HI!

Everyday during the late 1970's-early 80's all one heard was the latest interest rate news, and now nobody cares nor dares raise rates from essentially zero.

They talk a game because Australia juts raised theirs. 3% +.25% compared to our 0%+. They don't want to show how bad things still are.

Who closed mtges at 17 1/2%???

Meee, me me me me.

Pens would hover over notes. I would think so sign already, you are
here and you knew what you were getting.

Liz, thanks I've lived there before, I can adapt. What are the gun laws?

On Topic; Krugman wonks right on the money but forgets you have to have a dollar worth defending at the end of it all.

My little community has contributed two of the failed banks. The following article documents the bubble on the right coast (ex-Florida) and the concentration of lending by local banks which could cause a lot of harm as the recession grinds on.

FYI

Poor investments dig a hole two New Hanover residents – and two banks – can’t climb out of | StarNewsOnline.com | Star News | Wilmington, NC

Jim

lawyerliz
Don't feel bad, a high interest rate just means the sale price is lower -- so long as your competing bidders are afflicted by the same interest rate. Then you get the benefit of refinancing at lower interest rates and the price increases that brings to lower your LTV. Best time to buy a house is while interest rates are still high, but flat or on their way down

Why would Mexico pay for something their already getting for free?

free? you do know how many folks have died in their drug war due entirely to the gringo narco appetite and correctional mafia, right?

I think the CBO's growth estimates are too high.

Just saying.

I dunno señor, I am only the bridesmaid. [really bad, old joke.]

Plantagenet wrote:

and the pig men carry off the finest cuts

The job of the nobility is to loot the nation. The job of the peasants is to be revolting enough to prevent it from happening. The peasants are asleep.

Nemo wrote:

The Fed has to jabber like they might raise rates at any time to avoid a disorderly dollar collapse

They jabber now, and I have no idea why the Fed would have any credibility to anyone anymore.

Then, they'll make the classic mistake of raising to try to defend the currency when a run is already underway.

So Juvie your friend signed fewer papers?

Possible, but not my experience.

Anybody recall the graph a few weeks back showing total debt (over time) and total debt less government debt? Was arguing with a "conservative" yesterday who didn't believe anything except government debt was increasing substantially over the last 40 years.

If the Fed raises rates based on their 'dual mandate' because of 'improving' financial conditions that are based on stimulus/bailout programs, then the rate increases should only come in an environment of 'full employment' and 'low inflation' in the real economy.

He's probably referring to the total paper work of the purchase, application through closing. I would imagine the closing documents stayed the same but the application shrank.

Ok FED, come out slowly with your rates raised high so we can see em', real easy-like now-no funny business.

It doesn't require rocket science, or economics, to figure out what's going on here.*

1. No meaningful financial reform.
2. The Democrats are going to give up seats in the midterm election because of high unemployment.
3. The Republicans are moving in lockstep over TARP.
4. TARP will be phased out because of 2 and 3.
5. Obama will be one and done because of 1 through 4.
6. In 2012, Phil Gramm, the senior Republican economic adviser, will declare the US "a nation of whiners" and, this time, he'll make it stick.

• This analysis is courtesy of Conjure Bag.

Ok FED, come out slowly with your rates raised high so we can see em', real easy-like now-no funny business.

why did the image of Barney Fife jump into my head with that statement? Wonder if it has any bullets in it?

MP,

What about the currency deval? What about the outrage which finally arises from some prosecutions of people who didn't just confess?

The Taylor rule is designed for explaining the past behavior of the Fed.
It can be used for predicting future Fed's decision only if the following two conditions are met:
1) Historically the Fed has made optimal decisions
2) The Fed behavior will remain consistent with its historical track record

Given actual Fed's decisions over the past decade, how can one believe in these two conditions? The Taylor rule has become obsolete as a predictor of Fed's decisions, IMHO.

mp wrote:

Obama will be one and done because of 1 through 4.

You can't beat somebody with nobody. Who is the conservative somebody?

I don't see anyone currently but 2012 is a long way off. Still...

Jim

'All their fancy economic theory is just crap'.
Yeah if economic theory is even being followed. The economic theory that makes any sense is just ignored apparently.

Tom McClintock would be my first choice. IIRC he did pretty well in the recall election, even up against Arnie's star power.

Rahm's worst nightmare should be a governor's race in CA pitting McClintock against clowns like John Burton or Cruz Bustamante.

Dang Liz, can I have your ruby slippers!?

"You can't beat somebody with nobody. Who is the conservative somebody?"

Anybody except Bush Anybody except Obama.

