By The Tim on January 30, 2011
Talk about the global and national economy to your heart’s content, as much as it takes to get it out of your system so the rest of the site can stick to real estate and housing.
As of 09/07/2010, global economic comments that do not directly relate to Seattle-area real estate go only in threads designated for this specific subject.
Posted in Administrative, Open Thread | Tagged administrative, economics_open, 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.
By Blurtman @ 150:
but he passed it against the lobbying of wall street so there’s that.
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Quite analagous to the 12 oz box of food that costs $2.00 being replaced by the 10 oz box of food that costs $2.00. See, prices are stable.
U.S. Economy Trades High-Paying Jobs For Low-Paying Positions, Report Finds
In the last 12 months, the U.S. economy has largely traded high-quality jobs for poorly-paid positions, according to a new report by the National Employment Law Project.
Though the economy has added more than a million jobs over the last year, new positions have skewed towards relatively low-wage industries, the New York-based non-profit finds in “A Year of Unbalanced Growth: Industries, Wages, and the First 12 Months of Job Growth After the Great Recession.” The report finds a “striking imbalance” between the jobs being added and those lost over the last year:
http://www.huffingtonpost.com/2011/02/23/us-economy-trades-high-pa_n_827360.html
See, the economy is recovering.
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By Blurtman @ 152:
the goalposts are always moving with the zombie bears. we lose jobs for years and people say where are the jobs? now that we’ve added jobs they aren’t good enough.
“Quite analagous to the 12 oz box of food that costs $2.00 being replaced by the 10 oz box of food that costs $2.00. See, prices are stable.”
you honestly think that? you honestly think the BLS doesn’t see that? you fell for another internet meme.
How are CPI prices collected and reviewed?
http://www.bls.gov/cpi/cpifaq.htm#Question_8
Frequently Asked Questions
http://www.bls.gov/cpi/cpifaq.htm
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RE: pfft @ 153 – Great. Please provide a similar link for jobs, thanks!
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I’m kind of a perfect example. in the past twenty years if I ever got into financial trouble I could do a couple of Real Estate transactions, and Bob’s you uncle. Even though people swear to me that nothing has changed I know that it has. It’s not just here in the United States, it’s global.
We are now building, from the ground up, my “fall back” position of Real Estate services. While most of my buddies are going along with business as usual, I know that lower price points are what the consumer is buying, will buy, and will have to buy.
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By Blurtman @ 154:
see #152
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Charles Ferguson, who won the Oscar for Best Documentary for Inside Job. He said at the end of his acceptance speech:
“Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail and that’s wrong.”
Obama is holding the unemployed hostage to Wall Street. As Stiglitz and numerous others have stated, there will be no real recovery until there are prosecutions for fraud.
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RE: Blurtman @ 157 –
“there will be no real recovery until there are prosecutions for fraud.”
Maybe in the short run. I think it slows up the return of investor confidence in the short run, but I doubt that prosecutions affect investment confidence or deter future fraud to any great extent in the long run. I think they had about a thousand convictions after the S & L crisis in the early 1990′s and about 10 years later a new crop of cutting edge financial geniuses managed to do it all over again, but even bigger and with just a slightly different twist.
No matter what you do, in the long run, people will want government to reduce cost and regulation, and some ingenious but unscrupulous capitalists (perhaps a small minority but with a large impact) will figure out a new way to unethically and often illegally gain a competitive advantage in seeking alpha.
Saddly their success will cause others to copy their unscrupulous practices in order to compete and the financially sleazy will once again increase in number and rise to the top. The task of stopping the bastards is a never ending battle for truth, justice, and the American way. Its a super human job to figure out which regulations are just wasted cost and an unnecessary imposition on business and which are needed to really deter fraudulent buiness practices. Even when you figure it out, some capitalists will figure out arguably legal ways around the law (that’s what some lawyers do for a living) to gain a competitive advantage. Americans hate to spend money on government and they hate to lose. In all likelihood it will happen again and probably within my remaining life expectancy of about 25 years (although perhaps not as large in amount or with such devastating impact to the economy).
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By Blurtman @ 157:
I hope you come around to some of Stiglitz’s other ideas.
Joseph Stiglitz: The Stimulus ‘Absolutely’ Worked, Wants Second Round
http://crooksandliars.com/susie-madrak/joseph-stiglitz-stimulus-absolutely-w
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RE: pfft @ 159 – If it “worked”, then why do we need more? Obviously, it failed. So let’s do it again and prove Einstein’s definition of insanity to the world with real conviction this time. Also, the article is from October 2, 2010. What moral ground do you have to borrow from and tax future generations without representation into debt servitude? You have none and you know it.
