Mid-Week Open Thread (2010-02-17)

Here is your open thread for the mid-week on February 17th, 2010. 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!


About The Tim

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.

89 comments:

  1. 1
    Joel says:

    Anybody else notice Level 3 laying down (or making use of existing) fiber optic cable around Bellevue. My wife said she saw it around Richards Rd. a week ago and just this morning driving along 140th Ave SE we saw several signs and some digging going on. I can’t find anything in the news other than this article from 2002 about dark fiber. Is Bellevue finally going to get a fiber option? Please oh please say yes.

  2. 2
    Joel says:

    ^^^ I meant 140th Ave NE in the above post.

  3. 3

    RE: Joel @ 1

    This May Help?

    City of Bellevue, minutes from a year ago, fiber optic cable resolution approved a year ago from Renton, article in part:

    “…Resolution No. 7884 authorizing execution of Fiber Optic Project Agreement #42, for the installation of fiber optic cable in the right-of-way in the City of Renton as part of the fiber optic network infrastructure around Lake Washington, said agreement being an amendment to the Interlocal General Terms and Conditions for Sharing of Fiber Optic Installation Projects, with the City of Kirkland, the Lake Washington School District, and the University of Washington, approved October 20, 2003, Resolution No. 6911….”

    http://www.ci.bellevue.wa.us/Minutes/MinutesRegularSession02-17-09.pdf

  4. 4

    This Article Explains Why I Thought Biden Was the Best Presidential Candidate During the Primaries

    Yesterday’s article [it’s very short]:

    “…Biden on capital: ‘Washington right now is broken’

    Email this Story

    Feb 17, 7:45 AM (ET)

    WASHINGTON (AP) – Vice President Joe Biden says “Washington right now is broken” and the country is in “deep trouble” unless it attacks ballooning federal deficits.

    Asked about the political climate across the country, Biden said in a nationally broadcast interview that “we understand why they’re angry. … We get it.”

    Speaking of intense partisanship in the capital, Biden said on CBS’s “The Early Show” that “I’ve never seen it this dysfunctional.” He said the message coming from the stunning Republican upset in the recent Massachusetts election was, ‘Hey guys, get your act together. Get something going.'”…”

    http://apnews.myway.com/article/20100217/D9DTU9VO0.html

  5. 5
    pfft says:

    By softwarengineer @ 4:

    This Article Explains Why I Thought Biden Was the Best Presidential Candidate During the Primaries

    Yesterday’s article [it’s very short]:

    “…Biden on capital: ‘Washington right now is broken’

    Email this Story

    Feb 17, 7:45 AM (ET)

    WASHINGTON (AP) – Vice President Joe Biden says “Washington right now is broken” and the country is in “deep trouble” unless it attacks ballooning federal deficits.

    Asked about the political climate across the country, Biden said in a nationally broadcast interview that “we understand why they’re angry. … We get it.”

    Speaking of intense partisanship in the capital, Biden said on CBS’s “The Early Show” that “I’ve never seen it this dysfunctional.” He said the message coming from the stunning Republican upset in the recent Massachusetts election was, ‘Hey guys, get your act together. Get something going.'”…”

    http://apnews.myway.com/article/20100217/D9DTU9VO0.html

    the democrats have to realize that the republicans will filibuster and vote no on anything they pass. sure on some issues they’ll say different things at home like with the stimulus. in washington they will vote no. jam healthcare and cap and trade through and the base will be happy. try and do as much financial reform as possible to satisfy those on the left and right who are mad at wall street. the problem there is like with national security the democrats are too afraid of being called anti-business.

  6. 6
    pfft says:

    Lumber futures are higher. this could be the long-awaited sign that the home building industry is stabilizing.

    High Lumber Prices Threaten Housing Market
    http://online.wsj.com/article/SB10001424052748703562404575067750815490316.html?mod=WSJ_latestheadlines

    I actually think they have it backward. when lumber futures starting falling it was sign that there was trouble. now they are rising I think that is a sign of strength.

    We keep hearing that cre is the next shoe to drop. that shoe has already dropped.

    http://4.bp.blogspot.com/_pMscxxELHEg/S1ctqg2sPrI/AAAAAAAAHSs/yq563JZrDIQ/s1600-h/CREpricesNov2009.jpg

  7. 7

    RE: pfft @ 5

    Yes Pfft

    Politicians walk a tight-rope and if they upset any of the opposing groups, they fall and there’s no safety net. I was asked why I didn’t run for Senator, as my populist views would likely get a lot of votes….my first sentence above answers why.

