No?

Bank of England is forecasting a v-shaped recovery. I will try to find the link ... standby

link: V-Shaped Recovery, says Bank of England

Also, Money Printing Starting To Work, says Bank of England

We are saved !!!

According to Michael Saunders of Citigroup: "Forecasts that the recession will end in the year ahead are no longer purely speculative, but are beginning to gain some support from evidence."

What will define the end of this recession? Job growth? Unwinding of the FED's balance sheet? A bank that makes money from its lending activity rather than its trading activity? An insurance company that sells all of its assets and ceases to exist?

If the employment does not improve and the exports do not improve (remember that in Q1-2009 exports fell QoQ at 34% annualized rate), then that GDP growth will have to come from the government expenditures.

Well, she did not say it was 3% in real terms, now did she?
Smart woman, that Christy Romer. Helicopter Ben to the rescue!

Cr
You have posted over and over on the home equity withdrawls. So if you back that out and account for a normalized 7 percent savings rate and asime continued wage squeeze and the lower growth that is not only a function of lower leverage but wage arb snd structurally higher unemolyment rates how can some trendline for pce return at these levels. Perhaps if there were a collective flush lower but no way at these levels. Pce is a masice bubble within a bubble.

Cr
You have posted over and over on the home equity withdrawls. So if you back that out and account for a normalized 7 percent savings rate and asime continued wage squeeze and the lower growth that is not only a function of lower leverage but wage arb snd structurally higher unemolyment rates how can some trendline for pce return at these levels. Perhaps if there were a collective flush lower but no way at these levels. Pce is a masice bubble within a bubble.

Congressional Democrats are working on measures to offer government insurance for municipal bonds

That is the hail-mary pass that the states are looking for.

So who is reinsuring the us govt?

That is the hail-mary pass that the states are looking for.

And you know it will happen. Uncle Sam has his checkbook ready and is not afraid to use it.

Maybe some day after he finishes writing checks to help out the various shell game operators he will look around and see all the unemployed who can no longer play the game. After all if you have checks you have money, right?

So who is reinsuring the us govt? Dont worry son, we're with AIG

Nemo's not here, man

is a 3-5% decrease in consumer spending discernible to the naked eye?

The charts we all look at are behind the curve too... and notoriously revised...

This is why asset allocation works in general... If you are dealing with a fixed portfolio you are buying low and selling high... If you are accumulating then you are simply buying low... And if you cliff dive, dont panic... It's like I always used to tell my cousin who was learning to be a barber - "It will grow back..."

is a 3-5% decrease in consumer spending discernible to the naked eye?

Watch retail sales and earning reports by credit card companies

Since Romer is the chief economist for Obama, I presume we can say that the administrations policies are coming from her.... If I had been there I would have been pushing for a cut in the marginal income tax rates so people's paychecks would have increased immediately - that would have had a much faster effect than the Porkulus approach... Since deficits dont seem to matter at this point it would not have cost any more to do that... And if there had been some relaxation of biz regulations to lower company costs, that would have stimulated hiring too.. They havent dont anything like that - only directed the spout from the treasury to their voting block...

An image such as this comes to mind when ever Christina Romer's name is mentioned.

on that topic I visited CNBC.com (looking for the free Asia feed) and was greeted with this headline: "US Economy To Start Growing in Second Half"

I guess what is disturbing is that bears such as Grantham are entering the bull ring -

Well I was trying to stay away from her appearance and if critical only on her abilities and her policies... I dont really know how she thinks but she came from UC Berkeley last so I suppose that says a lot...

Basel we have had deficits going all the way back to 1828(?) but I remember many times over the last 3 decades when the Fed chairman admonished congress that continued deficit spending would result in lower living standards in the long run.... As I see it the govt spending at every level is the core problem... taxes and borrowing are the effect but the spending is the cause... Pay as you go was a good idea but the congress never lived up to it, any more than any other balanced budget restrictions... California is trying to weasel around that all the time, especially now...

I suspect more corrections are on the way to past numbers too. I don't know how anyone thinks unemployment will peak right now. Unless the federal jobs will roll out this summer in massive quantities....just don't see it happening.

If the next PMI report comes in at 43 or better, we are on our way to growth for at least a short time... at least a 'surge of restocking'....

Which is why pretty much all of Obama's henchmen are pissing me off.

"I'm still amazed by the bipolar outlooks of forecasters: just a few months ago, many forecasters were openly talking about a 2nd Great Depression (while I was writing about seeing a bottom in a few key leading indicators)..."

