Charles Kiting
"If we want a system that covers everyone like they have in Europe, then we need European tax rates. "
Along with European-style negative growth economies.

What makes you think America is positive growth economy sans credit cards and home ATMs???

this also shows that prices tend to fall faster for CRE than for residential.

It's only 9 years of data.

Sprott: We’re Now in Early Stages of a Depression
Sprott: We’re Now in Early Stages of a Depression

comment by angel9913
Apparently there is (another) huge rally in the stock market for whatever stupid reason.

Here's a quick quiz for all the conspiracy lovers out there...
How long do you think this rally will last considering that:
1) USD is tanking (again);
2) yields on ALL treasuries are shooting for the sky (again);
3) unemployment is... well let's not get too depressed here...

Oh, and Treasury is actioning for another 250 billions next week... )

P.S. When was the last time somebody saw the VIX in DIRECT correlation with the stock market ??... ))

P.S. When was the last time somebody saw the VIX in DIRECT correlation with the stock market ??...

about a week ago, before that don't know

km4

IMO we will have a cumulative GDP decline over the next 4 years of 9%. We may have flat quarters and heavily negative quarters but we will get our negative GDP then trough and then flat line similar to Japan.

MS

Cosmic Struggle?

The question that should be asked is: "What level of foreclosures causes total emotional detachment form any real estate investment?"

I say 25% of all sales being REO in a specific market area is a good benchmark. I am an appraiser and when I see that ratio....I see prices plummet.

Tim waiting for 2012 (homepage, profile) wrote on Thu, 7/23/2009 - 11:32 am
reply ignore user
I am not sure we agree but I'd like to say "Why not"? If the doctor and staff want to work an extra hour more to serve a patient that will cover their extra costs or if the clinic is being paid to perform one more MRI why shouldn't they be allowed to do so?

Because you shouldn't be allowed to pick the good of system A and the good of system B and discard the bad. You get the choice of the good and bad of whatever system you choose.

My father was an MD for years in Canada/US both pre and post socialized healthcare. Why should he get the benefit in Canada of the public system for those that he had to run after for payment in the old days and private for those who can pay? He and any doctor should be free to choose one system with everything good and bad that it entails.

They got in a rolling fight on the floor (this was about 15 year's ago when Buzz was a bit more virile)

Seems that Buzz is still a pugilist even at age 72.

JP,
Check my Boxing Buzz link a few posts above...

Nobody said BB was stupid but, good judgement and intelligence don't always co-exist. Two months ago he stated ue won't hit 10% now he's at 11%. We all know how wrong he's been leading up to this, sub-prime contained, US banks are healthy etc. Claims he's not monetizing as everyone from Boise to Bejing knows he is. I don't get the confidence in BB at all. Similar to Greenspan hype only to lead to blaming him for the latest crisis.

The other thing abut Buzz is that he always has a chip on his shoulder. We were in my office having lunch, prior to all of that, and he kept wanting to arm-wrestle me. I politely declined each time but one of the counselors who had come in to drop off some paperwork decided to take him up on it. This kid was about 6' 2"...big american indian and was reduced to tears when Buzz decided he was going to show this boy who was a man. I should have canceled the whole thing right then and there but I still would have had phone calls either way. Couldn't win in that situation.
Ciao
MS

If the stock market keeps going up Obi Ben will have the bubble he needs.

1) CalPers will be happy.
Happy causes more optimism
2) All pension-funds will be happy.
Happy causes more optimism
3) The peasants will be happy.
Happy causes more optimism
4) The peasants will start buyin'.
Happy causes more optimism
5) The Chinese will start sellin'.
Happy causes more optimism
6) The indicators of leading indicators will go up.
Happy causes more optimism

The peasants I work with are getting happier every passing moment.

I'm sensing DOW 14k here.

The other thing abut Buzz is that he always has a chip on his shoulder. - ms

Flyboys are like that. I'm a Navy brat, but I never wanted to date those guys. Way too much testosterone. McCain is the same type, IMO.

energycon / homegnome-

thanks for the links - honestly appreciated!

The guy in that clip is a lunatic....

