I try to avoid the mistake of being a contrarian just to be contrary.

I couldn't disagree more.

RRE walk aways and wage deteriation will be the biggest risks in 2010. JMO

Less saving, less spending.
Higher bank risk. Lower housing prices (including rents).
Higher food and energy prices.

A municipal failure could set off a bond contagion that would make the banking crisis look like a .

I think the risks are bottom up (municipal) rather than top down (international).

Edit: IOW; what Nuke just said.

In the event of shortage, at least there will be plenty of for everyone!!

Nuke wrote:

most governments are still seeing revenue falling YoY despite tax rate increases.

Same here. You may be right, the cities, counties, states will be our next .
And the jobs that are lost when they cut or go under will not help.

1870s USA Census radicalcartography
if anyone is interested, most interesting would probably be population distribution by age, for reference 1873 was a major economic panic, with a depression that lasted until 1879

Nuke wrote:

12,661,296,056,307.25

We are now officially in Reinhart and Rogoff territory.

Nuke wrote:

Reinhart and Rogoff

The 90% debt threshold.

See Reinhart and Rogoff, "Growth in a Time of Debt"

edit: 95 to 90

The results show that, below a debt/GDP ratio of 90%, there is no observable correlation between debt/GDP ratio and growth rate. However, and this is a key point, a debt/GDP ratio greater than 90% appears to be a threshold value with negative consequences for GDP growth. As the writers point out, “Surprisingly, the relationship between public debt and growth is remarkably similar across emerging markets and advanced economies.”

I believe that there is an upcoming one-two punch to the economy in the form of much-increased government layoffs, perhaps beginning this summer, and an unexpectedly-high level of small-business failures.

My impression is that a lot of small business-owners are hanging on by the skin of their teeth for the good times to come. If they don't come in the next X months, these businesses will fail, in perhaps more of a cascade than a smooth downward curve. Adding civil service layoffs to the mix just make this more likely.

Of course gov't intervention is always possible, to some unknown extent or level of effectiveness.

Walmart to slash grocery prices!

Wal-Mart to slash grocery prices
| Reuters

Slate has a report on how REPORTING the pedophile thing could get you excommunicated from the Catholic church.

Nuke wrote:

Do the author offer an cause?

In the case of the United States, Reinhart and Rogoff show that, when the debt/GDP ratio exceeds 90%, the average GDP growth rate falls to approximately -1.8% and the median growth rate falls to approximately -.9%. Also, average inflation rises to approximately +6.1% and median inflation rises to approximately +5.6%.

Bob Dobbs wrote:

one-two punch to the economy in the form of much-increased government layoffs, perhaps beginning this summer, and an unexpectedly-high level of small-business failures.

Just think about all the remora-type businesses that depend on municipal and local government. That's probably another big chunk of tech people right there.

Doc Holiday wrote:

Like Colorado Springs, the reality of denial will have to meet with the reality of having less and less for a longer period of time.

Colorado Springs is doing us a great favor by leading the way into absurdity -- by following the lean gov't / volunteerism logic of the last 30 years all the way down to dysfunction. The rest of us get to watch, see the results, and decide if we want to go that way. Obviously, I don't. Adopt-a-street light? Down that route lies neighborhoods hiring their own cops (only they won't be cops).

Nuke wrote:

Do the author offer an cause?

Not really.

Why are there thresholds in debt, and why 90 percent? This is an important question that
merits further research, but we would speculate that the phenomenon is closely linked to logic
underlying our earlier analysis of “debt intolerance” in Reinhart, Rogoff, and Savastano (2003).
As we argued in that paper, debt thresholds are importantly country-specific and as such the four
broad debt groupings presented here merit further sensitivity analysis. A general result of our
“debt intolerance” analysis, however, highlights that as debt levels rise towards historical limits,
risk premia begin to rise sharply, facing highly indebted governments with difficult tradeoffs.
Even countries that are committed to fully repaying their debts are forced to dramatically tighten
fiscal policy in order to appear credible to investors and thereby reduce risk premia. The link
between indebtedness and the level and volatility of sovereign risk premia is an obvious topic
ripe for revisiting in light of the more comprehensive cross-country data on government debt.

