Kohn said closer cooperation between the Fed and “fiscal authorities” is an “inevitable aspect of effective policy initiatives to meet our macroeconomic objectives in the current financial and economic crises.” He reiterated that the central bank is working with the Obama administration to seek additional powers for the Fed to tighten credit.
Plosser, by contrast, said in a May 21 speech that “when a nation’s treasury or finance ministry and its central bank work too closely together, there is a clear risk that the government’s spending will end up being financed by the central bank’s power to create money and that the public will become confused as to their respective roles.”
“History shows us that you can get very bad economic outcomes with rapidly rising inflation,” said Plosser, 60, the Philadelphia Fed’s president since 2006.
If you havent seen this yet, check it out... 63 year old Jeff Beck, one of the worlds best guitarists ever, playing with Tal Wilkenfeld who is 21 in this video... Totally amazing talent...
meanwhile Geithner Adopts Part of Wall Street Derivatives Plan
“The banks appear to wish to maintain the intra-dealer market and raise barriers to new entrants to keep the OTC business as compartmentalized as possible and to protect their profitable market conditions,”
In my opinion, no one is addressing the real question: How do we get the economy to function normally now that the Fed (reserve and gov) have intervened massively to prop up failed companies and business models? The fed has essentially backstopped the housing, banking, automotive, insurance and soon health care industries. They have given horrible, failed institutions (citibank, BofA, etc) an unfair advantage by publicly stating that they are too big to fail. How will we deal with the enormous mal-investments generated by this intervention?
I define normal as operating without constant cash infusions from the Treasury, federal loan guarantees, and massive intervention to hold down mortgage rates.
I think we are going back to the farm age. Biomedical/genetic/farming. Grow cows in your own home in a nice box. Have farm using solar panels (battery technology), etc. Grow your own food at home.
Kohn thinks the recovery will "be gradual amid the balance sheet repair of financial intermediaries and households".
does he mean walking away or being foreclosed repairs our households? or maybe he thinks a downpayment on a cardboard box below an underpass will repair our balance sheets? oh i get it now.
Spent the day in Lake George, north of Saratoga Springs NY (where I live). Good sized crowds, though parking and restaurant tables were easy to find. Most surprising was almost every hotel/motel had vacancies. This is normally not the case. Anecdotal evidence jives nicely with CR's weekly posts showing Revpar down 20% YOY. Also, LOTS of for sale signs on lakefront cottages.
broward (homepage, profile) wrote on Sat, 5/23/2009 - 6:57 pm
I thought we had two going already?
well a third war wouldnt hurt... maybe a bigger enemy... one that wouldnt mind playing the bogeyman... china or russia? hell russia already switched to the euro as its reserve currency last week.. .more reason to start a war with them.
dont worry! our overlords may not be the best overlords in the universe but they are OUR overlords. they will invent a nice diversion for us... kind of like a hollywood blockbuster war movie. something to wave the flag for and feel good about ourselves.
How do we get the economy to function normally ...
if by normally, you mean walking around fat, dumb, and happy, those days are over. Best thing you can do now is to help those within your sphere of influence, and stay cool.
How will we deal with the enormous mal-investments generated by this intervention?
1) by playfully bickering with like minded people on some blog. or...
2) parroting our favorite celebrity idiots like rush, glen beck, hannity, msnbc talking heads, etc. or...
3) ignoring it and focusing on the exciting developments on american idol or pro sports.
Kohn stated "The large output gap will keep long term interest rates and inflation in check "
Wow, this guy knows what the output gap is because he knows exactly how much of every good every single person in the world wants at this moment and what they will want the rest of the year. He needs to be our chief central planner at the politburo.
Really, the whole concept of an output gap is absurd. Stop screwing with the market and sending false signals all over the place.
They obviously serve the highest quality koolaid at the Fed.
There's no way they'll ever have the opportunity or time to unwind their positions, because the zombies they're supporting simply cannot function without ongoing cash infusions, and the combined drain of DC deficits (including TARP, AIG, PBGC, etc.) / FDIC backstop / GSE MBS purchases / etc. will push monetization past everyone's pain threshold.
Their actions are not delaying or denying a depression, they're guaranteeing one.
Humph,
Kohn is dreaming.
That last thread showed the depth of the debtberg we have floundered upon.
As long as we bleed dollars in mass quantity for overseas stuff and oil, without a massive drop in the dollar, we are going to be Japanese.
Japan could have exited their funk fairly quickly with a larger devaluation and homeland inflation. Real inflation, not that pale managed shadow they put over a massive debt bust.
Weeeeellll, since we import so much more than Japan, our creditors are going to do it for us.
So, there will be no return to normal Greenspanian monetary policy within Kohn's lifetime.
As I stated, buckle up, get ready, and watch the creeping devaluation.
Like watching glaciers melt, all of sudden there is a big calving event and all the observers are terrified, but the slow grind continues after the waves pass.
Last year was a big chunk of ice, but not the main event.
As for fixing FIRE- that too will take quite a bit of time and effort to reorganized foolish endeavors.
I am sorry, but once quantitative easing was deployed, the dollar will no longer be stable.
I watched an interview with Eisenhower's son where he claimed that famous phrase was changed in the original speech from "the military, industrial, congressional complex".
Maybe we are reaching the endgame: gold and commodities rising, equities and bonds falling. Things progress slowly until some large player panics first. I bring this up to my peers (educated 20 somethings), and they think I am crazy. However, so many unthinkable things have happened lately that I am starting to make some inroads. So many young people in this country have only known easy prosperity that they have developed a sense of entitlement. It will require a long and painful recession to dis-abuse them of this notion. However, in the long run our society will be better off for it.
Yep. That's why most major military gear is sourced based on the dominant Congressional members. In the 1980's, Raytheon's main plants were located in MA (home of Tip O'Neil and Ted Kennedy). I lived within a couple miles of the Watertown plant. After the Republicans took over Congress, they moved most of their production to states like AZ and Georgia.
I watched an interview with Eisenhower's son where he claimed that famous phrase was changed in the original speech from "the military, industrial, congressional complex".
~~~~
Glad to hear someone else pays attention ... yep that's what Eisenhower originally intended to say, until discouraged ...
"the military, industrial, congressional complex". ...... the truth was too radical ...
OT. For those following the NYT writer's story, one of Megan McArdle's followers has posted the bankruptcy filings to scribd.
I'll admit I read them but I don't feel good about having done that. : ( I'm shocked that her sister loaned her $30k and she chose to clear it through bankruptcy, but still, I feel kind of creepy for having read them.
I post the links here because I know other readers are following the fallout, but I shared my quesiness as a warning!
I am in the military. We could cut the Pentagon Budget by 30% with no degradation in readiness. However, the secondary purpose (some would argue primary) of the military would go unfulfilled: providing civilian employment to powerful constituencies.
Fort DeRussy’s buried under summers,
The ramparts and the ditches shoveled then
In ’61, abandoned by the bummers,
And gone the hundred-pounder Parrott gun
The field of fire’s over grown with trees,
Third or second growth of pine and oak
Where snipers training steadied on their knees,
And first lieutenants practiced saber strokes
Over east the valley of Rock Creek
Down a steep decline that can’t be flanked,
And over east the line of Seventh Street
Where Jubal Early’s raiders drew a blank
A hundred forty summers pass and four
The ramparts are the rounder for the rain,
A generation fights another war
And then a field of fire grows again
I found it fascinating that the MIC was regarded by democratic voters as a Republican evil empire, when the Dems were the ones dominating the hill (and funneling jobs to their districts) via the Pentagon for most of the 20th century.
I remember the fleet in the river
Long hulls with grey skins
Guns like fingers, blunt ends pointing
Turrets low in the autumn sunshine—
How many who were there can still remember?
How many dead are not remembered
Except by someone old who loves?
"Regarding the "military industrial complex"...
I found it fascinating that the MIC was regarded by democratic voters as a Republican evil empire, when the Dems were the ones dominating the hill (and funneling jobs to their districts) via the Pentagon for most of the 20th century."
Kohn is a Federal Reserve lifer and a Bush appointee. Anybody else know anything that would indicate he's particularly insightful or well-rounded? Sounds rather insulated, actually.
As for basing, largest military concentrations are in CA, HI, WA, NC, SC and FL. It's pretty evenly spread out. Thanks to the structure of the BRAC program (the Pentagon chooses the bases to close, and Congress can only vote the whole list up or down), basing is usually far less politicized than procurement.
"Most of Mr Obama's spending is devoted to social programmes rather than growth promotion, which may exacerbate America's over-consumption problem and delay sustainable recovery."
Professor Yu Qiao-Financial Times Editorial page, Apri1, aught 9.
question: Why is Private Capital going aggresively at low end homes, infrastructure, and banks? All you need is a company store....
*took out Obmama's and Ampril.....if a comment is edited in the blogosphere does anyone read it?
""Most of Mr Obmoma's spending is devoted to social programmes rather than growth promotion, which may exacerbate America's over-consumption problem and delay sustainable recovery.""
~~~
LOL
Social programs for the banksters and well connected ...
Infrastructure programs for pols friends ... dem and repug ...
I am glad mp has begun to believe the situation has stabilized. The ship might still make it into port with minimal loss of life. This is for selfish reasons; I just don't feel like crash and burn will be all that fun.
Bases tend to be in republican districts because military members and DOD employees tend to vote republican. If you build a base, a republican constituency will follow. However, in defense of Pentagon, basing decisions are usually made based on strategic/tactical concerns. There are, of course. exceptions. Overall, there is MUCH less politics in basing than in procurement. Like I said, BRAC is usually pretty good about shutting ineffective bases. There is no such program for eliminating stupid weapons systems and programs.
Count de Money ( Wall St Crooks )
Good To Be The King ( Bush now Obama )
The piss boy with the bucket ( American taxpayers )
BOL to everyone and I’m supremely confident that I’ll be a very content survivor ( and I’m not talking about the pseudo reality show that defines America today )
Kohn reveals the fatal flaw in all these efforts. There is an assumption that the current banking system can be repaired and also must be repaired no matter the cost. Until we get past that there will be no leveling out.
In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."
C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.
SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.
//Kohn reveals the fatal flaw in all these efforts. There is an assumption that the current banking system can be repaired and also must be repaired no matter the cost//
My neighbor, a retired Col who had a quad bypass and emphysema. He is back from the hospital and was sitting on his deck smoking. He is a good man but he isn't going to change...
He is the American consumer. He is not going to let go of smoking, and the consumer is not going to stop spending until a force outside them makes it happen. The culture of materialism is not going to change, We are not going to cut back. We will keep searching and trying to revive the monster until it kills us or it is obvious to even the dumbest that the horse ain't get going to get back on its feet.
Why? You guys were doing such a splendid job before..
Crisis Raises New Issues for Executive Coaches - Bloomberg.com
02:59 PM Tuesday May 19, 2009
By John Baldoni
1999 was the year of me! 2009 may be the year of us!
At least that is what we may infer from a new survey of seventy executive coaches conducted by WJM Associates, an executive coaching firm located in New York City. As the survey states, "the change [in coaching priorities] seems to reflect the trend of executive coaching being used by organizations to address specific business issues, rather than for individual, general 'self-improvement'."
This article is part of a 10-part series highlighting what companies need to do to transform uncertainty into opportunity. The full list will be posted on HarvardBusiness.org and SilverLiningPlaybook.com. The Silver Lining launches June 1.
Does your organization always asks, "How does the customer define 'more'?" before asking people to do more with less?
Government, politicians, billionaire etc. are not responsible for our problems. There was not some devious plot forged on Jekyll Island for world domination. Where we stand today was arrived at by a path dependent series of small steps of people pursuing power in culturally condoned ways. It's a giant chinese finger trap with huge momentum- but the players are mostly benign, with few true conspiracies.
Oil Slick Dick was glad to hear that!
Nuke,
What would you think about the US withdrawing its bases from Japan and South Korea and stationing those forces in places like Alaska, Guam, and Hawaii? I think it would save some cash and provide an economic boost to the states in question.
Japan is actually a pretty cheap place to station US forces because the Japanese heavily subsidize our presence. I just came from a 39 month sea tour in Guam. It is enormously expensive to keep bases there. Shipping stuff out to Guam (people, part equipment) is a huge cost. So is housing. Hawaii is also very expensive, but not as bad as Guam. Overall, however, I think we should reduce our presence overseas. There is no good reason for us to maintain a large force structure in Germany, for example.
Jesse's latest missive makes me think that the time is growing short for adding some Central Bank currency debasement insurance to your portfolio.
My favorite vehicles are miners, primarily silver, gold and copper. Most gold and silver miners have just cleared multi month bases, including SSRI, AUY, SLW and LIHR.
Long dated out-of-the-money calls are the best way to insure against the wealth stealers and crooks in your friendly neighborhood Central Bank.
"If the legislature can pass a majority rule, it can more easily cut spending and raise taxes," says Rick Jacobs, whose Courage Campaign is pushing to eliminate the two-thirds rule.
the time is growing short for adding some Central Bank currency debasement insurance to your portfolio.
My favorite vehicles are miners, primarily silver, gold and copper. Most gold and silver miners have just cleared multi month bases, including SSRI, AUY, SLW and LIHR.
Yes, because when paper money is trashed, what you want to be holding other pieces of paper, denominated in paper money.
I don't count on anything other than physical, in my possession. Everything else seems silly to me.
CEF- is a non derivative claim on glod and slivers, and its in Canada....WTF do I know, Im just fuckhole promoting bullshit on a blog. Its going to put in a golden cross....soon.
Also an alternative view of the Chrysler/GM fiascos from my neck of the woods:
"in the central Oregon city of Redmond, hard hit from the burst of the housing bubble, Ricky Suganuma figures no longer having to carry the Jeep brand built by Chrysler will make it easier for him to get out of the red, as long as his sales of Chevy pickups hold up. n the Northwest, six dealerships in Oregon and 15 in Washington got the news Thursday that they were on a list of 789 dealerships being closed by Chrysler as part of its bankruptcy proceedings.
Most of them still have other brands to fall back on, like Dave Hamilton Chevrolet-Jeep in Redmond, where Suganuma is general manager. He said Chevy pickups remain big sellers, despite the construction crunch.
"Right now the only reason my financial statement was in the red was new cars," he said.
He had already cut his advertising budget 85 percent back in November, without seeing his share of regional sales drop, trimmed payroll 10 percent by not filling vacancies, and expects to be able to keep his 30 employees working, even if he loses the General Motors franchise and is left with used car sales and an independent repair shop.
While he had hoped to keep the Jeep franchise, he said, no longer having to pay inventory charges on the vehicles will cut expenses significantly."
So not every dealer thinks the world is coming to an end.
TJ and The Bear (profile) wrote on Sat, 5/23/2009 - 6:37 pm
Rob, you ought to love this:
"If the legislature can pass a majority rule, it can more easily cut spending and raise taxes," says Rick Jacobs, whose Courage Campaign is pushing to eliminate the two-thirds rule.
I've been following this closely. Well, except for a break this weekend. It is unbelievable the lies that are being promulgated. The only thing limiting the Legislature from raping the taxpayers is the 2/3rds requirement.