    The silver lining to a stuck government, they don’t get anything done…LOL

    The unemployment success stick keeps getting pushed back another year or several years; have you noticed? Last year, they said we’d see employment gains in 2010….now its 2012; by 2012, they’ll be saying 2020, etc, etc….?

    Today’s article in part:

    “….The Federal Reserve predicts unemployment will stay high over the next two years because recession-scarred Americans are likely to stay cautious making for only a moderate-paced economic recovery…”

    http://news.yahoo.com/s/ap/20100217/ap_on_bi_ge/us_fed_economy

    LOL…recession scarred Americans staying cautious? It’s almost impossible not to be cautious in today’s zombie bank climate, when the only sizable interest return on investments is the savings you put in it….LOL

  8. 8
    Scotsman says:

    RE: pfft @ 6

    “High Lumber Prices Threaten Housing Market”

    Made me laugh out loud. I think a lack of demand and 18 million vacant units have a lot more to do with the housing markets than a bump in lumber prices.

    Does anybody think things through, or do they all just spew talking points after cherry-picking an issue to death?

  9. 9
    Mikal says:

    RE: softwarengineer @ 7 – Both the high lumber prices and you talking about running for office made me howl. Or, like what you put at the end of every other sentence.LOL. The only vote you could get would be from the fringe crazies. If lumber is rising it is because they stopped cutting down trees and all that excess as been used. Anyone building now is a buffon

  10. 10
    TheHulk says:

    RE: Mikal @ 9

    You are spot on Mikal. CR blogs that housing starts have plunged off a cliff and will continue to wallow at the bottom (see the red line in that graph — thats the vacancy rate).
    http://4.bp.blogspot.com/_pMscxxELHEg/S3wlRmiD7YI/AAAAAAAAHhM/V2ZNWqbQzok/s1600-h/HousingStartsVacancyRateJan.jpg

  11. 11

    RE: Mikal @ 9

    Fringe Crazies= We the People?

  12. 12

    RE: TheHulk @ 10

    Good Candidates= Corporate Funded Backed Candidates, the Only Ones We Have?

    I beg to differ: 87% of Americans are sick of our corporate picked and owned candidates and oppose the Conservative Supreme Court decision to continue foreign corporate money buying our elections and chosing our candidates.

    I’d call the Fringe Crazies the foreign corporates buying our elections…LOL

    How about you? Or are you the fringe crazies 13% that likes elections bought off by foreign corporate interests?

  13. 13

    RE: softwarengineer @ 12 – If it’s a foreign corporate interest that’s steering large sums of money in my direction? Sure, I’ll be one of the fringe crazy 13%.
    Gotta have principles.

  14. 14
    pfft says:

    By Mikal @ 9:

    RE: softwarengineer @ 7 Anyone building now is a buffon

    why?

  15. 15
    pfft says:

    By TheHulk @ 10:

    RE: Mikal @ 9

    You are spot on Mikal. CR blogs that housing starts have plunged off a cliff and will continue to wallow at the bottom (see the red line in that graph — thats the vacancy rate).
    http://4.bp.blogspot.com/_pMscxxELHEg/S3wlRmiD7YI/AAAAAAAAHhM/V2ZNWqbQzok/s1600-h/HousingStartsVacancyRateJan.jpg

    it doesn’t show that housing starts will wallow. it shows that they bottom during a recession and bounce back pretty good.

  16. 16
  17. 17
    Scotsman says:

    “Economists Predict Cutbacks, Tax Increases That ‘Aren’t Even Imaginable'”

    No! How could this be? And from ABC News, an Obama loving network. Must be Bush’s fault.

    http://abcnews.go.com/Politics/national-debt-budget-deficit-scary-forecast-taxpayers/story?id=9854459

  18. 18
    WestSideBilly says:

    RE: softwarengineer @ 4 – They don’t get it. If the Democrats could get their act together, they’d be running bill after bill through Congress and letting the GOP block them with filibusters. When November rolls around, Dems could say “We tried reforming the banking system, the GOP blocked us with a filibuster and not a single Republican was willing to help. We tried addressing rising health care costs that are driving up our debt, the GOP blocked us with filibusters and not a single Republican was willing to help. We tried passing jobs bills to help companies hire again, the GOP blocked us with filibusters and not a single Republican was willing to help….” And so on and so forth.

    Instead, they’re whining and quitting.

    As for softwareengineer running for senate, aside from being pretty comical, it would never work… the primary/caucus process ensures that the only people on the ballot with a chance to win are RNC/DNC vetted. Populism doesn’t get you through the primary, toeing the line does.

  19. 19
    Mikal says:

    RE: Scotsman @ 17 – Well, The NY Times had an article today about that. The conclusion was that it was his fault. He inherited a surplus. What did he leave?

