Why everyone on this comment page are so negative ? where is Subastian - my favorite counter indicator ?
and more seriously - why is it impossible that what we are seeing now is the bottom of the L-Shape recession ?

Lucifer I thought things were getting better... At least that is what everyone is saying....

Let's blame the Longshoreman unions. They still make decent wages.

Fire Bernanke now!

This is No Country for Old Ben

There is no justification for preserving faux capital. Bernanke is diluting the real capital of our Nation by proping up fraud. Bernanke is trying to legitimize the fraud perpetuated by banksters over the past 25 years. He can only succeed by stealing from those with real capital or from those that will produce real capital in the future.

What a sham(e)!

Wooo hooo, a real green shoot!!!

Mish seemed particularly contentious yesterday, almost desperate to deny any possibility of a recovery.

If we pumped our own oil the trade deficit would be even better!

The uptick in outbound container traffic is based on Wall Street banks packing their toxic assets and other incriminating documents into shipping containers and ordering them dumped overboard in the vicinity of the Tonga Trench.

Boy, I just can't wait to get my share of the PPIP losses. Sheila Bair should be fired too.

why is it impossible that what we are seeing now is the bottom of the L-Shape recession ?"

It isn't
Except for California and GM country.

If the rest of the country has successfully decoupled, we should be okay!

Here's another NEW reason port traffic could trend down further.

Guess what your own U.S. Senators (from your state) just did to your interest rates:

(hint: they ignored the universal conclusions of most nations through most of history)

Finding the Dream: Check to See How Your Senators Voted on Credit Card Reform (Updated)

Also has a nice analysis of just precisely what the vote actually means in dollars for a typical family.

(think, what's left over to spend in the economy)

I'm seeing a distinct Z-Pattern recovery..

The upper case being the time period from 1945 to 2008, and we're sliding down the backslash now.

Zed's debt baby.

"The upper case being the time period from 1945 to 2008, and we're sliding down the backslash now."

Just like Chutes and Ladders.

Japan heading into deflation again - US CPI only up on tobacco taxes... Unemployment only gets a bump from census hiring... Rail traffic still dropping... Porkulus money still not out to the shovel holders... Stock market long and short moving averages converging on the price quote... Sure looks like another leg down to me...

"Consumer Debt Pyramid = Catastrophe
Wall Street Debt Pyramid = Catastrophe
Government Debt Pyramid = Recovery and Prosperity

"Which one is not like the others?" "

That is what I have been saying. If printing money and QE is such a panacea, why don't we just do it every time the economy slows down? Why wouldn't every country do it? Heck, by that logic, Argentina would be the richest country in the world. Russia should have never defaulted on their debt, they should have just bought it themselves.

The US can get away from it only because the dollar is, for now, the world's reserve currency. What happens when that ends? And it will end.

Oh, gotta go, now the morons at CNBC are saying the upcoming Springsteen tour is a positive economic sign. Better add that to the list of leading economic indicators.

High water mark for the year.

Restocking for spring/summer based on 'green shoots'. When the demand fails to materialize purchasers will be sure not to make the same mistake for fall/winter.

"Isn't it funny, the ancient Egyptians built pyramids to the sky, and so did we.

The difference being, nobody will be able to see ours 3,000 years from now..."

No, no, no, the American Empire will live forever, things are different this time, we don't actually have to produce anything, the Egyptians never had a Federal Reserve...

History is accelerating. It might only be 100 years from now that people won't be able to see our pyramids.

amf,

1 Quatloo it is.... hope i can afford it when it is issued.... or not, if i am the winner!

ShadowInventory: Is the CPI up or down? It depends on whether you are looking at seasonally adjust numbers, or not. It depends on whether you are looking at the core CPI, or not. It depends on whether you are looking at month-to-month or year-over-year. Finally, it depends on whether you believe the government is cooking the numbers, or whether they are merely manipulating the numbers. (Can you guess that I believe the numbers are manipulated.)

This index has fallen 0.7 percent over the last 12 months, due primarily to a 25.2 percent drop in energy prices. The year-over-year declines in March and April are the first since 1955.

The improvement is entirely due to imported green shoots from Asia (probably La Choy).

More green shoots:

American Express card writeoffs pass 10% in April - MarketWatch 

American Express card writeoffs pass 10% in April

Ya lifeguard I agree with you - I think all the numbers coming out of the govt are made up... adjusted... marked to political demands...

bottom of an L-shaped recession?

Not as long as these loose 800-lb gorillas keep stomping the green shoots ...

And since the bunker is 100% Linux, I dont anticipate any problems...

I know not how, but somehow the USA was able to attract the best & rightest from the pages of Pravda, circa 1958, to inform us of official state statistics.

@lifeguard1999

We've been all over this. At the time, the Fed had not made the decision to enter the market and buy Treasuries. That doesn't happen very often, like once or twice a CENTURY.

You should know that.

You should also know that a bond crash could, and probably will, happen regardless of the Fed action.

Conjure and I are REALITY driven. We're not constrained in our thinking by continuation theory.

If you want to be left standing on the platform when the train leaves the station, well, that's your business.

