"New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract."
I have always found the ROI in political donations always far outstripped any conventional investment.
The taxpayers need to pool their money and start making contributions towards reforming the system. Buy a couple key votes in the senate and get the right congressperson to sponsor some pro citizen legislation and we could actually salvage the future of the USA.
But why won't we countenance the idea that fiscal stimulus doesn't work? The empirical evidence is contrary, weakly supporting, or ambivalent, and I consider that to be a very weak basis for a foundational theory in a discipline. It's been sufficient to discard other ideas like Ricardian equivalence, or Say's Law.
But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy.
When Yellen defends the failure of fiscal policy in Japan, she points entirely at... the failure of quantitative easing too. That's SAD. At least she talks about the need for a little discipline, but this is getting ridiculous.
Of course "conservative and liberal economists agree" -- everyone loves a plan where you raid the Treasury and future generations, ostensibly for their own good. The only debate is about how much to loot and how.
By the way, if you want a truly effective Keynesian "stimulus" program, trade wars are the most effective tool available.
Yellen: If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now.
with all due respect, I think there are three critical issues to consider here. If Ms. Yellen is reading this, I hop she can take some time to at least consider these points, if not respond.
1) What was the role of previous fiscal stimulus packages in engendering the financial crisis that Ms. Yellen speaks of?
I.e., to what extent was the flight to yield bubble engendered by the stimulatory response to 9/11 and the tech bubble the cause of this crisis?
If it was contributory even in a significant part, how will additional encouragement to indebtedness act to correct this, and will it accomplish anything of lasting note?
2) Regardless of if this is desirable from a domestic economic perspective, can the US raise sufficient funds for this massive fiscal stimulus regimen? Funds available for lending on a global basis should be a well-known quantity to Fed & Treasury officials. How does Treasury borrowing square with the available funds in the context of a massive global fiscal stimulus campaign?
3) Can Ms. Yellen describe to me in objective terms what a "normal" economy looks like? In other words, the US has been subject to various artificial economic stimuli since the mid-90s when the tech bubble began. This is over a decade.
Can we actually call a halt to this program in a timely fashion, or will a distorted image of the US' "normal" economic performance send us headlong into a major bout of inflation?
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary.
The hundreds of earthquakes at the caldera over the last week and the unprecedented and accelerating ground deformations around the most unstable thermal basins are really, really alarming. If this supervolcano erupts, the entire united states will be covered in inches of ash, causing agricultural collapse, not to mention human death from inhaling glass fragments in the ash.
Abject and complete fear in Yellen's statement. In essence she's saying we don't have the luxury to worry about the near term, we have to do something now to stave off a complete systemic collapse.
2) Regardless of if this is desirable from a domestic economic perspective, can the US raise sufficient funds for this massive fiscal stimulus regimen? Funds available for lending on a global basis should be a well-known quantity to Fed & Treasury officials. How does Treasury borrowing square with the available funds in the context of a massive global fiscal stimulus campaign?
Byzantine, they view this crisis as a liquidity trap. Under standard macroeconomic models, there is no harm in additional borrowing, because you're not going to raise inflation or interest rates due to the deflationary trap. On the IS/LM curve, you could think of it as a flat segment. See Krugman's diagram.
I've questioned whether those macro models apply cleanly under such extreme circumstances, and I continue to suspect that such interventions and further reallocations are actually increasing real interest rates through portfolio crowding out, increasing risk premiums due to the US' precarious balance sheet, uncertainty about what the USG will do next, and an unwillingness to compete against the Fed, a non-economic entity, in markets. There are reasons to believe I'm wrong, but also reasons to believe I'm right: sufficient scope for doubt, at least.
Also, to anyone who would hold up our debt-to-GDP ratio as a sign we're in fine fiscal health, it's a fairly meaningless number. You can very easily go bankrupt without a penny in debt if you must expend more than you make. The USG also has a few off-balance-sheet liabilities, like the FDIC, PBGC, Medicare, AIG, GE, GM, Social Security...
dk(Unrated) writes: But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy.
[...]
Of course "conservative and liberal economists agree" -- everyone loves a plan where you raid the Treasury and future generations, ostensibly for their own good. The only debate is about how much to loot and how.
You answer your own posit here. Of course Keynesianism is sacrosanct, it's a system of practice where you get to bust open the piggy bank and spend the contents on blow for the good of the nation. It's not just that you want to squander wealth, it's the only responsible choice.
You're never going to get traction arguing against that in modern America, the country that can't say "no" to an expenditure.
"Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic firestorm we face today poses a serious risk of an extended period of stagnationa very grim outcome. Such stagnation would intensify financial market strains, exacerbating the problems that triggered the downturn. It's worth pulling out all the stops to ensure those outcomes don't occur."
Maybe "those outcomes occurring" might be what we actually need!
We need more government intervention??? Has anyone been noticing the attendance at pro/college football games? The concession prices are outrageous! To me the economy is severe when a professional sports league goes bust, a few teams fail, & athlete salaries go the way of wall street bonuses!!
It's worth pulling out all the stops to ensure those outcomes don't occur.
I think we have a new candidate for hubris of the year.
deleveraging is widespread; the markets for most private asset-backed securities are dysfunctional; financial institutions, both large and small, have failed; and the economic downturn is causing delinquencies to rise, threatening further financial distress; households and businesses face an ongoing credit crunch; and housing and financial wealth has plunged.
What's that saying about economists? They are great at telling you what's happened not what is going to happen. While all these scary phrases are blindingly obvious I have to single out the last for special scorn.
...and housing and financial wealth has plunged.
This is why we are in such deep trouble. We haven't even started in on real wealth yet. All we've done is clean up a little sloppy paperwork that was incorrectly reporting wealth. People who bought stocks or houses ten years ago are still way ahead of historical returns. What's gone was never wealth for exactly the same reasons Madoff is under arrest today.
Oh yeah. I forgot to add FNM, FRE, C, JPM, MS, GS, $8.2 trillion of various loan guarantees, the CP market, a very large structural budget deficit, a very large structural trade deficit...
The 'micro-economic choices and related choices are spend or don't spend. Watch TV or turn it off. That would be turning the ads off. It's 99% 'advertising' one way or another. A lot of 'political advocacy ads mixed with ads to buy.
Buy or don't buy.
Use the internet or turn it off.
These are the choices of consumers.
The rest is out of our control.
Choosing how or where to work is still somewhat of a choice.
Does anyone want to buy a house or a car right now when prices may drop?
What good is credit if you don't want to buy right now?
The recovery is based on more buying.
"This doesn't really seem like quantitative easing in the sense of finding a growth rate in the money supply," he told a panel discussion during the annual meeting of the American Economics Association.
"What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy," he said
It's not just that you want to squander wealth, it's the only responsible choice.
And prudence is folly and folly is prudence, and so forth. I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Kindred souls like you and others I find here help me feel a little better. But only a little.
Comrade Byzantine Ruins,let me respond on ms Yellen's behalf.Question # 1 Errrm,next question.Question #2 Palau is still a member of the coalition of the willing and has promised support.Question # 3,next question...I'll take this one from Jeff Gannon.
Don't sweat the small stuff like Yellowstone. Besides if it happens SoCal real estate will finally stabilize.
"I have good news and bad news. The good news is your Inland Empire home price has doubled. The bad news, here is the displaced family that will be moving in with you. Don't worry they know how to grow winter wheat in the backyard and they brought Lutefish."
"Watch TV or turn it off. That would be turning the ads off. It's 99% 'advertising' one way or another. A lot of 'political advocacy ads mixed with ads to buy. Buy or don't buy"
...THIS forum is in direct contradiction to preferred spending. The 170 ppl sitting here posting are NOT contributing to the economy: We are NOT reading anything of a marketable nature, we are NOT out spending - our wallet is not coming out of our pocket to help spur the economy in any recognizable way. TPTB would rather we "get out more".
The best and safest solution is to just stay dumbed down, apathetic, and unaware. Just worry about basic needs like animals do and you'll survive. It's not what we thought it was but we have to not care why and who and just stay detached and in denial. Just mind your own business and keep blinders on. Be the ostrich and stay in the sand. It's the only way forward. Don't cross the line in the sand. Surrender.
Black Star,I will be going out and spending some $.I just learned how to make cheesecakes and plan to pick up the ingredients for several,along with a loaf of bread.Cheesecake is REALLY easy to make...
The kids are playing Life, literally. How appropriate. In the game, my son is an athlete, and he gets $60,000/year, whereas, my daughter is an attorney and she gets $90,000/year. Methinks they need to revise those amounts, at leat in regards to athletes.
Pulling out all stops should do the trick.....whatever that means. Dumb as a banker | 01.04.09 - 3:07 pm | #
It is supposed to mean getting as much noise out of a church organ as possible but in this case I'm afraid it means knocking the bilge plugs out of the ship of economy and letting the seawater rush in.
Well, at least they have a laundry list of whats happening.
For those who did not read her:
Indeed, the crisis is ongoing. Risk-aversion in financial markets remains exceptionally high; deleveraging is widespread; the markets for most private asset-backed securities are dysfunctional; financial institutions, both large and small, have failed; and the economic downturn is causing delinquencies to rise, threatening further financial distress; households and businesses face an ongoing credit crunch; and housing and financial wealth has plunged. Marty points out, and I agree, that the likely impact on consumer spending of the decline in wealth thus farone of a number of factors weighing on this sectoris, on its own, quite substantial. And house prices are continuing to slide.
dk: I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
Nobody cares if these theories work or are correct, they are justifications for looting. I don't say that out of natural cynicism, but because my observations lead me to conclude the policy engine in the West are largely broken and no longer use a policies objective worth as a criteria for evaluation. Germany seems to be an exception, but we'll see how long Merkel can hold on to rationalist policies in the age of the Free Lunch.
Thanks for the liquidity trap essay link, reading it now.
Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis.
Still in denial and can't bring himself to call a spade a spade.
The "severe financial crisis" didn't just erupt from a volcano on Mars. The crisis was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the creation of the Fed.
Hoopajoops, LTD writes:
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary.
Yellin's in the same boat as Krugman, their academic pinheads. Keynes is all they know, tic, tic...those softies. In actuality, the check's on the table and these folks are still debating on how to get out the door without departing with the remaining cash in their pocket after a good night's boozin'.
We're not in a depression, but if the Fed continues to expand the balance sheet with the the type of fiscal policy coming down the pipe, in about two years, with the debt we have, yeah it'll be a depression, and a good one too.
Anyone who says "we just need to inflate our way out of the problem" isn't thinking very hard. When they say that, they mean "we need to increase our nominal GDP and wage growth to bring them in line with our debt load."
What is the transmission channel? HOW do lowering interest rates, increasing fiscal deficits, and flooding the banks with liquidity create wage growth? Bonus points if you have an answer when China's peg is included.
The world is full of prices and trade and real people buying and selling. Your job is to change most of those prices rapidly away from its current equilibrium to what you'd like the new equilibrium to be. How?
We already witnessed one transmission channel: financial markets and bubbles. We just went through massive bubbles in stocks, housing, stocks again, and commodities. We did have inflation in most areas go down or unresponsive while it soared in a select few areas heavily exposed to the financial markets, like food, housing, and energy. Real wages sunk. Nominal wages barely went up. Everything exploded.
You could invoke this same course again in extremis: the Fed could buy everything imaginable. But any action that almost certainly leads to a hyperinflationary spiral and/or a loss of faith in the currency as a medium of value and exchange is not on my list of reasonable choices.
We'd really like to see wages go up, but we're not competitive enough at current exchange rates for that to happen. There will be no wage-price inflation until America is price competitive with the rest of the world. Devaluation of our currency is appealing, but it beggars our neighbors, may not be possible due to pegs and dependence on certain imports, and doesn't suit the rentier class anyway. The market is trying to do it through deflation because it can't do it through devaluation, and we're fighting it hard.
Trade wars, or allowing default of lots of debt and massive monetary contraction to occur seem to me to be the two serious solutions. Too bad both outcomes also suck.
All this is especially troubling, because financial firms will be keen to get into businesses from which they were previously excludedand quickly, because an accounting trick known as pooling of interest, which flatters the profits of the merged entity, will be scrapped at the end of next year. Big financial firms are already difficult to manage: Citigroup this week announced that it was hiring Robert Rubin, the former treasury secretary, bringing its roll-call of chairmen to three. Firms that marry in haste, choosing partners from different regions of the financial world, may repent at leisure in harder times. History is liberally dotted with crises caused by liberalising finance without improving supervision.
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default? Many "happy campers" with THAT solution....
[Oh yeah. I forgot to add FNM, FRE, C, JPM, MS, GS, $8.2 trillion of various loan guarantees, the CP market, a very large structural budget deficit, a very large structural trade deficit...
ndk ]
I agree. I can't see any clean way out and excessive govt stimulus spending will make matters worse. Might be time to do a currency devaluation like MX did in the '90s. They need to do something drastic.
Not sure what CNBC's intent was with this, but it seems like "don't look over there, look here," although it was interesting, in a comical way. It pushes the rags to riches meme.
I have a serious question: Is it true that the FEDS/TREASURY promised so far, more than they have currently provided? It seems to me that what the Govt is doing is offer as little money as possible with impossible promises to guarantee institutions...
If so, is the reason to not necessarily re inflate the economy so much as psychological support to get businesses and the public to buy more on credit?
Does anyone believe that 7 trillion stimulus (promised so far) will be sufficient to reverse the collapse of the US/GLOBAL economy?
We'd really like to see wages go up, but we're not competitive enough at current exchange rates for that to happen.
Most 2009 wages in the US were fixed in December. Annual 2008 bonuses were determined in December or will be determined in January. Given the economic sentiment, it is quite safe to say that there will be no wage inflation in the US in 2009.
sm_landlord wrote:
I wonder what Yellen really means by "getting the economy going"?
Once you start doing fiscal stimulus, where do you stop? And what happens when you do?
sm_landlord | Homepage | 01.04.09 - 2:38 pm | #
sm_landlord, you asked the most prescient of all questions...how do we get off the tiger? We don't because when they try to drain the liquidity out on the other side of this it will be politically impossible. Can you spell Argentina circa 2002 boys and girls?
Risk-aversion in financial markets remains exceptionally - Janet Yellen
Risk aversion?
Talk about spin. Fraud aversion is more accurate. It never makes sense to invest in overpriced assets. Never, ever, ever. Doing nothing is often the best investment.
By now the conditioning of past info released by the sources in control is to basically ignore current data, analysis, advisories, and projections because in short time there will be new semi-dire announcements that update the govspeak that will be more 'accurate'.
It's like 'they' are six months behind the truth.
Pretty soon you have to assume, 'they' provide consistently unreliable information. It's like 'they' are just buying time before the real panic sets into markets. Or consumers finally wake up. Buying time for what? Cash out? Disaster preparation? Obamanomics?
"Hoopajoops, LTD writes:
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary."
The impact on the financial situation would be "Game Over..." Neither free-market capitalism nor crony capitalism -- whichever you think we have -- copes well with a massive emergency that could potentially kill tens of millions in this country alone.
That said.... don't make yourself crazy. We don't have enough data on Yellowstone to know if there are long-term cycles of increased activity that stop short of actual eruption.
Yeah, it could erupt tomorrow for all we know. We could all die in a zillion ways. Just watch the Doom Channels on basic cable (DISC, HIST) for the complete rundown.
But frankly, it's just as constructive to have a beer and go about your business than worry. Far more so, in fact.
Black Star Ranch writes:
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default?
When the FED said it was buying Treasuries it is apparent we are in default
The Federal Government has long used the threat of losing federal money to make states support it's decisions.
What happens when the majority of bankrupt states can only function if the federal government gives them money to cover their budgets? Hasn't the final step towards concentrating power in DC finally reached fruition?
Challenge changes set forth by the EPA, DOT, DOE etc. and have your state funding cut. Bush is implementing many policy changes regarding the harvesting of natural resources and EPA environmental standards. What if Obama doesn't change these back? What if the states and municipalities that have been taking a leading role in challenging new regulations or the lack of enforcement of current regulations stop litigating?
California has always been in the forefront in suing the federal government. Hard to do that when your broke and going hat in hand to get bailed out. Frightening implications for the future and the stewardship of our nation.
Wage inflation obviously isn't happening. Devaluation of debt via commodity inflation may happen. We are still quite close to the 1974 script, and that is indeed how it went down in that era - a ST commodity peak in '72, with a much higher one 8 years later.
as for the destruction of the middle class, the banks gave them enough rope, and they hung themselves. that's really all there is to it.
The funds come with a few strings attached: The money must be spent in low- to middle-income neighborhoods, and buildings can be resold only to buyers who earn 120% or less of an area's median income. Governments, which had to submit plans to HUD by Dec. 1 to be considered for the program, have 18 months to spend the money
If Maxine's in, nothin' like Section 8 socialism.
When it's a full blown depression maybe the fat over-leveraged middle class will wake up....until then it's black comedy. No pun intended.
