Obama probably doesn't realize it yet, but he's riding a ferocious tiger, and if he doesn't point it toward some prey very soon - and then hold on for dear life - the tiger will make HIM its lunch.
Which is to say, prosecutions for fraud had better be on O's immediate agenda.
from the last thread... KR, you mentioned the plot is about to unfold... in the first 20 minutes we must have a triggering event that changes the status quo, that said, using the BAD BEARS graph is this a 3 Act structure or a 5 Act structure? If it plays out as a 3 Act following all recessions except the GD it will keep us glued to our seats till the end but if it's a 5 act and follows the GD ... boy, the lack of story compression in the 4th and 5th Act is really going to suck like say the last reel of the Unbearable Lightness of Being or nearly every Spielberg film...
I'll get back to you all when I write a new script completely driven not by plot but by plotted graphs
did you see the capacity utilization cliff dive for '74-'75. Wow! I'm expecting we go below 70% before all is said and done. Maybe we should have a contest with China to see who can shut down factories and manufacturing capacity the fastest.
I cannot find a single joke or smart alecky remark tonight. These are lagging indicators, folks. Give it another month and these charts will seem almost hopeful in comparison.
I think Conjure nailed it. The depression has begun.
"I asked him what he thought should be done to deal with the Great Repression. "It is time to start new banks," he said. "The old banks need to be completely restructured so that they stop trying to protect equity holders and let the bondholders know that they have to 'take a shave' -- something around 20 percent. "It's what happened in Argentina," he said. When was the last time anyone compared the largest economy in the world to Argentina's?"
Reality
It was time to go find Henry Kravis, who, not surprisingly, presented a completely different view, focusing on a number of recent equity offerings -- including a $2 billion offering by Goldman Sachs. So while Kravis was seeing "cracks" of light breaking through the darkness, Ferguson was seeing a state of denial.
The RI and non RI diverging just as Bush starts his first term interests me. Is it possible to have a look at the previous decade or 2 to see if these 2 were always reasonably close...and would that missing non-RI, be the industrial/commercial investment that the transnationals like GM took offshore?
Last ting: the score of records indicated ignore the population growth --not that I'm complaining, but this is an apologetic view of the low Housing starts when you consider the population has tripled.
So much hootin on the radio today about the 3.8% being better than expectations, I think the whole GDP advance report was scripted...it was repeated in that context so often.
Someone is listening to Krugmann. I can just hear it now, O in hunkered over in front of his TV, his face drenched in full color from the CNBC reports hours after his announcement, the market shooting upward to the 9,000 point of resistance muttering a la George C Scott--Krugmann, you magnificent bastard, I read your nook!
Well, so did I. We shall see what we shall see, but there's a humongous shit storm of money about to hit. Like a tribe of rock apes, these people will shit, scream, throw, repeat until ......
Great graphs, now if you'll excuse me I'm going to go jump out of my window...
Ok, I'm back.
I was already depressed enough today after watching Obama welcome the unions back to the White House this morning. I don't see how that can be anything but a big positive for the economy.
via volker the viking: The big bang approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence. HaloScan.com - Comments
Sec: It's the White House calling on two (points to flashing light)
K: The White House, well tell them I'm busy.
Sec: No, no, it's the President, he says it's important.
K: They pulled that trick once too often, it's probably Geithner again. I'm not answering.
Sec: No, NO! I took the call myself, it IS the president.
K: Fine, (Picks up receiver) Hello, this is Krugmann.
O: Dr. K! Wazzup? I had to call, the market is tanking. For a while there it did just like you said it would, shot up like an Atlas missile. But ever since the latest employment, or rather the unemployment reports it's retesting the October lows.
K: Well, can't you get Timmy to give Ben a call. I'm pretty tied up with my new book, I'm calling it Me and the O Man Save the Western World and All You Assholes Who Told me to Shut Up Can Kiss My Ass". Of course, it's just a working title. I figured, why not cash in while I'm hot. Mostly it's a rework of some older stuff...
O: Yo! K-man, listen up. We got to do something now. (Holds hand on receiver, muffled comment, sounds like "Get me Roubini, stat!")
Another of President Barack Obama's Cabinet nominees has run into tax problems.
This time it's former Sen. Tom Daschle, chosen to lead the new president's health reform efforts. Daschle recently filed amended tax returns to report $128,203 in back taxes and $11,964 in interest, according to a Senate document obtained by The Associated Press 2nd Cabinet nominee runs into tax troubles
I love the rightwing fairy tales that are told about business history!
There are three great national car industries that have unfolded over the last hundred years: the American, the German, and the Japanese. The American depended on high tarifs to get started - which continued into the 1920s with the Fordney- McCumber tariff act, an act that somehow has slipped down the memory hole of free traders since it was erected at the beginning of the 20s, imposed rates higher than the much later Smoot Hartley act, and seemed to speed up the American economy instead of slow it down - and became unionized in the thirties. The German car industry was basically started by the government - Volkswagen bears that origin in its very name - and after World War II became a unionized industry, with unions becoming part of the management as well. The Japanese car industry was state sponsored from the start - it was first developed by the Japanese imperial state, and then became a crucial player in Japan's neo-mercantilist policies. Those neo-mercantilist policies worked much better than any neo-liberal policy ever reluctantly adopted by a less developed state. Toyota, for instance, far from adopting the "free enterprise" ideas beloved by the right, went anti-union in a unique way - after a mass layoff in the early fifties, the Toyota workers occupied the factories, and in the settlement that followed, the management agreed to an employment for life provision for the workers. Gee, doesn't that sound all laissez faire? In the 80s, of course, the situation changed as interests converged between the American plutocracy, with its comic slogan of free trade, and the new wave of enterprises that had been nurtured by neo-mercantilism. That it was called "free" trade - which is one of those advertising phrases, like "all natural", which means the opposite of what it says - was besides the point. The point was to crush the bargaining power of labor. This is why an American commerce department, for instance, would hold seminars on how to export factories to Mexico, and close them in New Jersey. It was all for our benefit, honest!
The end result of this system was not that the American car companies fell - GM, until this year, was the largest car producer in the world - but to expand the use of the state to crush labor. Thus, we see the Toyota and Honda take advantage, as good businesses will, of the welfare afforded them in the less developed regions of the U.S., like Alabama and South Carolina, states where two hundred years of a slave/apartheid regime had resulted in a miserably underinvested public sector and an astonishing lack of endogenous industry - it is all imported. From a larger perspective, over time, these states might actually educate their people and contribute something to the world, so throwing billions in tax breaks at rich Japanese companies that were started by the Japanese Imperial army might not just be one of history's jokes. But it is a joke to blame unions, of all things, for the decline of the American auto industry. That was the unexpected result of the American government, in plutocrat mode, opening up to foreign, state nurtured industries. Government intervention works, contra the comic opera fantasies of the neo-classicals.
Or, just bash the Unions some more. Yea, that's the ticket!
The big bang approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence.
Now we'll make a bigger mess. A mess with a bulldozer. Then, future messes will be mere molehills in comparison. We will label them "adjustments" or better yet, "enhancements in our investment in America".
I have noticed "investment" is now the approved way of expressing this "bailout" concept among the democratic policy intelligentsia.
General Motors Corp (GM.N) could face a multibillion-dollar tax hit under its $13.4 billion federal bailout, a scenario the automaker faces just weeks before it must file a restructuring plan with the government.
Two sources familiar with bailout terms said the company has asked Congress to address the matter in economic stimulus legislation, which is expected to be finalized by mid-February. GM could face U.S. bailout tax hit, seeks changes
| Reuters
Wonder how many campaign contribution kick backs that's going to take.
Toyota: Auto Industry Race to the Bottom by Barbara Briggs, Special to CorpWatch
September 16th, 2008
Beneath Toyota's buffed shine lies a dark undercoat. The Toyota Corporation enjoys a fine reputation for well-built cars, environmental innovation, flexible production lines and effective management practices. But in its quest for ever-increasing efficiency, profitability and growth, the world's largest auto manufacturer has sparked a race to the bottom that, like its car sales, is global in scope.
Around the world, the company has been complicit in union busting in the Philippines, and engages in cozy relationships with Burma/Myanmar's military dictatorship.
In the U.S. â where Toyota has 13 facilities employing some 36,000 people, and sells an average of 56,923 vehicles each week â the need of the Big Three (General Motors, Ford and Daimler Chrysler) auto companies to compete is causing profound changes in the industry.
And in Japan, at its flagship operation in Toyota City, some 30 percent of the workforce is temporary workers who earn as little as half what permanent employees do. In the surrounding area, a network of closely-related supplier companies utilizes thousands of foreign guest workers under conditions that, by many definitions, qualify as human trafficking.
Toyota Japan has also created a work environment so stressful that, each year, an estimated 200 to 300 employees are incapacitated or killed from overwork and stress related illness.
Prius in the Making
In 2002, the year he died, Kenichi Uchino was 30 years old and married, with a three-year-old daughter and a one-year-old son. He had worked as a quality control inspector for the Prius hybrid at Toyota's Tsutsumi plant in Toyota City, north of Nagoya. Following his father and grandfather, who were both lifetime Toyota employees, Uchino had joined the company right out of high school, and was a good worker.
But as Toyota management added more and more responsibilities to his work load, Uchino began to feel the strain of the enormous overtime that was expected â and mostly unpaid. After his official, eight-hour shift was over, he prepared reports for the next shift. He had additional tasks relating to health and safety and traffic control inside the plant. Uchino was also a quality-circle leader. Toyota prides itself on employee participation in problem solving and constant improvement. Several times a month, workers meet in groups of ten or so, and are expected to submit at least two well-fleshed-out suggestions each month for improvement. All this time â to meet, to coordinate the group, write up suggestions and so forth â took place off-the-clock.
Adding to their physical and mental strain, Toyota workers alternate weekly between day and night shifts. On the day shift, Uchino routinely worked 13 to 15 hours a day, often six days a week, from 5:40 a.m. to 8:00 or 9:00 p.m. The week before he died, he put in 85 hours counting the three hours he worked at home on Sunday. The week he died, he was on the night shift, normally 70 hours a week, from 3:20 p.m. to 5:20 a.m. He typically got home around 7:00, just as his wife Hiroko was getting up to make breakfast. But on the morning of February 9, 2002, he never came home. At 4:20 a.m., 13 hours into what would have been his regular 14-hour shift, he collapsed in his office. Twenty minutes later he was pronounced dead from a heart attack. But the real cause of death, was a condition so common that a word was created to describe it: âkaroshi," literally death from overwork.
âHe kept saying and hoping things would get better," said Hiroko Uchino in an April interview, âbut they didn't, and he died."
Hiroko was left with two young children to support. When Toyota refused to acknowledge her husband's death as work-related, she went to the Japanese Labor Bureau and then to court to win his pension. Kenichi Uchino had kept meticulous records of his work time, which totaled a stunning 155 hours of overtime in the 30 days before his death. Toyota claimed that he had only worked 45 hours of overtime â saying that the rest of the time was voluntary. Almost six years later, in November 2007, the court recognized 110.5 hours of overtime (putting aside the hours Uchino had worked offsite) and judged that, indeed, Uchino had died of overwork.
This was the first time that anyone had won a judgment from Toyota establishing that karoshi qualified as a work accident. But Hiroko Uchino did something else that was a first: She spoke publicly about her husband's death by overwork â practically a revolutionary act in a culture where families and communities are expected to be completely loyal to the companies that employ them." People don't talk about the problems [work-related illnesses and deaths] as it reflects badly on Toyota," Hiroko Uchino said. âPeople tend to keep it to themselves."
What Hiroko Uchino did not know, when she decided to fight for her children's future, was that she would become the voice in Japan for Toyota's overworked employees. Uchino's case paved the way for a July 2008, Japanese Labor Bureau ruling that overwork was the cause of the January 2006 heart attack death of a lead engineer for Toyota's Camry hybrid, days before the car was to be introduced at the Detroit Auto Show.
But pressure on workers to âganbaru" â endure without complaint â remains so strong that the few cases make it into the legal system. Those that do, are the âtip of the iceberg," said a highly regarded lawyer familiar with karoshi and disability cases in the Nagoya/Toyota City area. Speaking anonymously in an April 2008 interview, he charged that up to 300 Toyota workers suffer serious work-related illness or death each year.
Visit to a Toyota Factory
On the Toyota Motormachi shop floor, the intensity is palpable. In April, a tour group, including this researcher, walked along an elevated pathway above the fray and observed the production lines at close range. Some 4,700 full-time workers, plus a large number of temps and subcontract workers race to produce 13,000 cars and vans a month. Efficiency has been taken the extreme. Huge robotic arms that move with great power, precision and speed carry out jobs, such as putting together large components of the auto bodies. The automation is controlled by computers on either side of the line.
Elsewhere in the factory, the production lines are mostly supplied by remote-controlled carts that zip along designated pathways. The factory is a cacophony of machine noise and nursery rhyme melodies, each of which is actually an auditory warning that a cart is in motion. The auto bodies move down the line, but not just one model at a time. Each line is producing up to five different car models, according to demand. The workers move quickly and with machine-like precision, installing a sedan's rear door one minute, a minivan's sliding door the next. Highly specialized machinery assists. A crane-like arm, for instance, grabs each door from the dolly where it sits lined up and waiting, and guides it into place on the auto body. The arms are hung with every tool as well as pouches filled with all the screws and rivets that the human worker will need to install each different door.
The workers are in constant motion, fetching pieces, stretching, bending into the cars and back out again, meanwhile planning several steps ahead for the motions needed to handle the next, different model car. After two hours, they get a ten-minute break; two more hours work, a half-hour for lunch; two more hours, and so on. But very few workers seem to rest during the breaks. Most are busy tidying and re-supplying their work areas. Even with the physical assists, one experienced worker commented that the physical and mental stress are such that âfew workers past 40 years of age can work on the fast-moving production line....The work is just to hard and wearing."
Almost a third of the assembly line workers at Toyota City are temporary employees who earn an average of $12.13 an hour. These 10,000 temps toil alongside permanent workers, who earn almost twice as much â $20.49 an hour including bonuses. The permanent workers also enjoy benefits including child subsidies, cheaper meals at the company cafeteria, and far greater job security. Temps are, well, temporary, hired month-to-month, laid off at will and not represented by a union.
Company Union Supports Management, Not Workers
In line with the usual practice in Japan, Toyota's official union, which represents only that company's permanent employees, functions as a human resources management mechanism that doesn't oppose management or stand up for worker interests. According to a number of long-time Toyota employees interviewed by National Labor Committee researchers on an April 2008 research trip to Toyota City, the company union works hand-in-hand with management, and worker demands for raises, job actions or even challenges to management policy are out of the question.
Despite the fact that Uchino had been a union member in good standing, his widow charges that the union turned a deaf ear to her pleas for help in having his death ruled work-related and making his family eligible for his pension. Nor has the union taken any position on the company's continued activities in Burma, on behalf of workers at Toyota's many Japanese supplier companies, or in response to
While I am not "big" of conspiracy theories or totally understanding of economics (degree in pol sci}, I am starting to get concerned...
After expanding my sources of reading materials on economic, pol sci (Bush's Wars)and US history of the last 100 years, I am drifting back to my beliefs of the 1960's...
I am beginning to believe from my readings and my personal experiences of how neo liberalism, globalization, the stagnation of wages and the off shoring of jobs has been one big rip off of the American citizen...
Over work is the same problem in US manufacturing at least one company that I know of in SO. CA.
As a insurance broker, I had an account wherein an illegal making minimum wages lost 4 fingers on a stamping press...
After investigating the accident on a modern piece of equipment with a cycle rate of one per minute, i could not figure out why the injury occurred...
After extensive discussions with the employees supervisor, I found out that the employee was injuried at the end of his second shift-16 hours on the job...
I further discoverd that his supv. was aware that he had a second full time job at another company...Thus he had just pulled 24 continuous hours of work in one day...
I attended the meeting with CA/OHA penalty hearing, but it never came out about the earlier work performed...
In reviewing serious claims among illegal employees (yes, they were illegal-using temp agencies for employee selection, which is the biggest scam in CA) that I have been involved in, only indicates that these employees are over worked and inadequately trained and supervised due to cost and time pressures on employers...
Anonymous(Unrated) writes: I am beginning to believe from my readings and my personal experiences of how neo liberalism, globalization, the stagnation of wages and the off shoring of jobs has been one big rip off of the American citizen...
I don't have an opinion on this, but I do think it's worth pointing out that just as being 'liberal' somehow got confused with being 'pacifist' through unexamined confutation, it would be a shame if 'liberal' turned into 'economic nationalist' without meaning to as well.
Regardless of where you stand on the globalization issue, I hope people will take time to think about if knee-jerk nationalism is really appropriate for an organization with populist, internationalist, universal roots.
Where is the brotherhood of all laborers? No seriously. Maybe it's a good thing to lose, maybe it's hopelessly egalitarian and utopian. God knows I can construct a solid development argument for economic nationalism.
Or maybe people are being co-opted by the same system of ism and schism to break into the same old packs so that we can change the signs but keep all the mechanisms the same.
Please do not get me wrong...my concern is that we need a sustainable economy...and it appears that an elite, which I have little exposure to, seem to be manipulating the citizens of this country against their long term best interests...
Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have...
We need more time and effort spent on programs like C-span and less advertisements on consumerism...
Interesting fact...went to CBS website to look at some videos...programs from the 60's were 53+ minutes in length...NCIS videos run 43+ minutes...so where did the difference go to in the last 30 years...advertisements to consume...
Don't you worry, there will be soon plenty of Americas to choose from.
Kansastan, New TexasMexico, New Yorkialis, Socialistic Republic of New Jersey, Floridados, California United, The Democratic People of Hawaii, Lakota, Vermont Union, Delaware Cowboys, Welfare Union of Lousiana, Glorious State of Nevada, Nebraska Nabos, United Crown of Dakota, High Kingdom of Virginia, Anarchy State of Wyoming, Black People (Only) State of Mississippi and so on.
Anonymous(Unrated) writes: Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have...
I don't really have a stake in it. I am at the most extreme right / left by the standards of modern Western political discourse.
I just see a lot of people on the left drifting into unexamined economic nationalism and it seems like a good idea to wave the red flag a bit, as it were.
Am I mis-reading this? 23000 new homes sold in December 2008 and 550000 new constructions were started?!
Even if the new-constructions figure is annualised, which would seem a silly thing to do, that's almost exactly twice as many houses started as were sold.
We have concluded that the $18 million capital infusion that occurred on May 9, 2008, should not have been included in IndyMacs thrift financial report for March 31, 2008, Reich wrote. The letters were obtained by Bloomberg News through a Freedom of Information Act request.
We're "led" by crooks and thieves who only come forward when pressed or exposed. Look at the latest two: Geithner & now Daschle......
It is troublesome to hear so many instances of regulators picking and choosing what they enforce,
The forced "Economic Diet" we are currently undergoing will be cathartic.
Anon says: "Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have..."
Hiya, Lying Con-job! Oh, YOU'RE not preaching National Socialism, commonly known as Nazism, no, no, it's just that it did such wonders for the German economy that it might be more important to a stable, not so efficient economy ... whatthefuckeverTHATshitmeans.
Cons are the addled residue of too much self-administered propaganda served with a large helping of sedition and coated in hypocrisy.
Please just SAY it, Cons: you admire fascism and want a good taste. Get it off your chest! That modern right-wingers are Nazis at least makes sense of some facts (ie, the shared irrational hatred of unions, demonization of minorities, loud claims of defense of "morals" and family, fetishization of the military, etc, etc.)
The Cons are fascists, and their little Dragon Eggs are hatching. Watch the next months as the lost get more and more ideologically rigid and begin to foam at the mouth.
It's great fun to watch the conversations here with the Cons, who seem to be taking up the meme of blaming the financial crisis on attempts to fix it.
If Daschle and Geithner weren't paying their fair share of taxes, I would expect a lot of other people with high incomes weren't paying their taxes either. Maybe the IRS should hire a lot more auditors and find out. Maybe the effort would not only put people to work, but pay for itself, too.
.......I might think it would make more sense to eradicate the 900-page Federal Tax Code first. If the IRS itself doesn't understand its own 'bible' and has alternative opinions, what makes you think normal people have a chance of complying? It's a joke.