I note that the origin of "lunatic" is "luna". Nuff said.

You're Welcome, nullpointer.

"Bet that punk won't ever call anyone else a liar and a coward again."

You're right, because he won't have to.

He'll be living on Buzz's money.

I don't think Buzz was ever charged for the altercation in the video link I posted.

"That is but one of many stories I can tell. I'll leave it with a drunken Alan Shepard (at 10:00am no less) slurring his words and calling out a kid with appropriate expletives because the kid could not understand him....."

Oh, MS, keep 'em coming somehow. Great stuff.

"Have to say he is my favorite along with Wally Schirra...fine human beings both of them. "

Well, you have to have your sh*t together if you're going to co-anchor with (sniff) Uncle Walter.

Re Aldrin, is this a joke too?:

YouTube - Astronaut Buzz Aldrin Recounts Apollo 11 UFO Encounter

He'll be living on Buzz's money.

Wikipedia claims no:Beverly Hills police and the city's prosecutor declined to file charges after witnesses confirmed that Sibrel had initiated physical contact. Sibrel suffered no serious injuries.[37]

People who make a name for themselves early in life and don't appear to get what they feel is their due seem to have problems throughout their lives.

I used to work at a biotech that had James Watson of DNA fame on the board. Pretty petulent and sh***t human being from the stories I heard.

Lovell and fellow crewmen ( he tells the story) about to come from behind the moon. On the count, burn button to be pressed to send them back towards Earth. Lovell says: You know, it's so awe inspiring up here, I don't think I'll push that button.

Fellow crewman yells: Push the button! Push the button!

Lovell, telling the story, then laughs uproariously.

Flyboys are like that. I'm a Navy brat, but I never wanted to date those guys.

I have a b-i-l who was one of those.

You have to be high testerone to do what they do - that's the thing.

I'd rather have an arrogant, control freak pilot in control of the plane I'm flying on.

You have to be high testerone to do what they do - that's the thing.- O

So the women pilots are getting injections? I never knew that.

seXXY

Maybe they're finally figuring out over there that deflation was the cure, not the disease.

Nope. Inflation is bad, deflation is worse...

Only people who benefit from deflation are those who have savings and don't work anymore - everyone else loses - some real bad.

Talked with a small biz guy who told me if he thought deflation was really happening he'd shut down his company now, liquidate and lay all 100 people off and wait it out and buy back when at bottom where he could replace all his machines and hire people back at a lower price.

Heck even going BK makes more sense than operating in a deflationary market.

So what do his people & customers do until then? That is their problem - not his - his mission would be to come out alive on the other side of the rabbit hole.

Multiply that logic across the whole economy and you quickly see why deflation is a non-starter for most.

Here's my CONtribution to the green shoot bin today:

In Q4, 2008, we had 111.854 million occupied housing units.

In Q1, 2009, we had 111.368 million occupied housing units.

I see negative demand. Where's the good news you ask? Well, I foresee continued negative demand in Q2 and we all now know that two negatives make a positive just like two wrongs make a right.

Keep building homes. Excess supply is the ultimate central bank regulator.

"Only people who benefit from deflation are those who have savings and don't work anymore - "

And some of the people we know have had their savings badly depleted. Even if they have good pensions they feel it, and their kids and grandkids feel it too.

And some of the people we know have had their savings badly depleted. Even if they have good pensions they feel it, and their kids and grandkids feel it too.

I'm one of them - but so far I'm still working. If deflation intensifies I won't be. We'll go underground and quit producing stuff until price stability returns... and it will once a lot of us quit making & growing stuff.

Do savers ever get hungry?

Dryfly,

The world experienced deflation for thousands of years with periodic bouts of inflation. I don't buy the deflation is bad thesis. Bad for ponzi debt - absolutely. But for output based on true demand deflation is fine.

From 1920 to 1930 the U.S. had annual cpi deflation of 1.15%. It wasn't the falling prices that caused the depression, it was the ponzi credit.

Talked with a small biz guy who told me if he thought deflation was really happening he'd shut down his company now, liquidate and lay all 100 people off and wait it out and buy back when at bottom where he could replace all his machines and hire people back at a lower price.