And on a lighter note, your taxes just went up....
why worry, it's less than 4 years to the magnetic pole reversal and of course that will be precipitated by the massive caldera eruptions and blanket of ash
hopefully we'll all feel good about it, what with the exceptional leadership the world enjoys
excerpt: my fellow Americans, today there has been a major worldwide geological calamity from which nobody will escape
screen prolly goes blank right after that
anyhoo.....I like the suggestion of getting drunk, it'll certainly be good for the economy
Translating "The sh#t has already hit the fan." The stink smells like severe Risk-aversion hit The Private Asset backed Securities and now all is acting dysfuctional. Go figure.
If the Yellowstone caldera blows, the FED will throw money at it, Obama will save more jobs, and the market will go up.........
so, what's the problem?
The real problem is not the bust but the unsustainable nature of the preceding boom. The growth of 2002-2007 was based upon massive and unsustainable US credit expansion, which encouraged consumer spending through the wealth effect of rising asset prices. This growth was an illusion, as real wages stagnated and manufacturing was outsourced to China. Now the illusion has been shattered, but western governments seem to think that another burst of stimulus will take us back to 2005. they will be sorely disappointed.
Nobody cares if these theories work or are correct, they are justifications for looting.
You are confused. I care and the theories work as Hank and I intended them to work. One man's looting is another man's stimulus package. Do I detect a whiff of envy?
" Morocco Bama writes:
And for those who didn't pick it up, Northeast sludge is used in agriculture. Yum.
Morocco Bama | Homepage | 01.04.09 - 3:46 pm | # "
If you go to your local bigbox home supply store and look at bags of budget fertilizer, it is very likely that you will find a brand bearing a discrete notice which describes its origin as (partially or wholly) human sewage.
Here in California, much of the solid waste is trucked out to places in the SE portion of the state where it is composted -- but not to a degree where it is bacteria-free -- and used in fertilizer for cotton and other nonfood (or non human-food) crops.
If need be, it can be put through a secondary composting process that "cooks" out the remainder of dangerous bacteria, and then can be used on food crops.
I talked to a guy who produces compost from "clean" sources, and he says it's hard to compete on price with such products. He makes his money by creating more costly products with special amendments (peat, various minerals, etc.) for specialized purposes.
It's actually a fascinating operation. He wouldn't let me drive his Scarab, though (huge, specialized composting tractor).
I'm seriously thinking that detachment or even 'the Great Refusal' of credit consumerism debt might just be the 'magic bullet' in all this. So detachment and 'cheapness frugality' as a healthy and positive response. Just say no.
Why 'consume' ourselves with this 'official' sales pitch to buy more so to speak? I mean the addicted day traders will probably compulsively trade to try and beat the Goliath and get burned some more. Live and learn and to each his/her own.
But creit consumerism dying will slay the credit cycle monster.
This Consumer/Banking 'freeze' is starting to appear as maybe a positive outcome. Maybe living simply within your means without crushing debt will be a step in the right direction for the New Economy. Unless 'they' order us to start borowing and buying Chinese consumer goods and big-ticket leveraged items again!
" reptillian writes:
Anyone have any ideas about the best shoes for a lot of walking, standing in lines?
reptillian | 01.04.09 - 3:54 pm | # "
I like heavy-duty Red Wings for lots of walking on concrete; but I have a hinky back, and that may be overkill for you. They don't exactly make a fashion statement, either.
Clarkes are good, too, and better looking. It's all about having a good sole and good arch support.
My current "presentable" shoes are Ecco crosstrainers -- good enough for the office, but also great for walking. Serious arch support.
Ummm, ash is good fertilizer in small amounts. Deadly in big amounts. Italians farm on the flanks of Vesuvius for a reason.
Remember the wasteland when Mt St. helens blew?
Or the pictures of Hawaiian land after lava flows?
I think Mt St H's is prolly very lush by this time.
so now making sure that the person you lend to can pay back the money is "risk aversion"
will these morons at the Federal Reserve ever learn? Might be worth remembering that in 1930 Keynes was considered a heretic by the economics profession. Perhaps it is time to look for the heretic policy not one that is embraced by the "range of blue ribbon economists".
How'd the Steve Quayle geologic disasterism get going? Maybe if the disasters are of non-human origins, our situation will be easier to swallow. Unless you believe weather modification is screwing up natural cycles.
Anyway if consumers are 70% of the economy and this last credit cycle looting destroys the mark...then the Big Sting fleecing will blow the game by eliminating the target and future 'profits' or the take.
Does anyone believe that 7 trillion stimulus (promised so far) will be sufficient to reverse the collapse of the US/GLOBAL economy?
Anonymous | 01.04.09 - 3:27 pm | #
Anonymous it all depends on what you mean by collapse of the US/GLobal economy? If your definition is a return to status quo ante (0% down loans 10-15% appreciation in Real estate) then the answer is clearly no. If we are talking about a return to a sustainable economy it could be done for a lot less. I think if just nationalized and cleaned up the banks (Swedish model)didn't try to prop up housing prices (in fact helped in their finding an appropriate equilibrium level relative to income)this thing would be over a lot quicker than what they are trying now.
"Before the 1930s all economic downturns were commonly called depressions. The term recession was coined later to avoid stirring up nasty memories. Even before the Great Depression, downturns were typically much deeper and longer than they are today (see right-hand chart). One reason why recessions have become milder is higher government spending. In recessions governments, unlike firms, do not slash spending and jobs, so they help to stabilise the economy; and income taxes automatically fall and unemployment benefits rise, helping to support incomes. Another reason is that in the late 19th and early 20th centuries, when countries were on the gold standard, the money supply usually shrank during recessions, exacerbating the downturn. Waves of bank failures also often made things worse."
But ya, that's all bullshot. Because all spending equal, whether its for CDS payoffs or energy infrastructure with a 30 plus year useful life. It only follows that we should Mellon ball the economy rather than indulge any of that Keynesian voodoo.
"New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract."
That's my guv!
BTW, CR congrats on getting to my neck of the woods last week; it really is a great place.
ITS not hard to see why the S.E.C. behaves as it does. If you work for the enforcement division of the S.E.C. you probably know in the back of your mind, and in the front too, that if you maintain good relations with Wall Street you might soon be paid huge sums of money to be employed by it.
The commissions most recent director of enforcement is the general counsel at JPMorgan Chase; the enforcement chief before him became general counsel at Deutsche Bank; and one of his predecessors became a managing director for Credit Suisse before moving on to Morgan Stanley. A casual observer could be forgiven for thinking that the whole point of landing the job as the S.E.C.s director of enforcement is to position oneself for the better paying one on Wall Street.
My current "presentable" shoes are Ecco crosstrainers -- good enough for the office, but also great for walking. Serious arch support.
Bob Dobbs | Homepage | 01.04.09 - 4:05 pm | #
My older Ecco's rubber like soles have all started to crumble. What's up with that? I stopped buying them. Rockports are comfortable dress/casual shoes under $90 many under $70. New Balance walking shoes at Academy and Sports Authority are comfortable casual. Clarks are good. My feet are the first thing to hurt and I'm always up for good shoes at a fair price. No more Eccos however...here is a link of mostly Ecco complaints: My Ecco shoes are junk | Honeypot.net
The next problem to be contained in the administration switch or handoff actually is possible unemployed government whistleblowers, so gagging and pardons will have to be extensive or the SHTF from too many loose lips who know too much. Of course the media won't be interested in these 'traitors' so they may be talking to obscure and officially 'discredited' internet sites which have been marginalized.
I'm no economist, but exactly at what point does a "deep recession" become a DEeP RecESSION? Is this signal language to prepare the great unwashed for what's ahead?
The shift from looting using credit bubbles is over. What will start happening in earnest is looting the natural resources in the US and Canada. Bush has changed the playing field and Obama will buy off the states by supporting their budgets while the chosen companies come in and rape the land with little to no challenge.
The middle class had to be made powerless before this could be ramped up. Hard to complain about the forests being cut down when that creates jobs and those environmentalists can no longer depend on middle class donors to fund litigation.
I want to believe in Obama but he's one man in a corrupt system. I will be carefully watching if Bush's final regulatory changes are changed back or are left standing. The answer will define what we can expect from Obama.
The Fed is getting very worried. ZIRP not working. QE not working. TARP not working. Not many other options left, so they're asking for more ammo.
Of course ZIRP isn't helping; it's intensifying the liquidity trap. TARP is a scheme for massive theft from the Treasury so of course that's not helping either.
"Quantitative Easing" (bah, I hate euphemisms) could help, but the amount so far has been only moderate. The promised mortgage interventions will produce a honker of a QE if QE is how they're done, but "expanding the balance sheet" could also refer to borrowing from the Treasury, which wouldn't be very inflationary.
In any case, the bigger problem with QE is that it takes 12-18 months for money supply changes to show up in the inflation rate. So we have a long wait before we see the effects of the current easing. A large enough QE to fix deflation now would produce catastrophic inflation later.
Only the SEC? You are describing the entire public-private shuffle of employment. Back and forth, sacrifice for a few years by serving in the government and then the private interests you helped out will reward you handsomely. Corrupt system without the will for change from anyone.
The majority of Americans have been in recession since the dotCON bust in 2000. Wages have declined as has purchasing power. If you exclude the gains made by the top 1%, the income and net worth numbers are truly disgraceful.
IMO, there is no such thing as a jobless recovery. The housing bubble masked the ongoing recession for a few years, but now the situation is even worse.
Jacked,
Yes...the Conserved and Preserved People's natural 'protected' assets will have to be liguidated for 'unpaid' debts to the Central Bank. Yellowstone may become the size of a Peter Piper Pizza franchise some day.
Won't be any long term 'camping' for the homeless at the National Parks as they are 'privatized' for cash flow.
They're anatomic shoes and are the most comfortable I've ever worn. I'm looking to buy a few more pairs before they stop making them, I always regret not buying more than one pair when I find good shoes.
A large enough QE to fix deflation now would produce catastrophic inflation later.
Highlighted Comrade F.E.'s comments for agreement, but I still think we need a better definition than just "deflation" and "inflation". Those are so vague as to be not useful and possibly counterproductive in practice.
Dear policymakers: what do you want to have happen? Why do your actions make that more likely?
As noted earlier on the thread by bgates, we could certainly engineer another commodity bubble if we tried hard enough. I think our experience with commodity bubble #1 is prima facie evidence that this is not helpful, to say the least.
Again, I want to be told what we do and don't want to have happen, and why our policies are helpful. So far, I just see headless chickens and rote application of poorly proven theory.
I am guessing that the Jarislowsky article that is making the rounds fits into your category of "not thinking to hard":)
I hope for the sake of those who are debt free and good stewards of their money that you are correct and J is wrong. A question - do you see upside in going short bonds via vehicles such as TBT or PST?
Time for some NFL. Enjoy everyday like it's your last.
Been great living in Disney Land for most of my life. The new entertainment coming on line uses less pleasurable ways to distract and cause conformity.
Do you think the Govt. is so opaque, is due to the fact that they have the facts and that do not want us to know that "this sucker is going down"...Maybe the situation is so bad, that nothing can be done to save our and the world's economy...They just want to string it out until they can come up will a plan for their worst case scenario???
Why else drag this situation out? I suspect that the govt/fed knows that there is not enough money to get the world/US back to a credit consumption society...
If this supervolcano erupts, the entire united states will be covered in inches of ash, causing agricultural collapse, not to mention human death from inhaling glass fragments in the ash.
Rob Dawg, Richardson is the governor of New Mexico. Arizona's governor, Janet Napolitano, is still poised to be in Obama's cabinet. merciless | 01.04.09 - 4:29 pm | #
[Dopeslap applied] Of course and I knew that honest. Whitehouse Ruins is right near the border and when we visit we go by way of friends in Gallup, NM.
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default? Many "happy campers" with THAT solution....
Black Star Ranch | 01.04.09 - 3:25 pm | #
I hesitate to post this because the last time I said something this silly the Pakistanis took me up on it, but here's a sketch of a possible endgame solution:
(1) suspend trading in US treasury debt
(2) suspend interest payments
(3) require all holders of treasuries to register their holdings
(4) resume interest payments to domestic holders only
(The remaining steps are left to the reader as an exercise. My recommendation is that they include preparations for WWIII.)
I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Well it certainly has in my house. I find myself yelling at these idiots on the TV with my eyebrows raised often. It boggles my mind, as Im sure it does many others here.
I think we are victims of our rhetoric. So some on the right will yell socialism if anybody thinks nationalization. So instead we will get this creeping destruction of the free market.
I think the more important reason is that policy makers are trying to preserve the wealth of those invested in the equity and debt of the banks. There are three players in this game- tax payers, the economy and the investors. Two out of three can be protected but not all three. So the natural choice is screw the tax payer and protect the other two.
BTW they couldn't possibly have better information than the collective posting here. If they didn't see the problem coming it is hard to see that they are going to see the solution. As Lenin put it" you can't have a revolution without firing squads" at the moment all the culprits are doing their best not to be a target.
The new 'entertainment' is films like '30 days of Night' and 'Hostel 2' where Americans are slashed and torn apart in large numbers. At
least the entertainment industry is getting us used to the idea of the not sp pretty Endtimes. Sure it's just fiction. Like the media and government/Fed reporting. But there's some truth to popular culture offerings. It's all pop kulture now.
I wore Clarks for a decade or so, but the last pair I bought (and quickly returned) were not comfortable and seemed kind of shoddy. They were the same model that I had become accustomed to, but the first that were made in China.
I am guessing that the Jarislowsky article that is making the rounds fits into your category of "not thinking to hard":)
I agree with some of what he says, but when he says "we have to create inflation", I need him to explain just how he proposes we do that in such a clean and uniform way.
A question - do you see upside in going short bonds via vehicles such as TBT or PST?
I think such vehicles are Grand Theft Portfolio. Anything that gives 4% down on 2% up days, and 4% up on 2% down days, will gradually milk you dry. It's beyond me why they're legal.
Secondly, I have absolutely no idea how to invest here. Anything could happen to interest rates, and real interest rates are very different from nominal ones. The Fed has already indicated they're on the other side of your trade, which is a little freaky. They could give up trying to support the system, or they could monetize so many assets we get hyperinflation. The choice is pretty bipolar. Even worse, it's all political and sociological here, and I suck at that stuff.
My personal sense, based on our proclivities, is that the optimal strategy is to either play the bubbles we're forcibly blowing again, or sit in cash waiting. This strategy will not be helpful, nor will it create lasting inflation. However, it will eventually become clear that the Fed is insolvent, which might or might not mean that cash will be useless. I'm cowering in economically insensitive commodities and cash. But again, I have no idea. Maybe others here do.
I want to believe in Obama but he's one man in a corrupt system.
The absence of corruption is a start, and yet corruption isn't the only problem in our system.
Obama will do whatever he's told by Wall St. unless he has in him some as-yet undiscovered independence from his financial backers. Believe in it when you see it.
the guest writes:
A DEEP REcession(Depression) is when you're hungry some days with not enough food.
Well then I'm in a Depression right now with my New Year's Resolution diet. Things are looking up then if weight loss goes hand in hand with economic collapse. Just as long as starvation isn't the eventual outcome; that would be truly depressing.
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Then don't read Lewis Lapham's piece in Harper's this month discussing how the naval piracy that helped win the Revolutionary war was a precursor to our current financial chicanery.
Why get excited? 'We the People' voted for the Bush dynasty. 'We' didn't protest the 2000 election fraud. 'We' bought the Obama hypnotic sales pitch laced with the religious fervor of great Salvation Preaching.
'We' bought the scare tactics for more Wars. 'We' bought into the bubble one way or another. 'We' believe propaganda like Michael Moore films. 'We' were scared into TARP by the hard close of fear.
We buy the fear or greed hard close sales pitch every time.
But that may be changing soon. This is the unintended Change that may be coming. When the consumer wakes up to the endless scams that got so big...they will be busted.
Is that the one with the early 40-something titan worth $80 million who has a harp the size of a Learjet in his "great room?"
A CNBC self-parody, I tells ya'!
(Memo to CNBC: I know that any publicity is supposedly good publicity. But understand that this cheesy program was yet another example of how you, in addition to your take-the-weekend-off lapses in reporting the crash of 2008, really, really suck!
You're right to some extent, in both truth and truism, TBFF(and I'd change "Fink" to a T word if you can). But there's a strong reek of treachery here that I really dislike.
Beyond the overt actions of Treasury and others, I do feel a bit robbed by my prairie boy education and environment, where there really were a lot of good people. Maybe Jefferson was on to something.
Fad dieting is a hobby of a bubble credit society. If the bubble cycle is broken with discovery & reforms, fad diets like flipping shows will be gone like pet rocks as a cultural excess malignancy.
I think you might have it there... maybe some pretty new looking dollar too
Crewman | 01.04.09 - 4:51 pm | #
I don't see the point of that in the computer age--physical currency is pretty much irrelevant.
Basically I think the game is to protect the relative strength of domestic debtholders. It's what I'd expect from general considerations of power and it's consistent with the decisions reached so far. I'm guessing a point will be reached where the only way to do that is to jettison foreign holders and prepare for the fallout.
Who Saw the Housing Bubble Coming?
Of course the Federal Reserve didn't see it. They were clueless. These public 'opinion' beliefs will be part of the research discovery process when consumer credit-ism is killed by the ponzi bubble to end all ponzis.
Who and why all this crap was allowed or planned won't really matter pretty soon though as people concentrate on the day-to-day stuff.
