Sears to Let Jobless Stop Payments, Still Keep Fridge (Update2) Bloomberg.com
By Lauren Coleman-Lochner
June 29 (Bloomberg) -- Sears Holdings Corp., the largest U.S. department-store chain, will let customers who lose their jobs suspend payments and keep appliances bought with store credit cards in an effort to bolster sales in the recession.
Customers who spend at least $399 on appliances and related merchandise between July 6 and Aug. 1 will have one-twelfth of the purchase price credited to their account for every month they are out of work, said Larry Costello, a company spokesman. Those who are jobless for more than a year will have the full debt forgiven, he said. The offer period may be extended, he said.
How does that Sears arrangement work? They are wanting to boost sales using their products and their credit line and will totally forgive said debt if you are unemployed for a year?
Commies! Why should wealth manger's compensation have any relation to their performance. and what is whole 'transparency' thing..
Wealth Manager Fees May Change, PriceWaterhouse Says (Update1) Bloomberg.com
By Jeff Plungis
June 29 (Bloomberg) -- Clients of wealth management and private-banking firms want more communication from their advisers and advisers may be paid based on performance, according to a study by PriceWaterhouseCoopers LLP.
“Transparency is the new gold standard of wealth management,” said Steven Crosby, head of the U.S. private banking and wealth management practice at PriceWaterhouseCoopers in a Webcast today. “Clients want to know, ‘Where are my assets?’ and ‘What risks am I exposed to?’”
unless the credit spigot opened up for subprime shoppers with 130% ltv because of underwater car loan and high dti, I would say the numbers will not be that great.
The spin will make it sound good...
Analysis: Risks of another Madoff-style scam? Yahoo! 404 - Page Not Found
Very high ...well ....since it's actually happening now with BB at the Fed and Obamanomics where
1) The government champions funds
2) Funds champion corporations
3) Corporations champion markets and industries
4) The people ( American taxpayers ) get the tab
......lets see.........the "rebound" in auto sales had to do with car dealerships unloading their stock before they went "belly up" - High profit margin on THOSE sales I'm sure. I'm already starting to sicken with all the subsequent "High-Fivin-Economy-Is-On-The-Mend Special Reports
.....Since I don't drink anymore, may I cut straight to the "excuse me while I retch" part?
The reality is that we have just experienced a collapse.
Now the entire goal of the Big O administration is to keep the populace distracted while all of the aftereffects of the disaster are gradually ameliorated by oceans of federal money.
Right now the states are feeling the first order effects, but the O boys are still playing some power politics to make sure that all of the states institute tax increases before the hopium is administered from DC.
49.4% drop in all taxes collected April 2008 to April 2009.
At this point, it is nearly impossible to raise taxes fast enough to bail out state government, so essentially, California is going first, and Arizona will follow into insolvency.
By: Charlie Gasparino, On-Air Editor | 29 Jun 2009 | 08:58 PM ET Text Size
The U.S. Treasury is planning to roll out its long-awaited Public-Private Investment Program (PPIP) plan, aiming to unveil it on Wednesday.
The program should include as many as nine participants. CNBC has confirmed that two firms will be Wilbur Ross's Distressed Real Estate/debt fund and a joint venture between GE Capital and private investor Angelo Gordon & Co. As many as seven other firms will likely participate. Other firms widely expect to be named include PIMCO and Blackrock.
June 30 (Bloomberg) -- A 25-year auto-assembly venture between Toyota Motor Corp. and General Motors Corp. is ending after bankrupt GM said it will shed its stake in the Fremont, California, plant, leaving its fate unknown.
The world’s two largest automakers have reviewed plans for the New United Motor Manufacturing Inc. factory since GM Chief Executive Officer Fritz Henderson said in April that the Detroit-based automaker would eliminate the Pontiac Vibe, its only model assembled there. GM said yesterday it will shed its stake in the factory, known as Nummi.
In other news - the American taxpayer is looking to write another check, European banksters need a bit of cash June 30 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., said that valuation declines on credit-default swaps sold to European banks could have a “material adverse effect” on the company’s results.
The risk of losses on the derivatives may last “longer than anticipated,” the New York-based insurer said late yesterday in a regulatory filing updating the “risk factors” in its 2008 annual report. The firm had $192.6 billion in swaps allowing lenders to reduce the funds they had to hold in reserve as of March 31, AIG said.
...
The insurer’s $182.5 billion bailout includes $30 billion to help retire swaps linked to subprime mortgages. The package also includes $22.5 billion to unwind the securities-lending program, a $60 billion credit line and an investment of as much as $70 billion.
The $192.6 billion figure for the swaps is comprised mostly of $99.4 billion tied to corporate loans and $90.2 billion linked to prime residential mortgages, the insurer said in a May 7 filing. The combined total was reduced from $234.4 billion on Dec. 31.
Didn't the Obama administration agree to buy a huge number of automobiles from Chrysler & GM as part of their BK arrangements? I'd suggest that between that and BSR's point about "fire sales" at the terminated dealerships we have our temporary bounce.
p.s.: Seem to remember something about Hertz or some other rental car company making a big buy, too.
km4 - thanks for the Madoff 101 link; bit of a shame that Markopolis was referred to as a "tipster". Some damn good forensic retrofitting was behind the "tips".
Short month might dampen green shoots...I looked at dealer credit application counts just now and it doesn't seem significantly better than May. Dealers over a 100 apps was steady with May having a couple more. Dealers over 60 apps was similar etc....
// American International Group Inc., the insurer bailed out by the U.S., said that valuation declines on credit-default swaps sold to European banks could have a “material adverse effect” on the company’s results.//
By: Dennis Kneale, CNBC Media & Technology Editor | 29 Jun 2009 | 01:34 PM ET Text Size
I said it on our 8 o’clock show on Thursday and Friday and now I’ll put it in writing: This horrible Great Recession is over, right here and right now. A spate of economic metrics supports this daunting prediction. We'll update this information and topspin it on CNBC Reports tonight at 8 p.m. I'll get to those numbers in a moment. The more important factor, though, is how we FEEL. I've said it before, let's put it on T-shirts: Capitalism is optimism monetized. As I put it in my "Parting Shot" on CNBC Reports on Friday night, hope is the magical elixir of capitalism. And even here, the latest consumer sentiment numbers, out on Friday from the vaunted University of Michigan monthly survey, show that hope is on the rise.
My auto story: was in Mexico looking at plants a few weeks ago... we were being driven back to the border by a logistics wonk for a shelter operation... he was recounting all the auto tier one & two maquilladore that were failing... one company alone had closed two operations in Matamoros, 4 of 6 in Reynosa and most of their Juarez facility... only one operation was relatively untouched [Nuevo Laredo].
So this one company cut back or eliminated 9 of their 10 operations in that part of Mexico [there are more - like many tier ones - elsewhere also being cut back or shuttered]. Ouch.
And we aren't even talking about the domestic capacity [shuttering them even before 'the crisis'].
There will be more cuts... a 10MM build will not support the current supply chain.
Financial products should be treated like medicines and sold to consumers only when they are certified safe to prevent a repeat of last year's financial meltdown, the world's central bankers said on Monday. The Bank for International Settlements (BIS), which acts as a forum for central banks, said government efforts to revive the global economy might have only a temporary impact because banks are not being pushed hard enough to fix their underlying problems.
dryfly, that is a key point ... 10 million is going to kill a lot of auto related businesses... and I don't think we will see anything like 14 million again for some time.
49.4% drop in all taxes collected April 2008 to April 2009.<?i>
Yep, the dark side of the recent rise in personal incomes (which all things being equal would be one of the most positive forward looking economic sign we could see) is that it seems to be coming at the expense of a collapse in government incomes. In other words it's an inorganic boost from balance sheet maneuvering.
dryfly, that is a key point ... 10 million is going to kill a lot of auto related businesses... and I don't think we will see anything like 14 million again for some time. - CR
I agree.
Here is another tid bit... 70-80% of the COGS for automotive is in 'parts & materials'. Got that from the book "Machine That Changed The World" [Womack]...
So if the effect to the OEMs is bad for the economy... the effect is approximately 3 to 4 times as bad when the supply chain is factored in.
Wow... anyone notice oil bubble-rocketing here after hours? Hope that's not a trend...
Is that the Goldman Sachs casino effect or supply/demand? Last charts I saw showed miles driven down YoY and supply at near record levels.
Looks like China is hiking fuel prices. Not sure of the implications offhand. I wonder if it means more Yuan will be directed towards oil purchases. If so that could be nasty for USD oil prices.
I think it interesting that diesel and gasoline don't even come close to covering the current crack spread- so either gas and diesel shoot higher ( um, demand problem!!!) or oil drop fast and traders leave a lot of small speculators holding the bag.
Dennis Kneale is a contrary indicator if there ever was one. Geez, and right at the end of the quarter, too -- he couldn't have picked a better time to be wrong.
If you look at the story of the Japanese auto industry, its pretty chilling to American auto companies. There's just been a sea change where folks have bought smaller and cheaper cars ... and really just haven't replaced there current cars. The equivalent in the US would be if everyone kept their cars for 3 extra years than they had been, and - when it is time to buy - stuck to Corollas and Civics.
ac, the problem is the feds have to push the economy hard just to stabilize it.
Without massive stimulus, including all of the massive carbon taxes, this economy is going to act like state governments- wave after wave of contractions until we find a bottom that finally holds. We are firmly in a downward spiral.
How long until the green shoot look like a total hallucination.
The Chinese raising oil in yuan is simply removing a massive subsidy.
The real level of costs to China to develop are going to be very interesting over the next few years.
Let's define "sales".
Is it a "sale" if it is 25% incentivized, or is it only 75% of a sale? How about if it goes at a cash loss? Just as with foreclosed or short sale houses, there is some tight-roping in the edge of the English language here... for the sake of deception, I'll add. There is a strong belief by some in the US government and many in finance that a false sense of optimism leads to real optimism leads to recovery. Trick your way to fortune; there are no "laws" in economics, it's all just a con game... so they believe.
