The dollar has been heading lower, which certainly had a lot to do with the slowing mfg. declines. A major rebound would likely send those numbers south again. Maybe this NY number is reflecting that.
Treasury-Altered Reality Plan - picking up from a previous thread.
We can argue about the nature of the debt and the cause- but that it exists and has gone up during the last 28 years by any measure - relative to GDP, household income, absolute terms etc - is an incontrovertible fact . The point I was making is that was our "prosperity" a function of economic recipe we have been prescribed for the last the 28 years or would the level of debt increase have generated the same level of "prosperity" irrespective of the economic prescription i.e. would the policies followed from the 50's to the 80's have yielded the same result? (I would add we had a free market then to so this not just about free markets but really about how free free markets are)
I think it is a valid question to ask whether the debt build up would have been possible under the regulatory regime of the 50-70's.
Dirk,
There was a decent amount of high-tech and medical instruments manufacturing on Long Island 10 years ago. I'm not sure if much is still there. There's also a fair amount of those industries in So CT.
And on the consumer credit front (from Marketwatch)...
Capital One Financial said in a filing to the Securities and Exchange Commission that its net charge-off in the U.S. were 9.41% at the end of May, up from 8.56% the prior month.
Some more "moderate" increases in deterioration (which must be good if it's increasing, right?)
'Tis the gift to be simple,
'tis the gift to be free,
'tis the gift to come down
where we ought to be,
and when we find ourselves in the place just right,
'twill be in the valley of love and delight.
When true simplicity is gained
to bow and to bend we shan't be ashamed,
to turn, turn, will be our delight
till by turning, turning we come round right.
The world economy is not quite a zero-sum game; but certainly a very slowly growing game.
That means that when China's slice gets bigger, some others have to get a smaller slice.
So even if we hadn't blinged-out we would had little or no growth.
But we did bling-out and of course we have to pay back all that money we overspent. It is payback time now
We will have to give up our fantasy of America the Beautiful Exception
Crazyv - while there are a lot of variables, the short answer is 'no', western economies in general would not have had the same prosperity. That's really a moot point now, though. The pressing question is whether we're collectively willing to start paying the price now, or keep trying to push the problem either into the future, or onto others by default.
Hint to bond smuggling Japanese business men: Next time hire a big ass truck and ten Harley bikers. Then just ram through the border gates of Switzerland shouting "PRIORITY ONE! PRIORITY ONE!" . Also wearing Hachimakis will help a lot
The pressing question is whether we're collectively willing to start paying the price now, or keep trying to push the problem either into the future, or onto others by default.
Pay the price? I don't want to pay the price. I want a pony, and I want it now.
Dollar strengthens on the words of Kudrin stating that Russia "believes" in the dollar. On the other hand, China and Japan actually limit purchases of US Treasuries opting for other vehicles.
Somebody might want to read a chart of the top 3 holders of USD...China, Japan,...
What's the definition of "long-term" in the TIC Report?
If foreigners bought a net $41.9B of T-Bonds and Notes in April, I'm wondering what percentage of issuance that represented. Would you just look at the 10 and 30 year issuance in April to derive that?
"Capital One Financial said in a filing to the Securities and Exchange Commission that its net charge-off in the U.S. were 9.41% at the end of May, up from 8.56% the prior month"
Real number is 9.91%. They changed their reporting guide lines. From ZH:
A change in bankruptcy processing resulted in an improvement in the U.S. Card charge-off rate that is reflected in the May results. The impact was approximately 50 basis points. While our internal guidelines require bankrupt accounts to be charged off within 30 days, our practice had been to charge off customer accounts within 2 to 3 days of receiving notification of bankruptcy. Due in part to an increase in the volume of bankruptcies, we have extended our processing window to improve the efficiency and accuracy of bankruptcy-related charge-off recognition. The new process remains within Capital One’s internal guidelines, as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification.
Just a reminder that a mere 3 months ago the charge off rate was just over 8% - a 20% deterioration in 12 weeks and accelerating.
Foreign direct investment in China was down 17.8 percent, year-on-year, for May, totaling $6.38 billion, Kyodo news agency reported June 15, citing the Chinese Commerce Ministry. The rate of decline had slowed from April’s 22.5 percent drop, but still exceeded the 9.5 percent fall in FDI noted in March from the year-ago period. Between January and May, FDI fell 20.4 percent, to $34.05 billion, the ministry said."
make no mistake here gentlemen (and Liz and bond girl) the days of foreigners financing our debt is coming to an end. Russia, japan, and china will if anything be net sellers as they try to prop up their economies. I say dollar collapse (20-30% decline) in less than 2 years.
The interesting thing about Cap One's accounting change is the point Tyler Durden makes; that companies are going through various accounting contortions to report not-so-bad numbers that are in no way sustainable. Whether it's orchestrated or not, there is certainly a widespread effort to give a false sense of security to the American populace.
Also noted that Cap One didn't specify the window they are now using for the charge offs after bankruptcy? Used to be 2-3 days, now it's sometime within "Capital One’s internal guidelines (30 days), as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification". Wonder if they are going to have a "sliding window" so they can massage their numbers month to month.
