transaction partnerships.
Dan Quayle : Biography
Things that will be less expensive to do, or buy, next year.
The reverse
Mel writes:
I don't believe Bush will offer it in a way GM or the UAW will accept.
I agree. Since GM and the UAW have so many other offers to choose from, they can afford to be picky about the terms of the deal.
~~
Currently, Dan Quayle is Chairman of Cerberus Global Investments, LLC (Cerberus),
He will next become a potatoe farmer......
Currently, Dan Quayle is just another money pimp.
Cerebus owns extreasury secretary Snow.
What a relief for Mexico as production increases there as plants are torn down in the USA. I read that mexican workers are paid $3 per hour. Whew, what a relief to know my car will be built by starving third world people. No worry about the airbags now.
Dan is really a whore. Selling it in the boardrooms. Selling it at the club. Selling it over the phone (cheaper access).
I just read the following paper and found it quite informative and relevant. I'd strongly recommend it to anyone who's got some spare time to do some reading:
Where Schumpeter was nearly Right the Swedish Model
and Capitalism, Socialism and Democracy
Cause the other industrial companies are stupid, and can't create credit arms?
Is the USG going to take a 80% ownership position in GM and Chrysler in return for the loans?
Oh Gee
He has to bail-out to be fair to Ford whoopee.
Lots of airlines were faced with competition in Ch.11.
But Ford couldn't compete. Well they could choose BK.
What does it take to buy a bank? All the little georgia drecksters could be had for a song.
Or maybe if you have a finacing arm like Sears would that be enough.
OT was it on this blog that someone pointed out that Starbucks has > 100000 employees plus I am sure a carload of suppliers. Is it too big to fail??
Dan is really a whore. Selling it in the boardrooms......
Legal prostitutio
Well, now the Mexicans have no reason to come here. This will benefit the economy by allowing students to cut grass and do landscaping during the summer.
Merry Christmas, Rick Wagoner.
Better than the lump of coal you deserve.
GM and Chrysler are headed towards an eventual bankruptcy. Either an announcement will be made in coming weeks, or - after throwing taxpayer money down a rathole - it will occur in the next year.
ova, it is more productive than smoking grass.
March?
I don't think Chrysler will survive until March. If/when the factories re-open and the UAW's walk outside the jobs bank blinking in the late winter sun, they are going to find the economic landscape has changed.
Conjure Clock says it will be so. We will have hit 12:00 on the Global depression clock and the bond clock.
Just think of it.
December will be remembered as "the good times." So pop a champagne cork, or pour a single malt. It's getting late.
My guess is Chrysler and GM still stiff their suppliers, piss away the money, and set a record for the largest sales drop in automotive history.
A 20 year boom on wall street and the majority are flat broke. Same thing as 1929.
Mr. Bernanke, no more prosperity. We can't afford it.
Cheap money ain't cheap.
As a former landscape worker I can say that one is required to do the other.
lafleur, conjure's clock says no such thing. it can turn backwards.. though probably will not.
"Bob_in_MA writes:
"The Treasury ...may lend to the automakers through their credit arms... to avoid having other industrial companies line up for access..."
Boy, that should fool a lot of those industrial companies! "
What stops any business including mom & pops from starting a credit "division" to qualify for TARP?
What stops any business including mom & pops from starting a credit "division" to qualify for TARP?
Probably the fact that when Pops calls Paulsen he finds that he never is available to talk?
Ever get the feeling we are moving backwards?
http://www.professorfekete.com/articles%5CAEFBACKWARDTHINKING.pdf
If we can print our way out of this mess why can't the rest of the world?
What stops any business including mom & pops from starting a credit "division" to qualify for TARP?
Not One Cent | Homepage | 12.18.08 - 9:49 pm | #
Nothing, but Pops better be a member at Henry Paulson's Country Club.
cd
This is the part of the hospital stay where the harvest team is in the operating room, and anesthiology is pumping the patient full of pressors and fluid in an attempt to delay multi-organ system failure. Kidneys, liver, heart,pancreas and brain all failing, but technically still alive. Just long enough to harvest the corneas and bones at this point.
Long wooden dowels inserted into the legs and arms to give structure for the coffin.
The outcome is not in doubt anymore.
Anybody want to call it?
Oh well, bail out the worker please.
jo6pac
My guess is Paulson has at least 5 phone numbers.
The official office number answered by his aide(s)
A land line with a number that no more than a 100 people have. Still answered by an aide.
His cell.
The cell his aide carries with the number that only 20 people have.
His Virgin Mobole throw away for his hooker.
BTW the PDF I linked to above discusses Sweden's use of heavily regulated credit markets as well as its efforts to direct credit to specific sectors of the economy.
If anybody's interested in that subject.
ac,
I like the Denmark model prior to the The Anders Fogh Rasmussen Government,
and minus the royal family.
Ponyless NJ, maybe you are right.
I can't imagine what it would take for the clock to move backward.
A rift in the space-time continuum. An opening of a wormhole into the 7th dimension. A glimpse of string theory. Fiscal responsibility.
Whatever comes first, and is most likely...,
This is the part of the hospital stay where the harvest team is in the operating room, and anesthiology is pumping the patient full of pressors and fluid in an attempt to delay multi-organ system failure. Kidneys, liver, heart,pancreas and brain all failing, but technically still alive. Just long enough to harvest the corneas and bones at this point.
Long wooden dowels inserted into the legs and arms to give structure for the coffin.
The outcome is not in doubt anymore.
Anybody want to call it?
Doctor Detroit | 12.18.08 - 9:51 pm | #
"'tis only a flesh wound."
cd
Circling the Drain writes:
"Bush said he doesn "want to "dump amajor catastrophe" on his successor, Barack Obama."
Now that's some funny shit.
....
What about the zero percent thingy ... you think Obama wanted to come in with no amunition?
Obama is probably getting real time info fed continously by people doing CYA and manuvering for position. Obama, at this point, is probably more in the loop than Bush ever was or wanted to be.
lafleur, no, none of the things you mentioned are possible. you gotta think outside of the box. i am sure there is something that is doable.
They have to bail them out or the stock market goes tits up two days before Xmas...
Bush would forever be known around family holiday tables as the man who screwed America...
ova writes:
My guess is Chrysler and GM still stiff their suppliers....
Sounds likely and it appears someone higher in my food chain realizes this, out back, where masses of cars would wait, a large and increasing contingent of supplier container trailers has formed...so far I would guess at current reduced production maybe a month or more of parts...
What about the zero percent thingy ... you think Obama wanted to come in with no amunition?
norma | 12.18.08 - 9:55 pm | #
You've lost me...fed interest rate policy isn't an Exectuve Branch tool.
G. W. Bush, OTOH, is a bona-fide Executive Branch Tool.
cd
I don't think the market will care too much about bailout. If it does, I'll buy more SDS
toyotaJoe | 12.18.08 - 9:59 pm |
Interesting. I wonder if Toyota and others are working the phones with suppliers? Trying to make sure they are at the top of the list... As in "Look, we both know they are going to screw you so take care me..."
I've walked from here. I'm sorry Tanta, I lacked your patience.
Trade well - - -
I don't believe Bush will offer it in a way GM or the UAW will accept.
------------------
I agree. Since GM and the UAW have so many other offers to choose from, they can afford to be picky about the terms of the deal.
Kyle | 12.18.08 - 9:39 pm | #
being picky about the price of a life raft turned out real well for dick fuld and lehman brothers.
NW
What must Ford be thinking?
"Wait, why didn't we beg for a piece of that pie?"
Saw a bit in the WSJ, why doesn't the Ford Foundation help bail out FMC? Good question.
mmckinl writes:
They have to bail them out or the stock market goes tits up two days before Xmas...
Bush would forever be known around family holiday tables as the man who screwed America...
If that were to happen, Bush would be lovingly known around my table as the man who gave away $15 billion less than we were afraid he might.