CR, I can't believe you wouldn't agree that, were it not for several trillion dollars over the past few months, we'd be looking at the Greatest Depression right now.

And, the fun part is, this crisis isn't over yet.

were it not for several trillion dollars over the past few months, we'd be looking at the Greatest Depression right now.

mp - where do you think this money went? Guarantee of the bank debt, yes, but the banks did not lend all this money. They were all used to plug holes in banks balance sheets.
I am pretty sure the government has spent trillions of dollars - yet.

It's just instead of cliff-diving in Nov-Jan, the economy resumed its more traditional recession-like decline

Romer is a just a fake recovery cheerleader.

The entire administration abruptly took the role of cheerleaders once the stimulus was passed. Pre-stimulus, we were supposedly teetering on the brink of disaster. Then, suddenly, we were on the road to recovery (just like the Bush spin pre and post TARP passage). Clearly they believe in the ability to manipulate the economy, and to a certain degree, they are right. The stock market is very susceptible to such manipulation, even more so since the media simply repeats government spin without much of a critical analysis.

Of course it's this last bit that I find most unsettling as it represents the continuation of a trend. The press learned nothing from their complicity in the build-up to the invasion of Iraq. As a whole, the mainstream media is functioning more and more as a propaganda machine for whoever is in power, and I find that unsettling.

Basel Too (profile) wrote on Sun, 5/10/2009 - 8:06 pm

When have they mattered in the last 30 years?

They got us to here, out at the end of a dusty, one-lane road in the middle of nowhere, with a flat spare and no gas left in the gallon can in the trunk. They didn't seem to matter at the time, but we sure couldn't have gotten into this pickle without them.

"where do you think this money went? "

Virtually all of the money has gone to prop up the banks, who are borrowing it at negative real rates and buying treasurys with it. Damned little of it is making it to the streets.

Anyway, not small business or households.

I think the gameplan is for the banks to earn their way out of this.

"And all shall be well and
All manner of thing shall be well
When the tongues of flame are in-folded
Into the crowned knot of fire
And the fire and the rose are one."

T.S. Eliot, "Little Gidding" in the Four Quartets.

I've been reading the compendium of Tanta's posts for the past few days. The comment threads of today are so much less without her.

The past 10 years are the golden age in modern Chinese history
The past 10 years are end of golden age of middle class America although most don't realize it yet.
So really "Who is laughing now?"

CR, my guess would be the forecasters are "on the take". The USG either succeeds at making this charade work, or things get very, very ugly for them (the USG). Time to pull out all the stops. In other words, these forecasts are total BS.

@mp,

you said a couple of days ago you saw green shoots, but you don't sound very convinced tonight. Macro economy still appears to be in decline to me, and I see a lot of bombs set to explode over the next 18 months. I don't think we've seen the worst.

I think the gameplan is for the banks to earn their way out of this.

I've been trying to figure out whether we'd actually know that they succeeded in earning their way out, because I discount the rosy reports from the banks & treasury.

"glad to see you've turned bullish."

I'll assume that's snark. Count me as unconvinced.

If the banks are going to earn their way out of this--if that's the plan--it's unfortunate. It means Japan Scenario.

I remember, after the S&L fiasco, being refused CDs at my bank. They didn't want my money. "Too much trouble," they said. They couldn't even be bothered with the paperwork. That was in '91. Well, hell, sure, when you can borrow all you need from the good 'ole government. That's what I see happening here.

Recovery ... I say Bullshit try and run a job add in the paper see how many calls you get . In the past we where getting maybe 10 calls a weeks . Now 20 plus calls a day . No recovery for years to come . Reality sucks the Federal Reserve/ Goverment sachs ass rape the tax payers without anyone going to jail

Romer sees 3.5% growth about the time we see the stimulus effects wane and interest rates ramping further depressing growth... the double-dip recession taking GDP into the tank.

Here's my Anectpointal Datadote -

consumer activity has become extremely sensitive to equities markets, especially in relatively expensive coastal locales.

the feedback loops implied are interesting.

When did hope and prayer become a doctrine for running the world?

so does anyone think that they run these projections with $4 gasoline?

faith based economies have their problems.. especially when faced with reality.

