rent_to_ow writes: \tThis is inflationary, right? \t Assuming you're seriously asking, no, it's deflationary. Lower demand for the same goods causes decreased prices, eventual lowering of production, reduction of workforce, lower income, fewer dollars in the market, lower demand for the same goods, rinse, lather, repeat.
Seriously - this is a deflationary spiral, and Bernanke and company remain far too fixed on making sure that the financially engineered institutions were kept alive to even notice what was happening around.
Maybe we need a new Mellow - liquidate ARMs, liqudate 0 down, liquidate credit cards, liquidate bank branches....
This actually good news. The savings rate needs to go back to about 8% from its near zero level or about a 8% decrease in spending- just about where we are. As long as we hold this down 7-8% level it would suggest that consumers are readjusting.
I know deflation is bad, and unemployment is certainly bad, but speaking as a long-term saver with zero debt, it's nice to know that my dollars aren't going to be worth .15 cents in the near term. I understand this is short-sighted of me, but I'm not 100% sure why.
I'm not sad that a bankrupt GM might actually declare bankruptcy. I look forward to what a new group of people can do with GM's assets, tools, factories.
I don't think it's short-sighted to wish for a little deflation. If you happen to be a good saver, free of debt, no reason you wouldn't want lots of deflation.
And this graph of declining consumption in the US? Why would anybody be distraught at the thought of the US consuming less stuff!!?? We've all known it in our guts for a long time that we consume too much as a nation. There are many truer signs of a wealthy nation than large spending bills.
Yeah there will be pain. Bring it on, cause we need to make some changes here.
look at futures....the auto makers are getting ready to file for BK and the futures are off their low of 323 up to -253. I think we might be green today!
I tried explaining to my daughter today why I thought what was happening to the US automakers was a bad thing. How it would effect communities, and hurt sales in other areas. I think she understood. Especially when I explained that for those without college the factory was the only way to make a good living.
I was born in Detroit. I have cousins that did, or still do, drink, use drugs, and generally are not fit to do a Powerpoint presentation. They always seemed to be able to show up and do the same muscle memory, repetitive job. They fed their kids, the wives went to church, and some of us made it out of town.
These retail numbers are bad? Sorry, who is buying now? Especially with this little ray of sunshine. Jeebus this is going to be ugly.
the markets are amazing. no amount of bad news seems to get the market down for long. when will we have the real capitulation and the crash that is required before a real, sustainable recovery starts?
Re: futures recovering...Maybe investors haven't given up on their bailout yet. Remember how congress eventually made a deal on the TARP. Cynical me, I think the Republicans are just holding a hard line to get some nice concensions on unrelated items.
I also am a saver with zero debt. Actually renting for the last year after being a homeowner for 18 years based on what seemed to be the imminent housing bubble collapse.
You're right that deflation actually is good if you have cash and little or no debt.
My fear is that we are being set up for either a vicious inflationary period on the backside of all this OR that we are headed for some national default or devaluation of the dollar.
I think we can handle the first scenario - stay flexible and be ready to jump into commodities or equities if they start to ride the inflation wave.
I'm kinda stumped by the 2nd scenario. I've thought about physical gold - but if it gets that bad my family and I can't eat it. I have some TBT to hedge a little against a national default.
I'm not a "guns, beans, and ammo" type - although I own a number of guns, always have. But the fiscal situation of our country seems untenable. I don't see things getting better without some serious pain.
Looking at a chart of the Nikkei, when would you say the Japanese finally capitulated? If the government keeps stepping into the markets, there's no telling how long this will last.
This is inflationary, right?
rent_to_own | 12.12.08 - 8:52 am | #
In the sense that it may remove one of the legs the dollar stands on. The rest of the world buys our paper with ink with their paper and ink because we buy their stuff. Eroding the confidence in our honesty by Ponzi schemes does not help either.
If the end of the auto bailout can be clearly put on the republicans, and given the completely hopeless nature of the GM and Chrysler at least... I think the dems, playing politics, will be pleased to get these BK's out of the way now, rather than post Jan 20th.
Chainsaw(Unrated) writes: \t...OR that we are headed for some national default or devaluation of the dollar.
Without hyperinflation, how can be possibly service 10T+ of debt? We better build lots of tanks and bombs for when the creditors come knocking at the door.
Johnny Rotten wrote this bs:
Yet another cliff diving financial chart brought to you by the Bush admin. Bush is the bloody Anti-Christ
Gee, I didn't know the president...read any president had that much power. I thought the Fed and THE HOUSE OF REPRESENTATIVES (see constitution) had the real power. Does that mean The Crooked One...I mean the messiah will have complete control? I don't think so.
" s0mebody writes:
I'm not sad that a bankrupt GM might actually declare bankruptcy. I look forward to what a new group of people can do with GM's assets, tools, factories.
s0mebody | 12.12.08 - 9:04 am | # "
I think some of Chrysler's assets might be more interesting, especially their automated engine plant.
--
What should we think of those who are still in denial of "severe recession," let alone depression?
Greater Depression would make laughingstocks out of almost all economic forecasters not just those who run the US auto companies. Optimitis is a terrible brain disease that most Americans contract growing up.
The US economy is, what, 72 to 75 percent consumer-based? So we elected to spend the bulk of the 'bailout' funds on a few wealthy people with friends in high places and screw the rest of them.
The records of Paulson and Bernanke are now largely written for history. They will be scrutinized for years, but the deeds are done. Like a bobsled, we are out of the gate at speed and it is all downhill from here.
Some central theories of economics as it is currently understood by the 'mainstream' will not fare well, either.