First link on this page: Reinhart and Rogoff: Higher Debt May Stunt Economic Growth - Real Time Economics - WSJ

Bob Dobbs wrote:

neighborhoods hiring their own cops

Many gated communities already have their own security force - for what it's worth - lot of those security guards are more like John Candy than Chuck Norris....

Bob Dobbs wrote:

selling the staff of life

Walmart is a godsend for a lot of low income people... including me... l shop there all the time.

mp wrote:
Better hope.
I can never remember,mp... do the skittles go in the right or left hand? Hope goes in the other, I know, but I fail to see how rubbing them together is going to do anything useful.

CalculatedRisk wrote:

My biggest concern remains housing.

I still don't fully understand how Price-to-Rent stays above the 90s minimum. At least, not without major gov't mucking in the market, but that will cause other downside issues.

Plastic surgery volumes plummeted in late 2007 through the first half of 2009. The second half of 2009 showed some green shoots, but volumes are way down now. Semi-elective surgeries (moderate knee/shoulder problems) are also down significantly. The thought is that COBRAs are ending, or deductibles are too high to proceed with anything but essential surgery.

ShadowInventory wrote:

High-End Repo Man Takes Back Toys From the Over-Leveraged Rich - WSJ.com

If you rent the '80s punk classic "Repo Man," one scene you'll find missing is where the young repo man "Otto" goes to the fancy home of an elderly couple who politely explain that it's become "inconvenient" to make payments on their Caddy for now, but they will get around to it when things improve. They of course turn nasty as shrews when that argument doesn't wash, among cries of "I DESERVE that car." I believe Otto has to punch the guy out.

The one scene that nails today's culture of entitled debtorship, and they left it out.

Have a nice day.

mp wrote:

Better hope Reinhart and Rogoff are wrong.
Wrong, wrong, wrong.
Better hope.

I don't think we're in Kansas anymore...

known-known: ARRA will go from adding 2% GDP growth to subtracting 1% GDP growth
Impact on GDP levels and growth:
Econbrowser: Levels versus Growth Rates and the Impact of ARRA
Macroadvisers: MA on fiscal stimulus, the definitive answer: it works. MA refutes the demagoguery.

Econbrowser: What Do Business Economists Think the ARRA Accomplished?
with a WSJ-survey estimate of 09Q4 YoY GDP w/o ARRA at -0.94%, the active spending increases of government are necessary to avoid recession

should be pretty straightforward with the declines in private credit leading to less spending power, leading to a a shrinking macro market, and it doesn't look like net exports will be the same help for the first half of 2010 that they were for all of 2009. It's nothing low interest rates can fix, the demand just isn't there in a shrinking market and growing your way out of debt is a myth -- it requires sacrifices in consumption to pay it down.

as for forecasting:
Econbrowser: Pre-ARRA, How Badly Did Macroeconomic Forecasters Overpredict GDP and Employment in 2009Q1?
the bias is more likely to be optimistic than pessimistic

Recession indicators:
http://www.econbrowser.com/archives/rec_ind/description.html
Business Cycle Index - Helping Advisors

The sum of all the efforts to date has been stability, not growth. Without the availability of a decline in the savings rate to rely on, or an increase in exports there is no reason to expect that a self-sustaining cycle will takeover. As for levels, so many things are at such low levels that sideways is not sufficient to prevent further reorganizations.

Look around the world. Who is doing well? The countries that have issued 15% of GDP or more in new credit per year, the commodity countries, and wherever the government is actively borrowing and growing credit in order to spend it on a program like C4C.

We can ignore a lot of things for a long time, but the problems are growing with time faster than our capacity to continue ignoring them.

