This morning I made some improvements to the monkey's... um... training. Now he flings something my way before the page even finishes loading. If you know what I mean.
I am not being snarky, just trying to push the thinking. I, for one, prefer to look at Nonagricultural Part-time Workers as % of All Private Employment. Among other things, you get more history than with U6. MrM | 01.29.09 - 9:23 pm | #
Sorry for the late response but I had to go for dinner.
The spread is interesting to me because it compares the two sets, one narrow (U-3) and one broader (U-6) as an indicator that broader unemployment/underemployment is worsening or improving vs. the very narrow definition of the "official" U-3 version. IMO it is important to use the U-3 as a base in comparisons because it is the figure most quoted in the media.
Because unemployment data is used in a variety of applications, Shiskin introduced the various unemployment measurements for just such a purpose.
So from my perspective, the spread reflects nicely the Phil Gramm indicators ("mental recession... we have become a nation of whiners..."). If it is low then official unemployment figures likely reflect the mood of the nation. If it is high as it is now, the establishment is seriously underestimating the plight of the common folk.
Just remember, the "stimulus" from Q2 08 should guarantee that GDP will decline in both Q2 and Q3 09, the stimulus being the apex of the W shaped depression.
Latin American leaders berate U.S. for crisis
the United States and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades. "Now, I expect the IMF to go to Obama and tell him how to fix the economy," Lula said, referring to new U.S. President Barack Obama.
I can't see him going away entirely. He's got a pretty good blog of his own, and he's been around since the early days of HBB. I'll have to hit his site a little more regularly...
San Jose Merc...bailout could cut Cali defecit in half (to 'only' $21B) :
"...And in another key development regarding the state's yawning budget shortfall, news emerged from the nation's capital that a federal stimulus package passed by the House this week would slice the projected $40 billion deficit almost in half...If the $19 billion figure holds up, it would significantly reduce the size of California's problem. But that could be a mixed blessing because it might relieve pressure on lawmakers to broker a budget deal...The federal aid "could take the urgency out of pushing for some very needed reforms," said Assemblyman Roger Niello, R-Sacramento, the vice chairman of the
budget committee..."
I can't see him going away entirely. He's got a pretty good blog of his own, and he's been around since the early days of HBB. I'll have to hit his site a little more regularly... Comrade Bear (tj & the bear) | 01.30.09 - 12:23 am | #
The Medicaid part of the stimulus was a backdoor approach by Congress to inject cash directly in the states coffers, bypassing real infrastructural projects.
Basel Too writes: "The Medicaid part of the stimulus was a backdoor approach by Congress to inject cash directly in the states coffers, bypassing real infrastructural projects."
Cali did the same thing when it instituted the Lottery...the money was supposed to go to schools, and that it did...which meant that the state could then take 'other' money away from schools to spend on something else, now that the lottery was suppling funds. Or so the story goes.
Fine, I'll be sure to bring my crash helmet to the HBB weekend in LV - that'll be attractive.
I'm one of the doomiest people I know and I'm starting to think I was an optimist. Someday after I plot all these social unrest stress points, I'll be famous... and most likely dead or broke >; )
...would slice the projected [California] $40 billion deficit almost in half...If the $19 billion figure holds up,
Unfortunately the number is up to $45.3 billion and climbing. It is tedious to keep hearing it but I have to repeat; there is not enough money to balance California's budget(s). Even in theory if enough money could be invented/borrowed/taxed whatever the consequences of those efforts themselves will precipitate their own round of new money troubles both expenses and revenues.
OT: Drought in California will mean much higher food prices.The weather has f@cked all the tree crops and the vineyards.Yields on pinot and chardonnay are expected to be 1/3 of last year.
<Latin American leaders berate U.S. for crisis the United States and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades>.
Shouldnt antagonize the retarded manchild w/ the big boomstick
NY Times
Bloomberg Will Seek Increase in Sales Taxes
"A month after imposing a property tax increase, Mayor Michael R. Bloomberg is expected to call for a $900 million increase in the citys sales tax on Friday, as the city confronts a loss of revenue due to the economic downturn.
New York City already has one of the highest sales taxes in the nation, at 8.375 percent...the city could generate almost $900 million by increasing the sales tax to 8.75 percent."
The Keynsian response is for the government to cut taxes and increase spending...however, the states and municipalities don't have the luxury of a reserve currency. Therefore the option on the table is to have the Feds borrow or print, and hand the money to the more local governments.
It's a pity that so many folks are leaving the comment zone nowadays, because although the original question has now been settled (yes virginia, there is a housing-led deflationary decession in progress), there are a host of new questions that will be coming up soon. The answers to these are (to me anyway) at least as interesting as the ones we've come to so far, and I think the questions are far more challenging.
Basically, we've gone from the phase where we could see the train coming off the tracks, and now we've got to figure out the much more complicated question of what the derailment will will look like. Then there's the challenge of deciding what we can/should do about it ourselves. And finally there's the question of identifying which pieces of the train deserve our investment support as we put the economy back on the tracks.
The pat answer right now of "stay in cash, hang onto your jobs, and watch out for signs of the eventual return of inflation" will tide us over for the time being -- which is good because the questions about the longer term are not easily answered -- but at some point the pat answer will become the wrong answer (either because the rules surrounding cash have changed, the job has been lost, or the macro inflation has indeed started to return). Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations...
My backyard looks like a groundhog convention w/ all the buried Krugerrands, and the basement bunker is lardered w/ pallets of single malt scotch. Work w/ what ya know.
Watch the inventory numbers in the report. The semis I know have been in huge don't-build-just-ship-from inventory mode since about mid 4th quarter. Many who are heavily consumer focused stopped starting new product fabrication and didn't plan to initiate new starts until near the end of this quarter.
Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations... Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
I've been as pessimistic as they come(sparring with Banker over Citi's viability) and I've been beat to the downside fairly consistenly. I wrote about BAC and JPM only going under unless people went to the mattresses, BAC is now testing that theorum. I still doubt they will but I didn't see them going on this consumpton spree.
Bastards. I'm beginning to think that this one is already baked in and no one can stop it. We all thought we were so god damned smart.
mp | 01.05.09 - 8:05 pm | #
I have come to the conclusion that there is a new reality. Buiter sees it clearly and I am coming to see it.
mp | 01.05.09 - 8:22 pm | #
Speaking of preparing: I jumped from sociological research to ag research and I'm hoping that move will keep me employed durning the worst of it. That and eight years of seniority.
If I can't help myself, I can't help others and I know many people who already need it.
BAC is now testing that theorum Comrade Alexei Mikhailovich | 01.30.09 - 12:41 am | #
I'm still thinking that BAC has been doing the Fed's & Treasury's wishes going back the the CFC purchase. Do these things for us and we'll back you all the way sorta thing.
the thing that "sticks out" from reading Buiter's piece is that, and as a practical matter, virtually every move ends in "checkmate." Bunker Dweller | Homepage | 01.30.09 - 12:43 am | #
I suddenly have a craving for jelly beans, for some reason. Nemo | Homepage | 01.30.09 - 12:16 am | #
I worked in the early ethanol biz back then - I thought that was completely behind me... had a guy contact me about a month ago asking if I wanted to run an ethanol plant again. I should have told him 'you can never go back'.
I'm still thinking that BAC has been doing the Fed's & Treasury's wishes going back the the CFC purchase. Comrade Bear (tj & the bear) | 01.30.09 - 12:45 am | #
According to my friend who's upper management @ BAC that's pretty much the prid pro quo for them and JPM getting early approval for their Check 21 systems. HUUUGE case of heartburn in digesting those shit sandwiches.
All options have to be on the table for Obama, including shutting down the Fed, which has utterly failed in its mission. Might be a lot of political mileage in taking out the bankstas.
Just talking over Mad Max scenarios with my partner, and it came up that there are more than one Mad Max movies. In the first one, things were normal enough that max & his family were taking a road trip to visit one of them's mother. There were violent episodes, but over all peopel were attempting to live life as usual.
Maybe that's closer to where we are, instead of the 3rd movie with Tina Turner and a midget.....
The nation's top economic officials are discussing a new way to stabilize the financial system by buying a portion of banks' bad assets and offering guarantees against future losses on some of the remainder, in an effort to help banks while trying to mitigate the cost to taxpayers....
Under the concept being discussed, the government "bad bank," possibly run by the FDIC, would buy only assets banks have already marked down heavily. This could avoid crushing the value of other assets held by banks. It could also potentially sidestep the pricing dilemma because banks have already recognized the low value of the assets being purchased....
The remaining troubled assets -- likely a sizable amount -- would be covered by a type of insurance against future losses. This would apply to mortgages, mortgage-backed securities and other loans that banks are holding until they mature. Banks have probably given these assets an overly optimistic value because they plan to hold them....
In addition, the Treasury is also likely to make more capital injections into banks.
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality.
He's not mad, he just had the last vestiges of optimism ripped away. Now that the path is clear -- all downhill from here -- he's doing what has to be done.
And I'm wondering, with what do we replace the Federal Reserve bank in several years? homedad43 | Homepage | 01.30.09 - 12:40 am | #
I don't know but it won't be 'metal' - that I can assure you. That is good news - it means you can personally opt to use metal as your store of value or not.
My guess is we'll still have a central bank but it will be much more 'centralized' and less private... the dollar will no longer be THE worlds reserve currency and that for most countries metal will be a much bigger part of their basket of currencies making up their reserves... in that sense metal will be a 'floating standard' not a true metal standard.
The dollar will never play the role it did in BW or BWII.
dweller, it has always been the thought of this board that a ponzi scheme can end in only one way. mp, along with a lot of other posters have been preaching it for a while.
It is time for us to pore over mp's old comments, and try to figure out just what he saw that drove him mad. Bunker Dweller | Homepage | 01.30.09 - 12:50 am | #
He isn't mad - he's moved on - at least for now. The forum became more 'cost' than 'benefit' to him. He wasn't the first and won't be the last.
I don't know but it won't be 'metal' - that I can assure you. dryfly | 01.30.09 - 12:54 am | #
Currencies will still be represented in paper and digital form, but I would expect they'll have to have some form of "backing". Pure fiat won't survive this downturn.
None of the gurus were gurus when they started dryfly | 01.30.09 - 12:36 am |
there are a host of new questions that will be coming up soon. The answers to these are (to me anyway) at least as interesting as the ones we've come to so far, and I think the questions are far more challenging. Wisdom Speaker | \t \t \tHomepage | \t01.30.09 - 12:37 am | #
Replying jointly to your comments, I think the easy part is over. The real gurus will be those who can answer those 'far more challenging' questions in the future.
I'm not in that class myself. It was fairly easy for anyone who looked to see that the road we were on was unsustainable. As the unwind began two years ago, it was even easier to say 'this will not end well.'
Exactly how we are going to get out of this mess is not at all clear to me.
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality. 10,000 Mosquitos | 01.30.09 - 12:53 am | #
By centralizing, I assume that you mean bringing it inhouse to Treasury perhaps.
My concern in that case is to have some kind of "firewall" between the bond issuance and money issuance segments (if that makes sense) so that we don't have any more of this damned financial masturbation.
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement. Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power. Innovation is happening and recovery will also happen in time
(Embarrassingly, I must have watched half a dozen episodes of House before I realized he was that Hugh Laurie.) Nemo | Homepage | 01.30.09 - 12:57 am | #
I love Black Adder too - and told my wife & daughter who are HARD CORE House fans that he is a better comic actor than a drmatic one - they thought I was nutz. Might have to get some Adder reruns...
Also fits my 'shit never changes' meme... what a great show.
One of the places where folks are starting to be able to see a little further down the tracks now is the fact that a large portion of the prior prosperity, and the whole mindset that went with it, was in fact a bubble-induced mirage. There's room to arbitrage this because most of the nation/world hasn't figured it out yet.
I'm talking about things like NYC and California thinking they can close a budget gap by raising taxes under an assumption of constant consumer spending. Last time I checked, the heart of the New York economy (e.g. XLF) just lost 75% of its market value. Property values are now following suit. Why on earth would retail sales stay at bubble levels? Not gonna happen. The same thing is true in California, especially now that the Nasdaq and venture capital pipelines have fallen off a cliff.
They can raise the tax rate all they like and it will just do what it usually does: encourage folks to leave for cheaper stomping grounds. The only way state and local governments can get through this is by cutting expenses to stay in-line with revenues, or by getting federal bailouts. Both are basically impossible short of a California-style crisis situation. Expenses can only be cut so far before the public unions have to be force-fed salary and benefit reductions, and until everyone "gets it", they'll fight those tooth and claw. Similarly, the federal bailout money is already oversubscribed and after the usual huge fraction gets porked away by the special interests, there won't be enough to save everyone.
So my immediate prediction is that the first round of state/local budget adjustments will prove grossly inadequate. We can immediately predict that as part of the train wreck there will be an ongoing series of these crises as more of the bubble economy unravels.
Since we're skeptical of the $4T-plus in federal bailouts and stimulus spending being swallowed whole by the bond markets, it seems like a lot of states and cities will have to sort this out themselves. If things unwind gracefully one might see pensions being closed to new members, and "zero COLA" flat salaries for several years. But nothing has been graceful so far so I expect much worse.
Therefore, government employees who expect to keep their jobs should still anticipate salary and benefit reductions over the next 1-3 years, and trim their lifestyles accordingly.
Meanwhile, muni bond investors can expect continued volatility as governments lurch from one fiscal crisis to the next. This could create a series of buying opportunities for those willing to take the risk (and willing to accept that by funding the muni debts, one is implicitly endorsing the spending habits of said muni governments).
I love Black Adder too - and told my wife & daughter who are HARD CORE House fans that he is a better comic actor than a drmatic one - they thought I was nutz. Might have to get some Adder reruns... dryfly | 01.30.09 - 1:03 am | #
Currencies will still be represented in paper and digital form, but I would expect they'll have to have some form of "backing". Pure fiat won't survive this downturn. Comrade Bear (tj & the bear) | 01.30.09 - 1:00 am | #
Some won't - like maybe ours - but I fully expect 'fiat' as a principle will come out even stronger from this episode... the key lesson will be if you back your currency with 'full faith' then by God you better protect that 'faith'. We haven't done that - we've squandered the world's trust and we will pay.
10,000 Mosquitos writes:
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement. Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power. Innovation is happening and recovery will also happen in time
~~~~~~~~~~~~~~~~~~~~
and, we will start using the metric system "tomorrow."
thanks dryfly.I'm from your neck of the woods and moved southwest. No rain here but I haven't swatted one of those damn bugs in years. But that also means no water except for the big blue thing next door
Does that make sense? homedad43 | Homepage | 01.30.09 - 1:01 am | #
Yes. But it will take a while getting there [to that realization]. My guess is it will happen when the world no longer lets us borrow in our own money. We can't be too far from that point now - that 's when you get your dollar & treasury crisis.
Meanwhile, muni bond investors can expect continued volatility as governments lurch from one fiscal crisis to the next. This could create a series of buying opportunities for those willing to take the risk (and willing to accept that by funding the muni debts, one is implicitly endorsing the spending habits of said muni governments).
Wisdom Speaker
There's lot of places but I like looking at Stone & Youngberg - Inventory
as a quick snapshot. Read it regularly and you'll see the metatrends.
And finally there's the question of identifying which pieces of the train deserve our investment support as we put the economy back on the tracks. Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
Is that the nice way of saying, "how do we make money off of the misrey of others?"
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement. 10,000 Mosquitos | 01.30.09 - 1:01 am | #
I think I tried to make an offer on that house - over between University & Como - my daughter is going to PT school there & I am looking at FCed fixer uppers to put her & her soon to be husband in. She asked what the big dirt floor room was for - I told her 'to store food - it is cool, dry and will keep potatoes almost all winter long'. She looked at me with that 'oh no - dads going to go native again' look.
Speaking of civil service and GDP, this went out after hours today.
'January 29, 2009
Dear Research Colleagues:
The attachment is a brief comparison of parts of the economic stimulus packages proposed by the House, in one version, and the Senate, in the other.
Whatever finally emerges will surely be a large pulse of new research funding, probably with a rapid turnaround from "calls" to "submissions."
