Posted by: 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 responses to “Global Economic March Thread”

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  1. Scotsman

    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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  2. pfft

    By Scotsman @ 198:

    RE: Scotsman @ 197

    Green jobs!!!

    organic!

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  3. pfft

    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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  4. pfft

    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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  5. pfft

    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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  6. whatsmyname

    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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  7. David Losh

    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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  8. Scotsman

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

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  9. Blurtman

    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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  10. B&W Nikes

    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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  11. B&W Nikes

    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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  12. David Losh

    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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  13. Blake

    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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  14. Blake

    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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  15. Scotsman

    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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  16. pfft

    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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  17. pfft

    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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  18. Scotsman

    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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  19. pfft

    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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  20. pfft

    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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  21. Scotsman

    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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  22. pfft

    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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  23. pfft

    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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  24. Scotsman

    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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  25. Kary L. Krismer

    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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  26. Kary L. Krismer

    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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  27. pfft

    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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  28. pfft
  29. Blake

    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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  30. David Losh

    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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  31. David Losh

    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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  32. Kary L. Krismer

    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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  33. David Losh

    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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  34. Kary L. Krismer

    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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  35. David Losh

    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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  36. Scotsman

    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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  37. Kary L. Krismer

    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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  38. Ben

    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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  39. David Losh

    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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  40. pfft

    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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  41. pfft

    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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  42. pfft

    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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  43. Blake

    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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  44. David Losh

    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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  45. pfft

    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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  46. Blake

    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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  47. pfft

    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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