The only thing Bush will ever be lovingly know for is leaving.
This is great news!
I've had my eye on a 2008 PT Cruiser. Maybe I can get it for invoice minus 17K., with no warranty.
Popeye - you could have even more fun throwing up false flags and see who gets burned in Q1 before people start trying to theive your IP again.
C
Indianapolis Jones | 12.18.08 - 10:06 pm | #
If your going to pay that much - hold out for the 2 for the price of 1 deal
Uh, i before e except after C.
C
ac,
I like the Denmark model prior to the The Anders Fogh Rasmussen Government,
and minus the royal family.
rps
FWIW not knowing much about Sweden I always kind of had the impression that it was an example of a "successful" socialist country.
The paper above seems to indicate that during it's heavily socialized, centrally planned phase (which included heavily regulated credit markets and mandatory savings plans) Sweden's economic performance was poor compared to other industrialized countries, and this was part of the reason the move toward socialism was abandoned.
It makes me question why such policies are being advocated as a solution to the problems we currently have.
popeye, thats too bad. i really wish there were other theories discussed here other than doom and gloom. How can you tell when the apocalypse has subsided if everyone you talk to is sealed up in a bunker and is sure the apocalypse is permanent? Good luck.
i really wish there were other theories discussed here other than doom and gloom.
Okay, how about Doom or Gloom?
Bush would be lovingly known around my table as the man who gave away $15 billion less than we were afraid he might.
Tyler
~~~~
Pity ...
We're all banks now!
Sure. But some banks are more equal than others.
I always kind of had the impression that it was an example of a "successful" socialist country.
If we keep up the financial shenanigans, we're going to be an "unsuccessful" socialist country.
What is the moral hazard here? Oh wait, let's see... An end game where US Auto Manufacturers sell below costs - subsidized by gubmint? Consumers like me who never, ever buy an "American" (re: UAW, Big 3) car ever again? Why would I ever pay twice for a crappy product - first time with a gun to my head (taxes), second time by choice (on the lot)? No thanks, let the Big 3 sink.
This will not work.
Have to wonder about the quality of the last 6 months or so of Chrysler vehicles. It's not like they were ever tops of the JD Power, but towards the end of any dying company, or one headed for BK / restructuring things get weird employee-wise.
Like going to eat at a restaurant that is about to close for good. I'd be uneasy in a 2008 PT Cruiser, myself Indy Jones. Or any Chrysler vehicle.
More from the Bloomberg headline writers' disconnect department:
Australia, New Zealand Dollars Sink ...
Australia, New Zealand Dollars Sink on GE Outlook, Global Slump - Bloomberg.com
Let's see:
CURRENCY\tVALUE\tCHANGE\t% CHANGE\tTIME
USD-JPY\t89.1600\t-0.2750\t-0.3075%\t21:53
USD-HKD\t7.7501\t0.0002\t0.0019%\t21:53
AUD-USD\t0.6902\t0.0032\t0.4658%\t21:53
NZD-USD\t0.5825\t-0.0008\t-0.1457%\t21:53
Hmm, funny kind of sinking when the AUD is up 0.4% and the NZD is down 0.1% rounded. That's not sinking. It's bobbing.
C
News from Mass and MN:
Polaroid announces BK, blames Petters fraud.
Polaroid Files For Bankruptcy, Citing Petters Case - wcco.com
Petters was MN's own mini-Madoff.
"Oh well, bail out the worker please."
Good luck with that jo6pac, those workers are going to be outsourced. This ain't got crap to do with helping the workers anymore then bailing out the banks had to do with helping Herby Homowner.
....CR: "We're all banks now..."
SubPrime Banks, but banks, just the same.......
Obama, at this point, is probably more in the loop than Bush ever was or wanted to be.
nova | Homepage | 12.18.08 - 9:58 pm | #
Only if those who are in position are their due to privalage or performance. Connections or competence. More Gates, lesss Paulson is a good sign.
WTF?! Trimmed compared to when?
Don't underestimate the Power Of Perception!
Once again I find myself amazed by Schumpeter's ability to predict current events back in the 1940s:
In his vision, the intellectual class will play an important role in capitalism's demise. The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for which they are not directly responsible and able to stand up for the interests of strata to which they themselves do not belong. One of the great advantages of capitalism, he argues, is that as compared with pre-capitalist periods, when education was a privilege of the few, more and more people acquire (higher) education. The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets and private property, even though these institutions are necessary for their existence. This analysis is similar to that of the philosopher Robert Nozick, who argued that intellectuals were bitter that the skills so rewarded in school were less rewarded in the job market, and so turned against capitalism, even though they enjoyed vastly more enjoyable lives under it than under alternative systems.
Capitalism, Socialism and Democracy
Paulson, quoted by Reuters: "President Bush has been pretty clear that, since Congress has failed to act, he wants to take steps to avoid a failure," Paulson said at a Business Week forum. But, he added: "If the right outcome is bankruptcy, then it's better to get there through an orderly process."
And what could be more orderly than various high level officials mumbling various possible vague scenarios to the press, rather than presenting a final plan as a fait accompli? Honestly, these people are going to be screwing things up right until their very last day. 'Act to fail,' indeed.
Another options ex Friday explosion upwards? Best to announce it later Friday for maximum effect.
So why are the futures drooping? The C downgrade? That's a joke. C is invincible as long as the Fed has unlimited financial authority.
Even Japan is set to drop rates. To what I don't know. And they are buying assets like Ben.
I would expect limit UP, and welcome it!
Disclaimer - I bot SPY calls this PM.
Disclaimer - I bot SPY calls this PM.
i covered SPG shorts... Wednesday!
good point about the cars now being put out by chrysler prob not having the best build quality, In normal times the standard is not to buy a car on monday or friday. Now, I would think every day was a day to get drunk.
Maybe I can get it for invoice minus 17K., with no warranty.
Actually Chrysler's limited Lifetime Warranty, which of course is the same thing.
The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets
An interesting blanket statement which automatically condemns any disagreement.
"Disclaimer - I bot SPY calls this PM.
i covered SPG shorts... Wednesday!"
You market-timing gamblers just gotta
share, huh? Who do you think cares?
Re: Recent Chrysler build quality.
It's worth noting that, in the recent results from the Insurance Institute for Highway Safety, Chrysler was the "only major manufacturer without a Top Safety Pick. Chrysler and Dodge models are among those that would have been Top Safety Picks if their seats and head restraints had also earned Good ratings."
So even when they're built to spec, I'd rather be riding in something else.
bearly - C is invincible? Wow, I never knew.
BWAHAHAHAHA, nothing can stop me now.
Broward - I know. Perception management is TBTF.
C
"The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces discontent. The intellectual class is then able to organise protest and develop critical ideas against free markets"
An interesting blanket statement which automatically condemns any disagreement.
Broward Horne
As I understand it, Schumpeter wasn't condemning anything. He was trying to make an argument that capitalism would inevitably transition to socialism.
I think his position has merit simply in as much as it describes a starting condition, a process, and an outcome that can be validated or repudiated by real world events.
I.E. his theory can easily be addressed scientifically.
In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........
they probably all will need to be reglazed........
also, on The PBS NewsHour someone mentioned that 25% of Chrysler customer's can't get financing....
well, they probably shouldn't have been able to get financing previously....
Ralph Cramdown writes:
Re: Recent Chrysler build quality...
So even when they're built to spec, I'd rather be riding in something else
Kinda like the 21st Century's answer to the Yugo?
>Isn't Dan Quayle part of Cerebus' brain trust?
Nice oxymoron squared. You win derivative of the day.
since GM needs 4 billion thru Dec31, and only owns 49% of GMAC, I hope the guys at Tsy have figured they need to double the payment to GMAC.make it $8billion , hank.
