Global Economic March Thread

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.

For previous economic open threads, click here.

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.


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.

247 comments:

  1. 1
    pfft says:

    CONFIRMED: Manufacturing Is Red Hot, And Payrolls Are Being Understated
    http://www.businessinsider.com/confirmed-manufacturing-is-red-hot-and-payrolls-are-being-understated-2011-3#ixzz1FOWCX7zR

    word is that the jobs report will be 200,000. will that finally satisfy the bears? it’s more than population growth.

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  2. 2
    pfft says:

    no recovery in car sales or the economy. still crashing.

    Based on an estimate from Autodata Corp, light vehicle sales were at a 13.44 million SAAR in February. That is up 28% from February 2010</blockquote.

    U.S. Light Vehicle Sales 13.44 million SAAR in February
    http://www.calculatedriskblog.com/2011/03/us-light-vehicle-sales-1344-million.html

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  3. 3
    Blake says:

    RE: pfft @ 1
    Re: “word is that the jobs report will be 200,000. will that finally satisfy the bears? it’s more than population growth.”
    Wow! It’s early 2011 and we may see the first month where job creation outstrips poulation growth!! I agree that the TARP bailout and (modest) stimulus propped up the system and prevented it from falling into the abyss. But there is still too much capacity, too little demand, too much debt, and a lot of fear. And the stimulus run out… AND there will be no more stimulus as governments are retrenching, cutting budgets and laying off people!
    From yesterday: “Pain without Purpose”
    -snip- There is no likelihood of reforms of Wall Street and Canary Wharf aimed at diminishing the likelihood and severity of any future financial panic, and no likelihood of government intervention to restore the normal flow of risky finance through the banking system. Nor is there any political pressure to expand or even extend the anemic government stimulus measures that have been undertaken.
    http://www.project-syndicate.org/commentary/delong111/EnglishAhhhh… Look across the sea to Britain! ;-(
    http://www.ft.com/cms/s/0/5e5a6d1e-33c9-11e0-b1ed-00144feabdc0.html#axzz1FObzeL9C

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  4. 4
    EconE says:

    By pfft @ 1:

    CONFIRMED: Manufacturing Is Red Hot, And Payrolls Are Being Understated
    http://www.businessinsider.com/confirmed-manufacturing-is-red-hot-and-payrolls-are-being-understated-2011-3#ixzz1FOWCX7zRword is that the jobs report will be 200,000. will that finally satisfy the bears? it’s more than population growth.

    How about population growth + # of students that graduated college in 2010 + # of people that lost their job in 2010.

    2010 college graduates 1,650,000
    2010 job losses 2,590,000

    Oooops

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  5. 5
    One Eyed Man says:

    RE: EconE @ 4

    Is that jobs lost number from that oft quoted publication Ursus Humorous? I believe the BLS number for 2010 was about 1.1 million net jobs gained. The 2.59 million might be lost jobs but only if there were 3.69 found jobs.

    Unfortuantely I believe that most of those found jobs are in the not so well paid service industries where the over flowing labor pool seeks a somewhat stagnant lower level in the bottom of the last remaining reservoir of available employment. The service sector, and especially the fast food industry, is growing and stealing market share from more expensive establishments. McDonalds has expertly executed its growth strategy with its expanded food and beverage menu. The other day I was in McDonalds in Nevada and in addition to the new salads and coffees, underneath the Big Mac and the Double Cheese Burger they listed a new trial offering they unbelievably called a Rub and a Tug. I asked the attractive young woman at the register if she was the one who served the Rub and a Tug and she smiled coyly and said yes. I told her to wash her hands real good cause I wanted a Cheese Burger.

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  6. 6
    pfft says:

    By Blake @ 3:

    RE: pfft @ 1
    Re: “word is that the jobs report will be 200,000. will that finally satisfy the bears? itâ��s more than population growth.”
    Wow! It’s early 2011 and we may see the first month where job creation outstrips poulation growth!!

    I think it may be the 2nd or 3rd. the birth/death model may also be understating the number of jobs added. we’re headed in the right direction but not fast enough.

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  7. 7
    pfft says:

    By EconE @ 4:

    By pfft @ 1:
    CONFIRMED: Manufacturing Is Red Hot, And Payrolls Are Being Understated
    http://www.businessinsider.com/confirmed-manufacturing-is-red-hot-and-payrolls-are-being-understated-2011-3#ixzz1FOWCX7zRword is that the jobs report will be 200,000. will that finally satisfy the bears? it’s more than population growth.

    How about population growth + # of students that graduated college in 2010 + # of people that lost their job in 2010.

    2010 college graduates 1,650,000
    2010 job losses 2,590,000

    Oooops

    this is the classic playbook of you guys here. good news comes out and you move the goal posts.

    I remember when I said less bad was good when we were only losing 50,000 jobs a month. then you guys said when will the jobs get here? I said the trend was we would add jobs soon. we did but then it wasn’t good enough. we had to add enough jobs for population growth. now that’s not good enough. I give up!

    you are wrong anyways, we didn’t lose jobs in 2010. we added 1 million private sector jobs. obama added about as many jobs in 1 year as bush did in 8 years.

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  8. 8
    EconE says:

    RE: pfft @ 7 -I’ve never moved any goal posts.You’re the queen of the Red Herring.

    7.9 million jobs lost…many forever.

    http://money.cnn.com/2010/07/02/news/economy/jobs_gone_forever/index.htm

    Kind of puts those 1,000,000 burger flipping pfft jobs in perspective.

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  9. 9
    pfft says:

    By EconE @ 8:

    RE: pfft @ 7 -I’ve never moved any goal posts.You’re the queen of the Red Herring.7.9 million jobs lost…many forever.http://money.cnn.com/2010/07/02/news/economy/jobs_gone_forever/index.htmKind of puts those 1,000,000 burger flipping pfft jobs in perspective.

    there it is. now 1,000,000 jobs isn’t good enough. they have to be the best jobs ever. 2010 was the best job creating year in probably 3 or 4 years. that is something to celebrate. it’s not good enough yet but it’s better.you can bet those 1,000,000 people are happy to have those jobs. we should be glad we’re adding jobs after two full years of losing jobs every month.

    “We’ve got the wrong people in the wrong place with the wrong skills,” said John Silvia, chief economist with Wells Fargo Securities. He said construction workers in California or Florida and auto workers in Michigan will have to relocate and retrain to find new jobs.”As many as half the people who lost their jobs will have to find something else to do,” said Silvia.

    that is false. there is no structural unemployment. there is simply too little demand.Who’s Unemployed?
    http://krugman.blogs.nytimes.com/2011/02/13/whos-unemployed/Defining Structural Unemployment
    http://krugman.blogs.nytimes.com/2010/11/29/defining-structural-unemployment/

    “Kind of puts those 1,000,000 burger flipping pfft jobs in perspective.”

    prove it.

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  10. 10
    EconE says:

    RE: pfft @ 9

    Red Herring.

    Why are you so dishonest pfft?

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  11. 11
    David Losh says:

    RE: pfft @ 9

    I am so stupid that I have been reading these idiotic Krugman Opinion Pages without paying any attention to what the guy is saying.

    Where does he address debt? Where does he talk about debt? What’s that debt to job ratio? How many credit cards has the average working family gone through to tide them over?

    Yippee they have a job, now what? Will they continue to make those minimum credit card payments?

    I like where he went back to the 1970, or 1980s, in England. How many credit cards were floating around in England in the 1970s, 1980s?

    The guy’s a moron, a blathering moron. If I were a conspiracy kind of guy I’d say he works for banking interests.

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  12. 12
    David Losh says:

    What are the chances of a global revolution?

    I was asking pfft some place on one of these threads if he had noticed that there are people in the streets all over the world. Europe, Africa, Asia, and Wisconsin. South America is still being plundered as an emerging market, but once the economy there stalls, by an over abundance of credit, that no one can afford to pay back, then what?

    What is going to happen when all of this new found credit is due, and payable? Are people, all over the world going to pay up because they promised to pay? Who will enforce that?

    There was a news report about foreclosures in Spain that showed an office crammed floor to ceiling with foreclosure files. There they garnish your wages after foreclosure, there is limited bankruptcy.

    Really, what’s going to happen?

    A better question is why people pay the bank. What honor does a bank have? What do they contribute? Really what if they were all closed? What if they were restricted to do what they were set up to do which is to protect our money, and fascilitate trade? What if usary were made illegal, and interest rates restricted to 4%?

    What could it hurt? Or is it that same argument that if medicine doesn’t pay billions of dollars to doctors, hospitals, and insurance companies, there would be no medical care?

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  13. 13
    Kary L. Krismer says:

    By David Losh @ 11:

    RE: pfft @ 9

    I am so stupid that I have been reading these idiotic Krugman Opinion Pages without paying any attention to what the guy is saying.

    Where does he address debt? Where does he talk about debt?

    He’s has addressed it in the past by pointing out that it’s a long term problem that needs to be dealt with, and pointing out that our debt level isn’t all that bad.

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  14. 14
    Kary L. Krismer says:

    RE: David Losh @ 12 – With the exception of Wisconsin, most of the revolution in the world has more to do with the nature of the authoritarian government and the fact that they don’t do anything at all to provide for their people. Look at all the foreign workers leaving Libya. The country has massive unemployment, but the citizens are so poorly educated and trained that they can’t fill the jobs. That isn’t due to lack of resources. Or Iran, where they can’t even manage to supply their own gasoline. Or Venezuela, where when they kick the foreigners out, things start slipping, again due to poor education and training.

    You complain a lot about capitalism, without realizing that it seemingly works the best of any system.

    BTW, your 4% interest rate cap would cripple the economy, put people out of work, and make it so that people could not afford to feed themselves. Other than that, it’s a great idea! ;-)

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  15. 15
    One Eyed Man says:

    RE: EconE @ 10 – EconE and Pfft:

    Warren Buffett had a good interview on CNBC this morning. I agree with Warren on many things including employment. I don’t know how much of the interview is available because it was spaced in bits and pieces over more than an hour but in the Oracle’s estimation, the resiliancy of capitalism says Pfft will be proven right over time. He said that Berkshire owned entities have about 270K employees and they added about 3K net new employees last year. But he also said that they are growing much faster than that and it will likely be necessary to add far more than 1% to the workforce in 2011 and beyond. He estimates unemployment will be in the low 7’s by the 2012 election.

    He also said it will be a mistake not to put deficit reduction similar to Simpson Bowles into effect; its a mistake not to limit future entitlements and public pensions; stimulus was necessary to stop panic but more stimulus and QE is probably unnecessary; you should value investments based upon what they produce and not on what markets price them at (markets are often just a measure of lemming mentality and that’s when alpha’s found by those who believe in fundamental long term valuation rather than technical indicators and momentum trading); etc.

    Way to hang in Pfft. If the bears would open their eye, they’d be able to see that there is light at the end of the tunnel and all they have to do is help clear the path for all to move to it to get some fresh air. If you believe in deficit reduction tell people about it and stop whining like a bunch of kitties about how your historically low taxes are too high.

    You don’t have to be a tea party idiologue to believe in deficit reduction and the social value of decreasing entitlement and defense spending. And you don’t have to be a Keynsian idiologue to believe that stimulus and QE helped stop the panic and the downward spiral in 2008.

    Capitalism occassionally cuts enforcement costs and rewards the less than scrupulous, but its also extremely resiliant and will adapt and survive. That doesn’t mean that recovery will bring back the bubble jobs supported by a misallocation of capital. And it doesn’t mean that jobs won’t be lost to the huge pool of cheap foreign labor. It does mean that the american economy will likely continue to grow as it adapts and survives. That doesn’t mean that now is necessarily a great time to invest in real estate. The fundamentals of rent vs own analysis, price to income ratios and distressed shadow inventory still show substantial risk despite low interest rates and potential future inflation. It does, however, mean that in all probability the sky isn’t falling!

    In all likelihood, just like BLS numbers were wrong on the way down in 2009 and Trim Tab’s was right, BLS is probably wrong now and ADP is closer to the real job gains. We’re in a long, slow recovery. And its in the form of a workout or reorganization that eliminates some of the long term social costs of entitlement and defense spending. It’s working so far, but there’s a lot more work to do in deficit reduction to keep the american reorganization on track.

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  16. 16
    Kary L. Krismer says:

    By One Eyed Man @ 15:

    And you don’t have to be a Keynsian idiologue to believe that stimulus and QE helped stop the panic and the downward spiral in 2008.

    Keynesians would not have supported much of the past debt which was incurred, so if their economic system had been in effect in the past we could have easily spent much more on stimulus without even half the concern about debt levels.

    It’s like if your car needs $2,000 worth of maintenance. Not a problem if you don’t have an existing debt problem, but if you’re already maintaining $40,000 in credit card debt, then it is a problem.

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  17. 17
    David Losh says:

    RE: One Eyed Man @ 15

    That was really well put.

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  18. 18
    David Losh says:

    RE: Kary L. Krismer @ 16

    That’s exactly what I was saying, but it just sounds better when you put it like that?

    I was talking about Europe, and people in the streets. Asia, the United States, and yes Africa, where the problem is much worse. I would have addressed oil as an issue, but that really gets us nowhere.

    Debt, both personal, and government, has to be equalized much sooner than later. In Europe, as well as the United States those good, educated wage earners owe, and have to pay back, investment capital, like student loans, in a “bad,” or deflating economy.

    The debts are out there, and will be growing while people wait for the economy to recover. In my opinion credit card debt will be increasing here, and in Europe, to tide people over. The payments are due even though people are working less, are paid less, are under employed, but still have the expenses of a more robust life style.

    The threat that the economy will collapse if interest rates are held to 4% is hooey. It’s like insisting that we Have to pay $4 a gallon for gas or the economy will collapse. That’s a lot more hooey. Banking, or oil companies are getting a free pass while the rest of the economy Has to pick up the slack. They are just to big not to be entitled to massive wind fall profits. We have to pay banking, stock, hedge fund, bond traders million dollars in bonuses or no one will do it? Hooey.

    We here, in the United States have bankruptcy in our Constitution. I don’t think Europe has the same system. We might survive if we stop giving banks the gift of our hard earned dollars, while in Europe the banking industry will destroy that new Euro trading economy.

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  19. 19
    softwarengineer says:

    RE: One Eyed Man @ 15

    Yes Unemployment Will Go Down in 2012

    If their benefits run out and we stop counting them as unemployed; but is that good news, if there’s even 35,000/mo jobs created [there isn’t] with a need for 355,000 jobs per month created.

    I’m a Democrat too [an old fashion Earthday MLK/JFK type for reduced population], but morphing today’s HORRIFYING unemployment the way the elite Democrats do today [and Buffet] is a complete joke IMO.

    Did Buffet talk about today’s $100/bbl oil BTW?….LOL, I’m sure he left that rattlesnake out of his recession’s bottomed out thesis.

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  20. 20
    Blurtman says:

    RE: One Eyed Man @ 15 – Needless to say, Buffett is a very smart investor, but one who also profits from fraud. Besides economic recovery, there are unaddressed issues of justice and law and order. Is one to assume that as crime has contributed to bringing down the world economy, it is OK now because even though we are in a deep ditch, we are clawing ourselves out?

    Analagous to what you are saying – the local bank has been robbed and neighborhood investment has crashed. But no worries, the bank has been stabilzed and the neighborhood is slowly clawing its way back. Hurrah! But what about the bank robbers?

    Or, more graphically, the criminal set the victim on fire, and the victim almost died. But he has stabilized, and is slowly recovering. Hurrah! While I am glad that the burn victim may be recovering, what about the guy that set him on fire?

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  21. 21
    pfft says:

    By EconE @ 10:

    RE: pfft @ 9

    Red Herring.

    Why are you so dishonest pfft?

    what are you talking about?

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  22. 22
    pfft says:

    By David Losh @ 11:

    RE: pfft @ 9
    Where does he address debt? Where does he talk about debt? What’s that debt to job ratio? How many credit cards has the average working family gone through to tide them over?

    he’s said over and over again that short-term debt like the stimulus is not a problem. the main thing is to rescue jobs. if people are working the national debt will take care of itself.

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  23. 23
    pfft says:

    By Kary L. Krismer @ 16:

    By One Eyed Man @ 15:
    And you don’t have to be a Keynsian idiologue to believe that stimulus and QE helped stop the panic and the downward spiral in 2008.

    Keynesians would not have supported much of the past debt which was incurred, so if their economic system had been in effect in the past we could have easily spent much more on stimulus without even half the concern about debt levels.

    It’s like if your car needs $2,000 worth of maintenance. Not a problem if you don’t have an existing debt problem, but if you’re already maintaining $40,000 in credit card debt, then it is a problem.

    also most democrats wouldn’t have supported the debt we built up. remember bush inherited a surplus and squandered it with 2 tax cuts for the rich, an unfunded medicare part d program and 2 unpaid for wars. those programsare cost to cost us eventually trillions. had bush not passed those programs we’d be trillions less in debt.

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  24. 24
    pfft says:

    usually this is posted already by you know who. it’s good data so that’s why it probably wasn’t posted. I don’t really pay attention to it I thought I’d just post it as a service.

    ADP Estimates U.S. Companies Added 217,000 Jobs in February
    http://www.bloomberg.com/news/2011-03-02/u-s-companies-added-more-than-estimated-217-000-jobs-last-month-adp-says.html

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  25. 25
    Blake says:

    RE: One Eyed Man @ 15
    The mistake you make is in referring to our current system simply as “capitalism.” It is actually state- or crony-capitalism and in many ways it could end up being worse than either pure capitalism or social-democracy.

    A few simple examples:
    The private health insurance companies would love to insure healthy people and push the sick people onto the state. If they are able to do this they end up with huge private profits, while the taxpayers get all the downside risk and costs. (“Obamacare” was written by the insurance industry and their stocks and profits have sky-rocketed since.)

    I wrote a masters thesis 22 years ago titled “The Privatization of Current Account Deficit Finanacing: 1973-1985″ about the private banks taking over covering current account deficits (due to the oil shocks of 73 and 79) from the IMF and World Bank – – and the resulting sovereign debt crises (and bailouts). When the debt crisis hit the banks stepped back and let the governments bailout out the countries (Mexico, Brazil etc) while the private banks walked away with billions in profits.

    And the way Fannie and Freddie were used in ’06-current to step in and take over the mortgage mess is similar – – they were doing the private sector a favor by buying all their sh*tty mortgages, while all those bankers and middle men walked away and paid themselves bonuses for being so brilliant!
    … It just keeps happening and has to stop, because the end result of all three examples above is lots of public debt, huge private profits and no accountability!

    It is wrong to say we have a capitalist system. If we did a whole lot of banks and pseudobanks (ie. GE and GM-finance) would be out of business and their leaders and owners out on the street in ruins…

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  26. 26
    Kary L. Krismer says:

    By pfft @ 23:

    By Kary L. Krismer @ 16:
    By One Eyed Man @ 15:
    And you don’t have to be a Keynsian idiologue to believe that stimulus and QE helped stop the panic and the downward spiral in 2008.

    Keynesians would not have supported much of the past debt which was incurred, so if their economic system had been in effect in the past we could have easily spent much more on stimulus without even half the concern about debt levels.

    It’s like if your car needs $2,000 worth of maintenance. Not a problem if you don’t have an existing debt problem, but if you’re already maintaining $40,000 in credit card debt, then it is a problem.

    also most democrats wouldn’t have supported the debt we built up.

    I would disagree with that. Spending other peoples’ money is a bi-partisan practice. Not to mention that the Ds were in control for many of the past 50 years.

