This chart actually isn't so alarming. If this were all there were to it I wouldn't be in a panic.

--
We are headed to new lows.

Jas

well, here is a variation that is more alarming, from 05. longer timeframe -

Savings as a % of Disposable Personal Income

The Big Picture

I didn't know O could be 450% of anything. The things I learn. It is impossible to live a good life on $250k a year and now this...

Congress deadlocked over whether to have a Czar or a Potentate.

Inertia applies to humankind as much as to billiard balls

That reminds me.
I haven't played any pool today.

I think many readers here could benefit from a true understanding of The Credit Cycle. The "generational warfare" comments of the last post imply that most people don't understand the sine-wave, positive feedback nature of the cycle.

Ray Dalio of Bridgewater Associates have an excellent explanation of the Credit Cycle in a 1993 issue of Barron's but I can't find it online.

Congress deadlocked over whether to have a Czar or a Potentate.
Not One Cent | Homepage | 12.11.08 - 3:57 pm | #

The bill is dead, but it doesn't matter.  Senate republicans realized that TARP will bridge GM and C until Obama takes the reins.  (F doesn't need the bridge.)
There will be more gnashing of teeth, but everyone is heading to the home town this weekend.

Would we be above 0 without Level 3 assets?

Pretty big currency moves today esp with the Euro United States Dollar in Euro - Google Finance

More evidence of Reaganomics behind the bubbles. Reaganomics in a nutshell: take all the money and give it to the top 2% richest people.

bubbles? I think the agreed upon term is "souffles".

Much more palatable. Don't want to spook the peeps or suggest that there is any need to put any heads on pikes.

Interesting anecdote. I just got a job solicitation for an "architect" position at a major telecom at $50 / hr on 1099.

Wow. That's 25% less than I made for a straight coding position (lesser title) last year. That's probably a real decline of more than 33%. They should at least re-name it to an appropriate title like "entry level temporary fall guy".

To me, this implies large number of 1099s are no longer even pretending that they'll be paying any income tax.

CR,

I try my best to not request anything, but wondering what you think about a chart of "total mortgage debt and the balance of trade". (I'm thinking they are complete mirrors of each other.

Just a thought, Cheers!

~n

................

yogi | sm lets hope so. I figured if nothing else he would have posted on Tanta's obituary.

............

More evidence of Reaganomics behind the bubbles. Reaganomics in a nutshell: take all the money and give it to the top 2% richest people.
Speed | 12.11.08 - 4:03 pm | #

Reagan. Greenspan. Bush Jr.

In a more just world, they might exhume Reagan and bury the three of them together on January 20th, like sullied Vestal Virgins.

Pretty big currency moves today esp with the Euro 404 Not Found? q=USDEUR

nades | Homepage | 12.11.08 - 4:02 pm | #

Dollar index has lost 5% since November 21st. The plan is working.

This is when a responsible Federal Reserve would have started to tighten credit.

AC,

1995 is when Greenspan allowed money supply growth to continually exceed nominal GDP growth by over 50%. For more than a decade no less (8.8% vs 5.5%).

Great for the toll takers and debt pushers on wall street. Ruinous for society as a whole.

Greenspan thought he had found a free lunch. What a dingbat.

(Sorry about the double post - didn't want to post as anonymous.)

OT- the closing volume for the DJIA has been decreasing for each of the last 5 days. I always assumed (ya'.. I know) that this was due to short sellers closing their positions at the end of the day. Anyone have any thoughts on this phenomena?

Household Net Worth. I wonder how many even understand that, let alone know how to figure it out. The term probably means different things to different people.

Kind of like the word "Broke." As in, "I am broke." The people I grew up with translated that as "No, I can't even afford to buy a pack of smokes."

Other people, well it means their cash flow has tightened up a lot and they are just meeting living expenses.

Too bad the chart doesn't go back further ...

like about 1928 ...

Bloomberg: BAC to cut 30,000 to 35,000 positions.

WOW!

They better get something to melt down quick or this dollar short squeeze looks to be just about done...
citizen energyecon

Wow. That's 25% less than I made for a straight coding position (lesser title) last year. That's probably a real decline of more than 33%. They should at least re-name it to an appropriate title like "entry level temporary fall guy".

