I don't buy it. These guys never say anything in public without permission.
They are deliberately trying to convince the market to build in some "uncertainty" about the future course of monetary policy. I do not know why, but that is clearly what they are trying to do.
...which is nonsense. The "Exit Strategy" section of Bernanke's speech starts with: "My colleagues at the Federal Reserve and I believe that accommodative policies will likely be warranted for an extended period."
Too many conflicting signals to be a coincidence. The entire plan is to send conflicting signals. Again, I am not entirely sure why.
C'mon nemo, you know why. If they make people think that times are going to be tough or even uncertain, any news that isnt awful will be seen as positive. Like at Christmas, when you are really hoping for a new car but convince yourself that are going to get a sweater. Tnen you are really happy when you get a new iPod.
If they are concerned about reining in money supply, they'll act first on their alternative facilities.
If they want to scare people out of risk trades and back into the dollar, they'll raise interest rates first. I don't think they want to do that though. Hurts bank profits (interest rate derivatives are #1 seller, banks are probably unanimously short), messes with mortgages.
If they make people think that times are going to be tough or even uncertain
Those are entirely different. If they want people to think times will be tough, they will signal accommodative policy (e.g., the Bernanke quote I mentioned).
Jansen re-published a different take, which is that they want market participants to be a little scared; i.e., not to assume too much about the future course of Fed policy.
I do not think they are playing as simple a game as you suggest.
Keep in mind there was the hysteria started by Fisk about concerns for the USD. Central bankers don't like to be bullied, and will probably cause the opposite to happen just to screw with anyone trying to push them around
CR: Some people are taking that as tough talk, see: Dollar Rises After Bernanke Says Fed Ready to ‘Tighten’ Policy, but I disagree - I think "improved sufficiently" means Bernanke will wait for a meaningful decline in the unemployment rate.
Agreed wholly CR. If Bernanke tried to tighten early, he'd be chased around with the spectre of Japan and political attacks that he hated America. Fed "policymakers" can say whatever they want, the reality is, they showed late last year they have no fortitude in the face of political pressure. They won't make any policy that isn't totally accommodative until they're told they can. They might make a gesture or two, but they'll retrench quickly if the gesture turns out to have any meaningful effect.
In Sept. alone, more than $12 billion of flows moved out of equity funds. Since foreign equity was about flat, all this loss was in domestic equity mutual funds.
Meanwhile, in Sept. more than $45 billion flowed into U.S. bond mutual funds.
Mutual fund flows are the best measure of retail investor sentiment. The mass public isn't buying this rally, especially in the U.S. You are seeing huge skepticism about U.S. stocks and also the decay of the 401(k) savings system and its equity emphasis, as we knew it.
So, where is all the U.S. equity money coming from? I think 90% of the money that's poured into the market since about May has been institutional leveraged (mainly prop desk) money. The market is built on a massive debt pyramid of margin, leverage, derivatives and TBTF speculation. That's why it's getting ready to crash.
That's why I like bullion more than miners. Normally, miners are the lowest correlation stock sector. At times they are the only negative correlation sector. But lately, that hasn't been the case, and I think it's due to the ponzi debt propping up the market. When margin washes in, all stocks rise. When it washes out, all stocks sink. There's no low correlation left.
Over time, miners probably will be low correlation again. But maybe not until after the margin tide washes out. The providers of margin debt, largely prime brokers, will start to get nervous soon and cut it back. The Fed is suppose to regulate stock market margin under Reg T. But that was long ago and far away, in another galaxy. When was the last time you heard anyone at the Fed talk about Reg T?
Nemo (homepage, profile) wrote on Thu, 10/8/2009 - 9:44 pm
I tend to agree with you, but that's a lot of jaw-boning by FRB members trying to make us question this assumption...
At this point, I don't think any amount of jawbone can paper over the Feb's obvious institutional bias toward easing. Between Japanese difficulties getting themselves out of the Lost Decade stimulus and the fact that the population of the Republic has been told for decades they are entitled to never hear any sort of bad news, I don't think there is a chance in the world the Fed can crack the whip and mean it and I don't think anybody is fooled at this point.
nova
I would say it has to do with gold going up $60 this week. No matter their expectations, they don't like discontinuous moves and they don't like the idea of alternative currencies which would hamper their ability to control monetary policy. What's more, a stronger USD would help boost US retail activity and GDP at this point just when the ECB has said 'no more' to appreciation, and Asia is getting anxious
sneering nihilist, I was just going to comment -- the Fed has to make some noise to cover their b*tts as the other central banks start to raise rates. The Aussies were first -- expect more noise to follow as others (actually concerned about protecting their currencies) follow suit.
But don't be fooled that we want to protect the dollar -- the end-game is to get Asia to delink. In the end, they will protect their jobs, and take a hit on their investments.
the FTC should require Edmund Andrews to place a disclaimer in articles stating that he's received free rent from the banks (JPM, i believe) for several years now...
if anything, the probability of Fed tightening has been slightly declining over the past week or so - not surprisingly, given bad jobs data. What is surprising is that people who believe the Fed will raise the rate think the rate will go up by 50 bps, not by 25 bps.
montas ankle
much too much happens by 2011. Will the new head of the ECB be comfortable with rates going up so soon after a UK default? What about rolling Spanish debt via Spanish banks? What about California, Illinois, NY, Arizona, ...?
DCRogers (profile) wrote on Thu, 10/8/2009 - 9:49 pm
OT: nova, reply on Afghanistan on last thread.
RE: "we'll just stand by and watch?"
It depends on how much your county remains ruled by emotional ninnies, and how much reality / gravity are doing the decisionmaking. America will keep fighting emotional wars of stabilization without objectives or war aims until the money runs out.
The decrease in the unemployment rate comes after the Reserve Bank on Tuesday became the first central bank in the G20 to begin tightening monetary policy, as it raised the official cash rate from 3 per cent to 3.25 per cent. Australian unemployment rate falls to 5.7pc | The Australian
somebody tell these guys we are going into gd2, ww3, etc. et al.
Another stupid question. Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
As I noted last month, it is unlikely that the Fed will increase the Fed's Fund rate until sometime after the unemployment rate peaks.
Good stuff from CR on two levels:
I never realized how much of a delay there was between peak unemployment and the Fed beginning to raise rates; and
I must have missed last month's blog post (or be just a little thicker than the average bear), so it's good that CR repeats some of these important relationships for those of us who aren't here day in and day out.
Asian central banks intervened heavily in the currency markets on Thursday to stem the appreciation of their currencies against the US dollar amid fears that their exports could be losing ground against China.
The mainly south-east Asian countries have been spurred to defend the competitiveness of their currencies by China’s decision to in effect re-peg the renminbi to the dollar since July last year.
nova (homepage, profile) wrote on Thu, 10/8/2009 - 9:57 pm
Another stupid question. Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
The Chinese can't stop buying any more than we can stop selling. Both sides want to portray themselves as capable of independent policy, especially to their opposite numbers in the relationship, but both are captives of the circle of death.
Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
Higher interest rates obviously make the US Government debt more attractive to investors, but at the same time more expensive for the Government/taxpayers to service it. So far the US Government has been enjoying very low cost financing - what's not to like?
MrM
Boosting retail would do a better job of boosting GDP / consumer sentiment / jobs. Besides, industrial and export sectors have had months to shovel out any orders they could, and they normally take it easy near the end of the year for scheduled shutdowns. This would be a temporary surge so the tradeoffs aren't direct/over-the-long-run.
The US govt can't afford to pay a 5% average maturity on debt outstanding today with peak government receipts. Debt servicing as a % of receipts is what I find a relevant measure. Debt to GDP is more nebulous
EHP
I agree, it is not a clear cut, However, the link from retail sales to job creation is much longer than from export to jobs (not to mention that quality of jobs is very different). A push for retail sales if it were just a demand shock type of recession (a la 2001).
This time around, there are really just two ways to restart growth - exports (for which one needs a weak USD) or slow grind stabilizing housing market and waiting for households to rebuild their balance sheets (for this one might prefer a stronger USD).
I think the administration is favoring the first option (I do, too, personally, FWIW).
America will keep fighting emotional wars of stabilization without objectives or war aims until the money runs out.
There are rational objectives here -- but I hope you'll read the link I provided before you decide on the without objectives part. There's a real reason to oppose what could happen there if we left. Here's his description of the Taliban:
Now, on the other hand, they have local agendas but what they follow is this Taliban ideology. Now, what do I mean by that? I mean, the Taliban we saw in the '90s in Afghanistan - anti-education, anti-women, anti any kind of economic development - you know, it's amazing to think that the Taliban today even, eight years on after 9/11, they still don't have any economic plan. I mean, in all their pronouncements there is no social plan. There is no economic plan. There is no plan for education.
So the Taliban are exactly, politically speaking, they're exactly in the same position that they were 10, 15 years ago, and they haven't really moved forward. They haven't become more modern or more moderate or - you know, they're as extreme as they were before. And this would be devastating for Muslims in this region.
I agree the money running out provides a real problem. It may be someone else's problem -- as at this point in world history, there ain't no-body else.
why would australia want a strong currency? they have an export based economy right? - sn
They don't. They're overheating and concerned about it. The recession didn't hit them hard at all. IMO this is the best financial newspaper in Australia.
So ehp you see rates going up sooner and slower?
More likely but that is bad policy
waiting and then raising rapidly accomplishes much more in changing inflation expectations
australia is "stimulating" their economy just like we are. i don't get the impression that the aussies fear overheating from just reading the main story on the front page of afr. if you have a more specific link to the aussies overheating, i'll read it.
This is only a story if these 'other Fed officials' have any influence on policy whatsoever. They have zero. The purpose of these 'divergent views' is to pretend otherwise.
MrM
Or for that matter, the amount of money raised in equity markets by multinationals and spent abroad, relative to the amount of new investments by the domestic sector (thinking about all the fund raising being done in HK. The more successful the market is, the more it attracts new issuance, the harder it is to maintain the illusion of success)
ehp -- i read the link that you provided. very interesting. it really does not suggest an overheating economy. it is entirely confined to the housing sector, and leaves the impression that better zoning would ease price pressure. i'm sure i missed a very important point.
"This improvement is mainly due to movements in interest rates rather than in house prices (Graph 2). Mortgage rates are particularly low at present and, as the Bank has noted on a number of occasions, it is not reasonable to expect that interest rates will stay at the current low levels indefinitely. When they do rise towards more normal levels, discussions on housing affordability will again focus more on the level of housing prices relative to incomes."
is this a key takeaway? well, if interest rates rise then wouldn't housing prices fall?
sneering nihilist,
For the sake of the domestic economy, the RBA would rather pop the housing bubble earlier rather than later. The problem isn't zoning when you have vacant homes just sitting as investments. It's the sign of an asset bubble, which means rates are too low. They don't have the ability to just zone in on mortgage rates. Keep in mind 2 things happened in the last year. One was a coordinated set of global rates cuts intended to show solidarity and not expose anyone's momentary weakness. The other was government stimulus, which btw is very politically popular, and that acts as an effective lowering of interest rates if you will (govt has the lowest borrowing rate, can spend/lend it out in a way is similar to a rate cut). So Australia stimulated more than it needed to for a variety of reasons, but the biggest reason why it was too much was that China had some major inventory stockpiling of commodities for the bulk of this year due to their own crazy domestic lending policies.
If you're interested in raising rates, Norway might be next and would provide a more stable case study.
When I was there a couple of weeks ago, that's all they talked about. Think about it. Why raise rates on the tail of a recession unless you think the economy is about to overcook?
RBA has no control over zoning. And it's not just zoning, it's the whole land use system, especially the urban growth boundary. Their economy is overheating partly because they are eating the Chinese stimpack, and they have artificially high housing costs that the recession did not stop. And most of their mortgages are variable rate. They had to slow things down or get a bigger crash later.
MrM
Who pays dividends these days? I know what you mean by the CA though, but by that method you get confusing things like tax havens/the UK 'holding' assets that have nothing to do with their own populace or economy. To simplify what I meant, let's say GE issues new shares valued at $500bn in the Shanghai market somehow. They then take that money to offset writedowns they have on their US credit portfolios. Suddenly there are less assets to chase more shares in that market, which makes ponzi harder
ehp -- norway. i haven't looked in a while but they are an energy exporting country as well right? maybe it has to do with exporting a real commodity(not memory chips, etc.) priced in dollars.
EHP - I am simply trying to differentiate debt service the society does to itself (taxpayers paying interest to taxpayers) from the debt service that just goes out of the door.
scone, ehp -- thanks for the links. i'm boggin down here real fast...
flew back from northern california to las vegas today. the flight was full. completely full. it was an afternoon flight though, the morning flights always have more room.
Alternatively, the Fed has lost control of the message, and there's a breakout. It has been known to happen. And the O administration is very different in style form Republican control freaks. I wouldn't jump to the conclusion that these guys are so smart, so coordinated, and so disciplined that they can never spaz out. If that were true, we might not be in this mess in the first place. It's easy to be paranoid. It's hard to model human complexity and orneriness. If you always jump to the paranoid conclusion, you're bound to get it wrong because things aren't that consistent.
