The U.S. budget deficit climbed to an estimated $1.1 trillion during the first nine months of the 2009 fiscal year, the U.S. Congressional Budget Office said on Wednesday.
The nonpartisan budget analysis for Congress showed that receipts in June were an estimated $46 billon, down 18 percent from the same period in 2008.
Not until the debt overhang is paid off or written off. It's OK for Reich to come out with this piece now that the administration is laying the groundwork for another big "stimulus" package.
vehicles will last much longer than most people think. Replacement rates will not be back to anything near historical. It goes back to the difference between need and want. You're not going to replace an upside down vehicle with a new one that you will immediately be upside down by a greater amount. Many vehicles are being finance over an insanley 5 to 6 year time period. By the fed's data the average is about 5 years (I have curretnly seen advertised 72 months).
Evolution took how long to perfect a working system that didn't result in die off, or in overpopulation,
Evolution didn't do any such thing. Dieoff and overpopulation are evolution's tools, not problems to be avoided... assuming you want to anthropomorphize evolution rather than acknowledge it as blind.
Implicit in the most writers' use of the word "recovery" is a return to the same economic model that just imploded. Reich is right: there will not be a recovery. The previous model was unsustainable. what we'll see is a new model rising from our current predicament. Of course, we'll try to resuscitate the old model several times (and probably experience severe social dislocation) before the new model emerges in the next several decades. I dread the intervening period.
I prefer to look at it a bit more as a technical bounce that nicely sets up the next leg down but if they want to call it a "recovery" who am I to stop them?
Yes, if consumption decreases, revenues decline and the deficit expands, how can America The Beautiful maintain traction with The dollar and or Treasury instruments? Bernanke will have to go the printing press and fire up the helicopter motor to help blow unlimited cash into the broken economic system. We are not hearing too much lately about systemic failure, but one doesn't have to look too hard to see that the wheels that were put back on, are falling off again!
A lot of used Americans cars end up being exported, especially to Mexico. The weak economy there and recent 30% fall in the value of the peso will not be helping those who normally could get $2000+ for just about any running car on trade-in.
Even if consumer spending begins to recover and the federal stimulus starts to kick in, state and local spending cuts may be bad enough to entirely off-set this new spending.
Panda is on it.....get the stooges to all come out and say: "well we 'miss-read' that one didn't we?...give us more". This is what 3 or 4 of them reversing course in the last week or so?
People just have a hard time understanding any of this but when I'm asked (which is on a regular basis because this IS my job) I always float the 70% of GDP is us buying crap. Until that changes (not anytime soon IMO) we end up worse than Japan.
"Will this next 'stimulus' be 'state oriented' to bail out the insolvent states? "
I bet there's a deliberate effort to draw liquidity out of the commodity complex so oil prices won't go berserk when they announce the next round of "Dubya Economics".
"but the replacement level (based on scrappage rates) is in the 12 to 13 million range. And that would be a significant increase from the current 9.7 million annual sales rate. That is still well below the peak, but recovery is from the bottom of the cliff - and is not measure by the previous peak. "
But your scrappage numbers are based on peak inventory. The replacement number should be based on a below peak rate of a smaller sustainable, non-bubble economy. Plus it is hurt further by an oversupply of peak inventory. A more useful barometer to me, would be to know what the average miles driven on the scrapped cars vs. what the average number of miles driven is on registered vehicles.
"Treasury Secretary Timothy Geithner on Friday defended the White House's plan for heightened regulation of over-the-counter derivatives, in anticipation of opposition by some lawmakers who believe there is a loophole when it comes to trillions of dollars in the opaque market of contract swaps."
I've got just two words to help people through this God-awful systemic crapfest: Broccoli Sprouts
The amount of glucoraphanin, the precursor of SFN, in broccoli seeds remains more or less constant as those seeds germinate and grow into mature plants. Thus, 3-day old broccoli sprouts are concentrated sources of glucoraphanin, which contain 10-100 times more glucoraphanin by weight than mature broccoli plants
@Hondo
I agree.
Also when I turned 16, way back when, we shared one car between 6 of us.
My kids both had cars as they turned 16 (4 and 5 years ago)and so didn't all their friends.
I believe things are going back to when I was 16.
Now if he backs it with Glod and Silber, and maybe throw some Uranium in....
Well that might work. The We Buy Gold and Silver Banners continue to sprout at all the strip malls here in Phoenix.
Poverty has begun for real.
Time to roll out some real level of relief again for men unable to find employment- basing our welfare on transition to nonexistent jobs is not going to work for quite a while.
The next few years will be punctuated by the screams of the Libertarian/Republican thinkers as the Velvet Fist of Government heaves into more and more corners of the economy.
I will get some cotton for my ears- sorry RobD-you should be offering 10 cents on the dollar- you are getting your pennies in front of a steamroller.
U.S. consumers fall behind on loans at record pace
Delinquencies on the value of all card debt soared to a record 6.60 percent from 5.52 percent in the fourth quarter as more cardholders relied on plastic to meet day-to-day expenses, the American Bankers Association said.
Late payments on home equity loans rose to 3.52 percent from 3.03 percent, and on home equity lines of credit climbed to 1.89 percent from 1.46 percent.
A broader gauge showing late payments on eight categories of loans rose for a fourth straight quarter to a new record, edging up to 3.23 percent from 3.22 percent. That rate actually understates consumer pain because it excludes credit cards. The ABA tracks loan payments that are at least 30 days late.
Bailed-out insurer AIG again found itself in the crosshairs of bonus rage on Friday over its plans to pay $2.4 million in executive bonuses next week.
But the larger issue is how AIG will deal with its obligation to pay roughly $235 million still owed to employees of its crippled financial products division.
This also makes me so friggn sick, that I'm getting on my bike and riding by the ocean.... Cheers!
Unintended consequences. The "scrappage rate" included lots of late model used exports. Holding them longer reduces US exports as well. The SUV/Light Truck category fleet aged 0.4 yr last yr. That's an outrageous increase. Extrapolating from past trends won't work this time. I can see a 8.5m new and a 6.5m scrap rate going forward.
We got three years for this to unwind and even see the bottom coming. Most will not be buying anything for a long while and if they do they will not hang on to it.
Neither bears or bulls are willing to give up. I guess the major indexes are just going to wait right here until the green shoots grow into trees, or they get ripped from the ground and eaten by hungry unemployed folks.
I own a collision shop in NH and no one is fixing dents, but they are fixing rust in order to pass annual state inspection.
Also friends with shops that do mechanical are busy keeping cars alive.
" Lobbyist Ben Dover (profile) wrote on Fri, 7/10/2009 - 3:28 pm
We got three years for this to unwind and even see the bottom coming. Most will not be buying anything for a long while and if they do they will not hang on to it."
Geithner says Stimulus is working and on right path and that financial derivatives blind-sided the government
This guy talks from all orifices but mostly his ass
Timmie who do you work for again
Here's a sign...forgot to mention this one. We bought this house in 2005. Mortgage payment with Wells Fargo...due on the 1st, not considered late until the 16th, no late fees until the 16th. No history of missed or late payments. Most checks clear around the 10th of a given month give or take. For the month of June, I submitted an online payment through my bank, normal process. The payment is clearly in the system. On the 9th, Wells Fargo calls me and wants to discuss my delinquent account. The lady is concerned that I haven't been paying my bills on the first of each month, and I have a history of late payments. I said what are you talking about. Never been charged a late fee, account always shows up to date...have they changed their policy of late fees on the 16th? She said no, and that I wasn't officially late, my credit score wasn't at risk, but this was a request to remember that my loan payment is due on the 1st of each month, and that I was in their system for late payments.....WTF?
