CR, If the cost of construction materials is decling (lumber, copper, etc..) and the number of houses built keeps falling, doesn't it stand to reason that residential construction spending could still fall a significant amount?
This economy is crashing. The people I work with are busy focused on the swivel of the DJIA, but the real story are the multiple graphs put up on CR daily.
The weekend summary post of January economic data is going to be a landmark post. One that is looked back at with a mix of fondness (for the relative good times) and dread (the fact that we didn't really appreciate the velocity and trajectory of the downdraft.
This is good? Dennis Kneal | 02.02.09 - 10:30 am | #
Well, if you consider it a return to rationality, then yes, it's good. Of course, it's probably not rational thinking but rather inadequate credits lines or something else.
Feb. 2 (Bloomberg) -- The cost of a Golden Gate Bridge view from the top of San Franciscos tallest residential building just got 15 percent cheaper.
Prices of all condominiums in the downtown Millennium Tower will be cut amid the citys biggest housing glut since the dot-com crash in 2001, according to city planning data. The offer includes apartments already sold in the 60-story, 419- unit high-rise being built in the South of Market area.
Ah, haloscan. A bit too much Superbowl Festivities? You're being as reliable as a broke junky scratching his arms after being asked to watch someone's wallet.
Regardless of the yoy changes, I see WAY too much residential and nonresidential space.
We could stop building for 5 years and still have excess residential and commercial real estate.
It's tough to inflate in the face of a glut. If the fed is stupid enough to force money into the system, I don't think if will inflate real estate. CPI goods look cheap to me.
Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
And please, no accusations of spin-control. Look at the charts.
Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
And please, no accusations of spin-control. Look at the charts.
Sebastian
Your observation is correct but inspires a serious question. What leading indicator of any kind has managed to so much as even keep up with the actual bad data? AFAICT every projection has failed to get out ahead of this decline. Several perviously reliable methods have even proven spectacular failures.
It is a pity that the banking problems don't appear to be heading for a thorough and lasting fix. Good banks may be useful in a couple of years when things finally bottom and possibly start to recover. Bad banks then will be an impediment that prevents recovery.
Angry Saver, why so angry?
You should be happy you saved for a rainy day - I am.
I see WAY too many pot holes on the way into work. I also see WAY too much traffic.
Super Bowl party yesterday. Friends looking to buy another house and rent theirs out. Tried to tell them there is no bottom yet, looked at me like I was a alien. So many people simply don't have a clue.
The Big Picture linked to these GDP technical note. TARP purchases contribute to GDP numbers. Apologies if a re-post. BEA : News Release: GDP Technical Note
Purchases of financial assets are generally not recorded in the GDP accounts (though they appear in the Federal Reserve's flow of funds accounts). However, when the Treasury purchases a financial asset (other than a loan) at more favorable terms than are available in private markets, BEA records a portion of the purchase as a capital transfer, calculated as the difference between the actual price paid for the financial asset and an estimate of its market value. This treatment is consistent with the recommendations of the newly updated international guidelines, System of National Accounts 2008. For the fourth quarter, in most cases BEA's estimates of these capital transfers are based on Congressional Budget Office estimates, which are prepared on a net present value basis. The recording of a capital transfer in the GDP accounts does not affect GDP or net government saving, but does reduce net government lending or borrowing.
Krugman said the U.S. governments rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well.
Traffic seems to be staging a moderate recovery. I'm gonna say the seizure in the credit markets is easing considerably in terms of the real economic distortions.
But, we should see a plateau in the demand recovery, possibly followed by a fresh drop, as the actual economic contraction takes place.
I don't know that you'll see as much of a recovery in the longer term averages. March should give a good impression of the size of the contraction in store. I think we may find some sense of real demand as early as mid-Feb.
Sebastian -
Please, shut up. you have no credibility.
There is ONE other recession on the chart - and perhaps the most mild one in our country's history - and one where residential construction actually continued to grow.
You havent a clue and should absolutely not compare what is happening today to what happened in 2001.
You are destined to repeat the mistakes of the past. I'm sure you have bought on the dips the whole way down.
Please listen and truly think before you post. Your arguments have been flawed for the past 2 years and continue to be so today.
Rob Dawg said: "Your observation is correct but inspires a serious question. What leading indicator of any kind has managed to so much as even keep up with the actual bad data? AFAICT every projection has failed to get out ahead of this decline...."
