AC, from the former thread, other than inflation or default, is there a way out of the debt mess? Is there an option I am missing. Do you see default as better or worse than hyperinflation? Is 'moderate' inflation a possibility?
i defer to AC on the subject but if you will allow a less informed opinion...
i think default..cascading default...recession...deepening recession.. leading to the greater depression will be hell...and thats where we are headed
if...if... the new prez and co. can juice the economy, the right way...just a little.. with infrastructure, and esp ad 21st century energy and transportation "apollo project"
we may nose up before crashing into the deck...but its a long long shot
Depends how you define "hyper".
We let rates go to 18% and lived. Now we have all the shelter we need, our food production is still strong, and renewable energy is better than it was 25 years ago. Plus we're still reaping windfalls from the digital revolution.
We have a ton of people locked in long at 6% or so. Won't take that much wage inflation spurred by New Deal 2 to squeeze Joe Homeowner's equity back from the banksters. China should wean themselves from the $ anyway. We can go back to the Monroe Doctrine and be just fine.
Amazon.com stock price sure liked the results today. Makes me want to buy more puts on them...
Come on, let's look ahead a few months. Regardless of whether holiday spending is weak or not, how will things look when oodles of newly-unemployed folks have no money to spend, (not to mention they might have their high-speed internet disconnected)? Even if the Internet retailers get a bigger piece of the pie, that pie is gonna be a whole lot smaller...
Last year's week 3 included thanksg & black fri (if the 11/23 at the bottom is the cutoff date). Cyber mon in week 4.
This year thanksg & black fri are in week 4. Cyber mon is actually in week 5 this year ... so it looks like the data is not in for cyber monday in this graph....
Perhaps the thanksg. & black fri sales are down YOY ... probably too early to tell about cyber monday...
My read of the graph, anyway
Can anyone suggest an "Econ 101" Textbook-style book for us non-wonks in the audience?
I came to this need after attempting to read Ben's "It" speech in a vain attempt to try and determine what will be next in his play book. But seeing as how my basic understanding of the topics is nearly non-existent it has turned out into an exercise in futility (as evidenced by the recent statement of buying Treasuries and even foreign Treasuries/Bonds/etc.).
Anywho... thoughts and suggestions are highly appreciated!
Ben speaks deliberately in code. The most important book you can read is "Empire of Debt". Addison Wiggin and Bill Bonner. 2005, but that makes it even more impressive.
A former confidant of President Saakashvili, Kitsmarishvili said Georgian officials told him in April that they planned to start a war in Abkhazia, one of two breakaway regions at issue in the war, and had received a green light from the United States government to do so. He said the Georgian government later decided to start the war in South Ossetia, the other region, and continue into Abkhazia.
Showing that they are going 'all out' to revive the ailing US automotive industry, executives from the 'Big 3' have unveiled a new advertising campaign,drawing on the best of the internet era. According to inside sources, new ads will feature graphic sexual acts between the Pets.com sock puppet and the Etrade.com monkey. 'It's totally cutting edge,' reported an industry insider. On an unrelated note, GM CEo, Rick Wagoner, was spotted in Dollar Daze shopping for tube socks."
Confession time. I bought something online Monday. My iTunes music collection outgrew my hard disk. So I spent $115 on a 1.5Tb SATA. Nothing to do with cyber monday, just time to upgrade.
Reflation, QE, and bailouts seem very dangerous. We need solutions to cushion the liquidation without endangering the national solvency.
You have to entice the hard money off the sidelines. The only way to accomplish this is to let prices fall, realize the losses, and let capital flow. The losses have to be in the trillions considering inevitable GDP declines.
Here we sit hiding in treasuries while the govi assists in hiding the losses.
Campbeln-
I really wouldn't know where to start with a good beginner's book on economics.
With a degree in economics and one in finance, I can tell you that the former has to do with defining the nature of trade, and the latter deals with how to create incentives to enable more of it.
Everything gets kinda complicated from there, though.
I take it back. Apparently he drove part of the way.
"His" car and two other sedans comprised the convoy. 500 miles at, say, average of 55 mph = 9 hours of top executive time. Would have been better to fly commercial.
I'm a bit surprised in the strong on-line sales because I foresaw the following situation...
Credit card companies are clamping down on available credit (a person who I assist managing his finances just had his limit cut to within $3 of the current balance).
Since essentially all cyber purchases are via CC's, I surmised that lower limits would impact sales.
I'm looking to buy a car. The dealers that did get my offer all laughed at it and basically said, "Even in this economy no dealer will take that...".
I'm really not that good at haggling. I'll have to remember son of mp's technique of drinking a soda during negotiations to let them mull over the price. I know when you go to the dealerships they have a lot of leverage, but then you can walk out and snatch the sale from their hearts...
Thanks for the input, and maybe requesting an "Econ" 101 book was a bad idea. So... not just on Econ, who has suggestions on a reading list of textbook-y books to get a bit more literate in the general topics here on CR?
I'm picking up on (and reading about) QE, Japan, GD1 in bits and bobs online as the topics come along, but I'm learning to swim in the middle of the ocean, anyone have a beach they can recommend? =)
Re Econ 101: Just make sure you're reading it for an explanation of terms. If today's world has taught us nothing else, it's that economist theories only explain the flaws in our systems, their solutions merely shuffle the holes around! Otherwise there'd be a country with a decent economy,...apparently the best we can hope for are periods of stability.
As other noted on the Black Friday "sales", there were many items you could get for cheaper online. Could this jump on Cyber Monday be more a matter of the Black Friday sales being a dud in relation to online pricing? Or that more people, driven by frugality, are buying online in Ernest in order to pinch those holiday pennies?
These seem more plausible to me (and the comment about which week Cyber Monday falls into from above counts for something as well!)
