The previous business cycle was "bad by any measure".

Was?

Is CR a closet doomer?

What year was it that Clinton gave China MFN status?

mp wrote:

Is CR a closet doomer?

No. I have the highest respect for Bill's data and his treatment of the data. And his chart porn is second to none. This is just more calling them as he sees them.

From previous thread:

" I felt that the park service was just another bloated govt agency, that they could have done a lot more with the funding they had, but mostly the managers were empire building - they had state rangers who had arrest authority cleaning bathrooms and hauling trash... I thought that work should have been outsourced and the savings could have paid for park improvements - lot of the roads were falling apart, sewers needed rebuilt etc...."

I'm not an expert on park rangers, but aren't they on salary? If so it doesn't necessarily save money to outsource the common labor. If you are already paying for labor on a salary, you might as well use that labor for the common work too. Of course your rangers won't be arresting anyone if they are cleaning toilets.

Rangers cleaning toilets could in fact show the park service was trying to save money...at the expense of whatever it is park rangers normally do.

re: the Posner article
.
I just finished it, and I'm kinda "Eh" about it. I know that Posner is more decorated and published than I'll be over the next 2-3 lifetimes (if not more). However his response to the "people's trust" of the government and the need for additional deficit spending is just old, tired, and out of touch.
.
To quote the Dawg: It's a spending problem, not a revenue problem.

Previous business cycle. Oh, you mean the one before the trillion dollar gov't pump. I think this one will be called "Irresponsible by any measure."

Elvis wrote:

Previous business cycle. Oh, you mean the one before the trillion dollar gov't pump

A business cycle does not necessarily mean a credit cycle. The converse is also true.

Ben Bernanke should be the Time "Man of the Year" just like GWB should be the Time "Best President Ever." Ben Bernanke is the man who put thirsty people who can't swim in the middle of a lake to quench their thirst. History will show that he would have been better suited to polishing shoes at the beach.

TJ and The Bear wrote:

The Minsky Moment is upon us.

The Minsky moment was in late 2008. It was followed by the Paulson/Geithner/Bernanke cartoon innovation of preventing Wiley Coyote from falling by printing a large enough pile of money to support him in place as he ran off the cliff.

They are currently concerned that someone has brought out the portable holes. Portable hole - Wikipedia, the free encyclopedia

I got an A in history, so I know about history.

Doc Holiday wrote:

concerns that China may order banks to halt loans to speculators

And again may order women to bind their feet.

TJ and The Bear wrote:

Soon they'll be zero tipping over to negative and the cycle will be complete.

Now that is some primo !

"What year was it that Clinton gave China MFN status?"

The answer is "he renewed it, like everybody else since 1980. Here's Wikipedia's little article on it:

"Countries that wish to have PNTR must fulfill two basic requirements:[citation needed] (1) comply with the Jackson-Vanik provisions of the Trade Act of 1974 that states that the President of the United States determines that a country neither denies or impedes the right or opportunity of its citizens to emigrate; and (2) reach a bilateral commercial agreement with the United States. Jackson-Vanik allows for the President to issue a yearly waiver to allow the granting of PNTR.
For many years, People's Republic of China was the most important country in this group which required an annual waiver to maintain free trade status. The waiver for the PRC had been in effect since 1980. Every year between 1989 and 1999, legislation was introduced in Congress to disapprove the President's waiver. The legislation had sought to tie free trade with China to meeting certain human rights conditions that go beyond freedom of emigration. All such attempted legislation failed to pass. The requirement of an annual waiver was inconsistent with the rules of the World Trade Organization, and for the PRC to join the WTO, Congressional action was needed to grant PNTR to the PRC. This was accomplished in late-1999, allowing the PRC to join WTO in the following year."

PNTR means Permanent Normal Trade Relations and is the replacement name for Most Favored Nation.

TJ and The Bear wrote:

Soon they'll be zero tipping over to negative and the cycle will be complete.

