I'm no Nobel-winning eCONomist, but IMHO Krugman's interpretation of the facts is rather self-serving.
The gains in employment and the economy in the early 30's were totally illusory, which was why they evaporated the moment the stimulus was withdrawn. There was no "full recovery" to be had through artifice.
Luckily the US was a exporter & creditor nation with little debt, cheap energy, and an ever-burgeoning manufacturing base. After ten years most of the debt accumulated in the 20's was worked off and the country was ready to take off again, war or no war.
Oddly enough, I'm not particularly concerned with the problems that they think they might have after our second half recovery. I'm still waiting for them to recognize the problems they have now.
What about the taxation rate during those years? How did that variable affect unemployment? It wasn't just the slow down in monetary stimulus that caused unemployment.
You can't compare this era and the depression because you didn't have the amount of money thrown at it then as now. Also you see what he's doing here.....rubber-stamping the policy of inflate the next bubble, etc.
He needs to STFU..he had his 15 minutes....it's over.
Depression-era employment would only be instructive if private vs. public employment was detailed. Undoubtedly a majority of the jobs were created through the Public Works program (which, I'll be the first to admit, did do some good work).
"In the face of rising budget deficits which reached $2.7 billion in 1931, Congress followed the prevailing economic wisdom at the time and passed the Tax Act of 1932 which DRAMATICALLY INCREASED tax rates once again.
This was followed by another TAX INCREASE in 1936 that further improved the government's finances while further weakening the economy. By 1936 the lowest tax rate had reached 4 percent and the top rate was up to 79 percent."
New four-part series on "The Ascent of Money"started tonight on PBS. I didn't know, for example, that bonds were invented to finance wars, and that John Law (a Scotsman) organized (in France) the initial central bank issuing fiat money. A two hour version is available online at PBS, but the full series plays through the end of July.
The theme of the series seems to me to be: we'll never learn from history. LOL
"Undoubtedly a majority of the jobs were created through the Public Works program (which, I'll be the first to admit, did do some good work)."
One wonders what we will be left with at the end of the trillions spent on bad banks and bad assets? Any equivalent to the TVA, the work done on the national parks, Hoover dam/Lake Meade, or Appalachian Trail?
So far it looks like we get Fannie/Freddie, AIG, Government Motors and a steaming pile of bad debt.
The surge in unemployment in 1937 was related to an attempt to unwind the monetary and fiscal stimulus policies, with disastrous results for employment. Just something to remember when the Fed and Treasury start to unwind the current stimulus programs.
Nobody sensible is making the argument that a lack of sufficient monetary and fiscal stimulus policies will lead to disaster.
I absolutely agree that insufficient stimulus and monetary easing will end disastrously.
That's simply a statement of the obvious. It's like saying that "Not operating on a person with a serious spine injury will end in disaster!"
It's a cheap intellectually vacuous rhetoric.
The question is not whether insufficient stimulus will lead to disaster - that's a given.
The question is whether "sufficient" stimulus and monetary easing will lead to an even greater disaster.
Will operating on the spine injury turn partial paralysis in quadriplegia or death?
Maybe after thinking long and hard FDR chose "disastrous results for employment" over "collapse of the US monetary and political system".
I'm used to CR doing a great job of breaking down numbers by choosing the right metrics and explaining their contexts. In this instance, we have a notion of an official unemployment rate, taken for a prolonged period. Now, during some chunk of the 'jobless recovery' era of GWB, Paul Krugman wrote often about the unemployment rate, and how a deteriorating situation could be reflected positively in the official number. The official unemployment number was not one-size-fits-all. This caused myself and many people to realize that there exist many numbers we have access to measuring labor/employment, and to piece the bigger picture together from those. Things like the employment/population ratio, the number of discouraged workers, and so on all factored in.
So, putting together all of this background, I wonder this: how was (un)employment even counted during the era we're looking at, and how does that compare to our current measurements? Did they have 'discouraged workers'? (I'm guessing not, as that whole notion sounds like something that would have come about after organized labor made some gains decades later, but that's just a guess)
I ask all of this because it's tempting to look at this chart and the current situation and attempt comparison.
Hopefully this isn't a tangent too far -- just some thoughts to add to the discussion.
Come on ac - that is equally vacuous. 25% unemployment is exactly the kind of thing required to produce those 'worse things'... history also shows that as well.
.......I am surely no expert, but I can't imagine what might get us rebooted this time around. I'm not anticipating a major war, people would assume it's too contrived. We don't manufacture anything of note that people actually need, other than food. Our industry serves only ourselves and we aren't buying, we are in hock up to our ears, and 20-million have no jobs to pay for what we need to stimulate the economy now. It is also agreed said job market is only to get worse thru this year (at a minimum).
We can't really compare situations between GD I and now unless we know exactly how unemployment was measured back then. Do anyone know exactly how unemployment was being measured back then - all the descriptions I have seen seem to be very vague and incomplete.
The other issue as dryfly alluded to is the number of people on farms back then. When crop prices fell through the floor people were still "employed", but incomes dropped very severely. I think that this is one of the major differences this time around.
I wouldn't equate stimulus with surgery as much as pain meds, since it only addresses the symptoms (i.e., makes the patient temporarily feel better) and does nothing for the underlying condition.
Curiously one thing that didn't happen in the depression was real house prices did not fall. Shiller's real house price data from 1929 t0 1940 shows no significant fall. Even in nominal terms prices fell less than one third from the high in 1925 to the low in 1933. In real terms, due to deflation the drop was only 12 1/2%. Obviously in parts of the country such as the dust bowl prices undoubtedly dropped more, but given that loans in excess of 50% of value were rare there was relatively little leverage and apparently a decent resale market, all of which is very different from current circumstances.
Year Real Nominal
1925 78.16 6.342667364
1926 72.49 6.086397975
1927 71.38 5.859250108
1928 73.28 5.946614672
1929 72.61 5.824304282
1930 69.49 5.573859198
1931 68.65 5.119563464
1932 68.34 4.58372747
1933 72.87 4.408998342
1934 73.28 4.537133036
1935 78.07 4.980221904
1936 79.41 5.140515399
1937 79.72 5.272286919
1938 78.46 5.226223931
1939 78.55 5.158199023
1940 81.73 5.328760428 Irrational Exuberance
I've been told that the shift in American lifestyle from agrarian to what we have now... (suburbian?) was significant. Hence unemployment isn't directly measured the same way.
OT,I would like to thank all of those who recommended the best glues to sniff.I still have not found one with a good nose and a clean finish,but cnbc is starting to make sense.
Yeah, we're nowhere near the peak in UE this time around. Much too much retail out there for a country where savings are going from negative to 8-to-12%.
Did they have 'discouraged workers'? (I'm guessing not, as that whole notion sounds like something that would have come about after organized labor made some gains decades later, but that's just a guess)
I've read that while measurement process was somewhat different due to technology it wasn't the key difference - key difference was the very large number of farmers then vs very few now. In the 1920s something like 50-60% of the population lived & worked on farms. They were considered 'employed' even if they weren't making money and essentially starving. So 25% unemployment then is actually pretty much equivalent to 12% unemployment now [same number out of work relative to entire population].
What about underemployment? What about household income volatility? These metrics are nowhere reported, yet they are part of the employment picture.
Underemployment: You are a skilled IT professional. You get laid off from a job making $60K. You land another job, but this time at Home Depot making $36K. You cannot find another IT job.
Income volatility: You go from making $60K to $40K to $45K. What does that do to your financial planning? Your ability to provide a constant level of lifestyle for you and your family? Your ability to keep living where you live? The ability to keep your kids at their present school?
You land another job, but this time at Home Depot making $36K.
Judging by the turnover at the three or four Home Depot stores we frequent, they're not hiring at 36K.
sorry but I can't get anything other than his lack of reality in anything he has put out since his visit "to the mountaintop"......prime rib must be powerful stuff in D.C.
The data still sucks...it's gotten worse, in fact, but he switched camps so quickly and his latest scribe can be placed right with the rest of the green shoot brigade. When he looks at some hard facts and see's reality vs. perception then I'll give him another chance. He was used and he may or may not know it. Looking at his past though I bet he doesn't care as long as the check cashes.
Hey, they most definitely had Mozillo-type characters. Lots of them.
That's never changed.
They maybe didn't have tanning salons but they had the Orange Blossom Special to take them from cold dreary winter time NYC to sunny Florida. The rich that remained rich after 1929 had that option anyway.
Seems that the "urban counterparts" did their best to try and catch up to the leverage level of the farmers, judging from recent years' data on household debt.
Though not faced with falling commodities, "urban counterparts" are faced with falling home prices.
They had guys that looked like pumpkins back then?
" Effectively, the securities he sold to investors provided loans for governments secured against assets that he himself controlled. The assets were held offshore, which today's tax planners would welcome, and mostly off-balance sheet, the custom at Enron and many of the banks that have suffered this year.
The Economist explains how this was done, and why it fell apart:
After secretly acquiring factories around Europe during the years of post-war Depression in the early 1920s, from 1925 onwards Kreuger began offering a bargain to penniless governments that many found hard to refuse. Kreuger would, he said (usually with great secrecy), lend money to countries that provided him with a national monopoly on match production. His monopoly and skilled marketing would increase sales (Kreuger was a first-rate salesman, too: he is said to have propagated the myth that it is unlucky to light three cigarettes from the same match). Governments taxed matches, so the higher sales would raise tax revenues used to repay the loans. It was, boasted Kreuger, an almost foolproof business plan: the loans were secured against revenues that he controlled; the monopolies, meanwhile, ensured generous returns.
. . .
But despite the apparently flawless business model, match monopolies, it turned out, were not all that profitable. In order to offer spectacular returns, Kreuger paid dividends out of capital, not earnings. He was, in effect, operating a giant pyramid scheme, reliant on confidence to maintain a steady inflow of cash."
"By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves."
Exactly.
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
Once the integrity of the monetary system is breached in the general public mind, it gradually ceases to have significance or ability to regulate behavior in any way among even the "suckers" whose value systems made a middle-class possible. That, not the loss of economic status, but the progressive disintegration (through growing irrelevance and lack of political potency) of the middle-class value structure and beliefs, rout the socioeconomic distribution into rich and poor since there are no other choices left.
"Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed."
"Perhaps CR meant when the PROC starts unwinding the current stimulus program. "
You mean the PROC stimulus that actually went to infrastructure, and supported commodities prices by generating real demand, as opposed to pork-filled projects like volcano monitoring in WA?
Yeah, we are close to the point where if they sneeze, we will catch an awfully mean cold.
I've read that while measurement process was somewhat different due to technology it wasn't the key difference - key difference was the very large number of farmers then vs very few now. In the 1920s something like 50-60% of the population lived & worked on farms. They were considered 'employed' even if they weren't making money and essentially starving. So 25% unemployment then is actually pretty much equivalent to 12% unemployment now [same number out of work relative to entire population].
This is basically the big difference for anyone who lived through GD I - most had a "job" but no income. Because everyone was in the same situation it made it really hard to fall back on family support. Now as long as you have a supportive family (I know not everyone does) the likelihood is that you won't really suffer like they did back in the 30s.
Didn't check the comments, but the article definitely puts a different spin on the "administrative costs" debate that doesn't favor Medicare. Oh, and I couldn't help but laugh about the fact that the IRS is the bill collector.
July 9 (Bloomberg) -- China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the world’s third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said in a statement today. Overall auto sales, including buses and trucks, rose 36 percent to 1.14 million.
"By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves."
Exactly.
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
~~~~~
We need to underwrite people with free health care and education ...
From what I see we need to reduce the workweek to 24-28 hours a week to accommodate enough jobs ...
That way people can earn their living ... Our previous economic model is broken beyond repair ...
ghostfaceinvestah (profile) wrote on Thu, 7/9/2009 - 12:34 am
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
Wealth confiscation from the well-to-do professional classes will keep things afloat for awhile. But the balance is inevitable. Once the voters who benefit from government subsidies attain majority there is no force that can stop the looting except catastrophic collapse (which will eventually happen anyway). Look to Cali and other union-owned states as the harbringer.
Come on ac - that is equally vacuous. 25% unemployment is exactly the kind of thing required to produce those 'worse things'... history also shows that as well.
Didn't work out that way in the US. Our most influential and prosperous years followed that period of 25% unemployment.
The US retained it's identity and didn't collapse politically.
Historically that's not such a bad outcome.
The question is "Why wasn't it nearly as bad as it could have been?"
I don't believe that fiscal deficits and easy money are the things that hold nations together in times of dire crisis.
I believe that nations who believe that fiscal deficits and easy money will hold them together in times of dire crisis are approaching the terminal phase of their existence.
FDR cut back on the deficits and easy money. The opposite of what Krugman advocates.
WWII brought us out of the Depression because the outcome provided huge asymmetric economic benefits to the US, not because the government spent alot.
Here is one major difference between GDI and today - who got the stimulus and why...
FDR's scheme while imperfect was targeted at keeping the unemployed masses from revolting - Germany or Russian style. While 'support' did go to some banks it was via the 'Bank Holiday' where a whole lot were shut down & a number recapitalized. The bulk of the stimulus then went to non-banking 'real economy' activities like rural electrification, civilian conservation corps, reforestation, etc.
Without trying to be snarky - the stimulus today seems targeted at making sure the BANKERS don't revolt... to hell with the masses. So instead of CCC or NRA... we got PPIP and TALF and TARP. Not exactly the same from a Main Street perspective.
"Once the voters who benefit from government subsidies attain majority there is no force that can stop the looting except catastrophic collapse (which will eventually happen anyway). Look to Cali and other union-owned states as the harbringer."
Excellent point, don't they always say "as goes California..."
Scary thought. But probably accurate in this case.
when Krugman acts more like his stated profession I'll be the first person to cut him slack...until then he's just a tool, a well-written and "awarded" one....but still a tool.
Language or not.....he certainly has not been very convincing about why he seems to believe we still have only a few more months of pain.
TJ & Bear...
didn't the greatest fall in farm land prices occur in the late 1880-90s?