YSLP - here is a tip. If you want to negotiate, you have to get the other party invested in the outcome.
Go into the dealership multiple times over the next several weeks, hem and haw, test drive, make jokes with the salesperson, let them know you are a serious buyer etc. Don't let on about all the internet research, but do indicate that you are "shopping around a bit" without getting specific.
Make them invest TIME in interacting and negotiating with you. They should feel as much like they are about to close on you (all the time) as you can manage without pissing them off. And look to close right around yearend, as others here have suggested.
Don't insist on every last nickel. Salespeople have families too. Settle for a good or very good deal. I feel best when I have negotiated well and not left the other party in their underwear.
There's something a little bit sick with this encompassing obsession with how much money is spent on gifts -- a lot of things just trinkets, a lot of it just crap -- at Christmas. Every year the same drill: the nauseating, cookie cutter stories about 'Black Friday' shopping, followed by more of the same all the way until Christmas. And then again immediately after.
Allen C(Unrated) writes:
"is there a way out of the debt mess?"
Reflation, QE, and bailouts seem very dangerous. We need solutions to cushion the liquidation without endangering the national solvency.
You have to entice the hard money off the sidelines. The only way to accomplish this is to let prices fall, realize the losses, and let capital flow. The losses have to be in the trillions considering inevitable GDP declines.
Here we sit hiding in treasuries while the govi assists in hiding the losses.
What I don't get is how to avoid inflation or default on the national debt, considering we need an ever increasing inflow just to stay afloat. Is there an infinite amount available somehow? Isn't paying current debt with newly acquired debt just a Ponzi scheme?
Oh yeah, don't jump all over price right out of the gate. Set price aside until you have discussed everything under the sun ... make like it is not important to you. By the time you drop a number, assuming it is not too onerous, they will be motivated to work with you.
You might have to start over with new dealers, I suppose
A bit off topic, Paul Krugman seems to be saying that we can afford to go into debt to the tune of another 10 trillion. That would amount to a total debt of about 20 trillion. At an interest rate of of 5% that comes to out to an interest payment of 1 Trillion a year.
Does not sound plausible to me. Is there anything i am missing.
I despise negotiating with new car dealers. I used a broker to buy my last car. It was COMPLETELY painless. I may have spent $125 more than I could have, but I saved hours of dealer manipulation and bullshit.
I spent no more than 15 minutes total sending emails and then arrived at the broker's house a week later to pick up the car. His fee was explicit and separate from the dealer paperwork. The price we agreed on was the price I paid, and the car was exactly what I'd requested.
"Isn't paying current debt with newly acquired debt just a Ponzi scheme?"
We've been doing that for decades. It works with a growing economy. You have to look at debt/GDP. It (national govi debt) was as high as 1.25 at the end of WWII.
We gorged on debt for the last 20 years in a vain effort to live richer lives than our own productivity allowed.
But the bill is due. Globalization is killing the American middle class. The average American is not smarter, not better educated, not more productive, not more motivated than the billions of Chinese, Brazilians and Mexicans who are striving to claw their way to a better life. Our fat and happy middle class no longer gets a free pass to live better than the smarter and harder working middle class of other nations.
The Feds can borrow or print all the money they desire but they can't make true wealth out of nothing. We are no richer than the sum of what we produce. And we don't produce enough to support the lifestyle that Americans expect.
We can extend the illusion by borrowing from future generations, or by enticing foreigners to lend us funds or sell us merchandise on credit. But it won't change the essential reality that we no longer create enough wealth to support our way of life.
But you hear nothing about rebuilding American industry. You hear nothing about putting Americans back to work in productive jobs. You hear nothing about training Americans to do real skilled work.
Instead you get endless attempts to return us to easy money and more debt creation. Our leaders look for the quick fix that will stop the howls of the angry masses and bring profits back to their banking patrons.
But nobody in Government wants to look at the real issue. It's too big, it's too scary and it's a lot easy to grasp at the happy illusion. But it can't last. Reality can be delayed but it can't be diverted.
Things are going to get very ugly indeed in a couple of years.
Why aren't people questioning Comscore's numbers? I work in online advertising, and I don't have a lot of faith in Comscore's data (though my company spends a lot of money on their products -- if we pay them enough money we get a high score in their rankings).
I'm not saying they're wrong. Just that they base their numbers on a sample size that may not be large enough or representative of real black Friday sales. Why aren't we hearing any real data? Credit card purchases, retailer results, etc? The only numbers we're getting are from unreliable sources.
Everyone is excited about infrastructure. But when I think infrastructure, I also think "eminent domain" takings. If we are going to use a lot of public money to build up infrastructure, does anyone else think there will be a lot of eminent domain going on?
Not once did I hear the words conservation or austerity during the campaign. They were afraid to be associated with "weak" Jimmy Carter. I still believe the internet will save democracy (and bicycles).
YLSP writes:
Everyone is excited about infrastructure. But when I think infrastructure, I also think "eminent domain" takings. If we are going to use a lot of public money to build up infrastructure, does anyone else think there will be a lot of eminent domain going on?
That's a $43b question here in Cali. Union Pacific is being very unamerican in refusing to donate billions worth of land the the high speed railway.
Speaking of media and what you won't hear. It sure was nice of the media to cover up the murder investigation into the top Democrat in the assembly.
Why was this covered up? Police said they traced the suspects to Sacramento almost immediately based on witness accounts in San Diego. Detectives had searched the Northern California homes of all four suspects about a week after the October stabbing. They are scheduled to be arraigned on Thursday.
Sure looks like someone was trying to accomplish this arrest and investigation with as little embarrassment to the state as possible.
