MEW and the Wealth Effect
Submitted by
CalculatedRisk on Thu, 09/10/2009 - 11:33am (286 comments)
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You really should grab a pic from LOLcats to go with this headline.
I vaguely recall a class in high school where they told us "withdrawal" is among the most unreliable ways to do something-or-other.
Ain't no equity until you sell and cash out from the housing casino...
Me no likely the scatter graphs...
The Household Leverage-Driven Recession of 2007 to 2009
2009? That's pretty optimistic!
The next time I decide to short this f'ing market, I'll just rip up my money and throw it in the garbage.
Not that I am bitter at all.
Can we haz a LoL cat for :mew:?
Mr. Market
'd your (calls|puts)?
You been drinkin syrup again, Ramathorn?
Only in economics can a point cloud with outliers be modeled by a linear equation.
A scientist or engineer would laugh out loud at a paper with such a graph.
Nemo (homepage, profile) wrote on Thu, 9/10/2009 - 3:35 pm
I vaguely recall a class in high school where they told us "withdrawal" is among the most unreliable ways to do something-or-other.
Looks like a reliable way to get bankrupt, or knocked-up-
eric
you could have sent money to me. or not.
2004-2007 looks like about 400-600 BILLION per year; people where taking loans against the house....
Eric (profile) wrote on Thu, 9/10/2009 - 3:36 pm
The next time I decide to short this f'ing market, I'll just rip up my money and throw it in the garbage.
Save your strength; just send it to me and I'll take care of that for you-
Eric,
"The next time I decide to short this f'ing market, I'll just rip up my money and throw it in the garbage."
Have you considered taking up competitive ocean sailing?
...Standing in a cold shower ripping up hundred dollar bills....
Joanna -
thread). All I can say is WOW. I lived/worked in B'ham in the early 90's and still have friends there. Bellingham does not need a Marriot.
I just saw the article you posted about the Marriot in Bellingham - (from the
Save your strength; just send it to me and I'll take care of that for you-
Yeah, yeah, you vultures.
Maybe I'll just take 10% of the position and stuff it in CR or kcoop's tip jar instead.
At least I still own GDX.
Eric: the stove can get HOT! Don't touchy!
There is nothing to invest in that is safe. (But I'm willing to be pursuaded by low-risk places for cash that have a VERY convincing story.)
MEW and the wealth effect pulled the US out of the last recession and caused this recession. Very efficent
Eric: the stove can get HOT! Don't touchy!
But the flames are soooooo pretty.........
At least I still own GDX.
Mr. Market makes a call to his "fixer" to see that GDX has an "accident."
Mr. M: We left some of Eric's money on the table. I need you to fix that arrangement.
I could maaaaaybe see it reasoning if it were in time for the Olympics in Vancouver, but no.
We have plenty of m/hotel space right now.
Was thinking the same thing. Just eyeballing 5B looks like an "S" shaped curve would be a better fit.
When the cat MEWS, it is very hungry usually. but feeding the WS lions by hand is 'risky business'
households that are most inclined to spend are mired in negative equity.
................
i.e. not so thrifty? They done spent their seed corn.
The seed corn has been eaten, digested, out-placed and is in the sewage system being readied for use as the next round of fertilizing.
Joanna (homepage, profile) wrote on Thu, 9/10/2009 - 3:47 pm
households that are most inclined to spend are mired in negative equity.
................
i.e. not so thrifty? They done spent their seed corn.
One typically 'EATS' the seed corn but spends their child's inheritance. FWIW, eating seed corn or feeding it to food animals is a bad idea, since (at least in the past) mercury was used as a fungicide, and it could accumulate to harmful levels in the aforementioned situations.
NakedCap has a rather explosive post today: Why Economists Rarely Say Bad Things About the Fed
"The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found…
“The Fed has a lock on the economics world,” says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. “There is no room for other views, which I guess is why economists got it so wrong.”
One critical way the Fed exerts control on academic economists is through its relationships with the field’s gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll — and the rest have been in the past. "
Seems reasonable...my impression of the field is there are few jobs for economists outside of academia and goverment other than for banks and possibly multinational corporations.
OT: I LOVE BACON!
Blackhalo,
I actually ate some of this beast; prepared by my good friend; Vic Mantolay.
YouTube - Bacon Explosion!
Here's what happens when you use toxic sludge as fertilizer....(this book is a good read btw)
Fateful Harvest - Wikipedia, the free encyclopedia
One could almost set the clocks by the 3 o'clock market rise...
Are you in my 'hood Ken?
It's turning into a nice day up here at Lake Padden.
Gold has hit a ceiling at $1,000. Someone posted previously that paper derivitive gold products exceed global physical gold by 80 to 1. Seems like paper derivitive products are controlling the gold price.
Spent
v.
Past tense and past participle of spend.
adj.
Used up; consumed: a spent youth.
Having come to an end; passed: a spent era of opulence.
Depleted of energy, force, or strength; exhausted: At the end of the hot day the spent workers slept under a shady tree.
You been drinkin syrup again, Ramathorn?
I am all that is man.
http://www.rockthelist.com/wp-content/uploads/2009/02/syrup.jpg
http://i44.photobucket.com/albums/f47/twk826/mother-of-god-super-troopers.jpg
Ben Bernanke is insane to think that destroying the US dollar to make the US markets rise is worth it.
Look forward to $5.00 gas in the coming months.
Everyone always talks about how bad the Fed was during the Great Depression...their mistakes are little compared to what the Fed is doing now.
It's turning into a nice day up here at Lake Padden.
...........
About to head to Red Square for chai lunch.
I'll drop you a line next time we go for pints at the Archer
off topic but interesting
Insiders sell like there's no tomorrow - Sep. 10, 2009
seems like companies are selling like crazy
Just looked up my house prices in my old neighborhood in Bay Area. Nothing has sold there since 2007.
The good news is that there's finally a sale coming. The bad news is it's a foreclosure.
Anyone who bought in that neighborhood in the past 3 years is between 150k to 250k under water.
We sold in 2004 and the current owner is 120k under water. Ouch!!
It's break time.
Question: When did Noah build the ark?
Answer: Before the rain.
Many years ago, based on what I was seeing, I decided to build a lifeboat, metaphorically speaking.
As the years passed, I added to the lifeboat.
Four years ago, I decided it was time to build a ****ing ark.
Free advice: It's never too late to start, even if all you've got is a lifejacket to stay afloat.
The Fannie Mae board at IV used to host a pretty lively community of daytraders (maybe it still does; I haven't visited in a long time) and some of them were convinced that this actually happened--that the trades they posted in public were much more likely to go bad than trades they didn't announce. But nobody liked being accused of puffing their results by only revealing trades after the fact, so eventually they created an off-board closed site where they could share their trades out of the public eye, knowing precisely who (or at least which handles) could see them.
When some of those trades also turned sour, they started turning on one another with accusations of treachery. Kind of funny; also kind of sad. Phil Dick levels of paranoia.
Joanna (homepage, profile) wrote on Thu, 9/10/2009 - 3:54 pm
Spent
v.
Past tense and past participle of spend.
adj.
Used up; consumed: a spent youth.
Sentence structure:
Subject-verb-object.
BTW, my Mom was a teacher.
Sentence structure:
Subject-verb-object.
.........
Sometimes it amuses me to vernaculate
Rosethorn, thanks for posting that article about the Fed. I wasn't aware how far their influence stretches. I find it to be very scary and dangerous.
OT but does anyone know if there is/isnt a relationship between regular gas prices and diesel? I need to make a car decision in the next few months.
I'd like that.
Taking them out on the high of the day!
Go PPT HFT!
Re: "High leverage growth counties "
This has always fasinated me, because every county around the globe thought they were going to see a spike in growth of something like 5-to-10%, when in fact, sustainable historical growth is typically 2% ...... thus the inventory build-out for an extra 10% of people that never should up, was indeed a pathetic symptom of this Homeownership Society....
Okay, dammit, I thought I told you guys to stop deflating your dollar. Any USD/CAD rate above $0.90 and the phone starts ringing and I get a headache.
"...anyone know if there is/isnt a relationship between regular gas prices and diesel?"