But don't be fooled that we want to protect the dollar -- the end-game is to get Asia to delink. In the end, they will protect their jobs, and take a hit on their investments.
What he said... except they aren't 'jobs' when you work for 'nothing'.
Well, yes. They try to run it like a college seminar. They think they are being democratic. So each faction gets a sentence or two. The Supreme Court is a little like that too, although the disagreements are more pronounced because they can write individual opinions. That's the thing here-- there's complexity, chaos, and contradiction, and no attempt at coherence. And it's effective, too-- look at the way you guys are second guessing it. Look at the way the Supremes stuff is minutely parsed. Saying many different things at once works very well indeed, on many levels. You guys should brush up your literary analysis skills. You'll find you can interpret any text umpteen ways.
If there was a certain one-way trade, that would create trouble. Thought the original carry trade moved the economy? We're in a much lower rate world today. Hot money
On the discussion of Afganistan last thread, we went to find bin Laden in Afganistan after 911. He apparently was not there, escaped, or is dead. Afganistan is like Iran. The premises or reasons these wars were begun by the U.S. are now seriously in question. Weapons of mass destruction were not found in Iraq and bin Laden was not found in Afganistan. Time to withdraw. The planned natural gas line being built through Afganistan is not a reson to stay. Neither is the revamped discredited domino theory. Militaryt occupation creates blowback and fuels opposition to the U.S.
the prez whether dem or repug gets directions (orders) from the central bankstas
And I would suggest this is exceedingly naive, rather than snarkily cynical. Quite frankly. Go back and read about the last few administrations, the pushme-pullyou among departments is mindboggling.
Now if the plan to remain in Afganistan and Iraq for a longer duration (that doesn't seem to make any sense based on the 'benefits'), then besides simple war profiteering, a larger plan to surround Iran for a war there would make some strategic sense. But the public has to be convinced despite conflicting evidence that Iran wants nukes to be an aggressor and seriously plans to nuke Israel killing Palestinians also. This Iranian 'new nuclear threat' is dubious the way weapons of mass destruction in Iraq and bin Laden hiding in Afganistan after miraculously pulling off the 911 attacks are now extremely dubious. The 911 attacks have not definitively been solved but the attack on the Taliban in Afganistan was quick. The serial Middle East wars will all be related and connected on dubious premises one after another.
As I understand it, the Taliban's gone from banning opium poppy growing to profiting from it. Not sure if that really qualifies as an economic plan but it indicates flexibility and/or opportunism.
I have no liking for the Taliban, but I do not see how preventing the Taliban from taking over Afghanistan qualifies as a rational objective. No more than stopping Ho Chi Minh from taking over all of Vietnam was the determining "domino" that, if it fell to "communism" would lead to all of SE Asia going communist. We didn't stop Ho, all of SE Asia wasn't taken over by one of various versions of "communists." It was the Vietnamese who (for whatever reasons) finally went in & stopped the Khmer Rouge from destroying Cambodia (something the US didn't seem to feel was worth doing) although it led to occupation of Cambodia by the Vietnamese for 10 years. Now Vietnam has trade relations w/the US & still hasn't recovered, i.e., still has birth defects, etc., from the huge amounts of Agent Orange sprayed there.
Afghanistan has been a disaster for every empire that's invaded & occupied it. The British Empire, the Soviets. I see no reason why things will end differently for the US empire. No one is indispensable, that includes the US.
As for national tragedies if authoritarian/viciously "conservative" dictatorship that will be a disaster if it/they continue--what about Myanmar? Don't see the US military marching into there. Afghanistan seems more like a pipeline war, but never discussed in those terms so also never discussed are possible alternatives.
I think we would be doing that no matter what had happened. The U.S. is a 'mature market' in more ways than one. And 'slow growth' was bound to show up in this century as the 1st world population ages. This crisis just triggered a process that was already in the cards.
"At one end of the stock exchange a man writes numbers on a whiteboard with a blue marker; at the other brokers tap sums into large calculators. Shares are bought and sold in crisp, verbal transactions; the deals noted on ledgers filled with carbon paper. In the corner a man with a laptop, the only computer in the room, keeps a record of the trading.
It resembles a scene from another era, but this is one of the world's best-performing stock markets. In January alone it doubled in value and the bull run is set to continue. Welcome to the surreal world of Zimbabwean economics."
"The winners in today's Zimbabwe are an eclectic group of share traders, currency dealers, estate agents, small-time entrepreneurs and cronies of Robert Mugabe's government, which is widely blamed for ruining what was once of Africa's most developed economies."
"It's quite embarrassing because the exchange is supposed to mirror the reality of the economy," said Emmanuel Munyukwi, the institution's chief executive. "We have benefited from the distortion of the market."
josap (profile) wrote on Thu, 10/8/2009 - 11:07 pm
When everyone wants to get rich, like the big players - everyone ends up poorer.
We want a middle class, but no one wants to be in it.
Even worse than class mobility and meritocracy mythologies, we fell for the oldest trick in the book - the belief that everyone can get rich together at the same time.
poic,
Wonder why all the fear (and selling/buying gold) from the possibility of hyperinflation coming to the U.S.? It seems like it's going to be just years and years of deflation but the fear 'stories' of hyperinflation are being circulated...maybe the dollar currency devaluation might get out of control from speculative attacks and there's something to the predictions of hyperinflation...hard to know what to believe anymore...and where the info or misinfo is coming from...
josap (profile) wrote on Thu, 10/8/2009 - 11:17 pm
Or at least look rich to their friends and nieghbors.
Good point... We made ourselves believe it too. Well, no, really, we just redefined "rich", much as we redefined the middle class as those making more than $18,000 and less than $250,000 annually.
Nice summary of the argument for exiting Afghanistan. I totally agree. We should bring our troops home and let the people living in Afghanistan sort things out themselves.
josap (profile) wrote on Thu, 10/8/2009 - 11:21 pm
Lots of talk about no longer using the USD as the reserve. That has shaken some people up big time.
If we leave the dollar hastily, I think it's almost inevitable we'll come crawling back. A real, lasting transition out of the dollar will be a decade-long affair with lots of compromise solutions along the way.
josap (profile) wrote on Thu, 10/8/2009 - 11:25 pm
I agree RIF. But people no longer trust the gov (ours or anyone elses) to not do something stupid.
I'm going to be very surprised if no government does something stupid. But I'll be even more surprised if it sticks and we don't fall back to the dollar in the ensuing currency crisis.
There have been allot of OMG actions and reactions with this crisis. One day things are fine, a week later the world is ending. One day the banks are solvent, the next it is imparitve that we hand them billions of dollars, without aksing in detail why or insisting we know where the money is going.
People don't like what has happened and are sure something worse may be next.
josap - Things are wicked enough out there that we are actually engaging in magical thinking disguised as economics. When reason fails, we fall back to an earlier stage of development. There is a concept in project management which basically says that for systems of a non-trivial level of complexity, no amount of money thrown at that project or subsystem will produce a useful result without the requisite skills or other contribution by a 'knowledge worker' being present.
josap,
Living in fear is BS...you'd think we still lived in the chaotic Middle Ages...evolution must have reversed itself...ongoing regression to impoverished barbarism...while everyone is building their moat and sharpening their swords and hoarding food...WTF
Agree that nothing works without someone who understands the project, system etc being directly involved. But some jobs require line by line understanding and some require thinking on the fly as well.
We seem to need thinking on the fly, but there are days I see no common sense at all.
azurite,
I was out in Lincoln City and Newport over the weekend. $55 a night using Priceline. Newport seems like it's prospering. A few vacant storefronts here and there. Still ridiculous asking prices for vacation homes. $1 million for a 1500 sq ft two story that would be $230K in a suburban neighborhood.
Well, a few years ago people were not worried about losing their job, or house, or retirement funds.
They felt that they had some control over their lives and future. The perception that one controls their own life feels safe.
Now that feeling of control is gone. You do your job and get laid off. You pay your mortgage and lose tthe equity in your home. You put money in the 401k and now it isn't enough. And if you did not do anything to get yourself into the mess ..... (although many, many people did just that, they don't want to admit even to themselves they messed up this badly.)
"A bankruptcy judge in New York has frozen the assets of a Beverly Hills money manager accused of funneling hundreds of millions of his clients’ dollars to a Ponzi scheme operated by disgraced financier Bernard L. Madoff....Irving Picard, a trustee representing victims of Madoff’s $65-billion Ponzi scheme, has accused Chais of collecting more than $800 million from his dealings with Madoff."
rich wrote: > So, where is all the U.S. equity money coming from? I think 90% of the money that's poured into the market since about May has been institutional leveraged (mainly prop desk) money. The market is built on a massive debt pyramid of margin, leverage, derivatives and TBTF speculation. That's why it's getting ready to crash.
I think the fed is funding the rapid trading programs of you know who. My question is where is all the stock going? Who holds it. Otherwise, is it possible to manipulate prices up with high frequency timed small trades and on balance not accumulate shares?
Is it possible to rapidly trade small lots and then dump one big pile on the sweet spot if you can see all the stops?
RE: 1st Great Depression,
'Indeed since the large banks felt confident that the Fed would protect them if necessary, the weeding of small competitors was a positive good, from their point of view.'
-Ben Bernanke, Federal Reserve Governor, Nov 8, 2002, conference to honor Milton Friedman's 90th birthday.
Fed officials appeared to subscribe to Treasury Secretary Andrew mellon's infamous "liquidationist" thesis, that weeding out "weak" banks was a harsh but necessary prerequisite to the recovery of the banking system.' -Ben Bernanke, 2002 Milton Friedman speech
Isn't the 'liquidationist' approach what is happening NOW?
When was the last time the market treated any kind of news as worthy of heavy selling? What happens when there IS a break downwards and the majority of equity long positions are held by trigger-fingered MoMo speculators? Who will be the buyers, especially with all the capitulation by the shorts?
Also, is it possible that 4% yields on 30 years is mostly the result of buying by Fed officials via OMA and indirect purchases by foreign proxiies? Or are there really significant numbers of "true believers" in the deflationary outcome (like Gary Shilling)?
But Mr. Warsh, as a Fed governor, has begun arguing that the central bank cannot afford to wait for irrefutable evidence of a solid expansion. Mr. Warsh recently argued that the Fed should take at least some of its cue from stock prices and other financial indicators, which turn around earlier and more quickly than the underlying economy.
“If policy makers insist on waiting until the level of real activity has plainly and substantially returned to normal,” he warned in a speech on Sept. 25, “they will have almost certainly waited too long.”
Mr. Warsh and some other Fed officials also argue that when the time does come to change gears, the central bank may have to raise rates almost as fast as it slashed them when the crisis began.
One borrower has at least a 38% front end DTI, the other MADE MONEY (tax credit + cash back at closing > down payment) to buy a home and admits to not being able to afford it.
I remember telling a gold seller once that I thought another depression was coming. We talked for an hour and he agreed with me over and over. It was like we were good friends. he figured I was a 'gold bug'. Then he sent his rare coin catalogue in the mail and emailed it and started calling me about 5 times a day. He would leave messages like how was I doing, etc. When I told the saleman I didn't want to collect coins, maybe just a buy a few Krueggerands, our friendlier times went out the window and it became a battle of tensley answering my objections and our discussion of the future depression took a back seat to the sales task at hand. I have heard of people losing a fortune buying rare gold coins at the top.
Effective Demand,
This was the dinner-time conversation of my wife and myself last night. We were talking about someone getting a loan; and then both said, "Who would give these people a loan?" I think imagined a commercial ala SNL for a bank called "Stupid Bank..." with the tagline... "We don't know whose watching our money, and frankly we don't care...". The commercial would have someone getting a car loan for their 10 year old; a 90 year old getting a 30 year mortgage, and the bank owner with a smile on his face handing out the money.
Lovely. The Senate had a chance to once again end sanctuary cities and voted against it.
Here is the rationale: This amendment is downright dangerous. It is dangerous to threaten policing funds to cities such as New York, San Francisco, Los Angeles, Chicago, Washington, DC, and smaller towns across America that have chosen to encourage their community members to report crime.
The Senate tabled this same amendment last year. The reason this body was wise enough to defeat it last year was because we understood that some of the toughest law enforcement officials in our country, from sheriffs to prosecutors, and a whole host of law enforcement officials in between, understand the cooperation of the communities essential in fighting crime. Senator Vitter's amendment would deny moneys to at least 50 cities in a whole host of States represented by Members on both sides of the aisle.
I want to solve the crime. I want to get the perpetrator. I want to convict the person and put them in jail. I don't want the opportunity to go to waste because of some political statement having nothing to do with the core issue of security in our communities. Do we want witnesses to be able to come forward and provide essential, crucial eye witness testimony about the crime or do we want them to hide in the darkness and not talk to police because they are afraid of their immigration status? I want to make sure a witness comes forth and testifies against a perpetrator and has no fear to do so. That is why local police oppose this amendment.
The unwillingness of that person to come forward because of a fear may lead to other crimes being committed by that same individual in the same community; perhaps to a child who might be molested, to a person who might be assaulted, to a family who might get robbed.