Note to any Cap One accountants who may be reading this: THIS IS NOT A SUGGESTION!!
I was just being snarky with the Empire State still has mfg. The City really doesnt but some still remains upstate, although Buffalo is sort of like a Detroit type town, some still remains in Rochester, Syracuse etc
VATICAN CITY, JUNE 14, 2009 (Zenit.org).- The market economy is only a path to progress if it is oriented to the common good, says Benedict XVI.
The Pope on Saturday considered the possible shortfalls of the free market system when he received in audience members of the Centesimus Annus Pro Pontifice Foundation. The foundation was founded by Pope John Paul II in 1993 as a lay foundation that aims to promote the social doctrine of the Church in professional and business sectors. The foundation hosted in Rome on Friday their annual international conference.
In his address, Benedict XVI called for a rethinking of predominant economic models.
"The financial crisis that has struck the industrialized nations, the emergent nations and those that are developing, shows in a cle! ar way how the economic and financial paradigms that have been dominant in recent years must be rethought," he said.
The Pope lauded his listeners' consideration of the "interdependency between institutions, society and the market."
Drawing from the 1991 encyclical by his predecessor, after which the Centesimus Annus foundation is named, the Holy Father noted how "the market economy, understood as 'an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector' can only be recognized as a way of economic and civil progress if it is oriented to the common good."
Continuing to cite John Paul II's encyclical, the German Pontiff affirmed that such a vision must be accompanied by the idea that freedom in the economic sector must be at the service of "human freedom in its totality." And this freedom must be responsible, "'the core of which is ethical and religious.'"
Thus, he said, the '91 encyclical "opportunely affirms that: 'The person fully realizes himself in the free gift of self, so too ownership morally justifies itself in the creation, at the proper time and in the proper way, of opportunities for work and human growth for all.'"
In this context, Benedict XVI affirmed his hope that the Centesimus Annus foundation would be able to "elaborate a vision of the modern economy that is respectful of the needy and of the rights of the weak."
The problem with the $ collapse scenario is relative to what? The Yen from the land of the setting sun? The Euro? The pound? The swiss franc? All have big problems. Now relative to commodities, that well may be the case, with prices going up despite end demand going down. Seems like China is trying to diversify into all sorts of comoddities, but the reports are they are running out of storage space. That might just be a short term problem until they can build more storage though. Seems like iron ore and oil might be better stores of value than T-bills, Bunds or Guilts.
respectful of the needy and of the rights of the weak
In his guarded palace, sitting on his gilded throne in an ermine robe, with enough god-bling around his neck to feed half the planet. Yes, he has truly captured the moral high ground.
"i wonder if there is papal infallibility with respect to the morality of economics."
As far as I know, papal infallibility has been invoked only twice, and in those instances in matters of religious dogma. As a layman I shouldn't think that economics would be the subject of an infallible pronouncement.
Had a customer saturday that got a phone call from a family member in California, said the state was going to file BK. Havnt seen anything on the news, just letting everyone know first hand
Of course the 10-20% gyrations have only been against other currencies. against gold it has stayed pretty much dead. Gold will move higher. All nominal prices of commodities will move higher (though I think we have gotten ahead of ourselves here) and interest rates will move higher. One trump card would be the nationalization of the banks. if this were to occur the dollar may strengthen.
The natural reaction to currency collapse is to go to real goods. This is either in the form barter, of commodity currencies like cigarettes and gold dust, or by the formation of asset-backed currencies like the Rentenmark.
So you came for the economic analysis? Well, I love the smell of doom in the morning....
From my CR inspired story of a future uncertain....
...He drew another big circle around the Norfolk - Newport News area. This is locked down also. The area around Quantico is also another safe area for the feds. Where we are headed is still in play. Once you cross into Ohio it is all ‘No Go’ as far as the feds are concerned. They don’t the manpower and their is nothing there they want so they are not bothering with it.
I read once that the Pope (this was the previous Pope JP2 but I believe the same would be true of Benedict), had very few personal posessions: His underwear, his comb and other toiletries, and a rosary.
I was standing outside and talking to a coworker. I was on my wayback from getting coffee. She was smoking. We stand there and talk. A man walks up to us, clean clothes, no crazy eyes. I figure he is going to ask her for a cig or us for money. I look at him "Whats up?"
His reply? He was waiting for us to move so he could go through the cigg butt container. Very polite and calm.
Los Angeles Officials Say Can't Afford Lakers Parade
From Reuters:
The Los Angeles Lakers need only one more win to capture a 15th National Basketball Association Championship, but some city officials are already saying they can't afford to throw the team a victory party...such a celebration could cost the city $1 million or more at a time when city leaders, faced with a deep budget deficit, were contemplating worker layoffs and cuts in services.
"We can't afford to cover the costs," City Councilwoman Jan Perry told the Los Angeles Times. "How could we make a decision about people's jobs and then sponsor the parade?"
Barbara Maynard, a spokeswoman for the city's employee unions, agreed, telling the paper: "We do not believe its appropriate in this economic climate for taxpayers to be funding a parade."
But Councilman Bernard Parks said he expected the city to throw the parade and pick up the tab.
