Beat me to it -- both CA and FL still have room to fall further. Perhaps retirees and military spending are buffering the downside, or perhaps we're still waiting for the shoe of state spending cuts to be thrown at the face of their state economies.
The new survey also shows that voters are skeptical that anything will be able to reduce the amount we spend on health care. If the cost of health care services comes down, 42% believe consumers will simply buy more services. Just 31% say reducing the cost of service would actually lead to less spending on health care. Twenty-seven percent (27%) are not sure.
Pamela Anderson has spoken for the first time about her huge debts after building her dream home left her millions of dollars in the red.
The 42-year-old actress has been forced to move into a trailer park during construction of her beach home in Malibu, California. But she now fears she may have to sell it after going over budget.
She said: ‘I am $3 million over budget and I should have moved in over a year ago. I’m tiling the whole pool in platinum — that’s expensive!’
‘I’m going to sell it. I hate it. People commit suicide over constructions.
‘Relationships break down over constructions and I can see why. It rips your heart out’
++++++++++++++++++++++++++++++
The Dow Cornings index sagged today, in heavy traiting.
U.S. officials have been extremely cautious about confronting the China problem, to such an extent that last week the Treasury Department, while expressing “concerns,” certified in a required report to Congress that China is not — repeat not — manipulating its currency. They’re kidding, right?
The thing is, right now this caution makes little sense. Suppose the Chinese were to do what Wall Street and Washington seem to fear and start selling some of their dollar hoard. Under current conditions, this would actually help the U.S. economy by making our exports more competitive.
My belief in California Exceptionalism is indeed wounded. However, our state gov't is still on-track to provide a memorable ride down the next leg of the crisis, so the race isn't over yet.
Cinco-X wrote:
Disappointed?
My belief in California Exceptionalism is indeed wounded. However, our state gov't is still on-track to provide a memorable ride down the next leg of the crisis, so the race isn't over yet.
But that is just the start - the next question PK needs to answer is if the Chinese go away who funds QE when Hu no longer wants to? Answer that in a way that doesn't lead to worldwide social chaos & win a second Nobel. Might be a 'Peace Prize' too not just that wonky Econ one.
Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.-- Sun Tzu
Commentariat: Are we there yet?
Uncle Ben: What do you mean? We never left?
Cousin Timmy: What do you mean, Ben? We are already there.
.
:Few more days down the road:
.
Commentariat: Are we there yet?
Uncle Ben: If you kids don't be quiet, I'm going to weaken your USDs more!
Cousin Timmy: And Uncle Hu will be mad if we aren't there in time.
.
:Another few more days down the road:
.
Commentariat: Are we there yet?
Uncle Ben: That is it! This recession is over! I'm turning this recovery around.
Cousin Timmy: Uncle Hu? We had to stop over in La-Laland. No, the kids are restless. No, we're still coming. ^click^
.
:silence:
Lone voice from the backseat: Uncle Ben. The sign says we passed into Depression County already. Do we need to stop and get directions?
"Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.-- Sun Tzu"
isn't the American version "baffle them with bullshit"?
It is essential to seek out enemy agents who have come to conduct espionage against you and to bribe them to serve you. Give them instructions and care for them. Thus doubled agents are recruited and used.-- Sun Tzu
the next question PK needs to answer is if the Chinese go away who funds QE
If the Chinese go away then you don't need QE any more -- that's the 180-degree turn signal. You're onto the next step: take the hit on standard of living, prepare to fight inflation, hunker down with your newly-competitive industries and devalued dollar, and hope the global economy doesn't crack up like Das Boot at 200 meters of stress.
As for state distribution of pain - notice we are just now returning to the bottom of where we were in the last couple recessions... meaning while the past recessions were awful there were at least a few places [primarily west coast & southeast] where folks could go and find some chance of evading the worst of the bad. This go around almost no place was spared [a few months ago almost all states were 'red'].
Now a few are actually in recovery... a few more are 'pink' [not too terrible]... and a lot are still plenty mired in pain. That was what it was like in the previous recessions. So if we are JUST returning to 70s-80s conditions... does that constitute 's
isn't the American version "baffle them with bullshit"?
No; baffling with BS requires a bit of bravado and arrogance on the part of the baffler to pull off. Sun Tzu's approach relies on the barvado and arrogance of the opposition to pull off-
Glad to see Krugman speaking out on this. There's been quite a bit of press about how the US shouldn't start up with "protectionist" policies, while ignoring the blatant protectionism of currency pegs.
Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you wait for the extraordinary moment — that which they cannot anticipate.-- Sun Tzu
They always said that the devil was in the details. Who knew that that arrangement was the "V" shaped recovery they were proclaiming in March '09? They were right. We just inferred incorrectly.
If the Chinese go away then you don't need QE any more -- that's the 180-degree turn signal. You're onto the next step: take the hit on standard of living, prepare to fight inflation, hunker down with your newly-competitive industries and devalued dollar, and hope the global economy doesn't crack up like Das Boot at 200 meters of stress.