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“Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.” Judge Louis D. Brandeis
A good read, as always: http://jessescrossroadscafe.blogspot.com/2011/02/american-monster-excerpts-from-madoff.html
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RE: pfft @ 159 – Jeepers, do I have to agree with everything that Greenspan says, too? He also decries the rampant fraud on Wall Street in the link I provided previously, and once again below. The point, which I know you undertstand, is that is you can have an assembly of learned people who may not agree on everything agree on this one thing, that no accountability means no recovery, and so you have to lsiten.
http://georgewashington2.blogspot.com/2010/12/letting-fraud-continue-will-not-restart.html
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RE: Blurtman @ 162 – You nailed it. Having no accountability is a wonderful benny of becoming a crony capitalist oligarch.
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RE: Blurtman @ 161 –
Re: A good read, as always:
http://jessescrossroadscafe.blogspot.com/2011/02/american-monster-excerpts-from-madoff.html
That is excellent… I’ve been reading a lot about sociopaths the last few years (Robert Hare’s work especially – i.e. Snakes in Suits). There are varying degrees of sociopathology – with some being completely psychotic (usually end up dead or in prison early in life) and others with some signs of compassion and empathy. But they are narcissists as much as the sociopaths always think of themselves first and love power/manipulating others. (They are often highly intelligent as well). This is a very real and substantial problem that our society must deal with: Sociopaths are driven personalities and never really quit and they comprise 2-4% of our society (6-12 million individuals!) and are disproportionately represented in the fields of business, finance and law according to Dr. Hare and other researchers.
See: http://www.hare.org/
and this is an excellent article
http://www.newyorker.com/reporting/2008/11/10/081110fa_fact_seabrook
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RE: Ben @ 160 –
Ironically, that may be one of Einsteins biggest failures. Quantum dynamics says Einstein was wrong and he never accepted it. According to quantum dynamics you may have a probability of the same result, but you can do the same thing over and get different results, at least at the sub-atomic level.
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RE: Blake @ 164 – Ahh, the New Yorker. Good stuff!
“Can you say Ted Bundy caused more disaster than the guys at Enron? How many destroyed lives and suicides followed as a result of so many people losing their savings?”
Exactly. How many lives are being destroyed by Wall Street fraud? The unemployed. Seniors receiving zip on their savings accounts. Pillaged pension funds.
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RE: Kary L. Krismer @ 249 –
You don’t get it. Agribusiness is no longer your local farmer. It’s not a supply, and demand issue. It’s a complex set of calculations to get the most money from the crops that can be produced anywhere in the world.
I’m consistent when I say it is simple enough to feed every one in the world. It’s a matter of distribution, and a willingness to let go of massive profits based on free dollars getting a return.
I don’t think you are getting the free dollars part. Credit is cheap. Borrowing money, millions or billions of dollars is cheap. The risk is very low.
An example that comes to me is when the Hunt brothers wanted to corner the silver market they were using hard dollars, real dollars. Today they could simply buy the dollars for cheap, buy all the silver they wanted, drive up the price, sell off, slowly, and make profits. They could dollar cost their way to owning the silver market.
What would be there to stop them?
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By Ben @ 160:
it worked, it saved millions of jobs but it wasn’t enough. it was too small to begin with.”What moral ground do you have to borrow from and tax future generations without representation into debt servitude? You have none and you know it.”if they economy had collapsed we’d be in even more debt. trillions more. futures generations will benefit if the economy doesn’t collapse and their parents and grandparents have good lives.
mark zandi, who was one of john mccain’s economic advisors, had a report that said this.
that’s $2.3 trillion more over just 3 years. so those who say it’s irresponsible to shoulder future generations with debt now have to support the stimulus, right?
http://www.creators.com/liberal/froma-harrop/washington-saved-our-economic-hide.html
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RE: pfft @ 168 – “if they economy had collapsed we’d be in even more debt. trillions more. futures generations will benefit if the economy doesn’t collapse and their parents and grandparents have good lives.”
Prove it.
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RE: pfft @ 168 – Mark Zandi is working at Mad Magazine! Oh wait, he is working at Moody’s Analystics, a place with much less credibility. Moody’s should be out of business for fraud and gross incompetence. And speaking of incompetence, didn’t Zandi endorse McCain’s witch craft trickle down economics nonsense?