The parade is likely to go on, but a discussion about cancellation is a further sign that things aren't like they used to be.
The governments of Los Angeles, of California and of the United States are in way over their heads financially. With Bernanke jerking the money supply around and Obama coming in with new regulations from every direction, things are only going to get worse.
Who five years ago would believe you if you said that in 2009 you would find reports of counties turning roads back to gravel, and Los Angeles officials debating whether to spend money to hold a parade for a Los Angeles Lakers' championship team?
And we aren't even talking about the biggies, the two trillion the government needs to raise this year, the money that is running out for medicare and social security. It is not going to be pretty.
This just tells me officially we are literally broke, no amount of QE is going to change that fundamentally.
te on Mon, 6/15/2009 - 7:21 am
Had a customer saturday that got a phone call from a family member in California, said the state was going to file BK. Havnt seen anything on the news, just letting everyone know first hand
Doesn't work that way. Instead the game is over when the markets declare California mutuo non grata. Unfortunately TPTB will see Federal backstopping as an easy and quick solution. We're all California now.
I believe someone who misses debt payments is in default.
I guess colloquially we use "bk" interchangeably with "default," but bk implies an orderly unwind of assets, default challenges the creditors to "come and get it (if you can), and good luck with that"
what do you call someone who misses their debt payments?
Insolvent.
The point of BK is for protection from creditors and for the resolution of debts. How does a creditor collect from a state? A state sheriff can't legally seize or levy against its own assets. And the creditors can't get to assets in other states, as state courts don't have jurisdiction over other states.
The only option is a lender's strike (e.g. Argentina)
If they sell bridges/roads/etc., and there's an earthquake, is the private investor on the hook to rebuild? Maybe they know something they're not telling us...
I see the cherry picking is beginning at Lloyds Bank:
"So far Lloyds has started dropping its "mass affluent" clients who have investment portfolios of up to a few hundred thousand pounds but that its "high-net-worth individuals" are not yet effected (sic).
A source said: "Until the new rules are properly explained, we don't know how expensive they will be to implement. But it's clear that Lloyds believes that any extra cost to the system will be too much when it comes to the mass affluent."
I like that term "mass affluent." I translate it from the British to mean "upper middle class." We used to have one of those in America, too.
BTW, if I know the difference between 'effected' and 'affected,' why doesn't the writer and the editor at the Telegraph?
So is 6 flags going to be broken into a "good 6 flags" which keeps the coasters up and running and a "bad 6 flags" where all the long-term debt gets eaten by the taxpayers?
A brilliant idea by the local government to raise property value. From the local paper:
"The town, using federal stimulus dollars, plans to buy abandoned properties in its newer subdivisions, rehabilitate them and resell them at below-market value"
Six Flags isn't TBTF, Scotto. If the employees are lucky, though, the gov't will step in and put them ahead of the secured lenders, though. It's prob. a matter of national security - gotta keep the masses happy with six flags play time, or they might have time to figure out what's really going on.
Friend of mine is the GM at an extended stay type of motel. Last year vacancy rate was below 5%, currently over 30%. Clientele has greatly improved. His parking lot is full of BMW's, Volvo's and Benz's vs. last years rusted p/u's, vans and older model cars.
These are going to be interesting times. I think you can count on that. But in what way ...? This is a time of the crisis of systems, of societies, and probably of technologies. People will yearn for stability, and that's why there are hazards out there.
Stimulus cash could help recession-weary builders
By Mary Shanklin | Sentinel Staff Writer
June 15, 2009
Florida Home Builders Association Vice President David Hart outlined programs ranging from the federal government's $8,000 credit for first-time buyers to appropriations for home weatherization and a tax credit for installations of residential solar, wind and geothermal equipment.
Last year vacancy rate was below 5%, currently over 30%. Clientele has greatly approved. His parking lot is full of BMW's, Volvo's and Benz's vs. last years rusted p/u's, vans and older model cars.
Putting those two facts together, I'm concluding that America has more rusted pickups, vans and older model cars than it has newer BMWs, Volvos and Benz..
There's a pretty broad decline going on today. Commodities and equities tanking.
Lot of talk going around that the Fed has been forced to pull liquidity out of the market because it's been causing a flight out of bonds and back into emerging markets and commodities.
Seems like it should be obvious that if the Fed is going to print money, at the first sign of economic recovery in other countries capital is going to go flying out of the US.
"Following his 14th birthday in 1941, Ratzinger was enrolled in the Hitler Youth, as membership was required for all 14-year old German boys after December 1939,[6] but was an unenthusiastic member and refused to attend meetings.[7] His father was a bitter enemy of Nazism, believing it conflicted with the Catholic faith, according to biographer John L. Allen, Jr. In 1941, one of Ratzinger's cousins, a 14-year-old boy with Down syndrome, was taken away by the Nazi regime to a care center and killed there in secrecy during the Aktion T4 euthanasia campaign of Nazi eugenics.[8] In 1943 while still in seminary, he was drafted at age 16 into the German anti-aircraft corps. Ratzinger then trained in the German infantry, but a subsequent illness precluded him from the usual rigours of military duty. As the Allied front drew closer to his post in 1945, he deserted back to his family's home in Traunstein after his unit had ceased to exist, just as American troops established their headquarters in the Ratzinger household. As a German soldier, he was put in a POW camp, but was released a few months later at the end of the war in the summer of 1945. He reentered the seminary, along with his brother Georg, in November of that year."