Well as long as you can sell your calls before they shut down your brokerage account, you'll be OK. The money may be debased, but I'd rather have 10 times as much as I started with ... I figure I will need it to pay for shit.
Not least of the problems entailed in all this are the scary political consequences. It's one thing for a business such as a bank to fail; its another thing for the public to lose confidence in banking, or their own currency, or the credibility of all the people who work in banking, or the authority of those charged to regulate these activities, or the courts and their officers who are supposed to adjudicate misconduct in them. When faith in all these things starts to go, all bets are off for even larger social constructs like democracy, justice, and the destiny of a federal republic.
When faith in all these things starts to go, all bets are off for even larger social constructs like democracy, justice, and the destiny of a federal republic.
Right. That's what pisses me off so much. Don't the F'ers at the Treasury and Fed know what kind of risks they are taking? I suspect they do, but feel their own interests are more important.
Nuke, it is also time that the europeans across the board defend themselves. After watching them in Kosovo, they couldn't organize a f**t after a Boston Backed Bean dinner. No more american blood or money. They are after all some of the richest folks on the planet. I am sure if radical islam or the soviets start to act up, they can send them a stern message of warning, then another and another.
Well as long as you can sell your calls before they shut down your brokerage account, you'll be OK. The money may be debased, but I'd rather have 10 times as much
Counterparty risk from your broker and whoever you're counting on to buy the stuff, plus whoever your counting on to actually be mining gold instead of investors;
Timing risk - you sell and then the currency debases another 10x;
I'll admit, though, it's more liquid if everything works out right.
Don't the F'ers at the Treasury and Fed know what kind of risks they are taking?
I call it "firebreak economics." The Treasury and Fed are so busy stamping out the open flames that they (incorrectly) don't think they have time to worry about the consequences.
it is also time that the europeans across the board defend themselves. ... I am sure if radical islam ... start to act up,
Eurabia? Defend itself from radical Islam? Europe is mostly lost already. Its Islamization is inevitable. It is a stark warning of the perils of unlimited, unassimilated, immigration.
Counterparty risk from your broker and whoever you're counting on to buy the stuff, plus whoever your counting on to actually be mining gold instead of investors
A distinct possibility. There are no guarantees, and more than one path out of the madness we've descended into.
However I am betting that the path taken by Central Bank crooks will be the path of debasement, and a gradual impoverishment of Americans as we've hit "peak stuff". Only by allowing the developing world to become good consumerist tools like us can they save their sorry asses, and this is a zero-sum game requiring that the majority of us take a bullet for the pigmen.
Best regards and enjoy the music - there are several videos of Tal playing on Youtube... She is the most amazing talent I have seen in a while... I think this one is talented too - Bianca Ryan - 11 years old when this video was made... the story I heard, might be true - she has had no formal voice training, learned to sing from the radio, asked her dad to take her to the auditions for this show and he thought she was going to dance - he didnt even know she sang...
I talked about squatters rights extensively within the last 2 or 3 weeks.
Too late to go into it now.
Briefly: squatter's rights: they have them.
Depends on the state. In Fla you have to pay taxes for 7 years. You have
to file a tax form.
Tenants are not squatters, and in fact, can't be in Fla, because they are there with permission.
What exactly do you want to know. I think we discussed a new Fla statute which gives tenants some
rights under foreclosure within the last few days. Normally in Fla tenants have no rights except to pay
and live in a place that is inhabitable and mostly to code, and be left alone (mostly) as long as they
obey the lease.
Tal Wilkenfeld has a cd out called Transformations - it's sort of avant garde jazz rock - very advanced for her age... And I really like Jeff Beck playing sort of fusion jazz/rock... if you notice in the video he uses no picks -plays only with his hands, and he can get a lot of vibrato out of the instrument without using the arm... Another useless fact that you might not know, Jeff Beck has a car collection and he builds them himself - he is very good at sheet metal art.... It's hard to believe that he is 65 years old now... He, Clapton and Paige... all that age, all still playing as good as ever...
I'd talk about finance and econ, but man is that ever depressing right now, especially after that Vegas video on Mish - changing the locks with all the kids stuff in that place... grim...
dollar index is broken.
some money is a claim on money.
some money is real goods.
some money sits in a mattress.
some money sits in the future.
some money believes in infrastuture, banks,and entry level housing.
systemic risk is off the table, a great malaise has besieged the peoples, and they look for truth and try to beleive a better life exists for the children while they experience the happiness of personal growth.
time as a construct of money is a myth promoted by markets of money. Markets of money is what I read as an extension of the communication for the safety and future of my family.
Well for one thing the next legislature is getting an 18% pay cut.... For decades California tried to outdo the rest of the world in standards and benefits all over the place, with the result that they drove a lot of business away, and attracted a lot of people who are only in CA to collect the benefits. CA has to lower those payments to the national average, not only to balance the budget but also to stop attracting nonproductive people from everywhere... It's not going to be pretty, but as Obama said, We are out of money... I'm in favor of zero based budgeting.... take the revenues, subtract the debt service, subtract 1% for the contingency fund, and all of the rest of the spending can not be greater than the remaining revenue. It's up to the legislature to do that. It's their job, man....
"Until we get past that [the current banking system being repaired] there will be no leveling out."
....then there will be no leveling out until other factors overwhelm. Government workers are quite insulated even in their off-hours. Many of them wouldn't see an oncoming train even with the tracks ending at their desk or couch.
The federal govt could be cut the same way - when Obama was campaigning he said he was going to go over the budget line by line and get rid of the waste, fraud, abuse, and unnecessary stuff... So far I have been underwhelmed by his efforts... Remember the Grace Commission? Was that under Reagan? They had a list of 1100 things that could be eliminated in the fed budget - went nowhere - we are still paying the wool subsidy for WW1 army uniforms... Soil Conservation Service? Govt employees do not conserve soil, farmers do... This could be a really long post but I'll spare you...
mmckinl- "Conjure should tune in to the Cali channel ..."
Oh, I'm very familiar with California. Familiar enough that I remember Bob Noyce installing his own 3-phase electrical at the building on Middlefield Road. That was when he still had his office next door to Chinese Gardens.
Anyway, many years ago, in the very darkest moment of a business deal gone bad, an associate from New York told me we all start life as 5th Avenue call girls and end up 42d Street hookers. That's how I think of California.
California got turned into a cash cow and was milked dry. In the best tradition of the Boston Consulting Group.
lawyerliz (profile) wrote on Sat, 5/23/2009 - 7:35 pm
Hey dawg, how bout getting specific about what Cali should cut?
[may be my last post for a day plus]
• Cut employee benefits.
• Cut union pay scales.
• Establish caps on retirement.
• Move the State House. Not, SF, not LA maybe Bakersfield.
• Neutral judicial oversight of redistricting.
(1)systemic risk is off the table,(2) a great malaise has besieged the peoples,(3a) and they look for truth and(3b) try to beleive a better life exists for the children while(4) they experience the happiness of personal growth.
(1)maybe, maybe not
(2) ditto
(3a) always dicey
(3b) yes, and will do everything possible
(4) depends upon whom you are talking about. Not everyone is selfish.
Kohn is essentially admitting the Fed is the "Wag that Dogs the Tail."
Just as the Fed "lowered" the funds rate target when it was all but decided as 0-.25%, the Fed will "raise" the rate when the market decides that keeping dollars for even 3-months time poses a real (no pun intended) risk of the dollars purchasing less in just 3-months. That is to say the Fed will raise its target too late as inflation expectations have taken hold.
But how does the Fed pull back on the liquidity at the spark of hyperinflation? It sells long-dated, low interest Treasuries and junk MBS back into the market. At a discount: 40%? 60%? To pull out a trillion of liquidity it will need to sell 2 trillion of debt.
So build up debt now to sell back into the market at a huge discount to mop up the liquidity created by the debt expansion. It's devaluation--fiat style. Neat trick. What about all those other holders of long treasuries? Take (or leave it) 100-year bonds at an ultra-low interest rate, in other words, essentially an exchange for equity play on the U.S. of A.
I'm not saying I like everything on the list, but it shows how spread out the state is.
For bigger fish to fry, there are some pretty good targets. Have you heard of CA's "In Home Healthcare" program? People tell the state they have a relative to care for, so the state enlists them in the SEIU and starts paying them $10+/hour full time. That one program alone has grown to something like $30B a year because there's absolutely no verification of need, and the Democratic legislature gets massive contributions from the SEIU.
"Incestuous" doesn't begin to describe the relationship between the Dems and the unions.
For years here I argued the FFR was going to zero. Now I'm saying that the Fed will never willingly raise the FFR above zero, at least not in dollars you'd recognize.
1 is a definite NOT. I quote Doug Noland once again:
Current policymaking is shifting the debt burden from the private sector to the federal government sector - and, in the process, increasing the total system (non-productive) debt burden by another $2.0 Trillion or so annually. Moreover, I would argue that this momentous government (Fed and Treasury) intervention in the pricing of finance further corrodes our system’s process of allocating financial and real resources. The “debt bomb” is not being diffused. Rather, the fuse is being somewhat lengthened as the bomb enlarges.
CC:
Right. That's what pisses me off so much. Don't the F'ers at the Treasury and Fed know what kind of risks they are taking? I suspect they do, but feel their own interests are more important.
I don't believe that they have even thought about the secondary effects of their actions. Their ZIRP policies have wiped out the retirement income for most retirees. The oldsters are now having to dip into principal to meet their daily living expenses. There will be no inheritance left to pass on to their children and grandchildren.
The Boomers, if they are not insolvent due to an underwater mortgage, can expect a minimal return on any savings that they hope to squirrel away for old age.
Gen-X and Gen-Y are learning that savings and prudence are for losers and that playing by the rules is for chumps when society is being organized as a winner-take-all game of Calvinball.
They've spent the last decade burning through financial capital; now they are burning through social capital.
I don't see how the Fed can sell assets at a deep discount. If they buy for 2 trillion and sell for 1 trillion, the net effect is leaving a trillion sloshing around and cycling up to 9 trillion through the banking system. That doesn't seem like a good way to slow the hyper train, or was that your point?
There are no guarantees in this life, no matter how well you plan and save... Things often have a way of taking an unexpected turn... Some Guy (?) said "Man can count as his possessions, that which will survive a shipwreck"... The best plan is to learn as much as you can, do as much as you can, and be happy with the results... If you have lot of different skills you will more likely be able to find something productive to do... Dont get stuck into thinking you can only do one thing, or only be willing to do one thing... I get a great deal of satisfaction from manual trades, as much as programming or money management... I like farming too - up to the point where the arthritis starts in... Some Guy also said "If you dont expect so much you wont be disappointed"... I would add, dont be too proud to do janitorial or food service, since there is practically unlimited demand for those services...
Rob Dawg has it right. They will move heaven and earth to put humpty dumpty back together again. No risk too great. They are dumping toxic assets into every nook and cranny of the fed's balance sheet and the treasury is being looted. The people will get crumbs. Bank earnings will be conjured through shenanigans when organic gardening fails. It just doesn't matter to them what happens if they can't have it the way it was before then everyone is going down with the ship. The federal reserve lackeys are practiced liars, they all are. The will loot everyone, and I mean everyone who uses their system.
I suspect this speech was part of a PR exercise to follow-up the last Fed meeting's agreement to buy more Treasuries and Agencies.
Read Bernanke's paper, we're dealing with an open book. Opinions and expectations of market participants are valued very highly, a financial crisis is only in everyone's head once the government has guaranteed the banks to ensure easy credit availability. Or so they believe.
They're going to keep it up, then we'll hit another mini-panic, at which point the Federal Reserve Board will declare a yield ceiling on long term Treasuries
the net effect is leaving a trillion sloshing around and cycling up to 9 trillion through the banking system
That assumes that the 1 Trillion will stay in the banking system. Most of it will go to back fill the huge, gaping holes in balance sheets that are hemorrhaging liquidity; the balance into holes in the ground.
I am still waiting for the first banker to be shot dead on the street by an unemployed industrial worker. Then, we might start to see some real reform.
Yep, that is what is happening now. In 2-3 years, maybe not. Banks don't have to lend for money to get out, they just have to invest for their own accounts -- stocks, commodities, whatever.
I have been wondering if there have been any prowlers around Stan Neal's place or John Thain's.... They both have estates in the high rent district... Or Dick Fuld too - there is a story that Fuld was working out in the executive gym and one of the other execs went up and slugged him....
Re: Nuke (Lake George)
Spent a couple days up there with a large group of folks. One of the locals took us cliff-jumping... couple 20-30 foot and then a monstrous 70 foot one. Jumping off that 70 foot bluff and surviving was one of those memorable live turns for someone like me at the time. When we went up there the local was just like, "do what I do" and just ran himself off the cliff roadrunner style. Redeemed the time I fastroped down a USMC rappel-tower. Corpsman and SGTs thought they had a lawsuit and guy with no skin on his hands after that...
It is interesting that you have taken systemic risk off the table as a possible outcome. I don't think TPTB have as much control over things as they think.
Gen-X and Gen-Y are learning that savings and prudence are for losers and that playing by the rules is for chumps when society is being organized as a winner-take-all game of Calvinball.
They've spent the last decade burning through financial capital; now they are burning through social capital.
I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. after my first two years as an undergrad I was ready to "go Galt" or simply drop out of the social matrix. but eventually I realized what a selfish and actually impossible choice that would be. I believe we need more "chumps". stop feeding the "best and brightest" into the elite universities, stop working for the Fortune 500, ignore federal jobs and large social institutions, go start-up, go underemploy yourself, go find small businesses that actually produce something and create value, or go consult for them. reject the false culture pulled over our eyes, learn self-control and disconnect from the media machine, overload your brain with information until you start hitting breaking points. I made my choices and I'll live with the results, good or bad.
Gen-X and Gen-Y .....
They've spent the last decade burning through financial capital; now they are burning through social capital.
isnt it the boomers who spent all the capital....not that it really matters because were all in the same boat anyway. i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded i think than babyboomers. its the apathy thats a problem with younger ppl... they have a good BS detector but there power to act is just not there... more like paralysis....instead all enthusiasm is led into a faux youth driven consumer culture (modern breads and circuses etc). but i would say thats just a part of being american these days for EVERY age group.
//I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. ..//
"until true unemployment hits a quarter of the country,"
.....it has. I define "true unemployment" as being no longer eligible for an unemployment check. THIS is when the masses start getting uncomfortable AND hungry. We've seen it locally where a handful have fallen off the back side of the unemployment wagon (no longer receiving checks) - and they just disappear - all contact ceases. There won't be any organization to the hungry until they start breaking into markets for food. We've already started reading the beginnings of that new "chapter".
isnt it the boomers who spent all the capital....not that it really matters because were all in the same boat anyway. i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded
yes, blaming this on a generation, or particularly the boomers, is weak. they are in the wrong place at the wrong time (in that they are the ones currently at or nearing the point where they will need to draw from the system more than they contribute to it). we are all responsible for what has been unleashed and we all have to deal with the result in ways appropriate to our stage of life. also (as I repeat too often), a key part of the strategy of TPTB is encouraging and artificially strengthening the barriers that separate generations to create a cultural memory hole, and to turn us against one another instead of against "them".
the Federal Reserve Board will declare a yield ceiling on long term Treasuries
That'll be the day to convert any remaining dollars to something else, anything else. Right now there's no particular line in the sand, but when they define it it'll be damned obvious either (a) when it's crossed or (b) the minute the presses go 24/7 printing money.
i pay attention daily to UE numbers more than anything. because in this economy i dont think its a lagging indicator... it is the ultimate leading indicator. there is nothing that can really be done to stop the bleeding.. if i had to make a guess i would say we are ALREADY at 25% of ppl who are deeply in distressed levels of debt and/or could be considered unemployed in that what they earn isnt nearly enough to get by.
its already bad, were still in the second inning down 10-1.....