Don't get me wrong. KNOWINGLY falsifying returns is illegal and it seems commonplace to attempt it. Add to the employment levels? No thank you.
One of my patrons is a courier. His main business for quite awhile was mortgages (imagine that). He told me yesterday he hasn't carried hardly any mortgages in months. My bank (Peoples First Panama City) hasn't issued one in several months and he said the branch in Tallahasee now has the mid level managers behind the teller windows...I'm guessing my bank is gonna be one of the next to go down...
My problem with Daschle is not that he didn't pay his taxes, which is bad enough, but it's the fact that he got paid $2M to to be a consultant for InterMedia Advisers. Look at the portfolio of this dog PE firm:
"to eradicate the 900-page Federal Tax Code first Black Star Ranch | 01.31.09 - 8:22 am | #"
Ah, those 19th century Simple Times of Wild West! When man was a MAN and even those Native Indians knew their place (or else..).
Would you also like to run chemical factories without documentation, guide lines and pesky rules, like that Bhopal factory. No pesky regulations, no laws. Nice lovely pesticide plant in the middle of big city! Who cares if thousands of simple natives die and half a million exposed to that MIC gas...Simple Times rules!
are my ideas so bad that you think that I should be tarred and feathered and run out on a rail? Anonymous | 01.31.09 - 8:48 am | #
No, just saying that "simple times wild west"-ideology will not solve this complex crisis. And how is that "setting examples" working for War on Drugs on the southern border? How many examples you really want to be put in jail? 10 million?
...that's the problem. Many laws are instituted without any thought as to how it will be paid for from initiation thru enforcement. I was married for MANY years to a gal who worked for the FedGov - she spent MANY hours devising ways to make everyone safer - neglecting the figurative "repairing of the pot-hole" and the subsequent costs of lawsuits after accidents.
"why is it that some bloggers take every think out of context and to extreme?"
Why attempt cogent discussions with the likes of supa? To site India of all places as a rough and tumble, unregulated landscape shows a level of ignorance that no amount of polite debate is going to rectify.
Pavel,
"An excellent example of the poor allocation of resources in our society"
You are, I hope, referencing the entity attempting the allocation.
What is wrong with self sufficiency and inward looking?
Is it really wrong not to be the world's policeman?
What's wrong with not getting involved in foreign entanglements?
What is the loss? No cheap foreign mfg goods made in labor cheap countries by American companies (American based, but probably foreign owned) that suppresses wages here...influx of cheap foreign labor driving down labor costs in the US...
Are we really better off today than we were 30 years ago? Declining wages, increasing costs, no pensions, independent contractor status vs. our employers?
And what do we get in exchange? National debt explosion, no health care, no pensions, no job security (20 year pension, fired in the 19th year by a 20 something new manager to clean out the deadwood)?
Too much government breeds too much dependence. Black Star Ranch | 01.31.09 - 8:54 am | #
Your computer is made in Taiwan, monitor in Indonesia, keyboard in Malesia, clothes..who even knows, your food is produced/packaged/transferred inside very complex system, requiring oil from faraway countries and pesticides from India...Modern man lifestyle is like having about 95 human slaves working for you, day and nite. Government dependence is the least of your worries.
I think there's a clear math relationship between the mortgage and mortgage derivative (broadly inclusive of CDOs, CMOs, synthetics, SIV/Conduit assets etc) losses and the Case Shiller indices. Since it seems clear to me that the CS indices have at least another 30% to fall (from 155-160 down to 100), doesn't that suggest that the sh*t-storm still has another year or two to run, and that for the Citi's and BofA's there's just no place to hide?
....Supa...over the course of months, your derogatory anti-American vehemence has gotten rather old. What has happened to you personally that inspires such HATE? A lot of wasted venom.
"You are, I hope, referencing the entity attempting the allocation."
All of us. If we have money for TARP, we have more than enough money for an adequate public health system, even if the resources we allocate are a back-up that is never used. Ejection seats in military aircraft are seldom used, but that doesn't cause them to be taken out of the design of the aircraft.
Nor will H5N1 be impressed with your bank account.
Default here! Those of you who were around last summer may remember me...anyways, I'm still employed, still trading CDS, and my book is still up (in no small part due to the posters on this site).
Just a quick question for those of you who were between 18-35 during the last blowout recession (late 70s/early 80s)...how were the parties? I've got a bit of an ongoing argument going with a friend of mine on what life for young people will be like...my take is that as young people give up on "the dream," however defined, social unrest skyrockets, and the parties just get that much better...his comeback is that no, everyone will just be angry & depressed and playing alot of WoW...
The Problem, Basel, with Daschel and geithner, is not that they blew/fudged/hid their tax liability, it's that the IRS never went after them.
The IRS has plenty of auditors, it's just that for the past decade or so, they've been concentrating on auditing those who make under 100K/yr (95% of the populace)
I was audited in '95 for a 1500 dollar health cost claim. The claim was real, the receipts were with my newly estranged wife...They threw the book at me.
From the Prudent Bear link provided earlier, Doug Nolan does a huge data sweep...launch of the prime mortgages into default space. Who was it upthread calling for another year or two of this? Spot on, as the alt-A and prime ramp-up will overlap...
About 6.9% of prime jumbo loans were at least 90 days delinquent in December, according to LPS Applied Analytics The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans climbed to 2.1% from 0.8% in December 2007 Moodys has downgraded more than 75% of all prime jumbo loans originated in 2006 and 2007 that carried the top rating of triple-A. PrudentBear
--
David Rosenberg, 01/30/09: Best and brightest couldnt see how bad things would get -- Even the best and brightest couldnt see how bad things were going to be just a year ago: We found this from a testimony that Ben Bernanke gave just last April this time last year, we were supposed to be in the throes of recovery by now. To wit: We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009, bolstered by a stabilization of housing activity, albeit at low levels, and gradually improving financial conditions. (The Economic Outlook, testimony to the Joint Economic Committee, April 2, 2008).
Chair-moron Burn-ass-ke said during his testimony a year earlier, in March 2007, when asked about specter of falling home prices, that the housing prices in the US as a whole would not fall, only that the price increase will fall to 3-5%.
Bernanke is not an econ-moron? After all, he was a born-and-bred American dope first and an economist and a professor later. Dont expect very many born-and-bred American dopes to get the economy right. Lifelong doping and optimitis are severe handicaps.
Nor will H5N1 be impressed with your bank account.
Pavel Chichikov | 01.31.09 - 9:13 am | #
Ah, Pavel keeping your eye on the ball no matter the distractions - that and ug99 are patient beyond measure - and if not them, their cousins as resources are criminally misallocated and civil society starts to fray...
besides, i suspect the world would be happy if we mind our own business... \t Anonymous | \t \t \t \t01.31.09 - 9:12 am | # Bingo! Ten points! YOU'll get VIP-seat tickets to American Idols finals! We would really be really friggin happy. No more war on tis or thad, no more planet screwing mindless consumer crap without any regards of future generations and thousand other fubar things, labelled MADE IN USA.
"over the course of months, your derogatory anti-American vehemence has gotten rather old. What has happened to you personally that inspires such HATE? A lot of wasted venom. \t Black Star Ranch"
Actually no, it is more of "what goes around, comes around" combined with "I FUCKING TOLD YOU SO YEARS AGO" combined with "HA HA!" combined with sometimes mindfuckingly serious boozing. Now, what else you would like to know ?
I'll tell you about the parties in the 1970s if you'll tell me about Merrill's CDS book and how they managed to lose $1-$15 billion on the basis trade in the 4Q?
like i said previously, i gave up a long time ago trying to change people's opinions/attitudes...by the way, I have never seen American Idols finals or any other game shows...and i do not have a 60" plasma TV or cable/satellite hook up...
have and continue to simply my life...one thing i have learned, the more you own the more your cost of storage, maintenance and insurance you need...
"Government" is a loaded word. But we decide what we want government to be.
We have learned nothing if we think that we can make a government "hands off" and passive. If we do that, we just get government by another name -- by the most tyrannical, greedy, cynical and corrupt.
It's going to be a tough job to make a government that works -one that isn't an utter lapdog, or a meddling babysitter.
But we have to figure it out this time. And seriously, picking at the bones of these old decayed arguments and theories is just going to break humpty over and over again.
I give medals to anyone who can take on the urgent business at hand without resorting to lables -- liberal, conservative, big government, socialism, captialism -- that are so emotionally muddled that they have become essentially meaningless -- or just tools for distraction.
Just show me your plan, and tell me how it's going to work.
For the most part, I didn't think the parties in the mid-1970s compared well with the 1980s parties because nobody had any money for beer, much less the designer drugs that are really necessary for a "blow"-out good time. Lol.
Seriously, the 1970s were a total downer, between the lousy economy and on top of that bad music, disco mania, leisure suits and all the rest. It wasn't until "Miami Vice" stylin' came along in 1984 that the party scene started to turn around.
About 6.9% of prime âjumbo' loans were at least 90 days delinquent in December, according to LPS Applied Analytics⦠The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans⦠climbed to 2.1% from 0.8% in December 2007⦠Moody's has downgraded more than 75% of all prime jumbo loans originated in 2006 and 2007 that carried the top rating of triple-A. citizen energyecon | Homepage | 01.31.09 - 9:22 am | #
I do so wish Tanta was here to take the otherside of this argument but lie does go on.
I predicted this years ago. "Ability" to pay was not going to drive jumbo defaults as so much of the rational that went into the decision involved investment return expectations. This aspect of the mania was self reinforcing on the way up and now on the way down. It also explains stickiness being largely absent this time. These people are not so much defaulting as allowing their options to expire worthless or declining to meet a margin call. I looks like Moody's is starting to get it.
The other piece that would be nice to see is the relative sizes of the outstanding mortgages of those vintages - dollar amounts of of sub-prime, alt-A, prime jumbo and just plain prime (soon to be formerly known as prime) - yep, we are due for another revision of default rate and loss severity (overdue?).
You are obviously very passionate, but lack a certain tact that makes your opinions tolerable to consume. We have many lefties, centrists, and righty posters here and we seem able to discuss things relatively calmly.
I suspect your anger is with the continuance of the status quo as evidenced with Obama's early choices and decisions, a betrayal that you deeply personalize.
As bad as Bush was, and he was very bad, you are coming to realize that the corruption and debauchery run so deep within the system, that short of collapse, a Libertarians wet dream, you are powerless as an individual.
This reality attacks your well intentioned ideology (my opinion) and forces you to make a choice. Sophie's choice if you will. Accept graft, corruption, and as an individual, marginalization, or welcome a social cataclysmic event of epic scale, knowing that people will suffer greatly, but a true change will truly result.
Either way, I feel for you, as your frustration and abject vitriol is all you have left, and you are acting out, attempting to give witness to your pain. Good luck.
Either that, or you are an ideological troll. I haven't decided yet.
"Government" is a loaded word. But we decide what we want government to be. Alo | 01.31.09 - 9:35 am | #
Oh really? So when the greatest democratic outcry in postwar history resulted in 20:1 opposition to the TARP we decided what kind of government we'd get? We don't decide and haven't for quite some time.
Default. I remember parties more than brooding. One has got to look at the upside. I wondered where you went. Your input would have been welcomed here throughout the fall during many discussions on CDS.
"Oh really? So when the greatest democratic outcry in postwar history resulted in 20:1 opposition to the TARP we decided what kind of government we'd get? We don't decide and haven't for quite some time."
I'm out of gas for that one this AM. I'll just cheer you from the sidelines Dawg.
The other piece that would be nice to see is the relative sizes of the outstanding mortgages of those vintages - dollar amounts of of sub-prime, alt-A, prime jumbo and just plain prime (soon to be formerly known as prime) - yep, we are due for another revision of default rate and loss severity (overdue?). citizen energyecon | Homepage | 01.31.09 - 9:40 am | #
The true extent of the jumbo bust is being obscured by several factors. Refinancing has still been available. Many on places like SoCal are property ladder houses with substantial original equity. These unsustainable interest rates are still luring greater fools. There's also a sizable contingent of people who don't know they are screwed. Those will be the third wave.
"as so much of the rational(e) that went into the decision involved investment return expectations."
It won't come close to curing what ails us, but one step on the road back to consumer financial sanity is for the average home buyer to stop buying homes because of assumed rapid increases in value. I would guess that notion is dead, and will remain so for quite a while, at least until the next NAR marketing campaign.
"It's going to be a tough job to make a government that works -one that isn't an utter lapdog, or a meddling babysitter.
But we have to figure it out this time. And seriously, picking at the bones of these old decayed arguments and theories is just going to break humpty over and over again.
Just show me your plan, and tell me how it's going to work. Alo | 01.31.09 - 9:35 am | #"
The basic problem is the size of USA. Democracy works until to the point where campaign costs of a Representative (Congress/Parliament/Village council/etc etc) exceed middle class candidate's ability to finance his/her campaign. The limit is roughly average yearly salary, 40-60 000 dollars.
So mathematically speaking you reach that point about when there is one representative per 50000 citizens. If a nation goes beyond that democracy event horizon point, it gradually turns into plutocracy, rule of the wealthy. A parliament usually has up to 300 members, so maximum democracy population limit is about 15 million people.
USA has now over 700 000 per Congress member! To go back the original 30000 people per representative, USA would need whopping 10000 Congress members. So the only logical conclusion is to break apart the union and probably it will happen sooner or later....
--
FYI, I have said many times that CR is among the best economic reporters, if not the best, in the US. For that my hat is off to CR and I am grateful and thankful for his reporting.
My disagreements with CR are about his forecasts, estimates and comments like "CRE is not as overbuilt as RRE." CRE is a lagging indicator and RRE leads the downturns. When the entire CRE pipeline is completed, e.g., the City Center in Lost Wages, the % over supply would be far greater than for RRE. Does anyone disagree with this?
USA has now over 700 000 per Congress member! To go back the original 30000 people per representative, USA would need whopping 10000 Congress members. So the only logical conclusion is to break apart the union and probably it will happen sooner or later....
So there! Easy! What you wanna know next? supafly73 | 01.31.09 - 9:53 am | #
In the break up who gets stuck with D.C. and L.A.? Seriously, you got it although I suspect technology could effectively empower the populace at 3-4 times your 50k threshold.
CR, are you certain you're not Bipolar Manic Depressive? The pace and magnitude of your posts are overwhelming. This latest was done late on a Friday night....when most folks are letting down their hair for the week. Of course, another explanation could be that CR is more than one person, maybe a team. I have already determined that there is a team posting to the comments section that seeks to control, contain and direct the dialogue much like Orwell's Ministry of Truth.
rsadge writes:
no loyalty to our country
rsadge | 01.31.09 - 10:03 am |
and yet we give these corps access to the US market, give away tax breaks to move business active off shore for cheap labor, allow them to have tax havens to avoid taxes and allow to buy influence in our govt...
It's begun. Google is restricting access to sites. It's just Phase 1. Morocco Bama | Homepage | 01.31.09 - 10:08 am | #
As much as I try to ignore you, this time you are right. UCLA.edu and house.gov were both blocked through google this morning. Still, don't be silly. It's a glitch.
It's begun. Google is restricting access to sites. It's just Phase 1. \t Example: http://www.google.com/interstitial?url=http://www.house.gov/house/MemStateSearch.shtml
US incorporated businesses have been getting away with bloody murder for a long time...
Time to wack them back, like trimming shrubs in a garden that has over grown(I love that, killing two birds with a single stone!)...Time to GO TR...that is the only thing that saved the Reps...They need to find religion(god, I love this, another two birds)...
bluestatedon writes:
"It won't come close to curing what ails us, but one step on the road back to consumer financial sanity is for the average home buyer to stop buying homes because of assumed rapid increases in value. I would guess that notion is dead, and will remain so for quite a while, at least until the next NAR marketing campaign."
Campaign idea: "At least housing outperformed the stock market!"
It's all a public service, and I'm happy to do it for you anyway.
"Soon my Treasury secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families," Obama, a Democrat, said in his weekly radio address.
"We'll help lower mortgage costs and extend loans to small businesses so they can create jobs."
...Republicans, who opposed the president's stimulus package of over $800 billion largely because of its spending priorities, suggested mortgage help as well, proposing government-backed 4 percent fixed-rate mortgages for "any credit-worthy borrower," Senate Republican Leader Mitch McConnell said"
I was audited in '95 for a 1500 dollar health cost claim.
When they can come up with 4 trillion for Tarp out of nowhere it puts a different perspective on things. We will never pay off our deficit. So why does it matter if we pay taxes? It matters in the sense that we have to use the unconstitutional scrip they call dollars so they can live off our labor. We are needed as a debt slaves nothing more. The pentagon alone had several trillion dollars in unaccounted for spending. Would'nt there be a much bigger bang for the buck if they just spent some auditing there? No, it will never happen. They cannot even sign the GAO report without a disclaimer but expect us to give up our 5th amendment rights every April 15th.
In the break up who gets stuck with D.C. and L.A.? Seriously, you got it although I suspect technology could effectively empower the populace at 3-4 times your 50k threshold. Rob Dawg | Homepage | 01.31.09 - 10:02 am | #
Germany is about one per 200000+ but the individual German states like Bavaria are much more independent than in the US and there might be even some limits of campaign costs. Werner probably knows much more about the German system.
For those who aren't part of the team, but rather the target audience, rather than reacting to the dialogue and commenting, take a step back and observe. Engage in pattern recognition. It will reveal itself to you.
friardaddy writes:
"How can the government guarantee 4% mortgage rates? If they just say it is so, sign a bill, and that's it? If that's the case, why not 2% mortgages?
Just curious. Thanks."
Quick answer: They can do it by the simple expedient of preparing to lose lots of money.
Longer Answer:
The U.S. Treasury can currently borrow at a rate well below 4% across the curve. (But there are definite capacity limits for long maturity borrowing near current rates.)
They could theoretically lend to consumers at 4%, and then borrow far enough below that so that they can cover the administrative costs, and make a profit.
But: they will almost certainly have to borrow short-term to finance the mortgage lending. Sooner or later, short rates will rise, unless we are in a permanent depression. This would put them in the position of the S&L industry in the 1980s - borrowing at higher short term rates to finance low yielding mortgages. This doomed the S&L industry, which then went on to do stupid things (losing yet more money) to cover the losses.
I would love to see the regular bloggers on this site together in the same room, each with a knife, with the lights turned out...O, the horror, with all the blood on the floor...It would be time to call in NCIS!
Bond Guy, excellent explainer. You left out the impact to revenues and fractional limts however. The source of some of that money to lend will be tax free reducing revenues at a time of increased borrowing. Second the reason they are lending to banks and not directly. Banks can fractionaly lend the same money 8-10 times whereas the government is a 1x pony.
I would love to see the regular bloggers on this site together in the same room, each with a knife, with the lights turned out...O, the horror, with all the blood on the floor...It would be time to call in NCIS! Anonymous | 01.31.09 - 10:26 am | #
Good idea. I especially like the odds when everyone else brings a knife to a gun fight. Actually I suspect the encounter would be more like Braveheart when the Irish & Scots charged each other.
CR....If you keep posting these graphs/charts...you may lead the masses to embrace thoughts that we ARE now in "FULL DEPRESSION MODE". Why scare us and do so much further damage to our "STRONG" Economy?-MAJOR SNARK
Good idea. I especially like the odds when everyone else brings a knife to a gun fight. Actually I suspect the encounter would be more like Braveheart when the Irish & Scots charged each other.
Rob Dawg | Homepage | 01.31.09 - 10:33 am | #
In your case, one need merely deprive you of your heart meds.
I ignore you, as well. You're beyond boring, if that's possible. The one comment you made that I found the slightest bit amusing and validating was how people at Disney were getting fatter. The rest is pontificating hot air.
It seems timely to resurrect this Americanism from the 1930s - one of many evocative words the United States has contributed to the English language, says Harold Evans. Americans are pretty good at adding words to the English language. We owe them pin-up girls, highbrows, killjoys, stooges, hobos, drop-outs, shills, bobby-soxers, hijackers, do-gooders and hitchhikers who thumb a ride.
The Americanisms are so much more concise and vivid. Instead of saying "sorry we're late but drivers ahead of us slowed us down when they craned their necks to look at a crash" you can say "we were held up by rubberneckers". Words pop in and out of our language as social conditions change. The American gangster, which is still with us, has been around as a noun and a reality since 1896 according to my Shorter Oxford, but it seems to have dropped another Americanism from the 1930s and I think now is the time to revive it. The word is bankster, derived by a marriage of banker and gangster.
