Did Ms. Bair not get the memo? Nemo | Homepage | 12.16.08 - 12:26 pm | # She shredded it and wrote the "rescue the insolvent homeowners with taxpayer dollars" memo.
A year or more after the crisis began, they realize things aren't normal. They should be increasing the rates for what horrors 2009 will bring (IO ARMS, Alt A ARMS, etc.).
Saying he was "forced" to cut costs by the doubling of JPMorgan Chase's FDIC premiums, Jamie Dimon today announced that the bank will lay off an additional 500,000 employees, raise most credit card rates to 86% APR and award each executive a $4 million retention bonus. Dimon will also ask for the entire $350 remainder of the TARP to cushion the blow.
The OPEC cartel plans to slash its oil production by a further 2 million barrels a day, the Saudi oil minister said on Tuesday, as producers struggle to contain a collapse in prices amid a global recession.
Seems americans arent the only ones with entitlement issues...
sdtfs, thanks. I once asked Tanta if she spell checked her pieces - she frequently would insert a weird word here and there, and I wondered what the spell checker would think. T just laughed. She had never used a spell checker in her life! All typos were intentional ... I can't say the same thing for me.
"Policymakers will have to worry about a strange beast called stag-deflation (a combination of economic stagnation, recession and deflation); about liquidity traps (when official interest rates become so close to zero that traditional monetary policy loses effectiveness); and about debt deflation (the rise in the real value of nominal debts, increasing the risk of bankruptcy for distressed households, firms, financial institutions and governments)."- Roubini http://www.taipeitimes.com/News/editorials/archives/2008/12/17/2003431295
But of course, like Krugman, no mention about credit bubble business cycle fraud as the cause of it all and thus the need to deflate.
We could say they spend money like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, because the sailors are spending their own money.
OT but important (maybe).
From the FT about why OPEC (excluding Saudi Arabia) has difficuulty cutting production:
"For producers and exporters the pain is just beginning. At current levels a number of Opec producers cannot cover their national budgets. Iran and Venezuela, for instance, need a price of $90 a barrel to sustain current spending. Having grown accustomed to high prices, countries such as Russia and Nigeria also face difficult adjustments. The stage is set for a painful downturn and possible political unrest in 2009."
He's the link: FT.com / Comment / Opinion - The low oil price calls for a fresh set of rules
Driving a substantial portion of the federal budget each year is the governments social insurance programs: Medicare, Medicaid and Social Security. Estimates prepared by the Government Accountability Office (GAO) the investigative arm of Congress show that the projected cost to the government of paying for these programs in the future will be at least $52.7 trillion. More simply, every American currently owes at least $410,000 to pay for the commitments made by the government in these areas, though that figure is on the rise....
this is EXACTLY what i predicted would happen, and is why i couldn't understand why banks and their customers weren't more offended by the FDIC getting into the mortgage modification business, an area clearly outside its realm.
--
Govt insuring risk taken by private for-profit institutions?
Only for Gangistan of America and paid for by the biggest dopes in history who live in Dopeland of America.
CR reports on the activities in Gangistan and we get to read the take of those in Dopeland who are powerless except for complaining about the Gangistan. Agents of Gangistan are fully in-charge of the USG at all levels.
Gangistan is safe and secure, more than ever, but for how long?
So the Bankers will just redirect TARP funds back to the issuer? Makes perfect sense...give them free money...raise rates...banks give it back. Gives the impression that something is being done. Fabulous...
Peter Schiff is usually right, but he has a few blind spots. One is his insistence at talking about dollar inflation, when deflation is currently taking place.
The second is his position on the car companies: YouTube - 12/10/2008 Part 1/3 Peter Schiff On Kudlow & Co: Market Drilldown
Starts at 1:20.
And please MUTE the video when Kudlow speaks.
Ot-just hung up phone with dealer, said banks were still not buying auto paper. I asked him what kind of paper he stated 600 or below..I ment'd it sounded like early 90's underwriting..
He proceeded selling me on letting him use our software in a 30 day pilot..were not selling anything etc...
I sd "we already have enough airplanes in the sky"
The last 7-8 years created perception and expectation bubbles in peoples head.
Dopes abound in the gangistan dopeland of America (GDoA). The born and bred dopes cry tears of dopedom while the gangistanis sharpen their shovels and dope prods, riding their scamsteeds into the fields of bankruptcy, slashing at the running born and bred dopes who can only buy further into the scam as they fall. Small pueblos rise out of the credit mud made of scams and thieves, and gangistan bankers rejoice untold scam dope fiends of American dopes bred and born like slashing bankster profit greed dopes against the big scam of gangster dopeland. Indeed.
Lez see.. da banks say show me da money, the FDIC sez give da money, the Treasury does print da money, da the FED sez hears da money. Now everybody's got a brand new pony......Hoocoodanode!!
In the coming months, mental health experts expect a rise in theft, depression, drug use, anxiety and even violence as consumers confront a harsh new reality and must live within diminished means.
It is also a rude awakening for a generation of shoppers who grew up on easy access to credit and have never had to limit purchases to simply what they needed or could afford.
"It is also a rude awakening for a generation of shoppers who grew up on easy access to credit and have never had to limit purchases to simply what they needed or could afford.
Ministry of Truth"
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
"I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?"
A phrase tends to lose all meaning or negative connotation after it is repeated a few thousand times.
There are dopes. They are American dopes. They have been born, of course, or else they would not be here today. More importantly, they have been bred. These are pedigreed dopes. Dopes which have come from a long line of elder dopes, grand dopes, and graet grand dopes, specially picked and raised free ranged for their dope qualities. Thus is created the phrase "Born and Bred Dope," and when referring to the American line of this breed of dope, it is proper to say it is an American born and bred dope, or to use the dope-trade term for america, "Gangistan." Gangistani born and bred dopes are some of the most profitable on the market, they are the most docile and easy to manage and breed, and they possess some of the finest fur.
According to research from Biryini Associates, since 1961, investors in mutual funds have earned annual returns of less than 1%. Far less than inflation and even less than the annual fund fees.
And Greenspan and Bernanke continually steer investors to wall street. Worse still, they just convinced CONgress to commit at least $700 billion to bailout the rip off artists and ensure this year's bonuses on wall street.
It's no wonder so many families are broke. Government sponsored shams.
America can't afford anymore of wall street's prosperity.
Ronald Ferguson, a former chief executive of General Re Corp, a reinsurance unit of Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz), is the first of five defendants convicted in the fraud to hear his sentence.
Link to a very succinct article on Keynesian economics and the current crisis-
What remedy would Keynes prescribe for an economy in crisis because it can only survive by borrowing ever increasing amounts of debt relative to its GDP?
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides. I think, if you look back over the Madoff scandle and ask where all the money went, you'll find it essentiallly was skimmed off to pay all the salaries of those who touched it. Well, given that the market is down in inflation adjusted numbers significantly over the last 10-15 years, we may ask ourselves, perhaps the losses are simply the rake from wallstreeters to provide the service of losing our money slowly.
Trying to play catch-up with rising insurance fees to pay current losses is a losing game when you are charging the losers more to cover their own losses...as if raising rates to those in a flood zone will generate enough money to fix the problem...why don't they just keep their money and use it to fix their own problem and get the middleman insurance company out of the way...you can't increase the value of your money by funneling it through some insurance program.
We as a nation have to learn that Government and Wallstreet and expenses and not wealth generators. We when run into money problems we have to reduce their hold over our money, not increase it.
Jas may be caustic, but he hits a cord that rings true.
That is why Keynes did not think that cutting the central banks interest rate would necessarily and certainly not quickly lower the interest rates charged on different types of loans. This was his main argument for the use of government stimulus to fight a depression. There was only one sure way to get an increase in spending in the face of an extreme private-sector reluctance to spend, and that was for the government to spend the money itself. Spend on pyramids, spend on hospitals, but spend it must.
We've been doing this non-stop since Reagan took office. What do we have to show for it?
Massive debt and an addiction to deficits?
How long can this country keep endlessly pursing the economic policies of the past 25 years before it completely loses its ability to borrow?
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides. I think, if you look back over the Madoff scandle and ask where all the money went, you'll find it essentiallly was skimmed off to pay all the salaries of those who touched it. Average Joe | 12.16.08 - 1:34 pm | #
Well, no.
Many people (including a bunch of the charities) were withdrawing money every year. That's where the majority of the money went. And that's why even people who got money out are scared: they're most likely going to be getting a letter soon, telling them they have to put that money back.
Interesting Times writes:
From the nytimes link above:
Today, you might add a further convention the belief that mathematics can conjure certainty out of uncertainty.)
Someone has been reading CR.
Or Scott Adams. Come to think of it... Has anyone ever seen Bill and Scott in the same room? Hmmm.
Anyway, the article also says: Today, Keynes is justly enjoying a comeback.
That's gonna leave a mark on the economy.
"Why, he asked, should anyone outside a lunatic asylum wish to hold money? The answer he gave was that holding money was a way of postponing transactions. The desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future. . . " - Keynes
What was the average lifespan when he wrote this? No longer applies.
How long can this country keep endlessly pursing the economic policies of the past 25 years before it completely loses its ability to borrow?
I thought we had reached the limit in 1998. Clearly I was wrong. Big time.
Much of the sp-called "borrowing" is actually a sham as it is based on borrowing of fictitious money spawned from ever increasing leverage.
Ponder the size of the Fed's guarantees in the past few months ~ $7 trillion. In my mind, that kind of number can only come from a ponzi system. I can't think of any other possible explanation.
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides.
As Joseph Tainter would say: Declining marginal returns on investments in complexity.
It drains too much out of ordinary people.
Who will, in the end, PREFER to go back to a lower level of investment in complexity (which will include a lower standard of living) because the returns on their engagement will be more reliable.