I weep for Eric's puts.
ac writes:
"Once again I find myself amazed by Schumpeter's ability to predict current events back in the 1940s:"
Not to knock Schumpeter, but I don't think he was predicting. I think he was observing what was going on around him at the time. Based on stories my father told me, what we are going through now is not unprecedented, and rhymes with the 30s and 40s in many ways. The "isms" had different names back then, but the (fewer) people who thought seriously about this sort of stuff were seeing similar manifestations of human nature and social organization.
Efforts by GMAC LLC to turn itself into a bank suffered a sharp setback Thursday after Pacific Investment Management Co. declined to tender its bond holdings as part of a massive debt restructuring at GMAC, a person familiar with the matter said.
White House Says Help For Auto Makers Is Near - WSJ.com
If we're all banks now, I declare a bank holiday!
You market-timing gamblers just gotta
share, huh? Who do you think cares?
If one of the 230 visitors reads my comment it is worth it. Thanks for reading
back on topic doesn't Cerberus own all of GMAC? How will this help GM's operations. A GMac loan to Gm.
"Lost another one to Ditech"
US taxpayer circa 2008
I figure this is all to prevent riots and that makes sense.
My question is, if I send paperwork and $50 to GMAC for an account, will they give me a car?
Seriously, WTF are we supposed to do here?
EVerything, and I mean everything, is now officially a craps game. And Bennie and Hank are sanding the corners of the dice to keep the house afloat.
On one hand, I'm glad that something was given to the automakers if for no other reason than giving a little credence to the lie that they (Fed/Treasury) actually care about mfg as well as financials. But this is Terry Schiavo territory as the money is a pittance and good 'til March while they're throwing Billions more at AIG.
Beaver writes:
"In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........"
So they finally found a use for El Toro that the locals will agree to?
It should have been Orange County International Airport, but the real estate developers and the NIMBYs put a stop to that...
NIMBYs
WHat's that
Sev writes:
good point about the cars now being put out by chrysler prob not having the best build quality... Now, I would think every day was a day to get drunk.
Old GM employees would tell of stories of how the assembly line worker would place a bottle of Jack in the car as it went down the line... everyone would take a shot...don't worry about Monday or Friday...worry about cars made after 4 hours into the shift
just in time for op ex
I.E. his theory can easily be addressed scientifically.
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
It's an issue of degree, though, so it's difficult to prove one way or another.
There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency.
OTOH, I question the overall value of efficiency these days, too. Other things can be more important.
[You market-timing gamblers just gotta
share, huh]
I guess counting cards on a 21 table is still technically gambling. About the same kind of ganble as taking the other side on ~300DOW pts on the day before OpEx with a few unresolved issues that might somehow get addressed just before the bell.
I learned last year in Oct how to count cards after Ben snatched away a limit down open after an Asia beating @9A on OpEx.
ac writes:
"The intellectual class is then able to organise protest and develop critical ideas against free markets"
Except sometimes the 'movement' gets a little out of control and thugs just shoot the intellectuals and throw the bodies in mass graves (a la-1920s & '30s Russia, Germany, Austria, Eastern-EU)...
sm_landlord(Unrated) writes:
\tBeaver writes:
"In SoCal, there is a big empty, unrebuilt Marine Base called El Toro...the Japan car guys, and I guess the American car guys, are arranging to park 1000's and 1000's of unsold vehicles at El Toro........"
So they finally found a use for El Toro that the locals will agree to?
It should have been Orange County International Airport, but the real estate developers and the NIMBYs put a stop to that...
sm_landlord | 12.18.08 - 10:54 pm | #
Just wait until a solidly Democrat Congress gets the next round of BRAC recommendations.
.$3 per hour. Whew, what a relief to know my car will be built by starving third world people. No worry about the airbags now.
I've heard stories about them loading the airbag's with rocksalt and pepper spray.
Stupidest "banker" wins.
Urban Legend writes:
I've heard stories about them loading the airbag's with rocksalt and pepper spray.
What the hell--let's just call it 'Saran gas' & called it even?
NIMBY = Not In My Backyard
Refers to local residents who are against development proposals (Especially enormous loud traffic generating things like international airports).
And the advanced version they teach in City Planning school -
BANANAS = Build Absolutely Nothing Anywhere Near Anyone
NASCAR settles $225 million suit with ex-official
The article requested is no longer available.
Ben snatched away a limit down open after an Asia beating @9A on OpEx.
bearly | 12.18.08 - 10:57 pm | #
I do not think Ben can do that. It would have been Cox, I think.
When did the BBC start hiring staff from The Onion?
BBC NEWS | Business | The BBC box hits the Big Apple
If your wondering why the administation delay with GM and Chysler bailout. Look at the Ford plant of Brazil.... Great Video last 30 seconds is priceless.
DETNEWS | WebVideo | Ford's most advanced assembly plant operates in rural Brazil
Also efficient shipping from the Rain Forrest
Bernanke and Paulson's Opex shennanaigans are going to work up until the day that they don't. Who knows when they stop working, but one of these days an opex save is going to turn into LLD. I'm sure this time it will work, but bullshit, smoke and mirrors stops working when the market stops believing.
That's when an orderly move down in the market turns into a water-fall.
"BANANAS = Build Absolutely Nothing Anywhere Near Anyone"
--Beach Blvd
Which is why we have completely useless airports in Ontario and Palmcaster that no one uses, and LAX is bursting at the seams and cannot be expanded.
"Old GM employees would tell of stories of how the assembly line worker would place a bottle of Jack in the car as it went down the line... everyone would take a shot...don't worry about Monday or Friday...worry about cars made after 4 hours into the shift"
As an ex-mechanic for Ford I can verify that, piston's with no rings, coke bottles in the doors and that was back in the late 70's. somethings never change.
I weep for Eric's puts.
Lionel | 12.18.08 - 10:51 pm | #
I feel the love, man. They're March puts though (except for HIG, which are June). So I have time.
OT to Brontide from last thread.
RE Insurance Companies and Investment results. They're regulated on a state level and required to maintain a certain level of capital to reserves and premiums. The capital levels can be threatened several ways -
Fortunately, the NAIC (National Assn of Insurance Commissioners) today ruled that life carriers can ease their capital requirements.
Lousy investments? No problem, you really don't have to have the previously acceptable level of capital.
Gee. Inadequate capital levels supporting a structure. Hoodathunk?
Frankly, if there's a major pandemic, my last conscious act will be to short the hell out of Met Life.
Proceeds to Tanta's Scholarship fund.
[I do not think Ben can do that. It would have been Cox, I think]
Oh no. It was quite painful. I remember that emergency 50bpts OpEx rate cut like yesterday... complete with all the ear-2-ear grins on bubblevision.
LAM:
Nice vid ...gonna forward to my co-workers
I can't believe we've made it this far without any Corinthian leather jokes.
"As an ex-mechanic for Ford I can verify that, piston's with no rings, coke bottles in the doors and that was back in the late 70's."
--Anonymous
Did you hear the stories about the last year of production of Cameros at the Van Nuys, CA plant?
Cig butts and garbage under the back seats...
LAM writes:
"If your wondering why the administation delay with GM and Chysler bailout. Look at the Ford plant of Brazil.... Great Video last 30 seconds is priceless."
I'm sorry, your video has been censored for political correctness, and your post has been logged to your permanent record...
--Central Scrutinizer.
Oh no. It was quite painful. I remember that emergency 50bpts OpEx rate cut like yesterday... complete with all the ear-2-ear grins on bubblevision.
bearly | 12.18.08 - 11:11 pm | #
Oh, I thought you were referring to the shorting holiday. I remember that painfully.
I'd think shorting St Paul Travelers would be the ultimate twofer one with a red umbrella thrown in as a bonus.
Toyota to suffer first full-year loss: reports\t
\tJapanese auto giant Toyota is likely to suffer its first-ever operating loss in the year to March 2009 due to a stronger yen and a global industry slump, news reports said Friday.