Or, a bankrupter. The curse of my life is being ahead of my time.
BTW, the greatest banker in America was not an Anglo or a Jew, but an Italian AmericanAP Giannini, mentioned in this article, who founded Bank of Italy in San Francisco that later was renamed Bank of America. He detested Bankrupters and Fraudsters of New York City (BFNYC) but he had to deal with these crooks, raised in a culture of fraud, exemplified by Bernie Made-off. BFNYC, at the top, Corporate Crooks of America, and the two organized political parties constitute Gangistan of America and they rule over most Americans that reside in Dopeland. There isnt a damn thing that the politically impotent Americans can do to challenge those in Gangistan. Born-and-bred American dope has nothing other than denial left to feel good about the American system that has deteriorated into one of the worst.
"There isn't a damn thing that the politically impotent Americans can do to challenge those in Gangistan. Born-and-bred American dope has nothing other than denial left to feel good about the American system that has deteriorated into one of the worst. Jas Jain | Homepage | 01.31.09 - 10:38 am | #"
Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789...
OT question.
I received notice today from one of the big credit card companies that my minimum payments/fees/terms have changed. Is there any recourse that will not potentially harm my credit score?
Rob Dawg writes:
"Bond Guy, excellent explainer. You left out the impact to revenues and fractional limts however. The source of some of that money to lend will be tax free reducing revenues at a time of increased borrowing. Second the reason they are lending to banks and not directly. Banks can fractionaly lend the same money 8-10 times whereas the government is a 1x pony. "
Unfortunately for the banks, their lending is constrained by their balance sheet equity. In the current environment, that constraint will prevent the money multiplier inherent in fractional reserve lending from kicking in.
On the revenue side, with lower interest, there will be less to deduct. And my guess is that unless the NAR campaign kicks in successfully ("Housing: it still lost less than equities!"(R)), most mortgage borrowing will tend to be refinancing or with lower debt levels. This should keep the aggregate amount of mortgage debt on a sub-par growth path, so there will be less aggregate mortgage interest deductions.
Although I covered the interest rate risk, the credit risk component is another nightmare. Even if the gov't reverts to stricter lending standards that would work for a bank, would the gov't be able to evict voters in the same way a bank would? Even if the gov't is working through 3rd parties, the risk is there.
Note that the Fed is starting to buy mortgage-backed securities (MBS). This is not exactly the same thing as passing a law to guarantee 4% mortgages, they could de facto operationally guarantee such a result. ("We will buy all MBS submitted in auction with a yield > 4%".) In the 1950s, the Fed did cap Treasury bond/note yields; however, there was much stricter regulation of banking system interest rates, so it was much more feasible to implement than now. (There is a variable spread between the MBS yield & the retail mortgage interest rate, so retail mortgage rates will not face a cap at 4% even under that scenario.)
Jas, I hear you. Americans are Born and Bred Dopes led by Gangsters and Banksters....and the Dopes lack a backbone, as well. The French may be dopes for other reasons, but at least they have the nerve, the backbone, to stand up and say no to Sarkozy's bailout. Where's that kind of outrage in the United States? What a bunch of wimps. A thouroughly softened and highly processed people, are the Americans.
Just sitting here, reading all the comments, it's occurred to me that the U.S. -- maybe the world -- has entered a time of crisis similiar to WWII. It is massive in scope, may well spread globally in unexpected ways, will last for a long time, will take massive effort to fight and win. And we've never done anything on this scale before, so we will make massive mistakes, unavoidably. And we may lose, and loss will have terrible consequences. ANd finally, the first three years of WWII, starting in '39, were largely a time of setbacks, failures, false truces, and unexpected disaster.
It's difficult to keep your brain on this in a thoughtful manner, daily, and stay calm. Kind of like reading casualty reports daily, , reading endless accounts of defeat by a seemingly invincible enemy. Personally, I'm just here to get input on which way to jump in the coming crisis. Because unlike WWII, the front line is not 4000 miles away; we are all on the front line.
This is going to be a long one; and one way or another it is going to bring vast changes. In the end, here in the U.S., I expect the majority of people to line up behind Obama and accept a message of hope -- whether true or otherwise -- because they have no choice. They either have to line up behind a credible leader and give him their hope and support, or wander in the wilderness on their own for four or five years. In times like this people will fix on a leader and give him much more leeway than they would in normal times. Look how much they gave to Bush.
The only other option is a basic change in the nature of the U.S. -- if no strong national initiative/leader gains credibility, then a devolution to regionalism may take place. I doubt it -- but that's an option.
It's going to be a long ride in any case; most of the answers we have now will be wrong. The right ones will be arrived at by trial and error as always. Just hang in there.
Don't flame me everyone but I think this is all planned. Look at what the elites are saying-a new world order which is what they have been planning for years
"They either have to line up behind a credible leader and give him their hope and support, or wander in the wilderness on their own for four or five years."
These "either or" things are getting tiresome. Especially when one or both sides of the statement point to things they do not contain.
That is the story of Odyseus, who told the cyclops his name was nobody, and when the crafy Odyseus and his surviving crew (that had not yet been eaten by the cyclops) put out his eye, the cyclops shouted "Nobody has blinded me!"
You're beyond boring, if that's possible. The one comment you made that I found the slightest bit amusing and validating was how people at Disney were getting fatter. The rest is pontificating hot air. Morocco Bama | Homepage | 01.31.09 - 10:37 am | #
Got it. Confirmation of your worldview = good. All else = boring and unworthy of consideration. There should be a word for that. Oh, wait. There is.
supafly73 | 01.31.09 - 10:46 am |
I am neither defending nor speaking for Jas; he can ably do that himself. Just clarifying. Jas I believe has only said that things have to deteriorate a lot more for dopes to fight back, not that dopes will never fight back
Ah the English translation riff led me astray, I am afraid you are looking for some n-dimensional Rosetta stone that will map Misean's thought process to the rest of the world...
Dopes have to stop being dopes...that's fighting back, but easier said than done. Dopeafication is a process that begins at birth. Americans are highly processed like the food they eat. The entire structure has to be dismantled in order to dedopeify. An entire generation must be reared as dope-resistant. The likelihhod of any of this happening without calamity is slim.
You have a particular translation of the Odyessy to recommend? I haven't read that in years and years, the last one IIRC was Lattimore...interested if you have a version in mind.
OKAY! Now I get it. I'm an old lady. Please be straightforward.
Saw an interesting show on cyber crime last night, and it makes me wonder whether that isn't a dual issue along with the economy, ranking right up there. Unless they were just sensationalizing. Must be cool to be Mudge.
"Guy Ryder, the general secretary of the International Trade Union Confederation (ITUC), said that the current financial turmoil had triggered a social timebomb that would lead to deepening civil unrest and soaring crime"
My library, such as it is, is reminiscent of that of Minas Tirith. The volumes near the top are the ones I've been most interested in of late. That one is sure to be deep in the back. I'll give it a rumage when I get back home Tuesday.
Anyone looking for the government to save them or get us out of this is a moron. I'd really like a party to rise that is deliberately obstructionist. They don't pass any budgets, they shut down government, they question all government action and interference. Not just the minority party, but a real obstruction party that believes "government is not the answer".
Of course folks like me who truly believe this just tend to steer clear of all political bs (which is just about everywhere). Our news-cycle seems to have become more much politically driven over the past 15 years. I haven't been able to guage it at all; but president, and congress aren't the most important things in America.
The comparisons of admirable, activist French and detestable, inert Americans will no doubt continue to blacken pixels here. They always remind me of older characterizations I think may be closer to the mark.
Speaking of Jean-Baptiste Colbert, the brilliant chancellor to Louis XIV, Nancy Mitford says, "He was the most remarkable minister in the history of France. If the French are divided into Franks and Gauls, Franks - serious and rather cold, the builders - and Gauls - the destroyers of this nation - Colbert was the very type of the FranK."
And regarding contemporary Florentine complaints as the English/American campaign in Italy progressed by inches rather than miles (and stung by constant references to German efficiency) Bernard Berenson observed that, having drawn what were after all predominantly Anglo-Saxon countries into conflict, Germany must not be surprised when the hostilities are served up cold, dogged and inexorable.
I think these come a bit closer to the real nature of things than "wonderful French" and "sofa-spud American".
Bob Dobbs writes:
"Just sitting here, reading all the comments, it's occurred to me that the U.S. -- maybe the world -- has entered a time of crisis similar to WWII. It is massive in scope, may well spread globally in unexpected ways, will last for a long time, will take massive effort to fight and win..."
Call me an optimist - the situation is more similar to the Great Depression than WWII.
I'm not an expert on the Great Depression, but I believe there was a coordinated global slump in economic growth that hit (almost) all regions, which has not happened again until now. And similar to then, the monetary framework was shuddering under large balance of payments imbalances. Current imbalances dwarf those of the Depression era, but a gold standard has much less tolerance for imbalances than what we have seen post WWII.
By WWII, there had been considerable breaking off from the global system by autocratic governments. (The Soviet Union had broken off before the Depression.) So the economic framework in WWII was very distinct from now, where all countries have rejoined the global system (North Korea, parts of Africa and Antarctica being the exceptions).
I realize your point was more about politics, but I just wanted to comment from an economic viewpoint.
How much more evidence do we need? We are headed for a major depression and it musdt play out. No sense in fighting it anymore. The sooner, the better.
Oh, but, the high end real estate neighborhoods, won't be affected. I almost forgot..
It's becoming clear - Globalization over the past 20 years has been a complete failure for Americans. Expect the masses to come to this conclusion. bearly | 01.31.09 - 11:11 am | #
What was inevitable is that globalization would lower American quality of life. The bs part was in denying this amongst the globalism advocates. The line of "a rising tide" was incredible only in that it worked until it was too late to object. Interestingly the US has less to lose than the rest of the world in a trade slowdown yet it is the other nations seeming more inclined to pull the trigger.
Thank you for everything, including this compendium. Thought I'd just "check what's going on" after a long hiatus. good grief.
ee thanks for the reminder for the weekly noland, in which the recap is usually to be skipped, but I've been in a deep freeze for the past week and need it.
Bob Dobbs, pls keep posting.
likewise Nemo, WTF? Hot bath and a good meal for you buddy, stat.
Don't know if I've got the mental ability and fortitude to resume the entrail pickings with you all, but come tomorrow, try try try.
I realize your point was more about politics, but I just wanted to comment from an economic viewpoint. bond guy | 01.31.09 - 11:18 am | #
Thanks in any case for the thoughtful reply. At the base of it, my argument is: it's a terrible crisis, and we'll either face it in a coordinate way -- or fail. That applies to both politics and economics -- which these days, seem to be two heads on the same dog.
--
"Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789..."
supafly73,
You stole my forecast as to how it would endA bloody civil war not unlike the French Revolution, the single most important political event of the past 350 years. Lot of Americans and others around the globe would suffer. The first half of the 21st century would make the first half of the 20th look less bloody in terms of human deaths.
The evildoers in America have done the dirty deed by financial means what some others did via military means. Evil occurs in many forms and born-and-bred American dope is oblivious of the evil in the financial form via debt slavery and manipulation.
FLtrader writes:
"Awesome charts! & 4Q GDP dropped only 3.8%??? How about 6-7%? Anyone know estimates for 4Q GDI (gross domestic income, gdp=gdi)?"
GDI makes a lot more conceptual sense than GDP, but it takes much longer to report. I think we only have semi-reliable GDI estimates to 2007 (?). Thus, it is not really followed (one reason I don't know what the reporting lag is).
Even though the 2 numbers are equal, they calculate both to verify that the GDP numbers are not too wonky. The gap between them, theoretically 0, is called the "statistical discrepancy".
The bond market is ultimately more interested in GDI than GDP. Interest and principal payments are serviced out of income; so we need to track the gross debt servicing ability of the economy. There is no need to worry about silly things like whether GDP really measures "the standard of living".
When criticizing of globalization I suppose one also has to indict the peculiar culture of American "progressivism" that has grown up as a result of it. I was always astonished at how Obama's election campaign relied on the unrealistic perceptions of the moneyed, nominally "liberal" white middle class... who seemed to not realize that the country's economic system was glittering but structurally unsound, and who seemed to believe that Obama would have infinite amounts of funding to work infinite miracles. "It's OUR turn now!" they crowed triumphantly, not knowing or caring just what unsteady foundations the '00s boom was built on. In other words, everything would continue as it was before, except liberal goals would be pursued instead of conservative or neo-con ones. And the whole world would love America again. Just because of "regime change."
Regime change without economic transformation means nothing. But economic transformation would mean a leveling out of standards of living in America... less granite countertops for you, less iPods for your kids.
The world they dreamed of was one of college degrees and white-collar jobs for all, a world where no jobs (not even the "green collar" ones) would be dirty or demeaning, a world where America could say "Sorry!" and be loved again, where magic would happen just because of having a "multicultural" president... a world where America's brand would be cleaned up. That's about as far as their political sophistication goes, I'm afraid.
This illusion was worth $50 trillion at the market's peak in 2007, according to Grantham. In his quarterly review he writes: "How could we kid ourselves that we were suddenly rich and didn't need to save for our pensions when were sitting in the very same buildings we bought in 1974? We have not lost wealth, but just the illusion of wealth."
He says the situation has led to a run down in savings and a build up in debt: "Now the illusion of wealth has been lost with formidably negative effects on animal spirits." Advisers serving the lower reaches of the high net worth community could be facing quite a challenge: profits growth at the majority of private banks is tending to ebb away.
Grantham points out that personal wealth following write downs in equities, housing and commercial real estate now totals $30 trillion while debt remains stuck at $25 trillion.
Credit standards have tightened up but more illusory wealth needs to disappear before the US economy will start to recover: "To be successful we need to halve the level of debt. Somewhere between $10 trillion and $15 trillion will have to disappear."
My Forecasts on the Global Economy and Crude Oil Prices Made During May-June 2008
Simple flow-chart: US Recession --> Global slowdown; US Depression --> Global recession; US Greater Depression --> Global depression
2008 saw the first (no?), 2009 would see the second, and 2010-11 would see the third.
The main catalyst for the crude oil prices to fall would be the global recession as the US recession, like cancer, spreads. Rising crude oil prices only speed up the process.
Fait accompli.
There must be a method behind my madness. It is the debt, stupid! Debt Pushers have ruled America, they still do, and the consequences are never in doubt.
Excellent compilation. With this on the lag side and chartists programming a GD1 retrace, the compression factor on the 4 bad bears charts would suggest about a 4-6 week rally before the next down jag, possibly in conjunction with a serious bond fracture at rollover.
Of course, if you think that bond holders are playing chicken with Bennie, then the bond fracture will happen, probably on the 10-year, at the next issuance.
I wish Pettis would put up some charts like this from China.
A reasonable strategy might be to vote out any incumbent in the Senate or Congress. To make the job a little easier, start with the TARP voters.
While one party did have a straglehold for six years, I didn't hear anyone on either side sounding the alarm. A review of investment bank industry contributions shows that both parties received "donations."
All this bad news is negated by the good news that the TED spread remained below 1.00 all week. Right?
Seriously, a lot of these indicators and some that aren't included are not symmetrical. They can't turn around and return to previous values in anywhere near the time they took to crash. In particular notice CR's trucking index. The air cargo index is similar. Capacity evaporates and only loose credit can bring it back. Unfortunately, loose credit doesn't allocate efficiently. Transportation capacity is way down the list of where more liquidity would flow. We may not be able to experience a trade war because there won't be enough transportation available to wage a war.
I'd say the assumptions you outline weren't nearly so universal, were present - so far as the idea of pressing ahead with broad, ideological agendas - in both parties, and were more prevalent in the early month of campaigning than they were subsequently.
Can I be alone in noting the steady change in talking points on all sides as we neared polling day? It seemed to me the condition of the economy, while not understood in any comprehensive way, took greater precedence in the last weeks of campaign and debate.
That aspirational streak has been very strong in the States at least since the Berlin wall came down. I think it's a durable, resilient part of the national psyche and, when it hasn't been trivialized, is one of America's strengths. The can-do attitude.
don't forget prop 13, rob. that should top the list in terms of CA. oldsters paying 0.1% property tax bases aren't too inclined to move.
bgates | 01.31.09 - 11:49 am | #
Air Freight down 22% while the Truckers dove by 11%. Even during 9/11 when many fleets were down, we only had a 13% drop in air freight. We are up the creek without a paddle kids!
"It's the same people who came last year and said the world economic situation is fine, and now we're in a financial crisis. Now it's the taxpayer who has to solve the whole problem.
"It's people like you and me who have to pay for it with their tax money," he said.
In Geneva, where the WEF has its headquarters, police in riot gear fired tear gas and water canon to disperse a crowd that had gathered in a square near the train station, sending people running in all directions. Witnesses said there did not appear to be any violence by the protesters.
"Getting between a broker and his bonus is like getting between a schnauzer and his lunch bowl. He may not bite you, but you are going to smell his breath."
"The true extent of the jumbo bust is being obscured by several factors. " don't forget prop 13, rob. that should top the list in terms of CA. oldsters paying 0.1% property tax bases aren't too inclined to move. bgates | 01.31.09 - 11:49 am | #
I don't forget Prop 13. no one let's me forget Porop 13.
It is a mixed bag. Immobility stabilizes neighborhoods. On the upside creating artificial shortages. On the downside slower apparent price declines. It also serves to mitigate municipal boom/bust spending. This time it didn't work. Cities like Oxnard entered into complex leaseback arrangements that allowed them to boom spend and thus crush future flexibility in spending. That's why the coming municipal cuts are going to be so disproportionately in personnel. Ask Mayor Bloomberg.
The deflation is everywhere including, but not limited to real estate. Commodities are a bust, equities are a bust and bonds will do the cliff dive soon enough. The only industry doing a robust business is guns and ammo. All the industry thanks you Presidente' Obama and names you their man of the year. Never has one man done so much for an industry.
The more I hang out on CR, the more convinced I am that America is not one country, that it's a hegemony that overlays older and more durable sociopolitical entities, and that it's going to be harder and harder for a centralized government to maintain meaningful control over it, unless it plans to become repressive (which may or may not happen).
So shouldn't CA repeal Prop 13 if the state is to receive federal dollars? Reverse mortgages will keep the oldsters in their homes, but will not preserve the estate for the greedy heirs.
"Getting between a broker and his bonus is like getting between a schnauzer and his lunch bowl. He may not bite you, but you are going to smell his breath."
I read that article. All I can say is, some of those folks are going to be first up against the wall when the revolution comes... I can imagine the petty nobility of 1789 expressing much the same heartfelt attitudes.
According to the Independent Budget Office of New York City, the outlook is bleak. The agency expects the city to lose 243,000 jobs from the peak of early 2008.
This is tough news for the city. Despite the Wall Street patina, the city is full of people who are effectively the working poor...with incomes under 40k..and the officially impoverished are already straining the city's social safety nets.
The GDP was only down 1%, not 3.8% as many report.
The estimate for the Gross Domestic Product for Q4-2008 was about $11,599B. That is only 0.965% smaller than in Q3 2008. Typically folks take that 0.965% and multiply by 4 to get an yearly number. But because so much Fed activity is occurring, these quarterly rates are likely to change significantly. It make no sense to multiple this number by 4. For example, back in the first quarter of 1982, the GDP "drop" reported was 6.4%... but the overall drop between the peak and valley's in that recession was 2.3%! http://mast-economy.blogspot.com/
Burnside, it's not going to happen everywhere but you can be damn sure it's going to happen in places like India, China and even parts of the U.S. on a smaller scale.
Man lost house to foreclosure (medical bills/wife died). No notice from bank before it was locked. Last year home appraised at $280. This year $180. Short sale was in progress, buyer offer $175, but house first had to go thru probate as wife was on mortgage. Bank was a TARP recipient, but no flexibility towards this owner.
"but will not preserve the estate for the greedy heirs."
actually, it will preserve it in value in terms of lower housing costs meaning less drain on the value of said estate. also, prop 13 status is transferrable to kids, even grandkids in the right situation.