That makes some sense, but we've had long periods of worldwide deflation without this happening en masse. Deflation, not inflation, was the norm before the 20th century, on the whole.

It seems to me that this argument really only holds in an environment in which inflation is the base expectation, with deflation an anomaly. Otherwise you wouldn't have any expectation of a bottom over a useful time span and the proper calculation would be whether your profits from operating your equipment more than offset the loss in value of your equipment due to deflation. Come to think of it, that's the calculation that matters regardless.

You also need to be sure you can store that value in a deflation-proof instrument, if you sell your capital. It's not obvious that everyone can.

Dryfly,

One more point. The other day I saw 12 oz cans of diet coke on sale for $0.16/can ( 2 12 pack min ). I've never seen coke that cheap. I bought 8 12 packs. Coke just reported excellent earnings.

Lower prices increase demand.

I've been cruising craigslist for Portland, and there's no desperation I can see-- people still have an inflated idea of what their stuff is worth. Fantasy pricing and over 12% unemployment. Crazy.

Talked with a small biz guy who told me if he thought deflation was really happening he'd shut down his company now, liquidate and lay all 100 people off and wait it out and buy back when at bottom where he could replace all his machines and hire people back at a lower price.

Liquidate to whom, exactly? What is the buyer going to do with the equipment?

barfly (profile) wrote on Thu, 7/23/2009 - 12:44 pm

Currently, there are about 151 LNG tankers in operation; 55 ships are under construction. (italics mine) Seems positive to me.

Phase effect. Circa 2007 Australian, Chinese and some other interests embarked on multiyear bets based on peak energy delivery pricing power. FAIL.

The world experienced deflation for thousands of years with periodic bouts of inflation. I don't buy the deflation is bad thesis. Bad for ponzi debt - absolutely. But for output based on true demand deflation is fine.

World has also experienced shortages of goods for most of history - only exception is the developed world in recent history. As a person on the production side I know for a fact many of us pull back when prices decline. Price signals are NOT economic theory to me and my kind.

That could happen again even if the resultant shortages produce hardship. In the last big deflationary cycle [US Depression] farmers burned corn for heat even while people starved in cities a few miles away because the price of corn was so low it didn't cover the price of buying coal... so coal workers got laid off and starved while farmers burned corn to try and keep warm. Ya that makes perfect sense.

During that period my father's uncle didn't work for ten years [construction worker]... but he survived because he had savings. He made it last the period by consuming almost nothing - he would have much rather worked even if it meant he had been able to have saved less - it wasn't an option then though.

It all eventually got worked out - after about a decade of hardship. Not a good plan I would recommend we follow.

Egregiously (OT): So I closed out my SSO and SPY call positions, booking my purely-accidental profits.

Barometer that, WestSac_grrl and MS.

Sebastian

Liquidate to whom, exactly? What is the buyer going to do with the equipment?

People are buying - just at lower prices [its a deflation after all].

We worked the numbers napkin style and it makes perfect sense to get out - even if you have to file BK to cut the strings - then re-enter later when price stability is more favorable.

They could also just shut down & mothball but that eats cash - cash that would be increasingly valuable - so instead shut down now, shut down hard, and wait.

Don't get me wrong - inflation offers up its own set of problems for the producer - but they are different and you don't benefit by 'shutting down'.

What is the topic? Astronauts, right?

I also sold call hedges just now. I would be flattered if anybody admits to using me as a contrary indicator.

China won't like inflation, I don't give a damn what BB says or does, either does China. Inflation increases they'll sell. What then?

NOTaREALmerican (profile) wrote (in reply to...) on Thu, 7/23/2009 - 12:58 pm

As for desparation. I see NO desparation anywhere. Unless you are unemployed AND have no un-employment benefits AND have run out of credit cards AND your normal human optimism is intact WHY would anybody be desparate?

The short snarky answer is that no man is an island. For instance; my house is "worth' 3x what I think it is worth and I can sell it for that 3x. Should my neighbors start failing on their obligations regardless of my situation, I would be affected.

Pink Floyd talked about hanging on in quiet desperation.