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By David Losh @ 167:
Yes, North Korea and China are doing really well feeding their people without regard to profit. :-D
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By David Losh @ 167:
Well for one thing, as soon as they stopped buying the price would plummet, leaving them with a bunch of silver they couldn’t sell for what they paid for it.
You do remember how that worked out for them, right?
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RE: pfft @ 168 – Ben, quit making me agree with pfft! The argument that the stimulus “didn’t work” is merely a Republican talking point designed to sway the ignorant. You can debate how effective it was, and whether it was worth it, but to argue it didn’t work at all is an argument based on a complete lack of understanding of the world we live in.
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The stimulus did squat. Kicking the can down the road isn’t fixing anything. How is delay the same as repair? Here are some pictures for the intellectually challenged. Revenues are on the left, expenditures are on the right. Pay attention to the gap. Also note that these numbers don’t reflect temporary recession, they reflect permanent imbalances:http://static2.businessinsider.com/image/4d690245ccd1d5d750110000-920-691/usa-income-Now here’s the kicker- the gap, $1.3 trillion, is 10% of GDP. A 10% reduction in GDP is the accepted definition of depression. Balancing the budget by reducing spending will put us in depression by the time multiplier effects are accounted for. Balancing the budget by borrowing or printing will only lead to increasing interest rates and or a depreciating currency, both of which will also throw us into depression, albeit through different mechanisms I won’t attempt to explain here. The long and the short of it is we’re cooked. The stimulus didn’t do anything except buy time and political favor at the expense of an increasingly negative and painful resolution. That’s not success.
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RE: Kary L. Krismer @ 173 – I am NOT a republican, nor a democrat for that matter. Not sure why you keep saying that. It should be pretty evident that I can’t stand either major party as both were complicit in the destruction.
Just jerking pfft’s chain as he likes to do – you too on occasion. The trick is to not post anything original and simply tear down other people’s posts with inane insults. Add a few non sequiturs and anyone can play pfft.
\sarcasm
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RE: Kary L. Krismer @ 173 – To give you a serious reply, stimulus can never “work” in the way people would like to believe, in the same way that living off your credit cards after a loss in income “works”. The future is borrowed from to pay for the present. Something for nothing does not exist, no matter how much you want to believe it so. The credit card of the US, otherwise known as peak debt, was maxed out about 2007. The consequences of this cannot be wished away. The fraud must stop, prosecutions start, and debts dealt with in order to return to anything resembling prosperity.
Call me “Sparks”.
http://www.youtube.com/watch?v=bLpNSvpMoZQ
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By Ben @ 169:
less people working means less tax revenue=more debt. it’s very simple. do you think that economic collapse helps government revenue?
here is former mccain economic advisor mark zandi and here is his report.
How the Great Recession Was Brought to an End(warning PDF)
http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf
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By Blurtman @ 170:
mark zandi is a pretty respected economist and is on all the business networks.
after 5 minutes of googling mark zandi saw this coming.
Moody’s Economy.com Study: Housing Market Downturn in Full Swing
http://www.prnewswire.com/news-releases/moodys-economycom-study-housing-market-downturn-in-full-swing-55951062.html
ok?
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RE: pfft @ 177 – Silly rabbit, tricks are for kids.
Watch why you have never heard of the Great Depression of 1920 if you really want to build your brain cells:
http://www.youtube.com/watch?v=czcUmnsprQI
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By Scotsman @ 174:
you couldn’t be more wrong. you’re already 0-1 in predicting economic disaster.
I repeat, economic collapse would put us into MORE debt not less. $2.3 trillion more just over 2010-2012.
“The stimulus did squat.”
if you don’t think that spending $700 billion didn’t help the economy it’s because you don’t want to. 2 years plus and it hasn’t led to much higher interest rates or even hyperinflation.
CBO says stimulus may have added 3.3 million jobs
http://voices.washingtonpost.com/political-economy/2010/08/cbo_says_stimulus_may_have_add.html
Research Desk responds: How do stimulus size and economic growth compare internationally?
http://voices.washingtonpost.com/ezra-klein/2010/06/research_desk_responds_how_do.html
Keynes In Asia
http://krugman.blogs.nytimes.com/2010/07/24/keynes-in-asia/
the stimulus worked all throughout the world.
austerity is failing in the UK right now. if you don’t see that it’s because you don’t want too.
Britain’s Economy Stalls, in Setback for Cameron
http://www.nytimes.com/2011/01/26/world/europe/26britain.html?_r=2&src=twr
“Balancing the budget by reducing spending will put us in depression by the time multiplier effects are accounted for.”
in a way only you could you just proved that the stimulus worked. you said Iceland was a model yet their debt increased from 35% of GDP to 100%.