So instead of catching the perpetrator, we prefer to deny moneys to communities that have a view that community policing is in their best interests and that means bringing the community in as part of that effort. These cities have made decisions across the landscape of this country--urban, suburban, and rural--to say we care more about prosecuting the crime and finding the criminal and having the witness come forward to tell us all about that crime so we can stop that person from continuing to perpetrate crimes against other people in our communities than we care about the person's status. These cities have decided they do not want a chilling effect to prevent people from reporting crime.
That is what tough law enforcement will tell you. Sheriffs will tell you, prosecutors will tell you, police chiefs will tell you, and they will tell you they want the community to participate in fighting crime. That is why we should vote to table the Vitter amendment.
Yeah; because studies have shown that illegal immigrants are awesome at solving and stopping crime?
Typical ZH 'anonymous' comment:
'You want to short the dollar?
Collapsing currency?
Buy gold then(it's the inverse to the USD).'
(Maybe widespread 'expectations' of currency collapse can make it happen faster.)
How bout a 'Got Gold' commercial campaign.
Wow; there is also an amendment instructing the census to not count illegal immigrants for the sake of divying up House membership. This one didn't get voted down yet. Effin' ridiculous policy in this country re: illegal immigration. Sorry but even if you admit you can't stop it, at least you can work to make it difficult.... yaddayaddapolitical bs...
I find it surprising that the Yen, Euro, Oil and Gold are falling for that line. I guess BB was telling the truth about QE, but raising rates would crush housing, the TBTF and UE. So, I have doubts as to his sincerity.
Was reading some of the afternoon threads and it appeared there was some row about religion and politics; I guess in regards to gay marriage and abortion or something like that? The simple fact is all politicians will hold some percentage of position that are non-negotiable. Additionally, those who practice any religion or hold to some belief system will inherently be biased to make those personal positions non negotiable. So while a large percentage of the population might hold views which are non-negotiable based on their religion, it is not the mixing of church and state; in fact its the democratic process whereby people make decisions on how government runs based on their personal biases. Is this so abhorrent to some?
I'd like to go further and suggest that abortion and the definition of marriage are no more "religious" issues than gun-control or global warming are; but I'm not sure I have the energy to put sound logic forward... just I had that thought when reading the thread this afternoon/morning?
Probably too late to respond to Rosethorn's comment but: I think Newport's doing better than some of the other coastal cities, partly because it seems very skilled (not sure of the political connections) at obtaining gov't subsidies of one kind or another & is a county seat. But more houses seem to go onto the market every day & few seem to get sold, and there are a few houses I've gone by that seem empty even though there's no "for rent" or "for sale" sign. I agree, reality hasn't hit regarding vacation home prices--they're still waiting for those rich Californians, or Arizonians, or people from Connecticut or NY. They don't care, they're not fussy, they just want a high price. Rental prices have not gone down much either, but I noticed when I moved to the coast years ago, that almost everything was more expensive, including rents, although the housing stock seemed generally of lesser quality then had been available in Eugene. There are more vacant storefronts then you'd think.
Newport definitely thinks it's "special." I'm tired of it. I like the beaches although Newport appears to be doing its best to permanently pollute the Nye Beach & Agate Beach wayside beaches. Newport's planning & management of traffic & development is abysmal. Lincoln City has better restaurants than Newport, a great used books bookstore & a much much much better mayor. Lincoln City reported a substantial drop in hotel revenues, Newport's not saying how it's doing which probably means revenues are down. At least one hotel & one RV park in Newport is for sale.
Most of the coastal cities (a few exceptions) seem to regard OR's land use planning rules as voluntary. They can comply if they feel like it. A friend in Depoe Bay ended up taking the county all the way up to, hmm, maybe the OR Court of Appeals (whoever hears land use appeals after LUBA/administrative level) because the county wanted to approve construction of a home on the slope above her property--so much so that they "determined" that a fence was actually a retaining wall. She won on appeal & the Court of Appeals was pretty scathing in its opinion & retained jurisdiction until the county & Depoe Bay Planning Commission had complied with its decision. County got revenge by going after her for allegedly having work done on her house w/out a permit. Only way she could disprove it was to tear out the external walls of her house. County counsel then applied the law wholly incorrectly to a deny a FOIA request (Or has a state FOI statute) she filed to get some more detail about the complaint. She declined to pursue although I volunteered some legal assistance. She said it was a warning + revenge. Politics suck, city of Newport shuts off public comment/input in any way it can. City & county still elitist, aging "christian" white male dominated & too many of them are jerks. Upside is the county voters usually go Democrat (except sometimes at state rep levels), while most of OR outside of the PDX metro & valley vote wacko GOP. Wait, you're from OR, aren't you? You probably know that, sorry.
Lincoln county has persistently higher UE rates than the inland counties, always has a higher % of people living in poverty, currently has 2nd or 3rd highest number of homeless students of all OR counties.
Almost forgot to say, hope you had a good time. When I take time off I sometimes go down to Cape Blanco state park. Love that part of the coast. Beautiful, fewer people in the off season. Nice coffeehouse/used bookstore in Gold Beach.
“Some observers are concerned that this expansion will ultimately prove to be inflationary,” William C. Dudley, president of the New York Fed told an audience at the Fordham University’s Corporate Law Center. “This concern is not well founded.”
All that money for nothing and he doesn't think it is going to be inflationary? Let's see how much a Big Mac costs by the time the alphabet soup is back down to zero!
Beyond raising the overnight federal funds rate, the Fed also has to unwind $2 trillion in special programs that prop up paralyzed banks and credit markets.
It's cute the way they pretend they can take the money back.
Upthread I comment that the .gov could tax assests, and exempt Treasure instruments, rather than the Fed raising intrest rates.
Interesting. Yes, they could tax assets but they won't for several reasons. I think the states would scream murder and let's face it, the rich won't let them. If they actually succeed then they face asset flight. The $2T is gone. Everyone knows it an no one admits it. No, I'm sure the Fed will "recapitalize" itself with a VAT and some crushing energy taxes. The States however might ramp up their asset taxation to try and cure their overspending problems.
We can conclude the comments were driven by events in the currency markets. The great monetary and fiscal experiment is destabilizing. Most here can create the list of destabilizing govi actions. The worst is FHA essentially becoming the new, sub-prime lender. They are underwriting uneconomical loans that will lead to high, future defaults. It smacks of desperation.
The govi thesis is reflation at essentially all costs seemingly ignoring the consequences of failure. I suspect the comments are mostly double-talk. I would hope for developing dissension as the thesis is unsustainable.
At some point the market will inform Bernanke et al that the great experiment is a failure. Effectively providing down payments for cars and houses to those likely living paycheck to paycheck is clear evidence of financial insanity.
At some point the market will inform Bernanke et al that the great experiment is a failure. Effectively providing down payments for cars and houses to those likely living paycheck to paycheck is clear evidence of financial insanity.
It isn't like the markets haven't been giving big hints. The CA bond failure Wed couldn't have been clearer. When the Ts start going blatantly unbid the game is up. The argument can be made that buying our own debt with printed money is that failure but there's still a few more suckers to scalp. What's the NPV of a 3%/30yr when rates go to 6%? The Chinese are gonna be pissed because it also will come with their currency unpegging.
The CA bond issue adjustment was interesting. With all the USD sloshing around the central impact is in the exchange rates. We may not see it in rates as the Fed is supporting the long end by QE. Hard to imagine anyone buying long paper with their own money
Oldsters are getting screwed by the low rates. Even corporate debt is being recycled at low rates. Tops, TransDigm Use Junk Rally to Fund Shareholder Payouts - Bloomberg.com
Imagine that stock dividends being financed by low interest rate debt. That'll end well. Not. In the mean time retireds planning on 6% are finding their paper being redeemed and reinvestments are looking at 2-3%. Why bother?
That's just sad. He's waffling between 12,000 and 40,000 troops to the 'Stan and has done everything Bush would have done and probably more than McCain would have done. This is more pathetic than Gore's award.
"Very rarely has a person to the same extent as Obama captured the world's attention and given its people hope for a better future," the committee said in a citation.
News quiz. What radical politician went all raving with the following?
"We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar," ...
"All of this is a result of our out-of-control debt. This is why we need to rein in spending, and this is also why we need energy independence."
Just in case people think the Fed will tighten anytime soon.. no chance.. they are pouring gasoline on a doused fire until it lights up.
This leads to an interesting position we are in up here in Canuckistan.
We live in a huge, underpopulated country with lots of trees, minerals, and dino juice. Therefore, we are lazy and don't bother making anything. However having an export economy, and 80% of trade with the 800 lb (362 kg) gorilla next door means keeping your dollar low, something they've done pretty well at since about 1976. Makes our lumber cheap, makes GM open plants in Windsor, yadda yadda.
So here's the rub. Our economy up here tends to lag the US economy trends by oh, about 18 months. Like everyone else, we have/had a pretty big RE bubble. The problem is ours hadn't really popped yet before the rate dropped to zero, so rather than prop up the market, it was like throwing gasoline on a fire. We're back to bidding wars and zero down 35 yr am's - in the middle of a terrible recession - all backed by the govt through the CMHC. It's utter insanity. See Garth Turner's blog for a few examples.
The BOC is rumbling about rate hikes to cool off the RE re-bubble. However unlike Aus, we DO have an export economy, and our CAN$ is already up to 95c, ostensibly because of our huge icky oil sands. If we raise rates, surely it will rocket past par. So our central bank seems to be in a bit of a pickle. Seeing how this plays out should be.... interesting.
The UK version of continued mortgage lunacy. Interest free and downside protection.
"To qualify for HomeBuy Direct, borrowers must have a good credit history, no rent arrears and have no breaches of their current rental agreement, according to the government brochure for borrowers. It didn’t cite a specific credit score needed to qualify.
The loans are interest-free for the first five years before starting at 1.75 percent and rising annually by a level linked to inflation. The plan reduces the chance of negative equity because the amount owed to the government and developer will fall if the value of the home declines. If the property’s value has increased when it’s sold, the state and homebuilder will share in the profit based on the size of the loan. "
Yup. It's interesting that when the personalities are removed the words start sounding reasonable.
The sad part of all this is that 1/3rd of the last stimpak would have paid for an entire partial solarization of the nation's sunbelt. the industry, construction jobs and electricity savings would already be paying returns orders greater than what we got instead.
- NY Times the Nobel Committee announced Friday that it had awarded its annual peace prize to President Obama “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples” less than nine months after he took office.
This is so unfair. Obama should share the Nobel Peace Prize with George W, who set the bar at the record low level.
Next - Larry Summers and Ben Bernanke share the Nobel Memorial Prize in Economics for averting the global depression.
The biggest bang for the buck would be to use our abundant NG. If we could construct pipelines, NG can run cars, home heating and a/c, power generation ...all the heavy lifting relatively cleanly.
WTF? That's absurd and cheapens the award. Not that O' might not earn it down the road, but my mind boggles as to what he has done to merit it at this point.
Think of just places like LV, PHX, the IE. All crushed by the bubble and we could have solar roofed them all and saved construction jobs and reduced utility bills for them a lot and the rest of us as well. Meeting baseline with coal/hydro/nuke frees up even more NG for better uses.
DCRogers (profile) wrote (in reply to...) on Thu, 10/8/2009 - 10:08 pm
There are rational objectives here -- but I hope you'll read the link I provided before you decide on the without objectives part. There's a real reason to oppose what could happen there if we left.
That's an emotional war. You can't afford the empire any more -- which was mostly you subsidizing American multinationals anyway. Without the justification of you acting as a handmaiden to economic interests with lobbying power over the foreign policy establishment, all that's left is that you don't want to see bad things happen to nice people.
It's great fun to make up lists of who will and will not be invited to the greatest garden party the city has ever seen, and which fabulous pavilion you will hold it in, but I'm not sure it's a good way for a bankrupt to spend his money. America = bankrupt. Your war = frivolous expense.
If you think it's going to cost you face to disengage after you led all those suckers at home and abroad into believing you were going to do something good, well that's why you should fight better-framed and more economical wars and not stake your national reputation on stupid, emotional ventures like reconstruction efforts in countries with no economic potential (Afghanistan), or building the best Yugoslavia the world has ever seen (Iraq). There are domestic priorities that need attention. Your foreign adventures will not last long if the home country itself undergoes substate fragmentation.
Blackhalo (homepage, profile) wrote on Fri, 10/9/2009 - 6:56 am
WTF? That's absurd and cheapens the award. Not that O' might not earn it down the road, but my mind boggles as to what he has done to merit it at this point.
Maybe you've noticed that international institutions are mostly useless supper clubs.
Ken Lewis (CEO Bank America), Vikram Pandit (CEO Citi), Ken Thompson (former CO Wachovia), Alan Schwartz (former CEO Bear Stearns) and Dick Fuld (former CEO Lehman Brothers)
Will all share in the 2009 Nobel Prize in Economics.
Also we need to rename it as the No-Balls Peace Prize.
Rob Dawg (homepage, profile) wrote on Fri, 10/9/2009 - 6:26 am
We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar," ...