I assert that a recession can have a sudden stop, where people suddenly decide to start buying stuff, and many more people go to work. Potential causes include: war, economic distress elsewhere, discovery of free energy, discovery of gold, massive migration of rich people, sudden end to an expensive and stupid practice.

As Jinx the Cat woud say "I hate Minsky moments to pieces."

dryfly wrote:

the army was shocked to learn just how many Americans were unfit for the military.

You mean that didn't happen in WWI too?

Xian — a city about 600 miles southwest of Beijing known for the discovery nearby of 2,200-year-old terra cotta warriors — has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month.

When Xei Lina, a 26-year-old Applied Materials engineer here, was asked recently whether China would play a big role in clean energy in the future, she was surprised by the question.

“Most of the graduate students in China are chasing this area,” she said. “Of course, China will lead everything.”

China Drawing High-Tech Research From U.S. - NY Times

China Drawing High-Tech Research From U.S. - NY Times

"
China Drawing High-Tech Research From U.S.
By KEITH BRADSHER

XIAN, China — For years, many of China’s best and brightest left for the United States, where high-tech industry was more cutting-edge. But Mark R. Pinto is moving in the opposite direction.

*Mr. Pinto is the first chief technology officer of a major American tech company to move to China. The company, Applied Materials, is one of Silicon Valley’s most prominent firms. It supplied equipment used to perfect the first computer chips. Today, it is the world’s biggest supplier of the equipment used to make semiconductors, solar panels and flat-panel displays.

In addition to moving Mr. Pinto and his family to Beijing in January, Applied Materials, whose headquarters are in Santa Clara, Calif., has just built its newest and largest research labs here. Last week, it even held its annual shareholders’ meeting in Xian.*

It is hardly alone. Companies — and their engineers — are being drawn here more and more as China develops a high-tech economy that increasingly competes directly with the United States.
"

This is going to help the UE rate in Santa Clara county, how exactly? Mr. Pinto and the rest of them are chasing cheap labor and govt freebies and at some point the US tax payers will bear the consequences.

Notes from the field, and reference material for future historians:

Amazon.com: Amusing Ourselves to Death: Public Discourse in the Age of Show Business (9780143036531): Neil Postman, Andrew Postman: Books

Amazon.com: The Unreality Industry: The Deliberate Manufacturing of Falsehood and What It Is Doing to Our Lives (9780195083989): Ian I. Mitroff, Warren Bennis: Books

Back to work now.

The part of the article I find really depressing is this part:

NatCore Technology of Red Bank, N.J., recently discovered a way to make solar panels much thinner, reducing the energy and toxic materials required to manufacture them. American companies did not even come look at the technology, so NatCore reached a deal with a consortium of Chinese companies to finish developing its invention and mass-produce it in Changsha, China.

“These other countries — China, Taiwan, Brazil — were all over us,” said Chuck Provini, the company’s chief executive.

So our domestic companies are now so short-sighted they don't even look at new technology? Or, are they just all out of $$$?

March 17, 2010

To: MEMBERS OF THE SENATE AND HOUSE BANKING COMMITTEES AND TO ALL SENATORS AND REPRESENTATIVES.

URGENT: TAKE THE FEDERAL RESERVE SYSTEM OUT OF FEDERAL BANK SUPERVISION AND DO NOT MERGE THE OTS INTO THE OCC OR CEASE EXISTENCE OF THE THRIFT CHARTER OR THE TRIFT BANK HOLDING COMPANY FORM OF OWNERSHIP

I first emailed this plea to various members of the House and Senate Banking Committees in April 2008. I emailed the same plea on or about March 14, 2010, and followed up with a phone call to each committee member’s office expressing the same plea on March 15, 2010. AND WHAT DID I SEE RELEASED BY SENATOR DODD? A BILL THAT GIVES THE FEDERAL RESERVE SYSTEM MORE POWER. ARE YOU SENATORS NUTS OR DO YOU JUST NOT GET IT?