Money doesn’t grow on trees for most of America. We sit down at our kitchen tables and write out checks to the phone-company, electric company, credit card-company, mortgage-company, and auto finance company every month. We clip coupons and go to the grocery store every week to put food in the mouths of our children. This is what our parents did before us.
begs the question why tax payer money should be used to pay for a parade in the first place?
As to turning streets back to gravel - I think it is a great idea. In fact I have been trying to get my town to do that with sidewalks. We are not spending enough money to maintain those that we have and rather than pay more taxes to maintain those that we have built I would rather that we eliminated them from one side of a quiet street. What works for sidewalks should work for roads too.
It is high time that we all learned to live within our means.
frist?
I think I just green shat myself.
This does little to support the "second derivitive" rally.
Is more than a 100% increase from the last month's number 'moderate'?
Maybe two negatives make a positive?
Apply more leeches!
C
Isn't part of the current problem that there are already too many leeches?
The Empire State still has Mfg?
Well off to work, catch ya all later
"The Empire State still has Mfg?"
.....THAT is the problem.
Of course they still have Mfg - Bankers buy lots of toys
tarp
only if you multiply them
Counterpointer's leeches prescription should be pushed by Krugman. Nothing gets rid of toxins like a good bleed. Stay the leeches.
long leeches, short drilling holes to relieve the pressure
The dollar has been heading lower, which certainly had a lot to do with the slowing mfg. declines. A major rebound would likely send those numbers south again. Maybe this NY number is reflecting that.
IMF says worst not over
April TIC data (not very good)
Treasury-Altered Reality Plan - picking up from a previous thread.
We can argue about the nature of the debt and the cause- but that it exists and has gone up during the last 28 years by any measure - relative to GDP, household income, absolute terms etc - is an incontrovertible fact . The point I was making is that was our "prosperity" a function of economic recipe we have been prescribed for the last the 28 years or would the level of debt increase have generated the same level of "prosperity" irrespective of the economic prescription i.e. would the policies followed from the 50's to the 80's have yielded the same result? (I would add we had a free market then to so this not just about free markets but really about how free free markets are)
I think it is a valid question to ask whether the debt build up would have been possible under the regulatory regime of the 50-70's.
Dirk,
There was a decent amount of high-tech and medical instruments manufacturing on Long Island 10 years ago. I'm not sure if much is still there. There's also a fair amount of those industries in So CT.
Eeek, that Net long-term TIC number is awful. 11,2B vs. 60.1B consensus. Print more money.
And on the consumer credit front (from Marketwatch)...
Capital One Financial said in a filing to the Securities and Exchange Commission that its net charge-off in the U.S. were 9.41% at the end of May, up from 8.56% the prior month.
Some more "moderate" increases in deterioration (which must be good if it's increasing, right?)
That's "only" a 10% increase month-over-month in their net charge-off. So glad things are stabilizing.
'Tis the gift to be simple,
'tis the gift to be free,
'tis the gift to come down
where we ought to be,
and when we find ourselves in the place just right,
'twill be in the valley of love and delight.
When true simplicity is gained
to bow and to bend we shan't be ashamed,
to turn, turn, will be our delight
till by turning, turning we come round right.
The world economy is not quite a zero-sum game; but certainly a very slowly growing game.
That means that when China's slice gets bigger, some others have to get a smaller slice.
So even if we hadn't blinged-out we would had little or no growth.
But we did bling-out and of course we have to pay back all that money we overspent. It is payback time now
We will have to give up our fantasy of America the Beautiful Exception
With such a bad TIC number, does this mean we are going to see a bond market sell-off today?
Crazyv - while there are a lot of variables, the short answer is 'no', western economies in general would not have had the same prosperity. That's really a moot point now, though. The pressing question is whether we're collectively willing to start paying the price now, or keep trying to push the problem either into the future, or onto others by default.
Where are you guys seeing the TIC data?
Hint to bond smuggling Japanese business men: Next time hire a big ass truck and ten Harley bikers. Then just ram through the border gates of Switzerland shouting "PRIORITY ONE! PRIORITY ONE!" . Also wearing Hachimakis will help a lot
Nevermind. Found it on the Treasury website.
MACNY reports manufacturing contributes $61 billion to New York's GDP, and employs about 550,000.
RATM has a link to the TIC data above.
The pressing question is whether we're collectively willing to start paying the price now, or keep trying to push the problem either into the future, or onto others by default.
Pay the price? I don't want to pay the price. I want a pony, and I want it now.
@MLM - there are websites where you can have virtual ponies for free, and can have one right now.
"Net long-term TIC number is awful. 11,2B vs. 60.1B consensus. "
Why this clock goes backwards and fast? Stupid plane this is. Now it is 1:30, 20, 15... Altimeter? What is that?
That's a great start. I'll pretend to vote and they can pretend to give me a pony.