I heard a first on the radio today, surgeon provided financing for plastic surgery.

ShadowInventory wrote:

Walmart to slash grocery prices!

I wouldn't want to be a food producer selling anything to Wally Mart right now... you can bet that the squeeze is on.

Other anecdotal: The attention on insurance has also reminded people of lifetime caps + unilateral dropping of coverage + non-coverage when moving due to preexisting conditions. So they have dialed the elective knob higher.

lawyerliz wrote:

And besides Citi must be destroyed.

No, just broken up into small enough to fail pieces with the stockholders wiped out and the bondholders impaired.

I have a sudden urge for a plate of shrimp tonight.

To make myself clear, non plastic surgery volumes are also down. Lots of surgeons doing workman's comp that weren't last year.

And, Liz, yesterday on the radio I heard an advertisement for a reputable Newport Beach plastic surgeon offering 40% off. The stated prices haven't changed too much, but the willingness to cut prices and negotiate is certainly there.

Tax receipts continue to show that there is no recovery, which should be obvious given 17% effective unemployment and another 20% underemployment. Unfortunately, many are blinded by an irrational stock market and isolated "green shoots" that are more the exception than the norm. As dryfly notes, those companies succeeding are doing so by virtue of surviving the death of most of their competition.

There is no downside risk, because it's a sure thing. As always, it's mostly a matter of broad recognition.

I wish the oral surgeons were having 40% off sales. I have 2 kids with 8 wisdom teeth needing to be pulled this summer, and insurance doesn't cover.

edit: my own 50% off discount - one is going to have to wait until next summer...

Citizen AllenM wrote:

Based on the experience of Japan, a first world economy can go much deeper, if the productive capacity still exists to be taxed.

One of the reasons Japan can maintain a high debt/GDP ratio is “home bias.” As much as 93% of Japan’s debt may be held domestically. “Even at the peak of their recent run-up, ten-year Japanese-government bonds only yielded a miserly 1.43%, but in a deflationary environment they were still attractive to Japanese investors in real terms.”—“A load to bear,” The Economist, November 26, 2009

The United States has no home bias.

dr munch wrote:

To make myself clear, non plastic surgery volumes are also down. Lots of surgeons doing workman's comp that weren't last year.

Got it.

booyah!

YouTube - Miller explains the cosmic unconsciousness

ok alternative.

In my small county of 20k we have fewer than 1000 jobs in manufacturing. Most income producing jobs is in government, school teachers, mental health, juvie system, food stamps, health department, court house employee's and they are all so dependent on one another to keep the burecracy going that they have no idea it all coming down on their heads. Drs are fueding over patients, no one has cash, no one has insurance, only those that work for the government and the over sixty five and the very poor. People are residing three famlies to one household and the entitlements that has kept generations up is coming to an end.

EvilHenryPaulson wrote:

The one thing I didn't like about them choosing that as their tipping point was that they didn't capture off balance sheet debt

EHP, they didn't choose 90% as the tipping point.

That's the number that fell out.

JP
How did I know you would be referring to the Idiocy chart ?

(for those not in the know, idiocy is a medical term that fell out of favour. Alternatives are retarded, mentally handicapped)

EvilHenryPaulson wrote:

I prefer a 20% of revenue spent on debt servicing as my danger metric.

You should take that up with Reinhart and Rogoff.

EvilHenryPaulson wrote:

I prefer a 20% of revenue spent on debt servicing as my danger metric. Applies to more than just sovereign governments. Demonstrates the relevance of interest rate shocks or even cross currency debt. Data for revenue and spending is more reliable and comparable.

Any thoughts on the amount of current spending that is borrowed?

Bob Dobbs wrote:

I dunno. You ever feel as if your mind had started to erode?

The more you drive, the less intelligent you become.

mp wrote:

ten-year Japanese-government bonds only yielded a miserly 1.43%

Japan has the lowest nominal rates for ten-year government bonds and the highest real rates for ten-year government bonds. The latest GDP deflator was -2.8%, so they are paying 4.23% real.