Toyota Motor Corp., which slashed its annual net profit forecast by more than half in November, is expected to downgrade its projections again at a year-end news conference on Monday, the Tokyo Shimbun said.
It would be Toyota's first operating loss since it began releasing earnings figures for the year to March 1941, the Nikkei business daily said.
Toyota to suffer first full-year loss: reports
I believe cig butts and McDonald's wrappers were an installable option for Camaros, highly in-demand by the target demographic.
CONJURE'S GLOBAL DEPRESSION CLOCK
The time is--
11:59:51
Bloomberg.com
Broward Horne @10:57 pm
"There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency."
WTX are you talking about?
Anyone watch Hanity Colmes tonight, Witney Tilson who was on 60min last Sunday. Was on Fox tonight explaining again in JSP terms how the next wave of real estate failures will be huge.
This is really starting to hit home(s)
ha ... the auto workers got nothin' on the steel workers of the by gone days
big hoagie and a 6pack in the cooler ... belly up in an out of the way corner of the mill ... fall asleep on the john for a few hours ... then walk out with anything not bolted down at the end of the shift ...
CONJURE'S GLOBAL DEPRESSION CLOCK
The time is-- 11:59:51
mp | 12.18.08 - 11:18 pm | #
Did I miss the Bond Implosion update?
WTX are you talking about?
What defines an accountant?
What defines a doctor?
A certain body of knowledge. But who defines what those boundaries are? It's all been developed by trial-and-error over time.
If you want teams of people to coorindate well, you need certain intersection of knowledge and a certain separation.
80/20 rule exists in nature for a reason.
I'm curious, which one are you?
Nate? Kurt? One of the wiccans?
Why do you torture yourself?
Move on.
"Did I miss the Bond Implosion update?"
I don't know. The bond clock was updated today.
sm_landlord,
I use Ontario all the time and think it is head and shoulders above LAX.
From Jesse's Cafe' Americain: "Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.
Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations. "
Big 3 gamepla
Here's the thing - if they loan money and those guys still go BK, the Big Kahuna gets paid back first and certainly. This means a Federal loan moves somebody else down the ladder. Would you buy stock or bonds or loan money or even extend 30 day payment terms to them knowing this???
Very odd, I would have expected Asia to rocket-shot on this GM/Chrysler news. Hasn't happened yet. I guess they're gonna wait till 8:30am to put the boot on the throat of the short-sellers.
"I use Ontario all the time and think it is head and shoulders above LAX."
In its day, Union was a wonderful airport.
@homedad43
Thanks, that what I was thinking. They will further leverage until they are bankrupt from investment losses or expenses. Unless they get bailed out too.
Watching the mp updates;
It's got me more than a little spooked to think that in a few months, I"m going to look back at this Conjure Clock stuff and remember that at first I thought it was a joke, then a tiresome repetitive bit, then foreboding, then ominous and finally give in that the narration was happening all along.
Those updates have become like the Tell-tale Heart for this blog's floorboards.
I'm sure that was the point all along.
what is the 80/20 rule?
80% of the time, it works 20% of the time....,
what is the 80/20 rule?
1 currency soon [yogi] | 12.18.08 - 11:27 pm | #
80% of the work done by 20% of the workers at a company?
Get 15B of O's 850B ready.
Gov Paterson to anounce $15B budget cut tomorrow. Cuts won't go into force until Jan 17th.
"...at first I thought it was a joke, then a tiresome repetitive bit, then foreboding, then ominous and finally give in that the narration was happening all along."
Conjure says, "It's all of the above, don't you think?"
"Part of the never beginning or never ending now."
"I use Ontario all the time and think it is head and shoulders above LAX."
--sportsfan
I'm glad to hear that someone is using it. No doubt it is vastly superior to the LAX experience. Ontario does have considerable air cargo traffic. I use Long Beach or Burbank when possible to avoid LAX. And I live about 8 miles from LAX, the other airports are considerably farther away. The last serious commercial service at Palmcaster just shut down a few months ago due to lack of traffic.
I am looking at air services that fly light planes now for travel around California and Nevada. Anything to avoid LAX, but there is no other real choice for international flights.
Just sent an email to the President. I advised him to cut oil production without warning and using force majure by 50%.
I hope Putin heeds my advice.
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
I don't believe in simplistic free market theories because I believe free markets are inherently complex.
I work with complex systems too. Professionally I have been tasked with the job of providing "central management" for an existing complex system.
I've worked for companies whose entire purpose was to provide "central management" for existing complex systems.
In general my experience is that if the system is too complex or wasn't designed to be managed as a whole it can't be done. Everything has to be rebuilt from the ground up to support this type of configuration.
This is my view of the current situation in the US economy - yes the government can productively enforce rules and attempt to set goals, but they cannot coordinate and control the myriad of economic actors in such a way to generate a specific outcome in the aggregate economy.
I think the micromanagement techniques they're currently trying will fail, based on my experience.
The only thing I believe they can do is create some compelling collective goal (like a war for survival) that causes the individual economic actors to be motivated toward its achievement.
By free markets I don't mean markets with out rules; I mean markets where the participants make decisions (while following the rules) instead of the government.
I believe in free markets simply because I do not believe that the government has the ability to make better decisions than the individuals that make up these markets.
The knowledge needed to make these decisions is too specialized. The breadth and depth of this specialization is vastly beyond the capacity of the government to analyze and act on intelligently.
Conjure is running out of bullets, err seconds.
Lam
Interesting vid. Have any ideas on why UAW would not want this type of a plant? seems like it would need less people, but why don't they want the suppliers on the same line?
Broward Horne writes:
OTOH, I question the overall value of efficiency these days, too. Other things can be more important.
Broward Horne | Homepage | 12.18.08 - 10:57 pm
Resiliency will trump efficiency in this kind of environment.
Hank better have a lot of yarn to spin in the AM because so far the futures are not responding as expected. The buysiders won't be pleased if he lets a perfect tee-shot get sliced.
I so wish David Paterson were President-elect. Just for the repartee.
Adam Smith is not simplistic. Who the heck said that? His words on governance, institution, markets and the rule of law and look revolutionarily left compared with what we see today in practice.
Far out.
C
GiezCubed(Unrated) writes:
Conjure is running out of bullets, err seconds.
Eventually he'll run out of markets and have to go to counting seconds til a cute lil animal somewhere dies through no fault of its own.
Bring back the Slant-6
Bond clock at 11:55? Did Conjure look at California's failed bond efforts?
"Conjure is running out of bullets, err seconds."
Conjure says, "As we approach the event horizon, seconds will seem like days, minutes like weeks."
"That's what happens when you are the deer caught in the headlights."
ac @ 10:46 wrote
As I understand it, Schumpeter wasn't condemning anything. He was trying to make an argument that capitalism would inevitably transition to socialism.
I think his position has merit simply in as much as it describes a starting condition, a process, and an outcome that can be validated or repudiated by real world events.
at 1057
you broward Horne responded with
I used to believe the simplistic Adam Smith free market theories. But the more I worked with complex designs and the more I read history, the clearer it is to me that complex systems require some level of standardization enforcement.
Most of the free marketeers I've happened across are in simple industries which require little coordination or depth of production.
It's an issue of degree, though, so it's difficult to prove one way or another.
There's a certain range and interaction of knowledge domains which works, which was ferreted out eimpirically over time. But that's a poor model for environments of rapid growth & rapid change.
That's something I should get back to someday. Knowledge domains aren't designed right now, they're legacy but I'm sure they could be reworked in an intelligent fashion to optimize efficiency.
latetotheparty @ 11:19
WTX are you talking about?
Broward Horne @ 11:22
If you want teams of people to coorindate well, you need certain intersection of knowledge and a certain separation.
80/20 rule exists in nature for a reason.
I'm curious, which one are you?
Nate? Kurt? One of the wiccans?
Why do you torture yourself?
Move on.
Broward Horne
latetotheparty now says:
what the heck are you saying?
