Green shoots don't make a good landing area -- if they're bamboo. Or stinging nettle.
As for the preeminent schol.ar-economist on stagflation, couldn't tell you. But Volcker could probably tell you a thing or two. He was there, he broke it (with help from Reagan-era union-marginalizing).
Chicago Dude:
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Tsk... Finish your analysis!
Now what happens to the commodity sellers who get stuffed with gobs of USD now? Those dollars do not vanish into thin air or get burned now does it?
At the end of the day, all the dollars OUTSIDE the USA have to go through repatriation in order to finish it's lifecycle. They either return to the USA because they bought something USA produces (and that something cannot be more USD or USD-producing-assets, or else we're back to the same game, even bigger now); or they remain locked outside the system, transferring from one owner to another or recycled back to USA as UST (which produces for USD as they mature, worsening the problem...).
Now, last I heard, the US don't produce much non-USD-producing (i.e. "real" ) goods; so there's little to buy to really dispose of the USD. If the world is looking to net-decrease it's USD holdings, it's going to drink the ocean through a really small straw.
The way I see it, the USD is like a CDS whose true value is WAY LOWER than what's being reported/marked; and all the holders of USD are similar to sucker mark-to-market banks we see everyday. They cannot allow USD to mark to real value; as that'll make their own books insolvent; so the facade continues.
This is the best game in town yet.
Balance (and USD destruction) returns when the Net holders allow the USD to be recognized to be lower than their own currencies. Based on the collective race to the bottom devaluation action seen so far, there's zero chance of that happening.
10yr & 30yr auctions next week. Who will be bidding alongside Ben as he tries to drive prices up ? Maybe waiting until he's done to see where the natural demand lands up would be a wise choice... looking at the fortune cookie now.
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent?
Am I missing some good news that everyone else knows about but being hidden from me? Really, I promise no one will kill you if you tell me, at least I don't think so.
Worries about the broader macroeconomic impact of higher oil prices centre on the possibility of the return of stagflation, the combination of high inflation and declining output that marred the periods of the 1970s after the two oil shocks of 1973 and 1979. For now that seems most unlikely, given the wider concerns about deflation in the rich world."
Pricey oil and the world economy
Hope and anxiety
Jun 1st 2009
From Economist.com
Rising oil prices suggest hope for the world economy, but could they also limit its recovery? Premium content | Economist.com
Pass this info on to your local News reporter....maybe just maybe someone will shock you and you will see the relevance to said article on the Tee Vee.
But I won't hold my breath to long....thats for dam sure.
Nothing irrational about buying up assets for which all risk has effectively been transferred to the sovereign. The real question is, how rational is said sovereign transfer? Therein lies the rub.
If the supply and demand theory held true, then that would mean that the recent decline in oil from $147 a barrel to $40 was based on our decreased consumption. Did we use 70% less gas and oil in January than we did in July? Did you cut your driving by 2/3? Did the world decrease its demand of oil by 70% in those 6 months? Hardly... Once you reason that way, it is pretty easy to dismiss the “supply and demand” factor in oil prices, at least for now.
Well, if you flunked Econ 101 maybe it is.
I'm not suggesting the moves in oil aren't liquidity driven. But to argue that supply and demand requires that the price of a commodity be proportional to demand is...I'm at a loss for words but the author's understanding of the most elementary of economic principles wouldn't even qualify him for a job at CNBC.
Erin B just said: You and your baby owe $211,934; mostly to China
U.S. National Debt Clock : Real Time
Has $188,436, while I read factoring in unfunded Governmental pensions, Medicaid, Medicare, it was in the field of $550,000+.
It just really messes up my net worth calculations.
If Goldman Sucks keeps engineering these little oil bubbles for fun and profit, they could completely unhinge the whole food production structure. That would be fun.
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent? - KK
It seems to me, the market is most rational, in the sense of a data-ingesting logic machine, only when things are relatively calm. During a crisis, it acts like any other system undergoing radical change, such as an organism experiencing disease, or a storm weather system. It seems irrational or 'emotional,' but it has it's own internal organized chaos. Lots of destructive energy, too.
I see this is in my local economy-- archaic businesses that were weak and just being carried along in the boom are now being killed off like dinosaurs. The strong are surviving, just barely. And there is some 'stimpack' money coming in for local government projects. So I don't thnk the market has any deep secret knowledge here, just a general sense that we have hit bottom, rightly or wrongly.
Comrade Misean is Dope:
If Goldman Sucks keeps engineering these little oil bubbles for fun and profit, they could completely unhinge the whole food production structure. That would be fun.
If you were them? Why wouldn't you? If you indeed have the power to cause massive spikes and crashes in the market, and profit from them; and be able to be bailed out by uncle sam, if you misjudged and hit the land mines.
WHY WON'T YOU GO ALL OUT and wreck the system in the process??
The protection and healing mechanism in capitalism is losses and the fear of losses. It prevents companies from going berserk and it reins in destructive behavior.
Remove fear and you get today. Oil, stocks for now, much much bigger things to come. Everything is going to start swinging wildly now.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:01 am
Fun Fact
National Debt per American is more than average savings per household. Yay
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
Business as we knew it is fast coming to an end. Here's what the Obamaconomy looks like. The government champions funds. Funds champion corporations. Corporations champion markets and industries. No one champions people (because they don't count).
It's difficult to argue that the market is irrational when it's so efficiently taking your money.
Rational market behavior doesn't necessarily coincide with the interests of an economy as a whole. Blowing bubbles for profit is quite rational if you're given the means to do so.
scone - So I don't think the market has any deep secret knowledge here, just a general sense that we have hit bottom, rightly or wrongly.
Yes, but maybe I just have my "bear" blinders on, but all I see is a small rest stop for the next couple of months. The initial flush from the stimulus might be helping a little, but there are just too many unexploded bombs waiting in the economy. But hey, I'll just make up some ginger/lemonade cool aid and drink deeply.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:10 am
Why does the Green party sound more free market than the Dem/GOP party?
Several reasons, all incorrect. The Greens have long been cheerleaders for the demise of American manufacturing. They also imagine a political vacuum they can exploit being created by the serial failures of the two mainstream parties. There's reasons the Greens cannot gain traction in this country.
What's the solution to too much private & public sector debt ? Transfer it ALL to the public sector because according to D Cheney deficits are irrelevant. I guess BHO & Dick found something they agree on!
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
I think he's smart too. I worry though that by the time he gains the experience and wisdom needed to govern well he may have gotten himself into too much trouble.
I think truly effective governance is so hard because some of the most important lessons can only be learned the hard way.
"The protection and healing mechanism in capitalism is losses and the fear of losses. It prevents companies from going berserk and it reins in destructive behavior."
Precisely why we don't have capitalism. GM died year's ago and last year's oil trade just made sure today was it's outcome.
I'm sure you've seen this Forbes article about GS (and "friends") got a looksy into Semgroup's book.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:20 am
RD - "The Greens have long been cheerleaders for the demise of American manufacturing."
And what party has championed American Manufacturing?
The New American Party Party. I'll send you an application. Are you interested in joining the laissez faire, reticent or apathy factions? If you don't chose you are put in the apathy section by default. Dues are exorbitant and meetings frequent, long and tedious but nobody minds since we never pay, attend or fail to entertain ourselves.
"Just a reminder - the end to cliff diving is not the same thing as "green shoots".'
Alternately, if consumption remains flat, Q2 GDP 'growth' would likely be just ~1% negative at a SAAR, which would be a major improvement from the previous two quarters. Building a base is the first step toward recovery.
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent?
Am I missing some good news that everyone else knows about but being hidden from me? Really, I promise no one will kill you if you tell me, at least I don't think so.