Sacramento's penchant for using general revenue to enhance municipal budgets didn't help either. Comrade Misean is Dope | Homepage | 01.31.09 - 12:03 pm | #
That's an artifact of both Prop 13 and several other power grabs that took away local control under several specious claims of equity and fairness. The idea was that by robbing from the rich and giving to the poor things like educational outcomes would approach parity. Well, it worked. Parity of the lowest common denominator. Ultimately it produced negative results. The worse performing municipal functions got the most money and the richer districts have balked at supporting improvemnts that never went to their area. This resulted in Statewide bonds thtat were dutifully approved by numerically superior recipients on the backs of the involuntary donors.
No, Morocco. As in git 'er done.
burnside | 01.31.09 - 11:55 am | #
I know, I was being sarcastic. However, whereas "git 'er done" can be highly beneficial when what's to be done is constructive, it can also be highly detrimental when what's to be done is destructive. In addition, "git 'er done" just to "git 'er done" is misguided, at best.
"when it hasn't been trivialized, is one of America's strengths. The can-do attitude."
Burnside,i agree. Which is why I find the tax problems of the nominees and the cavalier attitude of the bonus pool so discouraging...if most folks remain convinced that the top tier flouts the law and gets away with it, it will be impossible to engage the citizenry in slogging thru this depression with some hope of seeing daylight.
Whatever skills Rangel, Daschle and Geithner might have, their transgressions supersede their utility.
Pavel is right...it's a moral issue.
"People not being able to resolve contradictions is a big problem in America."
kind of like not being able to find non-fecal water in Rajasthan! At least born-and-bred dopes in this country have figured out that toilets and sinks use different pipes. Here's a contradiction - living off the infrastructure created by born-and-bred dopes, yet insisting that they can't tie their own shoes...
speaking of which - why would someone assume that treasuries aren't an asset with their own credibility issues? and why would anyone but a chronic gambler write a put on an asset whose value depends on the full faith and credit of born-and-bred dopes? methinks the treasury longs may soon prove to be the cockiest and dopiest of them all.
Jas, we both know why what you say is normally true. Bond prices typically go down, yield goes up because inflation is a concern. This is not the typical scenario, and we both know it. Bonds yields can also rise because your creditors believe that your ability to repay the debt is toast. They quit buying your Bills, notes and bonds because you are a bad credit risk. It happens to countrys as well companies and individuals.
lawyerliz,
If we break down into below 6500... I don't know what will make it stop sliding into somewhere around 4000 or 2000?
Once they get that low people will stop listening to everyone saying "buy, buy, cheap" because these are the same schmucks who said that when it broke down into 10k, 9k, 8k.
I believe this has got to be the real definition of capitulation. No expectation of any real return on investment for 5+ years... so what's the point in staying with the investment?
Frankly I don't know why most people aren't in this boat already.
What if many "credit worthy" parties turn out not to be. Then the taxpayer takes the hit for the foreclosure.
I think the true purpose of this proposal is clear. It is to refinance moribund mortgages away from their precious present bag-holding bankers, and stick their imminent losses on the taxpayer. And they can generate fees for the transactions. Bravo.
US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan? People not being able to resolve contradictions is a big problem in America.
The Bond Prince, Jas Jain | Homepage | 01.31.09 - 12:05 pm | #
Sebastian? Is that you?
I'll take the other side of that trade Jas. High interest rates in a deflationary environment are not incompatible. Long rates shouldn't reflect near term conditions. That they are responding is yet another reason to suspect a bubble. Add to this the real danger. At 2% a tiny 1% increase in prevailing rates significantly impairs present value.
The level of the stock market is no longer an indication of anything except the insanity of our system. Nuclear bombs could drop on several U.S. cities tomorrow and the stock market would rally on Monday.
Bondguy: thank you for explanation about 4% mortgages.
But question-- would those scenarios improve if the new mortgages were 80/20, (or some other combination) piggybacks?-- where the Gov't would only subsidize the 20% instead of the whole mortgage?
I watched a C-span hearing recently where the some of the C'critters were on about the Gov't doing "silent second mortgages" on the difference between the home new current value versus its original principal.
It sorta sounded like the "mortgage version" of "good bank/bad bank"-- wherein the Gov't only takes on the amount of principal being written down.
The only industry doing a robust business is guns and ammo. All the industry thanks you Presidente' Obama and names you their man of the year. Never has one man done so much for an industry. SPECTRE of Deflation | 01.31.09 - 11:57 am | #
While Obama may have done a lot for guns and ammo sales, anecdotal evidence it's not just increasing buying by the enthusiasts - evidence suggests that more people are deciding to be armed. This in fact is what happened to me in late 2007 after reading hear and other blogs (listed on my homepage) for a while. I went 52 years without feeling the need for a gun, until I read how badly fouled up the whole financial system was.
Retail Sales says it all. The CC Companies are putting the screws to consumers which will force a further slowing in everyday purchases including food and consumables.
During the Depression, pork chops were a nickel a pound, yet nobody could afford them. We have 6.84 Trillion in deposits in our financial institutions while they hold 365 Billion in cash on hand. As credit continues to be rationed, which it must, you can expect further runs on banks from individuals for needed funds to cover reduced credit availability.
--
"Bonds yields can also rise because your creditors believe that your ability to repay the debt is toast. They quit buying your Bills, notes and bonds because you are a bad credit risk. It happens to countrys as well companies and individuals."
SPECTRE of Deflation,
What are the alternatives for those with their money in US dollars today, especially, wealthy Americans?! Where would the savings, some $10Tr., go?
Inflation dopes have trashed me for years and years. They tried to scare me by predicting that I would be T-bombed! "Printing Money" inflation dopes (PMID) are the worst of born-and-bred American dopes. They are ignorant of how things work.
I have never understood why going down to say, 6400 means it's going down much, much more. Or, going up means it's gonna continue to go up.
I sold most of my stuff (not all) in Oct/Nov of 2007. I like being long. I don't have the nerve to sell short.
Haven't closed mtges at 17 1/2% in the early/mid 80s, and seen CDs at 10% or even more, I can certainly agree that yields are gonna go up. In fact I think they MUST go up.
SPECTRE of Deflation writes:
Retail Sales says it all. The CC Companies are putting the screws to consumers which will force a further slowing in everyday purchases including food and consumables.
CC purchases were up 12% in the 4th quarter 08 vs. 4th quarter 07.
I believe this has got to be the real definition of capitulation. No expectation of any real return on investment for 5+ years... so what's the point in staying with the investment?
YLSP,
Where do you put your capital, though? We're not having much success reaching consensus on that little item here.
Fund managers are scrabbling to come up with terrible, but blameless strategies. And retail investors rock between stocks and bonds, hating both.Neither has the intestinal fortitude to go to cash and, in all probability, they shouldn't.
I don't know how you have a capitulation if there's no sane place to put capital.
Rob Dawg writes:
"'US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan?
The Bond Prince,
Jas Jain | Homepage | 01.31.09 - 12:05 pm | #'
I'll take the other side of that trade Jas. High interest rates in a deflationary environment are not incompatible. Long rates shouldn't reflect near term conditions. "
On a pure expectations theory of interest rates, you're right. But the reality is that there is a supply and demand factor in interest rate determination: if no one is willing to borrow at a given rate, and there is someone who needs to invest, the rate will fall, regardless of what the future path of interest rates (bond prices) is. So the historical experience is that long term rates do "over react" to near term conditions.
But on the bond bearish side, Jas is ignoring default risk. Ask Icelandic bond holders about how government bonds perform in a depression. I'm not arguing that the U.S. is in the same boat as Iceland, but there's some very large risks floating around out there that you need to respect.
Treasuries Now Looking Attractive And to reiterate, we did publish a report back in mid-December saying that while we still liked Treasuries, the love affair was over and that better returns could be achieved with still high-quality securities such as munis and FDIC-insured paper. But after this massive yield backup in govies, it may well be time to re-load starting now; all the more so since a classic first-order Fibonacci retracement in the 10-year note has just been accomplished. Gold and oil are both bid in this, the wee hours of the morning - the latter is kissing the 50-day m.a.; the former has broken out to the upside and is about to enjoy the golden cross where the 50-day m .a. crosses above the 200-day m.a.
David Rosenberg is the best macro economist in America.
I don't know how you have a capitulation if there's no sane place to put capital.
Anonymous
The belief that there is all this money sitting on the sidelines waiting to get back in is bogus. What is it, $40 trillion of wealth has vanished? Savings rate going up. Capital has already been allotted. 1-2% CD's, MM's savings account all FDIC insured are a very sane place to go to from equities
I repeat in South Florida the only available mtges are fha, seller financing (which is rarer that before too), and hard equity. And oldster reverse mtges.
So I don't care if a 30 year mtg is 1%. It doesn't matter if you can't get it. People are telling me a few conventional mtges are being made.
I suppose so, but they are rare enough that nobody I know has seen any.
This is assuming that you have say, 750 credit and 20% equity at least at todays 40% off peak values.
I think its sorta interesting that we are "only" 40% off peak with basically no financing available.
As I've said before, another 5-15% to go, excluding the towers.
There's is not much justification in owning the 30yr at 2.5% if your just there collecting the interest. Your bond already appreciated. If you stick around waiting for 2,1.5, or 1% yield's , your the dope.
You could hold it...just to prove your 'right', but it's not great trade advice.
zuzu's petals writes:
"I watched a C-span hearing recently where the some of the C'critters were on about the Gov't doing "silent second mortgages" on the difference between the home new current value versus its original principal."
I think they would have to replace the original amount with a new mortgage that reflects current market pricing (or the original debt with a lower interest rate); otherwise the borrower is stuffed.
If you assume that the government is on the hook for mortgage losses (and I realize that is a debatable assumption), the best loss mitigation strategy is to make debt servicing possible for the borrower.
And that's not just me being a warm and fuzzy guy; that's the reality facing any debt workout situation where there is no ability to dump the assets into a rising market.
there are so many awesome graphs here.
Yikes! (Where's Nemo?)
CR: Always appreciate your postings with lots of graphs! Good night!
Obama probably doesn't realize it yet, but he's riding a ferocious tiger, and if he doesn't point it toward some prey very soon - and then hold on for dear life - the tiger will make HIM its lunch.
Which is to say, prosecutions for fraud had better be on O's immediate agenda.
so much for regular porn, these charts are much better
first
beginning 2nd Act
So when will CR and other economists realize this is at least a depression, not meere recession? When Captain Obvious comes knocking at the door?
wow.. those graphs look like a bad joke.
But I still get my bonus right ?
from the last thread... KR, you mentioned the plot is about to unfold... in the first 20 minutes we must have a triggering event that changes the status quo, that said, using the BAD BEARS graph is this a 3 Act structure or a 5 Act structure? If it plays out as a 3 Act following all recessions except the GD it will keep us glued to our seats till the end but if it's a 5 act and follows the GD ... boy, the lack of story compression in the 4th and 5th Act is really going to suck like say the last reel of the Unbearable Lightness of Being or nearly every Spielberg film...
I'll get back to you all when I write a new script completely driven not by plot but by plotted graphs
Happy New Year!
did you see the capacity utilization cliff dive for '74-'75. Wow! I'm expecting we go below 70% before all is said and done. Maybe we should have a contest with China to see who can shut down factories and manufacturing capacity the fastest.
unirealist | 01.31.09 - 3:04 am | #
Pretty obvious but does he understand it? Does he even have the power to change the system?
What if the cancer goes so deep that cutting it out kills the world?
" This might indicate that inventory levels are close to the peak for this cycle. "
bwAhahahahah
I cannot find a single joke or smart alecky remark tonight. These are lagging indicators, folks. Give it another month and these charts will seem almost hopeful in comparison.
I think Conjure nailed it. The depression has begun.
"I asked him what he thought should be done to deal with the Great Repression. "It is time to start new banks," he said. "The old banks need to be completely restructured so that they stop trying to protect equity holders and let the bondholders know that they have to 'take a shave' -- something around 20 percent. "It's what happened in Argentina," he said. When was the last time anyone compared the largest economy in the world to Argentina's?"
Reality
It was time to go find Henry Kravis, who, not surprisingly, presented a completely different view, focusing on a number of recent equity offerings -- including a $2 billion offering by Goldman Sachs. So while Kravis was seeing "cracks" of light breaking through the darkness, Ferguson was seeing a state of denial.
Dichotomy?
Arianna Huffington: Davos Notes: The Great Repression, Homer as the Original UGC, and Is America the New Argentina?
oh, is that all?
The RI and non RI diverging just as Bush starts his first term interests me. Is it possible to have a look at the previous decade or 2 to see if these 2 were always reasonably close...and would that missing non-RI, be the industrial/commercial investment that the transnationals like GM took offshore?
Last ting: the score of records indicated ignore the population growth --not that I'm complaining, but this is an apologetic view of the low Housing starts when you consider the population has tripled.
So much hootin on the radio today about the 3.8% being better than expectations, I think the whole GDP advance report was scripted...it was repeated in that context so often.
FT.com / Companies / Banks - US set for ‘big bang’ financial clean-up
Someone is listening to Krugmann. I can just hear it now, O in hunkered over in front of his TV, his face drenched in full color from the CNBC reports hours after his announcement, the market shooting upward to the 9,000 point of resistance muttering a la George C Scott--Krugmann, you magnificent bastard, I read your nook!
Well, so did I. We shall see what we shall see, but there's a humongous shit storm of money about to hit. Like a tribe of rock apes, these people will shit, scream, throw, repeat until ......
One of these days, I'm going to learn to read, spell and edit.
Great graphs, now if you'll excuse me I'm going to go jump out of my window...
Ok, I'm back.
I was already depressed enough today after watching Obama welcome the unions back to the White House this morning. I don't see how that can be anything but a big positive for the economy.
sigh
Time to start investing in political influence!
via volker the viking:
The big bang approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence.
HaloScan.com - Comments
Sec: Excuse me Dr. K
K: What is it, I asked not to be disturbed.
Sec: It's the White House calling on two (points to flashing light)
K: The White House, well tell them I'm busy.
Sec: No, no, it's the President, he says it's important.
K: They pulled that trick once too often, it's probably Geithner again. I'm not answering.
Sec: No, NO! I took the call myself, it IS the president.
K: Fine, (Picks up receiver) Hello, this is Krugmann.
O: Dr. K! Wazzup? I had to call, the market is tanking. For a while there it did just like you said it would, shot up like an Atlas missile. But ever since the latest employment, or rather the unemployment reports it's retesting the October lows.
K: Well, can't you get Timmy to give Ben a call. I'm pretty tied up with my new book, I'm calling it Me and the O Man Save the Western World and All You Assholes Who Told me to Shut Up Can Kiss My Ass". Of course, it's just a working title. I figured, why not cash in while I'm hot. Mostly it's a rework of some older stuff...
O: Yo! K-man, listen up. We got to do something now. (Holds hand on receiver, muffled comment, sounds like "Get me Roubini, stat!")
And so it might go
BTW, as per the graph of NOD's in CA: almost a year ago I suggested that there could be a million foreclosures in CA alone.
Not unrealistic at this point.
Are we in a Depression or not ?
dr strangemoney | \t \t \t \t01.31.09 - 4:24 am | #
## This is all bullshit. Krugman is the mad genius behind it.
CR,
Thank you for this impressive gallery of graphics with rock-solid information. It sure beats the journalism i see on a day-by-day basis.
Here is a Taleb, Roubini, Whitney compilation tape:
YouTube -
Another of President Barack Obama's Cabinet nominees has run into tax problems.
This time it's former Sen. Tom Daschle, chosen to lead the new president's health reform efforts. Daschle recently filed amended tax returns to report $128,203 in back taxes and $11,964 in interest, according to a Senate document obtained by The Associated Press
2nd Cabinet nominee runs into tax troubles
Every one of thse guys is dirtier then dirt.
I can see a graph bubble here.
I love the rightwing fairy tales that are told about business history!
There are three great national car industries that have unfolded over the last hundred years: the American, the German, and the Japanese. The American depended on high tarifs to get started - which continued into the 1920s with the Fordney- McCumber tariff act, an act that somehow has slipped down the memory hole of free traders since it was erected at the beginning of the 20s, imposed rates higher than the much later Smoot Hartley act, and seemed to speed up the American economy instead of slow it down - and became unionized in the thirties. The German car industry was basically started by the government - Volkswagen bears that origin in its very name - and after World War II became a unionized industry, with unions becoming part of the management as well. The Japanese car industry was state sponsored from the start - it was first developed by the Japanese imperial state, and then became a crucial player in Japan's neo-mercantilist policies. Those neo-mercantilist policies worked much better than any neo-liberal policy ever reluctantly adopted by a less developed state. Toyota, for instance, far from adopting the "free enterprise" ideas beloved by the right, went anti-union in a unique way - after a mass layoff in the early fifties, the Toyota workers occupied the factories, and in the settlement that followed, the management agreed to an employment for life provision for the workers. Gee, doesn't that sound all laissez faire? In the 80s, of course, the situation changed as interests converged between the American plutocracy, with its comic slogan of free trade, and the new wave of enterprises that had been nurtured by neo-mercantilism. That it was called "free" trade - which is one of those advertising phrases, like "all natural", which means the opposite of what it says - was besides the point. The point was to crush the bargaining power of labor. This is why an American commerce department, for instance, would hold seminars on how to export factories to Mexico, and close them in New Jersey. It was all for our benefit, honest!
The end result of this system was not that the American car companies fell - GM, until this year, was the largest car producer in the world - but to expand the use of the state to crush labor. Thus, we see the Toyota and Honda take advantage, as good businesses will, of the welfare afforded them in the less developed regions of the U.S., like Alabama and South Carolina, states where two hundred years of a slave/apartheid regime had resulted in a miserably underinvested public sector and an astonishing lack of endogenous industry - it is all imported. From a larger perspective, over time, these states might actually educate their people and contribute something to the world, so throwing billions in tax breaks at rich Japanese companies that were started by the Japanese Imperial army might not just be one of history's jokes. But it is a joke to blame unions, of all things, for the decline of the American auto industry. That was the unexpected result of the American government, in plutocrat mode, opening up to foreign, state nurtured industries. Government intervention works, contra the comic opera fantasies of the neo-classicals.
Or, just bash the Unions some more. Yea, that's the ticket!
The big bang approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence.
Now we'll make a bigger mess. A mess with a bulldozer. Then, future messes will be mere molehills in comparison. We will label them "adjustments" or better yet, "enhancements in our investment in America".
I have noticed "investment" is now the approved way of expressing this "bailout" concept among the democratic policy intelligentsia.
.............king of plot...........
I noted the Daschle Tax issue too, and correlating to Geithner's tax issues, this question came to mind...
If that were you or me, how long would it have taken the IRS to come knocking on our doors?
2 tier indeed.
And does anyone else indulge in Tin Foil Hat economics conspiracy theories?
F.W. Engdahl makes for some very rewarding reading. Quite eye opening.
F W Engdahl
How credible is he?
General Motors Corp (GM.N) could face a multibillion-dollar tax hit under its $13.4 billion federal bailout, a scenario the automaker faces just weeks before it must file a restructuring plan with the government.
Two sources familiar with bailout terms said the company has asked Congress to address the matter in economic stimulus legislation, which is expected to be finalized by mid-February.
GM could face U.S. bailout tax hit, seeks changes
| Reuters
Wonder how many campaign contribution kick backs that's going to take.
Dickeylee
Dickeylee | 01.31.09 - 6:05 am | #
Good comment except Toyota is as bad in union crushing as any American big corporation. They just do it among foreign workers:
CorpWatch : Toyota: Auto Industry Race to the Bottom
Toyota: Auto Industry Race to the Bottom
by Barbara Briggs, Special to CorpWatch
September 16th, 2008
Beneath Toyota's buffed shine lies a dark undercoat. The Toyota Corporation enjoys a fine reputation for well-built cars, environmental innovation, flexible production lines and effective management practices. But in its quest for ever-increasing efficiency, profitability and growth, the world's largest auto manufacturer has sparked a race to the bottom that, like its car sales, is global in scope.
Around the world, the company has been complicit in union busting in the Philippines, and engages in cozy relationships with Burma/Myanmar's military dictatorship.
In the U.S. â where Toyota has 13 facilities employing some 36,000 people, and sells an average of 56,923 vehicles each week â the need of the Big Three (General Motors, Ford and Daimler Chrysler) auto companies to compete is causing profound changes in the industry.