As I said before you can roll up your 10 favorite presidents, and 10 favoritest
politcos, all their best qualities smushed into one person, and it doesn't matter;
we are in the soup.

Or, rather in the soup line.

Hope plans are being made.

I expect Mike Huckabee to win the nomination. He would run a nice, decent campaign. If the Libertarians don't nominate someone I can stomach (Bob Barr is not a Libertarian, he's a carpet bagger. I would know, he used to be my congressman.), I could imagine voting for Huckabee. Of course, I have a prefect record so far. No presidential candidate I've voted for has ever won office.

re: FHA and loan mods, Dr. Housing Bubble Blog
59.1% 60+ day re-default

Go Ahead, Walk Away
There is nothing immoral about ditching your mortgage.

Go Ahead, Walk Away | The Big Money

'Ever since Greenspan took office, the economy has been driven to greater extremes of boom and bust.'
Yeah...we can't blame Greenspan for the 1st Great Depression!

States of (financial) disbelief:
The Automatic Earth: October 5 2009: States of disbelief

Disempowered Paper Pusher wrote:

McClintock against clowns like John Burton or Cruz Bustamante

John Burton is still dead, but death isn't an impediment in California.

Mayor Allioto, late, great, still very dead mayor of San Francisco, has a law office at the corner of Washington and Montgomery streets. Its across the street from the Pyramid. Being San Francisco, I assume that he still votes, as well as practices law.

NW

expect a strong man to emerge, one we have yet to 'hear' of, one who is toiling quietly in the vineyard of preparation, one who is presently and obscurely building the state by state organization, one who is lining up the money (or already has it), one who will skew events in a not good way

Question:
If government credit guarantees are the source of house buying,
why are there so many all cash purchases?

General Petraeus - doesn't he have a health issue - prostate cancer or something?

That's what I get for trusting Wikipedia.

Edit: It looks like he was alive as of three days ago.

A dead candidate for a dead state is fitting though.

Well, this will be nice proof of "The Fed hates Democrats" when they raise rates in a year.

Once China starts invading countries to get their citizen's mind of the collapse property bubble, we'll have plenty of customers: Taiwan, Vietnam, Russia.

If that thought makes you feel better, then I guess that's what you should believe.

Is Jas posting on other venues?

America has a proud history of war profiteering, we just have to get used to using our Pacific ports instead of our Atlantic ports.

Meanwhile, with rates locked near zero for years, they'll sky equities.

Maybe even real estate.

There's going to be trouble in 2010 as some States collapse economically--how much longer before they stop sending the Federal government tax revenue?

Good too see that both major parties are everybody's solution to the problem. Careening from socialism to fascism will surely do the trick.

Not that there's any alternative. But, the smart amoral scum-bags own both parties so what difference does the figurehead president matter?

Krugman's equation makes clear why economics is not a science. There are five figures, two variables and three fudge factors.

How did they arrive at 2 + 1.5 x inflation - 2 x excess unemployment? Why not 2.2, 1.7 and 1.8? Clearly, they plugged in numbers until they arrived at results that met their preconceptions. doh!

"how much longer before they stop sending the Federal government tax revenue?"

Based on tax agency reports, I think the taxpayers have already stopped sending tax money to all levels of government.

You can say Libertarian has moved away from Ayn Rand, but you can't say that Greenspan and Rand differed much. Besides, if Greenspan calls himself a Libertarian, I don't know how to refute that

Bob_in_MA
Welcome to linear regressions and econometrics

sssshhhush! it's a real science. real sciences have equations. numbers and variables mixed up with + and - signs makes whatever nonsense you're pushing look way, waaaay more legit.

But, the smart amoral scum-bags own both parties so what difference does the figurehead president matter?

None. Zero. Nada. Zilch.

You folks amaze me. This isn't about politics.

This is about M.O.N.E.Y.

What the hell gave you all the idea that it's about ideology?

mp wrote:

What the hell gave you all the idea that it's about ideology?

At ONE time is WAS about ideology. It used to be the peasants vs the nobility. That was before the '60 tho.

It's not the States that are withering away, but there could be problems for the state in terms of the Federal government. Remember, the federal government is an abstract entity. The Civil War was States versus States, the "Northern" States just supported a more centralized government; and with the Federal government reaching a point of corruption to where they don't even realize they're corrupt--it's just how Washington is done, they say--at what point does a State or States say enough is enough?

