What I want to see is everyone in an underwater house buy a different house of lower value (or semi-current market value in the area), then walk away from the underwater house.
Less debt.
Lower payments.
Good for Main Street. And what? for Wall Street ......
I don't care how many times you tweak a dumb premise. It'll remain a dumb premise.
The timer is running on the enactment of more bailout programs. The social mood has turned so dark and fiscally conservative that I don't think there's any way we can even continue extend & pretend, much less get any reflation of note going.
Naked Capitalism, where the authors and commentariat lean heavily liberal, had a long discussion on what the real limitations of public indebtedness are. Even there, the plebians rose up with clubs in hand to denounce what was in essence a fairly academic discussion.
The conclusion of the article? That we could print all the money we want so long as inflation doesn't occur and the dollar doesn't become too weak, as long as there's the political will for it. They're right, of course, from a theoretical standpoint, but that doesn't matter.
The political will's run out. It's over. We're fed up already. Nice try, though, Summers & Geithner. If you keep pushing this crap, the national mood will grow ever darker, and that is a terrible outcome for everyone.
......DC kinda reminds me of my flock of chickens.....a lot of running around and clucking, a lot getting laid, a whole lotta fights, but no real work getting done.....
With those income limits on the upper end and the restrictions on the lower end on first time status, that leaves out a big boatload of people who might bite in the middle. right?
I read, and reread the Naked Capitalism article. I just don't buy the premise that the gubmint has unlimited spending power. Eventually, the real economy cannot support the real needs of the government (in terms of goods and services), or foreigners stop accepting dollars. It is the height of arrogance to think it can't happen here.
Maybe I am one of the great unwashed, or maybe my training an an engineer objects to the something for nothing premise of the article.
I understand the premise of the "move-up" buyer......I just don't get it......
Now I do get it if all you are looking at is keeping the MBS market propped (which is what this is and continues to be) but....I just don't see how that makes ANY difference.
If you must reside in the house for 3 years then it won't work for a rental or vaction home. That is my guess anyway.
That means they are expecting you to sell your current home. Or use the current home as the rental / vacation home.
To sell your current home you need equity plus sales comm / escrow & closing costs. To buy the new house the $6500. is to cover closing costs. Closing and escrow costs are diff is diff places. The rule of thumb used to be 1% of the property price, not sure if that still holds true.
I stopped reading the Naked Capitalism article after the sentence: "Because the government is the only entity that gets to create money" Apparently the author does not understand the Federal Reserve system, nor fractional reserve banking.
I say again: It used to be a good site, but Yves seems to have blown a gasket over there.
I read, and reread the Naked Capitalism article. I just don't buy the premise that the gubmint has unlimited spending power. Eventually, the real economy cannot support the real needs of the government (in terms of goods and services), or foreigners stop accepting dollars. It is the height of arrogance to think it can't happen here.
They don't have unlimited spending power. The arrival of inflation and/or depreciation of the currency is the biggest reason why they don't.
But the restrictions go beyond that. One thing the article omits completely and in ugly fashion is the impacts on the economy that government spending always has, above and beyond the creation of inflation. The government will never have the same demands as the private sector, and if it encourages the private sector to meet its own demands, then there will be a recalibration of the private sector to better serve the needs of the government. Taxation policies (or the explicit use of inflation for seigniorage) have strong distortional effects on the economy too. These distortions can easily happen and damage an economy's ability to meet private demand with no overall inflation or currency devaluation.
But even beyond that, you make the most fundamentally important point of all. For 99% of the country, including engineers, a beautifully reasoned article like that completely fails the smell test, even if it's accurate. And that failure of the smell test means the theory itself will fail, because ultimately, you're dealing with people, and you rule with our consent.
At least the British left behind a literary tradition, as well as parlimentary democracies around the world. The Soviets left behind a lot of unsecured nuclear sites. I fear all we will leave behind is a fatty diet and pornographic films.
PORTLAND, Ore. (AP) - Costco Wholesale Corp. said Wednesday that it will start accepting food stamps at its warehouse clubs nationwide after testing them at stores in New York.
It's a big about-face for a retailer that has catered to bargain-hunting but affluent shoppers, and it's a sign of the grim reality facing retailers and their customers. The number of Americans relying on government food subsidies to eat recently hit a record 36 million
Clearly they see an opportunity for market growth.
To the employers of any stiff still pulling $125-132k looking to move up down or sideways: pay me a consultant fee of one-third the tax credit, I'll sell the one-time wage cut to the employee and help with the paperwork.
Smooth the windfall, win-win-win-lose. (The taxpayer again, naturally.)
Rep. Brad Sherman (D., Calif.) said he also had reservations about Rep. Frank's proposal. Essentially, he said, the proposal says, "'We may be borrowing $1 trillion or more from the Treasury and using that to bail out the creditors and counterparties, and then somehow, some way -- perhaps over the next year or century or three centuries -- maybe we'll get that money back from the financial-services industry.'" Deal Reached on Bank Crackdown - WSJ.com
The frequent declarations from some of our elected reps referencing the fact the Finance Sector Oligarchs own congress with the further concentration of oversight power with the FED leaves me uneasy. What I perceive is happening is the attempt to put a wolf in sheep's clothing with this bill. What is the true motivation and intent?
I stopped reading the Naked Capitalism article after the sentence: "Because the government is the only entity that gets to create money" Apparently the author does not understand the Federal Reserve system, nor fractional reserve banking.
It's a theological difference more than anything whether you believe the Federal Reserve is private or public. But glossing over both fractional reserve banking and the total uselessness of the formal 10% reserves rule is an ugly omission, I agree.
I say again: It used to be a good site, but Yves seems to have blown a gasket over there.
Might agree with you a bit on that, but writing a book is a huge endeavor for anyone, particularly someone with a day job.
$225K for a couple is just 25K shy of the 250K Obama said he was going to TAX more. lol.
When you push more dollars into circulation, you are subtly taxing those people who have dollars. Just like if you had a special collection of baseball cards and someone printed more sets of them. Is it any wonder that Buffett is sounding the alarms about inflation? He's not afraid of higher taxes, he's afraid of a steady erosion of the value of his dollar-denominated assets and cash.
Well said. Speaking of gubmint spending, I truly believe one of the reasons we lost our edge in engineering and industry was that many of our best and brightest scientists and engineers spent their careers developing nuclear bombs and fighter jets. The Germans and Japanese, unburdened by a defense establishment, concentrated their efforts of cars and electronics. The rest, as they say, is history.
"In a blow to Washington state, the Boeing Co. announced Wednesday that it has chosen North Charleston, South Carolina as the location for the second production line for the 787 Dreamliner program."
"pavel - had my flu shot yesterday pm. fell fine."
Barley, we had our seasonal flu shot some weeks ago. But since we're over 64 we're not even on the waiting list for H1N1 shots. School children here in DC are going to be vaccinated for H1N1, but I just read on the Web that in the closest county to us, Montgomery County, Md., there is no injectable H1N1 vaccine available.
the latest proposal from inside the beltway is the cash for stinkers program
the government proposes to purchase any stocks from taxpayers portfolios that have declined more than 30% from the citizens at the original purchase price, wiping out any losses
this will accomplish the trifecta of stimulating the economy, increasing capital gains tax receipts and driving the S&P 500 to at least 3000
boomers will be able to cash in their 401k and buy annuities and everyone will live happily ever after
some say this will be a massive give away to the rich
that is it's genius
I'm in the deflation camp currently because that money really isn't in the money supply-its being soaked up by a super-massive giant sponge of leverage as I understand it. We DO have inflation but its in sectors mostly services-we do currently have deflation in consumer discretionary. So its a mixed picture. I think we'll get deflation then stagflation in spades. But Ima nobody and don't take me seriously because I don't.
Might agree with you a bit on that, but writing a book is a huge endeavor for anyone, particularly someone with a day job.
Naked Capitalism - overall - is pretty well balanced. It has always been a bit toward the "one big group hug" side of things, but the links are always interesting to read and I always like Edward Harrison at Credit Write-down - a frequent substitute poster during the book-writing campaign - very good.
Speaking of gubmint spending, I truly believe one of the reasons we lost our edge in engineering and industry was that many of our best and brightest scientists and engineers spent their careers developing nuclear bombs and fighter jets. The Germans and Japanese, unburdened by a defense establishment, concentrated their efforts of cars and electronics. The rest, as they say, is history.
That's an excellent example of such reallocation of resources, Nuke. I can also categorically state that, in my experience dealing with numerous people and projects at numerous national labs in the DOE pantheon, that those are political wastelands devoid of creativity and innovation. Given your handle, you might have had better experiences with them.
More generally, the refocusing of our entire economy on asset prices, debt, lending, and political influence is extraordinarily toxic. It won't show up in traditional measures, where this transition may appear healthy or natural, but it will most certainly show up in the gut feelings of a disquieted and nervous public. Oh, and it might show up when the patina cracks and there's just a bunch of zombies in the cathedral of Capitalism, too.
No suprise about Boeing. Here in Illinois, were boeing is technically headquartered,, why didn't they consider the 35th rated business friendly state for the second line. Hell, it didn't make the papers they were even looking. well, we can just tax cigarettes some more.
What I perceive is happening is the attempt to put a wolf in sheep's clothing with this bill. What is the true motivation and intent?
It gives regulators broad, unfettered discretion to regulate any financial product or finanical service that they deem to be a threat to financial stability. It allows the government to pull a "Chrysler" on bondholders of a failed institution. It require creditors to retain 10 percent or more, of the credit risk associated with any loans that are transferred or sold, including for the purpose of securitization. Finally, it puts the cost of resolution on banks with over $10 billion of assets, which includes most regional banks but few community banks.
please tell me you are just playing around and this was a genius post by you rather than anything with any truth to it.
the fact that you have to ask that question on a forum like this is a sad statement about the times we live in. It would seem the government will go to any extreme to keep up appearances, which makes your question a fair one.
I am a Naval Officer currently stationed at one such DOE facility. I bet you can guess which one. I can attest to the sclerotic culture, mindnumbing bureaucracy and ingrained incompetence of these facilities. Any progress made is the result of heroic (no Herculean) efforts of small numbers of people swimming against the current.
I am a Naval Officer currently stationed at one such DOE facility. I bet you can guess which one. I can attest to the sclerotic culture, mindnumbing bureaucracy and ingrained incompetence of these facilities. Any progress made is the result of heroic (no Herculean) efforts of small numbers of people swimming against the current.
