NY Times: U.S. Better Off than Europe
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CalculatedRisk on Thu, 06/11/2009 - 8:44pm (139 comments)
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Broward - think this is a planted meme intended to halt slide in dollar vs. Euro?
Ahh, misery is a conspiracy, then.
Pump it up, Forrest Gump. You are gonna make it!
We originated the mess, so we are the first to catch the resulting disease. The rest get it through time delay by degree of connection to our debt instruments. So is this really being "better off" or just the time delay effect of being the patient having further run the course of the illness?
Since the U.S. doesn't export as much as it used to, it isn't hurt as badly by a global recession as it would have been.
Seems logical, but I'm not sure how that bodes well for the future.
Mama always said life was like a box of CDS. You never know what you're gonna get..
The Euro and Dollar are done IMO. Why would the developing world want worthless paper? better off letting their assets rise relative to the West then come in and buy at lower prices. Look what the Arabs have done with the German auto companies.
I read somewhere that the MBS's from America were sold to Europe and Asia 50/50. The problem is Europe had their own housing/asset bubbles. UBS (I think) had over 35:1 leverage.
Also Europe is deeper into the demographic shift than the US so they will have less of a recovery.
I've been away and/or lurking for a while, but I wanted to thank EHP, broward and others for a great previous thread. Not surprised to see Michael gone.
My sense is that altruism is indeed hard-wired (and reinforceable), but it's only one of several competing influences, and in most individuals it's definitely not always dominant.
WHO pandemic alert:
Europe has caught the Mortgage Pig Flu....
We are all swine now...
~miser
Geithner Said to Tell Bernanke Fed Gains Most in Rules Overhaul
Geithner Said to Tell Bernanke Fed Gains Most in Rules Overhaul - Bloomberg.com
Its easy to regulate when you have a shotgun... Foxes guarding the Taxpayer hen house
miser (profile) wrote on Thu, 6/11/2009 - 11:55 pm
WHO pandemic alert:
Europe has caught the Mortgage Pig Flu....
We are all swine now...
~miser
A chicken in every pot; A pig for every python!
From previous.
"I read some convincing accusations against Sec. of War Stanton, written in the early 20th Century but echoing many suspicions at the time, not so convincingly refuted. The impeachment of Johnson is seen as related."
Baker named both Stanton and his assistant, Thomas Eckert, as participants in the conspiracy.
The codebreakers: the story of ... - Google Books
Kahn fails to mention that Baker signed the page in secret ink. The signature was verified by licensed examiners from both the US National Archives and Pennsylvania State Police.
@Tim waiting for 2012: what gives you the impression that the dollar is worthless paper? Certainly there's a lot that's wrong in the world, but last time I checked the dollar has Strengthened over the past year against all of the following:
* real estate
* bonds
* corporate earnings (both stocks and actual earnings)
* oil
* most agricultural commodities
The only things that a dollar buys less of right now are gold and strong-government bonds, and in both cases it's not by much, it's not running away, and it's within a fairly wide trading range.
Personally I think that for the most part the "inflation" already happened (it was pushed out into the FIRE sector by the credit bubble and propagated from there into the physical economy, but not so strongly). I think the only issue at present is where we halt the ensuing deflation. The question of whether there's a longer-term inflation is much longer-term (years, not months).
Be careful swallowing the inflation meme. That way be dragons.
"The Euro and Dollar are done IMO"
Grouping together USA and EU is like grouping together two young brothers, the first one doing smack (USA), never doing his homework, always partying, spending everything he has and then some, never caring about tomorrow and the other one (EU) being a nice student with A-grades all the time with great plans for the future. Then the partying brother says to the other, "you are gonna fail just like me!"
For starters, Americans should start with building high-speed train network "as homework". Even SPAIN has one...careless partying days are over.
@Timmyone - I think the rail idea has been oversold. Just took a trip to Europe last month. Cost of high-speed train rides was steep (50 euros each way to go 100 miles, in a few hours, including waits and stops). One can travel significantly farther, in the same amount of time, for less cost (in dollars) on many airlines here. High-speed train network makes some sense there, but less sense in U.S., where much of what one wants to get to is more spread out. There's a lot more freedom in the personal automobile, and I think the better investment is in weaning those off fossil fuels.
Awfully quiet here... time for bed!
timmyone (profile) wrote on Thu, 6/11/2009 - 10:03 pm
For starters, Americans should start with building high-speed train network "as homework". Even SPAIN has one...careless partying days are over.
Yeah because we want to be just like the Spanish Empire when we grow up.
Seriously, get us the real construction and operating costs out of them or SNCF for that matter and we can discuss the merits.
The adviser to the French govt. was named Pisani-Ferry, and it was in the New York Times? Hell, thats two strikes.
USA vs Europe, like choosing the world's tallest midget.
In other news, I can't wait until Canada stops selling us oil.
Canada Begins U.S. Campaign to Curb Buy American Rule (Update1) - Bloomberg.com
"Seriously, get us the real construction and operating costs out of them or SNCF for that matter and we can discuss the merits."
Yeah, it is so much better to have "tens of thousands of faraway suburbias with one passenger per car-"transportation" infrastucture.Get back to me when oil hits 500 dollar mark due dollar crashing.
Deja-vu all over again, as Yogi B. put it.