Really, we don't have corrupt politicians? I'm sorry but this is embarrassing to the state. It's no wonder we have a debt problem when the Assembly leader is raising murderers.
I'd really like to know how the media missed this one...
Goodnight all... looks like I'll miss the global depression clock update. I'll also probably miss getting slapped around by mp for bringing up a political topic; but more regarding corruption and cover-up by media who is supposed to be working for us, the people.
Tommorrow is a day that ends in "y", so we can expect some government intervention... I bet it gets nasty in the afternoon as the employment numbers are released to Goldman...
Seriously, this isn't a case of replacing one productive product with somebody else's supposedly more productive use; this is a public good that also can complement the current user.
With the economy heading down the crapper it's not like cars full of paper are still going to china. So expand the right of way a little to help reduce bottlenecks and when it turns around you've got productivity gains on the government's dime. Stop gaming the f'n system and be a patriot.
With U.S. Treasury Secretary Henry Paulson looking on, he said Beijing backed U.S. initiatives to steady world markets and had acted responsibly to try to achieve the same goal.
But Wang urged Washington in return to heed Beijings needs.
I hope the United States will take all necessary measures to stabilise its economy and financial markets as soon as possible and to ensure the security of Chinese investments and interests in the United States, he said.
OT, but is Geithner floating this idea to gauge support...?
Dec. 4 (Bloomberg) -- Timothy Geithner, President-elect Barack Obama's choice for U.S. Treasury Secretary, is seeking to push Federal Deposit Insurance Corp. Chairman Sheila Bair out of office.
Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn't a team player and is too focused on protecting her agency rather than the financial system as a whole...
I hope the United States will take all necessary measures to stabilise its economy and financial markets as soon as possible and to ensure the security of Chinese investments and interests in the United States, he said.
Anonymous
Hey China, you're all a bunch of MORONS. Shut your traps, and give us more money. That's all we care about from you, so quit telling us how to run our country, and just keep "loaning" us your money, and quit worrying about whether you're going to get paid back, because you're not.
The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion. That's more than the entire endowments of all but six colleges, according to the latest official tally.
The Harvard Board of Trustees is expected to seek a bailout from congress sometime next week. When asked if he would support a bailout, Obama economic advisor, Larry Summers is reported to have replied " what did they let some chick run the endowment?". After further investigation this was deemed an internet rumor. His actual reply was "idiot says what?"
SPRINGFIELD, Ohio -- A Tri-State woman is in critical condition Wednesday after police say her husband shot her while they were having sex.
Timothy Havens, 38, told Springfield police he was reaching for something on the nightstand when the pistol went off, hitting his estranged wife Carolyn in the upper chest. (Hear part of the 911 call)
Dec. 4 (Bloomberg) -- Treasury Secretary Henry Paulson is considering a new plan to reduce mortgage rates in another bid to revive the U.S. housing market, a government official said.
Question: What would you rather buy?
1) a 400K house still to decline 10-20% at 4%?
or
2) wait and get the same house at say 340K at say 7%?
Dec. 4 (Bloomberg) -- General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with their internal discussions.
Auto executives have warned bankruptcy would lead to liquidation as customers abandoned the companies. Staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.
Hey China, you're all a bunch of MORONS. Shut your traps, and give us more money. That's all we care about from you, so quit telling us how to run our country, and just keep "loaning" us your money, and quit worrying about whether you're going to get paid back, because you're not.
Comrade Scared Shitless | 12.04.08 - 7:11 am |
Wow, reports of US being hit with n bomb within 5 years may be true, dipshit.
Maybe Cyber Monday was more successful because a critical mass has finally realized that you can often avoid taxes on purchase items. Watching state revenues decline, and budget deficits soar makes me wonder how long this little arrangement will last.
Internet taxes are like a giant pocket waiting for a hand to be put in it.
My question would be, does this not so bad start have to do with aggressive pricing pulling sales forward.
The reason I say that is that if this was a normal season prices would not still be in freefall with almost everything I look at cheaper from last week.
In general: Yes, there are plenty of ways out of this mess. None of them are painless. The question isn't even how much pain, the question is WHO feels the pain. The normal idea, much like risk is to ameloriate the pain by aggregating it over enough people that the pain is minor. But with this credit bubble spread out over a large portion of the population through the RE bubble, it's simply not possible to spread it out much more.
Back to the topic - the Comscore numbers are believable - anyone who bothered to follow the link finds:
"For the holiday season-to-date, $12.03 billion has been spent online, marking a 2 percent decline versus the corresponding days last year."
Before the big weekend and Monday, total sales were -4% YoY and Comscore is forecasting flat online spending (which is a fraction of brick and mortar spending). Any way you look at that, it is hitting a wall as YoY growth has basically been over 20% annually.
Casey Serin has family in Turkey that live in Dubai? Whoocoodanode!
Dubai Speculators Quit as Lending Drought Bursts Desert Bubble
By Glen Carey
Dec. 4 (Bloomberg) -- The classified ads in Dubai read like an obituary for a real-estate market that until a few months ago seemed immune from the global credit crisis.