I hear ya. Its that crack up thing that's the problem - that and the 'other deficits'... like federal budget.
Sharp discontinuities tend to behave like 'impacts' - stuff gets broken when that occurs. Don't get me wrong - I agree the 180 needs to happen - just wish it was a big wide turn in a remote bean field instead of a U turn at high speed on a busy interstate.
A lot of Californians are doing about as well as they ever did -- retirees (as someone said) with pensions, low taxes, and low expenses; military people; employees of defense contractors; energy industry people; agriculture; law enforcement and public safety professionals (politically strong, protected from cuts), public school teachers with seniority; and just a whole lot of people who were wealthy enough that a 40 percent drop in their portfolio didn't affect their daily life decisions.
And there are plenty who are doing crappy. But as a state California is too big to be homogenous; so, AFAIK, the income-secure part somewhat tempers the income-falling crowd in the final figures.
Morning all - it was interesting sitting in the gallery at the House Financial Services hearing room the past few days watching the final mark ups and votes on the derivatives legislation, the CFPA reform legislation and the Expedited CARD Act - it was lobbyist central.
On topic - CR - any idea how much of the "bump" in the states with positive trends was due to C4C?
Juvenal Delinquent (profile) wrote (in reply to...) on Fri, 10/23/2009 - 10:34 am
There is no instance of a nation benefitting from prolonged warfare.-- Sun Tzu
However, there are are many instances of otherwise-unsustainable industries benefiting to the extreme from a nation's prolonged warfare and from prolonging that warfare.
Over on KD's site, he has been talking about Citicard raising their purchase rates for some people to 29.9%. Same as their default rates. I don't see that anyone has mentioned that over here yet.
If that's the case, and if this is a trend, goodbye to anyone who can't afford to pay off the balance.
I wonder how many people are getting these letters. I haven't yet.
Uh, yea and he's advocating that we, along w/ the Chinaman, devalue the dollar. That's nice but as Faber points out, no nation has ever become rich devaluing its currency
Over on KD's site, he has been talking about Citicard raising their purchase rates for some people to 29.9%. Same as their default rates. I don't see that anyone has mentioned that over here yet.
If that's the case, and if this is a trend, goodbye to anyone who can't afford to pay off the balance.
I wonder how many people are getting these letters. I haven't yet.
Several staffers of House and Senate members got them and it was a definite discussion item in the halls of Congress the past few days!
Roubini: I don’t believe in market discipline. It doesn’t work. That was the ideology of the last 10 years; self-regulation means no regulation. Market discipline doesn’t exist with irrational exuberance and reliance on internal risk management models that don’t work. Nobody listens to risk managers, because it’s risk takers that make the profits.
He's definitely not a gold bug. Five years from now (or less), neither am I.
Somebody quoted here a few days ago said that prospects of inflation or deflation were not the biggest driver of gold prices; he said gold prices go up when there's the perception that the world financial markets are FUBAR and thus untrustworthy. We've got a couple of years of that left.
"Yes. Either that or their currency has to appreciate OR they accept lots of internal monetary inflation. Pick your poison."
then Krugman has nothing to worry about. Inflation has a history of bringing down regimes in China and they are aware of this and will act accordingly.
But on their time frame. Kind of like the US getting it's financial house in order whenever in the future they choose to.
Currency pegs, ongoing deficits etc.. always have a way of resolving themselves.
Its that crack up thing that's the problem - that and the 'other deficits'... like federal budget.
I think the stable end-game for the US will entail acceptance of a lower standard of living, weaker dollar, and higher interest rates. One of the 'shocks' we're currently re-building into the system is this attempt to reinflate asset prices -- tell me what housing prices are going to do in the end-game environment? Not good -- and I believe that the peg will be broken, eventually, so we should start planning now, Doesn't look likely -- the planning now, I mean.
I thought K's point was that if China drops the peg, the cost to US consumers of Chinese goods skyrockets reducing the price differential with goods made in the US. The peg means that the yuan is artificially low.
Juvenal - what about Rome? I know it didn't benefit from constant warfare in 'the Fall' [Imperial period] but what about during 'the Rise' [early republic to say Augustus]... I took some ancient history and if I recall Rome was at war pretty much non-stop from 500BC until Octavius 'became' Caesar. He said you could count the years on one hand where they didn't have a military campaign going on somewhere.
Of course the Chinese didn't know much about Rome... but still.
Is that Indiana looking good? I've been saying this for some time-- the doom is not evenly distributed. Some states are getting better, others continue to get worse. It's a bit like Europe that way. So painting the whole country with one doom brush doesn't really work. It also suggests we could see migration and other social changes on the way.
Ironically there is an "indian " economic model out there- less dependence on exports, higher interest rates, a floating currency and a highly regulated banking system that I am sure the Chinese are paying attention to. What we may be witnessing is a major geo-political realignment. The lower US living standard will be the least of our worries if the Chinese are no longer dependent on the US market to keep their masses employed and quiet. The US looses any kind of leverage that it has on the Chinese and while that might be welcomed by some it will not make for a better world. In some respect the US policy towards China is really no different than that employed by both the Western and Eastern Roman empire to pay off the barbarians to keep them from invading the empire. It worked for a while before they decided they might as well get it all rather than just the tribute.
then Krugman has nothing to worry about. Inflation has a history of bringing down regimes in China and they are aware of this and will act accordingly.