I can speak from experience that Paris-Marseilles is a quick, quiet, comfortable railride with good food, internet,... nyc subway is quick, but I can still beat many routes on my bicyclette.
Profit from tragedy
Goldman May Get $321 Million on Missed Trade Center Deadlines
Goldman May Get $321 Million on Missed Trade Center Deadlines - Bloomberg.com
"Geithner Said to Tell Bernanke Fed Gains Most in Rules Overhaul "
The Fed needs to be abolished, not given greater powers. This alone should be proof that BHO is no different than the elitists before him. Anyone still believing that Hope and Change BS?
OMG, that would be a nightmare. And the Mexicans have a lot less to sell since Cantarell is going dry too. Think Obama would allow US offshore drilling? Don't answer, I know it already. Maybe we can beg some from the Cubans, and Venezulans.
timmyone (profile) wrote on Thu, 6/11/2009 - 10:21 pm
"Seriously, get us the real construction and operating costs out of them or SNCF for that matter and we can discuss the merits."
Yeah, it is so much better to have "tens of thousands of faraway suburbias with one passenger per car-"transportation" infrastucture.Get back to me when oil hits 500 dollar mark due dollar crashing.
Where do you get this one passenger bit. It is 1.57. Besides energy is fungible, $500 oil would kill all forms of travel not just POVs. Of course despite your obvious lack of details you grasp this as evidenced by not wanting to delve into the true costs of HSR.
"you grasp this as evidenced by not wanting to delve into the true costs of HSR. "
Compared to maintaining your excessive suburbia road network? This is from Britain but you'll get the idea (2nd picture):
Revealed: Britain's most terrifying road junction | Mail Online
""While we were aggressive, I think everybody who was involved in the discussions with Goldman Sachs downtown at that point firmly believed that 2009 was a realistic time frame to achieve those deadlines,” John Cahill, who was former Governor George Pataki’s chief of staff and chief negotiator with Goldman Sachs, said in an interview. "
Oh fuckhead Cahill: they started digging the 2nd Avenue Subway 40 years ago (because the Lexington line was and still is packed like sardines.)
They aren't finished digging.
maybe timmay won't get his way after all, at least we can hope.
if only Ron Paul was in charge, we could get rid of the Fed once and for all.
Bernanke Success May Come at Cost of Congress Curbing Fed Power
Bernanke Success May Come at Cost of Congress Curbing Fed Power - Bloomberg.com
“Goldman got the largest retention package in the history of New York City, as far as I know,” said Jonathan Bowles, director of the Center of an Urban Future, a New York-based policy group funded by foundations and labor organizations. “I’m not ruling out the idea that maybe some incentive package was worth considering for Goldman Sachs, but it seemed like we gave away the store.”
immyone (profile) wrote on Thu, 6/11/2009 - 10:29 pm
"you grasp this as evidenced by not wanting to delve into the true costs of HSR. "
Compared to maintaining your excessive suburbia road network?
Excessive? Where do you come up with these myths? It's like reading discredited CNU/Sierra Club propaganda from the 1990s.
Wisdom Speaker, Timmyone
The dollar is backed by assets... it is linked with Real Estate in US. As long as the value or RE falls the value of the currency will fall. All the money printing bailouts and FRE/FNM guarantees all to prop up RE.
I think a lot of the commodity prices are overdone except gold the demand is not there but you have to take a long view with currencies. Even @ $45 per/barrel it is still over the price from 5 years before.
yes IMO stocks are overpriced relative to the dollar.
Europe/US are economies in a long-term secular decline.
Hey, I want to come clean. This is otishertz' sock puppet.
OT- Does Schwarzenegger wear lipstick?
Schwarzenegger threatens to shut down state government - Los Angeles Times
"At the same time, the governor reversed himself on a proposal to end health insurance for families of police officers and firefighters who died in the line of duty. Schwarzenegger called the plan, first reported by The Times on Tuesday, a "terrible screw-up" that is being corrected."
But how to correct the screw-up that got the clown elected?
europe has a safety net, decades of dealing with crappy demographics, relatively honest Unemployment stats, and a flagship export economy which isn't owned by bankers. ths story is the same-old - we yanquis print, lie, crush our middle class and manufacturing, enrich our FIRE sector and call it 'growth'.
our only significant advantage over europe is the fact that our immigrants become truly integrated after a generation or two.
Hollywood hack
Europe has a recipe for stabilization but nothing in your list is a recipe for Growth. their stats may be more accurate but their banks have not been as forthcoming. IMO you'll be surprised to what their growth numbers (or lack of) would have been w/o the worldwide credit bubble
Vietnam/China have the right idea ride bicycles! People need to slow down anyways
"but nothing in your list is a recipe for Growth"
well, the integration of formerly communist europe and a vibrant export sector to asia were that recipe until the magyar, nordic and slavic masses discovered the joy of borrowing in OPCs - other peoples' currencies. that being said, Germans largely confined their stupidity and excess to real estate investments on the mediterranean, and remained renters and savers at home. they also occasionally actually built something as part of their jobs. is the euro project condemned to fail? perhaps - and the different sized notes and stupid bridges won't be missed by me. but Germans have actually learned a little from their history, wheras the average californian wasn't even aware of the housing crash of the early 90s out here circa 2003.
