Ya think ??

Since Christmas Day?

Is he still arguing that in order to fix the economy, we need moar stimulus?

lawyerliz wrote:
Many mammalian males have harems...
Many species have booms and die off busts.
Right.. I was thinking more in terms of an ecosystem of predator-prey. There is a comparison possible, of course, but I don't really want to go there

He probably would agree that "expansion is possible".

Of course, expansion/contraction of GDP in $ is a useless statistic.

The prey has a few good years, multiplies too much;
the predators do too, and then they all starve.

Alas, the people- seldom starve.

Was watching the football, and they showed the asshat owner of the Redskins, Daniel Snyder sitting in his box, with Alan Greenspan stuffing his face with food in the background. I need to go wash my eyes with comet.

The largesse has NOT trickled down in any way
I can see. So I'd like to know exactly what they
proposed spending money on.

My small business clients are all being crushed, except
the one who got some old cars to re-do. They
are the relatively strong. The weak went quite a while
ago. More crushing would be dreadful, will be dreadful.

I would love to disagree, but can't.

lawyerliz wrote:

More crushing would be dreadful, will be dreadful

LL, some pockets in the US based their economy more on RRE growth than others. LV, for example. Could it be that your part of FL was in the same boat? If so, then it probably needs to go back a ways, because what was happening beforehand was an unsupportable and inefficient mirage of prosperity.

mp wrote:

The was only one Pancho Barnes.

Here is a bio on the Pancho Barnes official web site:
Pancho Barnes Official Site

and a longer pdf version:
http://www.panchobarnes.com/Who_is_Pancho_Barnes.pdf

Now she had the right stuff!

patientrenter wrote:

pockets in the US based their economy more on RRE growth than others.

This is true, but it includes large parts of large states. As well as entire states that are in real trouble.

It is no longer just about real estate. Maybe it never was, maybe it was about turning one dollar into hundereds of dollars over and over again. Looking for higher and higher returns forever.

Krugman really went out on a limb there, eh?

MS. MITCHELL: What I noticed when I was out covering Sarah Palin when she was out on the book tour, at 4 and 5 and 6 in the morning on freezing days, when people had been out for hours, camped out with their kids because they wanted to see her, they are so hungry for a symbol for anyone who can give them answers.

I vomited comet, when Mrs Alan Greenspan uttered this on MTP...

Sounds Like Paul needs a cup or two of Tom's soothing Potion,fall version.Take one quart of Everclear and pour a cup of it in a coffee mug,drink it down.Take 2/3 cup of Valerian Root,chopped fine,1/6 cup of good bud,chopped coarsely and 1/6 cup of Amanita Muscaria (It grows all over this area) chooped fine.Add the medicinals to the Everclear and cap it tightly.Shake the bottle vigorously for 5 minutes twice a day for a week then strain it through cheesecloth.1 cup per 100 lbs of body weight,and in 30 minutes I GUARANTEE you will be able to read anything put out by our government and it will make sense!

josap wrote:

This is true, but it includes large parts of large states. As well as entire states that are in real trouble.
It is no longer just about real estate. Maybe it never was

The chain can be summarized:

• Growing trade deficits, especially recently with China
• Those trade deficits mean we get used to having someone else make our goods, and then we buy them on credit because they don't want what we make
• All the extra foreign savings pouring into the US via trade deficits translates into extra demand for US assets, driving down interest rates and continually driving up the price of all assets, making us feel that we don't need to save because asset price inflation can work instead
• Rising asset prices, and low interest rates, combine to increase leverage throughout the US system, at the personal level, in companies, and in hedge funds, investment banks... everywhere, thereby further increasing our exposure to asset price risk

So all that RRE is connected to other things, like leverage, stock prices, trade deficits, the hollowing out of US industry, etc. But one thing we need to do is quit investing like drunken sailors in more and bigger houses with more granite inside. That change will feel bad, but we need to make the change, and the sooner the better.

So when I was in UC Berkeley not that long ago, I was taught by a well known economist that one could not have full employment and low inflation. The theory being that competition for labor would bid up wage rates, resulting in rising prices.

Of course the economic realties during the Clinton years are at odds with this theory, meaning that my well known professor was in error. Common sense could have told you that.

So if esteemed PhD economists don't know what the heck they are talking about with even very basic concepts. then why give these tea leave readers any air time at all?

Give me your credit card number, and I will send you a case of Everclear. Honest

Everclear is pure grain alcohol.pour a cup out of the bottle and leave the cap off for a couple of days and it will be full again if you live in a humid area.

josap wrote:

Az used to have high tec, call centers, cotton fields.