X marks the spot, right? Where the grave or treasure is buried.
The X marks a brand new track -- a new economy. What will it look like? Nobody knows. All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin.
Less like an empire-pretender, one hopes. Less like a financial oligopoly, one prays. More like a place were savings can be invested with the assurance they are safe from devaluation, deflation, inflation, outright theft, manipulated markets. (I know, I'm a hopeless dreamer).
" Lobbyist Ben Dover (profile) wrote on Fri, 7/10/2009 - 3:32 pm
Cinco-X
Hope you didn't buy the extended warranty!"
Rarely do. Only on things I think should last longer than the extended warranty, and which shouldn't be obsolete before the end of the standard warranty. I remember going to Circuit City and buying a high performance video card and having them ask about that. I'd reply, this card will be obsolete in 6 mos., so I'd rather buy a new one than have it repaired or replaced
Geithner said the rate of decline in the economy has slowed, consumer confidence has improved, the financial system is healing, and concern about a financial meltdown has receded.
WTF is he smoking ? must ne something good from his boss Goldman Sacks
JP, I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month. Had to call her on that one fast.
"She said no, and that I wasn't officially late, my credit score wasn't at risk, but this was a request to remember that my loan payment is due on the 1st of each month, and that I was in their system for late payments.....WTF?"
They really want that money in their hands as long as possible. Use of a couple grand for two weeks before it's passed on -- that's not nothing. They don't deserve it -- but they want it.
What would a new economy look like? We just blew on fantasy economy with easy credit. How we gonna do a hard to get credit economy? Seems impossible to me.
The only thing I can think of to spend money on is food, wine, preventative medicine / health care, and home improvements.
Most of that list is just subsistence spending. The only one that doesn't fit is home improvements but I can't work on putting in solar panels, a small wind turbine, an adequate urban garden, a grey water system, a real composting system, or a host of other green and economical items until I can afford a house.
Books and education are almost free now between libraries and the internet so why amass a bunch more stuff if you're just going to have to become accustomed to a very mobile way of life via renting and layoffs.
Anyways, that's my conundrum and I suspect I'm not alone.
the online payment system may be wonky, or some data input clerk clicked a box on a form somewhere indicating you were late. OR, the programmer has been told to generate a new "potentially late" report for everybody who doesn't pay by the 1st. Then they call you and scare you. It's a tactic to generate more cash flow-- for them.
BTW, if you subscribe to the Austrian viewpoint that debt must be cleared from the system in order for sustainable recovery begin, then this is the conclusion you inevitably come to.
So long as debt accumulation is continuing, true recovery is getting farther and farther away.
If it's any comfort, however, the debt accumulation always stops eventually, often with the involuntary loss of borrowing ability on the part of the economy in question.
If this is inevitable, then the rational debate is not one of stimulus vs. spending cuts, but one of controlled collapse vs. uncontrolled collapse.
Not sure who posted the link to the Bloomie article about Medvedev showing off the new world currency coin. Interesting. I think I liked the Amero design better.
"Sears, like most major retailers, has seen a plunge in retail sales over the past several months but the company's stock is up almost 40% for the year."
If it's any comfort, however, the debt accumulation always stops eventually, often with the involuntary loss of borrowing ability on the part of the economy in question.
Involuntary Loanslaughter will soon be a misdemeanor.
Upon further thought, I think Bernake would have been better off flying the dollar bills around
in money dumps hither and thither around the country, rather than handing useless electrons to the banks.
Moreover, if enough people grow comfortable witht he concept of default, the government will surely follow.
One feature common to all "developed" countries is the sanctity of long-term contracts (debt and currency being examples of such contracts). This seems to be one of the most important distinctions between first world and third world countries in the modern world.
Blackhalo (homepage, profile) wrote on Fri, 7/10/2009 - 12:41 pm
"WTF is he smoking ?"
The same thing the President and Congress are, banker dick.
"From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent"....Simon Johnson in his excellent piece The Quiet Coup
Once again Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored.
This will be Mr 'REAL hope and change' undoing ( he's already sinking ) because Americans are getting the same ole shaft....
"Upon further thought, I think Bernake would have been better off flying the dollar bills around
in money dumps hither and thither around the country, rather than handing useless electrons to the banks."
I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month... -V
They are definitely bullshitting you. IIWY, the next time that happened, I'd get her name, and her supervisor's name, and I'd talk to the supervisor. Well, not talk exactly, more like screaming bloody murder. Come to think of it, something like this happened to me once, a clerk from the local bank calling me on my account, wanting to sell me something-- and she had already been fiddling with the account without my permission. I read her the riot act, then got on the phone to the regional vice president for customer service. The VP agreed with me, and gave the local clerk a dissing. She no longer works there. Oh, wait, that was Washington Mutual. /snark
Is anybody here planning on buying a new car in the next three years?
I might. Because I have always leased cars every 3-4 years, and I don't want to keep the Equinox that I lease now, ever since somebody here told me the engine is made in China.
I want to lease or buy a small, green car that costs less than $15,000 and is big enough to hold 2 full-size American people.
scone,
you know she tried to get me to sign up for automatic payments after it was all said and done. Then asked me politely if there was anything she could do to 'service' my account.....had to bite my tongue and tell her not to stuff my account where the sun don't shine.
lawyerliz (profile) wrote on Fri, 7/10/2009 - 2:50 pm
The hub is planning to buy a car within 3 years. He is err, ummm, "saving up" for it.
Don't worry, in a few months to a year we will acknowledge the Era of Lowered Expectations wherein the term "saving up" will be a lot less loaded with social stigma than it has been during the Era of Overconsumption
I think it is because the traders on the floor are still employed. It makes them happy before they go home for the day and have to pass all the out of work bums.
you know she tried to get me to sign up for automatic payments after it was all said and done. Then asked me politely if there was anything she could do to 'service' my account.... - V
Yep, trying to scare you, alright. I like to put the Fear of God into these people, IIRC in the aforementioned incident I started screaming about the state banking commissioner and my lawyer and the district attorney. I want them to be afraid of me. And that's pretty sad, actually.
"Sears, like most major retailers, has seen a plunge in retail sales over the past several months but the company's stock is up almost 40% for the year."
There is a vast disconnect developing between what investors would be willing to pay for companies (outright) if anything, and what they are willing to pay for the market, meaning indexes.
Just being in an index can make a company worth 2X or 3X more.
You can see it especially in small caps. It's a gap that logically can't last. But logic is not in high supply.
I'm not altogther sure I'd ever have called Reich an Oligarist Apologist - he's always been part of the socialist pitchfork crowd...I recall him recently saying something about needing to move to the French model: we all work a 30 hour week. And he is right. We become more and more efficient - first we eliminated agrarian work and displaced thousands of years of human working occupation. Enclosure was massively disruptive in Europe, just as it is today in China. The loss of manufacturing as fewer and fewer workers are needed to produce just as many goods means we'll wind up with a second displacement. In short: the wealth from this productivity has to be spread around more broadly, or you wind up with a lot of unproductive and hungry hands.