Slow down? I beat anything through crosstown traffic short of a jetpack.
ah - new york city - wonder if soho lofts will be cheap again before i die an old man... i'd love to retire there in 30 years.
The last time i saw so many Europe sucks more stories the Euro was around 1.26.
In most of the stories, what is portrayed as a weakness in Europe can usually be spun to like a plus in my book. The ECB can not monetize in fed like quantities, smaller troubled countries having greater incentive to stay in the EU, Germany is making the case for letting banks fail...
Our PTB are monetizing the debt and are the buyer of last resort in all markets. This means price controls. We have a command economy now.
All comparisons with Europe are off. They will get through more easily.
The US is on the death spiral of narcissistic self destruction.
Watched a mini documentary on the California budget crisis last night. One of the gentleman being interviewed pointed out that California was cutting the programs for the poor to show the short term bond market that funds California's payroll that they could be fiscally responsible and a worthy risk. This quote from a Reuters article bears this out:
"State Senate President Pro Tem Darrell Steinberg has said spending cuts are inevitable, but he opposes Schwarzenegger's plan for scrapping state programs. Instead, he wants to tap reserves in the governor's plan to maintain the programs -- an idea State Treasurer Bill Lockyer, also a Democrat, dislikes because he wants a healthy reserve to help assure investors the state can pay the $7 billion to $9 billion in short-term debt his office assumes the state must sell. "
Perfect example of how the bond market rules the country. Also a perfect example of how this system is failing and will end in tragedy and to the detriment of us all. Ensuring a high rate of return trumps providing assistance keeping people alive is so morally reprehensible it defies belief.
California seen missing budget deadline again
| Reuters
Yogi +1 for the bike. I want a cruiser with one of those automatic gear shifts.
Swap Otis. Yes I agree the European model fits the region well but they will need to delverage just like the US
"Ensuring a high rate of return trumps providing assistance keeping people alive is so morally reprehensible it defies belief."
no, what defies belief is the fact that we'll privatize the coastline, end every form of GA and sell every acre of parkland before the pension of some fat fuck retired sherriff who collects two other pensions and who has lived in reno for 20 years is touched by a penny.
Misery can kiss my hairy ass.
Yogi--
OT but . . . has NYC ever finished constructing its 3rd water tunnel?
Our Local Correspondents: City of Water : The New Yorker (abstract of 2003 NYer article about very slow construction of 3rd water tunnel).
I still remember hearing, in the early 1980's, about the bridges NYC was going to have to close because they were unsafe. Somehow the city managed to find the money for the repairs necessary to stave off closure. Then I left the area & even though I have friends there & visit, I don't really know much about what's happening there, at least not infrastructure information. Like the tertiary sewage treatment plants that ran on methane from landfills the city was going to build--if that ever happened. The idea was that by using landfill generated methane (instead of just flaring it off periodically), the plants would no longer be dependent on Con Ed (or maybe it's not called that anymore?) power, so if/when a brownout/blackout occurred, the sewage gates would no longer automatically open & no more sewage spills. Never heard what happened to that good idea/plan, although I haven't spent much time looking for information lately.
Hollywood
Settle down man save that energy for political organizing. Real change will come when the economy starts waking people up. We're not even halfway thru the GDP decline IMO
The USA only looks like it is doing better because we have cheapened the value of our currency to create the illusion of prosperity, while the Euros were not willing to do that. Now the Euro is at 1.40 vs 1.25 on Mar 9th. Does this indicate the Euros are worse off than we are? Doesn't seem like that is how the world is betting.
So who is better off? Our citizens, who are now paying relatively more for gasoline, and everything that uses oil and oil products in its manufacture and distribution? The USA, with the same corrupt bankers who put us in this situation still in charge, and fatter and happier than ever? The USA, with higher (!!) unemployment than Germany, and no social safety net?
Any suggestion the USA is in better shape than Euro zone is a joke. I would rather have the deflation in Ireland than the currency-debasing hyperinflation the USA is facing.
The bridges were repaired but are starting to show rust again. Don't know about sewage and water. We haven't gotten the main breaks and steam pops that we did in the 80'sand 90's, and the parks are cleaner than in my lifetime. But the waters are troubled...
Does anyone here seriously believe that the US will decline by 2.8 percent? US stats have consistently been revised downward, whereas European stats
We are facing an imminent Minsky moment collapse in American Denial. This is an instant that is begging for a defining moment. Universal shock of recognition will mark all our lives when it does.
Will we fail eachother and fall into cannibalistic survival of the fittest?
The lead article over at the WSJ seems to layout the Fed's current thinking on QE.
A snippet...quite a bit more in the full article.
Worth a read.
http://online.wsj.com/article/SB124477575898508951.html#mod=testMod
Fed to Keep Lid on Bond Buys
Big Boost in Purchases Is Unlikely; Divisions Emerge Over Handling Risk of Inflation
WASHINGTON -- Federal Reserve officials are unlikely to significantly boost purchases of U.S. Treasurys and mortgage-backed securities when they meet in late June, but could make other adjustments in the face of rising bond yields and fresh signs of an improving economy.
Fed officials have become more confident recently that they have stabilized the economy and set the stage for recovery. But divisions are brewing within the Fed over whether it should do more to speed the healing, pause, or start pulling back to avoid an outbreak of inflation.