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  27. 27
    Not Patrick says:

    Let’s take a vote:

    Who here thinks that the individual behind “pfft” is a Fabian Socialist, aka a Communitarian, aka a follower of the Third Way? He or she is ultimately here to support the Communitarian ideal; that being a cross between communism and our current free market republic, intentionally arriving at a system that puts the community’s rights ahead of the individual’s.

    In accordance with traditional Communitarian methods, this person indulges in manipulation, distortion and deception for the purpose of furthering the Communitarianism program.

    Background 6 min. video on Communitarianism —
    http://www.youtube.com/watch?v=LKW862_h-W4

    Respond to this post with your vote: Yea, or Nay.

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  28. 28
    David Losh says:

    RE: pfft @ 22

    I was talking about personal debt. People have maxed out what they can borrow, but are being asked to borrow more. In Europe the situation is extremely dire because they garnish wages.

    Kary would have me believe we have to have credit to survive, that without credit we will collapse the economy.

    I’d like to hear about how capping interest rates, in this country, or globally, would crash an already broken system.

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  29. 29
    One Eyed Man says:

    RE: Blake @ 25

    I don’t disagree with any of that Blake. But there are some limits to how much of my BS anybody will tolerate. Scotsman gets irritated if I pontificate too much.;-)

    As a matter of fact, Buffett even addressed the issue of management compensation disconnected from long term liabilities and GSE’s socializing losses to some degree this morning. In particular he said you can’t have management (public or private) that can incur long term liabilities like pension obligations and entitlements while reaping short term rewards long before the bill comes due. He also discussed the possibility of having modified GSE’s where private money made up some percentage like perhaps 50% and the private investors took the first hit so that there would be true profit motivated risk management.

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  30. 30
    EconE says:

    99ers out of luck.

    http://dailynewspulse.com/house-to-vote-down-unemployment-extension/228772/

    This will make the unemployment rate (U3) fall as the people falling off won’t be *counted* as unemployed. Who cares if they don’t have jobs as long as it’s not “official”…right? Pfft will dishonestly tout this as evidence of a recovery and then screech that we “zombie bears” have once again “moved the goal posts”.

    If you’ve lost your job and are pi$$ed off about it…don’t blame the bearish bubble bloggers…blame the Pffts of the world.

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  31. 31
    Ben says:

    RE: Kary L. Krismer @ 16 – Kary, don’t be surprised when I say that is a great analogy.

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  32. 32
    One Eyed Man says:

    RE: Blurtman @ 20

    Your right Blurtman. I didn’t give any attention to the issues of injustice, criminality and control fraud. And in part, I think that’s a function of how the federal government decided to deal with the crisis. I stated in some posts two years ago that the government’s plan to resolve the economic crisis was to save the financial system first. I’m not sure that they’re giving everybody a free pass, but the pursuit of wrong doers has certainly been a much lower priority than proping up the fragile financial system.

    There are both budget issues (as you know, the enforcement entities don’t have enough money to do the job) and political issues (Obama has been labled as anti-business from the beginning and he’s trying to mitigate the political and economic damage that causes). Obviously, I don’t know all the facts but I think it would be really hard to nail any of the top management at the big financial institutions for fraud related to the huge amounts of bad MBS’s sold. The general statements that they were told that the loans backing the MBS’s were junk probably isn’t enough for criminal liability. The prosecutor probably has to show more specific knowledge of the facts concerning a specific deal.

    I think its a lot more likely that if anybody ends up being the fall guy on the MBS issues, it will be upper middle management guys whose figure prints are on the files so to speak. It’s a little like Ollie North and not Ronald R. taking the fall on the arms for hostages deal. The top guys will say they didn’t know the specific facts of any individual deal and they didn’t authorize any individual deal. Unfortuantely for the upper middle level guys, they’re names are all over those files. I also think maybe the only way there will be many criminal convictions is if the civil suits discover the needed evidence and provide it to the criminal prosecutors.

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  33. 33
    pfft says:

    By Not Patrick @ 27:

    In accordance with traditional Communitarian methods, this person indulges in manipulation, distortion and deception for the purpose of furthering the Communitarianism program.

    too funny. yeah, as soon as I convince everyone here that the economy is recovering my communitarian plot will be realized!

    sorry for deceptively posting public data!

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  34. 34
    pfft says:

    By David Losh @ 28:

    RE: pfft @ 22

    I was talking about personal debt. People have maxed out what they can borrow, but are being asked to borrow more.

    no they haven’t. some have. something like 50% of people don’t have credit card balances. are you maxed out? probably not. most people here probably aren’t.

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  35. 35
    pfft says:

    By EconE @ 30:

    99ers out of luck.

    http://dailynewspulse.com/house-to-vote-down-unemployment-extension/228772/

    This will make the unemployment rate (U3) fall as the people falling off won’t be *counted* as unemployed. Who cares if they don’t have jobs as long as it’s not “official”…right? Pfft will dishonestly tout this as evidence of a recovery and then screech that we “zombie bears” have once again “moved the goal posts”.

    If you’ve lost your job and are pi$$ed off about it…don’t blame the bearish bubble bloggers…blame the Pffts of the world.

    are you done with your histrionics? of course I care about the unemployed. you guys are the one’s who don’t care. you would rather the economy fall off a cliff and millions more be unemployed than take on a little bit of debt. then some of you(this doesn’t mean all of you) turn around and advocate for tax cuts that will leave us more in debt than the stimulus and tarp ever did.

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  36. 36
    pfft says:

    *warning deceptive economic data*

    DOT: Vehicle Miles Driven increased in December
    http://www.calculatedriskblog.com/2011/03/dot-vehicle-miles-driven-increased-in.html

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  37. 37
    One Eyed Man says:

    RE: EconE @ 30

    So if 2 or 3% of 2006 employment was bogus and bubble related, and 2% or 3% of GDP during each year from 2000 to 2007 was bogus bubble activity and/or deficit funded activity, doesn’t a recovered economy have a U-3 more like 7%? And isn’t it a slow job to whittle down the deficits at state and federal levels without tanking GDP? It took a long time to screw it up this bad and its going to take a long time to fix it.

    We gained a million jobs in 2010. We still need 7 or 8 million more just to get back to the employment level in 2007. I don’t think Pfft would dispute that. If Pfft says everythings fixed, he’s an idiot. If he says that the statistics show the economy is improving, he’s accurate based upon the majority of metrics over the last year.

    Scotsman would of course say that those stats are irrelevant because they were bought with a 1.3 T deficit in 2010. My response to that is that you eliminate the deficit slowly over about 5 years to avoid a huge negative shock to the economy and huge downward spiral. Its a work out or reorganization and it takes time like a Chapter 11 plan to put the entity back in the black.

    It might be more semanticly correct to say that we are “recovering” rather than that we have “recovered.” But I see the term recovery as a process, and I think we’re in it. If we don’t start eliminating the deficit soon we won’t be. But that die has not yet been cast.

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  38. 38
    Ben says:

    RE: pfft @ 35 – “a little bit of debt”????????

    Regarding Not Patrick’s vote: I vote Woody Woodpeckerish agitprop. HahahaHAHA….

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  39. 39
    Econe says:

    RE: One Eyed Man @ 37

    It’s not that I completely disagree with Pfft. She is just very dishonest in the way she cherrypicks her data while “pfft-ing” other peoples valid data. She also misrepresents many of our opinions. If she actually had joined in a two sided discussion and brought something to the table other than just googling and posting articles with nothing more than soundbites and bleats I wouldn’t be so inclined to investigate public mortgage data as I do.

    Vehicle miles driven? LOL

    Maybe I should post articles about bankers and realtors with cancer and claim it’s a good thing because chemotherapy contributed greatly to GDP.

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  40. 40
    One Eyed Man says:

    RE: Econe @ 39
    Point taken.

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  41. 41
    Blurtman says:

    RE: One Eyed Man @ 32 – You may be right. We may never know Obama’s motives until his bio or a tell all from a former cabinet member comes out. Personally, I think it has a lot to do with the “folks in our social circles can not conceivably be criminals” thinking (wink, wink, nod, nod) and the “I need those campaign dollars” thinking.

    But what a wonderful business it is, that you can run into the ground by stuffing your pockets with fraudulently obtained short term monies, and hold the rest of the country hostage if they don’t bail out your industry.

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  42. 42
    David Losh says:

    RE: pfft @ 34

    You don’t get that? You can’t see that the credit markets have lent beyond all reasonable limits?

    Let’s concentrate on housing unit debt as an example. Yes, there are people who own property free, and clear, yes there are people who have equity, or have huge equity. There are also maybe, as has been claimed 50% who owe more than the property is worth, let’s say 25%.

    The price of property is falling. My opinion is that we over built. I also think zoning laws, and available dirt, along with stream line permitting processes would allow for 2 units for every one that is currently standing, town houses as an example.

    As property prices fall it may be good for the new batch of borrowers, but the existing property owners are losing more equity, less equity, less wealth.

    At the same time all property owner borrowers are paying off debt that will not give them any equity in return. They are just burning dollars. They probably would be better off renting.

    What that means is one less avenue for creating, generating, or holding wealth.

    It’s a personal debt trap. Consumer credit is even worse, because you are using up your future dollars by buying today’s goods. If you say we haven’t exhausted that yet, OK, but we will, maybe very soon, maybe later, but there is a point where people don’t have any more ability to pay.

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  43. 43
    whatsmyname says:

    RE: Econe @ 39 – People who live in glass houses… How long since you made a post that did more than “pfft” pfft? Certainly none in this thread. I for one would be interested to know what opinions of yours are being misrepresented, and how they are being misrepresented.

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  44. 44
    pfft says:

    By Ben @ 38:

    RE: pfft @ 35 – “a little bit of debt”????????

    Regarding Not Patrick’s vote: I vote Woody Woodpeckerish agitprop. HahahaHAHA….

    $700 billion wasn’t alot. we also would be in greater debt if the economy had collapsed further. it was $700 billion over 2 years. the wars and tax cuts for the rich will cost much more.

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  45. 45
    pfft says:

    By Econe @ 39:

    RE: One Eyed Man @ 37

    It’s not that I completely disagree with Pfft. She is just very dishonest in the way she cherrypicks her data while “pfft-ing” other peoples valid data. She also misrepresents many of our opinions. If she actually had joined in a two sided discussion and brought something to the table other than just googling and posting articles with nothing more than soundbites and bleats I wouldn’t be so inclined to investigate public mortgage data as I do.

    Vehicle miles driven? LOL

    Maybe I should post articles about bankers and realtors with cancer and claim it’s a good thing because chemotherapy contributed greatly to GDP.

    how am I dishonest in the way I post data? what have I misrepresented?

    “Vehicle miles driven?”

    I like it because it’s data not many look at. more people are driving. we can infer that is because more people are driving to work or going shopping.

    “If she actually had joined in a two sided discussion and brought something to the table other than just googling and posting articles with nothing more than soundbites and bleats I wouldn’t be so inclined to investigate public mortgage data as I do.”

    I do join in two sided discussions. I am one person with an unpopular opinion so I get piled on by everyone. lots of other people do the same. if you don’t like it don’t read it. I skip a lot of quoted article. I take a lot of personal abuse. why is this accepted Tim? what is this?

    “I wouldn’t be so inclined to investigate public mortgage data as I do.””

    ?

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  46. 46
    pfft says:

    By David Losh @ 42:

    RE: pfft @ 34

    You don’t get that? You can’t see that the credit markets have lent beyond all reasonable limits?

    no. some loans are unreasonable. we maxed out loans to people who can’t pay them. many people outright own their homes. many people have no CC. there are plenty of good borrowers out there but they don’t want to borrow! I don’t blame them.

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  47. 47
    pfft says:

    anyone notice that in the midwest states that may decide the election in 2012 the Republicans are rushing through unpopular union-busting policies. Unions will be out campaigning big-time now in 2012. last time it was the tea party folks who were fired up. now it’s the unions. obama has the edge in 2012.

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  48. 48
    David Losh says:

    RE: pfft @ 46

    “no. some loans are unreasonable. we maxed out loans to people who can’t pay them.”

    That’s a hot mess of contrary statements. Then you reiterated what I already said, so you said nothing, but you do agree with me? or not?

    I know there are thousands of people, maybe millions, who are frugal, sitting on savings, maybe gold, and hybrid seeds, with no debt. They lurk around talking about how smart they are and every one with debt is foolish. It may be foolish to buy big houses, take trips, wear expensive shoes, make investments, or start businesses, but the alternative is to work your job, be frugal, have a nice life, and maybe be rewarded some day.

    I know you want me to say debt is good, and it is, with moderation. The problem today is the banking system collapsed a robust economy. It’s not for lack of money, or the availability of funds, it’s just corporate greed.

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  49. 49
    Kary L. Krismer says:

    By Ben @ 31:

    RE: Kary L. Krismer @ 16 – Kary, don’t be surprised when I say that is a great analogy.

    I was actually thinking I needed to work on it. Maybe tweaking it so that your car needed either $2,000 of repairs or a total replacement, but because of your prior borrowing and credit card balances you could only afford to make partial repairs which would leave you with an inefficient and unreliable vehicle.

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  50. 50
    Kary L. Krismer says:

    RE: One Eyed Man @ 32 – Beyond all that, it’s not criminal to make decisions that eventually put your employer into a position of insolvency. And it’s not criminal to oversee an employee that does that. It is a securities violation not to disclose that once you realize those facts, but I’m not certain that lack of disclosure is criminal, and in any case, the person who put the company in that position (and is most likely to know) isn’t a person who is likely to in any way be involved with such disclosures.

    Stated differently, lots of bad things occur that are not criminal. You can even kill someone in your car and have that not be a criminal act (as long as the nuts in Seattle don’t get to the politicians in Olympia). Massive financial losses and turmoil do not necessarily evidence a crime.

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  51. 51
    Kary L. Krismer says:

    By pfft @ 47:

    anyone notice that in the midwest states that may decide the election in 2012 the Republicans are rushing through unpopular union-busting policies. Unions will be out campaigning big-time now in 2012. last time it was the tea party folks who were fired up. now it’s the unions. obama has the edge in 2012.

    I actually agree with that. I blame (too strong of word, but I can’t think of a better one) the last election results on Pelosi and Rahm Emanuel overplaying their hands. The next election could very well turn on some Republicans overplaying their hands.

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  52. 52
    Blurtman says:

    RE: Kary L. Krismer @ 50 – Kary,
    I understand that you are a lawyer, but you have shown a continual bias towards an anti-fraud stance. In earlier posts you had even denied that significant fraud has occurred on Wall Street, which puts you in the same camp as Pffft.

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  53. 53
    Blurtman says:

    As mentioned in post #20, a and clearly working in cahoots with Denninger, more indications that Buffet profits from fraud.

    Where’s The Oracle Of Omaha’s Ethics?

    Say much less simple compliance with the law:

    CORPUS CHRISTI — A final judgment has been issued against one of the nation’s largest mobile homebuilders related to a jury trial last year that found the company liable for civil racketeering and fraud in a South Texas case.

    A federal jury in November found Vanderbilt Mortgage and Finance Inc. liable for collecting payments on a home for four years after it filed a release of the lien on the home.

    The jury found the company engaged in unfair debt collection practices, committed common law fraud and violated the Racketeer Influenced Corrupt Organizations Act, also known as RICO.

    On Friday, U.S. District Judge Janis Graham Jack confirmed the jury’s findings against that company and Clayton Homes Inc. and CMH Homes Inc. in a 13-page judgment. The companies plan to fight the judgment, their attorney said.

    Who is Clayton Homes? One of the largest mobile home builders in the United States, owned by Berkshire Hathaway. Warren Buffet’s company.

    http://market-ticker.org/akcs-www?post=181435

    Keep in mind that Buffet’s Berkshire was a very large shareholder in Moody’s before and during thier fraud derived revenue run-up, and based upon his access to the CEO, likely knew what fraud they were committing.

    Oracle or beneficiary of fraudulently derived gains?

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  54. 54
    Blurtman says:

    As stated in post #20 and clearly in cahoots with Denninger, more indications that Buffet profits from fraud.

    Where’s The Oracle Of Omaha’s Ethics?

    Say much less simple compliance with the law:

    CORPUS CHRISTI — A final judgment has been issued against one of the nation’s largest mobile homebuilders related to a jury trial last year that found the company liable for civil racketeering and fraud in a South Texas case.

    A federal jury in November found Vanderbilt Mortgage and Finance Inc. liable for collecting payments on a home for four years after it filed a release of the lien on the home.

    The jury found the company engaged in unfair debt collection practices, committed common law fraud and violated the Racketeer Influenced Corrupt Organizations Act, also known as RICO.

    On Friday, U.S. District Judge Janis Graham Jack confirmed the jury’s findings against that company and Clayton Homes Inc. and CMH Homes Inc. in a 13-page judgment. The companies plan to fight the judgment, their attorney said.

    Who is Clayton Homes? One of the largest mobile home builders in the United States, owned by Berkshire Hathaway. Warren Buffet’s company.

    http://market-ticker.org/akcs-www?post=181435

    Keep in mind that Buffet’s Berkshire was one of the largest shareholders in Moody’s before and during their fraud enabled revenue ramp. His access to the CEO means he likely knew tha game that Moody’s was playing.

    Oracle or fraud profiteer?

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  55. 55
    Kary L. Krismer says:

    RE: Blurtman @ 52 – I don’t think I’ve denied fraud exists, only that what some people are calling fraud is not fraud. The most obvious example is irregularities in mortgage foreclosures, such as not having the original documents or the Robosigner issue. It’s not fraud just because all of the signer didn’t actually read the documents. You need more than that (although having that system could be called a “fraud on the court” which is different than fraud).

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  56. 56
    Ben says:

    RE: Kary L. Krismer @ 55 – Fraudulent conveyance through robosigning is a hot topic and considered fraud by most outside of banks and mortgage lenders.

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  57. 57
    pfft says:

    By Blurtman @ 52:

    RE: Kary L. Krismer @ 50 – Kary,
    I understand that you are a lawyer, but you have shown a continual bias towards an anti-fraud stance. In earlier posts you had even denied that significant fraud has occurred on Wall Street, which puts you in the same camp as Pffft.

    I didn’t say fraud didn’t happen. I said even the smart money lost money. I said don’t make the mistake that everyone knew what was going on. you overestimate the intelligence of wall street. even if they are smart they have to overcome their emotions and bonuses like everyone else.

    as far as I know the only firm that hedged according to the big short was goldman sachs. if everyone knew why wasn’t everyone hedged? why did they lose so much money?

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  58. 58
    pfft says:

    By Blurtman @ 53:

    Keep in mind that Buffet’s Berkshire was a very large shareholder in Moody’s before and during thier fraud derived revenue run-up, and based upon his access to the CEO, likely knew what fraud they were committing.

    Oracle or beneficiary of fraudulently derived gains?

    oh please.

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  59. 59
    Blurtman says:

    RE: pfft @ 57 – Ok, you seem to worship academics. So please read the link by Christy Romer’s husband, a textbook for describing how to profit from fraud while destroying your employer. Title: Looting: The Economic Underworld of Banruptcy for Profit.

    Your naive and wrong argument is like a broken record – the assumption being that if companies lost money, they could not have committed fraud. So therefore there was no fraud at Enron, by your silly logic. The truth is that individuals were able to stuff their pockets with fraudulently derived bonuses and salaries, even to the detriment of their employer, typically to be bailed out by US taxpayers.

