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CR That is a brave header! Very brave.
Wow, more synchronicity. Never heard of Minsky, but I will read him asap. I was just discussing this afternoon whether or not capitalism operated like fire. Larger it gets, the more unstable, and ultimately gets out of control until it burns itself out and sets up the conditions for a rebirth like a phoenix. Point being, it is always a net destructive cycle.
While cute stuff. I have now moved onto Kondratieff. Provides some insight into longer term cycles and provides for some need to consider the obvious.
Yeah but at least the recession is over. So we got that going for us.
Stiglitz, Minsky...A bit bearish.
The question is not "if", but "when".
Weeks, months, years?
Well I need all the book suggestions I can get. Read the basics, but most of my focus was on international diplomacy, not economics. Why I hang out here a lot, completing my education. Thanks for the suggestion.
there is nothing wrong with laissez faire capitalism
that cant be cured by hungry angry mobs
Another Mish disciple.
There is nothing wrong with capitalism that a little Hopalicious Change-o-nomics can't cure.
So if Stiglitz and company figure out how to measure well-being, and if they can get capitalism to maximize it, then would a Minsky moment create a real depression (in the literal sense and en masse)?
Jah, our Minsky moment.
Well, batten down the hatches, I think interesting times are upon us again.
Family discussion today was to liquidate all of our debt possible and batten down the hatches.
No good place for cash- so back to the banks- they can eat it.
Hard assets are the only place to hide for a while.
The markets are screwed- the returns are not there- no real profits, no real bull market.
Japan with a declining dollar.
Someday this war's gonna end...
Okay, hopalicious change-o-nomics and hungry angry mobs, and an almost fanatical devotion to William Kunstler. No wait, our three, amongst our weaponry, I'll come in again.
I think this post will somehow mystically push us to SPX 1050 this week. Still, we may need Timmay quoting from the Little Red Book live on CNBC and Ann Coulter's meditations on Schumpeter on the Fox Business Channel to take us to 1150.
Failing empires have many things in common:
from Wiki:
The term was coined by Paul McCulley of PIMCO in 1998, to describe the 1998 Russian financial crisis,[2] and was named after economist Hyman Minsky.
"In other words, the one person who foresaw the crisis also believed that our whole financial system contains the seeds of its own destruction. "
This is so typical of people who refuse to accept the consequences of Minsky's theory, even if it sounds right to them. Minsky doesn't claim that the economic system will self-destruct and rise from the ashes. That is way too extreme. He just points out that some long cycles have a sharp downward notch. If we just accepted that, and got on with it, it wouldn't be the end of the world, economic or otherwise. Instead, we agonize over the adjustment, and put it off as long as possible.
"Why I hang out here a lot, completing my education"
News flash: There is no completion. It simply evolves.
I never thought Minsky had any more doom than a close reading of Galbraith wouldn't also offer.
We are all Minsky now...
C
albrt,
You just conjured up an image of a Magician Obama sawing the Lady Financial Liberty in half...high pitched scream, a sheepish grin, and a quick panicked look to the side of the stage asking for the curtain to be dropped. 'Whoops~my bad!' can be heard from behind the curtain... weird, something tells me I am going to have a hard time going to sleep tonight.
Mish understands 1/2 the cycle.
He rants about Greenspan today, apparently unable to reconcile K-Wave and Greenspan.
Similarly, he castigates "protectionism" but today the current trade cycle is "absurd".
Damn, can we get some consistency in the Mish Bible?!
So, Minsky is to Kondratieff as Tolkien is to Wagner?
this is the wile e coyote moment many here were talking about years ago
off the cliff but not yet falling
then the realization occurs
http://www.fastforwardblog.com/wp-content/photos/Wile_E_Coyote_1.jpg
i dont blame obama for causing this, but i blame him
for blowing the last best chance we had to avoid a total shit storm
as the realization that ben tim and the prez cant stop the collapse
spreads to the TPTB and the financiers and their money minions
the house of cards will fall
It's a good thing the level headed bankers were there to prevent irresponsible lending and the Wall St. financiers backed them up by providing constant vigilance in the form of price discovery.
"can we get some consistency in the Mish Bible?"
Um, no. What we need to do is outlaw unions so Wall Street can become less powerful and workers can be paid more.
Barley,
Bad choice of words. Yes as an absent minded philosopher, I know nothing and will be a life long scholar...or at least a seeker. I am to the point where I am remembering more than I ever learned. It is kind of scary.
"So if Stiglitz and company figure out how to measure well-being, and if they can get capitalism to maximize it, then would a Minsky moment create a real depression (in the literal sense and en masse)?"
Good question, nanya, although I'll bet your tongue was in your cheek when you said it.
If we were to value free time, time spent with family, work in the home, health etc, then I think a big increase in UE, a classic element of a Minsky moment, would be substantially cushioned using the Stiglitz measures, especially if UE benefits were decent.
It is a strange feeling reading about this sudden interest in Minsky.
Ever since I read "The Great Reckoning" by Davidson and Rees-Mogg in the early 1990s, the idea sunk into my head that this time was coming. There were a number of books published around that time and earlier that predicted pretty much what is happening now. However, they were all early in predicting when it would happen - most said that the late 1990s would be the collapse.
The genetic weakness of capitalism goes back to John Locke, but I'm about to take cupcakes out of the oven, so wait a second.....
Hollywood Hack,
So, Minsky is to Kondratieff as Tolkien is to Wagner?
Them be fighting words for me. Love a good Tolkien/Wagner debate.
broward - I read Mish. I have trouble with the oppressive nature of his one way perspectives sometimes. He has the brains and I wish he would stand back and give some pic of the forest for the trees so I can appreciate his insights.
For those who like to read, I suggest doing some research on "Winter" and Kondratieff. I do NOT take his thoughts as gospel but thet sure are interesting
I deleted Mish in my bookmarks. I couldn't take the union bashing and "wages must fall" drumbeat anymore. Wages are falling enough without any help from Mish and his acolytes.
Wagner - wonderful moments, awful quarters of an hour.
Tolkein - wonderful moments, cycles of starbirth and total entropic decay between chase scenes.
C
not much to debate - Wagner was the greatest artist of the 19th century who did more to create the world of the next century than any single person, Tolkien was an academic and talented linguist who wrote some interesting books.
Vonbek777 - For me I now forget more that I knew than I'm learning now.
Wait, frosting time, but this has to do with unlimited accumulation of wealth
does anybody out their know
regarding the squirrel recipes
if you run out of squirrel
can you substitute bankstas?