Can't say I'm surprised that the market is up today. Friday, the Marketwatch bold headline for most of the day was something along the lines of "GM BK will remove uncertainty" as if it was somehow a good thing. That and the Administration's full court press told me all I needed to expect regarding today's action.
BB is a crafty one, but his actions are becoming more predictable. Timmy G had to give the Chinese something this past weekend and Big Ben delivered the payoff. How long will this game of chicken last?
Unfortunately, lawyers are not on the "skilled worker" eligibility list. But I apparently could get in as a former food service and accomodations manager.
China must be quite pleased today. USD & Treasuries both crashing. Bet there might be a little handwringing & sweating and even perhaps a guillotine blade being sharpened in Beijing
You have to appreciate and applaud the bulltards who haven't quite pieced together yet the concept that as they cheer for the stock market BB is stealing dollars out of their back pocket. What's more hilarious are the profound rationalees for why the market must go up: tyhe recovery (no mention of EPS), valuation (at 20x forward) etc..Equity really has beocme the land of the retards.
I am still not seeing that anticipated next wave of FCs in my ZIP. Wonder if the Obama banking cartel is holding a meeting and will be setting REO prices soon.
0111: Financial Managers
0213: Computer and Information Systems Managers
0311: Managers in Health Care
0631: Restaurant and Food Service Managers
0632: Accommodation Service Managers
0711: Construction Managers
1111: Financial Auditors and Accountants
2113: Geologists, Geochemists and Geophysicists
2143: Mining Engineers
2144: Geological Engineers
2145: Petroleum Engineers
3111: Specialist Physicians
3112: General Practitioners and Family Physicians
3141: Audiologists and Speech Language Pathologists
3143: Occupational Therapists
3142: Physiotherapists
3151: Head Nurses and Supervisors
3152: Registered Nurses
3215: Medical Radiation Technologists
3233: Licensed Practical Nurses
4121: University Professors
4131: College and Other Vocational Instructors
6241: Chefs
6242: Cooks
7213: Contractors and Supervisors, Pipefitting Trades
7215: Contractors and Supervisors, Carpentry Trades
7217: Contractors and Supervisors, Heavy Construction Equipment Crews
7241: Electricians (Except Industrial and Power System)
7242: Industrial Electricians
7251: Plumbers
7252: Steamfitters, Pipe fitters and Sprinkler System Installers
7265: Welders and Related Machine Operators
7312: Heavy-Duty Equipment Mechanics
7371: Crane Operators
7372: Drillers and Blasters – Surface Mining, Quarrying and Construction
8221: Supervisors, Mining and Quarrying
8222: Supervisors, Oil and Gas Drilling and Service
9212: Supervisors, Petroleum, Gas and Chemical Processing and Utilities
In Jan 2009 when the indices were last at these same levels you could look forward to one 25% drop and return to even today.
In Jan 1998 when the indices were first at these same levels you could look forward to two 25% drops and return to even today.
"Usually PCE and Residential Investment (RI) lead the economy out of recession"
I honestly think we can throw the rule book out on the future path of the economy now. We have never been in a situation like this one before.
Even after the slight QE announcement in Dec (MBS and agency debt only) I thought we would be facing a nasty, but standard and somewhat predictable, recession, easily the worst since the GD.
But after BB announced he was going "Hunt brothers" on the MBS market (which drives the LT treasuries market in ways many don't understand), and buying Treasuries for good measure, and BHO announced his budget with zero fiscal discipline, you can throw historical precedence out the window.
I think what happens next is going to be incredibly hard to predict, as it will largely be dependent on the experimentation of one man who answers to no elected officials.
June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time in 152 years to hedge against further asset declines.
“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”
China must be quite pleased today. USD & Treasuries both crashing. Bet there might be a little handwringing & sweating and even perhaps a guillotine blade being sharpened in Beijing
Good thing China is stimulating their economy by creating yet more manufacturing capacity. US and Western European demand is soaring, no?
You can say what you want about Canada, but I tell you, I was watching the CBC last week (doing some research on my CAD investment) and they were literally wringing their hands about their budget deficit. All $50B of it.
It was amazing. Easily half of the one hour national news telecast was dedicated to debate, analysis, etc of the $50B deficit. And it was actually quite funny - they would have two commentators on to debate the budget, and they just agreed that budget deficits were awful and should be avoided at all costs.
And we wasted, what, $30B on GM just today? How many billion on AIG? $200B+ on Fannie and Freddie (AND BB is buying everything they throw at him).
I don't need to know much more than that. Adjusted for population size, $50B is about $500B here. Any country that has a national debate about a deficit that size is one I feel comfortable investing in.
Not to mention they have tons of oil and other commodities which BB can't create more of on a whim.
I can't look forward to ANYTHING...This is just prolonged SUCKING to the TENTH POWER. Suck Meter reaching critical mass and may stop sucking and begin BLOWING. Pres. Clinton....I hear, is very elated on this news brief.
JJ at Across the Curve posted this this morning...
"The spending and income numbers this morning were interesting and macroeconomically negative. All of the kick to income was from government transfers via Social Security,unemployment benefits or other stimulus items.
What does not augur well for the economy is that the savings rate jumped to 5.7 percent which is its highest level since February 1995 (according to my good friends at HSBC)."
You'd never know that these releases were macro negative when looking at the headlines all over the MSM.
Meanwhile, back on the sidelines watching Rome burn; do I add more TBT or short the dollar some more. Come on Benny, which way are you gonna screw us?
" "Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
His answer drew loud laughter from his student audience..."
BTW - if you're willing to take $400k (Cdn) of Canadian gov't credit risk for 5 years at a 0% yield, then you don't need to be on the list, you can be an entrepreneur or senior exec (requirement is minimum 2 years of business experience) and you get processed much faster too. Alternatively, you can finance that by making a onetime $120k payment. Its actually quite popular, my dad's firm has placed about $100 million through this program in the last 15 years.
This Country might be more willing to accept us than Canada.
Mexico remittances plunge in worst fall on record
MEXICO CITY (AP) -- Money sent home by Mexicans living abroad plunged in April by more than 18 percent compared to the same period last year, the biggest monthly fall on record, the central bank said Monday.
Remittances fell to $1.7 billion in April 2009 compared to $2.1 billion in April 2008, according to the bank. It said the U.S. recession has hurt migrants in the United States, while fewer Mexicans are heading north because of a lack of jobs and a crackdown on illegal immigration.
Last year was the first time remittances have dropped year-to-year since the bank started tracking the money 13 years ago. Mexico's second largest legal source of foreign income after oil, remittances plunged 3.6 percent to $25 billion in 2008 compared to $26 billion in 2007.
Remittances for the first four months of 2009 have dropped more than 8 percent, totaling $7.2 billion compared to $7.9 billion for the same period last year.
It was amazing. Easily half of the one hour national news telecast was dedicated to debate, analysis, etc of the $50B deficit.
Must be nice to actually be able to watch real news.
I like to watch the first half hour of The Today Show to get a feel for what the mainstream is being spoon fed. The first half hour is the supposedly the hard hitting news before getting to the softer news. Well, yesterday the first four segments were 1) Barack and Michelle on Broadway 2) Susan Boyle losing 3) Prince Harry in the US and 4) GM BK which relied mainly on an excerpt of Brian Williams interview with BO where he said GM BK better than liquidation (no mention of suppliers, $30 billion giveaway to retool overseas, competitive disadvantage to Ford etc).
shill --
I am a bit slow today could one of our Elite Bulltards please inform the board where this illustrious
( Factual ) growth is and in what sector.
I'm noticing a great increase in the supply of manure, providing lots of green shoots.
Otherwise, lots of census new hires, FDIC, FBI and CIA hiring experienced financial thieves, sooner or later the cliff diving will hit a reef and stop.
The hamster wheel must reach 77mph at which point the fluxcapacitor will send the economy back to the glorious 1950s...but the catch is we was must coerce a lightning bolt of 1.21 Gigawatts into the wheel without killing the hamster...