And in Japan, at its flagship operation in Toyota City, some 30 percent of the workforce is temporary workers who earn as little as half what permanent employees do. In the surrounding area, a network of closely-related supplier companies utilizes thousands of foreign guest workers under conditions that, by many definitions, qualify as human trafficking.
Toyota Japan has also created a work environment so stressful that, each year, an estimated 200 to 300 employees are incapacitated or killed from overwork and stress related illness.
Prius in the Making
In 2002, the year he died, Kenichi Uchino was 30 years old and married, with a three-year-old daughter and a one-year-old son. He had worked as a quality control inspector for the Prius hybrid at Toyota's Tsutsumi plant in Toyota City, north of Nagoya. Following his father and grandfather, who were both lifetime Toyota employees, Uchino had joined the company right out of high school, and was a good worker.
But as Toyota management added more and more responsibilities to his work load, Uchino began to feel the strain of the enormous overtime that was expected â and mostly unpaid. After his official, eight-hour shift was over, he prepared reports for the next shift. He had additional tasks relating to health and safety and traffic control inside the plant. Uchino was also a quality-circle leader. Toyota prides itself on employee participation in problem solving and constant improvement. Several times a month, workers meet in groups of ten or so, and are expected to submit at least two well-fleshed-out suggestions each month for improvement. All this time â to meet, to coordinate the group, write up suggestions and so forth â took place off-the-clock.
Adding to their physical and mental strain, Toyota workers alternate weekly between day and night shifts. On the day shift, Uchino routinely worked 13 to 15 hours a day, often six days a week, from 5:40 a.m. to 8:00 or 9:00 p.m. The week before he died, he put in 85 hours counting the three hours he worked at home on Sunday. The week he died, he was on the night shift, normally 70 hours a week, from 3:20 p.m. to 5:20 a.m. He typically got home around 7:00, just as his wife Hiroko was getting up to make breakfast. But on the morning of February 9, 2002, he never came home. At 4:20 a.m., 13 hours into what would have been his regular 14-hour shift, he collapsed in his office. Twenty minutes later he was pronounced dead from a heart attack. But the real cause of death, was a condition so common that a word was created to describe it: âkaroshi," literally death from overwork.
âHe kept saying and hoping things would get better," said Hiroko Uchino in an April interview, âbut they didn't, and he died."
Hiroko was left with two young children to support. When Toyota refused to acknowledge her husband's death as work-related, she went to the Japanese Labor Bureau and then to court to win his pension. Kenichi Uchino had kept meticulous records of his work time, which totaled a stunning 155 hours of overtime in the 30 days before his death. Toyota claimed that he had only worked 45 hours of overtime â saying that the rest of the time was voluntary. Almost six years later, in November 2007, the court recognized 110.5 hours of overtime (putting aside the hours Uchino had worked offsite) and judged that, indeed, Uchino had died of overwork.
This was the first time that anyone had won a judgment from Toyota establishing that karoshi qualified as a work accident. But Hiroko Uchino did something else that was a first: She spoke publicly about her husband's death by overwork â practically a revolutionary act in a culture where families and communities are expected to be completely loyal to the companies that employ them." People don't talk about the problems [work-related illnesses and deaths] as it reflects badly on Toyota," Hiroko Uchino said. âPeople tend to keep it to themselves."
What Hiroko Uchino did not know, when she decided to fight for her children's future, was that she would become the voice in Japan for Toyota's overworked employees. Uchino's case paved the way for a July 2008, Japanese Labor Bureau ruling that overwork was the cause of the January 2006 heart attack death of a lead engineer for Toyota's Camry hybrid, days before the car was to be introduced at the Detroit Auto Show.
But pressure on workers to âganbaru" â endure without complaint â remains so strong that the few cases make it into the legal system. Those that do, are the âtip of the iceberg," said a highly regarded lawyer familiar with karoshi and disability cases in the Nagoya/Toyota City area. Speaking anonymously in an April 2008 interview, he charged that up to 300 Toyota workers suffer serious work-related illness or death each year.
Visit to a Toyota Factory
On the Toyota Motormachi shop floor, the intensity is palpable. In April, a tour group, including this researcher, walked along an elevated pathway above the fray and observed the production lines at close range. Some 4,700 full-time workers, plus a large number of temps and subcontract workers race to produce 13,000 cars and vans a month. Efficiency has been taken the extreme. Huge robotic arms that move with great power, precision and speed carry out jobs, such as putting together large components of the auto bodies. The automation is controlled by computers on either side of the line.
Elsewhere in the factory, the production lines are mostly supplied by remote-controlled carts that zip along designated pathways. The factory is a cacophony of machine noise and nursery rhyme melodies, each of which is actually an auditory warning that a cart is in motion. The auto bodies move down the line, but not just one model at a time. Each line is producing up to five different car models, according to demand. The workers move quickly and with machine-like precision, installing a sedan's rear door one minute, a minivan's sliding door the next. Highly specialized machinery assists. A crane-like arm, for instance, grabs each door from the dolly where it sits lined up and waiting, and guides it into place on the auto body. The arms are hung with every tool as well as pouches filled with all the screws and rivets that the human worker will need to install each different door.
The workers are in constant motion, fetching pieces, stretching, bending into the cars and back out again, meanwhile planning several steps ahead for the motions needed to handle the next, different model car. After two hours, they get a ten-minute break; two more hours work, a half-hour for lunch; two more hours, and so on. But very few workers seem to rest during the breaks. Most are busy tidying and re-supplying their work areas. Even with the physical assists, one experienced worker commented that the physical and mental stress are such that âfew workers past 40 years of age can work on the fast-moving production line....The work is just to hard and wearing."
Almost a third of the assembly line workers at Toyota City are temporary employees who earn an average of $12.13 an hour. These 10,000 temps toil alongside permanent workers, who earn almost twice as much â $20.49 an hour including bonuses. The permanent workers also enjoy benefits including child subsidies, cheaper meals at the company cafeteria, and far greater job security. Temps are, well, temporary, hired month-to-month, laid off at will and not represented by a union.
Company Union Supports Management, Not Workers
In line with the usual practice in Japan, Toyota's official union, which represents only that company's permanent employees, functions as a human resources management mechanism that doesn't oppose management or stand up for worker interests. According to a number of long-time Toyota employees interviewed by National Labor Committee researchers on an April 2008 research trip to Toyota City, the company union works hand-in-hand with management, and worker demands for raises, job actions or even challenges to management policy are out of the question.
Despite the fact that Uchino had been a union member in good standing, his widow charges that the union turned a deaf ear to her pleas for help in having his death ruled work-related and making his family eligible for his pension. Nor has the union taken any position on the company's continued activities in Burma, on behalf of workers at Toyota's many Japanese supplier companies, or in response to
Xboxershorts,
While I am not "big" of conspiracy theories or totally understanding of economics (degree in pol sci}, I am starting to get concerned...
After expanding my sources of reading materials on economic, pol sci (Bush's Wars)and US history of the last 100 years, I am drifting back to my beliefs of the 1960's...
I am beginning to believe from my readings and my personal experiences of how neo liberalism, globalization, the stagnation of wages and the off shoring of jobs has been one big rip off of the American citizen...
Where do I sign up for the NEW America?
so it unanimous? it's gonna turn around soon?
supafly73,
Over work is the same problem in US manufacturing at least one company that I know of in SO. CA.
As a insurance broker, I had an account wherein an illegal making minimum wages lost 4 fingers on a stamping press...
After investigating the accident on a modern piece of equipment with a cycle rate of one per minute, i could not figure out why the injury occurred...
After extensive discussions with the employees supervisor, I found out that the employee was injuried at the end of his second shift-16 hours on the job...
I further discoverd that his supv. was aware that he had a second full time job at another company...Thus he had just pulled 24 continuous hours of work in one day...
I attended the meeting with CA/OHA penalty hearing, but it never came out about the earlier work performed...
In reviewing serious claims among illegal employees (yes, they were illegal-using temp agencies for employee selection, which is the biggest scam in CA) that I have been involved in, only indicates that these employees are over worked and inadequately trained and supervised due to cost and time pressures on employers...
jmho
Anonymous(Unrated) writes:
I am beginning to believe from my readings and my personal experiences of how neo liberalism, globalization, the stagnation of wages and the off shoring of jobs has been one big rip off of the American citizen...
I don't have an opinion on this, but I do think it's worth pointing out that just as being 'liberal' somehow got confused with being 'pacifist' through unexamined confutation, it would be a shame if 'liberal' turned into 'economic nationalist' without meaning to as well.
Regardless of where you stand on the globalization issue, I hope people will take time to think about if knee-jerk nationalism is really appropriate for an organization with populist, internationalist, universal roots.
Where is the brotherhood of all laborers? No seriously. Maybe it's a good thing to lose, maybe it's hopelessly egalitarian and utopian. God knows I can construct a solid development argument for economic nationalism.
Or maybe people are being co-opted by the same system of ism and schism to break into the same old packs so that we can change the signs but keep all the mechanisms the same.
CR,
Could you please post a stock tip?
What stocks would you buy today?
Comrade Byzantine_Ruins,
Please do not get me wrong...my concern is that we need a sustainable economy...and it appears that an elite, which I have little exposure to, seem to be manipulating the citizens of this country against their long term best interests...
Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have...
All those records being broken... sounds like the olympics except no one is winning.
We need more time and effort spent on programs like C-span and less advertisements on consumerism...
Interesting fact...went to CBS website to look at some videos...programs from the 60's were 53+ minutes in length...NCIS videos run 43+ minutes...so where did the difference go to in the last 30 years...advertisements to consume...
just a fact that you may not be aware of...
"Where do I sign up for the NEW America?"
Don't you worry, there will be soon plenty of Americas to choose from.
Kansastan, New TexasMexico, New Yorkialis, Socialistic Republic of New Jersey, Floridados, California United, The Democratic People of Hawaii, Lakota, Vermont Union, Delaware Cowboys, Welfare Union of Lousiana, Glorious State of Nevada, Nebraska Nabos, United Crown of Dakota, High Kingdom of Virginia, Anarchy State of Wyoming, Black People (Only) State of Mississippi and so on.
All that and yet somehow magically GDP only declined by 3%.
Amazing isn't it.
Anonymous(Unrated) writes:
Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have...
I don't really have a stake in it. I am at the most extreme right / left by the standards of modern Western political discourse.
I just see a lot of people on the left drifting into unexamined economic nationalism and it seems like a good idea to wave the red flag a bit, as it were.
CR(Unrated) writes:
Could you please post a stock tip?
Go long TRL.
Dear CR
Damn...I love you like a brother, but this has to be a record high for the use of the term, "record low."
Best regards
Am I mis-reading this? 23000 new homes sold in December 2008 and 550000 new constructions were started?!
Even if the new-constructions figure is annualised, which would seem a silly thing to do, that's almost exactly twice as many houses started as were sold.
....Monday should be a "sunshiny" day in the marketplace....after the Super Bowl on Sunday - lots of good moods wakening Monday.
If the OTS has been admittedly been allowing falsified information, NO government entity can be trusted in regards to informational output.
OTS Says IndyMac, 4 Thrifts Allowed to Restate Capital Levels - Bloomberg.com
We have concluded that the $18 million capital infusion that occurred on May 9, 2008, should not have been included in IndyMacs thrift financial report for March 31, 2008, Reich wrote. The letters were obtained by Bloomberg News through a Freedom of Information Act request.
We're "led" by crooks and thieves who only come forward when pressed or exposed. Look at the latest two: Geithner & now Daschle......
It is troublesome to hear so many instances of regulators picking and choosing what they enforce,
The forced "Economic Diet" we are currently undergoing will be cathartic.
.... morning, byz.....
Taxpayer susbsidies to builders means they will build even more.
BSR: didjahavacow?
LOL.....not yet. She's due March 5th. The Mrs. wants a bull-calf and I think I want a heifer - for more dairy - especially in these troubled times.
Anon says: "Not preaching National Socialism...just that it may be more important to a stable, not so efficient economy than the one we have..."
Hiya, Lying Con-job! Oh, YOU'RE not preaching National Socialism, commonly known as Nazism, no, no, it's just that it did such wonders for the German economy that it might be more important to a stable, not so efficient economy ... whatthefuckeverTHATshitmeans.
Cons are the addled residue of too much self-administered propaganda served with a large helping of sedition and coated in hypocrisy.
Please just SAY it, Cons: you admire fascism and want a good taste. Get it off your chest! That modern right-wingers are Nazis at least makes sense of some facts (ie, the shared irrational hatred of unions, demonization of minorities, loud claims of defense of "morals" and family, fetishization of the military, etc, etc.)
The Cons are fascists, and their little Dragon Eggs are hatching. Watch the next months as the lost get more and more ideologically rigid and begin to foam at the mouth.
It's great fun to watch the conversations here with the Cons, who seem to be taking up the meme of blaming the financial crisis on attempts to fix it.
B_R,
"I am at the most extreme right / left by the standards of modern Western political discourse."
I thought that I was.
Most extreme means there can be only one.
Nostrovia,
Most extreme means there can be only one.
Nostrovia,
\t Comrade Misean is Dope | \t \t \tHomepage | \t01.31.09 - 8:08 am | #
## I'm pleased to award you an appropriate medal to drape round your neck. The ribbon is blue of course and the medal is gilded zinc.
"Watch the next months as the lost get more and more ideologically rigid and begin to foam at the mouth."
Given your posts, it would seem that the waiting is over.
You might want to dab some of that foam and spittle from your lips. I understand animal control simply shoots the rabid.
Nostrovia,
..."I understand animal control simply shoots the rabid."
.....and they seem quite busy with the understaffing levels.....
THE EXILED – MANKIND'S ONLY ALTERNATIVE » Page not found
volker,
Hmmmm...perhaps my reference to "Highlander" was a bit too geeky.
I doubt the medal would protect my neck sufficiently however.
Nostrovia,
If Daschle and Geithner weren't paying their fair share of taxes, I would expect a lot of other people with high incomes weren't paying their taxes either. Maybe the IRS should hire a lot more auditors and find out. Maybe the effort would not only put people to work, but pay for itself, too.
BSR,
One can hope, can't one?
Nostrovia,
George Obama arrested on drug charge
Obama's half-brother arrested on charge of marijuana possession - CNN.com
They took me from my home," he said, "I don't know why they are charging me."
.......I might think it would make more sense to eradicate the 900-page Federal Tax Code first. If the IRS itself doesn't understand its own 'bible' and has alternative opinions, what makes you think normal people have a chance of complying? It's a joke.
Don't get me wrong. KNOWINGLY falsifying returns is illegal and it seems commonplace to attempt it. Add to the employment levels? No thank you.
Conservative Republicans Blow,
I guess your handle says it all? Are you a blowhard?
You seem to see everything in black and white...why can't someone believe in economic self sufficiency and a hands off foreign policy?
Why should we be the policeman of the world's economic and political system?
How's it working out for you, now?
Instead of forcing govt's and the world's population in doing our will, we should go back to the old days of setting an example...
Please believe me in saying I have no messianic desire to change the world to fit my way of doing things...
I can not even get my dog to listen to me...and when he does listen, he ignores me...I gave up a long time age trying to change peoples attitudes...
One of my patrons is a courier. His main business for quite awhile was mortgages (imagine that). He told me yesterday he hasn't carried hardly any mortgages in months. My bank (Peoples First Panama City) hasn't issued one in several months and he said the branch in Tallahasee now has the mid level managers behind the teller windows...I'm guessing my bank is gonna be one of the next to go down...
My problem with Daschle is not that he didn't pay his taxes, which is bad enough, but it's the fact that he got paid $2M to to be a consultant for InterMedia Advisers. Look at the portfolio of this dog PE firm:
InterMedia Partners, LP | Leo Hindery, Jr. | Peter M. Kern
It's absolutely ridiculous.
"to eradicate the 900-page Federal Tax Code first
Black Star Ranch | 01.31.09 - 8:22 am | #"
Ah, those 19th century Simple Times of Wild West! When man was a MAN and even those Native Indians knew their place (or else..).
Would you also like to run chemical factories without documentation, guide lines and pesky rules, like that Bhopal factory. No pesky regulations, no laws. Nice lovely pesticide plant in the middle of big city! Who cares if thousands of simple natives die and half a million exposed to that MIC gas...Simple Times rules!
Why are we spending so much on our defense budget?. Our country has been destroyed from within by our own citizens.
I should have said government
rsadge, somewhere in Waziristan, and old man with kidney problems is laughing...He said he'd take us down financially...and well..
REBear,
I guess O's immediate and extended family is no different than other president's families...
......"we should go back to the old days of setting an example..."
"Why are we spending so much on our defense budget?"
Because there will ALWAYS be "Bad Guys".
An excellent example of the poor allocation of resources in our society:
Minn. Health Department Issues Pandemic Flu Plan - wcco.com
supafly73,
why is it that some bloggers take every think out of context and to extreme?
Its like some people are looking for a fight/argument...
I made some simple statements about what I thought we should do or go in the future...
are my ideas so bad that you think that I should be tarred and feathered and run out on a rail?
I guess some people got up on the wrong side of the bed this morning...you seem to have neither a smirk or a smile...
are my ideas so bad that you think that I should be tarred and feathered and run out on a rail?
Anonymous | 01.31.09 - 8:48 am | #
No, just saying that "simple times wild west"-ideology will not solve this complex crisis. And how is that "setting examples" working for War on Drugs on the southern border? How many examples you really want to be put in jail? 10 million?
...that's the problem. Many laws are instituted without any thought as to how it will be paid for from initiation thru enforcement. I was married for MANY years to a gal who worked for the FedGov - she spent MANY hours devising ways to make everyone safer - neglecting the figurative "repairing of the pot-hole" and the subsequent costs of lawsuits after accidents.
Too much government breeds too much dependence.
"why is it that some bloggers take every think out of context and to extreme?"
Why attempt cogent discussions with the likes of supa? To site India of all places as a rough and tumble, unregulated landscape shows a level of ignorance that no amount of polite debate is going to rectify.
Pavel,
"An excellent example of the poor allocation of resources in our society"
You are, I hope, referencing the entity attempting the allocation.
Nostrovia,
What is wrong with self sufficiency and inward looking?
Is it really wrong not to be the world's policeman?
What's wrong with not getting involved in foreign entanglements?
What is the loss? No cheap foreign mfg goods made in labor cheap countries by American companies (American based, but probably foreign owned) that suppresses wages here...influx of cheap foreign labor driving down labor costs in the US...
Are we really better off today than we were 30 years ago? Declining wages, increasing costs, no pensions, independent contractor status vs. our employers?
And what do we get in exchange? National debt explosion, no health care, no pensions, no job security (20 year pension, fired in the 19th year by a 20 something new manager to clean out the deadwood)?
So how does paradise feel like now?
Great work CR, just great work. MBA students should be reading this.
Too much government breeds too much dependence.
Black Star Ranch | 01.31.09 - 8:54 am | #
Your computer is made in Taiwan, monitor in Indonesia, keyboard in Malesia, clothes..who even knows, your food is produced/packaged/transferred inside very complex system, requiring oil from faraway countries and pesticides from India...Modern man lifestyle is like having about 95 human slaves working for you, day and nite. Government dependence is the least of your worries.
.....no supa, you are entirely incorrect in your " general spoutings"...
Here's my question/perspective:
I think there's a clear math relationship between the mortgage and mortgage derivative (broadly inclusive of CDOs, CMOs, synthetics, SIV/Conduit assets etc) losses and the Case Shiller indices. Since it seems clear to me that the CS indices have at least another 30% to fall (from 155-160 down to 100), doesn't that suggest that the sh*t-storm still has another year or two to run, and that for the Citi's and BofA's there's just no place to hide?
My two cents' worth.
supafly73,
I think they call it neo liberalism? or globalism?
and who is benefiting out of all this...not most of the American citizens...
we have been sold a bad bill of goods...time to re evaluate what is in our best interests...this is not a world conversation, but an American one...
besides, i suspect the world would be happy if we mind our own business...
....Supa...over the course of months, your derogatory anti-American vehemence has gotten rather old. What has happened to you personally that inspires such HATE? A lot of wasted venom.
"You are, I hope, referencing the entity attempting the allocation."
All of us. If we have money for TARP, we have more than enough money for an adequate public health system, even if the resources we allocate are a back-up that is never used. Ejection seats in military aircraft are seldom used, but that doesn't cause them to be taken out of the design of the aircraft.