I worked as a bank examiner. After serving in numerous capacities, I can credibly tell you that the Federal Reserve System (Fed), its 12 Reserve Banks and the Board of Governors, should NOT be involved in bank regulation and, at the same time, engaged in setting monetary policy. This inherent conflict of interest is the reason we are in the banking crises that we are in today. MONETARY POLICY AND BANK SUPERVISION CANNOT BE DONE TOGETHER BY THE SAME AGENCY. LET ME REPEAT. IT’S A BLATANT CONFLICT OF INTEREST!

The previous Fed chairman continually lowered interest rates, promoted the housing boom by encouraging the use of exotic mortgage products, and refused to write regulations to address issues related to the inherent risks associated with exotic mortgage products. As a result, no bank examiner, Federal or State, in his or her right mind could or would dare do anything substantive to hinder the subprime mortgage explosion that ensued. THIS IS THE WAY IT REALLY WORKS IN REAL LIFE, REALLY! YOU GUYS DON’T GET IT. YOU SET UP THERE AND LISTEN TO THE FED CHAIRMAN AND FED GOVERNORS BLOW SMOKE UP YOUR COLLECTIVE DRESSES AND BUY IT. EITHER YOU DON’T GET IT, YOU DON’T WANT TO GET IT, OR YOU’RE TOO LAZY TO TRY TO GET IT.

NOW DODD AND THE REST OF YOU LAZY WASHINGTON INSIDERS WANT TO GIVE THE FED SUPERVISION OVER BANKS WITH $100 BILLION AND MORE IN ASSETS AND ALL BANK HOLDING COMPANIES WITH CONSOLIDTATED ASSETS OF $50 BILLION AND OVER? I worked as an examiner and I can tell you for a fact that the Fed has had supervision responsibility over bank holding companies of every size as a result of legislation passed by both the house and senate. They’ve had examination staff in bank holding companies with consolidated assets of $50 billion and over for years. THEY WERE ASLEEP AT THE SWITCH! Now you want to give them supervision over something they’ve always had supervision over? Are you nuts? You just don’t care about the facts? Don’t care about how things really are? Or are you Washington insiders who want to keep the good ole boys at the Fed in power because you’re too scared or lazy to do other wise?

And you and Dodd want to reward the Fed by giving them supervision of banks with assets of $100 billion and over? They have never examined that size institution in their history. The OCC examiners our nation’s largest banks and has since the beginning of time. DO YOU NOT KNOW THAT? OR DO YOU SIMPLY NOT CARE? The Fed does not have enough examiners with the necessary skill sets to examine banks that large. The Fed examines small community state banks. DO YOU NOT REALIZE THAT? WHY WOULD GIVE THE FED THE BIGGEST BANKS TO SUPERVISE WHEN THEY HAVEN’T THE RESOURCES TO DO SO EFFECTIVELY? THAT’S THE OCC’S SPECIALTY. DO YOU NOT KNOW THAT?

The Fed chairman stated, as every past chairman has, in testimony before a house subcommittee on March 17 that the Fed needs supervisory oversight over small state member banks too in order to establish smart monetary policy. BULL CRAP! The Fed chairman, the governors or their staff do not use data from bank exams or examiners for anything. They use date provided by economists on a macro level. Economists think bank examiners are below their level of esteem and would never as examiners for data in order to establish economic policy. IT DOESN’T HAPPEN IN REAL LIFE? BUT YOU GUYS KEEP BUYING THAT TIRED LIE YEAR AFTER YEAR. If that were true, the Fed Chairman and Paulson wouldn’t have run over to a closed session of congress in the middle of the night in early 2008 with the sudden realization that the our country and the rest of the industrialized countries were on the brink of a great depression. In fact, both of those clowns kept telling the public that everything was fine, the fundamentals of the economy were strong and that we had reached a bottom.