Alan Greenspan = Judas Beast

re: limit on interest rates B. Eason brought up in this thread
US Federal tax revenues have been 16-18% of GDP since records began. Let's say GDP is $13tn and they collect 20% of that to make the numbers pretty. That is $2.6tn in tax receipts. Let me suggest that the upper limit on debt servicing is 25% of gross income, or $650bn. Referring to the maturity distribution of outstanding debt that energyecon puts up, energyecon: Treasury Marketable Debt Rollover Update we can see that a rise in short term interest rates will have a quick and strong impact on federal debt servicing payments. Let's just call outstanding debt $12tn Debt to the Penny (Daily History Search Application)

So the maximum average interest rate that can be afforded at present would be 5.42% (assuming $0 future deficit)
The Fed is boxed in, in so many ways. There is no safe way to get off this path.

DPP: You're correct. I confused John with his brother, Phil, and his sister-in-law, Sala. All those SF machine politicians look alike to me. The are sooo interchangeable.

NW

i Think I would like some . Too bad I have no .

Ahnolt has given zee authorities till midnight to reconsider the whole damned zing, or else he'll veto 704 pending bills...

Line in the sand stuff

lawyerliz wrote:

i Think I would like some . Too bad I have no .

Missing California already?

To be polite, I think I prefer not surviving to thinking likethem. What wrong with the way I think (beside the fact that I'm crazy but a cute kind of crazy.)

mp wrote:

start thinking like them.

That's how you can tell the true-believer-peasants from just a peasant. How much they think like high-schoolers. But, all the ism's NEED their dumbasses to survive. And history has shown there's NEVER a shortage of believing dumbasses.

JimPortlandOR,

That wasn't my comment, I was just responding to it. Besides the term conservative has many meanings. The only Republican that in my opinion that starts to work out for president is Romney due to his financial ability. He at least has run a lemonade stand and has a track record. I hope better comes along but I see no one at the moment regardless of the party.

The States problems aren't with the Federal government, per se, they are with the Federal Reserve, which is supported by the Federal government--and it is clear that the Federal Reserve is nothing more than Wall Street's lacky, as it has always been

How about:

Alrighty, then...

We'll make a left @ Ohio.

mp, how much time does a market crash buy the Oteam?

I don't know.

But, I do know there's going to be another, and it's going to make the last one look like a warm-up.

some investor guy wrote:

Any sufficiently organized group of middle income people with a lot of money would be feared.

Isn't an organized group of ANY people with an interest in politics generally called a political party?

Depends on the size of the group: small groups are called special interests, larger groups are called parties (except for the Libertarians who small but still considered a party.)

B. Eason
By raising their rates they can burst the RE bubble, which will hurt the apparent economy, which will hurt their exchange rate, which will allow them to close their CA deficit and improve their real economy. They didn't raise rates to take pressure off anyone

I have to have a hobby to keep me busy.

Then, because our consumer economy is import based, we would suffer price inflation regardless and the loose $$$ policy would need to be curbed to hold up the dallah. Then we get an unwelcome rate hike regardless of the unempolloiment rate.

Now, you're saying something.

I agree completely.

That is a genuine possibility.

duh!

Third party?

No. I'm talking about an interest group that represents the financial interests of Americans making less than $250k a year. Why build a party when you can open a few think tanks, donate to existing politicians, and do some independent political ads?

I would add to bearly's comment above:

THAT COULD BE THE TRIGGER THAT CRASHES THE SYSTEM.

Given what has been transpiring politically of late.

With the lack of reform and all.

Australia upping their interest rates now puts them at risk for a currency crisis--you can slow down bubbles by simply raising taxes are implementing taxes, you don't have to raise interest rates, especially when you're an exporting nation with a massively appreciating currency. Simply to raise interest rates to improve their economy makes no sense in light that their dollar is already over valued.

lawyerliz
On average, probably not

sdtfs wrote:

No offense, but regardless of the financial acumen on this site, when it comes to politics: This commentariat sucks!
Americans are essentially politically illiterate, so I would not expect much, as they have lived in a one party state for over 200 years (with he exception of some minor populism on the late 1800's and and brief and small emergent left in early part of the 1900's).
This blog is about interest rates and bonds, and there is good info on that!

I think you might get a viable third party in this country after the collapse of the republicans.

What I read here in AZ is downright delusional. They are so far from reality, that they profess amazement when the forecast calls for rain.

Reality will dictate a lot of the outcomes, one of which might just be a nice gain for the dems at the midterm elections. Nobody seems to be giving them a chance, but as the storm continues to grow, they will be doing a lot of bailouts, and those bailouts buy votes from J6P.