I guess if Sears gives the unemployed free refrigerators that are just taking up floorspace and might be protected in BK anyway, they can write up a whole shitload of goodwill using their significant judgment. Then they leverage that up, securitize it. You know, make it up on volume...
TOKYO — A group of young people recently gathered in a darkened park here. Holding placards and megaphones, they chanted slogans condemning the Japanese government and a lack of jobs and opportunity.
The scene, which is repeated often in the gritty Tokyo neighborhood of Koenji, is nothing close to the protests that have recently shaken Iran. Indeed, the protests would hardly raise an eyebrow in most parts of the world, but in this country, which values conformity, they represent a stark departure from the norm. Since the 1960s, when youth protests turned violent, even the mildest form of protests by young people has been viewed as taboo.
If 5.2% unemployment is a "deflationary nightmare", maybe we need some of that here.
It is the result of heavy currency manipulation to maintain exports even if that manipulation results in the average Japanese being 'poorer' in purchasing parity terms.
In fact their policy is what Washington is trying to do... debase the currency via large public expenditures, weaker exchange rate increases exports & hampers imports, get more people working to lower UE rate even if that work results in less 'earnings' when converted into global purchasing power.
//That may be hyperbole, but the deteriorating economy has inarguably affected young people more than any other demographic. Unemployment was 9.6 percent in April for Japanese aged 15 to 24, compared with 5 percent unemployment over all.
But unemployment and welfare benefits are sparse in Japan. And government spending is skewed toward pensions and health care for older voters rather than programs that might train young workers or help them support their families.//
If you work 1-3(?) hours a week in Japan you are "employed"
You mean like they do in Europe?
Or like we do here... you work one hour a week here you become part-time employed but still employed.
Heck if you do a kitchen table start-up and make no money you are considered 'employed' here... In the US being employed has nothing to do with 'making money'... it's what you do with your time that counts.
From Russian web sites: Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end (hey, it's a lot of money by Russian standards - Russian GDP is only $2.2 Trillion, so that's like $90Bil for the US).
The government says it is willing to take losses on these loans so long as the credit gridlock gets broken.
And, oh, by the way, executives in these banks are not allowed to take vacations until this goal is accomplished.
Now, here is an argument in favor of "pre-privatization" !
PS. The Russian government did try to provide some guarantee for commercial loans, but there were no takers
ac, the problem is the feds have to push the economy hard just to stabilize it.
Without massive stimulus, including all of the massive carbon taxes, this economy is going to act like state governments- wave after wave of contractions until we find a bottom that finally holds. We are firmly in a downward spiral.
My problem with that idea is that it may stabilize it in terms of growth, but destabilize it in terms of structure and creditworthiness.
Look at what the stimulus in China is doing - more real estate insanity.
Look at how the US stimulus is causing a loss of faith in the dollar and US debt.
Governments love nothing more than to go on massive debt fueled spending sprees.
If massive debt driven stimulus could solve economic problems, there would be no economic problems.
If alcoholics got sober by drinking massive amounts of alcohol, there would be no alcoholics.
From Russian web sites: Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end (hey, it's a lot of money by Russian standards - Russian GDP is only $2.2 Trillion, so that's like $90Bil for the US).
The government says it is willing to take losses on these loans so long as the credit gridlock gets broken.
So the US housing credit bubble debacle all over again.
Same thing happening in Asia now.
This is why Andy Xie says another crash is coming in 2010 or so.
He sounds better than BHO.. He is at least trying hard.
//Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end.//
My wife just visited her sister in Xiamen (the largest city in Fujian Province). After a short hiatus, apparently the construction cranes are out in force again. The local press attributes it to a turnaround in the economy: green shoots. The smart(er) money attributes it to the PBOC forcing banks to loan to developers at below market rates to jumpstart consumption and soak up some of those disenfranchised migrants. We shall see. I expect, though, that this will end in tears.
So the US housing credit bubble debacle all over again.
Same thing happening in Asia now.
This is why Andy Xie says another crash is coming in 2010 or so.
That comes as no surprise to me... some gov'ts value political & social stability more than their bankers profits. They remember riots & revolutions. We don't... that might change. In such a case 'money' is one of the last things you worry about.
All of the Chinese apparatchiks grew up during the Cultural Revolution. Putin's gang remembers Poland's Solidarity & probably even the Czech uprising. We remember what... Kent State? Watts? No comparison. Different pasts different POVs & motivations going forward.
The securities firms still standing on Wall Street are about to close the most lucrative quarter since the credit crisis erupted.
And instead of relying on risk and leverage to drive profits, companies such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. are getting back to basics, with a strong performance from trading and underwriting.
The Bilderbergers must now be shitting bricks that their master plan of financial global control and domination is now showing fissures - not just cracks - in the facade!
That comes as no surprise to me... some gov'ts value political & social stability more than their bankers profits. They remember riots & revolutions. We don't... that might change. In such a case 'money' is one of the last things you worry about.
China will never be a real power till it's own people start consuming, hopefully by using debt free money.
ac
Time for 'Greenbacks' ..... money without debt ...
indeed why should we borrow our own money ...
With the profit of currency and credit creation a national dividend
like Alaska has ... just with profit from the issue of money
that banks will have to borrow once we outlaw fractional reserve banking ...
I don't know what to make of these statements.
Money is debt. It is a form of credit.
Credit is just when something of value is exchanged for a promise. Exchanging a car for money is precisely this - you exchange a real good for the promise that this money can be exchanged for something else of value. A mortgage contract is the same thing - you give away money in exchange for the promise that it will be repaid by future money that actually has value.
Money and credit are fundamentally about the exchange of something with tangible value for the promise of future tangible value.
There is no debt free money.
There is no reason why credit creation should be profitable unless it is made to be so.
Money can never be the last thing a country can worry about.
These things all concern promises made between social entities. They formally represent the trustworthiness of one party and the confidence of another.
Without trustworthiness and confidence there can be no meaningful social bonds, no meaningful economic collaboration, and no functioning society.
If you can't concern yourself with the integrity of money and credit in a modern economy then you cannot have a modern economy or even a functioning society - when communication and commitment between social entities has no meaning, there is no society.
//If you can't concern yourself with the integrity of money and credit in a modern economy then you cannot have a modern economy or even a functioning society - when communication and commitment between social entities has no meaning, there is no society.//
Lucifer (profile) wrote on Mon, 6/29/2009 - 10:14 pm
Both.. and add groupthink.
//brainwashing or self preservation?//
Neither really is a significant contributing factor. It's called investiture in the status quo. Between student loans incurred on the vacant-minded traintracks to a magic world of jobs "out there somewhere", and being forced to make long-term investments on shelters under the continuous threat of speculation, combined with readily-available credit that soon began to offset lack of real gains in income over a period of two or three decades, following the mass entry of women into the workforce in large numbers, which first propped up the scam... In short, people were suckered into a rigged game while young and vulnerable, and long before they understood the real consequences and economic realities started making most of their decisions for them. What follows is social breakdown and the traumatic realization about the real economy, plus widespread anger as J6P eventually is forced to face reality by an empty stomach and suddenly receiving no more magic money checks in the mail.
Yar, the continental, the assignat, the reichsmark.
Fiat usually fails.
Lincoln's greenback was a failure until the comstock lode came in big enough to pay back the issuance in gold and silver- after the war was won. I do note you omit the Confederate Dollar;-}
Nice omission of the fact the greenback traded at significant discounts even after the war, and most of them were held by speculators who lobbied for redemption at par to guarantee immense profits.
Real money is Fekete's canard- you might as well just call it a gold standard and set the value of a t-dollar in terms of micrograms of gold.
Lucifer (profile) wrote on Mon, 6/29/2009 - 10:35 pm
Why do people play their roles? Why do they not dissent? Why do they self-censor themselves? Why do they allow themselves to be driven to hell?
Yeah, I realized as I was whipping that up that we largely had dispute only on the semantics. The piece I don't see highlighted in any of the analyses and attempted moralizations is the fact that the most vulnerable people with the most to lose as well as the most potential to contribute to the real economy are the ones against whom economic war was waged. You would draw an analogy here to another long-term decision commonly made under false pretenses when people are most vulnerable and idealistic... but I won't go there. Give me a few years.
Edit: Call it the Hotel California business model.
But if they could ultimately be exchanged for something of value, then I would call them "debt". Was that not the case?
~~~~
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
You would draw an analogy here to another long-term decision commonly made under false pretenses when people are most vulnerable and idealistic...
How dare you talk about marriage like that! Or were you talking about the decision to have children? Or buying a house? Or going to college? Or,...
BTW, it occurs to me that in fact not all money is debt:
A gold coin used as money is not debt because the value is there in your hand - the money is valid without the necessity of some obligation being met. But the old gold-backed dollar still is - it was a promise by the Federal Reserve to deliver 1/20th of an ounce of gold on demand. In as much as it was a reliable promise it was good money.
Today's dollar is good money to the extent that it does have a reliable value - you know you can always wipe your ass with it if necessary.
Recently uncovered writings and interviews with childhood friends of Ben Bernanke paint the picture of a troubled man; who suffered bouts of depression after reading about the dutch "Tulip Mania" while a youth. The interviews and writings are set to be the subject of an upcoming documentary about the current chair of the Federal Reserve to be released in November.
"The interviews and writings give a clear picture into what has molded the mind of an important policymaker", says director John LaFarce. Included in the documentary will be dramatic reading of some of his high school essay's; particularly around the time of the study of Charles Mackay's history of the 1630s dutch-tulip mania. Included are long screeds of an angry young man, angry with God for bringing in clouds and wiping out all of the tulips, as well as restricting the water.
An excerpt of Bernankes beutiful imagery and poetry: "The children of Rottledorf weep; the maids of Dusselldorf lash out; the men of Amsterdand rip their clothes; oh tulip, come back, oh tulip, grow once more on these acres! Why have you hidden yourself, oh cruel Jesus!"... "the shaddows of the clouds bathe the golden fields; alas, poor tulips, they have gone, in permanent hibernation; the winter will last 6 months further."
LaFarce was inspired upon hearing the now famous "Helicopter" speech. "I thought the idea of a printing press absurd, at the time. Hasn't America always stood for a strong dollar policy?" However, his research has given his heart a softer view of the Federal Reserve Chairman's heart: "I see now, the root of his passion, the love, like a grandfather... everyone points to him as a student of the depression... but I hope my work will expose him as a more well-studied chap."
