Global Economic April 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.

253 comments:

  1. 1
    Blake says:

    Reposting in the April thread…. Happy Spring! ;-)
    April 1, 2011 at 10:20 am | Permalink
    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.

    Rate this comment: Thumb up 0

  2. 2
    Blake says:

    Re: The Big March Job Report Celebration
    http://www.cepr.net/index.php/blogs/beat-the-press/the-big-march-job-report-celebration-snip- “It is also striking that neither paper seems to have mentioned the Commerce Department’s report on construction in February, which showed a 1.4 percent decline in February, following even larger declines in December and January. (The big news in this report was the 2.6 percent downward revision to the data originally reported for January.) Much of the story here is in non-residential construction as the building boom that resulted from the bubble in that sector is leading to a bust. The largest declines are in manufacturing construction where bio-fuel subsidies had led to a boom in ethanol plants in 2009-2010.

    Anyhow, construction is certain to be a big drag on growth in the first quarter. It should knock at least a percentage point off GDP growth for the quarter. I am forecasting many surprised economists and reporters.

    I have one more point skunk to toss over at the celebrators. Here is the path of the employment to population ratio (EPOP) over the downturn. Note that we have only risen slightly from the low hit in December of 2009 and the EPOP is actually a hair lower today that it was a year ago. The drop in the unemployment rate over this period was entirely due to people leaving the labor force. Now is that good news or what?”

    Rate this comment: Thumb up 0

  3. 3
    David Losh says:

    Will the Japanese economy ever recover?

    Let’s hope the radiation can be contained, but when it is, a lot of the electricity in Japan will be suspect. This may be the push that starts real development of green energy products.

    In the mean time if we take the manufacturing out of the equation, and if we would really trust to take the manufacturing standards to China, the Japanese Yen would be toast.

    What I think is that parts manufacturing will have to be brought back to the United States. We would need a more secure delivery of parts to our manufacturing plants. As far as construction of plants I see no reason to tie construction to the ability to produce.

    We, especially here in the Seattle area, should remember we had thousand of small parts manufacturers all over the city, and up and down the I5 corridor. I don’t see why those jobs couldn’t come back. The gap in wages, plus shipping, should be closing. At the same time the quality, in my opinion, could be more closely monitored.

    I’d like to explore what the bad news for Japan means to our over all economy. More specifically what it does to currencies. Will the Yen stay as strong? Will this be the last blow to the Japanese economy? How does this impact the “lost decade” talking point of that economy?

    Rate this comment: Thumb up 0

  4. 4
    Pegasus says:

    “Extend and Pretend”: The Severe Ramifications of Wall Street’s Game

    The storyline that has been sold to the public by the federal government, Wall Street, and the corporate mainstream media over the last two years is that the economy is recovering and the banking system has recovered from its near-death experience in 2008. Wall Street profits in 2009 and 2010 totaled approximately $80 billion. The stock market has risen almost 100% since the March 2009 lows. Wall Street CEOs were so impressed by this fantastic performance that they dished out $43 billion in bonuses over the two-year period. It is amazing that an industry that was effectively insolvent in October 2008 has made such a spectacular and miraculous recovery. The truth is, recovery is simple when you control the politicians and regulators, and own the organization that prints the money.

    A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and politicians in Washington DC. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history. The authorities had a choice. This country has bankruptcy laws. The criminally negligent Wall Street banks could have been liquidated in an orderly bankruptcy. Their good assets could have been sold off to banks that did not take their extreme greed-based risks. Bondholders and stockholders would have been wiped out. Today, we would have a balanced banking system, with no “too big to fail” institutions.

    http://www.minyanville.com/businessmarkets/articles/extend-and-pretent-recovery-commericial-lending/3/31/2011/id/33692?page=full

    Rate this comment: Thumb up 0

  5. 5
    Blake says:

    here’s a shot of Japan’s quantitative easing… “QE3″
    http://www.ritholtz.com/blog/wp-content/uploads/2011/04/Japan-QE.png

    … BOJ current account balance going vertical after the earthquake!