I told my wife that they 'destroyed my America' this morning. Sounds overwrought? Perhaps. I knew retail sales were ugly. The stores we were in told me that.
Somehow, at least for me, I can not escape the feeling that as a society we crossed over an invisible line. One that historians will write about. The tipping point. Retail sails plus Mr Ponzi plus goodbye to the Industrial age remmants.
who is net short today and is sportin' some serious wood right now? not me, i'm all cash, but wishin' i wouldn't have covered in the past few days. enjoy the day and remember to donate generously to charities this holiday season, there are many out there who are hurtin'.
Re: futures recovering...Maybe investors haven't given up on their bailout yet. Remember how congress eventually made a deal on the TARP. Cynical me, I think the Republicans are just holding a hard line to get some nice concensions on unrelated items.
ShortCourage | 12.12.08 - 9:09 am | # "
How much of the "stuff" we buy is bought just to get new "stuff?" When, in reality, the old "stuff" works just fine. How much of the stuff we buy is unnecessary?? Maybe fun to buy when we are flush (with cash or credit), but really unnecessary?
If it is as large a percentage as I suspect, what happens when we are not flush and when it might even go out of fashion to be the first one on your block with the new stuff? Retail collapse, anyone?
nova(Unrated) writes: I was born in Detroit. I have cousins that did, or still do, drink, use drugs, and generally are not fit to do a Powerpoint presentation. They always seemed to be able to show up and do the same muscle memory, repetitive job. They fed their kids, the wives went to church, and some of us made it out of town.
What is it you do that is so much more important than making somthing?
Even if Shrub uses TARP the damage is done. Everyone involved in the auto industry knows that they can and will be kicked to the curb. The workers who don't know it today, will definetly know it soon.
--
What if Americans didn't need all the stuff they were buying until 2007? Think about the consequences if they start to be "un-doped?" Would there be any way to avoid depression in that case?
USG might have to pass laws that require every American to consume a minimum amount of goods and services. Those who dont comply would be put in jail to force consume!
Haha Liz, that hasn't been the trend. He's hanging in there, Union says January he should be back to work. Also found out yesterday I'm not underwater! Contacted a FHA specialist and she did a search for my neighborhood for homes sold in the last six months. Two sold for 160K and they don't have as much land or the same amenities. I'm 30K beneath, going for a refi now. Wish me luck!
"...OR that we are headed for some national default or devaluation of the dollar."
Since this recession/depression, whatever, is worldwide, a single country devaluating is an exact return to the beggar-thy-neighbor race to the bottom of the 1930s. I think it is more likely that, at some point, we will see a tacitly-agreed-upon move toward worldwide inflation to slowly wipe out debt worldwide. The saver is the only one who has not suffered so far... but that day will come.
Auto industry dead? Silver lining is that all that evil pollution will go away and the polar caps won't melt. Except we'll all be exhaling a lot more carbon with our daily 8 mile walk to work and for groceries.
I'm long horses...er, ponies.
Negotiate your exit package (assuming you get one) just as you negotiate a job offer. And take a day or two to consider the offer; the HR department may be in a hurry, but you don't have to be.
Make sure you secure continued healthcare benefits via COBRA.
If you have borrowed against your 401(k) and lose your job, you typically have 90 days to repay the loan.
Don't stop spending money but definitely "reallocate your expenses" on things like a Blackberry and interview attire that can help you stay in touch and land the next job.
Try not to cash out. What rate you getting? The FHA I just closed got 6.5%, but their average credit was below 600, due to sickness in the family. She said something about 5.5%, if the scores were better. Also, be patient, it takes forever to close. Try to lower your monthly payment as much as possible.
Then pay down the mtg faster, even if it's only 10 bucks a month.
wally(Unrated) writes: \tThe saver is the only one who has not suffered so far... but that day will come. \t Dude, dollars are worth less than half now then when I started saving in earnest. Savers have been taking it up the ass for decades now.
Don't stop spending money but definitely "reallocate your expenses" on things like a Blackberry and interview attire that can help you stay in touch and land the next job.
Tiberius | 12.12.08 - 9:30 am | #
I would add, stock up on 30 gallon plastic bags to keep said interview suit clean while you're sleeping on sidewalks and behind bushes.
"The saver is the only one who has not suffered so far." --wally
What about the difference in lifestyle of a saver over the last 20 years relative to his peers. Maybe the savers already have suffered, and now they get to play. Although, I agree that if things don't change, the government's direction is clear.
I agree. At this point I doubt the same "naked protectionism" of the 30s. however, there are nationalist possibilities: china.
I just don't know if the chinese elite can hold together a country of new rural to urban migrants, and then tell them to go the hell back to the countryside now that the factories are mothballed.
I have predicted they can do this, at gunpoint. But the question is when do they no longer have a need for us (U.S. us). Tend to agree with mp: Now. Or 10 minutes ago from now.
The lady I talked to said 5.5 is what she is shooting for, it would lower my payments by about 500 bucks a month. Snag is my documentation, I'm a bartender, luckily I claim tips and have a record of it but my income is still low, we're workin on it though and may be able to use hubby's union status if we put him on.
Soups kitchens are a marvelous networking tool. Learn first hand stories and methods of street survival.
"I don't want anyone who is unemployed to eat alone," Garnick says. "Have at least one or two appointments every day so you stay in the flow and fight against inertia. Once you're sitting at home, it's going to be hard to get out again."
lawyerliz writes:
Come to Florida for your tropical heat wave. There will be plenty of cheap houses to choose from. If they haven't rotted first.