Speaking of the Yen, do we gently break the 90 mark or crash through it last what happened on Friday? I'm not sure what to think of this falling brick we call the Yen.
well, i dislike almost everything Wagner made outside the Ring and 'Tristan'. So, yes, plenty of awful to go around from "Meistersingers" alone.
mock - we had this debate years ago your memory must be fading - use Spam instead
I'd rather take the nuts from banksters than from squirrels.
"wages must fall" drumbeat
this is the part Mish doesn't understand.
Work is finite which creates a tragedy of the commons issue.
Redistributing work fixes a lot of problems.
A lot of problems are workarounds over the past sixty years to account for shrinkage of real work.
Falling wages exacerbates problems, it does not fix them.
.
Mish and Billy Beck like simplistic answers.
They can tell me how we got here but they can't tell me WHY.
That's a key problem with their proposed solutions.
There's nothing wrong with Ponzi finance that more Ponzi finance can't cure.
yagij - the real story will be ith US 10yr.
No, that's the other other white meat.
"The introduction of money eliminates the limits of accumulation. Locke stresses that inequality has come about by tacit agreement on the use of money, not by the social contract establishing civil society or the law of land regulating property. Locke is aware of a problem posed by >>> unlimited accumulation<<< but does not consider it his task. He just implies that government would function to moderate the conflict between the unlimited accumulation of property and a more nearly equal distribution of wealth and does not say which principles that government should apply to solve this problem."
How was the unlimited accumulation of wealth to be justified? After all, there was a well-established moral tradition in Christianity that discouraged avarice, greed, and usury. The New Testament had long inveighed against needless acquisition: “Lay up not for yourselves treasures on earth,” “For what shall it profit a man, if he shall gain the whole world, and lose his own soul?” (Holy Bible, 1611/1952, pp. 1237, 1297).
John Locke, articulating the soon-to-be prevalent view, argued that an individual who encloses land and cultivates it increases its yield so that the acquisition of land generates more wealth, which is presumably available to others in the forms of expenditures, jobs, charity, etc. With this argument Locke simultaneously helped to attenuate a serious moral problem intrinsic to capitalism and created an ideological view of accumulators as benefactors (Locke, 1690/1952, pp. 16-30).
http://www.academyanalyticarts.org/u'ren.htm
i used to believe that, and my faith in that cost me a nice chunk of gambling money.
but i now know that we could be at a nickel to a yen or a jackson to a euro, and the fed would still be supporting treasuries at whatever rate they want.
Yalt - Mish?
Broward,
In regard to your pigged comment- wrong level- I slave for the state- we already had on guignol in April- next is the pay cut for a day off.
Still serious about hunker down mode- we only need/want a few more things. The rest would be opportunistic stuff.
If the dollar suffers severe damage over the next few months, we will have a dark start on our manufacturing capability onshore.
I predict mp becomes a multimillionaire of new dollars as a result of his endeavors;-}
Someday this war's gonna end...
Uh oh, Shanghai B Shares (the big nose ones) elmo, and Shenzhen Bs have just followed:
Bloomberg.com:
Personal Finance
Looks like someones are getting irritable with the tyres vs chickens trade discussion.
C
Doc -
And then came Hobbs
Barley and HollywoodHack --
The Bank of Japan has been printing money for a couple of decades now.
Looked at the yield on the Japanese 10-year lately?
Betting on a U.S. bond crash takes some serious cojones. More than I have.
before BW was dropped, the game was more transparent and logical. the physical presence of PMs on the planet made wealth accumulation a reasonable component of a functioning society. now, calvinball at the roots and calvinball at the leaves.
I am starting to get bullish on the Yen, but still figuring out a way to capture that gain without just "buying" Yen. I'm taking a wait-and-see approach to see where the BoJ decides to defend this time. Last time was 89, and this time, I'm thinking 85. Wherever the BoJ steps in, it will only be a short-term measure because our financial leadership has decided to
the USD.
I'm with Allen that hard assets are about as good a place to hide as possible for now. Production looks somewhat risky, but you will be able to get something out of booze and PMs.
Edit: Unless we get to 85 by the end of this month--which at the current rate is possible--then it may be lower. I agree with Nemo that the BoJ has been on the QE train longer than we have, but if it isn't at 85, I have no inkling where that new border will be.
"There's nothing wrong with you that an expensive operation can't prolong." (Monty Python)
perhaps, "There's nothing wrong with the economy that additional debt and liquidity can't prolong."?
this was my point. i got off the TBT knucklehead bandwagon above 50, at least my most recent play on that one wasn't as disastrous as my forays 2003-2007.
still not totally convinced that the PPT doesn't have a few big yellow rocks for the old pipe this week
Vonbeck777 - "Stabilizing an Unstable Economy" is Minsky's theory in book form. Warning - this is not a work of stunning clarity. The Levy Institute and Steve Keen (Debtwatch) are self-described disciples of Minsky. They also write well.
wrong level- I slave for the state
I wasn't sure but I was mostly funning with you, Allen. I have to admit, I applied for a position in Phoenix last week, but only as a significant career advancement.
Nemo - I'm not betting on a US bond crash (althought that might be nice) I'm saying weezz is pricing in a 3-5 year window of near negative growth...all my opinion of course.
Hollywood Hack,
Well said...and I will not disagree with your point of view, but for me...having delved into Tolkien's work and volumes of history both real and imagined...there is a view of the past that rings true for me and has a meaning deeper than even Wagner. I have read time and time again now how Tolkien borrowed from Wagner...but only in the sense that he was borrowing on the whole cycle of tales contained in those histories. Once you get into the Numenor/Atlantis motif and piece together the lost road and realize for every fictional aspect of Tolkien's work there was a historical basis in both linguistics and ancient tales...it makes your mind swim. Counterpointer made a good description above. For all of Tolkien's protesting that his was an essentially Catholic work, he betrayed himself by insisting on his abhorance of allegory. You can trace the history of the earth and mankind in his stories...maybe the characters are fiction, but the forms within are great truths....least to me. I have tried to get the same out of Wagner, but alas, have not felt it.
Damnit!! I wish I had remembered that one!
And then came Hobbs...
LOL! What about Calvin?
broward- a while back I gave you some advice to start charging $2k a day and work very part time- do that and you won't need 9-5.
Well,
I have work tomorrow- but my period of boredom is about to end...
Someday this war's gonna end...
DOC - Calvin made us think about 24/7 servitude. We like Calvin
lol!
I'm expecting the futures to be green by the time I wake up tomorrow.
As more an more citizens disconnect from the financial machine (sitting on cash, paying off credit card debt, jingle mailing their house keys, et. al), what WS does gets further and further away from being comprehended by the voters.
How many folks (percentage) that you know could follow the discussions here or would even think of trying?