A Turkish investor, who identified himself as Sebat, took out 10 bright yellow ads in the Nov. 25 edition of Gulf News, the United Arab Emirates biggest newspaper, with the headline: DIRECT FROM OWNER DISTRESS SALE!!! Sebat said he used to be able to buy four or five properties at a time and sell them the next day for a profit of as much as 5 percent.
a) They, not the US, decided to intervene heavily and in sustained way to hold their exchange rate down, a policy that necessarily implies financial losses for China. China is effectively overpaying for financial assets (dollar reserves) that it doesnt need in order to support its export sector. There is no way the US can guarantee China against losses on its holdings of dollars.
b) Investors in highly leveraged financial institutions risk large losses. Chinas discomfort with its current losses suggests it never should have bought large stakes in major financial institutions. One of the concerns Larry Summers raised about sovereign wealth fund investments in large financial institutions is such investments would turn the always difficult decision to wipe out the equity of a failed financial institution into a foreign policy decision. That rings true.
c) Given how much the US imports from China, it is hard to see how the US can increase its savings (and reduce its trade deficit) without putting pressure on Chinas export sector. Indeed, right now the US consumer seems to be following PBoC governor Zhous advice to save more - that is one reason why Chinas exports have slowed. And that hardly has made Chinese policy makers happy. Right now a smaller US fiscal deficit would imply even bigger falls in global demand for Chinas products.
d) If China wants to maintain its trade surplus and in the process to maintain a world where Chinas exports are growing faster than the worlds imports, meaning that Chinas global market share is rising other countries will necessarily have to run a trade deficit."
AC, from the former thread, other than inflation or default, is there a way out of the debt mess? Is there an option I am missing. Do you see default as better or worse than hyperinflation? Is 'moderate' inflation a possibility?
th
wow, first time using the add on and there I am... but I promised not to use the 'f' word.
Doing my part to boost the economy, I bought a bigscreen in October and a piece of luggage this month. I'd buy a car, but I live in Manhattan.
But the mortgage pig TM wear did not come out till yesterday.
These feel like early poll results. Kinda like... let's wait just a little to see how this really turns out.
aClem
i defer to AC on the subject but if you will allow a less informed opinion...
i think default..cascading default...recession...deepening recession.. leading to the greater depression will be hell...and thats where we are headed
if...if... the new prez and co. can juice the economy, the right way...just a little.. with infrastructure, and esp ad 21st century energy and transportation "apollo project"
we may nose up before crashing into the deck...but its a long long shot
CNBC reports massive spending jump, stock market rallies 15% in one day.
The most important weeks are coming up ...
CR - how big a bump would the webmarts have to provide to offset the decline in sales from the brick & mortar stores? Any hint there in the data?
Charlie Rose - Nassim Nicholas Taleb
A conversation about economics with Nassim Taleb
Dec 3, 2008
available online tomarrow
Search actually is holding up so far. Who knows going forward....
Depends how you define "hyper".
We let rates go to 18% and lived. Now we have all the shelter we need, our food production is still strong, and renewable energy is better than it was 25 years ago. Plus we're still reaping windfalls from the digital revolution.
We have a ton of people locked in long at 6% or so. Won't take that much wage inflation spurred by New Deal 2 to squeeze Joe Homeowner's equity back from the banksters. China should wean themselves from the $ anyway. We can go back to the Monroe Doctrine and be just fine.
I guess the recession is over. Kudlow was right.
I'm hoping for something similar, Mock Turtle. Not a very rosy outlook for a best case scenario.
Amazon.com stock price sure liked the results today. Makes me want to buy more puts on them...
Come on, let's look ahead a few months. Regardless of whether holiday spending is weak or not, how will things look when oodles of newly-unemployed folks have no money to spend, (not to mention they might have their high-speed internet disconnected)? Even if the Internet retailers get a bigger piece of the pie, that pie is gonna be a whole lot smaller...
Last year's week 3 included thanksg & black fri (if the 11/23 at the bottom is the cutoff date). Cyber mon in week 4.
This year thanksg & black fri are in week 4. Cyber mon is actually in week 5 this year ... so it looks like the data is not in for cyber monday in this graph....
Perhaps the thanksg. & black fri sales are down YOY ... probably too early to tell about cyber monday...
My read of the graph, anyway
Futures appear unimpressed.
So, its not about eyeballs...mmm
Retail sales rising? That's unpossible.
The internet isn't going anywhere. Remember when telephones and electricity were luxuries? Utilities are good for everyone.
Totally OT:
Can anyone suggest an "Econ 101" Textbook-style book for us non-wonks in the audience?
I came to this need after attempting to read Ben's "It" speech in a vain attempt to try and determine what will be next in his play book. But seeing as how my basic understanding of the topics is nearly non-existent it has turned out into an exercise in futility (as evidenced by the recent statement of buying Treasuries and even foreign Treasuries/Bonds/etc.).
Anywho... thoughts and suggestions are highly appreciated!
C
(my comments above relate to the graph, not to the text)
Can anyone suggest an "Econ 101" Textbook-style book for us non-wonks in the audience?
"The Creature from Jekyll Island" by G. Edward Griffi
Ben speaks deliberately in code. The most important book you can read is "Empire of Debt". Addison Wiggin and Bill Bonner. 2005, but that makes it even more impressive.
Ukraine, Georgia NATO Entry Put Off Indefinitely :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
A former confidant of President Saakashvili, Kitsmarishvili said Georgian officials told him in April that they planned to start a war in Abkhazia, one of two breakaway regions at issue in the war, and had received a green light from the United States government to do so. He said the Georgian government later decided to start the war in South Ossetia, the other region, and continue into Abkhazia.
Congrats, BondGirl, on starting your own blog.
Once again, if you believe this, it is proven that the Internet is anarcy.
A fun blog on Comex Gold:
Vaporize COMEX countDOWN « Meltdown 2011
Where is Bond Girl's blog?