Insurance. Bwahahaha! Now there's an effective business model. (a) collect premiums (b) fight every claim and pay absolute minimums, grudgingly (c) when evidence of overwhelming claims are imminent, artfully manage bankruptcy or dissolution. (d) TAKE MONEY
The simple fact that Keynesians seem unwilling to acknowledge (perhaps because they perceive it as part of the left-wing/liberal agenda) is that presidents like Ronald Reagan and George W Bush were super hard-core aggressive Keynesians.
I think a lot of the focus on deregulation is facade to hide a crisis in the orthodox economic agenda:
The economic and fiscal failures of the past two decades have occurred in despite a heavy handed application of Keynesian economics.
Ronald Reagan = Keynesian
George W. Bush = Keynesia
"The largest CPI drop on recording coinciding with a Fed meeting."
Sounds like nice cover for a 75 bp cut to me. The truth, however, is that if they cut at all there's really no reason not to go whole hog to ZIRP. Is 0.5% or 0.25% really any different from 0%? For any reason that isn't purely psychological?
How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. They can put the pedal to the floor and it will take a very long time before that much weight can even get moving. Then we can talk about trying to slow it when it finally gets rolling too fast (inflation). If the govt had little debt even light taps would be able to influence the economy.
30 mins to find out if my HELOC goes to 3.5% or 3.25%. I looked at the new terms for the same loan. 7.7% That's the lending lock up that's being denied by some.
Anyone who has read "Rise and Fall of the Great Powers" knows the great powers always end up going into debt when they decline. Where did all of Spain's gold vanish to? It didn't, it simply became worthless as there was too much of it. Just so now with American dollars and our excess wealth.
i worked "on wall st" but not in investment banking, but many of my MBA classmates did. the salaries were beyond astounding and i could never understand how it made economic sense, in the long term, to pay people so much for adding so little value. some add value, many do not, and many more detract value.
this is the third time in my life i have seen what i believed was a total scam, identified it for what it was, but for years was ridiculed by others because the system perpetuated and thrived.
First: I-Banking model
Second: dot.com valuation
Third: housing bubble
i profited a little on the scenarios, but nowhere near the potential....i just seem to play it safe and plod along with decent returns but never shoot the lights out (and never get whacked 50% down either thought...so not bad at all). oh well.
A whole minute. Was conjure looking at the Yen by any chance? Remember that I predicted an auction failure in December. When that happens the clock is gonna spin.
Much of the sp-called "borrowing" is actually a sham as it is based on borrowing of fictitious money spawned from ever increasing leverage.
truer words were never spoken. This has been my fear along.. that we have levered and accounted for the same 1 dollar 6 times at the same time, never transfering the credit off the books...
A whole minute. Was conjure looking at the Yen by any chance? Remember that I predicted an auction failure in December. When that happens the clock is gonna spin.
Rob Dawg | Homepage | 12.16.08 - 1:52 pm | #
The CPI is so old fashioned and the yield curve is so over-valued, and Fed meetings are so out-dated, and capitalism is so very yesterday ... What we need is new structure, one without The Fed, one without central banking, blah, blah, blah ...
The CPI is a distraction. The fed & gov game the numbers anyway. The fed's main concern is credit creation.
Without credit creation, the entire debt based money system collapses. No ifs, ands or buts. We either create enough new credit to pay the aggregate interest of previous credit or the system craps out.
The fed will create credit. They will not allow credit deflation.
Anyone who has read "Rise and Fall of the Great Powers" knows the great powers always end up going into debt when they decline. Where did all of Spain's gold vanish to? It didn't, it simply became worthless as there was too much of it. Just so now with American dollars and our excess wealth.
Well of course real wealth comes from productive effort. The gold gave Spain an excuse not to engage in such effort because they were "rich" and didn't need to be productive. Hence, they got poor.
sartre writes:
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
au contraie mon frere
many of us here thanks to CR, Tanta, Roubini, Volker and other...
took steps to brace for a big downturn.
i got out of the market more than a year before the top and received months of ridicule
a good friend who did not listen told me yesterday he had lost fore than 53% of the value on his 401k which had been worth well over 150k.
Oh my golly and gads, the 30-year Treasury @ 2.92, the 3-month Bill @ zero, and since everything falls apart in the middle, the 5-year is up, which probably means nothing at all!
"How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. "
That, and everyone now knows what 'the man from nantucket' said above is true, since 'net worth' no longer means what it used to.
Well of course real wealth comes from productive effort. The gold gave Spain an excuse not to engage in such effort because they were "rich" and didn't need to be productive. Hence, they got poor.
Uh oh. So to avoid this sort of thing I should probably stop reading blog comments and go do something?
Is 0.5% or 0.25% really any different from 0%? For any reason that isn't purely psychological? \t Assume Crash Positions! | Homepage | 12.16.08 - 1:49 pm | #
Given that the Fed can sell T-Bills at 0% and get a 0%,.25% or .5% return on it, I suspect anything more than ZIRP is infinitely different.
As Yves at NakedCapitism pointed out, the spend spend spend solution encouraged by Keynesian may not work for a heavily debted government. So the U.S. of the depression is now the Germany of the 1930's.
Governments have no option but to spend. So they will choose this solution no matter. It would be like a financial planner encouraging you to save by doing your own finances. You will never hear this advice from a financial planner.
Just like it's always a good time to buy if your a realtor, well it's always a good time to have government solve the problem if your a politician.
I doubt anyone would get elected for promising to do little to nothing for you.
Goldman Sachs was downgraded to A1 from Aa3 by Moody's. (Bloomberg)
AMG Data Services reported that muni funds that report weekly figures suffered net outflows of $1.05 billion during the seven-day period ending Dec. 10. That's more than triple the pace of withdrawals in the previous week. Outflows had been less than $450 million a week since mid-October.
Clients withdrew 0.47% of the funds' assets during the week, according to the Arcata, Calif.-based fund tracker. Among all muni mutual funds - including those that report monthly - net outflow was $954.5 million, or 0.28% of muni funds' roughly $338 billion in assets.
sartre writes:
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
I used to give Jas a harder time about his complaints about us Americans. Recent events make that more difficult to do, sadly.
So why are municipal bonds -- which already yield more than their taxable counterparts in the corporate world -- widening their underperformance? Partly, it is a function of risk aversion, as investors flee uncertain investments and instead seek safety in the lower yields of Treasury instruments. Growing budget problems in such states as California and Michigan are also taking their toll on investor sentiment. Indeed, the flight from munis is so notable -- the once safe and stodgy sector is down over 8% this year -- that one money manager plainly states, "The muni market is not working normally."
Even muni issuers such as Goldman have been recommending the purchase of credit default swaps against the possibility of municipal defaults. This default fear has especially rocked the high-yield segment of the muni market, which has seen declines approximating 30%. These concerns, combined with the increased need for hedge funds to invest in the most liquid instruments, has led to a historic divergence in the behavior of munis relative to Treasuries. This weakness recently led PIMCO to suspend dividends in its municipal closed-end funds.
"The median price paid for all homes combined last month was $285,000, down 5 percent from October and down a record 34.5 percent from November 2007. Last monthâs median was the lowest since it was $298,000 in April 2003, which was the last time the median was below $300,000. November's median stood 43.6 percent below the peak $505,000 median reached in spring and summer of last year.
The median price has eroded consistently over the past 16 months as price depreciation swept the region, discounted foreclosures ballooned in inland markets and sales stagnated in higher-end neighborhoods. The latter have suffered from, among other things, a difficult financing environment for large mortgages.
Foreclosures have accounted for about half of all Southland resales during the past three months. In November, 54.6 percent of all the homes that resold had been foreclosed on at some point in the prior 12 months. That's up from 50.9 percent in October and 18.8 percent a year ago...
The median price paid for all homes combined last month was $285,000, down 5 percent from October and down a record 34.5 percent from November 2007. Last monthâs median was the lowest since it was $298,000 in April 2003, which was the last time the median was below $300,000. November's median stood 43.6 percent below the peak $505,000 median reached in spring and summer of last year."
A 5% drop in one month in the median home price. Amazing.
" ac writes:
Link to a very succinct article on Keynesian economics and the current crisis-
What remedy would Keynes prescribe for an economy in crisis because it can only survive by borrowing ever increasing amounts of debt relative to its GDP?
ac | 12.16.08 - 1:33 pm | # "
tlanta, Detroit, Philadelphia and Phoenix have all asked in recent days for some of the Troubled Asset Relief Program billions. You can expect more to ask.
Some want the government to spend the money on infrastructure-construction projects and to buy short-term note issues to help tide them over. Others want the money to help pay for employees and mass transit, among other things.
Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Hoops' homage to jas also has elements of Dickens' description of the descent of the Chuzzlewits, a family no doubt well represented in current Wall St. circles.
anyone else have a puckered onion in anticipation of mkt action after the announcement? could be fun watching it unfold through the close. but who knows anymore, we could hear crickets chirping after 2:15.
Illinois, which faces a projected $2 billion budget shortfall this fiscal year, planned the short-term bond sale to pay a backlog of bills of as long as 12 weeks. The sale, scheduled for yesterday, was delayed until next week. At the same time, Standard & Poors said it was considering cutting the states credit rating after Blagojevichs Dec. 9 arrest.
The state may be able to get the sign-off from another elected official, such as Secretary of State Jesse White, said James Shanahan, an attorney with Ice Miller, the states bond counsel in Chicago. All that would be needed is for someone with significant stature in state government to certify that there is no litigation that would affect the bonds, Shanahan said.
Justice is served:
HARTFORD, Conn. (AP) -- The former chief executive of General Re Corp. was sentenced Tuesday to two years in prison and ordered to pay a $200,000 fine for his role in a scheme that cost shareholders of American International Group Inc. more than $500 million.