Referring back to CR's charts, it would appear that residential investment leads, or is at least coincident.
Sebastian(Unrated) writes: Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
Listen to Rob Dawg.
The knock-on effects of household balance sheet deleveraging on the economy. You have not seen this before. This is a credit panic in a global scale economy, and the credit bubble was driven by the export of real economic activity.
You need to wait for the real economy to register the actual contractionary effects. This is just the immediate effects of the credit panic we are getting past now.
Soon, the economy will shrink to fit the size of the new global ponzimonidebt pool, and that is what will lead to a real bottoming process.
<a href="http://www.ritholtz.com/blog/2009/02/gdp-goosed-by-tarp/>GDP Goosed by TARP
Since GDP is reported as a quarterly data point, the change in capital transfers from 3Q 08 to 4q08 was net $271 billion. Meaning, this was about 8-10%. of the reported US economic activity a significant (and artificial) goosing.
Is he implying that the GDP number was artificially inflated by 8-10% of GDP? That GDP for Q4 would have come in at ~-15% otherwise?
I see WAY too many pot holes on the way into work. I also see WAY too much traffic.
I don't. I packed it in late last year - early retirement. I'm long free time and short vanity. Saving > 20% of gross income & prudent investing worked for me.
I'm angry at the stupidity and the fraud that our financial industry has perpetuated against hard working Americans. I really am pissed. Obama looks like more of the same too.
Yeah, i ve been screaming this for ages. Banks that are failing have to be nationalized, turned into fed S&L to loan to corporation for couple of years and than sold off or liquidated.
YES!!! (can't usually say I support mr. Krugman's views)
Soon, the economy will shrink to fit the size of the new global ponzimonidebt pool, and that is what will lead to a real bottoming process.
Comrade Byzantine_Ruins
If you were shocked by last quarters 3.8% plunge in the economy, wait till you see the tally for the current quarter!
Late last year, consumers snapped their wallets shut so quickly, and Americas manufacturers were so unprepared, they couldnt stop their assembly lines fast enough.
...
Now, however, the big production shutdowns that did not occur last quarter are hitting in the current quarter.
Let me clarify: The whole operating thesis of the "lets do something" crowd is predicated on the assumption that they know what happens if they don't. The fact is, nobody knows.
PonziMonetizaCoruptiCapitalism(Unrated) writes: > ponzimonidebt
oh yeah, I like that
I was thinking of you.
I try not to drift out into the land of the fiat-cursing goldbugs but there's a difference between a responsibly managed fiat currency and John Law. We are at the point of conjuring up an arbitrary number of wealth counters. Analytic questions mainly seem to turn on if it will collapse before inflation can rob the creditors. Not a happy place for a fiat monetary regime.
As I am on the road again, I had only CNBS this morning. The hoots and hollars for more "money" to be poured into then system was surreal, if not amusing.
I truly could see Hitler in the bunker pushing imaginary divisions around a map. Push a billion dollars there, 50 billion there. The multiplier of that will force 1 trillion dollars over there...
Seb, you've taken more than your share of abuse around here. Thanks for hanging on. Some of us still appreciate the debate. \t Max | Homepage | 02.02.09 - 11:21 am | #
All these peaks! Me thinks the US is post-peak empire, but is still in denial. When Rome couldn't pay the legions (and started buying mercenaries) and couldn't maintain discipline, it was all over.
Angry Saver -
I hear you, but don't let the turkeys get you down.
You have done the right thing in the past and been prudent for yourself and your family. Regardless of what happens with our political follies you are ahead of the game.
Nonetheless, I agree that its all pretty hard to watch - but so was the the irrational behavior on the upside - and definately more so.
Enjoy your retirement and simply put some hedges in place to protect you from our politicians.....
From the link provided by Ju at 10:58am Krugman said the U.S. governments rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well.
and although there are some that think the role of Gov is to redistribute (tax) so that the wealthy can extend the game somewhat, there are even some of these who think that this (socializing risk) is confirmed with the present laudable, if not explicit, activities. The somewhat "cryptic" joke (quip/aphorism): "Capitalism is the exploitation of man by man. Socialism is the reverse.", suffers from compression.
Post-peak empire sums it up pretty well. And really, isn't it about time. The U.S. can be a better creature overall if we can finally get over our teenage theatrics. Exceptionalism is a cul-de-sac.