They turn the power off, no power no air conditioning.....MOLD
In Minnesota they turn the heat off.. pipes freeze..water leaks everywhere...MOLD Banks are stupid
Now, suppose, after falling the chart more or less levels off. Isn't that the savings factor mentioned above? Isn't that, more or less, something that had to happen? It could have had happened slower, with less pain, over a shorter time, I suppose. Thing is, will the institutions where the money flows invest it in something productive??
I can tell you don't understand nova's nuanced remarks/observations.
I can guarantee it was not a volley lobbed at those blue-collar stiffs who have to make stuff for a living...
irony? bitter irony. \t blackhat | \t \t \tHomepage | \t12.12.08 - 9:27 am | # Did I take his words out of context? I was just curious what he did that was so much better. He also made the same "Manufacturing is the place for drug-addled losers" comment the other night.
Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
If a total crackup happens, which appears to be happening in dribs and drabs, then the country will need victims and scapegoats for the purge and cleansing that's sure to come.
True, we don't have basements. We do have fierce tropical sun, occasional hurricanes, very hungry termites, and I would guess more varieties of mold. You should have seen the mold on my Andrew trashed house!!
But yes, a trashed house is a trashed house. Sometimes the outside looks ok, or even the inside, but you have to tear everything out anyhow.
CR, when viewing this graph along with this one Calculated Risk: Total Household Net Worth as Percent of GDP
I don't see how anyone can believe something dropping from a giant peak credit fraud bubble level is 'real' any longer. Maybe try another word, like 'sucker'.
I actually see this report as a huge positive. Just look deeper in the numbers-
"The data is not adjusted for any price changes. Consider gas prices, for instance, which have fallen by record levels in the past few months, The record 14.7% drop in sales at gas stations is mostly due to that adjustment in prices, not demand destruction. So in reality, you have a less excruciating number than what was reported. Retail sales, x-gas is only down 0.2% for the month. Much better than you would think, considering we are allegedly in the midst of another Great Depression. Now, exclude the very volatile auto-sales number and guess what you get? Retail sales gained 0.3% in November, the first increase since July, and right smack in the middle of the financial meltdown!"
They turn the power off, no power no air conditioning.....MOLD
In Minnesota they turn the heat off.. pipes freeze..water leaks everywhere...MOLD
Banks are stupid
Crewman
Buy stock in Caterpillar. Bulldozer sales will be picking up.
Here is a longer term view of ratail sales, the govt slightly changed the series in 1992, but the overlap between old and new is very close. Current worst y/y since data started in 47
I'm not looking for just panic and !!, I want to understand why people think hyperinflation will happen here, how it will happen, and when. Also what is the definition of hyperinflation? Greater than 10% per year? Are you considering just price inflation or also wage inflation?
To create hyperinflation takes a concerned effort by the Fed and our government - Yes? Do you think the new administration will really support hyperinflation?
Clearly we are deflationary now. Things cost fewer dollars now than a year ago.
Chrysler should approach Tesla for a licensing deal. If successful, they should close plants temporarily to re-tool (keeping employees on the rolls), and start building Teslas in large-enough numbers that the price will drop into the reasonable range.
CR, stealthwii, I will further add that when considering the graph I mentioned above showing the loss of net worth due to the bubble economy, along with the graph in this post, that the definitions of 'inflation' and 'deflation' do not fit the standard non-bubble definitions.
Thus, CR, may I also suggest that you create the new economic terms 'bubble inflation adjusted' and 'bubble deflation adjusted' since, it seeems, we now have this new 'bubble business cycle' model.
Excluding gasoline and automobiles, retail sales actually increased 0.3%---not great, but better than October (-0.7%), September (-0.7%) and August (-0.8%).
"Central banks around the world have undertaken a number of measures to forestall deflation and lift the global economy out of economic slump and credit crisis. Aside from traditional monetary policy tools such as official interest rate cuts and relaxations in reserve requirements, central banks have resorted to alternative unconventional tools. .. Despite liquidity raining down on the financial system from the Fed and ECB, the financial fires have yet to be extinguished. .. In the U.S., private demand continues to fall sharply as does the string of awful economic and financial news." - Roubini RGE - Will Aggressive Monetary and Fiscal Measures Prevent Stag-deflation in 2009?
CR, this is what I mean when I say that deflation etc. does not mean what it used to before the bubble business cycle.
I knew Jack Keynes, and Nouriel Roubini (nor Paul Krugman) is no Jack Keynes.
Walking through the mall last night in CA. I've never seen so many stores that are having 50-60% off sales. Every other store. Last night I saw the first "closing everything must be liquidated" sign -- another high end furniture store. Real rough out there.
CR, in addition as you know, the bubble business cycle also stole savings in various ways including excess consumption causing inflation (ie: distorting the space-time of the normal business cycle), as can be seen from this chart in this article Hoover Institution - Facts on Policy - U.S. Savings Rate
When might we begin seeing some 3-D graphs from you concerning the bubble economy in order to depict its distortion effects?
stealthwii, it doesn't matter if we are in deflation. With ever increasing unemployment rates it doesn't matter what prices are, more and more people can no longer afford to buy.
CAT was a good ride over the past few years, but I think that's really over - sales in Asia for new industrial production and for domestic development are going to slow or grind to a halt. Same story here in the domestic market.
Amazing. Scary.
This is inflationary, right?
But no surprise.
Warning: looking at too much disaster pr0n on a day like today might cause you to go blind.
TAKE THE MARKET ON ALL THIS BAD NEWS.
JUST BUY 'EM.
Another Tip From Wall Street
Keep Your Stock Certificates In Your Mother's Attic
Another Tip From Wall Street | dagblog.com
ooooooooo........
Another "since started keeping data"-record!
rent_to_ow writes:
\tThis is inflationary, right?