Phoenix area still have very large primary and backup data centers for many, many big corporations, big banks among them. No seismic activity area.

On another note interesting 60mins show on Afghanistaan and the CIA. Nothing like the nation building crap we are doing now!

Blurtman wrote:

So if esteemed PhD economists don't know what the heck they are talking about with even very basic concepts. then why give these tea leave readers any air time at all?

I think it is funny when economists talk about the odds of something happening. They are like financiers without money.

The real question is what the heck another contraction will look like.

For those that poopoo the severity of the current downturn, it is getting to depression grade in Wilmington, Ohio:
Wilmington, Ohio's Long Recession - 60 Minutes - CBS News

teh google is u friend

Bond Girl wrote:

The real question is what the heck another contraction will look like.

A depression?

lawyerliz wrote:

Fla used to have small sewing shops and small manufacturing,
long gone, much of it.

More of it there than you think - I have a buddy in Naples... sells castings & machine work & weldments. Says there is more than he ever realized. Granted for a state w/ 15MM not that much but there is more there than just Disney.

Does anyone here feel that the PTB (like Summers, Geithner, Bernanke, Frank, Dodd) know what they are doing, and agree with us on what the future needds to look like, and merely appear to support policies that keep bubble activities in place because they want a gentle glide path to that new future?

If I heard Summers lay out credible steps that took us from where we are to a less leveraged, more supportable, balanced trade future, then I would suffer through the years in between, with increasing confidence in the future as I could see them take each step in turn. But I haven't seen that. Has anyone here? Why wouldn't they do it?

Bond Girl (profile) wrote (in reply to...) on Sun, 12/27/2009

I think it is funny when economists talk about the odds of something happening. They are like financiers without money.

The real question is what the heck another contraction will look like.

The consumer does not come back. Unemployment at 12% and rising, Mortgage defaults increase. CRE continues to slide. Maybe?

Tom Stone wrote:

Dawg,you are mellow tonight.

Nah. PK may be coming around. Better to give him a face saving out rather than drive him forever into the tentacles of BiggerGov.

Yes. and then Krugman can say that as he had advised, a bigger stimulus would have led to recovery.

Yep, thanks Ken; it was Brighthouse screwing up
Central Florida.

Dawg,Krugman isn't even as cute as Palin (when she has makeup on),why give him an out when he is the equivalent of a 'moderate" wahabist?

josap wrote:

They may have a plan, but they aren't sure if it will work - or they think we won't like it so won't tell us what it is.
There is no way to know for sure.

I agree. I know we like to accuse them of being stupid, but someone like Larry Summers is quite comfortable spinning economic ideas and theories, and his ego is big enough to give him confidence in his ability to diagnose, forecast, and prescribe a cure. So my best guess is that they have a plan, but they think we won't like it. And my own guess on what they don't want to talk about is inflation.

Never, not for a single moment has it ever appeared these guys know what they are doing. Occam's Razor suggests they really don't.

Yancey Ward wrote:

Occam's Razor suggests they really don't.

Well, you may be right, Yancey. I don't know for sure either. (I gave my own best guesses above.)

patientrenter wrote:

I don't know for sure either.

It's either ignorance, stupidity or outright evil. Not something we like, regardless.

patientrenter wrote:

then that means I could do a better job managing the US economy

You could.

patientrenter wrote:

Yancey Ward wrote:

Occam's Razor suggests they really don't.

Well, you may be right, Yancey. I don't know for sure either. (I gave my own best guesses above.)

It is hard to blame them for not knowing - how would they? Have they ever walked factory floors? Had family pink slipped & on their couch? Had a home foreclosed on? Some might hear about it 2-3 hand from their political ops on the street but its not real.

Then they do hear from lobbyists & supporters who are basically 'yes' men... 100% you are the best boss & right on...

How could they ever get to the 'truth' even if it was accessible & easily knowable [which in econ - it isn't]?

patientrenter wrote:

I hope you and Yancey are wrong, dryfly, for all the best reasons. Honestly, if they are as clueless about our current situation as the above bunch were, then that means I could do a better job managing the US economy than they could, and that is really scary.

You would probably do a better job. You would at least start with better data - at least until you too became so isolated that you couldn't tell fact from fiction.

dryfly wrote:

they do hear from lobbyists & supporters who are basically 'yes' men... 100% you are the best boss & right on...
How could they ever get to the 'truth' even if it was accessible & easily knowable [which in econ - it isn't]?