I think there will be de-coupling from the government/banking apparatus and communities will learn to use 'local' resources which is what the Green movement has been preaching all these years.
Wouldn't be ironic if this Rip-off Crash leads to limited use of resources and reducing waste so that we end up fighting pollution and so-called global warming from the Crash of the banking/finance credit cycle boom/bust currency ponzi system.
The Irony of this!
"For economists now to make forecasts is a pretty difficult thing," said Ray Torto, chief global economist at real-estate firm CB Richard Ellis. "All of our models are outside the territory in which they've been built."
dk writes:
ndk - please kindly add state/municipal and private debt to your list. The US is indeed quite leveraged up.
MrM, after the governors asked for $1 trillion ponies, you're certainly right that I should. But I feel pretty sick already.
ndk | Homepage | 01.04.09 - 3:24 pm | #
I saw the Governor from Ohio this morning saying it was all WSs fault. He requested $5 billion from PE/O.
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NDK: Beyond the overt actions of Treasury and others, I do feel a bit robbed by my prairie boy education and environment, where there really were a lot of good people. Maybe Jefferson was on to something.
I was a prairie boy too. I take it you mean robbed of that idyll, and not duped by it.
The ethos that shaped my midwestern youth forty years ago is gone, gone, gone. And while it was also one that sadly produced, say, a pro-Vietnam War Humphrey, its advantages in social contract/quality of life are missed. They weren't worth trading for SUVs, SSRIs and shopping malls with flatscreens. In some ways these, too, were treacheries pointing toward the more particularized fleecing now underway.
""For economists now to make forecasts is a pretty difficult thing," "
Wow, well hello you motherfuckers. NOW is the time to make bold forecasts like "AK-47 and MAD MAX!" Or...KILL AS MANY AS YOU CAN BEFORE THEY WILL GET YOU" or "Just watch the JERICHO-series!" or "YOU GOT EXACTLY 28 DAYS TO LIVE!"
But noooo, useless idiotic copy machines. Man, You suck, Me suck, My cat suck and do not look me that kind of bad way...
I was a prairie boy too. I take it you mean robbed of that idyll, and not duped by it.
I did mean by, in this instance, because it really didn't prepare me for the world I was going to encounter. My value set just doesn't fare well in a world where it's every man or woman for themselves.
TBFF, robbed of would be more appropriate if I thought the ideal were tenable in this day and age. I truly wish the world were like my hometown, and I think back to friendly local shops, corn and wheat fields with leisurely canals lined with cottonwood trees when I need a better place. Maybe someday...
You can see the lines in the sand now. Keep borrowing debt and preserve the bubble prices. There is a movement for economic sanity and debt reduction. These econ blogs are at the front for the Change the banking apparatus doesn't want. The Great Refusal for consumers to remain debt peons to bubble prices will unwind the schemes ti inflate for cycle profits. I can see what's at stake here. And Obama is on the side to keep the bubble inflated.
The bubble blowers went too far this time. The bubble will not stay inflated because the people don't want to be chained to over-priced bubble assets.
Don't think of this as losing everything...maybe think of it as unloading bubble priced assets that were fictitious values anyway.
updated 7:26 p.m. ET, Sat., Jan. 3, 2009
NEW YORK - The recession has reached the ritzy Rainbow Room, the special-occasion spot that overlooks midtown Manhattan from high above the tourist-attracting Rockefeller Center skating rink.
With business slowing and the lease in dispute, the venue's Italian-themed Rainbow Grill restaurant plans to shutter as of Jan. 12, a spokesman said Saturday. Its bar, banquet space and the weekend dinner-dancing sessions that reflect its glamorous history will continue on the 65th floor.
Greg Robb
MarketWatch PulseBuzz up!Digg It StumbleUpon Reddit SAN FRANCISCO -- There is no risk an outbreak of deflation in the euro zone, Lucas Papademos, the vice president of the European Central Bank, said Sunday. "This risk is nil," he said in a speech at the American Economics Association meeting. Papademos also said there are signs financial stress is easing in the euro-zone, citing "a slow, steady decline in credit spreads in euro money-markets."
"Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis. "
well this is not really atypical; monetary policy was loosened after the tech bubble crash which money flowed into the real estate bubble, a recession would have occurred when monetary policy was again tightened and re-setting of mortgages rates; what made it worse was that financial instruments were made based on the collapsing mortgages which leveraged the collapse. its a combination of monetary policies and financial instruments, poor evaluation of those instruments and general retardation throughout wall street and the political class.
DANBURY, Conn. On the day that Donald Peters died, he unknowingly provided financial security for his wife of 59 years and their family.
Peters bought two Connecticut Lottery tickets at a local 7-Eleven store on Nov. 1 as part of a 20-year tradition he shared with his wife Charlotte. Later that day, the 79-year-old retired hat factory worker suffered a fatal heart attack while working in his yard in Danbury.
On Friday, his widow cashed in one of the tickets: a $10 million winner which, in her grief over her husband's death, she had put aside and almost discarded before recently checking the numbers.
"Driving around yesterday I got conflicting signals...
Closed/closing stores and "For Lease" signs, and
Plenty of "Help Wanted" signs.
What to make of it?
picosec
Understood, NDK. In fact, friends have said as much before.
However quaint and however impractical, it is a point of honor for me not to have been raised to treat the world as a sewer. Consequently I am watching the slide of our social Darwinists and their associated works with no small satisfaction (mingled, mind you, with blood-curdling trepidation).
The last ugly recession in the early 80's found me sleeping on the floor in a friends extra bedroom. It was a very cold winter and his apt. was substandard. The windows would have ice on the inside some mornings.
I owned 1 pair of shoes. A pair of cowboy boots from Kennys shoes. Kenneys was an early type of Payless shoestore. I went to apply for foodstamps. My total cash worth was $4 dollars. On the way to get my foodstamps, I slipped on a hill (no car) and ripped the heel of one of the boots.
So I hobbled in, got my emergency food stamps, and sat in a chair and hammered the heel back in, sort of. Every few days I would repeat the process. Oh, cowboy boots are feet killers if you have to walk any distance.
And how many times do you think Yellen voted against Greenspan/Bernanke? Sins of omission have grave consequences for adults (not so much for economists or bankers).
I hope Yellen gets wacked by the wand of the competence fairy when the history books are written.
Now if we get our borders are closed off here in the USA like Gaza, all bets for economic recovery & reforms(CHANGE NOW) are off. Is Obama going to get rid of all those stupid Executive Orders written in the last 7 years...?
the mayan calendar doesn't end in 2011, or 2012, it enters a new phase. the new phase portends massive change, not an "end" in the sense of total obliteration of everything. FYI. I can see the massive change thing happening. what is scary is that on the exact day that one of the previous worlds changed, Cortez arrived in south america and,....well,...there was massive change.
craig writes:
"what is scary is that on the exact day that one of the previous worlds changed, Cortez arrived in south america and,....well,...there was massive change."
First rat off the ship? Or someone who realized that they don't want to be in charge of Commerce during an extended recession? sm_landlord | Homepage | 01.04.09 - 5:54 pm | # Obama is so Chicago heavy this is a blow to a geographically balanced administration. I can't imagine anyone not wanting to play in the big game no matter the odds. We won't be allowed to use phrases like rats off the ship for a while. What surprises me is President Elect Obama simultaneously saying the can only be one President at a time while meeting with Congress this week to press his agenda.
this hubble photo show hundreds of galaxies showing billions of stars.
the setup for this shot is analogized by thinking of an 8 foot long mcdonalds straw and viewing thru that small opening. the sky contains 12.7 million of these possible images.
i think they concluded that to have a dog's life was best on this planet.
Not in vietnam.
Anonymous | 01.04.09 - 6:29 pm | #
While I have long felt that if reincarnation is for real, that I want to come back as a suburban golden retriever, its not just in Nam that dogs are having a tough time of it. One of the overlooked tradgidies of the forclosure crisis is what is happening to pets. Have a room mate who is very involved with rescue work. Lots of familys who lose their houses can only move in to rentals that dont allow pets, or in with relatives who cant take the dogs as well due to having their own dogs, allergies, or just not willing to take the pooch as well. Lots of dogs just left tied up in the back yard in abandond homes, ASPCA's overwhelmed etc. Talk about innocent victims of the downturn.
Topher writes:
How about we legalize Pot and change the color of our currency. Take in all the illegal dollars and fix the problem from the tax revenue from POT!
PS No, Im not high.
Topher | 01.04.09 - 5:21 pm | # I'm high and I think legalizing POT is a good idea.I agree it would greatly free up the Prison System which is killing us (33ka year). Hemp also has 4x the energy of corn based ethanol.Then again we only elect dumb asses who keep spending .
In our continuing series, here's delusion by the numbers in Hong Kong, bull version:
INDEX\tVALUE\tCHANGE\t%CHANGE\tTIME
HANG SENG INDEX\t15,042.81\t655.33\t4.55%\t01/02
HANG SENG COMPOSITE INDX\t2,066.39\t83.83\t4.23%\t01/02
S&P/HKEx LargeCap Index\t18,697.79\t806.63\t4.51%\t01/02
S&P/HKEx GEM Index\t381.70\t-3.77\t-0.98%\t01/02
HS FREEFLOAT COMP INDEX\t2,149.65\t85.77\t4.16%\t01/02
HANG SENG HK FREEFLT IX\t1,526.21\t45.61\t3.08%\t01/02
HANG SENG CHINA ENT INDX\t8,314.11\t422.31\t5.35%\t01/02
HANG SENG CHINA AFF.CRP\t3,441.74\t149.34\t4.54%\t01/02
HS MAINLAND FREEFLOAT IX\t4,533.72\t203.51\t4.70%\t01/02
HANG SENG 50 INDEX\t2,111.10\t90.92\t4.50%\t01/02
HANG SENG HK 25 INDEX\t1,465.64\t45.89\t3.23%\t01/02
HANG SENG MAINLAND25 IX\t5,368.92\t271.09\t5.32%\t01/02
HANG SENG H-FINANCIALS\t10,691.57\t505.62\t4.96%\t01/02
And from our Headline Writers Are Morons edition, apparently Hong Kong has the best open to the calendar year since 1970 ... wahey, the bottom is in! Um...
Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed.
"We are in a horrible mess. I believe it is very young and it is going to be long and deep," he said.
Even in the first quarter of 2010, the economy will likely be weak enough to need macro stimulus, he said.
Martin Feldstein, the prominent Harvard University economist, said there was no longer any basis for believing the recovery could start in the third quarter.
"I think we'll be lucky if by this time next year we see the economy hit the bottom and start turning up," Feldstein said.
"In terms of the level of activity, the end of 2009 is going to look lower than it is today," he said.
The financial shock that hit the U.S. this autumn was bigger than a similar shock during the Great Depression, former Federal Reserve governor Frederic Mishkin said Sunday. The recent shock "is much more complicated" and the clean up will be difficult to do, Mishkin said.
i'm disinclined to think that headlines have much of an effect on crude after the past year. but i also think recent news out of the ME is something of a non-story, maybe the markets agree.
After I developed a very painful heel (not plantars' fascitis) I adopted Apex "Ambulators" (?).
Wearing these (alternating pairs) for about a year cured the heel pain. I now use them all the time. The downside is they provide no lateral support so are no good for hiking, only pavement. Even there, you have to be careful. Running is OK straight ahead for brief distances only. But the cushioning/comfort provided is terrific.
Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed. Peter | 01.04.09 - 6:59 pm | #
Blinder: -1 CR: +1
What is wrong with Blinder? Does being in the Fed make it only possible to see things in terms of their impact on Wall Street?
No one shoe is suitable for everyone. Go to a good hiking or running store and talk to the shoe people. Different foot widths, arch heights, pronations, etc, determine what sort of shoe will work for you. If the shoe salesman you talk to doesn't seem to understand these issues, just walk out. Independent specialist shops are the only places you are likely to get good advice. You could, of course, visit the bricks and mortar shop, take their advise and buy online, but that would be shitty. The shop might not be there next time if too many people do that. I've found that the savings from going online aren't that great so I buy shoes in person.
I find it really frustrating that people attribute a "theory" to Taleb.
He's parlayed it into a "Distinguished Professor of Financial Engineering" position PI-NYU. I must say I'm a bit surprised. Deans are usually wary of prospective faculty members who annoy their most generous donators. Perhaps Taleb is out-contributing them!
Although Morris Brown has had shaky finances for several years, it now looks that it will be the first academic casualty of this downturn. Apparently, the school just got water turned back on and an academic building will be foreclosed upon. Fugly
let's cross our fingers and hope that all except the top fifty or so law schools in the country are closed within the next decade or so. gotta find that silver lining.
ndk(Unrated) writes: \tBut why won't we countenance the idea that fiscal stimulus doesn't work? The empirical evidence is contrary, weakly supporting, or ambivalent, and I consider that to be a very weak basis for a foundational theory in a discipline. It's been sufficient to discard other ideas like Ricardian equivalence, or Say's Law.
But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy. ndk | Homepage | 01.04.09 - 2:42 pm | #
NDK, part of the answer is that we are still benefitting personally and directly from Keynesianism. Today I travelled on two roads built as part of Eisenhower's highway stimulus.
But, reaching even further back, I am astounded at how often I encounter the lasting benefits of Roosevelt's programs. I'm an outdoorsy person, and I am amazed at how many structures in my state parks were built during that era - and how attractive and functional they are. The stone steps, the hanging bridge, the little dam, the roomy and fancy public restroom (nowadays we seem limited to ugly and dirty looking port-a-potties). Last year I took a group tour of North Dakota's refuges - many of these were begun during the New Deal, to help one of the then hardest-hit states. But the benefits have been lasting. Waterfowl restoration still builds on that foundation. I was in awe at the scope of Roosevelt's mind and the LASTING achievements of this sort. Our great National Wildlife Refuge system was, I suppose, Keynesianism in action. We are still benefitting, 70 years later. Our country was enriched by these programs. Not many initiatives can claim that.
The empirical evidence is there before my eyes, almost every weekend. These are the real achievements, the victories that count.
"These are the real achievements, the victories that count."
The dollar was still backed by gold abroad and silver at home in Ike's era. There's absolutely no connection between Keynesianism as it was known in the pre-BW world and the time since.
In the four years ending 2006, year-end household sector checkable deposits averaged $294.4 billion. Since 2007:Q1, checkable deposits have fallen from $226.1 billion to $46.3 billion at the end of 2008:Q3, the latest data available.
We've heard all this talk about money on the sidelines waiting to get into the markets. I saw the TrimTabs CEO and he said that was bunk, there is no extra money. Money pulled out of the markets went to paying down debt. Also said savings rate is going DOWN not up.
mp - CONJURE seems to be having way too much fun, and very juvenile. Perhaps these unfortunate numbers could be withheld from the kids and just held by the grown-ups who really know how the market works?
NDK, part of the answer is that we are still benefitting personally and directly from Keynesianism. Today I travelled on two roads built as part of Eisenhower's highway stimulus.
This wasn't done as Keynesian stimulus. It was done because having a national highway system makes an enormous amount of sense. Eisenhower realized this after his time in Germany and lobbied for it hard.
I'm all in favor of good public works on their own merits. That stuff's great. Spending because we think it's going to rescue our economy, against much evidence to the contrary, is pretty foolish.
We've heard all this talk about money on the sidelines waiting to get into the markets. I saw the TrimTabs CEO and he said that was bunk, there is no extra money. Money pulled out of the markets went to paying down debt. Also said savings rate is going DOWN not up. Anonymous | 01.04.09 - 8:06 pm | #
It's simpler than that...... there are really only two ways for money to actually leave the market: Bankruptcy, or dividends.
Every other trade is two-sided. If you have $100,000 stuffed in your mattress (that is, "on the sidelines"), and you wake up tomorrow and decide to stick it into the market by buying IBM, the guy who sold you the IBM now has that exact same $100,000 "on the sidelines". The amount of cash in the market never changes, absent a dividend, a bankruptcy, or a primary or secondary offering.
The whole "sideline cash" argument is just retarded.
The whole "sideline cash" argument is just retarded. Eric | 01.04.09 - 8:11 pm | #
I think TrimTabs uses "sideline cash" as a proxy for cash held by mutual funds, and only by mutual funds. So "no sideline cash" = mutual fund cash reserves are low. Anyone know for sure?
ndk - nice to see you here, you make a lot of sense, but are you cutting and pasting from Yves's shop?
Just wondering.
C
Great to see ya too.
I actually spent a lot of time on CR originally, but then went over to naked capitalism a lot more when CR became too famous and the comment section got too loud. I've CC'ed one or two of my comments there to CR in the past -- and felt shame every time, but thought it important -- but this is all fresh material. I do try to be consistent in my points, and with things changing so fast these days, I'm not sure if that's good or bad...
Anyway, it's a little quieter on CR during the holiday season, but I'm mostly posting here because I haven't seen a great post over there for me to really dig my teeth into recently. I try to keep my mouth shut until I have something truly egregious to say.
What we need is a Wealth Destruction Clock like the national debt clock. I read today that we have 8.5 trillion dollars of wealth destruction so far. Someone should come up with an algorithm to calculate the wealth destruction on a second by second basis and put it in a clock on a web site so I can check out the progress on a daily basis.