ShadowInventory wrote:

Walmart to slash grocery prices!

Of all the things I would not want to see price squeezed or subject ot Walmart efficiencies...

Did the price of melamine additives fall? Cut back on biological testing? Save money on refrigeration? Use by dates slip a little? A little extra rBST so they sell more bras to 10 years olds? Moving the product mix to higher profit margin processed foods?

I want dirt and tops on my radishes and carrots. I want my apples dull and blemished without any wax sealing in the fungicides. I want gray meat properly aged not the shiny red pink slimed fresh stuff they process by the feed lot. I want mature chickens with bones not accelerated growth cartilaginous connected meat products.

There is no such thing as cost savings in food safety.

Rob Dawg wrote:

I want mature chickens with bones not accelerated growth cartilaginous connected meat products.

You forgot to mention the antibiotic-riddled meat and the antibiotic-resistant bugs. ISTR they are putting Cipro into the feed as a growth stimulant, so Cipro may become ineffective before long.

Rob Dawg wrote:

I want my apples dull and blemished without any wax sealing in the fungicides.

[but leave me the birds and the bees]

mp wrote:

That's the number that fell out.

They chose that as their key metric, and it's not resilient to modern financial gimmicks (Greece is a case in point)
It also doesn't work well with countries like Italy or Japan to name but two

Their main message from writing that book was that it wasn't just external debt that mattered, as was/is normally conveniently assumed by Western Economists. Then to go on an imply that all the Govt owned Treasuries (eg IOUs for SS) are irrelevant because they are not public debt?

I could be on the hook for a $10bn loan right now, but it wouldn't matter until I could no longer service the debt. So make it a bubble payment, go 20 decimal places deep before registering a non-zero number in the interest rate, structure it in any way that doesn't crush me financially and I can keep it current if I want to.

A figure of 90% of GDP doesn't account for interest rates, and it doesn't account for different government balance sheet structures. It also overstates the impact of cross-currency debt based on a current, but not necessarily relevant exchange rate.

mp wrote:

The United States has no home bias.

mp, in a deflationary environment there isn't just home bias but also capital preservation bias. At this point I am much more worried about deflation than inflation. To my knowledge, Reinhart and Rogoff also identified that credit induced financial crises are rarely if ever followed by inflationary times. This might be different if the "government is sufficiently determined to inflate" but that is a lot easier said than done. As long as bonds are issued to cover debt, higher interest rates represent a very difficult obstacle to overcome deflationary pressures.

CR, I have nothing but respect for you..but, question. You've said this a number of times and I always want to ask: why does it the road to recovery have to run through consumer spending and residential investment? Why can it it never run through making things other countries want to buy?

Look, there's a very real danger of over-analysis here, so I'm going to put it to you in the form of a multiple choice question.

High sovereign debt loans lead to:

1) Lower growth rates.
2) Higher growth rates.
3) No effect.

I choose door number 1. How about you, EHP?

Have a nice day, really.

mp wrote:

High sovereign debt loans lead to:
1) Lower growth rates.
2) Higher growth rates.
3) No effect.
I choose door number 1. How about you, EHP?

Higher sovereign debt spending leads to higher growth rates.
Higher sovereign debt service leads to lower growth rates.

The economy has a bias towards GDP growth because of 3 factors:
1. Increasing size of labor pool
2. Increasing capital base - more equipment built, which enables more widgets to be built.
3. Technology increases.

Because of those, there should be a bias towards bullish forecasts; however, sometimes the bears are right.

Rob Dawg wrote:

Higher sovereign debt spending leads to higher growth rates.
Higher sovereign debt service leads to lower growth rates.

Whatever. You end up in the same place.

With a high debt load and no growth.

CalculatedRisk wrote:

The good news is we can't lose too many more residential construction jobs!