You are beginning to make me regret that CR did not take advantage of the small (and highly limited and choreographed etc) opportunity to make some basic points to the top people. He probably chose well. But if living in a bubble is the problem, then all we can do is use every opportunity to pierce that bubble.

Yancey Ward wrote:

Occam's Razor suggests they really don't.

My razor cleaves this way, they do but essentially it is a con job. They have to convince everyone that we can consume more than we produce and there will be no consequences in the future. It is a pretty difficult dance. Dollars are a claim on goods , bonds are a claim on dollars, many derivatives are essentially claims on bonds. There is infinitely more claims than goods and their job is to prevent everyone from panicking and trying to cash in their claims all at once.

The question is who profits from the bubbles and the busts and has institutional and organizational independence from the public?

patientrenter wrote:

You are beginning to make me regret that CR did not take advantage of the small (and highly limited and choreographed etc) opportunity to make some basic points to the top people.

Yup. I said that then - not to hear what the DC wonks have to say but to tell them what is going on. Really going on. They might listen or not - but they need to know whether they realize it or not.

Patientrenter,

The very first thing one must realize in order to do a better job of "managing" the economy is to have the intelligence and humility to accept that one can't. These people are doing the equivalent of building a house with no other tools or materials than a hammer.

Some of the stuff (on the net) I've read about the Fed is they are loading up with toxic and near-worthless junk and are in 'trouble' if they can reach a state of 'insolvency'. Not really possible?

tg wrote:

My razor cleaves this way, they do but essentially it is a con job. They have to convince everyone that we can consume more than we produce and there will be no consequences in the future. It is a pretty difficult dance. Dollars are a claim on goods , bonds are a claim on dollars, many derivatives are essentially claims on bonds. There is infinitely more claims than goods and their job is to prevent everyone from panicking and trying to cash in their claims all at once.

Well said. They aren't going to have a chance to make it [ever] unless the first part is fixed [make more consume less] - if that starts happening then the rest has a chance of clearing IF done slowly enough. Not guaranteed but a chance at least. Without the more production less consumption part the thing has no chance of ever clearing. No way. Never.

Given the circumstances and public ( & gov) panic at the time they took over: what would each of us have done differently when the credit markets siezed? How do you keep the system from crashing, oil from being so costly industry stops, runs on the local food market?

I'm not sure there is a really right answer. You do the best you can with what you have to work with at the moment. Then try to figure it out from there. The local, state, county, national, international economic structure is a large and very intricate puzzle. And the puzzle pieces keep changing shape and moving around the table.

barfly wrote:

I still think the impetus behind all the gov't support for housing prices is to maintain neighborhood stability, as worthy public policy.

Bug not feature...

Well...is the softer, gentler path to a more balanced economy have to come with the unemployment & credit destruction of many consumers (70% of the economy?) and the moral hazard bailout and enrichment of the TBTF bubble makers? Seems like a hard well-traveled road to the New (Govt.) Economy.

MrM wrote:

I agree with everything, but have my doubts whether this cure will always have sustainable effect.

But I don't think, MrM, that Mr Summers has laid out his cure for us all to see. Unless he thinks that an indefinite continuation of trade deficits, bubble asset prices etc is the cure. It's hard to believe that he sees that as anything other than a temporary step on the way to a different ultimate outcome. So I can't see "this cure", if he has one. I'd feel much better if he laid it out. As josap said, maybe he knows we won't much like it. But for those of us who believe a return to 2006 is unsustainable, and who now can only see policies that seem designed to take us back to 2006, the apparent absence of a plan beyond the present is more unsettling than any specific thing we might not like about Mr Summers' cure.

MrM wrote:

You need not only more production, but also more good-paying jobs, which is not an easy combination for American high-tech manufacturing.

It doesn't just have to be mfg - that is important to shore up CAD... the bulk of jobs created ultimately still could come in 'services'. But if CAD isn't shored up the resultant service jobs aren't just debt driven - they are driven by debt owed outside the US. A very nettlesome combination.

patientrenter wrote:

masterful example of Occam's razor

Thanks, must have the everclear they were passing around earlier hic

Go back and see what was said in academia and the public forum about the 'bubble makers' and bailout schemes of the 20's and 30's. Maybe we'll hear the same chorus again.

barfly wrote:

I still think the impetus behind all the gov't support for housing prices is to maintain neighborhood stability, as worthy public policy.

barfly, I hope you don't mind if I take this with a grain of salt. Why? For example, the FHA limits were expanded up to $729K in some very expensive areas. I know some of those areas very well. Neighborhood stability isn't the same issue in Irvine, California, as it is in some of the places you may be thinking of. I suspect there was more going on.