He is absolutely right though, there is no way we will go back to the old system, particularly without wage inflation. Period.
In point of fact, the solution is precisely the opposite of what the reactionaries clinging to 18th century 'values' prescribes: we need more idle time, and to share the work - we also need to get paid about the same amount for that reduced work. In essence: labor costs must rise, dramatically.
"I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month"
"IIWY, the next time that happened, I'd get her name, and her supervisor's name, and I'd talk to the supervisor. Well, not talk exactly, more like screaming bloody murder."
I wonder how that works for them. They must be bonused or comped on early/on-time payments for their set of clients. I had a similar call come in when I was running a little late on a payment for my 2008 ranger (shortly after getting layed-off) and my loan contract has lay-off insureance. I told the caller to have repo come pick it up, and the tune changed real fast to how I should keep the vehicle.
Wells used to do this as far back as 2002. I hated their calls, and faxed them some paper to shut off the calls- You have to get the right number, but you basically have to state that all contact must be handled through correspondence. Otherwise you will get the same frickin' call automated forever- GMAC was calling on the frigging 6th of the month until I shut them up. Pissed me off to no end.
Tanta had the same attitude- my 'tude was, well if it absolutely due on the 15th, the 15th is on time.
Banks ride the float, so why shouldn't I?
The loss of manufacturing as fewer and fewer workers are needed to produce just as many goods means we'll wind up with a second displacement. In short: the wealth from this productivity has to be spread around more broadly, or you wind up with a lot of unproductive and hungry hands.
And Lobbyist Ben Dover and his friends will be there to demand that they be worked to death in workhouses to maintain and sustain the protestant work ethic. "Get a job, loser!" Who cares if they are only 10 of them left in the world, if you don't have one, YOU'RE A BUM!
I wonder how that works for them. They must be bonused or comped on early/on-time payments for their set of clients. - BH
Definitely some sort of sales comp thing. I'll bet that started when banks began to sell "financial services" such as retirement packages, etc. But what really freaks me, is this clerk's access to confidential information. Is she really a Well's Fargo employee, or are they farming this stuff out to a marketing firm? Do I want a low-level clerk, who may or may not have passed any security check, to see all my account numbers? Do I want this person, who may be under a lot of financial pressure, to be able to "edit" my account? I'm talking about embezzlement.
Not to mention the numerous vendors doing work strictly with the government.
So to summarize: 34M on food stamps, 15M unemployed, 3M in jail, 51M on SS, 12M on SS, 15M government workers = 130M people. Wow, that's almost half the population. Socialism without the benefits of health care. Excellent.
"There is a vast disconnect developing between what investors would be willing to pay for companies (outright) if anything, and what they are willing to pay for the market, meaning indexes."
I'd have to say it's been developing for a long period of time...starting many year's ago. It's not fully developed however it's getting very close. It also really depends on how one defines the word investor's as well.
thank god we are not greeted every monday morning with yet another hedge fund overpaying for some 'asset' it feels has more upside. That's when it got out of control...think mid '06 into early '07.
@ BH "In essence: labor costs must rise, dramatically."
1.x billion Chinese say no. At least not until they float the Yuan.
Heh...they have the same problem in China...why do you think Hu had to run home suddenly? The Chinese have been struggling mightily to keep up with the expectations of their populace.
OT Noise:
SHANGHAI (Reuters) - Chinese developers are commemorating the late Michael Jackson by building a scaled-down replica of his Neverland Ranch on an island off Shanghai, a state-run newspaper said on Friday.
BR,
"And Lobbyist Ben Dover and his friends will be there to demand that they be worked to death in workhouses to maintain and sustain the protestant work ethic."
I guess if you ever worked hard you would understand it. The numbers add up and yours don't. Quit whining and go drive you American Honda.
Hollywood Reich has been chewing up the airwaves since he left the Clinton Administration and making little if any sense. Typically he tells you one side of an equation and the rest balances on socialism or just good feelings.
However, now that his paycheck is coming in the form of IOU's I suppose he needs to find cash from some other source. What better source than getting paid to tell the world how smart he is?
Remember the bank economist in the 1990's who claimed there was a new paradigm and nothing would ever go down in value? Maybe Robert Reich will disappear just like that fool. Then intelligent economists who actually do their homework and submit their findings to real scrutiny can have their day in the sun.
CR: I think you are missing a key point in cars when you consider replacement rate.
The US has the most cars per capita and the most cars per licensed driver. In the US there are about 1.01 cars per licensed driver versus .70 in Canada. Similarly the US has 765 cars per 1000 people versus 563 in Canada.
I would argue that the rate of car ownership in the US is/was unsustainable and was funded by debt. Going forward we may see an adjustment closer to Canadian levels (or at least part way there). That would mean a longer term drop in replacements while excess "in use" cars are worn out and then a permanently lower purchasing rate into the future.
The future is not bright for the car industry in the US
"In point of fact, the solution is precisely the opposite of what the reactionaries clinging to 18th century 'values' prescribes: we need more idle time, and to share the work - we also need to get paid about the same amount for that reduced work. In essence: labor costs must rise, dramatically."
Predicting a new car market based on scrappage rates is a great way to overestimate sales. As an IT guy in Detroit, I've seen 3 different auto companies (including one major importer) consistently overshoot their estimates by not understanding that the scrappage rate decline is a long-term phenomenon, not anomaly that will go away next year. It is partly self-inflicted, in that cars really are lasting longer than they used to, but it also has demographic roots in an aging population. There's also an economic component that predates the current recession. Cars have been rising in price faster than median income and in the past decade most of the benefit of growth in growth years has not gone to households `who have pent-up demand for another car, but rather to households where spending more on cars has taken the form of replacing higher-priced cars faster rather than having more per household.
The recession is squeezing down hard on an auto market that the Big 3 (primarily) have worked very hard to hold artificially inflated for a decade. They've pushed cars capable of being perfectly usable for over a decade out into the market in ways that have encouraged people to keep them going longer than in the past. There could easily be 10 million semi-redundant cars out there: cars that are convenient to have in a household, but are not really essential. As long as we have flat to falling incomes, high unemployment, and shrinking home equity, those cars will get squeezed out and seen as more scrappage than sales. The Big 3 have all finally recognized the realities, and are not counting on anything more than 10.5 million for profitability.
Predicting a new car market based on scrappage rates is a great way to overestimate sales. As an IT guy in Detroit, I've seen 3 different auto companies (including one major importer) consistently overshoot their estimates by not understanding that the scrappage rate decline is a long-term phenomenon, not anomaly that will go away next year. It is partly self-inflicted, in that cars really are lasting longer than they used to, but it also has demographic roots in an aging population. There's also an economic component that predates the current recession. Cars have been rising in price faster than median income and in the past decade most of the benefit of growth in growth years has not gone to households `who have pent-up demand for another car, but rather to households where spending more on cars has taken the form of replacing higher-priced cars faster rather than having more per household.
