Maybe they should just offer everyone $50,000. (small bills, non-sequential). Geesh - that would be less than the cost of an incremental house sold with the homebuyer tax credit!
Shortly after Roosevelt's inauguration, Congress passed the Economy Act, a provision of which cut many government salaries, including the pensions of retired Supreme Court justices. Associate Justice Oliver Wendell Holmes, Jr., who had retired in 1932, saw his pension halved from $20,000 to $10,000 per year. The serious cut to pensions appears to have dissuaded at least two older Justices, Willis Van Devanter and George Sutherland, from retirement.[9] Both would later find many aspects of the New Deal unconstitutional.
OT: Is there any interest in local meetings over a beverage?
I'm in the Portland metro area have sent inquiries to those who have let everyone know they are in the PDX area and have listed contact info. I'm partial to some place like The Lucky Lab brewpub because I can bring my kid. Anyone interested can send me an email and I'll try a to organize it. Other locations will need local volunteers. The holidays are coming up...
broward --
Another shock in my day was talking to another friend who is going for a Government job. Seems there is a mandatory retirement age set at a age of less than 60 in this field. Well, surprise, surprise, surprise, some how it is working out that over half of them will be forced into retirement in the next five years, and they will be doing the Washington revolving door returning after a few weeks, but being able to wear different colours of socks as consultants at 3x their former pay. Why, becuase no-one is in the pipeline with the experience and knows where the bodies are buried.
I just have have to laugh and cry at this stuff.
I Currency
are you kidding - "The serious cut to pensions appears to have dissuaded at least two older Justices, Willis Van Devanter and George Sutherland, from retirement." APPEARS?
if you want to play that game how many cases did William O Douglas vote on when he was in a senile state? they had to trick the man to resign by promising a 10th seat....
What kind of f*ing jobs does he think he can create?
From watching drug commercials, the average American:
has breathing difficulties and frequently needs a rescue inhaler
is morbidly obese with BMIs headed from the mid-30's on up
suffers from severe depression due to 'intimacy problems' (if male)
cannot stray far from a restroom due to 'sudden urge' (or as I call it, my 'nervous pee-pee')
cannot bend or lift anything heavier than a slurpee due to bone density problems
And though not advertised, a significant percentage of kids are doped up on ADHD meds, so can never be left alone, even for a second, or they'll end up burning the block down.
Seems there is a mandatory retirement age set at a age of less than 60
Many gov't jobs like that.
My uncle retired from the FBI at 55, mandatory, I think.
There's no doubt in my mind that I'm running into a lot of age discrimination but I suspect the youngsters don't see it that way. They just don't have the experience or frame of reference to understand many things. They've very much about themselves, even subconsciously. They do what's right for themselves, not necessarily what's right for the company or the long-term. Likewise, they've about detail and memorization, not judgement or abstraction, about money & kids, not ethics or long-term.
I'd say that 80% of my interviews with 45+ y-o, we share a common understanding of the world.
The 30-35 y-o's lack that frame of reference.
As I said, the 4 you cite as great Justices would not and did not hold the Federal Minimum Wage unconstitutional. If you believe Roberts' abrupt change in ideology had nothing to do with Roosevelt's Bill, fine. The Bill failed anyway. Yes, Andrew Jackson did ignore the Supreme Court, and was almost impeached.
I don't give a shit what someone regretted in his memoirs or is rumored to have said in some secret meeting. All memoirs are self-serving. I go by the record. Without New Deal reforms I doubt we would have fielded as strong a force in WWII. The minimum wage stands; the jurisprudence which deemed it unconstitutional has not been seriously revived.
Juvenal Delinquent wrote:
I wonder how employment opportunities are for illustrated men and women, inking deals?
-x-x.-
I just finished some diversity training that made the points that I have held for years. (Maybe feed back works?)
- Hire the teenager who knows everything before he forgets it.
- I don't care what tattoos, piercings, hair style, IT has, IT can do the damm job better than anyone else.
- I can find an ass hole anywhere, find me someone who can work as a team to get it done!
broward -
Thus the rule 3 -
I usually break it down to "hire teenagers while they still know everything"
Then make sure you have a baby sitter to make them play nicely and teach them what the real world is about.
I have been the teenager, the bridge, and the lightning rod.
It sucks, but the end result is worth it sometimes.
Duke, that's a quote from the Wiki article you cited.
Of course those Justices were probably not facing foreclosure, with their backgrounds. I put up the quote because everyone seems to think FDR just expanded the government. Cutting salaries in half is some expansion of big gubmint.
is the 10.2% unemployment reading really enough to rally another stimulus program? I would guess it will just be whatever justification available to fit the timing to satisfy ulterior motives
theoretically such a stimulus program ought to have maximum effect just before 2010 midterm elections, so it's not too early to plan but they would wait until just before next spring to implement it
I guess the only question is how much money. $400bn maybe?
will be very interesting as Ireland, UK, Germany, Spain, and others have big spending cuts planned to occur next year, with the important caveat of 'planned'. It shouldn't take much to scare them into self-preservation instead of ideology
Stimulus is like giving electroshock to the heart -- must be done quick, strong, and fast. President Obama let himself dilute the original dose from the original needed size, waste some on tax cuts, then spread it out on bullshit: then found it didn't work. Now he's scrambling.
A second, weak, dose, will just be political payoff to constituencies to keep them from running for the hills in the elections.
Conan Doyle hated Sherlock Holmes, thought he overshadowed his better work. Wanted to kill him off but the public wouldn't have it.
As for the stories themselves, Sherlock's brother Mycroft was the smartest one but had the flaw of hanging around opium dens.
The Taylor series number is interesting.
It's saying that things are further biased towards deflation now, yes?
I interpret that to mean Bernanke will have to drive down long-term mortgage rates further.
More and harder QE.
Arguing for or against government spending without knowing the details is foolish.
Who will pay, when and how? Who will likely gain what? What are the consequences of not spending? Having a goal of increasing the rate money changes hands for its own sake is fucking retarded.
The ones who benefited the most during the past 30 year buildup
I buy all your points except this one.
People in their 60s/70s will have a problem re-entering the workforce and will most likely take a big hit in their paper pensions. Assuming a ten-year Readjustment, people under 35 will be able to retack into the changes after it stabilizes.
Counterpointer
7% Solution was also an excellect novel about Sherlock Holmes meeting Freud due to Watson's
cunning, I think it was written bt Nicholas Meyer and later made into a movie directed by Meyer
starring Nicholl Williamson as Holmes and Alan Arkin as Freud... we finally find out who Moriarty was...
Duke - I suspect I saw the film and dredged the phrase from there!
Anyone tracking the muni implosion and who's on the hook? FT has a nice snip on French insurer CIFG and links - see the one from Mar 12 on the remaining rogues' gallery; Ambac, MBIA, ... and hey lookee here, FGIC!
I don't assume I know more than anyone. I have a right to my opinion on politics and class background influencing Supreme Court Opinions. Analyzing the minimum wage law as a Constitutional "taking" I find as archaic as treating Dred Scot as a private property issue.
I'm not relying on Wikipedia, believe me. I read the cases long ago, and plenty of history- both of specific political actors and broad trends. I've watched all the S. Ct. confirmation hearings of the last 20 years and I worked in judges' chambers for several years.
I respect W. Douglas for admitting what most other judges arrogantly deny: first they decide the case, then they craft the legal doctrine to support their decision. Occasionally they'll change their mind after reflection, but it's not rocket science, or any science. The Constitution is not capitalist or socialist.
if they are going to do a Stim Pack 2 (sounds like Ocean's Twelve) I hope they expand it in WPA fashion to support some federal projects in the arts - I could use some seed money to finance shooting at least a reel of my Central Park story which is unique in many ways ...
the appellant had not taken issue with the Adkins precedent and failed to challenge it.[69][70] Having no "case or controversy" legs upon which to stand, Roberts deferred to the Adkins precedent.[70]
A cop out on a technicality. Justices can always overturn their own precedent as incorrectly decided whether the appellant had argued it specifically or not. It's not criminal double jeopardy. Stare decisis is a common law doctrine. The Supreme Court makes common law.
Just use the money to create a few more govt. jobs ! What's wrong with everyone working for the Feds ? A new Department of homeland job creation.
~splat
I favor public contests that reward innovation eliminating work without compromising production/consumption, such as a currency without need of central bank intervention.