OT,
Dollar strengthens on the words of Kudrin stating that Russia "believes" in the dollar. On the other hand, China and Japan actually limit purchases of US Treasuries opting for other vehicles.
Somebody might want to read a chart of the top 3 holders of USD...China, Japan,...
--bh
hint on where dollar is going:
http://www.treas.gov/tic/s1_99996.txt
What's the definition of "long-term" in the TIC Report?
If foreigners bought a net $41.9B of T-Bonds and Notes in April, I'm wondering what percentage of issuance that represented. Would you just look at the 10 and 30 year issuance in April to derive that?
Are you suggesting that Kudrin might be lying?
If they (China, Japan, Russia) were going to orchestrate a currency coup, wouldn't they just come out and say so?
"Capital One Financial said in a filing to the Securities and Exchange Commission that its net charge-off in the U.S. were 9.41% at the end of May, up from 8.56% the prior month"
Real number is 9.91%. They changed their reporting guide lines. From ZH:
A change in bankruptcy processing resulted in an improvement in the U.S. Card charge-off rate that is reflected in the May results. The impact was approximately 50 basis points. While our internal guidelines require bankrupt accounts to be charged off within 30 days, our practice had been to charge off customer accounts within 2 to 3 days of receiving notification of bankruptcy. Due in part to an increase in the volume of bankruptcies, we have extended our processing window to improve the efficiency and accuracy of bankruptcy-related charge-off recognition. The new process remains within Capital One’s internal guidelines, as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification.
Just a reminder that a mere 3 months ago the charge off rate was just over 8% - a 20% deterioration in 12 weeks and accelerating.
Fitch Downgrades More 2005-2008 Subprime RMBS
Research Recap » Blog Archive » Fitch Downgrades More 2005-2008 Subprime RMBS
Take a name, good catch.
Gotta keep an eye on the games accountants play.
Take a Name,
Thanks for that info on their new methodology.
It's a 15% deterioration month-over-month, so it really has picked up speed dramatically in the last 4 weeks.
" June 15, 2009
Foreign direct investment in China was down 17.8 percent, year-on-year, for May, totaling $6.38 billion, Kyodo news agency reported June 15, citing the Chinese Commerce Ministry. The rate of decline had slowed from April’s 22.5 percent drop, but still exceeded the 9.5 percent fall in FDI noted in March from the year-ago period. Between January and May, FDI fell 20.4 percent, to $34.05 billion, the ministry said."
Worse is the new better after so long experiencing not but more worse.
Two long running statistical artifacts to keep in mind with these kinds of reports: survivors' bias and "a thousand points of inflation."
make no mistake here gentlemen (and Liz and bond girl) the days of foreigners financing our debt is coming to an end. Russia, japan, and china will if anything be net sellers as they try to prop up their economies. I say dollar collapse (20-30% decline) in less than 2 years.
The interesting thing about Cap One's accounting change is the point Tyler Durden makes; that companies are going through various accounting contortions to report not-so-bad numbers that are in no way sustainable. Whether it's orchestrated or not, there is certainly a widespread effort to give a false sense of security to the American populace.
Also noted that Cap One didn't specify the window they are now using for the charge offs after bankruptcy? Used to be 2-3 days, now it's sometime within "Capital One’s internal guidelines (30 days), as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification". Wonder if they are going to have a "sliding window" so they can massage their numbers month to month.
Note to any Cap One accountants who may be reading this: THIS IS NOT A SUGGESTION!!
The dollar has gyrated more than 20% back and forth over the past eight or nine months, Tim. I'd expect a dollar crash to be a lot bigger than 20-30%.
I was just being snarky with the Empire State still has mfg. The City really doesnt but some still remains upstate, although Buffalo is sort of like a Detroit type town, some still remains in Rochester, Syracuse etc
Stick save today, anyone?
TARP
When the dollar collapses this will happen over a week not over months and there will not be a "bounce back".
VATICAN CITY, JUNE 14, 2009 (Zenit.org).- The market economy is only a path to progress if it is oriented to the common good, says Benedict XVI.
The Pope on Saturday considered the possible shortfalls of the free market system when he received in audience members of the Centesimus Annus Pro Pontifice Foundation. The foundation was founded by Pope John Paul II in 1993 as a lay foundation that aims to promote the social doctrine of the Church in professional and business sectors. The foundation hosted in Rome on Friday their annual international conference.
In his address, Benedict XVI called for a rethinking of predominant economic models.
"The financial crisis that has struck the industrialized nations, the emergent nations and those that are developing, shows in a cle! ar way how the economic and financial paradigms that have been dominant in recent years must be rethought," he said.
The Pope lauded his listeners' consideration of the "interdependency between institutions, society and the market."
Drawing from the 1991 encyclical by his predecessor, after which the Centesimus Annus foundation is named, the Holy Father noted how "the market economy, understood as 'an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector' can only be recognized as a way of economic and civil progress if it is oriented to the common good."
Continuing to cite John Paul II's encyclical, the German Pontiff affirmed that such a vision must be accompanied by the idea that freedom in the economic sector must be at the service of "human freedom in its totality." And this freedom must be responsible, "'the core of which is ethical and religious.'"