Those crosscurrents are likely to inhibit bold new strokes by the Fed at its next meeting, in contrast to earlier in the year, when a bleak outlook spurred aggressive action.
The Fed's bond-purchase programs are designed to drive up Treasury prices and push down interest rates across the economy. The bond and mortgage-debt purchases have been at the center of the government's efforts to jump-start economic activity.
"Does anyone here seriously believe that the US will decline by 2.8 percent? "
Retail sales off 11% in a 70 % consumer economy where the chronically undead financial sector used to make up 40% of SP earnings. Count me as No.
"The Fed's bond-purchase programs are designed to drive up Treasury prices and push down interest rates across the economy. The bond and mortgage-debt purchases have been at the center of the government's efforts to jump-start economic activity."
Is there a name for the strategy of saying the opposite of what you mean?
Once lies get large enough are people willing to accept any story in order to make a big unsettling lie go away?
.
.
.
“Most truths are so naked that people feel sorry for them and cover them up, at least a little bit.” -Edward R. Murrow
You see, you take production, add consumption, you get production. The sad truth is no one notices.
That's crap.. the scariest intersections in the UK are the "Magic Roundabout" in Hemel Hempstead and the "Magic Roundabout" in Swindon.
They're worse than the Hanger Lane gyratory system by far, mostly coz of people having no idea which way to go on them. Hanger Lane is kind of a fun wild ride ! You want freaking crazy try going round the Arc de Triumphe... now that was fun.. I still have nightmares about it
I wouldn't quote the Daily Mail as any kind of 'source', it's like one of those tabloids you get in the supermarket, but with even more tabloid.
But I digress wildly off topic...
this is a misleading statement.
how is a barely positive GDP growth funded by 12% budget deficit, better than slight contraction funded by a small budget deficit???
here is the math, you can always replace my assumed numbers with the actuals at year end:
USA: spending 12% of GDP to produce 1% growth, a 11% of GDP debt increase to support something unsustainable;
EUROZONE: spending 3% of GDP to produce 3% contraction, a 6% of GDP debt increase to support something a bit less unsustainable.
but i guess just by looking at the benefit and ignoring the associated cost makes you feel better... like an ostrich with head in the sand
Europe has a recipe for stabilization
Europe has a recipe for stagnation and will be sticking to it for the next century at least.
Time for white American men to return to Europe. They whine about not having enough children and overrelying on "mongrel" immigration. We can solve that quickly.
"Even SPAIN has one...careless partying days are over. "
Amazing what you can do with 99.5 billion Euro in funding from the EU over 7 years. That of course excludes Spain's CAP subsidies.
I feel there is a dental, body hair and personal hygene joke in there somewhere.....
"Amazing what you can do with 99.5 billion Euro in funding from the EU over 7 years."
or you can float FRE/FNM with it for a few months... Camper makes some good shoes at least
The reason Americans crave sex more than any other nation on earth is because of our puritan traditions. It makes us want to be very bad and brake social laws. it heightens arousal and release to such levels, you have very little energy and are completely exhausted by the end of coitus.
Fannie and Freddie should just be nationalized. Their current state is sad.
"Amazing what you can do with 99.5 billion Euro in funding from the EU over 7 years. That of course excludes Spain's CAP subsidies. - splat"
Speaking like a true Brit
Nothing good ever comes from the continentals. (Well, nothing good ever came from continentals except invading armies to the foggy island but that is not the point 
Must be really difficult adjusting to the new reality in which Spain (former enemy of Great Britain), Holland (former enemy), France (former enemy), Italy (former enemy) and even the Beelzebub nation GERMANY are all in the same UNION! They are all out to get you!
timmyone,
your comments about a high speed rail network I just don't buy.... outside of a
few corridors in the USA the country is just too expansive to make it work.
take the TGV, for one, it relies on huge government subsidies for its operation.
having been a frequent traveler to Spain it's nice to see something other than La Punta
service bwt Madrid and Barcelona...
did the Concorde ever make money for either airline?
Then let's do those corridors already.
"your comments about a high speed rail network I just don't buy.... outside of a few corridors in the USA the country is just too expansive to make it work."
Depends on the definition of high speed. If you mean some fantastic Maglev trains all the way to the nearest shopping mall, then of course costs will be huge. But high speed means in most European countries trains travelling usually just up to 160-200 km/100-125 miles per hour. That is perfectly doable with just adequately kept normal electrified rail network and with 2nd generation ICEs. Anything over that costs a lot more.
A great site:
Institutional Risk Analytics
"Excuse us for not liking a market that is rigged in favor of the sellers, the monopoly dealers, who even today�refuse to allow open price discovery in CDS among and between the other dealers. We hear about this issue constantly, from clients large and small, from hedge funds to huge pension managers. If the range of end-users from whom we hear are at all representative of Buy Side views of the CDS market, change will be welcomed.
And yes please pardon us for not putting our stamp of approval on a market structure that creates more risk in financial institutions and their clients. Every day the OTC CDS market is allowed to continue in its current form, systemic risk increases because the activity, on net,�consumes�value from the overall market - like any zero sum, gaming activity.