All they know is things aren't as good as they were, aren't as good as they are being told, and our financial leaders and government officials seem to live in another world. This makes them testy and angry.
The masses are going to be looking for asses to kick and necks to throttle. This won't be pretty.
AEI paper from Oct. 2007 "Not yet a Minsky moment"
The author posts eight reasons why this is only a liquidity shock and not a Minsky moment. Two years later, he's wrong on all eight.
1)If housing prices fell by 50% nationwide (as some have argued is “entirelypossible”) ...Too much weight is being attached to the Case-Shiller index as a measureof the value of the U.S. housing stock
(2) Although the inventory of homes for sale has risen, it is also worth noting thathousing construction activity has fallen substantially, implying that thereduced supply of new housing should be a positive influence on housingprices going forward.
3) The shock to the availability of credit has been concentrated primarily insecuritizations rather than in credit markets defined more broadly
4) Aggregate financial market indicators improved substantially in September 2007
5) As Figure 15 shows, nonfinancial firms are highly liquid and not overl everaged.
6) As David Malpass has emphasized, households' wealth continue to grow. Per capita net worth is at a historic high.
7) As Fed Chairman Ben Bernanke noted from the outset of the recent difficulties, financial institutions’ balance sheets remain strong,
8) Banks hold much more diversified portfolios today than they used to, they areless exposed to real estate risk than in the 1980s
cache:7owrN6NcwjQJ:www.aei.org/docLib/20071214_Calomiris1.pdf minsky moment - Google Search
Me too Nemo...
I'm off.
elizabeth warren for president
Elizabeth Warren: Why Was Detroit Bailout Treated Differently Than Wall Street Bailout?
Allen - that's kind of where I've been. I've worked about 50% of a normal week the past three years but made about the same annual income. 2009 will be different but that's partly by choice, had other things to do.
Re: " “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.”"
I posted a story on that recently.... Wall Street’s Math Wizards Forgot a Few Variables
UNBOXED; Wall Street's Math Wizards Forgot a Few Variables - NY Times
To explain, Mr. Farmer points to the huge buildup of the credit-default-swap market, to a peak of $60 trillion. And in 2006, the average leverage on mortgage securities increased to 16 to 1 (it is now 1.5 to 1). Put the two together, he said, and you have a serious problem.
“You don’t need a model of human psychology to see that there was a danger of impending disaster,” Mr. Farmer observed. “But economists have failed to make models that accurately model such phenomena and adequately address their couplings.”
Re: Futures - red because of this? Bloomberg headline: "Obama to Mark Lehman Collapse With Push for New Financial Rules".
Don't worry, it won't amount to anything - Geithner and Summers are in charge.
Take a name - couldn't help reading that one with rising interest - Oct 2007, AEI... who would have the sheer unmitigated gall to attempt to capture the entirely of the situation and provide the necessary comforting bromides that all would be well... Ah yes.
Ok, he did say "not yet".
We're waiting for the confirmation from AEI, right?
C
"it won't amount to anything - Geithner and Summers are in charge."
Loopholes big enough to drive a bank through?
both played with fire - tribal (and psuedo-historical) consciousness in a modern European - Wagner just added gasoline while Tolkien kept a blanket handy. this may have more to do with the divided nature of english ethnic identity than anything (though Tolkien is a Saxon name and his y-chromosome probably looked very much like Wagner's).
Flashback to 1984:
Spokane Chronicle - Google News Archive Search
Off topic... I wrote an offer on a foreclosure property tonight. The seller is Bear Stearns. Just seemed strange to see the name listed as "seller".
Minsky's most famous work was the Financial Instability Hypothesis:
http://www.levy.org/pubs/wp74.pdf
Steven Keen has built on his work.
Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit” | Steve Keen's Debtwatch
or, if you are tired of reading and would prefer a lecture:
Household debt
YouTube - Steve Keen on Household Debt
Causes of Crisis
YouTube - Talk one: the causes - Global Financial Crisis Event : Dr. Steve Keen
Also, add Immanuel Wallerstein to your reading list.
YouTube - Immanuel Wallerstein on the end of Capitalism
barley wrote
" mock, we had this debate years ago your memory must be fading - use Spam instead"
ok yes spam
but can i substitute banksta enriched spam
homedad 43 dont worry..id use creamy not nutty
Do you think De Gaulle differentiated between more or less sympathetic Vichy officials?
Not that I expect him to jump out of cake tomorrow at Obama's speech, but anyone heard anything out of Volcker lately?
You could, but it tastes like shit.
Thanks everybody for the suggestions. I greatly appreciate it. Dawned on me that I must be reaching maturity. My fiction/nonfiction ratio used to be about 5/1. Now it is about 1/10. Never thought I would be reading more out of school than in, but my range of interests and just general ignorance is forcing me to up my reading...that and my 4 year old keeps asking me questions I can't answer...thought I would have a few years before I had to start making up things
"USD-JPY 90.4450 -0.2648 -0.29"
What is the ETA for an 8 handle?
Ok, he did say "not yet".
We're waiting for the confirmation from AEI, right?
C
/////////////////////////////////////
He'll have to come up with eight different "not yet" reasons.
i feel like such a shmuck for not jumping on the euro or aussie dollar this spring...
Blackhalo - Friday.
nytol
C
OMG.
It happened to me, too.
I don't read sci-fi or play games now, I just read econ articles.
Yancey Ward
yeah tastes like shit
but is it good shit
because in that case maybe we could smoke it?
(apologies to the board, im in a very pessimistic mood, which makes me slap happy without even one double shooter of scotch
Vonbek777 -
I was 1:10 fiction to non-fiction too, maybe more, but. now find myself returning to fiction. I think partly because of my age (upper 40's) and partly because reality has been damn depressing over the last year. Sometimes fiction is "truer" than non-fiction.
Although I'm not getting all escapist or anything - last couple of books were by Cormac McCarthy.
Are most econ articles sci-fi or some sort of -fi?
I don't know if it is the ongoing non-stop rain we have had for the past few days, or what...but I was in a crappy mood today too. Made an Irish beef stew heavy on the Guinness today. Turned out very well.
Momentum with the other Minsky:
MIT Media Lab: Minsky Momentum
hollywood hack
dont feel bad
you didnt miss an opportunity
jumping on the euro or a commodity backed currency (australia) wont save you
like saying geeeze if i knew the plane was going to nose dive into the deck
i woulda reserved a seat in the back of the plane
ps australia is effed, huge water shortages and desertification
so, I finally found it - if we could have gifs on this board, this would be it:
http://img225.imageshack.us/img225/7834/1244808724824.gif
yeah, it was actually the sydney housing bubble in the case of the aussies and the massive mediterranean housing bubble in the euro that made me think twice. should have just bought some swiss francs.
broward;
"I don't read sci-fi or play games now, I just read econ articles."