I will forward more information as it becomes available. In the meantime, I suggest initial planning for proposals by those whose programs are in the research areas indicated, and the formation of teams where appropriate.
Suggestions for how to optimize campus efforts to increase our competitiveness in the proposed areas of research growth are welcome.
Sincerely, (research overseer blah blah blah)'
I'm sure Rob will find it interesting. I know the folks at PARC and other organizations are way ahead of us on this.
One of the places where folks are starting to be able to see a little further down the tracks now is the fact that a large portion of the prior prosperity, and the whole mindset that went with it, was in fact a bubble-induced mirage. There's room to arbitrage this because most of the nation/world hasn't figured it out yet. Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
I was talking to a guy about that exact thing tonight - at kids sporting event. Bubble induced mirage describes it perfectly.
Since we're skeptical of the $4T-plus in federal bailouts and stimulus spending being swallowed whole by the bond markets, it seems like a lot of states and cities will have to sort this out themselves. If things unwind gracefully one might see pensions being closed to new members, and "zero COLA" flat salaries for several years. But nothing has been graceful so far so I expect much worse. Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
Or COLA less than inflation - then let inflation tear - I'd bet dollars against donuts we see that and soon.
The best thing about Bill Gross, once you get past the inherent corruption of his position, is that he doesn't take himself too seriously. He even keeps publishing that column by the guy who talks to rabbits.
Rob D, while things are slow, sorry I confused you with questions about movie titles a while back. I was thinking of Getstucco. I checked recently and realized you weren't him.
One thing I just can't understand about MN is the people on Hiawatha complaining about the light rail line. In Chicago the house oftentimes is more valuable the closer you are to one. Univesity and como might be really valuable if the light rail goes done into Saint paul along university corridor
sewage treatment facility in central Japan has recorded a higher gold yield from sludge than can be found at some of the world's best mines. An official in Nagano prefecture, northeast of Tokyo, said the high percentage of gold found at the Suwa facility was probably due to the large number of precision equipment manufacturers in the vicinity that use the yellow metal. The facility recently recorded finding 1,890 grammes of gold per tonne of sludge incinerated.
That is a far higher gold content than Japan's Hishikari Mine, one of the world's top gold mines, owned by Sumitomo Metal Mining Co Ltd, which contains 20-40 grammes of the precious metal per tonne of ore. Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Actually, when the money's gone, the only ones who really do get ahead will be the ones with talent and a modicum of sense to know how to exploit that talent.
Dryfly:
my daughter gives me that same look. When did I become the crazy old guy?
thanks dryfly.I'm from your neck of the woods and moved southwest. No rain here but I haven't swatted one of those damn bugs in years. But that also means no water except for the big blue thing next door 10,000 Mosquitos | 01.30.09 - 1:09 am | #
I live in the Mississippi River valley SE of the Twin Cities - the back waters are so full of them in summer they'll drain your blood dry. I'm safe though today [couple feet of ice between me and their devil spawn larvae]. Thank God for 20 below nights.
My wife works in public health, and yesterday I mentioned here that there are rumblings thoughout her world that there will be stimulus money coming from the CDC, so get ready, blah blah blah.
I told her last night that we were getting our pony, but she didn't know what the hell I was talking about.
@dryfly "exactly how we're going to get out of this mess..." and
@Homedad43:
1. How do we again re-build a level of trust between the governing institutions and the people (think FRB and Congress);
How do we recreate a relatively efficient/effective banking sector that meets the needs of the real economy;
Will there be a return to anti-trust and at what level will banks exist before deemed too big and are broken up?
Glad to see you both!
I've heard that trust is rebuilt through honest statements that can be verified as true by both sides. The people will rightly mistrust everything going forward. But this is good; much of our problem is that during the bubble, things were good for everyone so too few were inclined to ask the tough questions, and thus there was too much trust.
I'm thinking of a decentralized, organic sort of process. People will eventually realize that when they choose a bank or investment firm, they're voting with their money to support whatever that bank does. People are now voting with their money to shut down hedge funds, they've forced the government to shut down insolvent banks like IndyMac, Countrywide and Wachovia, and I suspect the same people power will also bring down Citi and Bank of America before this is all done. The herd behavior of the savers/investors in this country will have a huge effect.
The same effect will flow through into politics. Those who cashed out of the bubble mentality early (and especially those who profited) will have much more political influence.
Finally, as with stock investments, one would tend to expect to see the rebound start first in the areas which were hit less badly by the collapse. The epicenters of the collapse (CA, FL, NY) will have a much longer road to travel.
I just looked at the NIH and related monies and it's not that big. RO1s (those hefty 5 yr projects) often hit 5m each. 4B isn't 'stimulus' but i suppose it's big if you compare it to zirp.
ps. the cut UCOP takes off the top is obscene. It's the depts and colleges who bust butt to get things done. Bob I'm sure could share some stories too.
Actually, though, you hit on what I think is a key issue with the 'how do we rebuild trust' in the system questions earlier in the thread. After looking at the youtube video from France and realizing how remarkably peaceful things have been in the States, I'm guessing the polls are right when they say an overwhelming number of people 'trust' Obama to do the right thing.
Certainly the banker bailout has been at least as dramatic in the U.S. as it has been in France. Yet Americans seem disgusted, but not rabble-rousing, in their response. So some level of trust exists.
The more important reaction will be when the sheen wears off Obama's newness and different-from- Bush-ness. We all know he's not a magician. Can he hold it together is the question?
It's truly amazing how this cycle continues to gain momentum on the down side. As many know I work in the retail industry (actually WS to RTL). Death of small retail will be at hand by late summer. Many large will fall as well.
I think back to when I was a kid... we had to drive 20 miles (I know... boo hoo for me) to shop for school clothes vs. a shop on every corner. Considering we lived in one of the top 10 largest US cities this is significant. I think my children will soon have the same experience and its probably not a bad thing... or they will just shop via the web.
One thing I just can't understand about MN is the people on Hiawatha complaining about the light rail line. In Chicago the house oftentimes is more valuable the closer you are to one. Univesity and como might be really valuable if the light rail goes done into Saint paul along university corridor 10,000 Mosquitos | 01.30.09 - 1:18 am | #
It screwed up the lights along Hiawatha - used to be able to time the thing and never stop - now every time a train goes through they 'lock down' the intersection. makes what was a nice commute into start-n-stop bumper-to-bumper gridlock. And remember - the light rail doesn't even come close to going everywhere so many can't use it but are held up because of how it was laid out. Should have been raise so cars can go underneath.
The University/Midway corridor faces similar challenges.
On of the best weekends i ever had was sitting around in a teepee, in the snow (bear skin blankets ftw!) reading Saki stories aloud, drinking something odd and alcoholic and playing a bastard version of pharo. I had a very strange childhood.
"My key idea for relationships is that we need to honor the complexity and vastness of who the other person really is," he said. "Thats our biggest mistake. We expect others to be who we want them to be, not who they are. It takes a spiritual perspective to stand back and be engaged in what is beyond you. Its the opposite of watching out for your self." Barque: Thomas Moore
The Chancellor of the Exchequer cancelled his trip to the summit of politicians and executives at the last minute, despite the meeting being attended by a pantheon of leaders from around the world, including Russia and China.
He is understood to have called off the trip, planned for tonight, after it transpired that a number of the people he had planned to meet also cancelled.
However, the move will spark speculation that the Chancellor is battling a further bout of instability in the financial markets and the economy.
No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment.
In regards to recovery I recall an interview on NPR with the guys who started Ben and Jerrys ice cream. They mentioned that the real cost differential between producing a t shirt in the US verses offshore is only about forty cents. Over time.. production of goods may return here after US defaults through inflation and loss of reserve currency status. China the EU and other countries seem to do better wihout having the pesky reserve current status hampering their ability to be cost efffective
Therefore, government employees who expect to keep their jobs should still anticipate salary and benefit reductions over the next 1-3 years, and trim their lifestyles accordingly. Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
I don't know (or recall if I knew) where you are located, but I am keeping an eye on the California public employee furlough plan being pushed by the Governor and resisted by the Comptroller. The issue at the moment seems to be two days off a month at no pay, i.e., a 10% reduction in salary.
Virtually all independent contractors have already been terminated. That was the easy first step. Dealing with the entrenched union benefits (which are absurdly generous) will be the difficult third round.
We can see what private industry is doing in the layoff anouncements. Government will be the real test.
The big question for me had been where will the flash point be? With something as dilute as big government and big banks, where do you go to express your ire along with your fellow man?
Folks, it is just about over, forget about buying gold, buy guns, you are going to need them.
Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war.
Check out the action in the long bond today. Someone was doing a lot of selling. Wonder who?
That was a shot across the bow. If this protectionist package goes through, expect interest rates to explode, and the downward spiral to accelerate like nothing you have seen before.
Looking ahead to Friday's report, White House press secretary Robert Gibbs said Thursday: "We're likely to get a number for economic growth for the fourth quarter that's fairly staggering."
The report tallies gross domestic product, the value of all goods and services produced within the United States. It is considered the broadest barometer of the country's economic health.
Thanks to Rob Dawg for that muni link. I'm also tracking some of the Vanguard muni funds as a metric. (VCAIX, VCITX - these also require less "decoding" of the detailed numbers.)
@Homedad43 and "return of meritocracy" - I hope to see that happen as well. There's a good chance that as a result of the train wreck, economic survival will again depend more on competence than on connections. But Broward is probably right that this will take longer than one expects. I'd guess it requires a generational power shift.
@blackhalo and picking up the pieces afterwards: "Is that the nice way of saying, "how do we make money off of the misrey of others?""
That would be the booze/tobacco suppliers down in the wreckage. I was thinking more along the lines of "doing well by doing good" and the old WASP attitude (probably never followed much in reality) of business and investment as a form of public service. There may well be some gaping holes in the economic structure a few years from now, which creates opportunities to rebuild the economy by recreating the right sorts of businesses.
Think about what happens in a town that loses all its businesses of a certain type, because they were all over-indebted. Suddenly there's a great opportunity (as things recover) to run that business again. You don't need to profit from other's misery, you can profit by supplying something people genuinely need (but had to drive to the next town to get for a few years).
Now multiply by thousands of towns and cities and lines of business and you get what I'm thinking. The rebuilding of the economy will be a source of tremendous opportunity in a few years.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
I'm an expat too, and the big thing on the BBC was Wen and Putin ripping apart the US/UK banking system. On the same day, Putin moved missiles in Kaliningrad at a time when all of the the Baltic states are rioting. Did anyone notice that one?
In regards to recovery I recall an interview on NPR with the guys who started Ben and Jerrys ice cream. They mentioned that the real cost differential between producing a t shirt in the US verses offshore is only about forty cents. Over time.. production of goods may return here after US defaults through inflation and loss of reserve currency status. China the EU and other countries seem to do better wihout having the pesky reserve current status hampering their ability to be cost efffective 10,000 Mosquitos | 01.30.09 - 1:36 am | #
A buddy of mine - an old time industrialist who has been through Rust Belt I, Stagflation, Rust Belt II, Farm Crisis, Dotbomb and now this mess says: Recessions end one order at a time.
Meaning get an order - buy raw material & hire workers... they go out and spend, generating more orders resulting in more hires - etc.
Unfortunately we are still in reverse - losing & cutting order & laying off and cutting spending.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
I'm an expat too, and the big thing on the BBC was Wen and Putin ripping apart the US/UK banking system. On the same day, Putin moved missiles in Kaliningrad at a time when all of the the Baltic states are rioting. Did anyone notice that one? Banker Mercy Killings | 01.30.09 - 1:42 am | #
They can stimulate our economy anytime they want - I'd let them.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
Major trade wars tend to lead to major real wars. I'm trying to figure out where the next one will be, so I don't live there....
My vote is India making a big crater where Pakistan used to be.
Wisdom Speaker writes:
"I'm also tracking some of the Vanguard muni funds as a metric. (VCAIX, ..."
One of only two green numbers in my holdings today. That and gold miners.
I would be concerned about getting enough diversification buying munis directly, so I am happy to pay Vanguard's fee to spread out the risk a little bit.
No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment. NOT Irving Fisher says... | 01.30.09 - 1:34 am | #
I take the other side of that bet. If these rough economic time persist then it is highly unlikely that a Republican will win unless the party completely changes its colors. It is IMO a matter of risk avoidance and established Republican policies imply risk to a population that will have high unemployment.
Note that in times of hardship left parties or extreme right parties with socialist overtones usually win. It is no surprise that Roosevelt and Hitler were successful in the depression.
With so many guru's departing, i guess we are now left with daily bail...
1929er | 01.30.09 - 12:12 am |
And DJ (not a guru) and RD (another no). But they think they are and that's very irritating, I come here to read less of them, not more. If I wanted to read their pompous thoughts I'd visit their poorly updated blogs, which I avoid like the plague. Just go away or fix your smug elitist tone, please?
I have no idea what RD does for a living but DJ has made it clear that she is a State of California worker (via the UC system) and it absolutely chaps my ass that she sits on the internet posting her cheap shots on the taxpayer's dime...although she does, infrequently, use her private time to post too.
Gwyn Carnegie, get over yourself sister! Robert Cote, ditto.
One of my favorite micro lending projects is here in the US. I loaned an enterprising young woman in the rust belt 150 to get started. She combs thrift stores for old sweaters and blankets and reused them to knit the trendiest scarves and childrens clothing. She started on etsy and has a loyal following.
F the gap. She'd doing great. She paid back the loan in 4 weeks.
"No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment.
NOT Irving Fisher says... | 01.30.09 - 1:34 am | #
Not sure about that. Everyone said Reagan was dead until late 1983. It's easy to forget.
My vote is India making a big crater where Pakistan used to be. Banker Mercy Killings | 01.30.09 - 1:48 am | #
Better hope not. I believe that the U.S. military recently revised its estimate of what it takes to make a nuclear winter. Nuking a couple of dozen areas might be enough; earlier estimates hadn't taken into account the fuel load in metro areas.
A nuclear winter will ruin your whole day -- and kill a large proportion of the world population. And before you say, "good," think about what society would be like -- between individuals, between cities, between nations.
"A nuclear winter will ruin your whole day -- and kill a large proportion of the world population. And before you say, "good," think about what society would be like -- between individuals, between cities, between nations."
You were projecting when I said "good". Didn't say that. However, I work with a real sharp financial analyst here in Dubai from Mumbai. Right after the terrorist attacks he went on a 45 minute rant on why there weren't mushroom clouds permanently over Karachi, Islamabad. That's the mentality right now.
RD (another no). But they think they are and that's very irritating, I come here to read less of them, not more. If I wanted to read their pompous thoughts I'd visit their poorly updated blogs, which I avoid like the plague. Just go away or fix your smug elitist tone, please? Anonymous | 01.30.09 - 1:50 am | #
In the spirit trying to fix my elitist tone I'll shall talk down and plain. GFY anon.
The "trade war" evolving into a "resource war" is a real concern of mine. This country is way too dependent on foreign energy and way too well armed (and spoiled and arrogant) to go without.
You were projecting when I said "good". Didn't say that. Banker Mercy Killings | 01.30.09 - 1:55 am | #
Sorry. When I said "you," I was referring to the usual knee-jerk reaction of some of the less civilized posters around here. Wasn't meaning to point a finger at you. It's late.
Who said it had to be a Republican??? NOT Irving Fisher says... | 01.30.09 - 1:52 am | #
It is very difficult to win if you are not in one of the established parties. Ross Perot was an aberration but had a realistic chance.
Let's be clear, it takes a huge amount of money to win and therefore only an extremely wealthy person would have a shot. I don't think that deep recessions/depressions are times when people vote for rich folk... especially after this disaster.
BTW, I don't think Ron Paul will have a prayer, ever, to get elected.
Deflationary Jane. Regarding the specifics of pricing I acknowledge it's not my area of expertise. I'm simply wondering if the price differentials are really that large, and if all of the time and cost difficulties with global supply chain management are truly saving companies the money they claim to be saving ?
Heard on the radio tonight that the furlough plan is a go. Comrade Bear (tj & the bear) | 01.30.09 - 1:50 am | #
If it does go, we may get to see whether there's an immediate epidemic of blue flu.