"Bug not feature... " re: neighborhood stability

in the era of oursourcing and high labor motility, I'd have to agree, these days. But, still...

josap wrote:

If we are now learning to comsume less, which we are, the next step is to get production up. By devaluing the dollar?

What are the steps that get to that goal, over a reasonable period of time?

Forex is working on that night and day as we write these entries. The PBoC is fighting it but all that results in is them losing more and more on the ADDITIONAL MBS, ABS and even treasuries they buy. Nothing else really has to happen except the forex [and also comex] doing its thing.

I mean right now - US mfg is much more competitive than it was just 2-3 years ago - no other reason than the dollar is now at 6.8 yuan and it was at 8.3 yuan. Same with yen [was at 120 yen now at 90 yen].

You don't have to go to zero against these currencies - just push the balance point and we import less and make more. The yuan needs to strengthen more - yen at 90 might be okay - we could live with the euro at 1.20 [weaker]. The real issue is the yuan and everyone knows it - even the Chinese.

josap,
To understand this mess, it necessary to look at the international financial and economic ties, inter-relationships, central banking, international banking and all the limkages, aggregate debt, international TBTF risk, debt swaps, labor race to the periphery, exploitation of the semi-periphery and periphery, etc. A globalization perspective. Complex webs of financialization and securitization. Non-transparency. Good luck finding the light at the end of the tunnel.

MrM wrote:

2) Summers has a plan but does not want to publicize it because people won't like it and will freak out

After all that has happened so far, what would freak us out?
We can survive inflation again. Did it once, can do it again.
Socialism in full, that would freak out everyone.
Argentina? That would freak everyone out and could only be done as a suprise.

There was an article in the weeks Barrons by Kevin Duffy and Bill Laggner of Bearing Asset Managment, who recommended dueing the blowup to isolate the money centers, put them into receivership, take 100 Bil. open 1000 community Banks, and , use fractional reserve lending to create a trillion dollars to lend to small business. Not a bad idea as a fresh thinking, but the squid would have killled that fast. We don't have any leadership in Washington, but, you all know that.

Leftys Liquors Lubricants and Tarp and Bank wrote:

Not a bad idea as a fresh thinking

I'd love to see it happen, but again credit isn't the primary problem.

Leftys Liquors Lubricants and Tarp and Bank wrote:

create a trillion dollars to lend to small business

While all politicians pay lip service to the importance of small businesses, they do not really cares about them (CIT is a prime example). Small business are not organized and do not have strong lobby representing their interests, hence their interests are not on the top of the agenda of the Congress or the Administration. UAW or Big Pharma or Big Finance are all a very different matter

libertarian wrote:

And clearly, asset values are still the tail wagging the dog.

So assets must drop or the dog must grow, or some of both.

These things need to happen slowly, easier to adapt that way.

"And I hope and pray they fix resolutely on the underlying problems, like the trade deficit."

how do you fix such a trade deficit with such a wage imbalance, and free-trade policies?

TJ and The Bear wrote:

KY for the rest?

You get KY? Lucky.

We we have lubricants, aisle 2, bottom shelf, bend over if you have to.

Leftys Liquors Lubricants and Tarp and Bank wrote:

bend over if you have to.

It's not like you have a choice.

From today's News from 1930 :

Some are predicting a tax hike will be needed in a year due to a projected deficit next June 30, and doubtful prospects for next year. However, “the truth is that no one in the world can arrive at any accurate forecast of government fiscal probabilities much beyond the next six months. Even in that limited period the forecast may go entirely awry.”

They knew so well, and still could do nothing to stop the crash.

1 currency now -yogi wrote:

One currency now.

Let's see if Greece can handle its "one currency"

barfly wrote:

how do you fix such a trade deficit with such a wage imbalance, and free-trade policies?

As dryfly pointed out, the dollar has already depreciated a lot overall, but it needs to depreciate more against the yuan. Failing that, trade barriers against Chinese goods need to start going up. No one wants a trade war, because we have a lot to lose still, and the Chinese certainly do. But if they don't accept the best solution - currency changes - then they should be aware that trade barriers will follow.

We can help ourselves by a focused, WTO-legal, govt-led, well-funded, long-term, export growth / import substitution campaign, much like Japan's was.

Nothing is perfect, except (nearly) the currency change, but we need the alternatives to be lined up and ready to go if we are to have leverage at currency negotiations.

I will be traveling over the next 10 days with limited connection to the 'tubes.
See you all in January!

Happy New Year!

How's Greece going to make out bringing back the drachma?