"Europe (who have the same credit cards and home ATM's)."

BZZZT. only 45% of homes in germany are owner-occupied. try again, chuck.

my father's uncle didn't work for ten years

Learning additional skills not an option for him?

That would have been the dumbest thing to have ever done UNLESS those skills came FREE as in somebody else pay for it... it was the freaking 1930s - NOTHING was happening.

So he hunkered down, moved in with family and waited it out - like millions of others. Perfectly rational and he survived it... others not so well.

Dryfly,

The Great Depression did indeed cause great hardship. But it wasn't due to falling prices, those were a symptom. The system froze due to a collapse of ponzi credit. Key distinction.

Also, throughout history, it has often been finance that has caused shortages through mis-allocation of capital or economic privilege such as monopolies. Cavemen and Native Americans never starved due to finance like people during the depression, they only went hungry due to lack of resources. The sad part about the Great Depression is that the productive capacity was there but not used. Same thing with people losing their homes today. In both cases it was a simple matter of forcing people to eat losses. Rather than do that, we push the "easy button" known as inflation. But that takes TIME!

I donno. I lived in Florida for two years. I don't think the people there are capable of NOT being optimistic. If there was a shred of doubt the entire state would implode (like that Monty Python physic tower)

In both cases it was a simple matter of forcing people to eat losses. Rather than do that, we push the "easy button" known as inflation. But that takes TIME!

Inflation isn't 'the answer'... but neither is deflation. Deflation as described as a 'contraction in money supply'. Deflation as described as price declines due to productivity is swell - that is NOT what we are facing now and more of what we are facing now is NOT the answer anymore than bailing out GS & JPM. Calls for deflation is just one more 'easy button' and equally wrong.

Yeah. good point.

I just want inflation for another 30 years tho. Then the universe ends. So, I'm hoping Obi Ben can start another scam.

China won't like inflation, I don't give a damn what BB says or does, either does China. Inflation increases they'll sell. What then?

Well - if they sell they stop exporting to us [and we quit worrying about 'deflation' as described as price increases denominated in dollars]... problem solved. That is unless you still want to own big flat screens and cheap iPods.

"So, I still think most are living on the ever expanding credit card debt. It's either THAT or things really aren't ALL that bad. "

Over 80% of California workers are still employed. See, not all that bad.

"In Sacramento (area) the peasants appear to be very calm. People I work with hardly talk about "badness". So, I still think most are living on the ever expanding credit card debt. It's either THAT or things really aren't ALL that bad. "

I meet once a week with a small group of older men for dinner and discussion; no drumming . Two retired (and well off), two working and well-off, me working and not particularly well off, and one guy living in a house owned by his mom and getting by on his considerable jack-of-all-trade skills. Five of us homeowners.

This week's topic of discussion: how is this economy affecting you and those around you? Interesting range of replies:

• 67-year-old working electronics marketing exec: big blow to the portfolio, but he still wants to retire soon, and is thinking of trading in his condo for a house because he's "tired on not having a yard." Wants more time off to play music.
• 66-year-old working tech support guy at big valley firm. Still owes on his house. Lost a chunk of his retirement nestegg in the recent nastiness -- hasn't cashed out any. Planned to retire next year, but is resigning himself to dying in harness. Hasn't processed the idea that there might be not be a harness.

*Retired lawyer -- paid-for house, travels constantly. Portfolio took a hit and my rants on the stock market "scare the hell out of him," because he's mostly stocks and bonds. But isn't changing a thing.

• Middle-aged jack of all trades (programming, plumbing, auto, construction, electrical). Just breaking even on construction jobs; rented out part of his (mother's) house, is considering marriage for the first time ever (combining incomes). Planted a massive vegetable garden. Has no money to lose, scared anyway.
• Me. You know me.
• 75-year-old retired engineer, portfolio cut in half but isn't changing a single thing.

My conclusions. They're nervous, but the sun comes up everyday and life goes on no matter what their portfolio balance, especially the retired gusy. The only one to signficiantly change his life directory is the tech writer -- no retirement, ever. And JOAT has always lived on the edge.

They can see the wave, but it's way out there. And maybe it'll never break.