I know of a few tile stores, hardwood flooring businesses, landscapers, pool and water feature installers who aren't doing so well. Even the roofers are offering deals.

CalculatedRisk wrote:

Forecasting is humbling (and no one has a crystal ball) ... wishcasting (like some other sites) is, uh, not useful.

Hush, go take your victory lap. The June-July turn around should hold for a full year.

I'm still skeptical the NBER waits their 18 month cooling off period without something bursting before the end of the year.

Bob Dobbs wrote:

Even the roofers are offering deals.

That's got to hurt. Roofers have among the highest worker's comp costs. I saw one project where the worker's comp costs were equal to the amount that the workers were paid. This was in Alabama, which might explain part of it.

I agree with Elizabeth Warren who says she's afraid of what the future holds for the economic well-being of almost all Americans.

I say....


• 1950's to 1980's viable middle class

• 1980's to 2005 asset inflated middle class

• 2005 + fast diminishing middle class

BOL

As government from local to countries around the world try to sweep this mess under the rug, there is a very good chance of the wrong shoe dropping and something blows up. Statistics may say we are heading up but people attitudes will be going down.

CalculatedRisk wrote:

It is possible, but I think sluggish growth is more likely.

I could buy the "sluggish growth" if we'd truly hit bottom, but I don't think we've come anywhere close due to all the artifice. Heck, even mass psychology never hit bottom.

There's so much further to fall, and the government can't defy economic gravity forever.

The good news is we can't lose too many more residential construction jobs!

Then again, the bad news is that they're all lying around twiddling their thumbs and big toes waiting for work to pick up again.

Outsider wrote:

Then again, the bad news is that they're all lying around twiddling their thumbs and big toes waiting for work to pick up again.

I think a large number of them went home to Mexico and points South.

sm_landlord wrote:

Outsider wrote:
Then again, the bad news is that they're all lying around twiddling their thumbs and big toes waiting for work to pick up again.
I think a large number of them went home to Mexico and points South.

Where they are discontent and fomenting social unrest that will be allowed to spill over into the US before very long.

Anyone who wants to monitor or comment on the strength of the U.S. dollar, stop using the euro or yen as a reference point. It doesn't make sense.

Use gold, oil or Canadian currency. They give you a much truer read. None of them say the dollar has been particularly strong.

Rob Dawg wrote:
Where they are discontent and fomenting social unrest that will be allowed to spill over into the US before very long.
Someone has to - Idle Survivor Bachelor Crime Investigators is on!

Art Eclectic wrote:

Excommunication. For when "going to jail" would just be too harsh.

Please, please don't throw me in the friar patch!

Very punny.

2000+ applications for 75 positions.

I'll bet a lot of those are U-6ers. Otherwise, you earn more in UE bennies than Sprouts would pay, I imagine.

rosethorn wrote:

Oil at $80 and Russia's in economic trouble...strange.

Natgas at $4.28, not so strange.

Uh oh. Here it comes. I can feel it.

I think economists tend to focus on forests instead of trees, and sometimes trees can tell you more about the economy.

For me, a tree is the massive downsizing going on all over the U.S. in public school teachers. Tens of thousands of teachers are being laid off, furloughed, pay-capped or cut back in hours or extra-curriculars. Teachers were one of the few job growth engines left in the U.S. economy, and they weren't low-paid. In many places, the average experienced teacher was making 50-75k. So, their discretionary income is way down, and there is ripple multiplier at the local level.

This isn't a cyclical situation because the ARRA stimulus is running out and inflicting pain on states,and states are pushing the pain down on local districts, which are having a much harder time getting school budgets with higher taxes passed. At the same time American children are becoming more disabled (for whatever reason), Americans with Disabilities Act has expanded requirements and pressures, so basically more public schools are becoming dysfunctional. This has as much negative impact on many families as any news about the recession they might watch. It sits in their living rooms every night. The ripple economic impact on communities is big, too.