"All of this is a result of our out-of-control debt. This is why we need to rein in spending, and this is also why we need energy independence."
Let me guess, it's a Republican trying to rebrand herself as somehow responsible after the party split the country, carried us into two disastrous foreign wars, set the credit system on a course for global bankruptcy and proved itself to be full of criminally incompetent religious bigots? Let me guess, her plan is to grant generous emergency licenses for exploiting American resources and start a war with Iran despite the fact that she nominally decries external adventurism.
Good morning - Happy BFF to everyone. I wonder if Sheila has any money in the checkbook today and will take us across the 100 level.
on the comment above "If we could construct pipelines" and using natural gas, it is not only constructing pipelines, and establishing distribution points, which would costs tens of billions of dollars, but also retrofitting tens of millions of vehicles, etc., to run on the fuel. In the U.S., we have close to 140 million vehicles that run on gas and another 40 milion tha run on diesel (if a web resource is correct)
.......Afghanistan is going downhill........the generals need more troops and the pols are playing it like "Age of Empires" again........I knew the Nobel Prize was a load of propagandist crap before today, now it's confirmed. And Summers doesn't believe the idea of the "new norm", but then he's another "doubling-talking" Professor Corey if I ever heard one - what a piece of work HE is............OBAMA: GET the troops the Hell out of Afghanistan unless you'll commit another 100,000 soldiers and take the heat for it. Be a Man and make a stand for a change we can believe in! .....geeze.....Get a job as a community organizer or something less dangerous to ALL of US..........
Using solar to heat water to drive the turbines to produce electricity isn't very feasible either - in the desert areas where the sun and terrain are good for solar, the amount of water needed isn't avalable. Passive solar is one of the most expensive forms of energy production around, and the grids can't handle the variable power loads, without billions in fixes. And the biggest reason, solar doesn't generate power at night, so unless the southwest wants to have minimal lighting and no AC in August, they need backup generation capacity using traditional methods. Don't even suggest batteries. Solar will only be a small piece of peak power generation, if they can get around the environmental issues and lack of rare earth materials needed to build higher capacity systems.
Okay question of the day: Lunar bombing mission--harmless water search or culmination of ancient occult magic ritual to bring forth the new god-king? Just joking, lets hope Apollo doesn't take offense to us bombing his domain... and before you correct me, yes I know Apollo is usually associated with the sun. Good morning everyone.
While I don't think Obama necessarily deserves the Peace Prize, I am hard pressed to think of another who does deserve it. It seems to be a down year for peace. Are they allowed to skip a year?
not to put Obama down but you must understand where that award is coming from - Scandinavia! in the early 90s I had a friend visit Stockholm and Helsinki for over a month and she was the toast of both towns... didn't pay a dime, treated like a rock star. Why? she was a very good looking young woman or to paint it more precisely she looked like Whitney Houston in her prime. (disclosure: she later became my gf for a few years but held off any proposal cause I was worried about the extreme racism of my town where I grew up - no profile in courage, me)
You don't see people of color over there unless they're Turks and those people are looked down upon big time....
Terry......wrong......individual units like the two I have on the property are PERFECT for the SW.........The utilities can't make money from it though:.........(solar panels into battery storage back to the grid if any extra).....
Well the'll get rid of the qualative easing first. There's so many special programs pumping money into the economy that the "effective" rate is arguably less than zero. Which is to say that money is still easier for banksters to get out of the Fed than the interest rate alone would indicate. So it's the auxiliary money pumping programs that we'll have to look at when we're trying to see first evidence of Fed tightening.
Bernanke told Congress in July that the Fed may step beyond primary dealers and conduct the reverse repurchase agreements [with] government-sponsored enterprises or a “range of other counterparties.”
This is interesting. Taking Treasury cash out of the GSEs and pushing Fed-owned Treasury paper into its place. Call it what you want, someone looks to be setting up a recycling facility.
Edit: Any questions about how they are going to strip the cash out of people's retirement accounts are now tidily settled.
Vonbek777 (profile) wrote on Fri, 10/9/2009 - 3:04 pm Okay question of the day: Lunar bombing mission--harmless water search or culmination of ancient occult magic ritual to bring forth the new god-king?
The mission is dedicated to John Lennon birthday and aims at disruption of Elliot waves, especially the fifth one.
BSR - I would like to see how much energy costs you per kw, when you include the initial costs. I doubt it is as cheap as power off the grid. In any event, I was not talking about the ones and twosies out there, but real large scale solar power generation. It will only provide a small share of peak power needs.
BSR - I would like to see how much energy costs you per kw, when you include the initial costs. I doubt it is as cheap as power off the grid.
This is like the cost of automobiles. It all depends on how you want to compute the indirect costs, and what the reckonable damages to BSR's facility would be if the umbilical to civilization ran dry. With the power line already there and maintained, the sunk social costs are high but he'll have a better position to ride out deinfrastructuralization. For people who are solar only, I think that any reasonable assessment of line manufacture, installation and maintenance over a 20 year time period would mean the solar cells had to be extremely expensive to not be efficient.
The idea that there's not enough water to run power generation facilities out in the desert is nonsense though. Any kind of system would have to be closed-cycle to keep the water either pure enough or doped appropriately to preserve the turbine blades.
KCoop
some is definitely up with the IGNORE feature
just checked my list and not only was Nemo on it along with that
perennial favorite TJ & the Bear but suspiciously and I use that word in
its fullest Barack Obama... which gave me pause cause I didn't think that
a person of his character would pass muster with this here Illuminati!
"The idea that there's not enough water to run power generation facilities out in the desert is nonsense though. Any kind of system would have to be closed-cycle to keep the water either pure enough or doped appropriately to preserve the turbine blades."
Ahh - your conclusion is incorrect - all water driven turbine power generation systems, including active solar, need access to large amounts of replacement water. That is why coal and gas fired plants are located next to water sources (and why they have cooling towers), Getting that much water in the desert actually shut down a recent proposed active solar project
EDIT - the actual water in the turbine is closed - its the cooling water that causes the problems
WTF? That's absurd and cheapens the award. Not that O' might not earn it down the road, but my mind boggles as to what he has done to merit it at this point.
The best part is that he was actually nominated less than 2 weeks after taking office-
Obama's like that guy at the craps table who just can't seem to miss... I say ride his coattails,
if I were in post with a feature I'd try like hell to get him on film for say 5 minutes, that will get you
at least a best supporting actor nod from the Academy...
'hey, the guy's money!'
......
he wasn't over in Denmark for Chicago, that what was a ruse, like when Kissinger had the flu and secretly
flew to China in '71... he was going for his gold...
I also think this is a bit of window dressing. Ultimately the Fed's decisions will come down to what Bernanke thinks is best, and he has already laid out his plan of a zero-rate policy for quite some time. There is almost no chance the Fed raises rates while unemployment is still going up, which I think will happen for at least another year and perhaps as long as 2-3 years. And then unemployment will most likely stabilize rather than go down, because there are very few, if any, catalysts for sustainable job growth in this country.
Gnome - as it is getting closer to the end of the year, maybe we should start a poll on the total number of closures in '09? Don't know what kind of prize would be appropriate, though.
Nobel peace prize = blood money from the inventor of dynamite. American D-FENS firms should also do the same, Raytheon Peacemaker Trophy, Hug of Halliburton prize or Lockheed Love medal.
Terry, granted, this area seems to be the future "mecca" for solar start-ups in the near future. The first system our county is having public meetings on, is a "wet system" in an area that has limited water. You ARE correct in THAT as a "stand-up" regional solution, there are distinct limits to its workability. First is cost - electricity here is 10-cents a kilowatt for all usage.......nothing competes with that .........and in other than "onesies and twosies", as you related, it is not currently workable. THIS area (at the edge of Death Valley), though hot, has very few humidity spikes, thereby allowing cheap "evaporative cooling". Winters are mild, alleviating huge power drains during that time of year as well..........maybe I'm just a "onesie" kind of guy - and, in a much better mood after a cup of coffee......sorry about the rant, pre-java....
Ahh - your conclusion is incorrect - all water driven turbine power generation systems, including active solar, need access to large amounts of replacement water.
They are not venting steam into the interior of an Ohio class boat, and they are not dumping it externally either. And surely not on liquid metal piles.
Designing your system to be open cycle is an economy measure, not a requirement.
I don't buy it. These guys never say anything in public without permission.
They are deliberately trying to convince the market to build in some "uncertainty" about the future course of monetary policy. I do not know why, but that is clearly what they are trying to do.
Don't know how your were first. Things were so quiet I thought I was here all alone.
Some people are taking that as tough talk
...which is nonsense. The "Exit Strategy" section of Bernanke's speech starts with: "My colleagues at the Federal Reserve and I believe that accommodative policies will likely be warranted for an extended period."
Too many conflicting signals to be a coincidence. The entire plan is to send conflicting signals. Again, I am not entirely sure why.
Have they checked with Goldman Sachs to see if it's ok to raise the rates ?
~splat
Nemo wrote:
Trying to fool all of the people, all of the time? Like pigs at a trough, everyone can find something they like
C'mon nemo, you know why. If they make people think that times are going to be tough or even uncertain, any news that isnt awful will be seen as positive. Like at Christmas, when you are really hoping for a new car but convince yourself that are going to get a sweater. Tnen you are really happy when you get a new iPod.
I think "improved sufficiently" means Bernanke will wait for a meaningful decline in the unemployment rate.
Will he still be around for that?
Gotta talk up the dollar as it's about to croak.
"I think "improved sufficiently" means Bernanke will wait for a meaningful decline in the unemployment rate.
Will he still be around for that?"
if he is he'll be about 150
If they are concerned about reining in money supply, they'll act first on their alternative facilities.
If they want to scare people out of risk trades and back into the dollar, they'll raise interest rates first. I don't think they want to do that though. Hurts bank profits (interest rate derivatives are #1 seller, banks are probably unanimously short), messes with mortgages.
Mike_ --
Those are entirely different. If they want people to think times will be tough, they will signal accommodative policy (e.g., the Bernanke quote I mentioned).
Jansen re-published a different take, which is that they want market participants to be a little scared; i.e., not to assume too much about the future course of Fed policy.
I do not think they are playing as simple a game as you suggest.
Keep in mind there was the hysteria started by Fisk about concerns for the USD. Central bankers don't like to be bullied, and will probably cause the opposite to happen just to screw with anyone trying to push them around
CR:
Some people are taking that as tough talk, see: Dollar Rises After Bernanke Says Fed Ready to ‘Tighten’ Policy, but I disagree - I think "improved sufficiently" means Bernanke will wait for a meaningful decline in the unemployment rate.
Agreed wholly CR. If Bernanke tried to tighten early, he'd be chased around with the spectre of Japan and political attacks that he hated America. Fed "policymakers" can say whatever they want, the reality is, they showed late last year they have no fortitude in the face of political pressure. They won't make any policy that isn't totally accommodative until they're told they can. They might make a gesture or two, but they'll retrench quickly if the gesture turns out to have any meaningful effect.
Would these announcements have anything to do with the rather lackluster sale of Treasuries today?
Hey CR --
...but I disagree - I think "improved sufficiently" means Bernanke will wait for a meaningful decline in the unemployment rate
Warsh, Hoenig, and Fisher have all said (or strongly implied) the opposite.
I tend to agree with you, but that's a lot of jaw-boning by FRB members trying to make us question this assumption...
This is OT, but think these numbers are important.
Long-term mutual fund flows, total equity (domestic and foreign), by week:
9/2 -4.35 billion
9/9 -1.28 billion
9/16 -1.39 billion
9/23 -1.87 billion
9/30 -4.16 billion
In Sept. alone, more than $12 billion of flows moved out of equity funds. Since foreign equity was about flat, all this loss was in domestic equity mutual funds.
ICI -
Long-Term Mutual Fund Flows, October 7, 2009
Meanwhile, in Sept. more than $45 billion flowed into U.S. bond mutual funds.
Mutual fund flows are the best measure of retail investor sentiment. The mass public isn't buying this rally, especially in the U.S. You are seeing huge skepticism about U.S. stocks and also the decay of the 401(k) savings system and its equity emphasis, as we knew it.
So, where is all the U.S. equity money coming from? I think 90% of the money that's poured into the market since about May has been institutional leveraged (mainly prop desk) money. The market is built on a massive debt pyramid of margin, leverage, derivatives and TBTF speculation. That's why it's getting ready to crash.
That's why I like bullion more than miners. Normally, miners are the lowest correlation stock sector. At times they are the only negative correlation sector. But lately, that hasn't been the case, and I think it's due to the ponzi debt propping up the market. When margin washes in, all stocks rise. When it washes out, all stocks sink. There's no low correlation left.
Over time, miners probably will be low correlation again. But maybe not until after the margin tide washes out. The providers of margin debt, largely prime brokers, will start to get nervous soon and cut it back. The Fed is suppose to regulate stock market margin under Reg T. But that was long ago and far away, in another galaxy. When was the last time you heard anyone at the Fed talk about Reg T?
Dollar will be fine.
OT: nova, reply on Afghanistan on last thread.