Getting Bullish At The Wrong Time
Charles Biderman, TrimTabs, 12.16.08, 10:00 AM EST
Small investors and money managers alike are feeling a little happier about stocks this week, but that's not good.
Outflows from equity funds, particularly global equity funds, subsided early this month, suggesting the little guy thinks the worst of the sell-off is over. Based on the retail funds we track daily, we estimate U.S. equity funds lost $13.5 billion ($1.5 billion daily) on the first nine trading days of December. The pace of outflows this month is down 12% from the estimated $1.7 billion daily pace in November.
The biggest myth on Wall Street is that there is lots of sideline cash waiting to flood back into the stock market. Since the start of September, data from the Investment Company Institute and TrimTabs indicates all long-term mutual funds posted an outflow of $300.4 billion ($199.3 billion from equity funds and $101.2 billion from bond funds). This amount does not count what investors have pulled out of hedge funds, stocks and bonds directly. We think such direct outflows were equal to at least $150 billion, half again the $300.4 billion outflow from all long-term mutual funds. According to the latest Federal Reserve H.6, $336.4 billion flowed into demand deposits, savings deposits, small CDs and retail money market funds since Sept. 1.
Run, don't walk, into the high yields and safety of municipal bonds. Which ones? Click here for current buys from Marilyn Cohen in Forbes Tax-Advantaged Investor.
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Yahoo! BuzzIf individuals pulled $450 billion out of stocks and bonds and added only $336 billion to savings since the start of September, where did the rest of the money go? Most of it probably went to pay bills and pay off mortgages. Moreover, the $120 billion that went into small certificates of deposit by definition are not likely to be available for equity investment any time soon. Withholdings are decelerating rapidly, which means take-home pay for the average worker is falling. And equity extraction from homes is down about $30 billion per month relative to last year. Some of the money coming out of equities and bonds is replacing the money that is no longer being extracted from home equity.
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Portfolio managers are apparently convinced global equity markets have bottomed because they are putting lots of money into exchange-traded funds (ETFs) to gain sector exposure quickly. Since corporate liquidity is worse in consumer discretionary than in any other sector except financials, it is interesting that consumer discretionary is where portfolio managers are piling in. Smart investors usually sustain their biggest losses when they think they have detected a major market bottom and go long expecting a bull market.
Confirming the increasingly bullish sentiment toward equities, the American Association of Individual Investors reports that bullish sentiment among respondents to its sentiment survey rose to a four-week high of 38% this week, up from 27% last week. Meanwhile, bearish sentiment fell to a five-week low of 40% this week, down from 48% last week. Bond funds continue to experience massive redemptions. We estimate bond funds lost a whopping $25.2 billion ($2.8 billion daily) on the first nine trading days of December, and outflows of at least $1.5 billion occurred on all but one trading day. Outflows this month are running 87% above the estimated $1.5 billion daily pace in November.
U.S. equity ETFs issued $10.6 billion ($2.1 billion daily) last week. Futures-related ETFs issued $8.1 billion, non-futures related ETFs issued $2.5 billion and short ETFs issued $1.4 billion. The leading issuers were Spiders (amex: SPY - news - people ), which issued $5.4 billion (6.6% of assets); iShares Russell 2000 (amex: IWM - news - people ), which issued $1.7 billion (16.8% of assets); and UltraShort Real Estate ProShares (nyse: SRS - news - people ), which issued $525 million (30.5% of assets).
The leading redeemers were SPDR KBW Regional Banking (nyse: KRE - news - people ), which redeemed $135 million (20.4% of assets); UltraShort Financials ProShares (nyse: UYG - news - people ), which redeemed $88 million (4.6% of assets); and Ultra QQQ ProShares (nyse: QLD - news - people ), which redeemed $44 million (3.5% of assets).
In the four years ending 2006, year-end household sector checkable deposits averaged $294.4 billion. Since 2007:Q1, checkable deposits have fallen from $226.1 billion to $46.3 billion at the end of 2008:Q3, the latest data available.
mp | 01.04.09 - 8:02 pm | #
This at a time when other measures of liquidity going through the roof. Monetary base did a right angle increase over last 3 months. Yet non of that increase in money supply is showing up in consumer/small business. Can anyone say "Liquidity Trap" children. For our arts and crafts segment, we will have demonstration of String Pushing.
Former Clinton economic adviser Laura Tyson said ..."The downturn has become "self-reinforcing downward-spiral effects going on - from the housing market to the credit market to the real economy and back to the housing market,"
Rogoff, the former IMF chief economist, said Paulson's policy was similar to the "Wheel of Fortune" game show. Some companies spun the wheel and got $300 billion bailouts. Others spun it and got nothing.
This just added to market insecurity and uncertainty, he said.
Rogoff said... the U.S. housing-market collapse and stock-market weakness should continue until 2010.
The U.S. unemployment rate should spike to 12% and those elevated levels should last until 2011...
The root of the crisis remains the financial sector, Rogoff said. "We're going to be seeing second and third bailouts of the big banks," he said.
i believe this depression will be bigger than the GD. because of the current account deficit, private debt, corporate debt, and because we have exported so many industrial production related jobs
I called it the Bush Depression 2 weeks ago. I asked my Repub acquaintances why they were nominating Shrub eight years ago despite the drug use and the falsified military records and the silver spoon, and their defense was that the power-that-be would "surround him with good people". So a depression it will be
...thank you CR......keep up the good work...
2nd!!
Pay no attention to the politics behind the curtain.
Just what the gloom junkies want to hear.
I can haz 3rd half recoveries?
"New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract."
Bill Richardson Withdraws Commerce Secretary Nomination
I wonder what Yellen really means by "getting the economy going"?
Once you start doing fiscal stimulus, where do you stop? And what happens when you do?
Pay no attention to the wars behind the curtain. Believe in change.
On topic. Pay no attention to the Depression behind the curtain. Believe in change.
I have always found the ROI in political donations always far outstripped any conventional investment.
The taxpayers need to pool their money and start making contributions towards reforming the system. Buy a couple key votes in the senate and get the right congressperson to sponsor some pro citizen legislation and we could actually salvage the future of the USA.
But why won't we countenance the idea that fiscal stimulus doesn't work
? The empirical evidence is contrary, weakly supporting, or ambivalent, and I consider that to be a very weak basis for a foundational theory in a discipline. It's been sufficient to discard other ideas like Ricardian equivalence, or Say's Law.
But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy.
When Yellen defends the failure of fiscal policy in Japan, she points entirely at... the failure of quantitative easing too. That's SAD. At least she talks about the need for a little discipline, but this is getting ridiculous.
Of course "conservative and liberal economists agree" -- everyone loves a plan where you raid the Treasury and future generations, ostensibly for their own good. The only debate is about how much to loot and how.
By the way, if you want a truly effective Keynesian "stimulus" program, trade wars are the most effective tool available.
Go for it. I barely care anymore.
Risk-aversion in financial markets remains exceptionally high;
come on, was she high friday?
Booo-yahhh
come on, was she high friday?
The stock exchange isn't a financial market, its a casino. Didn't you get the memo ?
Yellen:
If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now.
with all due respect, I think there are three critical issues to consider here. If Ms. Yellen is reading this, I hop she can take some time to at least consider these points, if not respond.
1) What was the role of previous fiscal stimulus packages in engendering the financial crisis that Ms. Yellen speaks of?
I.e., to what extent was the flight to yield bubble engendered by the stimulatory response to 9/11 and the tech bubble the cause of this crisis?
If it was contributory even in a significant part, how will additional encouragement to indebtedness act to correct this, and will it accomplish anything of lasting note?
2) Regardless of if this is desirable from a domestic economic perspective, can the US raise sufficient funds for this massive fiscal stimulus regimen? Funds available for lending on a global basis should be a well-known quantity to Fed & Treasury officials. How does Treasury borrowing square with the available funds in the context of a massive global fiscal stimulus campaign?
3) Can Ms. Yellen describe to me in objective terms what a "normal" economy looks like? In other words, the US has been subject to various artificial economic stimuli since the mid-90s when the tech bubble began. This is over a decade.
Can we actually call a halt to this program in a timely fashion, or will a distorted image of the US' "normal" economic performance send us headlong into a major bout of inflation?
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary.
The hundreds of earthquakes at the caldera over the last week and the unprecedented and accelerating ground deformations around the most unstable thermal basins are really, really alarming. If this supervolcano erupts, the entire united states will be covered in inches of ash, causing agricultural collapse, not to mention human death from inhaling glass fragments in the ash.
Abject and complete fear in Yellen's statement. In essence she's saying we don't have the luxury to worry about the near term, we have to do something now to stave off a complete systemic collapse.
The stock exchange isn't a financial market, its a casino. Didn't you get the memo ?
RayOnTheFarm
ray -say WH^HHAT!
(inflection in the middle)
markets for most private asset-backed securities are dysfunctional
the madoff kind?
whaddya call that , ray?
me thinks janet want's to keep her thursday afternoon fr.laundry appt, so stimulus it is
So she's starting to recognize there are problems and maybe, just maybe, she's "losing some sleep" over things now? Interesting.
Hoop,
Around the world there are some interesting geological events happening.
AUSTRALIA SHOVES NORTHWARDS WITH GREAT VIOLENCE « Culture of Life News
What we need is a SuperVolcano Czar !
2) Regardless of if this is desirable from a domestic economic perspective, can the US raise sufficient funds for this massive fiscal stimulus regimen? Funds available for lending on a global basis should be a well-known quantity to Fed & Treasury officials. How does Treasury borrowing square with the available funds in the context of a massive global fiscal stimulus campaign?
Byzantine, they view this crisis as a liquidity trap. Under standard macroeconomic models, there is no harm in additional borrowing, because you're not going to raise inflation or interest rates due to the deflationary trap. On the IS/LM curve, you could think of it as a flat segment. See Krugman's diagram.
I've questioned whether those macro models apply cleanly under such extreme circumstances, and I continue to suspect that such interventions and further reallocations are actually increasing real interest rates through portfolio crowding out, increasing risk premiums due to the US' precarious balance sheet, uncertainty about what the USG will do next, and an unwillingness to compete against the Fed, a non-economic entity, in markets. There are reasons to believe I'm wrong, but also reasons to believe I'm right: sufficient scope for doubt, at least.
Also, to anyone who would hold up our debt-to-GDP ratio as a sign we're in fine fiscal health, it's a fairly meaningless number
. You can very easily go bankrupt without a penny in debt if you must expend more than you make. The USG also has a few off-balance-sheet liabilities, like the FDIC, PBGC, Medicare, AIG, GE, GM, Social Security...
The Fed is getting very worried. ZIRP not working. QE not working. TARP not working. Not many other options left, so they're asking for more ammo.
ever been a better time to buy and sell politicians.
Feds Yellin better stop hollerin.
dk(Unrated) writes:
But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy.
[...]
Of course "conservative and liberal economists agree" -- everyone loves a plan where you raid the Treasury and future generations, ostensibly for their own good. The only debate is about how much to loot and how.
You answer your own posit here. Of course Keynesianism is sacrosanct, it's a system of practice where you get to bust open the piggy bank and spend the contents on blow for the good of the nation. It's not just that you want to squander wealth, it's the only responsible choice.
You're never going to get traction arguing against that in modern America, the country that can't say "no" to an expenditure.
"Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic firestorm we face today poses a serious risk of an extended period of stagnationa very grim outcome. Such stagnation would intensify financial market strains, exacerbating the problems that triggered the downturn. It's worth pulling out all the stops to ensure those outcomes don't occur."
Maybe "those outcomes occurring" might be what we actually need!
We need more government intervention??? Has anyone been noticing the attendance at pro/college football games? The concession prices are outrageous! To me the economy is severe when a professional sports league goes bust, a few teams fail, & athlete salaries go the way of wall street bonuses!!
It's worth pulling out all the stops to ensure those outcomes don't occur.
I think we have a new candidate for hubris of the year.
deleveraging is widespread; the markets for most private asset-backed securities are dysfunctional; financial institutions, both large and small, have failed; and the economic downturn is causing delinquencies to rise, threatening further financial distress; households and businesses face an ongoing credit crunch; and housing and financial wealth has plunged.
What's that saying about economists? They are great at telling you what's happened not what is going to happen. While all these scary phrases are blindingly obvious I have to single out the last for special scorn.
...and housing and financial wealth has plunged.
This is why we are in such deep trouble. We haven't even started in on real wealth yet. All we've done is clean up a little sloppy paperwork that was incorrectly reporting wealth. People who bought stocks or houses ten years ago are still way ahead of historical returns. What's gone was never wealth for exactly the same reasons Madoff is under arrest today.
Oh yeah. I forgot to add FNM, FRE, C, JPM, MS, GS, $8.2 trillion of various loan guarantees, the CP market, a very large structural budget deficit, a very large structural trade deficit...
The 'micro-economic choices and related choices are spend or don't spend. Watch TV or turn it off. That would be turning the ads off. It's 99% 'advertising' one way or another. A lot of 'political advocacy ads mixed with ads to buy.
Buy or don't buy.
Use the internet or turn it off.
These are the choices of consumers.
The rest is out of our control.
Choosing how or where to work is still somewhat of a choice.
Does anyone want to buy a house or a car right now when prices may drop?
What good is credit if you don't want to buy right now?
The recovery is based on more buying.
Fed has abandoned monetary policy, critic says
Fed has abandoned monetary policy, critic says
| Reuters
"This doesn't really seem like quantitative easing in the sense of finding a growth rate in the money supply," he told a panel discussion during the annual meeting of the American Economics Association.
"What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy," he said
It's not just that you want to squander wealth, it's the only responsible choice.
And prudence is folly and folly is prudence, and so forth. I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Kindred souls like you and others I find here help me feel a little better. But only a little.
As someone said
Start selling when Yellen starts yelling.
Comrade Byzantine Ruins,let me respond on ms Yellen's behalf.Question # 1 Errrm,next question.Question #2 Palau is still a member of the coalition of the willing and has promised support.Question # 3,next question...I'll take this one from Jeff Gannon.
Diagnosing a Depression
Surviving a Depression
professional sports league goes bust, a few teams fail, & athlete salaries
that's just anarchy. you don't want to see whole communities lose faith.
Don't sweat the small stuff like Yellowstone. Besides if it happens SoCal real estate will finally stabilize.
"I have good news and bad news. The good news is your Inland Empire home price has doubled. The bad news, here is the displaced family that will be moving in with you. Don't worry they know how to grow winter wheat in the backyard and they brought Lutefish."
Chicago Fed Says Take Interest Rates "Below Zero" and Monetize Debt (to Devalue Dollar -
from Jesse's C A
and the idiocy (or is it insanity) continues. *.gov solution to everything is to borrow still more $$$ and spend it.
and the idiocy (or is it insanity) continues. *.gov solution to everything is to borrow still more $$$ and spend it.
Not borrow, manufacture.
"Watch TV or turn it off. That would be turning the ads off. It's 99% 'advertising' one way or another. A lot of 'political advocacy ads mixed with ads to buy. Buy or don't buy"
...THIS forum is in direct contradiction to preferred spending. The 170 ppl sitting here posting are NOT contributing to the economy: We are NOT reading anything of a marketable nature, we are NOT out spending - our wallet is not coming out of our pocket to help spur the economy in any recognizable way. TPTB would rather we "get out more".
Pulling out all stops should do the trick.....whatever that means.
The best and safest solution is to just stay dumbed down, apathetic, and unaware. Just worry about basic needs like animals do and you'll survive. It's not what we thought it was but we have to not care why and who and just stay detached and in denial. Just mind your own business and keep blinders on. Be the ostrich and stay in the sand. It's the only way forward. Don't cross the line in the sand. Surrender.
Black Star,I will be going out and spending some $.I just learned how to make cheesecakes and plan to pick up the ingredients for several,along with a loaf of bread.Cheesecake is REALLY easy to make...
The kids are playing Life, literally. How appropriate. In the game, my son is an athlete, and he gets $60,000/year, whereas, my daughter is an attorney and she gets $90,000/year. Methinks they need to revise those amounts, at leat in regards to athletes.
Doesn't ash make good fertilizer?
They're spending money they don't have. To me that's borrowing. Just look at the *.gov's total debt over the last 14 months.
Pulling out all stops should do the trick.....whatever that means.
Dumb as a banker | 01.04.09 - 3:07 pm | #
It is supposed to mean getting as much noise out of a church organ as possible but in this case I'm afraid it means knocking the bilge plugs out of the ship of economy and letting the seawater rush in.
The band played on as the Titanic sank. We all comment as the US collapses.
If you didn't build your own life boat then you are going down with the ship.
Still looking for the water resistant flat screen to put in mine.
Yellowstone - The death of the Superbowl.
C'mon Dawg,it is an appropriate analogy for a dirge.
The Guest, it does seem that is the message. Remember Invasion of The Body Snatchers? It feels like that.
"Doesn't ash make good fertilizer?"
It does with a good mix of Cow Sh** and soil
Yellowstone - The death of the Superbowl.
They'd find a way to play it somewhere, somehow. It's religion, afterall. The game must go on.
Well, at least they have a laundry list of whats happening.