So, most of these lost public school teacher jobs and salaries aren't coming back.

I would put the economic downturn for public school teachers in the top 4 or 5 reasons for a double-dip. It's a big tree.

la la la - TJ I'm not listening to you. You're doing that on purpose. la la la

:fingers in ears:

Uncle Ar wrote:

because you can't show me

The blind can't be shown.

Rob Dawg wrote:

2000+ applications for 75 positions.

Another bit of anecdata, this from one of my friends in the midwest.

Restaurant opening from scratch - don't ask me why. 45 jobs. Owner had 1700 applicants, 1500 of those holding degrees.

That's very good, rich. I think one aspect of the education cuts that may be beneficial in the long run is the fact that hard decisions that have been put off time after time are getting made now that cuts have to be made to avoid bankruptcy. I think there are more than a few half empty schools around this country where one school should have been closed and the students sent to another nearby school. Of course, there is always a huge controversy any time closing a school is brought up, so school boards have been avoiding this issue. Perhaps now school boards can point to the savings from closing a half empty school and back it up by pointing teacher jobs saved.

Maury the Credit Responsibility Panda wrote:

1500 of those holding degrees

Who says college doesn't prepare you for the real world?

I picture CR as a very strong-swimming salmon, working his way against the current and swimming up stream. He's stoic, and relentless in the face of adversity, deftly negotiating whirlpools and rapids that would suck a lesser blogger to their doom.

I respect a salmon who swims furiously upstream with the full knowledge that just above the waterfall there is a large number of hungry bears waiting for him.

Owner had 1700 applicants, 1500 of those holding degrees.

The thing I don't get is most of those jobs do not pay livable wages. If you work for $8/hour but can't live on $8/hour, then what?

Uncle Ar wrote:

TJ, please enlighten me if you are correct.

There's very likely nothing I can state that you haven't already heard and dismissed in your already made-up mind, and I'm not in the mood to beat my head up against your mental wall.

Bernanke Says Bailouts of Banks ‘Unconscionable’

Rob Dawg wrote:

Natgas at $4.28, not so strange.

Did it bounce back up to 4.28? I thought it was flirting around 4.00 last I checked.

Uncle Ar wrote:

Bernanke Says Bailouts of Banks ‘Unconscionable’

I write this off as an attempt at a little preemptive spin control in the wake of the FOIA ruling.

Uncle Ar wrote:

Bernanke Says Bailouts of Banks ‘Unconscionable’

I read this over breakfast and figured that it was being talked about on HCN (and I didn't have time to visit the boards this morning).

“It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms,” Bernanke said today in a speech in Orlando, Florida. “If we achieve nothing else in the wake of the crisis, we must ensure that we never again face such a situation.”

I assume that someone gently reminded him that if he didn't, at the very least, sound like he was going to play hardball with the that congress might circumvent him.

Rob Dawg wrote:

April closed at $4.169, got as low as $4.05 on Friday.

Gotcha, last I checked on friday I remembered seeing 4.08.

Uncle Ar wrote:

Is he finding Jesus now that he is going to have to open up his books (barring appeal)?

That was my assumption, and it sounds like Maury's as well. Maybe setting himself up for the post-release fall-out.

Not that it's really necessary, given that it still won't see the light of day for years.

@Rob Dawg (homepage, profile) wrote on Sat, 3/20/2010 - 5:21 pm
about 1,000 to 1,200 applicants for 75 positions for Arizona-based Sprouts

no here
like I said 2005 > fast diminishing middle class in America

rosethorn wrote:

Well, BB, then pull the plug now! Cut off Goldman, AIG, and JPM, and Citi.

Agreed. His first condition, that they've "achieved nothing else during this crisis", has already been met in spades.

Rob Dawg wrote:

Same contract traded at $10.60 in July '09. Eric's SRS ain't got nothing on energy contracts.

Oh wow. That's a world of hurt.