Death of small retail will be at hand by late summer. Many large will fall as well. NOT Irving Fisher says... | \t \t \t \t01.30.09 - 1:31 am | #
Some anecdotes from my small town this week: Hallmark Store had not sold a card in the past two days. Payless Shoes in the mall has only 4 employees to cover all shifts. Local chain restaurant announced it was closing and had no paychecks. Cops were called to stop the ex-employees from tearing the place apart.
Prof. Buiter suggests from 2-5 years before our investors (buyers of our debt) realize we've "got no game" and cash our chips in. Particular actions if taken with the help of magic fairy dust - with no variation whatsoever still won't be the winning combo. THAT'S what made mp realize it's "game/set/match". It's too late for ANYTHING to work, and he realizes it's time to get himself and family physically & mentally prepared.
This is only the beginning. I am dealing with many desperately attempting to stay alive. They have terrible cash flow and a face mountain of invoices for holiday product that did not sell. It is only a matter of time before they close shop.
I would say that at least 25% of our small retailer base will be out of business in Q1. I don't even want to guess how many wont make it to see the end of Q3.
The only positive is the larger, shall I say traditional retailers, seem to be picking up enough market share to keep the doors open.
If times get bad enough Obama could be vulnerable to a primary challenge from the left. Though right now, I don't see anybody with enough stature in the democratic party to pull it off. It was a smart move on his part to make Hillary part of the cabinet.
This is going to be an interesting presidency.
As for the economy IMHO one has to hedge against both deflation i.e. have some cash on hand and inflation i.e. stock up on the essentials.
Who our President is in four years is unimportant. For the next two to five years crisis after crisis will raise its ugly head. The BIG crisis will be when no one buys our debt. That could be as early as next year. We become 3rd world within a month.
It is only a matter of time before they close shop. NOT Irving Fisher says... | 01.30.09 - 2:18 am | #
Especially when no rent checks are going out. Between the storefronts that will be vacant soon and the ones trying to hold on against the void, it looks like many of the small folk will be gone before we even get to Q3.
But the damage goes beyond Wall Street, he said. The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional center manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.
The Chinese premier, Wen Jiabao, left little doubt that Beijing blamed the United States for the economic breakdown. Inappropriate macroeconomic policies, an unsustainable model of development characterized by prolonged low savings and high consumption, the blind pursuit of profit and the failure of financial supervision all contributed, he said.
Some anecdotes from my small town this week: Hallmark Store had not sold a card in the past two days.... sportsfan | 01.30.09 - 2:09 am | #
I love anecdotals. What I'm seeing here is a large number of long-time small local retailers suddenly for sale. Older owners, within striking distance of retirement age: they see hard years ahead and have no taste for them. It may be that some of them are already in the red, but a lot of them, I think, just aren't ready to fight.
"Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power."
People did imagine similar wondrous things, published their imaginings, and were widely read. I've observed that virtually every sentence that begins with "Nobody could have imagined..." is prima facie false. If books aren't your thing, try to find a good print of 'The Shape of Things to Come'.
Hillary's done. A bitch personally from what I've been told, and an utter opportunist with no ideals. I lost all respect for her a long time ago over flag-burning.
CNNMoney.com: 404 Page Not Found
NYC: 23,000 city jobs in danger of being cut
More spending cuts loom on the horizon for New York City, which could see a $4 billion deficit in the new budget that starts July 1.
Page not found
Failed Bank sues Regulators
$432 million asset National Bank of Commerce in Berkeley, Ill., failed two weeks ago. It sued the Treasury Department, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. after its application for the program was denied in November.
I think NBC has a great case - except that it is against the government. Even if they do win it would be years and years and years before it was settled .
In the spirit trying to fix my elitist tone I'll shall talk down and plain. GFY anon.
Rob Dawg | Homepage | 01.30.09 - 1:56 am
Talk down? Seriously? OK, Mr. Cote, talk down to the hoi polloi, we'll feel soooo much better.
There really are ways to discuss this without your need to condescend. Take notes DJ.
You have never read a post by CR or Tanta that mirrors your tone and they are both more accomplished than you.
There is a very big reason why CR's blog is far more read than yours and your attitude is most of the reason. You too, DJ.
Self satisfied pukes, go back to your unread blogs. Your whining over CR's lack of relevance dooms you. I can provide you with relevent quotes should you desire them.
Some perspective:
Time it took for some large/complex civilizations to collapse:
Western Roman Empire \t 310 years
Medieval Mesopotamia \t 550 years
Lowland Classic Maya \t 150 years
I peeked at NYC in the 70's but didn't live there at the time. Were the rents as bad then as they were in the 90's? (No need to discuss today's rents...)
Speak for yourself, Shark. I missed Conjure's Global Depression Clock striking 12:00 because I was working - propping up the economy singlehanded! Sorry to let you all down. It's my fault. Mea culpa. I can haz TARP now, pleez?
the anon who ragged on DJ and RD sucks,still laboring under the diminishing concept that the Internet provides high leverage to minority postions as theorized in the. Great Reckoning.
Current global system is a rube Goldberg structure destined to fail. The US supported complex structure through honesty and contract. Turning through US into Mexico benefits noboby but a few oligarches.
None of these guys understand complexity, building hubristic claptrap of high risk and low benefit. I see it a lot in software with the younger crowd, great nodding of heads towards the utterance of complexity with little true understanding of basics, need or benefit.
I interviewed with supergrniuses last month who wanted me to design a great and elaborate structure and they disliked my answer because it did not serve ego, I said I'd reuse an open source ESB framework and tweak a transaction layer, easy cheap and far more reliable than new code but young guys know they can code better one time than anyone else
Can code 100 times and proofed against hundreds of environments by thousands of people.
On my freaking iPhone and thinking about janet as I get my ass beat in pool
Too many smart people spending way too much time reading endless blog comments and surfing da web instead of engaging in productive work - that's why the economy is collapsing!
In 1982, the target fed funds rate was 20%. Now it's zero! Soon the economy will be back on track, not to worry. I'm waiting for a small confirmation before calling the bottom for global equity markets, should be through at most in 2-3 trading days next week.
BH - seems to me the younguns have skipped right over the lower levels of Maslow's hierarchy and gone right for self-actualization without earning it, kind of like a Third World country getting high tech and democratic ideals as hand-me-downs rather than fighting for them and growing into them.
Makes me wonder - when the GD2 shit hits the fan, will skipping those developmental stages prove their undoing?
is anybody in touch with the CR Companion guy 1929er | 01.30.09 - 12:15 am | #
I talk to him far too frequently. There was a well known installation problem, having to do with temporarily enabling cookies, that's outlined on the cr companion blog. If that's not the issue, post a comment there.
My colleagues at the Councils Center for Geoeconomic Studies calculated that it was enough to buy most of the common equity of the US financial system at least on January 21.
That isnt the best use of the TARPs funds, but it does illustrate just how little common equity is now supporting the financial sectors large aggregate balance sheet.
Japan imports all of its oil, and is not suited to having refinery exports (very developed, full of regulations, not lowest cost, ...) As such they have had decreases in refinery capacity in recent years when demand decreased (weak Yen, strong oil price)
I couldn't find very much freely available further on the matter. Nothing recent enough, and most of it in Japanese I can't read.
Just thought it might be interesting to share. A good windsock for global trade (big exporter, specialized in not easy to duplicate capital intensive processes, stable trade relationships)
A certain class of response stratagems have developed their moment of greatest urgency. That's why a big puff of people left at once. Comrade Byzantine_Ruins | Homepage | 01.30.09 - 5:27 am | #
A much more satisfactory answer than mine: They had a party to go to,...and we're not invited!
A certain class of response stratagems have developed their moment of greatest urgency. That's why a big puff of people left at once. \t Comrade Byzantine_Ruins | \t \t \tHomepage | \t01.30.09 - 5:27 am | #
## So, Byz, do you mean that there are some, perhaps more than a few who think things are about to tip from the cup to the saucer and soon onto the tablle?
EHP: RE-Japan oil consumption. I am sensing some shift in the force here as well. Oil holds in there at just above 40 but unleaded gas is edging up, from 1.20 to 1.24 or so yesterday. So, I stop by my jobber friend and ask, have you heard anything about possible supply interruptions? He said perhaps. The maintenance cycle is starting up and that happens every year. Refineries shut down, repair, refit, etc. All possible supply is going for home heating oil. Another friend who works the shut downs said a refinery in Georgia (US) is deferring maintenance for at least one month to keep up with demand. There's still a problem in Oklahoma where all the West Texas crude flows through.
Just some points that make me go, hmmmmm. Don't have any real facts, but then again we can't trust them either.
volker the viking,
Conoco and Valero have their shutdowns scheduled for February
Shell is negotiating on behalf of refineries behind 2/3rds of the US supply. They're not offering much, union offended, and at least serious talk of a likely strike. Managements/salaried/scabs "will take over operations" but there will be supply decreases
More importantly all these factors will unite and coalesce any parties looking to run the price up -- which is lunacy, but you cannot deny people their fu
Wisdom Speaker writes: Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations...
Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
Those who are prepared, have their money in several countries outside the US, a permanent residency card in another country and a current passport. Oh, bye the way, I should say to be up to your eyeballs in long term debt (here in the US, debt that one can service) so that you when you have to pull the rip cord and leave, no assets, none are left here.
More importantly all these factors will unite and coalesce any parties looking to run the price up -- which is lunacy, but you cannot deny people their fun \t EvilHenryPaulson | \t \t \tHomepage | \t01.30.09 - 6:02 am | #
## Labor problems, thanks for the heads up. I really don't know much, but I listen to people and just put things together. It may not take much to make the labor thing a big problem, but then again unions are just as sold out as the politicians and business types. And of course there's the geopolitical to keep in mind. Enjoy and benefit from much of what you post about.
volker, Shell offered union workers a three-year contract with a $500 signing bonus and a 2.5 percent hourly wage increase in the second and third years, the memo showed. Workers would receive a 75 cent-an-hour pay increase in the first year. The current agreement expires at 12:01 a.m. on Feb. 1. Members have already authorized the union to call a strike. Refinery Workers to Reject Offer, Threaten to Strike (Update3) - Bloomberg.com
...and in the UK About 600 contractors at the 200,000 barrel-a-day Lindsey plant remain on strike in protest at the employment of Italian workers on the construction of a hydro-desulfurization unit, Total said. Workers staged a protest outside the plant this morning, demanding the government act to protect jobs as the recession increases unemployment. U.K. Workers Strike as Foreign Staff Protest Spreads (Update1) - Bloomberg.com
but the whole "Buy America" program is a serious misstep if it stays in, other countries will not wait for WTO and FTA rulings to act punishingly. Bush carried on enough protectionism for the welcome to be worn out, and more importantly politicians the world over will fight 4 times as hard to preserve a job as trying to create 1 more. Even if the thing is a bargaining tactic, it's a loss
I drove around the lake at 3 am, passing many new homes built since my last visit in 1998. Not a bad place to hang during The Crash; my dad is a careful planner.
He never forgave my trespasses because ... he never blamed me. Quiet, modest and machine-like in his consistency. I don't have those genes, though. I have Bernanke's disease. I want to know that my model of reality is true.
Imagine a cruise ship. Starboard has debtors, port has lenders. If the Feds burn lenders, the ship lists dangerously to the right. Burn debtors and it lists left.
The Feds will do what they've done for decades. A balanced burnoff. Bond destruction through inflation combined with equal debt default. Expectations and behavior are bound to outcome so they have to balance. I don't know if they'll succeed but they'll try.
Bond paper sucks.
Why would you risk it?
It has to burn.
Uranium and oil have to be long-term buys.
I think Rogers is wrong about China. They pay lip service to Confucius. The greatest asset of India is the fusion of British culture and Gandhi.
You can't do complexity without predictability, which means honesty and contract law; honoring the spirit of the law, not just the letter. This implies balance of self-to-group and Gandhi did such a great job of balance, he may have laid a foundation to surpass Western culture.
Traces and secondary echos suggest that witch associations lurk. Scottsdale people, too, almost certainly.
It came to me
Suddenly
I sat in Starbucks
For an eternity
The hours pass
The days go by
But has anybody
Really tried
To cross that line?
To get inside?
Damn, I'm lucky. The more I ponder the Delusion Pandemic concept, the more I like it. Many things fit together better. I wish I could find a way to prove/disprove it.
.
volker the viking(Unrated) writes: ## So, Byz, do you mean that there are some, perhaps more than a few who think things are about to tip from the cup to the saucer and soon onto the tablle?
18. All warfare is based on deception.
Hence, when able to attack, we must seem unable;
when using our forces, we must seem inactive; when we
are near, we must make the enemy believe we are far away;
when far away, we must make him believe we are near.
Hold out baits to entice the enemy. Feign disorder,
and crush him.
If he is secure at all points, be prepared for him.
If he is in superior strength, evade him.
If your opponent is of choleric temper, seek to
irritate him. Pretend to be weak, that he may grow arrogant.
If he is taking his ease, give him no rest.
If his forces are united, separate them.
Attack him where he is unprepared, appear where
you are not expected.
These military devices, leading to victory,
must not be divulged beforehand.
BYZ: Put down your dog eared copy of "The Art of War" and pick up a copy of Dr. K's "Miracle Cure for What Ails You and Yes I AM the Only Living Soul On Earth That Knows Anything Other Than the Blather You Other Idiots Spout". I know the titles a little longish but hey, he ain't got much to say except something along these lines, and I also know he's reading this at one point or another. I threatened to flame him at his Blogovilla but I'd just get banned and there would be another medal I would wear on my chest as a badge of honor along with the many others that reside above my pocket seam. Anyhoo.....here goes:
Select all and delete from existing text.
Paste: I told you fuckers you were wrong when you told me to shut up and get on board. Jeeze, I got a freaking Nobel and you guys got creamed. HAHAHA! Now you guys shut the hell up and listen to me--SPEND, SPEND, SPEND!!!!!!!
My mother has Parkinson's and is frail, but won't leave NYC, and wouldn't in the 60's when the arson/slum came within a half mile. I tell her it won't be safe and she says wrong attitude: stay and rebuild.
EvilHenryPaulson(Excellent) writes: but the whole "Buy America" program is a serious misstep if it stays in, other countries will not wait for WTO and FTA rulings to act punishingly. Bush carried on enough protectionism for the welcome to be worn out, and more importantly politicians the world over will fight 4 times as hard to preserve a job as trying to create 1 more. Even if the thing is a bargaining tactic, it's a loss
Just IMO, the internationalist experiment was just a charade to cover neocolonialist resource harvesting in he first phase of the postwar ecumene, and then to cover the "vendor financing" regime and the export of capital from the west in the second phase.
Anybody that followed the rules of the international road got raped, and the only people who got ahead were folks who had very organized industrial development efforts. Obviously MITI is the paradigmatic example.
There are pitfalls to a national perspective on development but I think you are going to see it nevertheless, because it is what works. If not now then as the decline of energy affluence constricts global trade and travel in the post-Depression environment.
The modern large nation state and the transnational quasi-state apparatus appear like they may be the blow off top on humanity's hierarchic organization frenzy of the 20th century.
10,000 Mosquitos writes:
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality.
10,000 Mosquitos | 01.30.09 - 12:53 am | #
I fall in that camp but you know what? Everybody loses. The believers will have lost their money (or house), the naysayers will have lost social acceptance.
Some one some where posted a factoid that 40% of the wealth in the world has vanished so far. I think it was that Shedlock person. Anybody think we're anywhere close to the bottom?
As I sit in my study this morning. Nestled up against the mountians. I look to the east. I have trouble telling if the red glow that I see on the horizon is the new day dawning or Washington burning.
Second, I wonder if the system can be manipulated in real time to produce a "kitchen sink" quarter or two?
Probably not to the second, it's doubtful that the new team has enough control to pull that off yet.
sm_landlord | 01.30.09 - 1:08 am | #
I'd say kitchen quarter or 8.
There are too many people out there who are still clinging to the "old world". All industries got built up to the bubble revenue. All sectors will go through the wringer.
volker the viking(Unrated) writes: Some one some where posted a factoid that 40% of the wealth in the world has vanished so far.