    Romer reference: http://www.signallake.com/innovation/Looting1993.pdf
    Roberts reference: http://mercatus.org/sites/default/files/publication/RUSS-final.pdf

    Roberts excerpt: “In the United States we like to believe we are a capitalist society based on individual responsibility. But we are what we do. Not what we say we are. Not what we wish to
    be. But what we do. And what we do in the United States is make it easy to gamble with
    other people’s money—particularly borrowed money—by making sure that almost
    everybody who makes bad loans gets his money back anyway. The financial crisis of
    2008 was a natural result of these perverse incentives. We must return to the natural
    incentives of profit and loss if we want to prevent future crises.”

    Learn and grow wise.

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  60. 60
    Blurtman says:

    Romer: The Economic Underworld of Banruptcy for Profit.

    No longer an underworld.

    “Our theoretical analysis shows that an economic underground can
    come to life if firms have an incentive to go broke for profit at society’s
    expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy
    for profit will occur if poor accounting, lax regulation, or low penalties
    for abuse give owners an incentive to pay themselves more than
    their firms are worth and then default on their debt obligations.
    Bankruptcy for profit occurs most commonly when a government
    guarantees a firm’s debt obligations. The most obvious such guarantee
    is deposit insurance, but governments also implicitly or explicitly guarantee
    the policies of insurance companies, the pension obligations of private
    firms, virtually all the obligations of large banks, student loans,
    mortgage finance of subsidized housing, and the general obligations of
    large or influentialf irms.These arrangementsc an create a web of companies
    that operate under soft budget constraints. To enforce discipline
    and to limit opportunism by shareholders, governments make continued
    access to the guarantees contingent on meeting specific targets for an
    accounting measure of net worth. However, because net worth is typically
    a small fraction of total assets for the insured institutions (this, after
    all, is why they demand and receive the government guarantees), bankruptcy
    for profit can easily become a more attractive strategy for the
    owners than maximizing true economic values.”

    http://www.signallake.com/innovation/Looting1993.pdf

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  61. 61
    Blake says:

    RE: pfft @ 58
    >> “Buffet’s Berkshire was a very large shareholder in Moody’s ”
    Buffet was a smart investor… he liked to buy companies that were monopolies or oligopolies because they make HUGE profits. It’s not that Moody’s was engaging in fraud (they were), but that they had a lock on a sizeable chunk of their market and an incestuous relationship of the companies they were providing “services” to…
    It has nothing to do with honesty/dishonesty, right/wrong… it’s just about $$$$$
    (Lookit all the British and American companies that were doing big business with Libya/Gaddafi…)

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  62. 62
    pfft says:

    By Blurtman @ 59:

    RE: pfft @ 57 – Ok, you seem to worship academics. So please read the link by Christy Romer’s husband, a textbook for describing how to profit from fraud while destroying your employer. Title: Looting: The Economic Underworld of Banruptcy for Profit.

    Your naive and wrong argument is like a broken record – the assumption being that if companies lost money, they could not have committed fraud. So therefore there was no fraud at Enron, by your silly logic. The truth is that individuals were able to stuff their pockets with fraudulently derived bonuses and salaries, even to the detriment of their employer, typically to be bailed out by US taxpayers.

    Romer reference: http://www.signallake.com/innovation/Looting1993.pdf
    Roberts reference: http://mercatus.org/sites/default/files/publication/RUSS-final.pdf

    Roberts excerpt: “In the United States we like to believe we are a capitalist society based on individual responsibility. But we are what we do. Not what we say we are. Not what we wish to
    be. But what we do. And what we do in the United States is make it easy to gamble with
    other people�s money�particularly borrowed money�by making sure that almost
    everybody who makes bad loans gets his money back anyway. The financial crisis of
    2008 was a natural result of these perverse incentives. We must return to the natural
    incentives of profit and loss if we want to prevent future crises.”

    Learn and grow wise.

    how do you explain john devaney then? yes some were spurned on by bonuses. you are just so intent on demonizing wall street that you don’t stop and think about the fact that maybe they’re just stupid?

    Devaney was one of the top mortgage hedgies.

    Fund manager’s fun sailing away
    Hedge fund manager John Devaney looking to sell 142-foot yacht for $23.5 million after bad bet on subprime mortgage assets.
    http://money.cnn.com/2007/07/30/news/newsmakers/yacht_sale/index.htm

    I ask again. if everyone knew why didn’t they hedge? Goldman was the only one who hedged. the amount of people who shorted the mortgage market according to The Big Short was maybe 20 in the whole world.

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  63. 63
    pfft says:

    By Blake @ 61:

    RE: pfft @ 58
    >> “Buffetâ��s Berkshire was a very large shareholder in Moodyâ��s ”
    Buffet was a smart investor… he liked to buy companies that were monopolies or oligopolies because they make HUGE profits.

    he like companies more with a durable competitive advantage or one with a moat around it. I’m not sure if they could be all called monopolies or oligopolies. more like very good companies that can do what many can’t.

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  64. 64
    Blurtman says:

    From: Looting: The Economic Underworld of Bankruptcy for Profit by George A. Akerlof, Paul M. Romer (1993)

    “Our theoretical analysis shows that an economic underground can
    come to life if firms have an incentive to go broke for profit at society’s
    expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy
    for profit will occur if poor accounting, lax regulation, or low penalties
    for abuse give owners an incentive to pay themselves more than
    their firms are worth and then default on their debt obligations.”

    “Once owners have decided that they can extract more from a firm
    by maximizing their present take, any action that allows them to extract
    more currently will be attractive-even if it causes a large reduction in
    the true economic net worth of the firm. A dollar in increased dividends
    today is worth a dollar to owners, but a dollar in increased future earnings
    of the firm is worth nothing because future payments accrue to the
    creditors who will be left holding the bag. As a result, bankruptcy for
    profit can cause social losses that dwarf the transfers from creditors that
    the shareholders can induce. Because of this disparity between what the
    owners can capture and the losses that they create, we refer to bankruptcy
    for profit as looting.”

    This publication was based upon the analysis of several frauds that occured in the ’80’s – the S&L fraud, the junk bond fraud, and the Dallas commercial RE fraud. But it could have been written today, based upon the recent masssive securities fraud that brought down the world economies.

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  65. 65
    Blurtman says:

    RE: pfft @ 62 – Why would you hedge if you are trying to shovel as much toxic crap out the door for as long as you can?

    “Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice – growth and profitability – suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: “liars’ loans,” “ninja loans,” “neutron loans,” and “toxic waste,” tells you that people knew. I have also heard the expression, “IBG,YBG;” the meaning of that bit of code was: “I’ll be gone, you’ll be gone.””

    http://www.washingtonsblog.com/2011/02/government-is-trying-hard-to-convince.html

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  66. 66
    Matthew says:

    Fed Policy Makers Signal Abrupt End to Bond Purchases in June

    http://www.bloomberg.com/news/2011-03-04/fed-policy-makers-signal-abrupt-end-to-bond-purchases-in-june.html

    Interest rates about to skyrocket in 3….2…..1……

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  67. 67
    Blake says:

    RE: Matthew @ 66
    dunno… Interest rates went UP when the Fed started QE2 last Fall – instead of falling, so perhaps interest rates might GO DOWN this summer without the Fed!? Also considering the effects of rising oil prices and a slowing economy in the latter half of the year. (Note: This recovery has been anemic by any standard and especially considering that they said it would “snap back” since the drop off was so severe… this is “not like the others.”)

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  68. 68
    pfft says:

    By Blurtman @ 65:

    RE: pfft @ 62 – Why would you hedge if you are trying to shovel as much toxic crap out the door for as long as you can?

    “Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice â�� growth and profitability â�� suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: â��liarsâ�� loans,â�� â��ninja loans,â�� â��neutron loans,â�� and â��toxic waste,â�� tells you that people knew. I have also heard the expression, â��IBG,YBG;â�� the meaning of that bit of code was: â��Iâ��ll be gone, youâ��ll be gone.â��”

    http://www.washingtonsblog.com/2011/02/government-is-trying-hard-to-convince.html

    why are you so convinced bankers are so smart? big deal. I bet for every single year I can give you the same quotes about any asset you want. that doesn’t mean that the people in charge didn’t think their firm was safe and prudent.

    how do you explain john devaney?

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  69. 69
    pfft says:

    By Matthew @ 66:

    Fed Policy Makers Signal Abrupt End to Bond Purchases in June

    http://www.bloomberg.com/news/2011-03-04/fed-policy-makers-signal-abrupt-end-to-bond-purchases-in-june.html

    Interest rates about to skyrocket in 3….2…..1……

    just like mortgage rates were going to skyrocket last year? they actually fell.

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  70. 70
    whatsmyname says:

    Let’s end all this government meddling and treat real estate and other investments the same. Mortgage interest deduction? Well, for consistency, that’s gotta be a keeper. But wait: Local governments use a value based tax on the real estate they have to provide services for. Why not have the federal government do the same with the securities that they regulate. Put a 2% tax on stocks, bonds, any regulated security. It’s been demonstrated that we need the money to clean up the financial industry’s mess. Big time deficit reduction, and less government preferences. What do you think Scotsman?

    Ooh, I forgot about transfer taxes. More deficit reduction, yay!

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  71. 71
    whatsmyname says:

    RE: whatsmyname @ 70
    I’m very concerned that these tax disparities are leading to mal-investment.

    Not to mention moral hazard.

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  72. 72
    Blurtman says:

    RE: pfft @ 68 – “how do you explain john devaney then? yes some were spurned on by bonuses. you are just so intent on demonizing wall street that you don’t stop and think about the fact that maybe they’re just stupid?”RE: pfft @ 68 – “how do you explain john devaney then? yes some were spurned on by bonuses. you are just so intent on demonizing wall street that you don’t stop and think about the fact that maybe they’re just stupid?”You are the master of the strawman argument. Here is your illegitimate discourse and bizarre logic perfectly displayed. I have provided numerous references citing rampant fraud, that is, criminality that caused the economic meltdown. You falsely attribute to me the belief that these criminals were all intelligent, i.e., the strawman, and then you knock over the strawman by providing an example of a seemingly intelligent investor who was not a criminal and who bankrupted his company.I have to ask you an honest question as you continuously do this on this board – are you purposely utilizing this tactic, and why, as you are just arguing with yourself.To reply to your false attibution – guess what, criminals, including greedy ones, can be unintelligent. And honest investors can bankrupt companies. So what?

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  73. 73
    Blurtman says:

    RE: Blurtman @ 72 – And non-criminal businessmen can bankrupt companies. So what?

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  74. 74
    Kary L. Krismer says:

    By pfft @ 69:

    By Matthew @ 66:
    Fed Policy Makers Signal Abrupt End to Bond Purchases in June

    http://www.bloomberg.com/news/2011-03-04/fed-policy-makers-signal-abrupt-end-to-bond-purchases-in-june.html

    Interest rates about to skyrocket in 3….2…..1……

    just like mortgage rates were going to skyrocket last year? they actually fell.

    That’s actually a good example of how focusing on one factor can make your prediction wrong.

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  75. 75
    David Losh says:

    RE: pfft @ 68

    The conclusion that I have come up with in arguing with Kary is the thought of people behind the curtain. We used to call them bean counters. The accountants that control huge swathes of a corporation can literally do anything. We pay those people to make us profits, by buying stocks, buying goods, services, paying fees.

    I know some executives who have no idea how the business works. So, I’ll give you that.

    What I also think is that these mega corporations have a duty to perpetuate. Union busting bothers me in these times of massive corporate profits. Dissolving pension funds really bothers me, but it is legal. Financing every facet of a corporation under sub, after sub corporate structure so that parts can go bankrupt while the over all structure stays whole bothers me.

    All of that said, I’m going to jump right in to the fact our government only has $3 or $4 trillion dollars of debt. Let’s say total global debt is $12 trillion. In the world of the new corporate profit, and business structures of $290 trillion? what is the big deal about government debt?

    I’ve been thinking that if governments were smart they would, like here in the United Sates has done, make a safe haven for those hundreds of trillions of dollars. Europe may have also done the same, with China desperately catching up. It may be that the upheaval we are seeing is a growing pain of the global economy.

    The problem that I was discussing yesterday with a couple from Egypt is the massive number of people who work the farms, build the machines, sew the clothes, service the machines, and in general, labor. They may be uneducated, or under educated, but in Communism they are at least recognized. In Capitalism they are exploited. The real question is what is in all of this discussion for them?

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  76. 76
    Blurtman says:

    Here is a nice story. I am not sure how accurate it is, but it is one of the few I have read that quantifies the declinign standard of living in the USA, and atttempts to attibute causation to it. And yes, it is on Zero Hedge.

    The Coming Economic Collapse Revisited

    The seeds of today’s crisis were first sown in 1971 when the US formally opened up trade with China. In an effort to boost profits, large scale US manufacturers and other multinational firms began outsourcing their manufacturing jobs to the People’s Republic soon after.

    When other industries realized the kind of money that can be saved by sending work overseas, they soon followed suit. Outsourcing moved up the corporate food chain until even R&D jobs and other high-level, high-skill set jobs were shifted to Asia. This, of course, diminished the number of these positions in the US. Thus began three major trends:

    The US’s economic shift from manufacturing to services (mainly financial)

    The massive drop in US incomes

    The beginning of the debt bubble

    Nothing illustrates the first point like the rise of the financials sector. From 1970 until 2003, financials’ market capitalizations as a percentage of the S&P 500 rose from less than 5% to 22%. Over the same period, financials’ earnings as a percentage of the S&P 500’s total earnings rose from less than 10% to 31%.

    Put another way, by 2007 one in every three dollars of corporate profits came from the financial sector. Meanwhile, China was experiencing an unprecedented level of growth thanks to our renewed trade: Chinese per-capita income doubled from 1978 to 1987 and again from 1987 to 1996.

    Now, fewer jobs in the US means lower US incomes. Going by the Federal government’s official (inaccurate) data, weekly US incomes peaked in October 1972 and have since fallen 15%. Of course, these numbers are based on official inflation data which is horribly under-stated. According to John Williams of http://www.shadowstats.com, if you were to go by real inflationary data, US incomes have fallen more like 40%.

    http://www.zerohedge.com/article/coming-economic-collapse-revisited

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  77. 77
    pfft says:

    By Blurtman @ 72:

    RE: pfft @ 68 I have provided numerous references citing rampant fraud, that is, criminality that caused the economic meltdown.

    no. you provided quotes from people I don’t know. who I don’t know what their jobs were or how they even fit into the company. big deal if they warned. people warn all the time. the only thing that matters if the people at the top believed them. people, even the smartest in the biz, can get caught up like everyone else. not everything is rampant fraud. you still can’t explain why wall street lost so much? sure the party was good while it lasted. you can’t explain why they didn’t hedge when even they figured out the game was up. the answer is that not everyone was smart enough to see it. even the one’s who weren’t blinded by the bonuses or thought they’d be gone before things went haywire probably didn’t think it would get as bad as it did.

    the MBS space practically grew up overnight and ran wild. most people probably didn’t know what they were doing hadn’t been in the business for very long. read The Big Short.
    there is no way a lot of those people knew what they were doing.

    Fannie/Freddie Market Share Plummeted During Boom
    http://www.ritholtz.com/blog/2011/02/fannie-freddie-market-share/

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  78. 78
    pfft says:

    ” if you were to go by real inflationary data, US incomes have fallen more like 40%”

    simply not credible. shadowstats has inflation at like 9% right now. no way.

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  79. 79
    David Losh says:

    RE: Blurtman @ 76

    You have some missing pieces here.

    First is that manufacturing in China is a drop in the bucket. You already illustrated that. The financial sector, based here, and in Europe far outstripped manufacturing jobs. A strong job market actually returned to the United States, and Europe when Chinese labor couldn’t perform. The explosion of goods came in the 1990s when the United States allowed a defect rate of 20%, a rise from 10%. By then the damage was already done and manufacturing plants were all over the world. It really doesn’t matter the derivatives market went from $0 to $290 trillion.

    Second is the inflation rate which has been remarkably mild. I know housing, gas, food, spot gold, and other commodities have had huge spikes, many remain. Here in the United States, as some one else brought up we have alternative choices. So beef did go up, so did Ice Berg lettuce, but other foods went down, process foods went down. We have choices other parts of the world don’t have.

    Last, but foremost in my dialog is the cost of credit. China is just getting the credit we have enjoyed for these many years. So we have been able to buy more using fewer dollars, because we are stringing those dollars out longer. The end result is that service sector has tons of low paying jobs. Our middle management is our middle class. We also have a growing wealth segment of our population that transcends wages.

    All in all that figure of a 40% decline isn’t real. We have had a significant decline in wages, and benefits, but China is a small part of that.

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  80. 80
    David Losh says:

    RE: pfft @ 77

    It only takes a few to determine, or undermine the stock market.

    The stock market stopped being anything other than a profit generator probably in the late 1990s. The end of the tech era opened up billions of dollars for those millions of people who sold stock during the Microsoft Monopoly trial, then bought immediately after. Those dollars drove the housing bubble, the Mortgage Backed Securities Bubble, and the phantom deriviatives market that your buddy Warren Buffet is so fond of.

    It’s trillions, upon trillions of dollars chasing each other through financed profits of a variety of corporations. It’s all easy credit with low interest rates.

    A lot of people got hurt, a lot of people lied. There is enough there for several decades of investigation. Thousands of people should be in jail, and the banking sector needs to be closed, investigated, cleaned up, and regulated to the extreme. The stock market? It will go back to patterned growth based on revenue from production, maybe. Maybe it will collapse also.

    The alternative is to put enough checks, and balances in place to ensure stability, which we don’t have now.

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  81. 81
    Blurtman says:

    RE: pfft @ 77 – I am not certain what you mean when you ask why “they” didn’t hedge. As you know, there are several specialized departments in an investment bank like JP Morgan. “They” may refer to a group of individuals in one department I suppose. It is yet another strawman argument to say that since a department in an institution, or perhaps one sole senior executive, did not hedge, that the mysterious “they” did not know. Once again, strawman argument and flawed logic. In case you are clueless to your reasoning process, here is how your logic works: Ghaddafi points to Libyans rallying behind his leadership and claims that there is no insurrection in Libya. Well, not exactly, but simultaneoulsy there are folks loyal to Ghaddafi and folks who want to overthrow him. So it is possbile that some folks at JP Morgan did not think to hedge while others were committing fraud. Or that some knew what was going on and some didn’t. Not too mysterious. Hardly an indirect proof that everyone on Wall Street was just ignorant, not criminal. But there are numerous sources of information showing that at least some folks did in fact know.

    I have provided numerous links illustrating the knowing misrepresentation of the risk of securities that were sold, i.e., toxic junk knowingly sold as Triple A. Fraud. Even Goldman Sachs copped a plea to a civil fraud chrage.

    So one last try, and then, frankly, you are totally free to continue to live in ignorance As you will not believe me, perhaps the Angelides FCIC report may pierce through the denial.

    Here is Chairman Angelides in his own words. Note that it is fraud he is describing.

    “it’s now the job of the prosecutors to do their job. in what you’re referring to, that was a big dipstick. clayton holdings looked at 911,000 mortgages in 2006, the first half of 2007. they found that 28% of the mortgages being bought by firms like citigroup and goldman and deutsche bank and ubs, they were being packaged and sold to investors, didn’t even meet the crummy underwriting standards of the countrywides, the new centuries, the ameriquests that were selling it to them. yet they packaged them and didn’t disclose that to investors. by the way, they were sampling 2% to 5% of the loans. you’re talking about 20 million-plus loans out there. we’ve also pointed out in the report that private mortgage insurance, when they began examining the claims of loans they had insured, they’re finding 25% of those loans breached the representations and warranties, and fannie mae and freddie mac have found $35 billion of loans that they’re demanding banks pay them back for because their reps and warranties broken there. there are pervasive problems, dylan. you pointed out our budget. we had $9.8 billion in the end. the lehman bankruptcy examiner had $38 billion. madoff trustee, $228 million. we opened a lot of doors, laid out a lot of facts, did our job. there shouldn’t be vengeance in this country, but there needs to be a sense of justice that the powerful own wealthy are subject to the same judicial system as the rest of us in this country.”