Having said that, this remains a high-risk environment.

Have a nice day.

"FBI probes possible insider trading by SEC lawyers"

Wow! That would explain a lot.

thanks to SRS for the quick round-trip

mp: The FACTS indicate that the economy is STABILIZING, even though the STABILIZATION may be temporary.

It's one of those unstable stabilizations.

Imagine all the countries in the past that have collapsed due to economic problems when all they had to do was borrow and spend their way to prosperity!

Yeah like Zimbabwe...

The only reason we can do this is that the dollar IS the world's currency... There is no real challenger on the horizon, other than gold or a basket of commodities, and even then you need some way to trade without swapping shells and bones.... The Euro cant take the place of the dollar because some of the strong countries in Europe are not in the coalition... Even with everything that is happening, there is still more trust in the dollar than any other currency on the planet...

I want Yogi to go ahead and create his one world currency as long as I can be head of the central bank for life...

From the "Everyone gets a trophy" department, WTF is Brian Westbury still doing televised interviews ?

He discredits himself constantly and what makes him even more of an asswipe is he's an arrogant POS carrying his bagde of 100000000 mistakes up high.

Who has been wrong the most and lost their clients the most $$$$$$$ - Abby Joseph Cohen or Brian Westbury ?

Remember the Star Trek (60's) episode where the boys beam down to planet x, which is in the middle of a war that is being waged by computers on both sides, and if you are a designated a casualty, you dutifully report to the building where they do you in, and nobody seems to have a problem with it...

It feels like that financially, here on the good Earth.

just had a segment on CNBC (OT: I hate watching it, but that is what is on the floor) and some moron is arguing that the US is justified in erecting trade barriers against Canada. his justification? the US has a trade deficit.

BBAD ALERT!!

In a way, this total collapse is going to be fun to play out exactly on script.

As long as you are well armed.

U.S. Regulators Clash Over Holding Banks Accountable (Update1)
U.S. Regulators Clash Over Holding Banks Accountable (Update1) - Bloomberg.com

By Craig Torres

May 15 (Bloomberg) -- U.S. regulators are arguing over how much influence the government should wield over bank management, pitting taxpayer protection against concern at roiling fragile financial markets.

The clash intensified as supervisors completed last week’s stress test results on the biggest U.S. banks. Federal Deposit Insurance Corp. officials sought to make top executives and boards of directors of 10 banks accountable for raising more capital by November. The Federal Reserve insisted that managers’ fates be left to boards and shareholders.

So, the Treasury is comfortable with the 3-year guarantee, but not the 10-year?
Interesting... that and the muni re-insurance reminds me of that bazooka that we were not going to use.

I've been burned by SRS more than once. Time for another try?

Sure, why not?

I would have thought the Treasury would be more comfortable with the 10 year, as it's well past the statue of limitations criminally.

The only reason we can do this is that the dollar IS the world's currency... There is no real challenger on the horizon, other than gold or a basket of commodities, and even then you need some way to trade without swapping shells and bones....

Seems like there are some signs China is moving towards hoarding commodities (esp. oil) instead of dollars. That makes more sense anyhow.

Currencies are the primary mechanism for economic communication.

A breakdown of these might lead to a more animal warlike type of global economy focused on competition for existing resources as loss of financial efficiency degrades economic efficiency.

In a world of lies and deception you cannot have the trust necessary for the type of economy we have had in the past.

Inflation is theft and deception at one of the most fundamental far-reaching levels.

It's no wonder that during the inflation of the late 70s it was common to describe modern economies as "ungovernable".

The FACTS indicate that the economy is STABILIZING, even though the STABILIZATION may be temporary.

Errr, ok.

my dad is an exec at a large taiwanese electronics OEM (mostly computer stuff).

He had to go over there to talk to people in one of those factory towns where its mostly just "campuses" for corporations with factories and dorms.

Anyhow, this was back in december but he said even then it was getting "bad". I suppose we never hear about it in the mainstream media, but he was talking about billion dollar LCD panel plants, with say 10 lines, with only 1 active because of low demand for screens and that the companies were eventually going to go bankrupt because of the loans for the other 9 lines.

I also heard a story about an Asustek "campus where they might have to lay off half the plant. Now you think in american factory terms that sounds bad. But when the plant employs and houses 90k people its the type of thing that can cause a riot.

I've heard that a lot of these large multinationals were leaving last year anyway because china put in actual labor laws , and things like severance pay mandates and minimum wage, so they are going to vietnam, etc anyhow especially at the lower end. That and the commercial loans they took out to build out all these dorms and such.

I think thats another aspect of it. In america if you build a factory you don't also have to build housing and dorms and cafeterias for your workers. So there is the added cost of that in china and the loans for it. Though supposedly the chinese government was pretty generous in say just giving them the land to build on to create construction jobs etc.

I think it pays to hoard some supplies for an emergency, like a little canned goods or the strategic petroleum reserve, but in a functioning economy you need a reliable flow of raw materials... and since the materials are globally dispersed, there has to be a trade mechanism for the whole thing to function... we have that as long as some idiot doesnt permanently break it...