Nor will H5N1 be impressed with your bank account.
Default here! Those of you who were around last summer may remember me...anyways, I'm still employed, still trading CDS, and my book is still up (in no small part due to the posters on this site).
Just a quick question for those of you who were between 18-35 during the last blowout recession (late 70s/early 80s)...how were the parties? I've got a bit of an ongoing argument going with a friend of mine on what life for young people will be like...my take is that as young people give up on "the dream," however defined, social unrest skyrockets, and the parties just get that much better...his comeback is that no, everyone will just be angry & depressed and playing alot of WoW...
Hope everyone is rooting for the Cardinals!
Cheers,
Default
Obama probably doesn't realize it yet...
There is no Obama, merely the same Wall Street puppet masters.
I think TR was correct...Break up the holding companies...disperse power, so that an ego manic has minimal power control to screw up people's lives...
We should become more self sufficient as individuals instead of being more plug into the matrix...
The Problem, Basel, with Daschel and geithner, is not that they blew/fudged/hid their tax liability, it's that the IRS never went after them.
The IRS has plenty of auditors, it's just that for the past decade or so, they've been concentrating on auditing those who make under 100K/yr (95% of the populace)
I was audited in '95 for a 1500 dollar health cost claim. The claim was real, the receipts were with my newly estranged wife...They threw the book at me.
2 tier indeed
From the Prudent Bear link provided earlier, Doug Nolan does a huge data sweep...launch of the prime mortgages into default space. Who was it upthread calling for another year or two of this? Spot on, as the alt-A and prime ramp-up will overlap...
About 6.9% of prime jumbo loans were at least 90 days delinquent in December, according to LPS Applied Analytics The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans climbed to 2.1% from 0.8% in December 2007 Moodys has downgraded more than 75% of all prime jumbo loans originated in 2006 and 2007 that carried the top rating of triple-A.
PrudentBear
--
David Rosenberg, 01/30/09: Best and brightest couldnt see how bad things would get -- Even the best and brightest couldnt see how bad things were going to be just a year ago: We found this from a testimony that Ben Bernanke gave just last April this time last year, we were supposed to be in the throes of recovery by now. To wit: We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009, bolstered by a stabilization of housing activity, albeit at low levels, and gradually improving financial conditions. (The Economic Outlook, testimony to the Joint Economic Committee, April 2, 2008).
Chair-moron Burn-ass-ke said during his testimony a year earlier, in March 2007, when asked about specter of falling home prices, that the housing prices in the US as a whole would not fall, only that the price increase will fall to 3-5%.
Bernanke is not an econ-moron? After all, he was a born-and-bred American dope first and an economist and a professor later. Dont expect very many born-and-bred American dopes to get the economy right. Lifelong doping and optimitis are severe handicaps.
Jas
Nor will H5N1 be impressed with your bank account.
Pavel Chichikov | 01.31.09 - 9:13 am | #
Ah, Pavel keeping your eye on the ball no matter the distractions - that and ug99 are patient beyond measure - and if not them, their cousins as resources are criminally misallocated and civil society starts to fray...
--
So, CR and the rest, all these graphs don't add to a severe recession? How about a probable depression because no improvement is in sight?
I always wonder what it takes for CR to correct his forecast and admit that he was wrong.
Jas
besides, i suspect the world would be happy if we mind our own business...
\t Anonymous | \t \t \t \t01.31.09 - 9:12 am | #
Bingo! Ten points! YOU'll get VIP-seat tickets to American Idols finals! We would really be really friggin happy. No more war on tis or thad, no more planet screwing mindless consumer crap without any regards of future generations and thousand other fubar things, labelled MADE IN USA.
"over the course of months, your derogatory anti-American vehemence has gotten rather old. What has happened to you personally that inspires such HATE? A lot of wasted venom.
\t Black Star Ranch"
Actually no, it is more of "what goes around, comes around" combined with "I FUCKING TOLD YOU SO YEARS AGO" combined with "HA HA!" combined with sometimes mindfuckingly serious boozing. Now, what else you would like to know
?
Default:
I'll tell you about the parties in the 1970s if you'll tell me about Merrill's CDS book and how they managed to lose $1-$15 billion on the basis trade in the 4Q?
--
The symmetry of the Case-Shiller graphs, for the past 5 years, is amazing. For CA, the prices are back to June 2003.
Are be headed back to 2000?
Jas
Pavel,
"If we have money for TARP"
You are keen, and know that we do not have the money.
"Nor will H5N1 be impressed with your bank account."
No, nor will it care about some committee devised by some gov't agency looking for lobbyist money...erm...public comment.
Nostrovia,
supafly73,
like i said previously, i gave up a long time ago trying to change people's opinions/attitudes...by the way, I have never seen American Idols finals or any other game shows...and i do not have a 60" plasma TV or cable/satellite hook up...
have and continue to simply my life...one thing i have learned, the more you own the more your cost of storage, maintenance and insurance you need...
If you got nothing, you have nothin to loose...
"Government" is a loaded word. But we decide what we want government to be.
We have learned nothing if we think that we can make a government "hands off" and passive. If we do that, we just get government by another name -- by the most tyrannical, greedy, cynical and corrupt.
It's going to be a tough job to make a government that works -one that isn't an utter lapdog, or a meddling babysitter.
But we have to figure it out this time. And seriously, picking at the bones of these old decayed arguments and theories is just going to break humpty over and over again.
I give medals to anyone who can take on the urgent business at hand without resorting to lables -- liberal, conservative, big government, socialism, captialism -- that are so emotionally muddled that they have become essentially meaningless -- or just tools for distraction.
Just show me your plan, and tell me how it's going to work.
For the most part, I didn't think the parties in the mid-1970s compared well with the 1980s parties because nobody had any money for beer, much less the designer drugs that are really necessary for a "blow"-out good time. Lol.
Seriously, the 1970s were a total downer, between the lousy economy and on top of that bad music, disco mania, leisure suits and all the rest. It wasn't until "Miami Vice" stylin' came along in 1984 that the party scene started to turn around.
About 6.9% of prime âjumbo' loans were at least 90 days delinquent in December, according to LPS Applied Analytics⦠The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans⦠climbed to 2.1% from 0.8% in December 2007⦠Moody's has downgraded more than 75% of all prime jumbo loans originated in 2006 and 2007 that carried the top rating of triple-A.
citizen energyecon | Homepage | 01.31.09 - 9:22 am | #
I do so wish Tanta was here to take the otherside of this argument but lie does go on.
I predicted this years ago. "Ability" to pay was not going to drive jumbo defaults as so much of the rational that went into the decision involved investment return expectations. This aspect of the mania was self reinforcing on the way up and now on the way down. It also explains stickiness being largely absent this time. These people are not so much defaulting as allowing their options to expire worthless or declining to meet a margin call. I looks like Moody's is starting to get it.
Meanwhile, 19 year old Rory Mcllroy of N Ireland is on his way to a half mil win in Dubai.
--
Non-residential construction spending should fall by at least 50%. How many jobs, directly and indirectly, would that take away?
Jas
RD,
The other piece that would be nice to see is the relative sizes of the outstanding mortgages of those vintages - dollar amounts of of sub-prime, alt-A, prime jumbo and just plain prime (soon to be formerly known as prime) - yep, we are due for another revision of default rate and loss severity (overdue?).
"The forced "Economic Diet" we are currently undergoing will be cathartic."
I'd say it's more like an upper colonic administered with habanero and jalapeno, with some wasabi thrown in for sparkling freshness.
Republican are Aholes guy (or gal),
You are obviously very passionate, but lack a certain tact that makes your opinions tolerable to consume. We have many lefties, centrists, and righty posters here and we seem able to discuss things relatively calmly.
I suspect your anger is with the continuance of the status quo as evidenced with Obama's early choices and decisions, a betrayal that you deeply personalize.
As bad as Bush was, and he was very bad, you are coming to realize that the corruption and debauchery run so deep within the system, that short of collapse, a Libertarians wet dream, you are powerless as an individual.
This reality attacks your well intentioned ideology (my opinion) and forces you to make a choice. Sophie's choice if you will. Accept graft, corruption, and as an individual, marginalization, or welcome a social cataclysmic event of epic scale, knowing that people will suffer greatly, but a true change will truly result.
Either way, I feel for you, as your frustration and abject vitriol is all you have left, and you are acting out, attempting to give witness to your pain. Good luck.
Either that, or you are an ideological troll. I haven't decided yet.
"Government" is a loaded word. But we decide what we want government to be.
Alo | 01.31.09 - 9:35 am | #
Oh really? So when the greatest democratic outcry in postwar history resulted in 20:1 opposition to the TARP we decided what kind of government we'd get? We don't decide and haven't for quite some time.
Either that, or you are an ideological troll. I haven't decided yet.
Senorito American Mugabe
+1...TILT!
Nostrovia,
Default. I remember parties more than brooding. One has got to look at the upside. I wondered where you went. Your input would have been welcomed here throughout the fall during many discussions on CDS.
Rob Dawg,
"Oh really? So when the greatest democratic outcry in postwar history resulted in 20:1 opposition to the TARP we decided what kind of government we'd get? We don't decide and haven't for quite some time."
I'm out of gas for that one this AM. I'll just cheer you from the sidelines Dawg.
Nostrovia,
MP and Conjure was correct, Its time to move on...this train is moving down the tracts and nothing short of a crash will change it...
CR,
What are you trying to do with all these graphs? Get us all to jump out a window? If so, I've got a problem, because mine aren't high enough.
The other piece that would be nice to see is the relative sizes of the outstanding mortgages of those vintages - dollar amounts of of sub-prime, alt-A, prime jumbo and just plain prime (soon to be formerly known as prime) - yep, we are due for another revision of default rate and loss severity (overdue?).
citizen energyecon | Homepage | 01.31.09 - 9:40 am | #
The true extent of the jumbo bust is being obscured by several factors. Refinancing has still been available. Many on places like SoCal are property ladder houses with substantial original equity. These unsustainable interest rates are still luring greater fools. There's also a sizable contingent of people who don't know they are screwed. Those will be the third wave.
"as so much of the rational(e) that went into the decision involved investment return expectations."
It won't come close to curing what ails us, but one step on the road back to consumer financial sanity is for the average home buyer to stop buying homes because of assumed rapid increases in value. I would guess that notion is dead, and will remain so for quite a while, at least until the next NAR marketing campaign.
The only real issue left is the extend of the damage after the train crash...
"We don't decide and haven't for quite some time."
I'm out of gas for that one this AM. I'll just cheer you from the sidelines Dawg.
Comrade Misean is Dope | Homepage | 01.31.09 - 9:45 am | #
Thanks. Somehow I suspect no one is going to take the other side of this one.
"It's going to be a tough job to make a government that works -one that isn't an utter lapdog, or a meddling babysitter.
But we have to figure it out this time. And seriously, picking at the bones of these old decayed arguments and theories is just going to break humpty over and over again.
Just show me your plan, and tell me how it's going to work.
Alo | 01.31.09 - 9:35 am | #"
The basic problem is the size of USA. Democracy works until to the point where campaign costs of a Representative (Congress/Parliament/Village council/etc etc) exceed middle class candidate's ability to finance his/her campaign. The limit is roughly average yearly salary, 40-60 000 dollars.
So mathematically speaking you reach that point about when there is one representative per 50000 citizens. If a nation goes beyond that democracy event horizon point, it gradually turns into plutocracy, rule of the wealthy. A parliament usually has up to 300 members, so maximum democracy population limit is about 15 million people.
USA has now over 700 000 per Congress member! To go back the original 30000 people per representative, USA would need whopping 10000 Congress members. So the only logical conclusion is to break apart the union and probably it will happen sooner or later....
So there! Easy! What you wanna know next?
The only real issue left is the exten[t] of the damage after the train crash...
Anonymous | 01.31.09 - 9:51 am | #
There's an after? Optimist.
I'd love to see a chart showing unemployment vs. the stock market
@ Conservative Republicans Blow,
And you're as tiresome as they are. Take it down the street.
--
FYI, I have said many times that CR is among the best economic reporters, if not the best, in the US. For that my hat is off to CR and I am grateful and thankful for his reporting.
My disagreements with CR are about his forecasts, estimates and comments like "CRE is not as overbuilt as RRE." CRE is a lagging indicator and RRE leads the downturns. When the entire CRE pipeline is completed, e.g., the City Center in Lost Wages, the % over supply would be far greater than for RRE. Does anyone disagree with this?
Jas
Rob Dawg,
got to be, otherwise I would suck on the barrel of my shotgun...
20:1 opposition to the TARP
The silent majority were too busy sucking government teat to voice an opinion. Won't change 'till the cow runs dry.
There goes my everything.
the people at the top of our government and major corporations have no loyalty to this cThey are all
internationalists.
USA has now over 700 000 per Congress member!
To go back the original 30000 people per representative, USA would need whopping 10000 Congress members. So the only logical conclusion is to break apart the union and probably it will happen sooner or later....
So there! Easy! What you wanna know next?
supafly73 | 01.31.09 - 9:53 am | #
In the break up who gets stuck with D.C. and L.A.?
Seriously, you got it although I suspect technology could effectively empower the populace at 3-4 times your 50k threshold.
o loyalty to our country
Maybe when we start capitalism over we should name it something else.
Jas Jain | Homepage | 01.31.09 - 9:22 am |
Ha! I was thinking of you earlier this morning when I read this article.
BBC NEWS | UK | Magazine | Banker + gangster = bankster
I wondered where you'd gotten off to.
CR, are you certain you're not Bipolar Manic Depressive? The pace and magnitude of your posts are overwhelming. This latest was done late on a Friday night....when most folks are letting down their hair for the week. Of course, another explanation could be that CR is more than one person, maybe a team. I have already determined that there is a team posting to the comments section that seeks to control, contain and direct the dialogue much like Orwell's Ministry of Truth.
rsadge writes:
no loyalty to our country
rsadge | 01.31.09 - 10:03 am |
and yet we give these corps access to the US market, give away tax breaks to move business active off shore for cheap labor, allow them to have tax havens to avoid taxes and allow to buy influence in our govt...
no loyalty to our country
rsadge | 01.31.09 - 10:03 am | #
Loyalty is earned and deserved.
It's begun. Google is restricting access to sites. It's just Phase 1.
What sites?
It's begun. Google is restricting access to sites. It's just Phase 1.
Morocco Bama | Homepage | 01.31.09 - 10:08 am | #
As much as I try to ignore you, this time you are right. UCLA.edu and house.gov were both blocked through google this morning. Still, don't be silly. It's a glitch.
It's begun. Google is restricting access to sites. It's just Phase 1.
\t
Example: http://www.google.com/interstitial?url=http://www.house.gov/house/MemStateSearch.shtml
US incorporated businesses have been getting away with bloody murder for a long time...
Time to wack them back, like trimming shrubs in a garden that has over grown(I love that, killing two birds with a single stone!)...Time to GO TR...that is the only thing that saved the Reps...They need to find religion(god, I love this, another two birds)...
bluestatedon writes:
"It won't come close to curing what ails us, but one step on the road back to consumer financial sanity is for the average home buyer to stop buying homes because of assumed rapid increases in value. I would guess that notion is dead, and will remain so for quite a while, at least until the next NAR marketing campaign."
Campaign idea: "At least housing outperformed the stock market!"
It's all a public service, and I'm happy to do it for you anyway.
How can the government guarantee 4% mortgage rates? If they just say it is so, sign a bill, and that's it? If that's the case, why not 2% mortgages?
Just curious. Thanks.
Link: Obama pushes economic plan; cloud over health pick
| Reuters
Excerpt:
"Soon my Treasury secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families," Obama, a Democrat, said in his weekly radio address.
"We'll help lower mortgage costs and extend loans to small businesses so they can create jobs."
...Republicans, who opposed the president's stimulus package of over $800 billion largely because of its spending priorities, suggested mortgage help as well, proposing government-backed 4 percent fixed-rate mortgages for "any credit-worthy borrower," Senate Republican Leader Mitch McConnell said"
Thanks Rob D.
I was audited in '95 for a 1500 dollar health cost claim.
When they can come up with 4 trillion for Tarp out of nowhere it puts a different perspective on things. We will never pay off our deficit. So why does it matter if we pay taxes? It matters in the sense that we have to use the unconstitutional scrip they call dollars so they can live off our labor. We are needed as a debt slaves nothing more. The pentagon alone had several trillion dollars in unaccounted for spending. Would'nt there be a much bigger bang for the buck if they just spent some auditing there? No, it will never happen. They cannot even sign the GAO report without a disclaimer but expect us to give up our 5th amendment rights every April 15th.
(Am I going to get a beatin?)
In the break up who gets stuck with D.C. and L.A.?
Seriously, you got it although I suspect technology could effectively empower the populace at 3-4 times your 50k threshold.
Rob Dawg | Homepage | 01.31.09 - 10:02 am | #
Germany is about one per 200000+ but the individual German states like Bavaria are much more independent than in the US and there might be even some limits of campaign costs. Werner probably knows much more about the German system.
Bottom!!! There, I said it. Someone had to.
tg is a born & bred smeghead,
not from me, if that carries any weight in this crowd...
Google does that regularly if you're in a weird (non Santa country).
Just sayin'.
For those who aren't part of the team, but rather the target audience, rather than reacting to the dialogue and commenting, take a step back and observe. Engage in pattern recognition. It will reveal itself to you.
Re: Google
Glad to see I'm not the only one getting chived by teh google this morning.
Every single search result includes a warning that "this site may harm your computer."
PITA. Looks like ask.com will be getting extra business today.
Bama = troll
Bottom!!! There, I said it. Someone had to.
Anonymous | 01.31.09 - 10:17 am | #
That bottom's for spanking not sitting out the end of a crash.
friardaddy writes:
"How can the government guarantee 4% mortgage rates? If they just say it is so, sign a bill, and that's it? If that's the case, why not 2% mortgages?
Just curious. Thanks."
Quick answer: They can do it by the simple expedient of preparing to lose lots of money.
Longer Answer:
The U.S. Treasury can currently borrow at a rate well below 4% across the curve. (But there are definite capacity limits for long maturity borrowing near current rates.)
They could theoretically lend to consumers at 4%, and then borrow far enough below that so that they can cover the administrative costs, and make a profit.
But: they will almost certainly have to borrow short-term to finance the mortgage lending. Sooner or later, short rates will rise, unless we are in a permanent depression. This would put them in the position of the S&L industry in the 1980s - borrowing at higher short term rates to finance low yielding mortgages. This doomed the S&L industry, which then went on to do stupid things (losing yet more money) to cover the losses.
Anonymous writes:
Bama = troll
Not a troll so much as a resident pest.
Wow. CR, you rock!
I would love to see the regular bloggers on this site together in the same room, each with a knife, with the lights turned out...O, the horror, with all the blood on the floor...It would be time to call in NCIS!
lol
Bond Guy, excellent explainer. You left out the impact to revenues and fractional limts however. The source of some of that money to lend will be tax free reducing revenues at a time of increased borrowing. Second the reason they are lending to banks and not directly. Banks can fractionaly lend the same money 8-10 times whereas the government is a 1x pony.
Will Citi be around another month?
Oscar favorites for 2010.
Slumdog Bandit King.
The saga of a Wallstreet IB crook whose fortune takes a nosedive in a curious turn of events and lands him in a pile of **** in Mumbai.
"each with a knife, with the lights turned out"
I always took the admonition to never bring a knife to a gun fight to imply all fights are gun fights.
Nostrovia,
I would love to see the regular bloggers on this site together in the same room, each with a knife, with the lights turned out...O, the horror, with all the blood on the floor...It would be time to call in NCIS!
Anonymous | 01.31.09 - 10:26 am | #
Good idea. I especially like the odds when everyone else brings a knife to a gun fight. Actually I suspect the encounter would be more like Braveheart when the Irish & Scots charged each other.
I guess one could say, Well, it can't get any worse.
But, it can.
CR....If you keep posting these graphs/charts...you may lead the masses to embrace thoughts that we ARE now in "FULL DEPRESSION MODE". Why scare us and do so much further damage to our "STRONG" Economy?-MAJOR SNARK
Good idea. I especially like the odds when everyone else brings a knife to a gun fight. Actually I suspect the encounter would be more like Braveheart when the Irish & Scots charged each other.