I think prices paid in Iowa and nearby states never fully recovered, no?
The plunder continues. We have learned nothing. As long as the law is available to enrich some at the expense of others, there are those that will seek to wield it exactly for that purpose.
China Car Sales Jump 48% on Support, Most Since 2006 (Update1)
By Bloomberg News
July 9 (Bloomberg) -- China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the world’s third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said in a statement today. Overall auto sales, including buses and trucks, rose 36 percent to 1.14 million.
Same thing for real estate. The government is pumping easy credit left and right in order to generate economic growth at any cost.
Exactly the tactics that lead the US to where we are now.
If it wasn't for WWII, would America ever come out of the GD? How "Great" would that have been? "Those people were great, they lived in poverty for a generation".
FDR's scheme while imperfect was targeted at keeping the unemployed masses from revolting
What's ironic is that such an approach would be the most valid use of stimulus today, wherein the populace is far softer, entitled and violence-prone than that of the 30's.
The US is NOT immune from social forces - just cause we pulled the trigger once without blowing our brains out doesn't mean the next chamber is bulletless too.
Also as many here pointed out... the years right after 25% UE fell apart equally quickly once th edeficit spending was pulled away... it wasn't until one of those 'worse things' [WWII] came along that we really pulled out.
My father lived through the depression and remembered seeing BOTH Bund [American Nazis] and Wobblies [Communists] in the streets protesting - we dodged those situations only by luck and some timely policy. No guarantee that happens as smoothly again.
//Leaders of the world's eight foremost industrialized economies have established an aggressive new marker in the battle against climate change: holding the global temperature to a two-degree-Celsius increase.//
What's ironic is that such an approach would be the most valid use of stimulus today, wherein the populace is far softer, entitled and violence-prone than that of the 30's.
Agreed. As a 'liberal' I am as offended as the most conservative here that stimulus money is basically targeted at keeping middle and upper middle class in mini-mcmansions to 'save the banks'. History will not grade that decision well.
The plunder continues. We have learned nothing. As long as the law is available to enrich some at the expense of others, there are those that will seek to wield it exactly for that purpose.
Yes. Law misused creates privilege, and privilege needs to die, or we will.
when Krugman acts more like his stated profession I'll be the first person to cut him slack...until then he's just a tool, a well-written and "awarded" one....but still a tool.
Language or not.....he certainly has not been very convincing about why he seems to believe we still have only a few more months of pain.
Ciao
MS
I read an article by him in a local paper. He referred to "Rush Limbaugh" and "Glenn Beck" about 5 different times.
This is the kind of thing that Nobel Prize Economists focus their lives on?
No wonder the profession is in such a sorry state.
"it wasn't until one of those 'worse things' [WWII] came along that we really pulled out."
What is worrisome is one of the "worse things" might be invented to get the world out of it again.
Or, it might naturally develop. We are pretty secure here in the USA in that regard, but if Eastern Europe, or parts of China, collapse? Or oil prices drop to $20 and craters the Middle East or Venezuelan economies?
"...he seems to believe we still have only a few more months of pain."
....and THEN what happens??? Magic fairy dust is sprinkled all around and everyone magically has jobs and a paid for home with a refrigerator full of food, two cars in the driveway, and nobody will over-spend and over-pay for anything- including no more stupidity? Get real. What will change? Absolutely Nothing.
It's amazing people are still rationally discussing home prices, rental rates, and bankster pay-back. Five years from now when 10X as many people grovel in dumpsters for food, these logs will seem like......... "What were we thinking"??
"As a 'liberal' I am as offended as the most conservative here that stimulus money is basically targeted at keeping middle and upper middle class in mini-mcmansions to 'save the banks'."
Something both "liberals" and "conservatives" alike can agree on (notwithstanding the political and financial elite, who are really members of the OWG class).
Too bad there wasn't a political party representing our needs, rather than the Republicrats.
"You land another job, but this time at Home Depot making $36K.
Judging by the turnover at the three or four Home Depot stores we frequent, they're not hiring at 36K. "
Retail sucks. HD sucks worse.
"My starting wage was $8.50 per hour and my ending wage was the same. I did not get any other "perks" or discounts. Once a year, around Christmas, we were given 5 - 10% off coupons to use ourselves (1) and pass the rest on to family and friends. "
Yahoo News: Goldman Sachs to Securitize Health Care
Obama's electronic health record initiative may spawn another round of securitization from an unlikely source; the health industry. Unamed sources spoke to Yahoo News. Goldman is lobbying the Obama administration to be allowed to securitize patients when they enter the hospital. "By writing credit-default-swaps on the outcomes of hospital visits, we can make the system more efficient and reduce some of the costs...".said VP of Overseas Operations Manny Conner. Goldman's plan would bring pools of hospitals together based on geographic location, and specialty visits. Romanian pensioneer Feliza Mega was enthusiastic when interviewed regarding the new investment strategy... "Wow; American's are so fat, I am sure to make a lot of money from their hospital stays! I'll be first in line to get this investment". She was interviewed outside of her 300 sqft straw hut, however her village has an internet cafe with 6 connections hooked up to a 28.8 modem, with a special machine hooked up by Goldman Sachs for investment purposes. Goldman has been expanding their overseas operations by providing free brokerage accounts and even $30 credits to third world countries; they typically run out of special kiosks in the Internet cafes, which run on the faster 56k modems or even satelite links. "Our overseas operations are experiencing enormous profit, even though we have to put up a lot of investment..." said Conner.
Sadly the 35 year old Conner was killed in a bizzarre "office chair accident" prior to publishing of this story.
mp-
his attitude changed dramatically after his visit with the o'siah....he seems to think that by leaving the policy the same, i.e. inflate to create, we will "recover"....recover to what? I ask....the fake inflated level that shouldn't have existed?
This is where the language may come in but I (and I'm sure other's) have detected his shift from being prudent and focused on realism to his current stance of "well...gee I don't know..may be it might work but just don't tighten because that will surely kill this 'recovery' off".. What he really needs to do is face facts....no recovery until the created illusion of profits and prosperity is removed with some sound fiscal policies. I don't see him being very strong on that side of it. A person with his stature should be a bit more convincing since he is looked to as an expert...unfortunately so is Ben Bernancke.
Black Star Ranch (profile) wrote on Thu, 7/9/2009 - 12:56 am
It's amazing people are still rationally discussing home prices, rental rates, and bankster pay-back. Five years from now when 10X as many people grovel in dumpsters for food, these logs will seem like......... "What were we thinking"??
BSR, it isn't rational. It's a psychological defense mechanism followed by attempts at rationalization.
Lucifer,
debt to some extent is not so bad, without it Firenze would not be the Florence we know today...
(wish I could remember the study citation but it showed a correlation between the financial
power of Firenze with the explosion in great art via patronage.... I think the study was in early 90s)
....
also, I tracked the art auction house prices from say '88 to '93,
what one saw was a deterioration in auction prices from a one class,
say the new artists of the '76-86, next to the modern masters of '61 onward,
next level was abstract expressionism & late Picasso and then '06 to 41 &
and so on... (this is from memory ..)
noticed a story in the Times about the real estate in the Hamptons
and it got me thinking about this...
The US is NOT immune from social forces - just cause we pulled the trigger once without blowing our brains out doesn't mean the next chamber is bulletless too.
Also as many here pointed out... the years right after 25% UE fell apart equally quickly once th edeficit spending was pulled away... it wasn't until one of those 'worse things' [WWII] came along that we really pulled out.
Why don't governments deficit spend all the time and solve all their economic and social problems?
There was a big debate on a non-economics forum about McHugh (?) plan that we should just rebate the past 3 years of tax returns to American's. This will solve all of our problems. I can't believe people are so stupid...
dryfly (profile) wrote on Wed, 7/8/2009 - 10:05 pm
Amazing that the UE was near zero in 1929.
Half of America lived on [and was 'employed' by] their farm. Skews the numbers a bit.
Conversely, then, 25% UE in total population represented 50% UE in non-farm population. ?
I'm not so sure.
not getting worked up about it......just saying he needs to take a side one way or the other....no more half-assed commentaries...the world is filled with that.
I can point to many examples of "will they, won't they" type of attitudes.....he won the nobel prize..at least make it look like it was deserved other than to pile on Bush at an opportune time....how different are the polices now? None, in fact they are worse IMO.
25 min on hold with Southwest so-far. I guess I'm stupid for expecting no one would be calling them, period at 11 pm pacific. Who the hell else is trying to reach these people?
.......this is the perfect medium for us here..........a depressing thread shows up and another row of beans or peas gets planted. An anxiety ridden porn-chart is displayed and I go out and enlarge the chicken-coop for another dozen hens. I'm constantly flying in and out of the kitchen door between posts. LOL. Good night, all.........
I've subscribed to McHugh at times and his plan was actually 5 to 10 years.
Crazy as it sounds, it would be a lot more effective and certainly more equitable than what's been happening, because it would put the money back in the pockets of the consumer. The combination of cash and instant inflation would go a long ways to healing J6P's balance sheets and jump-starting consumption, while not favoring the deadbeats or Wall Street weenies. Of course, the rest of the world might not have gone for it...
"16.1 million
The number of U.S. armed forces personnel who served in World War II between Dec. 1, 1941, and Dec. 31, 1946."
And they all got GI Bill benefits, upon their return. THAT was the REAL stimulus. Free college for them and their kids, and a guaranteed mortgage loan. NOT giving money to Wall St. bankers or a broken GM.
According to my brother, Steinbeck tried to write Grapes of Wrath as non-fiction when he was a reporter and couldn't do it. He ended up writing it as a novel, but it is basically a mash-up of things he saw while working as a reporter in California.
unfortunately, a fine piece of literature like 'Grapes' could have been one for ages had not Steinbeck
drawn the 'bad' characters so one dimensionally... the Snidely Whiplash problem.
He stacked the deck against them and provided them with no redeeming features,
unlike say, the Joad family.
(edit)
ShortCourage,
point to me where I can find the clips of K. and M. and I'll screen grab or whatever tool I'll use,
any choice on the music interlude...?
The comparisons between the two time periods have some important differences:
1) The ability for society to function was supported with local farms and ranches.
2) The ability to produce the comparatively simple machinery to keep any key industry functioning was easily obtained and local.
3) The demographics were more favorable in larger population centers.
4) Religion was a source of stability for almost all communities.
5) Hard labor jobs were created and utilized by a population used to it.
6)The environment was a source of support and not an area of concern and resource cost to fix.
7)Population wasn't 370 million.
8)The entire system wasn't dependent on easily disrupted technology to function.
9)Key resources weren't in short supply and dependent on unfriendly foreign governments.
10)Weapon systems capable of annihilating entire areas and populations hadn't been invented.
But hey we have twitter, the internet and central banks. We should be able to save the world with those three.
The 1932 Moweaqua, Illinois mine disaster, in which fifty some miners were killed (some as young as 14, if I recall correctly, was typical of the kind of stuff going on during that time. Workers were used and abused. That fired up the union movement.
Death in the dust
Three years before publication of his masterpiece The Grapes Of Wrath, John Steinbeck visited squatters' camps in California. To mark the centenary of his birth, we print this account - previously unpublished in the UK - of the misery that he witnessed
....Here, in the faces of the husband and his wife, you begin to see an expression you will notice on every face; not worry, but absolute terror of the starvation that crowds in against the borders of the camp. This man has tried to make a toilet by digging a hole in the ground near his house and surrounding it with an old piece of burlap. But he will only do things like that this year. He is a newcomer and his spirit and his decency and his sense of his own dignity have not been quite wiped out. Next year he will be like his next-door neighbour.....
although the movie Grapes of Wrath came out in 1940 (with a different ending than the book)
I can't help think that the imagery used by the great John Ford was greatly influenced by the work of James Agee and
Walker Evans starting in 1936 onward and then published in its entirety in book form in '41. Many of the photographs
I believe circulated before '41.
[side note: one of my all time favorite films was Stagecoach by Ford again, notice who the villain in that film - a banker!,
in preparation to shoot Kane Orson Welles watched that one movie more than 40 times...]
Duke, thanks. I did a quick search on YouTube for a Mugabe clip re: US response to the crisis...no luck.
Anyways, I think we're far from being Zimbabwe, but my point is:
The solutions of our fearless monetary authorities are not without bad consequences. Witness the current crisis, which resulted from the most recent solution to deflation after the dot-com bust. Do these guys ever consider that the consequences might be bigger and badder crises down the road, worse with each expansion of the debt bubble?
I helped make Mexico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.
During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. - Foreword to War is a Racket. I believe it is public domain now?
That's ok Squid. That's why we have the internet. Agree with what you want and disregard the rest. We all filter according to our experiences.
Last thought. I read someone postulate that the level of trust necessary for a society to function was the ability of everyone to trust 80% of the information around them. The thought was we only have time to verify 20% of whatever needs to be thought processed. Once you passed into the plus 20% range you actually started dismantling the system you functioned in due to increased examination. It rang true when I read it.
OT to Ghostfaced - you work at a bank, correct? I believe you posted that you could see lotsa files with 100+ days of deliquencies.
To what do you attribute the "foreclosure backlog"?(eg the slowness in foreclosing) Thanks in advance
Duke,
your comments about the photos from Let Us Now Praise Famous Men that might have
been in various publications before the book release in 1941 and their influence on
Ford's cinematography seem to mesh well... comparing Stagecoach to Grapes there
is a strong greyscale tonal shift (need to re-watch)...
....
also agree that the flaw in Steinbecks book is the he makes the 'baddies' nearly
comic book constructs...
Water under the bridge, but Dryfly's comment equating 25% unemployment to 12% now due to farm workers having been considered "employed" seems backwards to me. If half the working population (farmworkers) were considered employed then the 25% unemployment came from the other half. That would mean 25% then = 50% today.
Critical mass has not been reached.. yet. Until 1932, everyone believed that it happened to 'other' people. After 1932, nobody could escape the reality that it was happening to everyone.