In this Sept. 25, 2008 file photo, Ronald Ferguson, former General Re CEO, leaves U.S. District Court in Hartford, Conn., after a pre-sentencing hearing. Ferguson has been sentenced, Tuesday, Dec. 16, 2008, to two years in prison and ordered to pay a $200,000 fine for his role in a scheme that cost shareholders of American International Group Inc. more than $500 million. (AP Photo/Bob Child, File)
Related Quotes
Symbol Price Change
AIG 1.73 -0.01
BRK-A 97,500.00 +2,549.00
{"s" : "aig,brk-a","k" : "c10,l10,p20,t10","o" : "","j" : ""} Ronald Ferguson, 66, was convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. He also serve two years of supervised release.
U.S. District Judge Christopher Droney noted that Ferguson's sentence falls far below federal sentencing guidelines, which called for him to receive a life term in prison.
Rob Dawg writes:
How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. They can put the pedal to the floor and it will take a very long time before that much weight can even get moving.
Don't count out the Pig Men just yet, Rob. Ben may have blown his interest-rate bazooka, but last time I checked, the federal government has a monopoly on currency creation, and quite a few levers to pump massive amounts of credit as well, not all of which have been exhausted yet.
Perhaps they cannot force banks to lend (though technically they could if they completely nationalized them GSE-style), and they cannot force borrowers to borrow. However, they can cut every adult American a big fat stimulus check, and they can directly employ millions of Americans in New Deal style make-work programs. This could potentially have the same dilutive effect of ZIRP in a low-debt environment.
Remember: monetary/economic policies are being made by politicians who are not just facing record Debt-GDP ratios. They are also facing huge unfunded future liabilites (S.S. & Medicare) as the Boomer pig passes through the taxpayer python. These politicians do not like deflation, and will do almost anything to defeat it. HeliBen himself declared it Enenmy #1.
Don't count out high inflation just yet. The debasement party's just getting started.
"The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,323 last month, down from $1,413 the previous month, and down from $2,049 a year ago. Adjusted for inflation, current payments are 37.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 48.7 percent below the current cycle's peak in June 2006."
Average monthly payment (they assume a 30 year fixed rate loan) is now about half of the peak in 2006. And prices are still falling fast. At 5% price drop each month, homes would be 45% cheaper in Dec 2009 vs Dec 2008. If that sounds wildly high, remember that prices dropped 34.5% in the last year. Feel free to make the usual arguments about CS vs medians, but both declines are massive.
I used to give Jas a harder time about his complaints about us Americans. Recent events make that more difficult to do, sadly. \t ac | \t \t \t \t12.16.08 - 1:59 pm | ac | 12.16.08 - 1:59 pm | #
We're not all dopes. The "and bred" part is wrong - several generations ago we beat Hitler and Tojo. More recently, we beat the Soviet Union.
We were naive about the level of uncaring and corruption at the top - which has turned out to be limitless. And I bought a house in 11/2005, so I was naive too. Didn't foresee the drastic discontinuities until I started reading here a year later.
ac writes:
The simple fact that Keynesians seem unwilling to acknowledge (perhaps because they perceive it as part of the left-wing/liberal agenda) is that presidents like Ronald Reagan and George W Bush were super hard-core aggressive Keynesians.
AC
i think you are half right
reagan for example spent money like a drunken sailor...big increaeses in defense spending, 500 ship navy for example, but never raised taxes during the boom years of the economy
Keynesians believe gov spending and taxation should be counter cyclical not gogogo all the time
reagan by the way did this as volker was raising interest rates thru the roof to halt inflation...
which ment that reagan made volkers job all that more difficult
Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Anonymous | 12.16.08 - 2:04 pm | #
Anon- dont throw out the baby just yet you are forgetting that BO's T dollar plan talks of all the muni projects that are ready for shovel to ground...
it will come in the form of stimulus after the innaug
It is also unknown whether π and e are algebraically independent, although Yuri Nesterenko proved the algebraic independence of {π, eπ, Γ(1/4)} in 1996.[49] However it is known that at least one of πe and π + e is transcendental (see LindemannWeierstrass theorem).
Rob Dawg, you made a good comment in an earlier thread:
Builders in general need to keep the pipeline open. They are till in denial. New starts down 16%, permits down 19%. All the builders I know think they'll be the only one to weather the downturn and then they'll clean up. It's sad. At least half of them are destroying themselves for no reason.
How deep are these guys' pockets? Unbelievably, they are still fighting open space battles here in New Jersey, while at the same time crying for local government tax relief because they cannot fill their developments.
Seriously, how do they have the money to buy land and fight court cases? I don't understand it.
34.5% in the last year. Feel free to make the usual arguments about CS vs medians, but both declines are massive. some investor guy | 12.16.08 - 2:07 pm | #
So who would sign a mortgage in the face of that depreciation? Would you not want to wait for things to at least level off? are the payments cheaper than rent?
We could say they spend money like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, because the sailors are spending their own money.
As the FDIC takes money from the banks to pay money that the TARP was supposed to cover, we'll know this musical chairs money game preordained to leave the taxpayers looking for a chair is up when:
The Fed gov refuses to accept, like a fallen Chinese dynasty, its own currency in payment for its taxes.
When you gots to carry some flour or beans down to the IRS to pay your taxes, you'll know the gig is up.
So who would sign a mortgage in the face of that depreciation? Would you not want to wait for things to at least level off? are the payments cheaper than rent?
Blackhalo | 12.16.08 - 2:12 pm | #
Born and bred dopes like my exwife.
Closed on a house, moved in, and had her first child two weeks ago. Her hubby is still reeling from the law school student loans. Had to have a house before the baby.
"Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Anonymous"
I think this is a fine idea (public entities asking for assistance from TARP). Why not get in on financing at a known rate, with a gigantic amount of capacity?
It's going to be tough to increase credit here. All the good ponzi schemes have been exposed - FNM, FRE, AIG, ABS, MBS, CMBS, derivatives, Bear Stearns, Lehman, private equity, hedge funds, etc.
It is so so wrong, but we really need a new ponzi vehicle. Seriously.
Don't count out the Pig Men just yet, Rob. Ben may have blown his interest-rate bazooka, but last time I checked, the federal government has a monopoly on currency creation, and quite a few levers to pump massive amounts of credit as well, not all of which have been exhausted yet.
Don't count out high inflation just yet. The debasement party's just getting started.
HARM
I laugh at people who think the Fed Funds Rate stops at zero. My issue is with response time errors. If the "pi" "e" "golden ratio" comments didn't cement my nerdiness the BBQ with tequila event must have.
What's going to happen is classic heterodyne response feedback. The inputs (easing) will not provide output data until there is so much easing that the stimulus will trigger runaway inflation.
We could see a case where investing in housing is considered a good idea because it returns half the rate of inflation.
I just shake my head at anyone buying anything longer than 2 year bills/bonds. The exception is Cali munis who are just so juicy.
"Keynesians believe gov spending and taxation should be counter cyclical not gogogo all the time
mock camus turtle | 12.16.08 - 2:08 pm | # "
Yes, Keynes is counter-cyclical in theory and hyper-cyclical in practice (even being contractionary at the wrong time, such as the FDIC setting FDIC insurance low in the boom and high in the bust--and similarly states with payroll taxes).
bgates(Unrated) writes: \t"More recently, we beat the Soviet Union."
or they just collapsed on themselves. something about an entrenched elite losing legitimacy... \t bgates | \t \t \t \t12.16.08 - 2:13 pm | # OUCH. I see your point.
Reagan for example spent money like a drunken sailor...big increaeses in defense spending, 500 ship navy for example, but never raised taxes during the boom years of the economy
It was the 700 ship Navy and RWR was absolutely clear as to the reasons behind his spending. One was the rebuilding of US military force projection and two was the deliberate intent to encumber the Federal govt with debt that would restrain growth of government. His failure was in believing Congress would remain fiscally responsible as it had been for the previous two centuries.
"It is so so wrong, but we really need a new ponzi vehicle. Seriously.
Angry Saver"
Those are easier to create than you might think. Many of them are not obviously ponzi or pyramid schemes to the casual observer. A few aren't even recognized as such until much later. If you mix a ponzi scheme with an actual profit-making business, it can get really difficult to recognize.
Sue (Capital S) writes:
Rob Dawg, you made a good comment in an earlier thread:
Thanks, I didn't know my comments were actually followed.
RD: Builders in general need to keep the pipeline open. They are till in denial. New starts down 16%, permits down 19%. All the builders I know think they'll be the only one to weather the downturn and then they'll clean up. It's sad. At least half of them are destroying themselves for no reason.
How deep are these guys' pockets?
It's a holdover from the loose credit market. They were granted lines of credit that would never be granted today. Not just them, me too. I've got a sweet HELOC tied to the FFR.
Unbelievably, they are still fighting open space battles here in New Jersey, while at the same time crying for local government tax relief because they cannot fill their developments.
IMO those are separate battles. Open space redesignations is winning the lottery. Buy "open space" and sell "development land." The existing developments are contrarywise built into municipal budgets.
Seriously, how do they have the money to buy land and fight court cases? I don't understand it.
Just remember that dying animals are not rational.
This is gonna be a buy the rumor, sell the news. Everybody knows the rate is already effectively ZIRP. But they're hanging in there because they expect everybody else to rally.
Rob,,,, Jeez please dont start up that crap again from yesterday... those trolls from yesterday that couldnt courtesly discuss fiscal policy without name calling might see your smoke signals and be directed to come back....
i agree with the part of your assessment that some of the spending increases were motivated to encumber the gov via debt and stem other expenditures
but what i think stockmans book, "triumph of politics" makes clear....and this gets back to ac post earlier...
is that they had reason to believe, at least eventually that the tax cuts would not sufficiently stimulative to be at least revenue neutral, counter to their claims
that is... they were not operating on the portion of the laffer curve that yielded the results they claimed...ie increased revenue due to economic growth
RWR was in my opinion not a keynesian
btw...was it a 700 ship navy??? im getting old, didnt remember that
also i think the reagan people wanted to continue the arms race with the soviets to push the ruskies economy over the edge...communism was failing and only needed a few more nudges after the afghan war etc to bring it down...and he succeeded
(however i think the ussr was headed for the scrap heap anyway but what the heck sooner than later thanks to RWR
UGA Dawg writes:
Rob,,,, Jeez please dont start up that crap again from yesterday... those trolls from yesterday that couldnt courtesly discuss fiscal policy without name calling might see your smoke signals and be directed to come back....