This doesn't respond to your question, but diesels are the one engine that allows you to manufacture your own fuel.
Serf's Up!
This doesn't respond to your question, but diesels are the one engine that allows you to manufacture your own fuel.
Indeed, but do a bit of research, especially if you live in colder climes.
shill (profile) wrote on Thu, 9/10/2009 - 3:55 pm
Ben Bernanke is insane to think that destroying the US dollar to make the US markets rise is worth it.
I suspect that the dollar was in actuality destroyed by (in particular) the last 10 years of binge borrowing. See:
http://market-ticker.denninger.net/uploads/KeyCharts/IncomeAssetsAndDebt.png
It's now time for both we and the Chinese to recognize that fact, and until everyone does, we cannot move on. It sucks, but there's little we can do to change it at this point.
I demand a spellcheck be placed in here and a grammar and a ghost writer
Folks, in case someone reads something into a change in the CRVIX:
I've turned off page caching experimentally to see how the load is, so we should be seeing a more accurate count of guests again. I may turn it back on if things get hairy.
mp (profile) wrote on Thu, 9/10/2009 - 4:02 pm
"...anyone know if there is/isnt a relationship between regular gas prices and diesel?"
I thought home heating oil and diesel were essentially the same. No?
eric-
i expect you are having a jeff mackie melt down right about now?
my condolences - i dont see how anybody could go short this market.
@OregonGuy
Only in economics can a point cloud with outliers be modeled by a linear equation.
A scientist or engineer would laugh out loud at a paper with such a graph.
As a BSc in Chemistry, I know exactly what you mean...the dismal science indeed...proof by hand-waving.
I nominate this for our new National Anthem since we are changing so much:
Sweethaven
Dirk (from the
thread),
I'm reading your release on Poverty Rising, good work. I'm glad to see someone bring up the issues in shifting metrics from the 60s.
I suspect the reason we aren't seeing more uninsured in 2008 is because of the Two Income Trap (TIT). In this case, it may be the Two Income Bandaid (TIB) as the probability is high of at least one household member having insurance to cover both spouses and the kids while the other looks for employment. This also means increased employee payouts for expanded coverage so it works as another downward force on disposable personal income. Unemployment coupled with unaffordable healthcare is truly is the gift that keeps on giving.
And thanks to you and CR for covering the GINI. I like that you gave comparisons since this is a measure that doesn't normally get much airtime. I'd love to see a real in depth look at the GINI along side some other standards of measured personal wealth so additional perspective. The trouble is finding apples to apples data on a national level.
Rob brought up the changes in median household size (good catch). As more people double and triple up, how this is counted going forward might be contentious.
We have a census coming and the changes the population is undergoing will be seen in more depth then we get from our annual estimates. Think about how wealthy and confident you felt 10 yrs ago during the last census vs. how you are handling today's issues. We are going to get hopefully some amazing data.
Back to the salt mines for me....
"I thought home heating oil and diesel were essentially the same. No? "
They are, but that's not my point.
My point is: what if you can't get any, or you can't afford it?
You make it.
That's worth something.
Comrade Scott (profile) wrote on Thu, 9/10/2009 - 4:06 pm
As a BSc in Chemistry, I know exactly what you mean...the dismal science indeed...proof by hand-waving.
If that fails, try using 42pt. type-
What was interesting was that the authors were surprised and impressed by the quality of the correlation--r-squared was almost 0.2 on one of the graphs, which they called "robust".
kcoop,
Thank you for all your on-going efforts to improve this forum.
Much Appreciated.
Gold has hit a ceiling at $1,000. Someone posted previously that paper derivitive gold products exceed global physical gold by 80 to 1. Seems like paper derivitive products are controlling the gold price.
Mmm, *bug discussion...
In the gold market, there is more outstanding paper than there are bars to support it. Look no further than JPM for the source of long paper and short paper. Yes,
's hurdle has been 1k USD/oz since the commodities topped out last summer, and it is again in the way. You will probably see Gold moving up more because of the devaluation of the USD than because of the importance of Gold.
"OT but does anyone know if there is/isnt a relationship between regular gas prices and diesel?"
Not really. It seems like it just depends on supply/demand and how the refineries are configured in anticipation.
Free advice: It's never too late to start, even if all you've got is a lifejacket to stay afloat.
I think I've asked you once before where to start building an ark, and you indicated the Army Officers Handbook was a good place to start. Maybe it might be worth it at some point to devote a thread, either here or elsewhere, to creating some sort of Maslow's hierarchy of economic collapse needs thread to exchange resources.
I suppose I've always been soured because these conversations start with "make sure you have lots of guns and gold", and that's not the most practical advice. If that's what a 'Plan B' generally entails, I'd much rather spend the time and effort continuing to develop good relationships with my friends, the farmers, abattoir owners, and hunters.
i expect you are having a jeff mackie melt down right about now?
Nah.. just bitter and posting here for your entertainment and mine. This last foray (the SPY Sep 101/106 bear call spread) was for like literally 1% of my portfolio's value.
Not a killer, really.
Just annoying. I mean, I drive around, I see the vacant stores. I pass a CORUS branch at the end of my block.
And yet,
comes along every day and gives me a facial.
believer usually diesel is higher than gas, maybe couple dimes here,last summer it was quarters higher,
but you are supposed to get much better mileage with diesel.
"...these conversations start with "make sure you have lots of guns and gold", "
Your mileage may vary but, in my view, lots of guns and gold have nothing to do with it.
Eric,
It is your duty to get some pics when Corus finally goes down!
mp (profile) wrote on Thu, 9/10/2009 - 4:07 pm
"I thought home heating oil and diesel were essentially the same. No? "
They are, but that's not my point.
Right; that's why I snipped out your portion of the reply-
"...you are supposed to get much better mileage with diesel. "
That is an understatement.
OK, it's a just after 4 pm EDT, and I see the equities markets have ended the final phase of their daily pump-dump-slump cycle. This calls for a little ...
haiku!
Goldman primes and pumps,
oscillating market waves
emit pure gold -- man!
Just when you thought enough with the rigged system and systemic corruption we get this
The Raw Story | US to start purchases of 'toxic assets' next month
The program is aimed at getting these toxic assets off the balance sheets of banks and onto the backs of American taxpayers.
BREAKING
National Semiconductor Q1 net income 13c vs 33c
Face it the powers that be are inflating this Market.....You think China recognizes this?
Handwaving and 42pt. text aside, I have to say: I agree wtih the argument these guys are making.
Your mileage may vary but, in my view, lots of guns and gold have nothing to do with it.
Precisely, which is why I prefer listening to you.
My preparations involve attempting to involve myself with organizations, institutions, and individuals that have a decent chance of surviving whatever might come, through dealing in products that remain in high demand, like raw commodities and fresh food.
Well, yeah, you can burn no-tax heating oil in your car but don't forget they put a different dye in home heating oil.
If your tank is ever sticked, and they find heating oil in it, you've got a serious problem.
Same thing goes for using farm diesel, yet another dye, in your vehicle.
mp
the diesel i watch is the kind 18 wheelers use,is it the same thing as diesel cars. drive a gas car.
more on Natgas. apparently, the move past $3 triggered a bunch of black boxes to hit the BUY button...
Natural Gas Poised for Biggest Weekly Gain Since May on Economy - Bloomberg.com
the diesel i watch is the kind 18 wheelers use,is it the same thing as diesel cars. drive a gas car.
It's all the same. Even the diesel in farm equipment and construction equipment is identical, just coloured with dye to prevent tax evasion.
Biodiesel from multiple sources is relatively easy to procure/refine, and can be done in your garage, but if you live in a colder area you want to make sure you research gelling issues and allow your vehicle to operate in winter.
EDIT: The probability of them 'sticking' your car tank is minimal, to say the least. If you're in the habit of crossing scales in an 18-wheeler, that's a different story altogether.
"If your tank is ever sticked, and they find heating oil in it, you've got a serious problem."
Oh, dear. Don't tell me that there are diesel police?
My ark has chocolote, lots of it. need my comfort food.
I think the answer is very individual as to what, where or how you build your ark,
Where are you starting from?
Where do you live, can you move if you think that is best?
Where do you think (not feel or fear) things will end up?