\t
Assuming you're seriously asking, no, it's deflationary. Lower demand for the same goods causes decreased prices, eventual lowering of production, reduction of workforce, lower income, fewer dollars in the market, lower demand for the same goods, rinse, lather, repeat.
looks to be a fine morning already - and I still haven't milked the cow yet!
Even the standouts are faltering. Yesterday Urban Outfitters dropped 20% after they warned sales would be flat.
I'm very interested to see what kind of earnings numbers Amazon.com puts up next...
OMG, that is one scary chart.
"rent_to_ow"
That's a fairly amusing screen-name mis-copy.
Seriously - this is a deflationary spiral, and Bernanke and company remain far too fixed on making sure that the financially engineered institutions were kept alive to even notice what was happening around.
Maybe we need a new Mellow - liquidate ARMs, liqudate 0 down, liquidate credit cards, liquidate bank branches....
Yet another cliff diving financial chart brought to you by the Bush admin. Bush is the bloody Anti-Christ
Another "since started keeping data"-record!
one_timmy | 12.12.08 - 8:54 am | #
It's always bad when the doctor/tech-support guy/economist says: "Huh.... I've never seen that before".
My typing is horrible - Mellon was never mellow, though his taste in art was exquisite.
I don't think the lemmings could survive this kind of cliff diving!
I can't stay and watch the disaster porn today, have to go to work and watch my patrons cry in their beer over their 201K's...
This actually good news. The savings rate needs to go back to about 8% from its near zero level or about a 8% decrease in spending- just about where we are. As long as we hold this down 7-8% level it would suggest that consumers are readjusting.
"Ladies and Gentlemen",
/takes off shoe
/bangs shoe on computer desk
"We stand before the abyss",
/bangs shoe for emphasis
"But today, I promise you, we shall take a great leap forward!"
/puts shoe back o
It would be very interesting to see this graph extended backwards a bit more.
Simon F,
To put that another way, we are going to need a bigger graph with smaller fonts.
I know deflation is bad, and unemployment is certainly bad, but speaking as a long-term saver with zero debt, it's nice to know that my dollars aren't going to be worth .15 cents in the near term. I understand this is short-sighted of me, but I'm not 100% sure why.
Is today Black Friday? What did I miss?
PapaSloth, deflation will be temporary, it will be followed most likely by hyperinflation. Enjoy your dollars now.
Bah, the Census Bureau always gets its numbers mixed up. The chart is actually upside down!
Comrade Kristina writes:
\tPapaSloth, deflation will be temporary, it will be followed most likely by hyperinflation. Enjoy your dollars now.
Some of my money is in gold and real estate, "just in case."
Maybe I should join the consensus here and load up on guns and wheat as well.
Sorry CR, but the chart only goes back to 1993. I wonder what the numbers were in 1990-91, or 1980-82.
I'm not sad that a bankrupt GM might actually declare bankruptcy. I look forward to what a new group of people can do with GM's assets, tools, factories.
Papasloth,
I assure you, you nefarious saver, that your dollars will be worthless, but in the short-term, you are correct. Preserve your capital. Go! I dare you!
And now to deal with your rebel friends...
SOMALI CHIEF: TURN THE CHART AROUND AND START BUYING.
With regards to my spouse I believe you have the graph upside down.
are we deflating yet?
PapaSloth,
I don't think it's short-sighted to wish for a little deflation. If you happen to be a good saver, free of debt, no reason you wouldn't want lots of deflation.
And this graph of declining consumption in the US? Why would anybody be distraught at the thought of the US consuming less stuff!!?? We've all known it in our guts for a long time that we consume too much as a nation. There are many truer signs of a wealthy nation than large spending bills.
Yeah there will be pain. Bring it on, cause we need to make some changes here.
...what a pointed headline:
"A Day To Dread On Wall Street"...quite concise..
CNNMoney.com Pre-Market Report - Dec. 12, 2008
Keep the union singing:
http://cgi.ebay.com/UNITED-AUTO-WORKERS-1979-UAW-SONG-BOOK-Woody-Guthrie_W0QQitemZ120339791383QQcmdZViewItemQQptZLH_DefaultDomain_0?hash=item120339791383&_trksid=p3286.c0.m14&_trkparms=72%3A1205%7C66%3A2%7C65%3A12%7C39%3A1%7C240%3A1318%7C301%3A1%7C293%3A1
CR: typo in first line? (change October to November).
these are not the numbers the MSM "bubbleberg" are reporting.
guest writes:
these are not the numbers the MSM "bubbleberg" are reporting.
To put that another way:
These are not the numbers you are looking for.
look at futures....the auto makers are getting ready to file for BK and the futures are off their low of 323 up to -253. I think we might be green today!
I tried explaining to my daughter today why I thought what was happening to the US automakers was a bad thing. How it would effect communities, and hurt sales in other areas. I think she understood. Especially when I explained that for those without college the factory was the only way to make a good living.
I was born in Detroit. I have cousins that did, or still do, drink, use drugs, and generally are not fit to do a Powerpoint presentation. They always seemed to be able to show up and do the same muscle memory, repetitive job. They fed their kids, the wives went to church, and some of us made it out of town.
These retail numbers are bad? Sorry, who is buying now? Especially with this little ray of sunshine. Jeebus this is going to be ugly.
Maybe they will tip a lot today Kristina! Hows the hub?
the markets are amazing. no amount of bad news seems to get the market down for long. when will we have the real capitulation and the crash that is required before a real, sustainable recovery starts?
I still use the phrase, "that and twenty-five cents will buy you a cup of coffee."