Potential GDP is an extremely loaded term. It presumes that the economy will be unchanged post-3-decade credit bubble. Then if you're talking about potential GDP, you better tally the non-monetary economy otherwise shifting from kids being looked after by family/friends to daycare/nanny would cause irreconcilable differences. Potential GDP is a lame way to bestow credibility on recent trend data without understanding what is behind the recent trend. Same deal with productivity.

I'm staking my prediction ground in the worse-than-CR's territory. This is not to insult CR, there is room to disagree in opinion -- especially when that opinion is backed by data interpreted in some consistent way. I like being right, and considering how the temporary uptick in shipping proved me right when it showed up in late Feb, it only makes sense to keep the same bet when there is less risk.

It really is comforting to rely on "this time is not different", but I could only do that if I were prepared to ignore the big news stories for little ones that might be positive

Consider the components of the Index of Leading Economic Indicators for March:

"Three of the ten indicators that make up The Conference Board LEI for the U.S. increased in March. The positive contributors-beginning with the largest positive contributor-were real money supply, interest rate spread, and the index of consumer expectations."

Well, the first two are pure financial indicators and the third-consumer expectations-is correlated with the S&P. In other words, the Fed is juicing the economy, which is playing out in the S&P, which is improving Joe Sixpack's view of the economy. Specifically, his 401K.

This is not a healthy situation and that is an understatement.

There is a big difference this time: the stimulus, not to mention TARP and the backstops.

p.s.: IOW, I'm agreeing with you.

Past rightness doesn't mean anything as a prediction of future rightness.

Alas.

The Thai restaurant we went to was full, but didn't have any waiting which it
used to. But they expanded a bit into what used to be an office next door, so
maybe that explains it.

Byzantine_Ruins looki forward to you, Obama admin, Wall St Crooks, and many other assclowns to feel max pain once ramifications of this kicks in

China cancels America's credit card
Daily Kos: China cancels America's credit card

It takes a very long time to change the direction of a market as large as the treasury market. Even the Federal Reserve, with its unlimited printing presses, can only move it slowly.

"Confidence in the U.S. dollar is ‘fraying’ and a shift away from the greenback after the financial crisis is inevitable."
- Nobel Prize-winning economist Joseph Stiglitz

Without the foreign creditors, and without any real domestic savings, we have no choice to fund our federal borrowing by turning to the federal reserve's printing press.

Trying to arrest deflation will lead to stagflation...watch and learn !

a shift away from the greenback after the financial crisis is inevitable

After?!? Who is he kidding?

" However, I also see "For Lease" signs popping up everywhere where longstanding businesses used to be."

Did these businesses offer a low-price product or service that can't be obtained on the internet or at walmart?

Ummm, I'll have to do some research into regimes who had bad money and managed to replace it with good. Didn't Britain do it at least several times in the last thousand years?

Henry the VII was quite stingy (ie frugal) I understand.

Other times and other places?

It can be done.

Remember tobacco companies had a lot of power for a while, and then they didn't.

It can happen with the banks too. I think--I hope--O is setting them up for a fall.

mp - I do not have much faith in the Conference Board's leading indicators for the same reasons you mentioned - most of the improvement came from interest rates and M2 - all these factors are directly controlled by the government (including the 10-year yield till recently).

I much prefer Chicago Fed National Activity Index (CFNAI-3M), which I think was the only indicator that correctly pointed to recessions back in Dec-2007. It is available here Chicago Fed National Activity Index (CFNAI) - Economic Research and Data, Federal Reserve Bank of Chicago

CFNAI still shows very substantial continued decline in the economic activity, although a slower pace compared to Jan-Feb.

The other thing that bothers me is this talk of a return to trend growth in 2010. Hell, that's next year!

We're already looking at an almost 8% output gap! How in hell do they expect to return to potential in one year?

I don't get it.

You need employment for a recover .

Employment and/or exports.
The government can only affect the former, so the green shoots are all those temp jobs by Census.

Incidentally I was just looking through some records, and I have a couple of EE bonds that we bought in 2001 - yielding 7.99% - the total investment is now worth about 50% more than was paid in 2001.... It's the miracle of compounding kids - no trading, no hassles...

Print, baby! Print!

A pair of ovaries?

"Trying to arrest deflation will lead to stagflation...watch and learn ! "

km4, as TJ and some of the others will verify, that question was put to bed here almost a year ago.

As to the end of the dollar's hegemony, well, that question was also put to bed here some time ago.

"A pair of ovaries? "

gazongas!

or maybe some breasts?

uhhh

Forgive me, I am typing out loud.