I don't believe PK is advocating inflating "THEIR" currency-
thx. Interesting article, since I've lost track of Roubini lately...
Roubini: I don’t believe in gold. Gold can go up for only two reasons. [One is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity, and demand is weak, and there’s slack in the labor markets with unemployment peeking above 10 percent in all the advanced economies. So there’s no inflation, and there’s not going to be for the time being.
The only other case in which gold can go higher with deflation is if you have Armageddon, if you have another depression. But we’ve avoided that tail risk as well. So all the gold bugs who say gold is going to go to $1,500, $2,000, they’re just speaking nonsense. Without inflation, or without a depression, there’s nowhere for gold to go. Yeah, it can go above $1,000, but it can’t move up 20-30 percent unless we end up in a world of inflation or another depression. I don’t see either of those being likely for the time being. Maybe three or four years from now, yes. But not anytime soon.
and any acknowledged decline of the financial sector, standard of living, or house prices is political and suicide, because there are only managers and not leaders at the helm
Several staffers of House and Senate members got them and it was a definite discussion item in the halls of Congress the past few days
There was a controvery in Sacramento several years ago when it was discovered that ATMs in and very close to the State Capitol did not have charges for withdrawing money if you had an account with a different bank. For some firms, these were virtually the only ATMs set up that way.
Roubini: I don’t believe in gold. Gold can go up for only two reasons. [One is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity, and demand is weak, and there’s slack in the labor markets with unemployment peeking above 10 percent in all the advanced economies. So there’s no inflation, and there’s not going to be for the time being.
The only other case in which gold can go higher with deflation is if you have Armageddon, if you have another depression. But we’ve avoided that tail risk as well. So all the gold bugs who say gold is going to go to $1,500, $2,000, they’re just speaking nonsense. Without inflation, or without a depression, there’s nowhere for gold to go. Yeah, it can go above $1,000, but it can’t move up 20-30 percent unless we end up in a world of inflation or another depression. I don’t see either of those being likely for the time being. Maybe three or four years from now, yes. But not anytime soon.
Sorry I do not belive this comment for one bit. This is where Roubini gets a little sheepish. Gold is money.
Also it already is a Depression for many, so he is talking BS right here.
Maybe three or four years from now, yes. But not anytime soon.
Is that Indiana looking good? I've been saying this for some time-- the doom is not evenly distributed. Some states are getting better, others continue to get worse.
Indiana is going from total disaster to not so terrible - it took one of the biggest hits when automotive stopped building... now its 'rebounding' a bit off those lows... so its change is positive but from a very low level.
"I don't believe PK is advocating inflating "THEIR" currency- "
Krugman is saying China needs to drop the peg. Maintaining the peg is resulting in monetary inflation within China as they need to print yuan to maintain the peg. One inflation gets out of hand I think that will result in China modifying the peg.
CR, I still think you're going to need to extend your blue recession bars.
The Philly Fed "number of states" graph pretty strongly indicates that a recession doesn't end until the number of states showing increasing activity is at least 20. Although the number is currently rising, it's still the case that only a handful of states have strengthening activity, even with the huge one-time stimulus, C4C and first-time homebuyer credits, and massive Federal Reserve intervention into the mortgage markets. The bills for which have yet to be paid...
Though I frequently sound like a doomer, I don't think the US will have a lower standard of living. We will have about as much stuff as we do now, it will just cost less.
Houses - less expensive
College education - less expensive
Health care - uncertain, but I could actually see including health care in antitrust provisions having an effect
Cars - less expensive
Gas, utilities - uncertain because of the rest of the world, but could easily be less expensive.
I find it very amusing that Doctor Formaldehyde doesn't have #79 coursing through his veins, as he's Persian and must surely realize that virtually all of the upper-class Iranians that came to our country in the late 1970's, were bankrolled initially by selling the mellow yellow they had brought with them...
I'm sure there were some angry meetings at Citibank about which idiot sent out the letters without running the list of names past the Capitol Hill employee lists and removing the hits.
Indiana is going from total disaster to not so terrible - it took one of the biggest hits when automotive stopped building... now its 'rebounding' a bit off those lows... so its change is positive but from a very low level. - dryfly
They look a lot better than Oregon, and have for some time. Our "low level" is lower than their "low level" -- so there!
Though I frequently sound like a doomer, I don't think the US will have a lower standard of living. We will have about as much stuff as we do now, it will just cost less.
Houses - less expensive
College education - less expensive
Paychecks -smaller
health care costs - higher
taxes - higher
energy cost - (to be) higher
I'm sure there were some angry meetings at Citibank about which idiot sent out the letters without running the list of names past the Capitol Hill employee lists and removing the hits.