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
Were they a claim on future taxes if they were ultimately collectible? If so I'd still consider that a "debt" as I'm defining it. But maybe my definition is too loose or unorthodox.
To me the key is a promise made in good faith that there will be value for that that paper if it was available. For my purposes I would call that "debt". Maybe there's a better term I should use.
Recently uncovered writings and interviews with childhood friends of Ben Bernanke paint the picture of a troubled man; who suffered bouts of depression after reading about the dutch "Tulip Mania" while a youth. The interviews and writings are set to be the subject of an upcoming documentary about the current chair of the Federal Reserve to be released in November.
It's lucky that people didn't have to live in their tulip bulbs. What a disaster that bubble would have been!
"Lincoln's greenback was a failure until the comstock lode came in big enough to pay back the issuance in gold and silver- after the war was won. I do note you omit the Confederate Dollar;-}
Nice omission of the fact the greenback traded at significant discounts even after the war, and most of them were held by speculators who lobbied for redemption at par to guarantee immense profits."
~~~~
The articles I have seen paint the opposite picture .... Greenbacks were very much in demand so that most were hoarded out of the system very quickly ...
Gold and silver are almost irrelevant to the Greenback ... The banks, using fractional reserve banking, already debased the metal standards ...
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
I am against fractional reserve banking, but to clarify, it the banking "system" that can create roughly 10 loaned dollars to one on deposit. A single bank must keep the reserve or capital ratios within limits. But part of the newly loaned money becomes reserves for another bank (or the same bank), and after all the iterations, it ends up at a roughly 10-1 ratio for the entire system.
A trip from Burbank to Sacramento; followed by the normal routine; traffic on 5 South light; heavier at the 118 interchange. Burbank airport dead, a number of annoyed Southwest customers were backing up the e-check-in line... the traveler was not daunted however he reserved some wrath for those behind him who pushed him to use the open machine; courtesy for the flustered grandmother and her family who have are checking in 7 bags was the rule of the time. In and bag checked, post-haste less than 1 minute; ticket in hand he briskly moved to the TSA checkpoint. "No one uses the expert traveler line, yet they get mad when someone else uses it and cuts ahead 5 places..." he did the typical move and gained 7 spots through the line; the passive-aggressive stares and quiet complaints of others... those are the same suckers who merge 3 miles prior and then get angry that other people are merging in at the actual merge. He checked his thoughts; those are also voters and gun-owners... they are not suckers, just naive enough to believe that the TSA actually would care they run their airport checkpoint lines efficiently. The terminal for his flight was empty; 30 people in, about 40 minutes to flight. "Last week this flight was a connection from Las Vegas... not the typical Sacramento - Burbank" express. The budget loomed large but there was very little news or chatter amongst the people. Sadly; there is never any chatter in the terminal; everyone with their own accoutrements of personal entertainment. The traveler's ipod (it was actually the better-featured Sansa Clip) contained Denninger... other traveler's had laptops, still most were content to view the ABC local feed and get their news appetite fed. Boarding time to in air was less than 10 minutes; the traveler smiled and was rewarded by nice smile from the fit, tall, flight attendant.... there were 3, there are always 3 when you fly Southwest. 60 passengers on the plane total; not one middle passenger and a number of rows had a single occupant. The traveler's dream. Sacramento upon arrival was deader...
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
Were they a claim on future taxes if they were ultimately collectible? If so I'd still consider that a "debt" as I'm defining it. But maybe my definition is too loose or unorthodox.
To me the key is a promise made in good faith that there will be value for that that paper if it was available. For my purposes I would call that "debt". Maybe there's a better term I should use.
~~~~~
Our current dollars and credit are created out of actual debt not future value ... This is why we are in so much trouble ...
Gold is only valuable because it is widely accepted ... Only a coin of the realm is actual money .... gold bullion is just gold ...
Ot-just saw a cash for clunkers finance application, 99 suburban, 3300 military income..470 fica with 31 lates on auto installment that closed this month...
Another application for new car by woman who puts in pull down menu government as job with unemployed as title..1000 k mos, 516 fica, student loans and collection accounts....
Auto paper looks more like paper mache....dont believe the hype on June being a better month...
sdtfs (profile) wrote (in reply to...) on Mon, 6/29/2009 - 10:53 pm
We've been poisoned by these fairy tales,...
Amazing song. Read the lyrics today and it'll almost make you cry, especially if you have college-age children. Though the "tired old man we elected king" is gone.
Money quote:
While the First Legal Tender Act limited the emission of United States Notes to $150,000,000, the printing of fiat currency is a heady wine[5] and by 1863 the Second[6] and Third[7] Legal Tender Acts had expanded the limit to $450,000,000, the option to exchange the notes for United States bonds at par had been revoked, and notes of $1 and $2 denominations had been introduced as the appearance of fiat currency had driven even silver coinage out of circulation. The greenback traded at a substantial discount from gold, which prompted Congress to pass the short-lived Anti-gold futures act of 1864 which was promptly repealed after it seemed to accelerate the decline of the greenback.
The Union's reliance on expanding the circulation of greenbacks eventually ended with the emission of Interest Bearing and Compound Interest Treasury Notes and the passage of the National Banking Act. However, the end of the war found the greenbacks trading for only roughly half of their nominal value in gold.[2]
Gee, does that sound like hoarding to me- the references to Gresham's Law driving gold and silver out of circulation proves my point.
A gradual contraction took place after the war was won and they were redeemed at par in gold and silver.
Gold and silver were chosen by the market as the best money. Governments hate metal money because they can't create infinite amounts of it in a computer. It really offends me that the Fed can instantly create an infinite amount of "money" that other people have to trade real goods and labor to obtain. It should offend everyone.
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
I am against fractional reserve banking, but to clarify, it the banking "system" that can create roughly 10 loaned dollars to one on deposit. A single bank must keep the reserve or capital ratios within limits. But part of the newly loaned money becomes reserves for another bank (or the same bank), and after all the iterations, it ends up at a roughly 10-1 ratio for the entire system.
~~~~
But the ten to one ratio is how our money is diluted ... ten are loaned for every one in deposit ... creating an excess of 9 dollars
in the supply of dollars ... This is reigned in by interest and taxes but that interest and the value of the money lent are underwritten
by the economy and the government ... not the banks themselves ...
Comrade Coinz (homepage, profile) wrote on Mon, 6/29/2009 - 10:59 pm
Gold and silver were chosen by the market as the best money. Governments hate metal money because they can't create infinite amounts of it in a computer. It really offends me that the Fed can instantly create an infinite amount of "money" that other people have to trade real goods and labor to obtain. It should offend everyone.
Does anyone have figures on the value of physical bullion versus outstanding funds and derivative instruments directly reliant upon PM's as the base of their value?
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
Using my "money is debt" analogy, I would say that the problem is not that today's money is debt, but that this debt it represents is undefined in terms of real value and can be arbitrarily debased over time.
A gold backed dollar is a debt obligation of 1/20th of an ounce of gold on demand now and in the future. It is debt with integrity and predictability (while it is is honored).
Todays dollar is backed by a promise of some unspecified future value because more dollars can be created at will. It is a debt with no long-term substance or deterministic value. It is at best a lottery ticket and at worst an outright fraud.
I don't have numbers on derivatives, but I do have this:
MZM vs. gold as of 6/1/2009:
MZM (billions, St. Louis Fed, not seasonally adjusted): 9609.9
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
MZM/oz: $1,857
M2 vs. gold as of 6/1/2009:
M2 (billions, St. Louis Fed, not seasonally adjusted): 8349.4
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
M2/oz: $1,613
The paper ETF and other derivatives plus central bank intervention distort the price of gold (for now).
Green shoots - a phenomenon where umemployed people, people with bad credit and people with 60% DTI ratios think they can get and deserve a car loan...
I think it is best to look at gold as another currency, like pounds, francs, or yen. Central banks actively intervene in the gold market like they do in other currency markets, with one distinct difference. They can't create gold at will.
They can manipulate the market through derivatives, buying, selling, and "leasing" it, but if their bluffs are ever called at Comex -- physical delivery of 90% of all contracts for 3 months, the jig will be up.
the point is the bounce off the bottom not the year over year percentage change. those numbers from 2007 and 2008 etc are levels not to be seen again until income catches up to the point where those level of sales can be supported without the same level of leverage. nevertheless, my own models(http://www.econmkts.com) find that home prices are in the process of turning -- on a nationally aggregated level. caveat emptor in each neighborhood. as for the "street" view -- well they missed the timing and magnitude of the downturn, why does anyone think are right now?
Well, that means the Fed could simply open the discount window to the Treasury to purchase gold at $2,000 an ounce and let everybody start melting gold for dollars.
It would be wild.
It would also stimulate the rest of the world to send gold here for dollars.
We could then tie one ounce of gold to oil at say 30 barrels per ounce.
"The Union's reliance on expanding the circulation of greenbacks eventually ended with the emission of Interest Bearing and Compound Interest Treasury Notes and the passage of the National Banking Act. However, the end of the war found the greenbacks trading for only roughly half of their nominal value in gold.[2]"
~~~~~~
This was was because the Greenbacks were not usable for the payment of Federal Taxes ... later when they were allowed they traded at par ....
Comrade Coinz (homepage, profile) wrote on Mon, 6/29/2009 - 11:08 pm
They can manipulate the market through derivatives, buying, selling, and "leasing" it, but if their bluffs are ever called at Comex -- physical delivery of 90% of all contracts for 3 months, the jig will be up.
This assumes someone will honor the contract. Why will this end any differently than CDS and other speculative debt unwinds of leveraged investments tied to physical stocks and flows, exactly? This is not a snark. I am genuinely curious how it's different this time.