Blackhalo,

I linked to that story yesterday..

// "FBI probes possible insider trading by SEC lawyers"
Wow! That would explain a lot.//

ghostfaceinvestah,

but timing is everything. what is your time-frame for when we go cliff diving on the indexes for real?

I can understand MP and the stabilization facts. Yet, stablization is not always good. For example:

I am unemployed. My assets are being melted away as I try to maintain my employed lifestyle (debt). Simple math shows I will be living in a tent behind Safeway in 6 months unless I get some income coming in. I get a job at Starbucks. Instead of 120K a year I now make 23K. My situation has now stabilized.

"Nope. Port of Long Beach has been unable to get an environmental impact review done. No green shoots under the bridge, evidently."

Here's hoping we see some sanity return to the environmental permitting process. Maybe the governator can override the nimbygreens in a fiscal crisis?

S&P broke 880. Lets see if Kermit puts up a fight.......

hans,

I was in PRC & Hong Kong in January '09. Compared to previous visits, I can tell you it was very bad and getting worse. People were very worried -- and not afraid to talk, either.

When I came home, I posted to this blog and others that the Chinese would soon not be able to buy US Treasuries like they had been, if at all. I gave them 3 months to keep up appearances, but they had probably been dumping even then.

@mp

Thanks for the update. With the old comment system, I regularly followed Nemo, Bond Girl, you and a few others. After the transition, I have not been able to follow my favorites as regularly as I would like.

riot- the unbeatable high

Well, who would benefit if a few "bad apples" slipped through the net and raped and killed a photogenic white person?

@riot,

I think you should own a firearm regardless of the prisoner release.

CNBC: Record Credit Card Defaults in April

Lucifer,

When you hold out an image of "black men" as dangerous and needing to be feared and imprisoned, you're not doing anybody a favor.

Hello all -- I've been a lurker for a good while now, and thought it was about time to get a login. Really enjoy the commentary and comedy on this blog, as well as CR's great insights of course.

So it's a slow Friday, and I was just messing around with some econometrics. Wanted to see what a very crude measure of "credit money" looks like over time relative to GDP. I used the difference between M3 and M1, divided by nominal GDP. Basically gives an approximation of IOU's in our economy, as a multiple of our annual domestic production (ignoring the fact that GDP is a contrived number, of course). This ratio was 30% in 1959. It was 62% in 1970 after the gold window was closed. It was 55% when we had hyperinflation in the 70's. It was 70% at 9/11 and throughout much of the tech recession. It was 87% last summer, before the blowups. It currently stands at 92%.

Hard to say what an "impossible" range for this ratio would be, but I think it's safe to say that higher = less stable, and that we haven't gotten a very good "bang for the buck" (apologies for the pun). So here's the thought experiment, and I think it shows why inflating your way out of a debt bubble is easier said than done. To get back to a ratio of 70%, which is where we were in 2004 but is still insanely high relative to history, we'd need to see one of two things: the first is to allow the money supply to deflate (which the fed clearly does not want to happen). That would be a $3.1 trillion shrinkage in (M3-M1). Not a restructuring, not a refinancing, but an outright destruction of that much expanded money (meaning savings and write-downs). The second path is the ubiquitous inflate-your-way back to prosperity. Here's the rub. Since GDP is the denominator, you have a convexity problem. You'd need to see an increase in nominal GDP of 31%, or over $4 trillion per year. So even if real growth gets a boost from this quantitative nonsense-- call it 2% which is generous-- you'd still need to raise aggregate prices by 29%. Easy for Mugabe perhaps, but I think we will have trouble. And maybe that's how the lost decade begins.

Anyway I'd love to hear your thoughts on this.

riot- the unbeatable high (profile) wrote on Fri, 5/15/2009 - 3:07 pm reply Ignore user query for anyone who has any insight:

one option on the table is the release of 19,000 "non-violent" state prisoners. question is this: i know lots of criminals plead out their cases to more modest charges. anyone want to hazard a guess as to what percentage of the 19,000 will be real bad apples who got caught for crime A and pled out to (non-violent) crime B? [as opposed to a bunch of minor drug possession/loitering/etc. style "criminals"]

Note: Should have spent more time making a justice system that didn't operate by trawler-netting every black male that fell into its clutches, then you wouldn't have to try to winnow the real dragon's teeth from the endless chaff, now that the money has run out for America's little "down-low" concentration camp system. Of course, then it wouldn't have been able to be a weapon in America's "strictly low-key" race war.

just wondering whether to buy a tazer or something more potent....

Do you know how to use a gun? If not, contact your local NRA and let them teach you. Then you will have a much better chance in a fight and a much better idea what you want.

If you know how to use a gun, use your judgement. I'm a big advocate of the Mossberg slide 12 gauge for home defense., probably with some #2 shot

CCW (carrying a concealed handgun) is more of a thing you do in your heart than in your hand. I didn't carry til I was over 30 'cause I didn't feel I was stable / adult enough to trust myself before then, and they taught me to shoot as soon as I could cock the Red Ryder with a foot and two hands. I would get a little trigger time in before I decided if that was for me or not.