    Note that Angelides is saying, “Prosecutors, where are you?”

    http://www.ritholtz.com/blog/2011/03/fcic-chairman-phil-angelides-discusses-fraud/

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  82. 82
    Matthew says:

    The U.S. sells treasuries at auction. The FED Reserve is currently the #1 purchaser of treasuries, surpassing the Chinese. If they exit the treasury market, where the is the demand going to be for US Debt? The Chinese have already scaled back their purchases.QE2 was not designed to drive rates lower, but merely to keep rates from flying through the roof.The only way the FED can keep treasury rates down without actually buying treasuries themselves is by causing a flight to safety from the equity markets into treasuries. I think we will either see a flight to safety, or the Fed rolls out QE3.

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  83. 83
    Kary L. Krismer says:

    California is so screwed up. They’re delaying the sale of voter approved bonds used for road construction to help reduce their deficit. I wonder though whether that will even help. Over the next fiscal year would the interest on the bonds be more than the unemployment claims of the construction workers and others that would work on that project? If not, no help at all with the issue they’re dealing with, and that ignores any multiplier from the money spent by the workers.

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  84. 84
    Kary L. Krismer says:

    RE: Kary L. Krismer @ 83 – I just realized the budget issue might be a cover. Perhaps it’s not feasible for CA to sell bonds prior to dealing with their deficit? I wouldn’t loan them money, even without their having an ability to file bankruptcy! ;-)

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  85. 85
    Scotsman says:

    If you can understand all the implications of this you know the stimulus didn’t do squat. We’re headed down again. We are buried in money with no real demand:

    http://research.stlouisfed.org/fred2/data/MULT_Max_630_378.png

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  86. 86
    whatsmyname says:

    RE: Scotsman @ 85 – Scotsman, I know how discouraged you are about our future because of the deficit and government meddling, but there is hope. Please see posts 70 and 71. We can make a huge correction in both the investment playing field and the deficit. Isn’t that great?

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  87. 87
    Blurtman says:

    RE: Scotsman @ 85 – May explain why the USG is not prosecuting Wall Street. Without bubbles, nothing happens.

    So what is the money doing besides paying out bonuses and bank bondholders? Being used to speculate?

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  88. 88
    pfft says:

    Bonds Show Why Boehner Saying We’re Broke Is Figure of Speech
    http://www.bloomberg.com/news/2011-03-07/bonds-show-why-boehner-saying-we-re-broke-is-figure-of-speech.html

    he simply doesn’t understand.

    “If an American family is spending more money than they’re making year after year after year, they’re broke,” said Michael Steel, a spokesman for Boehner.

    of course when it’s tax cuts for the rich that will be funded for with new debt mr. speaker doesn’t think we’re broke.

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  89. 89
    pfft says:

    By Scotsman @ 85:

    If you can understand all the implications of this you know the stimulus didn’t do squat. We’re headed down again. We are buried in money with no real demand:

    http://research.stlouisfed.org/fred2/data/MULT_Max_630_378.png

    the stimulus saved 3 million jobs. it also worked all over the world.

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  90. 90
    Blurtman says:

    RE: pfft @ 88 – It is an inane analogy, but appeals to the average knuckledragger. The Republicans need to push buttons to get elected. Note Mike Huckleberry Hound’s recent race bating comments.

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  91. 91
    Ben says:

    RE: pfft @ 89 – The stimulus did not save one job. It destroyed 3 million future jobs with interest. Any jobs that are “saved” in the present tense by pulling them forward are lost in the future. If you fail to see that, you are advocating belief in magic.

    TANSTAAFL my deluded friend.

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  92. 92
    Scotsman says:

    RE: whatsmyname @ 86

    Lots of mal investment, that’s for sure. But I’m not sure how you think you’re going to get the government to levy taxes on the people who own it. Revolution, baby!

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  93. 93
    Scotsman says:

    RE: pfft @ 89 -You remind me of a child’s doll that says one of seven phrases when you pull the string.

    [“buried” by The Tim for antagonistic name-calling]

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  94. 94
    Scotsman says:

    RE: Blurtman @ 87

    It’s an interesting question. A velocity of less than one means much of it isn’t doing anything- it might as well not exist. It is a frightening indication of just how dead things really are.

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  95. 95
    Matthew says:

    What the supply siders always seem to fail to mention is that the Government is supposed to save money during times of prosperity and use that savings to stimulate the economy during a recession.

    Instead we just borrow money during the good times and the bad! What a recipe! Let’s just borrow a few more trillion and give every household an extra 100k! Sounds great!

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  96. 96
    Matthew says:

    BTW, the Fed has purchased 70% of all treasuries issued during QE2. 70%!!!! Who is going to fill that void?? Answer: No one at current price/yield.

    You can only issue debt to keep this machine going if you have a buyer. Hide the salami can only last so long. Judgement day cometh.

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  97. 97
    Kary L. Krismer says:

    By Matthew @ 95:

    What the supply siders always seem to fail to mention is that the Government is supposed to save money during times of prosperity and use that savings to stimulate the economy during a recession.

    I’ve mentioned that several times. My analogy was to a situation where you needed to do car repairs. In the worst case scenario you couldn’t afford them because you already had more than $40,000 of credit card debt piled up from prior spending. In the best case scenario they wouldn’t be a big deal because you had savings to cover it. The US government is not currently in the best case scenario, but that doesn’t mean the economy (the car) doesn’t need to be repaired.

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  98. 98
    Scotsman says:

    $223 billion in deficit spending this month alone- a new record! Keep those presses rolling!

    Is it still Bush’s fault?

    http://www.washingtontimes.com/news/2011/mar/7/government-posts-biggest-monthly-deficit-ever/

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  99. 99
    Blurtman says:

    RE: Kary L. Krismer @ 97RE: Scotsman @ 98 – Debt jubilee! Or real helicopters dropping real money across this great land.

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  100. 100
    Ben says:

    RE: Scotsman @ 98 – To borrow a phrase from Wimpy: I Will Gladly Pay You Tuesday for a Hamburger Today!

    http://www.epinions.com/finc-review-6EFA-C85327C-38AD3574-bd3

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  101. 101
    The Tim says:

    By Matthew @ 95:

    Instead we just borrow money during the good times and the bad! What a recipe! Let’s just borrow a few more trillion and give every household an extra 100k! Sounds great!

    Hey, that idea sounds familiar

    If we’re going to use the kind of anti-logic that NAR and NAHB are apparently high on, I like the plan that (ironically) was suggested by a Georgia Realtor: Let’s increase the tax credit to $100,000! Heck, why not make it permanent, and up it to $500,000, or even a cool $1 million? Apparently cost and effectiveness are not factors in this decision, we should just do whatever it takes to get those pesky homebuyers “off the fence,” right?

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  102. 102
    David Losh says:

    RE: Scotsman @ 98 -Well, this is certainly the Republicans fault.

    What the tea baggers conveniently forgot is one, they were going to repeal Obama Care. which the Republicans screwed up, and turned into a gift to the Insurance Industry. Obama Care could have been the biggest jobs bill in history that paid dividends in both tax benefits, and reduced health care costs to the consumer, but I digress.

    Secondly the tea baggers were supposed to get us out of Iraq, and Afganistan. Instead these morons went on a publicity binge that address neither Obama Care or the deficit. The big accomplishment they have so far is to extend the tax credit for the wealthy.

    The tea baggers, with the whiney Republican contingent that came with them, have done nothing but put on a show. I suppose the hope is the American people remain stupid enough to elect them again.

    If you want to fix the deficit, it’s as easy as pulling the plug on the military, taxing the frigging heck out of banks, financial markets, and insurance companies. The deficit is easy, getting some one to address it will be the challenge.

    [“buried” by The Tim for pointless overuse of the antagonistic/lewd/derogatory “tea bagger” term]

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  103. 103
    David Losh says:

    RE: David Losh @ 102 -Tea baggers is a reference to the Tea Party. I don’t see anything lewd about the term.The point is fair. These people came in with a promise to tackle the deficit which they are not doing. They are lost, freshman, amateur politicians.

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  104. 104
    David Losh says:

    Maybe you don’t understand the term for it’s application to the Tea Party.

    The Tea Party isn’t a Party as in a third Party to our political system. It’s completely transitory. It’s a one use, throw away, political forum that helped to sweep in Republicans.

    One use, one time, then thrown away. I don’t understand the problem.

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  105. 105
    The Tim says:

    RE: David Losh @ 103 – I can’t tell if you are really that naïve or if you are just trying to put me on, but if you really don’t know why “tea bagger” is an antagonistic, lewd, and offensive term, then I suggest you read this.

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  106. 106
    David Losh says:

    RE: The Tim @ 105

    Oh. Well, that’s not what I meant.

    Rate this comment: Thumb up 0

  107. 107
    David Losh says:

    RE: Scotsman @ 98

    Let’s try this again.

    RE: Scotsman @ 98 -Well, this is certainly the Republicans fault.

    What the tea party conveniently forgot is one, they were going to repeal Obama Care. which the Republicans screwed up, and turned into a gift to the Insurance Industry. Obama Care could have been the biggest jobs bill in history that paid dividends in both tax benefits, and reduced health care costs to the consumer, but I digress.

    Secondly the tea partiers were supposed to get us out of Iraq, and Afganistan. Instead these morons went on a publicity binge that address neither Obama Care or the deficit. The big accomplishment they have so far is to extend the tax credit for the wealthy.

    The tea party, with the whiney Republican contingent that came with them, have done nothing but put on a show. I suppose the hope is the American people remain stupid enough to elect them again.

    If you want to fix the deficit, it’s as easy as pulling the plug on the military, taxing the frigging heck out of banks, financial markets, and insurance companies. The deficit is easy, getting some one to address it will be the challenge.

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  108. 108
    David Losh says:

    That may be strongly worded, but Obama did come into office with an agenda. It was a strong social agenda.

    The Republicans are perpetuating some idea that things can go back to “normal.” It’s maddening to hear the phrase we are going to get back to basics, or the Reagan era did this, that, or the other. The right wing agenda is pathetic on substance, and long on emotion.

    We need to shut down our involvement in Iraq, we need out of Afganistan. We need to cut the military budget to the bone. At the same time we need social programs. We need incentives for manufacturing, and we need workers to get a fair share of the profits.

    Having trillions of dollars sitting in coffers doing nothing is killing this country, and the global economy. Government will have to step in. You put up a chart showing exactly why.

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  109. 109
    pfft says:

    By Scotsman @ 98:

    $223 billion in deficit spending this month alone- a new record! Keep those presses rolling!

    Is it still Bush’s fault?

    http://www.washingtontimes.com/news/2011/mar/7/government-posts-biggest-monthly-deficit-ever/

    ah yes. the crash started on his watch. government revenue doesn’t rise just because obama is in office.

    even republicans are only asking for $60 billion in spending cuts. nothing more than a rounding error at the end of the day.

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  110. 110
    pfft says:

    By Ben @ 91:

    RE: pfft @ 89 – The stimulus did not save one job. It destroyed 3 million future jobs with interest. Any jobs that are “saved” in the present tense by pulling them forward are lost in the future. If you fail to see that, you are advocating belief in magic.

    TANSTAAFL my deluded friend.

    so you are agreeing that the stimulus worked? the idea was that we would cushion the crash now and have slightly slower growth later when we weren’t losing 700,000 jobs a month.. by you own admission you are saying the stimulus worked.

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  111. 111
    pfft says:

    By Scotsman @ 94:

    RE: Blurtman @ 87

    It’s an interesting question. A velocity of less than one means much of it isn’t doing anything- it might as well not exist. It is a frightening indication of just how dead things really are.

    that’s why you have a stimulus. because banks aren’t lending. it’s called a liquidity trap. lenders aren’t lending and borrowers aren’t borrowing. the government goes around that by issuing savings bonds that americans buy because they aren’t spending and the government goes out and spends the money. you proved the case for the stimulus with your own links.

    china had a stimulus, how is there economy going?

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  112. 112
    pfft says:

    the current bull market turns two today!

    As historic bull market nears its second birthday, some investors wonder about a bubble
    http://www.latimes.com/news/nationworld/nation/wire/sns-bc-us–wallweekahead-bubble,0,2581572.story

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  113. 113
    David Losh says:

    RE: pfft @ 111

    The economy in China is bad, very bad.

    The stimulus should have been in the form of social programs. Instead the government gave away trillions of dollars that speculators now have in “emerging markets” speculating on the price of oil, sugar, and soy beans.

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  114. 114
    Scotsman says:

    Well, the new “bury” feature looks like fun. It’s a good thing “mindless drivel” isn’t included in the restrictive terms of use or The Tim would be one busy dude. Of course he could always just toss me the keys and I’d be happy to play enforcer. And I promise I won’t just “put this car in the ditch.”

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  115. 115
    Scotsman says:

    Oh man, some commenters here are just killing me, claiming that stimulus was the sure way out of a liquidity trap, and that it worked! Now if I was king and had my finger on the “hide” button that one would get zapped for intentionally spreading lies. One look at the chart in my post #85 makes it pretty clear that the liquidity trap is not only alive and well, but thriving.

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  116. 116
    pfft says:

    By Scotsman @ 115:

    Oh man, some commenters here are just killing me, claiming that stimulus was the sure way out of a liquidity trap, and that it worked! Now if I was king and had my finger on the “hide” button that one would get zapped for intentionally spreading lies. One look at the chart in my post #85 makes it pretty clear that the liquidity trap is not only alive and well, but thriving.

    only because the stimulus wasn’t big enough which we knew from the beginning. I can post all the links you want on that. imagine w/o all the stimulus?

    U.K. Economy Suffers a Reversal
    http://online.wsj.com/article/SB10001424052748704698004576103423094723718.html

    Police Force Nearly Halved, Camden Feels Impact
    http://www.nytimes.com/2011/03/07/nyregion/07camden.html?_r=2&src=twr

    not liking that austerity much.

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  117. 117
    Scotsman says:

    RE: pfft @ 116

    ” I can post all the links you want on that.”

    Hell, I’m game. I’d like 127 links, no duplication, and no Krugman. I’d especially like to see a focus on actual flow of funds reporting, you know, where the dollars actually went and how they were spent. Get on it.

    And by the way- we live in the U.S.A. No foreign crap, OK? We’re an invincible super power, “special” as they say, so keep it relevant.

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  118. 118
    Kary L. Krismer says:

    RE: The Tim @ 105 – But which term is supposed to be offensive? Tea-bagger or tea-baggee? And why? ;-)

    Rate this comment: Thumb up 0

  119. 119
    Scotsman says:

    RE: Kary L. Krismer @ 118

    Do you ever read, Kary, or just type? He provided a link.

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  120. 120
    Kary L. Krismer says:

    RE: Scotsman @ 119 – LOL. Right back at you! Did you not READ what I wrote and see it was a joke?

    Here’s a link that might help with your comprehension of the world:

    http://en.wikipedia.org/wiki/Emoticon

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  121. 121
    Scotsman says:

    RE: Kary L. Krismer @ 120

    Oh, sorry- I forgot you were so intermperant as to go ahead and actually use the offensive term and think it was a joke.

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  122. 122
    Blurtman says:

    RE: Scotsman @ 121 – i always thought “humdinger” should have been an offensive word. E.g., “Say, Bob, how did your date go last night?” “Great! After dinner, went back to her place and got a real humdinger.”

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  123. 123
    pfft says:

    Unbroke America
    http://krugman.blogs.nytimes.com/2011/03/08/unbroke-america/

    and notice he acknowledges there is no free lunch.

    Yes, there is a long-run problem — but this requires long-run solutions. Slashing spending now now now is neither necessary nor helpful.

    that sums it up.

    is the difference between broke and not broke really $60 billion?

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  124. 124
    Scotsman says:

    RE: pfft @ 123

    Second sentence- one huge lie:

    ” Investors, putting real money on the line, are willing to lend funds to the Feds long-term at an inflation-adjusted interest rate of only 1 percent.”

    No, they aren’t. The Federal Reserve is buying this debt from the primary dealers, usually within a week or so. Nobody is “lending”- the debt is being monetized, pure and simple. Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.

    Then Krugman has the gall to post a chart showing rates being artificially pushed down from 3% to 1% and claim that the government isn’t broke- while it borrows 40% of every dollar it spends. Imagine what that percentage would be if/when rates jump to 3-8%. The man is a complete joke who writes only for an audience of self deluding ideologues.

    By the way, where are my 100+ posts on the flow of stimulus funds and how they saved those 237 political jobs?

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  125. 125
    David Losh says:

    America is broke, and broken, from this past decade of wars on all fronts.

    I can’t tell if any of you read the news, Krugman sure can’t, but they are killing a lot of people in Mexico. In the whole swath of our stability efforts from Afganistan to Iraq, there are riots in the street. Actually they seem to be in the streets of Europe also.

    Now pfft is saying that for just a few trillion dollars more our economy would be booming. Well let’s make the hard choice to find the trillions in our “wars, on drugs, and terror.”

    You see both wars stem from our own failed foriegn policies, so why can’t we fix that?

    We have a drug problem in this country so the logical steps were to go to other countries to tell them we have a problem in our country so they have to let us come in and fix that.

    We need oil so we tell the countries that are pumping oil that we have the right, after a World War that didn’t include them, to come in to protect, and serve while our companies pump the oil in thier soviergn nations. Don’t worry we will install our own puppet governments and send you billions of dollars.

    We just need to stop the madness, and flow of billions of dollars to countries who don’t want us, or need us interferring. We kill as many people as any petty dictator.

    Once we stop the big ticket items we can divert money into make work job programs, or education, take your pick.

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  126. 126
    David Losh says:

    BTW, as long as Congress is on this petty bickering binge the Real Estate market will be getting no more stimulus.

    If we are to believe pfft the stimulus didn’t do anything to spur inflation. If we have no inflation then the Real Estate market sinks deeper. On top of that we have the major problem of over supply, more foreclosure, and banks willing to unload properties rather than wait any longer.

    No inflation, no rise in prices, no reason for the banks to hold inventory.

    It looks like that 80% below peak pricing may be more accurate than I thought.

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  127. 127
    pfft says:

    By Scotsman @ 124:

    RE: pfft @ 123

    Second sentence- one huge lie:

    ” Investors, putting real money on the line, are willing to lend funds to the Feds long-term at an inflation-adjusted interest rate of only 1 percent.”

    No, they aren’t. The Federal Reserve is buying this debt from the primary dealers, usually within a week or so. Nobody is “lending”- the debt is being monetized, pure and simple. Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.

    Then Krugman has the gall to post a chart showing rates being artificially pushed down from 3% to 1% and claim that the government isn’t broke- while it borrows 40% of every dollar it spends. Imagine what that percentage would be if/when rates jump to 3-8%. The man is a complete joke who writes only for an audience of self deluding ideologues.

    By the way, where are my 100+ posts on the flow of stimulus funds and how they saved those 237 political jobs?

    remember when mortgage rates were supposed to sky-rocket after the Fed’s MBS program stopped?

    remember the double-dip we were supposed to have?

    remember what was supposed to happen when the stimulus was finished?

    rates have been low for awhile because money is pouring into bonds.