Governor plans to completely eliminate welfare for families
3:58 PM | May 21, 2009
Gov. Arnold Schwarzenegger is proposing to completely eliminate the state’s welfare program for families, medical insurance for low-income children and Cal Grants cash assistance to college and university students.
Resistance - we only ever listened to our relatives, grandparents, parents, aunts, uncles, etc. Just try to get yourself squared away as best you can and take care of you and yours. That's pretty much all any man can do. Your motto should be:"Whatever it takes".
"• Cut employee benefits.
• Cut union pay scales.
• Establish caps on retirement.
• Neutral judicial oversight of redistricting. "
Neutral judicial oversight doesn't exactly exist. Even if you have popularly elected judges, trying to apply "natural law" or some other standard they've convinced themselves is objective, it isn't possible. In districting per capita, you have to start drawing lines somewhere and carve according to some shape. Bush V. Gore shows that allowing life-tenured judges to decide election cases doesn't guarantee a non-partisan decision.
When you say "cut union pay scales", I take it you mean by a policy which respects existing law in its implementation. If the State can arbitrarily break contracts like a bust-out corporate shell, you're begging for full-on strikes.
Lucifer (profile) wrote on Sat, 5/23/2009 - 10:54 pm
Same here..
//I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. ..//
sorry to hear that. the sense of futility gets to you, but watching your peers and friends walk into it voluntarily is the harder part. money is a necessity of the present economic system, but it's sad to see how pecuniary we have become (aka we are all whores now). at least the ones you employ are honest about what they do for a living and why they do it.
Imagine the ads:
"Because of this rule, CA couldn't pass a budget like it was supposed to..."
"Because of this rule, CA had to lay off so many employees..."
Props went down last election because the idiots didn't have a reason to vote.
Fiscally responsible is outnumbered in CA. They will certainly suck the idiots in in 2010 with the Governor election.
In fact Arnold will come out hard against repealing the 2/3rds rule which will draw even more voters to repeal it.
Watch and see... its going to suck... I'm gonna seriously think about moving out.
Oil is set to fall, there is no more storage among other factors. Once that cash is freed, things get more volatile. Stock markets globally are ripe for being pulled back down from the clouds. Economic indicators are set to disappoint next week.
Once we have falling markets, that induces a flight to quality, and all kinds of concerns for sovereign nations, banks, and insurers. Credit will seize up, or at least not be as cheap as a central banker would like it to be. The next thing in line Bernanke hasn't pulled out of his toolbag is putting a ceiling on long term rates.
There is room for me to be wrong on the specifics because there are many coalescing equivalent moves. Like, maybe it isn't an equity market fall but a strengthening USD because of foreign CBs attempting to juice their way back to status quo. That would also put the peak in oil and free up the stored volatility, which could only cause equity markets to go down, etc...
I don't know how far this upcoming bit goes, but it will probably be just enough to allow for things after to drift downriver at the pace of a lazy summer. Bernanke might not bring out the long term treasury ceiling yield cap until this Fall because it would be evident
a) There was no second half recovery anywhere, but several nations did officially enter the -10% GDP depression camp
b) Without faith the US markets are reliable or will recover in any kind of meaningful time frame, the incentive is to cash out which would let the USD fall and Treasury yields rise, which would force Bernanke to expand QE
mmckinl (profile) wrote on Sat, 5/23/2009 - 11:06 pm
"we are all responsible for what has been unleashed"
~~~~
Oh BS ...
Our leadership got us here ... Trickle Down Reaganomics ...
Force fed through corrupt MSM and complicit politicians ...
The oligarchy set this plague upon us and now they are
looting the treasury to boot ...
who made the choice to buy shit they couldn't afford with money they didn't have? in the end, it can all be reduced to this. it wasn't decided in a dark smoky room by a coterie of billionaire oligarchs and high-level bureaucrats. they took advantage of an opportunity, and, many being good psychopaths, did so ruthlessly and efficiently over a long time horizon.
I tend to agree though I don't think it will happen quickly. In the "great pump and dump of 09' insiders have mostly sold (see BAC) and the next leg down will be from margin calls liquidations and cash raises. This will take twice as long as the last leg up (march-May) IMO.
america is consumer driven... im a part of it as anybody. i love my music, movies, gadgets and video games as much as any other genx or geny or boomer .... the only probelm i have with the consumer culture is that american identity becomes commdified, sold and our image as a nation is influenced by a thick gloss of pretty lies. they dont teach in school how to differentiate between junk and true value, and seperating your ego from all the mass media crap... sorta OT but i think it relates to how the public reaction to the crisis is treated as ... just another event that will eventually go away...outta sight outta mind... like the Iraq War. But it is a very real problem that cannot be turned off.
it just amazes me that the obama administration throws around press releases with billions here and billions there to corporations... and america just bats an eyelash... a part of it is the MSM as the Ministry of Truth... they have become so spineless since the start of the Iraq War. when you have washington/wall street/MSM sleeping in the same bed... it just is not good for America. meh... so depressing.
OT--GEAB No35 had an article on the ability (or lack thereof) of US and China to effectively deploy the billions in "stimulus" money their governments have promised to spend to fight the balance sheet recession (Depression or an Alfred Kahn BigMegaBanana).
GEAB's conclusion: the money will be stolen, wasted, or never spent because the BigDumbBureacracy cannot move the pig through the python.
The interview starts about halfway through the program.
He's buying land in Uruguay and Argentina.
Advises political (jurisdictional) diversification...
I don't think mp has called a recovery... He's called "stabilization", one that is quite possibly very short-lived. He clarified his position well on Friday (I think).
If the State can arbitrarily break contracts like a bust-out corporate shell, you're begging for full-on strikes.
I guess it's time that the workers joined the creditors already on strike in the Great State. Really, CalPERS and CalSTRS should not be expanding foreign investments while their beneficiaries crash and burn. There's got to be 21B available between the two.
The people of CA aren't going to make it easier to raise taxes, period, thus the 2/3rd's super-majority is untouchable. It's been tried and failed in much better climates.
In fact, if the legislature attempts to unconstitutionally bolster revenues via "fees" instead of "taxes" you could see yet another Prop that not only rolls back taxes but also places explicit ceilings on budgets tied to the overall state economy.
"i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded i think than babyboomers."
I was talking to an economics writer about the recent student protest at NYU, where he was visiting this year. He noted that the students were not well organized, had no clear goals, and wound up getting nothing. In my day students got our school to divest from South Africa. Purely anecdotal but I find today's students better informed on a lot of things but less politically active and aware (I coach a college team). I exclude Basel, but I take it he's a couple years older.
re: Retirement Income by source for all households
One more reason why it will be hard to persuade people to splurge, their incomes have been significantly cut even if their work income was untouched. These are not an irrational decisions, there is a fundamental limitation preventing people from maintaining spending
Tim waiting for 2012,
Those were people's savings other than their homes. They have since been cut in half. They are not close to being able to afford retirement (if you look in last night's thread there are more charts, including one of savings by age of head of household)
bANK fAILURE,
Do you understand how the Fed would cap long term Treasury yields? By having a standing order to buy whenever the price dropped below a certain level. Cruise control printing press
I thought the fed was already doing that across the board - buying all the bonds to hold the rates down... Hey the Fed does not have to balance their checkbook...
Basel Too:
"Really, CalPERS and CalSTRS should not be expanding foreign investments while their beneficiaries crash and burn."
Actually, it may be the best thing for their beneficiaries if they invest offshore.
Some protection from the ultimate fate of the dollar might be helpful.
Offshore investing is a crap shoot now. Russian default. hidden exposure to MBS, CDS, negative growth in China is all a possibility and is not entirely priced in at this point
if the fed were to initiate a rally in the long end by players expecting a QE move, those particiapants would go in the money at the expense of the dollar.
dollar index is already broken.. ergo, no cap on the long end.
mmckinl (profile) wrote on Sat, 5/23/2009 - 11:18 pm
ResistanceIsFeudal ~
Where were the f'ing adults ...
They were always there before ...
but since they were loaning OPM
they just gave it away ...
There wasn't any transaction ...
It was a financial fraud ...
to line their pockets with bonus money ...
the "adults" sold out, or were ignored, or were discredited, or were selectively filtered out by the power of mass communication. another disaster is in letting the masses become shareholders in large corporations. everyone demands return and the company has no choice but to deliver. the rich man invests in stocks knowing he could lose and having a core of secure wealth to fall back on. Joe6Pack and JaneSUV risk their retirement nest egg and there is no safety net if they lose. and OPM is a classic agent problem of responsibility that was only magnified by governments underwriting crappy, risky loans. and we brought back highly-leveraged debt instruments, which worked so well in the late 1920s for the wildcat banks. bankers got rich on transaction fees gained from fulfilling customer demand for lots of lousy and risky investment vehicles, then playing jenga with synthetic inventions based on them..
RockyR- "I don't think mp has called a recovery... He's called "stabilization", one that is quite possibly very short-lived. He clarified his position well on Friday."
"Bring it on. There'll be people in mile-long queues waiting to take their place for a steady paycheck at half the current rate."
Hiring enough police is never a problem. Give them a badge and a gun. Get that banker fighting wildfires. Even AAAHnold had no problem teaching kindergarten in Lalaland. How many will pay their mortgages at half the current rate? Bus drivers at half-price. Court clerks, building inspectors...How'd those NFL replacement players look? Top quality?
Tim waiting for 2012,
If it wasn't dramatic, consider this simple exercise. Those households who have incomes in the top 80 to 89.9% of all Americans, their median financial holdings totalled about $400k. This income bracket is dominated by the 55 - 65 crowd.
Apply some discounted cash flow analysis, (example):
If you had $400k at retirement, and planned to withdraw every last cent over 25 years. Let's assume as a retiree, you average a 5% return above inflation. Your annual income would be
$27,029.51
for a household. That was in the top 20% of earners.
Now if that $400k declined by ____ and went to ____, their annual income under same conditions would be _____
12.5% / $350k / $23,650.82
25% / $300k / $20,272.13
37.5% / $250k / $16,893.44
50% / $200k / $13,514.75
62.5% / $150k / $10,136.07
The baby boomers cannot save enough to retire. They will try to continue working as long as possible. Social Security will be their retirement. There's about 71 million baby boomers alive in the United States today.
re: last post
There are 71 million US born baby boomers left, but about 78 million baby boomers in the US due to immigration. baby boom is 1946-1965 inclusive
Kohn- "...the economy is only now beginning to show signs that it might be stabilizing, and the upturn, when it begins, is likely to be gradual..."
It's nice to know that Kohn is on the Conjure Channel.
so basically 90% of america needs to work til they die. i see it at my job right now. i work in an 'old' industry comparative to most companies. a third of my still employed coworkers are over 50- 55 (its a very niche industry where experience is important). they dont plan to retire. and im talking all of them from clerks to salesman to VPs.... our VPs dont make that much compared to other companies....like in the 125-150k range. well except for the new ivy league guys our investment bank owners forced on us (closers likely) they make easily in the 300k+ range.
It must be nice to be able to print money. IMF isn't too big on Keynesian output gaps.
Latvia is racing to halve an enormous government budget deficit, now estimated at 12 percent of gross domestic product, even as its economy is expected to contract by 16.5 percent this year. That is a condition of the $10 billion bailout by the I.M.F. that the European Union, of which Latvia is a member, also supported.
bANK fAILURE
What would a devaluing USD do to inflation?
Why did foreign CBs step up their purchases of the USD?
What has happened to the USD twice in the last 6 months when the equity markets plunged?
When did I say Bernanke would bring out that one last tool before spinning up the 'copters?
retirement... whats that? in my five years at my current company... only one person fully retired (and this is a 1000+ company)... she was friggin 78, a widow, and barely getting by as is. have you walked a walmart recently? its pathetic.
Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.
Too bad the early retirees are basing their decisions based on current pricing levels...
EvilHenryPaulson (profile) wrote (in reply to...) on Sat, 5/23/2009 - 11:46 pm
The baby boomers cannot save enough to retire. They will try to continue working as long as possible. Social Security will be their retirement. There's about 71 million baby boomers alive in the United States today.
exactly. we will experience diminished prospects and a lower standard of living, but they will take the brunt of the visceral punishment. it is a horrible situation for all, but nature ensures the real cost of a young and healthy person is much lower than that of an old and sick one. someone, somewhere, has to bear that cost, that or we go Soylent Green. that is just basic survival - I won't speculate about standards of living: the facts are staring us in the face. 70 will be the new 55, and 30 will be the new 20 as we adjust to the raw economic realities.
retirement... whats that? in my five years at my current company... only one person fully retired (and this is a 1000+ company)... she was friggin 78, a widow, and barely getting by as is. have you walked a walmart recently? its pathetic.
I'll bet her bosses weren't hurtin' tho. And that's all that matters, no?
I better quit before I get myself banned. Goodnight.
Feckless Ness / Basel Too, (I thought it was one person posting twice at first)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
ahahaha that rox... i think boomers are learning fast that SS might not be there (or severely cut) when they're 80. take it while youre 65! this is just ... just sad. golden years... at least they wont be fighting for a job vs illegals.
there is a fundamental limitation preventing people from maintaining spending
Yes, the credit cycle is not a belief or psychological effect, it's hard numbers from debt accumulation.
The baby boomers cannot save enough to retire.
Obvious from several years ago.
The real estate & stock market crash were baked in since 2001.
Most boomers will probably end up working a 20-30 hour week, which they might possibly have done anyway.
Anyway, many years ago, in the very darkest moment of a business deal gone bad, an associate from New York told me we all start life as 5th Avenue call girls and end up 42d Street hookers. That's how I think of California.
California got turned into a cash cow and was milked dry. In the best tradition of the Boston Consulting Group.
House prices can't recover unless there's substantial immigration, most likely from Mexico.
A significant part of the problem is real estate prices, they are a redistribution of income from future generations to earlier generations.
If future generations have no increase in standard of living, they can't pass it down through RE prices.
Basel Too / Feckless Ness, (at first I thought it was one user posting twice)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
Basel Too (profile) wrote on Sun, 5/24/2009 - 12:02 am
Early retirement claims increase dramatically
Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.
Too bad the early retirees are basing their decisions based on current pricing levels...
it's life in a fantasy land and things are going to get wicked when the money runs out.
"- I'll bet her bosses weren't hurtin' tho. And that's all that matters, no?" well our old management were pretty respectable in there own way... they never made huge salaries or benefits, kind of the old school family run type business atmosphere... but our new guys are the literal ivy league slime forty somethings (what will look good on my resume type). we know they came to sell us, or bankrupt us to get pennies on the dollar that the investment bank wanted. the stupid investment bankers (abn amro) wanted us to merge with a stupid company that was close to bankrupt\cy in 2006... and now theyre mistake is costing us... ivory tower idiots. all because they wanted to bust up one plant that had a union that really wasnt costing us THAT much. i digress....