Maybe that phrase will actually make sense again.
guest,
Re: futures recovering...Maybe investors haven't given up on their bailout yet. Remember how congress eventually made a deal on the TARP. Cynical me, I think the Republicans are just holding a hard line to get some nice concensions on unrelated items.
Santa doesn't care about retail sales, Santa's going to party a thousand strong in NYC tomorrow.
Santacon!
YouTube - SantaCon 2007 - NYC - Grand Central Terminal
no voyeurs, all Santa's welcome -
SantaCon NYC
@PapaSloth
I also am a saver with zero debt. Actually renting for the last year after being a homeowner for 18 years based on what seemed to be the imminent housing bubble collapse.
You're right that deflation actually is good if you have cash and little or no debt.
My fear is that we are being set up for either a vicious inflationary period on the backside of all this OR that we are headed for some national default or devaluation of the dollar.
I think we can handle the first scenario - stay flexible and be ready to jump into commodities or equities if they start to ride the inflation wave.
I'm kinda stumped by the 2nd scenario. I've thought about physical gold - but if it gets that bad my family and I can't eat it. I have some TBT to hedge a little against a national default.
I'm not a "guns, beans, and ammo" type - although I own a number of guns, always have. But the fiscal situation of our country seems untenable. I don't see things getting better without some serious pain.
when will we have the real capitulation and the crash that is required before a real, sustainable recovery starts?
guest | 12.12.08 - 9:09 am | #
When people stop buying every re-test.
When people get disgusted because they buy in after a 10% rally, ride it another 10%, don't cash in, and get wiped.
When people stop dollar averaging in, "just because".
I'll bet Bush and Hank are just praying they can hold it together until they are relieved of their watch and can go home.
guest,
Looking at a chart of the Nikkei, when would you say the Japanese finally capitulated? If the government keeps stepping into the markets, there's no telling how long this will last.
really wish they had a longer timeframe to compare, would show a more historical view as to how bad this is.
IT IS BAD, how bad is the question.... ie early 70's bad or late 1920's bad?
eric:
when will that be....DOW 5000? 4000?
guest,
When is the market losing close to 50% of value YOY not a crash?
The crash during the great depression was remarkable, but more so because it kept crashing, after going up, only to come that much more down.
Crash is a convenient convention for wrapping our minds around a very long and complicated historical experience.
/yoda-voice
crash we have, crash we will.
I think the Republicans are just holding a hard line to get some nice concensions on unrelated items.
The question is when, not if, the TARP money is used. Has Gasparino's cellphone gone off yet? I think his ringtone is "Highway to Hell."
When people stop dollar averaging in, "just because".
When the automatic 401k deposits stop.
When people get disgusted because they buy in after a 10% rally, ride it another 10%, don't cash in, and get wiped.
c'mon man, dont be telling people my secrets.
This is inflationary, right?
rent_to_own | 12.12.08 - 8:52 am | #
In the sense that it may remove one of the legs the dollar stands on. The rest of the world buys our paper with ink with their paper and ink because we buy their stuff. Eroding the confidence in our honesty by Ponzi schemes does not help either.
If the end of the auto bailout can be clearly put on the republicans, and given the completely hopeless nature of the GM and Chrysler at least... I think the dems, playing politics, will be pleased to get these BK's out of the way now, rather than post Jan 20th.
Chainsaw(Unrated) writes:
\t...OR that we are headed for some national default or devaluation of the dollar.
Without hyperinflation, how can be possibly service 10T+ of debt? We better build lots of tanks and bombs for when the creditors come knocking at the door.
Johnny Rotten wrote this bs:
Yet another cliff diving financial chart brought to you by the Bush admin. Bush is the bloody Anti-Christ
Gee, I didn't know the president...read any president had that much power. I thought the Fed and THE HOUSE OF REPRESENTATIVES (see constitution) had the real power. Does that mean The Crooked One...I mean the messiah will have complete control? I don't think so.
Now back to daily kos, Johhny Rotten.
" Tha Peter Lynch Mob writes:
Is today Black Friday? | 12.12.08 - 9:01 am | # "
It soon will be
"There's a lot of people out on Long Island at country clubs that aren't going to members much longer." -Bob Pisani, CNBC
" s0mebody writes:
I'm not sad that a bankrupt GM might actually declare bankruptcy. I look forward to what a new group of people can do with GM's assets, tools, factories.
s0mebody | 12.12.08 - 9:04 am | # "
I think some of Chrysler's assets might be more interesting, especially their automated engine plant.
--
What should we think of those who are still in denial of "severe recession," let alone depression?
Greater Depression would make laughingstocks out of almost all economic forecasters not just those who run the US auto companies. Optimitis is a terrible brain disease that most Americans contract growing up.
Jas
ACP,I didn't go blind,but my 401k got warts.
Dead letter--Was that maybe the whole idea?
Watching whole cities and all the people in the be played with like this is more than ugly.
Which is not to say that providing some debtor in possession financing after bk filing to really restructure might be the best solution.
If rioters don't burn down everything is sight first.
"There's a lot of people out on Long Island at country clubs that aren't going to members much longer." -Bob Pisani,
Clusterstock had a great piece on why you shouldn't feel bad for these guys:
I Knew Bernie Madoff Was Cheating--That's Why I Invested With Him
The US economy is, what, 72 to 75 percent consumer-based? So we elected to spend the bulk of the 'bailout' funds on a few wealthy people with friends in high places and screw the rest of them.
The records of Paulson and Bernanke are now largely written for history. They will be scrutinized for years, but the deeds are done. Like a bobsled, we are out of the gate at speed and it is all downhill from here.
Some central theories of economics as it is currently understood by the 'mainstream' will not fare well, either.