What is your point?
Do you agree with ac that Schumpeter describes a process where capitalism leads to socialism?
Or do you disagree?
What you comments above make no sense?
Have you been inhaling that wacky shit with CSC?
"Did Conjure look at California's failed bond efforts?"
Yes, he did.
Could someone be so kind to explain the opex thing? Why would this news have such meaning tomorrow?
Conjure Clock questions:
Has the clock ever run backwards?
Is there daylight savings time in ConjureWorld?
If so, do you spring forward and fall forward?
Are there half-seconds?
Are we on military time, and thus just approaching noon?
Conjure says, "As we approach the event horizon, seconds will seem like days, minutes like weeks."
Exactly my point. Conjure will be slowing to a dead standstill. Midnight will not come for years.
Reversion to the mean is your friend.
The problem with calling the end of the world is that you're only going to be right once in a million years and when your time comes, no one will be around to party with you.
I get it. Conjure is the spacechild at the end of 2001 A Space Overture.
Kool.
C
The only good for which the free market model works flawlessly is the widget.
I have never complained about the salary of a baseball player. His performance is all public, his stats udpated daily. Even the "intangibles" are fairly obvious. But the guy who got $100 million from Merrill Lynch over the last few years, only to discover the profits were illusory? We can't afford to wait long enough for the market to make that correction. Clawback is a bitch.
"Are we on military time, and thus just approaching noon?"
We are on Conjure Universal Time.
At 12:00:00 it's "High Noon."
YouTube - High Noon - The Original Train Sequence
mp writes:
CONJURE'S GLOBAL DEPRESSION CLOCK
The time is--
11:59:51
Bloomberg.com refer=home
mp | 12.18.08 - 11:18 pm | #
Angry Customer
Im incensed, the 52-year-old Palo Alto, California, resident said. I feel like theyre making a calculated decision to make me go away as a customer.
The make me go away as a customer is the whole idea. I got my AT&T Universal bill this month with a notice in it saying they were going to raise the interest rates to 29% or something like that. If I dont like it I needed to opt out and they would close the account.
Well I have had the card for more than fifteen years and never carried a balance. I just said to myself this is whats coming for the folks who do carry a balance.
bearly writes:
[I do not think Ben can do that. It would have been Cox, I think]
Oh no. It was quite painful. I remember that emergency 50bpts OpEx rate cut like yesterday... complete with all the ear-2-ear grins on bubblevision.
bearly | 12.18.08 - 11:11 pm | #
I remember it like it was yesterday myself. I learned real quick what the new game in town was!
Humble Lurker re opex.
Tomorrow a set of equities options and futures contract expire. Many participants have expectations that a market absent rigging and jolts by administration officals is a more level playing field, and should be continuing to tumble with the fate of the economy. It's true.
But you can expect otherwise when you gamble in a rigged casino.
"The knowledge needed to make these decisions is too specialized. The breadth and depth of this specialization is vastly beyond the capacity of the government to analyze and act on intelligently."
--ac
Agreed. And a related observation: if a system is too complex to manage or understand, it is probably worth re-engineering - if for no other reason so that the people who re-engineer it can understand how it works. Sometimes there are opportunities to distribute responsibility to make it work better. Almost never do you discover that central management can do a better job than distributed control.
Perversely, many politicians seem to understand this, yet they are drawn into the illusion that temporary micromanagement can solve the problems.
If we start seeing serial municipal bankruptcies or worse, forcible rebonding Conjure can press the red button. There's nothing that says he can't press it again when California fails to bailout CalPERs (down at least 25% since June).
Do you agree with ac that Schumpeter describes a process where capitalism leads to socialism?
perhaps..and sometimes even National Socialism....
Three dressed squirrils quartered. One quart salted boiling water. Add 3 minced garlic cloves and one medium onion roughly chopped. Cut one celery stalk into quarter inch pieces. Add all ingredients and simmer for 3 hours.
Prepare 12 ounces fettichini with butter and cracked pepper. Strain simmered pot and disgard stock. Place on noodles. Serves four.
Cost about $1.50 if you're a good shot.
GM and Chrylser Bailout Plan might be announced Friday
by CalculatedRisk on 12/18/2008 09:08:00 PM....We are all banks now!
what happens if bush and paulson wont give the bridge loan to GM / Chrysler unless the dems loosen up with the other half of the tarp money...HUH???
345b for the banksters and 15 for the UAW, uh i mean GM
yeah thats fair, right?
thats the hitch in this potential agreement
only i dont think this pig is going to fly
i think conjures clock is rapidly advancing even as we speak
Bush: Greater Depression than '29
YouTube -
Do you agree with ac that Schumpeter describes a process where capitalism leads to socialism?
Also note that earlier in this thread I recommended reading a paper argues that Schumpeter's process may not represent reality based on the events that took place in Sweden.
So I'm not making any kind of blanket endorsement of his ideas.
That said the paper argues most of his ideas were validated (in this case) by real events - just not the final outcome.
Anybody know how to get into one of those job banks I getting tired of working.
mock to market turtle writes:
only i dont think this pig is going to fly....
then you still have a chance to put lipstick on it...
A number of possible geopolitical events can put all this nonsense into perspective. Black swan indeed.
"Tomorrow a set of equities options and futures contract expire. Many participants have expectations that a market absent rigging and jolts by administration officals is a more level playing field, and should be continuing to tumble with the fate of the economy. It's true."
Read tickerforum.org on opex stick-save days and you will read about the "chrysler building up *ss" and other choice phrases.
Anybody know how to get into one of those job banks ?
Just look for the Cerebrus logo.
Come in and sit right down. Take off your pants and jacket !
Samdog writes:
mock to market turtle writes:
only i dont think this pig is going to fly....
then you still have a chance to put lipstick on it...
Samdog | 12.18.08 - 11:49 pm | #
ummm yes, and kiss it too
then you still have a chance to put lipstick on it...
Samdog | 12.18.08 - 11:49 pm | #
As bad as things seem to be, I am somewhat relieved that Palin is not the VP elect.
most of his ideas were validated (in this case) by real events
Ja! Der Tag fuer Frieheit, Brot und Bier bricht an!
"Exactly my point. Conjure will be slowing to a dead standstill. Midnight will not come for years.
Reversion to the mean is your friend."
Conjure says, "Some folks know what time it is. Some don't."
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True?
Bunch of damned slackers. Arbeit Mach Frei!
80/20 rule, aka Pareto's Principle. It's everywhere you look. Some examples:
20% of your clients provide 80% of revenue.
In an average work day, you'll get 80% of your work done in 20% of the hours.
20% of the population owns 80% of the wealth.
20% of the CDs (books, movies, etc) published provide 80% of sales.
20% top bloggers at CR provide 80% of the value in reading the comments.
The rest of the world lost the opportunity to ever see those Van Gogh's again.
Huh? Did I miss something?
RE: tha Peter Lynch Mob writes:
The rest of the world lost the opportunity to ever see those Van Gogh's again.
The Bank of Donna still wants a pony....
mp-
"minutes to weeks", hell!
These last Conjure seconds are taking, like, forever.
Kinda like that last few feet before the john when you've been holding it for three hours.
(I hate that)
Conjure says, "Some folks know what time it is. Some don't."
mp | 12.18.08 - 11:54 pm
Even Conjure should know the time is always 'right now.
from the scotish paper the herald
"... George W Bush, in one of his darker moments, apparently declaring: "If money isn't loosened up, this sucker is going to go down."
'If money isn't loosened up, this sucker is going to go down' - Herald Scotland
i didnt think it was one of his darker moments
seemed to me bush was off handed and glib in his declaration, with a pinch of "wtf", added to "soon i'm outta here" so who gives a flyin fluck
ill "publickly" (hahaha) french kiss the pig if im wrong, but seems to me midnight arrives before january 20
The only good for which the free market model works flawlessly is the widget.