What can you do that is reasonable with a hedge in case you are wrong?
...to hit the BUY button...
Stupid
Diesel:
Up here diesel prices don't move around as much. They tend to be cheaper than gas in the summer and more expensive in the winter.
sm_landlord (profile) wrote (in reply to...) on Thu, 9/10/2009 - 4:16 pm
Oh, dear. Don't tell me that there are diesel police?
Yes, and believe me, you don't want them to show you their sticks-
Don't tell me that there are diesel police?
yes virginia, there are, esp in the rural midwest.
From last thread:
Cinco-X (profile) wrote (in reply to...) on Thu, 9/10/2009 - 11:38 am replyIgnore userBarley (profile) wrote on Thu, 9/10/2009 - 1:02 pm
So, I'll no longer be putting any money into the US markets, only hard assets.
ditto that
Due to the anticipated drop in the USD and anticipating inflation, I am setting up a savings account in Canada and will park it in Canadian $$ there. If Mad Max scenario ensues, and you need to leave this country to live elsewhere, don't think our US government is going to let you take very many $$$ out.
HSBC bank, costs $200 if you don't open with at least 100k USD.
"Oh, dear. Don't tell me that there are diesel police?"
Most assuredly. Especially in rural areas.
Only recently, I passed a cattle auction where a large number of farmers attended. The state police were out with sampling tubes, pulling samples out of fuel tanks.
They were looking for untaxed gasoline and diesel, which is only supposed to be used in farm vehicles.
If someone is caught, they're usually charged with tax evasion.
"Euro - USD 1.4584 +0.0040 (0.28%)
USD - JPY 91.7200 -0.4400 (-0.48%)"
Wow. Looks like some of those dollars that Ben has been printing, have finally started to leak out.
USD - CNY 6.8291 +0.0005 (0.01%)
Is there some economic threshold where the Chinese stop their peg?
Where are you starting from?
Where do you live, can you move if you think that is best?
Where do you think (not feel or fear) things will end up?
What can you do that is reasonable with a hedge in case you are wrong?
Thanks for the reply, josap.
I'm heading home now, and I'm going to respond to those questions in a later thread, if I can find an appropriate one. I'd like to continue this discussion.
sort of on topic the old farmers almanac says that this winters will be very cold , the nws says not that cold. would this effect natgas prices?
Fascinating markets:
Insiders selling in waves ... market soars
Jobless claims stuck around 560K/week. ... market soars
Dollar plummets ... market soars
At this rate the US$ will be good for toilet paper but the Dow will be at 30,000. Or maybe all the insiders selling are buying new cars to pump up the economy.
Only recently, I passed a cattle auction where a large number of farmers attended. The state police were out with sampling tubes, pulling samples out of fuel tanks.
While I have no doubt a bored DOT inspector would target a cattle auction, if you're driving a Volkswagen TDI with no identifying 'farm' plates on it, the probability of being sticked is virtually nil. Even when I drove tractor-trailers that had 'Farm' written on the side I was never tested, so it's relatively rare in rural Canada.
home heating oil doesnt have the same level of quality requriements are auto diesel, but the product itself (hydrocarbon composition) is basically the same.
"They were looking for untaxed gasoline and diesel, which is only supposed to be used in farm vehicles."
Color me city slicker, hoocoodanode?
I suppose it would be pointless to ask why the distinction? The answer must be politics. Around here at least, the fuel tax was long ago "siphoned off" (sorry) for other spending, so I question the rationale.
"...if you're driving a Volkswagen TDI with no identifying 'farm' plates on it, the probability of being sticked is virtually nil."
No argument there. I'm just saying that, if they nail you, you've got a problem.
So, what's the moral?
If you're burning farm diesel in your TDI, don't take it to cattle auctions.
Blackhalo, Is there some economic threshold where the Chinese stop their peg?
Yes, when US workers are making trinkets for sale to the newly monied Chinese ...
yagij,
"Look no further than JPM for the source of long paper and short paper."
I was thinking more of ETFs like GLD. Yes, glod prices should increase in the inverse of a dollar decrease, but its still tempting to play the range from $850 to $1,000, based on recent price action. It would require a lot less captital to control the gold price then oil or treasuries, and I don't think the TPTB will be upset if glod doesn't go over $1K.
Or ask to see a warrant.
Ah the 4th amendment...
Some red dye and they are pretty much the same.
The dye is specified for diesel so that it can be diluted 10 fold and still be visually detectable.
If you put it in your tank, better run it dry before refilling, or the red will stay there for months.
That's a resounding beat--three cents higher than the highest estimate and almost double expectations.
No argument there. I'm just saying that, if they nail you, you've got a problem.
Absolutely. I never put coloured fuel in any commercial vehicles I drove, because there was always a chance I'd get pulled into a scale and my tanks dipped. However, in pickup trucks and cars, it was never much of an issue in Canada. I think most farmers considered it an additional subsidy.
The dye is specified for diesel so that it can be diluted 10 fold and still be visually detectable.
EDIT: This is why I'd never put it in any commercial over-the-road vehicle. The risk isn't worth the benefit, which is usually only a few cents a gallon anyway.
billwilson,
Don't forget today's market anomaly -- 30-yr T's rise on sale --DOH! (just pay no attention to the short, bald, bearded man behind the curtain).
"Yes, when US workers are making trinkets for sale to the newly monied Chinese ... "
But their currency is being devalued right along with ours. I'm not sure how "monied" that will be. As commodity prices rise, who calls uncle first? USAians at the gas pump? Germans? Japan? Or Chinese?
Break over.
Have a good day, what's left of it.
Cheers, mp.
you can learn all kinds of things on this board.
i never knew that heating oil and diesel were one and the same.
but one thing i would like to say
please put a pdf warning on links
laters mp
OT - looking for confirmation on one of the health plan questions - is it true that the plan will limit premiums, limit carrier overhead, and not have caps on payouts? If true, that will quickly drive everyone to the public option, as the carriers would be crazy to issue policies on that basis.
Just back from lunch....
Hoops has a site 401 Authorization Required that would be a good ark manual....
and i want to know what is going to happen to all of the health insurance companies if/when our insurance takes effect?
Blackhalo (homepage, profile) wrote on Thu, 9/10/2009 - 4:31 pm
"Yes, when US workers are making trinkets for sale to the newly monied Chinese ... "
But their currency is being devalued right along with ours. I'm not sure how "monied" that will be.
__
Sorry, you are correct. I took some literary license and it just didn't work.
I was thinking more of ETFs like GLD. Yes, glod prices should increase in the inverse of a dollar decrease, but its still tempting to play the range from $850 to $1,000, based on recent price action. It would require a lot less captital to control the gold price then oil or treasuries.
GLD's nasty bugaboo is that futures contracts can be settled with shares of GLD. You bought a contract with hopes for physical bullion, but you can end up with paper shares with more hurdles in redeeming GLD for bullion.
The price of the paper is different from the price of
in the marketplace--especially at the retail level. Just realize that the paper is mostly worthlessness & risk, and JPM and others can sink the paper market with HFT goodness if they want to do it.
The price of the paper is different from the price of XYZZY in the marketplace--especially at the retail level.
This is true for any value of XYZZY.
paper shares with more hurdles in redeeming GLD for bullion.
I didn't think you could redeem GLD shares for physical.
Am I wrong about that?
Terry (profile) wrote on Thu, 9/10/2009 - 4:35 pm
OT - looking for confirmation on one of the health plan questions - is it true that the plan will limit premiums, limit carrier overhead, and not have caps on payouts? If true, that will quickly drive everyone to the public option, as the carriers would be crazy to issue policies on that basis.
Here's a link to HR3200, one of the primary plans under consideration (Warning: PeeDeeEff) :
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf
Pay careful attention to Title 1, Sec. 102
US T long bond auction went well. Curious. Where the hell's the arb? Maybe it's coming?
C
You can in size.
Not sure for GLD but a common "creation unit" size where you can swap ETF shares for the stock/commodities backing the shares is 50,000.
It enables an arb should the ETF shares trade rich/cheap to the NAV of the fund.