Further, the intransigence of the big banks, combined with the republicans and blue dogs gives a natural target to run against.

Add in a nice wall street splatter, combined with some juicy trials, state economic collapses, a crashing dollar, and a losing war.

But hey, just remember, it is how you spin, and the republican resistance to change now will lead to destruction later.

A more flexible opposition, joining when advantageous, and resisting when a good idea from the middle would gain seats.

Someday this war's gonna end...

*Education doesn't pay now? *

Depends on what you learn, doesn't it?

NOTaREALmerican wrote:

there's NEVER a shortage of believing dumbasses.

Agree and that's what makes religion so interesting - people can get to believe in belief - a double delusion.

Probably impolite to post this on Sunday.

Jim

,rad Citizen AllenM,

I cannot wait for the very first neo-OK Corral gunfight, a little drinking hole gunplay...

Please keep us posted as to when the first act breaks out inside.

Folks, beliefs are expensive things. They have a high maintenance cost.

Once you toss them out and look at the world the way it is, instead of the way you think it is, or should be, you'll all be better off.

That isn't my advice.

It's Machiavelli's.

mp wrote:

Folks, beliefs are expensive things. They have a high maintenance cost.
Once you toss them out and look at the world the way it is, instead of the way you think it is, or should be, you'll all be better off.
Marx could not of said it better-- Dialectical Materialism in action!

lawyerliz,
That's what I mean, most degrees awarded probably do not increase income over a lifetime enough to be economically justified.

Time for the obligatory rant about grade inflation and how the college educated of present days are barely functional at the old high school level.
Consider it all said. (In a very peevish tone.)

EvilHenry, this is true now too for advanced degrees in technical disciplines, medicine, engineering, etc. You come out up to your eyeballs in debt, medicine-work there; engineers-depends on the discipline, it can be quite volatile. The long and short is, ask any physician in practice for 5 years and see if they ever expect to 'retire' (if they chose to have a family that is). If you don't get an advanced degree, then forget about advancement, anything but marginal work and even more marginal pay.

Externalized Costs,

I'm not sure how are defining "cheaper". Take the post office for example. Not only do you have to pay for psotage, but then there are taxes, and then there is government caused inflation to pay for these services.

B. Eason, how old are you?

Nothing you have mentioned has changed during my 43 years.

Nor will it.

You got death and taxes, and inflation.

Were you expecting something different?

Someday this war's gonna end...

mp wrote:

Folks, beliefs are expensive things. They have a high maintenance cost.

They are also part of human psychology. The need for a smothering mommy party (applied socialist aka democrats - ~35% of the US voters) is as strong as the need for a kick-ass daddy party (friendly-fascist party aka republicans - ~40% of the US voters). The smart amoral scumbags who run the political parties know how to manipulate these people (obviously, or the party wouldn't exist).

Bushwa- if government can't do it cheaper, without a profit margin, then you should explore how badly the government is run.

I am tired of arguing with fools who don't understand that a profit should inherently be more expensive.

Someday this war's gonna end...

They are also part of human psychology.

Well, you know, you can believe in God.

You can believe in your government.

Or, you can believe in yourself.

Most people have a hard time believing in themselves, and for a whole bagfull of reasons.

I prefer to believe in myself.

I'm not going to wait--I can't wait--for God's help and I sure as hell don't want the government's variety of "help."

C. Allen M beat me to the punchline with his angry rhetoric. Privatization is not the answer to all that ails us and in fact will just worsen conditions for the majority. Mish's constant anti-union, anti public sector in the end will produce worse results then those we have suffered through to this point.

My challenge still stands. Provide three examples of a successful privatization of a previously provided public sector service.

However, you are affected by the powerful organization run for the benefit of the smart amoral scumbags. You can't never escape them.

I've never claimed otherwise, but I can mitigate their impact on my life.

And I do.

Every goddamned day.

Citizen AllenM
Don't go on the defensive then, extoll the virtues of the ideal free market. There is supposed be zero profit in a free market is a good starting point. Maybe highlight Friedman's reflections on his great plans for Utopia, where he confesses that perhaps a functioning society, government, and rule of law are more important than free markets. Then, once they're stunned, bring them into the light that there is a whole spectrum of options -- each of them ideal depending on the context into which they are being called.
I like the idea of triangles to draw it out. Put Choice, Efficiency, Effectiveness at each vertex. Let them allocate 10 points across all 3 as they see fit. You want unlimited choice, and top notch service? The price is paying for the higher costs. Want good service, at a good price? Be prepared to give up choice, which would be analogous to regulation and unfree markets. so on and so forth

wooo. shouldn't you guys be in mass or something?