I agree with a National Banking System, but not the nationalizing of bad banks. Bad Banks, and their greedy Shareholders, have to take the medicine of their short-sighted investment decisions. Also, abolish the Federal Reserve. Sure, none of that will happen, but it should.
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: Mibbit IRC client widget (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
What others have said about CRBot: Gary writes: This CRbot is pretty nifty. EvilHenryPaulson writes: CRBot is great on mobiles Loudocracy writes:
Thank god CRbot spared me from that dead thread. Hoopajoops writes: Posting a test message from the IRC Channel... THIS THING ROCKS
CRBot: Killing dead threads deader since last week.
I was in Lowes Sat. There were carts piled high with kitchen cabinets in every line. It turns out they had a 50% off sale and needless to say, there is now a Suburban load of them in my garage. I will have the only garage outfitted with Oak front cabinets on my street!
Rob Dawg said: "Recall. Both the RRE and CRE indicators have been accelerating in their severity. This is not the typical pattern."
I agree it's a tough problem (leading indicators that go off into uncharted territory), I'm just troubled by the data that don't square with the accelerating severity pattern.
The personal income supplement to the GDP data came out today, and this is the third consecutive month that real income less transfers (NBER uses this as an indicator, for the less data-compulsive among us) has risen.
And if the downward spiral is continuing why did the interest-rate risk-spreads back off? Wouldn't they either continue to rise or at least remain at high levels?
As I said before, it's abundantly clear that we aren't out of the hole we've dug for ourselves but maybe we've finally stopped digging.
Sebastian did not debate historically - he pontificated using nonsensical personal observations, ficticious S&P p/e forecasts and the infamous Wright Model B. If he had actually debated and been willing to listen to the views and data provided by others I would be more tolerant.
For all of 2007 and substantially all of 2008 he was an arrogant commentator who often accused CR of spinning the data - posting only that information which supported a bearish outlook and overlooking bullish data that Sebastian was allegedly reading every day.
Sure, Sebastian has taken a beating since and I have no interest in piling on. But I also have no interest in feigning some debate with him arguing the same points that he failed to recognize 2 years ago and even 4 months ago.
Simply put, Sebastian does no work, has no conviction in what he says and is simply posting to take the other side and stir the pot. He has no thought other than the opposite of what he reads in these comments.
I am happy to debate intellegently and am by no means in the guns and canned goods crowd. I'm probably more optimistic than most posters on this board but have been very negative on the markets since the beginning of 2007 - that being said, I have no interest in a word Sebastian writes because he has no view. He just was to take the other side even if he has no reason for it - the world is littered with guys like him - now he is coming across as a kinder, gentler Sebastian because the arrogant approach didnt work.
For what its worth, I also think Jas is an ass.
Until these banks mark to market there is really no discussion about it. Face it,....loss is still a four letter word and until they actually mark these "assets" with real input pricing available (most likely south of .50 as opposed to just under par) we can postulate all we want about the outcome.
Facts suck.......which is why the system is engaged in wholesale fact denial.
I yearn for the day when actual results matter and insolvent business' are closed because they are.....insolvent. Doesn't look likely to return anytime soon though.
All these peaks! Me thinks the US is post-peak empire, but is still in denial. When Rome couldn't pay the legions (and started buying mercenaries) and couldn't maintain discipline, it was all over. JimPortlandOR | 02.02.09 - 11:24 am | #
The endgame came when they couldn't even afford to pay the mercenaries. Eventually the barbarians drifted in -- almost as much a migration as an invasion, with little to stop it.
Dennis Kneal said: "Sebastian, where do you think we are now? Or how about the next 5 years?
Will 2005 home prices return by 2014?
How long before things return to 'the good old days'?"
In all candor, I'm not an unbiased poster on this subject. For whatever reason or combination of reasons, where I live homes are still selling at 2008 prices, so the good old days never left.
Also, the answer to your question is complicated by the fact that home prices in aggregate according to an index can be very different from the prices of specific homes.
For example, according to a popular housing index, Case-Shiller, home prices in LA have fallen by more than 35% from their peak.
Based on that and the high amount of unsold inventory the implication is that there should be a good selection of well-located, nicely-appointed, well cared-for houses in good neighborhoods with good schools selling at a discount of 35% or more from their peak prices.