//A lot of people are falling through the cracks in the system.//
as I have talked about before I had this tree farm in mid-Tennessee and on
occassion would talk to a number of old timers about growing up there in
the 1930s. before TVA it was a very hard scrabble existence, but if your neighbor
had some food and you didn't they would share... community cohesiveness
got them through soe very tough times. many grew up in cabins with dirt floors...
plus, the top soil in that area had a high content of clay and not a lot of black loam
like up north and not a lot of valley floor land...
"To what do you attribute the "foreclosure backlog"?"
Waaaayyy too many foreclosures, way too few trained/empowered people to process the foreclosures (and way too many state-specific rules to follow - you need an army of lawyers to get through many states).
At least it is keeping people employed. Not the most productive work for the economy, of course.
The foreclosure moratorium slowed things down a bit, but to be honest, many of the foreclosures that were stopped probably could not have been processed anyway.
now, with the new mod programs, borrowers have to get screened through that too before they go to foreclosure, etc.
it is all a big mess.
gotta get going to get my requisite 4 hours of sleep.
Evolution occurs through things reaching their logical conclusion. The present trajectory will end in disaster. If their actions push it to that conclusion sooner, so be it.
many of the foreclosures that were stopped probably could not have been processed anyway.
meaning they didn't file the NODs, or they can't find the payment records, or ???
Bah; everyone will just end up piled into the home of the closets relative who owns their home outright... save those who are too proud... Got Paid Off Home?
When using the flying bus for business, pay the full fare and just show up when you want to fly; it's easier that way.
The biggest problems AZ has with water is that water from the Colorado corrodes the pipes in Tuscon, they don't recharge enough water into the ground, creating fissures as the water table drops and that they still grow cotton and alfalfa here.
All problems are eminently solvable.
Was reading reason magazine and a letter to the editor suggests that TPTB are partially following the Chicago school to solve the banking crisis by issuing debt to inflate the money supply, then buy the notes back to tamp inflation.
mp,
one of my central themes here in Asia is whether the American people could go back to living
within the limited means of say their grandparents... the Vietnamese could do it in a matter of weeks
if not months... Cambodians, by tomorrow morning or at least by next weekend but I contend
Americans don't have it anymore and would not be able to re-set their expectations...
From a synopsis of Sinclair's "The Jungle" (1906)..
// The most devastating mistake was the decision to use all their money for the downpayment on a house that is beyond their means, without researching the costs and legal issues involved in homeownership. The family had envisioned that Jurgis alone would be able to support them, but one by one, all of them — the women, the young children, and Jurgis's sick father — are forced to find jobs and contribute to the meager family income. The reality of having to work in a capitalist society takes a hold of their family as they are forced to succumb to the demands of the upper class. As the novel progresses, the jobs and means the family uses to stay alive lead to their moral decay.//
Lucifer,
don't get me started on the South...
in some parts of TN, hell, it's like I stepped into a time
machines and I'm back to the time of the Scottsboro boys...
would not be able to re-set their expectations
.
no of course not. Any re-setting will not be of their own volition.
Folks in 1929 were living pretty high. In ~1935 they got reset. But it wasn't something they chose.
I beleive we've scammed the rest of the world. We've sucked in everything we need to go through 50 years of minimal consumption. And we did it all on a big credit card which will be defaulted; so what if the companies hurt are American like Visa or Mastercard... isn't it kind've a large scale fraud?
It is funny that those who look down on others are often the biggest moochers, and many old-fashioned southern states are best examples of this schizophrenic attitude.
//in some parts of TN, hell, it's like I stepped into a time//
People are hardwired for survival, but for most of them it is more akin to a zero sum game ; either by location or aptitude unable to grow much more than a lawn they will pursue other means.
California "IOU" recipients can turn to credit unions and check-cashing storefronts if a state budget deal does not appear by Friday and if three major banks refuse to accepting the notes beyond Friday as planned, analysts said Tuesday. The willingness of the smaller institutions to take IOUs from the cash-strapped state should also stop the development of a secondary market for trading them, although individuals could end up paying hefty fees to get their hands on cash.
"People are hardwired for survival, but for most of them it is more akin to a zero sum game ; either by location or aptitude unable to grow much more than a lawn they will pursue other means."
Probably, but for me survival is not a zero sum game.
But, I'm prepared to deal with those who think it is.
I grew up in a southern Indiana town and in this town in a private
social club called the Harmony Club (oldest social club in IN)
originally, was set up by German immigrants and up until
around '33 all club members were Germans (the charter
was in German). Later, others were admitted. I don't believe
Catholics were allowed in until the 60s. In the charter it still bans
Jews, Chinese and Negroes. The restaurant part is open to the
public but the lounge and bar only to members and their guests.
.....
About 9 years a man had his work crew in the dining room and
walked into the bar and his friends said 'c;mon, bring your workers
in a for a drink... he resisted for a long while, finally he agreed and
brought them into the bar and when they saw that they were black
the bartender w/o missing a beat said, "sorry, we just had last call!"
the time time was 9:15 pm...
when I heard this back from NYC on a short trip I raised hell and made
some calls and made sure these guys get in touch with a lawyer, they did
and settled with the Harmony at some point in the future.
....
my Dad was once president and my youngest brother has been president many times:
the big question: if Michael Jordan walked into the bar would he be served (later I tossed in Tiger Woods)
Dad says Yes... but my brother says No Way!
he pulled me outside one time and said see all those old guys, 60% are former
Klan... that said it all!
To this day I do not believe a man of color has ever been served at that bar.
Early next year, the Southern California town of Carlsbad will break ground on a plant that each day will turn 50 million gallons of seawater into fresh drinking water. The $320 million project, which would be the largest desalination plant in the Western Hemisphere, was held up in the planning stages for years. But a protracted drought helped propel the project to its approval in May -- a sign of how worried local authorities are about water supplies
mp,
yes... I am quite aware the Indiana was and still is, to an extent, Klan territory,
esp. central Indiana and the border counties along the Kentucky state line.
Under William Henry Harrison for a 10 year period they waved the 'free state
status' and you could legally own slaves, Harrison tried his best but could
not put IN into the slave state category due to the abolition forces...
....
they were still having Klan funeral marches into the early 60s in my town.
my mother's side is Protestant and she's a double DAR, my granddad was
one level down from the highest order of Mason. He was a very fine man and
was elected as the first Republican mayor ever, BTW, that's how I met LBJ, Bobby, Eugene, etc.
(edit)
My grandma I'm not sure would be so comfortable with a black man in the White House. She adored Reagan, they were about the same age. But when it came to Jews she had nothing but the highest respect for them because of their insistence on
education, education, education. She was denied a college education and spent her entire life trying to make up for it by reading everything she could. It wasn't by accident that Henry Kissinger was my hero in high school.
"New statistic reports show that, in the United States, the rate of unemployment for electrical and electronics engineers (EEs) is at its lowest in years, and that many trained professionals are kicked out of their jobs on account of the economic crisis. And, while the federal government struggles to take the country out of the mess the other government set it in, one thing becomes clear – no one can hope to drive an economy on anything else than technology. Considering the rate at which these people are losing their jobs, that seems highly unlikely to happen."
The local police are doing "revenue enhancement" in mass quantities. They pulled over a car for a minor traffic violation, the first one was talking but the second policeman was unusually wary, constantly looking around at the crowd on the sidewalk. You can almost smell the fear wafting off of him.
Lots of b/w cars out in the past few days.
Normally I don't care but I've been followed twice this week.
CHICAGO—Richard Malone has cooked up a new operating model for sick newspapers, an idea that may need investors. Unsure of its feasibility, the former Chicago Tribune official outlined his tentative plan last month to executives seated in black leather chairs around a polished mahogany table here. The meeting’s attendees, mostly other displaced executives, proposed ways that Mr. Malone might improve his Power Point presentation before possibly pitching it to private-equity firms.
NEW YORK - Lenny Dykstra, the former star centerfielder for the Phillies and Mets, has filed for Chapter 11 bankruptcy protection, Reuters news service reports.
Reuters' report comes from court records. Dykstra, 46, has no more than $50,000 in assets and between $10 million and $50 million in liabilities, according to a petition filed Tuesday with the U.S. Bankruptcy Court in the Central District of California. Jonathan Hayes, one of Dykstra's lawyers, had no immediate comment. Dykstra's filing comes in the wake of some 20 lawsuits he faces tied to his activities as a financial entrepreneur, including The Players Club, a glossy magazine he had helped launch, according to published reports.
June 11th, 2009, 3:09 pm · 144 Comments · posted by Mark Eades
Former Real Housewives of Orange County cast member Jeana Keough says she’s now received a loan modification, saving her Coto de Caza home from potential foreclosure. We had earlier reported that Keough had received a notice of default on the mortgage on her Coto home.
Keough sent us a letter thanking ocregister.com reporter Mark Eades for letting her know about the loan default and that she had received a loan modification. Here’s the note (We added a few background words in parenthesis for context!) …
I am.
I could probably get a $80-90K coding job if I tried hard.
I either need something challenging and appropriate or easy and non-annoying.
I could probably get something unchallenging and annoying but I'm tired of spinning around in limbo like that.
About 90% of the job listings fall into that category so I don't bother with them.
Are you familiar w/the Kelly Criterion? Kelly was an AT&T mathematician in '50's who posed the following hypo: if a horseplayer's predictive info is 80% accurate as to next race's winner, what's the optimal % of bankroll to make a win bet on that race (the goal being to stay alive and max the BR)? Kelly proved it's 80%. (And X% predictive info => X% of BR wager.)
Slightly different point, but still indicative of deflationary spiral going on... Even the wealthy are tightening up.
I can't tell if there's a real bottom forming.
My gut and long-time expectation say "no".
But lately I see contradictory evidence. There's five new restaurants opening downtown. Two are already open and they're doing a much better business than the existing restaurants. I'm not sure what to think.
80/20 rule is often the optimum ratio for differentiation / common in design. Differentiation drives marginal value and during the credit cycle, marginal value is pursued beyond a positive profit point. Reversal of the cycle means paring away marginal costs because they're higher than marginal return so you get a period of increasing conformity and standardization.
If I remember correctly, Harry Dent says the demographic bottom is sometime around 2020. A 2013 bottom would fit a purely NYSE / historical pattern but I'm not sure it's right.
"Treasury Secretary Timothy Geithner in March promoted PPIP as a way to help speed recovery of the financial markets by removing distressed debt from bank balance sheets and spurring purchases of mortgage-linked securities. At the time, Bill Gross, Pimco’s co-chief investment officer, described the program in an interview as “win-win-win."
Looks like some caught a whiff of the stink on this one, and figured out that turd polishing can get messy...
Well, if I had to guess, I'd say modest recovery for a year and then a second, deeper crash for 2011-2013.
Dent's long term track record is pretty good, in the late 1980s I tried retro-fitting his demographic trends to the 19th century birth rate but it don't work so good, it looks like it's dependent on certain consumer behavior of the 20th century.
But still, Dent's probably a better predictor than Roubini or Krugman.
He's been doing it for at least twenty-five years.
So would you recommend buying some of Dent's books? Needless to say I am still desperately attempting to adjust to this new reality and holding my little savings in cash and some CD's at 1% kind of sucks.
Edward Teach Esq
so the Kelly Criterion is 80%, correct me if I'm wrong on this but I believe that
if you market time your investments you have to be right 82.7% of the times,
otherwise... don't know where that particular model comes from....
noticed on CNBC last night that John Merriwether (or JM as they called him
at Solly... I did a few projects with his bond arb group back in '87-88)
closed his JTM Partners fund recently after sustaining losses of > 40%
in the last year.
[most bits in Liar's Poker are fictitious, except for the odd bit every now and then like the description of Ranieri's suits..
I wonder what happened to that guy? At SB he was the BJOC at least a Qtr. a year, then he escaped the hangman's noose in the
Mozer scandal unlike say Gutfreund, Strauss and a few others (IMO he should have been banned also) and had 5 or 6 great years at LTC and then KaBoom!
my personal Oh-Oh moment - we had a guy named Tom Bernard who was head of general bond sales
he once boasted while toasted! (he later ended up at Lehman and I think retired before their demise... LOL if most of his holdings were in LEH) "at Salomon we don't sell Truth, we sell Bonds!"
EDIT
Here come the chicken feet!
CHICAGO (Reuters) - China and the United States are kicking up a trade war over chicken in which Beijing effectively has given the boot to millions of dollars worth of U.S. chicken, about half of which is chicken feet.
This action comes as Congress begins deliberating the 2010 federal budget for agriculture, which could extend a U.S. ban on imports of Chinese chicken products sparked by food safety concerns.
China is a huge market for U.S. chicken feet, commonly called paws, and bought 421,000 tons
noticed on CNBC last night that John Merriwether (or JM as they called him
at Solly... I did a few projects with his bond arb group back in '87-88)
closed his JTM Partners fund recently after sustaining losses of > 40%
in the last year.
Why stay in business with a -44% highwater mark, when you can fold, start over, and attract different stupid money?
---Leaders of G-8, G-5 Seek to Avoid ‘Competitive Devaluations’
Could probably power the entire Earth with all the hot air coming out of these meetings...
Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction_commit time points at NYSE:
OT.
"More Web attacks, North Korea suspected"
Un frickin real.
They still have 60's vintage military equipment but yet they want us to believe they are capable of cyber attacks.
I don't buy it.
Those dang evil doers.
before the serious adult time kicks in, here's vid mash-up I did
of a Sun Bear standing on its hind legs and waving as if it to
wants to go to the pub for a beer.... YouTube -
the song on the audio is Get Up, Harry! by Sham 69 and is quite famous in England,
esp. East London where it's a big time drinking anthem, sorta works
for a beer drinking bear, no?
Mornnnnning Counterpointer, day old java starting my day......Nuked it while fresh pot is brewing. Appears alot of people spent the night on CR, sure hope I didn't miss anything. Have a wonder-mus day.
Dollar down big this morning, I knew something was up yesterday with the big drop in PM's....seems some insiders had already gotten the memo on retailers....sideways day on tap.
And props ( snicker ) to Goldman Sachs seems they have all the right people in all the right places throughout all markets.