Thus, he said, the '91 encyclical "opportunely affirms that: 'The person fully realizes himself in the free gift of self, so too ownership morally justifies itself in the creation, at the proper time and in the proper way, of opportunities for work and human growth for all.'"
In this context, Benedict XVI affirmed his hope that the Centesimus Annus foundation would be able to "elaborate a vision of the modern economy that is respectful of the needy and of the rights of the weak."
The problem with the $ collapse scenario is relative to what? The Yen from the land of the setting sun? The Euro? The pound? The swiss franc? All have big problems. Now relative to commodities, that well may be the case, with prices going up despite end demand going down. Seems like China is trying to diversify into all sorts of comoddities, but the reports are they are running out of storage space. That might just be a short term problem until they can build more storage though. Seems like iron ore and oil might be better stores of value than T-bills, Bunds or Guilts.
How big is the Church's portfolio? How many divisions does the Pope have?
i wonder if there is papal infallibility with respect to the morality of economics.
"How big is the Church's portfolio? How many divisions does the Pope have?"
From what I know, the Church is not a big financial player.
If the dollar collapses, and that is still a very big if, I see that being a drawn out process as other countries slowly exit stage right.
Since nearly every other country is trying to blow bubbles too, though, there are lots of other possible outcomes.
respectful of the needy and of the rights of the weak
In his guarded palace, sitting on his gilded throne in an ermine robe, with enough god-bling around his neck to feed half the planet. Yes, he has truly captured the moral high ground.
"i wonder if there is papal infallibility with respect to the morality of economics."
As far as I know, papal infallibility has been invoked only twice, and in those instances in matters of religious dogma. As a layman I shouldn't think that economics would be the subject of an infallible pronouncement.
Had a customer saturday that got a phone call from a family member in California, said the state was going to file BK. Havnt seen anything on the news, just letting everyone know first hand
DvD
Of course the 10-20% gyrations have only been against other currencies. against gold it has stayed pretty much dead. Gold will move higher. All nominal prices of commodities will move higher (though I think we have gotten ahead of ourselves here) and interest rates will move higher. One trump card would be the nationalization of the banks. if this were to occur the dollar may strengthen.
The natural reaction to currency collapse is to go to real goods. This is either in the form barter, of commodity currencies like cigarettes and gold dust, or by the formation of asset-backed currencies like the Rentenmark.
"...with enough god-bling around his neck to feed half the planet."
That really is mythological.
Shill
My glod if you are right that would wipe out the Muni bond market. Maybe bk is the only scenario which CA can get bailed out
Shill,
This is a couple of days old, but maybe this article will help,
California nears financial meltdown as revenues tumble
| Reuters
So you came for the economic analysis? Well, I love the smell of doom in the morning....
From my CR inspired story of a future uncertain....
...He drew another big circle around the Norfolk - Newport News area. This is locked down also. The area around Quantico is also another safe area for the feds. Where we are headed is still in play. Once you cross into Ohio it is all ‘No Go’ as far as the feds are concerned. They don’t the manpower and their is nothing there they want so they are not bothering with it.
more: afterthecrash.net
I read once that the Pope (this was the previous Pope JP2 but I believe the same would be true of Benedict), had very few personal posessions: His underwear, his comb and other toiletries, and a rosary.
Can states file BK? In what court, under what statute?
I thought states didn't file BK, they just default.
Had a customer saturday that got a phone call from a family member in California, said the state was going to file BK.
A State can not file BK. There's nothing in the Code that a State can't handle internally.
We should all wish the current Pope good health, since prophecy suggests he's the next to last in his line.
If the next Pope comes along sometime in late 2012, say, in December, should we worry?
Expected returns
"I am CA hear me RAW!"
I was standing outside and talking to a coworker. I was on my wayback from getting coffee. She was smoking. We stand there and talk. A man walks up to us, clean clothes, no crazy eyes. I figure he is going to ask her for a cig or us for money. I look at him "Whats up?"
His reply? He was waiting for us to move so he could go through the cigg butt container. Very polite and calm.
Remember the story that British banks might drop American accounts because of Obama's tax plan? What do you guys make of this?
Lloyds Bank hit by Obama tax purge
I know a state cannot declare BK but what do you call someone who misses their debt payments? A rose by any other name and all that crap
Los Angeles Officials Say Can't Afford Lakers Parade
From Reuters:
The Los Angeles Lakers need only one more win to capture a 15th National Basketball Association Championship, but some city officials are already saying they can't afford to throw the team a victory party...such a celebration could cost the city $1 million or more at a time when city leaders, faced with a deep budget deficit, were contemplating worker layoffs and cuts in services.
"We can't afford to cover the costs," City Councilwoman Jan Perry told the Los Angeles Times. "How could we make a decision about people's jobs and then sponsor the parade?"
Barbara Maynard, a spokeswoman for the city's employee unions, agreed, telling the paper: "We do not believe its appropriate in this economic climate for taxpayers to be funding a parade."
But Councilman Bernard Parks said he expected the city to throw the parade and pick up the tab.
The parade is likely to go on, but a discussion about cancellation is a further sign that things aren't like they used to be.