Me three. I have small pile of unread sci-fi books waiting for me, and I have no idea when I will get to them. It's been months since I have even been able to read a short story. I never really played games, but I gamble in the stock market to make up for it.
On my list for next week: pack up my sci-fi collection and put it in storage. Roughly 2500 volumes. I wonder if they will be worth anything in a few years? Or if I'll ever pull them out and read them again?
OMG that was funny Hollywood.
lololololol
cormac is obviously a talented guy, i just wonder what his work would be if he wrote actual novels instead of proto-screenplays
reality has been damn depressing over the last year
I flirt online with 25-y-o girls to solve that one.
HollywoodHack --
Kind of reminds me of "Bert is Evil".
Kermit as vampire.
Too true.
Here's the thing that amazes me. My wife and I (yes, before kids) used to have all the time in the world even though we were working our butts off and read for recreation and we watched a ton of movies, even bad movies. These days we apply a five minute rule to everything. Five minutes, book, movie, music, or activity doesn't grab us...we move on. Just don't have the time to waste anymore. Was not prepared for this aspect of grown-up life....I used to like to 'waste time' and now I just hope 'time' doesn't waste me.
When online, how do you know that they are girls?
just askin'
Any smart 10 year old can explain why one cannot expand indefinitely in a finite system.
Capitalism, while resilient, and working in parallel with out evolutionary fitness, needs to deal with the second law of thermodynamics.
The second law always wins.
I must say, capitalism has been good to me, and while delusional, has give me power and resources.
broward
cheer up
you need top read a post or two by robotrader over at zero hedge
that ll cheer you up
forget the charts scroll down to the pegs
More Rotation, More Junk As Gambling Fever Continues | zero hedge
"I'd rather take the nuts from banksters than from squirrels."
I don't think that would change much of anything for the better...
"Throughout the Imperial Chinese dynasties, eunuchs were appointed to guard the royal household. Through daily contact with the Imperial family, they often gained immense power. Some eunuchs amassed huge fortunes through corruption, others had the Emperor so much in their power that they could effectively dictate policy."
Beijing Made Easy | Beijing History | Chinese Eunuchs
Mark Twain on Wagner: "Wagner's music is better than it sounds."
UB,
I like that Royal typewriter for $995!
Enjoy the time with them, Vonbek.
My youngest was four when started reading here and now reading to himself. Would suggest however, that don't be a KIA Dad (Know-it-all); did that once years ago with eldest and was wildly embarrassed. Never did that again and now freely admit to kids that don't know, but we'll find it out.
Fortunately, the kid present for that one now older but doesn't recall it at all.
Whew.
G'night.
"Any smart 10 year old can explain why one cannot expand indefinitely in a finite system."
But fiat currency is not finite, you can just keep adding zeros on to the end of the bills you print...
how do you know that they are girls?
I don't.
But usually they flinch and block me, which is indicative.
.
I'm not in a bad mood, Mock.
I have four job opportunities on, although two are sketchy.
I got dumped by the Chevy Nova last night and had to work on cars today, though.
Thank god for cellphones.
Wow, that newspaper search is nice (UB); I can look at my horoscope from 1984: I was to indulge myself; probably did?
About damned time people start recognizing that Minsky's the man and not Keynes.
Doug Noland's been talking about the "Minsky Moment" for the entire 6 years I've been following him. Doubtful anyone in DC really grasps the consequences.
Funny, Mock. +1
Doc: Typewriter? Steampunk?
As a smart 19 year old, I wrote a paper about creating infinity in a finite loop using nano crystals in a star of david pattern to replicate in smaller and smaller units. Wasn't a technical paper by any means, was actually a philosophy paper...but the point is that mankind has stopped looking at the length of the ruler and is now focusing on what is between the notches. If you can't perceive the entirety of the universe, create your own that you can. This applies to economics as well. We have created layer and layer of financial services between the measures of real metrics. Basically creating something from nothing. But this only works as long as the customer believes there is a flea at the circus. Even if you could shrink computer processing to the quantum level and beyond...will a person be apply to accept that one day the entire world is run from the head of a pin?
broward, cool, yeah, i thought (guessed) you were ok
you got it, ...was just tryin to be stupid-funny
Oh, I am very humble with my children homedad. My four year old is just starting to read. I plan on homeschooling, so we are testing out the parameters of how the teacher/student relationship is going to go. Can't believe how computer literate he is already though. He is henpecking on the keyboard in our reading exercises. Can type out three word sentences. Can't write with a pencil yet at all though. Going to have to work on that. Part of the problem is he hasn't picked a hand yet. When he draws with crayons, still uses both hands at the same time. Would be pretty neat, but you can't really tell what he is scribbling yet unless he tells you. My mom says I was the same way, so we will wait and see.
yagij,
I get the distinct impression that you are unaware that the yen is rising, not falling, and that at a quoted exchange rate of 85 it is higher than at 89, not lower.
At 89 yen to the dollar, a 1000 yen bill is worth $11.24
At 85 yen to the dollar. a 1000 yen bill is worth $11.77.
Although most dollar exchange rates are quoted in terms of how many dollars per unit of the other currency, e.g., 1.45 dollars per euro, if this were done for the yen the 89-yen rate would be $0.01124, difficult to read in a newscast, and taking up too many columns in a printed report. So the rate vs the yen is quoted "backwards" as a yen:dollar ratio.
The reason a yen is worth so little is that the Japanese government debased it enormously at the end of WWII to cancel its war debts. Before the war, 22 pounds of rice cost about 2.5 yen, a teacher's salary was 800 yen/year, and an admiral's 6,600.
[reference] And there were smaller currency units, the "sen" and "rin", respectively 1/100th and 1/1000th of a yen. The yen was defined at one time pre-war as equivalent to 1.5 grams of gold, or 24.6 grams of silver. [per Wikipedia]
toodles
"Doubtful anyone in DC really grasps the consequences."
I think it was Upton Sinclair. He said 'Its hard get a man to understand something, when he's being paid not to understand it'.
For the Ponzi regime, modest regulation makes it difficult to extract rents from the public...
The Biggest Threat to the U.S. Oil Supply
It's our struggling neighbor to the south.
Page not found- msnbc.com
My colleague David Lee Smith detailed the matter of Cantarell's dangerous decline curve in a seminal piece back in 2007. At that time, production had slipped by 20% in a little more than one year, from 2 million to 1.6 million barrels per day. The declines have only gotten more dramatic.