  20. 20
    whatsmyname says:

    From paragraph 3 of the abc story: “It keeps me awake at night, looking at all that red ink,” said President Obama in Nashua, N.H., on Feb. 2. “Most of it is structural and we inherited it.”

    Here’s Ritholtz take:
    http://www.ritholtz.com/blog/2010/02/deficit-hawks-want-new-or-double-dip-recession/

  21. 21
    One Eyed Man says:

    RE: Scotsman @ 17

    Actually, I think its only about half Bush’s fault according to Wikipedia and the NY Times. Just trying to help out, I wouldn’t want George to take the blame for anything that wasn’t his fault. ;-)

    “The U.S. budget situation has deteriorated significantly since 2001, when the Congressional Budget Office (CBO) forecast average annual surpluses of approximately $850 billion from 2009–2012. The average deficit forecast in each of those years is now approximately $1,215 billion. The NY Times analyzed this roughly $2 trillion “swing,” separating the causes into four major categories along with their share:

    Recessions or the business cycle (37%);
    Policies enacted by President Bush (33%);
    Policies enacted by President Bush and supported or extended by President Obama (20%); and
    New policies from President Obama (10%).”

    http://en.wikipedia.org/wiki/2010_United_States_federal_budget

  22. 22
    TheHulk says:

    By pfft @ 15:

    it doesn’t show that housing starts will wallow. it shows that they bottom during a recession and bounce back pretty good.

    Housing starts will “bounce” back only when excess inventory is worked off. Do you see the divergence between the red and blue lines? Additionally I am sure this does not take into account the shadow inventory that banks currently own in the form of short sales/REOs that havent been foreclosed yet, since CR mentions that the vacancy graph is based on Census Bureau vacancy rates for owner occupied and rental housing.

  23. 23
    One Eyed Man says:

    RE: Ira Sacharoff @ 13

    Should that be principles, or principal?;-)

  24. 24
    pfft says:

    By TheHulk @ 22:

    By pfft @ 15:

    it doesn’t show that housing starts will wallow. it shows that they bottom during a recession and bounce back pretty good.

    Housing starts will “bounce” back only when excess inventory is worked off. Do you see the divergence between the red and blue lines? Additionally I am sure this does not take into account the shadow inventory that banks currently own in the form of short sales/REOs that havent been foreclosed yet, since CR mentions that the vacancy graph is based on Census Bureau vacancy rates for owner occupied and rental housing.

    actually the red line can go sidways or up after housing starts bottom in a recession.

    – the red line goes sideways in the early 90s
    – the red line goes up in the early 80s out of the double-dip

    what really matters is how much I can build a house for and how much can I sell it for?
    starts bottomed in the early 90s during the recession but housing fell until 1995.

  25. 25
    Mikal says:

    RE: pfft @ 24 – Except the amount of unoccupied homes at the moment is unprecedented.

  26. 26
    corncob says:

    The FOMC does not appear to think that things are improving in residential RE anymore…

  27. 27
    Mikal says:

    RE: softwarengineer @ 11 – Thank you Jim Jones.

  28. 28
    Scotsman says:

    RE: One Eyed Man @ 21

    I’m sorry, but I don’t believe anything the NYT writes anymore. Neither should you. How about we take a look at the methodology that assigns such precise percentages to attribution? Would you care to take a stab at exactly how that works? The 10% for Obama gives it away- nothing more than political posturing. It doesn’t even come close to passing the smell test- I expect better from you. And when it comes to current issues with political content or foundation, WIKI isn’t much better.

  29. 29
    Scotsman says:

    RE: whatsmyname @ 20

    Right…. this time is different, we can for sure borrow our way out of debt. It’s too late- Obama could have gone with an aggressive effort to cut spending and raise taxes on the very rich while cutting taxes on producers but he chose the easy, conventional path. He’s no leader, he knows very little about economics, and he’s in way, way over his head.

  30. 30
    Scotsman says:

    RE: Mikal @ 19

    To be honest, who cares? Obama is the guy in charge of the present and the future, and he appears to be stuck on a set of old ideas that didn’t work in the past and won’t work now. So when the history books are written Bush won’t get much more than a footnote by the time this is over. And the more time and energy we spend on armchair quarterbacking what Bush did or didn’t do verses what Obama should be doing, the further down the hole we’re going to sink.

    It’s past time to sweep the crap off the table and start over- balanced budget amendment, term limits, eased bankruptcy laws, banks confined to banking without trading, accounting rules that reflect reality, no more too big to fail, and a healthy dose of moral hazard.