WASHINGTON (Reuters) - A proposal from a long-time congressional foe of the Federal Reserve that could give lawmakers sway over monetary policy has won the support of a majority in the House of Representatives, alarming officials at the U.S. central bank.
The Federal Reserve Transparency Act of 2009, put forward by Republican Representative Ron Paul of Texas, now has 250 co-sponsors in the House. It will get air-time on Thursday during a congressional hearing on Fed independence that will feature testimony from the Fed's No. 2 official, Donald Kohn.
It seems to me that America at large is learning the lesson that every over-40 divorced woman has already learned: when you decouple from marriage, your standard of living tends to plummet. Or at least, it doesn't go up.
The American middle-class worker/consumer has been thoroughly loved and left by the corporate hubby. Adding insult to injury, you don't even get the house.
On the topic.
People on this board have been commenting about 1937 for quite some time; I guess it is just now being discovered by the 'world'.
The difference between now and 1937 is that the government is in deeper this time. That doesn't imply a lesser second 'W' valley, it implies a deeper one.
The thing to remember is that a temporary bubble caused misalignments that we are now correcting, painfully. The fix preferred by the government- and some mainline, big-name economists - was to extend the bubble and postpone the pain. Now they want to increase that. They should have learned from the first bubble but, instead, they truly believe they can produced something for nothing. The trouble is that we will ALL pay for their academic experimenting.
565,000 initial jobless claims were filed for the week ending July 4. That is short of the consensus estimate, which called for 603,000 claims. Given that initial claims for the previous week were revised upward to 617,000 from 614,000, the four-week moving average now stands at 606,000. Last week it stood at 615,250. Meanwhile, continuing claims came in at 6.88 million, which is above the 6.71 million continuing claims that were widely expected and up from the previous week's tally of 6.72 million. The latter number was revised upward from 6.70 million. Stock futures have only improved moderately in the wake of the data's release as many participants remain mindful that the better-than-expected initial claims numbers came on a holiday week. Briefing.com: Stock Market Update
Homegroan, yes dear and it's stright from Panama, daughter was there recently and ask the cab driver to pick the best for her mamma. It's coffee all day for me, just like my dear old dad.
I would like to point out how this clearly shows that the unemployment rate was not "it's just a lagging indicator" during the Great Depression. At best, the unemployment rate was a coincident indicator during the 30s... and arguably also a leading one much of the time.
Given the many parallels between this recession and the experience of Japan post-bubble and our 1930s, it would be unwise of us to go on whistling in the dark about the already quite high and getting higher unemployment rate.
What is more, CEPR has done some research that shows that if U3 were measured the same way it was in the early 80s, the headline unemployment rate would probably already be approaching 11%, not 9.5%. And, if we really wanted to count headline unemployment the same loose manner that it was counted during the 30s (ie: doing occasional odd jobs, or being out of work so long that you have given up even saying that you are looking ≠ not being unemployed!) It's time to start following the U4 through U6 far more closely!
You should do some charts on the 1893 Depression.
There's that "D" word again. Just doesn't seem to want to go away.
Just something to remember when the Fed and Treasury start to unwind the current stimulus programs.
Won't happen; they won't get the opportunity.
Perhaps CR meant when the PROC starts unwinding the current stimulus program.
BBC NEWS | Business | Mexicans in US face cashback crisis
remittance flows of $50-60bn that go to Latin America on a yearly basis, from the US
Amazing that the UE was near zero in 1929.
By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves.
I'm no Nobel-winning eCONomist, but IMHO Krugman's interpretation of the facts is rather self-serving.
The gains in employment and the economy in the early 30's were totally illusory, which was why they evaporated the moment the stimulus was withdrawn. There was no "full recovery" to be had through artifice.
Luckily the US was a exporter & creditor nation with little debt, cheap energy, and an ever-burgeoning manufacturing base. After ten years most of the debt accumulated in the 20's was worked off and the country was ready to take off again, war or no war.
Oddly enough, I'm not particularly concerned with the problems that they think they might have after our second half recovery. I'm still waiting for them to recognize the problems they have now.
sdtfs,
Amen to that.
What about the taxation rate during those years? How did that variable affect unemployment? It wasn't just the slow down in monetary stimulus that caused unemployment.
Amazing that the UE was near zero in 1929.
Half of America lived on [and was 'employed' by] their farm. Skews the numbers a bit.
In the 30's they had an economic model that could work again given enough stimulus ...
Our economic model of consumption through debt creation is broken ... never to return ...
Not replacing it will result in years of suffering ...
krugman drank the kool-aid.....
You can't compare this era and the depression because you didn't have the amount of money thrown at it then as now. Also you see what he's doing here.....rubber-stamping the policy of inflate the next bubble, etc.
He needs to STFU..he had his 15 minutes....it's over.
Ciao
MS
Depression-era employment would only be instructive if private vs. public employment was detailed. Undoubtedly a majority of the jobs were created through the Public Works program (which, I'll be the first to admit, did do some good work).
"In the face of rising budget deficits which reached $2.7 billion in 1931, Congress followed the prevailing economic wisdom at the time and passed the Tax Act of 1932 which DRAMATICALLY INCREASED tax rates once again.
This was followed by another TAX INCREASE in 1936 that further improved the government's finances while further weakening the economy. By 1936 the lowest tax rate had reached 4 percent and the top rate was up to 79 percent."
The above on the U.S. Treasury website: U.S. Treasury - Fact Sheet on the History of the U.S. Tax System
Severe tax increases were major causes of spike in the unemployment rate.
"He needs to STFU..he had his 15 minutes....it's over."
Wow, just wow.
Well-reasoned, concise. We definitely know how you feel.
New four-part series on "The Ascent of Money"started tonight on PBS. I didn't know, for example, that bonds were invented to finance wars, and that John Law (a Scotsman) organized (in France) the initial central bank issuing fiat money. A two hour version is available online at PBS, but the full series plays through the end of July.
The theme of the series seems to me to be: we'll never learn from history. LOL
"Undoubtedly a majority of the jobs were created through the Public Works program (which, I'll be the first to admit, did do some good work)."
One wonders what we will be left with at the end of the trillions spent on bad banks and bad assets? Any equivalent to the TVA, the work done on the national parks, Hoover dam/Lake Meade, or Appalachian Trail?
So far it looks like we get Fannie/Freddie, AIG, Government Motors and a steaming pile of bad debt.
The surge in unemployment in 1937 was related to an attempt to unwind the monetary and fiscal stimulus policies, with disastrous results for employment. Just something to remember when the Fed and Treasury start to unwind the current stimulus programs.
Nobody sensible is making the argument that a lack of sufficient monetary and fiscal stimulus policies will lead to disaster.
I absolutely agree that insufficient stimulus and monetary easing will end disastrously.
That's simply a statement of the obvious. It's like saying that "Not operating on a person with a serious spine injury will end in disaster!"
It's a cheap intellectually vacuous rhetoric.
The question is not whether insufficient stimulus will lead to disaster - that's a given.
The question is whether "sufficient" stimulus and monetary easing will lead to an even greater disaster.
Will operating on the spine injury turn partial paralysis in quadriplegia or death?
Maybe after thinking long and hard FDR chose "disastrous results for employment" over "collapse of the US monetary and political system".
There are far worse things than 25% unemployment.
Read some history.
I'm used to CR doing a great job of breaking down numbers by choosing the right metrics and explaining their contexts. In this instance, we have a notion of an official unemployment rate, taken for a prolonged period. Now, during some chunk of the 'jobless recovery' era of GWB, Paul Krugman wrote often about the unemployment rate, and how a deteriorating situation could be reflected positively in the official number. The official unemployment number was not one-size-fits-all. This caused myself and many people to realize that there exist many numbers we have access to measuring labor/employment, and to piece the bigger picture together from those. Things like the employment/population ratio, the number of discouraged workers, and so on all factored in.
So, putting together all of this background, I wonder this: how was (un)employment even counted during the era we're looking at, and how does that compare to our current measurements? Did they have 'discouraged workers'? (I'm guessing not, as that whole notion sounds like something that would have come about after organized labor made some gains decades later, but that's just a guess)
I ask all of this because it's tempting to look at this chart and the current situation and attempt comparison.
Hopefully this isn't a tangent too far -- just some thoughts to add to the discussion.
mp,
Do you agree that the era's are comparable or not? (I feel like I'm going to regret the question).
Things far worse than 25% unemployment: embarking on a land invasion against russia in the summer.
I forget to mention that the full Part I (56 min.) of Ascent of Money is online available now at the link above.
"There are far worse things than 25% unemployment."
World War? Good thing FDR nipped that in the bud...
There are far worse things than 25% unemployment.
Come on ac - that is equally vacuous. 25% unemployment is exactly the kind of thing required to produce those 'worse things'... history also shows that as well.
.......I am surely no expert, but I can't imagine what might get us rebooted this time around. I'm not anticipating a major war, people would assume it's too contrived. We don't manufacture anything of note that people actually need, other than food. Our industry serves only ourselves and we aren't buying, we are in hock up to our ears, and 20-million have no jobs to pay for what we need to stimulate the economy now. It is also agreed said job market is only to get worse thru this year (at a minimum).
These eras are not comparable,this is a new sparadigm.
"Do you agree that the era's are comparable or not?"
Yes, in many respects the two are comparable, particularly when talking about the credit bubbles.
In terms of the unemployment statistics, I don't think the numbers are directly comparable.
We can't really compare situations between GD I and now unless we know exactly how unemployment was measured back then. Do anyone know exactly how unemployment was being measured back then - all the descriptions I have seen seem to be very vague and incomplete.
The other issue as dryfly alluded to is the number of people on farms back then. When crop prices fell through the floor people were still "employed", but incomes dropped very severely. I think that this is one of the major differences this time around.
ac,
I wouldn't equate stimulus with surgery as much as pain meds, since it only addresses the symptoms (i.e., makes the patient temporarily feel better) and does nothing for the underlying condition.
Curiously one thing that didn't happen in the depression was real house prices did not fall. Shiller's real house price data from 1929 t0 1940 shows no significant fall. Even in nominal terms prices fell less than one third from the high in 1925 to the low in 1933. In real terms, due to deflation the drop was only 12 1/2%. Obviously in parts of the country such as the dust bowl prices undoubtedly dropped more, but given that loans in excess of 50% of value were rare there was relatively little leverage and apparently a decent resale market, all of which is very different from current circumstances.
Year Real Nominal
1925 78.16 6.342667364
1926 72.49 6.086397975
1927 71.38 5.859250108
1928 73.28 5.946614672
1929 72.61 5.824304282
1930 69.49 5.573859198
1931 68.65 5.119563464
1932 68.34 4.58372747
1933 72.87 4.408998342
1934 73.28 4.537133036
1935 78.07 4.980221904
1936 79.41 5.140515399
1937 79.72 5.272286919
1938 78.46 5.226223931
1939 78.55 5.158199023
1940 81.73 5.328760428
Irrational Exuberance
It's the value of farmland that fell through the floor.
I've been told that the shift in American lifestyle from agrarian to what we have now... (suburbian?) was significant. Hence unemployment isn't directly measured the same way.
OT,I would like to thank all of those who recommended the best glues to sniff.I still have not found one with a good nose and a clean finish,but cnbc is starting to make sense.
"Curiously one thing that didn't happen in the depression was real house prices did not fall."
Yes, that's right, and you pointed out the reason.
It was highly unusual to have a residential mortgage written without at least 50% down. The terms of mortgages were also very short then.
5, 10 year mortgages were not unusual.
Seconds were unheard of.
BSR,
Yeah, we're nowhere near the peak in UE this time around. Much too much retail out there for a country where savings are going from negative to 8-to-12%.
Did they have 'discouraged workers'? (I'm guessing not, as that whole notion sounds like something that would have come about after organized labor made some gains decades later, but that's just a guess)
I've read that while measurement process was somewhat different due to technology it wasn't the key difference - key difference was the very large number of farmers then vs very few now. In the 1920s something like 50-60% of the population lived & worked on farms. They were considered 'employed' even if they weren't making money and essentially starving. So 25% unemployment then is actually pretty much equivalent to 12% unemployment now [same number out of work relative to entire population].
What about underemployment? What about household income volatility? These metrics are nowhere reported, yet they are part of the employment picture.
Underemployment: You are a skilled IT professional. You get laid off from a job making $60K. You land another job, but this time at Home Depot making $36K. You cannot find another IT job.
Income volatility: You go from making $60K to $40K to $45K. What does that do to your financial planning? Your ability to provide a constant level of lifestyle for you and your family? Your ability to keep living where you live? The ability to keep your kids at their present school?
mp,
You failed to mention that we didn't have any Mozilo's then, too, due to the fact that tanning salons hadn't been invented.
So 25% unemployment then is actually pretty much equivalent to 12% unemployment now [same number out of work relative to entire population].
Geez, dry, I hadn't heard it put quite that way before. You're scaring me.
"It's the value of farmland that fell through the floor. "
Yes. Farmers were highly leveraged compared to their urban counterparts.
They also faced falling prices for commodities.
@TJ
Hey, they most definitely had Mozillo-type characters. Lots of them.
That's never changed.
mp,
Hey, I thought it was worth a snicker or two.
Yes ... here it is again ... the debt to GDP ratio from 1923 to 2007
http://4.bp.blogspot.com/_9ZzZquaXrR8/SlFRqh1OFkI/AAAAAAAAENI/M-btT2xlRqM/s1600-h/DebtGDP.gif
mmckinl,
OT, but Economist's View: "Administrative Costs in Health Care"
You land another job, but this time at Home Depot making $36K.
Judging by the turnover at the three or four Home Depot stores we frequent, they're not hiring at 36K.
mmckinl,
Love that chart, BTW.
mp-
sorry but I can't get anything other than his lack of reality in anything he has put out since his visit "to the mountaintop"......prime rib must be powerful stuff in D.C.
The data still sucks...it's gotten worse, in fact, but he switched camps so quickly and his latest scribe can be placed right with the rest of the green shoot brigade. When he looks at some hard facts and see's reality vs. perception then I'll give him another chance. He was used and he may or may not know it. Looking at his past though I bet he doesn't care as long as the check cashes.