There's no doubt that free markets are flawed. They're just the collective decisions of flawed human beings (and trading programs) after all.
The real question is whether free markets are more or less flawed than centrally managed markets (again, by "free market" I don't mean markets without rules; I mean markets where the participants set prices, not the government).
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Furthermore it seems to me that the evidence is strongly in support of the contention that the current problems we have are precisely due to attempts by the government to intervene in the credit markets to set prices and protect risk takers from consequences, thereby encouraging insane risk taking behavior.
The problems we have today are not due to free markets.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
We have witnessed yet another catastrophic failure of central management. This is not a failure of free markets because we do not have free markets for credit.
That which has always failed in the past has failed again.
Why can't we learn?
Four out of five dentists surveyed say that 80% of the time Pareto's Principle holds, 20% of the time it doesn't.
Yes, but free market purists say the invisble hand is always right. Clearly, we'd be better off with a system that didn't allow individuals to waste such valuable resources. The problem is where to draw the line.
but that's from Sept..?
Remember how the detonator clock for the nuclear device in "Goldfinder" ran. That's the Conjure Clock.
For some reason I can't get mp's link to work for bloomberg.
The entire history of law and civilization is an attempt to correct the waste of the free market, usually for the greater good.
max flatow writes:
80/20 rule, aka Pareto's Principle. It's everywhere you look.
20% top bloggers at CR provide 80% of the value in reading the comments.
max flatow | 12.18.08 - 11:56 pm | #
yeah yeah yeah
ok max i get it
like , like
20% of everything is, like... 80% bull shit right?
"Free markets' is a shibbolith that has never ever existed.
Fairy tales are for children and brain washed shepple. The world has always been manipulated by those who could.
Enjoy the cyclical bull, conjure. Protect yer gonads.
It's saying the page doesn't exist, mp can you summarize what it was about or have another link?
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True?
1 currency soon [yogi] | 12.18.08 - 11:54 pm | #
Sure it is. But I'm not a big fan of Van Gogh
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
ac, assuming the problems we have today are merely symptoms or effects of the original management efforts, when do you think the attempts to centrally manage the growth of the economy began?
By which I mean what year or what administration?
Clearly they have been building for quite a while and some might even say they predate the Fed.
I hear Conjure is sposda look like LambChop. If he get near that red detonation button after the clock hits, I say we do this.
YouTube - Dr. Steel - Anger management
All fixed!
Comrade Kristina writes:
It's saying the page doesn't exist, mp can you summarize what it was about or have another link
try hold down 'CTL-ALT-ESC' while you dangle from the chandelier
bearly | 12.18.08 - 11:11 pm | #
That was the first one...
STOP!!!!!!!!!
Comrade Kristina
i cant get it to work again, now, either, but it did before
seems the link has changed
try this
Bloomberg.com
Kristina, just for you--
Dec. 18 (Bloomberg) -- Credit-card companies, facing an increase in defaults and a decline in consumer spending, are raising some rates, adding fees and cutting credit lines as the Federal Reserve makes the most sweeping changes to the industry in 30 years.
The provisions, approved by the Fed today and effective July 1, 2010, may curtail lenders ability to raise interest rates on current balances, require they apply payments to charges with higher interest rates first and extend the time customers have to pay bills before incurring late fees. The Office of Thrift Supervision, which regulates savings and loans, and the National Credit Union Administration approved the rules today.
Thanks guys, got it now.
"http://www.bloomberg.com/apps/ne...dYQg& refer=home"
--mp
Man, when Conjure speaks, people click. It took me 10 minutes to get a response from the Bloomberg web site...
On the topic, the main reason I use credit cards rather than debit cards is for the "protection" against fraudulent vendors. I never carry a balance, so I really do not know or care what the interest rate is on my cards. But when I see spurious charges, I complain, and if they are not removed, I cancel. What I mean by spurious is any charge to me for the use of the card.
I have had a couple of interesting discussions with CC companies in the last year. One of them stopped sending me statements, and I had to call every month to get the statements faxed out so that I could pay the balance. This went on for five months. Other CC companies have resorted to mailing the statements a few days before the due date. In these cases, I have had to do wire transfers to pay the balance on or before the due date.
It's getting to be a real PITA avoiding the fees, and I'm thinking about canceling some of these cards, but I don't want to screw up my FICO score in case I want to actually borrow money in the future.
The CC companies are in danger of putting themselves out of business. Yes, I know I am a "deadbeat" in their eyes, but they made the rules, and I am trying to play their game. What will they do if they stop getting a 2-3% cut of transactions? I'll just shift to commercial terms with the companies that I patronize if necessary, and they'll be out of the loop. The CC companies will be left with nothing but the bad risks if they keep playing this game.
China to BofA
ummm NO your not selling your stake in china bank...
Bank of America CCB Stake Sale Scuttled by China Rule (Update1) - Bloomberg.com
> recent history suggests that free market economies fare much better than economies with centrally managed markets.
Then why do we need a car czar?
RockyR writes:
Warren Buffett and Bill Gates have a contest. Who can buy the most Van Gogh's. After it's over, they decide that the paintings are socialist leaning so they burn them all. The two rational economic men have consumed their capital exactly how they wanted, and the dollar value of the paintings has been whisked along to their former owners, to be used for other useful projects. All is in equilibrium. Nothing has been lost. True?
1 currency soon [yogi] | 12.18.08 - 11:54 pm | #
all I can afford is the reprint anyway
GE= = Hedge Fund that owns a light blub factory
The real question is whether free markets are more or less flawed than centrally managed markets (again, by "free market" I don't mean markets without rules; I mean markets where the participants set prices, not the government).
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Furthermore it seems to me that the evidence is strongly in support of the contention that the current problems we have are precisely due to attempts by the government to intervene in the credit markets to set prices and protect risk takers from consequences, thereby encouraging insane risk taking behavior.
The problems we have today are not due to free markets.
ac | 12.19.08 - 12:02 am | #
Man, the people who argue that what is happening is a free market problem that needs centrally managed solutions are either confused or being purposefully manipulation. What we have had in America in recent history is not a free market. What we have had is a corrupt system of cronyism and half-assed socialism. Cronyism is not capitalism. Free markets can't thrive if political pull, connection, and influence are rewarded at the expense of talent and ability. Free markets can't thrive when corruption and thievery are allowed to go unregualted. In other words, free markets can't exist without rules.
Our system isn't broken because there are still people left here who want a freer market.
"ok max i get it
like , like
20% of everything is, like... 80% bull shit right?"
No no no, 80% of everything is 90% bullshit.
Guess I know which percentile you're not in...
Our predecessors the Native Americans had no central planning.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
ac, assuming the problems we have today are merely symptoms or effects of the original management efforts, when do you think the attempts to centrally manage the growth of the economy began?
By which I mean what year or what administration?
Clearly they have been building for quite a while and some might even say they predate the Fed.
sportsfan | 12.19.08 - 12:08 am |
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Further back, look at how the 1927 rate cuts caused insanity in the markets.
cd writes:
China to BofA
It's the new hegemony...Bank of 'Chimerica' as Niall Ferguson would say.
boj cuts o/n rate to 10bp and increases rinban's to 1.4 trl from 1.2 trl per month
U$D/JPY spiking up, on what?
"On the topic, the main reason I use credit cards rather than debit cards is for the "protection" against fraudulent vendors. I never carry a balance, so I really do not know or care what the interest rate is on my cards. But when I see spurious charges, I complain, and if they are not removed, I cancel. What I mean by spurious is any charge to me for the use of the card."
I had my visa debit card stolen and had 10k in charges run up in a single night. Including one shop apparently thinking that someone purchasing 4 1k cash advances @ 11pm at night all within 15 minutes didn't require a call to Visa to verify.
I only carry bank cards now that specifically do not allow Visa charges on them. Trust me it's a LOT easier to fight fraudulent charges on a credit card then dealing with it after the fact including massive overrage charges on your bank account.