Simply stated, the�supra-normal returns paid to the dealers in the�CDS market is a tax. Like most state lotteries, the deliberate inefficiency of the CDS market is a dedicated�subsidy�meant to benefit one class of financial institutions, namely the large dealer banks, at the expense of other market participants. Every investor in the markets pay the CDS tax�via wider spreads and the taxpayers in the industrial nations pay due to periodic losses to the system caused by the AIGs of the world. And for every large, overt failure like AIG, there are dozens of lesser losses from OTC derivatives buried by the professional managers of funds and financial institutions in the same way that gamblers hide their bad bets.
What offends us about the CDS market is not just that it is deceptive by design, which it is; not just that it is a deliberate evasion of established norms of transparency and safety and soundness, norms proven in practice by the great bilateral cash and futures exchanges over decades; not that CDS is a retrograde development in terms of the public supervision and regulation of financial markets, something that gets too little notice; and not that CDS is a manifestation of the sickly business models inside the largest zombie money center banks, business values which consume investor value in multi-billion dollar chunks.
No, what bothers us about the CDS market is that is violates the basic American principle of fair dealing. Jefferson said that "commerce between master and slave is barbarism." All of the Founders were Greek scholars. They knew what made nations great and what pulled them down into ruins. And they knew that, above all else, how we treat ourselves, as individuals, customers, neighbors, traders and fellow citizens, matters more than just making a living. If we as a nation tolerate unfairness in our financial markets, how can we expect our financial institutions and markets to be safe and sound?
Equal representation under the law went hand in hand with proportional requital, meaning that a good deal was a fair deal, not merely in terms of price but in making sure that both parties extracted value from the bargain. A situation in which one person extracts value and another, through trickery, does not, traditionally has been rejected by Americans. Whether through laws requiring disclosure of material facts to investors, anti-trust laws or the laws and regulations that once required virtually all securities transactions to be conducted across open, public markets, not within the private confines of a dealer-controlled monopoly, Americans have historically stood against efforts to reduce transparency and make markets less efficient - but that is precisely how we view the proposals before the Congress to "reform" the OTC derivatives markets. ..."
"Perhaps the fact of this huge, unmanageable risk embedded in the OTC model explains why none of the major partnership exchanges have been willing to propose themselves as alternatives for the OTC derivatives model. As one Chicago insider told The IRA: "None of our members are comfortable with the economics of CDS contracts nor would they be willing to backstop settlement of these instruments as they exist today."
Second, the decision to allow the larger banks to repay their TARP money is a mistake of the first order,in our view, and illustrates the degree to which Washington is letting the large dealers call the shots on regulatory strategy. If our estimates for loss rates by US banks prove correct, many of the TARP banks repaying capital now may be forced to come back to Washington seeking more help in Q4 2009 or in 2010. And the large banks not repaying the TARP money bear a stigma that may cause regulators and bankers serious problems as the year wears on. "
This is really a tale of two Europes; one anglophile and the other anglo-sceptic. The anglophile portion who blindly accepted American economic propaganda, Britian, Ireland, to some extent Spain and Italy, and Eastern Europe are seriously suffering. The anglo-sceptic core Germany, France, Belgium and Holland are obviously also feeling the pain as any exporting country would, but their long term prospects are bright since their economic systems are fundamentally sound.
The same cannot be said about America. The only way that the dysfunctional American debt-camp Ponzi-scheme can function is through the continued support of the AAA (Asians, Arabs, and various Anglophiles) countries mainlining free cash intravenously into the US’ greedy veins. The real question is whether these countries are just plain stupid or do they actually realize they are slowly rotting away the good American economic tissue and leaving only a rotten puss-filled corpse? In any case, the feel-good sensation of money-for-nothing will someday end; and with it an economic and political crisis will erupt in America as reality sets in. Rehab will be a bitch.
Touche HH!
Broward - think this is a planted meme intended to halt slide in dollar vs. Euro?
I have no idea but you can guesstimate for yourself, here's what I tend to do -
What's a unique identifier for the meme?
i ran "America" + "Europe" and "American" + "European" on Google trends.
Google Trends: american european, america europe
No trend change, pretty steady state.
Google is a huge sample size so I'm not seeing that it's even a meme with traction.
But we'll try Blogpulse as a counterpoint, since it samples blogs instead of queries.
Trend Search
Okay, now there is a spike.
So now let's dial in closer and broaden the timeline.
Add an additional qualifier to filter down closer to what we're seeking.
Let's try "American" + "European" + "economy".
Trend Search
Okay, over a longer timeline, there's actually a net decline.
So, from a three minute analysis, I'd say there's not even a meme, much less a manipulation.
Ensuring a high rate of return trumps providing assistance keeping people alive is so morally reprehensible it defies belief
Will probably fail, too. The reason that raising taxes was a successful strategy for fifty years is because taxes were raised primarily on higher incomes which have lower propensity to spend. Eliminating spending at lower incomes will show up as reduced consumption and create a downward spiral.
Okay, folk. re: train system and the need
It will work, and it will put the commuter airlines out of business. Period.
But it will work, following (in a general sense) the already existing elements such as interstates, cities, etc etc.
We could retrain all those bush pilots to be conductors, brakemen, engineers, etc.
broward writes: "Eliminating spending at lower incomes will show up as reduced consumption and create a downward spiral."