I told my wife that they 'destroyed my America' this morning. Sounds overwrought? Perhaps. I knew retail sales were ugly. The stores we were in told me that.
Somehow, at least for me, I can not escape the feeling that as a society we crossed over an invisible line. One that historians will write about. The tipping point. Retail sails plus Mr Ponzi plus goodbye to the Industrial age remmants.
who is net short today and is sportin' some serious wood right now? not me, i'm all cash, but wishin' i wouldn't have covered in the past few days. enjoy the day and remember to donate generously to charities this holiday season, there are many out there who are hurtin'.
" ShortCourage writes:
guest,
Re: futures recovering...Maybe investors haven't given up on their bailout yet. Remember how congress eventually made a deal on the TARP. Cynical me, I think the Republicans are just holding a hard line to get some nice concensions on unrelated items.
ShortCourage | 12.12.08 - 9:09 am | # "
Maybe the short sellers are in on this
I think today we go sledriding!
How much of the "stuff" we buy is bought just to get new "stuff?" When, in reality, the old "stuff" works just fine. How much of the stuff we buy is unnecessary?? Maybe fun to buy when we are flush (with cash or credit), but really unnecessary?
If it is as large a percentage as I suspect, what happens when we are not flush and when it might even go out of fashion to be the first one on your block with the new stuff? Retail collapse, anyone?
let's hope it's not a "Nantucket Sleigh Ride"
#
9:13 a.m.
Bush will 'consider' using TARP to bail out auto companies
WTH happened at 9am?
PPT figured "hell, it's on the hour.... hit it"?
Jas: Couldn't the Doom-sayers be holding off from the D-word for fear of scaremongering?
I think you have to be a combination of the three famous monkeys not to see where this is now going.
nova(Unrated) writes:
I was born in Detroit. I have cousins that did, or still do, drink, use drugs, and generally are not fit to do a Powerpoint presentation. They always seemed to be able to show up and do the same muscle memory, repetitive job. They fed their kids, the wives went to church, and some of us made it out of town.
What is it you do that is so much more important than making somthing?
Looking at a chart of the Nikkei, when would you say the Japanese finally capitulated?
I figure they came to their senses one at time, however it's showing up in the aggregate.
I've Japanese friends my age (mid 50's) who will pass a mortgage to their decendents.
Whose side are you on.
End your 401 contribution today
Stop giving bonus money to the Wall Street pigmen.
An average of 600,000 dollars of bonus money for GS employees is not excessive.
But an hourly wage of about 3o dollars is.
The southern party wants the whole country brought down to the living standards of Alabama and Mississipi.
That is the simple facts.
" guest writes:
eric:
when will that be....DOW 5000? 4000?
guest | 12.12.08 - 9:11 am | # "
Probably right after I get in at 7k
Max,
LOL at that article. I don't feel sorry for him, but I really want to play some of those northeastern country clubs.
Even if Shrub uses TARP the damage is done. Everyone involved in the auto industry knows that they can and will be kicked to the curb. The workers who don't know it today, will definetly know it soon.
A mild depression, followed by a tropical heat wave - the forecast for the rest of my life.
--
What if Americans didn't need all the stuff they were buying until 2007? Think about the consequences if they start to be "un-doped?" Would there be any way to avoid depression in that case?
USG might have to pass laws that require every American to consume a minimum amount of goods and services. Those who dont comply would be put in jail to force consume!
Jas
Where you sit is where you stand?
Come to Florida for your tropical heat wave. There will be plenty of cheap houses to choose from. If they haven't rotted first.
Haha Liz, that hasn't been the trend. He's hanging in there, Union says January he should be back to work. Also found out yesterday I'm not underwater! Contacted a FHA specialist and she did a search for my neighborhood for homes sold in the last six months. Two sold for 160K and they don't have as much land or the same amenities. I'm 30K beneath, going for a refi now. Wish me luck!
Here comes the TARP money. "Under consideration" of course. It'll get implemented around 12PM EST. Just long enough for the market to show its hand.
Excluding gasoline, retail is only down 0.2%?
alambka,
I can tell you don't understand nova's nuanced remarks/observations.
I can guarantee it was not a volley lobbed at those blue-collar stiffs who have to make stuff for a living...
irony? bitter irony.
"...OR that we are headed for some national default or devaluation of the dollar."
Since this recession/depression, whatever, is worldwide, a single country devaluating is an exact return to the beggar-thy-neighbor race to the bottom of the 1930s. I think it is more likely that, at some point, we will see a tacitly-agreed-upon move toward worldwide inflation to slowly wipe out debt worldwide. The saver is the only one who has not suffered so far... but that day will come.
I'm feeling a rally. After Bush tells all his friends to buy in, he announces TARP bridge loan. Mighty Mouse "Here I come to save the day"
--
Oooop, we can't tell the truth, there are kids around.
Jas
TARP funding will occur on Sunday before the Asian markets ope
Auto industry dead? Silver lining is that all that evil pollution will go away and the polar caps won't melt. Except we'll all be exhaling a lot more carbon with our daily 8 mile walk to work and for groceries.
I'm long horses...er, ponies.
What to Do If You Get Laid Off: Tech Ticker, Yahoo! Finance
What to Do If You Get Laid Off
Negotiate your exit package (assuming you get one) just as you negotiate a job offer. And take a day or two to consider the offer; the HR department may be in a hurry, but you don't have to be.
Make sure you secure continued healthcare benefits via COBRA.
If you have borrowed against your 401(k) and lose your job, you typically have 90 days to repay the loan.
Don't stop spending money but definitely "reallocate your expenses" on things like a Blackberry and interview attire that can help you stay in touch and land the next job.