Good point but it is fine line. I just wish they'd realize I don't lash out or respond to deliberate provocation. I share your concerns for both civility and politicization.
btw...was it a 700 ship navy??? im getting old, didnt remember that
Mock Turtle,
This is why I participate here. Reasoned discussion. Thank you.
Yes, 700 ship Navy was the metric. I was working for contractors working toward that in those days. This is one of those places where wikipedia is successfully rewriting history. Shame.
RWR was not a Keynesian. He wasn't a unionist despite holding high status in the SAG either. It was real simple. Starve the beast. The flaw in the plan was that the beast could print food.
RWR wanted to defeat the "commies." He did. I cannot imagine 2008 with an intact Soviet Union at the throats of an increasingly militant Mainland China (on the verge of) fighting over material resources.
Why can't oil producing countries use deficit spending? If I was going to buy government backed debt why wouldn't I buy the debt from a country with a very valuable and necessary resource?
Forgive any lack of knowledge if I'm missing the obvious.
yes , one of the best things about most of the people who post here is that
we can disagree (or agree )
and be civil about it
i probably learn more from the people who post here who have a different political slant to their economic theory than i do...forces me to question my ideas...im wrong ofte
Yeah, what was that movie? It's on the tip of my tongue. It starred Leonard DiCaprio and some little hotty, and they were on a big boat, and then the boat hit something, and then the orchestra played, and then...
Sold my Phoenix/Maricopa county munis about two weeks ago. Am I prescient? Don't know, but the Bloomberg article about cities wanting part of the Tarp makes me wonder.
Sheila Bair is so yesterday.
Barn -Door -Horse or something like that.
pony hater
I'm sure the added expenses will help the banks and make them more likely to lend.
/snark
Got Popcorn?
Neil
Seriously, though, this seems counter to the whole "rescue the insolvent banking system with taxpayer dollars" plan. Did Ms. Bair not get the memo?
Did Ms. Bair not get the memo?
Nemo | Homepage | 12.16.08 - 12:26 pm | #
She shredded it and wrote the "rescue the insolvent homeowners with taxpayer dollars" memo.
A year or more after the crisis began, they realize things aren't normal. They should be increasing the rates for what horrors 2009 will bring (IO ARMS, Alt A ARMS, etc.).
This means even lower returns on your MM account.
It's Shela's way of getting in on the free money.
1) Announce new rates
2) Banks go whining to congress
3) Treasury announces that it is underwriting the added cost.
Technical question. When the FDIC temporarily raised the amounts it guarantees, did it also raise the base on which premiums were assessed?
<i>This doubles (or more) the insurance rate for most <b>insitutions</b>.</i>
Man, CR is getting excited. Another minor typo. But it suits me to a "T".
maybe they can follow cali's lead and issue "IOU's"
this should effectively make BFF go from 1 to 11.
What a lagging indicator. I still had this senerio information long ago, delivered by horse and buggy.
Saying he was "forced" to cut costs by the doubling of JPMorgan Chase's FDIC premiums, Jamie Dimon today announced that the bank will lay off an additional 500,000 employees, raise most credit card rates to 86% APR and award each executive a $4 million retention bonus. Dimon will also ask for the entire $350 remainder of the TARP to cushion the blow.
The OPEC cartel plans to slash its oil production by a further 2 million barrels a day, the Saudi oil minister said on Tuesday, as producers struggle to contain a collapse in prices amid a global recession.
Seems americans arent the only ones with entitlement issues...
.....
"This doubles (or more) the insurance rate for most insitutions."
Way too late, but even if they'd done this ten years ago, it wouldn't be enough to deal with what we're facing.
Gotta remember to use the buttons when commenting with CR Companion. Doesn't like the <>, but then again, now we can use >0,...decent trade off.
No big deal. They can get extra TARP funds to pay for it
sdtfs, thanks. I once asked Tanta if she spell checked her pieces - she frequently would insert a weird word here and there, and I wondered what the spell checker would think. T just laughed. She had never used a spell checker in her life! All typos were intentional ... I can't say the same thing for me.
Best Wishes.
There goes the current .02% savings account rate at local bank with this increase of cost.
Which banks pay the higher rate?
Tarp or UnTarp
Just curious
"Policymakers will have to worry about a strange beast called stag-deflation (a combination of economic stagnation, recession and deflation); about liquidity traps (when official interest rates become so close to zero that traditional monetary policy loses effectiveness); and about debt deflation (the rise in the real value of nominal debts, increasing the risk of bankruptcy for distressed households, firms, financial institutions and governments)."- Roubini
http://www.taipeitimes.com/News/editorials/archives/2008/12/17/2003431295
But of course, like Krugman, no mention about credit bubble business cycle fraud as the cause of it all and thus the need to deflate.
We could say they spend money like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, because the sailors are spending their own money.
‐ Ronald Reagan on Congress
OT but important (maybe).
From the FT about why OPEC (excluding Saudi Arabia) has difficuulty cutting production:
"For producers and exporters the pain is just beginning. At current levels a number of Opec producers cannot cover their national budgets. Iran and Venezuela, for instance, need a price of $90 a barrel to sustain current spending. Having grown accustomed to high prices, countries such as Russia and Nigeria also face difficult adjustments. The stage is set for a painful downturn and possible political unrest in 2009."
He's the link: FT.com / Comment / Opinion - The low oil price calls for a fresh set of rules
Having grown accustomed to high prices, countries such as Russia and Nigeria also face difficult adjustments.
It was only 90+ for what? A year and a half maybe? They are bigger wh*res than we are (if you believe thats possible).
......
Anonymous,
thats a whole lot to have to look out for dontcha think...
CR: "All typos were intentional ..."
there was that "compleat" kerfuffle, but there were also those earthy colloqialisms... (sp?)
Driving a substantial portion of the federal budget each year is the governments social insurance programs: Medicare, Medicaid and Social Security. Estimates prepared by the Government Accountability Office (GAO) the investigative arm of Congress show that the projected cost to the government of paying for these programs in the future will be at least $52.7 trillion. More simply, every American currently owes at least $410,000 to pay for the commitments made by the government in these areas, though that figure is on the rise....
from coburn's annual waste report:
http://coburn.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=9badb127-e02d-49b0-946d-a2bd8cb50eae
this is EXACTLY what i predicted would happen, and is why i couldn't understand why banks and their customers weren't more offended by the FDIC getting into the mortgage modification business, an area clearly outside its realm.
Having grown accustomed to high prices, countries such as Russia and Nigeria also face difficult adjustments.
It was only 90+ for what? A year and a half maybe? They are bigger wh*res than we are (if you believe thats possible).
......
nades
OPEC members will be cheating like US Senators getting home loans when it comes to pumping quotas.
--
Govt insuring risk taken by private for-profit institutions?
Only for Gangistan of America and paid for by the biggest dopes in history who live in Dopeland of America.
CR reports on the activities in Gangistan and we get to read the take of those in Dopeland who are powerless except for complaining about the Gangistan. Agents of Gangistan are fully in-charge of the USG at all levels.
Gangistan is safe and secure, more than ever, but for how long?
Jas
Jas I left a post for you on the last thread. Record "deflation" if you will....
Credit unions? What about their equivalent?
Can a bank with little or no notification drop coverage (notification to end user). Will any?
British banks
British banks are likely to need even more help from the Government, warns Bank of England chief | Mail Online
So the Bankers will just redirect TARP funds back to the issuer? Makes perfect sense...give them free money...raise rates...banks give it back. Gives the impression that something is being done. Fabulous...
Peter Schiff is usually right, but he has a few blind spots. One is his insistence at talking about dollar inflation, when deflation is currently taking place.
The second is his position on the car companies:
YouTube - 12/10/2008 Part 1/3 Peter Schiff On Kudlow & Co: Market Drilldown
Starts at 1:20.
And please MUTE the video when Kudlow speaks.
Ot-just hung up phone with dealer, said banks were still not buying auto paper. I asked him what kind of paper he stated 600 or below..I ment'd it sounded like early 90's underwriting..
He proceeded selling me on letting him use our software in a 30 day pilot..were not selling anything etc...
I sd "we already have enough airplanes in the sky"
The last 7-8 years created perception and expectation bubbles in peoples head.
They don't know what is going to hit them..
Wow, insurance isn't free?
I wonder what the size of insured deposits -vs- insured TARP bank bonds will be. Are the good banks now subsidsing the bad ones?
Hawley Smoot writes:
Peter Schiff is usually right, but he has a few blind spots.
Third was his belief in Europe.
cd,
Are you saying credit score 600 or below?
Dopes abound in the gangistan dopeland of America (GDoA). The born and bred dopes cry tears of dopedom while the gangistanis sharpen their shovels and dope prods, riding their scamsteeds into the fields of bankruptcy, slashing at the running born and bred dopes who can only buy further into the scam as they fall. Small pueblos rise out of the credit mud made of scams and thieves, and gangistan bankers rejoice untold scam dope fiends of American dopes bred and born like slashing bankster profit greed dopes against the big scam of gangster dopeland. Indeed.
Hey.. even chip makers are getting bailout. Where are our ponies?
Lez see.. da banks say show me da money, the FDIC sez give da money, the Treasury does print da money, da the FED sez hears da money. Now everybody's got a brand new pony......Hoocoodanode!!
2009 gonga be gute one.