Bond girl has a blog? Do tell the url!
cambeln
i was raised on introduction to economics, by samuelson
but there are more readable econ 101 tests out there
may i suggest you go over to brad delongs blog and see what he has assigned to his berkley students for thier intro econ test
also mark thoma at oregon u is an outstanding prof and i would recommend referencing his blog to see what he assigns his students
sorry "tests" should be texts.. above hahah
Sure, ok. But are clicks up on usstillhasmoney.com? that's all i care about.
cambeln
to contact delong at berkley
J. Bradford DeLong's Grasping Reality with All Eight Tentacles
to contact mark thoma at oregon u
Economist's View
Haven't looked at Samuelson since 1981 but I didn't buy into it then. Seemed like a lot of circular reasoning. (I was an Econ major)
Yogi
yeah
im not a big samuelson fan..i struggled with that text even tho it came "highly" recommended
i bet delong and thoma will have better ideas
"Auto Executives Unveil New Plan
Showing that they are going 'all out' to revive the ailing US automotive industry, executives from the 'Big 3' have unveiled a new advertising campaign,drawing on the best of the internet era. According to inside sources, new ads will feature graphic sexual acts between the Pets.com sock puppet and the Etrade.com monkey. 'It's totally cutting edge,' reported an industry insider. On an unrelated note, GM CEo, Rick Wagoner, was spotted in Dollar Daze shopping for tube socks."
Cambeln, this is a good start: New Ideas from Dead Economists: An Introduction to Modern Economic Though
I have Mankiw's macro/micro textbooks and they are clearly written. Get the older editions at a huge discount.
Don't let this scene repeat, please :
Dec 3, 2008 The Grapes of Wrath Richard Russell 321gold ...inc ...s
Confession time. I bought something online Monday. My iTunes music collection outgrew my hard disk. So I spent $115 on a 1.5Tb SATA. Nothing to do with cyber monday, just time to upgrade.
Less than $.10 per gigabyte. I'm trying to remember what I paid for a 5 megabyte disk. It's deflation, deflation everywhere.
Bought a Herman Miller Aeron two hours ago. Craigslist. Flying under the radar.
campbeln
not to drive it into the ground
but
heres a link to what appears to be a good , free, online text
good luck
Contents
Off topic:
Anybody know how to short the makers of expensive wine?
For others who do not know (had to Google it), the Aeron is a chair.
Samuelson was the intro text at my high school and at Cornell back then, but I hope there are better ones.
Anonymous, Yogi, Mock, PeakVT, anyone I forgot... thanks! And keep 'em coming!
I'll look back over the thread and put in an Amazon order for a few as a white elephant Christmas gift to myself =)
C
I think of it as art I can sit o
"is there a way out of the debt mess?"
Reflation, QE, and bailouts seem very dangerous. We need solutions to cushion the liquidation without endangering the national solvency.
You have to entice the hard money off the sidelines. The only way to accomplish this is to let prices fall, realize the losses, and let capital flow. The losses have to be in the trillions considering inevitable GDP declines.
Here we sit hiding in treasuries while the govi assists in hiding the losses.
This is probably the first time in years Wagoner has driven himself anywhere. Assuming he drives, of course. He probably doesn't even have a license.
Campbeln-
I really wouldn't know where to start with a good beginner's book on economics.
With a degree in economics and one in finance, I can tell you that the former has to do with defining the nature of trade, and the latter deals with how to create incentives to enable more of it.
Everything gets kinda complicated from there, though.
Gotta run folks. Have a pleasant day tomorrow.
I take it back. Apparently he drove part of the way.
"His" car and two other sedans comprised the convoy. 500 miles at, say, average of 55 mph = 9 hours of top executive time. Would have been better to fly commercial.
Wonder if he is going to drive back, too?
I'm a bit surprised in the strong on-line sales because I foresaw the following situation...
Credit card companies are clamping down on available credit (a person who I assist managing his finances just had his limit cut to within $3 of the current balance).
Since essentially all cyber purchases are via CC's, I surmised that lower limits would impact sales.
Where did I go wrong?
I'm looking to buy a car. The dealers that did get my offer all laughed at it and basically said, "Even in this economy no dealer will take that...".
I'm really not that good at haggling. I'll have to remember son of mp's technique of drinking a soda during negotiations to let them mull over the price. I know when you go to the dealerships they have a lot of leverage, but then you can walk out and snatch the sale from their hearts...
Hong Konger:
Thanks for the input, and maybe requesting an "Econ" 101 book was a bad idea. So... not just on Econ, who has suggestions on a reading list of textbook-y books to get a bit more literate in the general topics here on CR?
I'm picking up on (and reading about) QE, Japan, GD1 in bits and bobs online as the topics come along, but I'm learning to swim in the middle of the ocean, anyone have a beach they can recommend? =)
C
Re Econ 101: Just make sure you're reading it for an explanation of terms. If today's world has taught us nothing else, it's that economist theories only explain the flaws in our systems, their solutions merely shuffle the holes around! Otherwise there'd be a country with a decent economy,...apparently the best we can hope for are periods of stability.
1 currency soon [yogi]
Cornell!? as in ithaca NY
cayuga lake
small world
i attended hobart college geneva NY
lake seneca
Regarding online sales, margins are compressed with the discounts and free shipping.
Anyone out there pay full price and shipping?
Finally something on topic:
As other noted on the Black Friday "sales", there were many items you could get for cheaper online. Could this jump on Cyber Monday be more a matter of the Black Friday sales being a dud in relation to online pricing? Or that more people, driven by frugality, are buying online in Ernest in order to pinch those holiday pennies?
These seem more plausible to me (and the comment about which week Cyber Monday falls into from above counts for something as well!)
Cn
YSLP - here is a tip. If you want to negotiate, you have to get the other party invested in the outcome.
Go into the dealership multiple times over the next several weeks, hem and haw, test drive, make jokes with the salesperson, let them know you are a serious buyer etc. Don't let on about all the internet research, but do indicate that you are "shopping around a bit" without getting specific.
Make them invest TIME in interacting and negotiating with you. They should feel as much like they are about to close on you (all the time) as you can manage without pissing them off. And look to close right around yearend, as others here have suggested.