You don't have to be part of a global economy. You can be Myanmar, or North Korea, or Somalia.

is there something about Larry Summers I missed? I've been off the grid totally for about 10 days.
in the background the house music is Vietnamese... not a big fan of quarter tone based music...

Duke of Con Dao wrote:

is there something about Larry Summers I missed?

Nope - same old Larry.

Same clowntard.

Did you win something at least, Duke?

dryfly wrote:

if they don't buy UST & agency then rates here sky [the dreaded auction failure] and consumer REALLY goes TU

We can always introduce legally required minimum shopping quota or force bank to charge negative interest rates

1 currency now -yogi wrote:

You can be Myanmar, or North Korea, or Somalia.
...
wow! beating up on one of my favorite countries Myanmar? no fan of the government by any means but the people
are the loviest of people in SE Asia. IMhumO. when it comes to Therevada Buddhists they are the real deal. might try
to visit before heading back to NYC.

Duke of Con Dao wrote:

brother's 'new' casino, what a dump

sorry, hope you got comped, glad your back posting

And I must check out also. Thanks all for the enlightening discussion.

Duke of Con Dao wrote:

is there something about Larry Summers I missed? I've been off the grid totally for about 10 days.

President Pelosi has said Larry Summers will continue through the transition and be central to her administration unencumbered by any of the others' indictment as she has issued and Executive pardon.

A lot can happen in 10 days Duke.

Everyone makes mistakes but try getting elected to something instead of appointed if you lost a billion dollars by hedging or speculation. Just saying since pr made the case that 'leadership' and the 'right vision' may be in this admin appointment. Hopefully the advisors will read the financial/currency crises research that warns us by the outcomes of certain policies being followed.

1 currency now -yogi wrote:

Did you win something at least, Duke?
...
I play blackjack and my general strategy is to at least break even. I had an excellent room, all the food and drink I wanted for those days and basically was down about a hundred when I checked out. The losses came during the last 14 hours, and then I knew I was spent. I was the only causcasion there the whole time. All the other players were Vietnamese. Very rude and very agressive. Prone to blame you for their losses when you change the rotation by sitting down at the table.

OT, looks as though there are some brave Iran citizens out demonstrating, I hope the US/CIA hasn't been playing with their minds by telling them what they told the Iraqi Kurds after Gulf Invasion I. Hope it's an indigenous, self-generated dissension and that the gov't forces don't wholly destroy them BBC News - Iranian protests spark fresh clashes in Tehran

In his book, "Destiny Disrupted, a View of History through Islamic Eyes, Tamim Ansary (raised in Afghanistan, now lives in SF), discusses/illustrates how complex Islam & Islamic history is. Reading his book has made it even more difficult for me to try to figure out what's going on in the Islamic world and what the demonstrations in Iran might presage.

Back to figuring the odds on the likelihood of another economic contraction . . ..

TJ and The Bear wrote:

Had it not been for government intervention, we'd have quite a few less bankers, automakers, and no government mortgage finance agencies.

But... the reality is that we DO have those things.

Pretending they don't exist is a recipe for disaster.

Oh, right, that's what's happening.

Broward,

So, what city's next on your hit parade?

Duke of Con Dao wrote:

I've been off the grid totally for about 10 days.

Iran got blown up,

an alien space gateway appeared in Norway

and somebody unknown bought $600 billion of US debt.

'Causes of the Crisis'
http://www.chapman.edu/images/userImages/mattmill/Page_12352/GjerstadSmith_CR_2009.pdf
-'Who (or what) Is to Blame?'
-'The Crisis in Perspective'
-'Crisis Banking 101'
-'The Failures of Economics'

Sure, just this once the free market failed, and we need "strong leaders" to set the course right.

Sounds like the Bird and Fortune routine: "Except that just this once (we bankers thought real estate would only go up...)".

Yancey Ward wrote:

The very first thing one must realize in order to do a better job of "managing" the economy is to have the intelligence and humility to accept that one can't.

Nominated for best point on this thread.

We have already seen where a managed economy gets us.

Comrade Misean is Dope wrote:

ROFL! You had me going until that last one!

ROFL

will read it since Stiglitz's name on cover...

tg wrote:

sorry, hope you got comped, glad your back posting
... comped? not a chance. the staff was clueless and the restaurant
looked like those found in HS caferterias (manager did say that will change) the gambling space looked like
a Moose Lodge with paneling. in Bavet there are 10 casinoes and his Casino Royalle plays to the low end.
I played at the New World. He's write in his article. The operators run the show. He must be discounting the
VIP money heavily. (classic Viet trick is trying to exchange with you some of their VIP chips for your cash chips.)