The House and Senate credit unions will probably be getting a bunch of new credit card applications.
I disagree particularly about gas/utilities: If we get into another global faux market in trading carbon credits-guess who pays again? and NO it won't be India or China.
Maintaining the peg is resulting in monetary inflation within China as they need to print yuan to maintain the peg. One inflation gets out of hand I think that will result in China modifying the peg
Or sterilize it by buying assets denominated in the peg currency - that has been what they've been doing up until now to maintain the peg.
They don't have an infinite number of options:
1] abandon export growth policy [let peg go]
2] sterilize reserves resulting from export growth - i.e. quit their bitchin' & continue to buy US T's & MBS
3] accept domestic inflation resulting from monetary growth from export driven reserves
I've read that in the old Soviet Union people put up with insane shortages and inconveniences because there was a near universal hope by parents that their children's lives would be better. After seventy years of living on that hope, the country reached the point where it collapsed. The hope for improvement under that system could never be realized. Maybe that's why so many of us here react so radically when politicians promising us "hope" want to do so by giving us fewer personal options and choices and instead, offer only more mandates and regimentation.
Sorry I do not believe this comment for one bit. This is where Roubini gets a little sheepish. Gold is money.
Also it already is a Depression for many, so he is talking BS right here.
No, I think he's right on. We're in a WileECoyote period right now. The Fed HAS postponed reality. Gold can't "do anything" because until reality is established the value of everything is fake - including gold, which is valued in dollars with fake values.
I find it very amusing that Doctor Formaldehyde doesn't have #79 coursing through his veins, as he's Persian and must surely realize that virtually all of the upper-class Iranians that came to our country in the late 1970's, were bankrolled initially by selling the mellow yellow they had brought with them...
That is completely consistent with his statement above. They sold because they did not see how it was going higher.
As you note, he is closer to a background that really needed gold as a currency so is probably more qualified by experience to know when it is right.
Indiana is going from total disaster to not so terrible - it took one of the biggest hits when automotive stopped building... now its 'rebounding' a bit off those lows... so its change is positive but from a very low level.
I'd be curious about someone's take on how similar Indiana is to other states.
It's got a lot of agriculture and a lot of industry. It also is a pretty big education exporter as well. I believe that the majority of students at the public colleges are from out of state or out of country and paying full tuition. I went to a football game at Purdue last weekend and was surprised that a lot of construction was still going on - even on a Saturday morning crews were working on some new building. In the cornfields surrounding the area hundreds of windmills were up and running. These weren't there when I drove through a year or two ago.
They have a lot of billboards up near the Chicago border advertising lower business costs than in Illinois; I wonder if that isn't actually working out for them.
"i.e. quit their bitchin' & continue to buy US T's & MBS"
You have to understand that much of this is for domestic consumption. Chinese leaders worry much more about what the average Chinese thinks in some ways due to their propensity to riot out of the blue.
soig
I don't disagree on those counts. The decline will come from more expensive financial markets (higher interest rates, less stock market capital, less VC), and more expensive imports in terms of the amount of exports necessary to pay for them. The more expensive financial markets has a wide range of fallout, more notably the takeover of American companies where the HQs are relocated. Manufacturing will become a larger part of GDP, reversing a long downward trend across non-asian developed countries.
Is Rome really gone? You could say the EU is to Rome what modern China is to the Zhou Dynasties. Been lots a churn on both ends of the continent over the millenniums.
Terry, you mean like NOW? Only we're been taxed by the commodity traders who have a strangle hold on the last great manipulated market to produce a FAST BUCK. Higher prices on lower demand and high inventories...eh?
JD
I find it very amusing that Doctor Formaldehyde doesn't have #79 coursing through his veins, as he's Persian and must surely realize that virtually all of the upper-class Iranians that came to our country in the late 1970's, were bankrolled initially by selling the mellow yellow they had brought with them...
In graduate school in the late seventies, the Persian boys had Porsche and blonds. Poor graduate students on measly gta, we envied them; one rich Iranian man sent his three children to the US each with a 1m$, before the shah fell. I knew one of the boys. Came time to marry, he dumped his blonds and got married to a chaste Iranian woman. Ah those Persians in the US! Somebody needs to write a book on them.
They sold it because that was all they had in the way of money in many instances, and besides the timing was right, as most Persians showed up in 79-80...
You wouldn't believe how many Pahlavis and misc large medals with the Shah on them got melted down~
A big majority of states - and all the large-population ones are still receding but somehow the US is no longer in recession?
Something doesn't match up here... as usual.
CA isn't worst?
That sorta resembles the CDC flu-view map.
some investor guy wrote:
Beat me to it -- both CA and FL still have room to fall further. Perhaps retirees and military spending are buffering the downside, or perhaps we're still waiting for the shoe of state spending cuts to be thrown at the face of their state economies.
49% Say No Health Care Reform Better Than Current Plan
The new survey also shows that voters are skeptical that anything will be able to reduce the amount we spend on health care. If the cost of health care services comes down, 42% believe consumers will simply buy more services. Just 31% say reducing the cost of service would actually lead to less spending on health care. Twenty-seven percent (27%) are not sure.