    “Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.”

    nonsense. people have been buying bonds like crazy.

    “Nobody is “lending”- the debt is being monetized”

    nope.

    Bernanke Making Sure Fed Governors Remind Congress Deficit Bigger Than QE2
    http://www.bloomberg.com/news/2011-02-10/bernanke-making-sure-fed-governors-remind-congress-deficit-bigger-than-qe2.html

    if you look at the chart it’s gone up since QE2…

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  128. 128
    pfft says:

    the people seem to have their priorities straight.

    Overall, public concern about the deficit — which is projected to reach $1.6 trillion this year — is growing, although it’s still eclipsed by employment, with poll respondents ranking job creation as a higher priority.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOLJNjA12epY

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  129. 129
    EconE says:

    By pfft @ 127:

    By Scotsman @ 124:
    RE: pfft @ 123

    Second sentence- one huge lie:

    ” Investors, putting real money on the line, are willing to lend funds to the Feds long-term at an inflation-adjusted interest rate of only 1 percent.”

    No, they aren’t. The Federal Reserve is buying this debt from the primary dealers, usually within a week or so. Nobody is “lending”- the debt is being monetized, pure and simple. Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.

    Then Krugman has the gall to post a chart showing rates being artificially pushed down from 3% to 1% and claim that the government isn’t broke- while it borrows 40% of every dollar it spends. Imagine what that percentage would be if/when rates jump to 3-8%. The man is a complete joke who writes only for an audience of self deluding ideologues.

    By the way, where are my 100+ posts on the flow of stimulus funds and how they saved those 237 political jobs?

    remember when mortgage rates were supposed to sky-rocket after the Fed’s MBS program stopped?

    remember the double-dip we were supposed to have?

    remember what was supposed to happen when the stimulus was finished?

    rates have been low for awhile because money is pouring into bonds.

    “Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.”

    nonsense. people have been buying bonds like crazy.

    “Nobody is “lending”- the debt is being monetized”

    nope.

    Bernanke Making Sure Fed Governors Remind Congress Deficit Bigger Than QE2
    http://www.bloomberg.com/news/2011-02-10/bernanke-making-sure-fed-governors-remind-congress-deficit-bigger-than-qe2.html

    if you look at the chart it’s gone up since QE2…

    The Fed has been buying the Bonds like crazy. They have a plan to buy $600 billion dollars worth. That’s old news. Did you forget about it?

    http://online.wsj.com/article/SB10001424052748703506904575592471354774194.html

    Compared to the amount of treasuries (bonds bills and notes) projected to be sold in Q1 ($320 Billion), $600 billion over an 8 month period is the lions share.

    http://www.capitolinterest.com/dynamic.aspx?id=523

    Bernanke admits to printing money (aka monetizing debt)

    http://www.youtube.com/watch?v=srx1cWLGzEI

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  130. 130
    Scotsman says:

    RE: pfft @ 127

    remember when mortgage rates were supposed to sky-rocket after the Fed’s MBS program stopped?
    WHAT DOES THIS HAVE TO DO WITH ANYTHING BEING DISCUSSED?

    remember the double-dip we were supposed to have?
    YOU MEAN THE DIP WE’RE STILL IN?

    remember what was supposed to happen when the stimulus was finished?
    UM, IT’S NOT FINISHED- IT’S CALLED QE2. BUT WHAT DOES STIMULUS HAVE TO DO WITH THE FED MONETIZING DEBT AND KEEPING RATES ARTIFICIALLY LOW?

    rates have been low for awhile because money is pouring into bonds.
    NO, THE BONDS ARE BEING MONETIZED. THAT’S THE POINT.

    “Without the Fed’s willingness to pay a premium there wouldn’t be a market for this crap.”
    nonsense. people have been buying bonds like crazy.
    NO, THE FED HAS BEEN MONETIZING THEM

    “Nobody is “lending”- the debt is being monetized”
    nope.
    NOTHING YOU HAVE POSTED REFUTES MY ORIGINAL CLAIM.

    Bernanke Making Sure Fed Governors Remind Congress Deficit Bigger Than QE2
    http://www.bloomberg.com/news/2011-02-10/bernanke-making-sure-fed-governors-remind-congress-deficit-bigger-than-qe2.html
    if you look at the chart it’s gone up since QE2…
    YEAH, QE2 ONLY RUNS THROUGH JUNE, QE3 WILL BE THE SECOND HALF OF THE YEAR. MOST ALL OF IT WILL BE MONETIZED DEBT AND INTER-AGENCY DEBT. YOU HAVEN’T REFUTED A THING.

    ANYONE WHO SWALLOWS THE B.S. KRUGMAN IS SHOOTING CLEARLY DOESN’T REALLY UNDERSTAND ANY OF THIS.

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  131. 131
    Blurtman says:

    RE: David Losh @ 126 – More porkulus, please. Urrrrrpppp….Tasty!

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  132. 132
    Kary L. Krismer says:

    On the double-dip possibility, don’t forget the rising cost of oil. That could be hanging over any economic recovery for many, many years to come, especially if the dollar declines in value.

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  133. 133
    David Losh says:

    RE: Scotsman @ 130

    I’m going to stick with you on this because you seem to oppose any hope of turning this around.

    I don’t mind printing the money, or the Fed’s current policy. To me this is purely a transition period. If you look at what Bernanke is saying it’s about borrowing, and lending that will spur growth. It’s what is supposed to keep unemployment in check. That was the purpose of the stimulus, jobs.

    Well we are seeing some improvement in jobs, now, and maybe through the summer. So that part of the stimulus is working as well as keeping interest rates lower so we don’t have massive resets in mortgages, so far, so good.

    Now we need to pay for it, and that part seems really simple to me. It’s called rapid deflation.

    If, and that is a big if, Congress can get passed giving banks more incentives to continue lending, prices will plummet. If we take the debt structure out of all, I mean all, purchasing in the United States, if we get banks out of the middle of all purchasing, the incremental costs that will be stripped away will save the consumer more real dollars.

    If you want to get the government out of our lives we should start with that. It’s called regulation, over sight, and yes, prosecution, of banking activity. That would be the first step.

    Second is this idea that pulling out of our wars, and it would have to be all of them, South America, and Africa, is only 1% of the budget. It’s much more than that because the domestic spending, the jobs of military procurement, and manufacturing account for much more, I’ll look it up later.

    If we direct military spending into our domestic economy, energy, health, and education, we would create more jobs, for more diverse segments of our population.

    So, until Congress starts talking prosecuting bankers, and redirecting military spending, there is no hope of a vigorous economy.

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  134. 134
    David Losh says:

    RE: Kary L. Krismer @ 132

    We are seeing the same carp we have been discussing about speculation in commodities.

    There is no reason for the price of oil to be up. Unrest in the Middle East? that’s been resolved. It is actually going to mean more pumping to pay for social programs across Northern Africa.

    Did we really forget that Russia discovered one of the largest oil fields ever?

    That and the fact we are closer every year to finding, and cultivating, alternative energy resources, oil prices should be falling through the floor.

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  135. 135
    Kary L. Krismer says:

    By David Losh @ 134:

    RE: Kary L. Krismer @ 132 – We are seeing the same carp we have been discussing about speculation in commodities.There is no reason for the price of oil to be up. Unrest in the Middle East? that’s been resolved. . . .
    Did we really forget that Russia discovered one of the largest oil fields ever?

    First, it’s the spot prices that are up over $100 a barrel–nothing to do with speculation. And since the unrest is relatively recent, there should be no doubt that it has nothing to do with the futures market (although that hasn’t stopped the press from making such claims).

    Second, how can you possibly say the unrest in the Middle East has been resolved? I have sort of wondered by Libya is considered the middle east, but the loss of production of 1M barrels a day is going to affect the price of a commodity with every inelastic demand (not to mention the fact that the unrest would temporarily increase demand as entities move their purchases forward).

    Third, it’s not about discovery of oil fields, it’s about present day production.

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  136. 136
    Kary L. Krismer says:

    RE: Kary L. Krismer @ 135 – I had obtained a link for the spot price history, but forgot to paste it in.

    http://www.wtrg.com/daily/oilandgasspot.html

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  137. 137
    David Losh says:

    RE: Kary L. Krismer @ 135

    I’m always fascinated by your reliance on oil as a means of economic viability.

    Libya is not the Middle East. Libya is as it always has been a Bedouin community. The idea that there is a “loss” of production isn’t realistic.

    Spot oil prices are just that, on the spot, which is one of the main factors of oil speculation. It’s the drama. It’s the draughts, or natural disasters that drive today’s prices. It’s a wind fall profit.

    You are said, “the rising cost of oil. That could be hanging over any economic recovery for many, many years to come.”

    I’m saying that there is enough on the table today to drive down the price of oil for many decades to come.

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  138. 138
    David Losh says:

    While I was out the thought came to me that maybe my concept of the modern speculator isn’t clear to you.

    The people today deal in borrowed dollars. They have no vested interest in the price of commodities. It’s nothing, literally, to them to crash the commodities, futures, or stock market. They have no skin, or dollars, in the game.

    These people can play with money they get from phantom accounting in a dozen countries. If they lose, so what, if they win, they just get more money.

    Today’s speculators are accountants. A few billion here, a trillion over there, and win lose or draw, somebody else pays the prices.

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  139. 139
    pfft says:

    THE IDIOT-MAKER RALLY: Two Years Of Making Gurus Look Stupid
    http://www.businessinsider.com/idiot-maker-rally-two-year-anniversary-2011-3

    throw in a little dunning-kruger effect and you get the picture.

    http://en.wikipedia.org/wiki/Dunning–Kruger_effect

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  140. 140
    Scotsman says:

    What? Bill Gross and Pimco out of bonds? I though pfft and krugman said the big money was flowing into treasuries? What does the world’s biggest bond fund know that others don’t?

    “Based on still to be publicly reported data by Pimco’s flagship Total Return Fund, the world’s largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in “government related” securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion”

    Now why would he want cash? Deflation, anyone, or just rising interest rates?

    http://www.zerohedge.com/article/exclusive-bill-gross-dumps-all-treasuries-brings-total-government-related-holdings-zero-flee

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  141. 141
    Scotsman says:

    How far have we come, how much further is left to go?

    “In short, there have been 3.5 million foreclosures and short sales to date stemming from legacy loans. There are presently ~7.5 million borrowers delinquent, defaulted, or in Foreclosure at present — grows by 100k to 125k per month — of which 75% to 80% will ultimately be liquidated. If another 7.5 million defaults — and modification redefaults — occur over the next three to five years then a total of 12 million to 15 million Foreclosure, short sale, and deed-in-lieu liquidations will occur, meaning we are now ~25% complete in cleansing the infamous 2003-2007 Bubble-Year’s toxic lending cesspool.”

    Good reading- bottom in 2013-2014. . . or beyond:

    http://mhanson.com/archives/321?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MarkHansonAdvisers+%28Mark+Hanson+Advisors%29

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  142. 142
    pfft says:

    Soros says U.S. spending cuts to brake economy
    http://finance.yahoo.com/news/Soros-says-US-spending-cuts-rb-3536641316.html?x=0&amp;.v=1

    who wouldn’t have thunk it?

    austerity=bad economy

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  143. 143
    pfft says:

    By Scotsman @ 140:

    What? Bill Gross and Pimco out of bonds? I though pfft and krugman said the big money was flowing into treasuries? What does the world’s biggest bond fund know that others don’t?

    “Based on still to be publicly reported data by Pimco’s flagship Total Return Fund, the world’s largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in “government related” securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion”

    Now why would he want cash? Deflation, anyone, or just rising interest rates?

    http://www.zerohedge.com/article/exclusive-bill-gross-dumps-all-treasuries-brings-total-government-related-holdings-zero-flee

    instead of making it seem like mystery why don’t you just post why?

    Investors like Gross believe that bond values could drop once the Federal Reserve ends its $600 billion bond buying program in June.

    http://abcnews.go.com/Business/wireStory?id=13099388&page=1

    when the Fed stopped buying mortgages everyone thought rates would go up and they went down.

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  144. 144
    David Losh says:

    RE: Scotsman @ 141

    Mark Hanson is another moron, he and Krugman should do lunch to compare theories.

    The only problem is equity loss. Principle reduction would do nothing other than putting the mortgage closer to value.

    People need to create their own wealth.

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  145. 145
    David Losh says:

    RE: pfft @ 143

    You and Scotsman seem to be on the same page tonight.

    What’s going to happen? What could possibly happen now that the government has no more free money?

    The real question is why any one would care.

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  146. 146
    scotsman says:

    RE: pfft @ 143

    Too funny. I thought you just said the fed wasn’t buying treasuries but you quote an article saying they were? What a joke.

    And you should check your facts first- rates are up. Try again.

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  147. 147
    scotsman says:

    RE: David Losh @ 144

    You’re right- equity loss is the problem, and there’s a lot more to be lost. When central control collapses maybe we’ll see more community.

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  148. 148
    Ben says:

    RE: pfft @ 139 – That Dunning-Kruger effect is actually the first piece of useful information I have seen come from you. I have seen my coworkers in a new light. Good job.

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  149. 149
    pfft says:

    even the IMF knows that austerity doesn’t help. they are the big pushers of it too…

    Austerity no help to growth: IMF
    http://au.news.yahoo.com/thewest/business/a/-/world/8049123/austerity-no-help-to-growth-imf/

    “In many economies, central banks can only provide a limited monetary stimulus because interest rates are already near zero,” the IMF said.

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  150. 150
    pfft says:

    By Ben @ 148:

    RE: pfft @ 139 – That Dunning-Kruger effect is actually the first piece of useful information I have seen come from you. I have seen my coworkers in a new light. Good job.

    how bout this?

    Denial vs. Progress
    http://www.ritholtz.com/blog/2011/03/denial-vs-progress/

    too many people live the ABC circle.

    how many times have you heard that the market will do XYZ? when it doesn’t you get C. it was the fed. it was the weather. it was the government. you should have thought of that at A! I used to be the ciricle on the left. I wasn’t complaining though I was just in full denial…

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  151. 151
    pfft says:

    By scotsman @ 146:

    RE: pfft @ 143

    Too funny. I thought you just said the fed wasn’t buying treasuries but you quote an article saying they were? What a joke.

    And you should check your facts first- rates are up. Try again.

    when did I say they weren’t buying them? I said they weren’t monetizing them. big difference. what is the big deal anyway? the fed has trillions, they have to buy SOMETHING. what are they supposed to own- straight cash, homie?

    google it.

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  152. 152
    Scotsman says:

    RE: pfft @ 149

    Wow, a passive/aggressive that has completely lost it. First you complain that austerity won’t help and provide a “supporting” link. Then you quote from the same article that stimulus won’t be effective either since rates are already at or near zero. Subconscious confusion? Is the light beginning to go on your brain that there is no way out? Or are you just rambling incoherently?

    Do let us know!

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  153. 153
    EconE says:

    By pfft @ 151:

    By scotsman @ 146:
    RE: pfft @ 143

    Too funny. I thought you just said the fed wasn’t buying treasuries but you quote an article saying they were? What a joke.

    And you should check your facts first- rates are up. Try again.

    when did I say they weren’t buying them? I said they weren’t monetizing them. big difference. what is the big deal anyway? the fed has trillions, they have to buy SOMETHING. what are they supposed to own- straight cash, homie?

    google it.

    The Fed is buying with printed money.

    http://en.wikipedia.org/wiki/Monetization

    I guess this isn’t really Ben Bernanke talking about printing in this video and is actually some sort of lying imposter?

    http://www.youtube.com/watch?v=srx1cWLGzEI

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  154. 154
    Scotsman says:

    RE: pfft @ 151

    Are you serious? Where do you think the Fed gets the money? Stay out of the deep end of the pool.

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  155. 155
    David Losh says:

    RE: pfft @ 150

    Growth, and progress, don’t go hand in hand.

    Many people have complained about my socialist, or communist rants. The fact is Capitalism needs to be restructured. The idea that nothing will be accomplished unless some one becomes wealthy is a dangerous myth. It’s actually contrary to Capitalism as it is incorporated into the Constitution of the United States.

    I was also confused pfft, until I saw the light.

    Define winning. In the chart it shows winning as progress? I guess the stock market needs to be continually climbing in order for there to be that progress? And what is the stock market climbing on? What’s the market driver, and is it a good thing?

    Let me save the gaining weight analogy for another time, you can either eat Twinkies, of protein, you can have fat, or muscle.

    Like the government, which is loaded with pure fat, American business has done the same. We don’t produce anything any more. We trade paper around, make staggering profits, while diminishing the consumers ability to pay. The consumers here are buried under staggering debt so business has gone into emerging markets convincing them to use credit.

    It’s not rocket science that in places where speculation has driven up pricing there are riots. 2008 proved that. You can talk austerity if you want, but people, governments, can’t continue on. At some point the credit needs to be paid down, or off. We are at that point, or we should be.

    We don’t produce anything.

    Our government continues to play this game that if they just keep giving money for nothing we will all be happy. What we need is a domestic agenda. Giving banks, and corporations more incentive to steal more money isn’t working. Our government is for, and by the people. We need a strong social agenda.

    That means killing off the banking sector. That means the stock market needs to lose at least 3000 points. That means a contraction of the economy until we all get caught up.

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  156. 156
    softwarengineer says:

    8.9 Earthquake Hits Japan and Destroys Much of the Nation Today

    And meanwhile, US Stocks are going up. Doesn’t this seem odd? Or not really? Perhaps all that foreign debt cod liver oil isn’t good for you after all…LOL

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  157. 157
    Kary L. Krismer says:

    RE: softwarengineer @ 156 – Earlier today the press was trying to related the drop in the market and the price of oil to the earthquake. Whenever there’s a change in the market they have to try to come up with something to explain it, no matter how absurd.

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  158. 158
    pfft says:

    green jobs.

    Geothermal to double by 2020, report says
    http://news.cnet.com/8301-11128_3-20041696-54.html

    The U.S. solar power sector grew 67 percent in 2010

    U.S. solar grows sharply, still lags Europe
    http://news.cnet.com/8301-11128_3-20041568-54.html

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  159. 159
    LUC says:

    By pfft @ 158:

    green jobs.Geothermal to double by 2020, report says
    http://news.cnet.com/8301-11128_3-20041696-54.html
    The U.S. solar power sector grew 67 percent in 2010

    U.S. solar grows sharply, still lags Europe
    http://news.cnet.com/8301-11128_3-20041568-54.html

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  160. 160
    LUC says:

    By pfft @ 158:

    green jobs.

    Geothermal to double by 2020, report says
    http://news.cnet.com/8301-11128_3-20041696-54.html

    The U.S. solar power sector grew 67 percent in 2010

    U.S. solar grows sharply, still lags Europe
    http://news.cnet.com/8301-11128_3-20041568-54.html

    Do you actually read what you post? The there is no mention of job creation in either of those articles you linked.

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  161. 161
    Matthew says:

    My prediction…. Pfffffffft won’t even be around on this forum in 2012.

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  162. 162
    Scotsman says:

    RE: LUC @ 160RE: pfft @ 158

    ” 2.2 jobs destroyed for every “green job” created”

    This is too funny- I do a little reading and what do I find? Turns out subsidized green jobs are poison to the general economy. Yes, green jobs could actually prove fatal to the economy, much like ethanol and other glorious ideas from the Politburo:

    “The study calculated that, since 2000, Spain spent $774,000 to create each “green job”, including subsidies of more than $1.3 million per wind industry job. It found that creating those jobs resulted in the destruction of nearly 113,000 jobs elsewhere in the economy, or 2.2 jobs destroyed for every “green job” created. Jobs lost were mostly in the fields of metallurgy, non-metallic mining and food processing, beverage and tobacco.”The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices,” Calzada said in an interview with Bloomberg News.