AS A BANK EXAMINER, I AND MY COLLEAGUES KNEW FOR OVER A YEASR PRIOR TO THAT EMBARRASSING MEETING WITH YOU THAT THE ECONOMY WAS NOT FINE. NO ONE AT THE FED KNEW BECAUSE THEY DO NOT USE BANK EXAMINATION OR BANK EXAMINER DATA OR IMPUT! THAT’S HOW IT REALLY IS. THAT’S REALITY. DO YOU NOT GET IT?

DO YOU NOT ALSO SEE THE CONFLICT OF INTEREST THAT THE FED FACES DUE TO TRYING TO SUPERVISE BANKS AND SET MONETARY POLICY? I DON’T CARE WHAT OTHER COUNTRY OR COUNTRIES ALLOW THEIR CENTRAL BANK TO DO BOTH, IT’S A CONFLICE TO INTEREST! DO YOU NOT GET IT?

CORRECT THIS CONFLIT NOW. DON’T GIVE THE FED POWER OVER BANKS THEY HAVE NO EXPERIENCE WITH. TAKE THEM OUT OF SUPERVISION. THEY COULDN ‘T EFFECTIVELY SUPERVISE BANK HOLDING COMPANIES. THEY HAD EXAMINERS IN LEHMAN BROTHERS AND EITHER COULDN’T UNDERSTAND THE ACCOUNTING FRAUD LEHMAN HAD GOING ON OR THEY CHOSE TO TRY TO SWEEP IT UNDER THE CARPET. THE LATTER IS MORE LIKELY BECAUSE THAT’S HOW FED EXAMINERS OPERATE IN MANY CASES INVOLVING HIGH PROFILE, OR LARGE COMPLEX FINANICAL ISNTITUTIONS WITH “POLICAL” CLOUT. THAT’S HOW THE FED WORKS IN REAL LIFE.

There needs to be one single Federal Bank Regulator. However, if this cannot be agreed upon due to gridlock in both chambers then at least remove the Fed from all supervisory responsibilities and leave everything else as is. Leave the OTS, the OCC, the FDIC, and the States in their current supervisory roles. The consumer protection idea is sound, but any agency would be better at overseeing this vitally important responsibility than the Fed.

DO NOT DO AWAY WITH THE THRIFT CHARTER, THRIFT HOLDING COMPANIES OR THE OTS. Because if you do, it will leave no option for large organizations to convert to a form of ownership that will allow for both regulatory oversight and for the organization to continue to operate in its present form and structure. And the OCC does not have the manpower or experience to supervise thrifts. You will disrupt the OCC, thrift operations, and stymie the mortgage industry, bringing it to a complete halt.

Also, if the thrift charter and the thrift holding company were no longer available as options, what would or could have been down with Wall Street firms to bring them under the Federal Supervision umbrella? Nothing unless such organizations were forced to divest or breakup operating units simply to enable them to become bank holding companies under the BHC Act. If were to happen then those actions would have a serious detrimental impact on a firm’s customer base and it would result in a negative compounding affect on the nation’s economy.

In addition, thrifts are charted to promote home ownership and mortgage lending. The thrift charter and importance will be of even greater benefit going forward. The banking industry will pull back from mortgage lending, and has done so already, by making lending standards more difficult to achieve. This will mean that thrifts will become the major player in rebuilding our economy which is heavily dependent upon mortgage lending and real estate construction. Do away with the thrift charter, the thrift holding company and the OTS and you have essentially guaranteed that the U.S. economy will never recover and that Federal regulatory oversight will become bogged down in confusion, become over taxed from a resource standpoint, and contribute to our economic demise.

exfedexaminer wrote:

ARE YOU SENATORS NUTS OR DO YOU JUST NOT GET IT?

"Or"? Don't you mean "and"?

4thstreet wrote:
“Of course, China will lead everything.”
That remains to be seen. Closed-culture groupthink is not conducive to innovation or problem solving. If the Chinese don't start developing their critical thinking skills, they'll never be able to do more than what they're told.