In the end it doesn't matter. If the economy continues to suck, the demand for commodities will decrease causing a lowering of price. You might as well get a few shares of DOW or ADM. At least then you aren't paying a speculator's premium. As for me, I'm still betting deflation.
I didn't think you could redeem GLD shares for physical.
Am I wrong about that?
There is a minimum share requirement needed to redeem certificates for
:
"The Trustee, Bank of New York, does not deal directly with the public. The trust handles creation and redemption orders for the shares with Authorized Participants, who deal in blocks of 100,000 shares. An individual investor wishing to exchange shares for physical gold would have to come to the appropriate arrangements with his or her broker."
"However, the pattern of boom-bust cycles in household leverage suggests that people borrow for reasons other than their long-term economic well-being. For instance, they may have self-control problems."
No Shit Sherlock!
Thanks, Mike.
50,000 shares of GLD means I could never convert, and probably most individuals.
I don't mess with it, but I do need to understand it.
A good read:
U.S. markets protect the biggest, not the best Outside the Box - MarketWatch
Excerpt:
"The key insight from this research is markets depend upon political goodwill for their continuing existence. And not surprisingly, after a crash, when this goodwill is gone, the public demands changes, a retreat from markets. But what results is not necessarily total government control or socialism. Instead it gives even more clout to economic insiders, who, freed from market pressure, can outmaneuver or shut down rivals.
As Zingales said in a recent telephone conversation: "Generally most people don't have enough political power to change things. However, the truly powerful can use these sentiments to cause reforms that apparently cater to the crowd but really appeal to their own economic interest." "
yagij,
Has a post with exact info - it appears as if GLD creation unit size is 100,000 shares.
Speaking of wealth effect check out these clocks.
U.S. National Debt Clock : Real Time
Clearly we need to get our economy growing home equity again. I can't think of any other product we make that is as valuable.
yagij,
Any idea how long it takes to exchange GLD for physical assuming 100K shares of GLD? Seems like there are oportunities here to game the market pricel of glod.
In the very late 70s and early 80s I found an easy way to make a few extra bucks.
Go to the pawn shop, buy nice rings.
Take them to the local jewlers and sell them at a profit.
I didn't even have to wait a day.
Yancey Ward (profile) wrote on Thu, 9/10/2009 - 4:58 pm
Clearly we need to get our economy growing home equity again. I can't think of any other product we make that is as valuable.
In the current environment, the only way to do that is for homeowners to pay down debt, and pay it down faster than their houses are losing value. Unfortunately, that's deflationary.
If I painted a vault on the back wall of my shed and sold
based on the paint being dry I'd take $996 all day long. Worked for Bernie for decades and stocks.
More green shoots
Marijuana farming rebounds in economic hard times Yahoo! 404 - Page Not Found
"If I painted a vault on the back wall of my shed and sold
based on the paint being dry..."
You had better paint the vault on your Tardis for a quick getaway.
Yancey Ward (profile) wrote on Thu, 9/10/2009 - 4:58 pm
Clearly we need to get our economy growing home equity again. I can't think of any other product we make that is as valuable.
In the current environment, the only way to do that is for homeowners to pay down debt, and pay it down faster than their houses are losing value. Unfortunately, that's deflationary.
And for home (debt) owners to pay down mortgage debt they would have to pay up to 50% of the principal on the loan. Or 30%, or however much they are now underwater. Not going to happen,.
Unfortunately, that's deflationary. - C
Like a lot of other stuff going on right now. To me, it looks more like Japan, with a lot of dead banks walking, rather than Weimar Germany.
Nah, that's too hard. I suggest we transfer all mortgage debt over to the treasury. That way we can immediately start borrowing against the new equity again.
Good plan Yancey.
So, this means we should transfer the leveraging process over to the government, right?
what's rising fast along with the unemployment rate ?
and Marijuana 
B. Eason (profile) wrote on Thu, 9/10/2009 - 5:06 pm
So, this means we should transfer the leveraging process over to the government, right?
Umm.....who owns Fannie, Freddie, et al?
Some variation of that is going to have to be contemplated at some point. I had envisioned it more as a writedown premium the fed would give mortgagers. For example, forgive $80,000 in debt, and the fed would give the bank $20,000. Waiting for a significant percentage of the population's mortgage to go through foreclosure is taking too long.
Late last year I realized a few things...
1) Prices of anything imported would never be cheaper and selection never greater, as world-wide trade was clearly crumbling.
2) Redundancy matters when figuring out what you think you might need, when outfitting yourself for whatever wicked this way comes.
3) A "Bucket List" consisting of a couple hundred books i'd never read, mostly classics, etc, was a fine thing to have hanging around, no matter what.
Hmm.. so an unsustainable debt burden is bad for people, but is ok for the bankster buddies in Washington.
Flash forward 4 years I can see their next major workr entitled "The US Government debt. collapse and depression 2012"
Just a quick link from Johnny Law in Minnesota:
MSP - Commercial Vehicle Enforcement
Dyed fuel violations are expensive- so drive at your own risk.
So, does a couple of dollars savings in your jetta pencil out with the risk?
Someday this war's gonna end...
I wonder what happens if you do a comparison between the c4c geographic sales and the level of level of leverage. ?
Latest FOMC minutes. These guys are convinced we're in a deflationary recession/depression, whatever you want to call it.
FRB: FOMC Minutes, August 11-12, 2009
Any idea how long it takes to exchange GLD for physical assuming 100K shares of GLD? Seems like there are oportunities here to game the market pricel of glod.
1) I have no idea.
2) You will be competing with the likes of JPM if you are wanting to game the market price. Got to be able to make your weather.
splat (profile) wrote on Thu, 9/10/2009 - 5:11 pm
Hmm.. so an unsustainable debt burden is bad for people, but is ok for the bankster buddies in Washington.
Flash forward 4 years I can see their next major workr entitled "The US Government debt. collapse and depression 2012"
- Splat
The trick is to be quick on your feet and blame it on somebody else, and make sure you scream it louder and longer than them, thus turning it into an "opportunity"
JD- the reason that I stocked up on sweaters and clothes late last year and early this year.
The best thing that could happen if all that junk - have you noticed how many people earning a living selling junk- became more expensive. Perhaps then we can discover buying something doesn't help long in filling the void in peoples lives.
3) A "Bucket List" consisting of a couple hundred books i'd never read, mostly classics, etc, was a fine thing to have hanging around, no matter what.
....
I agree
I'd add
4) Practice skills while failure is still a learning curve, not a death sentence.
OT
but this is nuts.
Micheal Steel, head of the GOP, is saying that he doesn't know for sure wether or not there will be death panels in health care bill.
sorry, it just makes me nuts.
Citizen AllenM (profile) wrote on Thu, 9/10/2009 - 5:11 pm
Just a quick link from Johnny Law in Minnesota:
MSP - Commercial Vehicle Enforcement
Dyed fuel violations are expensive- so drive at your own risk.
So, does a couple of dollars savings in your jetta pencil out with the risk?
But what value can you put on the excitement factor of "getting over" on Johnny Law?
Latest FOMC minutes. These guys are convinced we're in a deflationary recession/depression
We need a good CNN style buzzword, "the deflession" ? "the replationary cycle" ?
scone (profile) wrote on Thu, 9/10/2009 - 5:14 pm
Latest FOMC minutes. These guys are convinced we're in a deflationary recession/depression, whatever you want to call it.
http://www.federalreserve.gov/monetarypolicy/fomcminutes20090812.htm
Can't be true; it wasn't on the MSM
one party in a two party system has gone completely crazy- and we wonder why the future looks so bleak?
That with leadership like this 30% of the country is still proud to call themselves Republicans?
Micheal Steel, head of the GOP, is saying that he doesn't know for sure wether or not there will be death panels in health care bill.
At least he didn't make a personal attack on a certain Kenyan born, Stalinist, Muslim dictator.
I personally welcome the death panels and will volunteer to serve on one, as long as a can bring my own list of names to get the ball rolling.
The Wide Elephant Party realized that when Bush II's approval polling numbers never went below around 25%, that they could fool 1/4 of the voting populace all the time, their constituency.
LOL splat
Hmmm . . .http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm?postversion=2009091014
As I am working from home, due to illness, I have been watching the TV news.