Grrreat Kristina.
Try not to cash out. What rate you getting? The FHA I just closed got 6.5%, but their average credit was below 600, due to sickness in the family. She said something about 5.5%, if the scores were better. Also, be patient, it takes forever to close. Try to lower your monthly payment as much as possible.
Then pay down the mtg faster, even if it's only 10 bucks a month.
"USG might have to pass laws that require every American to consume a minimum amount of goods and services."
Universal health insurance is exactly such a law.
wally(Unrated) writes:
\tThe saver is the only one who has not suffered so far... but that day will come.
\t
Dude, dollars are worth less than half now then when I started saving in earnest. Savers have been taking it up the ass for decades now.
Don't stop spending money but definitely "reallocate your expenses" on things like a Blackberry and interview attire that can help you stay in touch and land the next job.
Tiberius | 12.12.08 - 9:30 am | #
I would add, stock up on 30 gallon plastic bags to keep said interview suit clean while you're sleeping on sidewalks and behind bushes.
"The saver is the only one who has not suffered so far." --wally
What about the difference in lifestyle of a saver over the last 20 years relative to his peers. Maybe the savers already have suffered, and now they get to play. Although, I agree that if things don't change, the government's direction is clear.
wally,
I agree. At this point I doubt the same "naked protectionism" of the 30s. however, there are nationalist possibilities: china.
I just don't know if the chinese elite can hold together a country of new rural to urban migrants, and then tell them to go the hell back to the countryside now that the factories are mothballed.
I have predicted they can do this, at gunpoint. But the question is when do they no longer have a need for us (U.S. us). Tend to agree with mp: Now. Or 10 minutes ago from now.
The lady I talked to said 5.5 is what she is shooting for, it would lower my payments by about 500 bucks a month. Snag is my documentation, I'm a bartender, luckily I claim tips and have a record of it but my income is still low, we're workin on it though and may be able to use hubby's union status if we put him on.
Futures cut in half. All this PPT money and Banker cash, but the ol' chin swipe for Detroit. Har!
I'm long horses...er, ponies.
Johnny Lee | 12.12.08 - 9:30 am | #
I'm starting to tool up for production of Amish buggies, both the horse and human-team pulled models.
That's great Kristina. Maybe by the time you've got your papers together, the hub will be back at work. My closing took 2-3 months, maybe more.
Soups kitchens are a marvelous networking tool. Learn first hand stories and methods of street survival.
"I don't want anyone who is unemployed to eat alone," Garnick says. "Have at least one or two appointments every day so you stay in the flow and fight against inertia. Once you're sitting at home, it's going to be hard to get out again."
What to Do If You Get Laid Off: Tech Ticker, Yahoo! Finance
BFF EARLY MORNING TREAT:
West Hartford Credit Union Closes Doors - Money News Story - WFSB Hartford
week old news...ugh
lawyerliz writes:
Come to Florida for your tropical heat wave. There will be plenty of cheap houses to choose from. If they haven't rotted first.
They turn the power off, no power no air conditioning.....MOLD
In Minnesota they turn the heat off.. pipes freeze..water leaks everywhere...MOLD Banks are stupid
Now, suppose, after falling the chart more or less levels off. Isn't that the savings factor mentioned above? Isn't that, more or less, something that had to happen? It could have had happened slower, with less pain, over a shorter time, I suppose. Thing is, will the institutions where the money flows invest it in something productive??
blackhat(Good) writes:
\talambka,
I can tell you don't understand nova's nuanced remarks/observations.
I can guarantee it was not a volley lobbed at those blue-collar stiffs who have to make stuff for a living...
irony? bitter irony.
\t blackhat | \t \t \tHomepage | \t12.12.08 - 9:27 am | #
Did I take his words out of context? I was just curious what he did that was so much better. He also made the same "Manufacturing is the place for drug-addled losers" comment the other night.
--
John Bogle says that it was all Wall Street's fault.
Nuke the bastards! And then blame al Qaeda!! Desperate times call for...
Jas
Crew--yep, mold. Is Fla's mold moldier than Minn's? I suspect so.
And---hahahahah, I have been saying banks are stupid 3 times a day since the late 70s, you been stalking me???
--
White House to the rescue of automakers! Drama continues.
Where is a monarch, or a dictator, when we need one?
Jas
Why look in the mirror, Jas.
lawyerliz..
In Minnesota the basements fill with water... Pretty moldy. And it is everywhere. Most foreclosed homes are trashed
Where is a monarch, or a dictator, when we need one?
Jas
Jas Jain | Homepage | 12.12.08 - 9:44 am | #
I'm declaring myself dictator. the line starts here.
may be able to use hubby's union status if we put him on
Ahem. That might have a negative value as of today, CK.
alambka,
You've made a case for an honest query.
So I'll return to my cave of solitude.
Fair enough.
My guess is that nova is not painting with a broad brush, but noting a dissatisfied sentiment related to a set of personal circumstances...
However, I do pain with an incredibly broad brush, using the most lugubrious black paint...
...'pain' is the new 'paint
From the AP story about White House using TARP funds for Big 3.
Ahem, clears throat
"Dana Perino says the White House normally would prefer to let the financial markets determine the companies' fate."
HAHAHAHAHAHAHAHAHAHAH
We now return you to your normal broadcasting day.
Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
WTF... Remind me where I live.... rUSAia?
Worst YOY retail number on record and the stock for the largest owner of shopping malls goes up (SPG).
Interesting stuff. Not exactly a long term strategy.
They'll use an intermediary ie guaranteed bank loans. They are going to get their money. Stupid or not.