However, that doesn't appear to be what the conditions are. Homes that are less-desirable are selling at substantial discounts but there don't appear to be a large supply of prime homes in prime areas available at those kinds of prices.
and there in lies the problem. If the govvie is backstopping ponzi finance, and purchasing CP so sp500 companies can maintain payroll, then the spread between the proletariat and the bourgeoise will contunue
anon said: "...If he had actually debated and been willing to listen to the views and data provided by others I would be more tolerant...."
You don't debate by immediately conceding the issue in the face of a strong argument, you push back with your own argument. When it was clear that I had lost the debate I acknowledged it, apologizing to CR and others that I had been arguing with.
That's the way it's supposed to work, unless all you're interested in is associating only with yes-men.
No!
Nemo?
again, steal shipments down 57% yoy.
that's not recessionary
Glod! Damn the torpedoes! We need to bring more consumption spending forward!
Turn that construction machine back on! Build more malls! More malls mean more spending!
Nostrovia,
CR, If the cost of construction materials is decling (lumber, copper, etc..) and the number of houses built keeps falling, doesn't it stand to reason that residential construction spending could still fall a significant amount?
....all the old stuff is being finished, huh?
Still waiting for the overdue major builder BK's.
This economy is crashing. The people I work with are busy focused on the swivel of the DJIA, but the real story are the multiple graphs put up on CR daily.
The weekend summary post of January economic data is going to be a landmark post. One that is looked back at with a mix of fondness (for the relative good times) and dread (the fact that we didn't really appreciate the velocity and trajectory of the downdraft.
I just dont know what we are looking for...
Statistical Anomaly writes:
again, steal shipments down 57% yoy
Link??
Statistical Anomaly writes:
again, steal shipments down 57% yoy
as long as steel shipments are not down, i'm not worried
This is good?
Dennis Kneal | 02.02.09 - 10:30 am | #
Well, if you consider it a return to rationality, then yes, it's good. Of course, it's probably not rational thinking but rather inadequate credits lines or something else.
Feb. 2 (Bloomberg) -- The cost of a Golden Gate Bridge view from the top of San Franciscos tallest residential building just got 15 percent cheaper.
Prices of all condominiums in the downtown Millennium Tower will be cut amid the citys biggest housing glut since the dot-com crash in 2001, according to city planning data. The offer includes apartments already sold in the 60-story, 419- unit high-rise being built in the South of Market area.
Ah, haloscan. A bit too much Superbowl Festivities? You're being as reliable as a broke junky scratching his arms after being asked to watch someone's wallet.
Nostrovia,
I call Peak Super Bowl !
Mish's Global etc.
steel
steal will be going higher
the NY times is crushing the plan too
Risks Are Vast In Revaluation Of Bad Assets - NY Times
Haloscan, sweet Haloscan.
Let me sing thy praises thusly:
Regardless of the yoy changes, I see WAY too much residential and nonresidential space.
We could stop building for 5 years and still have excess residential and commercial real estate.
It's tough to inflate in the face of a glut. If the fed is stupid enough to force money into the system, I don't think if will inflate real estate. CPI goods look cheap to me.
Tough times ahead.
Dennis Kneal asks: "This is good?"
Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
And please, no accusations of spin-control. Look at the charts.
Sebastian
ehhhheemmm
anyone?
Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
And please, no accusations of spin-control. Look at the charts.
Sebastian
Your observation is correct but inspires a serious question. What leading indicator of any kind has managed to so much as even keep up with the actual bad data? AFAICT every projection has failed to get out ahead of this decline. Several perviously reliable methods have even proven spectacular failures.
It is a pity that the banking problems don't appear to be heading for a thorough and lasting fix. Good banks may be useful in a couple of years when things finally bottom and possibly start to recover. Bad banks then will be an impediment that prevents recovery.
bloom headlines
Obama Should Nationalize U.S. Banks, Krugman Says (Update1) - Bloomberg.com
i think every media are against this bill now
Angry Saver, why so angry?
You should be happy you saved for a rainy day - I am.
I see WAY too many pot holes on the way into work. I also see WAY too much traffic.
early... now that's measurable.
Super Bowl party yesterday. Friends looking to buy another house and rent theirs out. Tried to tell them there is no bottom yet, looked at me like I was a alien. So many people simply don't have a clue.
"Several previously reliable methods have even proven spectacular failures."
Yep. Misdiagnosis by the doctors, wrong treatment applied... and here we sit at ZIRP with absolutely no results. As I say, books will be written...