From the haulage reports, it looks to me like the real economy shrank somewhere between the low and high teens in percentage points. Dunno exactly what constitutes "the real economy" though. The numbers don't describe a tightly bounded system. Some places like the Inland Empire and the Pearl River Delta are really hurt.
Obviously, a lot of financial leverage has gone away but the size of that and the scope of its effects on other segments of the economy are harder to judge.
It will take a minute for this to register. There will be secondary effects, serious ones. March promises some interesting days indeed, for example.
Then there will be whatever kind of Treasuries / general sov debt crisis materializes. One is beyond inevitable at this point.
Once the sov debt crisis sorts out the quick from the dead, the bottoming process will begin in earnest on a per-country basis depending on the prevailing local conditions and the rationing of credit.
It's not over til the sov debt / forex fat lady belts it out.
Byz: Agree! Good post. Just got back from Bellingham. Wow, things are still on hyper drive from what I observed. You're in Seattle, right? You are a programmer? I have an idea that may be seminal. Next time I'm out 'there' will be March.
more silly games. this is as bad as the earnings shenanigans that are played with by scum street. did it beat or miss,miss or beat. did it beat the whisper number? here come the silly words from the media as well.....SOAR, SKYROCKET,PLUMMET,MISS,UNEXPETENTLY,AS EXPECTED. how many times is this silly number revised 4?5?6?. global depression is here
Too many smart people spending way too much time reading endless blog comments and surfing da web instead of engaging in productive work - that's why the economy is collapsing!
whale | 01.30.09 - 3:46 am | #
I agree but...
You need to waste time (meaning taking time to think) to better yourself. Sometimes you even need to go backwards to go forwards.
The world is not rewarding hard work. Who wants to be Sisyphis?
Yes, the mal investments ran VERY deep this time around.
We got a glimpse with the airfreight numbers yesterday. Think about it. Airplanes take enormous resources to assemble and deploy. Shipping firms expanded their airfreight capacity tremendously to deal with the bubble. Suppliers of stuff to keep them in the air expanded too. That's all contracting. It's not going to contract a bit and then go back to the levels of a year ago. It's going to contract permanently. And so are all the attached businesses.
A microcosm of the mal investments. Multiply it. Pick an industry, and pull on a thread, any thread. Watch the supply chain unravel.
That's why mathematical modelers of economies fail. The status quo is considered an equilibrium point, but it never is.
At the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble. And all the feeders to that industry. And all the feeders feeders. The interconnected web itself is unraveling. This will not be pleasant.
Tread very carefully over the coming days, likely making for interesting Feb/Mar (in my opinion). With the numbers being thrown around such as an ADDITIONAL $4 - $5 trillion of stimulus needed in order for us to account for all of the bad assets as international recession continues to run deeper. Dominoes are falling quickly, and right now is starting to seem eerily similar to last October/November.
New lows look to be tested or broken through to the downside. And I'm the optimist on the board.
"CM, at the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble."
Agreed...I have many Dr clients and the medical industry is absolutely affected by this downturn. Anytime and anywhere someone has cash out of pocket connected to an expense in this environment, there will be delays in that spending, searching for lower cost alternatives (all econ 101 applies).
Attorney's should do well as the regulatory environment heats up and this is the only arrow left for many.
At the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble. And all the feeders to that industry. And all the feeders feeders. The interconnected web itself is unraveling. This will not be pleasant
I used to be angry at the spenders but then one day I realized that the savers have taken advantage of the excess just as much as the spenders.
All those savers who invested in the market got MORE returns than they deserved. And now a huge number of them are upset because valuations are coming down.
The whole thing is a total farce! Everybody is to blame. We are all in this together.
The "Spatula City" sign was placed on a real billboard in Tulsa, OK, for the film, and was left there for several months after shooting was over. According to the DVD commentary, many tourists would exit the freeway like the billboard said, and would drive for long periods of time looking for Spatula City, thinking that it was real. The billboard could be seen from eastbound SH-51 at its intersection with Memorial Drive.
Comrade Misean is Dope(Excellent) writes: And of course while I wrote my previous post you pithily posted this:
That's okay, it was a good post. The haulage data suggests to me macroeconomic nuclear winter.
We will soon see how much economy is out there. VERY SOON. These credit panics are madcap. It will be effectively over before they can spend the money they appropriate.
There is no real economy nor are there any real jobs. A lot of what we believe to be real is a construct of our imagination, created by our mind to make our existence seem meaningfull.
The whole thing is a total farce! Everybody is to blame. We are all in this together. DANM | 01.30.09 - 7:56 am | #
No, you Yanks and Brits are to blame with your "lassie dog" supervision and with your totally corrupted financial sectors but for once, Karma really is a bitch. You are also the ones who is going to suffer the most.
Ya doesn't that seem mighty tuff like he is outraged at those losers for doing that. But 2 things
1) We/he knew about these back in December. Why did he wait till they passed them out before being outraged!
2) Also he is so two faced, The federal budget is hemorraging and what does the Democratic congress get? 404 - Error: 404
What a narcissistic hypocrite along with the whole dam media
Of course no one calls him on it.
Should be good for +500 on the Dow.
I call first, Nemo doesn't count.
It will be VERY bad.
Looks like tomorrow will be interesting.
What tomorrow isn't these days?
I don't even remember 1982, maybe I need to do start doing the things I did in 1982?
With so many guru's departing, i guess we are now left with daily bail...
This morning I made some improvements to the monkey's... um... training. Now he flings something my way before the page even finishes loading. If you know what I mean.
"Because it was there"
I say -6%. It was the kitchen sink quarter, after all.
Did C&C say he was leaving too?
emo, we r in awe. is anybody in touch with the CR Companion guy? The download at Firefox add-ons seems to be corrupted.
since 1982
I suddenly have a craving for jelly beans, for some reason.
So I missed a few threads today. Has Bill Gross's latest already been discussed?
To PIMCO, the remedy for this deflationary delevering and mini-depression is simple and almost axiomatic: stop the decline in asset prices.
Sounds like a cunning plan that cannot fail.
emo, I think its called front-running?
Bill Gross in 2 words: "Buy ME!"
stop the decline in asset prices.
Nemo | Homepage | 01.30.09 - 12:16 am | #
Pass the anti-gravity device.
I can haz 5th half recoveriez?
Is it me or are we gaining speed?
Never been anybody better-named than Bill "Gross"
If the number is less than 5.0, we will see 300 pts on the dow. Other than that, it's baked in, and things will be flat.
From prior thread:
And what does it mean?
I am not being snarky, just trying to push the thinking.
I, for one, prefer to look at Nonagricultural Part-time Workers as % of All Private Employment.
Among other things, you get more history than with U6.
MrM | 01.29.09 - 9:23 pm | #
Sorry for the late response but I had to go for dinner.
The spread is interesting to me because it compares the two sets, one narrow (U-3) and one broader (U-6) as an indicator that broader unemployment/underemployment is worsening or improving vs. the very narrow definition of the "official" U-3 version. IMO it is important to use the U-3 as a base in comparisons because it is the figure most quoted in the media.
Because unemployment data is used in a variety of applications, Shiskin introduced the various unemployment measurements for just such a purpose.
So from my perspective, the spread reflects nicely the Phil Gramm indicators ("mental recession... we have become a nation of whiners..."). If it is low then official unemployment figures likely reflect the mood of the nation. If it is high as it is now, the establishment is seriously underestimating the plight of the common folk.
BTW, I like the nonag part-time workers as well.
Did C&C say he was leaving too?
Comrade Bear (tj & the bear) | 01.30.09 - 12:14 am | #
In so many words, yes, but I didn't get the sense that he meant forever. Who knows?
Just remember, the "stimulus" from Q2 08 should guarantee that GDP will decline in both Q2 and Q3 09, the stimulus being the apex of the W shaped depression.
RE, don't forget about "workforce participation".
Latin American leaders berate U.S. for crisis
the United States and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades. "Now, I expect the IMF to go to Obama and tell him how to fix the economy," Lula said, referring to new U.S. President Barack Obama.
UPDATE 1-Latin American leaders berate U.S. for crisis
| Reuters
Get those bastards!
RE, don't forget about "workforce participation".
Comrade Bear (tj & the bear) | 01.30.09 - 12:20 am | #
That's how this whole thing started two threads back...
"of the W shaped depression."
I'm more thinking of it as an 'M
(forgive me Conjure) These are the numbers to expect at 12:05:00 or so.
sportsfan,
I can't see him going away entirely. He's got a pretty good blog of his own, and he's been around since the early days of HBB. I'll have to hit his site a little more regularly...
Yeah, but Amazon beat, so all of our problems are in the rear view mirror.
San Jose Merc...bailout could cut Cali defecit in half (to 'only' $21B) :
"...And in another key development regarding the state's yawning budget shortfall, news emerged from the nation's capital that a federal stimulus package passed by the House this week would slice the projected $40 billion deficit almost in half...If the $19 billion figure holds up, it would significantly reduce the size of California's problem. But that could be a mixed blessing because it might relieve pressure on lawmakers to broker a budget deal...The federal aid "could take the urgency out of pushing for some very needed reforms," said Assemblyman Roger Niello, R-Sacramento, the vice chairman of the
budget committee..."
Schwarzenegger gets OK to furlough state workers - San Jose Mercury News
I can't see him going away entirely. He's got a pretty good blog of his own, and he's been around since the early days of HBB. I'll have to hit his site a little more regularly...
Comrade Bear (tj & the bear) | 01.30.09 - 12:23 am | #
He has closed his blog also.
http://bakersfieldbubble.blogspot.com/2009/01/final-post.html
Yeah, but Amazon beat, so all of our problems are in the rear view mirror.
friardaddy | 01.30.09 - 12:23 am | #
Don't look back, something's gaining on you. Like that T. rex.
DAMN! Just went to C&C's blog and he's got a "Final Post" up. This is not good; we go back too far.
Dammit Dawg, if you leave you better take me with you!!!
He's got a pretty good blog of his own,
Comrade Bear (tj & the bear) | 01.30.09 - 12:23 am | #
Hate to break it to you, but he says he shut it down
Bakersfield Bubble
DJ:"Is it me or are we gaining speed?"
Gwenster, it sure feels like it.
The Medicaid part of the stimulus was a backdoor approach by Congress to inject cash directly in the states coffers, bypassing real infrastructural projects.
Basel Too writes: "The Medicaid part of the stimulus was a backdoor approach by Congress to inject cash directly in the states coffers, bypassing real infrastructural projects."
Cali did the same thing when it instituted the Lottery...the money was supposed to go to schools, and that it did...which meant that the state could then take 'other' money away from schools to spend on something else, now that the lottery was suppling funds. Or so the story goes.
Fool me once...
Fine, I'll be sure to bring my crash helmet to the HBB weekend in LV - that'll be attractive.
I'm one of the doomiest people I know and I'm starting to think I was an optimist. Someday after I plot all these social unrest stress points, I'll be famous... and most likely dead or broke >; )
Nemo: You crack me up!
"Should be good for +500 on the DOW"
So true. Nothing makes sense anymore,
except Wallstreet still shelling out boni to idiots.
...would slice the projected [California] $40 billion deficit almost in half...If the $19 billion figure holds up,
Unfortunately the number is up to $45.3 billion and climbing. It is tedious to keep hearing it but I have to repeat; there is not enough money to balance California's budget(s). Even in theory if enough money could be invented/borrowed/taxed whatever the consequences of those efforts themselves will precipitate their own round of new money troubles both expenses and revenues.
OT: Drought in California will mean much higher food prices.The weather has f@cked all the tree crops and the vineyards.Yields on pinot and chardonnay are expected to be 1/3 of last year.
<Latin American leaders berate U.S. for crisis the United States and other rich countries should get the same tough treatment that Latin American countries received during their financial crises in recent decades>.
Shouldnt antagonize the retarded manchild w/ the big boomstick
NY Times
Bloomberg Will Seek Increase in Sales Taxes
"A month after imposing a property tax increase, Mayor Michael R. Bloomberg is expected to call for a $900 million increase in the citys sales tax on Friday, as the city confronts a loss of revenue due to the economic downturn.
New York City already has one of the highest sales taxes in the nation, at 8.375 percent...the city could generate almost $900 million by increasing the sales tax to 8.75 percent."
Bloomberg Will Seek $900 Million More in Sales Taxes - NY Times
The Keynsian response is for the government to cut taxes and increase spending...however, the states and municipalities don't have the luxury of a reserve currency. Therefore the option on the table is to have the Feds borrow or print, and hand the money to the more local governments.
With so many guru's departing, i guess we are now left with daily bail...
1929er | 01.30.09 - 12:12 am | #
None of the gurus were gurus when they started - all started all started at square one. Be the next guru.
But Tom, Pinot is always fussy.
That said, I found a bottle of Turley Aida, 97 for under $40. If this is what the future holds, good times to follow for 9 months or so >; )
It's a pity that so many folks are leaving the comment zone nowadays, because although the original question has now been settled (yes virginia, there is a housing-led deflationary decession in progress), there are a host of new questions that will be coming up soon. The answers to these are (to me anyway) at least as interesting as the ones we've come to so far, and I think the questions are far more challenging.
Basically, we've gone from the phase where we could see the train coming off the tracks, and now we've got to figure out the much more complicated question of what the derailment will will look like. Then there's the challenge of deciding what we can/should do about it ourselves. And finally there's the question of identifying which pieces of the train deserve our investment support as we put the economy back on the tracks.
The pat answer right now of "stay in cash, hang onto your jobs, and watch out for signs of the eventual return of inflation" will tide us over for the time being -- which is good because the questions about the longer term are not easily answered -- but at some point the pat answer will become the wrong answer (either because the rules surrounding cash have changed, the job has been lost, or the macro inflation has indeed started to return). Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations...
the city could generate almost $900 million by increasing the sales tax to 8.75 percent."
Tim Geithner's Mom | Homepage | 01.30.09 - 12:35 am | #
Yah, becuz ve know everyvun vil spend juz like alvayz.
My backyard looks like a groundhog convention w/ all the buried Krugerrands, and the basement bunker is lardered w/ pallets of single malt scotch. Work w/ what ya know.
Watch the inventory numbers in the report. The semis I know have been in huge don't-build-just-ship-from inventory mode since about mid 4th quarter. Many who are heavily consumer focused stopped starting new product fabrication and didn't plan to initiate new starts until near the end of this quarter.
Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations...
Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
Wisdom Speaker speaks wisely.
Wisdom Speaker
Well said! Come back folks!
dryfly:
Concur.
And I'm wondering, with what do we replace the Federal Reserve bank in several years?
I've been as pessimistic as they come(sparring with Banker over Citi's viability) and I've been beat to the downside fairly consistenly. I wrote about BAC and JPM only going under unless people went to the mattresses, BAC is now testing that theorum. I still doubt they will but I didn't see them going on this consumpton spree.
.
France is feeling a little unrest...
YouTube -
.
.
Bastards. I'm beginning to think that this one is already baked in and no one can stop it. We all thought we were so god damned smart.
mp | 01.05.09 - 8:05 pm | #
I have come to the conclusion that there is a new reality. Buiter sees it clearly and I am coming to see it.
mp | 01.05.09 - 8:22 pm | #
FT.com | Willem Buiter's Maverecon |
(buiter article)
the thing that "sticks out" from reading Buiter's piece is that, and as a practical matter, virtually every move ends in "checkmate."
We only buy time and the time we buy will become increasingly expensive.
mp | 01.05.09 - 8:33 pm | #
Speaking of preparing: I jumped from sociological research to ag research and I'm hoping that move will keep me employed durning the worst of it. That and eight years of seniority.
If I can't help myself, I can't help others and I know many people who already need it.
BAC is now testing that theorum
Comrade Alexei Mikhailovich | 01.30.09 - 12:41 am | #
I'm still thinking that BAC has been doing the Fed's & Treasury's wishes going back the the CFC purchase. Do these things for us and we'll back you all the way sorta thing.
deflationary jane:
are you the one on CR that does the government grants for UC?
the thing that "sticks out" from reading Buiter's piece is that, and as a practical matter, virtually every move ends in "checkmate."