    Rate this comment: Thumb up 0

  6. 6
    Ben says:

    It’s eerily quiet on the thread. Are we waiting for the next shoe to drop (or black swan)? Has everything been hashed and rehashed too many times? Or is pfft right and we who think we are prudent bears are really Chicken Little’s?

    Rate this comment: Thumb up 0

  7. 7
    Kary L. Krismer says:

    RE: Ben @ 6 – Many/most of the recent posts in the open threads should have probably been in this thread.

    Rate this comment: Thumb up 0

  8. 8
    Ben says:

    RE: Kary L. Krismer @ 7 – I’ve been too busy to post for a while and am checking to see what I missed. Thanks for the info.

    Rate this comment: Thumb up 0

  9. 9
    Blurtman says:

    David Plouffe on the Fox News(?) show today, consistently mispoke using the phrase “default on the debt celing.” This calculated mistake was likely designed to throw off the logical conclusion of not extending the debt ceiling. And that conclusion is that if the US does not borrow more money, it cannot pay the interest on money already borrowed. Borrowing to pay off interest on borrowed money, and the resulting default on the exisitng debt if more debt is not created, is what Plouffe tried to sidestep with his repetitive mistatement. The other possible conclusion is that he does not know WTF he is talking about. Bomb, bomb, bomb, Iarq. Er, I mean Iran.

    Rate this comment: Thumb up 0

  10. 10
    David Losh says:

    I waited for the budget show down, to see if in fact the Republicans, and Tea Party had any intention of following through on a lot of promises that they made. It ended with Obama once again staring them down and them cowering with more tough talk without any action.
    The Ron Paul guy is getting to be a very tired joke of fiscal conservatism as long as it stays to cutting funding for abortions, decimates any shreds of a safety net the country has, or gives tax breaks to the extremely wealthy.

    Rate this comment: Thumb up 0

  11. 11
    Scotsman says:

    RE: Ben @ 6

    “is pfft right ?”

    Yup, that’s it. Prosperity abounds. We’re all too busy yachting in the Bahamas to post comments. ;-)

    Rate this comment: Thumb up 0

  12. 12
    Scotsman says:

    Causality or simple correlation? The answer is important, because we need to know what happens when the Fed stops buying, as they eventually must.

    http://tickerforum.org/cgi-ticker/akcs-www?getimagenr=94849

    Rate this comment: Thumb up 0

  13. 13
    David Losh says:

    RE: Scotsman @ 12

    ticker forum is displaying a no outsource link message.

    Rate this comment: Thumb up 0

  14. 14
  15. 15
    Kary L. Krismer says:

    RE: Scotsman @ 14 – Does anyone have a graph that tracks either oil or gas prices against the value of the dollar relative to the euro?

    Rate this comment: Thumb up 0

  16. 16
    Scotsman says:

    A good review of our options going forward:

    http://econintersect.com/b2evolution/blog2.php/2011/04/06/unthinkable-end-games

    “For the U.S. (and Japan) a dogmatic belief in the first option (essentially more and more stimulus) has been the pretense for ignoring the long term debt problem. But the litmus test for success of that scenario is simply the ongoing debt/GDP ratio. If there isn’t an improvement in that ratio (e.g. Japan), an objective observer will eventually conclude that that option — however desirable — has demonstrably failed.

    Rate this comment: Thumb up 0

  17. 17
    pfft says:

    By Scotsman @ 16:

    A good review of our options going forward:http://econintersect.com/b2evolution/blog2.php/2011/04/06/unthinkable-end-games“For the U.S. (and Japan) a dogmatic belief in the first option (essentially more and more stimulus) has been the pretense for ignoring the long term debt problem. But the litmus test for success of that scenario is simply the ongoing debt/GDP ratio. If there isn’t an improvement in that ratio (e.g. Japan), an objective observer will eventually conclude that that option — however desirable — has demonstrably failed.

    more and more stimulus? the stimulus wore off in the middle of 2010. QE isn’t really stimulus. instead of buying one asset the Fed just buys a different one. the Fed has to put it’s money somewhere. if it doesn’t buy mortgages or beanie babies it still has to buy something.