There's an old saying:
"The military was designed by geniuses to be run by idiots".
Sorry 'bout that-
That's an excellent example of such reallocation of resources, Nuke.
Great plan:
Drain off the engineers to build useless (but, like, totally cool) weapons. Send more and more of the jobs overseas, concentrating the follow-up generations of smart people into the only field left to make money in; THE FINANCIAL SERVICES INDUSTREEEEEE which is concentrated in two places (counting DC). Sure, what can happen?
The Democrats and Republicans shot themselves in the foot when both enthusiastically embraced big-government over any other ideology, resulting in the parties having mutated into the applied-socialist and the friend-fascists parties (respectively), and both owned by the same people.
I am a Naval Officer currently stationed at one such DOE facility. I bet you can guess which one. I can attest to the sclerotic culture, mindnumbing bureaucracy and ingrained incompetence of these facilities. Any progress made is the result of heroic (no Herculean) efforts of small numbers of people swimming against the current.
I spent some time working for national labs in other countries and there's much less red tape and much more freedom in those environments. I have never understood why, but suspect it's something to do with not being defense-related, and their open cooperation with corporations rather than our awkward and partial competition with them.
Not that I like the military-industrial complex. I don't see a good answer. But it might explain some of the paralysis, since politicians are just as happy to give the funding and contracts exclusively to their favorite corporate friends, leaving the national labs to often be, as the Brits might say, "redundancies."
Given your handle, you might have had better experiences with them.
LOL! ndk, my father worked at Argonne and it became a political wasteland after Three Mile Island. (He once went on a one-man strike in the early 70's because of lax safety precautions - the union eventually backed him which settled the matter quickly but it cost him any advancement opportunity.)
Most of our national labs focus on military applications. This requires strict security regulations, which naturally hinders cooperation and collaboration. This is, in my opinion, a big part of the problem.
LOL! ndk, my father worked at Argonne and it became a political wasteland after Three Mile Island. (He once went on a one-man strike in the early 70's because of lax safety precautions - the union eventually backed him which settled the matter quickly but it cost him any advancement opportunity.)
"Finally, it puts the cost of resolution on banks with over $10 billion of assets, which includes most regional banks but few community banks."
No it doesn't.
Banks charge fees and interest rates. Should a huge cost be incurred, it will be a huge cost, if a TBTF fails then it will ultimately become a pass through cost to every American. ALSO if you go to page 253 of the discussion draft and read you will see that the new Financial Oversight Council can declare an emergency due to exigent circumstances and decide what and how much to bail out a failed financial institution. This motion will require a vote of 5 members in support including the Sec of Treasury who has to put his support in writing.
What I have read so far is a vast improvement from what we have but my two points I've stated above seem to make this a bit of a smoke screen to take power away from congress and their worry about being reelected should they be asked to provide further bailouts.
The thing is, the lax-ness was never budget related (it's government after all), it was project managers trying to hurry experiments along so they could put them on their resumes and get another gig sooner. Sort of like securitization.
Husband and dog want some of my most excellent attention Thanks again for all the great info, discussion everyone ; thanks too for hard work you do CR to keep us up to date/informed (not misinformed).
the new Financial Oversight Council can declare an emergency due to exigent circumstances and decide what and how much to bail out a failed financial institution.
The "exigent stage left" clause is how the Fed defended AIG and force feeding Merrill to BofA. It's financial martial law and should require a full vote of Congress IMO.
Harley To Close Test Facility
Motorcycle maker shutting down its test facility in Alabama, eliminating about 100 jobs there, as it consolidates its test operations ... continue
Husqvarna To Consolidate Arkansas Operations
Outdoor power-equipment maker says it will consolidate two operations at its Nashville plant next year, and its De Queen site will become a warehouse ... continue
Severstal, USW Agree To Permanently Cut 66 Jobs
United Steelworkers reached an agreement with Russian-owned steel company to put laid-off workers back on the job, but deal calls for permanent elimination of 66 jobs ... continue
We continue to stress test the "job loss recovery" theory.
Mr Slippery wrote:
The "exigent stage left" clause is how the Fed defended AIG and force feeding Merrill to BofA. It's financial martial law and should require a full vote of Congress IMO.
Yep. I consider this land grab to be the most disturbing by far of all the recent piles of lard to ooze out of DC, including the titular transgression for this comment thread. I can only hope we're not so fatigued by this point that we fail to respond.
At least 351 schools were closed last week alone — affecting 126,000 students in 19 states, according to the U.S. Education Department. So far this school year, about 600 schools have temporarily shut their doors.
The number of closures this year appears on target to surpass the roughly 700 schools closed last spring when the swine flu outbreak first hit.
Reviewing the CDC data the total number of patient visits is very similar now to the advent of H1N1 last spring, but the % of Influenza Like Illness (% ILI) is running at 7.2% vs. out of season H1N1 peak of 2.7% (if we used normal distributions like a Wall St analyst, the current % ILI would be 44 standard deviations away from the mean of the previous twelve years % ILI for week 42, the last report from CDC). energyecon: Time normalized data for CDC US Outpatient Influenza Surveillance: 1997-present
I keep hearing about management shakeups and related churn in the Movie and TV business, so I don't think LA can count on that industry leading the economy out any time soon...
And many of the country's last upper-middle-class corporate jobs are working for the merchants of death, and quite a few of them are in El Pueblo de Nuestra Señora la Reina de los Angeles del RÃo de Porciúncula.
BMW and Mercedes didn't go Southern. They were offshored from Germany. Probably a Leipzig-designed and -assembled Dreamliner would be a superior product. Or is that what you were saying?
And many of the country's last upper-middle-class corporate jobs are working for the merchants of death, and quite a few of them are in El Pueblo de Nuestra Señora la Reina de los Angeles del RÃo de Porciúncula.
When you see the 220,000 jobs lost in El Pueblo de Nuestra Señora la Reina de los Angeles del RÃo de Porciúncula. It actually means even more pain in the satellite metros. Notice the 12,600 lost in Oxnard-Thousand Oaks. That region is also suffering from the uncounted thousands of the Los Angeles jobs and the cocomitant multiplier effect of "imported" money.
Sorry, forgot. NYFed directed me to this "rare public comment" in the Wapo lamely defending AIG's noble 100% forkover of their welfare check to banks that laugh at TARP.
He's not afraid of higher taxes, he's afraid of a steady erosion of the value of his dollar-denominated assets and cash.
Well his dollar denominated assets will do fine in an inflation IF those assets produce goods that go up w/ inflation [i.e. where he can increase prices in the face of monetary inflation]... if all those assets produce is 'dollars' [bonds for example] then they get crushed. Same applies to a stack of dollars - if he's sitting on those then bad move in an inflation.
I think his insurance companies are sitting on a pile of laddered bonds trying to match up against expected pay out liability so I can understand his concern - the pay out liability could sky rocket meanwhile the bonds neither increase in value nor cash flow sufficiently to cover. The companies he owns that produce goods won't be hit quite as hard - he has no shortage of those either.
You arbitrage 125-133k with your employer, silly. How can anyone make that much and not be aware of such an easy game? Are you a lowly doctor or rocket scientist?
I never correlated closing schools with lack of free meals. Many children rely on free breakfasts and lunches. The district where my sister lives even sends free dinners and weekend back-pack meals for the kids that probably wouldn't eat otherwise.
Josap, that's my point. I don't want the credit and that's not what I make. However, can you imagine someone asking for a $1 a year pay cut? On second thought, stupid question.
1 currency now -yogi wrote:
N.Y. Fed pushed AIG on contracts - washingtonpost.com
Not news to people like on here (or similar sites) but still, at what point does somebody start issuing some subpoenas on this stuff.
Hey. You think prosecution is warranted? No problem. What's your address?
I was delivering round 1 of about 4 loads of food to the 1st National Food Bank yesterday, when 4x 33 oz cans of Yuban coffee (with a use-by Sep 23 2009 mark on them) felt they were useless and committed foodicide en route. I was able to save a few dozen Stagg chili cans from a similar fate.
Yep-- I hear lots of people talking about inflation, and saying that it's a good time to get in debt on a house. But house prices won't go up unless wages do too.
Yep-- I hear lots of people talking about inflation, and saying that it's a good time to get in debt on a house. But house prices won't go up unless wages do too.
And wages in the U.S. won't go up until wages in China, India, and Bangladesh go up -- and they're not rising there, either. Which means America has to adjust via deflation and falling wages, which means I <3 Treasuries.
Hopefully good news. Doesn't look like the extension to the home buyers gift can be added to the unemployment bill.
Found this tidbit on another forum
"That's not going to happen. Reid shut off all amendments to the unemployment extension bill yesterday with a cloture vote. The dems were afraid of various GOP amendments on illegal immigration and ACORN.
In order to pass this, they're going to have to put it in a stand-alone bill or attach it to some other legislation. Not saying it won't eventually pass, but it's not gonna be as easy as the report suggests."
Good for you! You can send them to my house. I'm not afraid of expiration dates. If I was, I'd be dead. Not in an expired food date or old age sense. I've just definitely lived on the edge at times during my life. Haven't we all?
And wages in the U.S. won't go up until wages in China, India, and Bangladesh go up -- and they're not rising there, either. Which means America has to adjust via deflation and falling wages, which means I <3 Treasuries.
Not necessarily - change the exchange rates and China can stay where it is in their currency and US wages & prices could skyrocket denominated in dollars.
Not necessarily - change the exchange rates and China can stay where it is in their currency and US wages & prices could skyrocket denominated in dollars.
Are you thinking c.1975 when groceries were more than mortgages?
Not necessarily - change the exchange rates and China can stay where it is in their currency and US wages & prices could skyrocket denominated in dollars.
I'll eat my hat -- and lose most of my net worth -- if China ever meaningfully changes the exchange rate. It would bankrupt the PBOC, nail exporters hard(listen to EHP kvetch here about the CAD!), etc. etc. It's not in China's interest no matter how much Washington pleads or screams, and the only way the U.S. can even try to force China into it is trade barriers that would deeply harm our multinationals and likely be killed by the WTO.
China stopping us from printing money? Please. China loves it when we monetize assets. It makes their exports to the rest of the world that much cheaper.
"China stopping us from printing money? Please. China loves it when we monetize assets. It makes their exports to the rest of the world that much cheaper. Laughing out loud"
At some point they will have to. Don't forget inflation not deflation is the big bugaboo for China. Pegging their currency is increasing their inflation. Inflation brings down regimes over there.