I'm really not 'getting' the badness of such a thing. Downward spiral? Well okay, so we make do with a neutral shade of salad shooter, we take the bus (maybe help expand the local bus system), we walk or bike to and from as sustainable support systems evolve locally.
Don't understand the fascination with superimposing an HSR network on the American scene.
Europe retained its passenger rail system, and the habit of using it, after WWII. And they upgraded highway transit and HSR systems in tandem. Consequently, urban and suburban new construction developed along lines which took full advantage of transport linkage - existing and projected - as one might anticipate they would do.
I have absolutely no expectation that a passenger rail network would be assembled here along sensible lines. The built environment argues against it, and the habits of long-range planning aren't a strong suit here. If we get HSR, it'll be pork, most likely. A subsidized showpiece conferring bragging rights, not a functional network.
Check out the 10yr. Rallied to 3.80 based on Japan's central bank comments. Someone made a phone call last night.
A lot of stuff being rendered reference the pursuit of happiness being wrapped up in the ever increasing wealth or whatever. Well, maybe we should all consider just what happiness is.
Happiness is or is not. Pursuit is a waste of energy.
Increase of the common weal is self reliance, community and acceptance that life offers nothing more than the light of a new day.
We deluded ourselves into thinking it was about money at the expense of all else. We can delude ourselves otherwise just as well.
Nuke - far out. Yosano's comments seem to have been taken at face value. Methinks much positioning is being larded out today in advance of the weekend meetings. Bloomie is running contradicatory and/or hilarious headlines. Sample "Bernanke's Success with Crisis...".
More puzzling is El-Erian punting comments into this field. They sound naive and dislocated. Which probably means it's party line, and we should all cue the cui bono chorus.
El-Erian Says Summit Shows `Rebalancing' as BRICS Buy IMF Bonds - Bloomberg.com
C
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500
U.S. taxpayers have reaped a 7.5 percent return on the $45 billion used to rescue Citigroup Inc., more than three times as much as if the money had been invested in the Standard & Poor’s 500 Index.
How do we place our sell order?
Counterpointer: from the article: "The meeting is primarily designed to focus on economic issues. Among the topics in the Ural Mountains city of Yekaterinburg, where Bolsheviks executed Tsar Nicholas II in 1918..."
So, the planners meet with Putin. He asks, "Have we chosen a city for the meeting?" He is informed. He pauses. He lowers his head with his steepled index fingers pressing against his lips. A moment passes, seeming like an eternity to the messenger.
Putin raises his head and says, "Da! Prekrasnah."
O! symbolism. Will others understand?
volker - LOL! I didn't know your sources were so good.
C
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500
That rather conveniently leaves out the various guarantees that might still pop, no?
What better to place to pop a cap into the dollar?
@Agronox
Citigroup racked up more than $100 billion of credit losses and writedowns during the global credit contraction that began in 2007 and is selling businesses and reducing head count to preserve capital.
With a record like that, what makes you think they'll need to use those guarantees? Seriously, I think FED/Treasury officials are writing stories for Bloomberg.
Looks like green shoots at Citi.
Oh, wait:
- NY Times
Citi aims as top priority to escape government jackboot to pay vast sums to key people to continue the healing process. Er, would these be the same genii who built the sh!tpile in the first place? Well, heads must roll, and since it was obviously the head of risk management who was placing all the bets, he should go...
C
COMPLETELY OT,
BUT
It is squirrel related.
But does anyone know how to set rat traps that won't kill squirrels? I have a goddamn rat superhighway outside my window which is covered in rats during the night, but which squirrels use during the day. I couldn't bear to kill a squirrel., and the area is delicate enough that I think if I set a rat trap and try to move it out of the way every morning I'm going to break my fingers. Suggestions?
I am currently holding my thumb and index finger approximately 1/32 of an inch apart. Which is done to demonstrate the difference between squirrels and rats. 8)
Right on cue, Bloomie runs story of strenghtening dollar going into the weekend meetings:
Dollar Rises as Yosano’s Comments Ease Diversification Concern - Bloomberg.com
Hoops - liquidate them all! A darwinian flush through the system! You are a crusading Mellon to scurrying vermin.
C
from the bloomie article: "Geithner said in China on June 1 that the U.S. is committed to a strong dollar, while promising to bring down the country’s fiscal deficit “over the medium term.”"
Lemmesee, Turbo Tim is 47, average life expectancy, plus two standard deviations beyond, add 10--medium term definition: after his cold dead body lies moldering in the ground.
PBGC appetizer on BFF.
PBGC Assumes Amsterdam Memorial Hospital Pension Plan
The PBGC estimates that the plan is 60 percent funded, with assets of $13.6 million to cover benefit liabilities of $23 million. The agency will be responsible for $9.2 million of the $9.6 million shortfall.
It is fun to watch hardcore americans believe that they can control reality.. let's see how this ends.
They have money?
//PBGC Assumes Amsterdam Memorial Hospital Pension Plan//
He is using ruby slippers.
// "Geithner said in China on June 1 that the U.S. is committed to a strong dollar, while promising to bring down the country’s fiscal deficit “over the medium term.”//
On high speed rail, why dont we start with the one area where we know there is the population dnesity than makes sure it will be a success, between DC and Boston, after that we can see how well it works and think about a few other dense corridors.