Don't insist on every last nickel. Salespeople have families too. Settle for a good or very good deal. I feel best when I have negotiated well and not left the other party in their underwear.
There's something a little bit sick with this encompassing obsession with how much money is spent on gifts -- a lot of things just trinkets, a lot of it just crap -- at Christmas. Every year the same drill: the nauseating, cookie cutter stories about 'Black Friday' shopping, followed by more of the same all the way until Christmas. And then again immediately after.
Allen C(Unrated) writes:
"is there a way out of the debt mess?"
Reflation, QE, and bailouts seem very dangerous. We need solutions to cushion the liquidation without endangering the national solvency.
You have to entice the hard money off the sidelines. The only way to accomplish this is to let prices fall, realize the losses, and let capital flow. The losses have to be in the trillions considering inevitable GDP declines.
Here we sit hiding in treasuries while the govi assists in hiding the losses.
What I don't get is how to avoid inflation or default on the national debt, considering we need an ever increasing inflow just to stay afloat. Is there an infinite amount available somehow? Isn't paying current debt with newly acquired debt just a Ponzi scheme?
Oh yeah, don't jump all over price right out of the gate. Set price aside until you have discussed everything under the sun ... make like it is not important to you. By the time you drop a number, assuming it is not too onerous, they will be motivated to work with you.
You might have to start over with new dealers, I suppose
A bit off topic, Paul Krugman seems to be saying that we can afford to go into debt to the tune of another 10 trillion. That would amount to a total debt of about 20 trillion. At an interest rate of of 5% that comes to out to an interest payment of 1 Trillion a year.
Does not sound plausible to me. Is there anything i am missing.
Mock so you've had your share of Genesee Cream Ale and Blatz?
Campbeln can't recommend "Empire of Debt" enough because it's a good read too.
"Trillion Dollar Meltdown" was helpful.
Tanta's posts are superb if you can work your way through.
Don't trust anything with too much math. It's not rocket science.
I second the motion on "Trillion Dollar Meltdown." A very good, and rather sobering, book.
Oh, and don't trust any book that ignores politics. Everyone from Moses to Marx to Friedman has a political agenda.
"What I don't get is how to avoid inflation or default on the national debt"
Default is essentially impossible. Inflation is quite probable, but not altogether certain.
1 currency soon [yogi]
yes yes
ummm drinkin geney at watkins glen with the girls from keuka college
ill never forget
We were near Cazenovia...
YSLP:
I despise negotiating with new car dealers. I used a broker to buy my last car. It was COMPLETELY painless. I may have spent $125 more than I could have, but I saved hours of dealer manipulation and bullshit.
I spent no more than 15 minutes total sending emails and then arrived at the broker's house a week later to pick up the car. His fee was explicit and separate from the dealer paperwork. The price we agreed on was the price I paid, and the car was exactly what I'd requested.
Campbeln,
Well, it's overwhelming because it's a social/political undertaking, rather than a hard science.
In some way, economic theory is a debate about morals.
"Isn't paying current debt with newly acquired debt just a Ponzi scheme?"
We've been doing that for decades. It works with a growing economy. You have to look at debt/GDP. It (national govi debt) was as high as 1.25 at the end of WWII.
"Isn't paying current debt with newly acquired debt just a Ponzi scheme?"
It's only a Ponzi scheme if the only way to pay the old debtors is with new debt. If there are any actual earnings then it's just a bad investment.
Agreed, Hong Konger. Terms like "fairness", "efficiency", "productivity", "growth" are relative and rely on moral philosophy, with all its paradoxes.
Why I gave up the study.
We gorged on debt for the last 20 years in a vain effort to live richer lives than our own productivity allowed.
But the bill is due. Globalization is killing the American middle class. The average American is not smarter, not better educated, not more productive, not more motivated than the billions of Chinese, Brazilians and Mexicans who are striving to claw their way to a better life. Our fat and happy middle class no longer gets a free pass to live better than the smarter and harder working middle class of other nations.
The Feds can borrow or print all the money they desire but they can't make true wealth out of nothing. We are no richer than the sum of what we produce. And we don't produce enough to support the lifestyle that Americans expect.
We can extend the illusion by borrowing from future generations, or by enticing foreigners to lend us funds or sell us merchandise on credit. But it won't change the essential reality that we no longer create enough wealth to support our way of life.
But you hear nothing about rebuilding American industry. You hear nothing about putting Americans back to work in productive jobs. You hear nothing about training Americans to do real skilled work.
Instead you get endless attempts to return us to easy money and more debt creation. Our leaders look for the quick fix that will stop the howls of the angry masses and bring profits back to their banking patrons.
But nobody in Government wants to look at the real issue. It's too big, it's too scary and it's a lot easy to grasp at the happy illusion. But it can't last. Reality can be delayed but it can't be diverted.
Things are going to get very ugly indeed in a couple of years.
Why aren't people questioning Comscore's numbers? I work in online advertising, and I don't have a lot of faith in Comscore's data (though my company spends a lot of money on their products -- if we pay them enough money we get a high score in their rankings).
I'm not saying they're wrong. Just that they base their numbers on a sample size that may not be large enough or representative of real black Friday sales. Why aren't we hearing any real data? Credit card purchases, retailer results, etc? The only numbers we're getting are from unreliable sources.
Wake me up when we get some real results.
I actually meant to post the above comment in the previous thread where it would have been more on topic.
Everyone is excited about infrastructure. But when I think infrastructure, I also think "eminent domain" takings. If we are going to use a lot of public money to build up infrastructure, does anyone else think there will be a lot of eminent domain going on?
Not once did I hear the words conservation or austerity during the campaign. They were afraid to be associated with "weak" Jimmy Carter. I still believe the internet will save democracy (and bicycles).