The 'Washington Consensus' is being challenged

Washington is actively resisting following the set of reforms advised by the 'Washington Consensus'

DCRogers wrote:

perhaps we'll call them "frenemies"?

I wouldn't know seeing as I don't speak Spanish.

There is only ONE ism in our economic paradigm and it is terminal, pathological, incurable, narcissism.

mp -

when do you expect the next collapse

Economics, before they turned it into a science (BWAHAHAHA!), used to be called political economy.

The art of the possible.

What I've been talking about here today is political economy.

I have a pretty good idea of where we're going with the zero bound, both poltically and economically.

It ain't good.

As far as the timing of the next crash goes, I don't know, but I think bearly touched upon a possible trigger. If they're forced to raise interest rates before the real economy has recovered, the consequences will be particularly nasty.

Edit:

Make no mistake about this. We're headed for a massive crack-up. Why?

There's been NO fundamental reform of the financial system. NONE. ZERO. NADA. ZILCH.

Simon Johnson has talked about this. It's not rocket science.

It's going to happen again and, with the current debt levels, it's going to be a goddamned DOOZY.

I work with public entities frequently. I don't expect to see much privatization.

I expect large scale reductions in services. There will be some asset sales of toll roads and airports. Here and there a public utility will be sold.

There are some big potential savings which don't require privatization which will be done more broadly. 1. Changes in retirement eligibility for new hires. 2. Dumping regulations which are only in place in a few cities or counties. 3. Simple budget cutting for departments. Want a department to spend 10% less? In many cases, all you have to do is cut their budget by that amount. 4. I really wish there would be more states like Rhode Island for income tax simplicity. Take your Federal taxes and multiply by 25%. Send a check. This kind of simplicification can save a ton of money. 5. Big cuts in any entitlements where the state or local govt is paying most of the cost. Medicaid is a big example.

The economics of where and how to cut are different for states, counties, and cities, and are often wildly different for expanding and contracting public entities.

Government can save money by using private contractors. Cities are starting to move that direction if they can do math and have the B's to do it against the unions.

http://www.mercergroupinc.com/pdf/centdcm100606.pdf

Yeah, I couldn't find three examples either.

Remember that when the politicos accelerate the selling of publicly owned resources for pennies on the dollar and tell us it is for our own good. Pay it in taxes or pay it in rate increases. Either way the bill is coming. One option provides a living wage and benefits while the other just provides less discretionary income and little recourse for protest.

Back tomorrow for the round robin discussion.

But if nobody pays those school loans maybe it WILL be worth
it. . ,.

What can't be repaid, won't be repaid.

Speaking of political economy

Oct. 9 (Bloomberg ) -- As President Barack Obama vowed in a Sept. 14 speech in New York’s Federal Hall to correct “reckless behavior and unchecked excess” on Wall Street, Mike McMahon and Barney Frank sat in the audience discussing how to ease proposed rules for the $592 trillion over-the-counter derivatives market.
Side by side at 26 Wall St., across from the New York Stock Exchange, freshman congressman McMahon told House Financial Services Committee Chairman Frank he was worried that Obama’s derivatives plan, released in August, would penalize a wide swath of U.S. corporations and could push jobs in his home district overseas, McMahon said in an interview.
“It’s not just the farmers, and it’s not just the Wall Street guys,” said McMahon, a member of the New Democrat Coalition, a group of 68 self-described pro-growth Democrats in the U.S. House of Representatives. “It’s across the nation. American industry uses these products for a very useful purpose, which keeps down prices and makes consumer products cheaper.”

The news had nothing about California.

But they did have something about vialical transactions and securitizing
them.

And one of the talking heads said, hey, people could live a lot longer
and there could be a collapse, and wall street has learned nothing.

Mr.M, anyone who wishes an example only needs to revisit the late '70s. n'est pas?

But this time it's different, right? We've learned how to manage inflation, no?

And btw, the unemployment is already higher than it had ever been in the '70s

broward wrote:

As a "private contractor" for the past five years (and from 1992 to 1996), you are clueless, Ben.

I wasn't going to comment on that.... but my spouse is a "private contractor" for CaLi. It's the biggest scam going. The smart amoral scumbags ALWAYS win. That's what people like Ben can't comprehend. Short term gains are all you get. But, just like letting the rube win a few hands, once the "private contractor" has their mark hooked the profits are unlimited. The CaLi state employees even have personal "private contractor" empires. It's very fun to watch (and, of course, get money from).

I was here in the 70s. This is way worse.