"Am I missing some good news that everyone else knows about but being hidden from me?"
same here... i really am trying to find the good news ... besides maybe American's wising up to save more/spend less.... but i really don't see any substantial good news, except that we have kicked the can down the road a few. Is there REALLY any good economic news now?
Thanks the lord that my wife is foreign. I have a back door. Several friends just bought real estate in Chile (Region I) and have the equivalent of green cards. They saw this coming several years ago.
Good news today - minor spending bump from transfer payments...
Bad news for the long term - Govt continues to encourage more dependency, no changes to stimulate business development...
If I had access to 100 billion in seed capital, what could I have created? Rollout Wimax to the whole country... truly smart robots... autonomous vehicles... Food production in high rises powered by hydro or nuclear... Fiber optic access to every home in America... Establish a secure voting system to restore confidence in the election process...
Ah that's just a few ideas that pop up in a few moments...
Chile (Region I) and have the equivalent of green cards. They saw this coming several years ago.
I'm not sure how accurate my history is, but both Chile and Argentina seemed to react badly during times of turbulent change. Maybe Amsterdam, they seem to be busy really enjoying the green shoots and who cares...
So baseball fans, which inning of the recovery are we in ?
I'd usually say "they're playing the national athem", but I'm beginning to think they haven't yet played the get-away game in the previous city yet........
While most of the news today is focused on the General Motors bankruptcy, there was an article in the New York Times BACK TO BUSINESS; Even in Crisis, Banks Dig In For Battle Against Regulation - NY Times that is worth reading about the efforts of the banks to get back to business as usual, with no significant changes to the regulatory structure (other that pure cosmetics) after the combination of de-regulation and lack of enforcement of reaming financial regulations brought the world to the edge of the financial abyss and caused incredible pain and suffering in the real economy, not only here in the U.S. but around the globe. Now lobbying is a constitutional right enjoyed by all citizens, and ever since the Santa Ana Railroad decision in the late 19th century, that right has been extended to corporations. That does not mean that our elected representatives have to take these people seriously. Murderers, rapists and pedophiles also have the right to petition congress. However, rest assured that the bank lobby does not have the well being of the country in mind. NAMBLA has the right to petition Congress as well as does the Mortgage Bankers Association (MBA). Congress has a right to ignore their requests, and the MBA has done far more damage to this country than NAMBLA ever could. Why are bankers given more of a hearing than NAMBLA? They have more money to spend on Congress as the article points out:
“Through political action committees and their own employees, securities and investment firms gave $152 million in political contributions from 2007 to 2008, according to the most recent Federal Election Commission data. The top five companies — Goldman Sachs (GS), Citigroup (C), JP Morgan Chase (JPM), Bank of America (BAC) and Credit Suisse (CS) — gave $22.7 million and spent more than $25 million combined on lobbying activities in that period, according to election data compiled by the Center for Responsive Politics.”
The bankers argue that too much regulation will slow down financial innovation. That very well may be true, but how many recent financial innovations have really helped the economy or investors? The only one I can really think of off hand are ETFs. Most of the others have just been ways to make financial transactions more complex and opaque. Just how in the long run has the economy been strengthened by innovations like CDO’s, CDO’s squared or cubed, CDS’s, CMBS’s? They mostly serve to lure people into investments they do not truly understand (but which they get into because they are “sophisticated”). They also make it possible for Wall Street to rake in huge fees. We desperately need more transparency, not less. Putting derivatives like CDS’s on an exchange with a central clearing house is a good idea, but the Geithner proposal would exempt customized swaps. If that happens, it is almost a guarantee that with in five years 90% of all derivatives will be specifically “customized” so they can avoid being regulated and can be hidden from regulators and investors.
Even after we have subsidized the banks to the tune of hundreds of billions to help clean up the mess they made, they are pushing hard for the right to make more and even bigger messes in the future. They have the money to buy the ear of Congress and the Administration (of either party, they sure had it last time, and so far the Obama Administration has been far to close to them). Bank regulation is the sort of down in the weeds boring but extremely important issue that most people quickly lose interest in. It is exactly the sort of issue where the special interests can have the greatest sway and do the most damage to the common good. For the sake of the country and your children and grandchildren, don’t let your eyes glaze over on this. Get in touch with your Senators and Representatives and let them know that what the banks want is bad for the country. Demand that we have more oversight and transparency in the markets.
"I'd usually say "they're playing the national athem", but I'm beginning to think they haven't yet played the get-away game in the previous city yet........"
Hard to tell with all of the rule changes. Blue's integrity is in doubt... Play by play man, is only reporting home team's runs.
Not in my wildest dreams, and I can dream very dark or very light. This is just surreal. But then, nothing is really stranger than reality.
I'm just very surprised that most people do not seem to read past the headline, most of the news is actually pretty bad but just put a positive spin on the headline and we are busting out of this quagmire. (Did I spell that right?)
Dirk - $25 million lobby.
How many Trillion in bailouts and backstops.
I think that is the best return on investment I have ever heard of, who says capitalism does not work.
Our Congress, Presidency and Judicial system is the best that money can buy.
Now isn't that the American dream.
May need a new index to track USG owned "private/public" partnerships:
C
GM
Chrysler
AIG
FNM
FRE
So much more for BHO to add!
And plan on BO issuing an EO to force all government employees to back this as part of their retirement package......with mandatory deductions, pretax of course, but subject to the Emmanual VAT
JP (homepage, profile) wrote on Mon, 6/1/2009 - 3:47 pm reply Ignore user OT: I am too much of an idiot to understand why GM is trading at 75 cents still.
What is high bond paper at staples or OD worth nowadays?
75 cents?
Some things will always remain that they can be worth the paper they are printed on..
Dirk van Dijk:
Even after we have subsidized the banks to the tune of hundreds of billions to help clean up the mess they made, they are pushing hard for the right to make more and even bigger messes in the future.
Why wouldn't they? This crisis has been extremely profitable for the insider bankers. All the bonus they raked was real. All the fees they skimmed off financial "innovations" that eventually collapsed -- the fees were real. The bailout (that can be used to pay bonuses) are definitely real; and the power they can hold sway over the govt only grows stronger the more times the world sinks into a crisis (and they're bailed out intact).
From their perspective, they should absolutely do this crisis again, in a few years. Perhaps trying to top this one and gain even more bonuses. If they do enough crisis of this kind, the world govt would be so "in the bag" and society become so weakened, that bankers effectively dominated the world.
Look long term people, beyond this crisis. Nothing has changed, and the game will continue (in a different format). Thus, I'm not so sure the stocks or oil won't become the next weapon to cause another huge bubble; bigger than RE/CRE.
There's one important thing you need to know to be pretty successful investing right now, and it's pretty simple.
Relative to current economic conditions and earnings prospects, stocks are as expensive as they have ever been.
That's pretty much true in markets all over the world. There is no fairly valued market left. Stocks are as over-valued now, relative to conditions, as they were in 10/07.
If you could find a currency that looks to be relatively strong over the next five years, then you should buy stocks in that market.
But weak earnings and weak currencies (devaluation, hyperinflation) create bear markets in stocks.
It's hard for anyone to know what's holding stocks up, and until you know what it is, you need to be careful shorting. But whatever it is, it can't last very long, and the next drop is going to be big and sharp (and maybe long).
This morning, I read an inspiring story about GLL Centres, a London-based non-profit
operating gyms for the benefit of the community. (check their site at gll.org). This is
truly brilliant thinking, as it uses the current environment to subtly undermine the status quo. The non-profit model would be a brilliant
Total credit market debt as a percentage of GDP has risen from 130% of GDP in 1952 to 350%
of GDP today. The various bailout and stimulus schemes enacted in the last year will drive
this percentage above 400% in the near future. When a country allows this much debt to
accumulate versus its GDP, they have done something seriously wrong. The country’s
politicians, business leaders, and citizens have all contributed to this disaster.