Sea World was not empty but it wasn't full either. No waits for anything
we went in. 10 minutes' wait for the Manta roller coaster. Lots of Brits.
Few Asians. No wait for the Penguins, or the tower. Parking lot I could see was
about 2/3rds, 3/4ths full, as was the stadia for the killer whales and sea lion
shows. Weather beautiful, not too hot, this has got to be high season.
At some point they will have to. Don't forget inflation not deflation is the big bugaboo for China. Pegging their currency is increasing their inflation. Inflation brings down regimes over there.
Is it? Remember that China has had lingering deflation problems since the late '90's. Productivity and GDP growth over there are very high, the surplus pool of labor is very large, and they've been very creative and effective in sterilizing their intervention. From lowering deposit rates to increasing deposit requirements to increasing down payment requirements, they've throttled credit creation pretty well. The biggest problem has been hot money from the West, and if that hot money stops expecting this inevitable revaluation, then I don't think China will have any problems with sterilization at all.
Are you thinking c.1975 when groceries were more than mortgages?
If the PBoC & BoJ walk away from treasuries & agencies - yes it could happen. It really could. But I doubt they walk away - cut back the buy maybe but not walk away.
[Sorry for the slow reply - wanted to read the Naked Cap article carefully & that took some time - I think he is 100% right on with only one exception - he says the foreign balances will remain static & only private & gov't balances matter - I think he needs to rethink that one - see BoJ & PBoC references above].
Hey, can I be a move up homeowner if I buy a super cheap townhouse for the
8k, and not sell my current house? Maybe I can make a mtg for the diff between
the actual price and the 80k to get to the max 8k refund, and then the Seller will
very kindly forgive the debt and give me a Satisfaction of Mortgage to record when
I feel like it, in, say 5 years.
China stopping us from printing money? Please. China loves it when we monetize assets. It makes their exports to the rest of the world that much cheaper.
Again - then they shouldn't worry about the value of our treasuries or MBS wrt to say a barrel of oil. So why exactly then are they bitchin' about some new 'reserve currency'?
Then no problems - we can keep growing debt AND consuming their production forever. They'll have us covered.
As the Auerbach article reiterates, we really could so long as we had the political will. But I don't think we do. Have you not seen the extreme surge in fiscal conservatism in this country? It's registered strongly in all the polls.
Put another way, I'm betting the American government and populace bend before the Chinese government does. And I feel quite confident in that projection.
Again - then they shouldn't worry about the value of our treasuries or MBS wrt to say a barrel of oil. So why exactly then are they bitchin' about some new 'reserve currency'?
For show. It doesn't hurt to pressure us, particularly because we can't really do anything about any of it. At the very least, it makes their "diversification" into other currencies or commodities look good, but in actuality they're locking up raw resources and additional export markets all while developing their domestic capital further.
By inflation being the bugaboo of the Chinese versus deflation I mean from a historical perspective of what has brought social chaos and regime change.
Deflation is what brought chaos to the US and thus we will do whatever it takes to prevent deflation.
Historically in China it has been high inflation that has brought their version of chaos and/or regime change. 1987, 1940s etc.. And Germany and a few others.
I concur with those that argue that now is when we will start seeing cracks in the unified front countries have shown in fighting this crisis. Some countries will be more worried about inflation (China being one of them) and others about deflation.
If dryfly or anyone else is interested in really delving into my thoughts on what China is doing from a war-gaming perspective, here's a post I wrote on it about a year ago. My thoughts haven't changed at all in that time, and I believe China's behavior has been extremely consistent with my projections.
Until they say that the buyer also has to be a seller, no way to know.
My guess is there will be no "must be a seller" clause. No way to know how long it would take to sell, or if you can, or what kind of sale. This will allow people to buy a retirement home early? Probably not a rental as the FTHB credit says you have to live in the house for 3 yrs.
The eurozone has reported the first year-on-year fall in bank lending to the private sector, strengthening the case for the European Central Bank to maintain its ultra-loose interest rate policy. The latest eurozone credit statistics indicated lending had been scaled back at an unprecedented pace, even though signs have become stronger that the 16-country region’s economy has stabilised.
By inflation being the bugaboo of the Chinese versus deflation I mean from a historical perspective of what has brought social chaos and regime change.
Deflation is what brought chaos to the US and thus we will do whatever it takes to prevent deflation.
Historically in China it has been high inflation that has brought their version of chaos and/or regime change. 1987, 1940s etc.. And Germany and a few others.
That is true, poic. Deflation really won't cause such severe problems in China because there's frankly very little debt, and they have their own brutal ways of dealing with bad debts (which they're surely amassing at an incredible pace right now as they build up yet more infrastructure that is completely uneconomical). I love Michael Pettis' work, and this is one of his finest points.
So, I agree with your thoughts that China is comfortable enduring deflation and less comfortable enduring inflation. Where I differ from most is that I believe it means the U.S. better start imposing some wicked tariffs soon, or get comfortable with enduring deflation itself.
Put another way, I'm betting the American government and populace bend before the Chinese government does. And I feel quite confident in that projection.
Okay I'll put it another way - the US population & gov't doesn't have to bend until the Chinese do - we can have miniMcMansions & stuff to fill them with forever or at least until the Chinese are no longer willing to sterilize dollar growth. And make no mistake their sterilization is a decision on their parts to forgo consumption.They probably think it is consumption delayed - but given that the sterilization is 'savings' ultimately comprised of USD denominated paper of dubious value - I think it is consumption denied. When they get to that level of understanding the game changes. I think they are closer to that than any of us realize.
yes I do think mpettis is a great read. He's one of the few out there who appears to have an understanding of both Western and Asian ways of thinking, doesn't have an axe to grind, lays out the pros and cons on both sides and argues basically (like dryfly) that either we all get through this together or we all go down together.
Unfortunately both sides are taking the short-term easy, long term very hard way out.
That's not entirely true. Most of the corruption trials that you see are show trials to appease the masses and a calculated way to blow off steam. No major changes, a few bones to the crowds. Similar to what goes on in Congress here.
I think they are closer to that than any of us realize.
Let's take your basic hypothesis as a given. What do you believe are the reasons China hasn't revalued their currency for years, even as they take more steps to curb property speculation and other incipient signs of inflation? Why haven't they acted yet, and what will spur them to act? I think that's a much more difficult case to make than that this is secretly in China's best interests, which is why I'm always eager to hear good arguments in its defense.
"What do you believe are the reasons China hasn't revalued their currency for years"
That despite their claims to the contrary they are still incredibly dependent on exports. Especially as a way to keep the lower-classes employed and reduce social strife.
IMO it's much more likely that China is acting in exactly the same way as the US. Fire-fighting every step of the way, taking the short-term easy route at every step.
And also previous thread. Not true that people don't buy stuff
when they buy a "used" house. We spent 30k when we bought to
bring the house up to tolerable.
U.S. debt are denominated in dollars. We will reach won't pay way before we get to can't pay.
Note that the "climate change" bill is very discriminatory against oil and (to a lessor extent) natural gas and favorable to coal, which makes no sense from an environmental viewpoint, since coal is much dirtier. But coal and natural gas are most produced domestically and oil is half imported. If the main provisions of the house bill stays intact, expect to see a smaller deficit as the tax burden falls mainly on oil producers. If the U.S. current account deficit falls below 2% of GDP, a lot of countries will become desperate.
So, I agree with your thoughts that China is comfortable enduring deflation and less comfortable enduring inflation. Where I differ from most is that I believe it means the U.S. better start imposing some wicked tariffs soon, or get comfortable with enduring deflation itself.
The bet is we can create money faster than they can sterilize it - Bernanke & Geitner are trying to do to China w/ money what Reagan did to the Soviet Union with weapons. In effect challenging them to keep up. I don't think they can nor do I think they will try to for a lot longer. If they are really comfortable w/ deflation they'll just pull back let the US stew in its own pot [let us keep our money & learn to make stuff for ourselves again]... I think that is more likely than China exporting deflation - that only works as long as they sterilize more than we send them [else the dollar balance & velocity grows here too].
If the credit in Europe and the US is drying up for commercial lending and the average American is being tight with a dollar who is going to buy Chinas exports in the quanity needed?
They fixed two issues with the previous plan: (a) they got away with the mysterious $7290 number, a number so exact it must have been based on good science (b) they got rid of clauses which favored move-up buyers over first-time.
W00t! This must be good, sensible policy!
Nobody Nova. I forgot to check the gee-gaws at Sea World to see where
they were made. An awful lot at discovery Cove wasn't from China. Coupla things
actually made here, lots of t-shirts from various parts of South America.
I think that is more likely than China exporting deflation - that only works as long as they sterilize more than we send them [else the dollar balance & velocity grows here too].
I think Geithner and Bernanke are much more likely to be foiled by the combination of accelerating deflationary forces and newfound American fiscal conservatism before ever reaching anything close to a monetization volume that China would see as detrimental rather than helpful for them. Everything we've done to this point is a tinkle in the ocean compared to what is required.
We'll find out in due time which of us is right. It'll be fascinating to watch. Too bad we also have to live through the results, since neither of our visions is a good one for America...
Falcon 9 (100% American made) will launch in a few months. It will be cheaper than Aries I and perform better (which is not a surprise since it is 100% liquid fueled.)
The messages just get lost in pan-pacific translation though sometimes.
Tell me about it - was on a conference call today and there were Chinese [originally from Beijing area], Indians [from somewhere in the northern part but were relocated to the south], Mexicans [from the Maquilladores] and us 'Mericans. Uffda - a whole lotta messages mistranslated in that conversation.
The underlying context to this crisis is the complete destruction of labor rights as represented by unions. The only significant pushback to this movement will be from government employee unions. They too will fall when a few large municipalities go BK and the "or else" threat is made clear when they are forced to renegotiate wages,benefits and pensions. Labor is a commodity when you are a capital holder and should be set by the "free market"(pause for ironic chuckle).
The leadership of the unions, especially the auto related unions, have been completely co-opted. Gettelfinger demonstrated this over the last few weeks by attempting to sell out his constituents before he retires. The Reformation Recovery doesn't include labor rights or a living wage.
++++
Dryfly wrote""The bet is we can create money faster than they can sterilize it - Bernanke & Geitner are trying to do to China w/ money what Reagan did to the Soviet Union with weapons."
That has been my suspicion for a while. I didn't want the hassle of having to don my tinfoil armor to defend that assertion. Bravo to you. Forcing China to depeg might be one of the goals during this disaster capitalism phase.