  31. 31
    Scotsman says:

    “The larger message, from my perspective, is that Obama’s financial dependence on Mohammed Hasan Chandoo is potentially the psychological precursor of Obama’s financial dependence on Antoin “Tony” Rezko during Obama’s years in Chicago, IL”

    http://www.breitbart.tv/college-acquaintance-young-obama-was-pure-marxist-socialist/

    “He definitely saw America as the enemy”

    http://anonymouspoliticalscientist.blogspot.com/

  32. 32
    Mikal says:

    RE: Scotsman @ 30 – At times you make sense. To suggest that who cares why we are in a predicament after blaming the current president shows what a hypocrite you truly are.

  33. 33
    pfft says:

    By Mikal @ 25:

    RE: pfft @ 24 – Except the amount of unoccupied homes at the moment is unprecedented.

    and so is the housing start numbers- 500,000.

  34. 34
    whatsmyname says:

    Scotsman@29

    I’m a little unsure how your response ties my post. I thought the Obama quote within your article was quite ironic given your postscript.

    Ritholtz is saying the time for deficit tightening was 2005-2006, not today. I think that this is consistent with basic household economics where you save when you are making money, but you still continue to eat even when you don’t. He goes on to wonder where the deficit scourges of today were in those years, and does a little speculating on the matter.

    He further shows some information to the meme that the US 1930’s and Japan’s more current problems are tied to premature tightening rather than to nefarious effects of stimulus and spending. It is not an overwhelming case, but neither is the opposite. I have always thought it was odd to make too tight a parallel between Japan’s export/production/saver economy and our import/consumption/borrower environment.

    So nobody is saying that this time is different. We just don’t want to make the same mistakes. Of course, doing that might make things different this time.

    I’ll give you this. No enterprise can borrow its way out of debt. But that is really not the point. Enterprises borrow to make money. If they make sufficiently more than the debt, they are successful. Not all successful businesses need to borrow, but most do.

  35. 35
    pfft says:

    By Scotsman @ 31:

    “The larger message, from my perspective, is that Obama’s financial dependence on Mohammed Hasan Chandoo is potentially the psychological precursor of Obama’s financial dependence on Antoin “Tony” Rezko during Obama’s years in Chicago, IL”

    http://www.breitbart.tv/college-acquaintance-young-obama-was-pure-marxist-socialist/

    “He definitely saw America as the enemy”

    http://anonymouspoliticalscientist.blogspot.com/

    breitbart! you REALLY linked to breitbart.

  36. 36
    One Eyed Man says:

    RE: Scotsman @ 28

    I only cited the NY Times numbers to get under your skin. I couldn’t resist “poking the bear” so to speak;-) I believe in fixing problems not placing blame for past events. Placing blame generally isn’t constructive. And when you’re in the Oval Office, as Harry said, “The buck stops here.”

    I still think that with recent changes like Massachusetts there’s some chance Obama will begin to lead from a position seeking a higher degree of bipartisan consensus, more along the lines of Clinton but there’s certainly no guaranty. For example, I thought I heard today that he’s moving toward nuclear energy as part of his energy package.

    As to Wiki, it’s one of the few sources where it’s been easy to find a break down of the new budget numbers to see how they got to the 1.3 trillion deficit. As to the editorial comments in Wiki, the NY Times or from either side of the isle, I’m enough of a free thinker to take them all with a grain of salt.

  37. 37
    Scotsman says:

    RE: Mikal @ 32

    Nonsense- that’s not hypocrisy. I blame the current president because he’s the only one who can turn the ship at this point. Did the prior president put us too close to the shoals? Yes. Is there any point in thinking about that while we are trying to save the ship in the present? Absolutely not- it gains us nothing. Folks can live in the past if they want- I’m only concerned about saving my butt now and for the future. Your contention that focusing on the present while ignoring an irrelevant past is hypocritical is emblematic of why the system doesn’t work- too many confuse assigning blame with creating solutions. Whether the blame for the past is accurately ascribed to one party or another offers nothing going forward. And to further confuse things by suggesting criticism of current leadership must somehow be balanced with blame for the past accomplishes nothing. I don’t care about the past. I do care about how my kids are going to live their lives and how productive the rest of my life is going to be. Both are pretty dependent on the economic and social environment we’ll have in the years to come.