    Western Business Roundtable also noted that the U.S. Energy Information Administration (EIA) recently calculated that Spain’s annual emissions of carbon dioxide have increased by nearly 50 percent since the launch of the subsidized “green jobs” program.The moral of the study, according to Calzada: Renewable energy stimulus and subsidies are not the answer to solving the current economic crisis.”

    Sure, it’s Spain, not the USA, but I’ll happily put money on the economic effects being the same. Market efficiency still rules the day, and one ignores it at their peril. Carbon taxes, subsidies, tax credits or penalties, all create a reality outside that which already exists in equilibrium, and all have largely unanticipated consequences- most often negative.

    http://www.icis.com/blogs/green-chemicals/2009/04/the-price-of-green-jobs-learn.html

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  163. 163
    David Losh says:

    RE: Scotsman @ 162

    Well, you are correct, jobs will be destroyed. I have a hard time with the job creation part of the equation. In my opinion we have way too many useless make work project jobs.

    Coal, and oil come to mind immediately. It must take millions of people to turn coal, and oil into energy.

    For the same subsidy money we could, even at today’s prices, supply a million solar panels that tie back into the grid. Once the panels are in place, people will lose jobs.

    There are billions of useless jobs going on today.

    Let’s take banking. Millions of jobs are contributed to the service sector by banks. Let’s take a small per cent in collections. Thousands of jobs are created in collections from people who can’t pay. Those jobs create a net loss from the economy. Consumers first pay for things with debt. The price goes up. The payments go into the bank, to be paid in those wages, but the consumer has that much less money to spend.

    The per cent, the drain, on the economy is incremental, but still a drain. Collections on debt people should have never had to begin with is a wheel in a rats cage. It creates jobs, at the cost to the economy.

    In my opinion oil, and coal are the same. Millions of jobs for a net economic loss.

    We are way past using jobs as an indication of prosperity.

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  164. 164
    Kary L. Krismer says:

    By David Losh @ 163:

    Well, you are correct, jobs will be destroyed. I have a hard time with the job creation part of the equation. In my opinion we have way too many useless make work project jobs.

    Coal, and oil come to mind immediately. It must take millions of people to turn coal, and oil into energy.

    For the same subsidy money we could, even at today’s prices, supply a million solar panels that tie back into the grid. Once the panels are in place, people will lose jobs.

    You really need to take a basic economics course. If that were actually true (as opposed to being totally made up facts), then money would be pouring into making solar panels. But it isn’t true, which is why money is still being spent to find and pump oil, etc.

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  165. 165
    Scotsman says:

    Subsidies for different energy sources:

    http://media.hotair.com/wp/wp-content/uploads/2011/03/energy-subsidies.jpg

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  166. 166
    David Losh says:

    RE: Kary L. Krismer @ 164

    It’s an example of job loss.

    Oil is self sustaining job creation that does much more than just run plants, and factories. Coal sustains millions of jobs from mine to energy.

    The point is no one will be pouring money into new energy sources because it will only decrease the all mighty GDP. There’s no wealth beyond the initial ramp up.

    It would be up to each individual property owner, in a case of solar, to make the investment, pay it off, while the frid, the over all system of energy, would be bolstered. That’s a tough sell to make.

    You did side step my example of banking. Banking created millions of jobs globally. It’s also a complete drain on the economy. I won’t say it’s a net drain because I don’t think there is any reasearch data on that, but I’ll check.

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  167. 167
    David Losh says:

    RE: Scotsman @ 165

    “The US government so far this year has financed $1.47 billion to several wind power producers via the Department of Energy loan programs.”

    The term used to describe solar, and wind is “sustainable” energy sources. That means job loss in the future. Where is the upside to that?

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  168. 168
    David Losh says:

    Sorry, researching the banking sector is really depressing. $50Bn here, $100Bn there, and we have a propped up profit center. It looks like the consumers will continue to be the losers there.

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  169. 169
    B&W Nikes says:

    RE: Scotsman @ 162 – I love your humor, but seriously? The whole fear of green jobs destroying good old petro jobs is really funny. With that cumbersome philosophy we’d never have made it out of the era of coal burning stoves and horse carriages. The jobs of the last century are not entitlements, we can live with changes in most of them, just like we learned to live without wooden propellers for aircraft. If technological advances don’t remove labor (jobs), they are often failing to meet the desired objective.
    What’s going to get interesting is seeing how we learn to run economies on the technocratic labor saving paradigm we’ve embraced without enacting some kind of serious socialism. It’s fairly obvious through history that things descend into a kind of barbarism when quality of life starts moving in opposite directions for the different economic classes.

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  170. 170
    Scotsman says:

    RE: B&W Nikes @ 169

    I don’t have a problem with green jobs, or green energy, or change in general. I have problems with efforts to force change faster than the technology or economy is able to accept it, and that’s what’s going on now. When the government gets involved and forces currently inefficient or immature changes upon the economy it justs ends up costing all of us. What the article reminds us of is the often unanticipated but real costs of going against current market equilibriums. For example, taxing one form of energy to fund research or implementation of another form, i.e. “green jobs,” often results in jobs losses in the taxed sector that aren’t necessarily recovered in the new, favored sector. I don’t doubt for a minute that the math/analysis in the referenced article is correct. When a market isn’t ready and you force change on it there will be inefficiency, often expressed as job losses. An economy is like a chess game or a Calder mobile- one move or change begets a hundred other compensating moves or adjustments. Too often folks just focus on the first move and ignore the consequences of what comes after. Especially if you’re a politician or similar short term thinker.

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  171. 171
    One Eyed Man says:

    RE: Scotsman @ 170

    Lots of free market business decisions are also made on an similarily inappropriate short term basis, whether due to inability of the first mover to keep others from reaping the benefits of start up costs, the desire for immediate return on investment, or other issues that separate the true risk of investment from reward like front end profits for mortgage brokers who aren’t exposed to the back end risk of the loan they originate.

    I don’t disagree that most things should be left to the private sector, but innovation and R & D are too important to what remains of our economy to be left entirely in private hands and let them get exported along with all the other jobs.

    No one in the private sector currently has an incentive to put in the infrastructure to provide NG fueling for trucks across the country so it won’t happen. If it did, we’d drop our fuel imports and thereby decrease the current account deficit, increase GDP, create domestic jobs, and help reduce the federal deficit. Unfortuantely those benefits won’t be captured by a private entity that would have to invest billions in NG fueling stations across the country as well as NG fueled trucks. What’s good for America won’t necessarily get done by privately motivate business entities.

    No private sector entity had the incentive to build the transcontinental railroad without the land grants that provided both the right of way and paid most of the construction costs. Its extremely unlikely that we would have an interstate highway system if the government hadn’t done it. If it weren’t for the government subsidies of NASA and defense spending there probably wouldn’t be a Boeing, Lockhead, General Dynamics, or Grummun just to mention a few. The nuclear power industry wouldn’t exist without the Manhattan Project. There probably wouldn’t have been an aluminium industry in the northwest without public investment in hydro electric facilities in the 1930’s and Tennessee Valley’s major product would probably still be moonshine.Tremendous amounts of innovation comes out of grant funded research at public and private universities, other entities like NIH and grants for research at private corporations as well.

    We’re no longer the resource rich country of the 1800’s, nor are we the leading industrialized manufacturing country of the 1900’s. If government doesn’t take the risk to fund a significant portion of R & D, there are times when the private sector will turn off the flow of investment or move the operations overseas because their interests are to promote the interests of their shareholders, not the interests of the American people. Science, technology, and the creation of intellectual property thru R & D are too important to the American public to be left solely to the short term profit motivations of the private sector. The potential long term benefits to the nation will never satisfy the executives who need to juice next quarter’s financial results if they want to keep their jobs.

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  172. 172
    B&W Nikes says:

    RE: Scotsman @ 170 – The government is always involved. For better or for worse (and somehow usually both at once), but always involved. From Colonization to Pony Express to Telegraph to Railroad to Highway to International Air. Market equilibrium (or whatever we want to call our current economic reflex) is an elastic human construct and is subject to react to whatever forces are placed against it. Markets are not laws of nature, they are habits of humankind and people ultimately decide what the markets will reflect. Most discussions around any major systemic changes really illustrate how strapped people feel financially, and how uncomfortable with the future many people are. It’s really a shame.
    In a couple of the older apartment buildings I’ve lived in there were still ice boxes left in the kitchen shelving. The market for local residential ice delivery is pretty much gone. There are however, kick ass new refrigerators that keep the cheese nice without blowing a hole in the ozone, according to Whirlpool and the EPA. They don’t seem as cool as an old icebox, but I’ve never had to use one of those on a daily basis, so what do I really know?

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  173. 173
    Blake says:

    RE: One Eyed Man @ 171
    Well said!
    Our country has lacked leadership and we’ve had no industrial policy for the 21st century. “Financialization” has taken over the US economy with all it’s emphasis on short term profits and the “quick buck.”
    My favorite quote (…and only 400 years old!)
    “Nothing doth hurt more in a country than that cunning men are mistaken for wise.”
    – Francis Bacon

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  174. 174
    Blake says:

    RE: One Eyed Man @ 171
    One eyed guy… you’d enjoy Ha-Joon Chang’s book Bad Samaritans. All about the “secret history of capitalism” (i.e. subsidies for key industries). Ha-Joon is coming to Seattle next week and speaks at Town Hall on Wed night. He’s an economics professor at Cambridge and very funny.
    http://www.amazon.com/Bad-Samaritans-Secret-History-Capitalism/dp/1596913991

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  175. 175
    One Eyed Man says:

    RE: Blake @ 174

    Thanks for the education Blake! I just spent an unplanned hour on the internet learning about Chang and his ideas. I think Bacon as the father of scientific method would approve of Chang’s preference for attempting an unbiased observation of economic events and development of theories and conclusions about those events that are independent of any particular ideological affiliation or prejudice. Its one thing to develop a model to fit the observations. Its another to force an interpretation on the data to fit the model.

    In comment 172 above, B & W NIkes said, “Markets are not laws of nature, they are habits of humankind and people ultimately decide what the markets will reflect.” Chang states a similar conclusion in one of his discussions concerning what a “free market” is. For some time now, I’ve been of the belief that the phrase “free market” is an over simplistic statement if not a bit of an oxymoron in that a market is in itself a set of agreed rules for human interaction that regulate what is acceptable behavior in the conduct of trade. In modern society, the market at the very least includes a set of regulations as to what constitutes a contract, who may contract, what may be the subject of a contract, how the contract can be performed, what constitutes a breach of contract and how the terms of the contract may be enforced.

    Even the simplest market place is defined by a significant amount of underlying ruegulation that guides the transaction. In order for people to participate in the market, regulation is needed to define the transaction and guarantee the faith of the participants that their expectations will be met. Without a reasonable guaranty that expectations will be fulfilled there is no “faith” in the market and commerce decreases due to that risk.

    The least regulated market is free only in the sense of the relatively limited extent and complexity of that regulation needed to provide faith in the market. Part of the irony of a “free” market is that as society becomes more sophisticated and inventive, capitalists create new ways of conducting business with increasingly complexity through intangible vehicles like limited liability entities for capital formation (ie corportations and LLC’s) and new contractual relationships like derivatives. These innovations spur the need for incredibly compex regulation to ensure faith in obtaining a fair and bargained for exchange at the market place. That’s not to say that anyone wants to create excessive regulation that burdens innovation and production, but merely that the task of balancing the control necessary to ensure faith in the market with the burden placed upon commerce and efficiency is a complicated, amorphous, moving target which must be delicately balanced in order to be both worthy of the faith of the participants and denominated as reasonably “free.”

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  176. 176
    David Losh says:

    As always, I would encourage people to read the Constitution.

    There are no provisions for giving any industry any protection through regulation. The People are to be protected. The common defence runs through the document along with promote the general welfare.

    Here’s what’s happening; we are at that Century 21 moment. All the things that were predicted are going on today. We could have a productive global economy through cooperation.

    No one wants to say that. Every one wants to hold on to old grudges, and fight over some archaic belief system. You could call it good, and evil, right, or wrong, but many things will have to change.

    violent love, and the way we look at violent love, will have to change. Drugs are a personal choice, there is no way we can do drug enforcement. War is a thing of the past, we can’t afford it, and the economy has changed, there are no spoils of war.

    Food, work, labor, economy, will have to be redefined. There just aren’t enough “jobs” to go around. We will never have a global economy by intellectual elitism, so over educating the populace is just to keep them out of the job market. Education has also changed.

    This is the greatest time of opportunity. You just have to look ahead.

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  177. 177
    2kt says:

    RE: David Losh @ 155

    What you are proposing makes no sense.

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  178. 178
    David Losh says:

    RE: 2kt @ 177

    It makes perfect sense. Show me where I’m wrong. Show me why we need to bank finance every facet of our economy. Why is Fred Meyer pushing the rewards Master Card? Why does every item in Best Buy have the installment payments listed?

    Show me why we need the credit markets. What do they produce? What is the gain?

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  179. 179
    Blurtman says:

    The reader’s comments are interesting…

    “The Sad But True Story of Wages in America”
    This is from Larry Mishel and Heidi Shierholz of the EPI:

    The sad but true story of wages in America, by Lawrence Mishel and Heidi Shierholz, EPI: Recent debates about whether public- or private-sector workers earn more have obscured a larger truth: all workers have suffered from decades of stagnating wages despite large gains in productivity. The current public discussion illogically pits state and local government employees against private workers, when both groups have failed to sufficiently benefit from the economic fruits of their labors. This paper examines trends in the compensation of public (state and local government) and private-sector employees relative to the growth of productivity over the past two decades.
    This paper finds:
    • U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth.
    • Wage stagnation has hit high school–educated workers harder than college graduates, although both groups have suffered—and a bit more so in the public sector. For example, from 1989 to 2010, real wages for high school-educated workers in the private sector grew by just 4.8%, compared with 2.6% in state government. During the same period, real wages for college graduates in the private sector grew 19.4%, compared with 9.5% in state government.
    • The typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s. While productivity grew 80% between 1979 and 2009, the hourly wage of the median worker grew by only 10.1%, with all of this wage growth occurring from 1996 to 2002, reflecting the strong economic recovery of the late 1990s.
    • The fading momentum of the 1990s recovery failed to propel real wage gains for college graduates employed by private-sector firms or states from 2002 to 2010, despite productivity growth of 20.2% over the same period.

    http://economistsview.typepad.com/economistsview/2011/03/the-sad-but-true-story-of-wages-in-america.html

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  180. 180
    2kt says:

    RE: David Losh @ 178

    Have you ever been to a country that lives on cash only? It ain’t much of a living. Those union “living wages” you advocate for are not possible for certain. The ideas of wealth distribution or, in your case, re-distribution, are neither new or very original. The world does not owe you a living. The sooner you realize it, the better off you are.

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  181. 181
    pfft says:

    By LUC @ 160:

    By pfft @ 158:
    green jobs.

    Geothermal to double by 2020, report says
    http://news.cnet.com/8301-11128_3-20041696-54.html

    The U.S. solar power sector grew 67 percent in 2010

    U.S. solar grows sharply, still lags Europe
    http://news.cnet.com/8301-11128_3-20041568-54.html

    Do you actually read what you post? The there is no mention of job creation in either of those articles you linked.

    so exactly how are all those new solar panels going to get up on roofs? who is going to build those new geothermal plants? just robots?

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  182. 182
    pfft says:

    By Scotsman @ 162:

    RE: LUC @ 160RE: pfft @ 158

    ” 2.2 jobs destroyed for every â��green jobâ�� created”

    not from the studies I’ve seen.

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  183. 183
    Scotsman says:

    RE: One Eyed Man @ 175

    “The least regulated market is free only in the sense of the relatively limited extent and complexity of that regulation needed to provide faith in the market.”

    You make a good point, and initially I was prepared to enthusiastically agree. But in giving it more thought it occurred that what this line of reasoning eventually does is take us back to the starting point. It is the regulations, run wild, that have been used to corrupt and distort the markets, in the process destroying the faith they were intending to protect. Something about “the government that governs least is the best” comes to mind. The initial motivations are good, but as you state capitalistic maneuvering soon co-opts or corrupts the regulations. It would probably be better in the long run to limit the extraneous tools shaping and manipulating markets, forcing more of a reliance on pure price/value calculations. Regulation is a great example of a mis-match between short term problems and long term solutions, where the solutions (specific regulations) linger too long and become via manipulation a new short term problem. It would be best to live with the vagaries of short term dislocations in exchange for long term efficiencies.

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  184. 184
    Scotsman says:

    RE: pfft @ 182

    “not from the studies I’ve seen”

    That’s because the studies you’ve seen are incomplete propaganda pieces. How are those fantastic new green jobs paid for? Have you seen the “studies” that detail the actual cost per new job? Do you really think green job workers are paid $200,000 to $700,000 a piece? They must be very, very productive to command that kind of pay.

    Robbing Peter to hire Paul in a green job is not progress. Maybe you should read this again, or even for the first time:

    http://www.icis.com/blogs/green-chemicals/2009/04/the-price-of-green-jobs-learn.html

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  185. 185
    David Losh says:

    RE: 2kt @ 180

    Yes , I’ve been to several cash economies, you are right, the life is hard.

    There is also a great disparity between the people who live in the big house on the plantation, and those who work in the fields.

    Wait a minute didn’t we have a big civil war about that? And then again in the North when Unions first organized? Wasn’t there some blood shed? What exactly are food riots any way?

    As the emerging markets are strapped with more debt they become more desperate. You have to look forward, not back. The distribution of wealth has been to the wealthy. Worker productivity is up, wages remain the same.

    There’s a point where no one, no one will be safe. There are fewer places to go that there isn’t “terrorism.” Just look at down town Seattle. There are camps of homeless. Portland is worse, and in San Fransisco there are areas that have given up gentrification.

    It’s an economic thing. I call it being a prisoner of wealth.

    Let’s say you retire in Mexico. Lake Chapala is a gringo district. Your house is paid off, you get social security, and life is good, as long as you don’t leave the compound. Once you are in town, with the rest of the people, you know what I men, those people, you hold your money a little closer. You start going out with sandals, old sandals, rather than shoes. You dress a little more shabbily, not because you want to, you just don’t want to cause attention.

    We have the same disparity here in the United States. We pay just enough to keep the hoards from rioting. However here in the United States we have rights. We can demand a shift in economic policy.

    So if you want to continue to worship people who steal money, go ahead. If you think some people are winners, and others are losers, it just shows you haven’t got what you think you deserve. You want more, and we should all work to get you more.

    On the other side if I get my daily bread what the frigging heck do you care?

    After your done with the Constitution, you should read the Bible, because this here is America, we take what we want.

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  186. 186
    David Losh says:

    RE: Scotsman @ 183

    Let’s take banking regulations. Are banking regulations keeping pace with the rapid developments of profit potential? Are the financial markets safe, secure, or even good for the economy?

    I’m asking because this hands off approach just collapsed the global economy. We are in a recession that you keep pointing out isn’t over yet. In my opinion we will have more deflation once interest rates are no longer artificially low.

    In that regard, yes, the government should stop propping up banking profits, and concentrate more on broader based economic stability.

    Regulation just isn’t keeping up.