Conception
Colonial scrip was not backed by gold or silver and therefore the colonies could control its purchasing power. This was similar to the "tally stick" system used by the British Empire for over 700 years. It was different from the conventional European mercantilist system of money which required governments to borrow from banks and pay interest for those loans, as gold and silver were the only regarded forms of money. Colonial scrip, were "bills of credit" created by the government, based on the credit of that government, and this meant that there was no interest to pay for the introduction of money. This went a considerable way towards defraying the expense of the Colonial governments and in maintaining prosperity. The Governments charged low interest when it loaned out this paper money to its citizens, with land as collateral, and this interest income lowered the tax burden on the people, contributing to prosperity.
The currency was born when a lack of gold and silver in the Colonies made trade hard to conduct, and a barter system prevailed. One by one, the Colonies began to issue their own paper money to serve as a medium of exchange to make trade vibrant. The Governments could then retire excess notes out of circulation by taxing the people, helping some colonies generally avoid inflation. Each colony had its own currency and some were better managed than others. It was banned by English Parliament in the Currency Act after Benjamin Franklin had explained the benefits of this currency to the British Board of Trade. Outlawing the circulating medium caused a depression in the colonies, and Franklin and many others believed it to be the true cause of the American Revolution.
The Pennsylvania version of this currency was said to be the most effective, because they controlled the money supply and issued only enough notes so as to satisfy the demands of trade, preventing inflation. In 1938, Dr. Richard A. Lester, an economist at Princeton University, wrote that “The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period.” Pennsylvania established a "land bank" that allowed landowners to borrow scrip with their land as collateral. They could borrow twice the value of their land, half of it representing actual land value, and the other half representing production potential of the land. The loan was to be retired over a set period of years, with the land ownership being restored to the citizen upon payment. When the loan was fully retired, another loan could be taken out.
Adam Smith wrote of the Pennsylvania currency in his famed 1776 work The Wealth of Nations:
The government of Pennsylvania, without amassing any [gold or silver], invented a method of lending, not money indeed, but what is equivalent to money to its subjects. [It advanced] to private people at interest, upon [land as collateral], paper bills of credit…made transferable from hand to hand like bank notes, and declared by act of assembly to be legal tender in all payments...[the system] went a considerable way toward defraying the annual expense…of that…government [low taxes]. [Pennsylvania’s] paper currency…is said never to have sunk below the value of gold and silver which was current in the colony before the…issue of paper money.
apologies to my irish brother Bono and the rest of the U2 bank
Get your boots revised
the future is amiss
winds blow with a twist
never seen a recession like this
can you see it to?
credit is falling everywhere
rockets hit the housing fair
satan loves the bombscare but he won’t scare you
sexy green shoots
get on your shoots yeah
free me from a dark dream
Housing first then treasuries(?)
all the congress are screaming but the ghosts aren’t real
here’s where you gotta be
love and frugality
laughter is eternity if joy is recovery
you don’t know how beautiful
the fed is left to blow it up
the front yard weeds are growing up
women are the future of credit investigations
i’ve gotta a subprime loan you’ve got prime
i don’t wanna talk about war between loan modifications
sexy green shoots
get on your shoots etc.
Taxpayers FREAKOUT
i don’t wanna talk about the defaulting modifications
Bernankes in the wrong/found/Bonham lives
let me hit the bong/bong/ housings going down I don’t wanna drown because were all subprime
let me hit the bong/bong/bong/bong
Remind me, did anybody anticipate a rebound in auto sales this year?
Could it work for cars?
Sears to Let Jobless Stop Payments, Still Keep Fridge (Update2)
Bloomberg.com
By Lauren Coleman-Lochner
June 29 (Bloomberg) -- Sears Holdings Corp., the largest U.S. department-store chain, will let customers who lose their jobs suspend payments and keep appliances bought with store credit cards in an effort to bolster sales in the recession.
Customers who spend at least $399 on appliances and related merchandise between July 6 and Aug. 1 will have one-twelfth of the purchase price credited to their account for every month they are out of work, said Larry Costello, a company spokesman. Those who are jobless for more than a year will have the full debt forgiven, he said. The offer period may be extended, he said.
Gee I can't wait for more Green Shooties and have good time as America becomes a much BIGGER version of Argentina or Mexico in the near future;)
"Could it work for cars?"
Some car company is already doing something like that - bundling unemployment insurance into the price. Some ad I saw on TV, so sorry no link.
I often make such jokes.. but no one in their right mind will believe them. But being in your right mind is so uncool.
//Remind me, did anybody anticipate a rebound in auto sales this year?//
How does that Sears arrangement work? They are wanting to boost sales using their products and their credit line and will totally forgive said debt if you are unemployed for a year?
WTF?
CR writes
"But before everyone gets all Green Shootie ..."
No danger of that around here.
Commies! Why should wealth manger's compensation have any relation to their performance. and what is whole 'transparency' thing..
Wealth Manager Fees May Change, PriceWaterhouse Says (Update1)
Bloomberg.com
By Jeff Plungis
June 29 (Bloomberg) -- Clients of wealth management and private-banking firms want more communication from their advisers and advisers may be paid based on performance, according to a study by PriceWaterhouseCoopers LLP.
“Transparency is the new gold standard of wealth management,” said Steven Crosby, head of the U.S. private banking and wealth management practice at PriceWaterhouseCoopers in a Webcast today. “Clients want to know, ‘Where are my assets?’ and ‘What risks am I exposed to?’”
Nemo, at least one person
I received a couple of congratulatory emails from analysts today saying "nice call". But hey, all I do is draw nice looking graphs ...
Just don't get Green Shootie on me.
best wishes
But CR, I went all-in on GM based on your analysis...
That is what he seems to have said.. who is compensating them for the loss.. timmay?
"Those who are jobless for more than a year will have the full debt forgiven, he said."
//They are wanting to boost sales using their products and their credit line and will totally forgive said debt if you are unemployed for a year?//
To get back to 14 million/year, I suggest they just give they cars away.
Nemo, don't blame me! I know you are kidding ... but I don't give investment advice.
best wishes
CalculatedRisk,
Maybe they should just give away cars and get some alphabet soup assistance from timmey.
CR gets props from the analysts. Nice!
unless the credit spigot opened up for subprime shoppers with 130% ltv because of underwater car loan and high dti, I would say the numbers will not be that great.
The spin will make it sound good...
New GM or Austere GM, nemo?
I waz old skool GM, that one went to half a quatloo.
Analysis: Risks of another Madoff-style scam?
Yahoo! 404 - Page Not Found
Very high ...well ....since it's actually happening now with BB at the Fed and Obamanomics where
1) The government champions funds
2) Funds champion corporations
3) Corporations champion markets and industries
4) The people ( American taxpayers ) get the tab
......lets see.........the "rebound" in auto sales had to do with car dealerships unloading their stock before they went "belly up" - High profit margin on THOSE sales I'm sure. I'm already starting to sicken with all the subsequent "High-Fivin-Economy-Is-On-The-Mend Special Reports
.....Since I don't drink anymore, may I cut straight to the "excuse me while I retch" part?
With all the 'green shoots' talk there were bound to be some who bought it ....
Wednesday is D-Day ... Cali and almost every other state will be slashing jobs,
welfare checks and health care for children ...
Just don't get Green Shootie on me.
I hear Green Shootie leaves a nasty stain...
But the financial system is a giant ponzi scheme.
// Risks of another Madoff-style scam?//
Didn't Obama order the Fed to buy a bunch of new cars? GMAC brought back subprime auto financing. Why not ride in style for a while!
CR gets props from the analysts. Nice!
And yet CR claims he just states the obvious,...
CalculatedRisk,
How can Sears make the offer I linked to? any ideas? who is the bagholder?
Green Shooters? Midori?
The reality is that we have just experienced a collapse.
Now the entire goal of the Big O administration is to keep the populace distracted while all of the aftereffects of the disaster are gradually ameliorated by oceans of federal money.
Right now the states are feeling the first order effects, but the O boys are still playing some power politics to make sure that all of the states institute tax increases before the hopium is administered from DC.
Arizona is in this boat.
Our economy has nearly collapsed.
Arizona April tax collections see page 10 http://www.azleg.gov/jlbc/mfh-may-09.pdf
49.4% drop in all taxes collected April 2008 to April 2009.
At this point, it is nearly impossible to raise taxes fast enough to bail out state government, so essentially, California is going first, and Arizona will follow into insolvency.
Someday this war's gonna end...
How can Sears make the offer I linked to? any ideas? who is the bagholder?
~~~~~
The refers are worth less than the cost to pick them up ....
Used refers are a dime a dozen ....
Why won't it die? Is it undead? Nice job starting PPIP on the same day as California.. never mind.
Treasury Set to Unveil PPIP; Ross, GE Capital Participate
Treasury Set to Unveil PPIP; Ross, GE Capital Participating - CNBC
By: Charlie Gasparino, On-Air Editor | 29 Jun 2009 | 08:58 PM ET Text Size
The U.S. Treasury is planning to roll out its long-awaited Public-Private Investment Program (PPIP) plan, aiming to unveil it on Wednesday.
The program should include as many as nine participants. CNBC has confirmed that two firms will be Wilbur Ross's Distressed Real Estate/debt fund and a joint venture between GE Capital and private investor Angelo Gordon & Co. As many as seven other firms will likely participate. Other firms widely expect to be named include PIMCO and Blackrock.
sdtfs: tanta was stating the obvious many moons before anyone of much news reporting importance had caught on.
i hope that's not a confrontational statement. i come here to learn, and keep learning.
thank you for understanding my point of view.
How can Sears make the offer I linked to?
Check the fine print. Credit card companies sold 'unemployment insurance', too.
Toyota does not share the optimism?
June 30 (Bloomberg) -- A 25-year auto-assembly venture between Toyota Motor Corp. and General Motors Corp. is ending after bankrupt GM said it will shed its stake in the Fremont, California, plant, leaving its fate unknown.
The world’s two largest automakers have reviewed plans for the New United Motor Manufacturing Inc. factory since GM Chief Executive Officer Fritz Henderson said in April that the Detroit-based automaker would eliminate the Pontiac Vibe, its only model assembled there. GM said yesterday it will shed its stake in the factory, known as Nummi.
In other news - the American taxpayer is looking to write another check, European banksters need a bit of cash
June 30 (Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S., said that valuation declines on credit-default swaps sold to European banks could have a “material adverse effect” on the company’s results.