Bunker Dweller | Homepage | 01.30.09 - 12:43 am | #
Great quote, and so true.
since 1982
I suddenly have a craving for jelly beans, for some reason.
Nemo | Homepage | 01.30.09 - 12:16 am | #
I worked in the early ethanol biz back then - I thought that was completely behind me... had a guy contact me about a month ago asking if I wanted to run an ethanol plant again. I should have told him 'you can never go back'.
Yeppers... NIH, USDA, NSF, privates, clinical trials, human subjects, vertabrate animals - name that protocol and I'm your girl >; )
I'm still thinking that BAC has been doing the Fed's & Treasury's wishes going back the the CFC purchase.
Comrade Bear (tj & the bear) | 01.30.09 - 12:45 am | #
According to my friend who's upper management @ BAC that's pretty much the prid pro quo for them and JPM getting early approval for their Check 21 systems. HUUUGE case of heartburn in digesting those shit sandwiches.
All options have to be on the table for Obama, including shutting down the Fed, which has utterly failed in its mission. Might be a lot of political mileage in taking out the bankstas.
Wisdom:
I'm starting to consider what happens AFTER the mess undergoes clean-up.
How does one rebuild trust? Best I can think of is somebody akin to Jackson or Cromwell (in terms of singularity of purpose).
It is time for us to pore over mp's old comments, and try to figure out just what he saw that drove him mad.
Just talking over Mad Max scenarios with my partner, and it came up that there are more than one Mad Max movies. In the first one, things were normal enough that max & his family were taking a road trip to visit one of them's mother. There were violent episodes, but over all peopel were attempting to live life as usual.
Maybe that's closer to where we are, instead of the 3rd movie with Tina Turner and a midget.....
http://en.wikipedia.org/wiki/Mad_Max
WSJ for this morning.
U.S. Eyes Two-Part Bailout for Banks
The nation's top economic officials are discussing a new way to stabilize the financial system by buying a portion of banks' bad assets and offering guarantees against future losses on some of the remainder, in an effort to help banks while trying to mitigate the cost to taxpayers....
Under the concept being discussed, the government "bad bank," possibly run by the FDIC, would buy only assets banks have already marked down heavily. This could avoid crushing the value of other assets held by banks. It could also potentially sidestep the pricing dilemma because banks have already recognized the low value of the assets being purchased....
The remaining troubled assets -- likely a sizable amount -- would be covered by a type of insurance against future losses. This would apply to mortgages, mortgage-backed securities and other loans that banks are holding until they mature. Banks have probably given these assets an overly optimistic value because they plan to hold them....
In addition, the Treasury is also likely to make more capital injections into banks.
Sounds like a cunning plan that cannot fail.
| \t01.30.09 - 12:16 am | #
\t Nemo | \t \t \tHomepage
Nemo | Homepage | 01.30.09 - 12:16 am | #
Are you a Blackadder fan?
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality.
Bunker Dweller,
He's not mad, he just had the last vestiges of optimism ripped away. Now that the path is clear -- all downhill from here -- he's doing what has to be done.
Scapegoating implies innocence.
The senior folks knew exactly what they were doing.
And if that's what it takes, so be it.
And I'm wondering, with what do we replace the Federal Reserve bank in several years?
homedad43 | Homepage | 01.30.09 - 12:40 am | #
I don't know but it won't be 'metal' - that I can assure you. That is good news - it means you can personally opt to use metal as your store of value or not.
My guess is we'll still have a central bank but it will be much more 'centralized' and less private... the dollar will no longer be THE worlds reserve currency and that for most countries metal will be a much bigger part of their basket of currencies making up their reserves... in that sense metal will be a 'floating standard' not a true metal standard.
The dollar will never play the role it did in BW or BWII.
Jane, you fear the unrest or the protection of the morally & financially bankrupt F'ed ?
Joanna --
Are you a Blackadder fan?
Even more of a Baldrick fan, but yes. Season 2 was the best...
(Embarrassingly, I must have watched half a dozen episodes of House before I realized he was that Hugh Laurie.)
Both actually. They go hand in hand. The trick is to know which one is coming first____ this time.
I like the cut of Buiter's jib.
dweller, it has always been the thought of this board that a ponzi scheme can end in only one way. mp, along with a lot of other posters have been preaching it for a while.
To PIMCO, the remedy for this deflationary delevering and mini-depression is simple and almost axiomatic: stop the decline in asset prices.
Did you noticed the asset prices that needed support were ones Pimco invests in a lot? Hehhehheh
It is time for us to pore over mp's old comments, and try to figure out just what he saw that drove him mad.
Bunker Dweller | Homepage | 01.30.09 - 12:50 am | #
He isn't mad - he's moved on - at least for now. The forum became more 'cost' than 'benefit' to him. He wasn't the first and won't be the last.
I don't know but it won't be 'metal' - that I can assure you.
dryfly | 01.30.09 - 12:54 am | #
Currencies will still be represented in paper and digital form, but I would expect they'll have to have some form of "backing". Pure fiat won't survive this downturn.
None of the gurus were gurus when they started
dryfly | 01.30.09 - 12:36 am |
there are a host of new questions that will be coming up soon. The answers to these are (to me anyway) at least as interesting as the ones we've come to so far, and I think the questions are far more challenging.
Wisdom Speaker | \t \t \tHomepage | \t01.30.09 - 12:37 am | #
Replying jointly to your comments, I think the easy part is over. The real gurus will be those who can answer those 'far more challenging' questions in the future.
I'm not in that class myself. It was fairly easy for anyone who looked to see that the road we were on was unsustainable. As the unwind began two years ago, it was even easier to say 'this will not end well.'
Exactly how we are going to get out of this mess is not at all clear to me.
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality.
10,000 Mosquitos | 01.30.09 - 12:53 am | #
Bingo.
Love the moniker too.
Yep, what sportsfan said.
Dryfly:
By centralizing, I assume that you mean bringing it inhouse to Treasury perhaps.
My concern in that case is to have some kind of "firewall" between the bond issuance and money issuance segments (if that makes sense) so that we don't have any more of this damned financial masturbation.
Does that make sense?
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement. Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power. Innovation is happening and recovery will also happen in time
I say -6%. It was the kitchen sink quarter, after all.
Max | Homepage | 01.30.09 - 12:14 am | #
With all the TARP activity going on? That seems pessimistic.
(Embarrassingly, I must have watched half a dozen episodes of House before I realized he was that Hugh Laurie.)
Nemo | Homepage | 01.30.09 - 12:57 am | #
I love Black Adder too - and told my wife & daughter who are HARD CORE House fans that he is a better comic actor than a drmatic one - they thought I was nutz. Might have to get some Adder reruns...
Also fits my 'shit never changes' meme... what a great show.
Exactly how we are going to get out of this mess is not at all clear to me.
hoopajoops, baby, hoopajoops.
Sounds like a cunning plan that cannot fail.
Nemo | Homepage | 01.30.09 - 12:16 am | #
Baldric, is that you?
Getting back to the GDP decline estimates.
How many people are going to trust whatever number comes out of the federal sausage factory where it is going to be concocted?
One of the places where folks are starting to be able to see a little further down the tracks now is the fact that a large portion of the prior prosperity, and the whole mindset that went with it, was in fact a bubble-induced mirage. There's room to arbitrage this because most of the nation/world hasn't figured it out yet.
I'm talking about things like NYC and California thinking they can close a budget gap by raising taxes under an assumption of constant consumer spending. Last time I checked, the heart of the New York economy (e.g. XLF) just lost 75% of its market value. Property values are now following suit. Why on earth would retail sales stay at bubble levels? Not gonna happen. The same thing is true in California, especially now that the Nasdaq and venture capital pipelines have fallen off a cliff.
They can raise the tax rate all they like and it will just do what it usually does: encourage folks to leave for cheaper stomping grounds. The only way state and local governments can get through this is by cutting expenses to stay in-line with revenues, or by getting federal bailouts. Both are basically impossible short of a California-style crisis situation. Expenses can only be cut so far before the public unions have to be force-fed salary and benefit reductions, and until everyone "gets it", they'll fight those tooth and claw. Similarly, the federal bailout money is already oversubscribed and after the usual huge fraction gets porked away by the special interests, there won't be enough to save everyone.
So my immediate prediction is that the first round of state/local budget adjustments will prove grossly inadequate. We can immediately predict that as part of the train wreck there will be an ongoing series of these crises as more of the bubble economy unravels.
Since we're skeptical of the $4T-plus in federal bailouts and stimulus spending being swallowed whole by the bond markets, it seems like a lot of states and cities will have to sort this out themselves. If things unwind gracefully one might see pensions being closed to new members, and "zero COLA" flat salaries for several years. But nothing has been graceful so far so I expect much worse.
Therefore, government employees who expect to keep their jobs should still anticipate salary and benefit reductions over the next 1-3 years, and trim their lifestyles accordingly.
Meanwhile, muni bond investors can expect continued volatility as governments lurch from one fiscal crisis to the next. This could create a series of buying opportunities for those willing to take the risk (and willing to accept that by funding the muni debts, one is implicitly endorsing the spending habits of said muni governments).
No sir. It's Plopy, sir. Son of Plopy
the "stimulus" from Q2 08
Comrade Alexei Mikhailovich | 01.30.09 - 12:19 am | #
Don't we have to pay that back? Will that harm Q2?
I love Black Adder too - and told my wife & daughter who are HARD CORE House fans that he is a better comic actor than a drmatic one - they thought I was nutz. Might have to get some Adder reruns...
dryfly | 01.30.09 - 1:03 am | #
Don't forget Jeeves and Wooster
. He was brilliant there as well.
Currencies will still be represented in paper and digital form, but I would expect they'll have to have some form of "backing". Pure fiat won't survive this downturn.
Comrade Bear (tj & the bear) | 01.30.09 - 1:00 am | #
Some won't - like maybe ours - but I fully expect 'fiat' as a principle will come out even stronger from this episode... the key lesson will be if you back your currency with 'full faith' then by God you better protect that 'faith'. We haven't done that - we've squandered the world's trust and we will pay.
I'm not in that class myself.
sportsfan | 01.30.09 - 1:00 am | #
I'm not either - just a pilgrim on a journey.
Rob Dawg writes:
"How many people are going to trust whatever number comes out of the federal sausage factory where it is going to be concocted?"
Two ways of looking at this.
First, the usual sausage job that we all know and love.
Second, I wonder if the system can be manipulated in real time to produce a "kitchen sink" quarter or two?
Probably not to the second, it's doubtful that the new team has enough control to pull that off yet.
Rob, my argument with gov data goes way back. I see no reason the release tomorrow will be any more truthful.
By centralizing, I assume that you mean bringing it inhouse to Treasury perhaps.
homedad43 | Homepage | 01.30.09 - 1:01 am | #
Or a more controlled proxy.
Same difference.
10,000 Mosquitos writes:
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement. Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power. Innovation is happening and recovery will also happen in time
~~~~~~~~~~~~~~~~~~~~
and, we will start using the metric system "tomorrow."
thanks dryfly.I'm from your neck of the woods and moved southwest. No rain here but I haven't swatted one of those damn bugs in years. But that also means no water except for the big blue thing next door
Whatever GDP is, it will be the highest for the next 2 qtrs at least
Wisdom:
Concur.
And it's not just going to be the civil servants.
Better half is employed by a non-profit and I've already commented that salary is neither permanent up or down.
OT however, I do look forward to the return of meritocracy.
Does that make sense?
homedad43 | Homepage | 01.30.09 - 1:01 am | #
Yes. But it will take a while getting there [to that realization]. My guess is it will happen when the world no longer lets us borrow in our own money. We can't be too far from that point now - that 's when you get your dollar & treasury crisis.
Already use metric every day in my professional practice.
Hey, I told you guys in December that the doom traffic had peaked.
http://www.realmeme.com/roller/page/realmeme?entry=cr_the_shark
Nice to see confirmation in the closed blogs, though.
My family attended a grief workshop when my sister got cancer. People can only handle so much bad news and then they shift gears.
.
Meanwhile, muni bond investors can expect continued volatility as governments lurch from one fiscal crisis to the next. This could create a series of buying opportunities for those willing to take the risk (and willing to accept that by funding the muni debts, one is implicitly endorsing the spending habits of said muni governments).
Wisdom Speaker
There's lot of places but I like looking at Stone & Youngberg - Inventory
as a quick snapshot. Read it regularly and you'll see the metatrends.
And finally there's the question of identifying which pieces of the train deserve our investment support as we put the economy back on the tracks.
Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
Is that the nice way of saying, "how do we make money off of the misrey of others?"
the "stimulus" from Q2 08
Comrade Alexei Mikhailovich | 01.30.09 - 12:19 am | #
Don't we have to pay that back? Will that harm Q2?
Blackhalo | 01.30.09 - 1:06 am | #
You only have to pay it back if you have taxable income. Worst case scenario for most folks is that your refund check is smaller.
OT however, I do look forward to the return of meritocracy.
Don't get your hopes up.
.
And considering the future I reflect on my grandmothers house in minneapolis, built in 1938 with a coal chute in the basement.
10,000 Mosquitos | 01.30.09 - 1:01 am | #
I think I tried to make an offer on that house - over between University & Como - my daughter is going to PT school there & I am looking at FCed fixer uppers to put her & her soon to be husband in. She asked what the big dirt floor room was for - I told her 'to store food - it is cool, dry and will keep potatoes almost all winter long'. She looked at me with that 'oh no - dads going to go native again' look.
FairEconomist --
Did you noticed the asset prices that needed support were ones Pimco invests in a lot? Hehhehheh
Yeah. As near as I can tell, "asset" is actually defined as "what PIMCO owns".
Would anybody take this guy seriously if he didn't oversee $¾ trillion of other people's money?
Blackhalo writes:
"Is that the nice way of saying, "how do we make money off of the misrey of others?""
I prefer to think of it as rescuing a few survivors from the wreckage.
Speaking of civil service and GDP, this went out after hours today.
'January 29, 2009
Dear Research Colleagues:
The attachment is a brief comparison of parts of the economic stimulus packages proposed by the House, in one version, and the Senate, in the other.
Whatever finally emerges will surely be a large pulse of new research funding, probably with a rapid turnaround from "calls" to "submissions."
I will forward more information as it becomes available. In the meantime, I suggest initial planning for proposals by those whose programs are in the research areas indicated, and the formation of teams where appropriate.
Suggestions for how to optimize campus efforts to increase our competitiveness in the proposed areas of research growth are welcome.
Sincerely, (research overseer blah blah blah)'
I'm sure Rob will find it interesting. I know the folks at PARC and other organizations are way ahead of us on this.
Is there a stimulus ETF?
One of the places where folks are starting to be able to see a little further down the tracks now is the fact that a large portion of the prior prosperity, and the whole mindset that went with it, was in fact a bubble-induced mirage. There's room to arbitrage this because most of the nation/world hasn't figured it out yet.
Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
I was talking to a guy about that exact thing tonight - at kids sporting event. Bubble induced mirage describes it perfectly.
Uh yeah, Dawg.
I'm just afraid that my bondese sucks.
How do I know that they aren't just random phone numbers from Charleston, SC?
Since we're skeptical of the $4T-plus in federal bailouts and stimulus spending being swallowed whole by the bond markets, it seems like a lot of states and cities will have to sort this out themselves. If things unwind gracefully one might see pensions being closed to new members, and "zero COLA" flat salaries for several years. But nothing has been graceful so far so I expect much worse.
Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
Or COLA less than inflation - then let inflation tear - I'd bet dollars against donuts we see that and soon.
Do these things for us and we'll back you all the way sorta thing.
Comrade Bear (tj & the bear) | 01.30.09 - 12:45 am | #
I hope for their sake they got it in writing...
Nemo writes:
"Yeah. As near as I can tell, "asset" is actually defined as "what PIMCO owns"."
Pimco still has the banker's mindset:
"We own everything and control all of the money. You all work for us whether you know it or not."
The best thing about Bill Gross, once you get past the inherent corruption of his position, is that he doesn't take himself too seriously. He even keeps publishing that column by the guy who talks to rabbits.