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  187. 187
    One Eyed Man says:

    RE: Scotsman @ 183

    Three quick comments (I acknowledge that quick is a relative term):

    1. Just because ingeniuous individuals found a way to circumvent a regulation doesn’t mean the initlal problem the regulation was intended to curtail went away. Many of the problems regulations seek to deal with are long term issues that will always exist in the market place. For example, just because investment bankers developed unregulated derivatives doesn’t mean that the huge mass of regulation dealing with registration and disclosure for securities, and capital reserves for insurance contracts were short term and are now irrelevant.

    2. No market is entirely free of regulation because the structure of the market is itself regulation.The real issue is the balance between regulation which is necessary to guaranty that markets will deliver what the participants expect (instill the faith to participate) vs allowing the market place the unrestricted freedom to work efficiently and without unnecessary distortion. For example, if you removed disclosure requirements from securities regulation, the risk premium to investors would be increased, market participation would be decreased, and the ability of the market place to raise capital for investment would likely be diminished. A different example would be the right of public workers to strike. In a purely free market, the public workers should be able to collectively bargain and strike. Even I agree that there is a need to regulate the bargaining rights of public workers. But that’s a regulatory limitation on the free market place.

    3. There are occassions when messing with a free market can have benefits that can be quantitatively demonstrated with a fairly high degree of certainty. Call it a tax if you want to. But as with any tax, the real question is whether it is a fair and constitutional tax and a public dollar well spent. There will always be certain costs and benefits to market transactions that aren’t captured in the costs and benefits of the transaction to the market participants. Pollution is an externalized cost that the market will ignore unless the party using the resource is forced thru regulation to bear the cost. That’s an economic dislocation that a free (unregulated) market doesn’t account for. Conversely, there are benefits from some economic activities that can’t be captured in the market place so a “free” market doesn’t account for them in the decisions of private parties to make the capital investment. As you know, I’d use the Picken’s plan as a current example. Much of thes benefit of switching big rigs to NG is benefit to our domestic economy that won’t be represented in the operating statement of a company incurring the initial investment. These benefits include decreased reliance on imported oil, improved current account deficit and GDP, creation of domestic jobs, hedge on oil price by making available a substitute domestic commodity, decreased economic need to provide defense of middle eastern oil interests, etc.

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  188. 188
    pfft says:

    By Scotsman @ 184:

    RE: pfft @ 182

    “not from the studies Iâ��ve seen”

    That’s because the studies you’ve seen are incomplete propaganda pieces. How are those fantastic new green jobs paid for? Have you seen the “studies” that detail the actual cost per new job? Do you really think green job workers are paid $200,000 to $700,000 a piece? They must be very, very productive to command that kind of pay.

    Robbing Peter to hire Paul in a green job is not progress. Maybe you should read this again, or even for the first time:

    http://www.icis.com/blogs/green-chemicals/2009/04/the-price-of-green-jobs-learn.html

    you know why you are skeptical of green jobs? you’re a climate change denier. there is probably no reaching you. I however read green blogs every day and see the advances on all fronts. wind, solar, hydro, efficiency/weatherization, smart grid and many other areas.

    this american study states the opposite of what your study says.

    warning PDF.

    http://rael.berkeley.edu/sites/default/files/old-site-files/2004/Kammen-Renewable-Jobs-2004.pdf

    two minutes of internet surfing finds this link:

    Department of Energy eviscerates right-wing Spanish ‘green jobs’ study
    http://climateprogress.org/2009/09/01/department-of-energy-spanish-green-jobs-study/

    Green Policies in California Generated Jobs, Study Finds
    http://www.nytimes.com/2008/10/20/business/20green.html

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  189. 189
    Blake says:

    RE: Scotsman @ 183
    re: “capitalistic maneuvering soon co-opts or corrupts the regulations”
    Yes, this is “regulatory capture” and I think that we can all agree that it is bad when the fox is guarding the henhouse… we need to preserve an impartial referee and some system of checks and balances. Our government is run by corporations and their minions – not only with a revolving door between govt and corporate jobs (both parties) but all the big money running political campaigns.

    Plus: it is not just that the capitalists dominate the govt and write their own rules, but they also corrupt the markets! THIS is the most important point… It is a NATURAL occurrance that the dominant actors in markets want to continue to dominate the market by driving out competitors (or buying them out) so they can set prices and enjoy enormous profits. The biggest enemies of free market competition are the largest corporations themselves! A free market tends to drive the rate of profit towards zero (or 5-10%) while the coprorations like to a rate of return of 20, 30% or more.

    Btw: It’s great to read an economist like Ha-Joon Chang who is both very smart and has a great sense of humor. It is a dismal science… but he makes it more interesting.

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  190. 190
    Blake says:

    The Former Heads of the FCC and FHA Will Soon Be Lobbying for the Industries They Regulated
    http://nymag.com/daily/intel/2011/03/former_fcc_chairman_and_obamas.html
    -snip- Since joining the FHA in 2009, Stevens “had a hand in most of the Obama administration’s housing and mortgage policies over the past year and half — almost of which have involved subsidies for housing and giveaways to banks,” says CNBC’s John Carney.

    … let’s act surprised. It just goes on and on and on and on…

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  191. 191
    whatsmyname says:

    RE: Blake @ 190
    In what I think is the Scotsman’s best ever post, he said something to the effect of good luck in getting the government to do something not in keeping with their owner’s interests.

    No republic has ever survived that country becoming an empire.

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  192. 192
    Blake says:

    RE: whatsmyname @ 191
    re: “good luck in getting the government to do something not in keeping with their owner’s interests.”

    The key is to wrest control of the government away from those with vested interests. Government should be a check on powerful interests. Checks and balances?

    Of course our country’s first Chief Justice of the Supreme Court believed that that “those who own the country ought to run it.” And the current Supreme Court and ruling coalitions seem tpo believe the same and perpetuate this… And look at what a good job they’ve been doing running our country! ;-(

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  193. 193
  194. 194
    Blake says:

    RE: whatsmyname @ 193
    Removing or reducing the role of money in our elections would be a start, but we are headed in the opposite direction unfortunately…

    The majority does have an interest in this – polls show – but they are fragmented and distracted by all sorts of nonsense by the corporate media and the two corrupt political parties that control the system. The last two years was ripe for change but the system is resiliant – – isn’t it! No one said it would be easy… but if we don’t fight against these powers they will continue to bankrupt our system.
    (BTW: 16 years ago Kevin Phillips wrote a short but incisive book titled “Arrogant Capital: Washington, Wall Street, and the Frustration of American Politics” which argued that throughout our nation’s history we had nonviolent, political revolutions basically every generation/30 years, but this was frustrated and ended in the 1990s by the rise of Wall Street power (“financialization”) and corporate dominance of both our political parties… and government.)

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  195. 195
    whatsmyname says:

    RE: Blake @ 194
    I surely don’t disagree with your ends. I just do not see a clear or cogent means. The new Republican party is an alliance of the original northern capital plus the dixiecrats, and the most rapacious of the wannabe’s. Without battling each other, they have no one to keep them in check, and all their energies can be united against the hoi paloi – or whatever they call working people these days. The Democrats appear content merely to be bought. The masses are busy in the race to the bottom, making sure the next guy doesn’t get to keep the benefits that they themselves gave up last decade.

    The Big Picture has some interesting shorts with Jeffrey Sachs today. Maybe there is a tipping point. Who knows?

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  196. 196
    pfft says:

    look at that economy tanking!

    Gains in FedEx Corp. (FDX)’s overnight box shipments in the U.S. reinforce the Federal Reserve’s view that the economic expansion is on a “firmer footing.”

    Average daily volume rose 2.4 percent to 1.22 million boxes in the quarter ended Feb. 28 from a year earlier, the second- largest U.S. package-shipping company reported today. It was the highest level of such shipments for a fiscal third quarter since 2006.

    FedEx Volumes Support Bernanke’s View U.S. Economy Is on ‘Firmer Footing’
    http://www.bloomberg.com/news/2011-03-17/fedex-volumes-support-bernanke-s-view-u-s-economy-is-on-firmer-footing-.html

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  197. 197
    Scotsman says:

    RE: pfft @ 196

    Mushroom farming seen as “way out” for struggling Michigan economy. And as Michigan goes, so goes the country:

    “It’s a very underutilized farming enterprise that uses Michigan’s vast renewable forests,” Ruster said as he prepared to spread the word about two specialty mushroom workshops he’ll conduct. “There are no environmental issues and very little (government) regulation when selling fresh mushrooms. It helps you better manage your forests, and for fresh sales, anybody can get into it without a commercial kitchen or a license.”

    Rumor has it Ben Bernanke is a big mushroom fan. Krugman, too.

    http://www.michiganfarmbureau.com/farmnews/transform.php?xml=20100430/ruster.xml

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  198. 198
    Scotsman says:

    RE: Scotsman @ 197

    Green jobs!!!

    Rate this comment: Thumb up 0

  199. 199
    Blurtman says:

    RE: Scotsman @ 197 – “Rumor has it Ben Bernanke is a big mushroom fan. Krugman, too.”

    Not the kind you can buy legally.

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  200. 200
    B&W Nikes says:

    RE: Scotsman @ 184 – Green propoganda? You refer to a posting on an astroturf chemical industry blogsite responding to an email sent by a conservative lobbying and activist group who forwarded a paper funded by a libertarian think tank that was written in the european union by a university professor who could not get the work peer reviewed. You do have a wile sense of humor.

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  201. 201
    Scotsman says:

    RE: B&W Nikes @ 200

    Whew- it’s a complex world, isn’t it?

    Keep the faith, baby- green jobs are going to save both the economy and the climate from those evil Fox News watchers. If you’re read “The Secret” you know that wishing will create any reality you desire. The laws of physics and economics be dammed. So carry on!

    P.S.- I love your mask. NW Indian (based on color) or your own creation?

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  202. 202
    pfft says:

    By Scotsman @ 198:

    RE: Scotsman @ 197

    Green jobs!!!

    organic!

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  203. 203
    pfft says:

    Fed Says Some of 19 Largest Banks Can Resume Dividends After Stress Tests
    http://www.bloomberg.com/news/2011-03-18/fed-says-some-banks-can-restart-dividends-after-stress-tests.html

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  204. 204
    pfft says:

    By Scotsman @ 201:

    RE: B&W Nikes @ 200

    Whew- it’s a complex world, isn’t it?

    Keep the faith, baby- green jobs are going to save both the economy and the climate from those evil Fox News watchers.

    don’t forget fox itself. hey scotsman, remember climategate? neither does anyone else because it was a fox farce. all those scientists were cleared.

    Fox News chief enforced climate change scepticism – leaked email
    Email obtained by Media Matters reveals reporters were under orders to cast doubt on any mention of climate change
    http://www.guardian.co.uk/media/2010/dec/15/fox-news-climate-change-email?INTCMP=SRCH

    remember though pay attention to what people do and not just what they say.

    News Corporation Is Carbon-Neutral, Murdoch Declares
    http://green.blogs.nytimes.com/2011/03/04/news-corp-is-carbon-neutral-murdoch-declares/

    that says a lot.

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  205. 205
    pfft says:

    here is how safe nuclear is!

    NRC inspectors at Indian Point recently found that the liner has been leaking 2 to 20 gallons per minute since at least 1993 (NRC 2010v), and that the plant owner has not yet delivered on repeated promises to fix the leak. That means the device installed to prevent leakage after an earthquake is leaking before an earthquake even occurs.

    http://www.businessinsider.com/indian-point-report-2011-3

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  206. 206
    whatsmyname says:

    RE: pfft @ 205
    Management response (from the article)
    Tut, tut. What’s all this worry? It only leaks when there’s water in it.

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  207. 207
    David Losh says:

    RE: Scotsman @ 201

    Green jobs are a fact of life.

    There won’t be a lot of them because unemployment is continuing to rise.

    Unemployment will also be a fact of life.

    Productivity is up!

    Short term retail jobs are down.

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  208. 208
    Scotsman says:

    What can I say? WE’RE ALL GONNA DIE!!!!!!!! Eventually.

    Rate this comment: Thumb up 0

  209. 209
    Blurtman says:

    Surely a government agency like the BLS cannot be incompetent or dishonest. I think we have unfortunately seen in the build-up to the last Iraq war, that government agencies will twist facts to tell the administration what they would like to hear. I hope that is not happening at the BLS.

    Gallup Finds U.S. Unemployment at 10.2% in Mid-March
    Underemployment was also unchanged from the end of February, at 19.9%

    PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, was at 10.2% in mid-March — essentially the same as the 10.3% at the end of February but higher than the 10.0% of mid-February and the 9.8% at the end of January. The U.S. unemployment rate is about the same today as the 10.3% rate Gallup found in mid-March a year ago.

    Jobs Situation About the Same as It Was a Year Ago

    The government’s February report on the U.S. unemployment situation suggests that 192,000 jobs were created last month and the unemployment rate declined to 8.9%, down from 9.7% a year ago. Federal Reserve Bank of New York President William Dudley and others said they were encouraged by this report.

    However, Gallup’s unemployment and underemployment measures have not shown the same gains in early 2011. Gallup finds an unemployment rate (10.2%) and an underemployment rate (19.9%) for mid-March that are essentially the same as those from mid-March 2010.

    In part, the difference between Gallup’s and the government’s current job market assessments may be due to the government’s seasonal adjustments. Gallup’s U.S. unemployment rate is also more up-to-date — its mid-March data include jobless figures for much of March, whereas the government’s latest unemployment rate is based on the jobs situation in mid-February.

    Most importantly, a key reason the government’s unemployment rate is dropping apparently has to do with the so-called participation rate: the percentage of Americans who are counted as being in the workforce. The government’s participation rate in February was at its lowest level since 1984. In essence, this tends to suggest that the government’s unemployment rate may be declining because many people are becoming discouraged and leaving the workforce — not because they are getting new jobs.

    If this is the case, then neither Gallup’s unemployment report nor that provided by the government is good news for the economy. It is equally bad news if people are out of work and looking for a job or just too discouraged to say they continue to do so. Either way, a lack of sufficient job creation to increase employment among those who want to work remains a major obstacle to U.S. economic growth in the months ahead.

    http://www.gallup.com/poll/146666/Gallup-Finds-Unemployment-Mid-March.aspx

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  210. 210
    B&W Nikes says:

    RE: Scotsman @ 201 – I remember that it’s a traditional folk japanese wood demon, I thought it had some NW coast similarities too. The artists page seems to have disappeared into the tubes… ah the impermanence of it all…

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  211. 211
    B&W Nikes says:

    RE: Scotsman @ 201 – Believing economics has laws does require perceiving our present social structures and our status in them has something analagous to the universal and invariable facts of the physical universe. It’s probably not entertained or questioned by those poor folks who need to believe that secrets are found on the impulse item endcap displays next to a cash register in a grocery.

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  212. 212
    David Losh says:

    RE: Scotsman @ 201

    Let’s see, oil slick in the Gulf of Mexico, or radiation in Japan? Oil spill, radiation, radiation or oil spill? If only we could burn more coal; that’s the ticket, more coal.

    Come on, use some logic here. Energy is getting to be a scarce as food, and water.

    We can fix anything. We just need to progress, and stop wishing for the 1950s. That post war economy is gone for good. We can, however, redirect our “war” efforts on solving these small global problems. The technology is there to feed, cloth, and supply every person on earth. It is simply called distribution. You don’t have to put wealth anywhere near the conversation about doing the right thing.

    Let that loser, low life scum, of this earth have all the money in the world. Just keep them away from good, decent, hard working people. They are called prisoners of wealth. It’s like monarchy; as long as they stick to in breeding, and don’t bother anybody, they can get along just fine by themselves.

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  213. 213
    Blake says:

    Worth reading…
    http://neweconomicperspectives.blogspot.com/2011/03/why-we-need-regulatory-cops-on-beat-and.html
    (Read the whole piece, but here are some choice parts)
    -snip- The senior officers that control fraudulent banks are exceptionally successful in using these Gresham’s dynamics to produce fraud epidemics and massively overstated asset values and earnings. They routinely get clean accounting opinions for financial statements that do not comply with GAAP and are deliberately contrary to reality. They routinely get grossly inflated appraisal values. They routinely got “AAA” ratings for toxic waste that was not even single “C.” They routinely got “liar’s” loan applications and appraisals that their employees and agents falsified to make them appear to have far lower loan-to-value (LTV) and debt-to-income ratios. The result was loans with a premium yield that looked (to the credulous) as if they were not exceptionally risky.

    These unique abilities, and dangers, posed by banks that are accounting control fraud mean that regulators are the only ones that can break a Gresham’s dynamic prior to catastrophe. Regulators’ unique advantage is that they are not paid, hired, or fired by bank CEOs.

    All of this explains why the “reinventing government” movement (a bipartisan project of then Texas Governor Bush and Vice President Gore) was a disaster for financial regulation. We were instructed to refer to banks and bankers as our “clients.” This is the worst possible mindset for effective financial regulation.

    The latest manifestation of this mindset was in response to Professor Elizabeth Warren’s recent congressional testimony. Dana Milbank’s March 16, 2011 column reported:

    “You kept saying ‘cop on the beat, cop on the beat,’ ” complained Rep. Shelley Moore Capito (R-W.Va.), who chaired the day’s hearing. Basically, the members of the panel didn’t want the new [Consumer Financial Protection Bureau] CFPB to have anything that would displease bankers. Rep. Blaine Luetkemeyer (R-Mo.) said the agency was “the last thing that our lenders need.” Rep. Robert Dold (R-Ill.) ridiculed the “theoretical consumer protection” the agency would provide. Rep. Sean Duffy (R-Wis.) complained that, in Warren’s agency, “consumer protection could trump safety and soundness.”

    Apparently, these politicians learned nothing useful from the crisis.
    -end quote-

    Nothing has changed… they gutted the regulations and now the Repuglicans are defunding the SEC and Elizabeth Warren’s new office.

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  214. 214
    Blake says:

    And a good piece abotu the dangers of “privatizing” Fannie and Freddie and the problems associated with lack of transparency:
    http://neweconomicperspectives.blogspot.com/2011/02/fannie-and-freddies-confused-futures.html
    -final ‘graph- “The first step, however, should be to make the existing disaster that is Fannie and Freddie fully transparent. We need to investigate fully what went wrong. If Fannie and Freddie put all their information on the web we could bring the wisdom of the masses to bear and determine the truth. There is no reason why Fannie and Freddie should have broad proprietary secrets.”

    … As I mentioned a few weeks back; Fannie and Freddie became the private bankers’ best friends back in ’07/08 when they stepped in to take care of their trash. I’m still waiting for the Fed (which is owned by the private banks) to transfer $1 trillion of its toxic waste onto the balance sheets of fannie and Freddie… Perhaps Christmas eve ’11 or ’12? Ho ho ho

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  215. 215
    Scotsman says:

    Who is this guy? He’s such a bear:

    FRANKFURT (Reuters) – The U.S. debt situation is at a “tipping point,” Dallas Federal Reserve Bank President Richard Fisher said on Tuesday, and urged the U.S. central bank to refrain from any further stimulus measures.
    “If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when,” Fisher said in a speech at the University of Frankfurt.

    He can’t be much of a banker/analyst or he would recognize we’re already technically insolvent.