And I was referring to the hub's particular contractors. He would
raise an enormous stench if they weren't.

Believe me the Nasa Fed employees work their buns off.
They are living a dream. Still

Citizen AllenM wrote:

B. Eason, how old are you?
Nothing you have mentioned has changed during my 43 years.
Nor will it.
If you are under 50, you have grown up inside a casino. Boy will you be surprised when you go outside! The screams will be apparent, as your fetal position will not help.

viatical settlements have been around for a very long time

securitize them?

wow, hey!

hows about we securitize squirrels?

I'd like to get out of contracting.
There's a lot of conflict-of-interest in contracting and it manifests itself in many ways.
Most non-contractors don't understand that, though, so they don't undersrtand why you'd voluntarily take a 20% pay cut.

lawyerliz wrote:

seems like a break down of California should have merited at least a mention.

I'm not sure what this "breakdown" you mention is. The state has been broken for years now. The government is irrelevant except as a money conduit to the connected. Next month, next year, nothing will change.

broward wrote:

I'd like to get out of contracting.
There's a lot of conflict-of-interest in contracting and it manifests itself in many ways.

You must fight the urge to have morals. It's bad for your health!

There's been NO fundamental reform of the financial system.

mp, you are being too charitable here. No reform means the system is like it was in 2007. In fact, the system is in a far worse shape than in 2007, with moral hazard galore and debt of TBTF banks essentially guaranteed by the government. What was only suspected a few years ago and was often viewed as too far reaching, is now supported by precedent.

NOTaREALmerican wrote:

bad for your health!

No kidding.
And what's most amazing is how few Americans think it's an issue.
Everything is measured in $$$$, nothing else matters.
If only I could talk uncensored.

lawyerliz wrote:

Well, if Arnold vetos 700 bills, won't that be significant?

If Onnald closed the governemnt for 10 years it wouldn't matter. Most of these 700 bill were probably just more funnelling of public money to legislative buddies anyway. It's broken, been that way for years. It would be like worrying about how many piece of the Titanic hit the bottom of the ocean.

Re: "talk of a rate hike in early 2010 seems crazy ..."

TARP is crazy, so re-set the clock!

lawyerliz wrote:

And if the connected don't get their money, won't screams ensue?

The connected NEVER scream in public. That's part of the game. The screaming is done by the dumbasses during election time. These would be private whispers....

World Bank President speaks...
White House plan for making Fed systemic regulator...
Media spin...'Washington Consensus...will continue to be important in creating economic growth and prosperity in the future(the way it has in the recent past).
Reuters.com

"private whispers"

That could either be a new novel, music CD or perhaps a line of down-sized lingerie

Maybe cat food also? Maybe a line of medical

Ok, we've dismantled a lot of factories and the dollar is
going down. So maybe this will be like Europe's stuff getting
bombed and then replaced with better stuff. Causing lots and
lots more exports and people to be rehired.

And gas has gone down, and house prices are going down(!),
and natural gas is going down, so people with jobs will have
more to spend on productive stuff, and they've learned a little
not to spend so much money.

s all around.

Just love poking a stick down the anthole.

Yes but unfortunately most of J6P and many better educated Americans are deaf, complacent, or just crossing fingers for more

Well, km4, my response to you is: go long physical concrete.

And I'm only half-joking.

Start believing in yourself and what you can do to protect yourself.

They * aren't going to take care of you, not any more.

• plug in any entity you prefer. Church, government, neighbors, relatives, friends. They're going to be too goddamned busy taking care of themselves.

In the foreseeable future, the FED and the Treasury will do NOTHING, that can affect wall street negatively in a big way. They were caught off guard with Lehman. GS will not have it. I will bet big money that Wall street correction upto 10 - 15% will be allowed. But no more precipitious fall, no F*ing way will that be allowed. Dollar crash may be allowed before a Wall Street crash is allowed again. GS and JPM rules.

Fed Said to Consider Clearing Banks, Drain Facility (Update2) - Bloomberg.com
“At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road.”

The Fed, after purchasing about $1.33 trillion in mortgage, government-housing agency and Treasury debt, would also be supplying short-term assets to the money markets at a time when corporate issuance has declined and following the expiration last month of a federal guarantee on money funds.