Correction.. it was about money not wealth. Creating wealth is a very worthy and satisfying endevour. Creating more imaginary money with financialism does not help anyone.
//A lot of stuff being rendered reference the pursuit of happiness being wrapped up in the ever increasing wealth or whatever. //
Dirk - "dense corridor" is right. Starting in the block between H St and G... IMF, WH, Treas.
C
How can you buy a company that manages over a trillion dollars with 13.5 billion (6.6 billion in cash)
BlackRock to Buy Barclays Global Investors for $13.5 Billion
BlackRock to Buy Barclays Fund Unit for $13.5 Billion (Update4) - Bloomberg.com
By Sree Vidya Bhaktavatsalam and Christopher Condon
June 12 (Bloomberg) -- BlackRock Inc., started 21 years ago in a one-room office by former mortgage-bond trader Laurence Fink, agreed to buy Barclays Plc’s investment unit for $13.5 billion to become the world’s largest money manager.
BlackRock will pay $6.6 billion in cash and the rest in stock for Barclays Global Investors, the New York-based company said today in a statement. Barclays will hold a 19.9 percent stake in the combined company. Financing will include $2.8 billion from the sale of equity to institutional investors and as much as $2 billion in loans from Barclays and other banks.
The purchase, the biggest of a fund manager, creates a company overseeing $2.7 trillion in assets, more than the Federal Reserve. BlackRock will add about $1 trillion in investments that track market indexes, which are attracting clients at the expense of funds whose managers choose securities to buy and sell. It’s the first top-ranked firm to attempt to combine both types of businesses.
Cargo cult alert!
U.S. Consumer Confidence Likely Rose for a Fourth Month in June
U.S. Consumer Confidence Likely Rose for a Fourth Month in June - Bloomberg.com
By Courtney Schlisserman
June 12 (Bloomberg) -- Confidence among U.S. consumers probably rose for a fourth straight month in June, reflecting signs that the worst recession in at least five decades may end this year, economists said before a private report.
The Reuters/University of Michigan preliminary index of consumer sentiment increased to 69.5, the highest level in nine months, according to the median estimate of 62 economists in a Bloomberg News survey. The final reading for May was 68.7.
Polishing a turd?
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500
By Michael J. Moore and Jeff Kearns
June 12 (Bloomberg) -- U.S. taxpayers have reaped a 7.5 percent return on the $45 billion used to rescue Citigroup Inc., more than three times as much as if the money had been invested in the Standard & Poor’s 500 Index.
Chief Executive Officer Vikram Pandit, summoned by Congress in February to explain his bank’s use of the funds, vowed to “make this a profitable investment for the American people.” The return since the government first purchased a stake in the bank on Oct. 28, which includes dividends, compares with 2.4 percent for the S&P 500 on that basis.
But wait.. there is more..
Bank Rescue Costs EU States $5.3 Trillion, More Than German GDP
Bank Rescue Costs EU States $5.3 Trillion, More Than German GDP - Bloomberg.com
By Meera Louis
June 12 (Bloomberg) -- European governments have approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, to support banks during the credit crunch, according to a European Union document.
The U.K. pledged 781.2 billion euros ($1.1 trillion) to restore confidence in its lenders, the most of any of the 27 EU members, according to a May 26 document prepared by officials from the European Commission, the European Central Bank and member states and obtained by Bloomberg News. Denmark, where 13 of the country’s 140 banks were bailed out by the central bank or bought by rivals last year, committed 593.9 billion euros.
I am shocked.. just kidding!
Lilly Sold Drug for Dementia Knowing It Didn’t Help, Files Show
Lilly Sold Drug for Dementia Knowing It Didn’t Help, Files Show - Bloomberg.com
By Margaret Cronin Fisk, Elizabeth Lopatto and Jef Feeley
June 12 (Bloomberg) -- Eli Lilly & Co. urged doctors to prescribe Zyprexa for elderly patients with dementia, an unapproved use for the antipsychotic, even though the drugmaker had evidence the medicine didn’t work for such patients, according to unsealed internal company documents.
In 1999, four years after Lilly sent study results to the U.S. Food and Drug Administration showing Zyprexa didn’t alleviate dementia symptoms in older patients, it began marketing the drug to those very people, according to documents unsealed in insurer suits against the company for overpayment.
@ Lucifer (CONsumer CONfidence)
Isn't it only the 12th of June?
Fortune telling eCONomists.
......."High-Speed Rail"........to be ridden by the millions out of work, to be built with the non-existent billions of investment capital - or surplus government funds - for a population that does not live in the general optimum baseline corridor paths (except for parts of the NE)
I get so tired of "Pop, can I have $50?"........especially since from when I started hearing it, it was $5.
Morning....time for coffee
HomeGnome,
We replaced entrail readers with ivy league economists.
Don't quite agree with you. Here in the Middle East in the land of $100/oil pretty soon, this party is soon getting started.
The Middle East is the pusher selling America smack (cheaper oil because the dollar is the reserve currency). Until the kid runs out of money. Then rehab and the pusher finds another prospect (China, India).
BTW - wasn't today supposed to be the big DTV day? We didn't do ANYTHING to prepare, no new TVs, no converter boxes, and all the channels are OK. Was it a scam?