The risk of losses on the derivatives may last “longer than anticipated,” the New York-based insurer said late yesterday in a regulatory filing updating the “risk factors” in its 2008 annual report. The firm had $192.6 billion in swaps allowing lenders to reduce the funds they had to hold in reserve as of March 31, AIG said.
...
The insurer’s $182.5 billion bailout includes $30 billion to help retire swaps linked to subprime mortgages. The package also includes $22.5 billion to unwind the securities-lending program, a $60 billion credit line and an investment of as much as $70 billion.
The $192.6 billion figure for the swaps is comprised mostly of $99.4 billion tied to corporate loans and $90.2 billion linked to prime residential mortgages, the insurer said in a May 7 filing. The combined total was reduced from $234.4 billion on Dec. 31.
CR,
Didn't the Obama administration agree to buy a huge number of automobiles from Chrysler & GM as part of their BK arrangements? I'd suggest that between that and BSR's point about "fire sales" at the terminated dealerships we have our temporary bounce.
p.s.: Seem to remember something about Hertz or some other rental car company making a big buy, too.
It is not just refers. It is pretty much any major appliance.
//The refers are worth less than the cost to pick them up//
Actually, if you think about it, it was a slam at the analysts.
And yet CR claims he just states the obvious,...
It's obvious to CR, not so much to everyone else. Of course, so was the entire housing bubble.
km4 - thanks for the Madoff 101 link; bit of a shame that Markopolis was referred to as a "tipster". Some damn good forensic retrofitting was behind the "tips".
C
Short month might dampen green shoots...I looked at dealer credit application counts just now and it doesn't seem significantly better than May. Dealers over a 100 apps was steady with May having a couple more. Dealers over 60 apps was similar etc....
green shoots would be a good band name right now.
Yup.. but those scams work if defaults stay under certain levels. I am not sure about this time ..
//Check the fine print. Credit card companies sold 'unemployment insurance', too.//
They never quit!!
// American International Group Inc., the insurer bailed out by the U.S., said that valuation declines on credit-default swaps sold to European banks could have a “material adverse effect” on the company’s results.//
Do you believe in magic?
Kneale: The Great Recession is Over!
Kneale: The Great Recession is Over! - CNBC
By: Dennis Kneale, CNBC Media & Technology Editor | 29 Jun 2009 | 01:34 PM ET Text Size
I said it on our 8 o’clock show on Thursday and Friday and now I’ll put it in writing: This horrible Great Recession is over, right here and right now. A spate of economic metrics supports this daunting prediction. We'll update this information and topspin it on CNBC Reports tonight at 8 p.m. I'll get to those numbers in a moment. The more important factor, though, is how we FEEL. I've said it before, let's put it on T-shirts: Capitalism is optimism monetized. As I put it in my "Parting Shot" on CNBC Reports on Friday night, hope is the magical elixir of capitalism. And even here, the latest consumer sentiment numbers, out on Friday from the vaunted University of Michigan monthly survey, show that hope is on the rise.
TJ and The Bear, yes, I think there are distortions ... but I also think we've seen the bottom (or at least close if we slide back)
We will see - 10 million a year is still very low
best wishes
My auto story: was in Mexico looking at plants a few weeks ago... we were being driven back to the border by a logistics wonk for a shelter operation... he was recounting all the auto tier one & two maquilladore that were failing... one company alone had closed two operations in Matamoros, 4 of 6 in Reynosa and most of their Juarez facility... only one operation was relatively untouched [Nuevo Laredo].
So this one company cut back or eliminated 9 of their 10 operations in that part of Mexico [there are more - like many tier ones - elsewhere also being cut back or shuttered]. Ouch.
And we aren't even talking about the domestic capacity [shuttering them even before 'the crisis'].
There will be more cuts... a 10MM build will not support the current supply chain.
Wow... anyone notice oil bubble-rocketing here after hours? Hope that's not a trend...
BTW, it just set a new high for the year at $73.38.
Hopium??
Financial Products Should be Treated as Drugs: BIS
Financial Products Should be Treated as Drugs: BIS - Financials * Europe * News * Story - CNBC.com
By: Reuters | 29 Jun 2009 | 08:51 AM ET Text Size
Financial products should be treated like medicines and sold to consumers only when they are certified safe to prevent a repeat of last year's financial meltdown, the world's central bankers said on Monday. The Bank for International Settlements (BIS), which acts as a forum for central banks, said government efforts to revive the global economy might have only a temporary impact because banks are not being pushed hard enough to fix their underlying problems.
TJ
I think BHO agreed to buy 74-130k cars over the next year. Most of them were fords...
Auto sales will slump even more going forward especially at the high end. I expect us to be back at the 8-9 rate in the fall
Flat out. If you are a car company w/o a sub 20k car in the US you are done here.
dryfly, that is a key point ... 10 million is going to kill a lot of auto related businesses... and I don't think we will see anything like 14 million again for some time.
best wishes
Lucifer
It is not just refers. It is pretty much any major appliance.
//The refers are worth less than the cost to pick them up//
~~~~~
Yep ...
Good PR ... write it off as advertising ...
Wow... anyone notice oil bubble-rocketing here after hours? Hope that's not a trend...
Is that the Goldman Sachs casino effect or supply/demand? Last charts I saw showed miles driven down YoY and supply at near record levels.
@ Lucifer (profile) wrote on Mon, 6/29/2009 - 7:17 pm
Do you believe in magic?
Yes but only by the Lovin' Spoonful
YouTube -
I know.. they are very cheap to produce nowadays. But who would not mind a new appliance
It is not just refers. It is pretty much any major appliance.
Dennis Kneale
A prime example of useless capacity ...
CNBC should can this guy and Caboosa Cabeza pronto ...
It's a credibility issue ...
49.4% drop in all taxes collected April 2008 to April 2009.<?i>
Yep, the dark side of the recent rise in personal incomes (which all things being equal would be one of the most positive forward looking economic sign we could see) is that it seems to be coming at the expense of a collapse in government incomes. In other words it's an inorganic boost from balance sheet maneuvering.
Oh well...
We require village idiots!
//A prime example of useless capacity//
"10 million is going to kill a lot of auto related businesses..."
~~~~~
And it will depend on where those parts and cars are made ...
dryfly, that is a key point ... 10 million is going to kill a lot of auto related businesses... and I don't think we will see anything like 14 million again for some time. - CR
I agree.
Here is another tid bit... 70-80% of the COGS for automotive is in 'parts & materials'. Got that from the book "Machine That Changed The World" [Womack]...
So if the effect to the OEMs is bad for the economy... the effect is approximately 3 to 4 times as bad when the supply chain is factored in.
Wow... anyone notice oil bubble-rocketing here after hours? Hope that's not a trend...
Is that the Goldman Sachs casino effect or supply/demand? Last charts I saw showed miles driven down YoY and supply at near record levels.
Looks like China is hiking fuel prices. Not sure of the implications offhand. I wonder if it means more Yuan will be directed towards oil purchases. If so that could be nasty for USD oil prices.
"Didn't the Obama administration agree to buy a huge number of automobiles from Chrysler & GM as part of their BK arrangements? "
I was thinking the exact same thing.
But then again, the govt is a large part of the economy now, probably permanently.
Oil is going higher for a brief moment.
Futures - Yahoo! Finance
I think it interesting that diesel and gasoline don't even come close to covering the current crack spread- so either gas and diesel shoot higher ( um, demand problem!!!) or oil drop fast and traders leave a lot of small speculators holding the bag.
Pick your poison!
Someday this war's gonna end...
Oil is indeed spiking. Maybe on the PPIP news?
CR-Every time the cow fertilizes the field (green shootie')...you gotta' go spraying Round-Up. Just Damn....
Complete wild speculation, but seems like kicking the price of oil up would help the PROC get dollars out.
Dennis Kneale is a contrary indicator if there ever was one. Geez, and right at the end of the quarter, too -- he couldn't have picked a better time to be wrong.
Complete wild speculation, but seems like kicking the price of oil (which is in USD) up would help the PROC get dollars out.
That's becoming common wisdom
I don't understand why everybody complains about the horrors of Japan's unending deflation:
Japan’s Jobless Rate Rises to Five-Year High of 5.2%
If 5.2% unemployment is a "deflationary nightmare", maybe we need some of that here.
If you look at the story of the Japanese auto industry, its pretty chilling to American auto companies. There's just been a sea change where folks have bought smaller and cheaper cars ... and really just haven't replaced there current cars. The equivalent in the US would be if everyone kept their cars for 3 extra years than they had been, and - when it is time to buy - stuck to Corollas and Civics.
Ac
If you work 1-3(?) hours a week in Japan you are "employed"
ac, the problem is the feds have to push the economy hard just to stabilize it.
Without massive stimulus, including all of the massive carbon taxes, this economy is going to act like state governments- wave after wave of contractions until we find a bottom that finally holds. We are firmly in a downward spiral.
How long until the green shoot look like a total hallucination.
The Chinese raising oil in yuan is simply removing a massive subsidy.
The real level of costs to China to develop are going to be very interesting over the next few years.
Someday this war's gonna end...
Let's define "sales".
Is it a "sale" if it is 25% incentivized, or is it only 75% of a sale? How about if it goes at a cash loss? Just as with foreclosed or short sale houses, there is some tight-roping in the edge of the English language here... for the sake of deception, I'll add. There is a strong belief by some in the US government and many in finance that a false sense of optimism leads to real optimism leads to recovery. Trick your way to fortune; there are no "laws" in economics, it's all just a con game... so they believe.
I guess if Sears gives the unemployed free refrigerators that are just taking up floorspace and might be protected in BK anyway, they can write up a whole shitload of goodwill using their significant judgment. Then they leverage that up, securitize it. You know, make it up on volume...
Ac
If you work 1-3(?) hours a week in Japan you are "employed"
You mean like they do in Europe?
They learned from the best.
//If you work 1-3(?) hours a week in Japan you are "employed"//
Now you are talking!