    Rate this comment: Thumb up 0

  18. 18
    pfft says:

    By Scotsman @ 11:

    RE: Ben @ 6

    “is pfft right ?”

    Yup, that’s it. Prosperity abounds. We’re all too busy yachting in the Bahamas to post comments. ;-)

    everyone is breathlessly waiting for you to predict another economic collapse.

    Rate this comment: Thumb up 0

  19. 19
    pfft says:

    Once people commit to a position, there is an unfortunate tendency to root for that perspective. Even worse, people stick with their forecast, regardless of what is actually happening in the market. We addressed this in the very first Apprenticed Investor, Expect to be Wrong. But instead of preparing, people dig their heels in and cost themselves money by being more concerned with trying to be right rather than making money.

    Apprenticed Investor: Bull or Bear? Neither
    http://www.thestreet.com/story/10219637/1/apprenticed-investor-bull-or-bear-neither.html

    Rate this comment: Thumb up 0

  20. 20
    David Losh says:

    RE: pfft @ 17

    You missed comment #14. Click the link to see what the stimulus is actually doing.

    Rate this comment: Thumb up 0

  21. 21
    Kary L. Krismer says:

    People here like to sometimes compare the US to Japan. This Tsunami related article on how the Japanese tend to not use banks shows why you cannot make that type of a comparison between societies. They are actually harming their economy by locking so much currency up out of use.

    http://www.mercurynews.com/ci_17814504

    Rate this comment: Thumb up 0

  22. 22
    Scotsman says:

    Imports, exports drop:

    “The sudden dip downward in both imports and exports indicates a reversal in demand both at home and abroad. As Reuters reports, that could signal a slowdown in the economy, which analysts expected to do significantly better in 2011Q1 than in 2010Q4:”

    http://hotair.com/archives/2011/04/12/trade-gap-narrows-as-both-imports-and-exports-fall-in-february/

    Rate this comment: Thumb up 0

  23. 23
    Ben says:

    RE: pfft @ 18 – I’ll bite but turn the question back on you. I’m a prudent bear. Please convince me that GDP growth is self sustaining without ever increasing deficit spending (or QEn monetization). I’ll go on record to say that without further stimulus or QEn monetization, the wheels come off the GDP bus this year. Conversely, if we continue to deficit spend and monetize, we risk the wheels coming off the bus via $5+/gallon gas and serious commodity related cost push inflation.

    Pollyanna pfft, please oh please prove me wrong. I would love to be wrong as I do not wish economic calamity. I just don’t see how we avoid it.

    Rate this comment: Thumb up 0

  24. 24
    pfft says:

    By Ben @ 23:

    RE: pfft @ 18 – I’ll bite but turn the question back on you. I’m a prudent bear. Please convince me that GDP growth is self sustaining without ever increasing deficit spending (or QEn monetization). I’ll go on record to say that without further stimulus or QEn monetization, the wheels come off the GDP bus this year. Conversely, if we continue to deficit spend and monetize, we risk the wheels coming off the bus via $5+/gallon gas and serious commodity related cost push inflation.

    Pollyanna pfft, please oh please prove me wrong. I would love to be wrong as I do not wish economic calamity. I just don’t see how we avoid it.

    “I’ll go on record to say that without further stimulus or QEn monetization, the wheels come off the GDP bus this year.”

    why? what are your GDP figures?

    “Conversely, if we continue to deficit spend and monetize, we risk the wheels coming off the bus via $5+/gallon gas and serious commodity related cost push inflation.”

    core inflation is low.

    commodiity prices are higher because of US growth and more importantly world growth. emerging markets are booming and pulling up world growth. world food prices are already backing off.