Dirk,
There's decent rail service between Boston and NY and really good service between NYC and DC. The problem is getting into and through NYC. That's where time stops. I think that's a tough fix as the HSR is on the same tracks as the locals once you're close to NYC.
The regular trains between Boston and NYC are really just as fast as the Acela (I verified with my GPS), but they make more stops, taking about 45 mins more. Once outside the cities, the rails on that corridor scream along at 80-125mph.
BSR: you milk ole Bossy by hand or with a machine?
I thought that rigged financial institutions trading worthless contracts would makes us all rich..
Two roadblocks on path to recovery: Housing and jobs rebound essential to healing
Two roadblocks to economic recovery - MarketWatch
By Howard Gold
NEW YORK (MarketWatch) -- Will the green shoots of economic recovery be strangled by the weeds in the garden? That's what investors are wondering now that the spring's vigorous rally appears to have stalled.
And it's not just the most immediate concerns -- higher energy prices and long-term interest rates -- that cause hand-wringing on Wall Street. There's growing concern that the more intractable problems of housing and jobs may mute any recovery and put a lid on stock prices.
Despite some "less bad" news on the economic front, those two key areas show little improvement; by some measures, they're still deteriorating. And until they stabilize, we can't really say that the banking system or the economy is out of the woods.
MIght be a tad interesting to find out who attended and what was discussed at Cheney's secret energy meetings prior to the U.S. Invasion of Iraq, now wouldn't it?
IMHO, more to due with recycling petrol $'s than the oil itself...
Discuss.
What happens when an aircraft stalls while ascending?
How is decoupling working out?
//The Middle East is the pusher selling America smack (cheaper oil because the dollar is the reserve currency). Until the kid runs out of money. Then rehab and the pusher finds another prospect (China, India).//
Larry Kuddly and Jim Screamer were gushing on and on about $12 and $12 when the invasion began.
volker.......both MilkShake & Belle are milked by "hand"........me on the right side, the Mrs. on the left - twice a day, 7-days a week.
Enron was the test run for gaming the global energy markets.
Connect the dots.
Black Star Ranch,
Your sentence could be interpreted in a rather different way..
BSR: from what i understand, the deadline is today, but individual stations have differing times when the analog signals go black.
@BSR
Love the name MilkShake.
Classic.
Ah! Marriage. what a wonderful bonding experience. Fortunately there's a big ole cow between yall. She mus be thinkin', I went to college for this?
Are they Jerseys or Holsteins?
LOL.......it's funny what sets the hearts at ease.
Decoupling is working out pretty well for those of us in the Middle East. I've had my best two financial years here ever personally. Must have something to do with soaring oil prices.
Enjoy it while you can..
//Decoupling is working out pretty well for those of us in the Middle East. I've had my best two financial years here ever personally. Must have something to do with soaring oil prices.//
....it used to be, if you had a family and any kind of backyard, you had a cow. And then we invented "convenience stores".
Belle is a Black Angus mix beef cow (milking her to help the new bull-calf) and MilkShake is a Jersey mix - milk as sweet as her name implies.
I have been told that you milk a Holstein if you want milk and a Jersey if you want the experience.
But an Angus must be a Baldy.
lol.......you're right, volker......higher fat in a Jersey (than a Holstein) and only about 3-5 gals vs. 6+ with dairy cows.
I have a dumb question... how many individual investors are still in the markets compared to, say, 2 years ago?
Picture of Putin upon hearing the news for the location of the meeting:
http://icanhascheezburger.files.wordpress.com/2009/06/128890282894296917.jpg
Lucifer-
"Enjoy it while you can.."
I am; we are all here. I do want to give a shout out to my sweet Lucifer for creating the economic miracle we're currently seeing in the Middle East. Or thanks to Lucifer for creating what created the mess, the Fed and US Treasury. Only a dark angel could do such a fine job.
Thank you, my Lord.
@Which is Worse
Bankers.
"Feds Confiscate On-Line Poker Winnings"
"Late last week, the federal government ordered five banks to freeze a total of $30 million in payments owed to the players......
Feds Freeze Poker Champ's Winnings
I wonder when this type of story will concern seizures of your 401-Ks. I can imagine that being next ala Argentina (or was it Brazil)?
The poker players were honest about their method of making money.
//"Feds Confiscate On-Line Poker Winnings"//
401K's, savings accounts, all contents of safe deposit boxes, social security, etc.
The DC folk are stating a recovery in 2009, but I do not see that happening. How, with the massive debt it may be temporary and then slip back into a recession like 81? Any thoughts?
One other thought.....Ahmedinejad of Iran could be out of a job today. We'll really miss him around here. He's almost 10% as bad as a terrorist. Or 1% as bad as a banker. Put a million Ahmeninejads together and you might get a Geithner. Scary.
Here is the map for Obama's international traveling every other month for the next 3 years:
India is predicted to grow at an average rate of 6.3 percent from 2011 to 2050, China 5.2 percent, Brazil 4.3 percent and Russia -- constrained by forecasts of a declining population -- just 2.8 percent.
Gain these people confidence and cooperation, these are the countries that will take us out of this situation, and it won't be overnight.
But, will any of these countries be stupid enough to buy our worthless debt.