House prices 'could fall 40 per cent without loan boost'
House prices 'could fall 40 per cent without loan boost' -
Mortgages, Money - The Independent
The Big Picture linked to these GDP technical note. TARP purchases contribute to GDP numbers. Apologies if a re-post.
BEA : News Release: GDP Technical Note
Purchases of financial assets are generally not recorded in the GDP accounts
(though they appear in the Federal Reserve's flow of funds accounts). However,
when the Treasury purchases a financial asset (other than a loan) at more
favorable terms than are available in private markets, BEA records a portion of
the purchase as a capital transfer, calculated as the difference between the
actual price paid for the financial asset and an estimate of its market value. This
treatment is consistent with the recommendations of the newly updated
international guidelines, System of National Accounts 2008. For the fourth
quarter, in most cases BEA's estimates of these capital transfers are based on
Congressional Budget Office estimates, which are prepared on a net present
value basis. The recording of a capital transfer in the GDP accounts does not
affect GDP or net government saving, but does reduce net government lending
or borrowing.
Obama Should Nationalize U.S. Banks in Bailout, Krugman Says
Krugman said the U.S. governments rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well.
I think Krugman has been reading CR.
Railfax Report - North American Rail Freight Traffic Carloading Report
Updated from 17 Jan to 24 Jan now.
Traffic seems to be staging a moderate recovery. I'm gonna say the seizure in the credit markets is easing considerably in terms of the real economic distortions.
But, we should see a plateau in the demand recovery, possibly followed by a fresh drop, as the actual economic contraction takes place.
I don't know that you'll see as much of a recovery in the longer term averages. March should give a good impression of the size of the contraction in store. I think we may find some sense of real demand as early as mid-Feb.
Sebastian -
Please, shut up. you have no credibility.
There is ONE other recession on the chart - and perhaps the most mild one in our country's history - and one where residential construction actually continued to grow.
You havent a clue and should absolutely not compare what is happening today to what happened in 2001.
You are destined to repeat the mistakes of the past. I'm sure you have bought on the dips the whole way down.
Please listen and truly think before you post. Your arguments have been flawed for the past 2 years and continue to be so today.
again, steal shipments down 57% yoy.
Statistical Anomaly | 02.02.09 - 10:38 am | #
Steel is coming back to $2,750 a ton for large buildings.... It peaked at $4,000 in mid '08
..............
foothills,
That may have been an uncomfortable moment, but I find friends - after the initial shock - often really do reconsider.
You may very well hear later they went home and took a sharper look at the downside, played "what if".
Byzantine_Ruins -
Great post - thank you for the data.
Rob Dawg said: "Your observation is correct but inspires a serious question. What leading indicator of any kind has managed to so much as even keep up with the actual bad data? AFAICT every projection has failed to get out ahead of this decline...."
Referring back to CR's charts, it would appear that residential investment leads, or is at least coincident.
Sebastia
"I think Krugman has been reading CR."
About time, too.
Sebastian(Unrated) writes:
Well, based on CR's charts, by the time non-residential peaked in the last recession it was nearly over and it continued to fall long after the recession ended.
Listen to Rob Dawg.
The knock-on effects of household balance sheet deleveraging on the economy. You have not seen this before. This is a credit panic in a global scale economy, and the credit bubble was driven by the export of real economic activity.
You need to wait for the real economy to register the actual contractionary effects. This is just the immediate effects of the credit panic we are getting past now.
Soon, the economy will shrink to fit the size of the new global ponzimonidebt pool, and that is what will lead to a real bottoming process.
Following up sexy derivative,
<a href="http://www.ritholtz.com/blog/2009/02/gdp-goosed-by-tarp/>GDP Goosed by TARP
Since GDP is reported as a quarterly data point, the change in capital transfers from 3Q 08 to 4q08 was net $271 billion. Meaning, this was about 8-10%. of the reported US economic activity a significant (and artificial) goosing.
Is he implying that the GDP number was artificially inflated by 8-10% of GDP? That GDP for Q4 would have come in at ~-15% otherwise?
Sebastian, that's true if you're referring to the builders' survey.
That metric has reflected several consecutive months' improvement before other indicators hinted at recovery, however.
I don't recall any indication that PCS functions as a leading indicator. Is it?
Referring back to CR's charts, it would appear that residential investment leads, or is at least coincident.