“The long and the short of it is we’re cooked. ”
you in another Friedman Unit?
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By Ben @ 176:
exactly. and since the government has a stake in the economy not collapsing it makes sense to take on short-term debt to keep the economy afloat.you guys just can’t seem to grasp the fact that if the economy collapsed we would be in even more debt.in 2019 the cost of the bailouts are a combined $69 billion dollars. the cost of tax cuts that year is $702 billion. the bailouts are hardly a drag. Iraq will cost more at over $100.http://www.cbpp.org/images/cms/12-16-09bud-rev6-28-10-t11.jpg
“To give you a serious reply, stimulus can never “work” in the way people would like to believe”
yes it can. supposed you are unemployed and just need to fix your car to get to a job that is already lined up. would you put your repairs on your credit card knowing that you could pay them off working for a few months at your new job? off course you would.
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I am knocking down internet memes left and right tonight. I leave you with this:
Moody’s: GOP Budget Would Cost 700,000 Jobs
http://tpmdc.talkingpointsmemo.com/2011/02/moodys-gop-budget-would-cost-700000-jobs.php?ref=fpblg
reduced spending=less jobs=less tax revenue=more debt. austerity is not expansionary.
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RE: pfft @ 182 – All you left me with is the realization that the morons I work with are comparative geniuses. The credit card is maxed out, silly rabbit. Cutting back your expenses to live within your means is not fun.
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RE: Ben @ 183 –
I can’t seem to figure out how we’d have more debt with an economic collapse. I like your analogy of a person living on credit cards after losing their job rather than cutting back expenses.
I look at a foreclosure as a personal “economic collapse” after which, the person has less debt…not more as pfft yammers on about.
How long do you think Pfft would last on Denningers forums?
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By Ben @ 183:
no it isn’t. interest rates are still low years after the stimulus and tarp. you’re wrong
“Cutting back your expenses to live within your means is not fun.”
that’s right and that’s why you don’t do it as a nation. austerity is not expansionary. it’s failing in real-time in the UK and it still doesn’t register with you people.
austerity during a recession reduced demand period. the UK economy contracting in the 4th quarter of last year.
Conservative Austerity Idea Is Failing: David G. Blanchflower
http://www.bloomberg.com/news/2011-01-28/conservative-austerity-idea-is-failing-commentary-by-david-blanchflower.html
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By EconE @ 184:
because if less people are employed the less the government collects in tax revenue. that means more debt. austerity would just compound the problem.
do you think the government would be less in debt if unemployment were 15% or if unemployment were 10%? the answer is obvious.
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Yup, this recovery is just boiling along. Here’s some cold water reality:
“Adjusted for inflation, S+P stock gains since 2000 have been negative, even counting dividends.
Federal spending has leaped up $1.5 trillion—a staggering 60%–in just six years, from 2004 to 2010, and $1 trillion—36%–just since 2007. Though the Great Recession officially ended in mid-2009, Federal deficits just keep going up.
Meanwhile, the U.S. economy has been treading water. In adjusted-for-inflation dollars, the U.S. Gross Domestic Product (GDP) in 2010 was almost precisely the same as it was in 2007: $13.363 trillion in 2007 and $13.382 trillion in 2010.
Remove this extraordinary rise in Federal spending, and the GDP would have declined by about 11%.
Anyone who thinks the U.S. economy is suddenly going to start growing rapidly organically–that is, via private-sector growth, not ever-rising Federal borrowing and spending–is delusional.”
We won’t even talk aboput pensions, but there’s more here:
http://www.oftwominds.com/blogfeb11/public-pensions2-11.html
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RE: pfft @ 186 –
Debt would be defaulted on and we would have hyperdeflation.
People with cash would hire former debt junkies like yourself for $2 per day.
At $2 a day wages the U.S. would be able to export far more and more people would be employed.
It wouldn’t matter to people as they wouldn’t have to service their former debt and prices of everything would adjust to accomodate their new wages.
You really need to brush up on your economics.
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RE: Kary L. Krismer @ 171 –
That is exactly the point. You are either playing the game or you’re outside, needing the product, but it is a game.
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By Scotsman @ 174:
It’s not about delay. It’s about preventing cascading failure. In the medical profession there’s a reason they use band-aids. Your approach is to ignore what little we know about economics and pretend it will somehow be better by doing nothing.