DCRogers wrote:
Might be those pesky increased existing home sales.
some investor guy wrote:
Disappointed?
(from the Daily Mail)
Pamela Anderson has spoken for the first time about her huge debts after building her dream home left her millions of dollars in the red.
The 42-year-old actress has been forced to move into a trailer park during construction of her beach home in Malibu, California. But she now fears she may have to sell it after going over budget.
She said: ‘I am $3 million over budget and I should have moved in over a year ago. I’m tiling the whole pool in platinum — that’s expensive!’
‘I’m going to sell it. I hate it. People commit suicide over constructions.
‘Relationships break down over constructions and I can see why. It rips your heart out’
++++++++++++++++++++++++++++++
The Dow Cornings index sagged today, in heavy traiting.
CR,
Isn't it time for a new "Distressing Gap" chart?
Cinco-X wrote:
CA isn't worst?
Disappointed?
I was surprised.
transports down 3% today hmmmmmm
OT-
No fat speaking fees for PK in China for a while! This is worth reading.
OP-ED COLUMNIST; The Chinese Disconnect - NY Times
The Chinese Disconnect
By PAUL KRUGMAN
Published: October 22, 2009
Cinco-X wrote:
My belief in California Exceptionalism is indeed wounded. However, our state gov't is still on-track to provide a memorable ride down the next leg of the crisis, so the race isn't over yet.
DCRogers wrote:
Keep the faith, brother-
I am surprised, but not disappointed. It just seems like the outward migration and dropping tax receipts would match up with worse experience.
About time.
But that is just the start - the next question PK needs to answer is if the Chinese go away who funds QE when Hu no longer wants to? Answer that in a way that doesn't lead to worldwide social chaos & win a second Nobel. Might be a 'Peace Prize' too not just that wonky Econ one.
China pretends to float it's currency.
The US pretends to fix it's bankings system.
Every country is taking the route of short term gain, long term pain.
It looks like we're still in a recession. I thought 3Q would show GDP growth.
Down goes Frasier?
Any idea what's up with the dow today?
Down on some decent volume; no idea what's up. Did Black Friday arrive a week late?
Commentariat: Are we there yet?
Uncle Ben: What do you mean? We never left?
Cousin Timmy: What do you mean, Ben? We are already there.
.
:Few more days down the road:
.
Commentariat: Are we there yet?
Uncle Ben: If you kids don't be quiet, I'm going to weaken your USDs more!
Cousin Timmy: And Uncle Hu will be mad if we aren't there in time.
.
:Another few more days down the road:
.
Commentariat: Are we there yet?
Uncle Ben: That is it! This recession is over! I'm turning this recovery around.
Cousin Timmy: Uncle Hu? We had to stop over in La-Laland. No, the kids are restless. No, we're still coming. ^click^
.
:silence:
Lone voice from the backseat: Uncle Ben. The sign says we passed into Depression County already. Do we need to stop and get directions?
"Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.-- Sun Tzu"
isn't the American version "baffle them with bullshit"?
I think it's awesome we get to celebrate Dow 10,000 every single day. It's like the part that never ends!
Oxtail: Break out the CA champagne!!
dryfly wrote:
If the Chinese go away then you don't need QE any more -- that's the 180-degree turn signal. You're onto the next step: take the hit on standard of living, prepare to fight inflation, hunker down with your newly-competitive industries and devalued dollar, and hope the global economy doesn't crack up like Das Boot at 200 meters of stress.
As for state distribution of pain - notice we are just now returning to the bottom of where we were in the last couple recessions... meaning while the past recessions were awful there were at least a few places [primarily west coast & southeast] where folks could go and find some chance of evading the worst of the bad. This go around almost no place was spared [a few months ago almost all states were 'red'].
Now a few are actually in recovery... a few more are 'pink' [not too terrible]... and a lot are still plenty mired in pain. That was what it was like in the previous recessions. So if we are JUST returning to 70s-80s conditions... does that constitute
's
poic wrote:
No; baffling with BS requires a bit of bravado and arrogance on the part of the baffler to pull off. Sun Tzu's approach relies on the barvado and arrogance of the opposition to pull off-
Nanoo-Nanoo wrote:
First MS was green. Now TN is green. Following the disease analogy, it is like the SE cousins are giving mono to each other one person at a time.
except for the parts about being subtle and quiet...
Glad to see Krugman speaking out on this. There's been quite a bit of press about how the US shouldn't start up with "protectionist" policies, while ignoring the blatant protectionism of currency pegs.
And only as a function of running the biggest percentage deficits since WWII...
yagij wrote:
I see it!!!! If you draw a line between Montana and Tennessee, and between Tennessee and Vermont you get a "V" shaped recovery
Forty one states are showing declining three month activity. The index increased in 7 states, and was unchanged in 2.
41 states still declined in the face of peak fiscal stimulus.
And now with the stimulus waning?