Rob Dawg | Homepage | 01.31.09 - 10:33 am | #
In your case, one need merely deprive you of your heart meds.
I ignore you, as well. You're beyond boring, if that's possible. The one comment you made that I found the slightest bit amusing and validating was how people at Disney were getting fatter. The rest is pontificating hot air.
--
Thanks, AnonyMiss.
Banker + gangster = bankster
It seems timely to resurrect this Americanism from the 1930s - one of many evocative words the United States has contributed to the English language, says Harold Evans. Americans are pretty good at adding words to the English language. We owe them pin-up girls, highbrows, killjoys, stooges, hobos, drop-outs, shills, bobby-soxers, hijackers, do-gooders and hitchhikers who thumb a ride.
The Americanisms are so much more concise and vivid. Instead of saying "sorry we're late but drivers ahead of us slowed us down when they craned their necks to look at a crash" you can say "we were held up by rubberneckers". Words pop in and out of our language as social conditions change. The American gangster, which is still with us, has been around as a noun and a reality since 1896 according to my Shorter Oxford, but it seems to have dropped another Americanism from the 1930s and I think now is the time to revive it. The word is bankster, derived by a marriage of banker and gangster.
BBC NEWS | UK | Magazine | Banker + gangster = bankster
Or, a bankrupter. The curse of my life is being ahead of my time.
BTW, the greatest banker in America was not an Anglo or a Jew, but an Italian AmericanAP Giannini, mentioned in this article, who founded Bank of Italy in San Francisco that later was renamed Bank of America. He detested Bankrupters and Fraudsters of New York City (BFNYC) but he had to deal with these crooks, raised in a culture of fraud, exemplified by Bernie Made-off. BFNYC, at the top, Corporate Crooks of America, and the two organized political parties constitute Gangistan of America and they rule over most Americans that reside in Dopeland. There isnt a damn thing that the politically impotent Americans can do to challenge those in Gangistan. Born-and-bred American dope has nothing other than denial left to feel good about the American system that has deteriorated into one of the worst.
Jas
In your case, one need merely deprive you of your heart meds.
Ouch.
Indeed; very amusing. It might have been moreso were it not for certain recent and unpleasant personal events.
This has been fun, but I see it is time for me to go. Bye, all.
Nemo | Homepage | 01.31.09 - 10:11 am | #
Nemo??? Nemo???
FIRST!
After reviewing all those charts it's clear this is a run-of-the-mill mid cycle slowdown. Sebastian & the Wright Model B was correct again.
"There isn't a damn thing that the politically impotent Americans can do to challenge those in Gangistan. Born-and-bred American dope has nothing other than denial left to feel good about the American system that has deteriorated into one of the worst.
Jas Jain | Homepage | 01.31.09 - 10:38 am | #"
Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789...
NEMO! Say it ain't so!
Oh for goodness sake. Now we have to go finding Nemo.
We need a Blog Shepherd.
OT question.
I received notice today from one of the big credit card companies that my minimum payments/fees/terms have changed. Is there any recourse that will not potentially harm my credit score?
Thanks
Rob Dawg writes:
"Bond Guy, excellent explainer. You left out the impact to revenues and fractional limts however. The source of some of that money to lend will be tax free reducing revenues at a time of increased borrowing. Second the reason they are lending to banks and not directly. Banks can fractionaly lend the same money 8-10 times whereas the government is a 1x pony. "
Unfortunately for the banks, their lending is constrained by their balance sheet equity. In the current environment, that constraint will prevent the money multiplier inherent in fractional reserve lending from kicking in.
On the revenue side, with lower interest, there will be less to deduct. And my guess is that unless the NAR campaign kicks in successfully ("Housing: it still lost less than equities!"(R)), most mortgage borrowing will tend to be refinancing or with lower debt levels. This should keep the aggregate amount of mortgage debt on a sub-par growth path, so there will be less aggregate mortgage interest deductions.
Although I covered the interest rate risk, the credit risk component is another nightmare. Even if the gov't reverts to stricter lending standards that would work for a bank, would the gov't be able to evict voters in the same way a bank would? Even if the gov't is working through 3rd parties, the risk is there.
Note that the Fed is starting to buy mortgage-backed securities (MBS). This is not exactly the same thing as passing a law to guarantee 4% mortgages, they could de facto operationally guarantee such a result. ("We will buy all MBS submitted in auction with a yield > 4%".) In the 1950s, the Fed did cap Treasury bond/note yields; however, there was much stricter regulation of banking system interest rates, so it was much more feasible to implement than now. (There is a variable spread between the MBS yield & the retail mortgage interest rate, so retail mortgage rates will not face a cap at 4% even under that scenario.)
Jas, I hear you. Americans are Born and Bred Dopes led by Gangsters and Banksters....and the Dopes lack a backbone, as well. The French may be dopes for other reasons, but at least they have the nerve, the backbone, to stand up and say no to Sarkozy's bailout. Where's that kind of outrage in the United States? What a bunch of wimps. A thouroughly softened and highly processed people, are the Americans.
BBC NEWS | Europe | Huge crowds join French strikes
anonymous | 01.31.09 - 10:48 am |
Pay it off in full at once and hold a lifetime grudge against that instition for the rest of your life?
That's what worked for me with Capital One.
Thanks for the graphs, CR. What a great summary.
Just sitting here, reading all the comments, it's occurred to me that the U.S. -- maybe the world -- has entered a time of crisis similiar to WWII. It is massive in scope, may well spread globally in unexpected ways, will last for a long time, will take massive effort to fight and win. And we've never done anything on this scale before, so we will make massive mistakes, unavoidably. And we may lose, and loss will have terrible consequences. ANd finally, the first three years of WWII, starting in '39, were largely a time of setbacks, failures, false truces, and unexpected disaster.
It's difficult to keep your brain on this in a thoughtful manner, daily, and stay calm. Kind of like reading casualty reports daily, , reading endless accounts of defeat by a seemingly invincible enemy. Personally, I'm just here to get input on which way to jump in the coming crisis. Because unlike WWII, the front line is not 4000 miles away; we are all on the front line.
This is going to be a long one; and one way or another it is going to bring vast changes. In the end, here in the U.S., I expect the majority of people to line up behind Obama and accept a message of hope -- whether true or otherwise -- because they have no choice. They either have to line up behind a credible leader and give him their hope and support, or wander in the wilderness on their own for four or five years. In times like this people will fix on a leader and give him much more leeway than they would in normal times. Look how much they gave to Bush.
The only other option is a basic change in the nature of the U.S. -- if no strong national initiative/leader gains credibility, then a devolution to regionalism may take place. I doubt it -- but that's an option.
It's going to be a long ride in any case; most of the answers we have now will be wrong. The right ones will be arrived at by trial and error as always. Just hang in there.
"Now we have to go finding Nemo."
A blinded Kyklops might shout to his brothers that no man had harmed him. This would, however, make it difficult for the brothers to find the culprit.
Nostrovia,
Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789...
At least half of americans have read a book, so No revolution it seems...
A blinded Kyklops might shout to his brothers that no man had harmed him. This would, however, make it difficult for the brothers to find the culprit.
Nostrovia,
Comrade Misean is Dope | Homepage | 01.31.09 - 10:54 am | #
I was never good at foreign languages. Can you translate that into english? Thank you.
Don't flame me everyone but I think this is all planned. Look at what the elites are saying-a new world order which is what they have been planning for years
Thanks CR! This is very good.
No conspiracy theorist here...but the stars sure are coming into alignment at a rapid pace.
Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789...
supafly73 | 01.31.09 - 10:46 am | #
Read a history book.
"They either have to line up behind a credible leader and give him their hope and support, or wander in the wilderness on their own for four or five years."
These "either or" things are getting tiresome. Especially when one or both sides of the statement point to things they do not contain.
Nostrovia,
AnonyMiss:
Thanks, that's the plan. Fortunately, I'm in a position to do that. Cap One and JPM - and probably every other one...
Outsider,
That is the story of Odyseus, who told the cyclops his name was nobody, and when the crafy Odyseus and his surviving crew (that had not yet been eaten by the cyclops) put out his eye, the cyclops shouted "Nobody has blinded me!"
You're beyond boring, if that's possible. The one comment you made that I found the slightest bit amusing and validating was how people at Disney were getting fatter. The rest is pontificating hot air.
Morocco Bama | Homepage | 01.31.09 - 10:37 am | #
Got it. Confirmation of your worldview = good. All else = boring and unworthy of consideration. There should be a word for that. Oh, wait. There is.
citizen energyecon | Homepage | 01.31.09 - 11:00 am | #
Got that part. It's relating it to Nemo that has me stumped.
supafly73 | 01.31.09 - 10:46 am |
I am neither defending nor speaking for Jas; he can ably do that himself. Just clarifying. Jas I believe has only said that things have to deteriorate a lot more for dopes to fight back, not that dopes will never fight back
thank you for the nice charts
Outsider,
Ah the English translation riff led me astray, I am afraid you are looking for some n-dimensional Rosetta stone that will map Misean's thought process to the rest of the world...
Belated thanks to CR.
Not just for this round up of bad news but for all the time and effort (and headaches) he puts in to provide his valuable site for our benefit.
energy,
I prefer the translation no man.
Nostrovia,
Thank you, CR. In one post, you've shown the perfect economic storm.
Dopes have to stop being dopes...that's fighting back, but easier said than done. Dopeafication is a process that begins at birth. Americans are highly processed like the food they eat. The entire structure has to be dismantled in order to dedopeify. An entire generation must be reared as dope-resistant. The likelihhod of any of this happening without calamity is slim.
"8 Ball writes:
Great work CR, just great work. MBA students should be reading this"
You are assuming most MBA students can read and that some are concerned about things beyond thier careers.
If anybody ought to be reading this it is polysci and law students because they have proven to be the most apt. to go into public service.
I think a way of thinkng has to change. It is not what is good for commerce is good for the USA but rather the USA is good for commerce.
It's becoming clear - Globalization over the past 20 years has been a complete failure for Americans. Expect the masses to come to this conclusion.
Misean,
You have a particular translation of the Odyessy to recommend? I haven't read that in years and years, the last one IIRC was Lattimore...interested if you have a version in mind.
erm...Odyssey
I prefer the translation no man.
OKAY! Now I get it. I'm an old lady. Please be straightforward.
Saw an interesting show on cyber crime last night, and it makes me wonder whether that isn't a dual issue along with the economy, ranking right up there. Unless they were just sensationalizing. Must be cool to be Mudge.
Globalization over the past 20 years has been a complete failure for Americans. Expect the masses to come to this conclusion.
And that's why Al Gore is more responsible for this mess than GWB. Without the intertubes, this level of globalization would not be possible.
j/k
These are lagging indicators.Let's see what is coming into view...War in Korea,the worst drought on record in California,H5n1,and ug99.Oh boy.
My fear:
"Guy Ryder, the general secretary of the International Trade Union Confederation (ITUC), said that the current financial turmoil had triggered a social timebomb that would lead to deepening civil unrest and soaring crime"
Unions condemn delegates on crisis - Times Online
More governments will fall.
energy,
My library, such as it is, is reminiscent of that of Minas Tirith. The volumes near the top are the ones I've been most interested in of late. That one is sure to be deep in the back. I'll give it a rumage when I get back home Tuesday.
Nostrovia,
The Know Nothing party shall rise again...
Anyone looking for the government to save them or get us out of this is a moron. I'd really like a party to rise that is deliberately obstructionist. They don't pass any budgets, they shut down government, they question all government action and interference. Not just the minority party, but a real obstruction party that believes "government is not the answer".
Of course folks like me who truly believe this just tend to steer clear of all political bs (which is just about everywhere). Our news-cycle seems to have become more much politically driven over the past 15 years. I haven't been able to guage it at all; but president, and congress aren't the most important things in America.
The comparisons of admirable, activist French and detestable, inert Americans will no doubt continue to blacken pixels here. They always remind me of older characterizations I think may be closer to the mark.
Speaking of Jean-Baptiste Colbert, the brilliant chancellor to Louis XIV, Nancy Mitford says, "He was the most remarkable minister in the history of France. If the French are divided into Franks and Gauls, Franks - serious and rather cold, the builders - and Gauls - the destroyers of this nation - Colbert was the very type of the FranK."
And regarding contemporary Florentine complaints as the English/American campaign in Italy progressed by inches rather than miles (and stung by constant references to German efficiency) Bernard Berenson observed that, having drawn what were after all predominantly Anglo-Saxon countries into conflict, Germany must not be surprised when the hostilities are served up cold, dogged and inexorable.
I think these come a bit closer to the real nature of things than "wonderful French" and "sofa-spud American".
Bob Dobbs writes:
"Just sitting here, reading all the comments, it's occurred to me that the U.S. -- maybe the world -- has entered a time of crisis similar to WWII. It is massive in scope, may well spread globally in unexpected ways, will last for a long time, will take massive effort to fight and win..."
Call me an optimist - the situation is more similar to the Great Depression than WWII.
I'm not an expert on the Great Depression, but I believe there was a coordinated global slump in economic growth that hit (almost) all regions, which has not happened again until now. And similar to then, the monetary framework was shuddering under large balance of payments imbalances. Current imbalances dwarf those of the Depression era, but a gold standard has much less tolerance for imbalances than what we have seen post WWII.
By WWII, there had been considerable breaking off from the global system by autocratic governments. (The Soviet Union had broken off before the Depression.) So the economic framework in WWII was very distinct from now, where all countries have rejoined the global system (North Korea, parts of Africa and Antarctica being the exceptions).
I realize your point was more about politics, but I just wanted to comment from an economic viewpoint.
Rents in NYC, especially in Manhattan are now falling fast, according to the NYTimes...
A Month Free? Rents Are Falling Fast - NY Times
How much more evidence do we need? We are headed for a major depression and it musdt play out. No sense in fighting it anymore. The sooner, the better.
Oh, but, the high end real estate neighborhoods, won't be affected. I almost forgot..
WestsideREmeltdown
Santa Monica Meltdown, The "90402"
energy,
Nobody may also be an infection of PC into classical texts. But, as my ancient Greek is quite weak, it's merely a really good guess.
Nostrovia,
Awesome charts! & 4Q GDP dropped only 3.8%??? How about 6-7%? Anyone know estimates for 4Q GDI (gross domestic income, gdp=gdi)?
It's becoming clear - Globalization over the past 20 years has been a complete failure for Americans. Expect the masses to come to this conclusion.
bearly | 01.31.09 - 11:11 am | #
What was inevitable is that globalization would lower American quality of life. The bs part was in denying this amongst the globalism advocates. The line of "a rising tide" was incredible only in that it worked until it was too late to object. Interestingly the US has less to lose than the rest of the world in a trade slowdown yet it is the other nations seeming more inclined to pull the trigger.
CR,
Thank you for everything, including this compendium. Thought I'd just "check what's going on" after a long hiatus. good grief.
ee thanks for the reminder for the weekly noland, in which the recap is usually to be skipped, but I've been in a deep freeze for the past week and need it.
Bob Dobbs, pls keep posting.
likewise Nemo, WTF? Hot bath and a good meal for you buddy, stat.
Don't know if I've got the mental ability and fortitude to resume the entrail pickings with you all, but come tomorrow, try try try.
I realize your point was more about politics, but I just wanted to comment from an economic viewpoint.
bond guy | 01.31.09 - 11:18 am | #
Thanks in any case for the thoughtful reply. At the base of it, my argument is: it's a terrible crisis, and we'll either face it in a coordinate way -- or fail. That applies to both politics and economics -- which these days, seem to be two heads on the same dog.
--
"Born and bred French peasants, who couldn't even read and did not even own a book, somehow managed to start the French Revolution 1789..."
supafly73,
You stole my forecast as to how it would endA bloody civil war not unlike the French Revolution, the single most important political event of the past 350 years. Lot of Americans and others around the globe would suffer. The first half of the 21st century would make the first half of the 20th look less bloody in terms of human deaths.
The evildoers in America have done the dirty deed by financial means what some others did via military means. Evil occurs in many forms and born-and-bred American dope is oblivious of the evil in the financial form via debt slavery and manipulation.
Jas
FLtrader writes:
"Awesome charts! & 4Q GDP dropped only 3.8%??? How about 6-7%? Anyone know estimates for 4Q GDI (gross domestic income, gdp=gdi)?"
GDI makes a lot more conceptual sense than GDP, but it takes much longer to report. I think we only have semi-reliable GDI estimates to 2007 (?). Thus, it is not really followed (one reason I don't know what the reporting lag is).
Even though the 2 numbers are equal, they calculate both to verify that the GDP numbers are not too wonky. The gap between them, theoretically 0, is called the "statistical discrepancy".
The bond market is ultimately more interested in GDI than GDP. Interest and principal payments are serviced out of income; so we need to track the gross debt servicing ability of the economy. There is no need to worry about silly things like whether GDP really measures "the standard of living".
I agree with Jas...this will all end badly.
Good Night AmeriKKKa!
Has anyone else noticed 'Spring Hours'?
I went shopping after work this week. I got a new job, and wanted some new clothes too
So I walked though the shopping district downtown.
Bananna Republic and H&M were supposted to be open until 9pm. They both had signs saying that 'Spring hours' were in effect... they closed at 8pm.
It's January, not spring. I smell some wacky cost cutting going on.
When criticizing of globalization I suppose one also has to indict the peculiar culture of American "progressivism" that has grown up as a result of it. I was always astonished at how Obama's election campaign relied on the unrealistic perceptions of the moneyed, nominally "liberal" white middle class... who seemed to not realize that the country's economic system was glittering but structurally unsound, and who seemed to believe that Obama would have infinite amounts of funding to work infinite miracles. "It's OUR turn now!" they crowed triumphantly, not knowing or caring just what unsteady foundations the '00s boom was built on. In other words, everything would continue as it was before, except liberal goals would be pursued instead of conservative or neo-con ones. And the whole world would love America again. Just because of "regime change."
Regime change without economic transformation means nothing. But economic transformation would mean a leveling out of standards of living in America... less granite countertops for you, less iPods for your kids.
The world they dreamed of was one of college degrees and white-collar jobs for all, a world where no jobs (not even the "green collar" ones) would be dirty or demeaning, a world where America could say "Sorry!" and be loved again, where magic would happen just because of having a "multicultural" president... a world where America's brand would be cleaned up. That's about as far as their political sophistication goes, I'm afraid.
US wealthy lose $20 trillion, says strategist
US wealthy lose $20 trillion, says strategist
This illusion was worth $50 trillion at the market's peak in 2007, according to Grantham. In his quarterly review he writes: "How could we kid ourselves that we were suddenly rich and didn't need to save for our pensions when were sitting in the very same buildings we bought in 1974? We have not lost wealth, but just the illusion of wealth."
He says the situation has led to a run down in savings and a build up in debt: "Now the illusion of wealth has been lost with formidably negative effects on animal spirits." Advisers serving the lower reaches of the high net worth community could be facing quite a challenge: profits growth at the majority of private banks is tending to ebb away.
Grantham points out that personal wealth following write downs in equities, housing and commercial real estate now totals $30 trillion while debt remains stuck at $25 trillion.
Credit standards have tightened up but more illusory wealth needs to disappear before the US economy will start to recover: "To be successful we need to halve the level of debt. Somewhere between $10 trillion and $15 trillion will have to disappear."
My Forecasts on the Global Economy and Crude Oil Prices Made During May-June 2008
Simple flow-chart: US Recession --> Global slowdown; US Depression --> Global recession; US Greater Depression --> Global depression
2008 saw the first (no?), 2009 would see the second, and 2010-11 would see the third.
The main catalyst for the crude oil prices to fall would be the global recession as the US recession, like cancer, spreads. Rising crude oil prices only speed up the process.
Fait accompli.
There must be a method behind my madness. It is the debt, stupid! Debt Pushers have ruled America, they still do, and the consequences are never in doubt.
Jas
CR
Excellent compilation. With this on the lag side and chartists programming a GD1 retrace, the compression factor on the 4 bad bears charts would suggest about a 4-6 week rally before the next down jag, possibly in conjunction with a serious bond fracture at rollover.
Of course, if you think that bond holders are playing chicken with Bennie, then the bond fracture will happen, probably on the 10-year, at the next issuance.
I wish Pettis would put up some charts like this from China.
C
A reasonable strategy might be to vote out any incumbent in the Senate or Congress. To make the job a little easier, start with the TARP voters.