    Rate this comment: Thumb up 0

  25. 25
    Blake says:

    very informative presentation by Barry:
    http://www.ritholtz.com/blog/2011/04/follow-the-money-how-systemic-bank-fraud-contributed-to-the-financial-crisis/
    …. check out slide 8 “GDP growth with and without mortgage equity withdrawal” to see how pitiful our economic growth has actually been the last 10 years.

    Slides 18 and 19 graphically demonstrate the basic underlying problem with US housing.

    All the slides are worth reviewing.

    Rate this comment: Thumb up 0

  26. 26
    Blake says:

    s’funny… USA = third world country
    http://www.salon.com/technology/how_the_world_works/2011/04/11/ikea_s_third_world_outsourcing_adventure_in_the_united_states
    -snip- Ikea seems to be treating its American workers at a furniture plant in Danville, Virginia a good deal worse than it does its Swedish workers back at home. The workers are trying to unionize; in response Ikea has hired the famous union-busting-specializing law firm Jackson-Lewis. Nothing particularly out of the ordinary for American labor relations in the 21st century, but in Sweden, eyebrows are being raised.

    (from the LATimes article) “Laborers in Swedwood plants in Sweden produce bookcases and tables similar to those manufactured in Danville. The big difference is that the Europeans enjoy a minimum wage of about $19 an hour and a government-mandated five weeks of paid vacation. Full-time employees in Danville start at $8 an hour with 12 vacation days — eight of them on dates determined by the company.

    What’s more, as many as one-third of the workers at the Danville plant have been drawn from local temporary-staffing agencies. These workers receive even lower wages and no benefits, employees said. Swedwood’s Steen said the company is reducing the number of temps, but she acknowledged the pay gap between factories in Europe and the U.S. “That is related to the standard of living and general conditions in the different countries,” Steen said.”

    Andrew Leonard concludes: “Of course that’s exactly the same line you hear when American outsourcers are justifying the low wages paid to employees on the assembly line in China or Mexico or Vietnam. Turns out, the United States isn’t “exceptional” at all. To keep up with the challenge of foreign competition, our plan is to crack down on our own working class until our sweatshops are just as oppressive as any other developing nation’s. Somehow, Sweden — and other Northern European countries — has managed to avoid heading down this same road. Must have something to do with the different “general conditions” that prevail there.”

    Rate this comment: Thumb up 0

  27. 27
    pfft says:

    By Scotsman @ 22:

    Imports, exports drop:

    “The sudden dip downward in both imports and exports indicates a reversal in demand both at home and abroad. As Reuters reports, that could signal a slowdown in the economy, which analysts expected to do significantly better in 2011Q1 than in 2010Q4:”

    http://hotair.com/archives/2011/04/12/trade-gap-narrows-as-both-imports-and-exports-fall-in-february/

    and exports are just off a record or near-record high but you’d never quote anyone saying that would raise growth estimates and hotair would never either…

    Rate this comment: Thumb up 0

  28. 28
    Kary L. Krismer says:

    I read the text of President Obama’s deficit speech. It reads like the assignment of a high school student who waited until the last night before starting a paper. Very little in it:

    http://blogs.wsj.com/washwire/2011/04/13/text-of-obama-speech-on-the-deficit/

    Four areas of action.

    1. Continue the cuts just demanded by the Republicans into the future to save $750B over 12 years.
    2. Cuts to defense.
    3. Make Medicare/Medicaid more efficient. Where have we heard that before.
    4. Tax increases on the rich.

    Other than the defense cuts, which have been discussed a bit before, there’s really nothing new.

    Rate this comment: Thumb up 0

  29. 29
    David Losh says:

    There was a lot new in Obama’s proposals. Number one is his continued talk of reaching an agreement with the Republicans. More than any President that I can think of he has repeatedly said he would work together with Congress, people scoff, and then another agreement emerges.