Rob D, while things are slow, sorry I confused you with questions about movie titles a while back. I was thinking of Getstucco. I checked recently and realized you weren't him.
One thing I just can't understand about MN is the people on Hiawatha complaining about the light rail line. In Chicago the house oftentimes is more valuable the closer you are to one. Univesity and como might be really valuable if the light rail goes done into Saint paul along university corridor
Don't forget Jeeves and Wooster. He was brilliant there as well.
RE | 01.30.09 - 1:06 am | #
Yes - I mentioned that to my wife - need to get those too.
sewage treatment facility in central Japan has recorded a higher gold yield from sludge than can be found at some of the world's best mines. An official in Nagano prefecture, northeast of Tokyo, said the high percentage of gold found at the Suwa facility was probably due to the large number of precision equipment manufacturers in the vicinity that use the yellow metal. The facility recently recorded finding 1,890 grammes of gold per tonne of sludge incinerated.
That is a far higher gold content than Japan's Hishikari Mine, one of the world's top gold mines, owned by Sumitomo Metal Mining Co Ltd, which contains 20-40 grammes of the precious metal per tonne of ore.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Their shit don't stink.
Broward Horne:
Actually, when the money's gone, the only ones who really do get ahead will be the ones with talent and a modicum of sense to know how to exploit that talent.
Dryfly:
my daughter gives me that same look. When did I become the crazy old guy?
Oops, Anonymous 1:18 is me.
Getstucco
Anonymous | 01.30.09 - 1:18 am | #
Wow, now that's a blast from the past!
dryfly writes:
[Jeeves]:"Yes - I mentioned that to my wife - need to get those too."
I recommend reading the original Wodehouse books. I really enjoyed them, and still have copies...
Their shit don't stink.
Anonymous | 01.30.09 - 1:19 am | #
LOL.
G'night folks.
Hope I sleep better than the last several nights, but I doubt it.
thanks dryfly.I'm from your neck of the woods and moved southwest. No rain here but I haven't swatted one of those damn bugs in years. But that also means no water except for the big blue thing next door
10,000 Mosquitos | 01.30.09 - 1:09 am | #
I live in the Mississippi River valley SE of the Twin Cities - the back waters are so full of them in summer they'll drain your blood dry. I'm safe though today [couple feet of ice between me and their devil spawn larvae]. Thank God for 20 below nights.
SM Landlord - if you like Wodehouse, try the short stories of HH Munro. Saki - Wikipedia, the free encyclopedia
deflationary jane --
My wife works in public health, and yesterday I mentioned here that there are rumblings thoughout her world that there will be stimulus money coming from the CDC, so get ready, blah blah blah.
I told her last night that we were getting our pony, but she didn't know what the hell I was talking about.
Just read the previous posted PIMCO link, is that Bill Gross real? My god what a dumb mf...marketing at it's best. Completely unrealistic.
@dryfly "exactly how we're going to get out of this mess..." and
@Homedad43:
1. How do we again re-build a level of trust between the governing institutions and the people (think FRB and Congress);
Glad to see you both!
I've heard that trust is rebuilt through honest statements that can be verified as true by both sides. The people will rightly mistrust everything going forward. But this is good; much of our problem is that during the bubble, things were good for everyone so too few were inclined to ask the tough questions, and thus there was too much trust.
I'm thinking of a decentralized, organic sort of process. People will eventually realize that when they choose a bank or investment firm, they're voting with their money to support whatever that bank does. People are now voting with their money to shut down hedge funds, they've forced the government to shut down insolvent banks like IndyMac, Countrywide and Wachovia, and I suspect the same people power will also bring down Citi and Bank of America before this is all done. The herd behavior of the savers/investors in this country will have a huge effect.
The same effect will flow through into politics. Those who cashed out of the bubble mentality early (and especially those who profited) will have much more political influence.
Finally, as with stock investments, one would tend to expect to see the rebound start first in the areas which were hit less badly by the collapse. The epicenters of the collapse (CA, FL, NY) will have a much longer road to travel.
Deflationary Jane writes:
"SM Landlord - if you like Wodehouse, try the short stories of HH Munro. http://en.wikipedia.org/wiki/Saki"
Thanks, I will. You probably are familiar with Thorne Smith:
Thorne Smith - Wikipedia, the free encyclopedia
...another old timer who wrote entertaining stuff. I still have some volumes of his from the 1930's that I purchased in used book stores...
I just looked at the NIH and related monies and it's not that big. RO1s (those hefty 5 yr projects) often hit 5m each. 4B isn't 'stimulus' but i suppose it's big if you compare it to zirp.
ps. the cut UCOP takes off the top is obscene. It's the depts and colleges who bust butt to get things done. Bob I'm sure could share some stories too.
hoopajoops, baby, hoopajoops.
homedad43 | Homepage | 01.30.09 - 1:04 am | #
Dave's not here, man.
Actually, though, you hit on what I think is a key issue with the 'how do we rebuild trust' in the system questions earlier in the thread. After looking at the youtube video from France and realizing how remarkably peaceful things have been in the States, I'm guessing the polls are right when they say an overwhelming number of people 'trust' Obama to do the right thing.
Certainly the banker bailout has been at least as dramatic in the U.S. as it has been in France. Yet Americans seem disgusted, but not rabble-rousing, in their response. So some level of trust exists.
The more important reaction will be when the sheen wears off Obama's newness and different-from- Bush-ness. We all know he's not a magician. Can he hold it together is the question?
I heard that Mises' books will be re-released in April, if only the pinhead publisher had been surfing here he could have been ahead of the curve.
It's truly amazing how this cycle continues to gain momentum on the down side. As many know I work in the retail industry (actually WS to RTL). Death of small retail will be at hand by late summer. Many large will fall as well.
I think back to when I was a kid... we had to drive 20 miles (I know... boo hoo for me) to shop for school clothes vs. a shop on every corner. Considering we lived in one of the top 10 largest US cities this is significant. I think my children will soon have the same experience and its probably not a bad thing... or they will just shop via the web.
One thing I just can't understand about MN is the people on Hiawatha complaining about the light rail line. In Chicago the house oftentimes is more valuable the closer you are to one. Univesity and como might be really valuable if the light rail goes done into Saint paul along university corridor
10,000 Mosquitos | 01.30.09 - 1:18 am | #
It screwed up the lights along Hiawatha - used to be able to time the thing and never stop - now every time a train goes through they 'lock down' the intersection. makes what was a nice commute into start-n-stop bumper-to-bumper gridlock. And remember - the light rail doesn't even come close to going everywhere so many can't use it but are held up because of how it was laid out. Should have been raise so cars can go underneath.
The University/Midway corridor faces similar challenges.
On of the best weekends i ever had was sitting around in a teepee, in the snow (bear skin blankets ftw!) reading Saki stories aloud, drinking something odd and alcoholic and playing a bastard version of pharo. I had a very strange childhood.
my daughter gives me that same look. When did I become the crazy old guy?
homedad43 | Homepage | 01.30.09 - 1:19 am | #
The day your wife gave birth to your daughter. Mines 24 y/o and has 24 years of perfecting 'the look'.
"My key idea for relationships is that we need to honor the complexity and vastness of who the other person really is," he said. "Thats our biggest mistake. We expect others to be who we want them to be, not who they are. It takes a spiritual perspective to stand back and be engaged in what is beyond you. Its the opposite of watching out for your self."
Barque: Thomas Moore
More imminent trouble in the U.K.?
Alistair Darling pulls out of World Economic Forum in Davos
The Chancellor of the Exchequer cancelled his trip to the summit of politicians and executives at the last minute, despite the meeting being attended by a pantheon of leaders from around the world, including Russia and China.
He is understood to have called off the trip, planned for tonight, after it transpired that a number of the people he had planned to meet also cancelled.
However, the move will spark speculation that the Chancellor is battling a further bout of instability in the financial markets and the economy.
sportsfan,
No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment.
Sheesh, my daughter is three and I swear I've already gotten 'the look
when the money's gone, the only ones who really do get ahead will be the ones with talent and a modicum of sense to know how to exploit that talent.
History suggests otherwise.
.
In regards to recovery I recall an interview on NPR with the guys who started Ben and Jerrys ice cream. They mentioned that the real cost differential between producing a t shirt in the US verses offshore is only about forty cents. Over time.. production of goods may return here after US defaults through inflation and loss of reserve currency status. China the EU and other countries seem to do better wihout having the pesky reserve current status hampering their ability to be cost efffective
Therefore, government employees who expect to keep their jobs should still anticipate salary and benefit reductions over the next 1-3 years, and trim their lifestyles accordingly.
Wisdom Speaker | Homepage | 01.30.09 - 1:06 am | #
I don't know (or recall if I knew) where you are located, but I am keeping an eye on the California public employee furlough plan being pushed by the Governor and resisted by the Comptroller. The issue at the moment seems to be two days off a month at no pay, i.e., a 10% reduction in salary.
Virtually all independent contractors have already been terminated. That was the easy first step. Dealing with the entrenched union benefits (which are absurdly generous) will be the difficult third round.
We can see what private industry is doing in the layoff anouncements. Government will be the real test.
he is destined to be a one term pres.
NOT Irving Fisher says... | 01.30.09 - 1:34 am | #
Really? Who is going to defeat him? Palin? Or are you alluding to something nefarious?
Ok now I know why MP wandered off.
The big question for me had been where will the flash point be? With something as dilute as big government and big banks, where do you go to express your ire along with your fellow man?
It's all about the flash point.
Folks, it is just about over, forget about buying gold, buy guns, you are going to need them.
Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war.
Check out the action in the long bond today. Someone was doing a lot of selling. Wonder who?
That was a shot across the bow. If this protectionist package goes through, expect interest rates to explode, and the downward spiral to accelerate like nothing you have seen before.
Looking ahead to Friday's report, White House press secretary Robert Gibbs said Thursday: "We're likely to get a number for economic growth for the fourth quarter that's fairly staggering."
The report tallies gross domestic product, the value of all goods and services produced within the United States. It is considered the broadest barometer of the country's economic health.
Oh that's right I forgot MNDOT was involved in the project on Hiawatha, my mistake.
guns, we need more guns to save humanity!
Thanks to Rob Dawg for that muni link. I'm also tracking some of the Vanguard muni funds as a metric. (VCAIX, VCITX - these also require less "decoding" of the detailed numbers.)
@Homedad43 and "return of meritocracy" - I hope to see that happen as well. There's a good chance that as a result of the train wreck, economic survival will again depend more on competence than on connections. But Broward is probably right that this will take longer than one expects. I'd guess it requires a generational power shift.
@blackhalo and picking up the pieces afterwards: "Is that the nice way of saying, "how do we make money off of the misrey of others?""
That would be the booze/tobacco suppliers down in the wreckage. I was thinking more along the lines of "doing well by doing good" and the old WASP attitude (probably never followed much in reality) of business and investment as a form of public service. There may well be some gaping holes in the economic structure a few years from now, which creates opportunities to rebuild the economy by recreating the right sorts of businesses.
Think about what happens in a town that loses all its businesses of a certain type, because they were all over-indebted. Suddenly there's a great opportunity (as things recover) to run that business again. You don't need to profit from other's misery, you can profit by supplying something people genuinely need (but had to drive to the next town to get for a few years).
Now multiply by thousands of towns and cities and lines of business and you get what I'm thinking. The rebuilding of the economy will be a source of tremendous opportunity in a few years.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
I'm an expat too, and the big thing on the BBC was Wen and Putin ripping apart the US/UK banking system. On the same day, Putin moved missiles in Kaliningrad at a time when all of the the Baltic states are rioting. Did anyone notice that one?
In regards to recovery I recall an interview on NPR with the guys who started Ben and Jerrys ice cream. They mentioned that the real cost differential between producing a t shirt in the US verses offshore is only about forty cents. Over time.. production of goods may return here after US defaults through inflation and loss of reserve currency status. China the EU and other countries seem to do better wihout having the pesky reserve current status hampering their ability to be cost efffective
10,000 Mosquitos | 01.30.09 - 1:36 am | #
A buddy of mine - an old time industrialist who has been through Rust Belt I, Stagflation, Rust Belt II, Farm Crisis, Dotbomb and now this mess says: Recessions end one order at a time.
Meaning get an order - buy raw material & hire workers... they go out and spend, generating more orders resulting in more hires - etc.
Unfortunately we are still in reverse - losing & cutting order & laying off and cutting spending.
. I had a very strange childhood.
Fear not, DJ.
Your tale of woe has been forwarded to Child Services. Unfortunately, you will be billed directly for their time after Feb 1, 2009.
.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
I'm an expat too, and the big thing on the BBC was Wen and Putin ripping apart the US/UK banking system. On the same day, Putin moved missiles in Kaliningrad at a time when all of the the Baltic states are rioting. Did anyone notice that one?
Banker Mercy Killings | 01.30.09 - 1:42 am | #
They can stimulate our economy anytime they want - I'd let them.
LOL! I was raised by 20th c gypsies (history freaks). I learned to shoot black powder long before I was allowed to date.
Halo,
The public expects a miracle. When it doesn't happen they/we will move on to the next miracle worker, whomever that may be.
BTW... I hope the Palin comment was a joke.
"Unlike 99.9999% of Americans, I watch international news through my satellite at night, and the rest of the world is PISSED at the Buy American provisions in the "stimulus" bill. We are facing a MAJOR trade war."
Major trade wars tend to lead to major real wars. I'm trying to figure out where the next one will be, so I don't live there....
My vote is India making a big crater where Pakistan used to be.
Wisdom Speaker writes:
"I'm also tracking some of the Vanguard muni funds as a metric. (VCAIX, ..."
One of only two green numbers in my holdings today. That and gold miners.
I would be concerned about getting enough diversification buying munis directly, so I am happy to pay Vanguard's fee to spread out the risk a little bit.
No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment.
NOT Irving Fisher says... | 01.30.09 - 1:34 am | #
I take the other side of that bet. If these rough economic time persist then it is highly unlikely that a Republican will win unless the party completely changes its colors. It is IMO a matter of risk avoidance and established Republican policies imply risk to a population that will have high unemployment.
Note that in times of hardship left parties or extreme right parties with socialist overtones usually win. It is no surprise that Roosevelt and Hitler were successful in the depression.
I call BS on the T shirt comment too. Maybe to screen the T.
With so many guru's departing, i guess we are now left with daily bail...
1929er | 01.30.09 - 12:12 am |
And DJ (not a guru) and RD (another no). But they think they are and that's very irritating, I come here to read less of them, not more. If I wanted to read their pompous thoughts I'd visit their poorly updated blogs, which I avoid like the plague. Just go away or fix your smug elitist tone, please?
I have no idea what RD does for a living but DJ has made it clear that she is a State of California worker (via the UC system) and it absolutely chaps my ass that she sits on the internet posting her cheap shots on the taxpayer's dime...although she does, infrequently, use her private time to post too.
Gwyn Carnegie, get over yourself sister! Robert Cote, ditto.
sportsfan,
Heard on the radio tonight that the furlough plan is a go.
"We are facing a MAJOR trade war."
Oh, thank god.
Somebody somewhere is finally thinking straight instead of regurgitating Keynes.
.
Dryfly,
One of my favorite micro lending projects is here in the US. I loaned an enterprising young woman in the rust belt 150 to get started. She combs thrift stores for old sweaters and blankets and reused them to knit the trendiest scarves and childrens clothing. She started on etsy and has a loyal following.
F the gap. She'd doing great. She paid back the loan in 4 weeks.
wtf... dnftt
RE
Who said it had to be a Republican???
"No matter how much I like O he is destined to be a one term pres. No one is capable of maintaining the peace over the long(er) term in this type of environment.
NOT Irving Fisher says... | 01.30.09 - 1:34 am | #
Not sure about that. Everyone said Reagan was dead until late 1983. It's easy to forget.
My vote is India making a big crater where Pakistan used to be.
Banker Mercy Killings | 01.30.09 - 1:48 am | #
Better hope not. I believe that the U.S. military recently revised its estimate of what it takes to make a nuclear winter. Nuking a couple of dozen areas might be enough; earlier estimates hadn't taken into account the fuel load in metro areas.