I feel compelled to note that there is no empirical support for multiplier effects from stimulus of which I am aware. Let me repeat that. There is no empirical evidence that private spending is increased by government spending in a liquidity trap, and there is significant empirical evidence to the contrary.
(I'm not on board with Barro WRT: tax cuts either here, BTW, because it would likely just induce savings and more destruction of credit, giving more resources to those with a low marginal propensity to consume and a high marginal propensity to invest. None of this is what we need.)
Also, our GDP numbers are starting to smell a little funky. Consumption +3.4% with state and local sales taxes -20% makes me wonder if it's really the sausage factory next door, or whether there's skeletons in the metaphorical closet.
I'm very strongly against this initiative. I think it's stupid.
Quantitative Easing Has Been A Monetary Failure; Persistent Deflation Means More Fed Intervention Coming Soon | zero hedge
Taylor rule shows us at -6.2% inflation right now versus -6% when Uncle Ben started QE.
I think they're right, but I also don't think further intervention in quantitative easing will help. There's a huge pile of surplus cash in the system already and most interest rates are quite low. Spreads are comically tight on MBS.
They can do more qualitative easing if things start to fall apart again, but that's a much riskier and more contentious tactic. If the gold rush spreads to oil as a result of more qualitative easing, it would be very counterproductive indeed.
I think the most likely outcome here is more silent vacuuming of bad debt from the balance sheets of banks and turning the other way from entrenched red ink on the books of government-owned enterprises. So long as they make it clear that most of the risk is on the Fed, spreads shouldn't blow out again.
But I would be pretty freaked owning any bonds but Treasuries at these spreads/prices.
long jury holiday at the moment...
waiting for the call... yesterday Thaksin was in town and Thailand made a lot
of threats like closing down the borders but so far nothing...
Stimulus package 2 is like burning the deck chairs on Titanic in ovens to get more steam and thus, more power to the engines. Obama is trying to ram USSA Titanic on shore. Beach or bust!
nor be deprived of life, liberty, or property, without due process of law
[From the 5th Amendment].
There is no general "liberty of contract". Contracts have always been subject to legislative regulation, otherwise you could avoid any law merely by creating a contract. "Cocaine illegal? But I have a contract..." Contracts are also subject to common law regulation. The same with property rights, which once treated humans as property.
And who's to say a wage law passed by Congress is not due process. It would not be applied ex post facto, to claw backpay. The argument was absurd, and could only be explained by political-economic ideology distinct from the Constitution.
ndk:If the gold rush spreads to oil as a result of more qualitative easing, it would be very counterproductive indeed."
IMO, it's diametrically the opposite. The gov't goal is to dilute the value of debt. The rise in commod's and the fall in the USD are evidences of this policy. StimPack2 is more evidence.
When it's all over, if the gov't mgr's are lucky, debt will be at 25cents to today's dollar. That will free the country to grow again. There can't be a massive write down of debt and debt burdened assets as that would crash the society and the government.
This ain't rocket science. Even the Bush idiots saw this and started TARP1.
The gov't goal is to dilute the value of debt. The rise in commod's and the fall in the USD are evidences of this policy. StimPack2 is more evidence.
Dilute the value of debt, sure. But not all inflation is created equally. Does pushing up the price of oil mean that wages will rise in response, leading to a cycle? Does it mean that businesses will be able to raise prices enough to compensate for their increased input costs?
We have 17.5% underemployment, below 70% capacity utilization, and immense global overcapacity far beyond those domestic figures. Just look at China -- it's breathtaking. The overcapacity is only increasing in this respite.
Pushing up the price of a raw commodity that is traded heavily on exchanges and has inelastic supply can be done, but does this really achieve our goal of making the incomes of companies and individuals rise faster so that they can repay debt more easily? I doubt it. I also doubt that those commodity prices can stay elevated because of the same inelasticity of supply as demand falls in response to higher prices. But you can definitely spike for a time; 2008 showed us as much.
This ain't rocket science. Even the Bush idiots saw this and started TARP1.
I disagree. I think it's actually quite difficult to deliberately spark inflation -- especially when China is actively preventing you from doing so.
Disagree. What matters most is flow. Proven in Japan and now in the U.S. (so far). Debt / currency is roughly analogous to voltage / current. What matters to an electronic circuit is current flow, you can vary the voltage quite a bit. It should be possible to "surgically" remove a great deal of debt without disrupting (much) the goods & service economy.
There can't be a massive write down of debt and debt burdened assets as that would crash the society and the government.
That's right, BH, it would only crash the currency and international relationships with trade imbalances. The elected government can reset the currency as did FDR with a command price of glod, then Nixon by dropping glod backing altogether.
I don't know why Slumdog says 25 cents/dollar is not a "massive writedown." China knows options are limited, and must one way or another take a distress sale haircut. "Surgery" is tedious, painful, imperfect, and expensive, but it beats death by debt spiral.
Let's bring back canals. Just imagine the labor force required. Multiple lanes, up, down, sideways; new tech and surface/sub veicles; fueling infrastructure, engineers, designers, planners, taxation specialists. Financiers, even.
Let's bring back canals. Just imagine the labor force required. Multiple lanes, up, down, sideways; new tech and surface/sub veicles; fueling infrastructure, engineers, designers, planners, taxation specialists. Financiers, even.
Something wonderful is going to happen...
C
Seriously, the largest wind farm in the US just got delayed 4 years due to financial constraints. Currently China has the world's largest wind farm in planning, financed directly by the banks (or directly by the government, since Hu is telling the banks to lend). Tell me again why StimPack2 is a bad idea?
We may not end up with a currency but the end of it, but will anyone else have one either?
Shall I part my hair behind? Do I dare to eat a peach?
I'm just not clear when the banking industry has not controlled the government? Who do you plan to have run the government instead? The idiots that bought houses the past several years. Ummmm....no thanks, I think the bankers are smarter.
I'm just not clear when the banking industry has not controlled the government?
Ah, I see. I'm not opposed to the bankers thriving,...I'd just like to see a few others do well, too. Even if it's just a new wind farm. Or system of canals. Or high speed train toy. Something we can point to proudly and say, "That's what we blew 500 billion on!"
Ah, I see. I'm not opposed to the bankers thriving,...I'd just like to see a few others do well, too. Even if it's just a new wind farm. Or system of canals. Or high speed train toy. Something we can point to proudly and say, "That's what we blew 500 billion on!"
Mentioned this a few days ago, but was talking to my dad who is Director of Research at a major technology company (Dow 30). It's pretty scary to her him say that he thinks innovation is on the wane and there are no new ideas out there. He thinks if there is any innovation to be had, it will have to come from defense contracting or universities rather than private sector research. This is problematic, since most universities are tied to either state funding or private sector grants. I think innovation is dead for a good amount of time.
Which is why I think growth will come from the increasing financialization of the economy, rather than spreading it around. From an ethical perspective, I'd rather put my money into terrorism rather than the growth of the banking sector. But, that's what it is right now. Besides, the yields on terrorism suck (looking at it from a purely perspective....snark).
If you live in America and you have been wanting to work from home, you might be in luck. Google has now released a new "Work From Home Program" that will allow Americans to work for the titan from the comfort of their own homes.
To thousands of Americans this means that they will soon have a safe and bright future working for one of the fastest growing companies in the world.
If you live in America and you have been wanting to work from home, you might be in luck. Google has now released a new "Work From Home Program" that will allow Americans to work for the titan from the comfort of their own homes.
To thousands of Americans this means that they will soon have a safe and bright future working for one of the fastest growing companies in the world.
Sweet I can get a part-time job working evenings from overseas and arbitraging the higher (part-time) wages in the US. More overseas stimulus leakage.
On the matter of state sales tax receipts/GDP disparity - my health and auto insurance expenses have risen substantially throughout this recession. I believe they are a part of the GDP calculation, but not subject to state taxes. While this may not account for all of the difference, doubtless it plays a part. We've often questioned some of the data used to calculate gross domestic product, particularly OER, but surely and even in an ideal situation, there will always be some difference between the two figures, GDP invariably showing more growth, or less contraction, than tax receipts.
ndk has it right -- this is all about the currency link -- we need China to back off so we can inflate a bit and get the debt beast to shrink and exports to grow a bit.