"so basically 90% of america needs to work til they die."
So what's that going to do to the unemployment numbers? Do you think it will count if a 70-year old worker gets laid off? If the workforce changes like that, the unemployment numbers are likely to get more misleading than they already are.
The big problem is; there aren't enough jobs for 90% to work until they die.
I guess we could pass a law requiring service stations to employ pump jockeys and window-washers. Excess job-seekers will push down the value of labor, and it could get to the point where it's not viable to work for a living. Then what?
broward,
It's been visible for some time, but the comforting blanket of uncertainty and hope is quickly being pulled away. I don't mind if it is obvious, because I even like calling out waypoints on a road trip even when everyone knows where we're going in advance
EvilHenryPaulson (profile) wrote (in reply to...) on Sun, 5/24/2009 - 12:08 am
Basel Too / Feckless Ness, (at first I thought it was one user posting twice)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
I look for unemployment to become permanent (just don't call it the dole!) within a year's time.
Gradual. Synonomous with anemic. Almost non-existant for most people, completely non-existant for the currently unemployed. Marginal. Within the margin of error.
Khon is too savy to add: a currently unforseen disruption will negate these forecasts as we will then break much lower than expected.
it's life in a fantasy land and things are going to get wicked when the money runs out.
I'm only fifty but I suspect that the early retirees are thinking the same thoughts.
1 - avoiding the unpleasantness of constant layoffs. The company I worked for during the Dot Com crash had layoffs every quarter. By the time I reached year four, I volunteered for the layoff because I was tired of the unpleasantness and there was clearly no career path.
2 - increased taxes. Just as obvious, if you're making a lot of money, you're going to get taxed more. Far easier to sell out, move to a cheaper area and take a low-income job.
Want to see what's going on in the high-end housing market? Take a look at Craigslist rental listings in the high-end neighborhood nearest you. For example, I looked at Los Gatos (here in the Silicon Valley), for houses renting for $4,000 per month or more.
There are 24 total, with 9 listed yesterday alone. They are generally plush multi-million dollar single-family homes. They have obviously been updated recently. Many are clearly being marketed simultaneously for sale (or have been recently).
Why do these folks want to give renters the chance to trash these plush dwellings?
Think there aren't some desparate owners, and future distressed sellers out there? Anybody buying a home in a >$1M neighborhood today is making a very big mistake. Discounts are coming.
Question about China:
Rumor has it that China is stockpiling commodities. To me, this makes no economic sense: Importing commodities is not stimulative to a domestic economy.
Does it make sense to anyone here?
The stockpiling of imported commoditie makes me wonder if they anticipate ... a naval conflict ....
Anyone share this paranoid thought?
When you work fewer hours, as you might in France, you have more time to babysit, exercise, discuss politics, or volunteer for civic duty. Your health and standard of living might actually rise, along with your productivity/hour.
Unfortunately, or maybe fortunately, I no longer remember remember the guy's name. Selective memory I guess. I was told he was involved in the startup of Airborne Express. Strange guy. I remember wincing when he said it.
I will be honest, high interest rate environment is good for me, very very good. I would make money hand over fist. I have no debt and got promoted to a salaried position last summer. Life is good and getting better everyday. But high rates would make it even better.
The Bush era wasn't fun. Interest rates collapsed and so did a big chunk of my money. Finding a good job out of college wasn't easy. I eventually ended up at...........right Wal-Mart as a unloader. Then manegement trainee, though I quit that to work at Nabisco...........as a part time merchandiser. I hated Wal-Mart.
Bleakness is the sin of society. We need investment and new areas of growth. The old consumption system that the Oligarch and Billies wanted has reached its end. It produced a tech revolution and a 2nd sexual revolution by the end of the 90's. But everything ends and bleakness returns.
Sounds like they are hoping for stagflation but going to get deflation Japaneese style
Kohn said closer cooperation between the Fed and “fiscal authorities” is an “inevitable aspect of effective policy initiatives to meet our macroeconomic objectives in the current financial and economic crises.” He reiterated that the central bank is working with the Obama administration to seek additional powers for the Fed to tighten credit.
Plosser, by contrast, said in a May 21 speech that “when a nation’s treasury or finance ministry and its central bank work too closely together, there is a clear risk that the government’s spending will end up being financed by the central bank’s power to create money and that the public will become confused as to their respective roles.”
“History shows us that you can get very bad economic outcomes with rapidly rising inflation,” said Plosser, 60, the Philadelphia Fed’s president since 2006.
Kohn Says Fed Asset Purchases May Boost Economy by $1 Trillion - Bloomberg.com
If you havent seen this yet, check it out... 63 year old Jeff Beck, one of the worlds best guitarists ever, playing with Tal Wilkenfeld who is 21 in this video... Totally amazing talent...
YouTube - Jeff Beck with Tal Wilkenfeld at Crossroads 2007 Live
meanwhile Geithner Adopts Part of Wall Street Derivatives Plan
“The banks appear to wish to maintain the intra-dealer market and raise barriers to new entrants to keep the OTC business as compartmentalized as possible and to protect their profitable market conditions,”
Geithner Adopts Part of Wall Street Derivatives Plan (Update1) - Bloomberg.com
In my opinion, no one is addressing the real question: How do we get the economy to function normally now that the Fed (reserve and gov) have intervened massively to prop up failed companies and business models? The fed has essentially backstopped the housing, banking, automotive, insurance and soon health care industries. They have given horrible, failed institutions (citibank, BofA, etc) an unfair advantage by publicly stating that they are too big to fail. How will we deal with the enormous mal-investments generated by this intervention?
I don't mean to be argumentative, but define "normal," Nuke. Kohn throws that word around too, but I don't think it means what he thinks it means.
"How do we get the economy to function normally " ?
~~~~
There is NO going back ... The FIRE economy is dead ...
There will have to be a new economic model ...
getting there will entail unimaginable suffering and dislocation ...
and it will all be worse because we are bailing out banksters ...
and not Main Street ...
I define normal as operating without constant cash infusions from the Treasury, federal loan guarantees, and massive intervention to hold down mortgage rates.
getting there will entail unimaginable suffering and dislocation
I disagree.
I think it's imaginable.
we're all normal
dont worry, our economy will be back to normal when they initiate plan b... probably a war.
We're all poor...
I think we are going back to the farm age. Biomedical/genetic/farming. Grow cows in your own home in a nice box. Have farm using solar panels (battery technology), etc. Grow your own food at home.
We are also all Macke now!
plan b... probably a war.
I thought we had two going already?
apparently I'm not normal, because accordiing the state of Idano I'm a cunt, i.e., Can't Understand Normal Thinking ....
i dont get the last part of this statement...
Kohn thinks the recovery will "be gradual amid the balance sheet repair of financial intermediaries and households".
does he mean walking away or being foreclosed repairs our households? or maybe he thinks a downpayment on a cardboard box below an underpass will repair our balance sheets? oh i get it now.
OT:
Spent the day in Lake George, north of Saratoga Springs NY (where I live). Good sized crowds, though parking and restaurant tables were easy to find. Most surprising was almost every hotel/motel had vacancies. This is normally not the case. Anecdotal evidence jives nicely with CR's weekly posts showing Revpar down 20% YOY. Also, LOTS of for sale signs on lakefront cottages.
broward (homepage, profile) wrote on Sat, 5/23/2009 - 6:57 pm
I thought we had two going already?
well a third war wouldnt hurt... maybe a bigger enemy... one that wouldnt mind playing the bogeyman... china or russia? hell russia already switched to the euro as its reserve currency last week.. .more reason to start a war with them.
Nuke wrote:
How will we deal with the enormous mal-investments generated by this intervention?
We will deal with it by enduring a long, painful depression.
broward
getting there will entail unimaginable suffering and dislocation
"I disagree.
I think it's imaginable."
~~~~
Time will tell ...
dont worry! our overlords may not be the best overlords in the universe but they are OUR overlords. they will invent a nice diversion for us... kind of like a hollywood blockbuster war movie. something to wave the flag for and feel good about ourselves.
How do we get the economy to function normally ...
How will we deal with the enormous mal-investments generated by this intervention?
1) by playfully bickering with like minded people on some blog. or...
2) parroting our favorite celebrity idiots like rush, glen beck, hannity, msnbc talking heads, etc. or...
3) ignoring it and focusing on the exciting developments on american idol or pro sports.
that's how
Shadow - thanks for the Saturday Rock Blogging - good stuff. I'm sure the fact that she's braless had nothing to do with your appreciation...
Maybe we're headed back to the seventies in more ways than economical.
Kohn stated "The large output gap will keep long term interest rates and inflation in check "
Wow, this guy knows what the output gap is because he knows exactly how much of every good every single person in the world wants at this moment and what they will want the rest of the year. He needs to be our chief central planner at the politburo.
Really, the whole concept of an output gap is absurd. Stop screwing with the market and sending false signals all over the place.
And now I expect that many of you are retracing the comments to find the link and go watch the braless bass player you skipped over earlier, unawares!
Hee hee hee. I have this thread all to myself for a few.
You wish..
CR,
As I said before, Kohn and Fischer are not on the same page. Your take?
They obviously serve the highest quality koolaid at the Fed.
There's no way they'll ever have the opportunity or time to unwind their positions, because the zombies they're supporting simply cannot function without ongoing cash infusions, and the combined drain of DC deficits (including TARP, AIG, PBGC, etc.) / FDIC backstop / GSE MBS purchases / etc. will push monetization past everyone's pain threshold.
Their actions are not delaying or denying a depression, they're guaranteeing one.
"Really, the whole concept of an output gap is absurd. "
~~~~
Not if there is no mal ~investment ...
As soon as we return to buying HumVees and McMansions
the output gap will be filled ...
Humph,
Kohn is dreaming.
That last thread showed the depth of the debtberg we have floundered upon.
As long as we bleed dollars in mass quantity for overseas stuff and oil, without a massive drop in the dollar, we are going to be Japanese.
Japan could have exited their funk fairly quickly with a larger devaluation and homeland inflation. Real inflation, not that pale managed shadow they put over a massive debt bust.
Weeeeellll, since we import so much more than Japan, our creditors are going to do it for us.
So, there will be no return to normal Greenspanian monetary policy within Kohn's lifetime.
As I stated, buckle up, get ready, and watch the creeping devaluation.
Like watching glaciers melt, all of sudden there is a big calving event and all the observers are terrified, but the slow grind continues after the waves pass.
Last year was a big chunk of ice, but not the main event.
As for fixing FIRE- that too will take quite a bit of time and effort to reorganized foolish endeavors.
I am sorry, but once quantitative easing was deployed, the dollar will no longer be stable.
Someday this war's gonna end...
We cannot have an output gap!
"Their actions are not delaying or denying a depression, they're guaranteeing one."
~~~~
They know we are going into a Depression ....
and they are protecting their pay masters ...
Banksters, Health Care Companies and the Military Industrial Complex.
We need Frasier Crane. From Cheers, paraphrased:
"Hello in there Kohn. Tell me, what color is the sky in your world?"
...the Military Industrial Complex.
Maybe we are reaching the endgame: gold and commodities rising, equities and bonds falling. Things progress slowly until some large player panics first. I bring this up to my peers (educated 20 somethings), and they think I am crazy. However, so many unthinkable things have happened lately that I am starting to make some inroads. So many young people in this country have only known easy prosperity that they have developed a sense of entitlement. It will require a long and painful recession to dis-abuse them of this notion. However, in the long run our society will be better off for it.
Barfly:
Yep. That's why most major military gear is sourced based on the dominant Congressional members. In the 1980's, Raytheon's main plants were located in MA (home of Tip O'Neil and Ted Kennedy). I lived within a couple miles of the Watertown plant. After the Republicans took over Congress, they moved most of their production to states like AZ and Georgia.
Kohn- "...the economy is only now beginning to show signs that it might be stabilizing, and the upturn, when it begins, is likely to be gradual..."
It's nice to know that Kohn is on the Conjure Channel.
barfly
...the Military Industrial Complex.
~~~~
Glad to hear someone else pays attention ... yep that's what Eisenhower originally intended to say, until discouraged ...
"the military, industrial, congressional complex". ...... the truth was too radical ...
mp,
I wouldn't give Kohn THAT much credit.
OT. For those following the NYT writer's story, one of Megan McArdle's followers has posted the bankruptcy filings to scribd.
I'll admit I read them but I don't feel good about having done that. : ( I'm shocked that her sister loaned her $30k and she chose to clear it through bankruptcy, but still, I feel kind of creepy for having read them.
I post the links here because I know other readers are following the fallout, but I shared my quesiness as a warning!
Patricia Barreiro (Sisson) 1998 Bankruptcy Filing
Patricia Barreiro 2007 Bankruptcy Filing
I am in the military. We could cut the Pentagon Budget by 30% with no degradation in readiness. However, the secondary purpose (some would argue primary) of the military would go unfulfilled: providing civilian employment to powerful constituencies.
"How will we deal with the enormous mal-investments generated by this intervention?"
~~~~
One persons mal-investment is another's pay day ...
Banksters, Health Care Companies and the Military Industrial Complex will have pay days ...
While everyone else starves ...
Memorial Day:
FIELD OF FIRE
Fort DeRussy’s buried under summers,
The ramparts and the ditches shoveled then
In ’61, abandoned by the bummers,
And gone the hundred-pounder Parrott gun
The field of fire’s over grown with trees,
Third or second growth of pine and oak
Where snipers training steadied on their knees,
And first lieutenants practiced saber strokes
Over east the valley of Rock Creek
Down a steep decline that can’t be flanked,
And over east the line of Seventh Street
Where Jubal Early’s raiders drew a blank
A hundred forty summers pass and four
The ramparts are the rounder for the rain,
A generation fights another war
And then a field of fire grows again
-- Pavel
Regarding the "military industrial complex"...
I found it fascinating that the MIC was regarded by democratic voters as a Republican evil empire, when the Dems were the ones dominating the hill (and funneling jobs to their districts) via the Pentagon for most of the 20th century.
Memorial Day:
1945
I remember the fleet in the river
Long hulls with grey skins
Guns like fingers, blunt ends pointing
Turrets low in the autumn sunshine—
How many who were there can still remember?
How many dead are not remembered
Except by someone old who loves?
-- Pavel
mp
Conjure should tune in to the Cali channel ...
programs, jobs, slashed ...
Then 45 other states ...
the next leg down ...
local devastation while the banksters get trillions ...
TJ and The Bear
"Regarding the "military industrial complex"...
I found it fascinating that the MIC was regarded by democratic voters as a Republican evil empire, when the Dems were the ones dominating the hill (and funneling jobs to their districts) via the Pentagon for most of the 20th century."
~~~
It's both sides of the aisle ...
The repugs have the majority of bases ...
Libs like Ted Kennedy had no problem with huge military programs, as long as they were built in places like Lynn and Watertown.
Kohn is a Federal Reserve lifer and a Bush appointee. Anybody else know anything that would indicate he's particularly insightful or well-rounded? Sounds rather insulated, actually.