"Tell me about it - was on a conference call today and there were Chinese [originally from Beijing area], Indians [from somewhere in the northern part but were relocated to the south], Mexicans [from the Maquilladores] and us 'Mericans. Uffda - a whole lotta messages mistranslated in that conversation."
Cultural misunderstandings have started some pretty serious conflicts before. I've always wondered whether that would be the black swan this time around as well.
That only holds up as long as we have food to eat & a place to live... as deflation grinds on unless we get a whole lot more 'socialist' [to avoid people starving & freezing in the street - a result of deflation as assets sit idle working through BK]... then they'll vote for deficits & food & jobs & bigger housing subsidies & worry about the public debt later. That is my guess - congress's recent actions I think just hint at what's to come.
But you are right in that none of these situations put us in a nice place. My bet is the Chinese realize this before we do & cut their losses. But then I might be giving them credit for more smarts than they actually really have. A sort of reverse discrimination.
Cultural misunderstandings have started some pretty serious conflicts before. I've always wondered whether that would be the black swan this time around as well.
Could be. There are a lot of elbows being thrown around right now.
The NASA plan is for Aries I to get the astronauts into orbit and the Aries V to actually get to the moon (still haven't figured out about the whole Mars thing which was the original goal of Aries program.) The problem is no one is sure that the Aries I will be able to get six astronauts into orbit. Still a work in progress and they went ahead and did the first test flight. The first manned flight is promised for 2014 or 2015. The shuttle is supposed to stop service next year. That's four or five years of NASA being grounded!
China is investigating whether the U.S. is unfairly selling cars in China. It threatens tariffs on American imports. No mention of Hummer being part of the investigation.
What would the USA look like if it had been continually inhabited for 3,000 years
We have found remains of settlement from 12,000 years ago in various places around the U.S. So I'm guessing it would look like it does today. No guns from that time period but they still sort of count as Americans.
China is investigating whether the U.S. is unfairly selling cars in China. It threatens tariffs on American imports. No mention of Hummer being part of the investigation.
They are making more cars in China now than in the US - China went over 10MM/yr last month... we are now under 10MM/year.
a whole lotta messages mistranslated in that conversation
After awhile, you don't need to know specifics to guesstimate a situation.
You see the same patterns over and over.
A major axis of fluctuation is differentiation vs commonality, it expresses itself in many ways.
Conformity versus Diversity
Standard vs Custom
It's often a symptom of declining marginal utility but political systems often overshoot the break-even point because belief systems have a lot of latency and good metrics are difficult to find / prove.
Sitting in a Starbucks, listening to an MLM scam again.
It's been awhile, I haven't been in Starbucks much lately.
Trade existed all that time. Don't know if it qualfies as "capitalist".
Don't know if China would qualfy as "capitalist" for most of that hypothetical
3k years.
Did you read that Sprott report the other day? Basically lays out the facts that if the Fed doesn't monetize T's then they won't sell, period, because there's simply not enough foreign and domestic demand otherwise.
IMHO our "trading partners" won't idly sit by and let us do that for very much longer. I still believe that the only reason we've managed to get away with it so far is that they've been playing for the V-shaped recovery which enables an exit strategy. Once it's obvious to all that there can be no exit then, well, the fiat goes off.
Did you read that Sprott report the other day? Basically lays out the facts that if the Fed doesn't monetize T's then they won't sell, period, because there's simply not enough foreign and domestic demand otherwise.
I read parts - thanks for the link. I think that's probably right.
Any guesses how long before the Golden Bear Chits make a reappearance? In about 10 days Chaing will have the Oct revenue figures. If it is unchanged from Sept, they'll have to do something.
That was the Mongals; don't know if they count as Chinese.
Marco Polo really goggled at the paper money thing, more than
many of the other wonders he saw or fantasies that someone
even father away had told him of.
Mexico heavily inhabited for far longer than that.
With some of the largest population densities of anywhere in the world at that time - including China. Commerce too. They've found pipestone only found in western Minnesota in archeological digs in central Mexico - got there somehow.
Marco Polo really goggled at the paper money thing, more than many of the other wonders he saw or fantasies that someone even father away had told him of.
He probably realized what 'his people' could do with something like that - more powerful than gun powder!!!
as an aside...from time to time i saw, up close, union leadership make decisions that suggested they were in league with management
aggressive when it would weaken the union by giving management a righteous excuse
soft when they had the high ground and the right reasons...very strange...well not really
ps
as you have noted over the months, im not a blind union supporter ...
there are band unions out there....and some good unions do stupid or bad things
i just feel that blue collar workers, one by one dont stand a chance negotiating reasonable pay, benefits and safe work conditions verses a smarter and united management (and management is almost always smarter...thats whey theyre management!)
LOL!!! Too soft - would scratch... good thing we dig a lotta granite up here though, that would work... all we need is a Pergo mine & we're self-sufficient.
"i just feel that blue collar workers, one by one dont stand a chance negotiating reasonable pay, benefits and safe work conditions verses a smarter and united management"
My sentiments as well. Altruism always seems to be trumped by greed. The middle class formation is beholden to the unions and without them we are due a rough ride until the cycle goes back around, if it ever does. Interesting time to be alive.
Revision?
.
I could hardly see it the first time!
More free money! This will push the stock rally for at least another 3 months.
Looks like NO provisions for the move down crowd.
The call it a move-up buyer, but maybe it applies to move-down too.
I'm done posting on this until it is voted on!
best to all
The next question is when will C4C come back? Another 3 local dealers closed this week.
I still don't get the credit part about living in the home for 5 years.
Are we subsidizing vacation homes again?
Ciao
MS
my ankle is all better now, thanks
gotta juice the jumbo market in the coastal zones
stuff that cash in the $225k pockets!
What I want to see is everyone in an underwater house buy a different house of lower value (or semi-current market value in the area), then walk away from the underwater house.
Less debt.
Lower payments.
Good for Main Street. And what? for Wall Street ......
MS wrote:
Trying to keep the people immobile?
I don't care how many times you tweak a dumb premise. It'll remain a dumb premise.
The timer is running on the enactment of more bailout programs. The social mood has turned so dark and fiscally conservative that I don't think there's any way we can even continue extend & pretend, much less get any reflation of note going.
Naked Capitalism, where the authors and commentariat lean heavily liberal, had a long discussion on what the real limitations of public indebtedness are. Even there, the plebians rose up with clubs in hand to denounce what was in essence a fairly academic discussion.
The conclusion of the article? That we could print all the money we want so long as inflation doesn't occur and the dollar doesn't become too weak, as long as there's the political will for it. They're right, of course, from a theoretical standpoint, but that doesn't matter.
The political will's run out. It's over. We're fed up already. Nice try, though, Summers & Geithner. If you keep pushing this crap, the national mood will grow ever darker, and that is a terrible outcome for everyone.
All Debt is Not Created Equal: Government Debt is NOT the Same as Private Debt « naked capitalism
For move-up buyers - "who have lived in their current home for at least five years" - the credit would be limited to $6,500.
I still say that some value involving "420" would be more suitable.
That is what I want to know MS, is the $6500 available to second home buyers?
......DC kinda reminds me of my flock of chickens.....a lot of running around and clucking, a lot getting laid, a whole lotta fights, but no real work getting done.....
The 5 years in the property is to exclude flippers.
And they probably think that anyone in a home for 5 years has some equity
probably why they put in the 5 year restriction
unlikely to be upside down if you've owned since 2003
With those income limits on the upper end and the restrictions on the lower end on first time status, that leaves out a big boatload of people who might bite in the middle. right?
I label this the "Hu flung poo" bill.
You keep throwing crap up on the wall and see what our Chinese overlords allow to stick.
Hooray! The country is saved! This is just what we need!
Not sure who posted the link to the Evans brothers fraud case, but it is fascinating. They got their
how do they measure the income if your income is variable? Is it what was on last year's tax return, or what the person is making this year? Or/..?
ndk:
I read, and reread the Naked Capitalism article. I just don't buy the premise that the gubmint has unlimited spending power. Eventually, the real economy cannot support the real needs of the government (in terms of goods and services), or foreigners stop accepting dollars. It is the height of arrogance to think it can't happen here.
Maybe I am one of the great unwashed, or maybe my training an an engineer objects to the something for nothing premise of the article.
"how do they measure the income if your income is variable? Is it what was on last year's tax return, or what the person is making this year? Or/..?"
It's the upper of either verifiable or stated income.
I understand the premise of the "move-up" buyer......I just don't get it......
Now I do get it if all you are looking at is keeping the MBS market propped (which is what this is and continues to be) but....I just don't see how that makes ANY difference.
Ciao
MS
montas ankle wrote:
Good point. This should accelerate collapse of those areas below 2003 prices.
$225K for a couple is just 25K shy of the 250K Obama said he was going to TAX more. lol.
If you must reside in the house for 3 years then it won't work for a rental or vaction home. That is my guess anyway.
That means they are expecting you to sell your current home. Or use the current home as the rental / vacation home.
To sell your current home you need equity plus sales comm / escrow & closing costs. To buy the new house the $6500. is to cover closing costs. Closing and escrow costs are diff is diff places. The rule of thumb used to be 1% of the property price, not sure if that still holds true.
It is the height of arrogance to think it can't happen here
Long live the British Empire!
oh ya
montas ankle wrote:
And did not get a HELOC or refi or get a 2nd, or .....
Fat chance.
I stopped reading the Naked Capitalism article after the sentence: "Because the government is the only entity that gets to create money" Apparently the author does not understand the Federal Reserve system, nor fractional reserve banking.
I say again: It used to be a good site, but Yves seems to have blown a gasket over there.
Nuke wrote:
They don't have unlimited spending power. The arrival of inflation and/or depreciation of the currency is the biggest reason why they don't.
But the restrictions go beyond that. One thing the article omits completely and in ugly fashion is the impacts on the economy that government spending always has, above and beyond the creation of inflation. The government will never have the same demands as the private sector, and if it encourages the private sector to meet its own demands, then there will be a recalibration of the private sector to better serve the needs of the government. Taxation policies (or the explicit use of inflation for seigniorage) have strong distortional effects on the economy too. These distortions can easily happen and damage an economy's ability to meet private demand with no overall inflation or currency devaluation.
But even beyond that, you make the most fundamentally important point of all. For 99% of the country, including engineers, a beautifully reasoned article like that completely fails the smell test, even if it's accurate. And that failure of the smell test means the theory itself will fail, because ultimately, you're dealing with people, and you rule with our consent.