Whether, in the event that takes place, we do the smart thing and don't just imeeeediately HELOC our debt levels back to max overload again out of sheer bad habit is another issue. New habits are hard to learn. But that's a separate matter from the former -- and until the former occurs, we'll have no chance to select either of the latter, one way or another.
edit: I expect much of the discussion this week is about a face-saving way for China to do exactly that. The rest of East Asia (and the EU) would breathe a sigh of relief -- they can stop buying dollars for a while.
burnside: I saw the same, homeowner insurance rose, car insurance rose (and yeah, I take all the credits possible) but outstripping both of those combined was health insurance, energy, food and ......drum roll.....property taxes. Taxation on gasoline also rose in this neck of the woods and other silent taxes did too for poor schmucks by pretty stunning percentages on cigarettes, liquor, sin taxes on everything possible etc.
This is why I say the 'depression' and deflation is sectored. Deflation in discretionary consumer items vs inflation in what people need to live save real estate (shelter).
The idiot bureaucrats still think they can assess taxes on the middle class to pay for all their bad bets and make the poor even poorer in those silent taxes. What isn't realized is the massive downward mobility of the middle class over the last 15 years, that the middle class is comprised now of some professionals who are educated and mad as hell. I think this omission will be their undoing as two demographics will end up organizing in something quite unique. It will be the young aspiring grads and the older generation whose most productive years are already behind them and are professionals. Put together energy with experience and some wisdom and it could produce quite the formula for a grass roots effort that is effective in the future. I look at this as our only chance to be honest and realize it is quite the long shot.
As bad as the news is regarding education, I've met some exceptionally bright people who have a depth of understanding and maturity for their age I wish I had, but I was too busy trying to survive at that age to think about anything else but and where all my energy was going.
There had better be an effort to create something besides day labor jobs, part-time or contract jobs which will end. People with time on their hands is a formula history books have shown to be a risk. Since history was ignored in the economic paradigm, I suspect those ivy-league schools forgot other lessons of history or minimized their importance.
I found out more about yesterday's post concerning the oil market manipulation. All agree that something happened last year when prices went over $140/bbl. But then prices crashed to below $30/bbl. Also Congress investigated. Like the attempts at manipulation in the past, (Feruzzi and Hunt tried it in soybeans..) it too failed. What's more to the point, the post yesterday tried to tie increasing volume to the discussion. It didn't make sense to all the people I discussed it with. Nor to me either. We all agreed that the guy was only ranting and had a very weak argument.
that little thread at UBS is beginning to unravel a little more in that blanket of protection for the wealthy and sends them from Switzerland to Hong Kong:
I hope once the FBI/IRS is done here (which will take many, many years and go to the Caribbean, Lichtenstein, So. Africa and around the world) they will find some fresh funding/personnel to go after large US corporations/banks where the lions share of tax evasion on profits is amassed overseas in units everywhere.
I think it is Citi that has a gigantic number of offices in the Caribbean but thats an old story and I lost it with my hd crash. The uber-wealthy international clients avoiding taxation will still find ways to hide/shelter their wealth, as always. I've been following this case for a long time now. The really large sums will be found in corporations/international broker/dealers, etc. Going after them would likely, if successfully prosecuted and back taxes paid, erase the national debt.
The problem with manipulating a futures market has always been that even though it's relatively easy to buy up most of the supply coming into the market, you end up amassing a huge inventory. At some point, after you run up prices, you have to sell your huge inventory. Once you begin to sell, traders will learn about it and sell in front of you(because they know how much more selling that you have to do). Whatever your offer, they will offer a lower price and the "race to the bottom" is on, and you lose all your profits and much more.
So, traderwalt, you're saying the former CFTC chair Greenberger is all wet regarding ICE, the Enron loophole and deregulation of energy trading via the CFMA? Brooksley Born was also all wet? The problem I see Walt is futures trade are paper, they get rid of that paper before taking delivery. They trade that paper on speculation and an ramp up the price, make huge profits and fees and never take delivery of the product.
In the case of Goldman, Merrill, etc. they do physically take delivery of some commodities and use rentals to store it. In the NE its for heating oil and they also are renting, to the tune of 7K/day, tankers offshore to hold oil. They bought low and they will sell high during a time when they can. In this case, its the small time distributors and consumers that LOSE. I really love that we are bailing them out and they are renting oil tankers and doing things like buying sugar operations WHOLE.
So, I respectfully disagree with you here. I've listened intently to subsequent testimony and how the large brokers squeeze out smaller ones in futures trades, those who are trying to utilize the market as intended. That market is totally whacked and not representative of the supply/demand market as intended. The liberalization of trading there on margins which were thin, have been increased recently. Like with the rest of the economy, this fails to address the core issues. This is the same as Glass-Steagall. Its created incentives which are counter-productive and have produced pain, rather than protection from wild swings in pricing. This was the original intent, a market that provided some stability in pricing for farmers. Since you formerly traded grains, please look at the wheat spot last year and tell me this represents fundamentals and how it does. Its a serious inquiry and I'm attempting to learn, not be flip. It was another perfect inverted "V" double digit swing.
Goldman, Merrill and other large broker/dealers play those market to great affect as we have seen. Goldman made billions and billions just in the first half of last year solely on energy future trades. One broker/dealer and just one commodity. Tell me how large percentage swings in mere days is reflective of a supply/demand market. Last year someone got creamed in oil, in mere hours there was a double-digit swing in pricing; the margin got called and the short squeeze was immense. It was a perfect inverse "V"-double digit swing in an HOUR. They HAD to sell or take delivery in a massive position in oil, someone didn't get a memo or something!!
Just like with other markets, it may not be technically illegal (in part because their lobbyists are writing the legislation and Mr. Gramm enabled it) but it certainly isn't a supply/demand market based on fundamentals.
Nov. 13 (Bloomberg) -- Prem Kumar’s demand for higher pay and better food at the cafeteria at the auto-parts factory where he works near New Delhi forced General Motors Co. and Ford Motor Co. to shut three plants on the other side of the world.
The strike Kumar led at Rico Auto Industries Ltd., coming after managers were beaten to death in labor disputes at two other partmakers, may derail an Indian government goal to boost components exports about sevenfold to $25 billion by 2015.
1 yogi, yes, you can gouge prices in the short run. People will eat less rice and more other things (the substitution of inferior goods). Eventually, though, another crop will hit the market and you still have a huge inventory from the last crop. You can buy this new crop, too but then your problems get even worse when the next corp comes onto the market.
No, Nanoo, I wasn't commenting on Born or Greenberger, (I agree with Born). I was talking about the other link you posted. One comment about the Enron loophole. Yes, I believe it allowed Enron and others to book artificial profits that did a lot of damage to investors . But in the end Enron went BK, and Merrill had to be rescued.
I mean really............I know Bush was a bumbling fool but this guy...talk about Mr. Hollywood. Smile for the camera in an extreme sense of the word.
Iceland parliament just called People's Meeting, total of 1500 participants and those living outside Reykjavik will be given free flights. (would about 1.5 million in the USA). The agenda: What to do now. Now THAT is democracy, not that American clown circus.
Thank you traderwalt, but as I understand it, the liberalization of energy trading in the futures market on ICE; this is the Enron loophole as trading on the ICE isn't regulated. This legislation (CFMA) was passed in 1999/2000, long after Enron and written and attached to other legislation by our pal, non-whiner Phil Gramm.
Nothing is going to save you, dear Americans. You escaped from the strict royalty pyramid of Europe, only to create a new one eventually. United you will stay until you will be europeanized, one size does not fit all. Especially 300 MILLION of people of very different origins. You will be divided and then, divided again United no more...
Nanoo, in a sense, it doesn't matter what the rules are. If futures prices get too high or too far away from the cash market, traders will sell them short. Conversly, if they get too low, someone who needs the commodity will buy them. And if prices don't reflect reality, no one will trade on that exchange. This is a real generalization, but you get the idea. Short term, I worry about manipulation because it impacts me. A 1% move is big deal in my business.
traderwalt, have you been seeing a upside bias in futures prices, and the larger roll to subsequent contracts, due to long only fund positions? I can't help but think this has been a factor over the past couple years?