For those who did not read her:
Indeed, the crisis is ongoing. Risk-aversion in financial markets remains exceptionally high; deleveraging is widespread; the markets for most private asset-backed securities are dysfunctional; financial institutions, both large and small, have failed; and the economic downturn is causing delinquencies to rise, threatening further financial distress; households and businesses face an ongoing credit crunch; and housing and financial wealth has plunged. Marty points out, and I agree, that the likely impact on consumer spending of the decline in wealth thus farone of a number of factors weighing on this sectoris, on its own, quite substantial. And house prices are continuing to slide.
dk:
I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
Nobody cares if these theories work or are correct, they are justifications for looting. I don't say that out of natural cynicism, but because my observations lead me to conclude the policy engine in the West are largely broken and no longer use a policies objective worth as a criteria for evaluation. Germany seems to be an exception, but we'll see how long Merkel can hold on to rationalist policies in the age of the Free Lunch.
Thanks for the liquidity trap essay link, reading it now.
Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis.
Still in denial and can't bring himself to call a spade a spade.
The "severe financial crisis" didn't just erupt from a volcano on Mars. The crisis was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the Fed's cure for the last crisis, which was caused by the creation of the Fed.
It does with a good mix of Cow Sh** and soil
And New York sludge.
Hoopajoops, LTD writes:
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary.
The hundreds of earthquakes...
The following is scary just to watch
USGS.gov SoCal quake simulation (WMP video)
or
a menus from USGS So Cal quake simulations by city (QT)
dk - please kindly add state/municipal and private debt to your list. The US is indeed quite leveraged up.
Yellin's in the same boat as Krugman, their academic pinheads. Keynes is all they know, tic, tic...those softies. In actuality, the check's on the table and these folks are still debating on how to get out the door without departing with the remaining cash in their pocket after a good night's boozin'.
We're not in a depression, but if the Fed continues to expand the balance sheet with the the type of fiscal policy coming down the pipe, in about two years, with the debt we have, yeah it'll be a depression, and a good one too.
Morocco Bama writes:
Yellowstone - The death of the Superbowl.
I was being more subtle - think Yellowstone as a caldera...plus a play on the Superbowl...
OK, please acknowledge my verbal genius.
OT:
confidence in the dollar depends on confidence in the US.
a video for some of the impression you leave..
http://www.cinegratis.net/index.php#
i am just the messenger
(
One last rant.
Anyone who says "we just need to inflate our way out of the problem" isn't thinking very hard. When they say that, they mean "we need to increase our nominal GDP and wage growth to bring them in line with our debt load."
What is the transmission channel? HOW do lowering interest rates, increasing fiscal deficits, and flooding the banks with liquidity create wage growth? Bonus points if you have an answer when China's peg is included.
The world is full of prices and trade and real people buying and selling. Your job is to change most of those prices rapidly away from its current equilibrium to what you'd like the new equilibrium to be. How?
We already witnessed one transmission channel: financial markets and bubbles. We just went through massive bubbles in stocks, housing, stocks again, and commodities. We did have inflation in most areas go down or unresponsive while it soared in a select few areas heavily exposed to the financial markets, like food, housing, and energy. Real wages sunk. Nominal wages barely went up. Everything exploded.
You could invoke this same course again in extremis: the Fed could buy everything imaginable. But any action that almost certainly leads to a hyperinflationary spiral and/or a loss of faith in the currency as a medium of value and exchange is not on my list of reasonable choices.
We'd really like to see wages go up, but we're not competitive enough at current exchange rates for that to happen. There will be no wage-price inflation until America is price competitive with the rest of the world. Devaluation of our currency is appealing, but it beggars our neighbors, may not be possible due to pegs and dependence on certain imports, and doesn't suit the rentier class anyway. The market is trying to do it through deflation because it can't do it through devaluation, and we're fighting it hard.
Trade wars, or allowing default of lots of debt and massive monetary contraction to occur seem to me to be the two serious solutions. Too bad both outcomes also suck.
Ironically, I see the best mid to long term value and safety in real estate
Still in denial and can't bring himself to call a spade a spade.
My apologies if Yellen isn't Ben in drag.
ndk - please kindly add state/municipal and private debt to your list. The US is indeed quite leveraged up.
MrM, after the governors asked for $1 trillion
ponies, you're certainly right that I should. But I feel pretty sick already.
Ironically, I see the best mid to long term value and safety in real estate
Anonymous | 01.04.09 - 3:22 pm | #
Tax confiscation of any residual value.
kidbuck writes:
The "severe financial crisis" didn't just erupt from a volcano on Mars. The crisis was caused by the Fed's cure for the last crisis...
Killing Glass-Steagall (The Economist 1999
All this is especially troubling, because financial firms will be keen to get into businesses from which they were previously excludedand quickly, because an accounting trick known as pooling of interest, which flatters the profits of the merged entity, will be scrapped at the end of next year. Big financial firms are already difficult to manage: Citigroup this week announced that it was hiring Robert Rubin, the former treasury secretary, bringing its roll-call of chairmen to three. Firms that marry in haste, choosing partners from different regions of the financial world, may repent at leisure in harder times. History is liberally dotted with crises caused by liberalising finance without improving supervision.
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default? Many "happy campers" with THAT solution....
[Oh yeah. I forgot to add FNM, FRE, C, JPM, MS, GS, $8.2 trillion of various loan guarantees, the CP market, a very large structural budget deficit, a very large structural trade deficit...
ndk ]
I agree. I can't see any clean way out and excessive govt stimulus spending will make matters worse. Might be time to do a currency devaluation like MX did in the '90s. They need to do something drastic.
For those who have not seen this.
Untold Wealth: The Rise Of The Super Rich
CNBC the new gilded age - Google Videos
Not sure what CNBC's intent was with this, but it seems like "don't look over there, look here," although it was interesting, in a comical way. It pushes the rags to riches meme.
Morocco,
Invasion of the Mind Snatchers as the updated sequel. Or the Puppet Masters Attack.
I have a serious question: Is it true that the FEDS/TREASURY promised so far, more than they have currently provided? It seems to me that what the Govt is doing is offer as little money as possible with impossible promises to guarantee institutions...
If so, is the reason to not necessarily re inflate the economy so much as psychological support to get businesses and the public to buy more on credit?
Does anyone believe that 7 trillion stimulus (promised so far) will be sufficient to reverse the collapse of the US/GLOBAL economy?
I figured you were, Nova. Very clever with that pun...you do know I appreciate a good pun.
We'd really like to see wages go up, but we're not competitive enough at current exchange rates for that to happen.
Most 2009 wages in the US were fixed in December. Annual 2008 bonuses were determined in December or will be determined in January. Given the economic sentiment, it is quite safe to say that there will be no wage inflation in the US in 2009.
Yellin's not Gellin.
"I was being more subtle - think Yellowstone as a caldera...plus a play on the Superbowl..."
That's pretty good.
"... economic firestorm ... very grim outcome."
Panic at the FED
Stumblebumfoolery in the USA
Entries by Karl Denninger - The Market Ticker
HUD funds to help cities clean up foreclosures
"Our concern is that we still haven't seen the bottom of the housing market," Ware said. "Are we really stabilizing neighborhoods here?"
HUD funds to help cities clean up foreclosures - Los Angeles Times
Morocco Bama | Homepage | 01.04.09 - 3:26 pm | #
Keeping the dream alive for the middle class is the intent. Play by the rules, make the right moves and you or your children could attain all of this.
The American Dream will be missed when it is replaced with covering the bare necessities as living well.
May the 1% that own the 90% of American wealth be damned.
Well, duh. Eliminating the middle class seems to have been the goal since the soldiers came back from World War II and created it.
Those veterans were scary. Their children and grandchildren, though, can be put back in their place.
If the rich can't get richer, they can sure as hell make the middle class get poorer.
Same effective outcome, eh?
sm_landlord wrote:
I wonder what Yellen really means by "getting the economy going"?
Once you start doing fiscal stimulus, where do you stop? And what happens when you do?
sm_landlord | Homepage | 01.04.09 - 2:38 pm | #
sm_landlord, you asked the most prescient of all questions...how do we get off the tiger? We don't because when they try to drain the liquidity out on the other side of this it will be politically impossible. Can you spell Argentina circa 2002 boys and girls?
Risk-aversion in financial markets remains exceptionally - Janet Yellen
Risk aversion?
Talk about spin. Fraud aversion is more accurate. It never makes sense to invest in overpriced assets. Never, ever, ever. Doing nothing is often the best investment.
On a lighter note (and as a collection of anecdotal evidence), here is Crunch Creep.
Can I have my pony now?
To me the economy is severe when a professional sports league goes bust.
Allow me to introduce you to the Fresno Falcons:
Fresno Falcon's Fold
Interesting side note: When I viewed this page there was an add for Gottschalks, who is probably right behind the falcons on the way out the door.
By now the conditioning of past info released by the sources in control is to basically ignore current data, analysis, advisories, and projections because in short time there will be new semi-dire announcements that update the govspeak that will be more 'accurate'.
It's like 'they' are six months behind the truth.
Pretty soon you have to assume, 'they' provide consistently unreliable information. It's like 'they' are just buying time before the real panic sets into markets. Or consumers finally wake up. Buying time for what? Cash out? Disaster preparation? Obamanomics?
"Hoopajoops, LTD writes:
I've just been reviewing the yellowstone situation and the potential for an impending eruption and its impact on the financial situation in the united states is pretty scary."
The impact on the financial situation would be "Game Over..." Neither free-market capitalism nor crony capitalism -- whichever you think we have -- copes well with a massive emergency that could potentially kill tens of millions in this country alone.
That said.... don't make yourself crazy. We don't have enough data on Yellowstone to know if there are long-term cycles of increased activity that stop short of actual eruption.
Yeah, it could erupt tomorrow for all we know. We could all die in a zillion ways. Just watch the Doom Channels on basic cable (DISC, HIST) for the complete rundown.
But frankly, it's just as constructive to have a beer and go about your business than worry. Far more so, in fact.
Arizona is busted:
Arizona may run out of money in February
I guess we need a state stimulus check- $3 billion should float us until December- Prez Obama had better get out the checkbook.
Someday this war's gonna end...
On the retail front...
Driving around yesterday I got conflicting signals...
Closed/closing stores and "For Lease" signs, and
Plenty of "Help Wanted" signs.
What to make of it?
Maybe I should move to Patagonia, afterall.
Black Star Ranch writes:
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default?
When the FED said it was buying Treasuries it is apparent we are in default
it's just as constructive to have a beer and go about your business
How about 3 Martinis? I did that last night, but I'm still thinking about Jellystone. Ash scares the shit outta me.
Hey Boo Boo.
Crewman has it in one!!!
Bingo!!!
We have a winner!!!
Now for the next set of problems- dealing in a busted economy!!!
Someday this war's gonna end...
"Plenty of "Help Wanted" signs.
What to make of it?
picosec | 01.04.09 - 3:42 pm | # "
It can be hard to find good help at minimum wage. You'll get turnover at the worst of times.
And for those who didn't pick it up, Northeast sludge is used in agriculture. Yum.
The Federal Government has long used the threat of losing federal money to make states support it's decisions.
What happens when the majority of bankrupt states can only function if the federal government gives them money to cover their budgets? Hasn't the final step towards concentrating power in DC finally reached fruition?
Challenge changes set forth by the EPA, DOT, DOE etc. and have your state funding cut. Bush is implementing many policy changes regarding the harvesting of natural resources and EPA environmental standards. What if Obama doesn't change these back? What if the states and municipalities that have been taking a leading role in challenging new regulations or the lack of enforcement of current regulations stop litigating?
California has always been in the forefront in suing the federal government. Hard to do that when your broke and going hat in hand to get bailed out. Frightening implications for the future and the stewardship of our nation.
"When they say that, they mean"
Wage inflation obviously isn't happening. Devaluation of debt via commodity inflation may happen. We are still quite close to the 1974 script, and that is indeed how it went down in that era - a ST commodity peak in '72, with a much higher one 8 years later.
as for the destruction of the middle class, the banks gave them enough rope, and they hung themselves. that's really all there is to it.
HUD Funds huh, ...
The funds come with a few strings attached: The money must be spent in low- to middle-income neighborhoods, and buildings can be resold only to buyers who earn 120% or less of an area's median income. Governments, which had to submit plans to HUD by Dec. 1 to be considered for the program, have 18 months to spend the money
If Maxine's in, nothin' like Section 8 socialism.
When it's a full blown depression maybe the fat over-leveraged middle class will wake up....until then it's black comedy. No pun intended.
And on a lighter note, your taxes just went up....
Prez-Elect Makes New Pitch, Promises on Job Creation -- Including 600,000 New Government Employees - Political Punch
why worry, it's less than 4 years to the magnetic pole reversal and of course that will be precipitated by the massive caldera eruptions and blanket of ash
hopefully we'll all feel good about it, what with the exceptional leadership the world enjoys
excerpt: my fellow Americans, today there has been a major worldwide geological calamity from which nobody will escape
screen prolly goes blank right after that
anyhoo.....I like the suggestion of getting drunk, it'll certainly be good for the economy
Translating "The sh#t has already hit the fan." The stink smells like severe Risk-aversion hit The Private Asset backed Securities and now all is acting dysfuctional. Go figure.
Anyone have any ideas about the best shoes for a lot of walking, standing in lines?
If the Yellowstone caldera blows, the FED will throw money at it, Obama will save more jobs, and the market will go up.........
so, what's the problem?
"Anyone have any ideas about the best shoes for a lot of walking, standing in lines?
reptillian | 01.04.09 - 3:54 pm | # "
Mephisto are great shoes, great arch support and they last for years.
The real problem is not the bust but the unsustainable nature of the preceding boom. The growth of 2002-2007 was based upon massive and unsustainable US credit expansion, which encouraged consumer spending through the wealth effect of rising asset prices. This growth was an illusion, as real wages stagnated and manufacturing was outsourced to China. Now the illusion has been shattered, but western governments seem to think that another burst of stimulus will take us back to 2005. they will be sorely disappointed.
Let's put it all together:
2012:
End of the Mayan calendar
Magnetic pole reversal
Yellowstone supervolcano explosion
End of Days (gives evangelicals something to feel good about)
12/31/11 is gonna be one helluva New Year's bash.
Nobody cares if these theories work or are correct, they are justifications for looting.
You are confused. I care and the theories work as Hank and I intended them to work. One man's looting is another man's stimulus package. Do I detect a whiff of envy?
You may kiss my sacred Harvard ring.
When the FED said it was buying Treasuries it is apparent we are in default
Really? Since the Fed has actually been selling Treasuries this year, does that mean we're solvent?
reptillian writes:
"Anyone have any ideas about the best shoes for a lot of walking, standing in lines?"
I recommend SAS shoes. Made in USA as well.
" Morocco Bama writes:
And for those who didn't pick it up, Northeast sludge is used in agriculture. Yum.
Morocco Bama | Homepage | 01.04.09 - 3:46 pm | # "
If you go to your local bigbox home supply store and look at bags of budget fertilizer, it is very likely that you will find a brand bearing a discrete notice which describes its origin as (partially or wholly) human sewage.
Here in California, much of the solid waste is trucked out to places in the SE portion of the state where it is composted -- but not to a degree where it is bacteria-free -- and used in fertilizer for cotton and other nonfood (or non human-food) crops.
If need be, it can be put through a secondary composting process that "cooks" out the remainder of dangerous bacteria, and then can be used on food crops.
I talked to a guy who produces compost from "clean" sources, and he says it's hard to compete on price with such products. He makes his money by creating more costly products with special amendments (peat, various minerals, etc.) for specialized purposes.
It's actually a fascinating operation. He wouldn't let me drive his Scarab, though (huge, specialized composting tractor).
I'm seriously thinking that detachment or even 'the Great Refusal' of credit consumerism debt might just be the 'magic bullet' in all this. So detachment and 'cheapness frugality' as a healthy and positive response. Just say no.
Why 'consume' ourselves with this 'official' sales pitch to buy more so to speak? I mean the addicted day traders will probably compulsively trade to try and beat the Goliath and get burned some more. Live and learn and to each his/her own.
But creit consumerism dying will slay the credit cycle monster.
This Consumer/Banking 'freeze' is starting to appear as maybe a positive outcome. Maybe living simply within your means without crushing debt will be a step in the right direction for the New Economy. Unless 'they' order us to start borowing and buying Chinese consumer goods and big-ticket leveraged items again!
12/31/11 is gonna be one helluva New Year's bash.
Feckless Ness | 01.04.09 - 4:00 pm | #
You forgot global warming and climate change.
"It is possible that inflation will fall to undesirably low levels"
From the article...she's trying to say deflation is coming, but just can't form the "de"......
(I am available for additional economist translation for a small fee...)
You forgot global warming and climate change.
Citizen Jacked | 01.04.09 - 4:03 pm | #
And the Cubs winning it all.
" reptillian writes:
Anyone have any ideas about the best shoes for a lot of walking, standing in lines?
reptillian | 01.04.09 - 3:54 pm | # "
I like heavy-duty Red Wings for lots of walking on concrete; but I have a hinky back, and that may be overkill for you. They don't exactly make a fashion statement, either.
Clarkes are good, too, and better looking. It's all about having a good sole and good arch support.
My current "presentable" shoes are Ecco crosstrainers -- good enough for the office, but also great for walking. Serious arch support.