At least, I like to tell myself that...
Barley:
At least the British left behind a literary tradition, as well as parlimentary democracies around the world. The Soviets left behind a lot of unsecured nuclear sites. I fear all we will leave behind is a fatty diet and pornographic films.
What? Nothing for the staying put crowd?
Now to go back and read from the top of the thread?
Watt wood Jesus dew?
We have to more in next bill [April 2010.?].
O/T but cute:
PORTLAND, Ore. (AP) - Costco Wholesale Corp. said Wednesday that it will start accepting food stamps at its warehouse clubs nationwide after testing them at stores in New York.
It's a big about-face for a retailer that has catered to bargain-hunting but affluent shoppers, and it's a sign of the grim reality facing retailers and their customers. The number of Americans relying on government food subsidies to eat recently hit a record 36 million
Clearly they see an opportunity for market growth.
OT, but significant:
Yahoo! 404 - Page Not Found
I smell opportunity!
To the employers of any stiff still pulling $125-132k looking to move up down or sideways: pay me a consultant fee of one-third the tax credit, I'll sell the one-time wage cut to the employee and help with the paperwork.
Smooth the windfall, win-win-win-lose. (The taxpayer again, naturally.)
I'm missing something regarding the new "TBTF Bill".
House Financial Services Committee
I've read Rep Sherman's comments saying it concentrates power without oversight into the administration.
Rep: Finance Safeguards Just ‘TARP on Steroids’ « The Washington Independent
AND
Rep. Brad Sherman (D., Calif.) said he also had reservations about Rep. Frank's proposal. Essentially, he said, the proposal says, "'We may be borrowing $1 trillion or more from the Treasury and using that to bail out the creditors and counterparties, and then somehow, some way -- perhaps over the next year or century or three centuries -- maybe we'll get that money back from the financial-services industry.'"
Deal Reached on Bank Crackdown - WSJ.com
The frequent declarations from some of our elected reps referencing the fact the Finance Sector Oligarchs own congress with the further concentration of oversight power with the FED leaves me uneasy. What I perceive is happening is the attempt to put a wolf in sheep's clothing with this bill. What is the true motivation and intent?
I've got a game called Godswar for an ad-coincidence-I think NOT. It even has a cute anime bunny but I can't tell if its wearing
Nuke wrote:
We WIN again!!!
JP wrote:
It's a theological difference more than anything whether you believe the Federal Reserve is private or public. But glossing over both fractional reserve banking and the total uselessness of the formal 10% reserves rule is an ugly omission, I agree.
Might agree with you a bit on that, but writing a book is a huge endeavor for anyone, particularly someone with a day job.
When you push more dollars into circulation, you are subtly taxing those people who have dollars. Just like if you had a special collection of baseball cards and someone printed more sets of them. Is it any wonder that Buffett is sounding the alarms about inflation? He's not afraid of higher taxes, he's afraid of a steady erosion of the value of his dollar-denominated assets and cash.
"I fear all we will leave behind is a fatty diet and pornographic films."
Dismal thought? It is if you think of it as symptomatic.
pavel - had my flu shot yesterday pm. feel fine.
A UK study some months ago said if the pandemic becomes acute, as much as -5% of UK GDP might occur
Edit: fell to feel
Barley wrote:
Freudian slip? Think about it...
You're not missing anything, the Democratic center is. Sherman is right, as usual.
TJ
+5
lol
good catch
ndk:
Well said. Speaking of gubmint spending, I truly believe one of the reasons we lost our edge in engineering and industry was that many of our best and brightest scientists and engineers spent their careers developing nuclear bombs and fighter jets. The Germans and Japanese, unburdened by a defense establishment, concentrated their efforts of cars and electronics. The rest, as they say, is history.
OT but major announcement for PNW: Boeing picks S. Carolina for 2nd 787 line - Puget Sound Business Journal (Seattle):
"In a blow to Washington state, the Boeing Co. announced Wednesday that it has chosen North Charleston, South Carolina as the location for the second production line for the 787 Dreamliner program."
I am totally unsurprised by this...
CR, please don't apologize for pigging comment threads when the number of comments is over 200. Pigging threads that large does more good than harm.
My ad is "Make Real Profits from Fantasy Stock Trading".
Is there another kind?
Slippery - Sure there is become an elected official
"pavel - had my flu shot yesterday pm. fell fine."
Barley, we had our seasonal flu shot some weeks ago. But since we're over 64 we're not even on the waiting list for H1N1 shots. School children here in DC are going to be vaccinated for H1N1, but I just read on the Web that in the closest county to us, Montgomery County, Md., there is no injectable H1N1 vaccine available.
that article was drivel. i offered the author a towel so he could clean up the mess he made drooling all over himself.
the latest proposal from inside the beltway is the cash for stinkers program
the government proposes to purchase any stocks from taxpayers portfolios that have declined more than 30% from the citizens at the original purchase price, wiping out any losses
this will accomplish the trifecta of stimulating the economy, increasing capital gains tax receipts and driving the S&P 500 to at least 3000
boomers will be able to cash in their 401k and buy annuities and everyone will live happily ever after
some say this will be a massive give away to the rich
that is it's genius
"OT but major announcement for PNW: Boeing picks S. Carolina for 2nd 787 line - Puget Sound Business Journal (Seattle):"
Yes and we all know how great the build quality of BMW and Mercedes stayed when they went 'Southern'.
Ciao
MS
I'm in the deflation camp currently because that money really isn't in the money supply-its being soaked up by a super-massive giant sponge of leverage as I understand it. We DO have inflation but its in sectors mostly services-we do currently have deflation in consumer discretionary. So its a mixed picture. I think we'll get deflation then stagflation in spades. But Ima nobody and don't take me seriously because I don't.
ndk wrote:
Naked Capitalism - overall - is pretty well balanced. It has always been a bit toward the "one big group hug" side of things, but the links are always interesting to read and I always like Edward Harrison at Credit Write-down - a frequent substitute poster during the book-writing campaign - very good.
Nuke wrote:
That's an excellent example of such reallocation of resources, Nuke. I can also categorically state that, in my experience dealing with numerous people and projects at numerous national labs in the DOE pantheon, that those are political wastelands devoid of creativity and innovation. Given your handle, you might have had better experiences with them.
More generally, the refocusing of our entire economy on asset prices, debt, lending, and political influence is extraordinarily toxic. It won't show up in traditional measures, where this transition may appear healthy or natural, but it will most certainly show up in the gut feelings of a disquieted and nervous public. Oh, and it might show up when the patina cracks and there's just a bunch of zombies in the cathedral of Capitalism, too.
Where the hell is our damned zombie icon?
please tell me you are just playing around and this was a genius post by you rather than anything with any truth to it.
No suprise about Boeing. Here in Illinois, were boeing is technically headquartered,, why didn't they consider the 35th rated business friendly state for the second line. Hell, it didn't make the papers they were even looking. well, we can just tax cigarettes some more.
Externalized Costs wrote:
It gives regulators broad, unfettered discretion to regulate any financial product or finanical service that they deem to be a threat to financial stability. It allows the government to pull a "Chrysler" on bondholders of a failed institution. It require creditors to retain 10 percent or more, of the credit risk associated with any loans that are transferred or sold, including for the purpose of securitization. Finally, it puts the cost of resolution on banks with over $10 billion of assets, which includes most regional banks but few community banks.
See how a couple of DOWN days in the markets can persuade CONgress to throw tax money into the streets ? Well, no big deal. It's just USD after all.
Nanoo-Nanoo wrote:
the fact that you have to ask that question on a forum like this is a sad statement about the times we live in. It would seem the government will go to any extreme to keep up appearances, which makes your question a fair one.
/sigh
ndk wrote:
What is her day job?
ndk
I am a Naval Officer currently stationed at one such DOE facility. I bet you can guess which one. I can attest to the sclerotic culture, mindnumbing bureaucracy and ingrained incompetence of these facilities. Any progress made is the result of heroic (no Herculean) efforts of small numbers of people swimming against the current.
I am reminded of the old saying: "When all you have is a hammer every problem begins to look like a nail."
Sign: "Are you one with the
?"
posts at midnight."
Countersign: "The
Reply: "Hoocoodanode?"
Response: "The commentariat. Pass friend."
Forgot who here coined the term "The Great Swallowing".
Deleveraging $2 quadrillion in illusory derivative toxic ink and paper will involve massive puking as well.
JP wrote:
Management and investment consulting. If you check the footer of the naked capitalism homepage, you'll see a copyright for:
Aurora Advisors, Inc. - Management Consulting
Nuke wrote:
There's an old saying:
"The military was designed by geniuses to be run by idiots".
Sorry 'bout that-
Thank for all your hard work.
Cinco-X:
No offense taken. We prefer the term "sailor-proofing". As in, we better sailor-proof that equipment so they don't break it.
ndk wrote:
Great plan:
Drain off the engineers to build useless (but, like, totally cool) weapons. Send more and more of the jobs overseas, concentrating the follow-up generations of smart people into the only field left to make money in; THE FINANCIAL SERVICES INDUSTREEEEEE which is concentrated in two places (counting DC). Sure, what can happen?
The Democrats and Republicans shot themselves in the foot when both enthusiastically embraced big-government over any other ideology, resulting in the parties having mutated into the applied-socialist and the friend-fascists parties (respectively), and both owned by the same people.
Absolutely.
Nuke wrote:
I spent some time working for national labs in other countries and there's much less red tape and much more freedom in those environments. I have never understood why, but suspect it's something to do with not being defense-related, and their open cooperation with corporations rather than our awkward and partial competition with them.
Not that I like the military-industrial complex. I don't see a good answer. But it might explain some of the paralysis, since politicians are just as happy to give the funding and contracts exclusively to their favorite corporate friends, leaving the national labs to often be, as the Brits might say, "redundancies."
CalculatedRisk wrote:
LOL - wanna bet they test you on this?
ndk wrote:
LOL! ndk, my father worked at Argonne and it became a political wasteland after Three Mile Island. (He once went on a one-man strike in the early 70's because of lax safety precautions - the union eventually backed him which settled the matter quickly but it cost him any advancement opportunity.)
ndk:
Most of our national labs focus on military applications. This requires strict security regulations, which naturally hinders cooperation and collaboration. This is, in my opinion, a big part of the problem.
Charles Kiting wrote:
Irradiation, promotion. Irradiation, promotion. Irradiation, promotion.
I was trying to phrase that like someone thinking it over in their head. Instead, it came out like a sequence diagram.