Downturn spurs "survival panic" for some
Downturn spurs survival panic for some
| Reuters
In the coming months, mental health experts expect a rise in theft, depression, drug use, anxiety and even violence as consumers confront a harsh new reality and must live within diminished means.
It is also a rude awakening for a generation of shoppers who grew up on easy access to credit and have never had to limit purchases to simply what they needed or could afford.
This should have been done two years ago! FOOLS and RETARDS!!!
"It is also a rude awakening for a generation of shoppers who grew up on easy access to credit and have never had to limit purchases to simply what they needed or could afford.
Ministry of Truth"
Yesterday's shoppers equal today's shop lifters.
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
I asked him what kind of paper he stated 600 or below..
Great news if you own a JD Byrider franchise.
"Daddy, I want a new doll for Christmas."
"Then go steal it, honey. Santa's not bringing Christmas presents for awhile."
"I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?"
A phrase tends to lose all meaning or negative connotation after it is repeated a few thousand times.
"sartre writes:
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes".
Who is this "Jas" you talk about?
Kung fu-yes..
to be clear..the perception of people hanging paper in the auto vertical has been polarized to the everyone should get a loan side...
I kinda of like the 90's due diligence underwriting style...c
Elvis writes:
"Daddy, I want a new doll for Christmas."
"Then go steal it, honey. Santa's not bringing Christmas presents for awhile."
Elvis | 12.16.08 - 1:22 pm |
Elvis,
Here is one for you...
A Recession Christmas Video
Who is this "Jas" you talk about?
Thanks Ken.
There are dopes. They are American dopes. They have been born, of course, or else they would not be here today. More importantly, they have been bred. These are pedigreed dopes. Dopes which have come from a long line of elder dopes, grand dopes, and graet grand dopes, specially picked and raised free ranged for their dope qualities. Thus is created the phrase "Born and Bred Dope," and when referring to the American line of this breed of dope, it is proper to say it is an American born and bred dope, or to use the dope-trade term for america, "Gangistan." Gangistani born and bred dopes are some of the most profitable on the market, they are the most docile and easy to manage and breed, and they possess some of the finest fur.
Barnum was generally beloved despite a similar attitude.
Nice Jas tribute, Hoops, you're got that W S Burroughs mojo working.
Speaking of JD Byrider, those guys really need to update their "Fast Facts" section:
"Approximately 40% of the U.S. population has non-prime or sub-prime credit."
I thought we were all subprime now.
According to research from Biryini Associates, since 1961, investors in mutual funds have earned annual returns of less than 1%. Far less than inflation and even less than the annual fund fees.
And Greenspan and Bernanke continually steer investors to wall street. Worse still, they just convinced CONgress to commit at least $700 billion to bailout the rip off artists and ensure this year's bonuses on wall street.
It's no wonder so many families are broke. Government sponsored shams.
America can't afford anymore of wall street's prosperity.
MOT-
That is what scared me most...
Could you imagine a cell phone blackout of 4 hours..or a total electical blackout of a couple hours at night..
The campers, outdoors people will be fine..The people who need light to comfort them...not so good
Mot-correction scares
Nice Jas tribute, Hoops, you're got that W S Burroughs mojo working.
I was thinking Joyce. Jas Joyce. He wrote Finnegan's Foreclosure.
Buffy's vampire boy, Ex-General Re chief gets 2 year sentence for fraud
Ex-General Re chief gets 2 year sentence for fraud
| Reuters
Ronald Ferguson, a former chief executive of General Re Corp, a reinsurance unit of Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz), is the first of five defendants convicted in the fraud to hear his sentence.
of all of the commodity angles, moocows may be the most underrated
Dawg,
That is a good one. I hope not too many kids got the Dora Rectal Thermometer for Xmas. The only thing worse would be a Hummer.
Link to a very succinct article on Keynesian economics and the current crisis-
THE WAY WE LIVE NOW; The Remedist - NY Times
Link to a very succinct article on Keynesian economics and the current crisis-
What remedy would Keynes prescribe for an economy in crisis because it can only survive by borrowing ever increasing amounts of debt relative to its GDP?
of all of the commodity angles, moocows may be the most underrated
Or lemon platt stands.
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides. I think, if you look back over the Madoff scandle and ask where all the money went, you'll find it essentiallly was skimmed off to pay all the salaries of those who touched it. Well, given that the market is down in inflation adjusted numbers significantly over the last 10-15 years, we may ask ourselves, perhaps the losses are simply the rake from wallstreeters to provide the service of losing our money slowly.
Trying to play catch-up with rising insurance fees to pay current losses is a losing game when you are charging the losers more to cover their own losses...as if raising rates to those in a flood zone will generate enough money to fix the problem...why don't they just keep their money and use it to fix their own problem and get the middleman insurance company out of the way...you can't increase the value of your money by funneling it through some insurance program.
We as a nation have to learn that Government and Wallstreet and expenses and not wealth generators. We when run into money problems we have to reduce their hold over our money, not increase it.
Jas may be caustic, but he hits a cord that rings true.
From the nytimes link above:
Today, you might add a further convention the belief that mathematics can conjure certainty out of uncertainty.)
Someone has been reading CR.
That is why Keynes did not think that cutting the central banks interest rate would necessarily and certainly not quickly lower the interest rates charged on different types of loans. This was his main argument for the use of government stimulus to fight a depression. There was only one sure way to get an increase in spending in the face of an extreme private-sector reluctance to spend, and that was for the government to spend the money itself. Spend on pyramids, spend on hospitals, but spend it must.
We've been doing this non-stop since Reagan took office. What do we have to show for it?
Massive debt and an addiction to deficits?
How long can this country keep endlessly pursing the economic policies of the past 25 years before it completely loses its ability to borrow?
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides. I think, if you look back over the Madoff scandle and ask where all the money went, you'll find it essentiallly was skimmed off to pay all the salaries of those who touched it.
Average Joe | 12.16.08 - 1:34 pm | #
Well, no.
Many people (including a bunch of the charities) were withdrawing money every year. That's where the majority of the money went. And that's why even people who got money out are scared: they're most likely going to be getting a letter soon, telling them they have to put that money back.
Interesting Times writes:
From the nytimes link above:
Today, you might add a further convention the belief that mathematics can conjure certainty out of uncertainty.)
Someone has been reading CR.
Or Scott Adams. Come to think of it... Has anyone ever seen Bill and Scott in the same room? Hmmm.
Anyway, the article also says:
Today, Keynes is justly enjoying a comeback.
That's gonna leave a mark on the economy.
"Why, he asked, should anyone outside a lunatic asylum wish to hold money? The answer he gave was that holding money was a way of postponing transactions. The desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future. . . " - Keynes
What was the average lifespan when he wrote this? No longer applies.
CONJURE'S BOND CRASH CLOCK
The time is--
11:53:00
"Have a nice day."
If the government owns the bank, will the FDIC charge the government for insurance?
Cordially,
Килгор Траут
mp, what's the "event" that causes the clock to move forward by 1 full minute?
The largest CPI drop on recording coinciding with a Fed meeting.
How long can this country keep endlessly pursing the economic policies of the past 25 years before it completely loses its ability to borrow?
I thought we had reached the limit in 1998. Clearly I was wrong. Big time.
Much of the sp-called "borrowing" is actually a sham as it is based on borrowing of fictitious money spawned from ever increasing leverage.
Ponder the size of the Fed's guarantees in the past few months ~ $7 trillion. In my mind, that kind of number can only come from a ponzi system. I can't think of any other possible explanation.
It's starting to become apparent that the entire Wallstreet and Banking system is too expensive for the service it provides.
As Joseph Tainter would say: Declining marginal returns on investments in complexity.
It drains too much out of ordinary people.
Who will, in the end, PREFER to go back to a lower level of investment in complexity (which will include a lower standard of living) because the returns on their engagement will be more reliable.
Does the negative CPI pretty much guarantee we will get ZIRP?
Insurance. Bwahahaha! Now there's an effective business model. (a) collect premiums (b) fight every claim and pay absolute minimums, grudgingly (c) when evidence of overwhelming claims are imminent, artfully manage bankruptcy or dissolution. (d) TAKE MONEY
Newest Wall Street/Main Street Mantra
HOW HAVE YOU MADOFF?
The simple fact that Keynesians seem unwilling to acknowledge (perhaps because they perceive it as part of the left-wing/liberal agenda) is that presidents like Ronald Reagan and George W Bush were super hard-core aggressive Keynesians.
I think a lot of the focus on deregulation is facade to hide a crisis in the orthodox economic agenda:
The economic and fiscal failures of the past two decades have occurred in despite a heavy handed application of Keynesian economics.
Ronald Reagan = Keynesian
George W. Bush = Keynesia
"The largest CPI drop on recording coinciding with a Fed meeting."
Sounds like nice cover for a 75 bp cut to me. The truth, however, is that if they cut at all there's really no reason not to go whole hog to ZIRP. Is 0.5% or 0.25% really any different from 0%? For any reason that isn't purely psychological?
We've been doing this non-stop since Reagan took office. What do we have to show for it?
ac | 12.16.08 - 1:37 pm | #
the Google?
How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. They can put the pedal to the floor and it will take a very long time before that much weight can even get moving. Then we can talk about trying to slow it when it finally gets rolling too fast (inflation). If the govt had little debt even light taps would be able to influence the economy.
30 mins to find out if my HELOC goes to 3.5% or 3.25%. I looked at the new terms for the same loan. 7.7% That's the lending lock up that's being denied by some.
Anyone who has read "Rise and Fall of the Great Powers" knows the great powers always end up going into debt when they decline. Where did all of Spain's gold vanish to? It didn't, it simply became worthless as there was too much of it. Just so now with American dollars and our excess wealth.
We've been doing this non-stop since Reagan took office. What do we have to show for it?
ac | 12.16.08 - 1:37 pm | #
the Google?
jus me
Well now that you put it that way...
