good morning!

Or, down the Rabbit hole:

Stongest UnRecovery of Post War Era!

--bh

Due to interest rate pressures and and continuing increases in property taxes, housing prices will flatline at best for the next 5-10 years

Ah yes, the old "sideline money" meme. I guess it applies to everything these days when trying to justify a "recovery".

Just go and try and find a home built from 1930 to 1945 somewhere in the country, it's not an easy task...

concrete example of "wage"-price inflation in the absence of wage growth.

1. College is too expensive.
2. Students want help from the government.
3. Government increases grants and loans.
4. Colleges absorb the fiscal stimulus and raise prices.
5. Repeat 1-4.

More regulations will not solve the problems we are facing now. remember enron, there were changes made during that time. did it prevent another one from happening?

I believe we'll be hearing about the "money on the sidelines" for years to come now. After a while, it will be a running joke up there with "green shoots".

Shill

Any regulation will be neutered through Congress.

you can do the same exercise with health care. it's the new "wage"-price spiral model

Off topic, but stunning if true. The $134 billion of treasury bonds in a suitcase brought this up "U.S. government bonds in billion dollar denominations are not considered negotiable by ordinary citizens, Corsi noted. Such bonds are typically bearer-bonds issued by the U.S. government only to banks and foreign governments that seek to purchase the bonds to hold in their institutional asset portfolios. " Smuggled: $134 billion in U.S. bonds

I really hope this isn't true. Bearer bonds? OMG? If so, what an incredible invitation to graft and dictators fleeing the countries they once plundered. The only upside is the denominations would be too large and the interest payments too easy to trace to be useful to drug dealers.

For those of you not in the investment industry, new bearer bonds have been illegal in the US since the 1980s. I haven't yet checked to see if the Treasury Dept is somehow excluded for nonretail transactions.

I believe we'll be hearing about the "money on the sidelines" for years to come now

Of course we will. It's unquantifiable and it reinforces the widespread belief that vast amounts of "smart money" actually exist.

Tim/Basel,

It's not just too much money, it's too little value. How many colleges post statistics on the rates of their graduates getting jobs in the field their degree prepaired them for? If they posted these statistics, how many would put a mill-stone of debt around their neck to get a social-ecology degree in order to become a barrista?

In any case, it's part of the jobless recovery and service-sector heavy explosion haveing democratized higher education when reality it was commoditzed. Another gross conflation, pretending to do one thing, but in fact absorbing it into the other.

--bh

•Developers now are under-building, and the market is primed for growth since homebuilding is failing to keep up with population growth.

This assumes that US home buyers are able to maintain access to long-term credit. It's possible that if as a nation we continue to abuse credit loans for periods longer than 5-10 years will not be available due to instability and unpredictability of the credit markets.

racial - same tune I have been signing since 2005....How can I change now? I will be either right or wrong, and its all over the finance blogosphere.

I spent a fortnight in Bakersfield one afternoon, or at least it seemed like that long...

I'm still asking myself why I'm not short this market with all my cash. A handful of FAZ just doesn't do it justice but I'm very gun shy now

BTW:

... We are forecasting the weakest economic recovery of the post-war era with real growth on the order of 2 percent to 3 percent," the report said.

This in combination with the current borrowing binge would seem to suggest more credit events are coming. Perhaps in the form of an escalating series of currency and bond market crises.

"concrete example of "wage"-price inflation in the absence of wage growth.

1. College is too expensive.
2. Students want help from the government.
3. Government increases grants and loans.
4. Colleges absorb the fiscal stimulus and raise prices.
5. Repeat 1-4.
   "

In the case of California public universities, college has been more expensive because the state has withdraw more and more support.

While public college could be much more efficient in California, leaving declining state support out of the equation invalidates it, at least in these parts.

World Net Daily is about as reliable as the Weekly World News. And you don't even get Batboy sightings, Ed Anger or Dear Dottie.

On the topic of stimulus and recovery:
Forbes.com File Not Found...
Oh well.....

On opening this article I'm immediately struck by the fact that this man has no beard and thus is unqualified to offer opinions on these subjects.

@ crispy

How's biz?

"real growth on the order of 2 percent to 3 percent"

Sorry, I still see -1 to +1 with governement debt crowding out private investment for sometime...

The first thing I thought was, isn't this the place that forced out Thornberg?

CR, does their track record count anymore, since they forced out their competent and honest economist?

MLM - all three business lines are flat yoy...the decline has stopped and with the cost structures much lower (mainly personnel adjustments), profits are way up...

Lots of complaints in this article. The businessmen are keeping more of their money by not splurging on the extras!!! LOL!!!

Sex selling for less amid economic downturn

Yahoo! 404 - Page Not Found

" Tim/Basel,
...... How many colleges post statistics on the rates of their graduates getting jobs in the field their degree prepaired them for? If they posted these statistics, how many would put a mill-stone of debt around their neck to get a social-ecology degree in order to become a barrista?"

ROFL...I suspect that it'd be more that you'd think Otherwise, how can a degree program in Eastern Philosophy, etc. even be offered?

dow 6000,

vix option expiration day...should turn back up tomm?

So what is going to be the driver of this new economic miracle recovery ? More spending by leveraged up to the eyeballs consumers ?

• splat

" splat (profile) wrote on Wed, 6/17/2009 - 12:33 pm

So what is going to be the driver of this new economic miracle recovery ? More spending by leveraged up to the eyeballs consumers ?"