MS wrote:
do you mean the plants where the workers will given comic books to that instruct on how to do the job? heheh
Sometimes I feel sorry for CR when he puts up a really good blog post and the comments run off-topic ten minutes later.
This isn't one of those times.
Later.
JimPortlandOR wrote:
I never heard about quality problems with US BMW/Mercedes factories. Have the Japanese had the same problems? Never actually thought about it before.
"Finally, it puts the cost of resolution on banks with over $10 billion of assets, which includes most regional banks but few community banks."
No it doesn't.
Banks charge fees and interest rates. Should a huge cost be incurred, it will be a huge cost, if a TBTF fails then it will ultimately become a pass through cost to every American. ALSO if you go to page 253 of the discussion draft and read you will see that the new Financial Oversight Council can declare an emergency due to exigent circumstances and decide what and how much to bail out a failed financial institution. This motion will require a vote of 5 members in support including the Sec of Treasury who has to put his support in writing.
What I have read so far is a vast improvement from what we have but my two points I've stated above seem to make this a bit of a smoke screen to take power away from congress and their worry about being reelected should they be asked to provide further bailouts.
http://www.house.gov/apps/list/press/financialsvcs_dem/title_i_discussion_draft_final.pdf
LOL. That explains a bunch of stuff.
I heard they were planning to open a Moon Pie plant in Munich, before the decade was over.
ndk wrote:
The thing is, the lax-ness was never budget related (it's government after all), it was project managers trying to hurry experiments along so they could put them on their resumes and get another gig sooner. Sort of like securitization.
Husband and dog want some of my most excellent attention
Thanks again for all the great info, discussion everyone ; thanks too for hard work you do CR to keep us up to date/informed (not misinformed).
Externalized Costs wrote:
The "exigent stage left" clause is how the Fed defended AIG and force feeding Merrill to BofA. It's financial martial law and should require a full vote of Congress IMO.
"require a full vote of Congress IMO"
Fully agree and thus my alarm at this bill.
I don't know how much good this tax credit will do in the LA area, after reading this news:
Los Angeles leads list of job losers - Washington Business Journal:
If I can't get a happy meal on my doomcation to Iceland, perish the thought.
From my manufacturing daily update email:
Harley To Close Test Facility
Motorcycle maker shutting down its test facility in Alabama, eliminating about 100 jobs there, as it consolidates its test operations ... continue
Husqvarna To Consolidate Arkansas Operations
Outdoor power-equipment maker says it will consolidate two operations at its Nashville plant next year, and its De Queen site will become a warehouse ... continue
Severstal, USW Agree To Permanently Cut 66 Jobs
United Steelworkers reached an agreement with Russian-owned steel company to put laid-off workers back on the job, but deal calls for permanent elimination of 66 jobs ... continue
We continue to stress test the "job loss recovery" theory.
sm_landlord wrote:
Didn't know Phoenix was hit so hard too.
Phoenix is starting to look like a waste land.
Both sales and income tax down 50% + -
,rad sm_,
The City of Angles looks to be running out...
Mr Slippery wrote:
The "exigent stage left" clause is how the Fed defended AIG and force feeding Merrill to BofA. It's financial martial law and should require a full vote of Congress IMO.
Yep. I consider this land grab to be the most disturbing by far of all the recent piles of lard to ooze out of DC, including the titular transgression for this comment thread. I can only hope we're not so fatigued by this point that we fail to respond.
Reviewing the CDC data the total number of patient visits is very similar now to the advent of H1N1 last spring, but the % of Influenza Like Illness (% ILI) is running at 7.2% vs. out of season H1N1 peak of 2.7% (if we used normal distributions like a Wall St analyst, the current % ILI would be 44 standard deviations away from the mean of the previous twelve years % ILI for week 42, the last report from CDC).
energyecon: Time normalized data for CDC US Outpatient Influenza Surveillance: 1997-present
"The 5 years in the property is to exclude flippers."
Don't you mean "honest flippers"?
Dawg - this is new territory. How do you create jobs in a service economy that is bouyed by consumerism?
Juvenal Delinquent wrote:
I keep hearing about management shakeups and related churn in the Movie and TV business, so I don't think LA can count on that industry leading the economy out any time soon...
OT
Pot will be next?
Bill Lifting US Online Gambling Ban Seen Raising $42B In Rev - WSJ.com
I guess from where they sit on Capitol Hill $125,000 looks like needy poor folk?
kidbuck wrote:
More like likely voters with money to contribute.
Yep, must be. Under $10,000.00 a month is the new poverty level.
Edit: Adjusted for inflation
Barley wrote:
Suggestion: Professional blog monitor.
sm - I'm hearing lotsa bad (ie some places near zero funding) for new/continuing productions
And many of the country's last upper-middle-class corporate jobs are working for the merchants of death, and quite a few of them are in El Pueblo de Nuestra Señora la Reina de los Angeles del RÃo de Porciúncula.
MS,
BMW and Mercedes didn't go Southern. They were offshored from Germany. Probably a Leipzig-designed and -assembled Dreamliner would be a superior product. Or is that what you were saying?
Rob, I qualify!!!!! New resume in the printer.
Barley wrote:
I heard that a certain mouse is cutting the film slate in half for next year.
Juvenal Delinquent wrote:
When you see the 220,000 jobs lost in El Pueblo de Nuestra Señora la Reina de los Angeles del RÃo de Porciúncula. It actually means even more pain in the satellite metros. Notice the 12,600 lost in Oxnard-Thousand Oaks. That region is also suffering from the uncounted thousands of the Los Angeles jobs and the cocomitant multiplier effect of "imported" money.
N.Y. Fed pushed AIG on contracts - washingtonpost.com
Sorry, forgot. NYFed directed me to this "rare public comment" in the Wapo lamely defending AIG's noble 100% forkover of their welfare check to banks that laugh at TARP.
I always hate these arbitrary limits. So, if I make $125,001.00 I don't qualify?
If you don't think the Federal Reserve is part of the government, you haven't been paying attention.
That would be true.
Ask for a lower wage?
X wrote:
Well his dollar denominated assets will do fine in an inflation IF those assets produce goods that go up w/ inflation [i.e. where he can increase prices in the face of monetary inflation]... if all those assets produce is 'dollars' [bonds for example] then they get crushed. Same applies to a stack of dollars - if he's sitting on those then bad move in an inflation.
I think his insurance companies are sitting on a pile of laddered bonds trying to match up against expected pay out liability so I can understand his concern - the pay out liability could sky rocket meanwhile the bonds neither increase in value nor cash flow sufficiently to cover. The companies he owns that produce goods won't be hit quite as hard - he has no shortage of those either.
You arbitrage 125-133k with your employer, silly. How can anyone make that much and not be aware of such an easy game? Are you a lowly doctor or rocket scientist?
Eric wrote:
"If you don't think FedGov is part of the Federal Reserve, you haven't been paying attention."
There. Fixed that for ya.
I never correlated closing schools with lack of free meals. Many children rely on free breakfasts and lunches. The district where my sister lives even sends free dinners and weekend back-pack meals for the kids that probably wouldn't eat otherwise.
AlleyCat wrote:
As well as hours of work / wages lost by parents. You can't send them to daycare sick.
Pretty much compounds the problem of no food.
Incomes are still falling across the world so home prices have no where to go but down
1 currency now -yogi wrote:
Not news to people like on here (or similar sites) but still, at what point does somebody start issuing some subpoenas on this stuff.
Josap, that's my point. I don't want the credit and that's not what I make. However, can you imagine someone asking for a $1 a year pay cut? On second thought, stupid question.
NOTaREALmerican wrote:
Not much they poke yoke everything [Japanese for 'sailor-proofing']... not sure Boeing is as adept at that as say Toyota or Honda.
NOTaREALmerican wrote:
Hey. You think prosecution is warranted? No problem. What's your address?
Back in the day, when I worked for other people, I rarely asked for a raise.
More vacation time, cell phone paid, milage. What ever was not taxable to me and a deduction for the firm.
I was delivering round 1 of about 4 loads of food to the 1st National Food Bank yesterday, when 4x 33 oz cans of Yuban coffee (with a use-by Sep 23 2009 mark on them) felt they were useless and committed foodicide en route. I was able to save a few dozen Stagg chili cans from a similar fate.
Well, all-in-all, it's quite depressing looking at our glorious nation.
But, there's always the chance of watching a hottie at the health-club (altho, Wednesdays aren't so great, but still), so I'm out-a-here.
Yep-- I hear lots of people talking about inflation, and saying that it's a good time to get in debt on a house. But house prices won't go up unless wages do too.
josap wrote:
Helloooo, CSC?
Dead Shtick wrote:
And wages in the U.S. won't go up until wages in China, India, and Bangladesh go up -- and they're not rising there, either. Which means America has to adjust via deflation and falling wages, which means I <3 Treasuries.
Congratulations on working for yourself!
Hopefully good news. Doesn't look like the extension to the home buyers gift can be added to the unemployment bill.
Found this tidbit on another forum
"That's not going to happen. Reid shut off all amendments to the unemployment extension bill yesterday with a cloture vote. The dems were afraid of various GOP amendments on illegal immigration and ACORN.
In order to pass this, they're going to have to put it in a stand-alone bill or attach it to some other legislation. Not saying it won't eventually pass, but it's not gonna be as easy as the report suggests."
Good for you! You can send them to my house. I'm not afraid of expiration dates. If I was, I'd be dead. Not in an expired food date or old age sense. I've just definitely lived on the edge at times during my life. Haven't we all?
and when Chinese wages start to rise, there is the rest of SE Asia and even Africa.
When Africans become too expensive, there are always the robots.
This is mere scraps to the dogs. There's a sobering chart
over at Mark Thoma's site that shows where the real money has gone.
It doesn't pay to work for a living.
ndk wrote:
Not necessarily - change the exchange rates and China can stay where it is in their currency and US wages & prices could skyrocket denominated in dollars.
Speed
I can get to the site, but which ink to the chart?
thanks
Non-farm Business: Labor Share
dryfly wrote:
Are you thinking c.1975 when groceries were more than mortgages?
Geeze, JD, coffee NEVER goes bad...........
dryfly wrote:
I'll eat my hat -- and lose most of my net worth -- if China ever meaningfully changes the exchange rate. It would bankrupt the PBOC, nail exporters hard(listen to EHP kvetch here about the CAD!), etc. etc. It's not in China's interest no matter how much Washington pleads or screams, and the only way the U.S. can even try to force China into it is trade barriers that would deeply harm our multinationals and likely be killed by the WTO.