If a total crackup happens, which appears to be happening in dribs and drabs, then the country will need victims and scapegoats for the purge and cleansing that's sure to come.
go in to Toyota?...As if
True, we don't have basements. We do have fierce tropical sun, occasional hurricanes, very hungry termites, and I would guess more varieties of mold. You should have seen the mold on my Andrew trashed house!!
But yes, a trashed house is a trashed house. Sometimes the outside looks ok, or even the inside, but you have to tear everything out anyhow.
thats a purty chart
I'm assuming that during a deflationary spiral, the last thing you want to hold is gold, right?
CR, when viewing this graph along with this one Calculated Risk: Total Household Net Worth as Percent of GDP
I don't see how anyone can believe something dropping from a giant peak credit fraud bubble level is 'real' any longer. Maybe try another word, like 'sucker'.
I actually see this report as a huge positive. Just look deeper in the numbers-
"The data is not adjusted for any price changes. Consider gas prices, for instance, which have fallen by record levels in the past few months, The record 14.7% drop in sales at gas stations is mostly due to that adjustment in prices, not demand destruction. So in reality, you have a less excruciating number than what was reported. Retail sales, x-gas is only down 0.2% for the month. Much better than you would think, considering we are allegedly in the midst of another Great Depression. Now, exclude the very volatile auto-sales number and guess what you get? Retail sales gained 0.3% in November, the first increase since July, and right smack in the middle of the financial meltdown!"
Via-
Economic Report: Retail Sales | Contrarian Musings
During these times, i'll take a 0.3% gain any time.
Henry Ford once wanted to make sure his workers could afford the products they were manufacturing.
Ah, memories!
CR, on second thought, make it 'unreal' sales.
They turn the power off, no power no air conditioning.....MOLD
In Minnesota they turn the heat off.. pipes freeze..water leaks everywhere...MOLD
Banks are stupid
Crewman
Buy stock in Caterpillar. Bulldozer sales will be picking up.
Here is a longer term view of ratail sales, the govt slightly changed the series in 1992, but the overlap between old and new is very close. Current worst y/y since data started in 47
http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s[1][id]=RETAIL&s[1][transformation]=pc1
I think we can expect a significant fall in retail for the next year. Check out gloomboom.com
Any logic behind the hyperinflation beliefs?
I'm not looking for just panic and !!, I want to understand why people think hyperinflation will happen here, how it will happen, and when. Also what is the definition of hyperinflation? Greater than 10% per year? Are you considering just price inflation or also wage inflation?
To create hyperinflation takes a concerned effort by the Fed and our government - Yes? Do you think the new administration will really support hyperinflation?
Clearly we are deflationary now. Things cost fewer dollars now than a year ago.
Chrysler should approach Tesla for a licensing deal. If successful, they should close plants temporarily to re-tool (keeping employees on the rolls), and start building Teslas in large-enough numbers that the price will drop into the reasonable range.
Pipe dream? Yeah. I know.
CR, stealthwii, I will further add that when considering the graph I mentioned above showing the loss of net worth due to the bubble economy, along with the graph in this post, that the definitions of 'inflation' and 'deflation' do not fit the standard non-bubble definitions.
Thus, CR, may I also suggest that you create the new economic terms 'bubble inflation adjusted' and 'bubble deflation adjusted' since, it seeems, we now have this new 'bubble business cycle' model.
Excluding gasoline and automobiles, retail sales actually increased 0.3%---not great, but better than October (-0.7%), September (-0.7%) and August (-0.8%).
"Central banks around the world have undertaken a number of measures to forestall deflation and lift the global economy out of economic slump and credit crisis. Aside from traditional monetary policy tools such as official interest rate cuts and relaxations in reserve requirements, central banks have resorted to alternative unconventional tools. .. Despite liquidity raining down on the financial system from the Fed and ECB, the financial fires have yet to be extinguished. .. In the U.S., private demand continues to fall sharply as does the string of awful economic and financial news." - Roubini
RGE - Will Aggressive Monetary and Fiscal Measures Prevent Stag-deflation in 2009?
CR, this is what I mean when I say that deflation etc. does not mean what it used to before the bubble business cycle.
I knew Jack Keynes, and Nouriel Roubini (nor Paul Krugman) is no Jack Keynes.
Walking through the mall last night in CA. I've never seen so many stores that are having 50-60% off sales. Every other store. Last night I saw the first "closing everything must be liquidated" sign -- another high end furniture store. Real rough out there.
CR, p.s.> I see a Nobel Prize in there for you somewhere.
Lurker | 12.12.08 - 11:55 am | #
What are those numbers year over year? Month over month is a fool's errand...
CR, in addition as you know, the bubble business cycle also stole savings in various ways including excess consumption causing inflation (ie: distorting the space-time of the normal business cycle), as can be seen from this chart in this article
Hoover Institution - Facts on Policy - U.S. Savings Rate
When might we begin seeing some 3-D graphs from you concerning the bubble economy in order to depict its distortion effects?
With all the 50% sales and the misery index, how does retails sales, ex auto and gas actually increase? Is is really as bad as we portend?
More nonsense re bubble business cycle being a 'rare' event:
This is said to be a global recession, a great global recession, that comes once in 100 years
Japanese Leader Announces A Sweeping Stimulus Plan - NY Times
stealthwii, it doesn't matter if we are in deflation. With ever increasing unemployment rates it doesn't matter what prices are, more and more people can no longer afford to buy.
Can You Hear Me, Dr. Wu?
CAT was a good ride over the past few years, but I think that's really over - sales in Asia for new industrial production and for domestic development are going to slow or grind to a halt. Same story here in the domestic market.
Yes, we need to return to Henry Ford's vision.
BTW - Katy does lie.