    I’ve come to the conclusion that the only way this guy got elected is that no one else wanted to be in the wheel house while the economy sank. Then again I think he has done one heck of a job every step of the way. I’m in awe of the guy for the simple way he has tackled huge problems. At the same time people just dump all of this hate on him for the most mundane, petty, little stuff, like taking his wife on a date. Geez, I wonder if he’s quit cigarettes, or is he really a left wing fanatic. Wait! Is he even a citizen of the United States? He sure has a really, really good document forger working for him.

    I’m liking the whole thing. He’s meeting debt reduction discussion head on. He’s staying in step with stimulus in China, and Europe. The Russians aren’t hating us, openly at least, and the Middle East, Northern Africa, seems to be getting broader support from us militarily. What I would like to see there is a tribal meeting in conjunction with heads of State. If any one could accomplish that it would be Obama.

    There’s a lot to like in this guy. We have massive problems, economically, militarily, social, and political. Obama seems to just keep this moving along.

    Rate this comment: Thumb up 0

  30. 30
    David Losh says:

    RE: Blake @ 25

    I think this is every simplistic. The abuses of the mortgage industry can’t be separated from banking. Looking at this country does nothing for what has happened globally, especially in emerging markets, like China.

    The thing this web site has taught me is to look at a much broader set of circumstances rather than focus on one set of statistics.

    I agree with how we got here, and that servicers are driving a lot of people from their homes. What I think though is that the government, in many countries, need to reign in banking, lending, and debt collection.

    It would have to be a global concern, because banks are just moving from one place to another. We need to deleverage on every scale. Debt is draining the poor, and middle class of resources for the benefit of a very few, in a very limited enterprise. Debt is it’s own industry that needs to be regulated.

    Rate this comment: Thumb up 0

  31. 31
    Kary L. Krismer says:

    RE: David Losh @ 29 – David, I agree with you on how petty a lot of the criticism is. Date nights, NCAA brackets, etc. And I actually had some hope for him when he was first elected. He totally crushed that hope through total ineptitude, probably the result of staff. Then when there was some changeover in staff things were getting better. But the last month has again been downhill. He caved to the Tea Party and now came up with a proposal that only his most adamant supporters (e.g. you) think is significant or new.

    BTW, when President Obama was selected as the nominee for the Ds, the extent of our economic crisis wasn’t known. Thus I don’t think his selection was like when the Rs picked Dole to run against Clinton.

    Rate this comment: Thumb up 0

  32. 32
    Scotsman says:

    RE: Kary L. Krismer @ 31

    “when President Obama was selected as the nominee for the Ds, the extent of our economic crisis wasn’t known”

    Not true. David Walker (served as United States Comptroller General from 1998 to 2008) has been running around the country for over a decade telling people the fiscal structure of the government was going to collapse. Lots of people have know for sometime that the entitlement systems were going broke and would not be salvageable. But the all chose to just kick the can down the road until the collapse of housing forced the whole mess to the surface.

    Rate this comment: Thumb up 0

  33. 33
    Scotsman says:

    Far too many think the solution to current fiscal problems should come as tax increases. Our own pride and joy, pfft, is convinced that the “Bush tax cuts” ( which were tax rate extensions, not cuts) are largely responsible for current deficits. It’s just not true.

    The WSJ came out with an analysis today that proves tax increases alone won’t solve the problem. Take a minute to think about what follows- it is the best example of just how broke we really are, and shows how we will never be able to recover without drastic cuts to the social programs that constitute the overwhelming majority of U.S. spending:

    “According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn’t cover Mr. Obama’s deficit for this year.”

    Yes- even if we took it all, we would still be short- and by an ever increasing amount each subsequent year.

    Life as we’ve known it in this country is about to come to and end.

    Rate this comment: Thumb up 0

  34. 34
    Kary L. Krismer says:

    RE: Scotsman @ 32 – I’m sure there’s probably someone who predicted the Japanese earthquake too, but that doesn’t mean the event was known in advance. But in any case, I was referring to the people selecting the nominee, which would have been voters and the powers that be in the D party.