Samdog most Van Gogh's are publicly viewable in museums, some for free.
peAkcredit writes:
U$D/JPY spiking up, on what?
boj more agressive than expected
ac: They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
You're absolutely right...starting w/ Greenspan the markets were not allowed to make its own adjustments 'cause the fed thought it knew better...now we're hosed.
ac wrote
"The problems we have today are not due to free markets.
The problems we have today are due to attempts to centrally manage the growth of the economy via the Federal Reserve.
We have witnessed yet another catastrophic failure of central management. This is not a failure of free markets because we do not have free markets for credit.
That which has always failed in the past has failed again.
Why can't we learn?
ac | 12.19.08 - 12:02 am | #
ac
much of what you say , in my humble opinion, is spot on
but i have to disagree with you when you fail to give weight to the...
old west capitalism, with the deception, opacity, and fraud that has taken place here in the USA and without a sheriff in town
free markets run wild and without regulation is a significant part of the problem, more than 50%
Probably the fact that when Pops calls Paulsen he finds that he never is available to talk?
nova | Homepage | 12.18.08 - 9:50 pm | #
I think you would need a piece of GS CDS to get his attention.
[That was the first one...
citizen energyecon ]
LOL! Wasn't it special? I was pretty much all-in. I got the deer-in-the-headlights look that day.
I'm temped to dig up the CR posts from that morning and go thru the comments.
"Our predecessors the Native Americans had no central planning."
--1 currency soon [yogi]
They had no economy either.
1 currency soon [yogi] writes:
Samdog most Van Gogh's are publicly viewable in museums, some for free.
Whew! I thought someone said Gates & Buffet burned 'em....
Yves Smith just posted on bailout. Nice comment on Bush position from game theory perspective:
naked capitalism
[boj cuts o/n rate to 10bp and increases rinban's to 1.4 trl from 1.2 trl per month
sg]
Trade & currency wars in a race to the bottom. We need to identify enemies to attack...
20% of everything is, like... 80% bull shit right?
latetotheparty | 12.19.08 - 12:06 am | #
Actually, no - Sturgeon's Law - 90% of everything is crap.
By far the largest government intervention in the marketplace is the limited liability of corporations, and the protection of bankruptcy.
Those developed out of past crises where economies ground to a halt because savers were afraid to invest.
How much for new wigwam?
Hmmm...twenty-five shells...
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Both Greenspan.
You could also add the 2002-03 cuts.
All Greenspan.
Do I detect a pattern here?
Ross - too funny. But the squirrels in this part of Maryland are too damned skinny to do anything with except boiling up for stock. Could be ok on couscous. I'm thinking misery and a .22 might be a better combination.
Actually, this is not a frivolous question, what do cardinals eat? We've got some really scrappy ones around here and I wonder if it's about lack of food.
And what do those helicopter convoys overhead eat? Must be quite nutritional cos they keep on keeping on.
C
1 currency soon [yogi] writes:
By far the largest government intervention in the marketplace is the limited liability of corporations, and the protection of bankruptcy.
For those of us who aren't lawyers, please explain,
The corporate structure, called a "legal fiction", allows the corporation to violate the law, or default on its debts, while protecting the assets of the individual owners.
Bankruptcy is welfare.
mp, i thought the extra $2T in credit contraction from '09 to '10 was the key rather than the new rules????????
"I had my visa debit card stolen and had 10k in charges run up in a single night. Including one shop apparently thinking that someone purchasing 4 1k cash advances @ 11pm at night all within 15 minutes didn't require a call to Visa to verify."
--Pissed Off In California
Every time I put more than $5K on my Discover card or even $2500 on one of my Visas or Mastercards, I get a phone call from the issuer asking for confirmation. As embarrassing as that can be at certain times, I appreciate it. I would rather get called on a charge than get billed for a fraud.
Oddly, Amex never calls. Might have to cancel that one in self defense.
The entire history of law and civilization is an attempt to correct the waste of the free market, usually for the greater good.
Replace "free market" with "human behavior" and I agree. "Free market" is really just a specialization of "human behavior".
But my point is that we don't attempt to correct these problems by having a bureaucrat following every person around telling them how to live their lives.
We have laws and consequences for breaking them.
We grant people free will but punish them when they do something harmful.
Central management proposes to take away that free will because you as an individual are nothing more than dumb brainless cattle with destructive intentions and your decisions must be replaced with those of brilliant and morally enlightened bureaucrats like George W. Bush, Hank Paulson, and Ben Bernanke.
Also efficient shipping from the Rain Forrest
LAM | 12.18.08 - 11:05 pm | #
Ford has a long history in Brazil. Utter failure the first time around. I was incredibly impressed by the factory and video but not the business plan.
What do people do to earn a living in a streamlined robotic factory future?
Why didd the workers revolt against management the first time around?
Damn Interesting • The Ruins of Fordlândia
Fordlândia - Wikipedia, the free encyclopedia
I forgot about the enforcement of contracts, another intervention into the pure free market.
nova writes:
Obama is probably getting real time info fed continously by people doing CYA and manuvering for position. Obama, at this point, is probably more in the loop than Bush ever was or wanted to be.
nova | Homepage | 12.18.08 - 9:58 pm | #
I absolutely agree.
The Bush administration was about 'creating reality' not dealing with it.
Having said that, what can really be done at this point other than to reduce the pain by assuming crash position?
sm_landlord,
I also get calls with large purchases on my actual Visa card. Hmm, wonder why they didn't care so much when the money came directly out of my bank account?
Oh well, they ended up eating the whole amount in any case.
You rang?
sm_landlord writes:
"Our predecessors the Native Americans had no central planning."
--1 currency soon [yogi]
They had no economy either.
sm_landlord | 12.19.08 - 12:18 am | #
you are wrong
may i suggest you read about NW indian potlatch ceremony, salmon fishing practices and tribal inter-support system for all members.
Potlatch - Wikipedia, the free encyclopedia
They've always been going on. But more recently it seems that after the 1987 crash we started trying to ensure that markets go up. Really it got aggressive in 1998.
Both Greenspan.
You could also add the 2002-03 cuts.
All Greenspan.
Do I detect a pattern here?
sportsfan | 12.19.08 - 12:22 am |
No... it happened in 1980s Japan. 1920s America. It happened prior to the depression of 1893.
It's been going on all over the world in recent years. Look at all the bubbles in Spain and the relation to ECB interest rate policy.
"I forgot about the enforcement of contracts, another intervention into the pure free market."
--1 currency soon [yogi]
Oh, please.
Our Dear President continues to build houses of cards on top of older houses of cards. His efforts to dump this on the next administration are understandable but somewhat callous in that he is probably burying our economy in debt so deep that we cannot get out in two or three generations. What a legacy! I really don't think he should build a library. A huge printing press would be more useful.
another intervention into the pure free market.
1 currency soon [yogi] | 12.19.08 - 12:27 am | #
Fair markets are as paramount to prosperity as free markets. Without guidelines and enforcement, there is NO market.
It seems to me that recent history suggests that free market economies fare much better than economies with centrally managed markets.
Just last week, a number of people found they were short $50 billion due to a free market economy. If you read history AT ALL, you'd know that before 'centrally managed markets,' banks went bust all the time, as did insurance companies, and their creditors got nothing. The land was awash with patent medicine salesmen whose wares were inert or toxic. Actual free markets in most everything have been tried at one time or another and, as another poster alluded to, widgets are the only thing where the outcome was remotely beneficial or fair. Asymmetrical information, bargaining power and intelligence dooms most 'free market' transactions in sophisticated goods/services to being an inequitable transfer of wealth from the less sophisticated party to the more sophisticated party. I tire of armchair Friedmanites/Heinlenites who believe some sort of Über-Consumer-Reports could even this all out in the absence of government controls. Want to know what an ideal free market would have had in store for you? Picture yourself broke and illiterate.