Donald Kohn - Wikipedia, the free encyclopedia
WE MEET AGAIN
Hotel Tashkent
Tank troops on leave
From Afghanistan
A general in black uniform
Riding up
A tall papakha hat
Sheepskin hat
Black uniform coat
“A hard road you’ve traveled”
“Yes, somewhat,
Somehow”
I say
And in the cold pavilion
On the winter street below
They spoon their warm white gruel
Skim kasha from their big white bowls
With large soup spoons
Butter first, on top
The race of human travelers
Puts down the bowl
And licks the spoon
Down spoon, down bowl
A hard road ahead
We rise until we meet again
We meet again
Will meet again
Will meet again
Pavel
May 14, 2009
"Kohn is a Federal Reserve lifer and a Bush appointee."
~~~~
Kohn is "on" message ...
Keep the people misinformed ...
while the looting continues unabated ...
As for basing, largest military concentrations are in CA, HI, WA, NC, SC and FL. It's pretty evenly spread out. Thanks to the structure of the BRAC program (the Pentagon chooses the bases to close, and Congress can only vote the whole list up or down), basing is usually far less politicized than procurement.
Nuke
Libs like Ted Kennedy had no problem with huge military programs, as long as they were built in places like Lynn and Watertown.
~~~~
Republicans do not have a monopoly on hypocrisy ...
Theirs is just more blatant and cruel ...
What channel is Mrs Watanabe watching?
"Most of Mr Obama's spending is devoted to social programmes rather than growth promotion, which may exacerbate America's over-consumption problem and delay sustainable recovery."
Professor Yu Qiao-Financial Times Editorial page, Apri1, aught 9.
question: Why is Private Capital going aggresively at low end homes, infrastructure, and banks? All you need is a company store....
*took out Obmama's and Ampril.....if a comment is edited in the blogosphere does anyone read it?
Nuke
Look at the Congressional districts , not the states ...
The House has the "power of the purse" ...
Whose message, mmckinl? Bernanke's? Geithner's? Why have we seen no rifts develop under the new administration?
That was a rhetorical question. No need to answer. Really.
mercantilism has worked so well..
//Professor Yu Qiao-Financial Times Editorial page, Ampri1, aught 9.//
Pavel - I must say your Civil War poem, earlier, moved me. Exactly why, I don't know, but then again, that is the function of art. Thank you.
""Most of Mr Obmoma's spending is devoted to social programmes rather than growth promotion, which may exacerbate America's over-consumption problem and delay sustainable recovery.""
~~~
LOL
Social programs for the banksters and well connected ...
Infrastructure programs for pols friends ... dem and repug ...
I am glad mp has begun to believe the situation has stabilized. The ship might still make it into port with minimal loss of life. This is for selfish reasons; I just don't feel like crash and burn will be all that fun.
mmckinl:
Bases tend to be in republican districts because military members and DOD employees tend to vote republican. If you build a base, a republican constituency will follow. However, in defense of Pentagon, basing decisions are usually made based on strategic/tactical concerns. There are, of course. exceptions. Overall, there is MUCH less politics in basing than in procurement. Like I said, BRAC is usually pretty good about shutting ineffective bases. There is no such program for eliminating stupid weapons systems and programs.
Alas after Obama, the beguiled candidate, I’ve had enough of American politics
America is now Darwinian like we’ve not seen in some time i.e. every man and women for themselves.
The History of The World Part 1 ironically defines America today !
YouTube - The French Revolution (from The History of The World Part 1)
Count de Money ( Wall St Crooks )
Good To Be The King ( Bush now Obama )
The piss boy with the bucket ( American taxpayers )
BOL to everyone and I’m supremely confident that I’ll be a very content survivor ( and I’m not talking about the pseudo reality show that defines America today )
nova,
I would like to believe the worst is behind us. I just don't see it.
It seems that O-man said something about the US being out of money.. at least drudgereport is spinning it that way.
"There is no such program for eliminating stupid weapons systems and programs."
~~~~
So true ...
We are outfitting for the Cold War ...
Poster Child : Jack Murtha D -Penn
Kohn reveals the fatal flaw in all these efforts. There is an assumption that the current banking system can be repaired and also must be repaired no matter the cost. Until we get past that there will be no leveling out.
How does that translate in Chinese or Japanese?
Sat May 23 2009 10:32:18 ET
In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."
C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.
SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.
Hubris?
//Kohn reveals the fatal flaw in all these efforts. There is an assumption that the current banking system can be repaired and also must be repaired no matter the cost//
My neighbor, a retired Col who had a quad bypass and emphysema. He is back from the hospital and was sitting on his deck smoking. He is a good man but he isn't going to change...
He is the American consumer. He is not going to let go of smoking, and the consumer is not going to stop spending until a force outside them makes it happen. The culture of materialism is not going to change, We are not going to cut back. We will keep searching and trying to revive the monster until it kills us or it is obvious to even the dumbest that the horse ain't get going to get back on its feet.
Hubris? Maybe but it is more inertia and ossified thinking. It's all they know so all they try.
Why? You guys were doing such a splendid job before..
Crisis Raises New Issues for Executive Coaches
- Bloomberg.com
02:59 PM Tuesday May 19, 2009
By John Baldoni
1999 was the year of me! 2009 may be the year of us!
At least that is what we may infer from a new survey of seventy executive coaches conducted by WJM Associates, an executive coaching firm located in New York City. As the survey states, "the change [in coaching priorities] seems to reflect the trend of executive coaching being used by organizations to address specific business issues, rather than for individual, general 'self-improvement'."
I am not without a sense of humor.
Seizing the Silver Lining Checklist #5: Customer-Focused Cost Cutting
- Bloomberg.com
01:40 PM Friday May 22, 2009
By Scott Anthony
This article is part of a 10-part series highlighting what companies need to do to transform uncertainty into opportunity. The full list will be posted on HarvardBusiness.org and SilverLiningPlaybook.com. The Silver Lining launches June 1.
Rob Dawg,
They think they can get away with that crap.. again.. that is hubris not inertia.
"There is an assumption that the current banking system can be repaired and also must be repaired no matter the cost. "
~~~~
And they will pursue those efforts until the economy crashes ...
Because they are trying to maintain and protect the wealthy ...
While there is no wealth there without the shadow banking system ...
with tens of trillions in CDS and hundreds of trillions in derivatives ...
All based on our dollars,
so when it crashes, "We the People " get crushed ...
and Jesse weighs in on the C-SPAN interview
23 May 2009
Ladies and Gentlemen: the US Is Insolvent
Jesse's Café Américain: Ladies and Gentlemen: the United States Is Insolvent
"analysts predicting lower-than-desired inflation"
Says it all right there. Our leaders are idiots, following an economic philosophy that does more harm than good.
mmckinl,
"My precious, they want to take away my precious"
I hope they have ugraded to reading animal entrails...
"analysts predicting lower-than-desired inflation"
mp
you see this ? Play this on the Conjure Channel ...
Jesse's Café Américain: Ladies and Gentlemen: the United States Is Insolvent
Government, politicians, billionaire etc. are not responsible for our problems. There was not some devious plot forged on Jekyll Island for world domination. Where we stand today was arrived at by a path dependent series of small steps of people pursuing power in culturally condoned ways. It's a giant chinese finger trap with huge momentum- but the players are mostly benign, with few true conspiracies.
Oil Slick Dick was glad to hear that!
We wants it, we needs it. Must have the precious. They stole it from us. Sneaky little banksteres. Wicked, tricksy, false!
adornosghost,
humans have far less power over their destiny than they believe.
Nuke,
What would you think about the US withdrawing its bases from Japan and South Korea and stationing those forces in places like Alaska, Guam, and Hawaii? I think it would save some cash and provide an economic boost to the states in question.
I predict lucifer will be the "last man standing" on Hoocoodanode.org.
IT WAS OUR BIIIIIIIRTHDAY PRESENT!!!!!!!
barfly,
People like you are not my true audience.
BBQ Banker. I tried following the directions; cooking with smoke and mirrors but it still came out all fat and entrails.
Rob Dawg,
They are still working out the bugs.. but one day you will be able to cook a make believe meal with smoke and mirrors.
getting there will entail unimaginable suffering and dislocation
"I disagree.
I think it's imaginable."
All depends on how active your imagination is. Given the state of denial out there, even my overactive imagination is being stretched to the limit.
Japan is actually a pretty cheap place to station US forces because the Japanese heavily subsidize our presence. I just came from a 39 month sea tour in Guam. It is enormously expensive to keep bases there. Shipping stuff out to Guam (people, part equipment) is a huge cost. So is housing. Hawaii is also very expensive, but not as bad as Guam. Overall, however, I think we should reduce our presence overseas. There is no good reason for us to maintain a large force structure in Germany, for example.
People like you are not my true audience.
a hauki for your pleasure:
lotta little towns
never gonna settle down
the buck stops here.
*thanks for the jesse update linky.
"This land today, shall draw its last breath
And take into its ancient depths
This frail reminder of its giant, dreaming self"
YouTube - John Cougar Mellencamp- Human Wheels (live 1993)
They are still working out the bugs.. but one day you will be able to cook a make believe meal with smoke and mirrors.
They will market it is as low cal and environmentally friendly
Jesse's latest missive makes me think that the time is growing short for adding some Central Bank currency debasement insurance to your portfolio.
My favorite vehicles are miners, primarily silver, gold and copper. Most gold and silver miners have just cleared multi month bases, including SSRI, AUY, SLW and LIHR.
Long dated out-of-the-money calls are the best way to insure against the wealth stealers and crooks in your friendly neighborhood Central Bank.
Rob, you ought to love this:
"If the legislature can pass a majority rule, it can more easily cut spending and raise taxes," says Rick Jacobs, whose Courage Campaign is pushing to eliminate the two-thirds rule.
There is no good reason for us to maintain a large force structure in Germany, for example.
Ever heard of an ambitious little fellow named Putin?
the time is growing short for adding some Central Bank currency debasement insurance to your portfolio.
My favorite vehicles are miners, primarily silver, gold and copper. Most gold and silver miners have just cleared multi month bases, including SSRI, AUY, SLW and LIHR.
Yes, because when paper money is trashed, what you want to be holding other pieces of paper, denominated in paper money.
I don't count on anything other than physical, in my possession. Everything else seems silly to me.
CEF- is a non derivative claim on glod and slivers, and its in Canada....WTF do I know, Im just fuckhole promoting bullshit on a blog. Its going to put in a golden cross....soon.
bobn++
Nothing beats fistfuls of the yellow and white metals.
The Way Out ...
Print money without debt ...
Underwrite it with higher taxes on the wealthy ...
financial transactions, corporations and estates ...
tariffs if need be ...
They would be called "Greenbacks" ...
Just like Lincoln created to pay for the Civil War ...
.
.
.
& Put the Fed into the UST ...
Also an alternative view of the Chrysler/GM fiascos from my neck of the woods:
"in the central Oregon city of Redmond, hard hit from the burst of the housing bubble, Ricky Suganuma figures no longer having to carry the Jeep brand built by Chrysler will make it easier for him to get out of the red, as long as his sales of Chevy pickups hold up. n the Northwest, six dealerships in Oregon and 15 in Washington got the news Thursday that they were on a list of 789 dealerships being closed by Chrysler as part of its bankruptcy proceedings.
Most of them still have other brands to fall back on, like Dave Hamilton Chevrolet-Jeep in Redmond, where Suganuma is general manager. He said Chevy pickups remain big sellers, despite the construction crunch.
"Right now the only reason my financial statement was in the red was new cars," he said.
He had already cut his advertising budget 85 percent back in November, without seeing his share of regional sales drop, trimmed payroll 10 percent by not filling vacancies, and expects to be able to keep his 30 employees working, even if he loses the General Motors franchise and is left with used car sales and an independent repair shop.
While he had hoped to keep the Jeep franchise, he said, no longer having to pay inventory charges on the vehicles will cut expenses significantly."
So not every dealer thinks the world is coming to an end.
TJ and The Bear (profile) wrote on Sat, 5/23/2009 - 6:37 pm
Rob, you ought to love this:
"If the legislature can pass a majority rule, it can more easily cut spending and raise taxes," says Rick Jacobs, whose Courage Campaign is pushing to eliminate the two-thirds rule.
I've been following this closely. Well, except for a break this weekend. It is unbelievable the lies that are being promulgated. The only thing limiting the Legislature from raping the taxpayers is the 2/3rds requirement.
Nuke,
Thanks. I agree that exiting Germany is a good idea. Let them build a force to defend themselves.
Well as long as you can sell your calls before they shut down your brokerage account, you'll be OK. The money may be debased, but I'd rather have 10 times as much as I started with ... I figure I will need it to pay for shit.
106th comment ignores 46
signal to noise is very high....
-1 edit
Kunstler:
Not least of the problems entailed in all this are the scary political consequences. It's one thing for a business such as a bank to fail; its another thing for the public to lose confidence in banking, or their own currency, or the credibility of all the people who work in banking, or the authority of those charged to regulate these activities, or the courts and their officers who are supposed to adjudicate misconduct in them. When faith in all these things starts to go, all bets are off for even larger social constructs like democracy, justice, and the destiny of a federal republic.
Nuke, they do seem to have problems however with wind farms off the coast in front of their mansions...NIMBY!
Aye, and there's the rub.
TJ and The Bear wrote:
When faith in all these things starts to go, all bets are off for even larger social constructs like democracy, justice, and the destiny of a federal republic.
Right. That's what pisses me off so much. Don't the F'ers at the Treasury and Fed know what kind of risks they are taking? I suspect they do, but feel their own interests are more important.
What's the first thing FDR did ?
Bank Holiday ....
Nuke, it is also time that the europeans across the board defend themselves. After watching them in Kosovo, they couldn't organize a f**t after a Boston Backed Bean dinner. No more american blood or money. They are after all some of the richest folks on the planet. I am sure if radical islam or the soviets start to act up, they can send them a stern message of warning, then another and another.
what credibility?
Well as long as you can sell your calls before they shut down your brokerage account, you'll be OK. The money may be debased, but I'd rather have 10 times as much
Counterparty risk from your broker and whoever you're counting on to buy the stuff, plus whoever your counting on to actually be mining gold instead of investors;
Timing risk - you sell and then the currency debases another 10x;
I'll admit, though, it's more liquid if everything works out right.
loggin out to read the "systemic failure, dystopian future of epic fail" be right back....
have a drinky, when you post a linky.
YouTube -
mothers little helper
Don't the F'ers at the Treasury and Fed know what kind of risks they are taking?
I call it "firebreak economics." The Treasury and Fed are so busy stamping out the open flames that they (incorrectly) don't think they have time to worry about the consequences.
nodhannum - we do what we do because we have to. Realpolitik.
I'm not sayin' I like it. However...
it is also time that the europeans across the board defend themselves. ... I am sure if radical islam ... start to act up,
Eurabia? Defend itself from radical Islam? Europe is mostly lost already. Its Islamization is inevitable. It is a stark warning of the perils of unlimited, unassimilated, immigration.
mckinl
the first thing FDR did was fall screaming out a cunt...
I usually turn your shit off so fast, it kills the thread.....
rents do always go up, up. up !