As long as we have a system that demands/requires exponential credit growth combined with an enabling fed we will be inundated with wall street shams. And based on the nature of exponents, these shams will always dwarf the the output from the goods producing economy.
I see more and ever larger shams ahead. Why work when the system rewards shams. The game will end when the bubble in shams ends. Sadly, the sham bubble will not end this cycle.
If you could find a currency that looks to be relatively strong over the next five years, then you should buy stocks in that market.
Why wouldn't that be the CNY? They are buying up all the commodities companies and sources that they can, they have unlimited cheap labor, and discipline. The only thing holding them back is the peg to the USD and the overdependence on exports. If they unpegged and focused inward on building for themselves, wouldn' t the CNY double or triple in value relative to the USD or EUR?
"The index enables investors to track the performance of U.S.-listed securities that are participating in U.S. government sponsored relief programs, such as the Troubled Asset Relief Program (TARP), or other direct government investments or government loans."
That was an excellent post by hc back at 12:50. It's amazing how many people think the Asians can easily sell off their US Treasury and GSE security holdings and move their accumulated trade surpluses into another currency.
For every seller, there needs to be a buyer.
The reason the Asian governments are holding all those dollars is that when their exporters got them in exchange for the goods they shipped us, no one else in the world would buy those dollars at an exchange rate that would enable the exporters to pay their bills. If they'd had to exchange them in a private market, they'd have gone out of business because the dollars they got from selling us their stuff hadn't enough real value to pay their production costs. That's why for years I've been referring to the Asian mercantilist exchange rate manipulation as vendor financing fraud on a Brobingnagian scale. The dollars were never worth what the governments paid for them, so they lost money the instant they bought them, and all that remains is for the losses to be revealed. By printing the local currency needed to buy the dollars, the Asian governments essentially defrauded their own citizens invisibly through money supply inflation.
green landing area?
Consumption requires income or credit.
Or the fed giving money away
so who is the preeminent scholar-economist on stagflation?
IIRC that uptick in Q1 is basically all transfer payments, no?
oops- was supposed to say hard green landing area
How much are rising gas prices a part of PCE since the core CPI does not include energy?
Just seen my local fill up guy on the latter.....$2.53
Green shoots don't make a good landing area -- if they're bamboo. Or stinging nettle.
As for the preeminent schol.ar-economist on stagflation, couldn't tell you. But Volcker could probably tell you a thing or two. He was there, he broke it (with help from Reagan-era union-marginalizing).
Chicago Dude:
I imagine that all foreign holders of US Dollars would go out and buy any commodity they could find that was priced in US Dollars until they either ran out of US Dollars or couldn't find any more commodities priced in US Dollars.
Tsk... Finish your analysis!
Now what happens to the commodity sellers who get stuffed with gobs of USD now? Those dollars do not vanish into thin air or get burned now does it?
At the end of the day, all the dollars OUTSIDE the USA have to go through repatriation in order to finish it's lifecycle. They either return to the USA because they bought something USA produces (and that something cannot be more USD or USD-producing-assets, or else we're back to the same game, even bigger now); or they remain locked outside the system, transferring from one owner to another or recycled back to USA as UST (which produces for USD as they mature, worsening the problem...).
Now, last I heard, the US don't produce much non-USD-producing (i.e. "real" ) goods; so there's little to buy to really dispose of the USD. If the world is looking to net-decrease it's USD holdings, it's going to drink the ocean through a really small straw.
The way I see it, the USD is like a CDS whose true value is WAY LOWER than what's being reported/marked; and all the holders of USD are similar to sucker mark-to-market banks we see everyday. They cannot allow USD to mark to real value; as that'll make their own books insolvent; so the facade continues.
This is the best game in town yet.
Balance (and USD destruction) returns when the Net holders allow the USD to be recognized to be lower than their own currencies. Based on the collective race to the bottom devaluation action seen so far, there's zero chance of that happening.
Can I haz 4% TNX this week?
10yr & 30yr auctions next week. Who will be bidding alongside Ben as he tries to drive prices up ? Maybe waiting until he's done to see where the natural demand lands up would be a wise choice... looking at the fortune cookie now.
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent?
Am I missing some good news that everyone else knows about but being hidden from me? Really, I promise no one will kill you if you tell me, at least I don't think so.
Worries about the broader macroeconomic impact of higher oil prices centre on the possibility of the return of stagflation, the combination of high inflation and declining output that marred the periods of the 1970s after the two oil shocks of 1973 and 1979. For now that seems most unlikely, given the wider concerns about deflation in the rich world."
Pricey oil and the world economy
Hope and anxiety
Jun 1st 2009
From Economist.com
Rising oil prices suggest hope for the world economy, but could they also limit its recovery?
Premium content | Economist.com
2007 all over again.
That ended well.
Oil is Bernanke-blasting its way past $68.15/bbl at the moment. Probably won't help too much.
EDIT: $68.40/bbl.
EDIT: $68.60/bbl.
Pass this info on to your local News reporter....maybe just maybe someone will shock you and you will see the relevance to said article on the Tee Vee.
But I won't hold my breath to long....thats for dam sure.
Why gas prices are rising
Why gas prices are rising
Nothing irrational about buying up assets for which all risk has effectively been transferred to the sovereign. The real question is, how rational is said sovereign transfer? Therein lies the rub.
dum luk
Heard of Peak Oil ?
If not you will ...
Fun Fact
National Debt per American is more than average savings per household. Yay
Erin B just said: You and your baby owe $211,934; mostly to China
"Just a reminder - the end to cliff diving is not the same thing as "green shoots"."
Cliff diving typically ends in "Red Spurts". And loud thuds. The green shoots are usually the daisy a corpse is pushing up.
It does seem like a repeat of 2007. People have short memories.
From Shill's Examiner article:
If the supply and demand theory held true, then that would mean that the recent decline in oil from $147 a barrel to $40 was based on our decreased consumption. Did we use 70% less gas and oil in January than we did in July? Did you cut your driving by 2/3? Did the world decrease its demand of oil by 70% in those 6 months? Hardly... Once you reason that way, it is pretty easy to dismiss the “supply and demand” factor in oil prices, at least for now.
Well, if you flunked Econ 101 maybe it is.
I'm not suggesting the moves in oil aren't liquidity driven. But to argue that supply and demand requires that the price of a commodity be proportional to demand is...I'm at a loss for words but the author's understanding of the most elementary of economic principles wouldn't even qualify him for a job at CNBC.
and look at oil go....
Ciao
MS
I've already sent notice to Timmy that I default on my share of The Great National Debt.
Green... Ah shoot who are we kidding?
Citizen Scotto -
Erin B just said: You and your baby owe $211,934; mostly to China
U.S. National Debt Clock : Real Time
Has $188,436, while I read factoring in unfunded Governmental pensions, Medicaid, Medicare, it was in the field of $550,000+.
It just really messes up my net worth calculations.
"and look at oil go...."
If Goldman Sucks keeps engineering these little oil bubbles for fun and profit, they could completely unhinge the whole food production structure. That would be fun.
Now, last I heard, the US don't produce much non-USD-producing (i.e. "real" ) goods; so there's little to buy to really dispose of the USD.
Real estate!
Oh, ...
... wait...
... nevermind ...
DEFAULT=Move to Canada.
I'm checking out Vancouver this Summer.
the US should just swiftly and boldly file a "surgical" BK so that we can emerge leaner and more competitive.
What's good for GM, is good for the country!!
oh $hit, maybe that's what's driving the tnx...