Sebastian
Recall. Both the RRE and CRE indicators have been accelerating in their severity. This is not the typical pattern.
On another note; please ignore the anon disruptor.
more jelly for china
China to aid recession recovery by doubling UK exports
China to aid recession recovery by doubling UK exports -
UK Politics, UK - The Independent
Referring back to CR's charts, it would appear that residential investment leads, or is at least coincident.
Sebastian | 02.02.09 - 11:06 am | #
I'm reluctant to make "it's different this time" predictions, good or bad.
I see WAY too many pot holes on the way into work. I also see WAY too much traffic.
I don't. I packed it in late last year - early retirement. I'm long free time and short vanity. Saving > 20% of gross income & prudent investing worked for me.
I'm angry at the stupidity and the fraud that our financial industry has perpetuated against hard working Americans. I really am pissed. Obama looks like more of the same too.
The TARP raised my anger to a new level.
Obama Should Nationalize U.S. Banks, Krugman Says (Update1) - Bloomberg.com
Yeah, i ve been screaming this for ages. Banks that are failing have to be nationalized, turned into fed S&L to loan to corporation for couple of years and than sold off or liquidated.
YES!!! (can't usually say I support mr. Krugman's views)
ponzimonidebt
oh yeah, I like that
corporation = corporations
Soon, the economy will shrink to fit the size of the new global ponzimonidebt pool, and that is what will lead to a real bottoming process.
Comrade Byzantine_Ruins
I was impressed by this article:
7 Startling Forecasts for 2009 | Money and Markets: Free Investment Email Newsletter
If you were shocked by last quarters 3.8% plunge in the economy, wait till you see the tally for the current quarter!
Late last year, consumers snapped their wallets shut so quickly, and Americas manufacturers were so unprepared, they couldnt stop their assembly lines fast enough.
...
Now, however, the big production shutdowns that did not occur last quarter are hitting in the current quarter.
Scary.
Let me clarify: The whole operating thesis of the "lets do something" crowd is predicated on the assumption that they know what happens if they don't. The fact is, nobody knows.
anon said: "Sebastian -
Please, shut up. you have no credibility...."
Which reminds me of a Sebastian joke.
Sebastian is taking an economics quiz.
Q: If unemployment is at 5%, is that good news or bad news for the economy?
Sebastian: Good news, because that's considered full employment.
Q: If unemployment was at 7%, would that be good news or bad news?
Sebastian: Good news, because it's not 10% yet.
Q: If unemployment was at 20%, would that be good news or bad news?
Sebastian: Good news, because prices of everything are so cheap during a Depression.
S.
"turned into fed S&L to loan to corporation for couple of years and than sold off or liquidated."
Let's leave the taxpayers out of it and just go straight to the latter.
Nostrovia,
Damned Haloscan! What a tease she is!
I was impressed by this article:
Rob Dawg | Homepage | 02.02.09 - 11:14 am | #
That goes to the "surprising" mfgr report today. They're "value adding" raw materials until the lights get shut off.
PonziMonetizaCoruptiCapitalism(Unrated) writes:
> ponzimonidebt
oh yeah, I like that
I was thinking of you.
I try not to drift out into the land of the fiat-cursing goldbugs but there's a difference between a responsibly managed fiat currency and John Law. We are at the point of conjuring up an arbitrary number of wealth counters. Analytic questions mainly seem to turn on if it will collapse before inflation can rob the creditors. Not a happy place for a fiat monetary regime.
Remember. Panic first.
some inflation here
Ford and Vauxhall to raise prices in UK after sterling's weakness
Ford and Vauxhall are to raise the prices of their cars in the UK because of sterling's fall in value.
B_R,
"Not a happy place for a fiat monetary regime."
As I am on the road again, I had only CNBS this morning. The hoots and hollars for more "money" to be poured into then system was surreal, if not amusing.
I truly could see Hitler in the bunker pushing imaginary divisions around a map. Push a billion dollars there, 50 billion there. The multiplier of that will force 1 trillion dollars over there...
Nostrovia,
Which reminds me of a Sebastian joke.
Sebastian | 02.02.09 - 11:15 am | #
Seb, you've taken more than your share of abuse around here. Thanks for hanging on. Some of us still appreciate the debate.
Stiglitz is for nationalization as well.