Obama has shown he does not understand how sustained jobs and private business works together. He couldn't run a lemonade stand with out government funding. Everything his agenda is pushing drives business out of the country. The meeting is a sham just like another stimulus.
thank you traderwalt, it affects everyone. I suppose its hard to come to grips with the manipulation on such a massive scale; I know its taken me sometime to come to terms with much of what is going on. I do get confused as it is anything but simple. I draw your attention now to the 2008 Farm bill. The mandates in the previous farm bill for ethanol were exceeded but more strident mandates were enacted. The reason I find it compelling is this effectively attaches food production to energy production. By this means, organics can be manipulated in pricing the same as energy. I think we saw that last year. Wheat and rice were insane. Rice moved on speculation, produced real strife in developing nations and hoarding elsewhere, even here in the US. I remember Costco limited rice purchases as there was a physical run on it on fear of high prices.
Since last year pricing has eased but in the grocery store, I really don't see prices for anything which is produced with grains coming down by the same percentages. In fact, last week, prices for some products were approaching the same levels as '08.
Growling tummies on speculation in markets rather than tangible supplies is very bothersome to this nobody.
You worry about 1%, but other people worry about eating, in the short term.
Your example is off. If you corner all the grain supply, by forming a giant oligarchy, you're not worried about next year's crop. You'll have all the money by then. You're just worried that the slaves will starve before they can harvest it.
It may not ever happen to such an extreme, but the leverage is still vicious.
'If you corner all the grain supply, by forming a giant oligarchy, you're not worried about next year's crop."
I don't think so. If you keep prices high enough and the people can't afford to eat properly, they can't work. Between a famished population and inflating food prices, you may have all the money, but your currency wouldn't have any value.
They are going if you look. Local Monroe shock plant closed. Mexico got most of the jobs. The next Chevy Cop cars may be Holden Australia. Local Vice Grip plant went to China. Lots of investment by the Auto makers in the world market and very little in NA. On and on. Just because you refuse to see it doesn't mean it is not happening. Been going on for decades.
You think China, Russia, and Europe don't claw back bonuses? Where is this magic industrialized land with lower taxes and less regulation?
You are so incredibly full of shit.
I am sure the Brits, French and Germans had the same attitude as their manufacturing base moved off-shore to the U.S decades ago. We have become Europe.
Inflation and Speculation: Ingredients for the Next Food Crisis?
Food First's Eric Holt-Giménez & Annie Shattuck write:
In March of 2008 the price of food commodities hit an all-time high, sending 100 million people into the ranks of the hungry, worldwide. Food price inflation got started with droughts, rising oil prices, and an increase in demand for grain (mostly coming from feedlots and biofuels plants). Then, as prices rose, investors-hungry in the aftermath of the housing bust-pounced on rising commodity futures, creating a "food bubble." There is now wide agreement that speculation in food was the major cause of the skyrocketing food prices that led to the 2008 global food crisis.
......
In March of 2008 the price of food commodities hit an all-time high, sending 100 million people into the ranks of the hungry, worldwide. Food price inflation got started with droughts, rising oil prices, and an increase in demand for grain (mostly coming from feedlots and biofuels plants). Then, as prices rose, investors-hungry in the aftermath of the housing bust-pounced on rising commodity futures, creating a "food bubble." There is now wide agreement that speculation in food was the major cause of the skyrocketing food prices that led to the 2008 global food crisis. ....
Last week, nearly 200 organizations delivered a letter to president Obama asking him to re-regulate the commodities markets. The letter points out that the 2008 food price volatility "could have been stopped with sensible rules that, if enforced, would have staved off the malnutrition and starvation... caused by excessive gambling on food prices." Speculation put our economy at risk and may yet crash Wall Street. Speculation in food could crash the world's food systems.
Senate Democrats will take up a new job-creation bill in the wake of the 10.2 percent unemployment rate, Majority Leader Harry Reid told his colleagues Tuesday.
The problem with this strategy is that there seems to be this assumption that all the economy needs is a swift kick start to get people spending again, and a lack of realization that the present situation is the result of 11 or more years of bad decisions, and even more than that of bad policy. Backing up a little and getting a running start just won't cut it; not for anything approaching a sustained recovery.
America still has price supports for many ag commodities. Fortunately, at least for now, the problem in America is too much food production. Distributing that food is, in some areas, another matter and so is the long term outlook for production.
Backing up a little and getting a running start just won't cut it; not for anything approaching a sustained recovery.
With Obama, Pelosi and Andy Stern calling the shots, small business will not hire. They will continue to cut back. Why earn more when the feds strip you of the fruits of your efforts.
I don't think so. If you keep prices high enough and the people can't afford to eat properly, they can't work. Between a famished population and inflating food prices, you may have all the money, but your currency wouldn't have any value.
See how well that worked for the Hunts back in the '70s. You can't sustain high prices with low demand unless you buy up the all the supply with your own money, and nobody has that much. As such, they'd need to finance it, and the financiers would expect a return on that investment. That's where it all falls apart.
With Obama, Pelosi and Andy Stern calling the shots, small business will not hire. They will continue to cut back. Why earn more when the feds strip you of the fruits of your efforts.
That's one fundamental problem. Another is the structural issue of all of the bad debt out there, and the fact that no one is willing to acknowledge its draining effect on the economy. We can fix the small business issue in the near term by sending Pelosi and Reid packing, but the issue with the financial industry is more problematic, since they effectively own the decision makers in Washington, DC.
The Brits, French and Germans bombed their manufacturing base into smithereens, with our help. They all have national health care if you haven't noticed. What gives you the foggiest notion that Mexico won't nationalize the factories one day, just like Venezuela, Cuba, Nicaragua... Or just tax them into foreclosure as soon as they are self-sufficient.
I wasn't quite an adult when the brothers Hunt showed me what financial bubbles are all about...
They and their Saudi sycophants were the only buyers of the grey mare, and delivery had to be in 1,000 ounce .999 fine Comex deliverable bars, and the refineries were so backed up in turning not pure silver into Comex bars, that anything not pure was discounted quite a bit back of the spot price, in the last few months of the 1970's...
When the end came, nobody wanted silver @ any price, it seemed.
U.S. trade gap widens sharply in Sept. - MarketWatch
Not a lot of details in the article. Oil price recovery probably played a part in it, but I wonder if big business is starting to get the sense that the government is going to try and put the burden of more spending on them, and are beginning to restructure their businesses in a way where the "profits" are made outside the US of A and beyond the reach of the USG.
Many of the small business owners I know used to work at larger firms, had an idea, got financing, etc. They might make more now, but they don't make more per hour. As a colleague emailed me "My marginal tax rate is 53%. I will take the weekend off, thank you."
This is why I say the 'depression' and deflation is sectored. Deflation in discretionary consumer items vs inflation in what people need to live save real estate (shelter).
So what does that work out to? $2000 per vote or thereabouts?
Maybe they should just offer everyone $50,000. (small bills, non-sequential). Geesh - that would be less than the cost of an incremental house sold with the homebuyer tax credit!
best wishes
Oh, No.
"Given the magnitude of the economic turmoil that we've experienced, employers are reluctant to hire," he continued.
Given the economic uncertainty he has created, he should be the last one to feign surprise.
We know where the first 40,000 jobs are going. Thing is government cannot create jobs, only shuffle them around or pull them from the future.
Wow, I can bring donuts and when we break out into workshops, we can eat them. Nah, the whole idea is stupid.
I wonder how they will ensure the jobs only go to Democratic voters.
CR-
It appears the idea of another stimulus package is gaining momentum ...
Only in Washington and the people tapped out, OK, maybe 65% of the population.
Rob Dawg wrote:
That's not exactly true.
32-hour work week would "create" more jobs, just not more work.
more stimulus? you don't say...
Judiciary Reorganization Bill of 1937 - Wikipedia, the free encyclopedia
What goes around, comes around, and is coming around again.
I wonder how employment opportunities are for illustrated men and women, inking deals?
Is a giant snake crawling up an arm or vague Chinese writing or other such tomfoolery finally passe, and an impediment in a major way?
OT: Is there any interest in local meetings over a beverage?
I'm in the Portland metro area have sent inquiries to those who have let everyone know they are in the PDX area and have listed contact info. I'm partial to some place like The Lucky Lab brewpub because I can bring my kid. Anyone interested can send me an email and I'll try a to organize it. Other locations will need local volunteers. The holidays are coming up...
broward --
Another shock in my day was talking to another friend who is going for a Government job. Seems there is a mandatory retirement age set at a age of less than 60 in this field. Well, surprise, surprise, surprise, some how it is working out that over half of them will be forced into retirement in the next five years, and they will be doing the Washington revolving door returning after a few weeks, but being able to wear different colours of socks as consultants at 3x their former pay. Why, becuase no-one is in the pipeline with the experience and knows where the bodies are buried.