Last summer, Cantarell dropped below the 1 million barrels a day. This July, output registered a 40% year-on-year decline, to a little more than half a million barrels per day. That's a 72% decline from peak production rates in 2005.
Blackhalo,
I can't tell you how many times that quote has come up here -- and previously over at HBB -- over the years. Never get tired of hearing, um, seeing it, either.
B E R T I S E V I L : Jonestown Massacre
also appropriate for this site
i feel like such a shmuck for not jumping on the euro or aussie dollar this spring...
Don't sweat, i feel like a schmuck for jumping off FXA at 80.99...
I get the distinct impression that you are unaware that the yen is rising, not falling, and that at a quoted exchange rate of 85 it is higher than at 89, not lower.
No, I'm well aware that the Yen is buying more USDs at 90 than it did at 115. I have been to Japan, lived in Japan, and followed it economically over the past 15 years. I have kept a 5 Yen piece as a good luck charm in my wallet for years. When I said I favor the Yen, it is because I believe it will buy more USDs, not fewer, until something changes (e.g. Japan's UE + Export Declines)
Honestly, I have no idea what point the BoJ wants to protect, but I wonder every day when I will see it trend back towards 95-100.
Pointless Academic Edit: The "g" in "yagij" stands for "gai(koku)jin".
I spent some time working closely with addicts.
Our economic crisis and the denial and refusal to deal with the underlying issues bear stunning similarities to active addiction.
And the truth is whether you want to deal with the issues is immaterial. You either deal with them and cleanse the system or you crash and burn.
The longer you delay the further you fall and the bigger the ultimate hole you have to crawl out of.
Either we deal with these issues in our economy now or the bust will be bigger next time. It's not a matter of if but of when.
"The Obama administration said Friday it will impose stiff tariffs on imports of Chinese-made tires, saying it found surging imports of such products had disrupted U.S. markets."
"China said Sunday it would launch an anti-dumping investigation into U.S. sales of chicken and auto products"
I don't think this ends well. What is President O' doing? Protecting Firestone? Are tires actually manufactured in the U.S.? Tires seem well overpriced as it is.
they are overpriced. continentals are POSes in my experience, and, I believe, are generally chinese in origin.
I can't recall the last day that I have not seen it on CR. It just fits so nicely. It should be the slogan for the... well I'd say NAR, but that is just too narrow, as it applies to so much more.
poic,
It is the same pattern in every field of human endeavor. I am beginning to believe this crash and burn is part of our DNA. If not DNA, it is a collective story that forms the pattern in our minds. It is the brick wall we keep smashing ourselves into throughout the ages. Not just a population control mechanism, it regulates ideas as well...I don't know, too late. Got to get some sleep, I am rambling and everything is everyone and I see roads leading everywhere but I still can't get to Shell Beach (Dark City reference) Night everybody!
It seems to fit large parts of the economics profession pretty well lately.
" It's not a matter of if but of when."
But, If you kick the can far enough, it becomes someone else's problem...?
that's deeply insulting to every junkie, drunk, weedhead, chronic gambler and porn addict out there. you should be ashamed.
Floyd Norris of the NYT says it's the Accountant's fault.
right, blame the bartender.
Blackhalo (homepage, profile) wrote (in reply to...) on Sun, 9/13/2009 - 10:26 pm
reply ignore user
" It's not a matter of if but of when."
But, If you kick the can far enough, it becomes someone else's problem...?
At some point the can blows up on your watch. I have no idea when, this could go on for years.
Amazing, isn't it?
Who's next? Probably the people who made the chips that the models ran on. Blame Intel.
it is because I believe it will buy more USDs
That's more likely to be a function of falling $$$ than rising yen.
I'm not sure if this could be taken as bullish for the Yen.
From The Times...
A bag of rice, a tray of dried octopus, a juicy cut of Maezawa beef and a box of fresh Fuji apples are, to most Japanese, the ingredients of a hearty dinner. To Japan, however, they are the triple-A-rated “moveable asset credit instruments” that could save its economy from downfall.
Despite the misgivings of many traditionalist Japanese bankers, there are early signs that moveable asset lending may work. In a test run of the plan in southern Japan, the Bank of Hiroshima lent 25 million yen (£165,000) to a seafood company that had only a recent catch of sea slugs as available collateral.
Cuttlefish, sea slugs and octopus are the new best friends of Japanese borrowers - Times Online
AAA sea-slugs?!?!?! WTF!?!? Maybe I can borrow on the delicious blue-cheese, tomato and asparagus quiche I just made.
Hollywoodhack,
The day you start recovering from addiction is they day you start taking personal responsibility for your role in life.
"taking personal responsibility"
How unAmerican. What are you, a Terrorist?
http://www.paecon.net/PAEReview/issue50/ErturkOzgur50.pdf What´s Minsky about anyway?
Mish and Billy Beck like simplistic answers.
Your jolly, candylike button is showing.
Your jolly, candylike button is showing.
Don't need subtle bait with Billy.
He's a drama queen.
Speaking of which, Dominique finally figured out to lead the memes rather than trail them.
I watched for years as she'd clutch one to her amble chest, only to watch it flicker out.
I tried to steer her strait three years ago but she's as obstinate as Beck.
Mish is an excellent observer, but when it comes to policy ideas he's out of his mind.
"What is President O' doing? Protecting Firestone?"
I doubt it. Firestone was bought by Bridgestone of Japan.
I guess it doesn't really occur to Americans that if they keep borrowing and not producing, eventually someone else owns you. Of course they'll bitch when they're forced out of their house and end up renting a place owned by a Chinese REIT.
he's out of his mind.
It's disturbing.
When I read his stie, I wonder how he can be so right yet so wrong.
"It's disturbing.
When I read his stie, I wonder how he can be so right yet so wrong."
Well, you should at least give him credit for a few things. Some good calls on his part:
1) The insolvency of Citi
2) The same of GM
3) The top of the stock market
4) Deflation
5) Gold in spite of deflation
Not sure what he's so wrong about. Personally I disagree with his lack of desire environmental protection, but if anything is disturbing, it would be his prescience.
Obama's protecting whatever anonymous tire companies lobbied the US ITC... hard to tell which ones from the report they wrote a couple months ago. In the report there are a number of companies that said they had no impact from Chinese imports. These are the smart companies that already had dealt with China rising in their plans. Whatever companies that reported major impacts were the petitioners. I think they are anonymous... the report has redacted information but for sure that's intentional.
I do find it amusing that we are slapping a tariff on tire imports from our most-favored nation for trade. (MFN)
PRC, you are are best-bestest best friend ever forever! Now come over here while I kick you in the balls!