//Then they leverage that up, securitize it. You know, make it up on volume...//
Young Japanese Raise Their Voices Over Economy
TOKYO — A group of young people recently gathered in a darkened park here. Holding placards and megaphones, they chanted slogans condemning the Japanese government and a lack of jobs and opportunity.
The scene, which is repeated often in the gritty Tokyo neighborhood of Koenji, is nothing close to the protests that have recently shaken Iran. Indeed, the protests would hardly raise an eyebrow in most parts of the world, but in this country, which values conformity, they represent a stark departure from the norm. Since the 1960s, when youth protests turned violent, even the mildest form of protests by young people has been viewed as taboo.
- NY Times
If 5.2% unemployment is a "deflationary nightmare", maybe we need some of that here.
It is the result of heavy currency manipulation to maintain exports even if that manipulation results in the average Japanese being 'poorer' in purchasing parity terms.
In fact their policy is what Washington is trying to do... debase the currency via large public expenditures, weaker exchange rate increases exports & hampers imports, get more people working to lower UE rate even if that work results in less 'earnings' when converted into global purchasing power.
But they want it now..
//The real level of costs to China to develop are going to be very interesting over the next few years.//
I see a problem here!
//That may be hyperbole, but the deteriorating economy has inarguably affected young people more than any other demographic. Unemployment was 9.6 percent in April for Japanese aged 15 to 24, compared with 5 percent unemployment over all.
But unemployment and welfare benefits are sparse in Japan. And government spending is skewed toward pensions and health care for older voters rather than programs that might train young workers or help them support their families.//
If you work 1-3(?) hours a week in Japan you are "employed"
You mean like they do in Europe?
Or like we do here... you work one hour a week here you become part-time employed but still employed.
Heck if you do a kitchen table start-up and make no money you are considered 'employed' here... In the US being employed has nothing to do with 'making money'... it's what you do with your time that counts.
From Russian web sites: Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end (hey, it's a lot of money by Russian standards - Russian GDP is only $2.2 Trillion, so that's like $90Bil for the US).
The government says it is willing to take losses on these loans so long as the credit gridlock gets broken.
And, oh, by the way, executives in these banks are not allowed to take vacations until this goal is accomplished.
Now, here is an argument in favor of "pre-privatization" !
PS. The Russian government did try to provide some guarantee for commercial loans, but there were no takers
ac, the problem is the feds have to push the economy hard just to stabilize it.
Without massive stimulus, including all of the massive carbon taxes, this economy is going to act like state governments- wave after wave of contractions until we find a bottom that finally holds. We are firmly in a downward spiral.
My problem with that idea is that it may stabilize it in terms of growth, but destabilize it in terms of structure and creditworthiness.
Look at what the stimulus in China is doing - more real estate insanity.
Look at how the US stimulus is causing a loss of faith in the dollar and US debt.
Governments love nothing more than to go on massive debt fueled spending sprees.
If massive debt driven stimulus could solve economic problems, there would be no economic problems.
If alcoholics got sober by drinking massive amounts of alcohol, there would be no alcoholics.
Analyses that say this is a massive inventory work-off appear to be correct. Look at the Railfax data. Auto shipments are still down over 50% YoY.
Railfax Report - North American Rail Freight Traffic Carloading Report
Sales may be up, but I'd be curious to see the marginal profitability of those sales.
/not buying this green shoots rebound
ac - try the Hopium. It's dreeeeamy. It's the high that never ends.
C
From Russian web sites: Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end (hey, it's a lot of money by Russian standards - Russian GDP is only $2.2 Trillion, so that's like $90Bil for the US).
The government says it is willing to take losses on these loans so long as the credit gridlock gets broken.
So the US housing credit bubble debacle all over again.
Same thing happening in Asia now.
This is why Andy Xie says another crash is coming in 2010 or so.
He sounds better than BHO.. He is at least trying hard.
//Putin announced today that all Russian banks where the state is the majority shareholder, have to extend at least $15 Billion worth of commercial loans before the year end.//
HAHA - Just Green Shootie Me!!!
ac, reposted from last thread:
My wife just visited her sister in Xiamen (the largest city in Fujian Province). After a short hiatus, apparently the construction cranes are out in force again. The local press attributes it to a turnaround in the economy: green shoots. The smart(er) money attributes it to the PBOC forcing banks to loan to developers at below market rates to jumpstart consumption and soak up some of those disenfranchised migrants. We shall see. I expect, though, that this will end in tears.
ac
Time for 'Greenbacks' ..... money without debt ...
indeed why should we borrow our own money ...
With the profit of currency and credit creation a national dividend
like Alaska has ... just with profit from the issue of money
that banks will have to borrow once we outlaw fractional reserve banking ...
Which gulag would you prefer?
//HAHA - Just Green Shootie Me!!!//
I have been saying that for some time.
//Time for 'Greenbacks' ..... money without debt ...//
China will never be a real power till it's own people start consuming, hopefully by using debt free money.
//I expect, though, that this will end in tears.//
So the US housing credit bubble debacle all over again.
Same thing happening in Asia now.
This is why Andy Xie says another crash is coming in 2010 or so.
That comes as no surprise to me... some gov'ts value political & social stability more than their bankers profits. They remember riots & revolutions. We don't... that might change. In such a case 'money' is one of the last things you worry about.
All of the Chinese apparatchiks grew up during the Cultural Revolution. Putin's gang remembers Poland's Solidarity & probably even the Czech uprising. We remember what... Kent State? Watts? No comparison. Different pasts different POVs & motivations going forward.
Street to Log Best Quarter Since Crisis
Street to Log Best Quarter Since Crisis - WSJ.com
The securities firms still standing on Wall Street are about to close the most lucrative quarter since the credit crisis erupted.
And instead of relying on risk and leverage to drive profits, companies such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. are getting back to basics, with a strong performance from trading and underwriting.
I've been in Oregon for the past 5 days... Tourism related biz are off about 75% overall.... Hanging on by their fingernails....
Lots of fresh talent for escort agencies!
//Tourism related biz are off about 75% overall//
The Bilderbergers must now be shitting bricks that their master plan of financial global control and domination is now showing fissures - not just cracks - in the facade!
Mere mentions of green shootery in demand (oil, dollar too) and Nikki bounces out of bed for a 1.89% up morning.
Bizarro.
nytol
C
And maybe even anal fissures
. . . there are no "laws" in economics, it's all just a con game... so they believe.
So some of us also believe, especially those of us who enjoy watching the game; hence my handle.
Lucifer
I have been saying that for some time.
//Time for 'Greenbacks' ..... money without debt ...//
~~~~~
Yet the major economists won't even touch the subject ...
of 'Greenbacks' or the abolition of fractional reserve banking
to the benefit of the US Treasury and tax payers in general ....
Two possible scenarios
~ they have no idea about monetary theory ...
~ they choose their careers over the answers ...
"getting back to basics, with a strong performance from trading and underwriting."
~~~~
Raising interest rates, fees and penalties ...
They will not think what they cannot accept.
//~ they choose their careers over the answers ...//
Dennis Kneale: Bill Murray look-a-like, but half as smart.
Lucifer
They will not think what they cannot accept.
//~ they choose their careers over the answers ...//
~~~~
brainwashing or self preservation?
getting back to basics, with a strong performance from trading and underwriting.
Strange that they got into all those high risk shenanigans when "basics" are so profitable.
/snark
Both.. and add groupthink.
//brainwashing or self preservation?//
Why do you think I posted that story?
//Strange that they got into all those high risk shenanigans when "basics" are so profitable.//
Likely for the same reason that I threw in the snark tag.
"Both.. and add groupthink."
~~~~~
I majored in accounting with an economics minor
and I can understand the concept of 'Greenbacks' ...
It would seem so simple to get us out of this mess ...
We can never recover completely but we would recover
years earlier ...
That comes as no surprise to me... some gov'ts value political & social stability more than their bankers profits. They remember riots & revolutions. We don't... that might change. In such a case 'money' is one of the last things you worry about.
China will never be a real power till it's own people start consuming, hopefully by using debt free money.
ac
Time for 'Greenbacks' ..... money without debt ...
indeed why should we borrow our own money ...
With the profit of currency and credit creation a national dividend
like Alaska has ... just with profit from the issue of money
that banks will have to borrow once we outlaw fractional reserve banking ...
I don't know what to make of these statements.
Money is debt. It is a form of credit.
Credit is just when something of value is exchanged for a promise. Exchanging a car for money is precisely this - you exchange a real good for the promise that this money can be exchanged for something else of value. A mortgage contract is the same thing - you give away money in exchange for the promise that it will be repaid by future money that actually has value.
Money and credit are fundamentally about the exchange of something with tangible value for the promise of future tangible value.
There is no debt free money.
There is no reason why credit creation should be profitable unless it is made to be so.
Money can never be the last thing a country can worry about.
These things all concern promises made between social entities. They formally represent the trustworthiness of one party and the confidence of another.
Without trustworthiness and confidence there can be no meaningful social bonds, no meaningful economic collaboration, and no functioning society.
If you can't concern yourself with the integrity of money and credit in a modern economy then you cannot have a modern economy or even a functioning society - when communication and commitment between social entities has no meaning, there is no society.
Does not work when a fraction of the population can produce all of life's neccesities and more. The post-industrial reality.
//Money is debt. It is a form of credit.//
There is no debt free money.
~~~~~
Money is money because the government says it is ...
They create demand for money with taxes ...
They institutionalize money with legal tender laws through the courts ...
Money is an exchange of demand, not value ...
Ya.. how is that working out?
//Money and credit are fundamentally about the exchange of something with tangible value for the promise of future tangible value.//
Our leaders and banksters are doing such a great job on that one.
//Without trustworthiness and confidence there can be no meaningful social bonds, no meaningful economic collaboration, and no functioning society.//
Tell that to banksters!
//If you can't concern yourself with the integrity of money and credit in a modern economy then you cannot have a modern economy or even a functioning society - when communication and commitment between social entities has no meaning, there is no society.//
ac
How do you explain Lincoln's 'Greenbacks' ... ?
How do you explain Ben Franklin's colonial script ...?
Both worked better than money as debt ...
Lucifer (profile) wrote on Mon, 6/29/2009 - 10:14 pm
Both.. and add groupthink.