Nemo (homepage, profile) wrote on Thu, 10/8/2009 - 9:44 pm
I tend to agree with you, but that's a lot of jaw-boning by FRB members trying to make us question this assumption...
At this point, I don't think any amount of jawbone can paper over the Feb's obvious institutional bias toward easing. Between Japanese difficulties getting themselves out of the Lost Decade stimulus and the fact that the population of the Republic has been told for decades they are entitled to never hear any sort of bad news, I don't think there is a chance in the world the Fed can crack the whip and mean it and I don't think anybody is fooled at this point.
nova
I would say it has to do with gold going up $60 this week. No matter their expectations, they don't like discontinuous moves and they don't like the idea of alternative currencies which would hamper their ability to control monetary policy. What's more, a stronger USD would help boost US retail activity and GDP at this point just when the ECB has said 'no more' to appreciation, and Asia is getting anxious
australia just raised rates. different set of rules down under?
rich
Thanks for that link
Question is not when they raise but how much when they do.
Good policy would be wait until early 2011 then raise by 100 bps or more at once
Thanks for the answer EHP
sneering nihilist, I was just going to comment -- the Fed has to make some noise to cover their b*tts as the other central banks start to raise rates. The Aussies were first -- expect more noise to follow as others (actually concerned about protecting their currencies) follow suit.
But don't be fooled that we want to protect the dollar -- the end-game is to get Asia to delink. In the end, they will protect their jobs, and take a hit on their investments.
the FTC should require Edmund Andrews to place a disclaimer in articles stating that he's received free rent from the banks (JPM, i believe) for several years now...
Fed funds probabilities
over 2 to 1
if anything, the probability of Fed tightening has been slightly declining over the past week or so - not surprisingly, given bad jobs data. What is surprising is that people who believe the Fed will raise the rate think the rate will go up by 50 bps, not by 25 bps.
montas ankle
much too much happens by 2011. Will the new head of the ECB be comfortable with rates going up so soon after a UK default? What about rolling Spanish debt via Spanish banks? What about California, Illinois, NY, Arizona, ...?
DCRogers (profile) wrote on Thu, 10/8/2009 - 9:49 pm
OT: nova, reply on Afghanistan on last thread.
RE: "we'll just stand by and watch?"
It depends on how much your county remains ruled by emotional ninnies, and how much reality / gravity are doing the decisionmaking. America will keep fighting emotional wars of stabilization without objectives or war aims until the money runs out.
The decrease in the unemployment rate comes after the Reserve Bank on Tuesday became the first central bank in the G20 to begin tightening monetary policy, as it raised the official cash rate from 3 per cent to 3.25 per cent.
Australian unemployment rate falls to 5.7pc | The Australian
somebody tell these guys we are going into gd2, ww3, etc. et al.
a stronger USD would help boost US retail activity
.. and would kill exports
To consume or to produce, that is the question
Pick your poison
Another stupid question. Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
CR's blog:
Good stuff from CR on two levels:
Hat-tip drudge: Financial Times: Asia steps in to support dollar
Asian central banks intervened heavily in the currency markets on Thursday to stem the appreciation of their currencies against the US dollar amid fears that their exports could be losing ground against China.
The mainly south-east Asian countries have been spurred to defend the competitiveness of their currencies by China’s decision to in effect re-peg the renminbi to the dollar since July last year.
nova (homepage, profile) wrote on Thu, 10/8/2009 - 9:57 pm
Another stupid question. Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
The Chinese can't stop buying any more than we can stop selling. Both sides want to portray themselves as capable of independent policy, especially to their opposite numbers in the relationship, but both are captives of the circle of death.
Don't they have to raise the interest rate sooner than later because they need to sell US gov. debt? Isn't their a connection between them?
Higher interest rates obviously make the US Government debt more attractive to investors, but at the same time more expensive for the Government/taxpayers to service it. So far the US Government has been enjoying very low cost financing - what's not to like?
MrM
Boosting retail would do a better job of boosting GDP / consumer sentiment / jobs. Besides, industrial and export sectors have had months to shovel out any orders they could, and they normally take it easy near the end of the year for scheduled shutdowns. This would be a temporary surge so the tradeoffs aren't direct/over-the-long-run.
why would australia want a strong currency? they have an export based economy right?
Thank you all for the replies to my question.
The US govt can't afford to pay a 5% average maturity on debt outstanding today with peak government receipts. Debt servicing as a % of receipts is what I find a relevant measure. Debt to GDP is more nebulous
EHP
I agree, it is not a clear cut, However, the link from retail sales to job creation is much longer than from export to jobs (not to mention that quality of jobs is very different). A push for retail sales if it were just a demand shock type of recession (a la 2001).
This time around, there are really just two ways to restart growth - exports (for which one needs a weak USD) or slow grind stabilizing housing market and waiting for households to rebuild their balance sheets (for this one might prefer a stronger USD).
I think the administration is favoring the first option (I do, too, personally, FWIW).
America will keep fighting emotional wars of stabilization without objectives or war aims until the money runs out.
There are rational objectives here -- but I hope you'll read the link I provided before you decide on the without objectives part. There's a real reason to oppose what could happen there if we left. Here's his description of the Taliban:
Now, on the other hand, they have local agendas but what they follow is this Taliban ideology. Now, what do I mean by that? I mean, the Taliban we saw in the '90s in Afghanistan - anti-education, anti-women, anti any kind of economic development - you know, it's amazing to think that the Taliban today even, eight years on after 9/11, they still don't have any economic plan. I mean, in all their pronouncements there is no social plan. There is no economic plan. There is no plan for education.
So the Taliban are exactly, politically speaking, they're exactly in the same position that they were 10, 15 years ago, and they haven't really moved forward. They haven't become more modern or more moderate or - you know, they're as extreme as they were before. And this would be devastating for Muslims in this region.
I agree the money running out provides a real problem. It may be someone else's problem -- as at this point in world history, there ain't no-body else.
why would australia want a strong currency? they have an export based economy right? - sn
They don't. They're overheating and concerned about it. The recession didn't hit them hard at all. IMO this is the best financial newspaper in Australia.
AFR.com - Sorry, we've encountered a problem
why would australia want a strong currency? they have an export based economy right?
Australia wants stable purchasing power of its currency and hence wants to avoid inflation
So ehp you see rates going up sooner and slower?
More likely but that is bad policy
waiting and then raising rapidly accomplishes much more in changing inflation expectations
"Some people are taking that as tough talk"
Some people think it's fun to light farts on fire. I'm not sure the qualification "Some people" is much authority here....
S&P500 P/E up 101% since March 9th Bespoke Investment Group: S&P 500 Sector P/E Ratios Rise
"Debt servicing as a % of receipts is what I find a relevant measure."
That's how you run a ponzi scheme, sho nuff...
australia is "stimulating" their economy just like we are. i don't get the impression that the aussies fear overheating from just reading the main story on the front page of afr. if you have a more specific link to the aussies overheating, i'll read it.
It was why Japan could maintain 200% debt to GDP just as easily at the US with 50% GDP during the last yield peaks
RBA: Speech-Housing Market Developments
You are welcome. Thanks for the list of fraudulent looking shorts yesterday. Good digging.
ehp -- about halfway through. really good link. gracias.
It's so cute the way they pretend to think they control interest rates.
Debt servicing as a % of receipts is what I find a relevant measure. Debt to GDP is more nebulous
Quite right. I would add that it is debt servicing to the rest of the world that really matters
Other Fed officials [have] similar views ...
This is only a story if these 'other Fed officials' have any influence on policy whatsoever. They have zero. The purpose of these 'divergent views' is to pretend otherwise.
MrM
Or for that matter, the amount of money raised in equity markets by multinationals and spent abroad, relative to the amount of new investments by the domestic sector (thinking about all the fund raising being done in HK. The more successful the market is, the more it attracts new issuance, the harder it is to maintain the illusion of success)
ehp -- i read the link that you provided. very interesting. it really does not suggest an overheating economy. it is entirely confined to the housing sector, and leaves the impression that better zoning would ease price pressure. i'm sure i missed a very important point.
"This improvement is mainly due to movements in interest rates rather than in house prices (Graph 2). Mortgage rates are particularly low at present and, as the Bank has noted on a number of occasions, it is not reasonable to expect that interest rates will stay at the current low levels indefinitely. When they do rise towards more normal levels, discussions on housing affordability will again focus more on the level of housing prices relative to incomes."
is this a key takeaway? well, if interest rates rise then wouldn't housing prices fall?
and if housing prices fall, is this an indication of reduced inflation? deflation... whatever...
sneering nihilist,
For the sake of the domestic economy, the RBA would rather pop the housing bubble earlier rather than later. The problem isn't zoning when you have vacant homes just sitting as investments. It's the sign of an asset bubble, which means rates are too low. They don't have the ability to just zone in on mortgage rates. Keep in mind 2 things happened in the last year. One was a coordinated set of global rates cuts intended to show solidarity and not expose anyone's momentary weakness. The other was government stimulus, which btw is very politically popular, and that acts as an effective lowering of interest rates if you will (govt has the lowest borrowing rate, can spend/lend it out in a way is similar to a rate cut). So Australia stimulated more than it needed to for a variety of reasons, but the biggest reason why it was too much was that China had some major inventory stockpiling of commodities for the bulk of this year due to their own crazy domestic lending policies.
If you're interested in raising rates, Norway might be next and would provide a more stable case study.
CR,
Another excellent chart. Well done.
Man, that's too complicated and probably not easy to find
Interest payments to the ROW, otoh, is readily available
To the rest of the world: Interest payments: Federal Government Current Receipts and Expenditures: Billions of dollars; Seasonally adjusted at annual rates (quarterly)
or at the BEA web site
@ SN
When I was there a couple of weeks ago, that's all they talked about. Think about it. Why raise rates on the tail of a recession unless you think the economy is about to overcook?
RBA has no control over zoning. And it's not just zoning, it's the whole land use system, especially the urban growth boundary. Their economy is overheating partly because they are eating the Chinese stimpack, and they have artificially high housing costs that the recession did not stop. And most of their mortgages are variable rate. They had to slow things down or get a bigger crash later.
MrM
Who pays dividends these days? I know what you mean by the CA though, but by that method you get confusing things like tax havens/the UK 'holding' assets that have nothing to do with their own populace or economy. To simplify what I meant, let's say GE issues new shares valued at $500bn in the Shanghai market somehow. They then take that money to offset writedowns they have on their US credit portfolios. Suddenly there are less assets to chase more shares in that market, which makes ponzi harder
ehp -- norway. i haven't looked in a while but they are an energy exporting country as well right? maybe it has to do with exporting a real commodity(not memory chips, etc.) priced in dollars.
scone -- do economies act like light switches? pitch black to too bright? frozen to boiling?
scone -- do economies act like light switches? pitch black to too bright? frozen to boiling?
That's what the Chinese are asking themselves right now. Too much stimulation causing whiplash:
China's roaring economy: Bull in a china shop | The Economist
From EHP, last thread:
I wish I had a friend with the name Wu Hu
Or his brother, Hu Nu
Morgan Stanley on the RBA's decision:
Morgan Stanley - Global Economic Forum
Thanks, Rich. I'm proud to have contributed to that data point. It's good to know that I-- I-- I matter in this world.
EHP - I am simply trying to differentiate debt service the society does to itself (taxpayers paying interest to taxpayers) from the debt service that just goes out of the door.
after reading the thread i think the commentariat got it right
there are no divergent views
different members of the fed have different speaking parts in the play
good cop bad cop...blah blah blah
we are being thrown a head fake
"Rift Emerges in Fed Over When to Tighten Money"
Cock and bull stories.
scone, ehp -- thanks for the links. i'm boggin down here real fast...
flew back from northern california to las vegas today. the flight was full. completely full. it was an afternoon flight though, the morning flights always have more room.
:peacesign:
Alternatively, the Fed has lost control of the message, and there's a breakout. It has been known to happen. And the O administration is very different in style form Republican control freaks. I wouldn't jump to the conclusion that these guys are so smart, so coordinated, and so disciplined that they can never spaz out. If that were true, we might not be in this mess in the first place. It's easy to be paranoid. It's hard to model human complexity and orneriness. If you always jump to the paranoid conclusion, you're bound to get it wrong because things aren't that consistent.
Isn't it some where in the Fed job discription that they must confuse everyone? Talk for an hour and say nothing? Say several things at once?
DCRogers wrote:
What he said... except they aren't 'jobs' when you work for 'nothing'.
What benifit woud we get if Asia delinks?
I don't understand.
Say several things at once?