Reptillian: I favor Keens.
Ummm, ash is good fertilizer in small amounts. Deadly in big amounts. Italians farm on the flanks of Vesuvius for a reason.
Remember the wasteland when Mt St. helens blew?
Or the pictures of Hawaiian land after lava flows?
I think Mt St H's is prolly very lush by this time.
You forgot global warming and climate change.
Citizen Jacked | 01.04.09 - 4:03 pm | #
Doh!
Gerald Celente Economic Armageddon
Part 1: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"1/6
Part 2: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"2/6
Part 3: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"3/6
Part 4: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"4/6
Part 5: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"5/6
Part 6: YouTube - Gerald Celente on The Alex Jones Show"Economic Armageddon"6/6
I was having a nice Sunday until I read this thread. J-Yello (Yellin) always makes me mad regardless of what she says or does not say.
Obamanomics gravy train:
Bull Market in... Food Stamps.
so now making sure that the person you lend to can pay back the money is "risk aversion"
will these morons at the Federal Reserve ever learn? Might be worth remembering that in 1930 Keynes was considered a heretic by the economics profession. Perhaps it is time to look for the heretic policy not one that is embraced by the "range of blue ribbon economists".
How'd the Steve Quayle geologic disasterism get going? Maybe if the disasters are of non-human origins, our situation will be easier to swallow. Unless you believe weather modification is screwing up natural cycles.
Anyway if consumers are 70% of the economy and this last credit cycle looting destroys the mark...then the Big Sting fleecing will blow the game by eliminating the target and future 'profits' or the take.
Anyone have any ideas about the best shoes for a lot of walking, standing in lines?
reptillian | 01.04.09 - 3:54 pm | #
Ferragamo!
Does anyone believe that 7 trillion stimulus (promised so far) will be sufficient to reverse the collapse of the US/GLOBAL economy?
Anonymous | 01.04.09 - 3:27 pm | #
Anonymous it all depends on what you mean by collapse of the US/GLobal economy? If your definition is a return to status quo ante (0% down loans 10-15% appreciation in Real estate) then the answer is clearly no. If we are talking about a return to a sustainable economy it could be done for a lot less. I think if just nationalized and cleaned up the banks (Swedish model)didn't try to prop up housing prices (in fact helped in their finding an appropriate equilibrium level relative to income)this thing would be over a lot quicker than what they are trying now.
From Major Kong's "what is a depression" link:
"Before the 1930s all economic downturns were commonly called depressions. The term recession was coined later to avoid stirring up nasty memories. Even before the Great Depression, downturns were typically much deeper and longer than they are today (see right-hand chart). One reason why recessions have become milder is higher government spending. In recessions governments, unlike firms, do not slash spending and jobs, so they help to stabilise the economy; and income taxes automatically fall and unemployment benefits rise, helping to support incomes. Another reason is that in the late 19th and early 20th centuries, when countries were on the gold standard, the money supply usually shrank during recessions, exacerbating the downturn. Waves of bank failures also often made things worse."
But ya, that's all bullshot. Because all spending equal, whether its for CDS payoffs or energy infrastructure with a 30 plus year useful life. It only follows that we should Mellon ball the economy rather than indulge any of that Keynesian voodoo.
"New Mexico Gov. Bill Richardson on Sunday announced that he was withdrawing his nomination to be President-elect Barack Obama's commerce secretary amid a grand jury investigation into how some of his political donors won a lucrative state contract."
That's my guv!
BTW, CR congrats on getting to my neck of the woods last week; it really is a great place.
ITS not hard to see why the S.E.C. behaves as it does. If you work for the enforcement division of the S.E.C. you probably know in the back of your mind, and in the front too, that if you maintain good relations with Wall Street you might soon be paid huge sums of money to be employed by it.
The commissions most recent director of enforcement is the general counsel at JPMorgan Chase; the enforcement chief before him became general counsel at Deutsche Bank; and one of his predecessors became a managing director for Credit Suisse before moving on to Morgan Stanley. A casual observer could be forgiven for thinking that the whole point of landing the job as the S.E.C.s director of enforcement is to position oneself for the better paying one on Wall Street.
My current "presentable" shoes are Ecco crosstrainers -- good enough for the office, but also great for walking. Serious arch support.
Bob Dobbs | Homepage | 01.04.09 - 4:05 pm | #
My older Ecco's rubber like soles have all started to crumble. What's up with that? I stopped buying them. Rockports are comfortable dress/casual shoes under $90 many under $70. New Balance walking shoes at Academy and Sports Authority are comfortable casual. Clarks are good. My feet are the first thing to hurt and I'm always up for good shoes at a fair price. No more Eccos however...here is a link of mostly Ecco complaints:
My Ecco shoes are junk | Honeypot.net
I'm a runner and I use New Balance.
The next problem to be contained in the administration switch or handoff actually is possible unemployed government whistleblowers, so gagging and pardons will have to be extensive or the SHTF from too many loose lips who know too much. Of course the media won't be interested in these 'traitors' so they may be talking to obscure and officially 'discredited' internet sites which have been marginalized.
I'm no economist, but exactly at what point does a "deep recession" become a DEeP RecESSION? Is this signal language to prepare the great unwashed for what's ahead?
The shift from looting using credit bubbles is over. What will start happening in earnest is looting the natural resources in the US and Canada. Bush has changed the playing field and Obama will buy off the states by supporting their budgets while the chosen companies come in and rape the land with little to no challenge.
The middle class had to be made powerless before this could be ramped up. Hard to complain about the forests being cut down when that creates jobs and those environmentalists can no longer depend on middle class donors to fund litigation.
I want to believe in Obama but he's one man in a corrupt system. I will be carefully watching if Bush's final regulatory changes are changed back or are left standing. The answer will define what we can expect from Obama.
The answer will define what we can expect from Obama.
Citizen Jacked | 01.04.09 - 4:21 pm | #
Abandon all hope.
A DEEP REcession(Depression) is when you're hungry some days with not enough food.
CR goes to Arizona and a few days later their Gov is under formal investigation. Coincidence? I think not.
The Fed is getting very worried. ZIRP not working. QE not working. TARP not working. Not many other options left, so they're asking for more ammo.
Of course ZIRP isn't helping; it's intensifying the liquidity trap. TARP is a scheme for massive theft from the Treasury so of course that's not helping either.
"Quantitative Easing" (bah, I hate euphemisms) could help, but the amount so far has been only moderate. The promised mortgage interventions will produce a honker of a QE if QE is how they're done, but "expanding the balance sheet" could also refer to borrowing from the Treasury, which wouldn't be very inflationary.
In any case, the bigger problem with QE is that it takes 12-18 months for money supply changes to show up in the inflation rate. So we have a long wait before we see the effects of the current easing. A large enough QE to fix deflation now would produce catastrophic inflation later.
Anonymous | 01.04.09 - 4:16 pm | #
Only the SEC? You are describing the entire public-private shuffle of employment. Back and forth, sacrifice for a few years by serving in the government and then the private interests you helped out will reward you handsomely. Corrupt system without the will for change from anyone.
The majority of Americans have been in recession since the dotCON bust in 2000. Wages have declined as has purchasing power. If you exclude the gains made by the top 1%, the income and net worth numbers are truly disgraceful.
IMO, there is no such thing as a jobless recovery. The housing bubble masked the ongoing recession for a few years, but now the situation is even worse.
Bush and Bernanke have gone full retard on the (e)CONomy.
YouTube -
All to bailout the rentier class and prop up a corrupt monetary system.
Jacked,
Yes...the Conserved and Preserved People's natural 'protected' assets will have to be liguidated for 'unpaid' debts to the Central Bank. Yellowstone may become the size of a Peter Piper Pizza franchise some day.
Won't be any long term 'camping' for the homeless at the National Parks as they are 'privatized' for cash flow.
I think Obama has the makings of a great leader, but he can't turn back time. There is nothing anyone can do at this point to prevent G2D2.
Rob Dawg, Richardson is the governor of New Mexico. Arizona's governor, Janet Napolitano, is still poised to be in Obama's cabinet.
oh, yeah, I know what I'm gonna do when:
http://vimeo.com/moogaloop.swf?clip_id=1778399&server=vimeo.com
I'm a bartender so I spend extended amounts of time standing on concrete. The best shoes I've found for that purpose are ecco boots or these super comfortable sandals that I wear to work all the time
Fly Flot Dana - Blue Nubuck - Free Shipping & Return Shipping - Shoebuy.com
They're anatomic shoes and are the most comfortable I've ever worn. I'm looking to buy a few more pairs before they stop making them, I always regret not buying more than one pair when I find good shoes.
A large enough QE to fix deflation now would produce catastrophic inflation later.
Highlighted Comrade F.E.'s comments for agreement, but I still think we need a better definition than just "deflation" and "inflation". Those are so vague as to be not useful and possibly counterproductive in practice.
Dear policymakers: what do you want to have happen? Why do your actions make that more likely?
As noted earlier on the thread by bgates, we could certainly engineer another commodity bubble if we tried hard enough. I think our experience with commodity bubble #1 is prima facie evidence that this is not helpful, to say the least.
Again, I want to be told what we do and don't want to have happen, and why our policies are helpful. So far, I just see headless chickens and rote application of poorly proven theory.
full retard
no one goes full retard. they go home empty handed. not forest gump. stupid, but not full retard.
dk writes:
One last rant.
I am guessing that the Jarislowsky article that is making the rounds fits into your category of "not thinking to hard":)
I hope for the sake of those who are debt free and good stewards of their money that you are correct and J is wrong. A question - do you see upside in going short bonds via vehicles such as TBT or PST?
Thanks
Time for some NFL. Enjoy everyday like it's your last.
Been great living in Disney Land for most of my life. The new entertainment coming on line uses less pleasurable ways to distract and cause conformity.
crazyvermonter,
Do you think the Govt. is so opaque, is due to the fact that they have the facts and that do not want us to know that "this sucker is going down"...Maybe the situation is so bad, that nothing can be done to save our and the world's economy...They just want to string it out until they can come up will a plan for their worst case scenario???
Why else drag this situation out? I suspect that the govt/fed knows that there is not enough money to get the world/US back to a credit consumption society...
Danm it, where is that tin foil hat?
It was 9 below last night in the yellowstone region. no one wants to live here year round that has the option of leaving
If this supervolcano erupts, the entire united states will be covered in inches of ash, causing agricultural collapse, not to mention human death from inhaling glass fragments in the ash.
What a time to run out of virgins!
Rob Dawg, Richardson is the governor of New Mexico. Arizona's governor, Janet Napolitano, is still poised to be in Obama's cabinet.
merciless | 01.04.09 - 4:29 pm | #
[Dopeslap applied] Of course and I knew that honest. Whitehouse Ruins is right near the border and when we visit we go by way of friends in Gallup, NM.
One thing we DO KNOW - there is no paying back any of this monstrous debt. So eventually, the interest becomes non payable. Then what? Default? Many "happy campers" with THAT solution....
Black Star Ranch | 01.04.09 - 3:25 pm | #
I hesitate to post this because the last time I said something this silly the Pakistanis took me up on it, but here's a sketch of a possible endgame solution:
(1) suspend trading in US treasury debt
(2) suspend interest payments
(3) require all holders of treasuries to register their holdings
(4) resume interest payments to domestic holders only
(The remaining steps are left to the reader as an exercise. My recommendation is that they include preparations for WWIII.)
dk writes:
I just can't believe that such a series of extraordinary claims, backed only by very clever theory that has thus far repeatedly failed to reflect reality, hasn't raised any eyebrows.
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Well it certainly has in my house. I find myself yelling at these idiots on the TV with my eyebrows raised often. It boggles my mind, as Im sure it does many others here.
Anonymous | 01.04.09 - 4:32 pm | #
I think we are victims of our rhetoric. So some on the right will yell socialism if anybody thinks nationalization. So instead we will get this creeping destruction of the free market.
I think the more important reason is that policy makers are trying to preserve the wealth of those invested in the equity and debt of the banks. There are three players in this game- tax payers, the economy and the investors. Two out of three can be protected but not all three. So the natural choice is screw the tax payer and protect the other two.
BTW they couldn't possibly have better information than the collective posting here. If they didn't see the problem coming it is hard to see that they are going to see the solution. As Lenin put it" you can't have a revolution without firing squads" at the moment all the culprits are doing their best not to be a target.
The new 'entertainment' is films like '30 days of Night' and 'Hostel 2' where Americans are slashed and torn apart in large numbers. At
least the entertainment industry is getting us used to the idea of the not sp pretty Endtimes. Sure it's just fiction. Like the media and government/Fed reporting. But there's some truth to popular culture offerings. It's all pop kulture now.
Shoes...
I wore Clarks for a decade or so, but the last pair I bought (and quickly returned) were not comfortable and seemed kind of shoddy. They were the same model that I had become accustomed to, but the first that were made in China.
I am guessing that the Jarislowsky article that is making the rounds fits into your category of "not thinking to hard":)
I agree with some of what he says, but when he says "we have to create inflation", I need him to explain just how he proposes we do that in such a clean and uniform way.
A question - do you see upside in going short bonds via vehicles such as TBT or PST?
I think such vehicles are Grand Theft Portfolio. Anything that gives 4% down on 2% up days, and 4% up on 2% down days, will gradually milk you dry. It's beyond me why they're legal.
Secondly, I have absolutely no idea how to invest here. Anything could happen to interest rates, and real interest rates are very different from nominal ones. The Fed has already indicated they're on the other side of your trade, which is a little freaky. They could give up trying to support the system, or they could monetize so many assets we get hyperinflation. The choice is pretty bipolar. Even worse, it's all political and sociological here, and I suck at that stuff.
My personal sense, based on our proclivities, is that the optimal strategy is to either play the bubbles we're forcibly blowing again, or sit in cash waiting. This strategy will not be helpful, nor will it create lasting inflation. However, it will eventually become clear that the Fed is insolvent, which might or might not mean that cash will be useless. I'm cowering in economically insensitive commodities and cash. But again, I have no idea. Maybe others here do.
"Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic"
Die Bad Doggie Yankie! You have been MISBEHAVING!
picosec, agreed on the Clarks. I used to wear them as well. The FlyFlots I recommended are Italian made and you can get them for about 50 bucks.
[Dopeslap applied] Of course and I knew that honest.
I knew you knew. Smooch.
Back to your regularly-scheduled apocasmut.
Well, fly, at least you're on topic. The hallucinogens must be wearing off.
Thought Clarks were made in portugal and vietnam.
A long time ago, they were made only in the UK.
I want to believe in Obama but he's one man in a corrupt system.
The absence of corruption is a start, and yet corruption isn't the only problem in our system.
Obama will do whatever he's told by Wall St. unless he has in him some as-yet undiscovered independence from his financial backers. Believe in it when you see it.
BERNIE MADOFF PAID STAFFERS STILL CLOCK IN - NYPOST.com
Madoff hacks
We basically get there at 9, hang around, and go home at 5. It's surreal. It's also scary, because we don't know what's going on
ok, cue Mr Trump
the guest writes:
A DEEP REcession(Depression) is when you're hungry some days with not enough food.
Well then I'm in a Depression right now with my New Year's Resolution diet. Things are looking up then if weight loss goes hand in hand with economic collapse. Just as long as starvation isn't the eventual outcome; that would be truly depressing.
Wow. That was a nice trip, sorry for and against anybody.
Dieting into a depression...that's putting lipstick on a pig.
That was a nice trip, sorry for and against anybody.
For and against but not with, i like you already.
Who gives a fuck what kind of shoes you old people wear?
What the hell happened to the good of the country and future generations? I've lost so much of my trust and faith in humanity through this crisis. I don't want to lose more.
Then don't read Lewis Lapham's piece in Harper's this month discussing how the naval piracy that helped win the Revolutionary war was a precursor to our current financial chicanery.
Ideal pasts: overrated.
Yalt writes:
here's a sketch of a possible endgame solution:
I think you might have it there... maybe some pretty new looking dollar too
Why get excited? 'We the People' voted for the Bush dynasty. 'We' didn't protest the 2000 election fraud. 'We' bought the Obama hypnotic sales pitch laced with the religious fervor of great Salvation Preaching.
'We' bought the scare tactics for more Wars. 'We' bought into the bubble one way or another. 'We' believe propaganda like Michael Moore films. 'We' were scared into TARP by the hard close of fear.
We buy the fear or greed hard close sales pitch every time.
But that may be changing soon. This is the unintended Change that may be coming. When the consumer wakes up to the endless scams that got so big...they will be busted.
Morocco Bama, re: CNBC
Is that the one with the early 40-something titan worth $80 million who has a harp the size of a Learjet in his "great room?"
A CNBC self-parody, I tells ya'!
(Memo to CNBC: I know that any publicity is supposedly good publicity. But understand that this cheesy program was yet another example of how you, in addition to your take-the-weekend-off lapses in reporting the crash of 2008, really, really suck!
Hey...did I forget to say that CNBC sucks?
Who Saw The Housing Bubble Coming?
Bruce Bartlett 01.02.09, 12:00 AM ET
Who Saw The Housing Bubble Coming? - Forbes.com
CR not mentioned.
Hope not anybody not writing a new new testament of my stupid idiotic writings. Shit Must have been "out there".