//brainwashing or self preservation?//
Neither really is a significant contributing factor. It's called investiture in the status quo. Between student loans incurred on the vacant-minded traintracks to a magic world of jobs "out there somewhere", and being forced to make long-term investments on shelters under the continuous threat of speculation, combined with readily-available credit that soon began to offset lack of real gains in income over a period of two or three decades, following the mass entry of women into the workforce in large numbers, which first propped up the scam... In short, people were suckered into a rigged game while young and vulnerable, and long before they understood the real consequences and economic realities started making most of their decisions for them. What follows is social breakdown and the traumatic realization about the real economy, plus widespread anger as J6P eventually is forced to face reality by an empty stomach and suddenly receiving no more magic money checks in the mail.
Ya.. how is that working out?
//Money and credit are fundamentally about the exchange of something with tangible value for the promise of future tangible value.//
It's not working out because we don't have money in that regard.
Our money and credit our fictions because our financial system and it seems to me our government too has no interest in honesty or commitment.
ac
How do you explain Lincoln's 'Greenbacks' ... ?
How do you explain Ben Franklin's colonial script ...?
Both worked better than money as debt ...
I'll have to look into those more. I don't know much about them.
But if they could ultimately be exchanged for something of value, then I would call them "debt". Was that not the case?
Lucifer
That Fridge story is scary. They can't afford $399? Post Credit world
ResistanceIsFeudal,
How does group-think work?
Why do people play their roles? Why do they not dissent? Why do they self-censor themselves? Why do they allow themselves to be driven to hell?
Free New Fridge!
//That Fridge story is scary. They can't afford $399? Post Credit world//
Yar, the continental, the assignat, the reichsmark.
Fiat usually fails.
Lincoln's greenback was a failure until the comstock lode came in big enough to pay back the issuance in gold and silver- after the war was won. I do note you omit the Confederate Dollar;-}
Nice omission of the fact the greenback traded at significant discounts even after the war, and most of them were held by speculators who lobbied for redemption at par to guarantee immense profits.
Real money is Fekete's canard- you might as well just call it a gold standard and set the value of a t-dollar in terms of micrograms of gold.
Someday this war's gonna end...
Lucifer (profile) wrote on Mon, 6/29/2009 - 10:35 pm
Why do people play their roles? Why do they not dissent? Why do they self-censor themselves? Why do they allow themselves to be driven to hell?
Yeah, I realized as I was whipping that up that we largely had dispute only on the semantics. The piece I don't see highlighted in any of the analyses and attempted moralizations is the fact that the most vulnerable people with the most to lose as well as the most potential to contribute to the real economy are the ones against whom economic war was waged. You would draw an analogy here to another long-term decision commonly made under false pretenses when people are most vulnerable and idealistic... but I won't go there. Give me a few years.
Edit: Call it the Hotel California business model.
ac
But if they could ultimately be exchanged for something of value, then I would call them "debt". Was that not the case?
~~~~
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
You would draw an analogy here to another long-term decision commonly made under false pretenses when people are most vulnerable and idealistic...
How dare you talk about marriage like that! Or were you talking about the decision to have children? Or buying a house? Or going to college? Or,...
BTW, it occurs to me that in fact not all money is debt:
A gold coin used as money is not debt because the value is there in your hand - the money is valid without the necessity of some obligation being met. But the old gold-backed dollar still is - it was a promise by the Federal Reserve to deliver 1/20th of an ounce of gold on demand. In as much as it was a reliable promise it was good money.
Today's dollar is good money to the extent that it does have a reliable value - you know you can always wipe your ass with it if necessary.
A gold coin used as money is not debt because the value is there in your hand - the money is valid without the necessity of some obligation being met.
Someone is channeling me
Recently uncovered writings and interviews with childhood friends of Ben Bernanke paint the picture of a troubled man; who suffered bouts of depression after reading about the dutch "Tulip Mania" while a youth. The interviews and writings are set to be the subject of an upcoming documentary about the current chair of the Federal Reserve to be released in November.
"The interviews and writings give a clear picture into what has molded the mind of an important policymaker", says director John LaFarce. Included in the documentary will be dramatic reading of some of his high school essay's; particularly around the time of the study of Charles Mackay's history of the 1630s dutch-tulip mania. Included are long screeds of an angry young man, angry with God for bringing in clouds and wiping out all of the tulips, as well as restricting the water.
An excerpt of Bernankes beutiful imagery and poetry: "The children of Rottledorf weep; the maids of Dusselldorf lash out; the men of Amsterdand rip their clothes; oh tulip, come back, oh tulip, grow once more on these acres! Why have you hidden yourself, oh cruel Jesus!"... "the shaddows of the clouds bathe the golden fields; alas, poor tulips, they have gone, in permanent hibernation; the winter will last 6 months further."
LaFarce was inspired upon hearing the now famous "Helicopter" speech. "I thought the idea of a printing press absurd, at the time. Hasn't America always stood for a strong dollar policy?" However, his research has given his heart a softer view of the Federal Reserve Chairman's heart: "I see now, the root of his passion, the love, like a grandfather... everyone points to him as a student of the depression... but I hope my work will expose him as a more well-studied chap."
A gold coin used as money is not debt because the value is there in your hand
Its value as a rock is nowhere near its value as a trading commodity.
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
Were they a claim on future taxes if they were ultimately collectible? If so I'd still consider that a "debt" as I'm defining it. But maybe my definition is too loose or unorthodox.
To me the key is a promise made in good faith that there will be value for that that paper if it was available. For my purposes I would call that "debt". Maybe there's a better term I should use.
YLSP (profile) wrote on Mon, 6/29/2009 - 10:46 pm
Recently uncovered writings and interviews with childhood friends of Ben Bernanke paint the picture of a troubled man; who suffered bouts of depression after reading about the dutch "Tulip Mania" while a youth. The interviews and writings are set to be the subject of an upcoming documentary about the current chair of the Federal Reserve to be released in November.
It's lucky that people didn't have to live in their tulip bulbs. What a disaster that bubble would have been!
sdtfs (profile) wrote (in reply to...) on Mon, 6/29/2009 - 10:43 pm
How dare you talk about marriage like that! Or were you talking about the decision to have children? Or buying a house? Or going to college? Or,...
This is the End of the Innocence.
Citizen AllenM
"Lincoln's greenback was a failure until the comstock lode came in big enough to pay back the issuance in gold and silver- after the war was won. I do note you omit the Confederate Dollar;-}
Nice omission of the fact the greenback traded at significant discounts even after the war, and most of them were held by speculators who lobbied for redemption at par to guarantee immense profits."
~~~~
The articles I have seen paint the opposite picture .... Greenbacks were very much in demand so that most were hoarded out of the system very quickly ...
Gold and silver are almost irrelevant to the Greenback ... The banks, using fractional reserve banking, already debased the metal standards ...
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
We've been poisoned by these fairy tales,...
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
I am against fractional reserve banking, but to clarify, it the banking "system" that can create roughly 10 loaned dollars to one on deposit. A single bank must keep the reserve or capital ratios within limits. But part of the newly loaned money becomes reserves for another bank (or the same bank), and after all the iterations, it ends up at a roughly 10-1 ratio for the entire system.
A trip from Burbank to Sacramento; followed by the normal routine; traffic on 5 South light; heavier at the 118 interchange. Burbank airport dead, a number of annoyed Southwest customers were backing up the e-check-in line... the traveler was not daunted however he reserved some wrath for those behind him who pushed him to use the open machine; courtesy for the flustered grandmother and her family who have are checking in 7 bags was the rule of the time. In and bag checked, post-haste less than 1 minute; ticket in hand he briskly moved to the TSA checkpoint. "No one uses the expert traveler line, yet they get mad when someone else uses it and cuts ahead 5 places..." he did the typical move and gained 7 spots through the line; the passive-aggressive stares and quiet complaints of others... those are the same suckers who merge 3 miles prior and then get angry that other people are merging in at the actual merge. He checked his thoughts; those are also voters and gun-owners... they are not suckers, just naive enough to believe that the TSA actually would care they run their airport checkpoint lines efficiently. The terminal for his flight was empty; 30 people in, about 40 minutes to flight. "Last week this flight was a connection from Las Vegas... not the typical Sacramento - Burbank" express. The budget loomed large but there was very little news or chatter amongst the people. Sadly; there is never any chatter in the terminal; everyone with their own accoutrements of personal entertainment. The traveler's ipod (it was actually the better-featured Sansa Clip) contained Denninger... other traveler's had laptops, still most were content to view the ABC local feed and get their news appetite fed. Boarding time to in air was less than 10 minutes; the traveler smiled and was rewarded by nice smile from the fit, tall, flight attendant.... there were 3, there are always 3 when you fly Southwest. 60 passengers on the plane total; not one middle passenger and a number of rows had a single occupant. The traveler's dream. Sacramento upon arrival was deader...
ac
No ... Both Lincoln's Greenbacks and Franklin's colonial script were based on the ability to collect taxes ... as is our dollar is today based on the ability to collect taxes
based on the prosperity of the underlying economy ... they were in no way debt of any kind ...
Were they a claim on future taxes if they were ultimately collectible? If so I'd still consider that a "debt" as I'm defining it. But maybe my definition is too loose or unorthodox.
To me the key is a promise made in good faith that there will be value for that that paper if it was available. For my purposes I would call that "debt". Maybe there's a better term I should use.
~~~~~
Our current dollars and credit are created out of actual debt not future value ... This is why we are in so much trouble ...
Gold is only valuable because it is widely accepted ... Only a coin of the realm is actual money .... gold bullion is just gold ...
So coinage and gold are two different animals ...
Ot-just saw a cash for clunkers finance application, 99 suburban, 3300 military income..470 fica with 31 lates on auto installment that closed this month...
Another application for new car by woman who puts in pull down menu government as job with unemployed as title..1000 k mos, 516 fica, student loans and collection accounts....
Auto paper looks more like paper mache....dont believe the hype on June being a better month...
sdtfs (profile) wrote (in reply to...) on Mon, 6/29/2009 - 10:53 pm
We've been poisoned by these fairy tales,...