  38. 38
    One Eyed Man says:

    RE: Scotsman @ 31

    Then again, Larry Kudlow used to be a Democrat and Ronald Reagan was a pro-labor new deal Democrat supporting Humphrey for senator and Truman for president. Given that change by Ronnie, Barrack might be a middle of the road kind of guy in the near future.;-)

    http://www.youtube.com/watch?v=uJDhS4oUm0M

  39. 39
    Scotsman says:

    RE: whatsmyname @ 34

    I don’t agree that we or Japan tightened things up too early in the past. That argument has never made sense to me. It assumes that pushing more stimulus into the system at an even faster rate would have helped, a premise I don’t accept. Look at Japan with a debt of 200% of GDP- how much more can you add in? Has it helped them at all, except to stall the now inevitable? The logic is flawed and the application not true to the theory. The stimulus is supposed to come from savings, not deficit financing, but everyone is either ignorant of this fact or willfully ignores it. I truly hope that the coming world fiasco will be the end of Keynesian theory, or at least what passes for the application of his theories in our deficit oriented economy.

  40. 40
    Scotsman says:

    RE: One Eyed Man @ 38

    “Barrack might be a middle of the road kind of guy in the near future.”

    True enough. And I could win Powerball’s $50M and find myself fighting off supermodels.

    Not. ;-)

  41. 41
    pfft says:

    By Scotsman @ 39:

    RE: whatsmyname @ 34The stimulus is supposed to come from savings, not deficit financing, but everyone is either ignorant of this fact or willfully ignores it.

    huh? where does deficit spending come from if not savings? the government issues bonds which are bought by people who are saving and not spending.

  42. 42
    Scotsman says:

    RE: pfft @ 41

    When you get a cash advance on your Mastercard, then put the cash in the bank, that isn’t “savings.” Go to the source, read the original work- what passes for Keynesian theory these days misses the original intent by a mile.

  43. 43
    Scotsman says:

    Oops- initial unemployment claims are are up more than expected, exceeding projections by more than 30,000. Hmmm. Channeling “Pfft” I would say this is a good thing, as it shows employers are quick to show less productive workers the door, making them available to other potential employers as the economy recovers. It’s all good.

    http://www.cnbc.com/id/35457298

    Since the peak, 8.4 million jobs have been lost. More than 4.5 million are still receiving unemployment. What happens when those benefits run out? How long will we be able to continue extending benefits to non productive workers as the tax base continues to fall?

  44. 44
    Scotsman says:

    RE: pfft @ 41

    Here’s more- KD covered the same topic today. The best part starts half way down:

    http://market-ticker.org/archives/1974-Media-Idiocy-Consumers-Spend-at-2009-Levels.html

  45. 45
    AMS says:

    RE: Scotsman @ 42 – But using Mastercard cash advance to pay the mortgage sure can help the cash flow problem! lol.

  46. 46
    AMS says:

    RE: Scotsman @ 43 – Earnings increase while the economy recovers with fewer workers…

  47. 47

    RE: Mikal @ 16

    Defamation of Character Doesn’t Win Points on This Blog

    Watch the name calling….it insults you, not me…LOL

  48. 48

    RE: softwarengineer @ 47

    Have You Noticed That Bloggers With No Facts or Substantiated Opinions

    Frequently resort to defamation of character….its a clear sign of no intelligent reply so call ’em a slimeball…LOL

  49. 49
    whatsmyname says:

    Scotsman@39

    You can always disagree. However, Ritholtz can demonstrate a correlation to pullbacks in stimulus and pullbacks in the Japanese economy. It is a more compelling argument to me.

    And I will repeat once more that Japan’s economy is a very poor analogy to our own.
    Still, here is a link showing some basic differences in how the government is incented to respond here v.s. there:
    http://www.pcasd.com/the_us_government_will_not_choose_deflation
    Here is another about how the government has responded differently here than there:
    http://www.pcasd.com/us_not_going_down_japans_road
    Your advice is more like what the Japanese did than what we are doing, and oddly enough their results are more like, well, Japan.

    I also looked at your KD article. Two big errors in his hypothetical right away. First he confuses the size of your economy with the size of your net worth. Then he assumes away or externalizes any benefits from spending or investing the $20,000. Terrible.

  50. 50
    WestSideBilly says:

    RE: One Eyed Man @ 36 – How can BHO govern from a bipartisan consensus position when the other side automatically opposes anything he suggests?

  51. 51
    Mikal says:

    RE: softwarengineer @ 47 – Do you have someplace I can send money for your next political contest Mr. President?

  52. 52
    Scotsman says:

    RE: whatsmyname @ 49

    Sorry if I wasn’t clear- I don’t dispute that adding stimulus pumps up the economy in the short term. And yes, when the stimulus ends the economy will contract by a like amount. What I am concerned about is the long term effects. There are a number of studies that suggest our debt load is already such that each dollar of additional debt results in less than a dollar of additional growth- a strong case for diminishing returns and the suggestion that we are past that part of the “curve” where stimulus works toward long term benefit. I do believe that at this point in the process additional stimulus, especially when spent as the current administration has spent it (short term benefits, foreign outsourcing, etc.) will have a net negative effect over the longer run. It’s now more about the debt, and less about the stimulus.