Well, yes. They try to run it like a college seminar. They think they are being democratic. So each faction gets a sentence or two. The Supreme Court is a little like that too, although the disagreements are more pronounced because they can write individual opinions. That's the thing here-- there's complexity, chaos, and contradiction, and no attempt at coherence. And it's effective, too-- look at the way you guys are second guessing it. Look at the way the Supremes stuff is minutely parsed. Saying many different things at once works very well indeed, on many levels. You guys should brush up your literary analysis skills. You'll find you can interpret any text umpteen ways.
dryfly wrote
I think that applies to a lot of us today
If there was a certain one-way trade, that would create trouble. Thought the original carry trade moved the economy? We're in a much lower rate world today. Hot money
@ EHP -- BTW, how did the Ph.D. thing go? Are you Dr. EHP yet? Or did I hear that wrong?
scone
Haven't gone for a PhD, but it's something I might have changed my mind on doing in the next few years
scone
let me suggest it works the other way around
the fed doesnt work for O nor dubya
the prez whether dem or repug gets directions (orders) from the central bankstas
On the discussion of Afganistan last thread, we went to find bin Laden in Afganistan after 911. He apparently was not there, escaped, or is dead. Afganistan is like Iran. The premises or reasons these wars were begun by the U.S. are now seriously in question. Weapons of mass destruction were not found in Iraq and bin Laden was not found in Afganistan. Time to withdraw. The planned natural gas line being built through Afganistan is not a reson to stay. Neither is the revamped discredited domino theory. Militaryt occupation creates blowback and fuels opposition to the U.S.
the prez whether dem or repug gets directions (orders) from the central bankstas
And I would suggest this is exceedingly naive, rather than snarkily cynical. Quite frankly. Go back and read about the last few administrations, the pushme-pullyou among departments is mindboggling.
josap
if asia delinks there are several ramifications
one in particular, they orient their economies (no pun intended) more towards consumerism and less towards export
and related, their currencies become worth more (rel to the dollar)
The so-called 'War On Terror' and the Bailout Nation are serious policy failures.
I do not know why, but that is clearly what they are trying to do.
.............
Are they buying time to create the next bubble?
Now if the plan to remain in Afganistan and Iraq for a longer duration (that doesn't seem to make any sense based on the 'benefits'), then besides simple war profiteering, a larger plan to surround Iran for a war there would make some strategic sense. But the public has to be convinced despite conflicting evidence that Iran wants nukes to be an aggressor and seriously plans to nuke Israel killing Palestinians also. This Iranian 'new nuclear threat' is dubious the way weapons of mass destruction in Iraq and bin Laden hiding in Afganistan after miraculously pulling off the 911 attacks are now extremely dubious. The 911 attacks have not definitively been solved but the attack on the Taliban in Afganistan was quick. The serial Middle East wars will all be related and connected on dubious premises one after another.
As I understand it, the Taliban's gone from banning opium poppy growing to profiting from it. Not sure if that really qualifies as an economic plan but it indicates flexibility and/or opportunism.
I have no liking for the Taliban, but I do not see how preventing the Taliban from taking over Afghanistan qualifies as a rational objective. No more than stopping Ho Chi Minh from taking over all of Vietnam was the determining "domino" that, if it fell to "communism" would lead to all of SE Asia going communist. We didn't stop Ho, all of SE Asia wasn't taken over by one of various versions of "communists." It was the Vietnamese who (for whatever reasons) finally went in & stopped the Khmer Rouge from destroying Cambodia (something the US didn't seem to feel was worth doing) although it led to occupation of Cambodia by the Vietnamese for 10 years. Now Vietnam has trade relations w/the US & still hasn't recovered, i.e., still has birth defects, etc., from the huge amounts of Agent Orange sprayed there.
Afghanistan has been a disaster for every empire that's invaded & occupied it. The British Empire, the Soviets. I see no reason why things will end differently for the US empire. No one is indispensable, that includes the US.
As for national tragedies if authoritarian/viciously "conservative" dictatorship that will be a disaster if it/they continue--what about Myanmar? Don't see the US military marching into there. Afghanistan seems more like a pipeline war, but never discussed in those terms so also never discussed are possible alternatives.
josap wrote:
We keep our jobs but then have to pay our own bills - for starters. Sort of like 'growing up'.
Sort of like 'growing up'. - dryfly
I think we would be doing that no matter what had happened. The U.S. is a 'mature market' in more ways than one. And 'slow growth' was bound to show up in this century as the 1st world population ages. This crisis just triggered a process that was already in the cards.
"We keep our jobs but then have to pay our own bills - for starters. Sort of like 'growing up'."
a lot of people are going to find out that a Louis vuitton habit on a barista wage without a credit card is going to be hard.
I found this story about the Zimbabwe stock market circa 2006. Sound familiar?
This is Bernanke's dream situation.
As Zimbawe's economy collapses, a tiny few make huge profits |
Business |
The Guardian
"At one end of the stock exchange a man writes numbers on a whiteboard with a blue marker; at the other brokers tap sums into large calculators. Shares are bought and sold in crisp, verbal transactions; the deals noted on ledgers filled with carbon paper. In the corner a man with a laptop, the only computer in the room, keeps a record of the trading.
It resembles a scene from another era, but this is one of the world's best-performing stock markets. In January alone it doubled in value and the bull run is set to continue. Welcome to the surreal world of Zimbabwean economics."
"The winners in today's Zimbabwe are an eclectic group of share traders, currency dealers, estate agents, small-time entrepreneurs and cronies of Robert Mugabe's government, which is widely blamed for ruining what was once of Africa's most developed economies."
"It's quite embarrassing because the exchange is supposed to mirror the reality of the economy," said Emmanuel Munyukwi, the institution's chief executive. "We have benefited from the distortion of the market."
At least he was embbarassed.
as I am about my spelling LOL
gettinglate
That's the trouble with the Left Coast. Everybody goes to bed before it's even party time out here. Bummer.
"This is Bernanke's dream situation.
As Zimbawe's economy collapses, a tiny few make huge profits |"
bernankes dream is a tiny few making huge profits?
I may disagree with bernankes methods but it's a real stretch to jump to the above conclusion.
When everyone wants to get rich, like the big players - everyone ends up poorer.
We want a middle class, but no one wants to be in it.
josap (profile) wrote on Thu, 10/8/2009 - 11:07 pm
When everyone wants to get rich, like the big players - everyone ends up poorer.
We want a middle class, but no one wants to be in it.
Even worse than class mobility and meritocracy mythologies, we fell for the oldest trick in the book - the belief that everyone can get rich together at the same time.
Or at least look rich to their friends and nieghbors.
poic,
Wonder why all the fear (and selling/buying gold) from the possibility of hyperinflation coming to the U.S.? It seems like it's going to be just years and years of deflation but the fear 'stories' of hyperinflation are being circulated...maybe the dollar currency devaluation might get out of control from speculative attacks and there's something to the predictions of hyperinflation...hard to know what to believe anymore...and where the info or misinfo is coming from...
josap (profile) wrote on Thu, 10/8/2009 - 11:17 pm
Or at least look rich to their friends and nieghbors.
Good point... We made ourselves believe it too. Well, no, really, we just redefined "rich", much as we redefined the middle class as those making more than $18,000 and less than $250,000 annually.
Lots of talk about no longer using the USD as the reserve. That has shaken some people up big time.
Nice summary of the argument for exiting Afghanistan. I totally agree. We should bring our troops home and let the people living in Afghanistan sort things out themselves.
josap (profile) wrote on Thu, 10/8/2009 - 11:21 pm
Lots of talk about no longer using the USD as the reserve. That has shaken some people up big time.
If we leave the dollar hastily, I think it's almost inevitable we'll come crawling back. A real, lasting transition out of the dollar will be a decade-long affair with lots of compromise solutions along the way.
I agree RIF. But people no longer trust the gov (ours or anyone elses) to not do something stupid.
josap (profile) wrote on Thu, 10/8/2009 - 11:25 pm
I agree RIF. But people no longer trust the gov (ours or anyone elses) to not do something stupid.
I'm going to be very surprised if no government does something stupid. But I'll be even more surprised if it sticks and we don't fall back to the dollar in the ensuing currency crisis.
There have been allot of OMG actions and reactions with this crisis. One day things are fine, a week later the world is ending. One day the banks are solvent, the next it is imparitve that we hand them billions of dollars, without aksing in detail why or insisting we know where the money is going.
People don't like what has happened and are sure something worse may be next.
Fascinating observation...
"We want a middle class but nobody wants to be in it."
I think that pretty well sums it up.
josap - Things are wicked enough out there that we are actually engaging in magical thinking disguised as economics. When reason fails, we fall back to an earlier stage of development. There is a concept in project management which basically says that for systems of a non-trivial level of complexity, no amount of money thrown at that project or subsystem will produce a useful result without the requisite skills or other contribution by a 'knowledge worker' being present.
josap,
Living in fear is BS...you'd think we still lived in the chaotic Middle Ages...evolution must have reversed itself...ongoing regression to impoverished barbarism...while everyone is building their moat and sharpening their swords and hoarding food...WTF
Agree that nothing works without someone who understands the project, system etc being directly involved. But some jobs require line by line understanding and some require thinking on the fly as well.
We seem to need thinking on the fly, but there are days I see no common sense at all.
azurite,
I was out in Lincoln City and Newport over the weekend. $55 a night using Priceline. Newport seems like it's prospering. A few vacant storefronts here and there. Still ridiculous asking prices for vacation homes. $1 million for a 1500 sq ft two story that would be $230K in a suburban neighborhood.
Or the .gov could tax assets not held in Treasury instruments, effectively making them more attractive.
Well, a few years ago people were not worried about losing their job, or house, or retirement funds.
They felt that they had some control over their lives and future. The perception that one controls their own life feels safe.
Now that feeling of control is gone. You do your job and get laid off. You pay your mortgage and lose tthe equity in your home. You put money in the 401k and now it isn't enough. And if you did not do anything to get yourself into the mess ..... (although many, many people did just that, they don't want to admit even to themselves they messed up this badly.)
Madoff judge freezes Beverly Hills money manager's assets
"A bankruptcy judge in New York has frozen the assets of a Beverly Hills money manager accused of funneling hundreds of millions of his clients’ dollars to a Ponzi scheme operated by disgraced financier Bernard L. Madoff....Irving Picard, a trustee representing victims of Madoff’s $65-billion Ponzi scheme, has accused Chais of collecting more than $800 million from his dealings with Madoff."
josap wrote:
Apathy and Easy Street do not cross.
The poor are apathetic. The middle class are angry.
The Federal Reserve Caused the Great Depression. True confessions by Ben Bernanke.
Bernanke: Federal Reserve caused Great Depression S
So IT CAN happen. History rhymes sometimes.
This stuff isn't 'conspiracy theory'.
rich wrote:
> So, where is all the U.S. equity money coming from? I think 90% of the money that's poured into the market since about May has been institutional leveraged (mainly prop desk) money. The market is built on a massive debt pyramid of margin, leverage, derivatives and TBTF speculation. That's why it's getting ready to crash.
I think the fed is funding the rapid trading programs of you know who. My question is where is all the stock going? Who holds it. Otherwise, is it possible to manipulate prices up with high frequency timed small trades and on balance not accumulate shares?
Is it possible to rapidly trade small lots and then dump one big pile on the sweet spot if you can see all the stops?
RE: 1st Great Depression,
'Indeed since the large banks felt confident that the Fed would protect them if necessary, the weeding of small competitors was a positive good, from their point of view.'
-Ben Bernanke, Federal Reserve Governor, Nov 8, 2002, conference to honor Milton Friedman's 90th birthday.
*
S&P500 P/E up 101% since March 9th Bespoke Investment Group: S&P 500 Sector P/E Ratios Rise
"The S&P 500's trailing 12-month P/E is currently at 20.13"*
EHP, did you forget /snark.
Bespoke is off on their both actual estimate and rate of change by a factor of seven.
It went from around 20 about a year ago to about 140 now.
poic wrote:
*> bernankes dream is a tiny few making huge profits?
I may disagree with bernankes methods but it's a real stretch to jump to the above conclusion. *
Right, it's not his dream. It is his reality.
Fed officials appeared to subscribe to Treasury Secretary Andrew mellon's infamous "liquidationist" thesis, that weeding out "weak" banks was a harsh but necessary prerequisite to the recovery of the banking system.' -Ben Bernanke, 2002 Milton Friedman speech
Isn't the 'liquidationist' approach what is happening NOW?
How often on the way to ZIRP did we hear Fed members talking about the next move being "up". Yeah, right.
Pwnzi,
Maybe their PE ratio used operating earnings instead of reported earnings? Well, at least they made it clear that they were using TTM earnings.
Argument for Hyperinflation from a gold seller:
http://cryptogon.com/docs/Towards_Hyperinflation.pdf
A few random musings...
When was the last time the market treated any kind of news as worthy of heavy selling? What happens when there IS a break downwards and the majority of equity long positions are held by trigger-fingered MoMo speculators? Who will be the buyers, especially with all the capitulation by the shorts?
Also, is it possible that 4% yields on 30 years is mostly the result of buying by Fed officials via OMA and indirect purchases by foreign proxiies? Or are there really significant numbers of "true believers" in the deflationary outcome (like Gary Shilling)?
“If policy makers insist on waiting until the level of real activity has plainly and substantially returned to normal,” he warned in a speech on Sept. 25, “they will have almost certainly waited too long.”
Mr. Warsh and some other Fed officials also argue that when the time does come to change gears, the central bank may have to raise rates almost as fast as it slashed them when the crisis began.
YouTube - Beatles - Honey Pie
Did I miss the discussion about these FHA borrowers from the NYT article?