The recession is squeezing down hard on an auto market that the Big 3 (primarily) have worked very hard to hold artificially inflated for a decade. They've pushed cars capable of being perfectly usable for over a decade out into the market in ways that have encouraged people to keep them going longer than in the past. There could easily be 10 million semi-redundant cars out there: cars that are convenient to have in a household, but are not really essential. As long as we have flat to falling incomes, high unemployment, and shrinking home equity, those cars will get squeezed out and seen as more scrappage than sales. The Big 3 have all finally recognized the realities, and are not counting on anything more than 10.5 million for profitability.
I wouldn't be too sure about the vehicle replacement rate staying low. There is new gasoline headed our way (higher ethanol percentage by regulation) that will mess up a lot of cars (some only 10 years old, or so). Along with tougher and more frequent smog checks (for older cars) and unavailability of some special parts, it may not be practical to keep your current car as long as you'd like. My last smog check forced me to buy 2 "special" hoses for the Evaporative system (unique size and shape) to the tune of $540.
If the career politicians decide they really need those new car sales tax revenues, they'll start writing regulations that force your 10 year old car off the road....all in the name of clean air, responsible safety, and "doing the considerate thing for your fellow citizens"!
They will protect their jobs and pensions FIRST, LAST, and ALWAYS.
In a Depression, people not only double up in houses....
Even worse -- the older car, that still runs....well, many families may decide they can't afford to register and insure and drive all the cars they have.
Across the street, the neighbors had a Hummer and a Prius.... then the Hummer sat with a "for sale" sign in it's window. It sat there for sale for weeks on end. Maybe they dumped it finally for cheap, don't know.
This here shit caught my eye:
The U.S. budget deficit climbed to an estimated $1.1 trillion during the first nine months of the 2009 fiscal year, the U.S. Congressional Budget Office said on Wednesday.
The nonpartisan budget analysis for Congress showed that receipts in June were an estimated $46 billon, down 18 percent from the same period in 2008.
me thinks harry dent may be on to something...
what will happen to california IOUs after today?
It's possible that the consumption economy was always doomed.
Good taste demands that it must be so.
What's the scrappage rate on residential housing and commercial retail and office space?
Not until the debt overhang is paid off or written off. It's OK for Reich to come out with this piece now that the administration is laying the groundwork for another big "stimulus" package.
vehicles will last much longer than most people think. Replacement rates will not be back to anything near historical. It goes back to the difference between need and want. You're not going to replace an upside down vehicle with a new one that you will immediately be upside down by a greater amount. Many vehicles are being finance over an insanley 5 to 6 year time period. By the fed's data the average is about 5 years (I have curretnly seen advertised 72 months).
Doc Holiday - That's like making $50 K a year and taking out a $100 k loan to buy your annual necessities like food, gas, electricity.
Not looking too smart.
Evolution took how long to perfect a working system that didn't result in die off, or in overpopulation,
Evolution didn't do any such thing. Dieoff and overpopulation are evolution's tools, not problems to be avoided... assuming you want to anthropomorphize evolution rather than acknowledge it as blind.
Will this next 'stimulus' be 'state oriented' to bail out the insolvent states?
Welcome to the new economy, it won't look like the old economy.
Idiot thinks that the cash on the sidelines will push the market much higher.
Someday, but not today.
Unemployment is still growing.
Next step purge;-}
LOL
There will always be a bull market.
Someday this market's gonna end...
"Will this next 'stimulus' be 'state oriented' to bail out the insolvent states? "
Methinks you are on to something.
Who would have guessed that Reich would be the first Oligarch apologist to crack?
I say he's just trying to redeem his reputation meltdown after the "Rich White Guys" comment.
http://www.realmeme.com/roller/page/realmeme/?entry=reich_white_guys
Yes, we can't have states laying off 30% of their employees.
The blow to stability from one of the last operating sectors of the economy would wreck the midterm elections.
Someday this war's gonna end...
Implicit in the most writers' use of the word "recovery" is a return to the same economic model that just imploded. Reich is right: there will not be a recovery. The previous model was unsustainable. what we'll see is a new model rising from our current predicament. Of course, we'll try to resuscitate the old model several times (and probably experience severe social dislocation) before the new model emerges in the next several decades. I dread the intervening period.
"When will the recovery begin?"
I prefer to look at it a bit more as a technical bounce that nicely sets up the next leg down but if they want to call it a "recovery" who am I to stop them?
IT,
Yes, if consumption decreases, revenues decline and the deficit expands, how can America The Beautiful maintain traction with The dollar and or Treasury instruments? Bernanke will have to go the printing press and fire up the helicopter motor to help blow unlimited cash into the broken economic system. We are not hearing too much lately about systemic failure, but one doesn't have to look too hard to see that the wheels that were put back on, are falling off again!
It's OK for Reich to come out with this piece now that the administration is laying the groundwork for another big "stimulus" package.
Hey, cheap money, tax cuts, and big government spending worked great under GWB.
Why mess with a winning formula?
A lot of used Americans cars end up being exported, especially to Mexico. The weak economy there and recent 30% fall in the value of the peso will not be helping those who normally could get $2000+ for just about any running car on trade-in.
Even if consumer spending begins to recover and the federal stimulus starts to kick in, state and local spending cuts may be bad enough to entirely off-set this new spending.
"Until consumers start spending again, you can forget any recovery ..."
Isn't the 70% CONsumer eCONomy D.O.A.?
Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8
Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8 - Bloomberg.com
Panda is on it.....get the stooges to all come out and say: "well we 'miss-read' that one didn't we?...give us more". This is what 3 or 4 of them reversing course in the last week or so?
People just have a hard time understanding any of this but when I'm asked (which is on a regular basis because this IS my job) I always float the 70% of GDP is us buying crap. Until that changes (not anytime soon IMO) we end up worse than Japan.
Ciao
MS
Looks like that 6 handle on oil might be gone for a while, in spite of that valiant defense over the last three days.
Chevron put a huge hole in the thesis we need more expensive oil. Only cheap oil will work to stimulate anything.
Geithner screwed up by allowing oil to ride stocks to this new peak- he should have shut it down at $50.
Someday this war's gonna end...
"Will this next 'stimulus' be 'state oriented' to bail out the insolvent states? "
I bet there's a deliberate effort to draw liquidity out of the commodity complex so oil prices won't go berserk when they announce the next round of "Dubya Economics".
CR,
"but the replacement level (based on scrappage rates) is in the 12 to 13 million range. And that would be a significant increase from the current 9.7 million annual sales rate. That is still well below the peak, but recovery is from the bottom of the cliff - and is not measure by the previous peak. "
But your scrappage numbers are based on peak inventory. The replacement number should be based on a below peak rate of a smaller sustainable, non-bubble economy. Plus it is hurt further by an oversupply of peak inventory. A more useful barometer to me, would be to know what the average miles driven on the scrapped cars vs. what the average number of miles driven is on registered vehicles.
You mean like securities for california IOUs?
"Treasury Secretary Timothy Geithner on Friday defended the White House's plan for heightened regulation of over-the-counter derivatives, in anticipation of opposition by some lawmakers who believe there is a loophole when it comes to trillions of dollars in the opaque market of contract swaps."
Geithner defends White House plan for derivatives - MarketWatch
"Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8 "
Another way to subject the masses to serfdom.
will it come with an electronic card so your spending can be tracked?