I thought the market would expect this to be bullish news... the ITC actually recommended a 55% tariff down to 25% in the 3rd year... it was actually 4 of 2 commissioners who made the recommendation. The other 2 recommended a cap on imports at something like 41M and tariffs beyond that cap. I think a 35% tariff vs. 55% is pretty soft, as some of the tires were actually 44% underselling American made tires (I think the average was ~ 22%?). So the administration chose to reduce the amount of tariff recommended by the ITC.
My point was the ITC report was made public a few months ago; why would there be an expectation that there wouldn't be tariff?
"My point was the ITC report was made public a few months ago; why would there be an expectation that there wouldn't be tariff?"
Because we are going to get worked by the WTO? Not a slap on the wrist like the off-shore gambling either.
Apparently the administration doesn't believe that... so we'll see...
YouTube - Young Turks Episode 9/11/09
Interesting discussion.
Actually, Mish understands less than 1/2 the cycle at any given moment because he lets his ideology blind his reason. While I admire his ability to occasionally identify his blind spots, his rabid libertarianism blocks his vision most of the time.
Although he probably does not realize it, Mish learned of Minsky by way of Steve Keen, a Post Keynesian economist whose blog posts took Mish from being a gold-bug hyper-inflationist to a debt-deflation believer. Minsky was actually building upon Keynes' true legacy, which was the recognition that markets are inherently unstable. That's what Keynes really added to the discussion. Unfortunately, according to Post Keynesians, classical economists chose to ignore what Keynes really said and reinterpret it into something entirely different, calling it "Keynesian" along the way.
While Minsky's tome is easier to understand the Keynes' original 1936 classic that Minsky attempted to build real models upon, most people are better off starting with Kindleberger's "Mania, Panics and Crashes" or Shiller's "Irrational Exuberance," both of which pay homage to Minsky (the former explicitly, the latter implicitly).
does anyone know the price of a watt of electricity?
I was looking into that German index I think it's called TechDas, which is mainly compromised of solar companies, and
noticed how many BK's they have and how even the largest just produced close to a billion dollar loss... it can produce
a 1 watt solar cell for 1.03 a unit, unfortunately the Chinese are doing it for 30 to 40% less... the German companies locked
into long term expensive silicon contracts whereas the Chinese played more the spot market...
.....
one more question? is carbon dioxide re-absorption at coal power plants really feasible?
A watt, per se, doesn't have a price, but a watt-hour could. It would be 1/1000th of the kilowatt-hour you see on your electric bill (probably in the $0.10-$0.15 range).
I think solar is supposed to make more economic sense roughly when prices approach $1/watt. But that assumes the cells last long enough to make them worthwhile, say 10 years or so.
CO2 pumping back into the ground is not likely to ever amount to much, IMO. I don't know why so many people expect such giant quantities of gas to stay underground indefinitely. In fact, if it's anywhere near people, if some of it comes up abruptly it could suffocate a small population.
Coal and oil trapped carbon over many millions of years and brought it underground. Humans seem bent on putting it back into the atmosphere as fast as they can.
If engineers analysed our systems, the way economists analysed theirs.
Well, we'd still be banging the rocks together, i suspect.
-- w
-- (probably in the $0.10-$0.15 range). --
Prices in Europe tend to be about 2x that, as they include amortization of the delivery network.
If a thinking brain consumes about 10W, that puts a floor under creative work at about 1 penny per day. Silicon is about 10x that.
Ideas are cheap. Cheaper than computation.
Capitalism bad.
Communism bad.
Greed bad.
Fraud bad.
Cooperation good.
Competition good.
Balance good.
Free sharing of information good.
Planning for future good.
Economics forecasting is educated guess, never science.
The Fed does not share information.
If the proposed reform to the toxic asset problem is a complicated finance scheme requiring the public guarantee or loan or insurance of private loss, I'll bet you a judge or jury somewhere, sometime has already decided the structure is fraud.
U.K. Banks to Post $215 Billion Losses, Moody’s Says (Update3) - Bloomberg.com
Only $215 billion more writedown in UK? I raise. But someone gained so it "nets out", right?
in the early part of 2009 I started reading Minsky, that was about the time I ran out of Adderall, so I really didn't make much headway. (you can find all kinds of drugs here in Cambodia, over the counter even, but that ain't one of them... )... for me at least I find it a wonder drug...
the rest edited out... lat night only
You have to craft your high.
right kidbuck...
edited: too personal .
Full disclosure: I am still short financials, long on commodity etf's.
I consider myself a "social" investor, in that I invest not strictly for maximum dollar profit but in what I believe is helpful. (Betting against banks, though, is zero sum and irrelevant to their success.) I believe that not letting financial institutions fail for fear of systemic collapse does more harm than good.
I believe that if every job in a financial company that had secret dealings with the Fed or Treasury, at special discount windows, were filled with civil servants by competitive exam at terms negotiated by a collective bargaining unit, the system would function better at allocating risk than the current one.
So I say let too big fail, if that's what the market demands. My puts then make me a killing, of course (in ponzi dollars). I promise to invest my share of trading profits so as to add value. If they're taxed heavily, I'll never complain. Maybe even get an honest job at the central bank "controlling" the free currency. No bonuses, no cronyism. Multiple choice, no. 2 pencil.
I'd be so curious to see what would happen if NYSE curbs go in in the middle of an Obama speech. Would they whisper in his ear W style, "don't scare the kids, but..."
or let him stand there pumping while everyone is dumping.
1 currency,
I think the upper level of government would rather pay huge bonuses to wall street people rather than risk the possibility of traders colluding with each other and , parish the thought, with government trading desks. I think of this as bribes to prevent stealing.
here's a vid mash-up I did of the Clive Owen and Naomi Watts 'The International', in these scene they are talking with the PM of Italy
about banks and being 'slaves to debt' .... this is a phrase I have heard used here many times and I thought it was worthy of a vid mash-up, no?
......
YouTube - Clive Owen & Naomi Watts Learns the Horrors of Goldman Banking 'The International' 其言糞土也
on second thought I think Bernanke would disagree with his premise about the power of DEBT,
forgot about the power of he who prints it.....
"I think of this as bribes to prevent stealing."
Not sure if you're being facetious, but there would be no trading desks at my fantasy central bank. Every single transaction would be open and transparent. Collusion doesn't go far if everyone's hole cards are exposed.
[On a personal note, I 'killed' the nl game this weekend. But I play for the competition]
I'm serious. I'm a spread trader and price relationships can get pretty confusing and very opaque. I'm not sure that government trading desks would ever have the manpower to monitor some of these trades. Ever watch the Dax-Nikki spread? How about the Icelandic index (if there is one) against the New Zealand stock index?