One more point on inflation and unemployment - and then off to watch a movie
Fed's Bullard warns on inflation, unemployment
LOS ANGELES (MarketWatch) -- Federal Reserve Bank of St. Louis President James Bullard said Sunday that unemployment is headed into double digits, while the medium-term inflation outlook poses more risk than generally believed, according to reported comments.
"Unemployment is leveling off, but we still may be headed toward double digits," Bullard was quoted as saying in a Bloomberg report.
...
Bullard also voiced concern that popular perceptions ignore the risk of high inflation.
"I am concerned about a popular narrative in use today ... that the output gap must be large since the recession is so severe ... [and] any medium-term inflation threat is negligible, even in the face of extraordinarily accommodative monetary policy. I think this narrative overplays the output-gap story," he was quoted as saying by Dow Jones Newswires.

California Budget Is Already in the Red 10 Weeks After Passage - Bloomberg.com
“The culprit here appears to be estimated quarterly personal income tax statements,” H.D. Palmer, the governor’s budget spokesman, said yesterday. “The numbers are cause for concern, but the issue now for us is to determine if this is a one-time event or whether it has more long-term implications.”

The latest figures show that California is facing resurgent fiscal strains brought on by the U.S. recession.

Lawrence Kadish: Taking the National Debt Seriously - WSJ.com

The OMB projects deficits of about $9 trillion over the next 10 years. If that occurs, the national debt will be almost $21 trillion by 2019.

UPDATE 3-US derivatives bill addresses end user concerns
| Reuters

The Peterson bill also says the government cannot impose margin requirements on end users. Under the Treasury proposal and the financial services measure they would have that power.

Peterson's bill attacks excessive speculation in regulated markets by allowing the CFTC to set position limits on future contracts for physically deliverable commodities and redefines eligibility for hedge exemptions and exceeding the limits.

nc jim
im in georgia

I can't resist this, which is from Doc's Bloomberg link on retail sales:

Purchases dropped 2.1 percent, the biggest decrease this year, after rising 2.7 percent in August

Last month, Dean Baker said:

Retail sales came in higher than generally expected in August, with non-car sales rising 1.1 percent from July. This statistic is less impressive than it seems. If gas sales are taken out of the picture, then the increase in August was just half as large. If we look over the last two months, the rise in non-auto sales, excluding gas, has been less than 0.2 percent. This is not the road to recovery.

So, the 2.7% increase ain't quite as good as it sounds.

Here's the link:

Beat the Press Archive | The American Prospect

Conjure and I wish y'all a pleasant evening.

Well, the clock says its time to close now
I guess Id better go now
Id really like to stay here all night
The cars crawl past all stuffed with eyes
Street lights share their hollow glow
Your brain seems bruised with numb surprise
Still one place to go
Still one place to go
Let me sleep all night in your soul kitchen
Warm my mind near your gentle stove
Turn me out and Ill wander baby
Stumblin in the neon groves
Well, your fingers weave quick minarets
Speak in secret alphabets
I light another cigarette
Learn to forget, learn to forget
Learn to forget, learn to forget
Let me sleep all night in your soul kitchen
Warm my mind near your gentle stove
Turn me out and Ill wander baby
Stumblin in the neon groves
Well the clock says its time to close now
I know I have to go now
I really want to stay here
All night, all night, all night

Government speaks for it's self. How many borrowed to the hilt and income dropping like a rock? How many will BK or default? I bet when some start contracting out Like Centennial is doing and it works many will jump for survival. Being a new city they where paying the county and the county was stabbing them. Their research showed private would be far more effective. Abuse is abuse, it's not just for private business.

Any banks DOA tomorrow? Guess?

Tomorrow is a Federal holiday--Columbus Day.

Does FDIC close banks on a federal holiday?

Actresses act.

Meryl Streep is not particularly stunning, but she
played a stunning beautiful woman in the French
Lieutenant's Woman.

And Julia Child--a masterpiece.

True.

Nitey-nite.

and

Cameron Debt Fix Called ‘Bizarre’ by Ex-BOE Officials (Update1) - Bloomberg.com

Cameron Debt Fix Called ‘Bizarre’ by Ex-BOE Officials

Oct. 9 (Bloomberg) -- Conservative leader David Cameron’s suggestion that the Bank of England end its asset purchases soon was criticized by two former central bank officials, a setback to the opposition’s effort to build credibility on the economy.

David Blanchflower, who left the bank’s Monetary Policy Committee in May, said Cameron’s speech yesterday was “bizarre” and if put into practice may tip the U.K. into a “depression.” Shamik Dhar, a former Bank of England economist, said “at best this is wrong and at worst downright dangerous.”

So it's 'bizarre' to think that purchasing over-valued assets using borrowed money is an unsustainable policy?