China stopping us from printing money? Please. China loves it when we monetize assets. It makes their exports to the rest of the world that much cheaper.
"China stopping us from printing money? Please. China loves it when we monetize assets. It makes their exports to the rest of the world that much cheaper. Laughing out loud"
At some point they will have to. Don't forget inflation not deflation is the big bugaboo for China. Pegging their currency is increasing their inflation. Inflation brings down regimes over there.
,rad BSR,
The cans in question defenestrated themselves out of my vehicle @ about 45 mph.
Open and shut case of foodslaughter, as far as i'm concerned...
Hi, guys.
What did I miss?
The Aries went up.
Sea World was not empty but it wasn't full either. No waits for anything
we went in. 10 minutes' wait for the Manta roller coaster. Lots of Brits.
Few Asians. No wait for the Penguins, or the tower. Parking lot I could see was
about 2/3rds, 3/4ths full, as was the stadia for the killer whales and sea lion
shows. Weather beautiful, not too hot, this has got to be high season.
Don't worry there's already plenty of discussions on how to get around the required closing date of April 30th for the new extension.
Implode-Explode Forums :: View topic - Housing tax credit question- Dry closing for tax credit
Looked spectacular on the vids too, awesome to see a new era in launchers.
~splat
poic wrote:
Is it? Remember that China has had lingering deflation problems since the late '90's. Productivity and GDP growth over there are very high, the surplus pool of labor is very large, and they've been very creative and effective in sterilizing their intervention. From lowering deposit rates to increasing deposit requirements to increasing down payment requirements, they've throttled credit creation pretty well. The biggest problem has been hot money from the West, and if that hot money stops expecting this inevitable revaluation, then I don't think China will have any problems with sterilization at all.
http://1.bp.blogspot.com/_Et4TQ-a0gGU/Sbe4121QNVI/AAAAAAAABl8/bxwZlZmD_QA/s400/china_inflation_chart.PNG
Rob Dawg wrote:
If the PBoC & BoJ walk away from treasuries & agencies - yes it could happen. It really could. But I doubt they walk away - cut back the buy maybe but not walk away.
[Sorry for the slow reply - wanted to read the Naked Cap article carefully & that took some time - I think he is 100% right on with only one exception - he says the foreign balances will remain static & only private & gov't balances matter - I think he needs to rethink that one - see BoJ & PBoC references above].
ndk wrote:
Then no problems - we can keep growing debt AND consuming their production forever. They'll have us covered.
If you don't think the Federal Reserve is part of the government, you haven't been paying attention.
More accurate to say that the government is part of the FRB, at this point. The shareholders of the FRB are big banks.
Hey, can I be a move up homeowner if I buy a super cheap townhouse for the
8k, and not sell my current house? Maybe I can make a mtg for the diff between
the actual price and the 80k to get to the max 8k refund, and then the Seller will
very kindly forgive the debt and give me a Satisfaction of Mortgage to record when
I feel like it, in, say 5 years.
Would anybody notice?
Would I be a bad person if I did that?
Here's hoping for the online gaming ban to end. I miss online poker!
ndk wrote:
Again - then they shouldn't worry about the value of our treasuries or MBS wrt to say a barrel of oil. So why exactly then are they bitchin' about some new 'reserve currency'?
Liz
I want to be a "move down" buyer.
Of course selling the underwater house might be an issue. Short sale maybe? Haven't seen any real details or regs yet.
Asia is
Nikkei down 2%
dryfly wrote:
As the Auerbach article reiterates, we really could so long as we had the political will. But I don't think we do. Have you not seen the extreme surge in fiscal conservatism in this country? It's registered strongly in all the polls.
Put another way, I'm betting the American government and populace bend before the Chinese government does. And I feel quite confident in that projection.
i have two close friends who are boeing machinists so my view is colored by their talk and local reporting
heres how the boeing story looks out here
boeing played south carolina like a stradivarius
there never was any intention to establish a permanent 2nd dream liner assembly line in everette washington
boeing bought the vought aircraft assembly line many months ago, (june 09?) recent negotiations were a charade
this was all about gamesmanship
boeing made a strategic decision more than a year ago to split assembly production
the anti union faction around the state has tried to blame organized labor for being unwilling to accept a no strike agreement
in fact labor offered to accept such an agreement with stipulations concerning cost of living/ addjustments and related
boeing refused colas and added more pro company arbitration language to the proposal
boeing and anti labor groups tried to blame dreamliner delays on a recent strike which lasted 8 weeks
problem is , the dreamliner wasmore than a year behind in production and waiting for parts when the strike occured
so if you want to blame all 8 weeks on the union, but debatable, but ok so
so the other 96 weeks, blame on management?
the problem was boeing had outsourced major portions of the fuselage and other portions of the plane around the world
several production facilities in foreign countries sent portions of the plane to washington state that were not to spec and even not fully assembled
boeings labor force agreed to bend work rules in the contract to make up for deficiencies created by foreign contractors
and in doing so helped boeing significantly reduce the production delay
so this is how boeing said thanks
i wish the workers of columbia south carolina well ,and hope in ten years
they dont find themselves loosing a bidding war as boeing threatens to move the north columbia assembly line to india or malaysia or mexico
washington state had, over the years, voted boeing a variety of incentives and special deals to keep as much of boeing here as possible
but like professional sports teams that want a new stadium at taxpayers expense, their appetite was insatiable
Yeah, but do we have to sell? Can't I just have a credit on the purchase
of a townhouse at practically nothing?
dryfly wrote:
For show. It doesn't hurt to pressure us, particularly because we can't really do anything about any of it. At the very least, it makes their "diversification" into other currencies or commodities look good, but in actuality they're locking up raw resources and additional export markets all while developing their domestic capital further.
Yeah, but do we have to sell? Can't I just have a credit on the purchase
of a townhouse at practically nothing?
You mean do it and still remain a member of the bar? 'Cause if you're willing to waive that stipulation, I'm sure we can help.
Ok, so I see the mkt went down again.
But hardly enough to qualify as a crash, and October is nearly over.
Getting worried; don't like to be wrong.
P.S. Forget about "straw buyers", I'm making mine out of twigs.
ndk,
By inflation being the bugaboo of the Chinese versus deflation I mean from a historical perspective of what has brought social chaos and regime change.
Deflation is what brought chaos to the US and thus we will do whatever it takes to prevent deflation.
Historically in China it has been high inflation that has brought their version of chaos and/or regime change. 1987, 1940s etc.. And Germany and a few others.
I concur with those that argue that now is when we will start seeing cracks in the unified front countries have shown in fighting this crisis. Some countries will be more worried about inflation (China being one of them) and others about deflation.
If dryfly or anyone else is interested in really delving into my thoughts on what China is doing from a war-gaming perspective, here's a post I wrote on it about a year ago. My thoughts haven't changed at all in that time, and I believe China's behavior has been extremely consistent with my projections.
ndk's notepad: Pondering Sino-American Economic Tension
Until they say that the buyer also has to be a seller, no way to know.
My guess is there will be no "must be a seller" clause. No way to know how long it would take to sell, or if you can, or what kind of sale. This will allow people to buy a retirement home early? Probably not a rental as the FTHB credit says you have to live in the house for 3 yrs.
And hurricane Wolfe will huff and puff and blow the houses down.
So, credit is still drying up everywhere except China?
source: Euro Watch
The eurozone has reported the first year-on-year fall in bank lending to the private sector, strengthening the case for the European Central Bank to maintain its ultra-loose interest rate policy. The latest eurozone credit statistics indicated lending had been scaled back at an unprecedented pace, even though signs have become stronger that the 16-country region’s economy has stabilised.
poic wrote:
That is true, poic. Deflation really won't cause such severe problems in China because there's frankly very little debt, and they have their own brutal ways of dealing with bad debts (which they're surely amassing at an incredible pace right now as they build up yet more infrastructure that is completely uneconomical). I love Michael Pettis' work, and this is one of his finest points.
http://mpettis.com/2009/10/china’s-september-data-suggest-that-the-long-term-overcapacity-problem-is-only-intensifying/
So, I agree with your thoughts that China is comfortable enduring deflation and less comfortable enduring inflation. Where I differ from most is that I believe it means the U.S. better start imposing some wicked tariffs soon, or get comfortable with enduring deflation itself.
ndk wrote:
Okay I'll put it another way - the US population & gov't doesn't have to bend until the Chinese do - we can have miniMcMansions & stuff to fill them with forever or at least until the Chinese are no longer willing to sterilize dollar growth. And make no mistake their sterilization is a decision on their parts to forgo consumption.They probably think it is consumption delayed - but given that the sterilization is 'savings' ultimately comprised of USD denominated paper of dubious value - I think it is consumption denied. When they get to that level of understanding the game changes. I think they are closer to that than any of us realize.
ndk wrote:
They do nothing for show.
yes I do think mpettis is a great read. He's one of the few out there who appears to have an understanding of both Western and Asian ways of thinking, doesn't have an axe to grind, lays out the pros and cons on both sides and argues basically (like dryfly) that either we all get through this together or we all go down together.
Unfortunately both sides are taking the short-term easy, long term very hard way out.
Yep, when we can't pay anymore, we won't pay anymore and then
they will have the problem.
"They do nothing for show. "
That's not entirely true. Most of the corruption trials that you see are show trials to appease the masses and a calculated way to blow off steam. No major changes, a few bones to the crowds. Similar to what goes on in Congress here.
dryfly wrote:
Let's take your basic hypothesis as a given. What do you believe are the reasons China hasn't revalued their currency for years, even as they take more steps to curb property speculation and other incipient signs of inflation? Why haven't they acted yet, and what will spur them to act? I think that's a much more difficult case to make than that this is secretly in China's best interests, which is why I'm always eager to hear good arguments in its defense.
Well, being executed is pretty showy.
And back to a previous thread.
Yeah, 402k new houses is low, but why are they building so many?
Wouldn't 2k for special projects suffice?
"What do you believe are the reasons China hasn't revalued their currency for years"
That despite their claims to the contrary they are still incredibly dependent on exports. Especially as a way to keep the lower-classes employed and reduce social strife.
IMO it's much more likely that China is acting in exactly the same way as the US. Fire-fighting every step of the way, taking the short-term easy route at every step.
Agreed poic.