Average Joe:
i worked "on wall st" but not in investment banking, but many of my MBA classmates did. the salaries were beyond astounding and i could never understand how it made economic sense, in the long term, to pay people so much for adding so little value. some add value, many do not, and many more detract value.
this is the third time in my life i have seen what i believed was a total scam, identified it for what it was, but for years was ridiculed by others because the system perpetuated and thrived.
First: I-Banking model
Second: dot.com valuation
Third: housing bubble
i profited a little on the scenarios, but nowhere near the potential....i just seem to play it safe and plod along with decent returns but never shoot the lights out (and never get whacked 50% down either thought...so not bad at all). oh well.
CONJURE'S BOND CRASH CLOCK
The time is-- 11:53:00
A whole minute. Was conjure looking at the Yen by any chance? Remember that I predicted an auction failure in December. When that happens the clock is gonna spin.
Do you guys have any Put recommendations?
thanks.
the internets...
the Batman!
that was me at 1:52
Angry-
Much of the sp-called "borrowing" is actually a sham as it is based on borrowing of fictitious money spawned from ever increasing leverage.
truer words were never spoken. This has been my fear along.. that we have levered and accounted for the same 1 dollar 6 times at the same time, never transfering the credit off the books...
Forget deflation, falling oil prices and FDIC rate-hikes. You know things are getting seriously bad when the People Who Count have to accept pay cuts:
Goldman Sachs Cuts Jobs, Slashes Average Pay 45% to $363,654
Oh, the well heeled humanity!
A whole minute. Was conjure looking at the Yen by any chance? Remember that I predicted an auction failure in December. When that happens the clock is gonna spin.
Rob Dawg | Homepage | 12.16.08 - 1:52 pm | #
89 bottles of yen on the wall 98 bottles of ye
The CPI is so old fashioned and the yield curve is so over-valued, and Fed meetings are so out-dated, and capitalism is so very yesterday ... What we need is new structure, one without The Fed, one without central banking, blah, blah, blah ...
Doh...
/me shoots typist
The CPI is a distraction. The fed & gov game the numbers anyway. The fed's main concern is credit creation.
Without credit creation, the entire debt based money system collapses. No ifs, ands or buts. We either create enough new credit to pay the aggregate interest of previous credit or the system craps out.
The fed will create credit. They will not allow credit deflation.
REBEar writes:
Do you guys have any Put recommendations?
Stocks, bonds, housing.
Anyone who has read "Rise and Fall of the Great Powers" knows the great powers always end up going into debt when they decline. Where did all of Spain's gold vanish to? It didn't, it simply became worthless as there was too much of it. Just so now with American dollars and our excess wealth.
Well of course real wealth comes from productive effort. The gold gave Spain an excuse not to engage in such effort because they were "rich" and didn't need to be productive. Hence, they got poor.
sartre writes:
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
au contraie mon frere
many of us here thanks to CR, Tanta, Roubini, Volker and other...
took steps to brace for a big downturn.
i got out of the market more than a year before the top and received months of ridicule
a good friend who did not listen told me yesterday he had lost fore than 53% of the value on his 401k which had been worth well over 150k.
Plus ca change, plus c'est la meme chose
Oh my golly and gads, the 30-year Treasury @ 2.92, the 3-month Bill @ zero, and since everything falls apart in the middle, the 5-year is up, which probably means nothing at all!
"How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. "
That, and everyone now knows what 'the man from nantucket' said above is true, since 'net worth' no longer means what it used to.
In my mind's eye, I see the Fed meeting. Bernanke is looking around the table sizing up everyone.
He says, "We're all deflationistas now."
"Lacker, for the record, you got a problem with that?"
Well of course real wealth comes from productive effort. The gold gave Spain an excuse not to engage in such effort because they were "rich" and didn't need to be productive. Hence, they got poor.
Uh oh. So to avoid this sort of thing I should probably stop reading blog comments and go do something?
that sounds like work but I'll give it a try.
Is 0.5% or 0.25% really any different from 0%? For any reason that isn't purely psychological?
\t Assume Crash Positions! | Homepage | 12.16.08 - 1:49 pm | #
Given that the Fed can sell T-Bills at 0% and get a 0%,.25% or .5% return on it, I suspect anything more than ZIRP is infinitely different.
As Yves at NakedCapitism pointed out, the spend spend spend solution encouraged by Keynesian may not work for a heavily debted government. So the U.S. of the depression is now the Germany of the 1930's.
Governments have no option but to spend. So they will choose this solution no matter. It would be like a financial planner encouraging you to save by doing your own finances. You will never hear this advice from a financial planner.
Just like it's always a good time to buy if your a realtor, well it's always a good time to have government solve the problem if your a politician.
I doubt anyone would get elected for promising to do little to nothing for you.
Goldman Sachs was downgraded to A1 from Aa3 by Moody's. (Bloomberg)
AMG Data Services reported that muni funds that report weekly figures suffered net outflows of $1.05 billion during the seven-day period ending Dec. 10. That's more than triple the pace of withdrawals in the previous week. Outflows had been less than $450 million a week since mid-October.
Clients withdrew 0.47% of the funds' assets during the week, according to the Arcata, Calif.-based fund tracker. Among all muni mutual funds - including those that report monthly - net outflow was $954.5 million, or 0.28% of muni funds' roughly $338 billion in assets.
Hmmm?
sartre writes:
I noticed that folks don't protest too much now when Jas calls americans "born and bred dopes". Maybe the events of last few months make us wonder if most of us indeed are dopes?
I used to give Jas a harder time about his complaints about us Americans. Recent events make that more difficult to do, sadly.
Anonymous writes:
Oh my golly and gads, the 30-year Treasury @ 2.92
We were at "pi" and headed towards "e." Can the golden ratio be far behind?
So why are municipal bonds -- which already yield more than their taxable counterparts in the corporate world -- widening their underperformance? Partly, it is a function of risk aversion, as investors flee uncertain investments and instead seek safety in the lower yields of Treasury instruments. Growing budget problems in such states as California and Michigan are also taking their toll on investor sentiment. Indeed, the flight from munis is so notable -- the once safe and stodgy sector is down over 8% this year -- that one money manager plainly states, "The muni market is not working normally."
Even muni issuers such as Goldman have been recommending the purchase of credit default swaps against the possibility of municipal defaults. This default fear has especially rocked the high-yield segment of the muni market, which has seen declines approximating 30%. These concerns, combined with the increased need for hedge funds to invest in the most liquid instruments, has led to a historic divergence in the behavior of munis relative to Treasuries. This weakness recently led PIMCO to suspend dividends in its municipal closed-end funds.
Why the Muni Bond Market Is in Decline -- Seeking Alpha
12th... your doing research...
Can the golden ratio be far behind?
The fed will divide by zero if necessary.
Governments have no option but to spend. So they will choose this solution no matter.
The outcome may ultimately make the Great Depression look like a "Sunday picnic" as people like to say.
Goldman Sachs was downgraded to A1 from Aa3 by Moody's.
Anonymous | 12.16.08 - 1:59 pm | #
Do they care? It seems they have a direct IV to the treasury's pocket.
This just in.
"The median price paid for all homes combined last month was $285,000, down 5 percent from October and down a record 34.5 percent from November 2007. Last monthâs median was the lowest since it was $298,000 in April 2003, which was the last time the median was below $300,000. November's median stood 43.6 percent below the peak $505,000 median reached in spring and summer of last year.
The median price has eroded consistently over the past 16 months as price depreciation swept the region, discounted foreclosures ballooned in inland markets and sales stagnated in higher-end neighborhoods. The latter have suffered from, among other things, a difficult financing environment for large mortgages.
Foreclosures have accounted for about half of all Southland resales during the past three months. In November, 54.6 percent of all the homes that resold had been foreclosed on at some point in the prior 12 months. That's up from 50.9 percent in October and 18.8 percent a year ago...
The median price paid for all homes combined last month was $285,000, down 5 percent from October and down a record 34.5 percent from November 2007. Last monthâs median was the lowest since it was $298,000 in April 2003, which was the last time the median was below $300,000. November's median stood 43.6 percent below the peak $505,000 median reached in spring and summer of last year."
A 5% drop in one month in the median home price. Amazing.
Glencore International AG (management buy out of Marc Rich & Co AG) is one of the world's largest suppliers of commodities and raw materials
See the CDS chart on this one:
News Kontent: Another Swiss giant on the edge ~ Glencore
" ac writes:
Link to a very succinct article on Keynesian economics and the current crisis-
What remedy would Keynes prescribe for an economy in crisis because it can only survive by borrowing ever increasing amounts of debt relative to its GDP?
ac | 12.16.08 - 1:33 pm | # "
Ponzi schemes have no sustainable equilibrium.
6 months of untangling the mess....
Madoffs Records Utterly Unreliable, Says SIPC Head
Madoff Failure Shows Oversight ‘Flawed,’ Levitt Says (Update1) - Bloomberg.com
I had a ex girlfriend scenario like that...
Begging for Bailout Cash, U.S Cities Told to Go Fish: Joe Mysak
Begging for Bailout Cash, U.S Cities Told to Go Fish: Joe Mysak - Bloomberg.com
tlanta, Detroit, Philadelphia and Phoenix have all asked in recent days for some of the Troubled Asset Relief Program billions. You can expect more to ask.
Some want the government to spend the money on infrastructure-construction projects and to buy short-term note issues to help tide them over. Others want the money to help pay for employees and mass transit, among other things.
Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Hoops' homage to jas also has elements of Dickens' description of the descent of the Chuzzlewits, a family no doubt well represented in current Wall St. circles.
Rob Dawg wins my "Nerd of the Thread" award for the "e" reference on the 30 year.
My wife would destroy me for a comment like that... until she realized she got the reference.
Kid: "Hey, I saw you shopping at K-Mart! Ha ha!"
Other kid: "What were you doing at K-Mart?"