I just have have to laugh and cry at this stuff.
"Obama announces forum -- a brainstorming session on job creation"
isn't there some self-help seminar called "the forum"?
delete by request of David Boies
any nominees for the UE Czar?
EEngineer -
OT: Is there any interest in local meetings over a beverage?
I'm always up to meeting other Doomers, gloomers from here, but I get to pick the bar, I do not go into Waikiki unless I'm paid to do it.
Juvenal Delinquent wrote:
potential ipo
Anyone watching Buffet and Gates on CNBC?
I Currency
are you kidding - "The serious cut to pensions appears to have dissuaded at least two older Justices, Willis Van Devanter and George Sutherland, from retirement." APPEARS?
if you want to play that game how many cases did William O Douglas vote on when he was in a senile state? they had to trick the man to resign by promising a 10th seat....
What kind of f*ing jobs does he think he can create?
From watching drug commercials, the average American:
And though not advertised, a significant percentage of kids are doped up on ADHD meds, so can never be left alone, even for a second, or they'll end up burning the block down.
Seriously.
Kauai_Kahuna wrote:
Many gov't jobs like that.
My uncle retired from the FBI at 55, mandatory, I think.
There's no doubt in my mind that I'm running into a lot of age discrimination but I suspect the youngsters don't see it that way. They just don't have the experience or frame of reference to understand many things. They've very much about themselves, even subconsciously. They do what's right for themselves, not necessarily what's right for the company or the long-term. Likewise, they've about detail and memorization, not judgement or abstraction, about money & kids, not ethics or long-term.
I'd say that 80% of my interviews with 45+ y-o, we share a common understanding of the world.
The 30-35 y-o's lack that frame of reference.
Duke: You are the one shooting your mouth off.
As I said, the 4 you cite as great Justices would not and did not hold the Federal Minimum Wage unconstitutional. If you believe Roberts' abrupt change in ideology had nothing to do with Roosevelt's Bill, fine. The Bill failed anyway. Yes, Andrew Jackson did ignore the Supreme Court, and was almost impeached.
I don't give a shit what someone regretted in his memoirs or is rumored to have said in some secret meeting. All memoirs are self-serving. I go by the record. Without New Deal reforms I doubt we would have fielded as strong a force in WWII. The minimum wage stands; the jurisprudence which deemed it unconstitutional has not been seriously revived.
Juvenal Delinquent wrote:
I wonder how employment opportunities are for illustrated men and women, inking deals?
-x-x.-
I just finished some diversity training that made the points that I have held for years. (Maybe feed back works?)
- Hire the teenager who knows everything before he forgets it.
- I don't care what tattoos, piercings, hair style, IT has, IT can do the damm job better than anyone else.
- I can find an ass hole anywhere, find me someone who can work as a team to get it done!
broward -
Many gov't jobs like that.
My uncle retired from the FBI at 55, mandatory, I think.
Bingo, I just can't talk around you.
Don't you feel much safer and secure now?
broward -
Thus the rule 3 -
I usually break it down to "hire teenagers while they still know everything"
Then make sure you have a baby sitter to make them play nicely and teach them what the real world is about.
I have been the teenager, the bridge, and the lightning rod.
It sucks, but the end result is worth it sometimes.
""Given the magnitude of the economic turmoil that we've experienced, employers are reluctant to hire," he continued."
My new acronym for the day.
NFSS - no f*****n shit sherlock.
Duke, that's a quote from the Wiki article you cited.
Of course those Justices were probably not facing foreclosure, with their backgrounds. I put up the quote because everyone seems to think FDR just expanded the government. Cutting salaries in half is some expansion of big gubmint.
poic - NFSS
Some how I got that before you expanded it.
is the 10.2% unemployment reading really enough to rally another stimulus program? I would guess it will just be whatever justification available to fit the timing to satisfy ulterior motives
theoretically such a stimulus program ought to have maximum effect just before 2010 midterm elections, so it's not too early to plan but they would wait until just before next spring to implement it
I guess the only question is how much money. $400bn maybe?
will be very interesting as Ireland, UK, Germany, Spain, and others have big spending cuts planned to occur next year, with the important caveat of 'planned'. It shouldn't take much to scare them into self-preservation instead of ideology
Stimulus is like giving electroshock to the heart -- must be done quick, strong, and fast. President Obama let himself dilute the original dose from the original needed size, waste some on tax cuts, then spread it out on bullshit: then found it didn't work. Now he's scrambling.
A second, weak, dose, will just be political payoff to constituencies to keep them from running for the hills in the elections.
Quantitative Easing Has Been A Monetary Failure; Persistent Deflation Means More Fed Intervention Coming Soon | zero hedge
Taylor rule shows us at -6.2% inflation right now versus -6% when Uncle Ben started QE.
Conan Doyle hated Sherlock Holmes, thought he overshadowed his better work. Wanted to kill him off but the public wouldn't have it.
As for the stories themselves, Sherlock's brother Mycroft was the smartest one but had the flaw of hanging around opium dens.
Someone who can make a poll should do a mid-November poll on what Stimulus: the sequel will total, during bank failure friday. Bucket sizes of $100bn
Kauai_Kahuna wrote:
Not really.
He got rehired into a gov't security firm.
The Taylor series number is interesting.
It's saying that things are further biased towards deflation now, yes?
I interpret that to mean Bernanke will have to drive down long-term mortgage rates further.
More and harder QE.
EvilHenryPaulson wrote:
Guess shooting cocaine had more cachet.
Indeed, the 7% solution.
That's compounding interest.
C
Good night all, early day tomorrow.
duplicate - delete
Counterpointer wrote:
I thought that was how much the cocaine was cut, the dilution.
broward
I confess to not being on the same wavelength as the age 50 cohort, but I seem to get along fine. What they appreciate most is hard work and willingness to learn, in my experience. Grand philosophies aren't necessary for negotiating most interactions. I'm not sure I want to understand the generation who thought this was a brilliant idea = )
edit: there's more @ YouTube - The 1987 Crystal Light National Aerobic Championship, team competition The San Francisco Bay Club
Arguing for or against government spending without knowing the details is foolish.
Who will pay, when and how? Who will likely gain what? What are the consequences of not spending? Having a goal of increasing the rate money changes hands for its own sake is fucking retarded.
EvilHenryPaulson wrote:
What counts is the age of the perp when the Felony was committed .
That would be about.... thirty.
broward - that is what I was referring to.
Turns out Friday 13th hasn't been so bad so far. We await the dark times, prepared now.
C
1 currency now -yogi wrote:
StimPak2 is gonna make this chart look real ugly...
Projected Deficit - washingtonpost.com
EvilHenryPaulson wrote:
I buy all your points except this one.
People in their 60s/70s will have a problem re-entering the workforce and will most likely take a big hit in their paper pensions. Assuming a ten-year Readjustment, people under 35 will be able to retack into the changes after it stabilizes.
Counterpointer
7% Solution was also an excellect novel about Sherlock Holmes meeting Freud due to Watson's
cunning, I think it was written bt Nicholas Meyer and later made into a movie directed by Meyer
starring Nicholl Williamson as Holmes and Alan Arkin as Freud... we finally find out who Moriarty was...
Duke - I suspect I saw the film and dredged the phrase from there!
Anyone tracking the muni implosion and who's on the hook? FT has a nice snip on French insurer CIFG and links - see the one from Mar 12 on the remaining rogues' gallery; Ambac, MBIA, ... and hey lookee here, FGIC!
FT Alphaville » Blog Archive » Bond insurer death watch, CIFG edition
C
edit: *Sherlock's brother Mycroft was the smartest one but had the flaw of hanging around opium dens. *
NO!
Mycroft was incurably lazy, only going to his special club where it was forbidden for members to talk to one another.
And here's SheBair's Board, in its ineffable wisdom, approving 3 years of insurance payments to bail in the DIF...
FDIC: Press Releases - PR-203-2009 11/12/2009
Wow, what a public-private partnership! With that kind of response no wonder more, new, and greater partnerships are being contemplated!
This new America certainly is modeling behaviors.
C
Duke:
I don't assume I know more than anyone. I have a right to my opinion on politics and class background influencing Supreme Court Opinions. Analyzing the minimum wage law as a Constitutional "taking" I find as archaic as treating Dred Scot as a private property issue.