It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms,” Bernanke said today

That's where we differ. I think there's a relatively large number of giant firms we're afraid to let fail.

More Americans will be cryin the blues going forward as reality hits them.....
YouTube - Part 1 - 1970 Isle Of Wight - Ten Years After - I Can't Keep From Crying, Sometimes - part 1
BTW, Alvin Lee and TYA were one of most underrated rock blues bands ever !

Rob Dawg wrote:

Same contract traded at $10.60 in July '09. Eric's SRS ain't got nothing on energy contracts.

Especially since you are nicely leveraged in those futures contracts.

noob goldberg wrote:

That was my assumption, and it sounds like Maury's as well. Maybe setting himself up for the post-release fall-out

I just think you have to assume that. Treasury is responsible for regulating the knabs, yet it was the SecTreas who pleaded with Congress to pass the TARP.

It's not like Fed and Treasury's roles haven't been a bit blurred in all this, either.

Outsider wrote:

I agree rosethorn - Tell the banks to take that money and apply it towards consumer balances. That would probably attract votes, too. Win-win.

What I really love about BB's 'coming to Jesus' moment (thanks Uncle Ar) is his blatant refusal to recognize the alternative option staring him in the face:

"We at the Federal Reserve have been working with international colleagues to require that the most systemically critical firms increase their holdings of capital and liquidity and improve their risk management,” he said.

The Fed chief also endorsed the concept of financial firms having “living wills,” or plans on how to unwind should they become insolvent. Dodd’s proposal includes a provision that requires large, complex companies to periodically submit “funeral plans” for their quick and orderly shutdown in the event of failure.

“An idea worth exploring is to require firms to develop and maintain a so-called living will, which will help firms and regulators identify ways to simplify and untangle the firm before a crisis occurs,” he said.

If there is an international acceptance that there are firms so powerful that they alone could disrupt the global financial system, the solution is to break apart the banks, not have them tell us how to wind them down when there is a crisis. He's not an idiot, no matter how much fun we poke at him, and he should be smart enough to recognize when his argument has such a blindspot in it.

CR,

I loved the report but i think it underestimates the impact of a worldwide debt crisis, even in the short term (and I mean next 9 months). The ratio of bond/stock is 10/1. There is an interesting resemblance between the current situation and 1930s b/c the center of the crash back in 1930-31 was the sovereign debt defaults. The worldwide economy is so weak right now that it will take only 1-2 defaults to trigger a domino effect. You think Greece defaulting (or even going to the IMF) will not be strong enough to trigger the domino? The markets have brought the country down in approximately 4 months (since the end of Nov.). How fast do you think it would take them to bring Spain on its knees?

thanks!
stamos

Maury the Credit Responsibility Panda wrote:

It's not like Fed and Treasury's roles haven't been a bit blurred in all this, either.

As I alluded to in my post above, Ben's argument is the fallacy of Ignoratio elenchi, or the Irrelevant Conclusion (I had to look that up, sadly).

He's focusing on arguing about how to better regulate systemically dangerous financial institutions in the event of a crisis. That's a when the real issue is why we allow these institutions to gain that much power in the first place. Before he can argue in favour of regulating large financial institutions, he has to first justify why they're permitted to exist in the first place.

rosethorn wrote:

Well perhaps Timmy could be impeached once the documents in question are made public;

I agree, but I also hope not. The last thing I'd want is for Timmy-the-scapegoat to be the focus of any such investigation. That's a recipe for another distraction, and avoidance of the real underlying issues. If they can all point and say "Timmy did it" and use that as justification for further inaction, we're just as screwed as we were before.

Odysseus wrote:

Even if Sprouts paid only minimum wage, a straight-up 40 hour week would be better than unemployment, or at least deeply competitive. At any higher pay, you're far better off working.

True. And many households are two-earner. You've lost your job, the spouse still has one. Your $320 a week could be the difference between breaking even, or not. Or at least not losing as fast.