"recovery" April 2010, below trend growth until late 2012/early 2013, probably longer as consumption is pulled forward.
Reich is on the right path on how it's another sea change.
I've got just two words to help people through this God-awful systemic crapfest: Broccoli Sprouts
The amount of glucoraphanin, the precursor of SFN, in broccoli seeds remains more or less constant as those seeds germinate and grow into mature plants. Thus, 3-day old broccoli sprouts are concentrated sources of glucoraphanin, which contain 10-100 times more glucoraphanin by weight than mature broccoli plants
The Emperor of Ice Cream,
Good post. I guess a bad debt relationship is better than no relationship at all to these people.
ghost-
Or the whole national I.D. thing......
Ciao
MS
"opposition by some lawmakers who believe there is a loophole"
Why would legislators concerned about a loophole oppose additional regulation?
Thanks for the scientific post, Doc!
Eat your greens people!
Just to second everyone's observations on auto replacement rate.
"Replacement" number may be moving to a lower level "permanently" or at least for 2-5 years.
Remember this is a nation that is undergoing a permanent downsizing. No more cars for every kid in the family.
In other words, if someone is betting the auto industry is going to pull us out soon, they may be negatively surprised.
@Hondo
I agree.
Also when I turned 16, way back when, we shared one car between 6 of us.
My kids both had cars as they turned 16 (4 and 5 years ago)and so didn't all their friends.
I believe things are going back to when I was 16.
What are the scrappage rates in Cuba ?
Havana Classic Cars 19 photo - Bill Klipp photos at pbase.com
Only cheap oil will work to stimulate anything.
But cheap commodities may ruin a lot of the foreign economies that have been a big part of the global growth story.
That truly puts us behind the economic 8 ball.
Now if he backs it with Glod and Silber, and maybe throw some Uranium in....
Well that might work. The We Buy Gold and Silver Banners continue to sprout at all the strip malls here in Phoenix.
Poverty has begun for real.
Time to roll out some real level of relief again for men unable to find employment- basing our welfare on transition to nonexistent jobs is not going to work for quite a while.
The next few years will be punctuated by the screams of the Libertarian/Republican thinkers as the Velvet Fist of Government heaves into more and more corners of the economy.
I will get some cotton for my ears- sorry RobD-you should be offering 10 cents on the dollar- you are getting your pennies in front of a steamroller.
Someday this war's gonna end...
Reich and Krugman-- separated at birth. What is it with econ people and beards and bow ties?
Maybe Reich finally read something about the credit cycle.
I mean, how long can the "Knowledge Gap" between him and Mish last in the Internet age?
Christmas in July for Christmas in December? Sorry if someone posted this already.
Sears Starts Christmas Sales In July
What is it with econ people and beards and bow ties?
It gives them street cred.
" HomeGnome (profile) wrote on Fri, 7/10/2009 - 3:16 pm
"Until consumers start spending again, you can forget any recovery ..."
Isn't the 70% CONsumer eCONomy D.O.A.?"
Of course not; it's just in the middle of a double amputation-
It gives them street cred. - n
Because they're flavor savers?
I question the use of the scrappage rate, since it's really an extrapolation of the bubble consmption patterns.
Might we not see the following:
Let's wait a few years and see what the scrappage rate looks like...
U.S. consumers fall behind on loans at record pace
Delinquencies on the value of all card debt soared to a record 6.60 percent from 5.52 percent in the fourth quarter as more cardholders relied on plastic to meet day-to-day expenses, the American Bankers Association said.
Late payments on home equity loans rose to 3.52 percent from 3.03 percent, and on home equity lines of credit climbed to 1.89 percent from 1.46 percent.
A broader gauge showing late payments on eight categories of loans rose for a fourth straight quarter to a new record, edging up to 3.23 percent from 3.22 percent. That rate actually understates consumer pain because it excludes credit cards. The ABA tracks loan payments that are at least 30 days late.
U.S. consumers fall behind on loans at record pace
| Reuters
Nova +1
" ghostfaceinvestah (profile) wrote on Fri, 7/10/2009 - 3:18 pm
will it come with an electronic card so your spending can be tracked?"
Will you be penalized if you don't spend enough?
@Vonbek777
I received an email from K-Mart also pushing x-mas
Both the vehicles (Corolla and Ranger) in my family are 9 years old.
Here's to another 9...
Depreciating "Assets" and all...
This is how the recovery begins:
Bailed-out insurer AIG again found itself in the crosshairs of bonus rage on Friday over its plans to pay $2.4 million in executive bonuses next week.
But the larger issue is how AIG will deal with its obligation to pay roughly $235 million still owed to employees of its crippled financial products division.
Unintended consequences. The "scrappage rate" included lots of late model used exports. Holding them longer reduces US exports as well. The SUV/Light Truck category fleet aged 0.4 yr last yr. That's an outrageous increase. Extrapolating from past trends won't work this time. I can see a 8.5m new and a 6.5m scrap rate going forward.
We got three years for this to unwind and even see the bottom coming. Most will not be buying anything for a long while and if they do they will not hang on to it.
U.S. consumers fall behind on loans at record pace
So the people that ultimately pay for the government's debt liabilities can't even pay their own personal debt liabilities?
If I were the government I would borrow as much as I could as fast as I could before my creditors figured this out.
The market is flat-lining.
Neither bears or bulls are willing to give up. I guess the major indexes are just going to wait right here until the green shoots grow into trees, or they get ripped from the ground and eaten by hungry unemployed folks.
I own a collision shop in NH and no one is fixing dents, but they are fixing rust in order to pass annual state inspection.
Also friends with shops that do mechanical are busy keeping cars alive.
" Lobbyist Ben Dover (profile) wrote on Fri, 7/10/2009 - 3:28 pm
We got three years for this to unwind and even see the bottom coming. Most will not be buying anything for a long while and if they do they will not hang on to it."
I just bought goats and chickens!
" Mark D (profile) wrote on Fri, 7/10/2009 - 3:30 pm
I own a collision shop in NH "
Are you in Brookline, NH?
Geithner says Stimulus is working and on right path and that financial derivatives blind-sided the government
This guy talks from all orifices but mostly his ass
Timmie who do you work for again
Cinco-X
Hope you didn't buy the extended warranty!
@Cinco-X
Bow
Corolla .GT. Ranger
NANth half recovery
So the people that ultimately pay for the government's debt liabilities can't even pay their own personal debt liabilities?
If I were the government I would borrow as much as I could as fast as I could before my creditors figured this out.
Moreover, if enough people grow comfortable witht he concept of default, the government will surely follow.
Here's a sign...forgot to mention this one. We bought this house in 2005. Mortgage payment with Wells Fargo...due on the 1st, not considered late until the 16th, no late fees until the 16th. No history of missed or late payments. Most checks clear around the 10th of a given month give or take. For the month of June, I submitted an online payment through my bank, normal process. The payment is clearly in the system. On the 9th, Wells Fargo calls me and wants to discuss my delinquent account. The lady is concerned that I haven't been paying my bills on the first of each month, and I have a history of late payments. I said what are you talking about. Never been charged a late fee, account always shows up to date...have they changed their policy of late fees on the 16th? She said no, and that I wasn't officially late, my credit score wasn't at risk, but this was a request to remember that my loan payment is due on the 1st of each month, and that I was in their system for late payments.....WTF?