Have we completely lost the capacity for self-reflection in our society?

who got twisted off ..

funny you should say that. Around here in the modern area of VA , there are outlets of high profile rebels that have the confederate flag flying on their home poles/garages or if their really brave, their cars.
Got a feeling of Fort Sumter is ready to happen soon....

I have decided to go with the "mp plan."

We are probably going to buy a second home with 10 acres, well, stream, about 50 miles outside of DC. It has sheds, a stable, and a workshop. The bunker begins.

Doc: I would argue that the effect of the Fed to money fund repo scheme will be to enable the Fed to inject cash into money funds in exchange for securities. The money funds have lost a lot of assets over the last few weeks. To raise cash to meet these redemptions, they will have had to sell their "best" assets (i.e. highest quality, most liquid securities). Sooner or later, they will have to sell less liquid assets, if redemptions continue. To move less liquid securities, they will have to cut prices and run the risk of breaking the buck again.

Money fund assets (2009-08-31)

retail: 879.3
institutional: 2430.8
total: 3310.1

Money fund assets (2009-09-28)

retail: 849.7
institutional: 2361.2
total: 3210.9

decrease: 99.2 billion (3% in one month)

If I may comment on bearly's suggestion that the Fed could surprise everyone and raise rates, well... interest rates alone do not determine the strength of a currency. They could very well raise rates, but given the immediate negative consequences of...

a) Government inability to service existing debt at higher rates;
b) Destruction of both the RRE & CRE markets;
c) Follow-on destruction of MBS, GSEs, and a good portion of the banking system due to (b) above;
d) Destruction of the stock market due to better, safer rates of return elsewhere, as well as the hit on export-dependent industries;
e) etc.

... it's highly likely that any bounce in the dollar would be extremely short-lived. See, you have to have a functioning economy, too.

You should turn it into a reality TV show, if that wouldn't completely ruin the entire reason for having a bunker in the first place.

Maybe get some rebel flag waving local color (white) to do some cameos. Have an episode on how I learn to poach deer out of season and make tasty beef jerky. Yep, could be a winner.

Blackwaterwannabe wrote:

But I still love that chick. She got the job done.

I'll second that. Hamilton was HOT in the T flicks. I love ass-kicking women.

nova wrote:

At this point, due to a lot of reasons, it is the best I can do.

Well, at least get as far away from major arteries as possible.

.. until the job was done to her satisfaction.

and your point?

Blackwaterwannabe wrote:

Brrrrrr. But I still love that chick. She got the job done.

Completely agreed. She would make an excellent friend, or maybe sister-in-law if you have one of those completely irresponsible younger brothers.

TJ and The Bear wrote:

... it's highly likely that any bounce in the dollar would be extremely short-lived. See, you have to have a functioning economy, too.

Precisely. Rate-setting worked the way it did because no one ever questioned the ability for the government to repay its obligations. This provided the fed with a lot more flexibility. Normally, of course, rates are supposed to provide the risk premium, which really has always been taken for granted by the fed.

Perhaps this is what's to change in the future.

nova wrote:

Believe me I know. This is right by where AA III takes place. At this point, due to a lot of reasons, it is the best I can do

The ankle bracelet only let's you go within 50 miles of home ?- bummer.

Try to make the best of a bad situation and flaunt it like a fashion accesory - like she's doing

| www.peopleofwalmart.com

the interest rate is proportional to the unemployment rate as per taylor rule..But what unemployment to use in globalised world..today's economy that creates job abroad thru outsourcing/offshoring should that be counted as well..meseems, fed model is outdated and that 's why we are seeing asset bubbles all over again..rates are too low right now should at least be 1%....

++++

You have a point there;
Companies routinely use economic downturns to lay people off in bunches. Less chance of lawsuit when you let go 100 as opposed to just the 10 old guys/gals. Then they hire and staff right back up, this time in some off shore location. Yahoo does that , IBM has done that, WFC has a offshore site in Hyderabad, the list goes on. So are these new headcounts show up in the formula for US? Heck some years back apple was hiring contractors back door when they laid people off in great many numbers up front. The equations are not robust enough to handle the distributed corporation.

Someone should show Obama that peopleofwalmart web-site when he's making one of his 'American Exceptionalism' speeches.

It's such a tragedy that Douglas Adams died so young. I'm sure he would be loving the current mess, and cheering us all up with doom-laden sketches. Week Ending (a radio sketch show in the UK) never really recovered from the end of the Falklands war. Happy people never seem to generate art of any consequence. I do miss Monty and Vera Patriot (and their dog, Jingo).

night all. Until the'morrow, when we will rise again like the Pheonix...
Peace