F.H.A. Problems Raising Concern of Policy Makers
One borrower has at least a 38% front end DTI, the other MADE MONEY (tax credit + cash back at closing > down payment) to buy a home and admits to not being able to afford it.
More here:
Effective Demand: How are these FHA loans being made?
We are throwing stupid people and taxpayer dollars in front of the housing bus in hopes of stopping it.
Just in case people think the Fed will tighten anytime soon.. no chance.. they are pouring gasoline on a doused fire until it lights up.
I remember telling a gold seller once that I thought another depression was coming. We talked for an hour and he agreed with me over and over. It was like we were good friends. he figured I was a 'gold bug'. Then he sent his rare coin catalogue in the mail and emailed it and started calling me about 5 times a day. He would leave messages like how was I doing, etc. When I told the saleman I didn't want to collect coins, maybe just a buy a few Krueggerands, our friendlier times went out the window and it became a battle of tensley answering my objections and our discussion of the future depression took a back seat to the sales task at hand. I have heard of people losing a fortune buying rare gold coins at the top.
Effective Demand,
This was the dinner-time conversation of my wife and myself last night. We were talking about someone getting a loan; and then both said, "Who would give these people a loan?" I think imagined a commercial ala SNL for a bank called "Stupid Bank..." with the tagline... "We don't know whose watching our money, and frankly we don't care...". The commercial would have someone getting a car loan for their 10 year old; a 90 year old getting a 30 year mortgage, and the bank owner with a smile on his face handing out the money.
Lovely. The Senate had a chance to once again end sanctuary cities and voted against it.
Here is the rationale:
This amendment is downright dangerous. It is dangerous to threaten policing funds to cities such as New York, San Francisco, Los Angeles, Chicago, Washington, DC, and smaller towns across America that have chosen to encourage their community members to report crime.
The Senate tabled this same amendment last year. The reason this body was wise enough to defeat it last year was because we understood that some of the toughest law enforcement officials in our country, from sheriffs to prosecutors, and a whole host of law enforcement officials in between, understand the cooperation of the communities essential in fighting crime. Senator Vitter's amendment would deny moneys to at least 50 cities in a whole host of States represented by Members on both sides of the aisle.
I want to solve the crime. I want to get the perpetrator. I want to convict the person and put them in jail. I don't want the opportunity to go to waste because of some political statement having nothing to do with the core issue of security in our communities. Do we want witnesses to be able to come forward and provide essential, crucial eye witness testimony about the crime or do we want them to hide in the darkness and not talk to police because they are afraid of their immigration status? I want to make sure a witness comes forth and testifies against a perpetrator and has no fear to do so. That is why local police oppose this amendment.
The unwillingness of that person to come forward because of a fear may lead to other crimes being committed by that same individual in the same community; perhaps to a child who might be molested, to a person who might be assaulted, to a family who might get robbed.
So instead of catching the perpetrator, we prefer to deny moneys to communities that have a view that community policing is in their best interests and that means bringing the community in as part of that effort. These cities have made decisions across the landscape of this country--urban, suburban, and rural--to say we care more about prosecuting the crime and finding the criminal and having the witness come forward to tell us all about that crime so we can stop that person from continuing to perpetrate crimes against other people in our communities than we care about the person's status. These cities have decided they do not want a chilling effect to prevent people from reporting crime.
That is what tough law enforcement will tell you. Sheriffs will tell you, prosecutors will tell you, police chiefs will tell you, and they will tell you they want the community to participate in fighting crime. That is why we should vote to table the Vitter amendment.
Yeah; because studies have shown that illegal immigrants are awesome at solving and stopping crime?
Typical ZH 'anonymous' comment:
'You want to short the dollar?
Collapsing currency?
Buy gold then(it's the inverse to the USD).'
(Maybe widespread 'expectations' of currency collapse can make it happen faster.)
How bout a 'Got Gold' commercial campaign.
Wow; there is also an amendment instructing the census to not count illegal immigrants for the sake of divying up House membership. This one didn't get voted down yet. Effin' ridiculous policy in this country re: illegal immigration. Sorry but even if you admit you can't stop it, at least you can work to make it difficult.... yaddayaddapolitical bs...
Bernanke Says Fed Ready to Tighten When Economy Improves Enough
Bernanke Ready to Tighten When Recovery Sufficient (Update1) - Bloomberg.com
I find it surprising that the Yen, Euro, Oil and Gold are falling for that line. I guess BB was telling the truth about QE, but raising rates would crush housing, the TBTF and UE. So, I have doubts as to his sincerity.
What amazes me is that anyone still listen to Big Ben. I mean, will someone just call his bluff? C'mon Gold.
Was reading some of the afternoon threads and it appeared there was some row about religion and politics; I guess in regards to gay marriage and abortion or something like that? The simple fact is all politicians will hold some percentage of position that are non-negotiable. Additionally, those who practice any religion or hold to some belief system will inherently be biased to make those personal positions non negotiable. So while a large percentage of the population might hold views which are non-negotiable based on their religion, it is not the mixing of church and state; in fact its the democratic process whereby people make decisions on how government runs based on their personal biases. Is this so abhorrent to some?
I'd like to go further and suggest that abortion and the definition of marriage are no more "religious" issues than gun-control or global warming are; but I'm not sure I have the energy to put sound logic forward... just I had that thought when reading the thread this afternoon/morning?
Probably too late to respond to Rosethorn's comment but: I think Newport's doing better than some of the other coastal cities, partly because it seems very skilled (not sure of the political connections) at obtaining gov't subsidies of one kind or another & is a county seat. But more houses seem to go onto the market every day & few seem to get sold, and there are a few houses I've gone by that seem empty even though there's no "for rent" or "for sale" sign. I agree, reality hasn't hit regarding vacation home prices--they're still waiting for those rich Californians, or Arizonians, or people from Connecticut or NY. They don't care, they're not fussy, they just want a high price. Rental prices have not gone down much either, but I noticed when I moved to the coast years ago, that almost everything was more expensive, including rents, although the housing stock seemed generally of lesser quality then had been available in Eugene. There are more vacant storefronts then you'd think.
Newport definitely thinks it's "special." I'm tired of it. I like the beaches although Newport appears to be doing its best to permanently pollute the Nye Beach & Agate Beach wayside beaches. Newport's planning & management of traffic & development is abysmal. Lincoln City has better restaurants than Newport, a great used books bookstore & a much much much better mayor. Lincoln City reported a substantial drop in hotel revenues, Newport's not saying how it's doing which probably means revenues are down. At least one hotel & one RV park in Newport is for sale.
Most of the coastal cities (a few exceptions) seem to regard OR's land use planning rules as voluntary. They can comply if they feel like it. A friend in Depoe Bay ended up taking the county all the way up to, hmm, maybe the OR Court of Appeals (whoever hears land use appeals after LUBA/administrative level) because the county wanted to approve construction of a home on the slope above her property--so much so that they "determined" that a fence was actually a retaining wall. She won on appeal & the Court of Appeals was pretty scathing in its opinion & retained jurisdiction until the county & Depoe Bay Planning Commission had complied with its decision. County got revenge by going after her for allegedly having work done on her house w/out a permit. Only way she could disprove it was to tear out the external walls of her house. County counsel then applied the law wholly incorrectly to a deny a FOIA request (Or has a state FOI statute) she filed to get some more detail about the complaint. She declined to pursue although I volunteered some legal assistance. She said it was a warning + revenge. Politics suck, city of Newport shuts off public comment/input in any way it can. City & county still elitist, aging "christian" white male dominated & too many of them are jerks. Upside is the county voters usually go Democrat (except sometimes at state rep levels), while most of OR outside of the PDX metro & valley vote wacko GOP. Wait, you're from OR, aren't you? You probably know that, sorry.
Lincoln county has persistently higher UE rates than the inland counties, always has a higher % of people living in poverty, currently has 2nd or 3rd highest number of homeless students of all OR counties.
Almost forgot to say, hope you had a good time. When I take time off I sometimes go down to Cape Blanco state park. Love that part of the coast. Beautiful, fewer people in the off season. Nice coffeehouse/used bookstore in Gold Beach.
All that money for nothing and he doesn't think it is going to be inflationary? Let's see how much a Big Mac costs by the time the alphabet soup is back down to zero!
It's cute the way they pretend they can take the money back.
Rob Dawg wrote:
Upthread I comment that the .gov could tax assests, and exempt Treasury instruments, rather than the Fed raising intrest rates.
Quarter Pounder meal cost me $4.25 in Summer of 2005.
Now costs me $6.50 in Summer of 2009.
53.5% increase in four years.
dont you believe it wrote:
Interesting. Yes, they could tax assets but they won't for several reasons. I think the states would scream murder and let's face it, the rich won't let them. If they actually succeed then they face asset flight. The $2T is gone. Everyone knows it an no one admits it. No, I'm sure the Fed will "recapitalize" itself with a VAT and some crushing energy taxes. The States however might ramp up their asset taxation to try and cure their overspending problems.
I've long been a fan of the Economist's big mac index: Premium content | Economist.com
We can conclude the comments were driven by events in the currency markets. The great monetary and fiscal experiment is destabilizing. Most here can create the list of destabilizing govi actions. The worst is FHA essentially becoming the new, sub-prime lender. They are underwriting uneconomical loans that will lead to high, future defaults. It smacks of desperation.
The govi thesis is reflation at essentially all costs seemingly ignoring the consequences of failure. I suspect the comments are mostly double-talk. I would hope for developing dissension as the thesis is unsustainable.
At some point the market will inform Bernanke et al that the great experiment is a failure. Effectively providing down payments for cars and houses to those likely living paycheck to paycheck is clear evidence of financial insanity.
Allen C wrote:
It isn't like the markets haven't been giving big hints. The CA bond failure Wed couldn't have been clearer. When the Ts start going blatantly unbid the game is up. The argument can be made that buying our own debt with printed money is that failure but there's still a few more suckers to scalp. What's the NPV of a 3%/30yr when rates go to 6%? The Chinese are gonna be pissed because it also will come with their currency unpegging.
The CA bond issue adjustment was interesting. With all the USD sloshing around the central impact is in the exchange rates. We may not see it in rates as the Fed is supporting the long end by QE. Hard to imagine anyone buying long paper with their own money
Oldsters are getting screwed by the low rates. Even corporate debt is being recycled at low rates. Tops, TransDigm Use Junk Rally to Fund Shareholder Payouts - Bloomberg.com
Imagine that stock dividends being financed by low interest rate debt. That'll end well. Not. In the mean time retireds planning on 6% are finding their paper being redeemed and reinvestments are looking at 2-3%. Why bother?
Surprise, surprise...
Obama says Nobel Peace Prize is call to action
| Reuters
That's just sad. He's waffling between 12,000 and 40,000 troops to the 'Stan and has done everything Bush would have done and probably more than McCain would have done. This is more pathetic than Gore's award.
All hail the
News quiz. What radical politician went all raving with the following?
Hint, it isn't Al Gore.
Effective Demand wrote:
This leads to an interesting position we are in up here in Canuckistan.
We live in a huge, underpopulated country with lots of trees, minerals, and dino juice. Therefore, we are lazy and don't bother making anything. However having an export economy, and 80% of trade with the 800 lb (362 kg) gorilla next door means keeping your dollar low, something they've done pretty well at since about 1976. Makes our lumber cheap, makes GM open plants in Windsor, yadda yadda.
So here's the rub. Our economy up here tends to lag the US economy trends by oh, about 18 months. Like everyone else, we have/had a pretty big RE bubble. The problem is ours hadn't really popped yet before the rate dropped to zero, so rather than prop up the market, it was like throwing gasoline on a fire. We're back to bidding wars and zero down 35 yr am's - in the middle of a terrible recession - all backed by the govt through the CMHC. It's utter insanity. See Garth Turner's blog for a few examples.
The BOC is rumbling about rate hikes to cool off the RE re-bubble. However unlike Aus, we DO have an export economy, and our CAN$ is already up to 95c, ostensibly because of our huge icky oil sands. If we raise rates, surely it will rocket past par. So our central bank seems to be in a bit of a pickle. Seeing how this plays out should be.... interesting.
OT: Sweet, watching NASA bomb the moon live right now. http://nasa.gov/ntv
No-Money-Down Property Loans That Sank U.K. Housing Return - Bloomberg.com
The UK version of continued mortgage lunacy. Interest free and downside protection.
"To qualify for HomeBuy Direct, borrowers must have a good credit history, no rent arrears and have no breaches of their current rental agreement, according to the government brochure for borrowers. It didn’t cite a specific credit score needed to qualify.
The loans are interest-free for the first five years before starting at 1.75 percent and rising annually by a level linked to inflation. The plan reduces the chance of negative equity because the amount owed to the government and developer will fall if the value of the home declines. If the property’s value has increased when it’s sold, the state and homebuilder will share in the profit based on the size of the loan. "
Sarah Palin?
Economist's article on this earlier in the pm.
Rob Dawg wrote:
One that can talk the talk, but can't walk the walk.
Yup. It's interesting that when the personalities are removed the words start sounding reasonable.