That's what I thought when I read that too. But I had an uncomfortable memory of reading this in the Atlantic Monthly an issue back:

In her 2006 book, Generation Me, Twenge notes that self-esteem in children began rising sharply around 1980, and hasn’t stopped since. By 1999, according to one survey, 91 percent of teens described themselves as responsible, 74 percent as physically attractive, and 79 percent as very intelligent. (More than 40 percent of teens also expected that they would be earning $75,000 a year or more by age 30; the median salary made by a 30-year-old was $27,000 that year.) Twenge attributes the shift to broad changes in parenting styles and teaching methods, in response to the growing belief that children should always feel good about themselves, no matter what. As the years have passed, efforts to boost self-esteem—and to decouple it from performance—have become widespread.

. . . .

Ron Alsop, a former reporter for The Wall Street Journal and the author of The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace, says a combination of entitlement and highly structured childhood has resulted in a lack of independence and entrepreneurialism in many 20-somethings. They’re used to checklists, he says, and “don’t excel at leadership or independent problem solving.” Alsop interviewed dozens of employers for his book, and concluded that unlike previous generations, Millennials, as a group, “need almost constant direction” in the workplace. “Many flounder without precise guidelines but thrive in structured situations that provide clearly defined rules.”

I'm not wild about plotting growth in consumption as if it were an unmixed good thing. Prior to 1960 that was largely true. Since 1960 a lot of consumption seems pointless if not counterproductive.

But what I really wanted to point out is that population growth in the US crashed after the advent of the pill in 1960. I think that charts like these really should use per capita numbers. which would moderate the bars on the left hand side.

However, the conclusion that the naughts were a nasty decade seems valid even after guessing at corrections. Best to keep cowboys out on the range and well away from the halls of finance and governance I think.

Well that ought to solve the problem of excessive self-esteem in children alluded to in the Atlantic Monthly essay. Two generations of adults in a household will bring back the old "seen and not heard" maxim for children pretty fast.

Nikkei looks to be down almost 100 points. Who approved s business travel expenses?

Slightly OT:

Still, CalPERS spokesman Brad Pacheco said the board plans to consider lowering the fund's expected rate of return.

That target annual growth rate has been set at 7.75 percent since 2003. A change to that rate could impact employer contributions. In the next few months, the board will review whether that rate still reflects market conditions."

Heck, return was 20% this year, maybe they should up it to 10%. What could go wrong...

Follow-up on a story I posted last week:
Man arrested in meat thermometer attack during 'Shutter Island' screening | L.A. NOW | Los Angeles Times

More reasons to leave the "big smoke" as JD calls it:
Homeless people can find compassion at the beach - latimes.com
Tuesday's Los Angeles-area earthquake occurred on a fault 'that could eat L.A.' | L.A. NOW | Los Angeles Times

Ex-Gov Moonbeam's latest battle plan:
Jerry Brown urges unions to go on the offensive - latimes.com

Trouble in River City:
Authorities arrest 30 members of the Vagos motorcycle gang in Riverside County | L.A. NOW | Los Angeles Times

NIMBYs again (riddle: How is Duarte like Santa Barbara?):
Mining proposal maddens Duarte - latimes.com

LA in Default:
L.A. becomes a test case in battle to undo interest rate swap deals - latimes.com

Hecklers Harass Fuld:
Lehman's collapse was all its own fault - latimes.com

Expansion plans for a propeller shop?
Airplane propeller repair shop hits credit turbulence - latimes.com

What part of "you're fired" do you not get?
NUMMI workers voting on $278-million severance package funded by Toyota | Money & Company | Los Angeles Times

Demand? What Demand?
Oil companies look at permanent refinery cutbacks - latimes.com

Why is Pandit Smiling?
Citi to taxpayers: Thanks for the bailout, now pay up - latimes.com

Strategic Default makes the front page (again):
More homeowners are opting for 'strategic defaults' - latimes.com

We need Karl D here to explain that showing consumption and income growth rates without also showing debt growth is utterly useless.

Let me put it in his favorite font: UTTERLY USELESS!!!!!