Should adjust my medicine except I why I do that anyway?
Ideal pasts: overrated.
You're right to some extent, in both truth and truism, TBFF(and I'd change "Fink" to a T word if you can). But there's a strong reek of treachery here that I really dislike.
Beyond the overt actions of Treasury and others, I do feel a bit robbed by my prairie boy education and environment, where there really were a lot of good people. Maybe Jefferson was on to something.
Anonymous writes:
Who gives a fuck what kind of shoes you old people wear?
Anonymous | 01.04.09 - 4:50 pm | #
Lol, I needed a good laugh!
Fad dieting is a hobby of a bubble credit society. If the bubble cycle is broken with discovery & reforms, fad diets like flipping shows will be gone like pet rocks as a cultural excess malignancy.
Should adjust my medicine except I why I do that anyway?
supafly73 | 01.04.09 - 4:54 pm | #
More importantly, why do you do it HERE? Seriously.
To me the economy is severe when a professional sports league goes bust
FLtrader | 01.04.09 - 2:56 pm | #
Not this time. The 22-year-old AFL announced Monday it's canceling the 2009 season as it seeks to mold a better business model in tough economic times. The decision was pending an agreement with the players' union.
Arena league owners vote to cancel '09 season - ESPN
I think you might have it there... maybe some pretty new looking dollar too
Crewman | 01.04.09 - 4:51 pm | #
I don't see the point of that in the computer age--physical currency is pretty much irrelevant.
Basically I think the game is to protect the relative strength of domestic debtholders. It's what I'd expect from general considerations of power and it's consistent with the decisions reached so far. I'm guessing a point will be reached where the only way to do that is to jettison foreign holders and prepare for the fallout.
Don't worry old folks, those iYoungs will discover some new iSMs and execute a couple of billions for that! Except I like David Hasselhoff!
Who Saw the Housing Bubble Coming?
Of course the Federal Reserve didn't see it. They were clueless. These public 'opinion' beliefs will be part of the research discovery process when consumer credit-ism is killed by the ponzi bubble to end all ponzis.
Basically I think the game is to protect the relative strength of domestic debtholders.
The purpose of the FED is to protect the Creditor Class. Not much more.
Anonymous writes: | 01.04.09 - 4:32 pm
They just want to string it out until they can come up will a plan for their worst case scenario???
All I know is I hope I come up with one first!
Well, who gives a shit anyway. Michelle will be Eva Braun, hope she can dance on top of the tables!
Yanks are going way down with their 8000 billion dollar this year rollover&new demand demands. Long live Yanks!
Who and why all this crap was allowed or planned won't really matter pretty soon though as people concentrate on the day-to-day stuff.
I think there will be de-coupling from the government/banking apparatus and communities will learn to use 'local' resources which is what the Green movement has been preaching all these years.
Wouldn't be ironic if this Rip-off Crash leads to limited use of resources and reducing waste so that we end up fighting pollution and so-called global warming from the Crash of the banking/finance credit cycle boom/bust currency ponzi system.
The Irony of this!
Real-Estate Markets Still Plumb for Bottom
"For economists now to make forecasts is a pretty difficult thing," said Ray Torto, chief global economist at real-estate firm CB Richard Ellis. "All of our models are outside the territory in which they've been built."
dk writes:
ndk - please kindly add state/municipal and private debt to your list. The US is indeed quite leveraged up.
MrM, after the governors asked for $1 trillion ponies, you're certainly right that I should. But I feel pretty sick already.
ndk | Homepage | 01.04.09 - 3:24 pm | #
I saw the Governor from Ohio this morning saying it was all WSs fault. He requested $5 billion from PE/O.
Im Rich!
We are pleased to inform you of the result ofthe Yahoo! Financial promotions held this New Year.Your e-mail address attached to ticket number 883734657492-5319 with serial number 7263-267, batch number8254297137,lottery ref number 7336065782 and drew luckynumbers14-22-28-37-40-44 which consequently won you the cash prize in the 1stcategory, you have therefore been approved for
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NDK:
Beyond the overt actions of Treasury and others, I do feel a bit robbed by my prairie boy education and environment, where there really were a lot of good people. Maybe Jefferson was on to something.
I was a prairie boy too. I take it you mean robbed of that idyll, and not duped by it.
The ethos that shaped my midwestern youth forty years ago is gone, gone, gone. And while it was also one that sadly produced, say, a pro-Vietnam War Humphrey, its advantages in social contract/quality of life are missed. They weren't worth trading for SUVs, SSRIs and shopping malls with flatscreens. In some ways these, too, were treacheries pointing toward the more particularized fleecing now underway.
...Fed's Yellen: Recession "longer and deeper" than "Garden-Variety"...
And that counts for "news" ?
Yalt - You forgot #5
(5) Other nations saddled with USTs nationalizes US company assets
Besides that , how was the play Mrs. Lincoln?
""For economists now to make forecasts is a pretty difficult thing," "
Wow, well hello you motherfuckers. NOW is the time to make bold forecasts like "AK-47 and MAD MAX!" Or...KILL AS MANY AS YOU CAN BEFORE THEY WILL GET YOU" or "Just watch the JERICHO-series!" or "YOU GOT EXACTLY 28 DAYS TO LIVE!"
But noooo, useless idiotic copy machines. Man, You suck, Me suck, My cat suck and do not look me that kind of bad way...
please contact our claims director Mr.Micheal Wallace who
is incharge of the claims office in UK
Richistan | 01.04.09 - 5:10 pm | #
I'm fairly sure we're related.
How about we legalize Pot and change the color of our currency. Take in all the illegal dollars and fix the problem from the tax revenue from POT!
PS No, Im not high.
I was a prairie boy too. I take it you mean robbed of that idyll, and not duped by it.
I did mean by, in this instance, because it really didn't prepare me for the world I was going to encounter. My value set just doesn't fare well in a world where it's every man or woman for themselves.
TBFF, robbed of would be more appropriate if I thought the ideal were tenable in this day and age. I truly wish the world were like my hometown, and I think back to friendly local shops, corn and wheat fields with leisurely canals lined with cottonwood trees when I need a better place. Maybe someday...
You can see the lines in the sand now. Keep borrowing debt and preserve the bubble prices. There is a movement for economic sanity and debt reduction. These econ blogs are at the front for the Change the banking apparatus doesn't want. The Great Refusal for consumers to remain debt peons to bubble prices will unwind the schemes ti inflate for cycle profits. I can see what's at stake here. And Obama is on the side to keep the bubble inflated.
The bubble blowers went too far this time. The bubble will not stay inflated because the people don't want to be chained to over-priced bubble assets.
Don't think of this as losing everything...maybe think of it as unloading bubble priced assets that were fictitious values anyway.
updated 7:26 p.m. ET, Sat., Jan. 3, 2009
NEW YORK - The recession has reached the ritzy Rainbow Room, the special-occasion spot that overlooks midtown Manhattan from high above the tourist-attracting Rockefeller Center skating rink.
With business slowing and the lease in dispute, the venue's Italian-themed Rainbow Grill restaurant plans to shutter as of Jan. 12, a spokesman said Saturday. Its bar, banquet space and the weekend dinner-dancing sessions that reflect its glamorous history will continue on the 65th floor.
Greg Robb
MarketWatch PulseBuzz up!Digg It StumbleUpon Reddit SAN FRANCISCO -- There is no risk an outbreak of deflation in the euro zone, Lucas Papademos, the vice president of the European Central Bank, said Sunday. "This risk is nil," he said in a speech at the American Economics Association meeting. Papademos also said there are signs financial stress is easing in the euro-zone, citing "a slow, steady decline in credit spreads in euro money-markets."
posted at EB today:
<i>Bernard Madoff has caused losses equal to all the losses caused by all the conventional thieves in America for nearly three full years.</i>
"Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis. "
well this is not really atypical; monetary policy was loosened after the tech bubble crash which money flowed into the real estate bubble, a recession would have occurred when monetary policy was again tightened and re-setting of mortgages rates; what made it worse was that financial instruments were made based on the collapsing mortgages which leveraged the collapse. its a combination of monetary policies and financial instruments, poor evaluation of those instruments and general retardation throughout wall street and the political class.
So the question really is could the York town in England be more valuable than New York by 2011? Snake Plissken is waiting...
DANBURY, Conn. On the day that Donald Peters died, he unknowingly provided financial security for his wife of 59 years and their family.
Peters bought two Connecticut Lottery tickets at a local 7-Eleven store on Nov. 1 as part of a 20-year tradition he shared with his wife Charlotte. Later that day, the 79-year-old retired hat factory worker suffered a fatal heart attack while working in his yard in Danbury.
On Friday, his widow cashed in one of the tickets: a $10 million winner which, in her grief over her husband's death, she had put aside and almost discarded before recently checking the numbers.
"Driving around yesterday I got conflicting signals...
Closed/closing stores and "For Lease" signs, and
Plenty of "Help Wanted" signs.
What to make of it?
picosec
Just lowering labor cost?
A prediction...
Obama will have lots of turnover in his ranks...
The smartest folks will leave quickly once they figure out that it's a lose-lose economy.
An ironic thought... GM's Rick Wagoner has the most/closest executive experience to Obama's situtation.
A manual would be useful.. Anyone have this title laying around for Barak?
"How to unravel a massive Ponzi scheme without actually admitting you did anything wrong n 3 easy steps"
Richardson Bows Outs As Commerce Secretary Nominee
New Mexico Governor Bill Richardson Withdraws Bid To Be Obama's Commerce Secretary - cbs5.com
Understood, NDK. In fact, friends have said as much before.
However quaint and however impractical, it is a point of honor for me not to have been raised to treat the world as a sewer. Consequently I am watching the slide of our social Darwinists and their associated works with no small satisfaction (mingled, mind you, with blood-curdling trepidation).
Bernard Madoff has caused losses equal to all the losses caused by all the conventional thieves in America for nearly three full years.
Edwin Sutherland was right.
What not to wear for shoes in a recession.
The last ugly recession in the early 80's found me sleeping on the floor in a friends extra bedroom. It was a very cold winter and his apt. was substandard. The windows would have ice on the inside some mornings.
I owned 1 pair of shoes. A pair of cowboy boots from Kennys shoes. Kenneys was an early type of Payless shoestore. I went to apply for foodstamps. My total cash worth was $4 dollars. On the way to get my foodstamps, I slipped on a hill (no car) and ripped the heel of one of the boots.
So I hobbled in, got my emergency food stamps, and sat in a chair and hammered the heel back in, sort of. Every few days I would repeat the process. Oh, cowboy boots are feet killers if you have to walk any distance.
By 2011 you Yanks will need more peacekeepers than Middle East EVER! Man, you are going down and not in a "good way".
All the meters are friggin RED or SCREAMING "TERRAIN LOW YOU FUCKING IDIOTS, PULL UP UP!". Except with what?!
That is why I do not really give a shit anymore, after years of warning, blogging and shit whatever. Good LUCK anyway!
And how many times do you think Yellen voted against Greenspan/Bernanke? Sins of omission have grave consequences for adults (not so much for economists or bankers).
I hope Yellen gets wacked by the wand of the competence fairy when the history books are written.
Now if we get our borders are closed off here in the USA like Gaza, all bets for economic recovery & reforms(CHANGE NOW) are off. Is Obama going to get rid of all those stupid Executive Orders written in the last 7 years...?
the mayan calendar doesn't end in 2011, or 2012, it enters a new phase. the new phase portends massive change, not an "end" in the sense of total obliteration of everything. FYI. I can see the massive change thing happening. what is scary is that on the exact day that one of the previous worlds changed, Cortez arrived in south america and,....well,...there was massive change.
YAHOO! Headline
Hoyer: Stimulus unlikely before inauguration.
Mrs. Hoyer: Lose some weight Steny and I will think about it.
Nova, Funny
Print, baby, print!
Sooo much more marketable than quantamassive easturbation, as I think YSLP had it the other day.
Honestly, selling the response could save Madison Ave.
Not that that's necessarily a good thing.
C
eco writes:
"Richardson Bows Outs As Commerce Secretary Nominee"
First rat off the ship?
Or someone who realized that they don't want to be in charge of Commerce during an extended recession?
craig writes:
"what is scary is that on the exact day that one of the previous worlds changed, Cortez arrived in south america and,....well,...there was massive change."
Aliens coming to Earth?
You read it here first.
.
"Richardson Bows Outs As Commerce Secretary Nominee"
First rat off the ship?"
Or else the new administration, having campaigned on a "change" platform are super paranoid about any hint of fiscal scandal.
Aliens coming to Earth?
You read it here first.
.
sm_landlord
We're already here.
We're already here.
Anonymous | 01.04.09 - 6:01 pm
Yeah, and everytime you guys come to cut my grass, I find you weedwacked some of my flowers.
First rat off the ship?
Or someone who realized that they don't want to be in charge of Commerce during an extended recession?
sm_landlord | Homepage | 01.04.09 - 5:54 pm | #
Obama is so Chicago heavy this is a blow to a geographically balanced administration. I can't imagine anyone not wanting to play in the big game no matter the odds. We won't be allowed to use phrases like rats off the ship for a while. What surprises me is President Elect Obama simultaneously saying the can only be one President at a time while meeting with Congress this week to press his agenda.
eco writes:
First rat off the ship?
The real RAT has been in charge for 8 years
Kinney's shoes
Kinney Shoe Corp. -- Company History
Yuck. Politics. We can do better. C'mon lets CHANGE the subject.
Sorry
aliens?
HubbleSite - Picture Album: Galaxy Abell 1689's "Gravitational Lens" Magnifies Light of Distant Galaxies
this hubble photo show hundreds of galaxies showing billions of stars.
the setup for this shot is analogized by thinking of an 8 foot long mcdonalds straw and viewing thru that small opening. the sky contains 12.7 million of these possible images.
yeah, there are aliens out there.
My recent favorite shoes are HS Trask. Reptilian, some of them are selling on their website for 75% off, making me fear for their survival.
Sorry, I am not the thread polizei. So, I will shutup and go see if I can finally play Jessica semi-right.
YouTube -
Reptilian,I have a Clark's outlet store half an hour away and shop their sales.SAS are also good,Ecco's don't last for me.Good shoes are IMPORTANT.
yeah, there are aliens out there.
Tin Free | 01.04.09 - 6:10 pm | #
They stopped bye looking for intelligent life, communicated with the dolphins and whales, and continued on their way.
I guess what...
My skull is empty.
They stopped bye looking for intelligent life, communicated with the dolphins and whales, and continued on their way.
Cachalot comes to mind.
i think they concluded that to have a dog's life was best on this planet.
i think they concluded that to have a dog's life was best on this planet.
Not in vietnam.
Getting a chuckle out of you all tonight.
i think they concluded that to have a dog's life was best on this planet.
Not in vietnam.
Anonymous | 01.04.09 - 6:29 pm | #
While I have long felt that if reincarnation is for real, that I want to come back as a suburban golden retriever, its not just in Nam that dogs are having a tough time of it. One of the overlooked tradgidies of the forclosure crisis is what is happening to pets. Have a room mate who is very involved with rescue work. Lots of familys who lose their houses can only move in to rentals that dont allow pets, or in with relatives who cant take the dogs as well due to having their own dogs, allergies, or just not willing to take the pooch as well. Lots of dogs just left tied up in the back yard in abandond homes, ASPCA's overwhelmed etc. Talk about innocent victims of the downturn.
Topher writes:
How about we legalize Pot and change the color of our currency. Take in all the illegal dollars and fix the problem from the tax revenue from POT!
PS No, Im not high.
Topher | 01.04.09 - 5:21 pm | # I'm high and I think legalizing POT is a good idea.I agree it would greatly free up the Prison System which is killing us (33ka year). Hemp also has 4x the energy of corn based ethanol.Then again we only elect dumb asses who keep spending .
In our continuing series, here's delusion by the numbers in Hong Kong, bull version:
INDEX\tVALUE\tCHANGE\t%CHANGE\tTIME
HANG SENG INDEX\t15,042.81\t655.33\t4.55%\t01/02
HANG SENG COMPOSITE INDX\t2,066.39\t83.83\t4.23%\t01/02
S&P/HKEx LargeCap Index\t18,697.79\t806.63\t4.51%\t01/02
S&P/HKEx GEM Index\t381.70\t-3.77\t-0.98%\t01/02
HS FREEFLOAT COMP INDEX\t2,149.65\t85.77\t4.16%\t01/02
HANG SENG HK FREEFLT IX\t1,526.21\t45.61\t3.08%\t01/02
HANG SENG CHINA ENT INDX\t8,314.11\t422.31\t5.35%\t01/02
HANG SENG CHINA AFF.CRP\t3,441.74\t149.34\t4.54%\t01/02
HS MAINLAND FREEFLOAT IX\t4,533.72\t203.51\t4.70%\t01/02
HANG SENG 50 INDEX\t2,111.10\t90.92\t4.50%\t01/02
HANG SENG HK 25 INDEX\t1,465.64\t45.89\t3.23%\t01/02
HANG SENG MAINLAND25 IX\t5,368.92\t271.09\t5.32%\t01/02
HANG SENG H-FINANCIALS\t10,691.57\t505.62\t4.96%\t01/02
And from our Headline Writers Are Morons edition, apparently Hong Kong has the best open to the calendar year since 1970 ... wahey, the bottom is in! Um...