Kid: " ... "
anyone else have a puckered onion in anticipation of mkt action after the announcement? could be fun watching it unfold through the close. but who knows anymore, we could hear crickets chirping after 2:15.
Illinois, which faces a projected $2 billion budget shortfall this fiscal year, planned the short-term bond sale to pay a backlog of bills of as long as 12 weeks. The sale, scheduled for yesterday, was delayed until next week. At the same time, Standard & Poors said it was considering cutting the states credit rating after Blagojevichs Dec. 9 arrest.
The state may be able to get the sign-off from another elected official, such as Secretary of State Jesse White, said James Shanahan, an attorney with Ice Miller, the states bond counsel in Chicago. All that would be needed is for someone with significant stature in state government to certify that there is no litigation that would affect the bonds, Shanahan said.
Justice is served:
HARTFORD, Conn. (AP) -- The former chief executive of General Re Corp. was sentenced Tuesday to two years in prison and ordered to pay a $200,000 fine for his role in a scheme that cost shareholders of American International Group Inc. more than $500 million.
In this Sept. 25, 2008 file photo, Ronald Ferguson, former General Re CEO, leaves U.S. District Court in Hartford, Conn., after a pre-sentencing hearing. Ferguson has been sentenced, Tuesday, Dec. 16, 2008, to two years in prison and ordered to pay a $200,000 fine for his role in a scheme that cost shareholders of American International Group Inc. more than $500 million. (AP Photo/Bob Child, File)
Related Quotes
Symbol Price Change
AIG 1.73 -0.01
BRK-A 97,500.00 +2,549.00
{"s" : "aig,brk-a","k" : "c10,l10,p20,t10","o" : "","j" : ""} Ronald Ferguson, 66, was convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. He also serve two years of supervised release.
U.S. District Judge Christopher Droney noted that Ferguson's sentence falls far below federal sentencing guidelines, which called for him to receive a life term in prison.
Yahoo! 404 - Page Not Found
Rob Dawg writes:
How long has it been since anyone dared repeat the "foot on accelerator pedal" myth of the Fed? It doesn't work any more. It doesn't work because the Federal govt is laden with $11 trillion in debt. They can put the pedal to the floor and it will take a very long time before that much weight can even get moving.
Don't count out the Pig Men just yet, Rob. Ben may have blown his interest-rate bazooka, but last time I checked, the federal government has a monopoly on currency creation, and quite a few levers to pump massive amounts of credit as well, not all of which have been exhausted yet.
Perhaps they cannot force banks to lend (though technically they could if they completely nationalized them GSE-style), and they cannot force borrowers to borrow. However, they can cut every adult American a big fat stimulus check, and they can directly employ millions of Americans in New Deal style make-work programs. This could potentially have the same dilutive effect of ZIRP in a low-debt environment.
Remember: monetary/economic policies are being made by politicians who are not just facing record Debt-GDP ratios. They are also facing huge unfunded future liabilites (S.S. & Medicare) as the Boomer pig passes through the taxpayer python. These politicians do not like deflation, and will do almost anything to defeat it. HeliBen himself declared it Enenmy #1.
Don't count out high inflation just yet. The debasement party's just getting started.
And there's more. Southland home sales up, prices down; foreclosures now half the market
"The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,323 last month, down from $1,413 the previous month, and down from $2,049 a year ago. Adjusted for inflation, current payments are 37.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 48.7 percent below the current cycle's peak in June 2006."
Average monthly payment (they assume a 30 year fixed rate loan) is now about half of the peak in 2006. And prices are still falling fast. At 5% price drop each month, homes would be 45% cheaper in Dec 2009 vs Dec 2008. If that sounds wildly high, remember that prices dropped 34.5% in the last year. Feel free to make the usual arguments about CS vs medians, but both declines are massive.
I had a ex girlfriend scenario like that...
cd | 12.16.08 - 2:03 pm | #
Let's hope she wasn't leveraged 40:1
I used to give Jas a harder time about his complaints about us Americans. Recent events make that more difficult to do, sadly.
\t ac | \t \t \t \t12.16.08 - 1:59 pm |
ac | 12.16.08 - 1:59 pm | #
We're not all dopes. The "and bred" part is wrong - several generations ago we beat Hitler and Tojo. More recently, we beat the Soviet Union.
We were naive about the level of uncaring and corruption at the top - which has turned out to be limitless. And I bought a house in 11/2005, so I was naive too. Didn't foresee the drastic discontinuities until I started reading here a year later.
Mr. Sparkle writes:
Rob Dawg wins my "Nerd of the Thread" award for the "e" reference on the 30 year.
My wife would destroy me for a comment like that... until she realized she got the reference.
LOL! Sadly I am so much that nerd that I was pleased to win this award.
Kenyan Economics:
The Standard | Online Edition :: Drumbeats of recession
ac writes:
The simple fact that Keynesians seem unwilling to acknowledge (perhaps because they perceive it as part of the left-wing/liberal agenda) is that presidents like Ronald Reagan and George W Bush were super hard-core aggressive Keynesians.
AC
i think you are half right
reagan for example spent money like a drunken sailor...big increaeses in defense spending, 500 ship navy for example, but never raised taxes during the boom years of the economy
Keynesians believe gov spending and taxation should be counter cyclical not gogogo all the time
reagan by the way did this as volker was raising interest rates thru the roof to halt inflation...
which ment that reagan made volkers job all that more difficult
as for bush fugedaboutit
"Let's hope she wasn't leveraged 40:1"
If that was intended as innuendo, I'm not 100% sure what it means, but it sounds hot.
I am dissapointed that CR Companion lacks a feature to vote in the FOMC meeting.
Bernanke: "What the! ...257 votes for a 500bp rise?!"
Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Anonymous | 12.16.08 - 2:04 pm | #
Anon- dont throw out the baby just yet you are forgetting that BO's T dollar plan talks of all the muni projects that are ready for shovel to ground...
it will come in the form of stimulus after the innaug
It is also unknown whether π and e are algebraically independent, although Yuri Nesterenko proved the algebraic independence of {π, eπ, Γ(1/4)} in 1996.[49] However it is known that at least one of πe and π + e is transcendental (see LindemannWeierstrass theorem).
Pi - Wikipedia, the free encyclopedia
Rob Dawg, you made a good comment in an earlier thread:
Builders in general need to keep the pipeline open. They are till in denial. New starts down 16%, permits down 19%. All the builders I know think they'll be the only one to weather the downturn and then they'll clean up. It's sad. At least half of them are destroying themselves for no reason.
How deep are these guys' pockets? Unbelievably, they are still fighting open space battles here in New Jersey, while at the same time crying for local government tax relief because they cannot fill their developments.
Seriously, how do they have the money to buy land and fight court cases? I don't understand it.
34.5% in the last year. Feel free to make the usual arguments about CS vs medians, but both declines are massive.
some investor guy | 12.16.08 - 2:07 pm | #
So who would sign a mortgage in the face of that depreciation? Would you not want to wait for things to at least level off? are the payments cheaper than rent?
Pimpco's Bill on BubbleVision...
this will shock you.... he's talking his book.
"More recently, we beat the Soviet Union."
or they just collapsed on themselves. something about an entrenched elite losing legitimacy...
Mock Turtle:
We could say they spend money like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, because the sailors are spending their own money.
‐ Ronald Reagan on Congress
As the FDIC takes money from the banks to pay money that the TARP was supposed to cover, we'll know this musical chairs money game preordained to leave the taxpayers looking for a chair is up when:
The Fed gov refuses to accept, like a fallen Chinese dynasty, its own currency in payment for its taxes.
When you gots to carry some flour or beans down to the IRS to pay your taxes, you'll know the gig is up.
So who would sign a mortgage in the face of that depreciation? Would you not want to wait for things to at least level off? are the payments cheaper than rent?
Blackhalo | 12.16.08 - 2:12 pm | #
Born and bred dopes like my exwife.
Closed on a house, moved in, and had her first child two weeks ago. Her hubby is still reeling from the law school student loans. Had to have a house before the baby.
FDIC visits the Double Down saloon: http://www.doubledownsaloon.com/
Re: I am dissapointed that CR Companion lacks a feature to vote in the FOMC meeting.
How 'bout no, you crazy Dutch bastard!
"Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.
Anonymous"
I think this is a fine idea (public entities asking for assistance from TARP). Why not get in on financing at a known rate, with a gigantic amount of capacity?
Market opens in four minutes.
I think it goes like this:
If your guys is HMFIC then its congress's fault... if it is the other teams, its his.
This hardly sounds responsible:
Canada
It's going to be tough to increase credit here. All the good ponzi schemes have been exposed - FNM, FRE, AIG, ABS, MBS, CMBS, derivatives, Bear Stearns, Lehman, private equity, hedge funds, etc.
It is so so wrong, but we really need a new ponzi vehicle. Seriously.
11:15 almost here - spx to 895 then down to 855 in a flash?
Am I the only one hearing the showdown theme from The Good, the Bad, and the Ugly in my head while waiting for the announcement? Just wondering.
"but we really need a new ponzi vehicle"
gold "deposits"
Don't count out the Pig Men just yet, Rob. Ben may have blown his interest-rate bazooka, but last time I checked, the federal government has a monopoly on currency creation, and quite a few levers to pump massive amounts of credit as well, not all of which have been exhausted yet.
Don't count out high inflation just yet. The debasement party's just getting started.
HARM
I laugh at people who think the Fed Funds Rate stops at zero. My issue is with response time errors. If the "pi" "e" "golden ratio" comments didn't cement my nerdiness the BBQ with tequila event must have.
What's going to happen is classic heterodyne response feedback. The inputs (easing) will not provide output data until there is so much easing that the stimulus will trigger runaway inflation.
We could see a case where investing in housing is considered a good idea because it returns half the rate of inflation.
I just shake my head at anyone buying anything longer than 2 year bills/bonds. The exception is Cali munis who are just so juicy.