The governments of Los Angeles, of California and of the United States are in way over their heads financially. With Bernanke jerking the money supply around and Obama coming in with new regulations from every direction, things are only going to get worse.
Who five years ago would believe you if you said that in 2009 you would find reports of counties turning roads back to gravel, and Los Angeles officials debating whether to spend money to hold a parade for a Los Angeles Lakers' championship team?
And we aren't even talking about the biggies, the two trillion the government needs to raise this year, the money that is running out for medicare and social security. It is not going to be pretty.
This just tells me officially we are literally broke, no amount of QE is going to change that fundamentally.
te on Mon, 6/15/2009 - 7:21 am
Had a customer saturday that got a phone call from a family member in California, said the state was going to file BK. Havnt seen anything on the news, just letting everyone know first hand
Doesn't work that way. Instead the game is over when the markets declare California mutuo non grata. Unfortunately TPTB will see Federal backstopping as an easy and quick solution. We're all California now.
How big is the Church's portfolio? How many divisions does the Pope have?"
From what I know, the Church is not a big financial player.
Pavel, so why should we care about what a geriatric former Nazi has to say?
I believe someone who misses debt payments is in default.
I guess colloquially we use "bk" interchangeably with "default," but bk implies an orderly unwind of assets, default challenges the creditors to "come and get it (if you can), and good luck with that"
Los Angeles Officials Say Can't Afford Lakers Parade
=======
awesome, hopefully this is the first of many times when municipalities will stand up and say "NO" to the pro sports industry
what do you call someone who misses their debt payments?
Insolvent.
The point of BK is for protection from creditors and for the resolution of debts. How does a creditor collect from a state? A state sheriff can't legally seize or levy against its own assets. And the creditors can't get to assets in other states, as state courts don't have jurisdiction over other states.
The only option is a lender's strike (e.g. Argentina)
C Scotto,
CA is trying to auction off land, bridges etc.
So why should we care about what [the Holy Father] has to say?
=========
Probably Catholics would care the most what he has to say. But there are only about 1 billion or so of us.
CA is trying to auction off land, bridges etc.
======
yeah, I guess they are trying to avoid default
hey SRS is actually making an uptick today
This is just sickening
US cities may have to be bulldozed in order to survive
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5516536/US-cities-may-have-to-be-bulldozed-in-order-to-survive.html
If they sell bridges/roads/etc., and there's an earthquake, is the private investor on the hook to rebuild? Maybe they know something they're not telling us...
scott basel thanks... so when does the PPT come in?
I see the cherry picking is beginning at Lloyds Bank:
"So far Lloyds has started dropping its "mass affluent" clients who have investment portfolios of up to a few hundred thousand pounds but that its "high-net-worth individuals" are not yet effected (sic).
A source said: "Until the new rules are properly explained, we don't know how expensive they will be to implement. But it's clear that Lloyds believes that any extra cost to the system will be too much when it comes to the mass affluent."
I like that term "mass affluent." I translate it from the British to mean "upper middle class." We used to have one of those in America, too.
BTW, if I know the difference between 'effected' and 'affected,' why doesn't the writer and the editor at the Telegraph?
extended stay hotel chain files for Chap 11 BK.
Let me guess. It has a lot of debt, and would much more profitable if it could extinguish them.
so when does the PPT come in?
====
don't they show up everyday around 2:30 or 3:00 ET? 8)
Extended Stay Hotels declares bankruptcy
Extended Stay Chain Files for Bankruptcy, Hit by Debt (Update4) - Bloomberg.com
scott basel thanks... so when does the PPT come in?
Not today. It's time to go back to treasuries for awhile.
DOW is -209 "Stay the course"
Extended Stay bankrupt. 6 Flags bankrupt. These are green shoots, right?
"Pavel, so why should we care about what a geriatric former Nazi has to say?"
I don't think you know too much about the Pope, Dirk.
So is 6 flags going to be broken into a "good 6 flags" which keeps the coasters up and running and a "bad 6 flags" where all the long-term debt gets eaten by the taxpayers?
"mass affluent"..........as compared to say "mass effluent".
A brilliant idea by the local government to raise property value. From the local paper:
"The town, using federal stimulus dollars, plans to buy abandoned properties in its newer subdivisions, rehabilitate them and resell them at below-market value"
Six Flags isn't TBTF, Scotto. If the employees are lucky, though, the gov't will step in and put them ahead of the secured lenders, though. It's prob. a matter of national security - gotta keep the masses happy with six flags play time, or they might have time to figure out what's really going on.
Down over 200pts. Today's stick save should be very impressive.
"If the next Pope comes along sometime in late 2012, say, in December, should we worry?"
I think we might have enough to worry about between now and then, and I wouldn't plan my investments on the basis of the Mayan cosmic calendar.
6 flags will be covered under the Circus-Related Asset Promulgation (CRAP)
movies where hamsters dance will also be covered under the Circus-Related Asset Promulgation (CRAP)
CRAP: keeping the masses distracted one weekend at a time.
@pavel - that was for the convergence theorists
@Scotto - lol
Friend of mine is the GM at an extended stay type of motel. Last year vacancy rate was below 5%, currently over 30%. Clientele has greatly improved. His parking lot is full of BMW's, Volvo's and Benz's vs. last years rusted p/u's, vans and older model cars.