And a lot of small businesses throwing in the towel post xmas?
Anyone still expecting V recovery?
Doesn't the currency peg force China to buy the US debt that Krugman and others see as such a desperate necessity to get us out of this quagmire?
Cinco-X wrote:
They always said that the devil was in the details. Who knew that that arrangement was the "V" shaped recovery they were proclaiming in March '09? They were right. We just inferred incorrectly.
DCRogers wrote:
I hear ya. Its that crack up thing that's the problem - that and the 'other deficits'... like federal budget.
Sharp discontinuities tend to behave like 'impacts' - stuff gets broken when that occurs. Don't get me wrong - I agree the 180 needs to happen - just wish it was a big wide turn in a remote bean field instead of a U turn at high speed on a busy interstate.
Thanks for the reference to Pamela Anderson's remodeling trama, that is a hoot!.
If they can't release this index before the 15th of the Month they should rename it.
Amen brother....
some investor guy wrote:
A lot of Californians are doing about as well as they ever did -- retirees (as someone said) with pensions, low taxes, and low expenses; military people; employees of defense contractors; energy industry people; agriculture; law enforcement and public safety professionals (politically strong, protected from cuts), public school teachers with seniority; and just a whole lot of people who were wealthy enough that a 40 percent drop in their portfolio didn't affect their daily life decisions.
And there are plenty who are doing crappy. But as a state California is too big to be homogenous; so, AFAIK, the income-secure part somewhat tempers the income-falling crowd in the final figures.
If anybody missed Colbert's take on Dow 10K , here it is.
The Money Shot
The Money Shot | October 15, 2009 | ColbertNation.com
Nouriel Roubini: Big Crash Coming
Nouriel Roubini: Big Crash Coming - Features
I believe the Economics Prize is not part of the original Nobel legacy and was something added on .
Morning all - it was interesting sitting in the gallery at the House Financial Services hearing room the past few days watching the final mark ups and votes on the derivatives legislation, the CFPA reform legislation and the Expedited CARD Act - it was lobbyist central.
On topic - CR - any idea how much of the "bump" in the states with positive trends was due to C4C?
poic wrote:
Yes. Either that or their currency has to appreciate OR they accept lots of internal monetary inflation. Pick your poison.
Juvenal Delinquent (profile) wrote (in reply to...) on Fri, 10/23/2009 - 10:34 am
There is no instance of a nation benefitting from prolonged warfare.-- Sun Tzu
However, there are are many instances of otherwise-unsustainable industries benefiting to the extreme from a nation's prolonged warfare and from prolonging that warfare.
Over on KD's site, he has been talking about Citicard raising their purchase rates for some people to 29.9%. Same as their default rates. I don't see that anyone has mentioned that over here yet.
If that's the case, and if this is a trend, goodbye to anyone who can't afford to pay off the balance.
I wonder how many people are getting these letters. I haven't yet.
Financial failure tends to be very seasonal.
rosethorn wrote:
Uh, yea and he's advocating that we, along w/ the Chinaman, devalue the dollar. That's nice but as Faber points out, no nation has ever become rich devaluing its currency
,rad RIF,
You are talking about whorefare.
Outsider wrote:
Several staffers of House and Senate members got them and it was a definite discussion item in the halls of Congress the past few days!
Roubini: I don’t believe in market discipline. It doesn’t work. That was the ideology of the last 10 years; self-regulation means no regulation. Market discipline doesn’t exist with irrational exuberance and reliance on internal risk management models that don’t work. Nobody listens to risk managers, because it’s risk takers that make the profits.
shill wrote:
He's definitely not a gold bug. Five years from now (or less), neither am I.
Somebody quoted here a few days ago said that prospects of inflation or deflation were not the biggest driver of gold prices; he said gold prices go up when there's the perception that the world financial markets are FUBAR and thus untrustworthy. We've got a couple of years of that left.
"Yes. Either that or their currency has to appreciate OR they accept lots of internal monetary inflation. Pick your poison."
then Krugman has nothing to worry about. Inflation has a history of bringing down regimes in China and they are aware of this and will act accordingly.
But on their time frame. Kind of like the US getting it's financial house in order whenever in the future they choose to.
Currency pegs, ongoing deficits etc.. always have a way of resolving themselves.
dryfly wrote:
I think the stable end-game for the US will entail acceptance of a lower standard of living, weaker dollar, and higher interest rates. One of the 'shocks' we're currently re-building into the system is this attempt to reinflate asset prices -- tell me what housing prices are going to do in the end-game environment? Not good -- and I believe that the peg will be broken, eventually, so we should start planning now, Doesn't look likely -- the planning now, I mean.
I thought K's point was that if China drops the peg, the cost to US consumers of Chinese goods skyrockets reducing the price differential with goods made in the US. The peg means that the yuan is artificially low.
Juvenal - what about Rome? I know it didn't benefit from constant warfare in 'the Fall' [Imperial period] but what about during 'the Rise' [early republic to say Augustus]... I took some ancient history and if I recall Rome was at war pretty much non-stop from 500BC until Octavius 'became' Caesar. He said you could count the years on one hand where they didn't have a military campaign going on somewhere.