A nuclear winter will ruin your whole day -- and kill a large proportion of the world population. And before you say, "good," think about what society would be like -- between individuals, between cities, between nations.
People made it through GDI without automatic weapons, bunkers, and 3 years of dry goods. Survival isn't the trouble. Comfort will be - for some.
good point on Reagan.
Also, I hope for all of our sake I am wrong and he is successful.
"A nuclear winter will ruin your whole day -- and kill a large proportion of the world population. And before you say, "good," think about what society would be like -- between individuals, between cities, between nations."
You were projecting when I said "good". Didn't say that. However, I work with a real sharp financial analyst here in Dubai from Mumbai. Right after the terrorist attacks he went on a 45 minute rant on why there weren't mushroom clouds permanently over Karachi, Islamabad. That's the mentality right now.
Nuking a couple of dozen areas
Bob Dobbs | Homepage | 01.30.09 - 1:52 am | #
shoulda been "couple of dozen metropolitan areas"
RD (another no). But they think they are and that's very irritating, I come here to read less of them, not more. If I wanted to read their pompous thoughts I'd visit their poorly updated blogs, which I avoid like the plague. Just go away or fix your smug elitist tone, please?
Anonymous | 01.30.09 - 1:50 am | #
In the spirit trying to fix my elitist tone I'll shall talk down and plain. GFY anon.
The "trade war" evolving into a "resource war" is a real concern of mine. This country is way too dependent on foreign energy and way too well armed (and spoiled and arrogant) to go without.
You were projecting when I said "good". Didn't say that.
Banker Mercy Killings | 01.30.09 - 1:55 am | #
Sorry. When I said "you," I was referring to the usual knee-jerk reaction of some of the less civilized posters around here. Wasn't meaning to point a finger at you. It's late.
If we are going to fight for energy I would look south... much easier targets.
Who said it had to be a Republican???
NOT Irving Fisher says... | 01.30.09 - 1:52 am | #
It is very difficult to win if you are not in one of the established parties. Ross Perot was an aberration but had a realistic chance.
Let's be clear, it takes a huge amount of money to win and therefore only an extremely wealthy person would have a shot. I don't think that deep recessions/depressions are times when people vote for rich folk... especially after this disaster.
BTW, I don't think Ron Paul will have a prayer, ever, to get elected.
"without automatic weapons"
???
are you kidding? the tommy gun was what made the 20s roar!
I recommend reading the original Wodehouse books. I really enjoyed them, and still have copies...
\t sm_landlord | \t \t \t \t01.30.09 - 1:20 am | #
Inherited a full set from my late father in '06. Only through a couple so far. Too many cr comments...
Deflationary Jane. Regarding the specifics of pricing I acknowledge it's not my area of expertise. I'm simply wondering if the price differentials are really that large, and if all of the time and cost difficulties with global supply chain management are truly saving companies the money they claim to be saving ?
Dating a Banker Anonymous
that's how you know it is really worse then expected. poor silly bankers.
Heard on the radio tonight that the furlough plan is a go.
Comrade Bear (tj & the bear) | 01.30.09 - 1:50 am | #
If it does go, we may get to see whether there's an immediate epidemic of blue flu.
Death of small retail will be at hand by late summer. Many large will fall as well.
NOT Irving Fisher says... | \t \t \t \t01.30.09 - 1:31 am | #
Some anecdotes from my small town this week:
Hallmark Store had not sold a card in the past two days.
Payless Shoes in the mall has only 4 employees to cover all shifts.
Local chain restaurant announced it was closing and had no paychecks. Cops were called to stop the ex-employees from tearing the place apart.
Anybody post this yet?
Sharp Words from Obama over Wall Street Bonuses
Sharp words from Obama over Wall Street bonuses - Los Angeles Times
"Many economists think..."
They don't.
Prof. Buiter suggests from 2-5 years before our investors (buyers of our debt) realize we've "got no game" and cash our chips in. Particular actions if taken with the help of magic fairy dust - with no variation whatsoever still won't be the winning combo. THAT'S what made mp realize it's "game/set/match". It's too late for ANYTHING to work, and he realizes it's time to get himself and family physically & mentally prepared.
Put the time to good use.
sportsfan,
This is only the beginning. I am dealing with many desperately attempting to stay alive. They have terrible cash flow and a face mountain of invoices for holiday product that did not sell. It is only a matter of time before they close shop.
I would say that at least 25% of our small retailer base will be out of business in Q1. I don't even want to guess how many wont make it to see the end of Q3.
The only positive is the larger, shall I say traditional retailers, seem to be picking up enough market share to keep the doors open.
If times get bad enough Obama could be vulnerable to a primary challenge from the left. Though right now, I don't see anybody with enough stature in the democratic party to pull it off. It was a smart move on his part to make Hillary part of the cabinet.
This is going to be an interesting presidency.
As for the economy IMHO one has to hedge against both deflation i.e. have some cash on hand and inflation i.e. stock up on the essentials.
Mayor Michael R. Bloomberg is expected to call for a $900 million increase in the citys sales tax
Somebody needs to send Mayor Bloomberg a link to the Wikipedia page about conditions precedent to the French Revolution.
Hillary left of Obama? No way.
Broward Horne,
My condolences on your sister's illness, I hope she is better now.
So frighteningly bad for families, my heart actually hurts for you and your loved ones.
Who our President is in four years is unimportant. For the next two to five years crisis after crisis will raise its ugly head. The BIG crisis will be when no one buys our debt. That could be as early as next year. We become 3rd world within a month.
It is only a matter of time before they close shop.
NOT Irving Fisher says... | 01.30.09 - 2:18 am | #
Especially when no rent checks are going out. Between the storefronts that will be vacant soon and the ones trying to hold on against the void, it looks like many of the small folk will be gone before we even get to Q3.
Prof. Buiter suggests from 2-5 years...it's "game/set/match".
Make that 2-5 months.
....could very well be, Feckless.....
ppk - I think you are mistaken to think that Hillary Clinton is to the left of Obama. He's a mediator, not a moderate.
But the damage goes beyond Wall Street, he said. The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional center manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.
The Chinese premier, Wen Jiabao, left little doubt that Beijing blamed the United States for the economic breakdown. Inappropriate macroeconomic policies, an unsustainable model of development characterized by prolonged low savings and high consumption, the blind pursuit of profit and the failure of financial supervision all contributed, he said.
In Davos, Russia and China Blame Capitalists for Crisis - NY Times
Some anecdotes from my small town this week:
Hallmark Store had not sold a card in the past two days....
sportsfan | 01.30.09 - 2:09 am | #
I love anecdotals. What I'm seeing here is a large number of long-time small local retailers suddenly for sale. Older owners, within striking distance of retirement age: they see hard years ahead and have no taste for them. It may be that some of them are already in the red, but a lot of them, I think, just aren't ready to fight.
"Nobody back then could have imagined thin film solar panels coming along a few short decades later. Or microprocessors, or the Internet ,or farms in flyover using cow dung for electrical power."
People did imagine similar wondrous things, published their imaginings, and were widely read. I've observed that virtually every sentence that begins with "Nobody could have imagined..." is prima facie false. If books aren't your thing, try to find a good print of 'The Shape of Things to Come'.
Hillary left of Obama? No way.
1 currency sooner [yogi] | 01.30.09 - 2:22 am | #
Not right now of course. But politicians do shift with the political winds. Anyway she's lost her chance.
ppk,
I have cash and am slowly adding to a DXO position as a hedge.
Need any ranch hands, Black Star? I can cook beans and cornbread like nobody's business. And I do windows.
Would anybody take this guy seriously if he didn't oversee $¾ trillion of other people's money?
Ding Ding Ding! Circular argument of the day.
Hillary's done. A bitch personally from what I've been told, and an utter opportunist with no ideals. I lost all respect for her a long time ago over flag-burning.
Star... I am originally a Texan. Lots of ranch time (not the one outside of Vegas). I might drop in too.
good night all
My guess for 2012: It'll be Obama vs. Mitt Romney. Could go either way.
My guess for GDP tomorrow: It doesn't matter what the number is. We're truly screwed.
Goodnight, folks.
NYC Mayor Announces $1 Billion In Cuts, Job Losses On Friday - wcbstv.com
NYC Budget Axe To Carve Out $1 Billion
Slew Of New Taxes On Tap, Higher Fees For Services, Plastic Bag Charge; City Workforce To Lose 23,000 Jobs
City Employees To Pay Part Of Healthcare; Pension Reform
CNNMoney.com: 404 Page Not Found
NYC: 23,000 city jobs in danger of being cut
More spending cuts loom on the horizon for New York City, which could see a $4 billion deficit in the new budget that starts July 1.
I spent the early 90's recession in NYC. Not a good place to be when business dries up.
Anonymous, you may be right. For now, I'm willing to give him the benefit of the doubt. I think more will be revealed in the days and weeks ahead.
Page not found
Failed Bank sues Regulators
$432 million asset National Bank of Commerce in Berkeley, Ill., failed two weeks ago. It sued the Treasury Department, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. after its application for the program was denied in November.
I think NBC has a great case - except that it is against the government. Even if they do win it would be years and years and years before it was settled .
Ha. You should have seen the 70's.
In the spirit trying to fix my elitist tone I'll shall talk down and plain. GFY anon.
Rob Dawg | Homepage | 01.30.09 - 1:56 am
Talk down? Seriously? OK, Mr. Cote, talk down to the hoi polloi, we'll feel soooo much better.
There really are ways to discuss this without your need to condescend. Take notes DJ.
You have never read a post by CR or Tanta that mirrors your tone and they are both more accomplished than you.
There is a very big reason why CR's blog is far more read than yours and your attitude is most of the reason. You too, DJ.
Self satisfied pukes, go back to your unread blogs. Your whining over CR's lack of relevance dooms you. I can provide you with relevent quotes should you desire them.
Some perspective:
Time it took for some large/complex civilizations to collapse:
Western Roman Empire \t 310 years
Medieval Mesopotamia \t 550 years
Lowland Classic Maya \t 150 years
Source:
"How Civilizations Fall: A Theory of Catabolic Collapse"
How Civilizations Fall: A Theory of Catabolic Collapse
U.S. to unveil menu of bank fixes next week: source
| Reuters
U.S. to unveil menu of bank fixes next week: source
(Crack & Bongwater are options)
I peeked at NYC in the 70's but didn't live there at the time. Were the rents as bad then as they were in the 90's? (No need to discuss today's rents...)
No one is talking about how much worker productivity is being lost by reading and posting for hours on end on blogs during working hours.
Blogging is collapsing the economy!
U.S. to unveil menu of bank fixes next week: source
(Crack & Bongwater are options)
I read Prix Fixe menu....and my first thought...that sounds like it might work. 'Tis a pity my eyes deceived me.
Self satisfied pukes...
Anonymous | 01.30.09 - 3:01 am | #
Why, Grandma! What a big chip on your shoulder!
Slums, muggings, graffitti (some wonderful), the concrete jungle. Fun for a teenage boy, not for others.
Speak for yourself, Shark. I missed Conjure's Global Depression Clock striking 12:00 because I was working - propping up the economy singlehanded! Sorry to let you all down. It's my fault. Mea culpa. I can haz TARP now, pleez?
Futures turn red. Traffic lights turn blue, tomorrow...
the anon who ragged on DJ and RD sucks,still laboring under the diminishing concept that the Internet provides high leverage to minority postions as theorized in the. Great Reckoning.
Current global system is a rube Goldberg structure destined to fail. The US supported complex structure through honesty and contract. Turning through US into Mexico benefits noboby but a few oligarches.
None of these guys understand complexity, building hubristic claptrap of high risk and low benefit. I see it a lot in software with the younger crowd, great nodding of heads towards the utterance of complexity with little true understanding of basics, need or benefit.
I interviewed with supergrniuses last month who wanted me to design a great and elaborate structure and they disliked my answer because it did not serve ego, I said I'd reuse an open source ESB framework and tweak a transaction layer, easy cheap and far more reliable than new code but young guys know they can code better one time than anyone else
Can code 100 times and proofed against hundreds of environments by thousands of people.
On my freaking iPhone and thinking about janet as I get my ass beat in pool
America's Most Correct Internet Conspiracy Theorist Calls Next Market Crash - Apocalypse - Gawker
Too many smart people spending way too much time reading endless blog comments and surfing da web instead of engaging in productive work - that's why the economy is collapsing!
In 1982, the target fed funds rate was 20%. Now it's zero! Soon the economy will be back on track, not to worry. I'm waiting for a small confirmation before calling the bottom for global equity markets, should be through at most in 2-3 trading days next week.
BH - seems to me the younguns have skipped right over the lower levels of Maslow's hierarchy and gone right for self-actualization without earning it, kind of like a Third World country getting high tech and democratic ideals as hand-me-downs rather than fighting for them and growing into them.
Makes me wonder - when the GD2 shit hits the fan, will skipping those developmental stages prove their undoing?
Admirable multitasking on your part, BTW.
is anybody in touch with the CR Companion guy
1929er | 01.30.09 - 12:15 am | #
I talk to him far too frequently. There was a well known installation problem, having to do with temporarily enabling cookies, that's outlined on the cr companion blog. If that's not the issue, post a comment there.
I talk to him far too frequently.
Ken Cooper | Homepage | 01.30.09 - 3:59 am | #
Don't worry, talking to one's self is no longer a sign of mental instability. At least, that's what my alter ego says.
Seen Honda's numbers?
Expired
Ouch
From Brad Setser's Blog:
Just how much is $350 billion?
Posted on Friday, January 30th, 2009
By bsetser
My colleagues at the Councils Center for Geoeconomic Studies calculated that it was enough to buy most of the common equity of the US financial system at least on January 21.
That isnt the best use of the TARPs funds, but it does illustrate just how little common equity is now supporting the financial sectors large aggregate balance sheet.
Brad Setser: Follow the Money » Blog Archive » Just how much is $350 billion?
This may be an odd diversion at this hour, but I'm modestly fascinated with Japanese gasoline consumption right now.
Down since 2006, and biggest MoM decline since records began in 1952
Japan imports all of its oil, and is not suited to having refinery exports (very developed, full of regulations, not lowest cost, ...) As such they have had decreases in refinery capacity in recent years when demand decreased (weak Yen, strong oil price)
So when you see Japan exporting gasoline, it is exceptional
I couldn't find very much freely available further on the matter. Nothing recent enough, and most of it in Japanese I can't read.
Just thought it might be interesting to share. A good windsock for global trade (big exporter, specialized in not easy to duplicate capital intensive processes, stable trade relationships)
Bunker Dweller(Unrated) writes:
It is time for us to pore over mp's old comments, and try to figure out just what he saw that drove him mad.
A certain class of response stratagems have developed their moment of greatest urgency. That's why a big puff of people left at once.
Got glod?
+2%
A certain class of response stratagems have developed their moment of greatest urgency. That's why a big puff of people left at once.
Comrade Byzantine_Ruins | Homepage | 01.30.09 - 5:27 am | #
A much more satisfactory answer than mine:
They had a party to go to,...and we're not invited!
1 currency sooner yogi writes:
Slums, muggings, graffitti (some wonderful), the concrete jungle. Fun for a teenage boy, not for others.
The new natural habitat of the human race. Enjoy.
I suggest adapting and staying a teenage boy forever.
A certain class of response stratagems have developed their moment of greatest urgency. That's why a big puff of people left at once.
| \t01.30.09 - 5:27 am | #
\t Comrade Byzantine_Ruins | \t \t \tHomepage
## So, Byz, do you mean that there are some, perhaps more than a few who think things are about to tip from the cup to the saucer and soon onto the tablle?
you know that non-thinking concept "first into a recession is first out" I have heard used as the only reasoning ever given for a '2nd half recovery'
when do I get to see Bartiromo + Friends jump into Detroit real estate
EHP: RE-Japan oil consumption. I am sensing some shift in the force here as well. Oil holds in there at just above 40 but unleaded gas is edging up, from 1.20 to 1.24 or so yesterday. So, I stop by my jobber friend and ask, have you heard anything about possible supply interruptions? He said perhaps. The maintenance cycle is starting up and that happens every year. Refineries shut down, repair, refit, etc. All possible supply is going for home heating oil. Another friend who works the shut downs said a refinery in Georgia (US) is deferring maintenance for at least one month to keep up with demand. There's still a problem in Oklahoma where all the West Texas crude flows through.