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent? - KK
It seems to me, the market is most rational, in the sense of a data-ingesting logic machine, only when things are relatively calm. During a crisis, it acts like any other system undergoing radical change, such as an organism experiencing disease, or a storm weather system. It seems irrational or 'emotional,' but it has it's own internal organized chaos. Lots of destructive energy, too.
I see this is in my local economy-- archaic businesses that were weak and just being carried along in the boom are now being killed off like dinosaurs. The strong are surviving, just barely. And there is some 'stimpack' money coming in for local government projects. So I don't thnk the market has any deep secret knowledge here, just a general sense that we have hit bottom, rightly or wrongly.
Why does the Green party sound more free market than the Dem/GOP party?
I'm at a loss for words but the author's understanding of the most elementary of economic principles wouldn't even qualify him for a job at CNBC.
Aux contraire ... it qualifies him perfectly.
Yalt are you implying that todays action or any Market action today is econ 101...?????????????
than I must have flunked, cause this is Market 202 market fantasy.
Comrade Misean is Dope:
If Goldman Sucks keeps engineering these little oil bubbles for fun and profit, they could completely unhinge the whole food production structure. That would be fun.
If you were them? Why wouldn't you? If you indeed have the power to cause massive spikes and crashes in the market, and profit from them; and be able to be bailed out by uncle sam, if you misjudged and hit the land mines.
WHY WON'T YOU GO ALL OUT and wreck the system in the process??
The protection and healing mechanism in capitalism is losses and the fear of losses. It prevents companies from going berserk and it reins in destructive behavior.
Remove fear and you get today. Oil, stocks for now, much much bigger things to come. Everything is going to start swinging wildly now.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:01 am
Fun Fact
National Debt per American is more than average savings per household. Yay
You reminded me to get a reality check on the REAL America
U.S. National Debt Clock : Real Time
the US should just swiftly and boldly file a "surgical" BK so that we can emerge leaner and more competitive.
What's good for GM, is good for the country!!
oh $hit, maybe that's what's driving the tnx...
It's incredible to watch US sovereign debt bounce around like a financial
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
Business as we knew it is fast coming to an end. Here's what the Obamaconomy looks like. The government champions funds. Funds champion corporations. Corporations champion markets and industries. No one champions people (because they don't count).
It's difficult to argue that the market is irrational when it's so efficiently taking your money.
Rational market behavior doesn't necessarily coincide with the interests of an economy as a whole. Blowing bubbles for profit is quite rational if you're given the means to do so.
Above average volume on both NYSE and NAZ
Shark Investing - Volume Charts
scone - So I don't think the market has any deep secret knowledge here, just a general sense that we have hit bottom, rightly or wrongly.
Yes, but maybe I just have my "bear" blinders on, but all I see is a small rest stop for the next couple of months. The initial flush from the stimulus might be helping a little, but there are just too many unexploded bombs waiting in the economy. But hey, I'll just make up some ginger/lemonade cool aid and drink deeply.
I'm telling you guys move to Canada before they build the border force on the southern border and Alaska becomes independent territory of Canada.
Before you move bring your car over or buy a car in the US it is much cheaper.
"Just a reminder - the end to cliff diving is not the same thing as "green shoots"."
Tell that to the market.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:10 am
Why does the Green party sound more free market than the Dem/GOP party?
Several reasons, all incorrect. The Greens have long been cheerleaders for the demise of American manufacturing. They also imagine a political vacuum they can exploit being created by the serial failures of the two mainstream parties. There's reasons the Greens cannot gain traction in this country.
What's the solution to too much private & public sector debt ? Transfer it ALL to the public sector because according to D Cheney deficits are irrelevant. I guess BHO & Dick found something they agree on!
RD
"The Greens have long been cheerleaders for the demise of American manufacturing."
And what party has championed American Manufacturing?
It's a shame that our President — who's actually pretty bright — has turned out to be the economic equivalent of Dubya, at the time we needed economic competence the most.
I think he's smart too. I worry though that by the time he gains the experience and wisdom needed to govern well he may have gotten himself into too much trouble.
I think truly effective governance is so hard because some of the most important lessons can only be learned the hard way.
"The protection and healing mechanism in capitalism is losses and the fear of losses. It prevents companies from going berserk and it reins in destructive behavior."
Precisely why we don't have capitalism. GM died year's ago and last year's oil trade just made sure today was it's outcome.
I'm sure you've seen this Forbes article about GS (and "friends") got a looksy into Semgroup's book.
http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html
Circumstantial my ass....
Ciao
MS
does hu have to treat timmay according to the geneva conventions?
Consumption usually springs in spring time:). This does not mean though that the crisis is over.
If you want to comment on how the crisis is affecting you, visist Crisis meter | world crisis | share, measure and make your crisis statistics
Regards,
Alex
I'm telling you guys move to Canada before they build the border force on the southern border and Alaska becomes independent territory of Canada.
i'm in the process of getting dual citizenship just to keep the options open.
MS
Isn't the ICE totally opaque? The banks could easily game that entire exchange.
Go ahead and tell me this isn't the funniest thing you have read today.
GM bankruptcy forever linked to Harlem dealership
| Reuters
How GM is filing for BK in NY.
Tim waiting for 2012 (homepage, profile) wrote on Mon, 6/1/2009 - 11:20 am
RD - "The Greens have long been cheerleaders for the demise of American manufacturing."
And what party has championed American Manufacturing?
The New American Party Party. I'll send you an application. Are you interested in joining the laissez faire, reticent or apathy factions? If you don't chose you are put in the apathy section by default. Dues are exorbitant and meetings frequent, long and tedious but nobody minds since we never pay, attend or fail to entertain ourselves.
Why can't CNBC be more like this:
FT.com / Short View
Permabear cat is having a rough time again today. He just logged into his trading account and checked his short positions.
"Just a reminder - the end to cliff diving is not the same thing as "green shoots".'
Alternately, if consumption remains flat, Q2 GDP 'growth' would likely be just ~1% negative at a SAAR, which would be a major improvement from the previous two quarters. Building a base is the first step toward recovery.
I'll look into it but I like being a independent voter (former Dem)
Have I lost touch with reality or can the market stay irrational longer than I can stay solvent?
Am I missing some good news that everyone else knows about but being hidden from me? Really, I promise no one will kill you if you tell me, at least I don't think so.
Can't say I'm surprised that the market is up today. Friday, the Marketwatch bold headline for most of the day was something along the lines of "GM BK will remove uncertainty" as if it was somehow a good thing. That and the Administration's full court press told me all I needed to expect regarding today's action.
BB is a crafty one, but his actions are becoming more predictable. Timmy G had to give the Chinese something this past weekend and Big Ben delivered the payoff. How long will this game of chicken last?
ICE transparent?? Not in a million year's....
They did this in the OTC market I recall.....rules changed so they took sandbox away.
Ciao
MS
"move to Canada"
Unfortunately, lawyers are not on the "skilled worker" eligibility list. But I apparently could get in as a former food service and accomodations manager.
Good, it's always easiest to indoctrinate those who have never before belonged to an organized political party. [apologies to Will Rogers]
China must be quite pleased today. USD & Treasuries both crashing. Bet there might be a little handwringing & sweating and even perhaps a guillotine blade being sharpened in Beijing
Sorry I meant opaque that comment above didn't make sense
Notice that after they changed the rules oil inexplicably fell.
I think he's smart too. I worry though that by the time he gains the experience and wisdom needed to govern well
Define governing? The wealthiest Americans are glee filled over his adroitness at governing. Barack W. Obushma.
You have to appreciate and applaud the bulltards who haven't quite pieced together yet the concept that as they cheer for the stock market BB is stealing dollars out of their back pocket. What's more hilarious are the profound rationalees for why the market must go up: tyhe recovery (no mention of EPS), valuation (at 20x forward) etc..Equity really has beocme the land of the retards.