Of course the Chinese didn't know much about Rome... but still.
Is that Indiana looking good? I've been saying this for some time-- the doom is not evenly distributed. Some states are getting better, others continue to get worse. It's a bit like Europe that way. So painting the whole country with one doom brush doesn't really work. It also suggests we could see migration and other social changes on the way.
Ironically there is an "indian " economic model out there- less dependence on exports, higher interest rates, a floating currency and a highly regulated banking system that I am sure the Chinese are paying attention to. What we may be witnessing is a major geo-political realignment. The lower US living standard will be the least of our worries if the Chinese are no longer dependent on the US market to keep their masses employed and quiet. The US looses any kind of leverage that it has on the Chinese and while that might be welcomed by some it will not make for a better world. In some respect the US policy towards China is really no different than that employed by both the Western and Eastern Roman empire to pay off the barbarians to keep them from invading the empire. It worked for a while before they decided they might as well get it all rather than just the tribute.
Existing Home Sales FALL in September 2009 | The Big Picture
Barry frothing at the mouth so hard the article is filled with typos.
Great read.
DCRogers wrote:
What he said.
I would not say I am much of a
bug myself. Yes I do own some, but Cash is still king. But would I trade my 
in for cash? No, no I would not.
poic wrote:
I don't believe PK is advocating inflating "THEIR" currency-
I'm starting to get a rotator cuff injury from constantly putting my Dow 10K hat on then off then on again.
thx. Interesting article, since I've lost track of Roubini lately...
Roubini: I don’t believe in gold. Gold can go up for only two reasons. [One is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity, and demand is weak, and there’s slack in the labor markets with unemployment peeking above 10 percent in all the advanced economies. So there’s no inflation, and there’s not going to be for the time being.
The only other case in which gold can go higher with deflation is if you have Armageddon, if you have another depression. But we’ve avoided that tail risk as well. So all the gold bugs who say gold is going to go to $1,500, $2,000, they’re just speaking nonsense. Without inflation, or without a depression, there’s nowhere for gold to go. Yeah, it can go above $1,000, but it can’t move up 20-30 percent unless we end up in a world of inflation or another depression. I don’t see either of those being likely for the time being. Maybe three or four years from now, yes. But not anytime soon.
and any acknowledged decline of the financial sector, standard of living, or house prices is political and suicide, because there are only managers and not leaders at the helm
in case this hasn't been posted.
this is gonna end well...
20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down
Terry wrote:
There was a controvery in Sacramento several years ago when it was discovered that ATMs in and very close to the State Capitol did not have charges for withdrawing money if you had an account with a different bank. For some firms, these were virtually the only ATMs set up that way.
Sorry I do not belive this comment for one bit. This is where Roubini gets a little sheepish. Gold is money.
Also it already is a Depression for many, so he is talking BS right here.
All the more reason to buy and hold
poic wrote:
Sure; blame it on THAT. We know what you've been doing
scone wrote:
Indiana is going from total disaster to not so terrible - it took one of the biggest hits when automotive stopped building... now its 'rebounding' a bit off those lows... so its change is positive but from a very low level.
"I don't believe PK is advocating inflating "THEIR" currency- "
Krugman is saying China needs to drop the peg. Maintaining the peg is resulting in monetary inflation within China as they need to print yuan to maintain the peg. One inflation gets out of hand I think that will result in China modifying the peg.
CR, I still think you're going to need to extend your blue recession bars.
The Philly Fed "number of states" graph pretty strongly indicates that a recession doesn't end until the number of states showing increasing activity is at least 20. Although the number is currently rising, it's still the case that only a handful of states have strengthening activity, even with the huge one-time stimulus, C4C and first-time homebuyer credits, and massive Federal Reserve intervention into the mortgage markets. The bills for which have yet to be paid...
Though I frequently sound like a doomer, I don't think the US will have a lower standard of living. We will have about as much stuff as we do now, it will just cost less.
Houses - less expensive
College education - less expensive
Health care - uncertain, but I could actually see including health care in antitrust provisions having an effect
Cars - less expensive
Gas, utilities - uncertain because of the rest of the world, but could easily be less expensive.
Thanks Eric for the linkie-you are right-great read.
I find it very amusing that Doctor Formaldehyde doesn't have #79 coursing through his veins, as he's Persian and must surely realize that virtually all of the upper-class Iranians that came to our country in the late 1970's, were bankrolled initially by selling the mellow yellow they had brought with them...
I'm sure there were some angry meetings at Citibank about which idiot sent out the letters without running the list of names past the Capitol Hill employee lists and removing the hits.
Indiana is going from total disaster to not so terrible - it took one of the biggest hits when automotive stopped building... now its 'rebounding' a bit off those lows... so its change is positive but from a very low level. - dryfly
They look a lot better than Oregon, and have for some time. Our "low level" is lower than their "low level" -- so there!
Map: The article requested is no longer available.