Is the Entire Bailout Strategy Flawed? Let's Rethink This Before It's Too Late | Corporate Accountability and WorkPlace | AlterNet
End The Fed
YouTube - End the Fed
Here's a taste of what the the "bad bank" will be buying:
SCHWAB YIELDPLUS FUND SELECT SH Fund Chart - Yahoo! Finance
Click on the "holdings" to the left of the chart. A real eye opener. And these are the short duration notes. The longer term stuff will be worse.
The bad bank idea is a black hole for tax payers. Equity and bondholders should not be bailed out on the backs of tax payers.
Seb, you've taken more than your share of abuse around here. Thanks for hanging on. Some of us still appreciate the debate.
\t
Max | Homepage | 02.02.09 - 11:21 am | #
I second that, Sebastian.
I'm really hoping the 2008 year end wall street bonuses were the tipping point.
We just can't afford anymore ponzi finance.
Sebastian, where do you think we are now? Or how about the next 5 years?
Will 2005 home prices return by 2014?
How long before things return to 'the good old days"?
"We could stop building for 5 years and still have excess residential and commercial real estate."
There's a 37-story building near my work in downtown LA that has essentially stood empty since it was built in 1987.
1100 Wilshire - Wikipedia, the free encyclopedia
All these peaks! Me thinks the US is post-peak empire, but is still in denial. When Rome couldn't pay the legions (and started buying mercenaries) and couldn't maintain discipline, it was all over.
there's a difference between optimism and being pollyanish
Angry Saver -
I hear you, but don't let the turkeys get you down.
You have done the right thing in the past and been prudent for yourself and your family. Regardless of what happens with our political follies you are ahead of the game.
Nonetheless, I agree that its all pretty hard to watch - but so was the the irrational behavior on the upside - and definately more so.
Enjoy your retirement and simply put some hedges in place to protect you from our politicians.....
The difference between an optimist and a pollyanna:
If you call a pollyanna an optimist they say; "thank you."
If you call an optimist a pollyanna they say; "thank you."
and round and round we go.
From the link provided by Ju at 10:58am
Krugman said the U.S. governments rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well.
and although there are some that think the role of Gov is to redistribute (tax) so that the wealthy can extend the game somewhat, there are even some of these who think that this (socializing risk) is confirmed with the present laudable, if not explicit, activities. The somewhat "cryptic" joke (quip/aphorism): "Capitalism is the exploitation of man by man. Socialism is the reverse.", suffers from compression.
Post-peak empire sums it up pretty well. And really, isn't it about time. The U.S. can be a better creature overall if we can finally get over our teenage theatrics. Exceptionalism is a cul-de-sac.
I agree with a National Banking System, but not the nationalizing of bad banks. Bad Banks, and their greedy Shareholders, have to take the medicine of their short-sighted investment decisions. Also, abolish the Federal Reserve. Sure, none of that will happen, but it should.
New Thread: Residential Investment Components ( 1 comments )
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I was in Lowes Sat. There were carts piled high with kitchen cabinets in every line. It turns out they had a 50% off sale and needless to say, there is now a Suburban load of them in my garage. I will have the only garage outfitted with Oak front cabinets on my street!
Sebastian writes:
Dennis Kneal asks: "This is good?"
Dennis needs to get on the stick!
Shut up Vlad!
punk ass pansy
Rob Dawg said: "Recall. Both the RRE and CRE indicators have been accelerating in their severity. This is not the typical pattern."
I agree it's a tough problem (leading indicators that go off into uncharted territory), I'm just troubled by the data that don't square with the accelerating severity pattern.
The personal income supplement to the GDP data came out today, and this is the third consecutive month that real income less transfers (NBER uses this as an indicator, for the less data-compulsive among us) has risen.
And if the downward spiral is continuing why did the interest-rate risk-spreads back off? Wouldn't they either continue to rise or at least remain at high levels?
As I said before, it's abundantly clear that we aren't out of the hole we've dug for ourselves but maybe we've finally stopped digging.
Sebastia
As near{
} as i can tell, Sebastian believe's himself to be a missionary of good will bringing light to the darkness here at cr.
Let's think though, how those cultures that has the missionary change their society.
Hawaii, for instance.
Sebastian did not debate historically - he pontificated using nonsensical personal observations, ficticious S&P p/e forecasts and the infamous Wright Model B. If he had actually debated and been willing to listen to the views and data provided by others I would be more tolerant.