Pro's for recovery

The banks can begin lending again. They will not crash and burn.
Eventually the American auto industry will begin producing products people want. There has to be a reorganization, and a rebuilding of suppliers and public trust, but this is America and it can be done.
The change to "green" products will open the playing field to new productts.
The growth in China will help heavy equipment and Boeing.
Climate change will help US agriculture.

Con's

The banks are still very fragile and will not, or can not, loan money in the amounts needed. There is also a dearth of qualified people and companies.
The auto industry will never employ great numbers of people in this country again.
"Green" will become important but not as an employer except for small companies doing retro fitting.
China will build their own.
No clue
An economy built around consumers spending does not work when they have no money

Other

US Gov debt
Wars and revolutions
Terrorist attack
Spice Girls Reunite

odds are good that only 1f will pass. 1a has been abandoned by the dems, d and e only shift money from one place to the other and b and c are polling almost as well as "do you want to pay more taxes?" with the average voter.

the budget is supposed to be delivered to the governor's desk by July 1, though it was a few months late last year. the circus tends to start in earnest in early june. we're already at 9.25% sales tax in most major counties, and one of the highest income tax rates in the nation.

incidentally, the california constitution explicitly forbids running a deficit... and the federal reserve act of 1913 forbids ownership of the fed of anything except treasuries... maybe the guys that made these rules 90 years ago knew something?

Spice Girls Reunite

NKOTB is on a reunion tour, so why the hell not? kind of creepy, given their fan base, if you ask me...

I wasn't long ago that Britain thought they couldn't print their way out of the problem, llike the US might, because the pound wasn't the world's reserve currency. They have printed and achieved some positive results, so they're going to print some more.

If you take a close look at the Conference Board's Index of LEI, you'll see that the big contributions to the LEI are coming from financial indicators like the S&P, M2, etc, which are being juiced by Fed money.

A lot of analysis these days seems to me to be attempts to apply theories to situations well outside of their suitable area of application.

As an example, most economic analysis is based on the assumption that market participants are rational profit-maximizers, with deviations like informational asymmetry and non-rational behaviors treated as perturbations on perfect markets. But we now have a situation where critical credit markets are dominated by entities that are explicitly not attempting to maximize profits: see the Fed, or Fannie Mae's admission in their 10-K that they are wholly dedicated to providing liquidity to the housing and mortgage markets without regard to any expectations for profit. These are not mere perturbations...why would we expect routine analysis to give useful results under these circumstances?

Another example that comes to mind is the frequent use of data from series that do not include any period anything like the period under analysis.

Your statement should be the beginning of any serious attempt to analyze LEI, but how often does it even get a comment?

The critical next question, it seems to me, is whether these financial indicators directly lead to future increases in economic activity, or are they useful leading indicators because under normal circumstances they correlate with some other, perhaps less easily measurable, factor that brings about future increases in activity.

We just came back from a fairly expensive dinner. They were busy, no surprisem but for the first time I saw a steady stream of people walking past with their leftovers boxed. Maybe it was 70 year old Mom saying "Sonny, you paid $$ for this meal and didn't finish the ribs. You take them home and don't waste them!"

The banks can begin lending again.

They can, but will not - it makes not economic sense from an individual bank perspective to increase lending in recession, with the unemployment rate going up.

Climate change, "green technology", American auto industry - are all long term plays

the growth in China will help heavy equipment and Boeing.
Heavy equipment - yes, Boeing - they already got plenty of planes, actually more than the country needs.

Basel, I just threw it in to see if anyone actually read it. Thanks.

Is this single sideband? Something tells me I'm only receiving one half of the conversation.

I suspect you mean "half-duplex". (are you a ham?)

I read it too. We all read it nova.

Carausious? Name unfamiliar.

So is there an example of fiat money that went to zero and was successfully replaced?

reptilian
The only money worth mentioning that has been spent was by the Fed at auction, or top-ups for banks/AIG/FNM/FRE from the Treasury. Stimulus is small, and back-loaded -- it is responsible for nothing yet

All that has happened, is the FDIC will allow the biggest banks to erode their capital levels below prior regulatory minimums. This is a one off benefit. Once they are cut down to the bone, they'll have to support them on a weekly basis because a loss would be even more devastating than before when they couldn't even allow it

Is the velocity of money not falling? Are low mortgage rates not raising house prices? Are bankruptcy laws not stopping credit card defaults?