"Keynesians believe gov spending and taxation should be counter cyclical not gogogo all the time
mock camus turtle | 12.16.08 - 2:08 pm | # "
Yes, Keynes is counter-cyclical in theory and hyper-cyclical in practice (even being contractionary at the wrong time, such as the FDIC setting FDIC insurance low in the boom and high in the bust--and similarly states with payroll taxes).
bgates(Unrated) writes:
\t"More recently, we beat the Soviet Union."
or they just collapsed on themselves. something about an entrenched elite losing legitimacy...
\t bgates | \t \t \t \t12.16.08 - 2:13 pm | #
OUCH. I see your point.
"11:15 almost here - spx to 895 then down to 855 in a flash?"
That's one of about 3 scenarios I can envision.
"Am I the only one hearing the showdown theme"
B aritone
G uitars
A lways
T ease
E mergency
S ituations
She was probably fine at 40-1 until the govt came in and shut her business down at that time..
business looks bleak for her today to if she moved around......
These days, not even sex sells - Los Angeles Times
I was at a 20/30 club mtg and Joe Conforte was guest speaker..
I got up and asked him how the fucking business was...
He said it was great...
"Am I the only one hearing the showdown theme"
be naive I hear the magnificent 7
wow...don't know if I've seen it later than 2:17 before...... must be loading up their floor brokers....
crap - a fire alert on the floor - awesome timing...
Reagan for example spent money like a drunken sailor...big increaeses in defense spending, 500 ship navy for example, but never raised taxes during the boom years of the economy
It was the 700 ship Navy and RWR was absolutely clear as to the reasons behind his spending. One was the rebuilding of US military force projection and two was the deliberate intent to encumber the Federal govt with debt that would restrain growth of government. His failure was in believing Congress would remain fiscally responsible as it had been for the previous two centuries.
"crap - a fire alert on the floor - awesome timing..."
Are you kidding? If not, that's simply awesome.
"It is so so wrong, but we really need a new ponzi vehicle. Seriously.
Angry Saver"
Those are easier to create than you might think. Many of them are not obviously ponzi or pyramid schemes to the casual observer. A few aren't even recognized as such until much later. If you mix a ponzi scheme with an actual profit-making business, it can get really difficult to recognize.
ACP, I think a girlfriend levered 40:1 is sleeping with 39 other guys. Profitable in the short term, but badly exposed to disease and jealous rage.
they're pretty late. interesting.
disappointed
I guess the "too big to fail" institutions would be considered low risk, right?
beuller? beuller? anyone? hello?
they're pretty late. interesting.
bgates | 12.16.08 - 2:25 pm | #
It's truly bizzare.
anyone else notice the huge turn today in TBT?
Does everyone in the fed board room still have their shoes on?
Whooosh!
I'm short vanity and long free time.
The trade of the century in my opinion.
Give it a try. What do you have to lose? Beats the debt nightmare.
UGA Dawg
good point
OPM (other peoples money)
there she is
Target range of 0 to 25bps.
To the moon.
All your paper money is now worthless
zirp it is
zirp baby, yeh!
And you're out of ammunition. Fool.
He-l-l-o-o-o liquidity trap!!!!!
And you're out of ammunition. Fool.
Gavshire Hathaway | 12.16.08 - 2:27 pm | #
Well no, he's not. Print baby print.
Have they ever done a range before?
Sue (Capital S) writes:
Rob Dawg, you made a good comment in an earlier thread:
Thanks, I didn't know my comments were actually followed.
RD: Builders in general need to keep the pipeline open. They are till in denial. New starts down 16%, permits down 19%. All the builders I know think they'll be the only one to weather the downturn and then they'll clean up. It's sad. At least half of them are destroying themselves for no reason.
How deep are these guys' pockets?
It's a holdover from the loose credit market. They were granted lines of credit that would never be granted today. Not just them, me too. I've got a sweet HELOC tied to the FFR.
Unbelievably, they are still fighting open space battles here in New Jersey, while at the same time crying for local government tax relief because they cannot fill their developments.
IMO those are separate battles. Open space redesignations is winning the lottery. Buy "open space" and sell "development land." The existing developments are contrarywise built into municipal budgets.
Seriously, how do they have the money to buy land and fight court cases? I don't understand it.
Just remember that dying animals are not rational.
We're not all dopes. The "and bred" part is wrong - several generations ago we beat Hitler and Tojo. More recently, we beat the Soviet Union.
Actually the Soviets defeated Hitler, we just came in at the end and picked up the best pieces of Europe.
This is gonna be a buy the rumor, sell the news. Everybody knows the rate is already effectively ZIRP. But they're hanging in there because they expect everybody else to rally.
Not saying we crash today. But within a month.
damn, missed FAZ at 44
And now do we all finally, uh, "get" conjure bag's sudden move?
Rob,,,, Jeez please dont start up that crap again from yesterday... those trolls from yesterday that couldnt courtesly discuss fiscal policy without name calling might see your smoke signals and be directed to come back....
does conjure have different baggies in those bags?
insofar as bonds can mean treasuries and corporate and munis...
appropriate:
SchoolhouseRock - My Hero, Zero
the unanimity of this vote is frightening...
it's like the TBT groupthink here x 1000
And the markets take off as if this was some kind of unexpected, positive news...lol...
Hoped you missed me! I'm baaack!
--
"A phrase tends to lose all meaning or negative connotation after it is repeated a few thousand times."
Hoopajoops,
Like Nazis and Holocaust? Hey, they didn't do anything bad to me or my family. Not very many AMERICANS suffered. Why talk about it?
Jas
Rob Dawg
i agree with the part of your assessment that some of the spending increases were motivated to encumber the gov via debt and stem other expenditures
but what i think stockmans book, "triumph of politics" makes clear....and this gets back to ac post earlier...
is that they had reason to believe, at least eventually that the tax cuts would not sufficiently stimulative to be at least revenue neutral, counter to their claims
that is... they were not operating on the portion of the laffer curve that yielded the results they claimed...ie increased revenue due to economic growth
RWR was in my opinion not a keynesian
btw...was it a 700 ship navy??? im getting old, didnt remember that
also i think the reagan people wanted to continue the arms race with the soviets to push the ruskies economy over the edge...communism was failing and only needed a few more nudges after the afghan war etc to bring it down...and he succeeded
(however i think the ussr was headed for the scrap heap anyway but what the heck sooner than later thanks to RWR
UGA Dawg writes:
Rob,,,, Jeez please dont start up that crap again from yesterday... those trolls from yesterday that couldnt courtesly discuss fiscal policy without name calling might see your smoke signals and be directed to come back....
Good point but it is fine line. I just wish they'd realize I don't lash out or respond to deliberate provocation. I share your concerns for both civility and politicization.
Not enough.
FFDIC -
Are you saying they should have gone negative?
UDN one day graph... (dollar bear fund)
MLM - the FDIC's action. Not enough FDIC insurance or taxpayer protection for banking depression.
btw...was it a 700 ship navy??? im getting old, didnt remember that
Mock Turtle,
This is why I participate here. Reasoned discussion. Thank you.
Yes, 700 ship Navy was the metric. I was working for contractors working toward that in those days. This is one of those places where wikipedia is successfully rewriting history. Shame.
RWR was not a Keynesian. He wasn't a unionist despite holding high status in the SAG either. It was real simple. Starve the beast. The flaw in the plan was that the beast could print food.
RWR wanted to defeat the "commies." He did. I cannot imagine 2008 with an intact Soviet Union at the throats of an increasingly militant Mainland China (on the verge of) fighting over material resources.
Why can't oil producing countries use deficit spending? If I was going to buy government backed debt why wouldn't I buy the debt from a country with a very valuable and necessary resource?
Forgive any lack of knowledge if I'm missing the obvious.
we beat the Soviet Union
I beg to differ. The Soviet Union destroyed itself.
The U.S. may be well on its way to doing to the same.
'Uncertainty' blamed for Houston home sales' plunge | Chronicle | Chron.com - Houston Chronicle
Houston home sales plunge by 31.7 percent
(Texas now being impacted which impacts Texas banking...expect more bank failures here once the Dallas office does not have to handle the entire country with the opening of Irvine office and expansion of Atlanta & DC staffs. )
We need NATO to stop The Paulson/Bush/Bernanke Coup!!
SOS
YouTube - The Police - Message In A Bottle: Video
Fit Treasury yield curve with cubic polynomial
YouTube - Fit Treasury yield curve with cubic polynomial
Too bad the model is broken!
Um, barn door... horse...
Fuckers.
U.S. Treasury - Treasury Yield Curve Methodology
New Thread.
Rob Dawg and UGA Dawg... hat tip
yes , one of the best things about most of the people who post here is that
we can disagree (or agree
)
and be civil about it
i probably learn more from the people who post here who have a different political slant to their economic theory than i do...forces me to question my ideas...im wrong ofte
The sum of squared errors! Yah baby!
Re: Treasury yield curves.
Has anyone know of a "movie" showing the evolution of the yield curve over a period of time?
Yeah, what was that movie? It's on the tip of my tongue. It starred Leonard DiCaprio and some little hotty, and they were on a big boat, and then the boat hit something, and then the orchestra played, and then...
Re: movie" showing the evolution of the yield curve over a period of time?
No!
"So the U.S. of the depression is now the Germany of the 1930's. "
Time to invade Poland!
Wow, increased costs for banks when velocity is down and lending is basically dead. Poor things.
It's time to put the money under the pillow (with an AK47 under the bed).
Sold my Phoenix/Maricopa county munis about two weeks ago. Am I prescient? Don't know, but the Bloomberg article about cities wanting part of the Tarp makes me wonder.
Dow up 4.2%, today. Our economic woes must be behind us! Who knew the Fed's tight monetary policy was responsible for all of our problems?
/sarc off
This increase in expenses will definitely help the banks. Thank you very much for sharing the information.