Mark D,
My friend in Denver has a body shop and is experiencing the same thing. Luckily a Hail storm brought him some business including mine!
Bring back Fox Mulder to maintain the X-files!
X marks the spot, right? Where the grave or treasure is buried.
The X marks a brand new track -- a new economy. What will it look like? Nobody knows. All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin.
Less like an empire-pretender, one hopes. Less like a financial oligopoly, one prays. More like a place were savings can be invested with the assurance they are safe from devaluation, deflation, inflation, outright theft, manipulated markets. (I know, I'm a hopeless dreamer).
Vonbek: Was she phishing?
" Lobbyist Ben Dover (profile) wrote on Fri, 7/10/2009 - 3:32 pm
Cinco-X
Hope you didn't buy the extended warranty!"
Rarely do. Only on things I think should last longer than the extended warranty, and which shouldn't be obsolete before the end of the standard warranty. I remember going to Circuit City and buying a high performance video card and having them ask about that. I'd reply, this card will be obsolete in 6 mos., so I'd rather buy a new one than have it repaired or replaced
"If I were the government I would borrow as much as I could as fast as I could before my creditors figured this out. "
Which creditors are more scary, the Chinese creditors that we owe 1.3T to, or the retirees that we owe 57T to?
'bought a fridge from Sears last Saturday. The $75 delivery cost was to be rebated.
What you get is a credit card for $75.
'like the fridge, but haven't gotten the card yet...
So instead of asking when the recovery will start, we should be asking when and how the new economy will begin.
Today. Welcome to your new economy. And hope you can adjust.
Geithner said the rate of decline in the economy has slowed, consumer confidence has improved, the financial system is healing, and concern about a financial meltdown has receded.
WTF is he smoking ? must ne something good from his boss Goldman Sacks
JP, I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month. Had to call her on that one fast.
"we should be asking when and how the new economy will begin."
Probably hard for the new economy to get going when TPTB are hell bent on propping up the old, dead one.
Is anybody here planning on buying a new car in the next three years?
"She said no, and that I wasn't officially late, my credit score wasn't at risk, but this was a request to remember that my loan payment is due on the 1st of each month, and that I was in their system for late payments.....WTF?"
They really want that money in their hands as long as possible. Use of a couple grand for two weeks before it's passed on -- that's not nothing. They don't deserve it -- but they want it.
You can have my Old Economy when you pry it from my cold dead hands.
that is exactly the problem
Work hard! Millions of people on welfare are depending on you
34M on food stamps, 15M unemployed, 3M in jail, 51M on SS, 12M on SSD
Hard Times
What would a new economy look like? We just blew on fantasy economy with easy credit. How we gonna do a hard to get credit economy? Seems impossible to me.
"WTF is he smoking ?"
The same thing the President and Congress are, banker dick.
The only thing I can think of to spend money on is food, wine, preventative medicine / health care, and home improvements.
Most of that list is just subsistence spending. The only one that doesn't fit is home improvements but I can't work on putting in solar panels, a small wind turbine, an adequate urban garden, a grey water system, a real composting system, or a host of other green and economical items until I can afford a house.
Books and education are almost free now between libraries and the internet so why amass a bunch more stuff if you're just going to have to become accustomed to a very mobile way of life via renting and layoffs.
Anyways, that's my conundrum and I suspect I'm not alone.
@ Vonbek
the online payment system may be wonky, or some data input clerk clicked a box on a form somewhere indicating you were late. OR, the programmer has been told to generate a new "potentially late" report for everybody who doesn't pay by the 1st. Then they call you and scare you. It's a tactic to generate more cash flow-- for them.
"When Will The Recovery Begin? Never."
BTW, if you subscribe to the Austrian viewpoint that debt must be cleared from the system in order for sustainable recovery begin, then this is the conclusion you inevitably come to.
So long as debt accumulation is continuing, true recovery is getting farther and farther away.
If it's any comfort, however, the debt accumulation always stops eventually, often with the involuntary loss of borrowing ability on the part of the economy in question.
If this is inevitable, then the rational debate is not one of stimulus vs. spending cuts, but one of controlled collapse vs. uncontrolled collapse.
How many government employees, including military and how many people working on various government contracts, roads, defense, etc?
HomeGnome
Nope, not me.
04 Scion, 80k, 36mpg.
With a little luck I will squeak 10 more years out of it.
Pavel,
you seem to be channeling Rumi today, in the best sense.
Thanks
Not sure who posted the link to the Bloomie article about Medvedev showing off the new world currency coin. Interesting. I think I liked the Amero design better.
Anyway, here is a link directly to the pix
.
It looks like it made of the same inferior industrial metals as the current US dollar coin: copper, zinc, steel, etc.
"When Will The Recovery Begin? Never. " And never is forever. Boom like that.
I agree. The confluence of housing, banksters, wall street, etc., has dispersed. Games up - pay the man and go home.
Disconnect from that Sears link:
"Sears, like most major retailers, has seen a plunge in retail sales over the past several months but the company's stock is up almost 40% for the year."
I will never buy a new car again. Bought exactly one in my life and it wasn't even for me......meaning brand-new less than 100 miles on the odo new.
There is just no need to take the immediate 20% haircut on it any longer.
C
Can we just start a "New US" and leave the "Old US" debt and bad assets behind?
ac wrote:
If it's any comfort, however, the debt accumulation always stops eventually, often with the involuntary loss of borrowing ability on the part of the economy in question.
Involuntary Loanslaughter will soon be a misdemeanor.
regarding the picture of the coin...
One of what I ask?
Ciao
MS
Vonbek,
Just hang up on those fools if they call you again.
Or put your 4 year old on the phone...
Upon further thought, I think Bernake would have been better off flying the dollar bills around
in money dumps hither and thither around the country, rather than handing useless electrons to the banks.
Moreover, if enough people grow comfortable witht he concept of default, the government will surely follow.
One feature common to all "developed" countries is the sanctity of long-term contracts (debt and currency being examples of such contracts). This seems to be one of the most important distinctions between first world and third world countries in the modern world.
Great Coinz!!
Blackhalo (homepage, profile) wrote on Fri, 7/10/2009 - 12:41 pm
"WTF is he smoking ?"
The same thing the President and Congress are, banker dick.
"From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent"....Simon Johnson in his excellent piece The Quiet Coup
Once again Obama and his Wall St bought and paid for economic team have put all their chips on the Banking Oligarchs to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored.
This will be Mr 'REAL hope and change' undoing ( he's already sinking ) because Americans are getting the same ole shaft....
"Upon further thought, I think Bernake would have been better off flying the dollar bills around
in money dumps hither and thither around the country, rather than handing useless electrons to the banks."
Far better to water the roots than a dead stump.
04 Scion, 80k, 36mpg.
If you paid $80K for that thing, you got ripped, buddy.
p-p-p-p-p-p-p-p-p-p, p-p-p-p-p-p-p-p-p-p, p-p-p-p-p-p-p-p-pump that SPY.
remember the original song?