General Motors now Obama Motors.
"Unfortunately, lawyers are not on the "skilled worker" eligibility list."
Canada's equivalent to the lost 13th Amendment.
Not only can't you run for office, you can't even get in to try.
I am still not seeing that anticipated next wave of FCs in my ZIP. Wonder if the Obama banking cartel is holding a meeting and will be setting REO prices soon.
Here is the Canadian skilled worker list--enjoy 0111, for this one Americans need not apply...
Immigrating to Canada: Skilled workers and professionals - Who can apply
0111: Financial Managers
0213: Computer and Information Systems Managers
0311: Managers in Health Care
0631: Restaurant and Food Service Managers
0632: Accommodation Service Managers
0711: Construction Managers
1111: Financial Auditors and Accountants
2113: Geologists, Geochemists and Geophysicists
2143: Mining Engineers
2144: Geological Engineers
2145: Petroleum Engineers
3111: Specialist Physicians
3112: General Practitioners and Family Physicians
3141: Audiologists and Speech Language Pathologists
3143: Occupational Therapists
3142: Physiotherapists
3151: Head Nurses and Supervisors
3152: Registered Nurses
3215: Medical Radiation Technologists
3233: Licensed Practical Nurses
4121: University Professors
4131: College and Other Vocational Instructors
6241: Chefs
6242: Cooks
7213: Contractors and Supervisors, Pipefitting Trades
7215: Contractors and Supervisors, Carpentry Trades
7217: Contractors and Supervisors, Heavy Construction Equipment Crews
7241: Electricians (Except Industrial and Power System)
7242: Industrial Electricians
7251: Plumbers
7252: Steamfitters, Pipe fitters and Sprinkler System Installers
7265: Welders and Related Machine Operators
7312: Heavy-Duty Equipment Mechanics
7371: Crane Operators
7372: Drillers and Blasters – Surface Mining, Quarrying and Construction
8221: Supervisors, Mining and Quarrying
8222: Supervisors, Oil and Gas Drilling and Service
9212: Supervisors, Petroleum, Gas and Chemical Processing and Utilities
Q: What's the difference between Canadians and Americans?
A: Canadians don't know yet that they're Americans.
Guys please cut the positive talk about Canada. If Lucifer sees this chain he's liable to blow an anueurism.
In Jan 2009 when the indices were last at these same levels you could look forward to one 25% drop and return to even today.
In Jan 1998 when the indices were first at these same levels you could look forward to two 25% drops and return to even today.
"Usually PCE and Residential Investment (RI) lead the economy out of recession"
I honestly think we can throw the rule book out on the future path of the economy now. We have never been in a situation like this one before.
Even after the slight QE announcement in Dec (MBS and agency debt only) I thought we would be facing a nasty, but standard and somewhat predictable, recession, easily the worst since the GD.
But after BB announced he was going "Hunt brothers" on the MBS market (which drives the LT treasuries market in ways many don't understand), and buying Treasuries for good measure, and BHO announced his budget with zero fiscal discipline, you can throw historical precedence out the window.
I think what happens next is going to be incredibly hard to predict, as it will largely be dependent on the experimentation of one man who answers to no elected officials.
blackhat (profile) wrote on Mon, 6/1/2009 - 11:47 am
Here is the Canadian skilled worker list...
What? No "Telephone Sanitizers?" We all know how that worked out.
In the immortal words of Peter Griffin ( Family Guy )...Canada....Canada sucks!,,,,sorry had to.
Alas, poor Jas
& his Burned Bond Hope.
SRS down "only" 7% now
Casino Bernanke to FCX buyers, "Your winnings, sir"
300% in 6mo. Thank you for playing.
FCX: Basic Chart for FREEPORT MCMORAN B - Yahoo! Finance
Hmmm... this is interesting.
91 day bill offering:
Bid-to-cover 3.69, Indirect was ~51% of the total (eek!)
182 day bill offering:
Bid to cover 3.22, Indirect was 46%.
The Market Ticker
BBAD's keep Jas flame lit.
Here comes that final hour..... will Elmo make a break for it?
Apologies if already posted
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajf0L9wTPq6Y&refer=home
June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time in 152 years to hedge against further asset declines.
“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”
Rob Dawg,
True. But at least they didn't have Nutritionist, Life Coach, Consultant, or Facilitator.
--bh
Roughly, Jas' long bond positions are down 1/3rd in value this year. I wonder if "banker" executed his positions.
China must be quite pleased today. USD & Treasuries both crashing. Bet there might be a little handwringing & sweating and even perhaps a guillotine blade being sharpened in Beijing
Good thing China is stimulating their economy by creating yet more manufacturing capacity. US and Western European demand is soaring, no?
You can say what you want about Canada, but I tell you, I was watching the CBC last week (doing some research on my CAD investment) and they were literally wringing their hands about their budget deficit. All $50B of it.
It was amazing. Easily half of the one hour national news telecast was dedicated to debate, analysis, etc of the $50B deficit. And it was actually quite funny - they would have two commentators on to debate the budget, and they just agreed that budget deficits were awful and should be avoided at all costs.
And we wasted, what, $30B on GM just today? How many billion on AIG? $200B+ on Fannie and Freddie (AND BB is buying everything they throw at him).
I don't need to know much more than that. Adjusted for population size, $50B is about $500B here. Any country that has a national debate about a deficit that size is one I feel comfortable investing in.
Not to mention they have tons of oil and other commodities which BB can't create more of on a whim.
BBAD's keep Jas flame lit.
Unfortunately using Jas's paper to do it.
I can't look forward to ANYTHING...This is just prolonged SUCKING to the TENTH POWER. Suck Meter reaching critical mass and may stop sucking and begin BLOWING. Pres. Clinton....I hear, is very elated on this news brief.
JJ at Across the Curve posted this this morning...
"The spending and income numbers this morning were interesting and macroeconomically negative. All of the kick to income was from government transfers via Social Security,unemployment benefits or other stimulus items.
What does not augur well for the economy is that the savings rate jumped to 5.7 percent which is its highest level since February 1995 (according to my good friends at HSBC)."
You'd never know that these releases were macro negative when looking at the headlines all over the MSM.
Meanwhile, back on the sidelines watching Rome burn; do I add more TBT or short the dollar some more. Come on Benny, which way are you gonna screw us?
Just in case you didn't see this, Zero Hedge linked this report from Reuters:
UPDATE 3-Geithner tells China its dollar assets are safe
| Reuters
" "Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
His answer drew loud laughter from his student audience..."
0213: Computer and Information Systems Managers
I have been faking this for over a decade, wonder if I could fake it in Canada?
BTW - if you're willing to take $400k (Cdn) of Canadian gov't credit risk for 5 years at a 0% yield, then you don't need to be on the list, you can be an entrepreneur or senior exec (requirement is minimum 2 years of business experience) and you get processed much faster too. Alternatively, you can finance that by making a onetime $120k payment. Its actually quite popular, my dad's firm has placed about $100 million through this program in the last 15 years.
This Country might be more willing to accept us than Canada.
Mexico remittances plunge in worst fall on record
MEXICO CITY (AP) -- Money sent home by Mexicans living abroad plunged in April by more than 18 percent compared to the same period last year, the biggest monthly fall on record, the central bank said Monday.
Remittances fell to $1.7 billion in April 2009 compared to $2.1 billion in April 2008, according to the bank. It said the U.S. recession has hurt migrants in the United States, while fewer Mexicans are heading north because of a lack of jobs and a crackdown on illegal immigration.
Last year was the first time remittances have dropped year-to-year since the bank started tracking the money 13 years ago. Mexico's second largest legal source of foreign income after oil, remittances plunged 3.6 percent to $25 billion in 2008 compared to $26 billion in 2007.