Everyother commercial is about health care. Both sides are throwing a ton of money around.
The other most often runnning ad is for mortgage modification help from one company or another.
Saw this on a billboard yesterday.
GMAFB.
Phshaw! What would an insider know anyway? I am borrowing against my liver to buy stocks!
If you told me 2 years ago that I'd be taking a lively interest in the FOMC, I'd have said you're nuts. Now I have a portfolio to manage, and a husband who thinks I'm a financial genius. No pressure or anything, but I am in the market for brown-colored lower garments.
mortgage modification
......
I first misread this as mortgage 'mortification'
josap
same thing on radio. health care(against it) mortgage modication and yes "you can buy new home with no money down" commercials
Joanna,
they may really be the same today.
Pardon me for stating what used to be obvious but I really feel the need to expose the propaganda today.
MEW = Taking on DEBT and getting poorer!
The Wealth Effect = Taking on DEBT and getting poorer.
Credit crisis = DEBT crisis.
Credit is frozen = DEBT is frozen.
You need a good FICO score so you can get access to more DEBT!
Financial innovation led households to take on more DEBT than they could possibly repay.
Poor and struggling families can't get access to DEBT. (No SH%T, BFD)
Does anyone remember when credit was called DEBT? Would our response to the "crisis" be more debt if we still called credit debt? I doubt it.
The word DEBT had a negative connotation for a reason. The propagandists came up with the word "credit" because it has a more positive CONnotation.
Josap,
what? no tivo?
I can't tell you the last time I watched full ad during anything but a live sports broadcast.
Some interesting thoughts and chart porn:
Raymond James | Weekly Economic Commentary
The YoY Wages and Salaries are of particular interest, since the real has, for perhaps for the first time in my lifetime, edged above the nominal.
They wouldn't be spending money on those ads if they weren't getting businss from them.
Gawd, this is never going to end.
Forclosure help along with "buy now". Filling up the faris wheel.
Yancey Ward (profile) wrote (in reply to...) on Thu, 9/10/2009 - 5:26 pm
Phshaw! What would an insider know anyway? I am borrowing against my liver to buy stocks!
Smart move; your liver will actually grow back-
I can't tell you the last time I watched full ad during anything but a live sports broadcast.
I don't even watch sports live if I can help it. Let it spin up for an hour, then watch commercial-free.
yagij,
"You will be competing with the likes of JPM if you are wanting to game the market price."
Not compete with them, go along with their trade, if you assume the premise that the glod price is capped at $1K. Anyway its been profitable lately, but who knows what the future will bring.
Democrats beilieve evey Republican proposal will damage the country. Republicans believe every Democratic propasal will damage the country.
I think the Dems and Repubs are both spot on.
Jim luvs him his cable TV mute button, and a window to look out of during commercials. Better than TIVO because you get a break (which works for getting a glass of water, a bottle of beer, or to pee).
I told BofA that I had two of them. Borrowed against both.
Glod may have a firm run beyond $1000. I'm hearing enough chatter about it and not just from the kooks. The problem will be when people get ready to cash in their gains. Additionally, I have difficulty seeing any industrial company that uses gold having fun anytime soon. Not even a neophyte in gold related manufacturing, but I imagine those that see gold as a good conductor of electricity are going to be clamoring to substitute some other metal or starting to lose business.
Interesting, from the FOMC minutes:
"The staff presented an update on the continuing development of several tools that could help support a smooth withdrawal of policy accommodation at the appropriate time. These measures include executing reverse repurchase agreements on a large scale, potentially with counterparties other than the primary dealers; implementing a term deposit facility that would be available to depository institutions in order to reduce the supply of excess reserves; and taking steps to tighten the link between the interest rate paid on reserve balances held at the Federal Reserve Banks and the federal funds rate."
In other words, they are fully aware of the hyperinflation danger. And if I'm reading this right, they want to be able to raise rates to bribe the banks to hold reserves, rather than lending it out and increasing money velocity. They also seem to be worrying about the consequences of withdrawl-- when the Fed money recedes, the zombie banks are revealed as insolvent, and we're right back where we started. They'll have to withdrawl slowly over time, catching the banks as they fall, to keep the panic down. That explains BFF pretty well. If that scenario takes hold, it's pretty radically deflationary, it seems to me.
Angry Saver (profile) wrote on Thu, 9/10/2009 - 5:34 pm
Democrats beilieve evey Republican proposal will damage the country. Republicans believe every Democratic propasal will damage the country.
I think the Dems and Repubs are both spot on.
Cinco thinks Angry Saver is spot on. Cinco has also decided to refer to himself in the 3rd person
So the problem was household debt and NOT cheap credit!
Thanks, National Progressive Radio!
Smart move; your liver will actually grow back-
:tequila: :BFF:
..........
Glod I hope so!
I have another 3 day weekend on the agenda
SACRAMENTO – State Controller John Chiang today released his monthly report detailing California’s cash balance, receipts and disbursements in August 2009. Total General Fund revenue was down $237 million (-3.6%) from estimates in the recently amended 2009-10 Budget Act.
“My office’s stress-testing of the budget anticipated some revenue loss, so the State’s cash outlook has not changed. While those revenues can be made up in the months ahead, I am concerned that they constitute nearly one half of the State’s $500 million budget reserve,” said State Controller John Chiang. “What is more troubling to me is that consumer activity and unemployment continue to be a drag on California’s recovery.
Chiangangreen,
Snatch blade of revenue from hand, grass hoper...
Joanna (homepage, profile) wrote on Thu, 9/10/2009 - 5:39 pm
Smart move; your liver will actually grow back-
..........
Glod I hope so!
I have another 3 day weekend on the agenda Beer In Vino Veritas :tequila: :BFF:
You can remove 95% of a healthy liver and it'll regrow, but if it's wrecked by alcohol or Hep-C, not so much. Sorry 'bout that
Veni Vidi Visa
As I have said earlier the the challenges that the Fed faces are far less than most people anticipate. In fact I think this probably the easiest time for the Fed. The bond market will initially do the work for the Fed. If they don't the Fed has 1.7Trillion in securities to bleed into the market. Only later will they be required to validate the higher rates with a Fed Funds rate increase. Plus now that they are paying interest on reserves they can increase that interest rate without increasing the more visible Fed Funds rate. Both these two factors remove the greatest challenge to the Fed.- dealing with the political fallout.
A steeper yield curve that would ensue is also exactly what the Fed would like to help the banks recapitalize.
The Chinese support of the bond market - which kept rates low even as the Fed was tightening is a much less significant factor if at all. The purchase of Treasuries by the Chinese is no longer the major part of the government deficit.
OT
- NY Times
September 10, 2009
Geithner: Confidence Has Returned to Markets (Read GS stock is up, way up; all is well with the world!)
By THE ASSOCIATED PRESS
Filed at 5:22 p.m. ET
WASHINGTON (AP) -- Citing emerging financial sector stability, Treasury Secretary Timothy Geithner said Thursday that a number of government rescue efforts in place since the Wall Street crisis are no longer needed and that banks will repay $50 billion in rescue funds over the next 18 months.
Geithner, testifying before a congressional watchdog panel, said the nation still has a ways to go before ''true recovery takes hold.'' But he said improved conditions in the banking industry have prompted Treasury to begin winding down emergency support programs implemented after the collapse of Lehman Brothers last year.
''The financial system is showing very important signs of repair,'' Geithner said. He added later: ''I would not want anyone to be left with the impression that we're not still facing really substantial enormous challenges throughout the US financial system.''
The cautious but upbeat tone reflects a growing push by the administration to present the government financial rescue efforts as a success amid lingering public apprehension about the economy.
Geithner was testifying before the Congressional Oversight Panel that monitors Treasury's $700 billion financial bailout that President George W. Bush and President Barack Obama used to shore up not only banks but the auto industry as well.
Banks have already paid back $70 billion of the $250 billion that the government injected over the past year to boost their liquidity. Geithner noted that only $11 billion of that infusion has occurred since he became Treasury secretary earlier this year. He said dividends on those infusions and the repurchase by banks of warrants held by the government has also generated $12 billion for the government. Overall, he said, the government realized a 17 percent return from 23 banks that have paid back the government in full.