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  216. 216
    pfft says:

    austerity FAILS again in real-time. when will we learn?

    yields are higher than ever:

    http://www.tradingeconomics.com/Economics/Government-Bond-Yield.aspx?symbol=PTE

    austerity is enacted:

    Portugal approves austerity measures
    http://www.telegraph.co.uk/finance/financialcrisis/8163146/Portugal-approves-austerity-measures.html

    austerity fails:

    Portugal government risks collapse over austerity cuts
    http://www.globalpost.com/dispatch/news/regions/europe/110322/portugal-euro-zone-debt-financial-crisis

    Portugal is also raising taxes and implementing deep spending cuts in an effort to convince investors it can curb its debt and avoid a bailout.

    you don’t raise taxes and slash spending during a deep recession! this is real-time proof.

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  217. 217
    pfft says:

    By Scotsman @ 215:

    Who is this guy? He’s such a bear:

    FRANKFURT (Reuters) – The U.S. debt situation is at a “tipping point,” Dallas Federal Reserve Bank President Richard Fisher said on Tuesday, and urged the U.S. central bank to refrain from any further stimulus measures.
    “If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when,” Fisher said in a speech at the University of Frankfurt.

    He can’t be much of a banker/analyst or he would recognize we’re already technically insolvent.

    actually no but that won’t deter you. the US has no problem meeting it’s interest obligations. have you seen yields lately? we can always cuts spending and raise taxes.

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  218. 218
    Scotsman says:

    RE: pfft @ 217

    Is that a tape loop, or is it you? You’ve got to put at least four responses in the que and mix them up a bit.

    What’s really funny is your continued “austerity fails” response. Of course austerity is going to fail. So is stimulus. So is the balanced budget- next year or ten years from now. Despite One Eye’s contention that equilibrium will be attained the yahoos in D.C. can’t even agree to cut $6B- about what we spend every morning- from the year’s budget. Hollowed out banks, falling employment, rising commodity prices, declining pensions and real estate values, all is going according to my original analysis. Doesn’t matter what we try.

    The games will continue until the checks ounce.

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  219. 219
    pfft says:

    By Scotsman @ 218:

    RE: pfft @ 217

    Is that a tape loop, or is it you? You’ve got to put at least four responses in the que and mix them up a bit.

    What’s really funny is your continued “austerity fails” response. Of course austerity is going to fail. So is stimulus. So is the balanced budget- next year or ten years from now. Despite One Eye’s contention that equilibrium will be attained the yahoos in D.C. can’t even agree to cut $6B- about what we spend every morning- from the year’s budget. Hollowed out banks, falling employment, rising commodity prices, declining pensions and real estate values, all is going according to my original analysis. Doesn’t matter what we try.

    The games will continue until the checks ounce.

    the stimulus will not fail. the academics behind the stimulus is 70 years old. it worked.

    ” all is going according to my original analysis.”

    ah yes.

    By Scotsman @ 41:

    RE: pfft @ 32

    ” you can borrow your way out of debt. you do that by jump-starting the economy and increasing your tax revenues.”

    Check back in 6 months and let me know how that works out.

    #notwinning

    http://seattlebubble.com/blog/2010/06/29/case-shiller-seattle-finally-sees-a-tax-credit-price-boost/

    “The games will continue until the checks ounce.”

    deep analysis. the checks are nowhere near bouncing.

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  220. 220
    pfft says:

    By Scotsman @ 215:

    Who is this guy? He’s such a bear:

    I see why you provided no link:

    He said the U.S. economy was now growing under its own steam, but voiced his concerns about building global inflation pressures and said it was now time for the central bank to stop pumping out extra support.

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  221. 221
    Scotsman says:

    RE: pfft @ 220

    Funny. That’s your counter argument? Can you please explain how that invalidates what is posted in #215? Are you suggesting the man is contradicting himself?

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  222. 222
    pfft says:

    gold from krugman.

    If fears of default, attacks of the bond vigilantes, were driving rates, a rise in interest rates should be associated with a fall in stock prices — because the change was about bad news. If, on the other hand, it’s about economic optimism — rates rise because people think the US will emerge from the liquidity trap sooner — stocks and rates should move in the same direction.

    The (Nature of) Shock Doctrine
    http://krugman.blogs.nytimes.com/2011/03/23/the-nature-of-shock-doctrine/

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  223. 223
    pfft says:

    By Scotsman @ 221:

    RE: pfft @ 220

    Funny. That’s your counter argument? Can you please explain how that invalidates what is posted in #215? Are you suggesting the man is contradicting himself?

    I think that he is contradicting himself and can’t make up his mind. unclear thinking means he doesn’t really know what’s going on. cognitive dissonance maybe? anyways his fears are laughable. everyone knows the government can’t and won’t run 10% deficits. people have been calling for a bond disaster for years know and it hasn’t happened. people instead of going into denial should admit they were wrong and figure out why.

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  224. 224
    Scotsman says:

    RE: pfft @ 223

    ” everyone knows the government can’t and won’t run 10% deficits.”

    WHAT??? Ten percent of federal expenditures? Easy- we’re at close to 50% for 2010 with its $1.7T deficit on a budget of $3.6T. $1.7T also happens to be more than 10% of GDP at $14T. And it sure doesn’t look like the deficit will be lower this year. Hey, Barack just got us into war number 3.

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  225. 225
    Kary L. Krismer says:

    This story on rising gasoline use, despite higher prices, would tend to indicate that the economy is improving. Either that or gasoline is somehow beyond being perfectly inelastic–people buy more of it because it gets more expensive! ;-)

    http://www.mercurynews.com/ci_17687094?nclick_check=1

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  226. 226
    Kary L. Krismer says:

    But here’s a clear sign of future trouble ahead! ;-)

    http://money.msn.com/top-stocks/post.aspx?post=de2ca99b-df69-46a0-8780-238d0ad46a90%3Focid%3Dmsnfacebooktwitter

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  227. 227
    pfft says:

    By Scotsman @ 224:

    RE: pfft @ 223

    ” everyone knows the government canâ��t and wonâ��t run 10% deficits.”

    WHAT??? Ten percent of federal expenditures? Easy- we’re at close to 50% for 2010 with its $1.7T deficit on a budget of $3.6T. $1.7T also happens to be more than 10% of GDP at $14T. And it sure doesn’t look like the deficit will be lower this year. Hey, Barack just got us into war number 3.

    10% of gdp more or less.

    “Hey, Barack just got us into war number 3.”

    no that was Libya.

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  228. 228
  229. 229
    Blake says:

    RE: Kary L. Krismer @ 226
    Heh… Cramer is right. Stocks remain the “best game in town.”
    It is a great big game… And you don’t want to play against the hedge funds!“We are just plagued today with the lack of long-term trends, and it’s because of people reacting to the issues of the day. You get long-term investors trying to anticipate what hedge funds are going to do—and not do— so they don’t get caught on the train tracks.”
    – Jim Sarni, managing principal, Payden & Rygel

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  230. 230
    David Losh says:

    RE: pfft @ 228

    I’m still fascinated by this idea of speculation in commodities. It’s the only thing that makes sense. Demand is through the floor. Sales may be good, because we have to buy, but supply has to be at an all time high.

    The supply of commodities doesn’t just stop. There is a futures market, there is an interest in meeting those higher prices, but the amount of growth, production, or delivery doesn’t just stop on a dime.

    I can vaguely see a way to manipulate markets by diverting supply. Food stamps, and social programs come to mind as a way to divert. How it works on a global scale is beyond me. I’m just saying is that no only does it seem probable, it also seems likely to me.

    The amount of government dumping of currency also seems to be coming to an end. I just don’t see any more bailing out with the way the world is today. If Spain defaults I can’t imagine a resource for funding it’s ten year debt.

    In my opinion we are in a sink or swim situation, globally.

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  231. 231
    David Losh says:

    RE: Scotsman @ 215

    I’ve been thinking about this and agree there will be no more stimulus. As much as there may be a desire to lipstick up the pig lips there is no source of funding remaining. Japan will need fixing, desperately. In my opinion the idea that the 3rd largest economy is dead in the water will take precedence over any other consideration.

    Manufacturing will need to move.

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  232. 232
    Kary L. Krismer says:

    By David Losh @ 230:

    RE: pfft @ 228 – I’m still fascinated by this idea of speculation in commodities. It’s the only thing that makes sense. Demand is through the floor. Sales may be good, because we have to buy, but supply has to be at an all time high.

    Using gasoline as an example, reports last week were consumption was higher the last period (I don’t remember if it was a month or a week) than the same period a year ago with much lower prices. Inventories also fell a lot more than forecast. And most of the output of one OPEC country is virtually totally off-line.

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  233. 233
    David Losh says:

    RE: Kary L. Krismer @ 232

    If you are referring to Libya, i don’t even have to Google that to know they are still at capacity to meet the obligations they have to OPEC. Alaskan out put is way down.

    Speculation has nothing to do with supply, or demand. It’s dollars in, and dollars out. In my opinion that is what is going on today. Higher prices mean higher profits.

    You’re not really seeing any reaction. The price of gas is where it was supposed to be. People buy it, profits are made, and the next round of speculation will begin.

    Like I’ve said many times, oil is a useless product, like gold. We have not begun to scratch the surface of energy. We want to rely on huge, bloated corporate profits to keep our light bulbs burning. It’s a ridiculous waste of resources.

    Actually if you want to talk about energy I have the same level of commitment to that as I do health care. We might be relegated to an energy thread.

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  234. 234
    Kary L. Krismer says:

    By David Losh @ 233:

    RE: Kary L. Krismer @ 232 – If you are referring to Libya, i don’t even have to Google that to know they are still at capacity to meet the obligations they have to OPEC.

    I’m not sure what you’re talking about. Other OPEC countries are trying to increase production to make up for Libya.

    http://www.menafn.com/qn_news_story_s.asp?StoryId=1093402266

    Of course it’s in their self-interest to do that, and historically some of them cheat anyway.

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  235. 235
    David Losh says:

    RE: Kary L. Krismer @ 234

    If Gadhafi wasn’t doing his job, he’d be dead. You don’t mess with US oil interests.

    The oil fields are a different world from the Middle East. It would be like saying the Royal family of Saudi Arabia has something to say about oil production, delivery, or refinement.

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  236. 236
    Scotsman says:

    RE: David Losh @ 235

    Most of the oil in Libya is produced by and sold to European interests. We (the U.S.) are there now to keep the oil flowing to Europe and protect their capital investments in plant and equipment. The rest of the noise is a distraction, and a pretty transparent one at that.

    By the way, the Fed recently initiated a buy-back program, the opposite of adding liquidity. There may indeed not be a QE3.

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  237. 237
    Kary L. Krismer says:

    By Scotsman @ 236:

    Most of the oil in Libya is produced by and sold to European interests.

    It’s practically irrelevant where the oil is sold, because it’s part of the global market.

    To the extent say Venezuela doesn’t sell oil to the U.S., the only impact on the market is the result of the marginal increase in oil used to transport their product a greater distance, and the same increase in transporting the oil we do buy. It’s completely insignificant.

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  238. 238
    Ben says:

    RE: Kary L. Krismer @ 232 – pfft can argue with Hoenig if he should like. I’m sure Krugman will ignore the obvious because it doesn’t fit his paradigm. The truth is very simple to see when the blinders are removed.

    http://www.zerohedge.com/article/hoenig-says-lower-and-middle-classes-pay-dear-price-fed-mistakes-accuses-fed-commodity-price

    Hoenig is back, and a few months before his retirement, has released what appears a valedictory exercise in venomous truthiness: “Today, my view has not changed. The FOMC should gradually allow its $3 trillion balance sheet to shrink toward its pre-crisis level of $1 trillion. It should move the U.S. federal funds rate off of zero and toward 1 percent within a fairly short period of time. Then, after evaluating the effects of those actions, it should be prepared to move the funds rate further toward a level that could be reasonably judged as closer to normal and sustainable.” At long last, someone admits the obvious: “While some of the increase may reflect global supply and demand conditions, at least some of the increase is driven by highly accommodative monetary policies in the United States and other economies.” For those terrified by the ravages of deflation: “I tracked the average growth of money and the price levels in the United States from the 19th century to the present (Chart 3). It should surprise no one that there is a striking parallel between the long-run growth of money and the growth in the price-level index. From the end of World War II alone, the price index has increased by a factor of ten. With such a track record, it is hard to accept that deflation should be the world’s dominant concern.” And lastly, for those who refuse to see Bernanke’s policies as genocidal (metaphorically speaking but quite literally in MENA) to the lower (and increasingly) middle classes: “Central bankers must look to the long run. If current policy remains in place, we almost certainly will stimulate the growth of asset values and inflation. This may temporarily increase GDP and employment, but in the long run, we risk instability, damaging inflation and lost jobs, which is a dear price for middle and lower income citizens to pay.”

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  239. 239
    David Losh says:

    RE: Kary L. Krismer @ 237

    You used the example of an OPEC country off line. That’s not the case. The case is that in this speculative bubble the price of gasoline increased more gadually than the last to spikes.

    Inventories are low because we aren’t getting supply from the Gulf Coast or Alaska.

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  240. 240
    pfft says:

    wasn’t someone going nuts earlier about the Maiden Lane deal? looks like the fed will make money on that one.

    Maiden Lane II will make the Fed more than $1.5 billion.

    dueling bids show how much less pessimistic investors have grown about the mortgage market in recent months, even as the housing market continues to struggle. Many mortgage bonds had plummeted too much given their expected cash flows, and investors looking for high yields have few other good options.

    Bidders hope for Fed Maiden Lane II auction-source
    http://www.reuters.com/article/2011/03/25/aig-fed-idUSN2522296020110325

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  241. 241
    pfft says:

    By Scotsman @ 236:

    RE: David Losh @ 235 We (the U.S.) are there now to keep the oil flowing to Europe and protect their capital investments in plant and equipment. The rest of the noise is a distraction, and a pretty transparent one at that

    wrong. if we wanted to do that we would have just let khadafi run wild and not have taken sides. he would have run through benghazi by now and the rebels would have been toast. this puts everything even more in flux.

    this is a humanitarian mission to make up for Bosnia and Rwanda.

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  242. 242
    pfft says:

    By Ben @ 238:

    RE: Kary L. Krismer @ 232 – pfft can argue with Hoenig if he should like. I’m sure Krugman will ignore the obvious because it doesn’t fit his paradigm. The truth is very simple to see when the blinders are removed.

    if you read carefully he deftly conflates the US and the world. The US doesn’t have an inflation problem because it’s not stimulating enough. we still have tremendous deflationary forces. some of the world does because of it’s own internal monetary policy and growth, not because of the Fed’s actions. the Fed can only set monetary policy for the US, not for every country in the world.

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  243. 243
    Blake says:

    RE: pfft @ 242
    No, the US exports inflation thru loose monetary policies. And now Japan is effectively doing the same (as Krugman pointed out last week – – effectively a QE3) because of the earthquake and all the liquidity they are injecting into the system. It is an open system currency markets and the liquidity flows all over blowing bubbles. US monetary policy is the largest influence because our economy is so big and our current accoutn debts enormous.

    But… the only thing that is keeping dollar inflation in check is the ongoing deleveraging and the fact that everyone is hoarding and not borrowing and spending (no money velocity and M2 is flat).

    More on this tomorrow!!

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  244. 244
    David Losh says:

    RE: Blake @ 243

    Well, nicely put.

    The same points that I make about wealth still apply here. I was talking with a non profit consultant last week about the odd juxtaposition that as the wealthy have more to give to charities the need for charity has grown.

    There is enormous wealth in the world today. many of the wealthy, and soon to be wealthy, like the Starbucks founder, need to figure out a place in the economy. Warren Buffet, who is a weird demented individual, just plays stupid games with himself to build on his wealth.

    There is a huge amount of money in circulation that never ventures outside of tried, and true investment strategy. That’s why we have oil, coal, telephone, and automobile fortunes that never seem to progress. It’s just stick to the script.

    Even technology seems to be getting bogged down in what we can do, how we can make money, and the “formula” for wealth still seems to be monopolies.

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  245. 245
    pfft says:

    By Blake @ 243:

    RE: pfft @ 242
    But… the only thing that is keeping dollar inflation in check is the ongoing deleveraging and the fact that everyone is hoarding and not borrowing and spending (no money velocity and M2 is flat).

    More on this tomorrow!!

    ah yeah, that’s WHY you have the Fed policy. we’re in a liquidity trap and the way out of that is or was a stimulus program.

    don’t blame the US. many other nations had stimulus programs. the Fed can only consider and control policy in the US. central bankers of other nations must conduct their own monetary policy based on their own situations. there is no blaming anything on the US.

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  246. 246
    Blake says:

    No April Fools…
    The massive intervention by the govt and Fed the last 2 years prevented a slide into another Depression, but that has only put things off. The worst is ahead of us! As Harry Dent argues in the interview, housing will not come back for various reasons: demographics, debt and deleveraging. Look at Japan, 20 years after the bubble popped housing has still not recovered. I don’t agree with everything Dent says, nor his worst case scenerio, but the factors he mentions are very real and major problems!

    Harry Dent interview:
    http://finance.yahoo.com/blogs/daily-ticker/debt-deleveraging-demographics-mean-great-depression-ahead-dent-20110331-125135-967.html

    In The Great Depression Ahead, author and economic forecaster Harry Dent makes the case for why the worst isn’t behind us, despite the economy’s recovery and the stock market’s revival.

    In a nutshell, Dent’s grim forecast comes down to the “deadly Ds”: Debt, Deleveraging and Demographics.

    “We have to go through the detox process of deleveraging debt,” he says in the accompanying clip. “The government simply hasn’t allowed it [but] it will come because the government can’t stop this much debt from deleveraging.”

    How much debt? By Dent’s estimate, there is $120 trillion of debt outstanding, including $66 trillion in unfunded mandates. That’s roughly 10 times U.S. GDP and five times the levels during the Roaring 20s.

    “The slowdown of Baby Boomers will continue to force deleveraging,” Dent says, citing the demographic force behind his gloomy outlook. “92 million Baby Boomers will work less and save more no matter what [the government does].”

    That, in turn, will put downward pressure on the economy and, critically keep the housing market in retreat. (See: “Housing Is Dead”: Bubble Still Bursting Here and Abroad, Says Harry Dent )

    Continued weakness in housing — along with Europe’s debt crisis — will lead to a repeat of the 2008 credit crisis, Dent predicts, only this time the Fed and Uncle Sam won’t be able to stop it. “We see a second downturn where the banking system will meltdown, real estate will fall further and a lot of debt will be written off.”

    Dent’s advice to prepare for the coming deflationary depression is to sell financial assets — including precious metals — get out of real estate and get long the much-maligned U.S. dollar.

    While it’s tempting to dismiss Dent as a “gloom and doomer,” he’s not a permabear, as the titles of his prior books evince, including The Great Boom Ahead, published in 1992.

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  247. 247
    pfft says:

    By Blake @ 246:

    While it’s tempting to dismiss Dent as a “gloom and doomer,” he’s not a permabear, as the titles of his prior books evince, including The Great Boom Ahead, published in 1992.

    yeah he’s not a pemabear, he’s worse. he’s wrong!

    his 1999 and 2006 books forecasted the greatest boom ever.

    The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History
    http://www.amazon.com/Roaring-2000s-Building-Lifestyle-Greatest/dp/0684853108/ref=sr_1_5?s=books&ie=UTF8&qid=1301714778&sr=1-5

    The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010
    http://www.amazon.com/Next-Great-Bubble-Boom-2006-2010/dp/B000W3U9CY/ref=sr_1_6?s=books&ie=UTF8&qid=1301714778&sr=1-6

    Dow 40,000, Nasdaq 20,000 by 2009
    Harry Dent predicts a ‘New Millionaire Economy’
    http://www.marketwatch.com/story/a-post-election-blast-of-unbridled-optimism

    he’s basically a coin-flipper like the rest of us.

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