    Karl would argue that the $20k you borrowed has very little net effect or return when spen on consumer goods (70% of the economy) that were most likely manufactured over seas.

  53. 53
  54. 54
    The Tim says:

    RE: Scotsman @ 53 – Wow. I love how matter-of-fact the guy is in the video. It is also amazing when they show the “$350,000 home” and you think of how much a home like that would cost anywhere near here.

    Looks like it even has some sort of water frontage there on the left side.

  55. 55
  56. 56
    AMS says:

    RE: softwarengineer @ 48

    In regards to software engineers:

    “A software engineer furious with the Internal Revenue Service launched a suicide attack on the agency Thursday by crashing his small plane into an office building containing nearly 200 IRS employees, setting off a raging fire that sent workers running for their lives.”

    What more can I say?

  57. 57
    AMS says:

    In regards to cheap interest rates, Greg Hunter suggested, “You are buying an asset, not a loan.”

    http://usawatchdog.com/will-the-real-estate-crisis-continue/

  58. 58
    Scotsman says:

    RE: The Tim @ 54

    Funny, my first thought was “geez, that’s a lot of home for $350K!” Just serves to remind us how expensive Seattle is.

  59. 59
    whatsmyname says:

    Scotsman@52

    “Sorry if I wasn’t clear- I don’t dispute that adding stimulus pumps up the economy in the short term.” KD does. He claims that each dollar spent by the government replaces a dollar of private spending for no net gain.

    “Karl would argue that the $20k you borrowed has very little net effect or return when spent on consumer goods (70% of the economy) that were most likely manufactured over seas.”
    He very likely would. If the original premise doesn’t pan out, add more assumptions. Maybe assume the conclusion.

    This article is problematic He effectively sets up the straw man for seignorage, but he ignores inefficiencies in cross border flows and investor “perception”. He equates ALL government spending with gifts and aid. He postulates a scenario that rates will be set indefinitely to protect the weakest debtors, and then assumes unchanging exponential growth. He concludes from this a sort of doomsday rate ceiling as though the players remain constant in their situation. From there you can (he does) build quite a castle, but why bother?

  60. 60
    Mikal says:

    RE: whatsmyname @ 59 – Don’t bother. He is as deluded as the other “populist.” They both just like to see their comments. Without either of them this site would lose 1/3 of the comments.

  61. 61
    what goes up must come down says:

    The Tim,

    Since in the past you took exception with someone calling the tea partiers tea baggers, what is your feeling now when one spokes people of the tea baggers I mean tea partiers calls for hanging someone. Since this has become more of a political blog. I am curious. I mean if name calling is derogatory what is calling for violence?

  62. 62
    The Tim says:

    RE: what goes up must come down @ 61 – Sorry, I have somehow missed whatever you’re referring to. I thought maybe it was a comment in this thread, but I searched for “hang” and only your comment referred to hanging anyone. I don’t carefully read every single comment so it’s possible I missed some oblique reference to a hanging somewhere? What are you talking about?

  63. 63
  64. 64
    The Tim says:

    RE: AMS @ 63 – Ahh, thanks for the link. I had not seen that random two-paragraph news blurb.

    So because I criticized someone for using a foul term in a comment on my site, apparently “what goes up must come down” now believes that it is my responsibility to actively seek out and denounce any inappropriate comments made by anyone, anywhere. Or something.

    Well what goes up must come down @ 61, I think it’s quite a stretch to call an “unidentified woman” a “spokes person of the tea baggers,” but regardless, I definitely think that calls for violence are just as inappropriate as using sexual innuendo to insult those with which you disagree politically.

  65. 65

    RE: Mikal @ 51

    Hi Mikal

    I do hope you have a nice weekend.

    In reference to intelligent reply: what is your opinion of foreign corporations currently funding/controlling our election campaigns? If you’re looking for support from Obama, he agrees with the 87% of us Americans, opposing the recent Supreme Court decision to side with foreign corporations, also, McCain helped write the Supreme Court’s case opposing foreign corportaion buying off of elections. Do you agree with with Obama and McCain, like 87% of Americans do, on this issue?

    Simple question and the answer from you should be fairly simple too.

  66. 66

    RE: AMS @ 56

    AMS…LOL

    You’d better bury this news story though, the SE turned out to be an hardline Obama supporting Democrat?

  67. 67
    pfft says:

    By Scotsman @ 42:

    RE: pfft @ 41

    When you get a cash advance on your Mastercard, then put the cash in the bank, that isn’t “savings.”

    so the entire spike in the savings rate is mastercard? nonsense.