Geithner said a major Treasury program that had been used to guarantee up to $3 trillion in money market mutual fund assets would be closed down on schedule on Sept. 18. The program had no direct cost to taxpayers and actually earned more than $1 billion in fees paid by the mutual fund industry.
That program was established at the height of the financial crisis a year ago after a large money market fund called the Reserve Primary Fund ''broke the buck'' -- meaning the value of its underlying assets fell below $1 for each investor dollar put in.
Geithner said a series of emergency program initiated by the Federal Deposit Insurance Corp. and the Federal Reserve have also begun to phase out.
Still, unemployment stands at 9.7 percent and administration officials say it could rise to 10 percent in the coming months. Foreclosure rates are surging and the mortgage market remains tight. Geithner acknowledged that the economy would still face ''more than the usual ups and downs.''
''The classic mistake people make is they declare victory too soon,'' he said.
The government's bailouts have not been popular with the public and Geithner's testimony emphasized the positive returns from the various measures
Still, one protester sitting behind Geithner held up a pink sign asking: ''Where did the $ go?''
Elizabeth Warren, the oversight panel's chairwoman, said: ''Taxpayers still want to know how their money has been used and what difference their enormous investment has made.''
When Warren pointed out that bank failures are reducing the number of financial institutions, Geithner replied: ''Fewer every day, but that's sort of the necessary process of repair and restructuring that we're going through.''
The panel has been critical of government steps, arguing that in the past it has not received full value for repaid infusions of money into financial institutions. More recently, the panel contended that a significant portion of the government assistance to the auto industry will likely not be repaid.
Geithner pointed out that the number of large financial institutions has grown smaller since the economic crisis. But Warren cautioned that some of the remaining firms were larger than before.
''Are we more at risk on the question of concentration than we were a year ago?'' she asked.
''I don't think so,'' Geithner replied. ''But it depends largely on what Congress ultimately decides in terms of financial reforms.''
The administration has called for a series of regulatory changes, including requiring large, intertwined institutions to have access to more money to cover their risks.
- NY Times
Yeah, alcohol related liver damage == bad. Something like bullet wound damage == not good, but recoverable.
Credit is frozen = DEBT is frozen.
All good, Angry Saver.
I also find it helpful to think of credit as future-money.
If you spend future-money today, that leaves less to spend in the future. And, future-money spent today affects things like velocity, prices, and [I think] should be included in money supply calculus.
Followed the earlier link to insider sales/purchases and then went looking for charting kept up to date.
No luck so far. Anyone? Might be worth considering as indicative of a market turn.
[T]he initial economic slowdown was a direct result of an over-leveraged household sector unable to keep pace with its debt obligations.
.
And as employment continues to crater, and all the 'helping' poliicies are geared towards increasing indebtedness on the part of consumers with declining incomes...this ends well how? (besides for the banksters?)
So, presumably the Fed has the legal power to force the banks to give back the reserves it has lent out? And if so, and I'm leaping to a conclusion here, is that why they aren't too freaked about the hyperinflation scenario? In other words, they have the nuclear option, the MAD , strategy, should the banks try to increase velocity. But it's a bit of a standoff. I can see this going on for years, like Japan.
Hu's here,
Did somebody order a Chinese take-out?
Elizabeth Warren, the oversight panel's chairwoman, said: ''Taxpayers still want to know how their money has been used and what difference their enormous investment has made.'
Taxpayer money is being used to purchase 'toxic assets'
The Raw Story | US to start purchases of 'toxic assets' next month
The program is aimed at getting these toxic assets off the balance sheets of banks and onto the backs of American taxpayers.
Feels good huh !
''The classic mistake people make is they declare victory too soon,'' he said.
Self-criticism is refreshing in this day and age.
So, presumably the Fed has the legal power to force the banks to give back the reserves it has lent out?
I guess that since they created the reserves with computer clicks, they can destroy them with computer clicks.
That works fine, unless the banks have already lent it out.
Once the money starts circulating, it can multiply like gremlins and wreak much inflation havoc.
Yeah, alcohol related liver damage == bad. Something like bullet wound damage == not good, but recoverable.
.............
Oh well....best stick to the moderation plan. And zero tolerance for bullet wounds
On Aug 28, 2009 Barney Frank said he expects Ron Paul’s legislation to audit the Fed will pass.
Gee I wonder if this will happen before Taxpayer money is used to purchase 'toxic assets' from the too greedy to fail banks.
Ron Paul: End the Fed | The Big Picture
Once the money starts circulating, it can multiply like gremlins and wreak much inflation havoc.
Yes, everyone's well aware of that. But the interest paid on the reserves is stopping that scenario, and if the Fed can take back the money instantly, the banks have will not lend. The only thing this money is doing right now is slowing the death rate of the banks. So presumably BFF will be going on and on. And all of them are protected by FDIC and other programs. So ultimately, all this comes back down to the taxpayer. That still seems deflationary to me.
yagij,
I had a crazy drunk great uncle. Helped build Hoover dam, then quit the civilized human race. Hunted and fished and drank. When his eyesight finally started going, they put him in a home. Hadn't been to a doctor in decades, and after his routine physical...docs couldn't figure out how the man was still alive. His blood alcohol level was permanently high...his body's tissues were basically dead or in suspended alcohol animation...and his liver was totally shot. Lived in the home for 10 years. Broke out every Friday night to go get drunk. The docs told him each year he should be dead..but he kept on ticking til 83, outlived two of his doctors. Smoked like a chimney too. Some people just break the mold. He blew off his thumb after hunting when drunk..had the sense to pick it up...but they couldn't get it re-attached. Attached it to a chain and wore it around his neck...really interesting fellow. Cursed like a sailor, learned a lot from him. I think he finally died just because he was bored.
The state police were out with sampling tubes, pulling samples out of fuel tanks.
Good idea to invest in a 2nd 10gal tank hidden in the trunk or body. Filler cap behind the license plate of course.
As losses continue in RRE,CRE, CC loans, the banks need to keep the reserves. From what I see it will be several years before losses slow down enough for banks to even think about lending out those funds.
And if jobs don't come back, no one will want to borrow anyway. At least I hope not.
But the interest paid on the reserves is stopping that scenario
Is it the interest, or is that the banks know they have billions in bad loans to write down against those reserves?
For whatever reasons, I agree with you about the reserves staying put.
FYI: I've been wrong before.
I had a malfunction with the poll this week.
Please cast your guess at the "BFF Poll Vote Here" link.
Gulf Stream Mysteriously Slowed
Now a new report has identified the two major factors behind the high sea levels—a weakened Gulf Stream and steady winds from the northeastern Atlantic.
The Gulf Stream is a northward-flowing superhighway of ocean water off the U.S. East Coast. Running at full steam, the powerful current pulls water into its "orbit" and away from the East Coast.
But this summer, for reasons unknown, "the Gulf Stream slowed down," Edwing said, sending water toward the coasts—and sea levels shooting upward.
Adding to the sustained surge, autumn winds from the northeastern Atlantic arrived a few months early, pushing even more water coastward.
Sea Levels Rose Two Feet This Summer in U.S. East
"The Day After Tomorrow". Good movie. Life meet art. Can real life get any weirder?
My favorite character was a gent similar to your great uncle, he was a waist gunner on B-17's, and he figured he was a dead man anyway, so he'd take over on guys 24th or 25th missions for $100 a pop. He figured he must have flown around 65 missions over Europe.
When he got home alive it really messed with his future plans because he didn't have any...
Please have a look at this HSBC Singapore.
To open contact them, theyll send form, fill and get attested by HSBC office here.
Send it and account is open.
Foreign currency current account | HSBC Singapore
"When Warren pointed out that bank failures are reducing the number of financial institutions, Geithner replied: ''Fewer every day, but that's sort of the necessary process of repair and restructuring that we're going through.''"
/////////
wow, talk about showing your hand! "Well, Liz, the whole idea is to slip hundreds of billions under the table to the dozen or so most politically connected institutions. If we can also serve them up entire markets on a platter - like JPM with California - that's all the better! Second-tier banks just don't enter in the political calculus, Liz. Go big or go home!"