(had to get it out of my sytem )
Cuvaison 2006 Zinfandel "bald Mountain Vineyard." Nom, nom, nom.
bANK fAILURE
the first thing FDR did was fall screaming out a cunt...
I usually turn your shit off so fast, it kills the thread.....
~~~~~
?
Counterparty risk from your broker and whoever you're counting on to buy the stuff, plus whoever your counting on to actually be mining gold instead of investors
A distinct possibility. There are no guarantees, and more than one path out of the madness we've descended into.
However I am betting that the path taken by Central Bank crooks will be the path of debasement, and a gradual impoverishment of Americans as we've hit "peak stuff". Only by allowing the developing world to become good consumerist tools like us can they save their sorry asses, and this is a zero-sum game requiring that the majority of us take a bullet for the pigmen.
get ready for the third world, America.
BTW Shadow, thanks for that Beck video, the girl has some amazing bass chops.
A distinct possibility. There are no guarantees, and more than one path out of the madness we've descended into.
I see where you're coming from.
I'm not sure there's even one path oout of the madness, however.
this is a zero-sum game requiring that the majority of us take a bullet for the pigmen
It's time to give the pigmen some bullets.
The video of the day with Krugman is in Cantonese.. You expect most ppl here understand?
sorry mckinll,
whenever I feel aligned with your thougts I turn you off....
I know that you are American, older than me, and promoting value sets that are different than my own.
Best regards and enjoy the music - there are several videos of Tal playing on Youtube... She is the most amazing talent I have seen in a while... I think this one is talented too - Bianca Ryan - 11 years old when this video was made... the story I heard, might be true - she has had no formal voice training, learned to sing from the radio, asked her dad to take her to the auditions for this show and he thought she was going to dance - he didnt even know she sang...
Bianca Ryan - 11-Year-old Singin
most of my friends are Amercan, older than me, and DONT get it.
mostly what I look for here is Americans that are younger than me, and GET it.
bANK fAILURE
Accepted ...
Please enlighten me as to your take ...
I put out there what I am certain is true ...
if there can be any truth to be found these days ...
the girl has some amazing bass chops
Yeah, those too!
Somebody called me from previous thread.
I was at Angels & Demons and I liked it.
I talked about squatters rights extensively within the last 2 or 3 weeks.
Too late to go into it now.
Briefly: squatter's rights: they have them.
Depends on the state. In Fla you have to pay taxes for 7 years. You have
to file a tax form.
Tenants are not squatters, and in fact, can't be in Fla, because they are there with permission.
What exactly do you want to know. I think we discussed a new Fla statute which gives tenants some
rights under foreclosure within the last few days. Normally in Fla tenants have no rights except to pay
and live in a place that is inhabitable and mostly to code, and be left alone (mostly) as long as they
obey the lease.
majority of us take a bullet for the pigmen.
Majority already took a bullet, they're paying on fixed real estate loans with declining wages.
Tal Wilkenfeld has a cd out called Transformations - it's sort of avant garde jazz rock - very advanced for her age... And I really like Jeff Beck playing sort of fusion jazz/rock... if you notice in the video he uses no picks -plays only with his hands, and he can get a lot of vibrato out of the instrument without using the arm... Another useless fact that you might not know, Jeff Beck has a car collection and he builds them himself - he is very good at sheet metal art.... It's hard to believe that he is 65 years old now... He, Clapton and Paige... all that age, all still playing as good as ever...
I'd talk about finance and econ, but man is that ever depressing right now, especially after that Vegas video on Mish - changing the locks with all the kids stuff in that place... grim...
...and promoting value sets that are different than my own...
so, express yo'sef
my take?
dollar index is broken.
some money is a claim on money.
some money is real goods.
some money sits in a mattress.
some money sits in the future.
some money believes in infrastuture, banks,and entry level housing.
systemic risk is off the table, a great malaise has besieged the peoples, and they look for truth and try to beleive a better life exists for the children while they experience the happiness of personal growth.
-2 fer spellin.
Hey dawg, how bout getting specific about what Cali should cut?
There is stuff (and services) and future stuff (and future services).
Money is a symbol. A useful symbol until it isn't a symbol anymore.
Feckless. There is no normal.
There is stuff that goes on for a long time, but there is no normal.
laywerliz,
Mish put a decent list together a while back...
Mish's Global Economic Trend Analysis: Mish's California Budget Proposal
I've got lots of other prime examples.
the whole thing is liz,
money is fungible...more fungible than me.
time as a construct of money is a myth promoted by markets of money. Markets of money is what I read as an extension of the communication for the safety and future of my family.
Well for one thing the next legislature is getting an 18% pay cut.... For decades California tried to outdo the rest of the world in standards and benefits all over the place, with the result that they drove a lot of business away, and attracted a lot of people who are only in CA to collect the benefits. CA has to lower those payments to the national average, not only to balance the budget but also to stop attracting nonproductive people from everywhere... It's not going to be pretty, but as Obama said, We are out of money... I'm in favor of zero based budgeting.... take the revenues, subtract the debt service, subtract 1% for the contingency fund, and all of the rest of the spending can not be greater than the remaining revenue. It's up to the legislature to do that. It's their job, man....
bANK fAILURE
So do I ...
But I follow the money ...
And the money says,
We are being ripped off
to the tune of trillions ...
I would not own anything in the market that the sister of my mother would not own.
"Until we get past that [the current banking system being repaired] there will be no leveling out."
....then there will be no leveling out until other factors overwhelm. Government workers are quite insulated even in their off-hours. Many of them wouldn't see an oncoming train even with the tracks ending at their desk or couch.
I am aligning that money....by rule of the Patriarch.
bobn,
Europe wanted to keep the darkies as poor second class citizens. The Muslims wanted to be a law unto themselves.
Both deserve each other
Some of those health services mentioned sound essential--not the recruitment part--but what do
I know, I'm 3000 miles away.
No wildlife conservation?
But it sounds like there is plenty of cuttable stuff.
The Europeans don't want to reproduce themselves. What do they think will happen.
'Course Luci isn't apt to reproduce himself either.
Think of it as evolution in action. (Niven)
Im out, again.
The federal govt could be cut the same way - when Obama was campaigning he said he was going to go over the budget line by line and get rid of the waste, fraud, abuse, and unnecessary stuff... So far I have been underwhelmed by his efforts... Remember the Grace Commission? Was that under Reagan? They had a list of 1100 things that could be eliminated in the fed budget - went nowhere - we are still paying the wool subsidy for WW1 army uniforms... Soil Conservation Service? Govt employees do not conserve soil, farmers do... This could be a really long post but I'll spare you...
mmckinl- "Conjure should tune in to the Cali channel ..."
Oh, I'm very familiar with California. Familiar enough that I remember Bob Noyce installing his own 3-phase electrical at the building on Middlefield Road. That was when he still had his office next door to Chinese Gardens.
Anyway, many years ago, in the very darkest moment of a business deal gone bad, an associate from New York told me we all start life as 5th Avenue call girls and end up 42d Street hookers. That's how I think of California.
California got turned into a cash cow and was milked dry. In the best tradition of the Boston Consulting Group.
Oh, I'm very familiar with California.
"But it sounds like there is plenty of cuttable stuff."
~~~~
Every state in the Union will have to find cuttable stuff ...
And when you add it all up, it's a pittance ...
to what the banksters are legally stealing ...
Millions of layoffs ... shortened school weeks ...
child health care cut ... to fill bankster wallets ...
lawyerliz (profile) wrote on Sat, 5/23/2009 - 7:35 pm
Hey dawg, how bout getting specific about what Cali should cut?
[may be my last post for a day plus]
• Cut employee benefits.
• Cut union pay scales.
• Establish caps on retirement.
• Move the State House. Not, SF, not LA maybe Bakersfield.
• Neutral judicial oversight of redistricting.
(1)systemic risk is off the table,(2) a great malaise has besieged the peoples,(3a) and they look for truth and(3b) try to beleive a better life exists for the children while(4) they experience the happiness of personal growth.
(1)maybe, maybe not
(2) ditto
(3a) always dicey
(3b) yes, and will do everything possible
(4) depends upon whom you are talking about. Not everyone is selfish.
"There is no normal."
....normal for me is a daily 10-eggs into the refrigerator - 1 being a green one. Very few would find that as being "normal".
mp
"Conjure should tune in to the Cali channel ..."
Oh, I'm very familiar with California.
~~~~
Then fill your recovery calculations with Cali ...
and all the other states ...
It doesn't add up ...
Kohn is essentially admitting the Fed is the "Wag that Dogs the Tail."
Just as the Fed "lowered" the funds rate target when it was all but decided as 0-.25%, the Fed will "raise" the rate when the market decides that keeping dollars for even 3-months time poses a real (no pun intended) risk of the dollars purchasing less in just 3-months. That is to say the Fed will raise its target too late as inflation expectations have taken hold.
But how does the Fed pull back on the liquidity at the spark of hyperinflation? It sells long-dated, low interest Treasuries and junk MBS back into the market. At a discount: 40%? 60%? To pull out a trillion of liquidity it will need to sell 2 trillion of debt.
So build up debt now to sell back into the market at a huge discount to mop up the liquidity created by the debt expansion. It's devaluation--fiat style. Neat trick. What about all those other holders of long treasuries? Take (or leave it) 100-year bonds at an ultra-low interest rate, in other words, essentially an exchange for equity play on the U.S. of A.
Cool stuff. Bernanke is a genius.
lawyerliz,
I'm not saying I like everything on the list, but it shows how spread out the state is.
For bigger fish to fry, there are some pretty good targets. Have you heard of CA's "In Home Healthcare" program? People tell the state they have a relative to care for, so the state enlists them in the SEIU and starts paying them $10+/hour full time. That one program alone has grown to something like $30B a year because there's absolutely no verification of need, and the Democratic legislature gets massive contributions from the SEIU.
"Incestuous" doesn't begin to describe the relationship between the Dems and the unions.
The SEIU looks like a snake that has got out into the plains and is devouring things as it grows unchecked...
dcr100,
For years here I argued the FFR was going to zero. Now I'm saying that the Fed will never willingly raise the FFR above zero, at least not in dollars you'd recognize.
barfly,
1 is a definite NOT. I quote Doug Noland once again:
Current policymaking is shifting the debt burden from the private sector to the federal government sector - and, in the process, increasing the total system (non-productive) debt burden by another $2.0 Trillion or so annually. Moreover, I would argue that this momentous government (Fed and Treasury) intervention in the pricing of finance further corrodes our system’s process of allocating financial and real resources. The “debt bomb” is not being diffused. Rather, the fuse is being somewhat lengthened as the bomb enlarges.
CC:
Right. That's what pisses me off so much. Don't the F'ers at the Treasury and Fed know what kind of risks they are taking? I suspect they do, but feel their own interests are more important.
I don't believe that they have even thought about the secondary effects of their actions. Their ZIRP policies have wiped out the retirement income for most retirees. The oldsters are now having to dip into principal to meet their daily living expenses. There will be no inheritance left to pass on to their children and grandchildren.
The Boomers, if they are not insolvent due to an underwater mortgage, can expect a minimal return on any savings that they hope to squirrel away for old age.
Gen-X and Gen-Y are learning that savings and prudence are for losers and that playing by the rules is for chumps when society is being organized as a winner-take-all game of Calvinball.
They've spent the last decade burning through financial capital; now they are burning through social capital.
This will not end well.
NW
dcr100
What hyperinflation ? The Shadow Banking System still has trillions
it will steal from the system ...
Look at Japan ...
@dcr100,
I don't see how the Fed can sell assets at a deep discount. If they buy for 2 trillion and sell for 1 trillion, the net effect is leaving a trillion sloshing around and cycling up to 9 trillion through the banking system. That doesn't seem like a good way to slow the hyper train, or was that your point?
Anybody here remember Tempress Instrument? They made wire bonders. Good ones.
"The “debt bomb” is not being diffused. Rather, the fuse is being somewhat lengthened as the bomb enlarges."
~~~~
Exactly correct ...
and instead of just the banks being insolvent
the risk is the solvency of the US of A ...
There are no guarantees in this life, no matter how well you plan and save... Things often have a way of taking an unexpected turn... Some Guy (?) said "Man can count as his possessions, that which will survive a shipwreck"... The best plan is to learn as much as you can, do as much as you can, and be happy with the results... If you have lot of different skills you will more likely be able to find something productive to do... Dont get stuck into thinking you can only do one thing, or only be willing to do one thing... I get a great deal of satisfaction from manual trades, as much as programming or money management... I like farming too - up to the point where the arthritis starts in... Some Guy also said "If you dont expect so much you wont be disappointed"... I would add, dont be too proud to do janitorial or food service, since there is practically unlimited demand for those services...
Rob Dawg has it right. They will move heaven and earth to put humpty dumpty back together again. No risk too great. They are dumping toxic assets into every nook and cranny of the fed's balance sheet and the treasury is being looted. The people will get crumbs. Bank earnings will be conjured through shenanigans when organic gardening fails. It just doesn't matter to them what happens if they can't have it the way it was before then everyone is going down with the ship. The federal reserve lackeys are practiced liars, they all are. The will loot everyone, and I mean everyone who uses their system.
I suspect this speech was part of a PR exercise to follow-up the last Fed meeting's agreement to buy more Treasuries and Agencies.
Read Bernanke's paper, we're dealing with an open book. Opinions and expectations of market participants are valued very highly, a financial crisis is only in everyone's head once the government has guaranteed the banks to ensure easy credit availability. Or so they believe.
They're going to keep it up, then we'll hit another mini-panic, at which point the Federal Reserve Board will declare a yield ceiling on long term Treasuries
the net effect is leaving a trillion sloshing around and cycling up to 9 trillion through the banking system
That assumes that the 1 Trillion will stay in the banking system. Most of it will go to back fill the huge, gaping holes in balance sheets that are hemorrhaging liquidity; the balance into holes in the ground.
I am still waiting for the first banker to be shot dead on the street by an unemployed industrial worker. Then, we might start to see some real reform.
NorkaWest Sat, 5/23/2009 - 8:09 pm
"They've spent the last decade burning through financial capital; now they are burning through social capital.
This will not end well."
Yep ...
The social contract will be torn asunder ...
I see a new political party ... populist and angry ...
Norka,
Yep, that is what is happening now. In 2-3 years, maybe not. Banks don't have to lend for money to get out, they just have to invest for their own accounts -- stocks, commodities, whatever.
I have been wondering if there have been any prowlers around Stan Neal's place or John Thain's.... They both have estates in the high rent district... Or Dick Fuld too - there is a story that Fuld was working out in the executive gym and one of the other execs went up and slugged him....
buzzsaw99
Yep ... it's all about the banksters
looting the country by way of the
privately owned and operated
Federal Reserve and their agent at the UST
Timmay ...
Re: Nuke (Lake George)
Spent a couple days up there with a large group of folks. One of the locals took us cliff-jumping... couple 20-30 foot and then a monstrous 70 foot one. Jumping off that 70 foot bluff and surviving was one of those memorable live turns for someone like me at the time. When we went up there the local was just like, "do what I do" and just ran himself off the cliff roadrunner style. Redeemed the time I fastroped down a USMC rappel-tower. Corpsman and SGTs thought they had a lawsuit and guy with no skin on his hands after that...