  68. 68
    The Tim says:

    RE: what goes up must come down @ 61 – Just saw an update to this story run across Twitter.

    But Dianne Capps of Clarkston said her remark about Sen. Patty Murray was taken out of context, and what she meant was that Murray should be voted out of office in November.

    “Nobody had a rope to hang Patty Murray,” she said.

    Whether or not she is being entirely forthcoming about her original phrasing (she should just be straight and say it was a joke in bad taste that she never should have made), she is obviously back-pedaling on her violent statement.

    This is more than can be said for people such as yourself who continue to use the name of a disgusting sexual act to deride your ideological opponents.

  69. 69
    Scotsman says:

    RE: whatsmyname @ 59

    Ah, that’s a bit much. We have two issues, semantics and time line. Karl tends to focus more on long term effects- I doubt he would dispute the short term rush of government spending, but would claim it’s negated over the longer term by the debt, a very reasonable position. And sure, there are other considerations that will temper various aspects of the analysis but none of them change the outcome.

    What you haven’t done in all this is satisfactorily refuted the main point- that eventually the cost of the ever increasing debt kills any recovery one may think they’ve bought. In reality, the only time line that counts is the longer term, and the main issue has to be sustainability. The truths still hold- you can’t borrow your way out of debt, an economy can only service so much debt before the currency or economy as a whole collapses, and we are past the point where we will ever be able to pay off our current and future commitments through growth or any other normally expected path.

  70. 70
    Scotsman says:

    RE: pfft @ 67

    No, we’ve been over this before- it’s debt reduction, seen as an increase in savings through the magic of government statistics. And just like putting the cash advance in the bank isn’t an increase in savings, paying off your mastercard, or even defaulting on it, isn’t savings either. Unless you work in the federal office of obfuscation and delusion, also known as governmental statistics.

  71. 71
    Mikal says:

    RE: softwarengineer @ 65 – President SoftwareEngineer, I think the Supreme Court over stepped it’s bounds. They are legislating from the court and not following over 100 years of legal precedence. If health care isn’t reformed in some way we are definately finished. I don’t see either party addressing it at the moment. What is the point of having the best health care in the world if few can afford to use it.

  72. 72
    whatsmyname says:

    Scotsman@69
    I have the disadvantage of having to argue with what Karl did say rather than what he would say. Still, there is precious little there to refute. His main point is built upon unrealistic assumptions taken to absurd proportions. I’ve pointed out other holes you have neglected to address. And I see no support at all for the idea that we are past the tipping point. The “borrowing your way out of debt” is an emotional appeal, and not to any rational point because you haven’t in any way shown how much debt the economy can service. The accumulated detritus becomes unmanageable for argumentation. Now I don’t expect to turn you, but similarly you can not expect me to get to a .08 on such weak beer.

  73. 73
    AMS says:

    RE: whatsmyname @ 72 – Does a tipping point exist, and if so, how would we determine its value?

  74. 74

    RE: Mikal @ 71
    Keep brown nosing Software Engineer and he might appoint you Secretary of State:)

  75. 75
    Scotsman says:

    RE: whatsmyname @ 72
    Nonsense- Karl’s argument is built upon this chart that has been around for some time. Since a picture’s worth a thousand words, I’ll be brief. In short, for every dollar of new debt spent into the economy we now get about 18 cents of new growth. That puts us well past any tipping point, and in fact we passed it long ago:

    http://yelnick.typepad.com/.a/6a00d8341c563953ef01156f264c13970c-popup

    If you are honest with yourself and want to learn, not just drinking the Obama juice and running around in your rose-colored glasses, thinking about this should get you well past .08. If you need some discussion, here’s one of hundreds of articles that explain both the chart and its implications. Have fun!

    http://www.safehaven.com/article-12962.htm

  76. 76
    what goes up must come down says:

    RE: The Tim @ 68 – you have got to be kidding me first I was not the one who used such terminology to begin with I just pointed out something, now you want to lecture me about someone saying something about some sexual act as opposed to killing someone well guess what fyou

  77. 77
    what goes up must come down says:

    RE: The Tim @ 64 – mmm guess you were as they say wrong

  78. 78
    The Tim says:

    RE: what goes up must come down @ 76 – So you made a pitiful attempt to play gotcha, I called you on it, and your response is “guess what fyou.”

    Super mature.