The forces at play are too big for anything yey undertaken. The Fed buying trillion+ of whatever assets. Definitely got my attention, definitely gave me pause. Big dollars, immediate, etc. Then I realized that the quicker they spend on that, the harder it will be to maintain spending on regular budget items. It's a last ditch hope to get the economy growing.

So let's say they do surprise me, and get enough spent in a short enough time to show some happy GDP numbers.
- Money is not being spent in a way that will help with defaults. Will not disperse fast enough, will not be enough total
- But let's pretend we don't know that yet because we can't find any articles beyond "Mission Accomplished/Green Shoots"
- Interest rates rise. Now you're screwed again

The challenge is not only to get a new bubble going before spending power runs out, it is to get a bubble that can outrun competition from risk-weighted global opportunities. High rates of return in the US would avoid the foreign exchange problem, but would starve any real production and push the Federal government into default. Low rates of return in the US would cause a crowd into emerging markets where the higher returns are supported by real production, albeit production vulnerable to export orientation. If the USD is devalued, it means automatic high inflation in an environment where the government is paying its bills by printing or by borrowing that causes further devaluation.

We don't have another generation of credit bubble before us. We would need a pure ponzi scheme. Mortgage worked because of the assumed low risk (keeping them on balance sheet at higher value), low interest payments/bleed (low risk after all...), high dollar value, highly dispersed. There is no way to raise enough money, and multiply it fast enough unless it is a pure ponzi scheme. The problem with such a scheme is that you would need remarkably few individuals involved to keep the secret, to keep it going. However if you concentrate the ponzi, the less outsiders are willing to contribute to it.

Even a spontaneous dispersed pure ponzi wouldn't work. That would be all major central banks competitively devaluing in sync, which would mean that no one had a comparative advantage, and at the end would just amount to global default. So that would give the US a clean slate, but no savings and no willing lenders. Which would amount to the same major GDP contraction. It would also carry high incidental costs around the world. It's also vulnerable to any major player which holds fast and doesn't devalue, and they would stand to take the place of the US/UK/Switzerland/etc in global financial markets which has a much greater benefit than the collection of taxes

simply put, there is no way out. The books will be reconciled. It's different, but in a limited sense because this has happened before

Ahhh, mp is a good egg.

Conjure now, he is a bad egg who is a good egg. A hairy egg.

Do you contest mp? The hub likes to contest in low power.

Ok evilhenry, so you are saying that a lot appears to have been done, but it really
didn't amount to much of anything?

Re: Cheerleading an happy talk. Perhaps "they" know that the edge is far closer than most of us. Most governments when put in a situation that that threatens their existence do not tell their citizens "Well, if the Red Army crosses the Dnieper we are truly screwed." No, they talk about secret weapons, faith, and staying the course. I can imagine if Mr. Tim said what he really thought could happen he would be resigning to spend time with his family.

lawyerliz (profile) wrote on Sun, 5/10/2009 - 9:46 pm

Carausious? Name unfamiliar.

Carausius - Wikipedia, the free encyclopedia

Western Roman Empire usurper emperor. Declared himself emperor of Gaul and Britain. Came to a bad end, but, that doesn't matter now. I just happened to read some stuff about his attempts to improve the specie of his realm to keep the troops happy and paid with real money and got to think about it.

So is there an example of fiat money that went to zero and was successfully replaced?

Weimar Germany?

Hyperinflation - Wikipedia, the free encyclopedia

I seem to recall that article was useful.

nova, if I didn't know better, I would swear you are equating Timmay with Baghdad Bob...

@MrM,

Thanks for the link to the CFNAI. That looks like a useful thing to follow. Those tricky Fed Regionals actually do some good work.

I had an interesting conversation the other day with a Military Officer in Counter Intel regarding some thoughts I had. I once upon a time had a TS/SI clearance. They were confirmed, without them saying much of anything which how it is usually done. There is some very weird stuff going on right now to say the least.

"It would appear drug use is rampant in the govt. circles"

SSRIs are just as damaging as cocaine in the long term. I'd imagine that heroin was a nice moneymaker for Bayer back in the day...

So is there an example of fiat money that went to zero and was successfully replaced?

Hungarian forint replacing the pengö?

It didn't go to zero, they never quite do, but this is as close as anyone's ever come:

http://en.wikipedia.org/wiki/File:HUP_10Mmil_1946_obverse.jpg

HollywoodHack, Yes. Slicker. We just did "Shock and Awe" on the economy.

the MSM is really pounding this green shoots theme.