Ciao
MS
Hey, they most definitely had Mozillo-type characters. Lots of them.
That's never changed.
They maybe didn't have tanning salons but they had the Orange Blossom Special to take them from cold dreary winter time NYC to sunny Florida. The rich that remained rich after 1929 had that option anyway.
Seems that the "urban counterparts" did their best to try and catch up to the leverage level of the farmers, judging from recent years' data on household debt.
Though not faced with falling commodities, "urban counterparts" are faced with falling home prices.
They had guys that looked like pumpkins back then?
Yeah but they did have Krueger.
History of a financial scandal - the Match King - The Intangible Economy
" Effectively, the securities he sold to investors provided loans for governments secured against assets that he himself controlled. The assets were held offshore, which today's tax planners would welcome, and mostly off-balance sheet, the custom at Enron and many of the banks that have suffered this year.
The Economist explains how this was done, and why it fell apart:
After secretly acquiring factories around Europe during the years of post-war Depression in the early 1920s, from 1925 onwards Kreuger began offering a bargain to penniless governments that many found hard to refuse. Kreuger would, he said (usually with great secrecy), lend money to countries that provided him with a national monopoly on match production. His monopoly and skilled marketing would increase sales (Kreuger was a first-rate salesman, too: he is said to have propagated the myth that it is unlucky to light three cigarettes from the same match). Governments taxed matches, so the higher sales would raise tax revenues used to repay the loans. It was, boasted Kreuger, an almost foolproof business plan: the loans were secured against revenues that he controlled; the monopolies, meanwhile, ensured generous returns.
. . .
But despite the apparently flawless business model, match monopolies, it turned out, were not all that profitable. In order to offer spectacular returns, Kreuger paid dividends out of capital, not earnings. He was, in effect, operating a giant pyramid scheme, reliant on confidence to maintain a steady inflow of cash."
"By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves."
Exactly.
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
ac (profile) wrote on Thu, 7/9/2009 - 12:17 am
Read some history.
Once the integrity of the monetary system is breached in the general public mind, it gradually ceases to have significance or ability to regulate behavior in any way among even the "suckers" whose value systems made a middle-class possible. That, not the loss of economic status, but the progressive disintegration (through growing irrelevance and lack of political potency) of the middle-class value structure and beliefs, rout the socioeconomic distribution into rich and poor since there are no other choices left.
WTF!
Trying to change flight times on business travel: Southwest says they have a 1.5 to 2 hour current wait time! Are you kidding me!
My travel agent is not going to wait that long...
TJ and The Bear
I read that post at Economist View and left a comment ...
Is that what you mean ?
"Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed."
What, we are all bankers now?
Yes, you are probably correct. I just used it to illustrate the case. By the way, no offense meant in any way to either IT or Home Depot employees.
"Perhaps CR meant when the PROC starts unwinding the current stimulus program. "
You mean the PROC stimulus that actually went to infrastructure, and supported commodities prices by generating real demand, as opposed to pork-filled projects like volcano monitoring in WA?
Yeah, we are close to the point where if they sneeze, we will catch an awfully mean cold.
MS, don't be in a hurry to blow off Krugman. I think he's misunderstood on a lot of things, just as I've been misunderstood here.
Languages are imperfect. It takes a lot of words (and a lot of time) for people to make themselves understood.
I've read that while measurement process was somewhat different due to technology it wasn't the key difference - key difference was the very large number of farmers then vs very few now. In the 1920s something like 50-60% of the population lived & worked on farms. They were considered 'employed' even if they weren't making money and essentially starving. So 25% unemployment then is actually pretty much equivalent to 12% unemployment now [same number out of work relative to entire population].
This is basically the big difference for anyone who lived through GD I - most had a "job" but no income. Because everyone was in the same situation it made it really hard to fall back on family support. Now as long as you have a supportive family (I know not everyone does) the likelihood is that you won't really suffer like they did back in the 30s.
mmckinl,
Didn't check the comments, but the article definitely puts a different spin on the "administrative costs" debate that doesn't favor Medicare. Oh, and I couldn't help but laugh about the fact that the IRS is the bill collector.
China Car Sales Jump 48% on Support, Most Since 2006 (Update1)
China Car Sales Jump 48% on Economic Stimulus, Most Since 2006 - Bloomberg.com
By Bloomberg News
July 9 (Bloomberg) -- China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the world’s third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said in a statement today. Overall auto sales, including buses and trucks, rose 36 percent to 1.14 million.
"Yes ... here it is again ... the debt to GDP ratio from 1923 to 2007 "
Don't worry, we have the world's reserve currency.
That should last us for at least another year. After that, well...better start burying food in the woods, and all that...
ghostfaceinvestah (
"By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves."
Exactly.
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
~~~~~
We need to underwrite people with free health care and education ...
From what I see we need to reduce the workweek to 24-28 hours a week to accommodate enough jobs ...
That way people can earn their living ... Our previous economic model is broken beyond repair ...
As long as you create money through debt, you are screwed!
//debt to GDP ratio//
"China Car Sales Jump 48% on Support, Most Since 2006 (Update1)"
Ah, yes, official Chinese statistics.
Whatever happened to that electricity usage report?
Maybe all those riots over there are just road rage.
better start burying food in the woods
Instead of squirrels burying nuts, it'll be people burying squirrels?
25% unemployment - did that include women? If not, we're already there.
ghostfaceinvestah (profile) wrote on Thu, 7/9/2009 - 12:34 am
We are near the tipping point. Once the amount of voters who are net beneficiaries of govt largess outnumber those who are net contributors to govt largess, we are totally screwed.
Wealth confiscation from the well-to-do professional classes will keep things afloat for awhile. But the balance is inevitable. Once the voters who benefit from government subsidies attain majority there is no force that can stop the looting except catastrophic collapse (which will eventually happen anyway). Look to Cali and other union-owned states as the harbringer.
There are far worse things than 25% unemployment.
Come on ac - that is equally vacuous. 25% unemployment is exactly the kind of thing required to produce those 'worse things'... history also shows that as well.
Didn't work out that way in the US. Our most influential and prosperous years followed that period of 25% unemployment.
The US retained it's identity and didn't collapse politically.
Historically that's not such a bad outcome.
The question is "Why wasn't it nearly as bad as it could have been?"
I don't believe that fiscal deficits and easy money are the things that hold nations together in times of dire crisis.
I believe that nations who believe that fiscal deficits and easy money will hold them together in times of dire crisis are approaching the terminal phase of their existence.
FDR cut back on the deficits and easy money. The opposite of what Krugman advocates.
WWII brought us out of the Depression because the outcome provided huge asymmetric economic benefits to the US, not because the government spent alot.
Wars bankrupt governments all the time.
TJ and The Bear
Didn't check the comments, but the article definitely puts a different spin on the "administrative costs" debate that doesn't favor Medicare.
~~~~
The administrative costs still overwhelmingly favor Medicare ... and so what if the IRS is the bill collector ....
It is still another reduction of the costs ...
Here is one major difference between GDI and today - who got the stimulus and why...
FDR's scheme while imperfect was targeted at keeping the unemployed masses from revolting - Germany or Russian style. While 'support' did go to some banks it was via the 'Bank Holiday' where a whole lot were shut down & a number recapitalized. The bulk of the stimulus then went to non-banking 'real economy' activities like rural electrification, civilian conservation corps, reforestation, etc.
Without trying to be snarky - the stimulus today seems targeted at making sure the BANKERS don't revolt... to hell with the masses. So instead of CCC or NRA... we got PPIP and TALF and TARP. Not exactly the same from a Main Street perspective.
"Once the voters who benefit from government subsidies attain majority there is no force that can stop the looting except catastrophic collapse (which will eventually happen anyway). Look to Cali and other union-owned states as the harbringer."
Excellent point, don't they always say "as goes California..."
Scary thought. But probably accurate in this case.
Does their "wealth" not depend on the less well of not lynching them and their kids?
//Wealth confiscation from the well-to-do professional classes will keep things afloat for awhile.//
"By 1936/37 people had become so accustomed to the government taking care of them, they had completely forgotten how to do it themselves."
Exactly.
Gee, that doesn't sound like the stuff of the Greatest Generation,...but maybe you're talking about the people who raised them?
when Krugman acts more like his stated profession I'll be the first person to cut him slack...until then he's just a tool, a well-written and "awarded" one....but still a tool.
Language or not.....he certainly has not been very convincing about why he seems to believe we still have only a few more months of pain.
Ciao
MS
"Didn't work out that way in the US. Our most influential and prosperous years followed that period of 25% unemployment."
Well, there was that war where we wiped out the industrial base of all our competitors...
TJ & Bear...
didn't the greatest fall in farm land prices occur in the late 1880-90s?
I think prices paid in Iowa and nearby states never fully recovered, no?
dryfly 10:42 pm
Exactly correct and exactly why the current policies will end very badly indeed ...
"...he seems to believe we still have only a few more months of pain."
I don't get that from Krugman.
A more straightforward estimate ... would be in the range of 5 to 6 percent.
Plans covering companies with at least 1,000 employees had a mere 7 percent in administrative costs.
Oh wow, we now consider 1% to be an overwhelming advantage? Better find a new argument...
Sadly this point was eloquently expressed by Frederic Bastiat in The Law, published first in 1850!!
The Law
The plunder continues. We have learned nothing. As long as the law is available to enrich some at the expense of others, there are those that will seek to wield it exactly for that purpose.
China Car Sales Jump 48% on Support, Most Since 2006 (Update1)
By Bloomberg News
July 9 (Bloomberg) -- China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the world’s third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said in a statement today. Overall auto sales, including buses and trucks, rose 36 percent to 1.14 million.
Same thing for real estate. The government is pumping easy credit left and right in order to generate economic growth at any cost.
Exactly the tactics that lead the US to where we are now.
Lucifer
As long as you create money through debt, you are screwed!
~~~
Exactly ...
And when you leverage it with fractional reserve banking it gets even better ...
"the Greatest Generation"
If it wasn't for WWII, would America ever come out of the GD? How "Great" would that have been? "Those people were great, they lived in poverty for a generation".
Wars are great for creating heros. In retrospect.
FDR's scheme while imperfect was targeted at keeping the unemployed masses from revolting
What's ironic is that such an approach would be the most valid use of stimulus today, wherein the populace is far softer, entitled and violence-prone than that of the 30's.
"Sadly this point was eloquently expressed by Frederic Bastiat in The Law, published first in 1850!!"
Human nature hasn't changed in 159 years, unfortunately.
Mercantilism is the real problem. Zero sum games are the problem..
//If it wasn't for WWII, would America ever come out of the GD? //
Didn't work out that way in the US.
The US is NOT immune from social forces - just cause we pulled the trigger once without blowing our brains out doesn't mean the next chamber is bulletless too.
Also as many here pointed out... the years right after 25% UE fell apart equally quickly once th edeficit spending was pulled away... it wasn't until one of those 'worse things' [WWII] came along that we really pulled out.
My father lived through the depression and remembered seeing BOTH Bund [American Nazis] and Wobblies [Communists] in the streets protesting - we dodged those situations only by luck and some timely policy. No guarantee that happens as smoothly again.
Also, don't forget that grain farming boomed in the '90s through the '10s because of the weather patterns.
When weather patterns changed Montana, for example, fell apart. Believe it or not, Montana was a big grain producer during that period.
Ants believing that they control the universe.
//Leaders of the world's eight foremost industrialized economies have established an aggressive new marker in the battle against climate change: holding the global temperature to a two-degree-Celsius increase.//
TJ and The Bear
Single Payer is the only way to go and it has been proven over and over again ...
get over it ...
What's ironic is that such an approach would be the most valid use of stimulus today, wherein the populace is far softer, entitled and violence-prone than that of the 30's.
Agreed. As a 'liberal' I am as offended as the most conservative here that stimulus money is basically targeted at keeping middle and upper middle class in mini-mcmansions to 'save the banks'. History will not grade that decision well.
MrSaito (profile) wrote (in reply to...) on Thu, 7/9/2009 - 12:45 am
Sadly this point was eloquently expressed by Frederic Bastiat in The Law, published first in 1850!!
The Law
The plunder continues. We have learned nothing. As long as the law is available to enrich some at the expense of others, there are those that will seek to wield it exactly for that purpose.
Yes. Law misused creates privilege, and privilege needs to die, or we will.
when Krugman acts more like his stated profession I'll be the first person to cut him slack...until then he's just a tool, a well-written and "awarded" one....but still a tool.
Language or not.....he certainly has not been very convincing about why he seems to believe we still have only a few more months of pain.
Ciao
MS
I read an article by him in a local paper. He referred to "Rush Limbaugh" and "Glenn Beck" about 5 different times.
This is the kind of thing that Nobel Prize Economists focus their lives on?
No wonder the profession is in such a sorry state.
"it wasn't until one of those 'worse things' [WWII] came along that we really pulled out."
What is worrisome is one of the "worse things" might be invented to get the world out of it again.
Or, it might naturally develop. We are pretty secure here in the USA in that regard, but if Eastern Europe, or parts of China, collapse? Or oil prices drop to $20 and craters the Middle East or Venezuelan economies?
Bad news.
Well Lucifer, WWII did put an end to the unemployment rate.
I mean you take a few million unemployed people and you ship them overseas. Your unemployment rate is no longer a problem:
16.1 million
The number of U.S. armed forces personnel who served in World War II between Dec. 1, 1941, and Dec. 31, 1946.
Hitler was a Keynesian, but he didn't know it.
"...he seems to believe we still have only a few more months of pain."
....and THEN what happens??? Magic fairy dust is sprinkled all around and everyone magically has jobs and a paid for home with a refrigerator full of food, two cars in the driveway, and nobody will over-spend and over-pay for anything- including no more stupidity? Get real. What will change? Absolutely Nothing.
It's amazing people are still rationally discussing home prices, rental rates, and bankster pay-back. Five years from now when 10X as many people grovel in dumpsters for food, these logs will seem like......... "What were we thinking"??