Lake George is beautiful...
the weirdest part about reading tonight is Evil Henry Paulson is one of the good guys.
the dichotomy fascinates me.
I see a new political party ... populist and angry ...
If we are very, very lucky, we will get a new political party.
I don't see it as being that well organized.
I just see a populace that will be very sullen, except when they are very angry.
Some folks take losing at Calvinball personally and react....
NW
@bANK fAILURE,
It is interesting that you have taken systemic risk off the table as a possible outcome. I don't think TPTB have as much control over things as they think.
EHP, what would manifest as the "next" panic?
my typing skills are shitting the bed.
"There is no good reason for us to maintain a large force structure in Germany, for example.
Ever heard of an ambitious little fellow named Putin?"
Why would the Russians invade Germany, and with what? Someone else here refers to the them as 'soviets.' This is terminology from the antique show.
Somebody went after Giuliani, does that count?
Rudy Giuliani Stands Up To Crazed Attacker On Hamptons Stroll
"They've spent the last decade burning through financial capital; now they are burning through social capital."
Astute and interesting point of view.
crazed attackers in the Hampton are the groth rates of Iguanans broward.
broward,
No, doesn't count. What counts is bullets, not chest puffing.
Coinz.
you can bet on triple down bank blowups and triple dollar down and gold triple up every day, during regular scheduled sessions.
this is a live album over the long weekend.
I need to go cool off in my isolation tank. Peace.
loggin out....be right back.
189th comment ignores 66
EHP what would manifest as the "next" panic?
folks moving out of the dollar into something, anything else that they hope is safer.
after that proves not to be a safe as hoped, the herd will stampede into some other asset class, currency, or commodity.
flight capital will be sloshing all over the world; capsizing economies left and right.
Visualize all the currency and economic crises of the last three decades compressed into the next few years.
Output gap, meet your kissing cousin, production gap.
this is the last thing I m gonna say tonight...you should hope.
I sit on the comments for a large portion of my "puter" time...
why? why would I read the spewing vomit of the peoples?
might be a kernel of truth in it somewhere......
nytol.
Gen-X and Gen-Y are learning that savings and prudence are for losers and that playing by the rules is for chumps when society is being organized as a winner-take-all game of Calvinball.
They've spent the last decade burning through financial capital; now they are burning through social capital.
I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. after my first two years as an undergrad I was ready to "go Galt" or simply drop out of the social matrix. but eventually I realized what a selfish and actually impossible choice that would be. I believe we need more "chumps". stop feeding the "best and brightest" into the elite universities, stop working for the Fortune 500, ignore federal jobs and large social institutions, go start-up, go underemploy yourself, go find small businesses that actually produce something and create value, or go consult for them. reject the false culture pulled over our eyes, learn self-control and disconnect from the media machine, overload your brain with information until you start hitting breaking points. I made my choices and I'll live with the results, good or bad.
I see a new political party ... populist and angry ...
If we are very, very lucky, we will get a new political party.
I don't see it as being that well organized.
I just see a populace that will be very sullen, except when they are very angry.
NW
until true unemployment hits a quarter of the country, the song remains the same.
Re: CA 2/3rds Rule
2/3rds rule will fall.
YLSP
Re: CA 2/3rds Rule
2/3rds rule will fall.
~~~~
During or after the Depression ?
"until true unemployment hits a quarter of the country, the song remains the same."
~~~~
17% U6 ...
Only 25% of college grads have jobs lined up ...
They won't be counted ...
25% ... one-two years ...
Gen-X and Gen-Y .....
They've spent the last decade burning through financial capital; now they are burning through social capital.
isnt it the boomers who spent all the capital....not that it really matters because were all in the same boat anyway. i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded i think than babyboomers. its the apathy thats a problem with younger ppl... they have a good BS detector but there power to act is just not there... more like paralysis....instead all enthusiasm is led into a faux youth driven consumer culture (modern breads and circuses etc). but i would say thats just a part of being american these days for EVERY age group.
Same here..
//I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. ..//
"until true unemployment hits a quarter of the country,"
.....it has. I define "true unemployment" as being no longer eligible for an unemployment check. THIS is when the masses start getting uncomfortable AND hungry. We've seen it locally where a handful have fallen off the back side of the unemployment wagon (no longer receiving checks) - and they just disappear - all contact ceases. There won't be any organization to the hungry until they start breaking into markets for food. We've already started reading the beginnings of that new "chapter".
bleh: I don't think "apathy" is the right word exactly. Maybe "sense of futility" is a better description.
NorkaWest,
I see it as a failure to think creatively.
bleh (profile) wrote on Sat, 5/23/2009 - 10:54 pm
isnt it the boomers who spent all the capital....not that it really matters because were all in the same boat anyway. i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded
yes, blaming this on a generation, or particularly the boomers, is weak. they are in the wrong place at the wrong time (in that they are the ones currently at or nearing the point where they will need to draw from the system more than they contribute to it). we are all responsible for what has been unleashed and we all have to deal with the result in ways appropriate to our stage of life. also (as I repeat too often), a key part of the strategy of TPTB is encouraging and artificially strengthening the barriers that separate generations to create a cultural memory hole, and to turn us against one another instead of against "them".
Black Star Ranch
Won't be long ...
States cutting social programs ...
shelters full and some closing ...
food pantries empty ... more people, fewer donations ...
the Federal Reserve Board will declare a yield ceiling on long term Treasuries
That'll be the day to convert any remaining dollars to something else, anything else. Right now there's no particular line in the sand, but when they define it it'll be damned obvious either (a) when it's crossed or (b) the minute the presses go 24/7 printing money.
17% U6 ...
Only 25% of college grads have jobs lined up ...
They won't be counted ...
25% ... one-two years ...
i pay attention daily to UE numbers more than anything. because in this economy i dont think its a lagging indicator... it is the ultimate leading indicator. there is nothing that can really be done to stop the bleeding.. if i had to make a guess i would say we are ALREADY at 25% of ppl who are deeply in distressed levels of debt and/or could be considered unemployed in that what they earn isnt nearly enough to get by.
its already bad, were still in the second inning down 10-1.....
Re: CA 2/3rds Rule
2/3rds rule will fall.
NWIH.
"we are all responsible for what has been unleashed"
~~~~
Oh BS ...
Our leadership got us here ... Trickle Down Reaganomics ...
Force fed through corrupt MSM and complicit politicians ...
The oligarchy set this plague upon us and now they are
looting the treasury to boot ...
Hold onto your guns and bibles folks!
Governor plans to completely eliminate welfare for families
3:58 PM | May 21, 2009
Gov. Arnold Schwarzenegger is proposing to completely eliminate the state’s welfare program for families, medical insurance for low-income children and Cal Grants cash assistance to college and university students.
Governor plans to completely eliminate welfare for families | L.A. NOW | Los Angeles Times
Resistance - we only ever listened to our relatives, grandparents, parents, aunts, uncles, etc. Just try to get yourself squared away as best you can and take care of you and yours. That's pretty much all any man can do. Your motto should be:"Whatever it takes".
[what to cut in Cali]
"• Cut employee benefits.
• Cut union pay scales.
• Establish caps on retirement.
• Neutral judicial oversight of redistricting. "
Neutral judicial oversight doesn't exactly exist. Even if you have popularly elected judges, trying to apply "natural law" or some other standard they've convinced themselves is objective, it isn't possible. In districting per capita, you have to start drawing lines somewhere and carve according to some shape. Bush V. Gore shows that allowing life-tenured judges to decide election cases doesn't guarantee a non-partisan decision.
When you say "cut union pay scales", I take it you mean by a policy which respects existing law in its implementation. If the State can arbitrarily break contracts like a bust-out corporate shell, you're begging for full-on strikes.
Lucifer (profile) wrote on Sat, 5/23/2009 - 10:54 pm
Same here..
//I grew up seeing people serve an economy, not an economy that serves people. as an early Gen-Y, all I have seen is corruption and a culture of image and even as a teenager I thought it was morally bankrupt. ..//
sorry to hear that. the sense of futility gets to you, but watching your peers and friends walk into it voluntarily is the harder part. money is a necessity of the present economic system, but it's sad to see how pecuniary we have become (aka we are all whores now). at least the ones you employ are honest about what they do for a living and why they do it.
Tim waiting for 2012,
People will not wake up otherwise... I hate to say, but this is necessary.
Imagine the ads:
"Because of this rule, CA couldn't pass a budget like it was supposed to..."
"Because of this rule, CA had to lay off so many employees..."
Props went down last election because the idiots didn't have a reason to vote.
Fiscally responsible is outnumbered in CA. They will certainly suck the idiots in in 2010 with the Governor election.
In fact Arnold will come out hard against repealing the 2/3rds rule which will draw even more voters to repeal it.
Watch and see... its going to suck... I'm gonna seriously think about moving out.
Oil is set to fall, there is no more storage among other factors. Once that cash is freed, things get more volatile. Stock markets globally are ripe for being pulled back down from the clouds. Economic indicators are set to disappoint next week.
Once we have falling markets, that induces a flight to quality, and all kinds of concerns for sovereign nations, banks, and insurers. Credit will seize up, or at least not be as cheap as a central banker would like it to be. The next thing in line Bernanke hasn't pulled out of his toolbag is putting a ceiling on long term rates.
There is room for me to be wrong on the specifics because there are many coalescing equivalent moves. Like, maybe it isn't an equity market fall but a strengthening USD because of foreign CBs attempting to juice their way back to status quo. That would also put the peak in oil and free up the stored volatility, which could only cause equity markets to go down, etc...
I don't know how far this upcoming bit goes, but it will probably be just enough to allow for things after to drift downriver at the pace of a lazy summer. Bernanke might not bring out the long term treasury ceiling yield cap until this Fall because it would be evident
a) There was no second half recovery anywhere, but several nations did officially enter the -10% GDP depression camp
b) Without faith the US markets are reliable or will recover in any kind of meaningful time frame, the incentive is to cash out which would let the USD fall and Treasury yields rise, which would force Bernanke to expand QE
Last year CA had 60 billion in debt outstanding
http://www.ppic.org/content/pubs/jtf/JTF_PublicDebtJTF.pdf
Tim waiting for 2012
Those are just the cuts at the state level ...
Local government will be hit even worse ...
29 billion in the hole ... The savings cutting those programs?
not even a third ...
ResistanceIsFeudal,
Benjamin Franklin got it right when he said something like "Experience keeps an expensive school, but fools will learn in no other".
re: Retirement
this is not a joke
Including Canada?
//There was no second half recovery anywhere, but several nations did officially enter the -10% GDP depression camp//
mmckinl (profile) wrote on Sat, 5/23/2009 - 11:06 pm
"we are all responsible for what has been unleashed"
~~~~
Oh BS ...
Our leadership got us here ... Trickle Down Reaganomics ...
Force fed through corrupt MSM and complicit politicians ...
The oligarchy set this plague upon us and now they are
looting the treasury to boot ...
who made the choice to buy shit they couldn't afford with money they didn't have? in the end, it can all be reduced to this. it wasn't decided in a dark smoky room by a coterie of billionaire oligarchs and high-level bureaucrats. they took advantage of an opportunity, and, many being good psychopaths, did so ruthlessly and efficiently over a long time horizon.
I tend to agree though I don't think it will happen quickly. In the "great pump and dump of 09' insiders have mostly sold (see BAC) and the next leg down will be from margin calls liquidations and cash raises. This will take twice as long as the last leg up (march-May) IMO.
EHP could you explain your graph a little bit
america is consumer driven... im a part of it as anybody. i love my music, movies, gadgets and video games as much as any other genx or geny or boomer .... the only probelm i have with the consumer culture is that american identity becomes commdified, sold and our image as a nation is influenced by a thick gloss of pretty lies. they dont teach in school how to differentiate between junk and true value, and seperating your ego from all the mass media crap... sorta OT but i think it relates to how the public reaction to the crisis is treated as ... just another event that will eventually go away...outta sight outta mind... like the Iraq War. But it is a very real problem that cannot be turned off.
it just amazes me that the obama administration throws around press releases with billions here and billions there to corporations... and america just bats an eyelash... a part of it is the MSM as the Ministry of Truth... they have become so spineless since the start of the Iraq War. when you have washington/wall street/MSM sleeping in the same bed... it just is not good for America. meh... so depressing.
OT--GEAB No35 had an article on the ability (or lack thereof) of US and China to effectively deploy the billions in "stimulus" money their governments have promised to spend to fight the balance sheet recession (Depression or an Alfred Kahn BigMegaBanana).
GEAB's conclusion: the money will be stolen, wasted, or never spent because the BigDumbBureacracy cannot move the pig through the python.
Online interview with Doug Casey, recorded back in early January.
http://radio.goldseek.com/shows/2009/01.03.2009/GSR-01.03.09-c.mp3
The interview starts about halfway through the program.
He's buying land in Uruguay and Argentina.
Advises political (jurisdictional) diversification...
Mcminkl,
I don't think mp has called a recovery... He's called "stabilization", one that is quite possibly very short-lived. He clarified his position well on Friday (I think).
If the State can arbitrarily break contracts like a bust-out corporate shell, you're begging for full-on strikes.
I guess it's time that the workers joined the creditors already on strike in the Great State. Really, CalPERS and CalSTRS should not be expanding foreign investments while their beneficiaries crash and burn. There's got to be 21B available between the two.
ResistanceIsFeudal ~
Where were the f'ing adults ...
They were always there before ...
but since they were loaning OPM
they just gave it away ...
There wasn't any transaction ...
It was a financial fraud ...
to line their pockets with bonus money ...
YLSP,
The people of CA aren't going to make it easier to raise taxes, period, thus the 2/3rd's super-majority is untouchable. It's been tried and failed in much better climates.
In fact, if the legislature attempts to unconstitutionally bolster revenues via "fees" instead of "taxes" you could see yet another Prop that not only rolls back taxes but also places explicit ceilings on budgets tied to the overall state economy.
EHP, the fed wont cap the long end...
the FED needs an inflation scare. think 500 dollar oil rationing, and 3k dollar gold panic in at the ATM.
windfall profits notwithstanding.
Investors face their fears in muni debt
"I'm believing that everything will be OK." -Harvey Kauffman CA muni bond holder
Investors face their fears in muni debt - Los Angeles Times
"HOPE is our investment strategy"
I am still waiting for the first banker to be shot dead on the street by an unemployed industrial worker.
I look forward to it - though I wonder if any unemployed industrial workers are well-informed enough.
Paulson, Mozillo - I can't decide.
He's buying land in Uruguay and Argentina.
"i actually have some faith in those born after the 70's (im gen x) because these generations dont adhere to a specific political party or issue as much as older ppl do, generally speaking they are more impartial and open minded i think than babyboomers."
I was talking to an economics writer about the recent student protest at NYU, where he was visiting this year. He noted that the students were not well organized, had no clear goals, and wound up getting nothing. In my day students got our school to divest from South Africa. Purely anecdotal but I find today's students better informed on a lot of things but less politically active and aware (I coach a college team). I exclude Basel, but I take it he's a couple years older.
If the State can arbitrarily break contracts like a bust-out corporate shell, you're begging for full-on strikes.