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By Ben @ 176:
Thank you for the serious reply. I too think both parties are at fault. And BTW, I didn’t accuse you of being a Republican, just of stating one of their talking points.
I don’t understand though how you can say borrowing doesn’t work. Companies borrow all the time to make more money in the future, and where they can’t do that you have what we call third world economies. For governments it wouldn’t be to borrow to make money, but instead borrowing to set conditions for the economy to grow.
What doesn’t work is borrowing nearly every year for 50 years in a row. But we only have ourselves to blame for that. The voters of this country like government spending money and hate taxes, so that’s what the politicians do.
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By pfft @ 177:
It also means spending more to bail out banks (on deposit guarantees) and less lending for business activity, meaning even less tax revenue.
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RE: Kary L. Krismer @ 172 –
I do remember.
It just wasn’t that long ago that it was big news that a few million here, maybe a billion over there could sway a market.
My point is that today, by the sheer volume of money, in the system, it’s possible that there are a hundred Hunt Brother schemes going on today, tracked by a computer generated, and managed portfolio.
Now that sounds like a conspiracy, which I know it isn’t, it’s there, as a part of doing business today.
In addition to the volume, the massive amounts of money already made, we have governments throwing more money into an already bloated system.
I’m not saying it will work, or it’s smart, I’m saying that there is no risk. I think we are seeing the system is broken.
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RE: David Losh @ 193 – My point was the Hunt brothers ended up in bankruptcy. Your scheme doesn’t work.Something like that can work for stocks if you create some hype to get others to buy it. But the key is to get others to buy, not buying it yourself. But just the process of buying stuff up doesn’t make you any money, because when you stop the value returns to normal.
I would add that if you want to buy something in a scam, the key would be buying something nearly worthless, such as a penny stock, not a precious metal.
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RE: EconE @ 188 – You’re talking about a sovereign default. A nation’s money is its credit – the result is hyperinflation not deflation. To put it in the personal economy metaphor you seem to favor, if you default on your obligations, your credit is worth less, not more.
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RE: Kary L. Krismer @ 190 –
No, my approach is we’re already dead, we just haven’t hit the ground yet. So it really doesn’t matter what we do. But the sooner we get started on the real clean up the better it will be.
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RE: Scotsman @ 196 – If it doesn’t really matter what we do, how can it be better to get started sooner? Sir, this makes no sense.
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By Scotsman @ 187:
GDP- growing
unemployment has peaked
recession has been over for almost two years
ISM Manufacturing Index increases in February
http://www.calculatedriskblog.com/2011/03/ism-manufacturing-index-increases-in.html
how can you look at this chart and not see the economy improving and growing for almost two years.
http://cr4re.com/charts/charts.html?Manufacturing#category=Manufacturing&chart=ISMFeb2011.jpg
same here:
World-Wide Factory Activity, by Country
http://blogs.wsj.com/economics/2011/03/01/world-wide-factory-activity-by-country-14/
“”Adjusted for inflation, S+P stock gains since 2000 have been negative, even counting dividends.”
we can cherry pick any time period we want. the stock market is up 100% almost two years to the day. I guess that means we are recovering?
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By EconE @ 188:
I need to brush up on my economics? you still haven’t explained how less people paying taxes would lead to more government revenue. your argument makes no sense. less people working means less tax revenue period. debt wouldn’t necessarily be defaulted on. I don’t even know what hyperdeflation is. did you make that up? the nation most similar to ours is Iceland. Greece and Ireland don’t have their own currency or monetary policy. what happened in iceland? the currency crashed. inflation roared. gdp crashed. unemployment went up national debt went from 35% of GDP to 100%. no hyperdeflation.
mark zandi’s report proved we’d be in more debt. the higher the unemployment rate the more debt. more people unemployed means more payments like welfare and food stamps.
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By Scotsman @ 196:
you aren’t worried about a collapse. you don’t care about the national debt. you supported the extension of the bush tax cuts. that adds more than $3 trillion to the national debt over the next 10 years. you want repeal of obamacare which will subtract $250 billion over the next 10 years from the national debt and even more over 20 years. it’s the singlest biggest deficit reducing plan in over a decade.
watch what people do not what they say.
Putting the $3.9 trillion extension of the Bush tax cuts in context
http://voices.washingtonpost.com/ezra-klein/2010/09/putting_the_39_trillion_extens.html
CBO: Health-care reform bill cuts deficit by $1.3 trillion over 20 years, covers 95%
http://voices.washingtonpost.com/ezra-klein/2010/03/cbo_health-care_reform_bill_cu.html
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