I'm not relying on Wikipedia, believe me. I read the cases long ago, and plenty of history- both of specific political actors and broad trends. I've watched all the S. Ct. confirmation hearings of the last 20 years and I worked in judges' chambers for several years.
I respect W. Douglas for admitting what most other judges arrogantly deny: first they decide the case, then they craft the legal doctrine to support their decision. Occasionally they'll change their mind after reflection, but it's not rocket science, or any science. The Constitution is not capitalist or socialist.
if they are going to do a Stim Pack 2 (sounds like Ocean's Twelve) I hope they expand it in WPA fashion to support some federal projects in the arts - I could use some seed money to finance shooting at least a reel of my Central Park story which is unique in many ways ...
i hear Meeechigan has a movie-financing stimulus plan. gran torino was one of the successes
Duke of Con Dao wrote:
I thought you had the Emperor Of Vietnam's daughter on tap?
A cop out on a technicality. Justices can always overturn their own precedent as incorrectly decided whether the appellant had argued it specifically or not. It's not criminal double jeopardy. Stare decisis is a common law doctrine. The Supreme Court makes common law.
Just use the money to create a few more govt. jobs ! What's wrong with everyone working for the Feds ? A new Department of homeland job creation.
~splat
got baited... too old to fall for that
I favor public contests that reward innovation eliminating work without compromising production/consumption, such as a currency without need of central bank intervention.
Get to work on it Broward.
I feel compelled to note that there is no empirical support for multiplier effects from stimulus of which I am aware. Let me repeat that. There is no empirical evidence that private spending is increased by government spending in a liquidity trap, and there is significant empirical evidence to the contrary.
Robert J. Barro and Charles Redlick: Stimulus Spending Doesn't Work - WSJ.com
(I'm not on board with Barro WRT: tax cuts either here, BTW, because it would likely just induce savings and more destruction of credit, giving more resources to those with a low marginal propensity to consume and a high marginal propensity to invest. None of this is what we need.)
Also, our GDP numbers are starting to smell a little funky. Consumption +3.4% with state and local sales taxes -20% makes me wonder if it's really the sausage factory next door, or whether there's skeletons in the metaphorical closet.
I'm very strongly against this initiative. I think it's stupid.
This time is different.
I think they're right, but I also don't think further intervention in quantitative easing will help. There's a huge pile of surplus cash in the system already and most interest rates are quite low. Spreads are comically tight on MBS.
They can do more qualitative easing if things start to fall apart again, but that's a much riskier and more contentious tactic. If the gold rush spreads to oil as a result of more qualitative easing, it would be very counterproductive indeed.
I think the most likely outcome here is more silent vacuuming of bad debt from the balance sheets of banks and turning the other way from entrenched red ink on the books of government-owned enterprises. So long as they make it clear that most of the risk is on the Fed, spreads shouldn't blow out again.
But I would be pretty freaked owning any bonds but Treasuries at these spreads/prices.
Something wonderful is going to happen...
C
Duke: How is your jury duty going?
long jury holiday at the moment...
waiting for the call... yesterday Thaksin was in town and Thailand made a lot
of threats like closing down the borders but so far nothing...
Stimulus package 2 is like burning the deck chairs on Titanic in ovens to get more steam and thus, more power to the engines. Obama is trying to ram USSA Titanic on shore. Beach or bust!
[From the 5th Amendment].
There is no general "liberty of contract". Contracts have always been subject to legislative regulation, otherwise you could avoid any law merely by creating a contract. "Cocaine illegal? But I have a contract..." Contracts are also subject to common law regulation. The same with property rights, which once treated humans as property.
And who's to say a wage law passed by Congress is not due process. It would not be applied ex post facto, to claw backpay. The argument was absurd, and could only be explained by political-economic ideology distinct from the Constitution.
ndk:If the gold rush spreads to oil as a result of more qualitative easing, it would be very counterproductive indeed."
IMO, it's diametrically the opposite. The gov't goal is to dilute the value of debt. The rise in commod's and the fall in the USD are evidences of this policy. StimPack2 is more evidence.
When it's all over, if the gov't mgr's are lucky, debt will be at 25cents to today's dollar. That will free the country to grow again. There can't be a massive write down of debt and debt burdened assets as that would crash the society and the government.
This ain't rocket science. Even the Bush idiots saw this and started TARP1.
Duke, where did your post disappear to?
Dilute the value of debt, sure. But not all inflation is created equally. Does pushing up the price of oil mean that wages will rise in response, leading to a cycle? Does it mean that businesses will be able to raise prices enough to compensate for their increased input costs?
We have 17.5% underemployment, below 70% capacity utilization, and immense global overcapacity far beyond those domestic figures. Just look at China -- it's breathtaking. The overcapacity is only increasing in this respite.
Pushing up the price of a raw commodity that is traded heavily on exchanges and has inelastic supply can be done, but does this really achieve our goal of making the incomes of companies and individuals rise faster so that they can repay debt more easily? I doubt it. I also doubt that those commodity prices can stay elevated because of the same inelasticity of supply as demand falls in response to higher prices. But you can definitely spike for a time; 2008 showed us as much.
I disagree. I think it's actually quite difficult to deliberately spark inflation -- especially when China is actively preventing you from doing so.
can't create inflation
Slumdog wrote:
Disagree. What matters most is flow. Proven in Japan and now in the U.S. (so far). Debt / currency is roughly analogous to voltage / current. What matters to an electronic circuit is current flow, you can vary the voltage quite a bit. It should be possible to "surgically" remove a great deal of debt without disrupting (much) the goods & service economy.
Gonna grow up to be... be a DEBASER:
YouTube - Pixies - Debaser.mpg
C
That's right, BH, it would only crash the currency and international relationships with trade imbalances. The elected government can reset the currency as did FDR with a command price of glod, then Nixon by dropping glod backing altogether.
I don't know why Slumdog says 25 cents/dollar is not a "massive writedown." China knows options are limited, and must one way or another take a distress sale haircut. "Surgery" is tedious, painful, imperfect, and expensive, but it beats death by debt spiral.
Let's bring back the CCC, we need more rock walls.
Let's bring back canals. Just imagine the labor force required. Multiple lanes, up, down, sideways; new tech and surface/sub veicles; fueling infrastructure, engineers, designers, planners, taxation specialists. Financiers, even.
Something wonderful is going to happen...
C
Counterpointer wrote:
Seriously, the largest wind farm in the US just got delayed 4 years due to financial constraints. Currently China has the world's largest wind farm in planning, financed directly by the banks (or directly by the government, since Hu is telling the banks to lend). Tell me again why StimPack2 is a bad idea?
We may not end up with a currency but the end of it, but will anyone else have one either?
This?
YouTube - Something Wonderful
Because everyone is thinking we're going to end up with the same deal we got before: nothing but fat bankers.
Mary Poppins on Compound Returns * Get Rich Slowly
Ooooops, as I suspected, Disney got there first. Oh well, the lyrics are there and the apposite tagline.
sdtfs wrote:
There is no way not to end up with anything but fat bankers when Goldman Sachs runs your government. Next question?
Yeerrssssss.
C
Shall I part my hair behind? Do I dare to eat a peach?
sdtfs wrote:
I'm just not clear when the banking industry has not controlled the government? Who do you plan to have run the government instead? The idiots that bought houses the past several years. Ummmm....no thanks, I think the bankers are smarter.
Which is worse - bankers or terrorists wrote:
Ah, I see. I'm not opposed to the bankers thriving,...I'd just like to see a few others do well, too. Even if it's just a new wind farm. Or system of canals. Or high speed train toy. Something we can point to proudly and say, "That's what we blew 500 billion on!"
It's an infinite doom loop: Taxpayers to suffer losses
more federal stimulus 
taxpayers to suffer losses 
more federal stimulus 
etc., etc., etc., 
sdtfs wrote:
Mentioned this a few days ago, but was talking to my dad who is Director of Research at a major technology company (Dow 30). It's pretty scary to her him say that he thinks innovation is on the wane and there are no new ideas out there. He thinks if there is any innovation to be had, it will have to come from defense contracting or universities rather than private sector research. This is problematic, since most universities are tied to either state funding or private sector grants. I think innovation is dead for a good amount of time.