Victory gardens and free range chickens. Don't shoot the messenger-

It would be great to track colleges and their grads student loan defaults!

How can I change now? I will be either right or wrong, and its all over the finance blogosphere.

With such vehement hair splitting, I suspect you will be both right and wrong simultaneously. Enjoy!

That spending article seems to make reasonable arguments, it doesn't sound like some right-wing hit piece:

Spending skeptics regard the impact of government spending on private spending very differently, as the Keynesian model was replaced many years ago, at least among research economists; and many of the presumptions of the Keynesian model have changed as well. The central message from new research on fiscal policy is that the impact of government spending depends critically on what the spending is on, and how it is ultimately financed.

In some cases, higher spending can raise GDP for a short period of time if tax increases are delayed, but the greater the delay, the greater the long-run decline in employment and output that ultimately swamps the temporary gain. These findings are summarized in a new paper by Harald Uhlig of the University of Chicago, who writes that "the analysis here may lead one to conclude that the long-term consequences of massive expansions in government stimulus come at substantial costs."

Isn't this consistent with the experience of the eastern European countries?

C&C snark factory mocks all talk of a "mild depression" while promoting the marginally different "great recession" label.

Things that make you go "Hmmm"... ?

Sorry, couldn't resist.

The key reason recent studies don't find a Keynesian-level multiplier is because the higher taxes on incomes or expenditures that ultimately accompany higher spending depress economic activity. And the depressing effect of these tax increases is the largest when government spending closely replaces private expenditures. Ironically, the largest temporary gains of higher spending occur when the spending is on items that have little direct value to consumers, such as military spending.

Guess this is why leaders like to start wars during depressions.

and these guys are from California!

haha, wow.

Someone either needs to leave campus more often or is just trying to get time on CNBC.

Either way.....FAIL!

People always trot out WWII spending as what pulled us out of the post-depressionary funk.

There is no reason we couldn't devote the same resources to building up our own infrastructure rather than blowing up others.

Food for thought.

"The Empire State Building."

How would you shovel snow off the roof?

@Gary - the element you're missing is the part where you blow up the other guy's infrastructure so that you become the only game in town.

@blackhat - that was scary.

Basel Too,

excellent point.

And now back to Operation Comet Stikes China Economic Recovery Plan.

--bh

thanks for 2006 link
I believe UCLA also fudged some of the demographic numbers and over estimated the number of households that would need to be created over the next 10-20 years. So I chuckle when I hear about buyers on the sidelines

UCLA is in the mode of Friedman so I am not surprised at their bullishness.

If I went to P.F. Chang's and they were serving Mexican food that day I'd be very upset.

Upset but still hungry.

And that's what counts.

3 minutes till the new iPhone OS is available.....

Here's a CR post on UCLA housing demographics. One of the first posts I ever read here.

Calculated Risk: Housing Starts and Demographics

The Obama Regulatory Reform Plan

If a consumer can afford $400K at 5% he can only afford $350K at 7%.

And since most buyers only consider the monthly payments when deciding whether to buy a house...
I wish sellers would figure this out.

Ac-
if it's good authentic mexican food it's tolerable right?
from past i believe you play options? I have ? for you if so

"Since taking office, my administration has mounted an extraordinary response to an historic economic crisis."

"Since taking office, my administration has mounted an extraordinary poor and shorty sighted response to an historic economic crisis."

Fixored !

• splat

how about tyh, do you see any oct puts being a good buy.. 50-60?

thanks..

Agreed with Basel Too.

I often feel -- when people are slagging on "non-productive" individuals -- the people really aren't thinking about the realities of modern industrialism.

Only people who don't have anything to do have free time. Free time for politics, for learning without specific goal. The Renaissance followed the Black Death, not "The Great Get A Job". Individuals who are not required to work directly in creating and maintaining the operating machinery of your culture are a direct proxy for what you are going to accomplish as a culture. Agricultural surplus anyone? This is considered a "good" thing, but industrial surplus is simply unimaginable.

It seems to me that people confuse the post-industrial quest for purpose -- we are all supposed to be taking part in the great enterprise of industry, which can now provide the world with as many singing rubber fish as it desires, to say nothing of necessities. Now most people are superfluous and this is a sign of our economic victory but people don't "get" it. Everyone here seems convinced you should become either an engineer or a welder. Instead, markets are expected to expend to absorb infinite capacity with an infinite appetite for consumption. "Rain follows the plow," is certainly fun to believe, but it doesn't work that way. I don't think it's any more convincing when the market follows the drillpress.

It seems to me the best use would be to turn them into Greek citizens and set them to work talking and writing. The problem with all the psychology and communications majors isn't that we have them, it's that we expect them to integrate into the real economy, and that we let the university / educational systems operate as private concerns without regulating them as public utilities.

I find the whole geezer / lud argument against digital culture the same. You want "real" things? Don't you have enough real overcapacity yet? You better virtualize those people's passtimes if you don't want to run into the world's finite limit of resources even faster than you're gonna. To hell with peak oil, peak Chindian is coming and antique expectations that everyone will be a bricklayer or blacksmith are going to crash headlong into the fact that economies of scale in productive industries are going to reach fantastic levels in the near future. Not only will nobody have anything to do, you'll all have nothing to do after you blow through the world's resources in record time proving that the market doesn't follow the drillpress.

I think there is a lot of fighting the last intellectual war going on, and a lot of people whose acquisitive personality compels them to try to force everyone into the same system because any transition to something that isn't a footrace to the largest pile of success tokens will "rob" them somehow.