Ciao
MS
I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month... -V
They are definitely bullshitting you. IIWY, the next time that happened, I'd get her name, and her supervisor's name, and I'd talk to the supervisor. Well, not talk exactly, more like screaming bloody murder. Come to think of it, something like this happened to me once, a clerk from the local bank calling me on my account, wanting to sell me something-- and she had already been fiddling with the account without my permission. I read her the riot act, then got on the phone to the regional vice president for customer service. The VP agreed with me, and gave the local clerk a dissing. She no longer works there. Oh, wait, that was Washington Mutual. /snark
"Is anybody here planning on buying a new car in the next three years? "
If by new car you mean a 4 year old lease return cream puff at 60% or more off original then yes that would be me
HomeGnome,
I am. Maybe 2.
The hub is planning to buy a car within 3 years. He is err, ummm, "saving up"
for it.
I might. Because I have always leased cars every 3-4 years, and I don't want to keep the Equinox that I lease now, ever since somebody here told me the engine is made in China.
I want to lease or buy a small, green car that costs less than $15,000 and is big enough to hold 2 full-size American people.
Here comes kermie!
scone,
you know she tried to get me to sign up for automatic payments after it was all said and done. Then asked me politely if there was anything she could do to 'service' my account.....had to bite my tongue and tell her not to stuff my account where the sun don't shine.
Current car is nine years old, 173K miles.
If I got a real job again, I might replace it with a two-year-old car for cash.
But that might be my last car ever.
how come the economy always gets better in the last half hour of trading?
A Ford 150 for sure. To replace my 23 year old Toyota truck
Wait a minute, didn't consumer confidence drop?
How many bank failure will we have today?
I'll start the poll with:
Four.
Bonus Round!
1 in Florida
2 in California
1 in Texas
Winner gets a virtual beer.
lawyerliz (profile) wrote on Fri, 7/10/2009 - 2:50 pm
The hub is planning to buy a car within 3 years. He is err, ummm, "saving up" for it.
Don't worry, in a few months to a year we will acknowledge the Era of Lowered Expectations wherein the term "saving up" will be a lot less loaded with social stigma than it has been during the Era of Overconsumption
The GS program trade never sleeps, and is fully aroused at mid-afternoon (EST).
I think it is because the traders on the floor are still employed. It makes them happy before they go home for the day and have to pass all the out of work bums.
Car Lay-a-way?
you know she tried to get me to sign up for automatic payments after it was all said and done. Then asked me politely if there was anything she could do to 'service' my account.... - V
Yep, trying to scare you, alright. I like to put the Fear of God into these people, IIRC in the aforementioned incident I started screaming about the state banking commissioner and my lawyer and the district attorney. I want them to be afraid of me. And that's pretty sad, actually.
There is a vast disconnect developing between what investors would be willing to pay for companies (outright) if anything, and what they are willing to pay for the market, meaning indexes.
Just being in an index can make a company worth 2X or 3X more.
You can see it especially in small caps. It's a gap that logically can't last. But logic is not in high supply.
To replace my 23 year old Toyota truck
Nice Work, Nova!
broward
"If you paid $80K for that thing, you got ripped, buddy"
LOL
80k miles
I'm not altogther sure I'd ever have called Reich an Oligarist Apologist - he's always been part of the socialist pitchfork crowd...I recall him recently saying something about needing to move to the French model: we all work a 30 hour week. And he is right. We become more and more efficient - first we eliminated agrarian work and displaced thousands of years of human working occupation. Enclosure was massively disruptive in Europe, just as it is today in China. The loss of manufacturing as fewer and fewer workers are needed to produce just as many goods means we'll wind up with a second displacement. In short: the wealth from this productivity has to be spread around more broadly, or you wind up with a lot of unproductive and hungry hands.
He is absolutely right though, there is no way we will go back to the old system, particularly without wage inflation. Period.
In point of fact, the solution is precisely the opposite of what the reactionaries clinging to 18th century 'values' prescribes: we need more idle time, and to share the work - we also need to get paid about the same amount for that reduced work. In essence: labor costs must rise, dramatically.
@Broward - Evolution is not a suicide pact!
a tautology or an anti-oxy-moron?
"I thought so at first, it was unreal, but she had all my data, even found my computer payment in her system. She tried to tell me at first I hadn't paid for this month"
"IIWY, the next time that happened, I'd get her name, and her supervisor's name, and I'd talk to the supervisor. Well, not talk exactly, more like screaming bloody murder."
I wonder how that works for them. They must be bonused or comped on early/on-time payments for their set of clients. I had a similar call come in when I was running a little late on a payment for my 2008 ranger (shortly after getting layed-off) and my loan contract has lay-off insureance. I told the caller to have repo come pick it up, and the tune changed real fast to how I should keep the vehicle.
@speed racer
about 1.8 civilian workers in the federal government
Federal Government, Excluding the Postal Service
BFF prediction:
Four.
GA, FL, TX, CA.
One will not have a buyer.
Wells used to do this as far back as 2002. I hated their calls, and faxed them some paper to shut off the calls- You have to get the right number, but you basically have to state that all contact must be handled through correspondence. Otherwise you will get the same frickin' call automated forever- GMAC was calling on the frigging 6th of the month until I shut them up. Pissed me off to no end.
Tanta had the same attitude- my 'tude was, well if it absolutely due on the 15th, the 15th is on time.
Banks ride the float, so why shouldn't I?
Someday this war's gonna end...
@MS,
It was from a Bloomie article: Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8
I thought I found the link from this thread, but not sure.
I will go AZ for a 6pack.
"In essence: labor costs must rise, dramatically."
1.x billion Chinese say no. At least not until they float the Yuan.
2 full size American people in a small car, now thats a scary mental picture.
Six failures in AZ, nova?
or one in AZ for a sixer...
The loss of manufacturing as fewer and fewer workers are needed to produce just as many goods means we'll wind up with a second displacement. In short: the wealth from this productivity has to be spread around more broadly, or you wind up with a lot of unproductive and hungry hands.
And Lobbyist Ben Dover and his friends will be there to demand that they be worked to death in workhouses to maintain and sustain the protestant work ethic. "Get a job, loser!" Who cares if they are only 10 of them left in the world, if you don't have one, YOU'RE A BUM!
Capital put the screws to labor by way of the layoff and outsource model, now labor is putting the screws to capital by not going shopping. Well, duh.
Now the only thing left standing is government.
well, we win!
Reich is right, we are going to become French!
O is taking lessons from Sarkozy!
Someday this war's gonna end...
I wonder how that works for them. They must be bonused or comped on early/on-time payments for their set of clients. - BH
Definitely some sort of sales comp thing. I'll bet that started when banks began to sell "financial services" such as retirement packages, etc. But what really freaks me, is this clerk's access to confidential information. Is she really a Well's Fargo employee, or are they farming this stuff out to a marketing firm? Do I want a low-level clerk, who may or may not have passed any security check, to see all my account numbers? Do I want this person, who may be under a lot of financial pressure, to be able to "edit" my account? I'm talking about embezzlement.
rich,
Equinox will have more American parts in 2010. The Ecoctec 4 cyl will have direct injection and should be as powerful as the China V6.
Looks like 15M state/local workers
50% is in education (way too many administrators)
5% in police. (That'll be great when riots start breaking out over inflation)
Number, Cost of Government Workers Growing Fast, Study Says - by Chris Edwards - Budget & Tax News
Not to mention the numerous vendors doing work strictly with the government.