Top Colleges See Little Fall in Freshman Commitments

The dean of admissions at Pomona College in California, Bruce Poch, said, “For all the Chicken Little and Henny Penny hysteria and dire predictions, it seems to have worked out just fine here.” At Pomona, 384 applicants sent in their deposits, only 6 fewer than the goal the college had set. The class is “essentially full,” Mr. Poch added, though some students on the waiting list might be offered admission.

Of course, a deposit is about 1% of the actual tuition.

Sorry, wrong image. This is as close as any fiat currency has ever come to zero:

http://www.captainscomments.com/images/681-pengo.jpg

That's a 100 million billion pengö note. And "billion" is the European billion, our trillion.

They printed notes for the next order of magnitude up but never issued them.

Those tricky Fed Regionals actually do some good work.

Thomas Hoenig is another Regional Fed that is doing some quality work, including in the public domain.
Now, the Fed Board of Governors is a totally different story.

Geez, nova, four long sentences saying exactly nothing but raising all kinds of alarms in doing it.

How many minutes to midnight is it on the Nova Weird Counterintelligence Stuff Clock?

(Sorry, mp and conjure, I don't mean to imply that you weren't saying anything. We just need a new clock.)

We haven't had any cascading cross defaults lately. What happened to the cascade?

Nova, don't answer Yalt. I would like to sleep tonight.

Blackhalo (homepage, profile) wrote on Sun, 5/10/2009 - 10:07 pm

"WASHINGTON (AP) - Dick Cheney made clear Sunday he'd rather follow firebrand broadcaster Rush Limbaugh than former Joint Chiefs chairman Colin Powell into political battle over the future of the Republican Party."

Awesome.

Those whom the gods choose to destroy, they first drive mad.

Bernanke has to keep refi rates in the 4.5-5.0 range for a real recovery and even then it will probably be shorter than the 2003 "recovery" after which Bernanke (or his successor) will need to drive down rates to the 4% range to get another bounce. He can play this game as long as there's a rising amount of capital/investors willing to take the hit; ie de facto transfer from savers to borrowers.

No, no, we'll call it the Counterparty!!

The WW I and II debts of Europe never got paid did they?

Lets see a pair of ovaries, eggs and ham...there is a story here...

The economic recovery, Ms. Romer said, will be driven by business investment in sectors like renewable energy

Sounds like rainbows and unicorns to me. 'Mericans will learn to make do with what they can actually afford. Got KOL?

lawyerliz,

Too many delicious beverages?

Hey Broward,

I had an interesting project for you, as you like to play with memes.

Did you ever wonder if they was a pattern to the distribution of (random news item) in the standard formulation "equities close (higher / lower) on (random news item)"? It seems like it would be easy to subject to automated analysis.

Just an idea I had while out walking I thought might prove interesting to you.

Nah, my brain is running wild and free tonite.

Only one glass of plum wine at the Thai restaurant.

Nite-nite all.

Cash money accounts for a tiny percentage of transactions in the scheme of things, so if we were stupid enough to print like there was no tomorrow, everybody would know by tomorrow.

"The bank stress test results, released Thursday, suggested that the nation’s 19 biggest banks could expect nearly $82.4 billion in credit card losses by the end of 2010 under what federal regulators called a “worst case” economic situation.

But if unemployment breaches 10 percent, as many economists predict, the rate of uncollectible balances at some banks could far exceed that level. At American Express and Capital One Financial, around 20 percent of the credit card balances are expected to go bad over this year and next, according to stress test results. At Bank of America, Citigroup and JPMorgan Chase, about 23 percent of card loans are expected to sour."

Banks Brace for Credit Card Write-Offs - NY Times

p.s.: Volker the Viking, I was dead serious. Securitization has collapsed, and the conditions that allowed it to flourish no longer exist nor will they.

They're going after it with hammer and tong as we speak. What do you think they're doing with their windfall? It's all they know. One trick ponies, which BTW I'm still waiting for.

have a crisp ZImbabwae $100 trillion dollar bill. If things really get bad, I'll pay off the national debt with it and we can start over.

I would like a pony named Sam since you will have change left over. Is 5% down ok?

come in here and try to find the bear case without loggin in, and what do I get?

MP with a conference board, pdf.
AMF with a strong dollar policy.
Lawyerliz hoping for more bank failures.
Nova talking shock and economic awe.
and CR is right... a market timer.