Which is why I think growth will come from the increasing financialization of the economy, rather than spreading it around. From an ethical perspective, I'd rather put my money into terrorism rather than the growth of the banking sector. But, that's what it is right now. Besides, the yields on terrorism suck (looking at it from a purely perspective....snark).
Innovation? You want innovation?!
sdtfs wrote:
Sweet I can get a part-time job working evenings from overseas and arbitraging the higher (part-time) wages in the US. More overseas stimulus leakage.
ndk:
On the matter of state sales tax receipts/GDP disparity - my health and auto insurance expenses have risen substantially throughout this recession. I believe they are a part of the GDP calculation, but not subject to state taxes. While this may not account for all of the difference, doubtless it plays a part. We've often questioned some of the data used to calculate gross domestic product, particularly OER, but surely and even in an ideal situation, there will always be some difference between the two figures, GDP invariably showing more growth, or less contraction, than tax receipts.
ndk has it right -- this is all about the currency link -- we need China to back off so we can inflate a bit and get the debt beast to shrink and exports to grow a bit.
Whether, in the event that takes place, we do the smart thing and don't just imeeeediately HELOC our debt levels back to max overload again out of sheer bad habit is another issue. New habits are hard to learn. But that's a separate matter from the former -- and until the former occurs, we'll have no chance to select either of the latter, one way or another.
edit: I expect much of the discussion this week is about a face-saving way for China to do exactly that. The rest of East Asia (and the EU) would breathe a sigh of relief -- they can stop buying dollars for a while.
It's gummint cheese all the way down.
Czarina please.
burnside: I saw the same, homeowner insurance rose, car insurance rose (and yeah, I take all the credits possible) but outstripping both of those combined was health insurance, energy, food and ......drum roll.....property taxes. Taxation on gasoline also rose in this neck of the woods and other silent taxes did too for poor schmucks by pretty stunning percentages on cigarettes, liquor, sin taxes on everything possible etc.
This is why I say the 'depression' and deflation is sectored. Deflation in discretionary consumer items vs inflation in what people need to live save real estate (shelter).
The idiot bureaucrats still think they can assess taxes on the middle class to pay for all their bad bets and make the poor even poorer in those silent taxes. What isn't realized is the massive downward mobility of the middle class over the last 15 years, that the middle class is comprised now of some professionals who are educated and mad as hell. I think this omission will be their undoing as two demographics will end up organizing in something quite unique. It will be the young aspiring grads and the older generation whose most productive years are already behind them and are professionals. Put together energy with experience and some wisdom and it could produce quite the formula for a grass roots effort that is effective in the future. I look at this as our only chance to be honest and realize it is quite the long shot.
As bad as the news is regarding education, I've met some exceptionally bright people who have a depth of understanding and maturity for their age I wish I had, but I was too busy trying to survive at that age to think about anything else but and where all my energy was going.
There had better be an effort to create something besides day labor jobs, part-time or contract jobs which will end. People with time on their hands is a formula history books have shown to be a risk. Since history was ignored in the economic paradigm, I suspect those ivy-league schools forgot other lessons of history or minimized their importance.
Nanoo,
I found out more about yesterday's post concerning the oil market manipulation. All agree that something happened last year when prices went over $140/bbl. But then prices crashed to below $30/bbl. Also Congress investigated. Like the attempts at manipulation in the past, (Feruzzi and Hunt tried it in soybeans..) it too failed. What's more to the point, the post yesterday tried to tie increasing volume to the discussion. It didn't make sense to all the people I discussed it with. Nor to me either. We all agreed that the guy was only ranting and had a very weak argument.
that little thread at UBS is beginning to unravel a little more in that blanket of protection for the wealthy and sends them from Switzerland to Hong Kong:
http://www.bloomberg.com/apps/news?pid=20601127&sid=aoY9mGd1juOY
I hope once the FBI/IRS is done here (which will take many, many years and go to the Caribbean, Lichtenstein, So. Africa and around the world) they will find some fresh funding/personnel to go after large US corporations/banks where the lions share of tax evasion on profits is amassed overseas in units everywhere.
I think it is Citi that has a gigantic number of offices in the Caribbean but thats an old story and I lost it with my hd crash. The uber-wealthy international clients avoiding taxation will still find ways to hide/shelter their wealth, as always. I've been following this case for a long time now. The really large sums will be found in corporations/international broker/dealers, etc. Going after them would likely, if successfully prosecuted and back taxes paid, erase the national debt.
The problem with manipulating a futures market has always been that even though it's relatively easy to buy up most of the supply coming into the market, you end up amassing a huge inventory. At some point, after you run up prices, you have to sell your huge inventory. Once you begin to sell, traders will learn about it and sell in front of you(because they know how much more selling that you have to do). Whatever your offer, they will offer a lower price and the "race to the bottom" is on, and you lose all your profits and much more.
How can traders "sell in front of you" if you've "bought up most of the supply"?
If you have all the rice, and people want to eat, you can gouge monopoly prices, in the short run.
So, traderwalt, you're saying the former CFTC chair Greenberger is all wet regarding ICE, the Enron loophole and deregulation of energy trading via the CFMA? Brooksley Born was also all wet? The problem I see Walt is futures trade are paper, they get rid of that paper before taking delivery. They trade that paper on speculation and an ramp up the price, make huge profits and fees and never take delivery of the product.
In the case of Goldman, Merrill, etc. they do physically take delivery of some commodities and use rentals to store it. In the NE its for heating oil and they also are renting, to the tune of 7K/day, tankers offshore to hold oil. They bought low and they will sell high during a time when they can. In this case, its the small time distributors and consumers that LOSE. I really love that we are bailing them out and they are renting oil tankers and doing things like buying sugar operations WHOLE.
So, I respectfully disagree with you here. I've listened intently to subsequent testimony and how the large brokers squeeze out smaller ones in futures trades, those who are trying to utilize the market as intended. That market is totally whacked and not representative of the supply/demand market as intended. The liberalization of trading there on margins which were thin, have been increased recently. Like with the rest of the economy, this fails to address the core issues. This is the same as Glass-Steagall. Its created incentives which are counter-productive and have produced pain, rather than protection from wild swings in pricing. This was the original intent, a market that provided some stability in pricing for farmers. Since you formerly traded grains, please look at the wheat spot last year and tell me this represents fundamentals and how it does. Its a serious inquiry and I'm attempting to learn, not be flip. It was another perfect inverted "V" double digit swing.
Goldman, Merrill and other large broker/dealers play those market to great affect as we have seen. Goldman made billions and billions just in the first half of last year solely on energy future trades. One broker/dealer and just one commodity. Tell me how large percentage swings in mere days is reflective of a supply/demand market. Last year someone got creamed in oil, in mere hours there was a double-digit swing in pricing; the margin got called and the short squeeze was immense. It was a perfect inverse "V"-double digit swing in an HOUR. They HAD to sell or take delivery in a massive position in oil, someone didn't get a memo or something!!
Just like with other
markets, it may not be technically illegal (in part because their lobbyists are writing the legislation and Mr. Gramm enabled it) but it certainly isn't a supply/demand market based on fundamentals.
India Food Strike, Fatal Riots Hobble Push to Export Auto Parts - Bloomberg.com
I thought they were supposed to be so happy just to have jobs...
1 yogi, yes, you can gouge prices in the short run. People will eat less rice and more other things (the substitution of inferior goods). Eventually, though, another crop will hit the market and you still have a huge inventory from the last crop. You can buy this new crop, too but then your problems get even worse when the next corp comes onto the market.
No, Nanoo, I wasn't commenting on Born or Greenberger, (I agree with Born). I was talking about the other link you posted. One comment about the Enron loophole. Yes, I believe it allowed Enron and others to book artificial profits that did a lot of damage to investors . But in the end Enron went BK, and Merrill had to be rescued.
I mean really............I know Bush was a bumbling fool but this guy...talk about Mr. Hollywood. Smile for the camera in an extreme sense of the word.
http://static.businessinsider.com/~~/f?id=4ab7e6b5253ff00677797bb4
Iceland parliament just called People's Meeting, total of 1500 participants and those living outside Reykjavik will be given free flights. (would about 1.5 million in the USA). The agenda: What to do now. Now THAT is democracy, not that American clown circus.
If obama would resign the economy would recovery.
Thank you traderwalt, but as I understand it, the liberalization of energy trading in the futures market on ICE; this is the Enron loophole as trading on the ICE isn't regulated. This legislation (CFMA) was passed in 1999/2000, long after Enron and written and attached to other legislation by our pal, non-whiner Phil Gramm.