  79. 79
    pfft says:

    By Scotsman @ 69:

    RE: whatsmyname @ 59

    What you haven’t done in all this is satisfactorily refuted the main point- that eventually the cost of the ever increasing debt kills any recovery one may think they’ve bought. In reality, the only time line that counts is the longer term, and the main issue has to be sustainability. The truths still hold- you can’t borrow your way out of debt, an economy can only service so much debt before the currency or economy as a whole collapses, and we are past the point where we will ever be able to pay off our current and future commitments through growth or any other normally expected path.

    how do you get there though? italy, japan and belgium all have higher debt to gdp ratios and haven’t suffered any of those. what you have to do is stabilize the debt to gdp levels when the economy recovers. we have had a national debt almost since day one. of course it won’t ever get paid off. we’ll always carry some debt. the debt service burden isn’t that high. we’re just back to where we were in the 90s.

  80. 80
    Scotsman says:

    RE: pfft @ 79

    Read the article I posted at #75. It’s not as much about the ratio as it is the productivity of the debt. We’ve been over this before too. Japan, etc. have a different structure to their economies, more manufacturing, etc. and they buy their own debt as opposed to selling it offshore, i.e. the money stays in the country. and while you claim they are doing OK, I maintain they are dead men walking, finished as soon as rates pop up or their population stops shrinking. Just because the zombie is able to chase you down the street doesn’t mean they’re healthy or coming back to life.

  81. 81

    RE: The Tim @ 77

    Tim, Good Response

    I appreciate your management of blog etiquette….troll behavior on SB is not communication and one of the best things about your website is I see almost no troll behavior.

    Thanks for your pragmatic response.

    BTW, you manage SB, so you make the rules for communications :-)

  82. 82

    RE: Ira Sacharoff @ 74

    And Ira

    I appoint you Secretary of Real Estate ethics.

  83. 83

    RE: Mikal @ 71

    Hi Mikal

    I agree with you on the Supreme Court campaign finance ruling.

    Health care reform is needed too, but Obama is facing the same buzz saw Hillary saw in the 90s, IMO….who’s gonna pay for it and how do we restructure a pay plan; assuming health care workers’ pay and benefits stay stable?

    I know the assumption is efficiencies would lower costs; but since it’s ambiguous what the efficiencies really are, re: Medicare, Medicaid, Cadillac Insurance, etc, etc….it’s bound to make a lot of Americans suspicious until it’s spelled out in simple/understandable terms.

    Its a conundrum and if I had a magic wand, I’d fix it if I could.

  84. 84
    whatsmyname says:

    AMS@73
    I think it is conceivable. I will leave it up to those who think it probable to burn the calories calculating the value.

    Scotsman@75
    I checked your links. The article is interesting, but not compelling. If he is right that all the money flooding the economy is being used to pay down debt, then there really will be no net debt increase, no? I do like the underlying premise that it’s all that bastard Nixon’s fault – but that is just an emotional feel good.

    Your graph is great. If only I had seen it in 1987 the trend line would have put zero hour at about 1998, and all this would be safely in the past.

  85. 85
    AMS says:

    RE: whatsmyname @ 84 – Actually I prefer to look at the net present value. If the investment is sound, then the investment will pay off in the future, net of the debt servicing costs.

    I still am not sure that the $4,500 paid on my car purchase was a sound use of taxpayer money.

    Ultimately, one might suggest that we are experiencing diminishing returns on the government spending, but it still might be a positive investment, if it pays off sufficiently in the future.

  86. 86
    whatsmyname says:

    AMS @ 85
    I agree.

  87. 87

    By softwarengineer @ 82:

    RE: Ira Sacharoff @ 74

    And Ira

    I appoint you Secretary of Real Estate ethics.

    Not lucrative enough. I want to be the head of the Securities and Exchange Commission, or Secretary of Commerce. How ’bout Treasury Secretary? You think I could do worse than Geithner?

  88. 88
    pfft says:

    By Scotsman @ 70:

    RE: pfft @ 67

    No, we’ve been over this before- it’s debt reduction, seen as an increase in savings through the magic of government statistics.

    no you told me it was debt reduction, you didn’t have any source so call me very very skeptical.

  89. 89
    pfft says:

    By Scotsman @ 80:

    RE: pfft @ 79

    Read the article I posted at #75. It’s not as much about the ratio as it is the productivity of the debt. We’ve been over this before too. Japan, etc. have a different structure to their economies, more manufacturing, etc. and they buy their own debt as opposed to selling it offshore, i.e. the money stays in the country. and while you claim they are doing OK, I maintain they are dead men walking, finished as soon as rates pop up or their population stops shrinking. Just because the zombie is able to chase you down the street doesn’t mean they’re healthy or coming back to life.

    basically you’re saying you’re right but you’re wrong? we just…wait and someday you’ll be…right.

    bottom line is other countries less credit worthy have taken on more debt and not had economic collapse. you didn’t even note that corporate cash is up 78% in the last year to $1.2 trillion(a record) and investors poured $300 billion into bonds.

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