31 ignores, number 198. yes I read the post, the pdf, and the comments.

volker the viking (profile) wrote on Sun, 5/10/2009 - 10:44 pm reply Ignore user p.s.: Volker the Viking, I was dead serious. Securitization has collapsed, and the conditions that allowed it to flourish no longer exist nor will they.

They're going after it with hammer and tong as we speak. What do you think they're doing with their windfall? It's all they know. One trick ponies, which BTW I'm still waiting for.

I don't see where the demand for the securitized debt will come from. Norweigan fishing villages, pension funds? China doesn't even want it.

Tim 2012. I agree. Lots of coal stocks up 50-100% in the last few weeks, as stockpiles grow. They're making money on contracts signed last year, but new contracts (to be signed in Sept for 2010?) not so much I'd guess. I shorted Massey after it went from 12 to 22 in 3 weeks.

Stimulus, TARP, PPIP, and untold trillions of Fed offload are making equities and US sovereign bonds give false indicators.

The rush of new money allocated by Congress (less than 10%) and remainder by Fed (printing) have given this crash a breather.

We remember, of course, that money spends fast and easy; earns very, very hard.

We still have to float all that TARP and Congress budget promises via bonds. China has at most $200 bill, most creditor nations are balking. No one wants to loan to anyone papering the world with IOUs while simultaneously destroying the currency of settlement. No foreign and domestic consumption of long bond is atrophying. And we have the looming boomer retirement and welfare state costs to contend with.

It could not be afforded at the pinnacle of the ponzi prosperity. Now with ever diminishing production and tax revenue, there can be nothing but the physical economy falling away in exponential decline just as a rapidly ascending exponential growth of gov't borrowing seeks maintenance of status quo. The gap in that divergence will draw away all green shoots of growth, crush them, and come wanting more--infinitely more.

Without creditors, the only recourse is default or printing. Once this latest flush of new funny money and funny trading peters out, reality will set in again with the added weight of the misdirected exercizes of Fed/Treasonry. Just couldn't stop digging.

Green shoots now. Shoot me later.

oh yeah, dashdashdash dashdotdot dotsdotdot dot dot dotdashdot dash dashdashdotdotdot.

I got a parody of Roubini on SNL.....Supernova already sold.

ahhll yur tradishunal linkz r belongs to uz memed hipsters

The only thing that has prevented a Depression, so far

"so far" being the operative phrase. The Depression hasn't been denied, only delayed (and IMO deepened).

It might be 15 or 20 years before the current actions of the government take root in the real economy. That is not without precedent...

They got us to here, out at the end of a dusty, one-lane road in the middle of nowhere, with a flat spare and no gas left in the gallon can in the trunk.

Not to worry! a quick "jump start" will fix all of that!

"I seem to recall that the UK paid off their last WWII debt a few years ago"

Correct. I think it was 2003, maybe 2001.

In any case, there seems to be a mood of hysteria here this evening.