The worst bubble crash in history (it is NOT the tech dotcom bubble). You will feel dizzy when you see the dive!
Details below:
MarketWarnings: Commodity Bubble Is Worse Than 2000 Tech Dotcom Bubble
YLSP writes:
Everyone is excited about infrastructure. But when I think infrastructure, I also think "eminent domain" takings. If we are going to use a lot of public money to build up infrastructure, does anyone else think there will be a lot of eminent domain going on?
That's a $43b question here in Cali. Union Pacific is being very unamerican in refusing to donate billions worth of land the the high speed railway.
Careful Gav, Moody's and S&P were an inch away from criminal prosecution.
How does one BK Union Pacific?
For those of you who like dramatic charts, feast your eyes on this one:
http://omrpublic.iea.org/demand/us_tp_ov.pdf
What % of oil consumption is "industrial", versus for transportation?
Speaking of media and what you won't hear. It sure was nice of the media to cover up the murder investigation into the top Democrat in the assembly.
Why was this covered up?
Police said they traced the suspects to Sacramento almost immediately based on witness accounts in San Diego. Detectives had searched the Northern California homes of all four suspects about a week after the October stabbing. They are scheduled to be arraigned on Thursday.
Sure looks like someone was trying to accomplish this arrest and investigation with as little embarrassment to the state as possible.
Really, we don't have corrupt politicians? I'm sorry but this is embarrassing to the state. It's no wonder we have a debt problem when the Assembly leader is raising murderers.
I'd really like to know how the media missed this one...
Here are the numbers. Have fun!
Diesel
http://omrpublic.iea.org/demand/us_dl_ov.pdf
Heating Oil
http://omrpublic.iea.org/demand/us_ho_ov.pdf
Jet/Kero
http://omrpublic.iea.org/demand/us_jk_ov.pdf
Mogas
http://omrpublic.iea.org/demand/us_gs_ov.pdf
Residual Fuel Oil
http://omrpublic.iea.org/demand/us_fo_ov.pdf
Diesel looks like a laggard...
Goodnight all... looks like I'll miss the global depression clock update. I'll also probably miss getting slapped around by mp for bringing up a political topic; but more regarding corruption and cover-up by media who is supposed to be working for us, the people.
Tommorrow is a day that ends in "y", so we can expect some government intervention... I bet it gets nasty in the afternoon as the employment numbers are released to Goldman...
heating oil way off, everyone burning wood and squirrel bones this winter?
Night all. We accomplished a lot today.
OT
King Canute(Very Good) writes:
CR Companion:
https://addons.mozilla.org/en-US/firefox/addon/ 9437
is really nice. i am promoting it
How to BK a railroad?
Nationalize it.
Seriously, this isn't a case of replacing one productive product with somebody else's supposedly more productive use; this is a public good that also can complement the current user.
With the economy heading down the crapper it's not like cars full of paper are still going to china. So expand the right of way a little to help reduce bottlenecks and when it turns around you've got productivity gains on the government's dime. Stop gaming the f'n system and be a patriot.
China urges US to stabilise its economy
FT.com / Asia-Pacific - China lectures US on economy
With U.S. Treasury Secretary Henry Paulson looking on, he said Beijing backed U.S. initiatives to steady world markets and had acted responsibly to try to achieve the same goal.
But Wang urged Washington in return to heed Beijings needs.
I hope the United States will take all necessary measures to stabilise its economy and financial markets as soon as possible and to ensure the security of Chinese investments and interests in the United States, he said.
OT, but per CNBC, Ebbers asking for a pardon from Pres Bush.
Good way to get me all riled up first thing in the morning.
Hell no!
OT, but is Geithner floating this idea to gauge support...?
Dec. 4 (Bloomberg) -- Timothy Geithner, President-elect Barack Obama's choice for U.S. Treasury Secretary, is seeking to push Federal Deposit Insurance Corp. Chairman Sheila Bair out of office.
Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn't a team player and is too focused on protecting her agency rather than the financial system as a whole...
I hope the United States will take all necessary measures to stabilise its economy and financial markets as soon as possible and to ensure the security of Chinese investments and interests in the United States, he said.
Anonymous
Hey China, you're all a bunch of MORONS. Shut your traps, and give us more money. That's all we care about from you, so quit telling us how to run our country, and just keep "loaning" us your money, and quit worrying about whether you're going to get paid back, because you're not.
Yogi: According to T. Boone Pickens, U.S. uses 30% of its imported oil on transportation.
The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion. That's more than the entire endowments of all but six colleges, according to the latest official tally.
The Harvard Board of Trustees is expected to seek a bailout from congress sometime next week. When asked if he would support a bailout, Obama economic advisor, Larry Summers is reported to have replied " what did they let some chick run the endowment?". After further investigation this was deemed an internet rumor. His actual reply was "idiot says what?"
Wow fried... Source?
And on the lighter side of news:
SPRINGFIELD, Ohio -- A Tri-State woman is in critical condition Wednesday after police say her husband shot her while they were having sex.
Timothy Havens, 38, told Springfield police he was reaching for something on the nightstand when the pistol went off, hitting his estranged wife Carolyn in the upper chest. (Hear part of the 911 call)
Man Accidentally Shoots Wife During Sex - Video - WLWT Cincinnati
ATT cutting 12K jobs per CNBC
ATT cutting 12K jobs per CNBC
"We're the Phone Company. We don't care. We don't have to".
Dec. 4 (Bloomberg) -- Treasury Secretary Henry Paulson is considering a new plan to reduce mortgage rates in another bid to revive the U.S. housing market, a government official said.
Question: What would you rather buy?
1) a 400K house still to decline 10-20% at 4%?
or
2) wait and get the same house at say 340K at say 7%?
purchase once vs. refi infinitum
Dryfly wake up...