Hong Kong Stocks Rise in Best Opening Day for Year Since 1970 - Bloomberg.com
Far [east] freakin out.
C
"Take in all the illegal dollars"
heh, I was just enjoying the Madoff humidor featured in the nypost link...
too bad no one got me that for xmas.
Japan set for take off futures +5.5%
crude is going nuts, while spx futures are slightly red. works for me!
Some tidbits today
Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed.
"We are in a horrible mess. I believe it is very young and it is going to be long and deep," he said.
Even in the first quarter of 2010, the economy will likely be weak enough to need macro stimulus, he said.
Martin Feldstein, the prominent Harvard University economist, said there was no longer any basis for believing the recovery could start in the third quarter.
"I think we'll be lucky if by this time next year we see the economy hit the bottom and start turning up," Feldstein said.
"In terms of the level of activity, the end of 2009 is going to look lower than it is today," he said.
The financial shock that hit the U.S. this autumn was bigger than a similar shock during the Great Depression, former Federal Reserve governor Frederic Mishkin said Sunday. The recent shock "is much more complicated" and the clean up will be difficult to do, Mishkin said.
bgates writes:
crude is going nuts
Cut oil sales to Israel's backers-Iranian commander
Reuters.com
"Cut oil sales "
i'm disinclined to think that headlines have much of an effect on crude after the past year. but i also think recent news out of the ME is something of a non-story, maybe the markets agree.
Another shoe recommendation:
After I developed a very painful heel (not plantars' fascitis) I adopted Apex "Ambulators" (?).
Wearing these (alternating pairs) for about a year cured the heel pain. I now use them all the time. The downside is they provide no lateral support so are no good for hiking, only pavement. Even there, you have to be careful. Running is OK straight ahead for brief distances only. But the cushioning/comfort provided is terrific.
Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed.
Peter | 01.04.09 - 6:59 pm | #
Blinder: -1
CR: +1
What is wrong with Blinder? Does being in the Fed make it only possible to see things in terms of their impact on Wall Street?
http://en.wikipedia.org/wiki/File:Deathvalleysky_nps_big.jpg
come on guys , there's plenty of oil out there.
Dirk(Excellent) writes:
Lots of dogs just left tied up in the back yard in abandond homes
What if we tie the former owner up in the backyard in the dog's place and forget them?
It's a being totally dependent on you. If you can find a place for it to live, you can't find a place for you to live.
Disgraceful.
Aliens coming to Earth?
You read it here first.
No, I saw it first on "They Live".
They Live (1988)
.
billions upon billions
see, we need this tarp crap so we can better understand big numbers
No one shoe is suitable for everyone. Go to a good hiking or running store and talk to the shoe people. Different foot widths, arch heights, pronations, etc, determine what sort of shoe will work for you. If the shoe salesman you talk to doesn't seem to understand these issues, just walk out. Independent specialist shops are the only places you are likely to get good advice. You could, of course, visit the bricks and mortar shop, take their advise and buy online, but that would be shitty. The shop might not be there next time if too many people do that. I've found that the savings from going online aren't that great so I buy shoes in person.
Bond Girl writes:
I find it really frustrating that people attribute a "theory" to Taleb.
He's parlayed it into a "Distinguished Professor of Financial Engineering" position PI-NYU. I must say I'm a bit surprised. Deans are usually wary of prospective faculty members who annoy their most generous donators. Perhaps Taleb is out-contributing them!
Show caution jumping to conclusions regarding Asian Markets...
Nikkei has been closed since 12/30 so hasn't participated in the last two and a half US market days.
Byz, excellent opening rant.
wow, the OT activity tonight really is about the other shoe dropping
Although Morris Brown has had shaky finances for several years, it now looks that it will be the first academic casualty of this downturn. Apparently, the school just got water turned back on and an academic building will be foreclosed upon. Fugly
"the first academic casualty of this downturn"
let's cross our fingers and hope that all except the top fifty or so law schools in the country are closed within the next decade or so. gotta find that silver lining.
ndk(Unrated) writes:
\tBut why won't we countenance the idea that fiscal stimulus doesn't work? The empirical evidence is contrary, weakly supporting, or ambivalent, and I consider that to be a very weak basis for a foundational theory in a discipline. It's been sufficient to discard other ideas like Ricardian equivalence, or Say's Law.
But Keynesianism is sacrosanct. No matter how many times it fails, no matter how many times the outcome of its use violates the predicted effects, it's holy.
ndk | Homepage | 01.04.09 - 2:42 pm | #
NDK, part of the answer is that we are still benefitting personally and directly from Keynesianism. Today I travelled on two roads built as part of Eisenhower's highway stimulus.
But, reaching even further back, I am astounded at how often I encounter the lasting benefits of Roosevelt's programs. I'm an outdoorsy person, and I am amazed at how many structures in my state parks were built during that era - and how attractive and functional they are. The stone steps, the hanging bridge, the little dam, the roomy and fancy public restroom (nowadays we seem limited to ugly and dirty looking port-a-potties). Last year I took a group tour of North Dakota's refuges - many of these were begun during the New Deal, to help one of the then hardest-hit states. But the benefits have been lasting. Waterfowl restoration still builds on that foundation. I was in awe at the scope of Roosevelt's mind and the LASTING achievements of this sort. Our great National Wildlife Refuge system was, I suppose, Keynesianism in action. We are still benefitting, 70 years later. Our country was enriched by these programs. Not many initiatives can claim that.
The empirical evidence is there before my eyes, almost every weekend. These are the real achievements, the victories that count.
Ot, just asked my wife for a divorce. sad and confused. will leave everything to her. any insight?
"These are the real achievements, the victories that count."
The dollar was still backed by gold abroad and silver at home in Ike's era. There's absolutely no connection between Keynesianism as it was known in the pre-BW world and the time since.
bgates - damn, you got in before me on shoe dtopping.
However, we're dealing with not a bipedal model, but a centipedal one. The other shoe to drop has 98 more to go...
C
"any insight?"
smart move in terms of not putting up a fight. take florida and the over with the money you would have spent.
CONJURE'S FUN FACTS
In the four years ending 2006, year-end household sector checkable deposits averaged $294.4 billion. Since 2007:Q1, checkable deposits have fallen from $226.1 billion to $46.3 billion at the end of 2008:Q3, the latest data available.
"98 more to go."
evita has frequently come to mind when watching our current policies... why not add imelda to the mix
THE BUSH DEPRESSION is going to be long and deep.
What if we tie the former owner up in the backyard in the dog's place and forget them?
It's a being totally dependent on you. If you can find a place for it to live, you can't find a place for you to live.
Disgraceful.
I could not possibly agree more. People who neglect their companion animals deserve a special place accessible only by Dante's service elevator.
A depression
Just in time for all the Fascists, communists, and other fanatics to come out of their hybernation. Just fricking fantastic.
I am leaving for some far away island.
Any suggestions?
CONJURE'S FUN FACTS
In the four quarters ending 2008:Q3, the US household sector net worth fell $7.09 trillion.
We've heard all this talk about money on the sidelines waiting to get into the markets. I saw the TrimTabs CEO and he said that was bunk, there is no extra money. Money pulled out of the markets went to paying down debt. Also said savings rate is going DOWN not up.
imperial subject - Vanuatu, great diving, French food, kava. What's not to like?
C
checkable deposits have fallen from $226.1 billion to $46.3 billion at the end of 2008:Q3
mp | 01.04.09 - 8:02 pm | #
OUCH!
lost,
I could give you a lot of insight, but this isn't the forum, and I won't spam it.
Principality of Sealand - Wikipedia, the free encyclopedia
seems like a nice vacation spot for the average CR poster
mp, I'd hate to see his non fun facts...
"Huckabee's on FOX, gotta go
mp - CONJURE seems to be having way too much fun, and very juvenile. Perhaps these unfortunate numbers could be withheld from the kids and just held by the grown-ups who really know how the market works?
They've done a great job so far.
C
NDK, part of the answer is that we are still benefitting personally and directly from Keynesianism. Today I travelled on two roads built as part of Eisenhower's highway stimulus.
This wasn't done as Keynesian stimulus. It was done because having a national highway system makes an enormous amount of sense. Eisenhower realized this after his time in Germany and lobbied for it hard.
Keynesian stimulus suggests it doesn't matter what the hell you build. In fact, some Keynesians argue that useless projects are better than useful ones.
I'm all in favor of good public works on their own merits. That stuff's great. Spending because we think it's going to rescue our economy, against much evidence to the contrary, is pretty foolish.
We've heard all this talk about money on the sidelines waiting to get into the markets. I saw the TrimTabs CEO and he said that was bunk, there is no extra money. Money pulled out of the markets went to paying down debt. Also said savings rate is going DOWN not up.
Anonymous | 01.04.09 - 8:06 pm | #
It's simpler than that...... there are really only two ways for money to actually leave the market: Bankruptcy, or dividends.
Every other trade is two-sided. If you have $100,000 stuffed in your mattress (that is, "on the sidelines"), and you wake up tomorrow and decide to stick it into the market by buying IBM, the guy who sold you the IBM now has that exact same $100,000 "on the sidelines". The amount of cash in the market never changes, absent a dividend, a bankruptcy, or a primary or secondary offering.
The whole "sideline cash" argument is just retarded.
Good god conjure. could ya wait til friday afternoon's with that data.
" is pretty foolish."
okay, okay, here's "dogs and demons" reference #245... the writer should give me a cut:
Amazon.com: Dogs and Demons: Tales from the Dark Side of Japan (9780809039432): Alex Kerr: Books
FRB: H.6 Release--Money Stock and Debt Measures--December 3, 2009
dk - nice to see you here, you make a lot of sense, but are you cutting and pasting from Yves's shop?
Just wondering.
C
imperial subject DH 8:04 pm
"I am leaving for some far away island.
Any suggestions?"
let me recommend manhattan
soon to be available for a purchase price of 26 dollars
The whole "sideline cash" argument is just retarded.
Eric | 01.04.09 - 8:11 pm | #
I think TrimTabs uses "sideline cash" as a proxy for cash held by mutual funds, and only by mutual funds. So "no sideline cash" = mutual fund cash reserves are low.
Anyone know for sure?
ndk - nice to see you here, you make a lot of sense, but are you cutting and pasting from Yves's shop?
Just wondering.
C
Great to see ya too.
I actually spent a lot of time on CR originally, but then went over to naked capitalism a lot more when CR became too famous and the comment section got too loud. I've CC'ed one or two of my comments there to CR in the past -- and felt shame every time, but thought it important -- but this is all fresh material. I do try to be consistent in my points, and with things changing so fast these days, I'm not sure if that's good or bad...
Anyway, it's a little quieter on CR during the holiday season, but I'm mostly posting here because I haven't seen a great post over there for me to really dig my teeth into recently. I try to keep my mouth shut until I have something truly egregious to say.
What we need is a Wealth Destruction Clock like the national debt clock. I read today that we have 8.5 trillion dollars of wealth destruction so far. Someone should come up with an algorithm to calculate the wealth destruction on a second by second basis and put it in a clock on a web site so I can check out the progress on a daily basis.
Getting Bullish At The Wrong Time
Charles Biderman, TrimTabs, 12.16.08, 10:00 AM EST
Small investors and money managers alike are feeling a little happier about stocks this week, but that's not good.
Outflows from equity funds, particularly global equity funds, subsided early this month, suggesting the little guy thinks the worst of the sell-off is over. Based on the retail funds we track daily, we estimate U.S. equity funds lost $13.5 billion ($1.5 billion daily) on the first nine trading days of December. The pace of outflows this month is down 12% from the estimated $1.7 billion daily pace in November.
The biggest myth on Wall Street is that there is lots of sideline cash waiting to flood back into the stock market. Since the start of September, data from the Investment Company Institute and TrimTabs indicates all long-term mutual funds posted an outflow of $300.4 billion ($199.3 billion from equity funds and $101.2 billion from bond funds). This amount does not count what investors have pulled out of hedge funds, stocks and bonds directly. We think such direct outflows were equal to at least $150 billion, half again the $300.4 billion outflow from all long-term mutual funds. According to the latest Federal Reserve H.6, $336.4 billion flowed into demand deposits, savings deposits, small CDs and retail money market funds since Sept. 1.
Run, don't walk, into the high yields and safety of municipal bonds. Which ones? Click here for current buys from Marilyn Cohen in Forbes Tax-Advantaged Investor.
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Yahoo! BuzzIf individuals pulled $450 billion out of stocks and bonds and added only $336 billion to savings since the start of September, where did the rest of the money go? Most of it probably went to pay bills and pay off mortgages. Moreover, the $120 billion that went into small certificates of deposit by definition are not likely to be available for equity investment any time soon. Withholdings are decelerating rapidly, which means take-home pay for the average worker is falling. And equity extraction from homes is down about $30 billion per month relative to last year. Some of the money coming out of equities and bonds is replacing the money that is no longer being extracted from home equity.
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Portfolio managers are apparently convinced global equity markets have bottomed because they are putting lots of money into exchange-traded funds (ETFs) to gain sector exposure quickly. Since corporate liquidity is worse in consumer discretionary than in any other sector except financials, it is interesting that consumer discretionary is where portfolio managers are piling in. Smart investors usually sustain their biggest losses when they think they have detected a major market bottom and go long expecting a bull market.
Confirming the increasingly bullish sentiment toward equities, the American Association of Individual Investors reports that bullish sentiment among respondents to its sentiment survey rose to a four-week high of 38% this week, up from 27% last week. Meanwhile, bearish sentiment fell to a five-week low of 40% this week, down from 48% last week. Bond funds continue to experience massive redemptions. We estimate bond funds lost a whopping $25.2 billion ($2.8 billion daily) on the first nine trading days of December, and outflows of at least $1.5 billion occurred on all but one trading day. Outflows this month are running 87% above the estimated $1.5 billion daily pace in November.
U.S. equity ETFs issued $10.6 billion ($2.1 billion daily) last week. Futures-related ETFs issued $8.1 billion, non-futures related ETFs issued $2.5 billion and short ETFs issued $1.4 billion. The leading issuers were Spiders (amex: SPY - news - people ), which issued $5.4 billion (6.6% of assets); iShares Russell 2000 (amex: IWM - news - people ), which issued $1.7 billion (16.8% of assets); and UltraShort Real Estate ProShares (nyse: SRS - news - people ), which issued $525 million (30.5% of assets).
The leading redeemers were SPDR KBW Regional Banking (nyse: KRE - news - people ), which redeemed $135 million (20.4% of assets); UltraShort Financials ProShares (nyse: UYG - news - people ), which redeemed $88 million (4.6% of assets); and Ultra QQQ ProShares (nyse: QLD - news - people ), which redeemed $44 million (3.5% of assets).
I try to keep my mouth shut until I have something truly egregious to say.
great, what's your favorite shoe.
I'm still waiting for my National Wealth Destruction Clock. A world Wealth Destruction Clock would be nice too.
dk - "truly egregious"? Wow, you are talking my language.
If only I could be truly egregious to everyone, all of the time.
Then the counterpointer agenda would reach complete sublimity.
Trouble is, too many peeps keep agreeing with me.
Hmm, might have a shipping story coming up.
C
In the four years ending 2006, year-end household sector checkable deposits averaged $294.4 billion. Since 2007:Q1, checkable deposits have fallen from $226.1 billion to $46.3 billion at the end of 2008:Q3, the latest data available.
mp | 01.04.09 - 8:02 pm | #
This at a time when other measures of liquidity going through the roof. Monetary base did a right angle increase over last 3 months. Yet non of that increase in money supply is showing up in consumer/small business. Can anyone say "Liquidity Trap" children. For our arts and crafts segment, we will have demonstration of String Pushing.
Comrade Bear (tj & the bear)(Excellent) writes:
Byz, excellent opening rant.
Thanks. You're one of the people here whose opinion I really enjoy hearing, so I'm flattered.
BTW, mp, that checkable deposits number is hair raising.
from the same article quoted by "peter up thread at 659 pm
How to get U.S. out of the ditch - MarketWatch
Former Clinton economic adviser Laura Tyson said ..."The downturn has become "self-reinforcing downward-spiral effects going on - from the housing market to the credit market to the real economy and back to the housing market,"
Rogoff, the former IMF chief economist, said Paulson's policy was similar to the "Wheel of Fortune" game show. Some companies spun the wheel and got $300 billion bailouts. Others spun it and got nothing.
This just added to market insecurity and uncertainty, he said.
Rogoff said... the U.S. housing-market collapse and stock-market weakness should continue until 2010.
The U.S. unemployment rate should spike to 12% and those elevated levels should last until 2011...
The root of the crisis remains the financial sector, Rogoff said. "We're going to be seeing second and third bailouts of the big banks," he said.
i believe this depression will be bigger than the GD. because of the current account deficit, private debt, corporate debt, and because we have exported so many industrial production related jobs
Interested Observer,
I called it the Bush Depression 2 weeks ago. I asked my Repub acquaintances why they were nominating Shrub eight years ago despite the drug use and the falsified military records and the silver spoon, and their defense was that the power-that-be would "surround him with good people". So a depression it will be