Bring it on. There'll be people in mile-long queues waiting to take their place for a steady paycheck at half the current rate.
re: Retirement
Income by source for all households
One more reason why it will be hard to persuade people to splurge, their incomes have been significantly cut even if their work income was untouched. These are not an irrational decisions, there is a fundamental limitation preventing people from maintaining spending
Sure, just displace the locals.
More like enrich them by buying their land, products & services, as well as employing them with the new businesses you build and wealth you bring.
RockyR
mp said Kohn sees it his way ... today on this thread ...
More like enrich them by buying their land, products & services, as well as employing them with the new businesses you build and wealth you bring.
Tim waiting for 2012,
Those were people's savings other than their homes. They have since been cut in half. They are not close to being able to afford retirement (if you look in last night's thread there are more charts, including one of savings by age of head of household)
bANK fAILURE,
Do you understand how the Fed would cap long term Treasury yields? By having a standing order to buy whenever the price dropped below a certain level. Cruise control printing press
The spinelessness and moral cowardice of the Obama administration know no bounds.
FT.com | Willem Buiter's Maverecon
I thought the fed was already doing that across the board - buying all the bonds to hold the rates down... Hey the Fed does not have to balance their checkbook...
Basel Too:
"Really, CalPERS and CalSTRS should not be expanding foreign investments while their beneficiaries crash and burn."
Actually, it may be the best thing for their beneficiaries if they invest offshore.
Some protection from the ultimate fate of the dollar might be helpful.
EHP oh okay I see.
The FED does not set rates long term The market does. CC rates are a good example. Its either 30% or nothing you'll see.
Offshore investing is a crap shoot now. Russian default. hidden exposure to MBS, CDS, negative growth in China is all a possibility and is not entirely priced in at this point
"Offshore investing is a crap shoot now."
And investing in Treasuries is safe. Just ask Jas.
Seriously, a little diversification is a very good idea.
isnt the fed auctioning another 150+ billion next week? just another week, more debt.
EHP.
if the fed were to initiate a rally in the long end by players expecting a QE move, those particiapants would go in the money at the expense of the dollar.
dollar index is already broken.. ergo, no cap on the long end.
the mish call for the long end is wrong.
mmckinl (profile) wrote on Sat, 5/23/2009 - 11:18 pm
ResistanceIsFeudal ~
Where were the f'ing adults ...
They were always there before ...
but since they were loaning OPM
they just gave it away ...
There wasn't any transaction ...
It was a financial fraud ...
to line their pockets with bonus money ...
the "adults" sold out, or were ignored, or were discredited, or were selectively filtered out by the power of mass communication. another disaster is in letting the masses become shareholders in large corporations. everyone demands return and the company has no choice but to deliver. the rich man invests in stocks knowing he could lose and having a core of secure wealth to fall back on. Joe6Pack and JaneSUV risk their retirement nest egg and there is no safety net if they lose. and OPM is a classic agent problem of responsibility that was only magnified by governments underwriting crappy, risky loans. and we brought back highly-leveraged debt instruments, which worked so well in the late 1920s for the wildcat banks. bankers got rich on transaction fees gained from fulfilling customer demand for lots of lousy and risky investment vehicles, then playing jenga with synthetic inventions based on them..
RockyR- "I don't think mp has called a recovery... He's called "stabilization", one that is quite possibly very short-lived. He clarified his position well on Friday."
Yeah, I thought so too.
seriously, Im gonna eat and then go to bed....I'll read more tomorrow.
"The spinelessness and moral cowardice of the Obama administration know no bounds."
~~~~
This is news ?
Obama has been a shill for Bush lite since he started ...
"Bring it on. There'll be people in mile-long queues waiting to take their place for a steady paycheck at half the current rate."
Hiring enough police is never a problem. Give them a badge and a gun. Get that banker fighting wildfires. Even AAAHnold had no problem teaching kindergarten in Lalaland. How many will pay their mortgages at half the current rate? Bus drivers at half-price. Court clerks, building inspectors...How'd those NFL replacement players look? Top quality?
Tim waiting for 2012,
If it wasn't dramatic, consider this simple exercise. Those households who have incomes in the top 80 to 89.9% of all Americans, their median financial holdings totalled about $400k. This income bracket is dominated by the 55 - 65 crowd.
Apply some discounted cash flow analysis, (example):
If you had $400k at retirement, and planned to withdraw every last cent over 25 years. Let's assume as a retiree, you average a 5% return above inflation. Your annual income would be
$27,029.51
for a household. That was in the top 20% of earners.
Now if that $400k declined by ____ and went to ____, their annual income under same conditions would be _____
12.5% / $350k / $23,650.82
25% / $300k / $20,272.13
37.5% / $250k / $16,893.44
50% / $200k / $13,514.75
62.5% / $150k / $10,136.07
The baby boomers cannot save enough to retire. They will try to continue working as long as possible. Social Security will be their retirement. There's about 71 million baby boomers alive in the United States today.
Who said anything about treasuries. Short equity (25%) long gold (30%) trade and TIPS for people over 60 seems like a good way to limit exposure
"the "adults" sold out, or were ignored, or were discredited, or were selectively filtered out by the power of mass communication."
~~~~
And just who called the shots ... J6P ?
This was Greenspan and the banksters ...
with help from the pols and the MSM ...
Hardly the people leading this parade of parasites ...
I'll add that this will put downward pressure on the younger workers looking for employment.
Older and younger people will be forced to cut back as the prospects for the future become clearer.
re: last post
There are 71 million US born baby boomers left, but about 78 million baby boomers in the US due to immigration. baby boom is 1946-1965 inclusive
mp
Kohn- "...the economy is only now beginning to show signs that it might be stabilizing, and the upturn, when it begins, is likely to be gradual..."
It's nice to know that Kohn is on the Conjure Channel.
~~~~~
stabilize then upturn ...
EHP
Is your chart just baby boomers????
I'll add that this will put downward pressure on the younger workers looking for employment.
so basically 90% of america needs to work til they die. i see it at my job right now. i work in an 'old' industry comparative to most companies. a third of my still employed coworkers are over 50- 55 (its a very niche industry where experience is important). they dont plan to retire. and im talking all of them from clerks to salesman to VPs.... our VPs dont make that much compared to other companies....like in the 125-150k range. well except for the new ivy league guys our investment bank owners forced on us (closers likely) they make easily in the 300k+ range.
It must be nice to be able to print money. IMF isn't too big on Keynesian output gaps.
Latvia is racing to halve an enormous government budget deficit, now estimated at 12 percent of gross domestic product, even as its economy is expected to contract by 16.5 percent this year. That is a condition of the $10 billion bailout by the I.M.F. that the European Union, of which Latvia is a member, also supported.
Latvia Races to Cut Deficit To Keep to Its Bailout Deal - NY Times
bANK fAILURE
What would a devaluing USD do to inflation?
Why did foreign CBs step up their purchases of the USD?
What has happened to the USD twice in the last 6 months when the equity markets plunged?
When did I say Bernanke would bring out that one last tool before spinning up the 'copters?
I think you'll find I realize what I'm saying
I'll add that this will put downward pressure on the younger workers looking for employment.
dont worry the BLS wont include them in the U3 numbers... so its all good!
didnt you hear? 30 is the new 20s... and 20 is the new teenager! god i hate that mentality... its so stupid.
Tim waiting for 2012,
from last night's thread
Median value of retirement accounts by age of head
retirement... whats that? in my five years at my current company... only one person fully retired (and this is a 1000+ company)... she was friggin 78, a widow, and barely getting by as is. have you walked a walmart recently? its pathetic.
A surprise brewing over at SSA?
Early retirement claims increase dramatically - Los Angeles Times
Early retirement claims increase dramatically
Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.
Too bad the early retirees are basing their decisions based on current pricing levels...
EvilHenryPaulson (profile) wrote (in reply to...) on Sat, 5/23/2009 - 11:46 pm
The baby boomers cannot save enough to retire. They will try to continue working as long as possible. Social Security will be their retirement. There's about 71 million baby boomers alive in the United States today.
exactly. we will experience diminished prospects and a lower standard of living, but they will take the brunt of the visceral punishment. it is a horrible situation for all, but nature ensures the real cost of a young and healthy person is much lower than that of an old and sick one. someone, somewhere, has to bear that cost, that or we go Soylent Green. that is just basic survival - I won't speculate about standards of living: the facts are staring us in the face. 70 will be the new 55, and 30 will be the new 20 as we adjust to the raw economic realities.
retirement... whats that? in my five years at my current company... only one person fully retired (and this is a 1000+ company)... she was friggin 78, a widow, and barely getting by as is. have you walked a walmart recently? its pathetic.
I better quit before I get myself banned. Goodnight.
damn it, feckless
Feckless Ness / Basel Too, (I thought it was one person posting twice at first)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
ahahaha that rox... i think boomers are learning fast that SS might not be there (or severely cut) when they're 80. take it while youre 65! this is just ... just sad. golden years... at least they wont be fighting for a job vs illegals.
there is a fundamental limitation preventing people from maintaining spending
Yes, the credit cycle is not a belief or psychological effect, it's hard numbers from debt accumulation.
The baby boomers cannot save enough to retire.
Obvious from several years ago.
The real estate & stock market crash were baked in since 2001.
Most boomers will probably end up working a 20-30 hour week, which they might possibly have done anyway.
mmckinl- "stabilize then upturn ... "
When it begins, mmckinl, when it begins.
WHEN IT BEGINS!
EHP
Thanks something to mull over. Appreciate the data mining/analysis
Anyway, many years ago, in the very darkest moment of a business deal gone bad, an associate from New York told me we all start life as 5th Avenue call girls and end up 42d Street hookers. That's how I think of California.
California got turned into a cash cow and was milked dry. In the best tradition of the Boston Consulting Group.
Milked dry and now going to be hamburger.
Re: boomer retirement.
House prices can't recover unless there's substantial immigration, most likely from Mexico.
A significant part of the problem is real estate prices, they are a redistribution of income from future generations to earlier generations.
If future generations have no increase in standard of living, they can't pass it down through RE prices.
Basel Too / Feckless Ness, (at first I thought it was one user posting twice)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
"A surprise brewing over at SSA?"
What surprise ?
Basel Too (profile) wrote on Sun, 5/24/2009 - 12:02 am
Early retirement claims increase dramatically
Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.
Too bad the early retirees are basing their decisions based on current pricing levels...
it's life in a fantasy land and things are going to get wicked when the money runs out.
"- I'll bet her bosses weren't hurtin' tho. And that's all that matters, no?" well our old management were pretty respectable in there own way... they never made huge salaries or benefits, kind of the old school family run type business atmosphere... but our new guys are the literal ivy league slime forty somethings (what will look good on my resume type). we know they came to sell us, or bankrupt us to get pennies on the dollar that the investment bank wanted. the stupid investment bankers (abn amro) wanted us to merge with a stupid company that was close to bankrupt\cy in 2006... and now theyre mistake is costing us... ivory tower idiots. all because they wanted to bust up one plant that had a union that really wasnt costing us THAT much. i digress....
"so basically 90% of america needs to work til they die."
So what's that going to do to the unemployment numbers? Do you think it will count if a 70-year old worker gets laid off? If the workforce changes like that, the unemployment numbers are likely to get more misleading than they already are.
The big problem is; there aren't enough jobs for 90% to work until they die.
I guess we could pass a law requiring service stations to employ pump jockeys and window-washers. Excess job-seekers will push down the value of labor, and it could get to the point where it's not viable to work for a living. Then what?
House prices can't recover unless there's substantial immigration, most likely from Mexico.
i think that's what happened after the housing bust of the early 1990s. perhaps we can consumerize africa?
broward,
It's been visible for some time, but the comforting blanket of uncertainty and hope is quickly being pulled away. I don't mind if it is obvious, because I even like calling out waypoints on a road trip even when everyone knows where we're going in advance
EvilHenryPaulson (profile) wrote (in reply to...) on Sun, 5/24/2009 - 12:08 am
Basel Too / Feckless Ness, (at first I thought it was one user posting twice)
Hey, it beats unemployment when the benefits run out and there is still no one hiring
I look for unemployment to become permanent (just don't call it the dole!) within a year's time.
Gradual. Synonomous with anemic. Almost non-existant for most people, completely non-existant for the currently unemployed. Marginal. Within the margin of error.
Khon is too savy to add: a currently unforseen disruption will negate these forecasts as we will then break much lower than expected.
Falling asleep at the wheel, here. Night all!
it's life in a fantasy land and things are going to get wicked when the money runs out.
I'm only fifty but I suspect that the early retirees are thinking the same thoughts.
1 - avoiding the unpleasantness of constant layoffs. The company I worked for during the Dot Com crash had layoffs every quarter. By the time I reached year four, I volunteered for the layoff because I was tired of the unpleasantness and there was clearly no career path.
2 - increased taxes. Just as obvious, if you're making a lot of money, you're going to get taxed more. Far easier to sell out, move to a cheaper area and take a low-income job.
3 - sell out house now before prices go lower.
Off Topic:
Want to see what's going on in the high-end housing market? Take a look at Craigslist rental listings in the high-end neighborhood nearest you. For example, I looked at Los Gatos (here in the Silicon Valley), for houses renting for $4,000 per month or more.
There are 24 total, with 9 listed yesterday alone. They are generally plush multi-million dollar single-family homes. They have obviously been updated recently. Many are clearly being marketed simultaneously for sale (or have been recently).
Why do these folks want to give renters the chance to trash these plush dwellings?
Think there aren't some desparate owners, and future distressed sellers out there? Anybody buying a home in a >$1M neighborhood today is making a very big mistake. Discounts are coming.
perhaps we can consumerize africa?
Question about China:
Rumor has it that China is stockpiling commodities. To me, this makes no economic sense: Importing commodities is not stimulative to a domestic economy.
Does it make sense to anyone here?
The stockpiling of imported commoditie makes me wonder if they anticipate ... a naval conflict ....
Anyone share this paranoid thought?
Thanks for your consideration
"Want to see what's going on in the high-end housing market? "
I've seen the same thing around here (Santa Monica). The rents are pretty high, though.
I'm actually considering renting a new place if the prices come down.
When you work fewer hours, as you might in France, you have more time to babysit, exercise, discuss politics, or volunteer for civic duty. Your health and standard of living might actually rise, along with your productivity/hour.
@dryfly
Unfortunately, or maybe fortunately, I no longer remember remember the guy's name. Selective memory I guess. I was told he was involved in the startup of Airborne Express. Strange guy. I remember wincing when he said it.
I will be honest, high interest rate environment is good for me, very very good. I would make money hand over fist. I have no debt and got promoted to a salaried position last summer. Life is good and getting better everyday. But high rates would make it even better.
The Bush era wasn't fun. Interest rates collapsed and so did a big chunk of my money. Finding a good job out of college wasn't easy. I eventually ended up at...........right Wal-Mart as a unloader. Then manegement trainee, though I quit that to work at Nabisco...........as a part time merchandiser. I hated Wal-Mart.
Bleakness is the sin of society. We need investment and new areas of growth. The old consumption system that the Oligarch and Billies wanted has reached its end. It produced a tech revolution and a 2nd sexual revolution by the end of the 90's. But everything ends and bleakness returns.
Bleakness is suffering, suffering in nirvana.
On stockpiling commodities. Got somewhere better to spend your dollars?