Amazing song. Read the lyrics today and it'll almost make you cry, especially if you have college-age children. Though the "tired old man we elected king" is gone.
wikipedia has a good thumbnail discussion- United States Note - Wikipedia, the free encyclopedia
Money quote:
While the First Legal Tender Act limited the emission of United States Notes to $150,000,000, the printing of fiat currency is a heady wine[5] and by 1863 the Second[6] and Third[7] Legal Tender Acts had expanded the limit to $450,000,000, the option to exchange the notes for United States bonds at par had been revoked, and notes of $1 and $2 denominations had been introduced as the appearance of fiat currency had driven even silver coinage out of circulation. The greenback traded at a substantial discount from gold, which prompted Congress to pass the short-lived Anti-gold futures act of 1864 which was promptly repealed after it seemed to accelerate the decline of the greenback.
The Union's reliance on expanding the circulation of greenbacks eventually ended with the emission of Interest Bearing and Compound Interest Treasury Notes and the passage of the National Banking Act. However, the end of the war found the greenbacks trading for only roughly half of their nominal value in gold.[2]
Gee, does that sound like hoarding to me- the references to Gresham's Law driving gold and silver out of circulation proves my point.
A gradual contraction took place after the war was won and they were redeemed at par in gold and silver.
Just what I said.
Someday this war's gonna end...
Gold and silver were chosen by the market as the best money. Governments hate metal money because they can't create infinite amounts of it in a computer. It really offends me that the Fed can instantly create an infinite amount of "money" that other people have to trade real goods and labor to obtain. It should offend everyone.
A trip from Burbank to Sacramento; followed by the normal routine
Reads a bit like a chapter from After the Crash.
Comrade Coinz
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
I am against fractional reserve banking, but to clarify, it the banking "system" that can create roughly 10 loaned dollars to one on deposit. A single bank must keep the reserve or capital ratios within limits. But part of the newly loaned money becomes reserves for another bank (or the same bank), and after all the iterations, it ends up at a roughly 10-1 ratio for the entire system.
~~~~
But the ten to one ratio is how our money is diluted ... ten are loaned for every one in deposit ... creating an excess of 9 dollars
in the supply of dollars ... This is reigned in by interest and taxes but that interest and the value of the money lent are underwritten
by the economy and the government ... not the banks themselves ...
Comrade Coinz (homepage, profile) wrote on Mon, 6/29/2009 - 10:59 pm
Gold and silver were chosen by the market as the best money. Governments hate metal money because they can't create infinite amounts of it in a computer. It really offends me that the Fed can instantly create an infinite amount of "money" that other people have to trade real goods and labor to obtain. It should offend everyone.
Does anyone have figures on the value of physical bullion versus outstanding funds and derivative instruments directly reliant upon PM's as the base of their value?
That is the problem ... fractional reserve banking ... the banks loan 10 to every one of real deposit causing the dilution of our money's value.
Using my "money is debt" analogy, I would say that the problem is not that today's money is debt, but that this debt it represents is undefined in terms of real value and can be arbitrarily debased over time.
A gold backed dollar is a debt obligation of 1/20th of an ounce of gold on demand now and in the future. It is debt with integrity and predictability (while it is is honored).
Todays dollar is backed by a promise of some unspecified future value because more dollars can be created at will. It is a debt with no long-term substance or deterministic value. It is at best a lottery ticket and at worst an outright fraud.
Resistance,
I don't have numbers on derivatives, but I do have this:
MZM vs. gold as of 6/1/2009:
MZM (billions, St. Louis Fed, not seasonally adjusted): 9609.9
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
MZM/oz: $1,857
M2 vs. gold as of 6/1/2009:
M2 (billions, St. Louis Fed, not seasonally adjusted): 8349.4
Gold supply (oz, estimated): 5,175,202,156
Gold price in USD: $939.30
M2/oz: $1,613
The paper ETF and other derivatives plus central bank intervention distort the price of gold (for now).
ResistanceIsFeudal
Gold has nothing to do with the value of our money ...
The value of our money is based on two things ...
The proportion of money collected in taxes ...
and the underlying productivity of the economy ...
Green shoots - a phenomenon where umemployed people, people with bad credit and people with 60% DTI ratios think they can get and deserve a car loan...
I think it is best to look at gold as another currency, like pounds, francs, or yen. Central banks actively intervene in the gold market like they do in other currency markets, with one distinct difference. They can't create gold at will.
They can manipulate the market through derivatives, buying, selling, and "leasing" it, but if their bluffs are ever called at Comex -- physical delivery of 90% of all contracts for 3 months, the jig will be up.
CR: increase in auto sales in June
Revenue is not profit.
the point is the bounce off the bottom not the year over year percentage change. those numbers from 2007 and 2008 etc are levels not to be seen again until income catches up to the point where those level of sales can be supported without the same level of leverage. nevertheless, my own models(http://www.econmkts.com) find that home prices are in the process of turning -- on a nationally aggregated level. caveat emptor in each neighborhood. as for the "street" view -- well they missed the timing and magnitude of the downturn, why does anyone think are right now?
WSJ: A GM spokesman also said an annualized 10 million sales rate is possible for June.
What is the net car increase (after losses from scrapping including Congress paying people to throw away running automobiles)?
Are we getting richer or poorer?
Well, that means the Fed could simply open the discount window to the Treasury to purchase gold at $2,000 an ounce and let everybody start melting gold for dollars.
It would be wild.
It would also stimulate the rest of the world to send gold here for dollars.
We could then tie one ounce of gold to oil at say 30 barrels per ounce.
Bedtime for me.
Someday this war's gonna end...
I've seen a few mentions of increased .gov fleet purchases. Are these in enough size to matter?
"The Union's reliance on expanding the circulation of greenbacks eventually ended with the emission of Interest Bearing and Compound Interest Treasury Notes and the passage of the National Banking Act. However, the end of the war found the greenbacks trading for only roughly half of their nominal value in gold.[2]"
~~~~~~
This was was because the Greenbacks were not usable for the payment of Federal Taxes ... later when they were allowed they traded at par ....
Comrade Coinz (homepage, profile) wrote on Mon, 6/29/2009 - 11:08 pm
They can manipulate the market through derivatives, buying, selling, and "leasing" it, but if their bluffs are ever called at Comex -- physical delivery of 90% of all contracts for 3 months, the jig will be up.
This assumes someone will honor the contract. Why will this end any differently than CDS and other speculative debt unwinds of leveraged investments tied to physical stocks and flows, exactly? This is not a snark. I am genuinely curious how it's different this time.
Sears might be assuming that, for example, 100 people are postponing purchases even though only 20 will default.
It would work if the 80 people pay for 100 appliances.
I would look at the finance charges.
Citizen AllenM
Colonial Script
Conception
Colonial scrip was not backed by gold or silver and therefore the colonies could control its purchasing power. This was similar to the "tally stick" system used by the British Empire for over 700 years. It was different from the conventional European mercantilist system of money which required governments to borrow from banks and pay interest for those loans, as gold and silver were the only regarded forms of money. Colonial scrip, were "bills of credit" created by the government, based on the credit of that government, and this meant that there was no interest to pay for the introduction of money. This went a considerable way towards defraying the expense of the Colonial governments and in maintaining prosperity. The Governments charged low interest when it loaned out this paper money to its citizens, with land as collateral, and this interest income lowered the tax burden on the people, contributing to prosperity.
The currency was born when a lack of gold and silver in the Colonies made trade hard to conduct, and a barter system prevailed. One by one, the Colonies began to issue their own paper money to serve as a medium of exchange to make trade vibrant. The Governments could then retire excess notes out of circulation by taxing the people, helping some colonies generally avoid inflation. Each colony had its own currency and some were better managed than others. It was banned by English Parliament in the Currency Act after Benjamin Franklin had explained the benefits of this currency to the British Board of Trade. Outlawing the circulating medium caused a depression in the colonies, and Franklin and many others believed it to be the true cause of the American Revolution.
The Pennsylvania version of this currency was said to be the most effective, because they controlled the money supply and issued only enough notes so as to satisfy the demands of trade, preventing inflation. In 1938, Dr. Richard A. Lester, an economist at Princeton University, wrote that “The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period.” Pennsylvania established a "land bank" that allowed landowners to borrow scrip with their land as collateral. They could borrow twice the value of their land, half of it representing actual land value, and the other half representing production potential of the land. The loan was to be retired over a set period of years, with the land ownership being restored to the citizen upon payment. When the loan was fully retired, another loan could be taken out.
Adam Smith wrote of the Pennsylvania currency in his famed 1776 work The Wealth of Nations:
The government of Pennsylvania, without amassing any [gold or silver], invented a method of lending, not money indeed, but what is equivalent to money to its subjects. [It advanced] to private people at interest, upon [land as collateral], paper bills of credit…made transferable from hand to hand like bank notes, and declared by act of assembly to be legal tender in all payments...[the system] went a considerable way toward defraying the annual expense…of that…government [low taxes]. [Pennsylvania’s] paper currency…is said never to have sunk below the value of gold and silver which was current in the colony before the…issue of paper money.
Colonial scrip - Wikipedia, the free encyclopedia
apologies to my irish brother Bono and the rest of the U2 bank
Get your boots revised
the future is amiss
winds blow with a twist
never seen a recession like this
can you see it to?
credit is falling everywhere
rockets hit the housing fair
satan loves the bombscare but he won’t scare you
sexy green shoots
get on your shoots yeah
free me from a dark dream
Housing first then treasuries(?)
all the congress are screaming but the ghosts aren’t real
here’s where you gotta be
love and frugality
laughter is eternity if joy is recovery
you don’t know how beautiful
the fed is left to blow it up
the front yard weeds are growing up
women are the future of credit investigations
i’ve gotta a subprime loan you’ve got prime
i don’t wanna talk about war between loan modifications
sexy green shoots
get on your shoots etc.
Taxpayers FREAKOUT
i don’t wanna talk about the defaulting modifications
Bernankes in the wrong/found/Bonham lives
let me hit the bong/bong/ housings going down I don’t wanna drown because were all subprime
let me hit the bong/bong/bong/bong
or at least CSC
YouTube -