Lucifer (profile) wrote on Thu, 7/9/2009 - 12:42 am
Does their "wealth" not depend on the less well of not lynching them and their kids?
//Wealth confiscation from the well-to-do professional classes will keep things afloat for awhile.//
Gated communities, private security guards, private schools. They will still have these available for quite a while.
Wow, my little daytrading excursions have proven more profitable than I anticipated.
Yes, but it could also have occurred if people had stopped being mercantile.
WW2 just forced spending.. that is all. I do not believe that a debt based and fiscally conservative economy is sustainable.
//Well Lucifer, WWII did put an end to the unemployment rate.//
"As a 'liberal' I am as offended as the most conservative here that stimulus money is basically targeted at keeping middle and upper middle class in mini-mcmansions to 'save the banks'."
Something both "liberals" and "conservatives" alike can agree on (notwithstanding the political and financial elite, who are really members of the OWG class).
Too bad there wasn't a political party representing our needs, rather than the Republicrats.
"You land another job, but this time at Home Depot making $36K.
Judging by the turnover at the three or four Home Depot stores we frequent, they're not hiring at 36K. "
Retail sucks. HD sucks worse.
"My starting wage was $8.50 per hour and my ending wage was the same. I did not get any other "perks" or discounts. Once a year, around Christmas, we were given 5 - 10% off coupons to use ourselves (1) and pass the rest on to family and friends. "
Home Depot Jobs Forum - Salaries and Benefits | Indeed.com
Yahoo News: Goldman Sachs to Securitize Health Care
Obama's electronic health record initiative may spawn another round of securitization from an unlikely source; the health industry. Unamed sources spoke to Yahoo News. Goldman is lobbying the Obama administration to be allowed to securitize patients when they enter the hospital. "By writing credit-default-swaps on the outcomes of hospital visits, we can make the system more efficient and reduce some of the costs...".said VP of Overseas Operations Manny Conner. Goldman's plan would bring pools of hospitals together based on geographic location, and specialty visits. Romanian pensioneer Feliza Mega was enthusiastic when interviewed regarding the new investment strategy... "Wow; American's are so fat, I am sure to make a lot of money from their hospital stays! I'll be first in line to get this investment". She was interviewed outside of her 300 sqft straw hut, however her village has an internet cafe with 6 connections hooked up to a 28.8 modem, with a special machine hooked up by Goldman Sachs for investment purposes. Goldman has been expanding their overseas operations by providing free brokerage accounts and even $30 credits to third world countries; they typically run out of special kiosks in the Internet cafes, which run on the faster 56k modems or even satelite links. "Our overseas operations are experiencing enormous profit, even though we have to put up a lot of investment..." said Conner.
mp-
his attitude changed dramatically after his visit with the o'siah....he seems to think that by leaving the policy the same, i.e. inflate to create, we will "recover"....recover to what? I ask....the fake inflated level that shouldn't have existed?
This is where the language may come in but I (and I'm sure other's) have detected his shift from being prudent and focused on realism to his current stance of "well...gee I don't know..may be it might work but just don't tighten because that will surely kill this 'recovery' off".. What he really needs to do is face facts....no recovery until the created illusion of profits and prosperity is removed with some sound fiscal policies. I don't see him being very strong on that side of it. A person with his stature should be a bit more convincing since he is looked to as an expert...unfortunately so is Ben Bernancke.
Ciao
MS
Black Star Ranch (profile) wrote on Thu, 7/9/2009 - 12:56 am
It's amazing people are still rationally discussing home prices, rental rates, and bankster pay-back. Five years from now when 10X as many people grovel in dumpsters for food, these logs will seem like......... "What were we thinking"??
BSR, it isn't rational. It's a psychological defense mechanism followed by attempts at rationalization.
RIF is right; everyone's still in the "denial" stage.
Nytol - got work to do tomorrow.
MS, at the end of the day it really doesn't make any difference to me as to what Krugman, or anyone else, says about the problem.
I've developed a construct that works for me and I use it to guide my activities.
Why get all worked up about it?
"I forgot to take health care into account. Never mind. I'm not quite yet profiting as madly as I thought."
Well if you get sick, you just need to plead guilty to some 1-2 year sentence, unsolved crime? Then you really would be off the grid...
Adios, dryfly.
Lucifer,
debt to some extent is not so bad, without it Firenze would not be the Florence we know today...
(wish I could remember the study citation but it showed a correlation between the financial
power of Firenze with the explosion in great art via patronage.... I think the study was in early 90s)
....
also, I tracked the art auction house prices from say '88 to '93,
what one saw was a deterioration in auction prices from a one class,
say the new artists of the '76-86, next to the modern masters of '61 onward,
next level was abstract expressionism & late Picasso and then '06 to 41 &
and so on... (this is from memory ..)
noticed a story in the Times about the real estate in the Hamptons
and it got me thinking about this...
Why get all worked up about it?
Words to live by.
Well if you get sick, you just need to plead guilty to some 1-2 year sentence, unsolved crime? Then you really would be off the grid...
Don't think the thought hasn't crossed my mind. But then again, I'd be adding hepatitis C to whatever original malady I had. Maybe even swine flu.
The US is NOT immune from social forces - just cause we pulled the trigger once without blowing our brains out doesn't mean the next chamber is bulletless too.
Also as many here pointed out... the years right after 25% UE fell apart equally quickly once th edeficit spending was pulled away... it wasn't until one of those 'worse things' [WWII] came along that we really pulled out.
Why don't governments deficit spend all the time and solve all their economic and social problems?
"Why don't governments deficit spend all the time and solve all their economic and social problems? "
I have a feeling we will soon find out the answer to that question, since we have been following that path for awhile.
Yes, debt as a minor method of creating money is fine..but once it becomes the major method of creating money.. watch out.
//debt an extent is not also bad//
"Why don't governments deficit spend all the time and solve all their economic and social problems?"
Are you serious?
There was a big debate on a non-economics forum about McHugh (?) plan that we should just rebate the past 3 years of tax returns to American's. This will solve all of our problems. I can't believe people are so stupid...
dryfly (profile) wrote on Wed, 7/8/2009 - 10:05 pm
Amazing that the UE was near zero in 1929.
Half of America lived on [and was 'employed' by] their farm. Skews the numbers a bit.
Conversely, then, 25% UE in total population represented 50% UE in non-farm population. ?
I'm not so sure.
Something about humans being stupid and hubristic.
//"Why don't governments deficit spend all the time and solve all their economic and social problems? "//
not getting worked up about it......just saying he needs to take a side one way or the other....no more half-assed commentaries...the world is filled with that.
I can point to many examples of "will they, won't they" type of attitudes.....he won the nobel prize..at least make it look like it was deserved other than to pile on Bush at an opportune time....how different are the polices now? None, in fact they are worse IMO.
Ciao
MS
that is how we got"grapes of wrath"
//Conversely, then, 25% UE in total population represented 50% in non-farm population//
25 min on hold with Southwest so-far. I guess I'm stupid for expecting no one would be calling them, period at 11 pm pacific. Who the hell else is trying to reach these people?
.......this is the perfect medium for us here..........a depressing thread shows up and another row of beans or peas gets planted. An anxiety ridden porn-chart is displayed and I go out and enlarge the chicken-coop for another dozen hens. I'm constantly flying in and out of the kitchen door between posts. LOL. Good night, all.........
didn't read it, but wasn't "grapes of wrath" about migrant .... farmers?
// that is how we got the "grapes of wrath" //
YLSP-
"our (one) operator is busy please call back at a later time"
Ciao
MS
Didn't read "Grapes of Wrath?"
My brother, who has made an avocation of studying Steinbeck's life, would be very upset to hear that.
YLSP,
I've subscribed to McHugh at times and his plan was actually 5 to 10 years.
Crazy as it sounds, it would be a lot more effective and certainly more equitable than what's been happening, because it would put the money back in the pockets of the consumer. The combination of cash and instant inflation would go a long ways to healing J6P's balance sheets and jump-starting consumption, while not favoring the deadbeats or Wall Street weenies. Of course, the rest of the world might not have gone for it...
I read "The Pearl" and "Mice & Men" but not "grapes"
it was much worser for farmers than city folk.
//didn't read it, but wasn't "grapes of wrath" about migrant .... farmers?//
"16.1 million
The number of U.S. armed forces personnel who served in World War II between Dec. 1, 1941, and Dec. 31, 1946."
And they all got GI Bill benefits, upon their return. THAT was the REAL stimulus. Free college for them and their kids, and a guaranteed mortgage loan. NOT giving money to Wall St. bankers or a broken GM.
According to my brother, Steinbeck tried to write Grapes of Wrath as non-fiction when he was a reporter and couldn't do it. He ended up writing it as a novel, but it is basically a mash-up of things he saw while working as a reporter in California.
But, yeah, Grapes was about the farmers ("Okies" mainly), who migrated to California during the Dust Bowl.
unfortunately, a fine piece of literature like 'Grapes' could have been one for ages had not Steinbeck
drawn the 'bad' characters so one dimensionally... the Snidely Whiplash problem.
He stacked the deck against them and provided them with no redeeming features,
unlike say, the Joad family.
(edit)
mp,
The book was more positive than reality, the movie was more positive than the book. It was that bad!
Somebody with the time and expertise, please put together a looping video of the following:
1) Krugman espousing his "keep spending, keep printing...or things will get really bad" claims.
2) The leader of Zimbabwe's crowing about how US economists now follow his lead.
It's not as if Depression-level unemployment is the only horrible outcome we can suffer.
What strikes me in Chart 1 of CR's Northern Trust link is how narrow the post WW2 UE spikes are
It was that bad!
Uhhm, uhh, Luci, were you there? (just trying to understand)
ShortCourage,
point to me where I can find the clips of K. and M. and I'll screen grab or whatever tool I'll use,
any choice on the music interlude...?
squidward,
when the book was made into a movie, the studio investigated whether the book was an exaggeration. It turned out that it was not as bad as reality..
"It's not as if Depression-level unemployment is the only horrible outcome we can suffer."
Can suffer? Are you an optimist? How about will suffer.
The only doubt is in the timing.
In regards to the short run, I'm more optimistic than say, CR. Concerning the long run, I'm far more pessimistic than he is.
Free college for them and their kids, and a guaranteed mortgage loan. NOT giving money to Wall St. bankers or a broken GM
Blackhalo - For a rebuttal from the 1930's, see
War Is a Racket - Wikipedia, the free encyclopedia
The comparisons between the two time periods have some important differences:
1) The ability for society to function was supported with local farms and ranches.
2) The ability to produce the comparatively simple machinery to keep any key industry functioning was easily obtained and local.
3) The demographics were more favorable in larger population centers.
4) Religion was a source of stability for almost all communities.
5) Hard labor jobs were created and utilized by a population used to it.
6)The environment was a source of support and not an area of concern and resource cost to fix.
7)Population wasn't 370 million.
8)The entire system wasn't dependent on easily disrupted technology to function.
9)Key resources weren't in short supply and dependent on unfriendly foreign governments.
10)Weapon systems capable of annihilating entire areas and populations hadn't been invented.
But hey we have twitter, the internet and central banks. We should be able to save the world with those three.
We could get guys with funny mustaches speaking impassionately to an adoring public.
//"It's not as if Depression-level unemployment is the only horrible outcome we can suffer."//
I agree with Lucifer. The book actually understated what was happening. The movie did the same.
Steinbeck, you know, liked to put food on the table, and the studios liked to sell movie tickets.
Externalized - Disagree there are major differences on 1, 2, 3, 4, 5, 6, 8, 9, 10.
Things have changed in scale but not in kind.
mp,
inflation did not bring mr. funnymustache into power, deflation did that.
they have changed beyond scale..
//Things have changed in scale but not in kind.//
mp & Luci - thanks for your comments that GD1 was worse than Grapes of Wrath. interesting. thank you
The 1932 Moweaqua, Illinois mine disaster, in which fifty some miners were killed (some as young as 14, if I recall correctly, was typical of the kind of stuff going on during that time. Workers were used and abused. That fired up the union movement.
mp,
here is an interesting link...
Death in the dust |
Books |
The Guardian
Death in the dust
Three years before publication of his masterpiece The Grapes Of Wrath, John Steinbeck visited squatters' camps in California. To mark the centenary of his birth, we print this account - previously unpublished in the UK - of the misery that he witnessed
....Here, in the faces of the husband and his wife, you begin to see an expression you will notice on every face; not worry, but absolute terror of the starvation that crowds in against the borders of the camp. This man has tried to make a toilet by digging a hole in the ground near his house and surrounding it with an old piece of burlap. But he will only do things like that this year. He is a newcomer and his spirit and his decency and his sense of his own dignity have not been quite wiped out. Next year he will be like his next-door neighbour.....
although the movie Grapes of Wrath came out in 1940 (with a different ending than the book)
I can't help think that the imagery used by the great John Ford was greatly influenced by the work of James Agee and
Walker Evans starting in 1936 onward and then published in its entirety in book form in '41. Many of the photographs
I believe circulated before '41.
[side note: one of my all time favorite films was Stagecoach by Ford again, notice who the villain in that film - a banker!,
in preparation to shoot Kane Orson Welles watched that one movie more than 40 times...]
"2) The leader of Zimbabwe's crowing about how US economists now follow his lead."
I would love to see a video of that, got a YouTube link anywhere?
Duke, thanks. I did a quick search on YouTube for a Mugabe clip re: US response to the crisis...no luck.
Anyways, I think we're far from being Zimbabwe, but my point is:
The solutions of our fearless monetary authorities are not without bad consequences. Witness the current crisis, which resulted from the most recent solution to deflation after the dot-com bust. Do these guys ever consider that the consequences might be bigger and badder crises down the road, worse with each expansion of the debt bubble?
I helped make Mexico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.
During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. - Foreword to War is a Racket. I believe it is public domain now?
That's ok Squid. That's why we have the internet. Agree with what you want and disregard the rest. We all filter according to our experiences.
Last thought. I read someone postulate that the level of trust necessary for a society to function was the ability of everyone to trust 80% of the information around them. The thought was we only have time to verify 20% of whatever needs to be thought processed. Once you passed into the plus 20% range you actually started dismantling the system you functioned in due to increased examination. It rang true when I read it.