Every time I put more than $5K on my Discover card or even $2500 on one of my Visas or Mastercards, I get a phone call from the issuer asking for confirmation. As embarrassing as that can be at certain times, I appreciate it. I would rather get called on a charge than get billed for a fraud.
Oddly, Amex never calls. Might have to cancel that one in self defense.
sm_landlord | 12.19.08 - 12:26 am | #
In the UAE, a lot of people had their credit card limits reduced without notice in the last couple of weeks.
They found out when their cards were rejected at the till.
Want to know what an ideal free market would have had in store for you? Picture yourself broke and illiterate.
Ralph Cramdown | 12.19.08 - 12:31 am
Well put.
"mp, i thought the extra $2T in credit contraction from '09 to '10 was the key rather than the new rules????????"
Arw, you are correct. The contraction is coming about because of the new rules, and the contraction starts now.
BTW, the calls from your credit card company when you charging pattern changes are not acts of altruism.
Credit card companies are held to strict liability laws; the law limits consumer liability for credit card fraud to $50 and many credit cards, including all Visa and MasterCard credit cards, now have zero liability policies (your liability for unauthorized transactions is $0). In addition, if you notice suspicious charges on your credit card statement such as double billing or an incorrect charge, the credit card company is obligated to investigate if you send in a written request within 60 days.
For debit card fraud, your liability is $50 if you notify the bank within two days of noticing the fraudulent charges. After two days, your liability increases to $500, and up to your entire account balance after 60 days.
Credit Card Help - Credit Cards vs. Debit Cards
No doubt there are idiot bureaucrats, and there is no guarantee that a planner won't be corrupt, greedy, lazy...
(There are hedge fund managers with those traits)
In theory though, the planner's actions are controlled by the democratic process, which is why we have public hearings whenever the electric company wants to raise rates. We have laws that say the electric company can't deny you service because they don't like you, and they must take careful steps before cutting you off. Maybe the operation of our banking system or our auto industry is too important not to regulate as a utility. Baseball can stay a perfect competitive model.
Now till Jan. 20th is a scary time. Bush is 50/50 likely to revert to his animal torturing youth and coke/booze snorting 20s, and enact a big FU on the economy. Nothing to prevent it, and his history tells us it could happen. It is certain the Cheney wouldn't stop him, and nobody else can.
As far as I can tell, the $350B is completely unaccounted for and the other $350B could be gone in a day - with no court review possible according to the law Bush/Paulson demanded.
Bush could buy a bank, TARP loan that bank $350B and then wire the proceeds offshore in one day.
Balance of Powers, our ass. An a Fed that is completely out of control of any branch of government - with the possible exception Congress could abolish it, but never would.
Hang on suckers, it's going down.
ac | 12.19.08 - 12:30 am |
Ah, yes, the Panic of '93 (which would be before the Fed). I always wanted one of those last Carson City dollars.
I agree the centralized management concept has been around a very long time. One might say it's almost an essential aspect of most governments in one form or another.
Control of the individual has always been the goal of government, as it was also for the spiritual leaders of different epochs.
Markets are the new opiate of the masses.
Follow the ticks, up and down. They're mesmerizing, aren't they?
Balance of Powers, our ass. An a Fed that is completely out of control of any branch of government - with the possible exception Congress could abolish it, but never would.
Hang on suckers, it's going down. - JimPortlandOR | 12.19.08 - 12:36 am | #
If Congress made the bed we are lying in then the Fed stuffed the mattress.
Hang on suckers, it's going down.
JimPortlandOR | 12.19.08 - 12:36 am | #
... and with that ladies and gentlemen, I'm off to a Christmas party.
Adieu.
A free market for chickens? Do you really want that? Try to be made whole when you're battling salmonella.
"Bush could buy a bank, TARP loan that bank $350B and then wire the proceeds offshore in one day."
--JimPortlandOR
Jeez Jim, careful with that tinfoil. it attracts magnetic rays, you know.
Jim - as one among many that wasted too much time writing his elected representatives, I think you're missing around 535 parts of the problem, give or take.
[tinfoil and titanium helmet firmly in place]
BOJ Lowers rates to .01
Dec. 19 (Bloomberg) -- The Bank of Japan cut its benchmark interest rate to 0.1 percent and introduced new ways of pumping money into the banking system to bolster the ailing economy
Bank of Japan Cuts Rate to 0.1%, Adds Funds to Ease Credit Woes - Bloomberg.com
[tinfoil and titanium helmet firmly in place] - JimPortlandOR | 12.19.08 - 12:40 am | #
But the platinum power pasties chafe me so.
Dead serious about contracts. Why waste all that money with lawyers, judges, courtrooms. Just a bunch of bureaucratic parasites. You have your market remedies: self help or never do business with the other party again.
The Fed: Dodging Deflation
The Fed: Dodging Deflation - BusinessWeek
Compounding matters, weak labor markets and tight credit aren't the only factors depressing demand. Using a new measure of house prices, the Fed now says consumers have lost a staggering $7.1 trillion in net worth since the third quarter of 2007. That drop exceeds the $4.2 trillion decline after the 2000 stock market collapse, and more losses in the fourth quarter could lift that total to more than $10 trillion.
Want to know what an ideal free market would have had in store for you? Picture yourself broke and illiterate.
Ralph Cramdown
See how I defined free markets earlier. Maybe my definition differs from yours.
By free markets I do not mean markets without rules.
I mean markets where rules exist, but decisions are made by the market participants, not the government.
In that regard our credit markets are not free.
the absence of any element of an "insurable interest" when writing credit default swap "insurance" is a prime example of the free market run amuck
capitalism becomes a casino and capital becomes mis-allocated into non-productive but handsomely rewarded endeavors without some degree of management or regulation
i believe in markets, i believe in entrepreneurial risk taking and profit, i believe in capitalism...that is moderated by social democratic principals..
otherwise my friend the game ends like it always has...
with an incredible concentration of wealth and power... a concentration far beyond that we face now
A guy who doesn't honor his contracts will be "naturally" competed into oblivion by a better businessman.
could lift that total to more than $10 trillion
Is that a lot?
I have always been of the opinion hat centralized management is a demon.
You have your market remedies: self help or never do business with the other party again.
1 currency soon [yogi] | 12.19.08 - 12:44 am | #
Madoff investors probably are not too fond of those options.
arw -
And by the way, yogi has decided you should go to jail for a bad attitude.
could lift that total to more than $10 trillion
Is that a lot?
MLM | Homepage | 12.19.08 - 12:46 am | #
Depends on whether it is being quoted in old dollars or the new pesobucks.
By the way, according to recent Government statistics ,several measures of concentration of wealth are at their most extreme since what year???
"By free markets I do not mean markets without rules."
Recall the Wealth of Nations friends. Adam Smith said you can't have functioning markets without property rights and protection from fraud. Trust would be shattered. Sound familiar?
We are headed to either a global currency and central bank or regional trading blocs headed towards a 3rd World War. Take your pick....
By free markets I do not mean markets without rules.
ac | 12.19.08 - 12:45 am | #
Golden rules? He who has the gold makes the rules?
ac | 12.19.08 - 12:30 am |
Ah, yes, the Panic of '93 (which would be before the Fed). I always wanted one of those last Carson City dollars.
The 51st congress attempted to boost the economy by engaging in inflationary policy.
Sound familiar?
Is it coincidental that inflationary monetary policy precedes all these catastrophic economic events?
Or is it the free markets? Which out of sheer baffling coincidence only blow up when some government agency attempts to promote economic growth with credit expansion.
1 currency soon [yogi] writes:
Dead serious about contracts. Why waste all that money with lawyers, judges, courtrooms. Just a bunch of bureaucratic parasites. You have your market remedies: self help or never do business with the other party again.
Geez, yogi, don't you think national and international commerce might take a hit or two if contracts could not be enforced except by breaking knees or shunning the evildoers?