So to summarize: 34M on food stamps, 15M unemployed, 3M in jail, 51M on SS, 12M on SS, 15M government workers = 130M people. Wow, that's almost half the population. Socialism without the benefits of health care. Excellent.
coinz-
I was being sarcastic....hence the
rich-
"There is a vast disconnect developing between what investors would be willing to pay for companies (outright) if anything, and what they are willing to pay for the market, meaning indexes."
I'd have to say it's been developing for a long period of time...starting many year's ago. It's not fully developed however it's getting very close. It also really depends on how one defines the word investor's as well.
thank god we are not greeted every monday morning with yet another hedge fund overpaying for some 'asset' it feels has more upside. That's when it got out of control...think mid '06 into early '07.
Ciao
MS
@ BH "In essence: labor costs must rise, dramatically."
1.x billion Chinese say no. At least not until they float the Yuan.
Heh...they have the same problem in China...why do you think Hu had to run home suddenly? The Chinese have been struggling mightily to keep up with the expectations of their populace.
Speculate...What will history say about O? 1. The Wallstreet Bankers curse got him.
OT Noise:
SHANGHAI (Reuters) - Chinese developers are commemorating the late Michael Jackson by building a scaled-down replica of his Neverland Ranch on an island off Shanghai, a state-run newspaper said on Friday.
WTF?
Ah man, Oinked again.
anti-oxy-moron
I use that to wash my clothes.
BR,
"And Lobbyist Ben Dover and his friends will be there to demand that they be worked to death in workhouses to maintain and sustain the protestant work ethic."
I guess if you ever worked hard you would understand it. The numbers add up and yours don't. Quit whining and go drive you American Honda.
Bill Moyers Journal - a conversation with Robert Reich (June 12, 2009)
Hollywood Reich has been chewing up the airwaves since he left the Clinton Administration and making little if any sense. Typically he tells you one side of an equation and the rest balances on socialism or just good feelings.
However, now that his paycheck is coming in the form of IOU's I suppose he needs to find cash from some other source. What better source than getting paid to tell the world how smart he is?
Remember the bank economist in the 1990's who claimed there was a new paradigm and nothing would ever go down in value? Maybe Robert Reich will disappear just like that fool. Then intelligent economists who actually do their homework and submit their findings to real scrutiny can have their day in the sun.
HomeGnome
I am going for 1 with a 6 payoff.
"I want to lease or buy a small, green car that costs less than $15,000 and is big enough to hold 2 full-size American people."
The Ford Fusion Hybrid got rave reviews...the Honda Insight, got trashed by reviewers...
BEHIND THE WHEEL | 2010 FORD FUSION HYBRID; A Detroit Hybrid That Hums ... - NY Times
CR: I think you are missing a key point in cars when you consider replacement rate.
The US has the most cars per capita and the most cars per licensed driver. In the US there are about 1.01 cars per licensed driver versus .70 in Canada. Similarly the US has 765 cars per 1000 people versus 563 in Canada.
I would argue that the rate of car ownership in the US is/was unsustainable and was funded by debt. Going forward we may see an adjustment closer to Canadian levels (or at least part way there). That would mean a longer term drop in replacements while excess "in use" cars are worn out and then a permanently lower purchasing rate into the future.
The future is not bright for the car industry in the US
"In point of fact, the solution is precisely the opposite of what the reactionaries clinging to 18th century 'values' prescribes: we need more idle time, and to share the work - we also need to get paid about the same amount for that reduced work. In essence: labor costs must rise, dramatically."
Slack! More slack! At last somebody gets it!
pigged -
Head and sholders will probably fail. too many underwater short sellers are anticipating it
. if it does materialize it will stick a fork in the efficient market hypothesis. Target
8400 next week. And then 9000. Interesting Finance & Economic articles
Predicting a new car market based on scrappage rates is a great way to overestimate sales. As an IT guy in Detroit, I've seen 3 different auto companies (including one major importer) consistently overshoot their estimates by not understanding that the scrappage rate decline is a long-term phenomenon, not anomaly that will go away next year. It is partly self-inflicted, in that cars really are lasting longer than they used to, but it also has demographic roots in an aging population. There's also an economic component that predates the current recession. Cars have been rising in price faster than median income and in the past decade most of the benefit of growth in growth years has not gone to households `who have pent-up demand for another car, but rather to households where spending more on cars has taken the form of replacing higher-priced cars faster rather than having more per household.
The recession is squeezing down hard on an auto market that the Big 3 (primarily) have worked very hard to hold artificially inflated for a decade. They've pushed cars capable of being perfectly usable for over a decade out into the market in ways that have encouraged people to keep them going longer than in the past. There could easily be 10 million semi-redundant cars out there: cars that are convenient to have in a household, but are not really essential. As long as we have flat to falling incomes, high unemployment, and shrinking home equity, those cars will get squeezed out and seen as more scrappage than sales. The Big 3 have all finally recognized the realities, and are not counting on anything more than 10.5 million for profitability.
Predicting a new car market based on scrappage rates is a great way to overestimate sales. As an IT guy in Detroit, I've seen 3 different auto companies (including one major importer) consistently overshoot their estimates by not understanding that the scrappage rate decline is a long-term phenomenon, not anomaly that will go away next year. It is partly self-inflicted, in that cars really are lasting longer than they used to, but it also has demographic roots in an aging population. There's also an economic component that predates the current recession. Cars have been rising in price faster than median income and in the past decade most of the benefit of growth in growth years has not gone to households `who have pent-up demand for another car, but rather to households where spending more on cars has taken the form of replacing higher-priced cars faster rather than having more per household.
The recession is squeezing down hard on an auto market that the Big 3 (primarily) have worked very hard to hold artificially inflated for a decade. They've pushed cars capable of being perfectly usable for over a decade out into the market in ways that have encouraged people to keep them going longer than in the past. There could easily be 10 million semi-redundant cars out there: cars that are convenient to have in a household, but are not really essential. As long as we have flat to falling incomes, high unemployment, and shrinking home equity, those cars will get squeezed out and seen as more scrappage than sales. The Big 3 have all finally recognized the realities, and are not counting on anything more than 10.5 million for profitability.
I wouldn't be too sure about the vehicle replacement rate staying low. There is new gasoline headed our way (higher ethanol percentage by regulation) that will mess up a lot of cars (some only 10 years old, or so). Along with tougher and more frequent smog checks (for older cars) and unavailability of some special parts, it may not be practical to keep your current car as long as you'd like. My last smog check forced me to buy 2 "special" hoses for the Evaporative system (unique size and shape) to the tune of $540.
If the career politicians decide they really need those new car sales tax revenues, they'll start writing regulations that force your 10 year old car off the road....all in the name of clean air, responsible safety, and "doing the considerate thing for your fellow citizens"!
They will protect their jobs and pensions FIRST, LAST, and ALWAYS.
Replacement. Let's hope so.
In a Depression, people not only double up in houses....
Even worse -- the older car, that still runs....well, many families may decide they can't afford to register and insure and drive all the cars they have.
Across the street, the neighbors had a Hummer and a Prius.... then the Hummer sat with a "for sale" sign in it's window. It sat there for sale for weeks on end. Maybe they dumped it finally for cheap, don't know.
ah....ok, I looked. It's still there. Months now.