"I did a quick search on YouTube for a Mugabe clip re: US response to the crisis...no luck."
I will keep looking. That would be a true gem.
OT, a driveby comment and all that jazz, mostly for The O.C. crowd who might be online:
July 22, 2009, The Moody Blues will be at the Pacific Amphitheatre in Costa Mesa
Moody Blues - Tuesday Afternoon (1970)
What's 40 or 45 years when it comes to good music outdoors on a summer's night?
Pacific Amphitheatre
"Death in the dust"
Well, yeah, most Americans can't conceive of it. They can't believe it happened here.
THEY CAN'T BELIEVE IT'S STILL GOING ON.
OT to Ghostfaced - you work at a bank, correct? I believe you posted that you could see lotsa files with 100+ days of deliquencies.
To what do you attribute the "foreclosure backlog"?(eg the slowness in foreclosing) Thanks in advance
Duke,
your comments about the photos from Let Us Now Praise Famous Men that might have
been in various publications before the book release in 1941 and their influence on
Ford's cinematography seem to mesh well... comparing Stagecoach to Grapes there
is a strong greyscale tonal shift (need to re-watch)...
....
also agree that the flaw in Steinbecks book is the he makes the 'baddies' nearly
comic book constructs...
Water under the bridge, but Dryfly's comment equating 25% unemployment to 12% now due to farm workers having been considered "employed" seems backwards to me. If half the working population (farmworkers) were considered employed then the 25% unemployment came from the other half. That would mean 25% then = 50% today.
Luci - read the "Death in the Dust" link.
Before I was concerned. Now I'm scared.
"Death in the Dust."
"The trees are drawing me near . . . "
Clearly, I'm outta sync. Goodnight.
But we are special!
//They can't believe it happened here.//
picosec - yeah.
squidward,
That actually happened.. but almost nobody today will admit that it happened...
Funny thing, it was worse in the places they came from.
Ah. The delay from Southwest was only ~ 1 hour, not the 1 hour 58 min as promised.
"That actually happened.. but almost nobody today will admit that it happened."
Hey, it's happening now. I see it all the time. Not on the scale of the thirties, but it's happening.
A lot of people are falling through the cracks in the system.
The idea that California may cut all welfare payments .... is not comforting
"The idea that California may cut all welfare payments .... is not comforting"
Yeah, and it's going to be a long, hot summer too.
Just saying.
Critical mass has not been reached.. yet. Until 1932, everyone believed that it happened to 'other' people. After 1932, nobody could escape the reality that it was happening to everyone.
//A lot of people are falling through the cracks in the system.//
as I have talked about before I had this tree farm in mid-Tennessee and on
occassion would talk to a number of old timers about growing up there in
the 1930s. before TVA it was a very hard scrabble existence, but if your neighbor
had some food and you didn't they would share... community cohesiveness
got them through soe very tough times. many grew up in cabins with dirt floors...
plus, the top soil in that area had a high content of clay and not a lot of black loam
like up north and not a lot of valley floor land...
I dare them to do that.
//The idea that California may cut all welfare payments .... is not comforting//
The "new deal" made their life better! That is so communist..
//before TVA it was a very hard scrabble existence//
"long, hot summer" - dumb question - I don't know what the phrase means, really. Does it refer to riots?
"To what do you attribute the "foreclosure backlog"?"
Waaaayyy too many foreclosures, way too few trained/empowered people to process the foreclosures (and way too many state-specific rules to follow - you need an army of lawyers to get through many states).
At least it is keeping people employed. Not the most productive work for the economy, of course.
I think that stalemates, dares, screw ups, delays, incompetence will take us there!
//Does it refer to riots?//
You dare them? What does that mean?
All right, I stayed long enough to check the Death in the Dust link (good) and to reverse Lucifer's bassackwards style of posting:
"//The idea that California may cut all welfare payments .... is not comforting//
"I dare them to do that."
They don't have enough cops to do that. They live here too.
Goodnight again.
"many grew up in cabins with dirt floors..."
One of my cousins did. She is in her mid-seventies now.
That kind of existence is never very far away. Few realize how thin the ice is.
Ghostface - thank you.
Does that apply to non-judicial foreclosure states? (like cali)
The foreclosure moratorium slowed things down a bit, but to be honest, many of the foreclosures that were stopped probably could not have been processed anyway.
now, with the new mod programs, borrowers have to get screened through that too before they go to foreclosure, etc.
it is all a big mess.
gotta get going to get my requisite 4 hours of sleep.
Lucifer,
without the electrification via TVA most of TN would be in dire straits,
sometimes, gov. projects are beneficial!
Evolution occurs through things reaching their logical conclusion. The present trajectory will end in disaster. If their actions push it to that conclusion sooner, so be it.
//You dare them? What does that mean?//
many of the foreclosures that were stopped probably could not have been processed anyway.
meaning they didn't file the NODs, or they can't find the payment records, or ???
Bah; everyone will just end up piled into the home of the closets relative who owns their home outright... save those who are too proud... Got Paid Off Home?
Duke of Con Dao,
But the south still deserted the democratic party after civil rights legislation was passed. What does it say about them..
"without the electrification via TVA most of TN would be in dire straits,"
Roosevelt's rural electrification program brought power to the area in which I live.
The utility was started during the '30s as a cooperative, which it still is.
I guess some would call it socialism.
YLSP,
When using the flying bus for business, pay the full fare and just show up when you want to fly; it's easier that way.
The biggest problems AZ has with water is that water from the Colorado corrodes the pipes in Tuscon, they don't recharge enough water into the ground, creating fissures as the water table drops and that they still grow cotton and alfalfa here.
All problems are eminently solvable.
Was reading reason magazine and a letter to the editor suggests that TPTB are partially following the Chicago school to solve the banking crisis by issuing debt to inflate the money supply, then buy the notes back to tamp inflation.
Any opinions?
mp,
one of my central themes here in Asia is whether the American people could go back to living
within the limited means of say their grandparents... the Vietnamese could do it in a matter of weeks
if not months... Cambodians, by tomorrow morning or at least by next weekend but I contend
Americans don't have it anymore and would not be able to re-set their expectations...
From a synopsis of Sinclair's "The Jungle" (1906)..
// The most devastating mistake was the decision to use all their money for the downpayment on a house that is beyond their means, without researching the costs and legal issues involved in homeownership. The family had envisioned that Jurgis alone would be able to support them, but one by one, all of them — the women, the young children, and Jurgis's sick father — are forced to find jobs and contribute to the meager family income. The reality of having to work in a capitalist society takes a hold of their family as they are forced to succumb to the demands of the upper class. As the novel progresses, the jobs and means the family uses to stay alive lead to their moral decay.//
Lucifer,
don't get me started on the South...
in some parts of TN, hell, it's like I stepped into a time
machines and I'm back to the time of the Scottsboro boys...
would not be able to re-set their expectations
.
no of course not. Any re-setting will not be of their own volition.
Folks in 1929 were living pretty high. In ~1935 they got reset. But it wasn't something they chose.
"I contend Americans don't have it anymore and would not be able to re-set their expectations"
Duke, I think everyone is hardwired for survival, regardless of culture.
Having said that, it would take Americans a very long time to adjust, but I think they would if they knew there was no alternative.
But, yes, I've no doubt that more than a few would simply end it all because they couldn't deal with it.
I beleive we've scammed the rest of the world. We've sucked in everything we need to go through 50 years of minimal consumption. And we did it all on a big credit card which will be defaulted; so what if the companies hurt are American like Visa or Mastercard... isn't it kind've a large scale fraud?
It is funny that those who look down on others are often the biggest moochers, and many old-fashioned southern states are best examples of this schizophrenic attitude.
//in some parts of TN, hell, it's like I stepped into a time//
People are hardwired for survival, but for most of them it is more akin to a zero sum game ; either by location or aptitude unable to grow much more than a lawn they will pursue other means.
enter the wet dream of leadbugs everywhere
California IOU Holders May Turn to Check Cashers
California IOU Holders May Turn to Check Cashers - Financials * US * News * Story - CNBC.com
By: Reuters | 07 Jul 2009 | 04:37 PM ET
California "IOU" recipients can turn to credit unions and check-cashing storefronts if a state budget deal does not appear by Friday and if three major banks refuse to accepting the notes beyond Friday as planned, analysts said Tuesday. The willingness of the smaller institutions to take IOUs from the cash-strapped state should also stop the development of a secondary market for trading them, although individuals could end up paying hefty fees to get their hands on cash.
"People are hardwired for survival, but for most of them it is more akin to a zero sum game ; either by location or aptitude unable to grow much more than a lawn they will pursue other means."
Probably, but for me survival is not a zero sum game.
But, I'm prepared to deal with those who think it is.
mp,
yes.. but most humans cannot think in the abstract.
It is funny that chicago in 1906 was as full of subprime borrowers as it is now.
I grew up in a southern Indiana town and in this town in a private
social club called the Harmony Club (oldest social club in IN)
originally, was set up by German immigrants and up until
around '33 all club members were Germans (the charter
was in German). Later, others were admitted. I don't believe
Catholics were allowed in until the 60s. In the charter it still bans
Jews, Chinese and Negroes. The restaurant part is open to the
public but the lounge and bar only to members and their guests.
.....
About 9 years a man had his work crew in the dining room and
walked into the bar and his friends said 'c;mon, bring your workers
in a for a drink... he resisted for a long while, finally he agreed and
brought them into the bar and when they saw that they were black
the bartender w/o missing a beat said, "sorry, we just had last call!"
the time time was 9:15 pm...
when I heard this back from NYC on a short trip I raised hell and made
some calls and made sure these guys get in touch with a lawyer, they did
and settled with the Harmony at some point in the future.
....
my Dad was once president and my youngest brother has been president many times:
the big question: if Michael Jordan walked into the bar would he be served (later I tossed in Tiger Woods)
Dad says Yes... but my brother says No Way!
he pulled me outside one time and said see all those old guys, 60% are former
Klan... that said it all!
To this day I do not believe a man of color has ever been served at that bar.
@Lucifer, et al
I would recommend, if you're that concerned about the trajectory of this thing, go find a place in a country.
They better! Screw marine life, enviros and their lawyers.
California Gives Desalination Plants a Fresh Look: Process to Make Seawater Drinkable Gains Traction, but Environmentalists Object to Heavy Energy Use, Harm to Marine Life
California Gives Desalination Plants a Fresh Look - WSJ.com
By SABRINA SHANKMAN
Early next year, the Southern California town of Carlsbad will break ground on a plant that each day will turn 50 million gallons of seawater into fresh drinking water. The $320 million project, which would be the largest desalination plant in the Western Hemisphere, was held up in the planning stages for years. But a protracted drought helped propel the project to its approval in May -- a sign of how worried local authorities are about water supplies
mp,
I am not concerned. I see it as evolution.. what is outmoded has to be destroyed.
"60% are former Klan... that said it all!"
You doubtless know that Indiana was Klan territory. Still is, relatively speaking.
jeez, not this again...
there was no growth 33-37 - just absorption of 70% devaluation...
how stupid can this country get? no wonder sulzberger's sunday rag costs more than a share of the common stock.
To all a good night/day (choose one)
For me, tomorrow is going to be a long day.
mp,
yes... I am quite aware the Indiana was and still is, to an extent, Klan territory,
esp. central Indiana and the border counties along the Kentucky state line.
Under William Henry Harrison for a 10 year period they waved the 'free state
status' and you could legally own slaves, Harrison tried his best but could
not put IN into the slave state category due to the abolition forces...
....
they were still having Klan funeral marches into the early 60s in my town.
my mother's side is Protestant and she's a double DAR, my granddad was
one level down from the highest order of Mason. He was a very fine man and
was elected as the first Republican mayor ever, BTW, that's how I met LBJ, Bobby, Eugene, etc.
(edit)
My grandma I'm not sure would be so comfortable with a black man in the White House. She adored Reagan, they were about the same age. But when it came to Jews she had nothing but the highest respect for them because of their insistence on
education, education, education. She was denied a college education and spent her entire life trying to make up for it by reading everything she could. It wasn't by accident that Henry Kissinger was my hero in high school.
Duke,
given the gov. docs released in the last 8 years I suspect he's not your hero anymore?
"New statistic reports show that, in the United States, the rate of unemployment for electrical and electronics engineers (EEs) is at its lowest in years, and that many trained professionals are kicked out of their jobs on account of the economic crisis. And, while the federal government struggles to take the country out of the mess the other government set it in, one thing becomes clear – no one can hope to drive an economy on anything else than technology. Considering the rate at which these people are losing their jobs, that seems highly unlikely to happen."
Engineering Jobless Rates Are Sky-High - An economy without technology cannot progress - Softpedia
Externalized Costs,
Must support banksters and MBAs. The illusory economy is real and the real economy is illusory.
They're right, technology is the marginal driver for the economy.
It was the railroads, mass production and agriculture during the Industrial Revolution.
But the railroads reached a point of diminishing returns and that was that.
broward,
you should have started a hedgefund, dykstra did
how stupid can this country get?
That's not a good question to ask right now.
The local police are doing "revenue enhancement" in mass quantities. They pulled over a car for a minor traffic violation, the first one was talking but the second policeman was unusually wary, constantly looking around at the crowd on the sidewalk. You can almost smell the fear wafting off of him.
Lots of b/w cars out in the past few days.
Normally I don't care but I've been followed twice this week.
you should have started a hedgefund, dykstra did
I'm too risk adverse and believe it or not, I don't care that much about money.
You have to really care about it to do well.
Why do people fall for this scam..
More Jobless Execs Foot Their Outplacement Bill
High-End Placement Firms Assist Unemployed Executives - WSJ.com
CHICAGO—Richard Malone has cooked up a new operating model for sick newspapers, an idea that may need investors. Unsure of its feasibility, the former Chicago Tribune official outlined his tentative plan last month to executives seated in black leather chairs around a polished mahogany table here. The meeting’s attendees, mostly other displaced executives, proposed ways that Mr. Malone might improve his Power Point presentation before possibly pitching it to private-equity firms.