Just some points that make me go, hmmmmm. Don't have any real facts, but then again we can't trust them either.
let me say from experience, that people taking a break from CR are probably doing so chiefly because it can feel good to take a break
when do I get to see Bartiromo + Friends jump into Detroit real estate
| \t01.30.09 - 5:50 am | #
\t EvilHenryPaulson | \t \t \tHomepage
## I wanna see her, that Caruso Cabrerra person and Trish Regan take off their sweaters. And I wanna see Mark Haines backhand that Erin Burnett twit.
volker the viking,
Conoco and Valero have their shutdowns scheduled for February
Shell is negotiating on behalf of refineries behind 2/3rds of the US supply. They're not offering much, union offended, and at least serious talk of a likely strike. Managements/salaried/scabs "will take over operations" but there will be supply decreases
More importantly all these factors will unite and coalesce any parties looking to run the price up -- which is lunacy, but you cannot deny people their fu
Wisdom Speaker writes: Those who are prepared for the full range of possibilities and have thought out their next moves "in advance" will benefit from the preparations...
Wisdom Speaker | Homepage | 01.30.09 - 12:37 am | #
Those who are prepared, have their money in several countries outside the US, a permanent residency card in another country and a current passport. Oh, bye the way, I should say to be up to your eyeballs in long term debt (here in the US, debt that one can service) so that you when you have to pull the rip cord and leave, no assets, none are left here.
More importantly all these factors will unite and coalesce any parties looking to run the price up -- which is lunacy, but you cannot deny people their fun
| \t01.30.09 - 6:02 am | #
\t EvilHenryPaulson | \t \t \tHomepage
## Labor problems, thanks for the heads up. I really don't know much, but I listen to people and just put things together. It may not take much to make the labor thing a big problem, but then again unions are just as sold out as the politicians and business types. And of course there's the geopolitical to keep in mind. Enjoy and benefit from much of what you post about.
volker,
Shell offered union workers a three-year contract with a $500 signing bonus and a 2.5 percent hourly wage increase in the second and third years, the memo showed. Workers would receive a 75 cent-an-hour pay increase in the first year. The current agreement expires at 12:01 a.m. on Feb. 1. Members have already authorized the union to call a strike.
Refinery Workers to Reject Offer, Threaten to Strike (Update3) - Bloomberg.com
...and in the UK
About 600 contractors at the 200,000 barrel-a-day Lindsey plant remain on strike in protest at the employment of Italian workers on the construction of a hydro-desulfurization unit, Total said. Workers staged a protest outside the plant this morning, demanding the government act to protect jobs as the recession increases unemployment.
U.K. Workers Strike as Foreign Staff Protest Spreads (Update1) - Bloomberg.com
but the whole "Buy America" program is a serious misstep if it stays in, other countries will not wait for WTO and FTA rulings to act punishingly. Bush carried on enough protectionism for the welcome to be worn out, and more importantly politicians the world over will fight 4 times as hard to preserve a job as trying to create 1 more. Even if the thing is a bargaining tactic, it's a loss
I drove around the lake at 3 am, passing many new homes built since my last visit in 1998. Not a bad place to hang during The Crash; my dad is a careful planner.
He never forgave my trespasses because ... he never blamed me. Quiet, modest and machine-like in his consistency. I don't have those genes, though. I have Bernanke's disease. I want to know that my model of reality is true.
Imagine a cruise ship. Starboard has debtors, port has lenders. If the Feds burn lenders, the ship lists dangerously to the right. Burn debtors and it lists left.
The Feds will do what they've done for decades. A balanced burnoff. Bond destruction through inflation combined with equal debt default. Expectations and behavior are bound to outcome so they have to balance. I don't know if they'll succeed but they'll try.
Bond paper sucks.
Why would you risk it?
It has to burn.
Uranium and oil have to be long-term buys.
I think Rogers is wrong about China. They pay lip service to Confucius. The greatest asset of India is the fusion of British culture and Gandhi.
You can't do complexity without predictability, which means honesty and contract law; honoring the spirit of the law, not just the letter. This implies balance of self-to-group and Gandhi did such a great job of balance, he may have laid a foundation to surpass Western culture.
Traces and secondary echos suggest that witch associations lurk. Scottsdale people, too, almost certainly.
It came to me
Suddenly
I sat in Starbucks
For an eternity
The hours pass
The days go by
But has anybody
Really tried
To cross that line?
To get inside?
Damn, I'm lucky. The more I ponder the Delusion Pandemic concept, the more I like it. Many things fit together better. I wish I could find a way to prove/disprove it.
.
RPT-FACTBOX-U.S. refinery maintenance plans for 2009
volker the viking(Unrated) writes:
## So, Byz, do you mean that there are some, perhaps more than a few who think things are about to tip from the cup to the saucer and soon onto the tablle?
18. All warfare is based on deception.
when using our forces, we must seem inactive; when we
are near, we must make the enemy believe we are far away;
when far away, we must make him believe we are near.
and crush him.
If he is in superior strength, evade him.
irritate him. Pretend to be weak, that he may grow arrogant.
If his forces are united, separate them.
you are not expected.
must not be divulged beforehand.
BR
it's not Confucius, at this point it is limited choices
politicians are simple
just need to figure out what questions they ask
BYZ: Put down your dog eared copy of "The Art of War" and pick up a copy of Dr. K's "Miracle Cure for What Ails You and Yes I AM the Only Living Soul On Earth That Knows Anything Other Than the Blather You Other Idiots Spout". I know the titles a little longish but hey, he ain't got much to say except something along these lines, and I also know he's reading this at one point or another. I threatened to flame him at his Blogovilla but I'd just get banned and there would be another medal I would wear on my chest as a badge of honor along with the many others that reside above my pocket seam. Anyhoo.....here goes:
Select all and delete from existing text.
Paste: I told you fuckers you were wrong when you told me to shut up and get on board. Jeeze, I got a freaking Nobel and you guys got creamed. HAHAHA! Now you guys shut the hell up and listen to me--SPEND, SPEND, SPEND!!!!!!!
Now there's a book for you.
Come on, rent, no need to hide names here.
My mother has Parkinson's and is frail, but won't leave NYC, and wouldn't in the 60's when the arson/slum came within a half mile. I tell her it won't be safe and she says wrong attitude: stay and rebuild.
EvilHenryPaulson(Excellent) writes:
but the whole "Buy America" program is a serious misstep if it stays in, other countries will not wait for WTO and FTA rulings to act punishingly. Bush carried on enough protectionism for the welcome to be worn out, and more importantly politicians the world over will fight 4 times as hard to preserve a job as trying to create 1 more. Even if the thing is a bargaining tactic, it's a loss
Just IMO, the internationalist experiment was just a charade to cover neocolonialist resource harvesting in he first phase of the postwar ecumene, and then to cover the "vendor financing" regime and the export of capital from the west in the second phase.
Anybody that followed the rules of the international road got raped, and the only people who got ahead were folks who had very organized industrial development efforts. Obviously MITI is the paradigmatic example.
There are pitfalls to a national perspective on development but I think you are going to see it nevertheless, because it is what works. If not now then as the decline of energy affluence constricts global trade and travel in the post-Depression environment.
The modern large nation state and the transnational quasi-state apparatus appear like they may be the blow off top on humanity's hierarchic organization frenzy of the 20th century.
Soylent green is people.
JIT is a planned economy.
1 currency sooner yogi writes:
JIT is a planned economy.
You are a wise little Yogi.
Bill Gross in 2 words: "Buy ME!"
He sees the writing on the wall... just a matter of time before 50% of his AUM tank!
10,000 Mosquitos writes:
I'm not suprised that people move on to other pursuits after swimming against the tide and correctly calling the downturn. After all of their online catharsis... acceptance sets in... life still needs to be lived and adjustments made to the new reality.
10,000 Mosquitos | 01.30.09 - 12:53 am | #
I fall in that camp but you know what? Everybody loses. The believers will have lost their money (or house), the naysayers will have lost social acceptance.
The whole thing is a disaster.
Some one some where posted a factoid that 40% of the wealth in the world has vanished so far. I think it was that Shedlock person. Anybody think we're anywhere close to the bottom?
Sm...arter than the average bear. Or so my counterparties would have to admit.
As I sit in my study this morning. Nestled up against the mountians. I look to the east. I have trouble telling if the red glow that I see on the horizon is the new day dawning or Washington burning.
Second, I wonder if the system can be manipulated in real time to produce a "kitchen sink" quarter or two?
Probably not to the second, it's doubtful that the new team has enough control to pull that off yet.
sm_landlord | 01.30.09 - 1:08 am | #
I'd say kitchen quarter or 8.
There are too many people out there who are still clinging to the "old world". All industries got built up to the bubble revenue. All sectors will go through the wringer.
volker the viking(Unrated) writes:
Some one some where posted a factoid that 40% of the wealth in the world has vanished so far.
From the haulage reports, it looks to me like the real economy shrank somewhere between the low and high teens in percentage points. Dunno exactly what constitutes "the real economy" though. The numbers don't describe a tightly bounded system. Some places like the Inland Empire and the Pearl River Delta are really hurt.
Obviously, a lot of financial leverage has gone away but the size of that and the scope of its effects on other segments of the economy are harder to judge.
It will take a minute for this to register. There will be secondary effects, serious ones. March promises some interesting days indeed, for example.
Then there will be whatever kind of Treasuries / general sov debt crisis materializes. One is beyond inevitable at this point.
Once the sov debt crisis sorts out the quick from the dead, the bottoming process will begin in earnest on a per-country basis depending on the prevailing local conditions and the rationing of credit.
It's not over til the sov debt / forex fat lady belts it out.
Byz: Agree! Good post. Just got back from Bellingham. Wow, things are still on hyper drive from what I observed. You're in Seattle, right? You are a programmer? I have an idea that may be seminal. Next time I'm out 'there' will be March.
Banker Mercy Killings writes:
"Unlike 99.9999% of Americans, I watch international news through my satellite at night,
can you receive the english language Al Jazeera?
. March promises some interesting days indeed, for example
What's interesting about March?
volker the viking(Unrated) writes:
You're in Seattle, right?
Urban hillbilly, American NE.
You are a programmer?
Nope. Scripting, sure. Software engineer? No way.
take a name ass wipe(Unrated) writes:
What's interesting about March?
Spatula City breaches its loan covenants because nobody is coming in due to layoffs at the tractor factory.
more silly games. this is as bad as the earnings shenanigans that are played with by scum street. did it beat or miss,miss or beat. did it beat the whisper number? here come the silly words from the media as well.....SOAR, SKYROCKET,PLUMMET,MISS,UNEXPETENTLY,AS EXPECTED. how many times is this silly number revised 4?5?6?. global depression is here
Too many smart people spending way too much time reading endless blog comments and surfing da web instead of engaging in productive work - that's why the economy is collapsing!
whale | 01.30.09 - 3:46 am | #
I agree but...
B_R,
"There will be secondary effects, serious ones."
Yes, the mal investments ran VERY deep this time around.
We got a glimpse with the airfreight numbers yesterday. Think about it. Airplanes take enormous resources to assemble and deploy. Shipping firms expanded their airfreight capacity tremendously to deal with the bubble. Suppliers of stuff to keep them in the air expanded too. That's all contracting. It's not going to contract a bit and then go back to the levels of a year ago. It's going to contract permanently. And so are all the attached businesses.
A microcosm of the mal investments. Multiply it. Pick an industry, and pull on a thread, any thread. Watch the supply chain unravel.
That's why mathematical modelers of economies fail. The status quo is considered an equilibrium point, but it never is.
At the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble. And all the feeders to that industry. And all the feeders feeders. The interconnected web itself is unraveling. This will not be pleasant.
Nostrovia,
Tread very carefully over the coming days, likely making for interesting Feb/Mar (in my opinion). With the numbers being thrown around such as an ADDITIONAL $4 - $5 trillion of stimulus needed in order for us to account for all of the bad assets as international recession continues to run deeper. Dominoes are falling quickly, and right now is starting to seem eerily similar to last October/November.
New lows look to be tested or broken through to the downside. And I'm the optimist on the board.
B_R,
And of course while I wrote my previous post you pithily posted this:
"Spatula City breaches its loan covenants because nobody is coming in due to layoffs at the tractor factory."
Need more coffee...brain is still in the slow lane.
Nostrovia,
"CM, at the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble."
Agreed...I have many Dr clients and the medical industry is absolutely affected by this downturn. Anytime and anywhere someone has cash out of pocket connected to an expense in this environment, there will be delays in that spending, searching for lower cost alternatives (all econ 101 applies).
Attorney's should do well as the regulatory environment heats up and this is the only arrow left for many.
At the moment, I cannot find an industry that isn't severely mal adjusted due to the credit bubble. And all the feeders to that industry. And all the feeders feeders. The interconnected web itself is unraveling. This will not be pleasant
I used to be angry at the spenders but then one day I realized that the savers have taken advantage of the excess just as much as the spenders.
All those savers who invested in the market got MORE returns than they deserved. And now a huge number of them are upset because valuations are coming down.
The whole thing is a total farce! Everybody is to blame. We are all in this together.
The "Spatula City" sign was placed on a real billboard in Tulsa, OK, for the film, and was left there for several months after shooting was over. According to the DVD commentary, many tourists would exit the freeway like the billboard said, and would drive for long periods of time looking for Spatula City, thinking that it was real. The billboard could be seen from eastbound SH-51 at its intersection with Memorial Drive.
GiezeCubed,
"Attorney's should do well as the regulatory environment heats up and this is the only arrow left for many."
Yes, and whilst I'll benefit from this, it is, on baalnce, a barrier to recovery.
Nostrovia,
Comrade Misean is Dope(Excellent) writes:
And of course while I wrote my previous post you pithily posted this:
That's okay, it was a good post. The haulage data suggests to me macroeconomic nuclear winter.
We will soon see how much economy is out there. VERY SOON. These credit panics are madcap. It will be effectively over before they can spend the money they appropriate.
OT
Great 5 setter in Australia now.
I realized that the savers have taken advantage of the excess just as much as the spenders.
Not sure I follow that. I agree for better or worse we are in this together.
Bloomberg interview with Stephen Roach. Roach foresees 3 year global recession (~5 min into video) and US unemployment 9-10% this year.
Bloomberg News
sm_landlord and deflationary jane.
Munro writes very funy stories and i am already a wodehouse fan.thanks for telling about thorne guy.
The real yr-to-yr GDP contraction is closer to 7% ... Let us see what the official phony say.
3 minutes until we get the magic numbers...Should be ugly.
And the windup... and the pitch!
Minus 3.8!
Wow- that's actually almost halfway decent... OK, it sucks but not as much as believed.
Employment cost index +0.6 vs. +1.1 expected.
Comrade Byzantine_Ruins,
There is no real economy nor are there any real jobs. A lot of what we believe to be real is a construct of our imagination, created by our mind to make our existence seem meaningfull.
Banker Mercy Killings writes:
My vote is India making a big crater where Pakistan used to be.
i sincerely hope it will happe
-3.8%
Hmmmmmm...
Let's take another look.
Nostrovia,
-3.8% Take the market on that, baby.
The whole thing is a total farce! Everybody is to blame. We are all in this together.
DANM | 01.30.09 - 7:56 am | #
No, you Yanks and Brits are to blame with your "lassie dog" supervision and with your totally corrupted financial sectors but for once, Karma really is a bitch. You are also the ones who is going to suffer the most.
Fortis trading suspended.
Feckless Ness writes:
Anybody post this yet?
Sharp Words from Obama over Wall Street Bonuses
Ya doesn't that seem mighty tuff like he is outraged at those losers for doing that. But 2 things
1) We/he knew about these back in December. Why did he wait till they passed them out before being outraged!
2) Also he is so two faced, The federal budget is hemorraging and what does the Democratic congress get?
404 - Error: 404
What a narcissistic hypocrite along with the whole dam media
Of course no one calls him on it.