The sad part of all this is that 1/3rd of the last stimpak would have paid for an entire partial solarization of the nation's sunbelt. the industry, construction jobs and electricity savings would already be paying returns orders greater than what we got instead.
- NY Times
the Nobel Committee announced Friday that it had awarded its annual peace prize to President Obama “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples” less than nine months after he took office.
This is so unfair. Obama should share the Nobel Peace Prize with George W, who set the bar at the record low level.
Next - Larry Summers and Ben Bernanke share the Nobel Memorial Prize in Economics for averting the global depression.
The biggest show on Earth indeed!
The biggest bang for the buck would be to use our abundant NG. If we could construct pipelines, NG can run cars, home heating and a/c, power generation ...all the heavy lifting relatively cleanly.
Distributed solar can feed the national grid.
Nobel Peace Prize Is Awarded to President Obama
WTF? That's absurd and cheapens the award. Not that O' might not earn it down the road, but my mind boggles as to what he has done to merit it at this point.
Think of just places like LV, PHX, the IE. All crushed by the bubble and we could have solar roofed them all and saved construction jobs and reduced utility bills for them a lot and the rest of us as well. Meeting baseline with coal/hydro/nuke frees up even more NG for better uses.
Nobel has produced a black swan event.
DCRogers (profile) wrote (in reply to...) on Thu, 10/8/2009 - 10:08 pm
There are rational objectives here -- but I hope you'll read the link I provided before you decide on the without objectives part. There's a real reason to oppose what could happen there if we left.
That's an emotional war. You can't afford the empire any more -- which was mostly you subsidizing American multinationals anyway. Without the justification of you acting as a handmaiden to economic interests with lobbying power over the foreign policy establishment, all that's left is that you don't want to see bad things happen to nice people.
It's great fun to make up lists of who will and will not be invited to the greatest garden party the city has ever seen, and which fabulous pavilion you will hold it in, but I'm not sure it's a good way for a bankrupt to spend his money. America = bankrupt. Your war = frivolous expense.
If you think it's going to cost you face to disengage after you led all those suckers at home and abroad into believing you were going to do something good, well that's why you should fight better-framed and more economical wars and not stake your national reputation on stupid, emotional ventures like reconstruction efforts in countries with no economic potential (Afghanistan), or building the best Yugoslavia the world has ever seen (Iraq). There are domestic priorities that need attention. Your foreign adventures will not last long if the home country itself undergoes substate fragmentation.
Blackhalo (homepage, profile) wrote on Fri, 10/9/2009 - 6:56 am
WTF? That's absurd and cheapens the award. Not that O' might not earn it down the road, but my mind boggles as to what he has done to merit it at this point.
Maybe you've noticed that international institutions are mostly useless supper clubs.
BREAKING NEWS:
Ken Lewis (CEO Bank America), Vikram Pandit (CEO Citi), Ken Thompson (former CO Wachovia), Alan Schwartz (former CEO Bear Stearns) and Dick Fuld (former CEO Lehman Brothers)
Will all share in the 2009 Nobel Prize in Economics.
Also we need to rename it as the No-Balls Peace Prize.
Byzantine_Ruins wrote:
Will they serve roast beef?
Rob Dawg (homepage, profile) wrote on Fri, 10/9/2009 - 6:26 am
We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar," ...
"All of this is a result of our out-of-control debt. This is why we need to rein in spending, and this is also why we need energy independence."
Let me guess, it's a Republican trying to rebrand herself as somehow responsible after the party split the country, carried us into two disastrous foreign wars, set the credit system on a course for global bankruptcy and proved itself to be full of criminally incompetent religious bigots? Let me guess, her plan is to grant generous emergency licenses for exploiting American resources and start a war with Iran despite the fact that she nominally decries external adventurism.
Rob Dawg (homepage, profile) wrote (in reply to...) on Fri, 10/9/2009 - 7:40 am
Will they serve roast beef?
They do. The question is, if it is good enough to get the father of roast beef himself on their string.
Good morning - Happy BFF to everyone. I wonder if Sheila has any money in the checkbook today and will take us across the 100 level.
on the comment above "If we could construct pipelines" and using natural gas, it is not only constructing pipelines, and establishing distribution points, which would costs tens of billions of dollars, but also retrofitting tens of millions of vehicles, etc., to run on the fuel. In the U.S., we have close to 140 million vehicles that run on gas and another 40 milion tha run on diesel (if a web resource is correct)
I shall go out on a limb here and predict that People magazine will make
Obama sexiest Man alive very soon...
.......Afghanistan is going downhill........the generals need more troops and the pols are playing it like "Age of Empires" again........I knew the Nobel Prize was a load of propagandist crap before today, now it's confirmed. And Summers doesn't believe the idea of the "new norm", but then he's another "doubling-talking" Professor Corey if I ever heard one - what a piece of work HE is............OBAMA: GET the troops the Hell out of Afghanistan unless you'll commit another 100,000 soldiers and take the heat for it. Be a Man and make a stand for a change we can believe in! .....geeze.....Get a job as a community organizer or something less dangerous to ALL of US..........
Good Morning....I need
Using solar to heat water to drive the turbines to produce electricity isn't very feasible either - in the desert areas where the sun and terrain are good for solar, the amount of water needed isn't avalable. Passive solar is one of the most expensive forms of energy production around, and the grids can't handle the variable power loads, without billions in fixes. And the biggest reason, solar doesn't generate power at night, so unless the southwest wants to have minimal lighting and no AC in August, they need backup generation capacity using traditional methods. Don't even suggest batteries. Solar will only be a small piece of peak power generation, if they can get around the environmental issues and lack of rare earth materials needed to build higher capacity systems.
Okay question of the day: Lunar bombing mission--harmless water search or culmination of ancient occult magic ritual to bring forth the new god-king? Just joking, lets hope Apollo doesn't take offense to us bombing his domain... and before you correct me, yes I know Apollo is usually associated with the sun. Good morning everyone.
While I don't think Obama necessarily deserves the Peace Prize, I am hard pressed to think of another who does deserve it. It seems to be a down year for peace. Are they allowed to skip a year?
not to put Obama down but you must understand where that award is coming from - Scandinavia! in the early 90s I had a friend visit Stockholm and Helsinki for over a month and she was the toast of both towns... didn't pay a dime, treated like a rock star. Why? she was a very good looking young woman or to paint it more precisely she looked like Whitney Houston in her prime. (disclosure: she later became my gf for a few years but held off any proposal cause I was worried about the extreme racism of my town where I grew up - no profile in courage, me)
You don't see people of color over there unless they're Turks and those people are looked down upon big time....
Terry......wrong......individual units like the two I have on the property are PERFECT for the SW.........The utilities can't make money from it though:.........(solar panels into battery storage back to the grid if any extra).....
Well the'll get rid of the qualative easing first. There's so many special programs pumping money into the economy that the "effective" rate is arguably less than zero. Which is to say that money is still easier for banksters to get out of the Fed than the interest rate alone would indicate. So it's the auxiliary money pumping programs that we'll have to look at when we're trying to see first evidence of Fed tightening.
Yes.
Fed Said to Consider Clearing Banks, Drain Facility (Update2) - Bloomberg.com
Bernanke told Congress in July that the Fed may step beyond primary dealers and conduct the reverse repurchase agreements [with] government-sponsored enterprises or a “range of other counterparties.”
This is interesting. Taking Treasury cash out of the GSEs and pushing Fed-owned Treasury paper into its place. Call it what you want, someone looks to be setting up a recycling facility.
Edit: Any questions about how they are going to strip the cash out of people's retirement accounts are now tidily settled.
Vonbek777 (profile) wrote on Fri, 10/9/2009 - 3:04 pm
Okay question of the day: Lunar bombing mission--harmless water search or culmination of ancient occult magic ritual to bring forth the new god-king?
The mission is dedicated to John Lennon birthday and aims at disruption of Elliot waves, especially the fifth one.
Liz Warren's panel has a new report out... in case anyone wanted an update on TARP...
BSR - I would like to see how much energy costs you per kw, when you include the initial costs. I doubt it is as cheap as power off the grid. In any event, I was not talking about the ones and twosies out there, but real large scale solar power generation. It will only provide a small share of peak power needs.
Obama got the Nobel peace prize for ending the Iraq and Afghanistan Wars?
ylsp
nope. why does this remind me of when carter was in office, we had high hopes,high hopes then too.
oh well. (sigh) need
"...harmless water search or culmination of ancient occult magic ritual to bring forth the new god-king?"
As always "a fertility ritual." [sarcasm, satire].
My banner add is 'International Muslim Matrimonials'.
Terry (profile) wrote on Fri, 10/9/2009 - 8:21 am
BSR - I would like to see how much energy costs you per kw, when you include the initial costs. I doubt it is as cheap as power off the grid.
This is like the cost of automobiles. It all depends on how you want to compute the indirect costs, and what the reckonable damages to BSR's facility would be if the umbilical to civilization ran dry. With the power line already there and maintained, the sunk social costs are high but he'll have a better position to ride out deinfrastructuralization. For people who are solar only, I think that any reasonable assessment of line manufacture, installation and maintenance over a 20 year time period would mean the solar cells had to be extremely expensive to not be efficient.
The idea that there's not enough water to run power generation facilities out in the desert is nonsense though. Any kind of system would have to be closed-cycle to keep the water either pure enough or doped appropriately to preserve the turbine blades.
dont you believe it (homepage, profile) wrote on Fri, 10/9/2009 - 8:28 am
My banner add is 'International Muslim Matrimonials'.
I got one to meet surfers in my area.
KCoop
some is definitely up with the IGNORE feature
just checked my list and not only was Nemo on it along with that
perennial favorite TJ & the Bear but suspiciously and I use that word in
its fullest Barack Obama... which gave me pause cause I didn't think that
a person of his character would pass muster with this here Illuminati!
Rob Dawg wrote:
Is it more pathetic than the award shared by a terrorist and the worst US President of the 2nd half of the 20th Century?
Obama won the Nobel Peace Prize ?!?!?!?!
I seriously had to check to make sure I hadn't accidentally typed in "www.theonion.com". NOPE. It was CNN.
"The idea that there's not enough water to run power generation facilities out in the desert is nonsense though. Any kind of system would have to be closed-cycle to keep the water either pure enough or doped appropriately to preserve the turbine blades."
Ahh - your conclusion is incorrect - all water driven turbine power generation systems, including active solar, need access to large amounts of replacement water. That is why coal and gas fired plants are located next to water sources (and why they have cooling towers), Getting that much water in the desert actually shut down a recent proposed active solar project
EDIT - the actual water in the turbine is closed - its the cooling water that causes the problems
Blackhalo wrote:
The best part is that he was actually nominated less than 2 weeks after taking office-
Just a reminder that there is still time to cast your vote in the BFF Poll at the "Toys" link.
Obama's like that guy at the craps table who just can't seem to miss... I say ride his coattails,
if I were in post with a feature I'd try like hell to get him on film for say 5 minutes, that will get you
at least a best supporting actor nod from the Academy...
'hey, the guy's money!'
......
he wasn't over in Denmark for Chicago, that what was a ruse, like when Kissinger had the flu and secretly
flew to China in '71... he was going for his gold...
I also think this is a bit of window dressing. Ultimately the Fed's decisions will come down to what Bernanke thinks is best, and he has already laid out his plan of a zero-rate policy for quite some time. There is almost no chance the Fed raises rates while unemployment is still going up, which I think will happen for at least another year and perhaps as long as 2-3 years. And then unemployment will most likely stabilize rather than go down, because there are very few, if any, catalysts for sustainable job growth in this country.
homeGnome
voted yesterday do wonder if we are going to get past that magic number of 100?
Gnome - as it is getting closer to the end of the year, maybe we should start a poll on the total number of closures in '09? Don't know what kind of prize would be appropriate, though.
Nobel peace prize = blood money from the inventor of dynamite. American D-FENS firms should also do the same, Raytheon Peacemaker Trophy, Hug of Halliburton prize or Lockheed Love medal.
Terry, granted, this area seems to be the future "mecca" for solar start-ups in the near future. The first system our county is having public meetings on, is a "wet system" in an area that has limited water. You ARE correct in THAT as a "stand-up" regional solution, there are distinct limits to its workability. First is cost - electricity here is 10-cents a kilowatt for all usage.......nothing competes with that .........and in other than "onesies and twosies", as you related, it is not currently workable. THIS area (at the edge of Death Valley), though hot, has very few humidity spikes, thereby allowing cheap "evaporative cooling". Winters are mild, alleviating huge power drains during that time of year as well..........maybe I'm just a "onesie" kind of guy - and, in a much better mood after a cup of coffee......sorry about the rant, pre-java....
Terry (profile) wrote on Fri, 10/9/2009 - 8:39 am
Ahh - your conclusion is incorrect - all water driven turbine power generation systems, including active solar, need access to large amounts of replacement water.
They are not venting steam into the interior of an Ohio class boat, and they are not dumping it externally either. And surely not on liquid metal piles.
Designing your system to be open cycle is an economy measure, not a requirement.
Have a great day BSR - gotta go to work (ugh)