There's a pretty broad decline going on today. Commodities and equities tanking.
......geeze......I don't know much about the current Pope, but even I would be hesitant calling him a Nazi..........just sayin'
"@pavel - that was for the convergence theorists"
These are going to be interesting times. I think you can count on that. But in what way ...? This is a time of the crisis of systems, of societies, and probably of technologies. People will yearn for stability, and that's why there are hazards out there.
Stimulus cash could help recession-weary builders
By Mary Shanklin | Sentinel Staff Writer
June 15, 2009
Florida Home Builders Association Vice President David Hart outlined programs ranging from the federal government's $8,000 credit for first-time buyers to appropriations for home weatherization and a tax credit for installations of residential solar, wind and geothermal equipment.
"If you're motivated and willing to subject yourself to the paperwork, which can be pretty substantial," businesses can tap into these funds, Hart told the group.
Home builders: Stimulus cash could boost companies -- OrlandoSentinel.com
Re: Papal Nazism
=====
I guess only certain types of religious bigotry are tolerated on hoocoodanode.
"even I would be hesitant calling him a Nazi..........j"
An in-law of mine was in a Nazi youth organization. I met her after the war. If you'd ever met a real Nazi you wouldn't call the Pope a Nazi.
Last year vacancy rate was below 5%, currently over 30%. Clientele has greatly approved. His parking lot is full of BMW's, Volvo's and Benz's vs. last years rusted p/u's, vans and older model cars.
Putting those two facts together, I'm concluding that America has more rusted pickups, vans and older model cars than it has newer BMWs, Volvos and Benz..
My, how quickly we all fall down.
Isn't that what convergence theory is all about, Pavel? Events speeding up and all moving toward the same point? (vastly over-simplified)
I guess only certain types of religious bigotry are tolerated on hoocoodanode.
Perhaps CR will delete a few posts without banning anyone.
All forms of bigotry are intolerable.
......geeze......I don't know much about the current Pope, but even I would be hesitant calling him a Nazi..........just sayin'
Its funny how someone that wouldn't tolerate a bad word about gays, minorities, or any other protected class, has no problem calling the Pope a Nazi.
There's a pretty broad decline going on today. Commodities and equities tanking.
Lot of talk going around that the Fed has been forced to pull liquidity out of the market because it's been causing a flight out of bonds and back into emerging markets and commodities.
Seems like it should be obvious that if the Fed is going to print money, at the first sign of economic recovery in other countries capital is going to go flying out of the US.
......I don't know much about the current Pope, but even I would be hesitant calling him a Nazi..........
Who know how he really felt about his days in the Hitler Youth?
And the point about meeting a "Real Nazi" does ring true.
His views are on the right, that is a given.
"Isn't that what convergence theory is all about, Pavel? Events speeding up and all moving toward the same point? (vastly over-simplified)"
Beats me. I don't know too much about it.
"Who know how he really felt about his days in the Hitler Youth?"
He left his unit and went home. He was only 16. His views about the NSDAP are well known.
"His views are on the right, that is a given."
I wouldn't say that. You'd have to know something about the social teaching of the Church to characterize them.
"Following his 14th birthday in 1941, Ratzinger was enrolled in the Hitler Youth, as membership was required for all 14-year old German boys after December 1939,[6] but was an unenthusiastic member and refused to attend meetings.[7] His father was a bitter enemy of Nazism, believing it conflicted with the Catholic faith, according to biographer John L. Allen, Jr. In 1941, one of Ratzinger's cousins, a 14-year-old boy with Down syndrome, was taken away by the Nazi regime to a care center and killed there in secrecy during the Aktion T4 euthanasia campaign of Nazi eugenics.[8] In 1943 while still in seminary, he was drafted at age 16 into the German anti-aircraft corps. Ratzinger then trained in the German infantry, but a subsequent illness precluded him from the usual rigours of military duty. As the Allied front drew closer to his post in 1945, he deserted back to his family's home in Traunstein after his unit had ceased to exist, just as American troops established their headquarters in the Ratzinger household. As a German soldier, he was put in a POW camp, but was released a few months later at the end of the war in the summer of 1945. He reentered the seminary, along with his brother Georg, in November of that year."
Pope Benedict XVI - Wikipedia, the free encyclopedia
Money doesn’t grow on trees for most of America. We sit down at our kitchen tables and write out checks to the phone-company, electric company, credit card-company, mortgage-company, and auto finance company every month. We clip coupons and go to the grocery store every week to put food in the mouths of our children. This is what our parents did before us.
good articles> Econ & Finance Articles Updated Daily
The fact the government is busy throwing parades is a big chunk of the problem. The government needs to be frugal to the point of cheap at all times.
begs the question why tax payer money should be used to pay for a parade in the first place?
As to turning streets back to gravel - I think it is a great idea. In fact I have been trying to get my town to do that with sidewalks. We are not spending enough money to maintain those that we have and rather than pay more taxes to maintain those that we have built I would rather that we eliminated them from one side of a quiet street. What works for sidewalks should work for roads too.
It is high time that we all learned to live within our means.