"there seems to be a mood of hysteria here this evening."

~~~~

Reading the pronouncements

from our so called leaders ...

hysteria is called for ...

Way up thread...

China cancels America's credit card
http://bit.ly/GjVKd

Well if that happens our recession is really over - that wouldn't be a green shoot it would be a mature sequoia... in short we would all go from meaningless unproductive service jobs & consumption to making damned near everything the country needs & consumes... almost over night. Hope you all know how to make something.

"Hope you all know how to make something."

Amen to that.

Take a name asswipe writes: "I don't see where the demand for the securitized debt will come from. Norweigan fishing villages, pension funds? China doesn't even want it."

Follow the money. Someone smarter than me will be able to show you. I don't know this for sure, but I know it because this is how it started many years ago--they're selling the new shit to themselves and each other. Back rooms and branches and subsidiaries of one sells to another and then after a couple hitches in the giddyup they peddle what has the appearance of a tradeable security to another bank/hedge fund/fill in the blank.

C'mon folk. You don't think they're not do you?

Pakistani Troops Kill 200 Taliban; Zardari Says More Aid Needed
By Molly Peterson and Ed Johnson

May 11 (Bloomberg) -- Pakistani troops backed by helicopter gun ships killed as many as 200 Taliban militants in the northwestern Swat Valley at the weekend as President Asif Ali Zardari called for unconditional U.S. aid to combat extremists.

Forces secured strategic peaks and ridges as they battled to wrest control of the valley from insurgents, the military said in a statement yesterday. Gunmen destroyed two schools and shelled villages with mortars, killing civilians, it said.

Zardari, pressed by the U.S., has deployed thousands of soldiers to Swat after the Taliban took advantage of a February peace accord that introduced Islamic law in Swat and advanced closer to the capital, Islamabad. President Barack Obama has said an aid package to Pakistan worth $1.5 billion a year would be conditional on the government tackling Islamic extremists.

“We need, in fact, much more help,” Zardari said yesterday on NBC’s “Meet the Press” program. “Altogether this aid package is not even one-tenth of what you give AIG,” he added, referring to New York-based American International Group Inc., the insurer bailed out four times by the U.S. government.
Pakistani Troops Kill 200 Taliban; Zardari Says More Aid Needed - Bloomberg.com

And while they're at it, they're writing straddles, CDS's and other positions, selling them, cratering some and fluffing others. There's more fluffing going on than all of Porndom has ever known. From one back room it was heard, "Hey, easy big fellow, you'll break it."

Weimar Germany, with the Rentenmark.

Of course the follow-on effects weren't so good.

Hyperinflation in 1923 Germany

Sunday Night Futures

.... As I see it the govt spending at every level is the core problem... taxes and borrowing are the effect but the spending is the cause...

After everything you've read on this blog you think it boils down to something as simplistic as that. All we have to do is stop government spending?

The problem isn't that the government is spending too much, it's that they are giving our cash to the same guys that ripped us off on the way up. Multiple trillions for banks, bondholders and investors and education is still on the ropes. Good luck rebuilding a modern economy with a bunch of high school dropouts. We need government with the nerve to regulate the con games in play. And ultimately it is those con games, not the government, that got us into this. It's true the government could have stopped it. But hey, blaming the government now is like blaming your neighbor cause he didn't stop you from shooting your dog.

Cut taxes, cut spending. Ensure that the government looses all capacity to maintain a well-regulated marketplace. That'll solve everything.

/rant

Well I rather agree with you ecoshift - I didnt mean to imply that there should be no regulation, just the we should have something similar to zero based budgeting or at least sunset budgeting so that budgets dont run on forever... Did you know that there is a wool subsidy still in place today, that was enacted in WWI supposedly to ensure that there would be a sufficient wool supply for army uniforms? There are New Deal projects which are still getting funding too, and that should be stopped. Mostly though, I contend that there are a lot of govt programs which not only do not solve the problem they were announced for, but that those programs actively make the problems worse and perpetuate them... It all comes down to increasing dependency on govt particularly by people at the entry job level... All those programs provide so much that those people never enter the productive economy, and never grow in their personal lives so they remain dependent forever. It's a real shame - to see someone who has never realized their potential and who has lived in poverty all their life... But they keep voting for those who will promise them a crumb....

But - no matter what - we have to live in this world the way we find it - as that old song says "These may not be the best of times, but they are the only times that we'll ever have..."

Okay... didn't mean to go off there. I don't have any problem with cleaning up legacy subsidies from bygone eras... in fact there are a number of corporate subsidies and tax breaks for major market players that are patently unfair and anticompetitive for small business and small farmers (what few may be left). I suspect that the total dollar amount involved in business subsidies dwarfs the amount committed to people at the entry job level.

The problem as I see it is that too many people have only an entry job level education. And truth be told we don't need 'em any more. Worse than that we don't need half the people we have with college educations.

Remember in the late 50's and early 60's when all the labor saving devices came out? We were encouraged to wonder what we would do with all our new found "leisure" time. Turns out what we will do is be underemployed. It's become far to easy to make products. We need people to consume them, but we don't them to produce them....

We've been getting by through exporting our menial work to foreign countries and importing the profits through one mechanism or another. Works great for investors, consultants and a host of other professionals. Works very poorly for the average Joe and his wages.

Until the dollar truly tanks (Friday's decline could be a start) I doubt we can even be competitive in our own markets.

I'm expecting another leg down. And I hope that government spending can help cushion the fall... but so far we are spending it on the wrong people. We are merely contributing to a great pile of money sloshing around the globe seeking double digit returns. That money won't get spent until after a recovery...

"The economic recovery, Ms. Romer said, will be driven by business investment in sectors like renewable energy rather than consumer spending..."

Feel good greenie crap. Take away the government corporate welfare and all renewable energy initiatives do is consume more productive resources.