Saw this today too E.Costs:
Solar wind surprise
THANK YOU KEN!
The only thing this money is doing right now is slowing the death rate of the banks.
It's doing something even more important than that--it's creating inflation expectations in the minds of many. Nothing wrong with deflation as long as enough people think it could turn on a dime. Deflationary spirals require deflationary expectations; deflation alone isn't enough.
In anticipation of BFF - Corus may not go down tomorrow. If the bank formed by Stephen M. Ross, Jeff T. Blau, and Bruce A. Beal, Jr. is the successful bidder, they only have a shelf charter with the OCC, and if the FDIC accepted a bid from them, they still need to complete the OCC application process and submit an operating plan before they get the actual charter. That may stretch it out a week or two.
Interesting thing is if they formed a bank, they must be planning to bid on deposits in a failed bank, not just loans - they only need the bank charter if the plan of accepting deposits. This goes contrary to the good bank/bad bank stories of earlier this week.
Of course, they may not be bidding on Corus and even if they did, their bid may not be accepted, so who the heck knows.
Is it the interest, or is that the banks know they have billions in bad loans to write down against those reserves? MrS
It's both. There is a strong disincentive to lend, and an even stronger disincentive to do anything other than what the Fed wants. So the Fed preserves dead banks with one hand, and hands them over for dissolution to the FDIC with the other. After a couple of years, there are far fewer, but far larger, banks. So the systemic risk could actually increase. The toxic loans are another issue.
JD, Hu now going after service industry?
Previous thread:
"Do those [Catholic] principles find it jolly OK to "ration" coverage through the employer-covered, Blue Cross monopoly "private" system? "
No, they don't find it OK. As a Catholic and as a citizen I believe that everyone has a right to quality health care.
My old haunt Santa Anita racetrack, failed to receive a bid worthy of it being sold yesterday @ auction
Anybody been to the horse races lately?
Might get a few thousand people on a perfect weekend day, as opposed to 40,000 on the same day 30 years before...
It's doing something even more important than that--it's creating inflation expectations in the minds of many. - Y
I just can't see it. Everyone assumes the banks will lend, and inflation just explodes. But that's not in the self-interest of the Fed or the banks. It seems to me they would far rather have a mild deflation scenario, with stagnant growth and high unemployment. And the politically connected banks will survive, and even thrive, as Hollywood Hack points out. I'm beginning to think the "financial engineers" are going for Zombie America, not Weimar. Skip the hyperinflation, go straight for 20 years of stagnation.
Anybody been to the horse races lately?
Might get a few thousand people on a perfect weekend day, as opposed to 40,000 on the same day 30 years before...
The rake is too damn high. Seen any winning horse bettors lately?
"Gulf Stream Mysteriously Slowed"
Uh oh.
////"The Day After Tomorrow". Good movie. Life meet art. Can real life get any weirder?
/////
Interesting read. Thanks,
But now I have to watch the weather channel too?
once corus goes down we're done, right?
bernanke said that we wouldn't be japan 2.0
The biggest problem is the idea that bettors couldn't wager but once every 30 minutes...
pavel is the Gulf stream slows, buy wheat futures!
burnside
got something ends on 9-3-09
Insider Trading - Insider Transactions - Form 4
"pavel is the Gulf stream slows, buy wheat futures!"
Barley, our commodities account has been a bit into gold lately.
But now I have to watch the weather channel too?
............
Extreme weather reports are in my data point collection route, along with CR and BDI, etc.
Can't hurt to be aware.
If the Golf Stream slow enough, go to Cosco with a U-Haul.
Watch the snow level this winter on the east coast.
Been talking about Russian wheat for awhile now...but what do I know. I'll just keep staring at the sun.
"Been talking about Russian wheat for awhile now"
Contracts versus the stuff itself?
What would do with a stock certificate., frame it and hang it on the wall ?
When every one head for the exits its too late.
At least gold looks pretty and I am sure there will be a woman somewhere wholl be happy to have it.
Please be altruistic and donate the gold and dont consider exchange.
There are some aggressive strains of wheat rust spreading. Not to mention drought and water rights issues in a lot of wheat growing areas.
I'd buy actual wheat, just in case.
Geithner said that financial institutions are no longer today in the dire situation they were when the program to buy toxic assets was being formulated last year. He added that the improvement in financial-market conditions have "created the positive backdrop to proceed with the program at a scale smaller than initially envisioned."
The Treasury official said "dollars will start to be in invested" in the program, known as the Public Private Investment Program, later in September or in early October, further on than initially anticipated. "Private capital would not have come in had these entities not had enough capital," the official added. "We are not dealing with a situation of zombie banks."
Geithner: Treasury phasing out its bank bailouts - MarketWatch
PPIP =
Silver was indispensable to the film industry until along came a digital spider...
Things Change~
"There are some aggressive strains of wheat rust spreading."
Even in the worst days of the late 80s early 90s there was bread in the shops in Moscow. The authorities would go to any length to keep it there, because they had a good idea of what would happen if the shops ran out of bread. As in the 70s, if there were any problem with wheat, the Russian government would pay premium price for it world-wide.
scone (profile) wrote
It's doing something even more important than that--it's creating inflation expectations in the minds of many. - Y
And the politically connected banks will survive, and even thrive, as Hollywood Hack points out. I'm beginning to think the "financial engineers" are going for Zombie America, not Weimar. Skip the hyperinflation, go straight for 20 years of stagnation.
It's called Surgery Room Triage...financial engineering triage. In policymakers' minds, allowing deleveraging to run its natural course simply is not an option...too much wealth destruction occuring in the Top 20% (the folks who count)....2007-08 was definately an Equal Opportunity asset valuation destroyer...didnt matter if you were Fuld, Pelosi, JimBob,J6P, Harvard U's Endowment or a subprime condo flipper, your biz and ur portfolio took a hit.
The Fed has bought Zombie banks lots of time...time for Wall Street to churn and find more bagholders, domestically (J6P and his MM account maybe) or Overseas.
The Triage aims to kill off the Debt Deleveraging option...which kills off America's only hope for financially sustainable economic models.
But..if they, Team O, embrace mortgage cramdowns...could be a sign of major change in thinking...regime change w/o changes in bodies?
EDIT: oddly tho, by using Mish's definition of deflation...I think debt deleveraging eventually prevails anyway...but what couldve been completed in maybe 3-4 years is now being dragged out, policy after policy....which is why any change in Team O's take on cramdowns (after they get the memo from Goldman Sachs (snark there))) will be interesting.
pavel: no Gulf Stream, no fish, no fertilizer for SA, no crops...bet wheat futures will pop huge once the water tracking is confirmed (then again current crops look like bumper year, so who knows). You can jump on the band wagon by tagging some AG funds too. I'm tied to AGB oin the TSE. Get the upside of a good currency, trding below nav as a closed fund, and good exposure to the sector. I'm out of papaer gold and took a differnet approach to catch some upside on silver.
Pavel,
I am a seeker not a trader. With my skill in predictions, I will stay away from the casino. Anyway, the original story on the Gulf stream came out late Spring/early summer. I actually posted something here on it.. Anyway, gulf stream alters, Great Britain, Russian wheat belt, and US east coast have a lot to worry about. No one knows what is going on here, just lots of puzzle pieces. Decline in sunspots, new cooler interstellar cloud, solar winds acting strange, abnormal tides, cold water warming, warm water cooling....list goes on and on. Regardless of the hype of climate change, I think we are about to embark on some extended abnormal weather for a few years. But I am probably wrong on this front too. Still sticking to my little ice age guns though.
"Still sticking to my little ice age guns though."
Vonbek777, wild cards are always possible.
Can someone loan me the money to subscribe to The Economist and then can someone else read it for me and summarize the contents? People on this board are so generous.
Probably because atlantic deep water format has slowed.
This has been a predicted /possible since around 1994 based on climate change scenarios.
North Atlantic Deep Water - Wikipedia, the free encyclopedia
Its probably a herald of bigger changes.
Too bad patentrenter isnt around.
Just a reminder that the BFF Poll is open at the polls link.
I will gladly pay you Tuesday for a hamburger today...
HG - where?
Any of you keep on eye on financial bubbles?