Add a level of obscurity. For a long time (decades if not more than a century) traders illegally execute trades away from the market, "bucketing" the profits. How would you know where trades are being made with other people's money if they weren't reported, or made and reported at 1 Am EST at the Viet Vietnamese trading desk? Obscure and opaque.
I'm just describing the mushroom model of trade reporting. Keep everything in darkness with rich levels of manure. It works for growing mushrooms!
Protectionism: It comes.
Will China Retaliate?
The dark ages of trade wars may be upon us, again.
With China furious at President Obama's tariff on tires coming into the United States from China, will China retaliate?
Chen Deming, China’s minister of commerce, correctly condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.
“This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the United States government made at the [April] G20 financial summit.”
China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies.
This could get very interesting. Obama is messing with a country that owns two trillion dollars of U.S. Treasury securities. Do you think this might speed up China's gold buying? Seems to me someone is trying to expedite a trade war, this is getting better by the day.
Actually Walt, some fungi require light in order to 'fruit' and not all species utilize manure as a substrate.
But yes, during spawn run and 'casing' (if required); darkness may be helpful.
this is getting better by the day.
---Careful what you wish for, shill.
Very careful.
"that was about the time I ran out of Adderall"
try cannabis......it won't kill you like prescription drugs and you can bypass big Pharma.....and depending on the strain you can use it for anything you may want or need....improving creativity, sleep aid or, alternatively, as an energy booster/stimulant.....
much better than Adderall...
29BB 13-week, 29 BB 26-week T's scheduled this week, 4-week TBA (22-35?)
China says why would we lend you your currency at 4% if you take 35% juice on our tire trade? Students not laughing any more, wondering why China would sell perfectly OK tires for useless dollars in the first place. Obama creates a bubble in domestic tire inflation, fulfilling his first campaign pledge.
Then Friday there's a thing called quadruple witching hour. Who wins from huge volatility? Oh yeah, the house.
I'm kinda glad I'll be out of the country on Friday.
Maybe I won't come back...
Looks like that US/China strategic dialog might need another round or two. Maybe Hanky's available as a consultant. US line: y'know, sometimes we have to do expedient stuff to get re-elected, as 300m angry voters isn't pretty. China line: y'know sometimes we have to pander and do stuff to stop civil war, as a 1b person lynch mob isn't pretty.
In other news, shock horror, Nemo's call on kermit futures is plainly wrong. US bigtime elmo. Yen eased to 90.8c. Equity bloodbath for Nikki, Kospi, Taiex, Hang Seng. CSI300 found its mojo though, up 1.71%.
Yerp futures pushing 1% elmo. Stoxx50 flat. Could be a good week to watch VDAX.
C
this is getting better by the day.
---Careful what you wish for, shill.
Very careful.
Again getting better by the day......
Hell to Pay.
thanks... not much of a smoker but I think the other cocktail of pharma stuff (lexapro, zoloft, zanax, valium) has too many side effects...
esp the SSRI's...
....
traderwalt,
a good friend of mine runs the trading desk at VinaCapital in HCMC, Vietnam... some years ago when that index reached its all time peak (March 2007)
what was difficult is getting your orders executed in a timely fashion, there seemed to be a lot of front running going on - if you were connected
your order got executed otherwise back to the end of the line...
....
and for those who missed it here's that classic line again - 'Slaves to Debt"
YouTube - Clive Owen & Naomi Watts Learns the Horrors of Goldman Banking 'The International' 其言糞土也
yogi - quad witching will play out for longer than the last hour of trading. There are volume/price and futures signals going into Friday including overnight trading, opening positions for opex which are usually huge, then the day's trade. Could be difficult to normalize this one.
C
Counterpointer writes: "Could be difficult to normalize this one."
understatement of the month
"improving creativity, sleep aid or, alternatively, as an energy booster/stimulant....."
......and these are the benefits of pot? What pot planet are you talking about? The "pot" I smoked (from the best to the worst) did NONE of this! It DID make me believe of its miracles for 50-years........nothing else........wait........there WAS something about total short term memory loss - not that I remember. Lets not forget the paranoia and the disgusting "give it away-yes-I-just-smoked-a-hooter" smell billowing out from the house everytime I opened the front door, or as might be the case, in your life, "my rented room"........a lot of denial still going on after all these years.........its a shame.....
Good Morning!
Could be a long month, volker!
C
/Yerp corporate paper in trouble, rollovers not rolling like they used to. More like roll-stop:
FT.com / Brussels / Economy - Lending in Europe continues to shrink
This was a probable consequence and risk picked in Feb when sov bond supply signals started ramping up.
Don't bogart that that stereotyping man, pass it on.
In another universe, Wile E. Coyote gets his way:
YouTube -
Today three FRB members speak: Elizabeth Duke, Jeffery Lacker, and Janet Yellen. Let's see if they are concerned about tariffs...
....everything is peachy here......tomatoes are growing like crazy, cukes, peppers, squash, beans, carrots.......it'll be another GREAT month....
Don'tcha hate people who automatically wake up in a good mood?.....must be the high veggie intake........and rich dairy products.....LOL
BSR: please, open your mind to the possibilities
c: It started about Labor day in the PM's, oil is acting all schizoid, unsure where it wants to be (75 or 60, that is the question), meanwhile the equity people must surely be smoking rope.
LOL.....Morning, JD ....
Anybody ever been in a country that used high import tariffs to dissuade their citizens from becoming onerous consumers?
who wants to go find what Smoot Hawley first impacted?
Morning BSR,
I think in your honor, i'll enjoy a 2x+ good 2nd bowl... (that's funny, Juvenal almost never does a 2nd wake & bake)
Bottoms gottem'!
Yes. And export tariffs. And capital controls. And exchange fixing. And a bunch of other welfare-limiting policy.
Why?
C
Weak pound can't help UK retailers. From Yves:
The British Retail Consortium said that like-for-like retail sales in Central London plummeted by 5.9 per cent in August
Juvvie D
yep, that would be Vietnam, they at least until 2006 or 07 had a 100% import tax on imported cars....
Howdy. volker..........how be the cool and dry southeast?
with import tariffs everyone might not be able to buy another "lets scrap off all the toxic teflon" electric frying pan from Wu-Mart again this year.
JD
know a couple of western pilots who smuggled into Vietnam about 10 high end motorcycles nearly part by part
(2 Harleys were included in the bunch) ... of course they had to pay off other pilots, etc when it came to the frame, etc...
but still made a boatload of money on it... but for some reason it was a one shot deal, that spigot is now closed...
