By The Tim on August 10, 2009
Here is your open thread for Monday August 10th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Posted in Open Thread | Tagged open_thread
Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.
Government spending is up 21%, revenues are down 17%, what could go wrong? Is this what they mean by “sustainable growth?” Or is there “an inconvenient truth” hiding in the “green shoots?”
http://market-ticker.org/archives/1314-Americas-NOD.html
RE: Scotsman @ 1 – Not all of it, but at least part of it, is merely fiscal policy. Have you not heard of the stimulus plan? ;-)
RE: Kary L. Krismer @ 2 –
You mean “cash for bankers” … or is that “clunkers?”
RE: Scotsman @ 3 –
What separates America from a full-fledged depression today?
Just two hours of panic at the bank doors, the unemployment [calculated correctly] is already there.
RE: Softwarengineer @ 4 – That bank run comment is probably really true. Just look what happened to WAMU and a few others with bank withdrawals, and that probably largely on fully insured accounts.
But for FDIC (and similar) insurance, the banking system would have probably totally collapsed months ago.
RE: Kary L. Krismer @ 5 –
The FDIC fund is seriously depleted- that’s why we have a number of “zombie” banks still operating that really should have been shut down, at least according to the government’s own standards. But the reality is the government can’t afford to close them right now. That should inspire some additional confidence…
RE: Scotsman @ 6 – That could be, but my point was more that without the insurance, things would have been worse. People would have withdrawn money from the banking system in mass, hindering credit much more than what it was.
Accounting wise banks can post profits even though they have losses. I was shocked that they were in trouble to begin with. They sold debt instruments as fast as they created them. Every body bought debt with the idea every body else would pay. Well, people are still paying.
The credit market must be taking in billions of dollars a day to offset losses. If they can keep that up for a couple of years they could get to evens. After that it will be on to the next money making scheme.
In my opinion the government money was a safe bet from the beginning.
RE: Scotsman @ 1 – I think that if revenue is down then people make less money and businesses make less money. That is a dangerous situation where deflation could set in and could make the situation worse.
To offset that the govt needs to replace the lost monetary base. And by spending more it does not even create any deflation. The dollar still buys the same amout of goods and services today as it did 1 year ago. This could be a smart move to avert the depression.
If the game is played well – we could be all laughing at this recession in 2 years time.
Here’s Krugman’s take on government spending and bank issues.
http://seattletimes.nwsource.com/html/opinion/2009635308_krugman11.html
RE: Rally dude @ 9 –
Hi Rally Dude
Just spend more of our grandchildren’s grandchildrens money and all will be well?
Haven’t we been down that path wil Bush [$10 Trillion Dude] and look where it got us. An unemployment depression with banks using monopoly money and pretending its real, to not cause a panic.
You may be of the camp that thinks FDR’s spending cured the last depression, but let’s be pragmatic….was it WWII’s manufacturing and the inventions that America subsequently dreamed up in the 60s and 70s that caused good times, while the federal spending was just a moot point creating long decades from 1930-1945 of no growth depression?
Read your history books and you make the call….and yes, I hated Bush’s drunken sailor deficit spending too….Obama needs to learn from Bush’s mistakes; not simply repeat them.
RE: Softwarengineer @ 11 –
Don’t worry, the FDIC isn’t broke…LOL
Then why is Senator Dodd recently proposing this:
“…Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department…..”
And with the $100s of Trillions or whatever the figure is in the NWO IMF, $500B is just a squirt gun at a blazing fire…
The rest of the URL:
http://www.creditwritedowns.com/2008/07/does-fdic-have-enough-money.html
This is a bit off-topic, but I wanted to let my Seattlebubble compatriots know about an article I just wrote, analyzing many of the engineering problems I’ve seen at Microsoft. In the coming weeks I will follow up with articles on the business issues the company faces.
http://bit.ly/oOUh4
The is certainly relevant to the broader question as to whether Microsoft will continue to provide the type of economic growth, and expanding pay-roll, that our region as been used to.
RE: Sniglet @ 13 –
I’ll read it, thanks. Are you counting on anonymity (doesn’t look like it) or do you no longer work there?
Nope, I am definitely not shooting for anonymity. I gave that up long ago. I guess I should just invite the reality TV cameras into my house next. :)
That Sniglet reality TV show might just be the end of his financial difficulties, and he’ll be buying houses with cash, just to tear them down.
A new car for $5, 490! Come and get it while the “free money” lasts!
Nissan Versa
.
1. You cannot bring about prosperity by discouraging thrift.
2. You cannot strengthen the weak by weakening the strong
3. You cannot help the poor man by destroying the rich.
4. You cannot further the brotherhood of man by inciting class hatred.
5. You cannot build character and courage by taking away man’s initiative and independence.
6. You cannot help small men by tearing down big men.
7. You cannot lift the wage earner by pulling down the wage payer.
8. You cannot keep out of trouble by spending more than your income.
9. You cannot establish security on borrowed money.
10 You cannot help men permanently by doing for them what they will not do for themselves.
Not mine, but noteworthy during these times.