Remittances for the first four months of 2009 have dropped more than 8 percent, totaling $7.2 billion compared to $7.9 billion for the same period last year.
Yahoo! 404 - Page Not Found
I don't think anyone has commented on the irony of removing Citigroup and replacing it with Travelers...
One and the same..
Ciao
MS
good for a laugh
General Motors | GM Reinvention | Tell Us - Join the New GM
They just keep spinning the hamster wheel we're on faster and faster. Do everything in your power to get off the hamster wheel.
Treasury 10-year yields rise most in eight months as growth recovers – Bloomberg
I am a bit slow today could one of our Elite Bulltards please inform the board where this illustrious
( Factual ) growth is and in what sector.
Basel WTH he is did this morning. Keep up the lie. Prop up the fraud.
"They just keep spinning the hamster wheel we're on faster and faster"
It's easy to confuse apathy for audacity.
Does anyone know what the state does with the seized gold?
NC agents raid office, seize nearly $2 million in gold, silver bullion and coins
Yahoo! 404 - Page Not Found
shill,
That's one of those "STORY TO FOLLOW" Bloomberg posts
It was amazing. Easily half of the one hour national news telecast was dedicated to debate, analysis, etc of the $50B deficit.
Must be nice to actually be able to watch real news.
I like to watch the first half hour of The Today Show to get a feel for what the mainstream is being spoon fed. The first half hour is the supposedly the hard hitting news before getting to the softer news. Well, yesterday the first four segments were 1) Barack and Michelle on Broadway 2) Susan Boyle losing 3) Prince Harry in the US and 4) GM BK which relied mainly on an excerpt of Brian Williams interview with BO where he said GM BK better than liquidation (no mention of suppliers, $30 billion giveaway to retool overseas, competitive disadvantage to Ford etc).
shill --
I am a bit slow today could one of our Elite Bulltards please inform the board where this illustrious
( Factual ) growth is and in what sector.
I'm noticing a great increase in the supply of manure, providing lots of green shoots.
Otherwise, lots of census new hires, FDIC, FBI and CIA hiring experienced financial thieves, sooner or later the cliff diving will hit a reef and stop.
"Does anyone know what the state does with the seized gold?"
Have you ever wondered why the return cargo containers aren't 100% empty?
KK, it is a wonderful time to be an american. Good news is great news, bad news is good news, all news is good news. What a country!
Michael,
The hamster wheel must reach 77mph at which point the fluxcapacitor will send the economy back to the glorious 1950s...but the catch is we was must coerce a lightning bolt of 1.21 Gigawatts into the wheel without killing the hamster...
--bh
Does anyone know what the state does with the seized gold?
They put it in a great big pile and go all Scrooge McDuck on it?
Now that would be pretty fun until you dive in from the high board. Double back flip anyone?
"Does anyone know what the state does with the seized gold?"
they stick it in the property locker where the cops gradually replace it with gold painted lead bars.
His answer drew loud laughter from his student audience
Nice. Chinese now mock US leadership IN PERSON.
I wonder if Geithner cracked himself. He must use Botox to keep from laughing when he says things like "strong dollar policy".
"so who is the preeminent scholar-economist on stagflation?"
Volcker... or was that rhetorical?
"Am I missing some good news that everyone else knows about but being hidden from me?"
same here... i really am trying to find the good news ... besides maybe American's wising up to save more/spend less.... but i really don't see any substantial good news, except that we have kicked the can down the road a few. Is there REALLY any good economic news now?
Youtube the Chinese laughing at Timmy G's comments please?
Thanks the lord that my wife is foreign. I have a back door. Several friends just bought real estate in Chile (Region I) and have the equivalent of green cards. They saw this coming several years ago.
So baseball fans, which inning of the recovery are we in ?
'they stick it in the property locker where the cops gradually replace it with gold painted lead bars.'
Thats more likely to happen, IMO. I was wondering if they would auction it like they do with other property.
Good news today - minor spending bump from transfer payments...
Bad news for the long term - Govt continues to encourage more dependency, no changes to stimulate business development...
If I had access to 100 billion in seed capital, what could I have created? Rollout Wimax to the whole country... truly smart robots... autonomous vehicles... Food production in high rises powered by hydro or nuclear... Fiber optic access to every home in America... Establish a secure voting system to restore confidence in the election process...
Ah that's just a few ideas that pop up in a few moments...
"Unfortunately using Jas's paper to do it."
T-Bill puts are printed on flash paper? Poof!
nodhannum -
Chile (Region I) and have the equivalent of green cards. They saw this coming several years ago.
I'm not sure how accurate my history is, but both Chile and Argentina seemed to react badly during times of turbulent change. Maybe Amsterdam, they seem to be busy really enjoying the green shoots and who cares...
So baseball fans, which inning of the recovery are we in ?
I'd usually say "they're playing the national athem", but I'm beginning to think they haven't yet played the get-away game in the previous city yet........
"I don't think anyone has commented on the irony of removing Citigroup and replacing it with Travelers..."
We're post-ironic now.
You can't make this stuff up.
Just a little bit off topic:
While most of the news today is focused on the General Motors bankruptcy, there was an article in the New York Times BACK TO BUSINESS; Even in Crisis, Banks Dig In For Battle Against Regulation - NY Times that is worth reading about the efforts of the banks to get back to business as usual, with no significant changes to the regulatory structure (other that pure cosmetics) after the combination of de-regulation and lack of enforcement of reaming financial regulations brought the world to the edge of the financial abyss and caused incredible pain and suffering in the real economy, not only here in the U.S. but around the globe. Now lobbying is a constitutional right enjoyed by all citizens, and ever since the Santa Ana Railroad decision in the late 19th century, that right has been extended to corporations. That does not mean that our elected representatives have to take these people seriously. Murderers, rapists and pedophiles also have the right to petition congress. However, rest assured that the bank lobby does not have the well being of the country in mind. NAMBLA has the right to petition Congress as well as does the Mortgage Bankers Association (MBA). Congress has a right to ignore their requests, and the MBA has done far more damage to this country than NAMBLA ever could. Why are bankers given more of a hearing than NAMBLA? They have more money to spend on Congress as the article points out:
“Through political action committees and their own employees, securities and investment firms gave $152 million in political contributions from 2007 to 2008, according to the most recent Federal Election Commission data. The top five companies — Goldman Sachs (GS), Citigroup (C), JP Morgan Chase (JPM), Bank of America (BAC) and Credit Suisse (CS) — gave $22.7 million and spent more than $25 million combined on lobbying activities in that period, according to election data compiled by the Center for Responsive Politics.”
The bankers argue that too much regulation will slow down financial innovation. That very well may be true, but how many recent financial innovations have really helped the economy or investors? The only one I can really think of off hand are ETFs. Most of the others have just been ways to make financial transactions more complex and opaque. Just how in the long run has the economy been strengthened by innovations like CDO’s, CDO’s squared or cubed, CDS’s, CMBS’s? They mostly serve to lure people into investments they do not truly understand (but which they get into because they are “sophisticated”). They also make it possible for Wall Street to rake in huge fees. We desperately need more transparency, not less. Putting derivatives like CDS’s on an exchange with a central clearing house is a good idea, but the Geithner proposal would exempt customized swaps. If that happens, it is almost a guarantee that with in five years 90% of all derivatives will be specifically “customized” so they can avoid being regulated and can be hidden from regulators and investors.
Even after we have subsidized the banks to the tune of hundreds of billions to help clean up the mess they made, they are pushing hard for the right to make more and even bigger messes in the future. They have the money to buy the ear of Congress and the Administration (of either party, they sure had it last time, and so far the Obama Administration has been far to close to them). Bank regulation is the sort of down in the weeds boring but extremely important issue that most people quickly lose interest in. It is exactly the sort of issue where the special interests can have the greatest sway and do the most damage to the common good. For the sake of the country and your children and grandchildren, don’t let your eyes glaze over on this. Get in touch with your Senators and Representatives and let them know that what the banks want is bad for the country. Demand that we have more oversight and transparency in the markets.