Article: The article requested is no longer available.
some investor guy wrote:
Paychecks -smaller
health care costs - higher
taxes - higher
energy cost - (to be) higher
DCRogers wrote:
The House and Senate credit unions will probably be getting a bunch of new credit card applications.
"energy cost - (to be) higher "
MUCH higher. Wait for cap and trade.
The destruction of the middle class is only in the 1st inning.
Indiana is green, Ilinois is dark red...Peyton has saved 'em!
I disagree particularly about gas/utilities: If we get into another global faux market in trading carbon credits-guess who pays again? and NO it won't be India or China.
Andy Xie: For Economic Stimuli, a Revolving Exit Door | The Big Picture
,rad dryfly,
Which Empire lasted longer?
Nanoo - the taxes on energy will be higher, maybe not the commodity costs
poic wrote:
Or sterilize it by buying assets denominated in the peg currency - that has been what they've been doing up until now to maintain the peg.
They don't have an infinite number of options:
1] abandon export growth policy [let peg go]
2] sterilize reserves resulting from export growth - i.e. quit their bitchin' & continue to buy US T's & MBS
3] accept domestic inflation resulting from monetary growth from export driven reserves
Or some combination.
" "energy cost - (to be) higher "
MUCH higher. Wait for cap and trade.
The destruction of the middle class is only in the 1st inning. "
I've read it will add roughly $100/mos for the average middle class family.
I've read that in the old Soviet Union people put up with insane shortages and inconveniences because there was a near universal hope by parents that their children's lives would be better. After seventy years of living on that hope, the country reached the point where it collapsed. The hope for improvement under that system could never be realized. Maybe that's why so many of us here react so radically when politicians promising us "hope" want to do so by giving us fewer personal options and choices and instead, offer only more mandates and regimentation.
shill wrote:
No, I think he's right on. We're in a WileECoyote period right now. The Fed HAS postponed reality. Gold can't "do anything" because until reality is established the value of everything is fake - including gold, which is valued in dollars with fake values.
Juvenal Delinquent wrote:
That is completely consistent with his statement above. They sold because they did not see how it was going higher.
As you note, he is closer to a background that really needed gold as a currency so is probably more qualified by experience to know when it is right.
I'd be curious about someone's take on how similar Indiana is to other states.
It's got a lot of agriculture and a lot of industry. It also is a pretty big education exporter as well. I believe that the majority of students at the public colleges are from out of state or out of country and paying full tuition. I went to a football game at Purdue last weekend and was surprised that a lot of construction was still going on - even on a Saturday morning crews were working on some new building. In the cornfields surrounding the area hundreds of windmills were up and running. These weren't there when I drove through a year or two ago.
They have a lot of billboards up near the Chicago border advertising lower business costs than in Illinois; I wonder if that isn't actually working out for them.
"i.e. quit their bitchin' & continue to buy US T's & MBS"
You have to understand that much of this is for domestic consumption. Chinese leaders worry much more about what the average Chinese thinks in some ways due to their propensity to riot out of the blue.
soig
I don't disagree on those counts. The decline will come from more expensive financial markets (higher interest rates, less stock market capital, less VC), and more expensive imports in terms of the amount of exports necessary to pay for them. The more expensive financial markets has a wide range of fallout, more notably the takeover of American companies where the HQs are relocated. Manufacturing will become a larger part of GDP, reversing a long downward trend across non-asian developed countries.
Juvenal Delinquent wrote:
Is Rome really gone? You could say the EU is to Rome what modern China is to the Zhou Dynasties. Been lots a churn on both ends of the continent over the millenniums.
Terry, you mean like NOW? Only we're been taxed by the commodity traders who have a strangle hold on the last great manipulated market to produce a FAST BUCK. Higher prices on lower demand and high inventories...eh?
Nice summary.
In graduate school in the late seventies, the Persian boys had Porsche and blonds. Poor graduate students on measly gta, we envied them; one rich Iranian man sent his three children to the US each with a 1m$, before the shah fell. I knew one of the boys. Came time to marry, he dumped his blonds and got married to a chaste Iranian woman. Ah those Persians in the US! Somebody needs to write a book on them.
,rad JP,
They sold it because that was all they had in the way of money in many instances, and besides the timing was right, as most Persians showed up in 79-80...
You wouldn't believe how many Pahlavis and misc large medals with the Shah on them got melted down~
Internal inflation in the short run would spur domestic consumption but possibly crank up the saving rate in the long run.
...remained unchanged in two (North Carolina and Nebraska)
Okay, the map says that SOUTH Carolina remained unchanged, not NORTH Carolina. That's very basic stuff they're getting wrong.
shill
im with ya
roubini decries a variety of asset classes and says he likes cash
complains about liquid investments and the carry trade
then roubini says that a big shit storm is quite possibly on the horizon
then he says gold only does well in a shit storm
then he says he doesnt like gold
wtf?
A big majority of states - and all the large-population ones are still receding but somehow the US is no longer in recession?
Something doesn't match up here... as usual.