Comrade mike,
How would that happen?
CalculatedRisk wrote:
CR for President!
Who was it that said, "First kill all the lawyers."?
I propose to update this... First kill all the MBAs.
British Airways and Iberia to merge. Thousands to be laid off to achieve a more efficient structure.
Brilliant!, as the English like to say.
Another crop of people who probably won't be able to afford to fly in airplanes.
First kill all the MBAs!
Anonymous Bosch wrote:
Shakespeare
CR delivers exquisite snark, viking.
Nothing is going to save you, dear Americans. You escaped from the strict royalty pyramid of Europe, only to create a new one eventually. United you will stay until you will be europeanized, one size does not fit all. Especially 300 MILLION of people of very different origins. You will be divided and then, divided again
United no more...
Nanoo, in a sense, it doesn't matter what the rules are. If futures prices get too high or too far away from the cash market, traders will sell them short. Conversly, if they get too low, someone who needs the commodity will buy them. And if prices don't reflect reality, no one will trade on that exchange. This is a real generalization, but you get the idea. Short term, I worry about manipulation because it impacts me. A 1% move is big deal in my business.
The future tab is already too high with continued losses, paying the unemployed to look for nonexistent work, and state Medicaid.
traderwalt, have you been seeing a upside bias in futures prices, and the larger roll to subsequent contracts, due to long only fund positions? I can't help but think this has been a factor over the past couple years?
Obama has lost his way on Jobs
Jesse's Café Américain: Sachs: Obama Has Lost His Way On Jobs
Obama has shown he does not understand how sustained jobs and private business works together. He couldn't run a lemonade stand with out government funding. Everything his agenda is pushing drives business out of the country. The meeting is a sham just like another stimulus.
thank you traderwalt, it affects everyone. I suppose its hard to come to grips with the manipulation on such a massive scale; I know its taken me sometime to come to terms with much of what is going on. I do get confused as it is anything but simple. I draw your attention now to the 2008 Farm bill. The mandates in the previous farm bill for ethanol were exceeded but more strident mandates were enacted. The reason I find it compelling is this effectively attaches food production to energy production. By this means, organics can be manipulated in pricing the same as energy. I think we saw that last year. Wheat and rice were insane. Rice moved on speculation, produced real strife in developing nations and hoarding elsewhere, even here in the US. I remember Costco limited rice purchases as there was a physical run on it on fear of high prices.
Since last year pricing has eased but in the grocery store, I really don't see prices for anything which is produced with grains coming down by the same percentages. In fact, last week, prices for some products were approaching the same levels as '08.
Growling tummies on speculation in markets rather than tangible supplies is very bothersome to this nobody.
You worry about 1%, but other people worry about eating, in the short term.
Your example is off. If you corner all the grain supply, by forming a giant oligarchy, you're not worried about next year's crop. You'll have all the money by then. You're just worried that the slaves will starve before they can harvest it.
It may not ever happen to such an extreme, but the leverage is still vicious.
comrade mike wrote:
Is this snark? Or are you just dumb?
Anak, I mostly spread the back stuff, so I really don't know.
'If you corner all the grain supply, by forming a giant oligarchy, you're not worried about next year's crop."
I don't think so. If you keep prices high enough and the people can't afford to eat properly, they can't work. Between a famished population and inflating food prices, you may have all the money, but your currency wouldn't have any value.
What part is dumb? Obama or the economy? I vote the latter.
And that is not snark.
Trade balance at 8:30: Briefing - consensus -$31.8B, prior -$30.7B
Briefing.com: Bond Market Update
Walt, thanks anyway . . . . keep on keeping 'em honest.
Where the fuck are they going to go, India?
India Food Strike, Fatal Riots Hobble Push to Export Auto Parts - Bloomberg.com
You think China, Russia, and Europe don't claw back bonuses? Where is this magic industrialized land with lower taxes and less regulation?
You are so incredibly full of shit.
Mish Unemployment Projections Through 2020 - It Looks Grim
In case you were getting a little too cheery reading about the next "fluffing"
Bingo.
U.S. trade gap widens sharply in Sept. - MarketWatch
,rads y apparatchicas,
We've proven we can make money appear out of nowhere vis a vis a stimulus package, do-it-yourself financial prestidigitation.
How's that going to work with dwindling food and water supplies?
The next stimulas will include a coupon for 5 free tacos from Taco Bell.
"Between a famished population and inflating food prices, you may have all the money, but your currency wouldn't have any value. "
Yeah, pretty much...all I can say WELCOME TO THE REAL WORLD! IN WHICH YOU CANNOT just print your money. Real Hurt, Real Pain, Real Everything.
Yogi,
They are going if you look. Local Monroe shock plant closed. Mexico got most of the jobs. The next Chevy Cop cars may be Holden Australia. Local Vice Grip plant went to China. Lots of investment by the Auto makers in the world market and very little in NA. On and on. Just because you refuse to see it doesn't mean it is not happening. Been going on for decades.
Skyin' 'em on that trade news.
1 currency now -yogi wrote:
I am sure the Brits, French and Germans had the same attitude as their manufacturing base moved off-shore to the U.S decades ago. We have become Europe.
No shit. But you blame Obama.
http://www.localfutures.org/index.php?option=com_content&task=view&id=38&Itemid=30
......
The problem with this strategy is that there seems to be this assumption that all the economy needs is a swift kick start to get people spending again, and a lack of realization that the present situation is the result of 11 or more years of bad decisions, and even more than that of bad policy. Backing up a little and getting a running start just won't cut it; not for anything approaching a sustained recovery.
America still has price supports for many ag commodities. Fortunately, at least for now, the problem in America is too much food production. Distributing that food is, in some areas, another matter and so is the long term outlook for production.
Cinco-X wrote:
With Obama, Pelosi and Andy Stern calling the shots, small business will not hire. They will continue to cut back. Why earn more when the feds strip you of the fruits of your efforts.
Waking up to the news of another stimulus?
I can't wait for these motherfrackers to just go bankrupt.....and stop causing harm.
,rad dum luk,
I thought experts said exports were going to be the silver lining of the dollar weakening, but as usual they turned out to be ex-experts.
traderwalt wrote:
See how well that worked for the Hunts back in the '70s. You can't sustain high prices with low demand unless you buy up the all the supply with your own money, and nobody has that much. As such, they'd need to finance it, and the financiers would expect a return on that investment. That's where it all falls apart.
Terry wrote:
That's one fundamental problem. Another is the structural issue of all of the bad debt out there, and the fact that no one is willing to acknowledge its draining effect on the economy. We can fix the small business issue in the near term by sending Pelosi and Reid packing, but the issue with the financial industry is more problematic, since they effectively own the decision makers in Washington, DC.
The Brits, French and Germans bombed their manufacturing base into smithereens, with our help. They all have national health care if you haven't noticed. What gives you the foggiest notion that Mexico won't nationalize the factories one day, just like Venezuela, Cuba, Nicaragua... Or just tax them into foreclosure as soon as they are self-sufficient.
I wasn't quite an adult when the brothers Hunt showed me what financial bubbles are all about...
They and their Saudi sycophants were the only buyers of the grey mare, and delivery had to be in 1,000 ounce .999 fine Comex deliverable bars, and the refineries were so backed up in turning not pure silver into Comex bars, that anything not pure was discounted quite a bit back of the spot price, in the last few months of the 1970's...
When the end came, nobody wanted silver @ any price, it seemed.
For the last time, move to China or India where the jobs are or quit whining.
dum luk wrote:
Not a lot of details in the article. Oil price recovery probably played a part in it, but I wonder if big business is starting to get the sense that the government is going to try and put the burden of more spending on them, and are beginning to restructure their businesses in a way where the "profits" are made outside the US of A and beyond the reach of the USG.
Many of the small business owners I know used to work at larger firms, had an idea, got financing, etc. They might make more now, but they don't make more per hour. As a colleague emailed me "My marginal tax rate is 53%. I will take the weekend off, thank you."
Why earn more when you got a hundred million dollar bonus last year?
This is why I say the 'depression' and deflation is sectored. Deflation in discretionary consumer items vs inflation in what people need to live save real estate (shelter).
Nanoo Nanoo is Rob Dawg?
Banking, housing, and autos are the only industries in trouble. The same ones that received "stimuls." I don't think stimulus is the problem.