....
guess, they got tired of the their Moments with Minsk
Elizabeth Duke started speaking 3 minutes ago, where's the leaked speech?
C
New Zealand until the mid 80's, was where imports came to die...
There were big duties on everything, and as a result the people were incredibly self-sufficient, as in making do (this of course has changed, and NZ is just like the rest of the world-except they live in paradise) and everybody is familiar with 1957 Chevys on the streets of Havana nowadays, but that's what it was like in NZ in the early 80's, the streets were full of 50's Morris Minors, Awesome looking 50's vehicles of every stripe from the UK & France mostly, and all in good running order.
Baltic Dry Index (BDI) -18 2450.
cool and dry my ass
I'm setting records for the over fifty class in treading water
".....There were big duties on everything, and as a result the people were incredibly self-sufficient"
........opinions llike THAT are not popular concepts in the "Global Economy" scheme of things....
The entire driving force of capitalism the quest for "efficiency". One key source for generating increased efficiency is to reduce redundancy and friction. From a micro perspective this a is a good thing. But the aggregation of lots of efficient micros may lead to a aggregate macro system that is efficient but it certainly is not more stable. A high precision Swiss watch may keep the most accurate time but a grain of sand could cause it to fail.
The whole ABS looked at from a macro perspective is a good illustration. In a traditional system the depositor placed funds with a bank the bank lent the money but was required to keep a certain level of capital. Systemically all lending was supported by capital. Efficiency was achieved by eliminating the bank and its need for capital via the ABS. Now systemically we have a system in which the depositor lends directly to the borrower and there is no capital behind the lending. A more efficient system but certainly not a more stable system since the shock of the the borrower default is felt immediately by the depositor and onto the general economy.
Juvie - I was thinking more of China in the early 90s but that's an interesting example. Was that before or after the UK car plants got shipped to India? Now there's a bunch of neo-classical production. The "Ambassador", for instance.
C
with import tariffs everyone might not be able to buy another "lets scrap off all the toxic teflon" electric frying pan from Wu-Mart again this year.
......
Good cover story for the lack of xmas sales
Ecuador. Appliances and auto's expensive. Chinese motorcycles cheap. U$ is Ecuadors currency, for now.
The entire driving force of capitalism the quest for "efficiency".
.............
I thought it was certain people's quest for wealth that was the driving force, with efficiency being a tool keep it flowing.
NZ is a better example, because China & Vietnam had shall we say, more trying circumstances that forced them into austerity, while NZ was at that time the ultimate cradle-to-grave socialist country, forced into a tough economic corner mainly because of the UK entering the ECU in 1973, effectively cutting off their main trading partner..
This was my favourite car on the road in NZ in the early 80's, it was so cool looking~
http://farm4.static.flickr.com/3373/3591407594_f37d2748f0.jpg
"I thought it was certain people's quest for wealth"
....I think it's more of "I want what Bobby wants"......"I want what Sally has"......."I'm tired of being the one who never gets any good stuff".....and the quest for wealth is to satisfy the longing for "cool stuff" from within.....
"speculative borrowers, those whose income would cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose income could cover neither, and could only pay their bills by borrowing still further"...so does that mean that the U.S Government now qualifies as a "Ponzi Borrower"?
JD - you from there? Sounds like an interesting place.
C
U.S Government now qualifies as a "Ponzi Borrower"
Oh, yes. Since 1913.
Bling was the thing.
But how many folks actually know what they want rather than what others have or have been manipulated to want?
........U.S Government now qualifies as a "Ponzi Borrower"
....but as he suggests, Capitalism is prone naturally to greedy dumbasses taking advantage of the situation and forgetting the possibility of disaster for the whole system.
Virtually every country at some point in the economic development- including the United States. The smart ones realized when high tariffs had become counter productive and began to drop them. Some countries developed vibrant export based economies which forced companies to become efficient even though they were not subject to foreign competition in their domestic economies e.g. Japan.
To me the idea that an economic theory fits all stages of economic development just makes no sense. The fact that a policy in the past made sense and may make sense in the future doesn't mean that it makes sense today. Communism is a case in point. Does anybody honestly believe that any other system would have the taken the USSR from where it was in 1921 to the place it was in 1955 ? The mistake that the USSR made was that they didn't realize that their system had reached the end of its useful life. They like many in the US were wedded to an ideology not because it continued to be effective but because it was an ideology. The Chinese communists have not forsaken the their communist beliefs and they still very much have a goal in a 100 years of working towards their communist ideal but recognized ( thanks to what had happened in the USSR) that the tactics - some kind of free market capitalism - is something that they would have to adopt to get to their goal.
It is this kind of pragmatism that has been lost in the US. This applies equally to the left and the right. For those who argue that universal health care is precursor to communism they might be well advised to remember that Truman the strongest anti- communism warrior was the one who proposed it. Of course they won't consider it because as I said this is not a debate about what works or doesn't but is a matter of ideology.
I've been there perhaps a dozen times over the years, and got to watch an entire economic way of life gets flip-flopped 180 degrees...
When they went full-tilt boogie economics anything goes in the 1980's, all the cars I mentioned went away, replaced by 3 year old used Japanese vehicles, exported from Nippon.
.......I've been long systemic collapse for 20-years now......and there IS NO WAY of tinkering with it to fix it......the ups and downs are normal with "greedy dumbasses", no regulation or enforcement.....
And there's the Duke speech. C u.
C
I think you miss Mish's point. He does not want to see wages fall. He is anti public sector and large employer unions that get to hold us ransom for wages that we as taxpayers can't afford. His objection is relevant, as cities lose tax revenue, they are being backrupted by the outrageous agreements blackmailed from the taxpayer in boom times. (pay up or we will make your life miserable). Now that reality has sunk in, the unions, with high wages, outlandish job protection, gold plated pension arrangements, are refusing to be part of the solution. This situation is evidenced by fact that municipalities in California are having to file for bankruptcy to get a new deal with their unions.
Shedlock's form of "libertarianism", for lack of a better word, is fair, equitable, and works if you assume China and the USA are one country, otherwise, his form of "libertarianisn" is nothing more than a weird predator banker's ideology masquerading as capitalism. He is probably still bitter about being jobless for 3 years due to global wage arbitrage and attacks American workers who, unlike him, have been temporarily isolated from this viscious and cruel process. It's becoming obvious to most Americans now that this deflation was caused by the mass exodus of good paying, outsourced jobs and the influx of H1-B workers and illegals that was concealed by Wall Street who loaded up the uninformed, American worker, whose standard of living was declining, with debt. Talk about gaming the system, this takes the cake or should they say "let them eat cake".