Who said anything about doing well.. the basic idea behing any hedge fund is the same as behind any ponzi scheme
Dykstra lost money.. BTW
//You have to really care about it to do well.//
they will try that till their victims cannot pay and the taxpayer cannot pay their salary.
//Normally I don't care but I've been followed twice this week.//
Dykstra files for bankruptcy protection
Dykstra files for bankruptcy protection | Philadelphia Daily News | 07/09/2009
NEW YORK - Lenny Dykstra, the former star centerfielder for the Phillies and Mets, has filed for Chapter 11 bankruptcy protection, Reuters news service reports.
Reuters' report comes from court records. Dykstra, 46, has no more than $50,000 in assets and between $10 million and $50 million in liabilities, according to a petition filed Tuesday with the U.S. Bankruptcy Court in the Central District of California. Jonathan Hayes, one of Dykstra's lawyers, had no immediate comment. Dykstra's filing comes in the wake of some 20 lawsuits he faces tied to his activities as a financial entrepreneur, including The Players Club, a glossy magazine he had helped launch, according to published reports.
Ahhh, well, that's true enough.
I quit my last job partly because it wasn't a good ethical situation.
Seems to be the norm in consulting.
I could never get three things lined up.
At times, work was good but the money was poor.
Other tiimes, work sucked but money was good.
A couple of times work & money were good but sex sucked.
Now sex is great and my salary range is good but... work sucks.
Sex. Money. Respect.
It;s like I can get 2 out of 3 but never the trifecta.
What is it about BSU and you?
//I quit my last job partly because it wasn't a good ethical situation.//
Dykstra, 46, has no more than $50,000 in assets and between $10 million and $50 million in liabilities
Holy Moly.
I'm doing better than he is.
You were married to a bitch.. remember.
//A couple of times work & money were good but sex sucked.//
broward,
something about the tide receding.. and people's swimwear status becoming obvious.
I thought you were still unemployed.
//Now sex is great and my salary range is good//
Another bitch who deserves it.. I hope the 'loan modification' fails.
Real Housewife saves Coto home from foreclosure
Real Housewife saves Coto home from foreclosure - Lansner on Real Estate : The Orange County Register
June 11th, 2009, 3:09 pm · 144 Comments · posted by Mark Eades
Former Real Housewives of Orange County cast member Jeana Keough says she’s now received a loan modification, saving her Coto de Caza home from potential foreclosure. We had earlier reported that Keough had received a notice of default on the mortgage on her Coto home.
Keough sent us a letter thanking ocregister.com reporter Mark Eades for letting her know about the loan default and that she had received a loan modification. Here’s the note (We added a few background words in parenthesis for context!) …
I thought you were still unemployed.
I am.
I could probably get a $80-90K coding job if I tried hard.
I either need something challenging and appropriate or easy and non-annoying.
I could probably get something unchallenging and annoying but I'm tired of spinning around in limbo like that.
About 90% of the job listings fall into that category so I don't bother with them.
Same here.. but I have found a niche that pays me.
//I could probably get something unchallenging and annoying but I'm tired of spinning around in limbo like that.//
@Externalized Costs and 20%/80% post:
Are you familiar w/the Kelly Criterion? Kelly was an AT&T mathematician in '50's who posed the following hypo: if a horseplayer's predictive info is 80% accurate as to next race's winner, what's the optimal % of bankroll to make a win bet on that race (the goal being to stay alive and max the BR)? Kelly proved it's 80%. (And X% predictive info => X% of BR wager.)
Slightly different point, but still indicative of deflationary spiral going on... Even the wealthy are tightening up.
It seems to be the nature of the world.
I can't tell if there's a real bottom forming.
My gut and long-time expectation say "no".
But lately I see contradictory evidence. There's five new restaurants opening downtown. Two are already open and they're doing a much better business than the existing restaurants. I'm not sure what to think.
80/20 rule is often the optimum ratio for differentiation / common in design. Differentiation drives marginal value and during the credit cycle, marginal value is pursued beyond a positive profit point. Reversal of the cycle means paring away marginal costs because they're higher than marginal return so you get a period of increasing conformity and standardization.
Bottom likely forming, meager recovery from April 2010 until 2012-13 when demographics kickstart the next secular wave.
This is a technical recovery only.
If I remember correctly, Harry Dent says the demographic bottom is sometime around 2020. A 2013 bottom would fit a purely NYSE / historical pattern but I'm not sure it's right.
Ahhh, here it is.
Dent predicts a short-term recovery from for several years and a final crash around 2018-2019.
HS Dent | The Great Depression Ahead by Harry S. Dent, Jr.
A first major stock rally, likely between mid-2012 and mid-2017,will be followed by a final setback around late 2019/early 2020.
The next broad-based global bull market will be from 2020-2023 into 2035-2036.
"Treasury Secretary Timothy Geithner in March promoted PPIP as a way to help speed recovery of the financial markets by removing distressed debt from bank balance sheets and spurring purchases of mortgage-linked securities. At the time, Bill Gross, Pimco’s co-chief investment officer, described the program in an interview as “win-win-win."
Looks like some caught a whiff of the stink on this one, and figured out that turd polishing can get messy...
Well, if I had to guess, I'd say modest recovery for a year and then a second, deeper crash for 2011-2013.
Dent's long term track record is pretty good, in the late 1980s I tried retro-fitting his demographic trends to the 19th century birth rate but it don't work so good, it looks like it's dependent on certain consumer behavior of the 20th century.
But still, Dent's probably a better predictor than Roubini or Krugman.
He's been doing it for at least twenty-five years.
So would you recommend buying some of Dent's books? Needless to say I am still desperately attempting to adjust to this new reality and holding my little savings in cash and some CD's at 1% kind of sucks.
*****California's Rapid Descent Into The Abyss*****
Market Skeptics
Edward Teach Esq
so the Kelly Criterion is 80%, correct me if I'm wrong on this but I believe that
if you market time your investments you have to be right 82.7% of the times,
otherwise... don't know where that particular model comes from....
noticed on CNBC last night that John Merriwether (or JM as they called him
at Solly... I did a few projects with his bond arb group back in '87-88)
closed his JTM Partners fund recently after sustaining losses of > 40%
in the last year.
[most bits in Liar's Poker are fictitious, except for the odd bit every now and then like the description of Ranieri's suits..
I wonder what happened to that guy? At SB he was the BJOC at least a Qtr. a year, then he escaped the hangman's noose in the
Mozer scandal unlike say Gutfreund, Strauss and a few others (IMO he should have been banned also) and had 5 or 6 great years at LTC and then KaBoom!
my personal Oh-Oh moment - we had a guy named Tom Bernard who was head of general bond sales
he once boasted while toasted! (he later ended up at Lehman and I think retired before their demise... LOL if most of his holdings were in LEH)
"at Salomon we don't sell Truth, we sell Bonds!"
EDIT
Here come the chicken feet!
CHICAGO (Reuters) - China and the United States are kicking up a trade war over chicken in which Beijing effectively has given the boot to millions of dollars worth of U.S. chicken, about half of which is chicken feet.
This action comes as Congress begins deliberating the 2010 federal budget for agriculture, which could extend a U.S. ban on imports of Chinese chicken products sparked by food safety concerns.
China is a huge market for U.S. chicken feet, commonly called paws, and bought 421,000 tons
noticed on CNBC last night that John Merriwether (or JM as they called him
at Solly... I did a few projects with his bond arb group back in '87-88)
closed his JTM Partners fund recently after sustaining losses of > 40%
in the last year.
Why stay in business with a -44% highwater mark, when you can fold, start over, and attract different stupid money?
Good moorrrrning Mary-Nam!
Beautiful day. Financial survivalism at its finest. Fat n happies all round. Think I'll buy me some hopium bonds. Big, LOOONG ones.
C
G-8, G-5 Dodge Dollar Spat, Vow to Avoid Devaluations (Update1) - Bloomberg.com
---Leaders of G-8, G-5 Seek to Avoid ‘Competitive Devaluations’
Could probably power the entire Earth with all the hot air coming out of these meetings...
Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction_commit time points at NYSE:
Daily Kos: "Incredibly Shrinking Liquidity" as Goldman Flushed Quant Trading
OT.
"More Web attacks, North Korea suspected"
Un frickin real.
They still have 60's vintage military equipment but yet they want us to believe they are capable of cyber attacks.
I don't buy it.
Those dang evil doers.
False Flag, China or Russia, Mark D?
More Web attacks, GS suspected.
before the serious adult time kicks in, here's vid mash-up I did
of a Sun Bear standing on its hind legs and waving as if it to
wants to go to the pub for a beer....
YouTube -
the song on the audio is Get Up, Harry! by Sham 69 and is quite famous in England,
esp. East London where it's a big time drinking anthem, sorta works
for a beer drinking bear, no?
"Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction_commit time points at NYSE"
Daily Kos: "Incredibly Shrinking Liquidity" as Goldman Flushed Quant Trading...
Now it's up to the SEC to investigate and enforce the law ( or do a Bernie Madoff, mumble that it isn't their job, and look the other way).
walt,
FYI.
This was posted 10 minutes ago by The Third Brick...
and, SEC isn't going to do S*it to GS.
Mornnnnning Counterpointer, day old java starting my day......Nuked it while fresh pot is brewing. Appears alot of people spent the night on CR, sure hope I didn't miss anything. Have a wonder-mus day.
Maryann,
Are you really drinking day old coffee, dear?
"This was posted 10 minutes ago by The Third Brick..."
Sorry. It's important to give credit where credit is due.. The Third Brick , The Third Brick, yes,..The Third Brick...
Day old coffee.....oh the heartburn!
Abercrombie & Fitch June same-store sales down 32%
BJ's June same-store sales down 7.5%
[M] Macy's same-store sales down 8.9% in June
[DDS] Dillard's June same-store sales down 14%
8:02am Today
MarketWatch.com Search
Some of our more "colorful" posters might appreciate this article.
In Praise of Cussing - CBS News
In Praise of Cussing
Ah man, the adults are waking up...
@HomeGnome
You left out the US
Dollar down big this morning, I knew something was up yesterday with the big drop in PM's....seems some insiders had already gotten the memo on retailers....sideways day on tap.
And props ( snicker ) to Goldman Sachs seems they have all the right people in all the right places throughout all markets.
WASHINGTON (Reuters) - A proposal from a long-time congressional foe of the Federal Reserve that could give lawmakers sway over monetary policy has won the support of a majority in the House of Representatives, alarming officials at the U.S. central bank.
The Federal Reserve Transparency Act of 2009, put forward by Republican Representative Ron Paul of Texas, now has 250 co-sponsors in the House. It will get air-time on Thursday during a congressional hearing on Fed independence that will feature testimony from the Fed's No. 2 official, Donald Kohn.
AUDIT THE FED!
Gap same-store sales down 10% in June
Aeropostale June same-store sales up 12%
[AEO] American Eagle June same-store sales down 11%
MarketWatch.com Search
removed double post
Jobless claims.... loving that second derivative....
TAKE THE MARKET, BABEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!
It seems to me that America at large is learning the lesson that every over-40 divorced woman has already learned: when you decouple from marriage, your standard of living tends to plummet. Or at least, it doesn't go up.
The American middle-class worker/consumer has been thoroughly loved and left by the corporate hubby. Adding insult to injury, you don't even get the house.
broward, et al...
here's the duke at the range with his gun moll (the beard is a disguise)
YouTube - Duke & Dau Firing the Big Caliber Big Guns during Cambodian Weapons Training
funny that the DailyKos had a piece on Goldman,
I thought that sick crew over at ZeroHedge
did a nice job of coverage
On the topic.
People on this board have been commenting about 1937 for quite some time; I guess it is just now being discovered by the 'world'.
The difference between now and 1937 is that the government is in deeper this time. That doesn't imply a lesser second 'W' valley, it implies a deeper one.
The thing to remember is that a temporary bubble caused misalignments that we are now correcting, painfully. The fix preferred by the government- and some mainline, big-name economists - was to extend the bubble and postpone the pain. Now they want to increase that. They should have learned from the first bubble but, instead, they truly believe they can produced something for nothing. The trouble is that we will ALL pay for their academic experimenting.
One of the distinguishing features of the 1930s was a big reduction in immigration, or at least legal immigration.
565,000 initial jobless claims were filed for the week ending July 4. That is short of the consensus estimate, which called for 603,000 claims. Given that initial claims for the previous week were revised upward to 617,000 from 614,000, the four-week moving average now stands at 606,000. Last week it stood at 615,250. Meanwhile, continuing claims came in at 6.88 million, which is above the 6.71 million continuing claims that were widely expected and up from the previous week's tally of 6.72 million. The latter number was revised upward from 6.70 million. Stock futures have only improved moderately in the wake of the data's release as many participants remain mindful that the better-than-expected initial claims numbers came on a holiday week.
Briefing.com: Stock Market Update
Homegroan, yes dear and it's stright from Panama, daughter was there recently and ask the cab driver to pick the best for her mamma. It's coffee all day for me, just like my dear old dad.
Too bad there wasn't a political party representing our needs, rather than the Republicrats. - ghostfaceinvesta
This brings up depression economics -
I would like to point out how this clearly shows that the unemployment rate was not "it's just a lagging indicator" during the Great Depression. At best, the unemployment rate was a coincident indicator during the 30s... and arguably also a leading one much of the time.
Given the many parallels between this recession and the experience of Japan post-bubble and our 1930s, it would be unwise of us to go on whistling in the dark about the already quite high and getting higher unemployment rate.
What is more, CEPR has done some research that shows that if U3 were measured the same way it was in the early 80s, the headline unemployment rate would probably already be approaching 11%, not 9.5%. And, if we really wanted to count headline unemployment the same loose manner that it was counted during the 30s (ie: doing occasional odd jobs, or being out of work so long that you have given up even saying that you are looking ≠ not being unemployed!) It's time to start following the U4 through U6 far more closely!
Prompted me to write up a post about it: the_recession: Unemployment: Maybe Not Your Father's Lagging Indicator