And also previous thread. Not true that people don't buy stuff
when they buy a "used" house. We spent 30k when we bought to
bring the house up to tolerable.
lawyerliz wrote:
U.S. debt are denominated in dollars. We will reach won't pay way before we get to can't pay.
Note that the "climate change" bill is very discriminatory against oil and (to a lessor extent) natural gas and favorable to coal, which makes no sense from an environmental viewpoint, since coal is much dirtier. But coal and natural gas are most produced domestically and oil is half imported. If the main provisions of the house bill stays intact, expect to see a smaller deficit as the tax burden falls mainly on oil producers. If the U.S. current account deficit falls below 2% of GDP, a lot of countries will become desperate.
ndk wrote:
The bet is we can create money faster than they can sterilize it - Bernanke & Geitner are trying to do to China w/ money what Reagan did to the Soviet Union with weapons. In effect challenging them to keep up. I don't think they can nor do I think they will try to for a lot longer. If they are really comfortable w/ deflation they'll just pull back let the US stew in its own pot [let us keep our money & learn to make stuff for ourselves again]... I think that is more likely than China exporting deflation - that only works as long as they sterilize more than we send them [else the dollar balance & velocity grows here too].
If the credit in Europe and the US is drying up for commercial lending and the average American is being tight with a dollar who is going to buy Chinas exports in the quanity needed?
poic wrote:
I know - but they don't send meaningless messages.
"I know - but they don't send meaningless messages. "
That's very true as I found out whilst courting my wife years back (:
The messages just get lost in pan-pacific translation though sometimes.
They fixed two issues with the previous plan: (a) they got away with the mysterious $7290 number, a number so exact it must have been based on good science (b) they got rid of clauses which favored move-up buyers over first-time.
W00t! This must be good, sensible policy!
Nobody Nova. I forgot to check the gee-gaws at Sea World to see where
they were made. An awful lot at discovery Cove wasn't from China. Coupla things
actually made here, lots of t-shirts from various parts of South America.
Nobody much was in the gift shops at Sea World.
dryfly wrote:
I think Geithner and Bernanke are much more likely to be foiled by the combination of accelerating deflationary forces and newfound American fiscal conservatism before ever reaching anything close to a monetization volume that China would see as detrimental rather than helpful for them. Everything we've done to this point is a tinkle in the ocean compared to what is required.
We'll find out in due time which of us is right. It'll be fascinating to watch.
Too bad we also have to live through the results, since neither of our visions is a good one for America...
I saw the Ariana in the paper. They said they want to cancel the shuttle an outsource it to commercial firms
Fascinating.
Don't think so.
More like
. . . . . . . .
The shuttle has been due to be cancelled for quite a while.
And it's Aries.
nova wrote:
Falcon 9 (100% American made) will launch in a few months. It will be cheaper than Aries I and perform better (which is not a surprise since it is 100% liquid fueled.)
poic wrote:
Tell me about it - was on a conference call today and there were Chinese [originally from Beijing area], Indians [from somewhere in the northern part but were relocated to the south], Mexicans [from the Maquilladores] and us 'Mericans. Uffda - a whole lotta messages mistranslated in that conversation.
mock turtle-
The underlying context to this crisis is the complete destruction of labor rights as represented by unions. The only significant pushback to this movement will be from government employee unions. They too will fall when a few large municipalities go BK and the "or else" threat is made clear when they are forced to renegotiate wages,benefits and pensions. Labor is a commodity when you are a capital holder and should be set by the "free market"(pause for ironic chuckle).
The leadership of the unions, especially the auto related unions, have been completely co-opted. Gettelfinger demonstrated this over the last few weeks by attempting to sell out his constituents before he retires. The Reformation Recovery doesn't include labor rights or a living wage.
Save the anti union rhetoric from the commentariat. We have discussed unions to death. Unions have lost. We will be poorer because of it.
Ford Workers at Three Factories Vote Down Concessions (Update1) - Bloomberg.com
++++
Dryfly wrote""The bet is we can create money faster than they can sterilize it - Bernanke & Geitner are trying to do to China w/ money what Reagan did to the Soviet Union with weapons."
That has been my suspicion for a while. I didn't want the hassle of having to don my tinfoil armor to defend that assertion. Bravo to you. Forcing China to depeg might be one of the goals during this disaster capitalism phase.
They have a heavy lift vehicle and a "light" lift vehicle planned, as I
understand it with a debate over which survives, or both.
Rajesh,
Thank you. The Falcon 9 looks very cool.
"Tell me about it - was on a conference call today and there were Chinese [originally from Beijing area], Indians [from somewhere in the northern part but were relocated to the south], Mexicans [from the Maquilladores] and us 'Mericans. Uffda - a whole lotta messages mistranslated in that conversation."
Cultural misunderstandings have started some pretty serious conflicts before. I've always wondered whether that would be the black swan this time around as well.
ndk wrote:
That only holds up as long as we have food to eat & a place to live... as deflation grinds on unless we get a whole lot more 'socialist' [to avoid people starving & freezing in the street - a result of deflation as assets sit idle working through BK]... then they'll vote for deficits & food & jobs & bigger housing subsidies & worry about the public debt later. That is my guess - congress's recent actions I think just hint at what's to come.
But you are right in that none of these situations put us in a nice place. My bet is the Chinese realize this before we do & cut their losses. But then I might be giving them credit for more smarts than they actually really have. A sort of reverse discrimination.
poic wrote:
Cultural misunderstandings have started some pretty serious conflicts before.
I'm guessing the next one will be because we understand each other too well.
poic wrote:
Could be. There are a lot of elbows being thrown around right now.
The NASA plan is for Aries I to get the astronauts into orbit and the Aries V to actually get to the moon (still haven't figured out about the whole Mars thing which was the original goal of Aries program.) The problem is no one is sure that the Aries I will be able to get six astronauts into orbit. Still a work in progress and they went ahead and did the first test flight. The first manned flight is promised for 2014 or 2015. The shuttle is supposed to stop service next year. That's four or five years of NASA being grounded!
sdtfs wrote:
+1!
What would the USA look like if it had been continually inhabited for 3,000 years, like China?
China is investigating whether the U.S. is unfairly selling cars in China. It threatens tariffs on American imports. No mention of Hummer being part of the investigation.
Yep. And given a lot more money on top of whatever money
they already have could keep the shuttle going for another couple
of years only.
And cut backs have some of the plans down to 3 astronauts only.
What would the USA look like if it had been continually inhabited for 3,000 years, like China?
Ask a Native American
Juvenal Delinquent wrote:
We have found remains of settlement from 12,000 years ago in various places around the U.S. So I'm guessing it would look like it does today. No guns from that time period but they still sort of count as Americans.
Um, it has.
Mexico heavily inhabited for far longer than that.
Rajesh wrote:
They are making more cars in China now than in the US - China went over 10MM/yr last month... we are now under 10MM/year.
I was thinking more from a capitalism standpoint, chief.
poic wrote:
After awhile, you don't need to know specifics to guesstimate a situation.
You see the same patterns over and over.
A major axis of fluctuation is differentiation vs commonality, it expresses itself in many ways.
Conformity versus Diversity
Standard vs Custom
It's often a symptom of declining marginal utility but political systems often overshoot the break-even point because belief systems have a lot of latency and good metrics are difficult to find / prove.
Sitting in a Starbucks, listening to an MLM scam again.
It's been awhile, I haven't been in Starbucks much lately.
Trade existed all that time. Don't know if it qualfies as "capitalist".
Don't know if China would qualfy as "capitalist" for most of that hypothetical
3k years.
dryfly,
Did you read that Sprott report the other day? Basically lays out the facts that if the Fed doesn't monetize T's then they won't sell, period, because there's simply not enough foreign and domestic demand otherwise.
IMHO our "trading partners" won't idly sit by and let us do that for very much longer. I still believe that the only reason we've managed to get away with it so far is that they've been playing for the V-shaped recovery which enables an exit strategy. Once it's obvious to all that there can be no exit then, well, the fiat
goes off.
Juvenal Delinquent wrote:
I'll ask some of my neighbors - they are Mdewakanton Sioux. Been a village here for something like 3000 years.
,rad liz,
The Chinese had money and commerce for a long time, including issuing the first paper money. That kind of capitalism.
Title of the post corrected : "Homebuyer tax credit revulsion"
TJ and The Bear wrote:
I read parts - thanks for the link. I think that's probably right.
Any guesses how long before the Golden Bear Chits make a reappearance? In about 10 days Chaing will have the Oct revenue figures. If it is unchanged from Sept, they'll have to do something.
Juvenal Delinquent wrote:
I thought paper money was the first step down the road of socialism.
Down the street is a village from 5000 years ago. They built a strip shopping center on it. We do that a lot around here.
That was the Mongals; don't know if they count as Chinese.
Marco Polo really goggled at the paper money thing, more than
many of the other wonders he saw or fantasies that someone
even father away had told him of.
It is too soon to tell...
lawyerliz wrote:
Was that the feminine half of the horde?
lawyerliz wrote:
With some of the largest population densities of anywhere in the world at that time - including China. Commerce too. They've found pipestone only found in western Minnesota in archeological digs in central Mexico - got there somehow.
I think the Mongol's paper money experiment ended badly.
Anybody know?
Yep, yep, TJ. That was not an incorrect spelling at all!
*They've found pipestone only found in western Minnesota in archeological digs in central Mexico - got there somehow. *
Was it for countertops?
lawyerliz wrote:
He probably realized what 'his people' could do with something like that - more powerful than gun powder!!!
Externalized Costs at 601
well said
as an aside...from time to time i saw, up close, union leadership make decisions that suggested they were in league with management
aggressive when it would weaken the union by giving management a righteous excuse
soft when they had the high ground and the right reasons...very strange...well not really
ps
as you have noted over the months, im not a blind union supporter ...
there are band unions out there....and some good unions do stupid or bad things
i just feel that blue collar workers, one by one dont stand a chance negotiating reasonable pay, benefits and safe work conditions verses a smarter and united management (and management is almost always smarter...thats whey theyre management!)
and i get the sense you, generally, agree
sdtfs wrote:
LOL!!! Too soft - would scratch... good thing we dig a lotta granite up here though, that would work... all we need is a Pergo mine & we're self-sufficient.
"i just feel that blue collar workers, one by one dont stand a chance negotiating reasonable pay, benefits and safe work conditions verses a smarter and united management"
My sentiments as well. Altruism always seems to be trumped by greed. The middle class formation is beholden to the unions and without them we are due a rough ride until the cycle goes back around, if it ever does. Interesting time to be alive.