For all of 2007 and substantially all of 2008 he was an arrogant commentator who often accused CR of spinning the data - posting only that information which supported a bearish outlook and overlooking bullish data that Sebastian was allegedly reading every day.
Sure, Sebastian has taken a beating since and I have no interest in piling on. But I also have no interest in feigning some debate with him arguing the same points that he failed to recognize 2 years ago and even 4 months ago.
Simply put, Sebastian does no work, has no conviction in what he says and is simply posting to take the other side and stir the pot. He has no thought other than the opposite of what he reads in these comments.
I am happy to debate intellegently and am by no means in the guns and canned goods crowd. I'm probably more optimistic than most posters on this board but have been very negative on the markets since the beginning of 2007 - that being said, I have no interest in a word Sebastian writes because he has no view. He just was to take the other side even if he has no reason for it - the world is littered with guys like him - now he is coming across as a kinder, gentler Sebastian because the arrogant approach didnt work.
For what its worth, I also think Jas is an ass.
Until these banks mark to market there is really no discussion about it. Face it,....loss is still a four letter word and until they actually mark these "assets" with real input pricing available (most likely south of .50 as opposed to just under par) we can postulate all we want about the outcome.
Facts suck.......which is why the system is engaged in wholesale fact denial.
I yearn for the day when actual results matter and insolvent business' are closed because they are.....insolvent. Doesn't look likely to return anytime soon though.
Ciao
MS
FWIW even though I don't use CR companion Seb's handle is that very first I.D. I intentionally skip over.
Could not agree more with that post from Anon..
Ciao
MS
Sorry...post at 11:40 should have been on the more relevant thread...thought I was in that comment section.
Ciao
MS
I think Krugman has been reading CR.
s0mebody | 02.02.09 - 11:02 am | #
He does. He has given it credit several times in his column, and calls the blog his "go to place" on the Internet for the mortgage and housing crisis.
About time, too.
wally | 02.02.09 - 11:09 am | #
You think you've been reading CR longer than Krugman has? Pffft.
All these peaks! Me thinks the US is post-peak empire, but is still in denial. When Rome couldn't pay the legions (and started buying mercenaries) and couldn't maintain discipline, it was all over.
JimPortlandOR | 02.02.09 - 11:24 am | #
The endgame came when they couldn't even afford to pay the mercenaries. Eventually the barbarians drifted in -- almost as much a migration as an invasion, with little to stop it.
I hate haloscan.
Dennis Kneal said: "Sebastian, where do you think we are now? Or how about the next 5 years?
Will 2005 home prices return by 2014?
How long before things return to 'the good old days'?"
In all candor, I'm not an unbiased poster on this subject. For whatever reason or combination of reasons, where I live homes are still selling at 2008 prices, so the good old days never left.
Also, the answer to your question is complicated by the fact that home prices in aggregate according to an index can be very different from the prices of specific homes.
For example, according to a popular housing index, Case-Shiller, home prices in LA have fallen by more than 35% from their peak.
Based on that and the high amount of unsold inventory the implication is that there should be a good selection of well-located, nicely-appointed, well cared-for houses in good neighborhoods with good schools selling at a discount of 35% or more from their peak prices.
However, that doesn't appear to be what the conditions are. Homes that are less-desirable are selling at substantial discounts but there don't appear to be a large supply of prime homes in prime areas available at those kinds of prices.
Sebastia
and there in lies the problem. If the govvie is backstopping ponzi finance, and purchasing CP so sp500 companies can maintain payroll, then the spread between the proletariat and the bourgeoise will contunue
it certainly can't last long
anon said: "...If he had actually debated and been willing to listen to the views and data provided by others I would be more tolerant...."
You don't debate by immediately conceding the issue in the face of a strong argument, you push back with your own argument. When it was clear that I had lost the debate I acknowledged it, apologizing to CR and others that I had been arguing with.
That's the way it's supposed to work, unless all you're interested in is associating only with yes-men.
Sebastia
do not confuse being beligerent with artful argument.
Dennis Kneal writes:
Shut up Vlad!
punk ass pansy
I am pretty sure guys with vagina's shouldn't be calling guys with sharp sticks punk ass anything
This is good?
haloscan rocks.
uno
full haloscan suckage
Nemo
krugman turns bullish
Depressing economics - Paul Krugman Blog - NYTimes.com
I've peaked before