In fact, according to KD, a substantial part of GDP growth since the early 60's has been from new debt. Probably the period from 1982 on would look much worse--consumption growth far outweighing income growth--if new debt was accounted for.

It's astonishing how today's economists ignore debt as a factor in their calculations.

Greek Crisis in Not Over Shocker!

Germany Seeks IMF Role for Greece, CDU Lawmaker Says (Update1) - Bloomberg.com

Tune in tomorrow to see if Angela is really playing footsies under the table with the IMF....

C

Sacked dealer disables cars, sets off horns | Stuff.co.nz

burnside wrote:

I see consumption growth exceeds income growth in all periods since 1971. In the aggregate, this is "normal" to people under the age of, say, fifty?

"When you wish upon a star, makes no difference who you are, any thing your heart desires, your dreams, will come true." I grew up with that refrain practically forced upon me by Big Business. (Disney). I never believed it. I didn't fit in well

Another common belief in the American Exceptionalism school of thought is that "American phd's and engineers have invented everything important and those other countries can't think like we do". I've heard it from some highly educated american phds.

Having gotten my ass kicked in engineering school by a lot of very smart kids from other countries, I don't buy into this. Also watching immigrants from all of those countries outwork americans in many businesses in this country, I have confidence that Americans don't have some special skills no one else has. They've just had more opportunity for longer. Which they now have squandered.

I was speaking to someone this week who is expanding business in China very quickly. He said you can hire a top phd for $25k. You can test things much faster due to lack of regulations. Seemed promising for innovation.

And I don't care who develops the good cheap solar panels, I'll be buying them.

HomeGnome wrote:

Good Morning, Dooooooooooooooom!!!ers.

Are there any doomers left?

Good Morning cheery, upbeat, ers!

Watt's Gnu.

HG, are you going to open the BFT/F poll early? Like today? It's never too early to bet on failure.

It is the BFF poll and I'll be posting it right before 6pm EST today.

noob goldberg wrote:

As proof, I've posted a picture of my wife and I, taken just this morning:

"Don't worry, it happens to everyone".

LMAO.

Oh good, because it would be a PITI to miss a failure on Fursday.

As Banks Boomed, Watchpoodles Got Big Bonuses - CBS News

Bosch<

I've got half a dump truck load of mushroom compost being delivered this morning.
I'm going to be sore this evening; that's for sure.

Who did you pick to win March Madness?

I went with Duke beating Kansas for the

Good morning doomeratchiks...

...has the price of the kind gone down in your bailiwick, compared to what you used to pay for20?

Bosch<

The mushroom compost is awesome.
I've added quite a bit to my garden over the last six years or so.
Compost coupled with laying down wheat straw as a mulch after planting is the way to go.
---Got Green Beans?
:rototiller: :rototiller:

HomeGnome wrote:

I went with Duke beating Kansas for the Crown Crown

Excellent choice! I went with Duke over GTown in a rematch of their earlier game.

I think the field is pretty wide open this year with a slight edge to KU.

YouTube - One Is the Loneliest Number for Three Dog Night (lyrics and download) 

Not much change.

U.S. jobless claims fall 5,000 to 457,000 - MarketWatch

Shelter costs - which account for more than 32% of the CPI - have fallen 0.4% over the past year. In February, owners' equivalent rent and residential rents were unchanged.

Consumer price index flat in February Economic Report - MarketWatch

Chainsaw wrote:

What exactly is the system telling me here?

Can you still buy coins from the mint with free shipping ?

The previous business cycle was "bad by any measure".

No doubt. I recall last summer/fall watching 'economists' on tv pimping the stock market with nothing other than 'the harder the fall the bigger the hockey stick' in GDP growth. That was the ENTIRE basis of their arguement for growth in 2010 - looking at a few charts of past recessions and extrapolating. Funny, I don't hear those comments (much) anymore (not that the stock market would care).

HomeGnome wrote:

I've got half a dump truck load of mushroom compost being delivered this morning.

You might try reselling it on wall street. They like to bury info in sh$t and keep everyone in the dark.