While one party did have a straglehold for six years, I didn't hear anyone on either side sounding the alarm. A review of investment bank industry contributions shows that both parties received "donations."
Illusions abound. Plato's cave, and all that.
All this bad news is negated by the good news that the TED spread remained below 1.00 all week. Right?
Seriously, a lot of these indicators and some that aren't included are not symmetrical. They can't turn around and return to previous values in anywhere near the time they took to crash. In particular notice CR's trucking index. The air cargo index is similar. Capacity evaporates and only loose credit can bring it back. Unfortunately, loose credit doesn't allocate efficiently. Transportation capacity is way down the list of where more liquidity would flow. We may not be able to experience a trade war because there won't be enough transportation available to wage a war.
Retail Sales makes me cry, MOMMA HOLD ME! I'm under the bed!!
Here lie some good graphs :-
Uncharted Waters
Uncharted Waters
"The true extent of the jumbo bust is being obscured by several factors. "
don't forget prop 13, rob. that should top the list in terms of CA. oldsters paying 0.1% property tax bases aren't too inclined to move.
The low TED spread is good news for me. One man's good news is another man's bad news. That's our system, in a generalized nutshell.
mal,
I'd say the assumptions you outline weren't nearly so universal, were present - so far as the idea of pressing ahead with broad, ideological agendas - in both parties, and were more prevalent in the early month of campaigning than they were subsequently.
Can I be alone in noting the steady change in talking points on all sides as we neared polling day? It seemed to me the condition of the economy, while not understood in any comprehensive way, took greater precedence in the last weeks of campaign and debate.
That aspirational streak has been very strong in the States at least since the Berlin wall came down. I think it's a durable, resilient part of the national psyche and, when it hasn't been trivialized, is one of America's strengths. The can-do attitude.
don't forget prop 13, rob. that should top the list in terms of CA. oldsters paying 0.1% property tax bases aren't too inclined to move.
bgates | 01.31.09 - 11:49 am | #
Time to engage Youth In Asia.
Air Freight down 22% while the Truckers dove by 11%. Even during 9/11 when many fleets were down, we only had a 13% drop in air freight. We are up the creek without a paddle kids!
The deflation is mostly in real estate assets, the rest are inflation infested.
is one of America's strengths. The can-do attitude.
burnside | 01.31.09 - 11:50 am | #
As in I can have my cake and eat it, too.
Protesters rally against World Economic Forum
Protesters rally against World Economic Forum
| Reuters
"It's the same people who came last year and said the world economic situation is fine, and now we're in a financial crisis. Now it's the taxpayer who has to solve the whole problem.
"It's people like you and me who have to pay for it with their tax money," he said.
In Geneva, where the WEF has its headquarters, police in riot gear fired tear gas and water canon to disperse a crowd that had gathered in a square near the train station, sending people running in all directions. Witnesses said there did not appear to be any violence by the protesters.
" the rest are inflation infested."
impt to seperate devaluation from inflation.
overcapacity is real, very real relative to the credit steroids the economy was one of year and years.
what happens after years and years of steroid abuse?
wow, that syntax was bad. sorry. hope the point was clear.
"Getting between a broker and his bonus is like getting between a schnauzer and his lunch bowl. He may not bite you, but you are going to smell his breath."
It's Theirs and They're Not Apologizing
No, Morocco. As in git 'er done.
what happens after years and years of steroid abuse?
bgates
your brain and other internal organs rot and you die
"The true extent of the jumbo bust is being obscured by several factors. "
don't forget prop 13, rob. that should top the list in terms of CA. oldsters paying 0.1% property tax bases aren't too inclined to move.
bgates | 01.31.09 - 11:49 am | #
I don't forget Prop 13. no one let's me forget Porop 13.
It is a mixed bag. Immobility stabilizes neighborhoods. On the upside creating artificial shortages. On the downside slower apparent price declines. It also serves to mitigate municipal boom/bust spending. This time it didn't work. Cities like Oxnard entered into complex leaseback arrangements that allowed them to boom spend and thus crush future flexibility in spending. That's why the coming municipal cuts are going to be so disproportionately in personnel. Ask Mayor Bloomberg.
The deflation is everywhere including, but not limited to real estate. Commodities are a bust, equities are a bust and bonds will do the cliff dive soon enough. The only industry doing a robust business is guns and ammo. All the industry thanks you Presidente' Obama and names you their man of the year. Never has one man done so much for an industry.
The more I hang out on CR, the more convinced I am that America is not one country, that it's a hegemony that overlays older and more durable sociopolitical entities, and that it's going to be harder and harder for a centralized government to maintain meaningful control over it, unless it plans to become repressive (which may or may not happen).
But even so, repression would be just a phase.
what happens after years and years of steroid abuse?
California.
So shouldn't CA repeal Prop 13 if the state is to receive federal dollars? Reverse mortgages will keep the oldsters in their homes, but will not preserve the estate for the greedy heirs.
Good News Economist writes:
4 Bears and 5 Bulls... examine the Dow 8000...
Nothing found for 2 -down-1-not-38
CNNMoney.com: 404 Page Not Found
http:// scottgrannis.blogspot.com...sappearing.html
Blogger: Page not found record.html
http://mast-economy.blogspot.com...ver- 700000.html
8,000 looks cheap to me.
GNE
Good News Economist | Homepage | 01.31.09 - 1:30 am | #
"Getting between a broker and his bonus is like getting between a schnauzer and his lunch bowl. He may not bite you, but you are going to smell his breath."
I read that article. All I can say is, some of those folks are going to be first up against the wall when the revolution comes... I can imagine the petty nobility of 1789 expressing much the same heartfelt attitudes.
According to the Independent Budget Office of New York City, the outlook is bleak. The agency expects the city to lose 243,000 jobs from the peak of early 2008.
This is tough news for the city. Despite the Wall Street patina, the city is full of people who are effectively the working poor...with incomes under 40k..and the officially impoverished are already straining the city's social safety nets.
The deflation is everywhere including, but not limited to real estate.
Food prices and consumables are up.
The estimate for the Gross Domestic Product for Q4-2008 was about $11,599B. That is only 0.965% smaller than in Q3 2008. Typically folks take that 0.965% and multiply by 4 to get an yearly number. But because so much Fed activity is occurring, these quarterly rates are likely to change significantly. It make no sense to multiple this number by 4. For example, back in the first quarter of 1982, the GDP "drop" reported was 6.4%... but the overall drop between the peak and valley's in that recession was 2.3%!
http://mast-economy.blogspot.com/
Dickylee at 605 am... well said!
Rob Dawg,
"It also serves to mitigate municipal boom/bust spending. This time it didn't work."
Sacremento's penchant for using general revenue to enhance municiple budgets didn't help either.
Nostrovia,
Oh, I do wish we'd stop fictionalizing French history generally and the Louis XVI era particularly.
Vain hope.
"Wake up & smell reality"
Is that you Larry Dumblow?
Burnside, it's not going to happen everywhere but you can be damn sure it's going to happen in places like India, China and even parts of the U.S. on a smaller scale.
It looks like we are more on a road that leads us to look like Saudi Arabia instead of revolutionary France.
What, you don't think anyone who wants "revolution" is going to be called a "terrorist"?
Bob D---An excellent summary of why mp, conjure and other long timers, should stay around.
We are now in the important part.
Unless they are really living in a bomb shelter or the equivalent, and don't wanna come out.
And default, stick around and talk to us.
--
"...bonds will do the cliff dive soon enough."
SPECTRE of Deflation,
Do you mean the US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan?
People not being able to resolve contradictions is a big problem in America.
The Bond Prince,
Jas
Yikes!! The Cliffs of Insanity.
8,000 looks cheap to me.
GNE
Good News Economis
buy buy buy
Fosters.com - Dover NH, Rochester NH, Portsmouth NH, Laconia NH, Sanford ME
News article.
Main points:
Man lost house to foreclosure (medical bills/wife died). No notice from bank before it was locked. Last year home appraised at $280. This year $180. Short sale was in progress, buyer offer $175, but house first had to go thru probate as wife was on mortgage. Bank was a TARP recipient, but no flexibility towards this owner.
Same ol' plot line. All the usual suspects.
6xxx seems more likely to be cheap to me.
We are now down more than 6000 points, right? 6000 points. And pe ratios still way to high.
"but will not preserve the estate for the greedy heirs."
actually, it will preserve it in value in terms of lower housing costs meaning less drain on the value of said estate. also, prop 13 status is transferrable to kids, even grandkids in the right situation.
Sacramento's penchant for using general revenue to enhance municipal budgets didn't help either.
Comrade Misean is Dope | Homepage | 01.31.09 - 12:03 pm | #
That's an artifact of both Prop 13 and several other power grabs that took away local control under several specious claims of equity and fairness. The idea was that by robbing from the rich and giving to the poor things like educational outcomes would approach parity. Well, it worked. Parity of the lowest common denominator. Ultimately it produced negative results. The worse performing municipal functions got the most money and the richer districts have balked at supporting improvemnts that never went to their area. This resulted in Statewide bonds thtat were dutifully approved by numerically superior recipients on the backs of the involuntary donors.
No, Morocco. As in git 'er done.
burnside | 01.31.09 - 11:55 am | #
I know, I was being sarcastic. However, whereas "git 'er done" can be highly beneficial when what's to be done is constructive, it can also be highly detrimental when what's to be done is destructive. In addition, "git 'er done" just to "git 'er done" is misguided, at best.
"when it hasn't been trivialized, is one of America's strengths. The can-do attitude."
Burnside,i agree. Which is why I find the tax problems of the nominees and the cavalier attitude of the bonus pool so discouraging...if most folks remain convinced that the top tier flouts the law and gets away with it, it will be impossible to engage the citizenry in slogging thru this depression with some hope of seeing daylight.
Whatever skills Rangel, Daschle and Geithner might have, their transgressions supersede their utility.
Pavel is right...it's a moral issue.
"People not being able to resolve contradictions is a big problem in America."
kind of like not being able to find non-fecal water in Rajasthan! At least born-and-bred dopes in this country have figured out that toilets and sinks use different pipes. Here's a contradiction - living off the infrastructure created by born-and-bred dopes, yet insisting that they can't tie their own shoes...
speaking of which - why would someone assume that treasuries aren't an asset with their own credibility issues? and why would anyone but a chronic gambler write a put on an asset whose value depends on the full faith and credit of born-and-bred dopes? methinks the treasury longs may soon prove to be the cockiest and dopiest of them all.
Jas, we both know why what you say is normally true. Bond prices typically go down, yield goes up because inflation is a concern. This is not the typical scenario, and we both know it. Bonds yields can also rise because your creditors believe that your ability to repay the debt is toast. They quit buying your Bills, notes and bonds because you are a bad credit risk. It happens to countrys as well companies and individuals.
what happens after years and years of steroid abuse?
bgates
You grow breasts and your peenie no work no more. Same thing that happens to corporate execs.
"methinks the treasury longs may soon prove to be the cockiest and dopiest of them all."
So true!
I wish I had cheated on my taxes. I could get a job in The Cabinet for more money than I make now.
An infrastructure that would not have been possible without taxation. An infrastructure cum rubble, I might add.
lawyerliz,
If we break down into below 6500... I don't know what will make it stop sliding into somewhere around 4000 or 2000?
Once they get that low people will stop listening to everyone saying "buy, buy, cheap" because these are the same schmucks who said that when it broke down into 10k, 9k, 8k.
I believe this has got to be the real definition of capitulation. No expectation of any real return on investment for 5+ years... so what's the point in staying with the investment?
Frankly I don't know why most people aren't in this boat already.
Republicans, ... , proposing government-backed 4 percent fixed-rate mortgages for "any credit-worthy borrower,
friardaddy | 01.31.09 - 10:13 am | #
Cui bono?
What if many "credit worthy" parties turn out not to be. Then the taxpayer takes the hit for the foreclosure.
I think the true purpose of this proposal is clear. It is to refinance moribund mortgages away from their precious present bag-holding bankers, and stick their imminent losses on the taxpayer. And they can generate fees for the transactions. Bravo.
US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan?
People not being able to resolve contradictions is a big problem in America.
The Bond Prince,
Jas Jain | Homepage | 01.31.09 - 12:05 pm | #
Sebastian? Is that you?
I'll take the other side of that trade Jas. High interest rates in a deflationary environment are not incompatible. Long rates shouldn't reflect near term conditions. That they are responding is yet another reason to suspect a bubble. Add to this the real danger. At 2% a tiny 1% increase in prevailing rates significantly impairs present value.
The level of the stock market is no longer an indication of anything except the insanity of our system. Nuclear bombs could drop on several U.S. cities tomorrow and the stock market would rally on Monday.
Bondguy: thank you for explanation about 4% mortgages.
But question-- would those scenarios improve if the new mortgages were 80/20, (or some other combination) piggybacks?-- where the Gov't would only subsidize the 20% instead of the whole mortgage?
I watched a C-span hearing recently where the some of the C'critters were on about the Gov't doing "silent second mortgages" on the difference between the home new current value versus its original principal.
It sorta sounded like the "mortgage version" of "good bank/bad bank"-- wherein the Gov't only takes on the amount of principal being written down.
Any thoughts on the viability of this, anyone?--
thanks
Why does haloscan just make comments disappear, only to have them reappear after being refreshed?
It's the halo effect, Liz.
The only industry doing a robust business is guns and ammo. All the industry thanks you Presidente' Obama and names you their man of the year. Never has one man done so much for an industry.
SPECTRE of Deflation | 01.31.09 - 11:57 am | #
While Obama may have done a lot for guns and ammo sales, anecdotal evidence it's not just increasing buying by the enthusiasts - evidence suggests that more people are deciding to be armed. This in fact is what happened to me in late 2007 after reading hear and other blogs (listed on my homepage) for a while. I went 52 years without feeling the need for a gun, until I read how badly fouled up the whole financial system was.
Retail Sales says it all. The CC Companies are putting the screws to consumers which will force a further slowing in everyday purchases including food and consumables.
During the Depression, pork chops were a nickel a pound, yet nobody could afford them. We have 6.84 Trillion in deposits in our financial institutions while they hold 365 Billion in cash on hand. As credit continues to be rationed, which it must, you can expect further runs on banks from individuals for needed funds to cover reduced credit availability.
--
"Bonds yields can also rise because your creditors believe that your ability to repay the debt is toast. They quit buying your Bills, notes and bonds because you are a bad credit risk. It happens to countrys as well companies and individuals."
SPECTRE of Deflation,
What are the alternatives for those with their money in US dollars today, especially, wealthy Americans?! Where would the savings, some $10Tr., go?
Inflation dopes have trashed me for years and years. They tried to scare me by predicting that I would be T-bombed! "Printing Money" inflation dopes (PMID) are the worst of born-and-bred American dopes. They are ignorant of how things work.
Jas
Do you mean the US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan?
Did Japan have the debt load per capita the the US has today?
I have never understood why going down to say, 6400 means it's going down much, much more. Or, going up means it's gonna continue to go up.
I sold most of my stuff (not all) in Oct/Nov of 2007. I like being long. I don't have the nerve to sell short.
Haven't closed mtges at 17 1/2% in the early/mid 80s, and seen CDs at 10% or even more, I can certainly agree that yields are gonna go up. In fact I think they MUST go up.
It might have been moreso were it not for certain recent and unpleasant personal events.
Nemo | Homepage | 01.31.09 - 10:11 am | #
My god, Nemo hung out with Morocco Bama offline.
"Why does haloscan just make comments disappear, only to have them reappear after being refreshed?"
I suspect it is a database backend getting overwhelmed and the syncing isn't up to snuff for real time displays.
Hastas. Doing Super Bowl in Vegas for a bit of fun and hopefully profit.
Nostrovia,
SPECTRE of Deflation writes:
Retail Sales says it all. The CC Companies are putting the screws to consumers which will force a further slowing in everyday purchases including food and consumables.
CC purchases were up 12% in the 4th quarter 08 vs. 4th quarter 07.
I believe this has got to be the real definition of capitulation. No expectation of any real return on investment for 5+ years... so what's the point in staying with the investment?
YLSP,
Where do you put your capital, though? We're not having much success reaching consensus on that little item here.
Fund managers are scrabbling to come up with terrible, but blameless strategies. And retail investors rock between stocks and bonds, hating both.Neither has the intestinal fortitude to go to cash and, in all probability, they shouldn't.
I don't know how you have a capitulation if there's no sane place to put capital.
Rob vs Jas
let the battle commence
Gary = American Born & Bred Dope #1
Rob Dawg writes:
"'US Treasuries? Clear contradiction. Deflation --> lower yield and higher prices on long-term US Treasuries. Do you remember Japan?
The Bond Prince,
Jas Jain | Homepage | 01.31.09 - 12:05 pm | #'
I'll take the other side of that trade Jas. High interest rates in a deflationary environment are not incompatible. Long rates shouldn't reflect near term conditions. "
On a pure expectations theory of interest rates, you're right. But the reality is that there is a supply and demand factor in interest rate determination: if no one is willing to borrow at a given rate, and there is someone who needs to invest, the rate will fall, regardless of what the future path of interest rates (bond prices) is. So the historical experience is that long term rates do "over react" to near term conditions.
But on the bond bearish side, Jas is ignoring default risk. Ask Icelandic bond holders about how government bonds perform in a depression. I'm not arguing that the U.S. is in the same boat as Iceland, but there's some very large risks floating around out there that you need to respect.
--
Long-term US Treasuries...
David Rosenberg, 01/30/09:
Treasuries Now Looking Attractive And to reiterate, we did publish a report back in mid-December saying that while we still liked Treasuries, the love affair was over and that better returns could be achieved with still high-quality securities such as munis and FDIC-insured paper. But after this massive yield backup in govies, it may well be time to re-load starting now; all the more so since a classic first-order Fibonacci retracement in the 10-year note has just been accomplished. Gold and oil are both bid in this, the wee hours of the morning - the latter is kissing the 50-day m.a.; the former has broken out to the upside and is about to enjoy the golden cross where the 50-day m .a. crosses above the 200-day m.a.
David Rosenberg is the best macro economist in America.
Jas
Time and time again investors fail to understands that the bailouts will only benefit a select few.
The cost of the bailouts will be borne by the majority. Bailouts are not a reason to celebrate. If it looks to good to be true, it is.
There is no solution to this eCONomic mess. In fact the proposeds solutions are just more problems.
The life boat can only save a few. You're dreaming if you think you will get a spot.
CR,
You might consider apologizing to Nemo for that one.
I don't know how you have a capitulation if there's no sane place to put capital.
Anonymous
The belief that there is all this money sitting on the sidelines waiting to get back in is bogus. What is it, $40 trillion of wealth has vanished? Savings rate going up. Capital has already been allotted. 1-2% CD's, MM's savings account all FDIC insured are a very sane place to go to from equities
Ummm.
I repeat in South Florida the only available mtges are fha, seller financing (which is rarer that before too), and hard equity. And oldster reverse mtges.
So I don't care if a 30 year mtg is 1%. It doesn't matter if you can't get it. People are telling me a few conventional mtges are being made.
I suppose so, but they are rare enough that nobody I know has seen any.
This is assuming that you have say, 750 credit and 20% equity at least at todays 40% off peak values.
I think its sorta interesting that we are "only" 40% off peak with basically no financing available.
As I've said before, another 5-15% to go, excluding the towers.
I don't know how you have a capitulation if there's no sane place to put capital.
Listen to rich. It's called GOLD. But, please don't buy any. I want to the price to drop, so I can buy some more.
There's is not much justification in owning the 30yr at 2.5% if your just there collecting the interest. Your bond already appreciated. If you stick around waiting for 2,1.5, or 1% yield's , your the dope.
You could hold it...just to prove your 'right', but it's not great trade advice.
zuzu's petals writes:
"I watched a C-span hearing recently where the some of the C'critters were on about the Gov't doing "silent second mortgages" on the difference between the home new current value versus its original principal."
I think they would have to replace the original amount with a new mortgage that reflects current market pricing (or the original debt with a lower interest rate); otherwise the borrower is stuffed.
If you assume that the government is on the hook for mortgage losses (and I realize that is a debatable assumption), the best loss mitigation strategy is to make debt servicing possible for the borrower.
And that's not just me being a warm and fuzzy guy; that's the reality facing any debt workout situation where there is no ability to dump the assets into a rising market.