To me, this implies large number of 1099s are no longer even pretending that they'll be paying any income tax.
Broward Horne | Homepage | 12.11.08 - 4:11 pm | #

There's another implication:  Tech salaries are in free fall.  This has been my experience.

Please sir. May I have some blue bars on this fine graph?

They better get something to melt down quick or this dollar short squeeze looks to be just about done...
citizen energyecon

I would have thought there would be much worse currencies still emerging.

Looks like we'll be leaders again! Straight down the backside of that hill...

......Opps!............

Bank of America to cut up to 35,000 jobs over the next three years

~~~~

It will a lot sooner than that ... This thing will unraveling fast.

The Southern Senators are refighting the Civil War and everybody is going down.

mmmckinl, They never stopped fighting it. I'm still on the fence as to whether we shouldn't just force them secede, I'd have to move but that might not be all bad anyway

In the early 90's recession, this was flat, but it dropped to around 300% during the late 70's about early 80's recessions.  If 300% is the destination, it looks like home value has to drop another 25%, ignoring the likely drop in GDP.  That looks consistent with other home price comparisons based on income or rents.

What is the ratio of GDP and incomes?

re: Wage deflation

How about $250k to $0?

"one of Britain’s major industrial giants is striking a deal to cut its workers’ salaries by 10pc"

At least we're not alone.

"one of Britain’s major industrial giants is striking a deal to cut its workers’ salaries by 10pc"

~~~~~

Not gonna help to pay down debt ... 50 trillion in U.S. aggregate debt ...

Britain is headed for the sh(&&&ter ...

Yeah, 30,000 on Tuesday
Rob Dawg

Le Dawg do you have a link? 30K five days from now? Dios mio. Lets hope they use some tarp funds to give these people a severance. Its better than paying a bonus to some fat cat!

.....

(or maybe that was a joke?)

CR posted this about a month ago:

Title: Bernanke and Asset Bubbles

From the New York Times article: To Fight Rising Prices, Fed Nominee May Need New Weapons

Mr. Bernanke ... has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, and in this he departs from Mr. Greenspan.

What lifts asset prices, Mr. Bernanke and others argue, is the willingness of lenders to offer riskier types of loans, which "juice up the housing market and are not very responsive to interest rates," as Mark Zandi, chief economist at the research firm Economy.com, put it.

Lenders can engage in riskier loans because they have developed techniques in recent years that make it far easier for them to shed their vulnerability to risk, doing so mainly by shifting the risk of default to others. The lenders operate in sophisticated markets that allow thousands of individual investors to purchase a slice of the original loan, and a slice of the risk.

In the past, the danger of default as rates rose tended to discourage lenders from making overly risky loans. The lender, often a bank, kept the loan and bore all the risk. Mr. Bernanke, in response to the risk shifting, has raised the possibility of limiting the dangers through the use of regulations - microregulatory policy, he calls it.

"There are two ways to approach bubbles: one is interest rate policy, the other is microregulatory policy," he said in a little noted interview published last year by the Federal Reserve Bank of Minneapolis. "Microregulatory policy is the much better approach, in my view," Mr. Bernanke said.

Pursuing his point, he added: "Research on historical episodes suggests that large asset price increases are sometimes preceded by credit booms. In many cases, this pattern results from the fact that the country in question deregulated its banking system, giving banks extra powers, but did not enhance the supervisory structure adequately at the same time."

I believe tighter lending requirements would have minimized the housing bubble. Of course its too late this time.

My question: since the economy is clearly only sustainable with deficit spending and massive bubbles, what's the Fed's next move?

Was the small drop-off in late 2005 due to hurricane Katrina or something else?

It's time to give up the ghost. Let the bad loans default. Rescind the TARP before it is spent on wall street bonuses.

Save the dollar, get competitive, reward work not asset inflation. No more unsustainable debt expansion.

30K five days from now? Dios mio. Lets hope they use some tarp funds to give these people a severance. Its better than paying a bonus to some fat cat! - nades

No, I was just saying that the layoffs will be very front loaded. You can't run a business with the axe waiting to fall. Just SOP and IMO a good business practice.