Someone is listening to you...
Dec. 4 (Bloomberg) -- General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with their internal discussions.
Auto executives have warned bankruptcy would lead to liquidation as customers abandoned the companies. Staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.
dupont to cut jobs...
Hey China, you're all a bunch of MORONS. Shut your traps, and give us more money. That's all we care about from you, so quit telling us how to run our country, and just keep "loaning" us your money, and quit worrying about whether you're going to get paid back, because you're not.
Comrade Scared Shitless | 12.04.08 - 7:11 am |
Wow, reports of US being hit with n bomb within 5 years may be true, dipshit.
Maybe Cyber Monday was more successful because a critical mass has finally realized that you can often avoid taxes on purchase items. Watching state revenues decline, and budget deficits soar makes me wonder how long this little arrangement will last.
Internet taxes are like a giant pocket waiting for a hand to be put in it.
My question would be, does this not so bad start have to do with aggressive pricing pulling sales forward.
The reason I say that is that if this was a normal season prices would not still be in freefall with almost everything I look at cheaper from last week.
Said it before, will say it again,
Rick Santelli Rocks.
As with everything else, who knows if the data is correct. Am questioning all data releases now from practically everyone.
In general: Yes, there are plenty of ways out of this mess. None of them are painless. The question isn't even how much pain, the question is WHO feels the pain. The normal idea, much like risk is to ameloriate the pain by aggregating it over enough people that the pain is minor. But with this credit bubble spread out over a large portion of the population through the RE bubble, it's simply not possible to spread it out much more.
Back to the topic - the Comscore numbers are believable - anyone who bothered to follow the link finds:
"For the holiday season-to-date, $12.03 billion has been spent online, marking a 2 percent decline versus the corresponding days last year."
Before the big weekend and Monday, total sales were -4% YoY and Comscore is forecasting flat online spending (which is a fraction of brick and mortar spending). Any way you look at that, it is hitting a wall as YoY growth has basically been over 20% annually.
And, off topic, the Washington Post had an obit for Tanta* this morning.
*since she introduced hereself to us under that psuedonym, I've decided to continue to refer to her by it even now that I know her given name.
CR- re the last thread...
Are you considering putting together a rate-price-(rent) spreadsheet?????
Would love to see it.
Link please, Jim
On line advertisers (and their consultants) are getting savvier and savvier!
Washington Post obit on Tanta...
Doris J. Dungey; Blogger Chronicled Mortgage Crisis - washingtonpost.com
argued Bair isn't a team player
Emanuel is probably walking around with a steak knife.
Today's Baltic Dry Index: 666.
(Just Beastly...)
mal writes:
Today's Baltic Dry Index: 666.
(Just Beastly...)
I thought you were kidding. My mistake.
-6 666
851
Nice of Pat to print something local.
Though she reguretated a previous Obit, word for word....
Too much effort to write your own I guess.
Daily Effective Rate: 0.36
Date \tET \tRelease \tFor \tActual \tBriefing.com \tConsensus \tPrior \tRevised From
Dec 04 \t08:30 \tInitial Claims \t11/29 \t509K \t540K \t540K \t530K \t529K
Dec 04 \t10:00 \tFactory Orders \tOct \t????\t-4.0% \t-4.5% \t-2.5%
Casey Serin has family in Turkey that live in Dubai? Whoocoodanode!
Dubai Speculators Quit as Lending Drought Bursts Desert Bubble
By Glen Carey
Dec. 4 (Bloomberg) -- The classified ads in Dubai read like an obituary for a real-estate market that until a few months ago seemed immune from the global credit crisis.
A Turkish investor, who identified himself as Sebat, took out 10 bright yellow ads in the Nov. 25 edition of Gulf News, the United Arab Emirates biggest newspaper, with the headline: DIRECT FROM OWNER DISTRESS SALE!!! Sebat said he used to be able to buy four or five properties at a time and sell them the next day for a profit of as much as 5 percent.
There is panic in the market, said Sebat, 52, who wouldnt give his full name because hes juggling 60 properties.
Dubai Speculators Quit as Lending Drought Bursts Desert Bubble - Bloomberg.com
I'm shocked, SHOCKED!
Brad Setser gives PRC a policy smackdown:
"I hope that Chinese policy makers recognize:
a) They, not the US, decided to intervene heavily and in sustained way to hold their exchange rate down, a policy that necessarily implies financial losses for China. China is effectively overpaying for financial assets (dollar reserves) that it doesnt need in order to support its export sector. There is no way the US can guarantee China against losses on its holdings of dollars.
b) Investors in highly leveraged financial institutions risk large losses. Chinas discomfort with its current losses suggests it never should have bought large stakes in major financial institutions. One of the concerns Larry Summers raised about sovereign wealth fund investments in large financial institutions is such investments would turn the always difficult decision to wipe out the equity of a failed financial institution into a foreign policy decision. That rings true.
c) Given how much the US imports from China, it is hard to see how the US can increase its savings (and reduce its trade deficit) without putting pressure on Chinas export sector. Indeed, right now the US consumer seems to be following PBoC governor Zhous advice to save more - that is one reason why Chinas exports have slowed. And that hardly has made Chinese policy makers happy. Right now a smaller US fiscal deficit would imply even bigger falls in global demand for Chinas products.
d) If China wants to maintain its trade surplus and in the process to maintain a world where Chinas exports are growing faster than the worlds imports, meaning that Chinas global market share is rising other countries will necessarily have to run a trade deficit."
Well said...
It's too bad our economy isn't structured such that if holiday-related sales stayed basically the same it would be considered pretty good.
have read her from day 1. she had this crap nailled from day 1.may she rest in pease knowing that.