May need a new index to track USG owned "private/public" partnerships:
C
GM
Chrysler
AIG
FNM
FRE
So much more for BHO to add!
"I'd usually say "they're playing the national athem", but I'm beginning to think they haven't yet played the get-away game in the previous city yet........"
Hard to tell with all of the rule changes. Blue's integrity is in doubt... Play by play man, is only reporting home team's runs.
Funniest Comment of the day
sm_landlord -
You can't make this stuff up.
Not in my wildest dreams, and I can dream very dark or very light. This is just surreal. But then, nothing is really stranger than reality.
I'm just very surprised that most people do not seem to read past the headline, most of the news is actually pretty bad but just put a positive spin on the headline and we are busting out of this quagmire. (Did I spell that right?)
Dirk - $25 million lobby.
How many Trillion in bailouts and backstops.
I think that is the best return on investment I have ever heard of, who says capitalism does not work.
Our Congress, Presidency and Judicial system is the best that money can buy.
Now isn't that the American dream.
Dirk
Don't worry, the Fed is going to regulate the banks.
LOL!!!
NAMBLA has the right to petition Congress as well as does the Mortgage Bankers Association (MBA).
LOL! I've been wondering how to put those two in the same sentence. You have blazed the path.
Where's Kermit?
Somebody please take the last of my MOT before the close!
Re: CSCO joining the DOW.
A company that has never returned a dime to shareholders.
How appropriate a representative of the stock market Ponzi scheme.
I'm just very surprised that most people do not seem to read past the headline
Are you?
I'm not.
If anyone wanted to know the truth, we wouldn't be in this situation.
May need a new index to track USG owned "private/public" partnerships:
C
GM
Chrysler
AIG
FNM
FRE
So much more for BHO to add!
And plan on BO issuing an EO to force all government employees to back this as part of their retirement package......with mandatory deductions, pretax of course, but subject to the Emmanual VAT
OT: I am too much of an idiot to understand why GM is trading at 75 cents still.
A company that has never returned a dime to shareholders.
Only via dividends. They have executed buybacks.
JP (homepage, profile) wrote on Mon, 6/1/2009 - 3:47 pm reply Ignore user OT: I am too much of an idiot to understand why GM is trading at 75 cents still.
What is high bond paper at staples or OD worth nowadays?
75 cents?
Some things will always remain that they can be worth the paper they are printed on..
ghostfaceinvestah;
"A company that has never returned a dime to shareholders."
Oh, come on - dividends are soooo last century.
Sigh...
JP;
"They have executed buybacks."
More than enough to cover the options dilution?
Dirk van Dijk:
Even after we have subsidized the banks to the tune of hundreds of billions to help clean up the mess they made, they are pushing hard for the right to make more and even bigger messes in the future.
Why wouldn't they? This crisis has been extremely profitable for the insider bankers. All the bonus they raked was real. All the fees they skimmed off financial "innovations" that eventually collapsed -- the fees were real. The bailout (that can be used to pay bonuses) are definitely real; and the power they can hold sway over the govt only grows stronger the more times the world sinks into a crisis (and they're bailed out intact).
From their perspective, they should absolutely do this crisis again, in a few years. Perhaps trying to top this one and gain even more bonuses. If they do enough crisis of this kind, the world govt would be so "in the bag" and society become so weakened, that bankers effectively dominated the world.
Look long term people, beyond this crisis. Nothing has changed, and the game will continue (in a different format). Thus, I'm not so sure the stocks or oil won't become the next weapon to cause another huge bubble; bigger than RE/CRE.
wooo look at TBT
More than enough to cover the options dilution?
At one point, yes. But I've lost track. (How much of the 2005 $10B was executed?)
dang...that basically just nails it
SELL into the close??? WTH is coming down the pike tomorrow?
looks like the DOW is on the verge of retracing to: about January 2, 2009
partay!
There's one important thing you need to know to be pretty successful investing right now, and it's pretty simple.
Relative to current economic conditions and earnings prospects, stocks are as expensive as they have ever been.
That's pretty much true in markets all over the world. There is no fairly valued market left. Stocks are as over-valued now, relative to conditions, as they were in 10/07.
If you could find a currency that looks to be relatively strong over the next five years, then you should buy stocks in that market.
But weak earnings and weak currencies (devaluation, hyperinflation) create bear markets in stocks.
It's hard for anyone to know what's holding stocks up, and until you know what it is, you need to be careful shorting. But whatever it is, it can't last very long, and the next drop is going to be big and sharp (and maybe long).
USD picking itself up off the mat. Ben winding up to give it another sharp kick...
So baseball fans, which inning of the recovery are we in ?
It doesn't matter. The opposing side has 1,000 relievers and Sparky Anderson as Mgr
"What inning of the recovery are we in"
That game has not started yet we are still in the fifth inning of a rain delay blowout.
American Ponzis 987 billion (stimulus)
Market Enforcers 12 trillion (liquidity destroyed)
This morning, I read an inspiring story about GLL Centres, a London-based non-profit
operating gyms for the benefit of the community. (check their site at gll.org). This is
truly brilliant thinking, as it uses the current environment to subtly undermine the status quo. The non-profit model would be a brilliant
Total credit market debt as a percentage of GDP has risen from 130% of GDP in 1952 to 350%
of GDP today. The various bailout and stimulus schemes enacted in the last year will drive
this percentage above 400% in the near future. When a country allows this much debt to
accumulate versus its GDP, they have done something seriously wrong. The country’s
politicians, business leaders, and citizens have all contributed to this disaster.
I came across this interesting site.. Econ & Finance Articles Updated Daily
As long as we have a system that demands/requires exponential credit growth combined with an enabling fed we will be inundated with wall street shams. And based on the nature of exponents, these shams will always dwarf the the output from the goods producing economy.
I see more and ever larger shams ahead. Why work when the system rewards shams. The game will end when the bubble in shams ends. Sadly, the sham bubble will not end this cycle.
If you could find a currency that looks to be relatively strong over the next five years, then you should buy stocks in that market.
Why wouldn't that be the CNY? They are buying up all the commodities companies and sources that they can, they have unlimited cheap labor, and discipline. The only thing holding them back is the peg to the USD and the overdependence on exports. If they unpegged and focused inward on building for themselves, wouldn' t the CNY double or triple in value relative to the USD or EUR?
"Is there REALLY any good economic news now?"
Sure there is. For instance, we don't have 100% unemployment.
@ bearly,
That index exists already. No joke.
Page Not Available
"The index enables investors to track the performance of U.S.-listed securities that are participating in U.S. government sponsored relief programs, such as the Troubled Asset Relief Program (TARP), or other direct government investments or government loans."
EMC counterbids for DDUP, NTAP response , tech rally party on!
That was an excellent post by hc back at 12:50. It's amazing how many people think the Asians can easily sell off their US Treasury and GSE security holdings and move their accumulated trade surpluses into another currency.
For every seller, there needs to be a buyer.
The reason the Asian governments are holding all those dollars is that when their exporters got them in exchange for the goods they shipped us, no one else in the world would buy those dollars at an exchange rate that would enable the exporters to pay their bills. If they'd had to exchange them in a private market, they'd have gone out of business because the dollars they got from selling us their stuff hadn't enough real value to pay their production costs. That's why for years I've been referring to the Asian mercantilist exchange rate manipulation as vendor financing fraud on a Brobingnagian scale. The dollars were never worth what the governments paid for them, so they lost money the instant they bought them, and all that remains is for the losses to be revealed. By printing the local currency needed to buy the dollars, the Asian governments essentially defrauded their own citizens invisibly through money supply inflation.