I liked the 1980's Silver & Tin Bubbles and the late 1980's Ferrari bubble was a hoot (prices went to the moon, because old man Ferrari was dying), but the kid oriented bubbles were the best.
Kids are just as fickle as we are, and watching the short-lived sportscards, POGS, Beanie Baby and other tiny bubbles involving them really isn't all that different than watching a bunch of grown-ups do the same thing with homes and stock.
"pavel: no Gulf Stream, no fish, no fertilizer for SA, no crops"
Barley, no Gulf Stream would be of the utmost global significance. I find it hard to believe it can happen. But what do I know?
Joanna - You cant store wheat very easily - it gets mold and then its worthless.
Harvard endowment posted 27 percent loss
And that includes March-June... furthermore, harvard's got a ridiculously high exposure to PE
gabyjan, thanks very much. I think I can work with that.
At the polls link at upper left.
In policymakers' minds, allowing deleveraging to run its natural course simply is not an option...too much wealth destruction occuring in the Top 20% (the folks who count)... ADBoth
The de-leveraging is ongoing, but at a trickle, to slow it down. The hyperinflation scenario, as you say, would kill all wealth. But a Japan-like scenario preserves the upper classes and keeps a lid on social unrest.
pavel: There are two prior occasions in the 1900s when Guld Stream ocean waters changed some and lots of problems occured. El Nino is apparently happening this year...So I feel sorry for EHP because the 2010 Olympics might be a bust...there wont be much snow.
Hmm...baseball cards....
For some reason my grandfather got the idea that I liked baseball cards and he bought me packs religiously. I didn't have the heart to tell him, I didn't collect them. Anyway...come college...I have a whole closet full of unopened cards. Fates aligned, I took them to a dealer...and made a tidy sum. Helped me out in a tough time.
Pavel, stuff I read talks about the Gulf stream moving south, not disappearing. If it moves south, the cold air buffer goes with it.
Barely, you can buy wheat that is gas sealed, Forget what it is called.
http://kansascity.craigslist.org/for/1367831686.html
"EHP"
Sorry, unfamiliar with that acronym.
josap - really TFT
Yeah, alcohol related liver damage == bad
Uh, oh.
EvilHenryPaulson...who doesn't post nearly enough to my liking.
Joanna - You cant store wheat very easily - it gets mold and then its worthless.
.............
Wheat does store very easily, at least in my personal experience, and from what I've read. Lots of stories about wheat sprouting and being edible after 10-30 years of low humidity storage. That's why granaries were built.
One thing about bumper crops in areas not hit with climate/pest troubles....like Pavel says, Russia will do what it takes to keep bread on the shelves. I'm thinking US farmers will sell to the highest bidders.....
Climate change consequences in the Arctic:
Arctic Under Siege :: Discovery Earth :: Discovery Channel
Pavel,
North Atlantic Deep water formation failing, gulf stream flows shut off, deep water formation shifts to Pacific North West (alaska).
These scenarios were hypothesized researched over two decades ago.
It was standard oceanography grad school fare.
There has been evidence of such scenarios in the past.
Google "North Atlantic Deep water formation" for more details.
Decision Analysis time. Picked up a speeding ticket last week.
Background:
Perfect driving record for 12+ years, no tickets, no accidents.
Options:
1) Pay ticket -- $144
2) Defer Ticket -- $0 if clean record for 1 year. $144 and no recourse with another infraction. Can only defer once every 7 years.
3) Retain Lawyer -- $400
--10-20% chance he can get me off. $400 Total.
--70+% chance he can get ticket knocked down to 2 non-moving violations. $648 Total.
--Last resort is still deferral. $400 Total. Potentially $544 with an infraction.
What would you guys do? I'm leaning towards deferral. Not sure if insurance would go up with a ticket, or by how much. It would be nice to keep the driving record clean, but the lawyer option seems expensive. Thoughts?
scone "In policymakers' minds, allowing deleveraging to run its natural course simply is not an option...too much wealth destruction occuring in the Top 20% (the folks who count). .. ADBoth The de-leveraging is ongoing, but at a trickle, to slow it down. The hyperinflation scenario, as you say, would kill all wealth. But a Japan-like scenario preserves the upper classes and keeps a lid on social unrest."
So we agree.
But the big wild card is double-digit joblessness plus furloughs, etc. Even before it could lead to pitchforks (Im not in that camp anyway, after all, we're not France where they riot easily)....it feeds deflation by lowering demand.
I think at best they're gonna try sequences at reinflating a Goldilocks-type (perfect size) Mini-bubbles that are the perfect size to absorb <some" joblessness but which will naturally burst in 18 months. Wash, rinse, repeat.
And that's the dream goal of TPTB.
"The Arctic as we know it may soon be a thing of the past,"
If history has taught us anything, and using the immortal words of Public Enemy, it is "don't believe the hype, don't don't don't don't believe the hype.."
pavel,
I am watching daily the refreeze news coming out of the north. A very few are seeing signs of actual ice growth, granted still way down below historical levels. Most are painting a grim portrait of an ice free summer arctic. This winter will be interesting to watch and see what actually happens.
Defer if the ticket will not show up for your insurance.
Defer if you are really carefull for 1 year.
Never take wheat advice from someone named barley.
Gav - I got one of these a few years back. After some peronal research, the "offence" was noted on a piece of roadway that was privately owned and therefore I could not be ticketed by the local constabulary. The judge ruled in my favor and all was well...The judge said I was entitled to costs but I settled for $1.00.
btw did you know some speed radars gizmos, if not calibrated right, cannot accurately meassure the speed going up or down very steep roads, who knew
Best option is to stop picking up those tickets.
Just leave them where they lay.
racial - lol
burnside
you are welcome
Vonbek777 (profile) wrote on Thu, 9/10/2009 - 3:56 pm
I am watching daily the refreeze news coming out of the north. A very few are seeing signs of actual ice growth, granted still way down below historical levels. Most are painting a grim portrait of an ice free summer arctic. This winter will be interesting to watch and see what actually happens.
Whainthehell are you talikinabout?
There's a lot of multiyear ice. The sea surface coverage is above 2008 and 2007 and average temps are lower than in years. Every climate "scientist" asked for a projection has been embarrassingly wrong in their projections for this year. The whole theory is busted.
Pavel, this may help defragment the news coverage on Gulf Stream.
RealClimate: Gulf Stream slowdown?
Seriously, though, with your record, just defer it. The lawyer route isn't even an option in my opinion, and your insurance rates shouldn't budge with just a speeding ticket in your case.
I always like to go before the judge and plead inanity.
I think at best they're gonna try sequences at reinflating a Goldilocks-type (perfect size) Mini-bubbles that are the perfect size to absorb - AD
The guys at Baseline Scenario think we live in perpetual bubble land, due to the way the system is structured, especially the Fed.That explains the stock market right now. But that's happening against a massively deflationary background. I don't think a mini-bubble or 2 is enough to trigger hyperinflation. And jobs aren't coming back anytime soon. So I guess I'm going on record as seeing a Zombie America scenario.
Gavshire,
If you got in Jericho, Arkansas, watch your back in court.
I agree with you. But many people don't...and that's the ideal scenario. Mild deflation but with inflationary expectations sufficiently widespread to keep everyone from simply shutting down and waiting out the spiral.
This has been Bernanke's play ever since he made the helicopter speech. It's been a long, well thought out bluff.
scone, Yalt, count me in; I think you're right.
"I don't think a mini-bubble or 2 is enough to trigger hyperinflation. And jobs aren't coming back anytime soon. So I guess I'm going on record as seeing a Zombie America scenario. '
I agree...minis wont do it. And Mish's definition explains why teh Fed's Trillions havent caused it either.
But there are a lot othe rfactors....outside the US that affect this. Makes it hard to say how long the status quo of today can last.
Im thinking...not long.
Gav......defer the SOB, get a dozen tickets, then die..........that'll teach 'em
What's to contemplate - #2 - with any luck $144 in a year will only really be $86 or still 0.
thks for the advice all! Probably going to go the deferral route. Since the ticket was on the other side of the state it isn't worth my time to contest in person -- hence the lawyer option.
It would be fun to show up in court and waste a ton of their time though....