I'm with Angry Saver. Rip that band aid right off.

Rob Dawg writes:
REBear writes:
Bank of America to cut up to 35,000 jobs over the next three years

Yeah, 30,000 on Tuesday and 100 per month thereafter. We know how these work. I want the distribution numbers, how many from Countrywide and how many from Merrill.

Rob Dawg | Homepage |

I read the PR release at Y! since Bloomberg didn't have it up yet.

It's Merrill, not CW. PR says final numbers in early 2009 after the acquisition is completed.

I was hoping for more Countrywide too.

Sorry if this is a duplicate.

if we all pull a Ghandi and just stop eating, spending and working

All right, baby, I'm 2/3rds of the way there!

Ha ha ha. And Wall Street will just "go quietly into that good night." There's a war going on, and they have all the ammunition

You're right. Wall street will NOT go down without a fight. But that's okay.

The first salvo against wall street should be a numerous CEO & CFO perp walks. Followed up with loooonnnng prison sentences (Enron/World CON style).

When the auto makers go ...

Watch out below ...

bearly writes:
"Charges against Madoff allege that he told senior employees on Wednesday that the firm was "a giant Ponzi scheme" after trying to distribute the "couple of hundred million dollars" he had left before turning himself in"

What? You mean they're NOT "An Intricate Interweaving of Advanced Technology and Sophisticated Traders"?

In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark.

The page cannot be found.

Another reason this mess cannot be fixed is our extremely skewed wealth distribution.

Too many now have nothing.

Any true student of the GD knows that wealth CONcentration was a large CONtributing factor in causing and prolonging the GD.

Tech salaries are in free fall. This has been my experience

Mine, too. If I was willing to play the Game, this year I was finally back to my 2000 level compensation but frankly I wasn't comfortable with being forced into a salesman role and the odds of layoffs in 2009 were good anyhow.

I have to admit, I feel better now that I gave up trying to accomplish anything career-wise. I was hoping that I could beat the Bubble collapse by working hard and staying current but it just wasn't worth it.

Easier to give up and play pool.

I won't buy a house again.
I won't get married again.
I won't have any kids.

So I'm kind of retired in a way, I guess. Uncle Sam can go sell houses, cars and collect taxes from those guys in India.

--
"Any true student of the GD..."

I am sure that Bernanke is not included in that list. The guy is a certifiable moron.

Jas

I am sure that Bernanke is not included in that list. The guy is a certifiable moron.

That goes without saying.

--
S&P 500 down 11 points in the after hours. New lows this year or in 2009?

Jas

--
AS,

I made the comment about Burn-ass-ke for the benefit of the rest.

Jas

unirealist,

you mean Jennifer Aniston?

Morocco Bama,

China on the other hand has not borrowed from the West. It's easy to see why.

Except for the Marshall plan, aid from the West is VERY expensive. Perpetual debt servitude it seems.

i may sound like some kind of freak: i remember when you never ever borrowed against your house unless it was an emergency. praise to the add men huh?

--
China is not a democracy and Germany and Japan are not voluntary democracies. Even in India it was imposed by the local elite "educated" in England so that they can have the power after the Brits left.

Democracy ain't what it has been cracked up to be. It would be fully discredited in 20-25 years.

"Making the world safe for democracy was the codeword for American imperial designs following the WW I.

Jas

robert writes:
i may sound like some kind of freak: i remember when you never ever borrowed against your house unless it was an emergency. praise to the add men huh?
robert | 12.11.08 - 5:16 pm |

I remember too. That's why I'm part of the 31% while I have friends who owe more on their home than they paid for it. Sad.

Oh, NPR had a thing on Canadian diamonds. Apparently they have a lot of them. They require 10% to be cut in Canada. The Canadians are apparently happy to buy them and pay decent wages to cutters and polishers.

No blood diamonds.

Oops, I used the C word.

I sure hope this is a joke. Thats an emergency? ever heard of a health club with a pool? or how about no pool?
I think the definition of emergency is also going to return to it long term average....

I don't know if it means much, but I have found few movies worth a shit beyond the mid-90s. Too much product placement, not enough talented screenplays.