    Rate this comment: Thumb up 0

  35. 35
    One Eyed Man says:

    RE: Scotsman @ 33

    ” tax increases alone won’t solve the problem.”

    I’m unaware of anyone credible having said that was the case unless maybe Patty Murray or Maxine Waters wrote their own speach on deficit reduction. The fact that eliminating the Bush tax cuts without much larger spending cuts to close the budget gap doesn’t mean that it wouldn’t be the best choice to eliminate the Bush tax cuts as part of an overall strategy of spending cuts to solve the debt problem.

    And would somebody please tell Ryan that I’m still waiting for something besides Shrek to watch on the 3D TV, and when it comes out it golly well better not be in Madarin!

    Rate this comment: Thumb up 0

  36. 36
    Scotsman says:

    RE: One Eyed Man @ 35

    I have to admire your consistency. Only a real liberal (of either the Seattle or Berkley variety) could come up with the following sentence and think it made sense:

    “eliminate the Bush tax cuts as part of an overall strategy of spending cuts to solve the debt problem”

    I guess because the word “cuts” is associated with both phrases it all works out in the liberal mind. Here’s the deal, in case you missed it above- we could take all the income over $100K a year, plus the current tax receipts on the income from zero to $100K, and we’d still be running a deficit. How broke do we have to be before people start to think out of the box? I used to sorta joke, but it will be proved true- nothing changes until the checks bounce.

    OK- thanks for letting me vent on you- this rain is driving me absolutely batsh#t. ARrrrrrrrgg! ;-)

    Rate this comment: Thumb up 0

  37. 37
    David Losh says:

    The economy was common knowledge in 2006. The global implications were still a point of discussion, but Citi Group was widely known to be completely out of control. If you just wanted to talk housing we had a double digit appreciation, and were on track for another double digit rate of appreciation. That was unsustainable.

    Obama’s talking points during the election process were military. He hasn’t performed. We need to shut down the military, stop spending money on useless technology, and reduce arms. That money could be redirected to more profitable ventures, like sustainable energy. In my opinion energy is more vital to our National Security than all we could ever hope to accomplish in Northern Africa, and the Middle East.

    Obama was elected with a mandate to stop military expense.

    The Bush tax laws were, or are, a complete joke. It makes no sense to lower the tax burden on wealthy individuals who are reaping benefits from failed economic policy. Prescription drugs being one of the biggest scams ever pulled on the American Public.

    There again, I don’t care, because Obama did bring us Health Care Reform that has been needed for decades. If we wanted to we could take an entire entitlement program and make it profitable, but this is the global economic thread, not the health care thread, so we can’t go there.

    Obama has brought a lot to the table, but as Ronald Reagan pointed out the President doesn’t make the budget. The President makes a budget proposal. It’s Congress that needs to cut spending, and so far they have only promoted a contrary social agenda.

    Rate this comment: Thumb up 0

  38. 38
    Scotsman says:

    I don’t know David- seems to me Obama has pretty much broken every promise he made or at a minimum failed to implement the change he wanted. His big achievement, health care reform, has a national popularity polling of something like 35% and will most likely never come to pass. If I’d voted for him I’d be feeling somewhere between pissed and used, but somehow he still has his (few) fans.

    Rate this comment: Thumb up 0

  39. 39
    Kary L. Krismer says:

    RE: Scotsman @ 38 – His style seems to be very hands off, so that he doesn’t impact anything until it’s on his desk for signature. That’s why we get things like the Health Care Bill, where it wasn’t really what he said he wanted. It’s somewhat amazing to me he has any support at all from anyone who didn’t vote for GWB, and that the GWB supporters aren’t really in his camp.

    Rate this comment: Thumb up 0

  40. 40
    One Eyed Man says:

    RE: Scotsman @ 36

    You know I agree with you on the spending cuts, if spread out over about 5 years. And cheer up, the 10 day forecast says its only going to rain 5 of the next 10 days.;-)

    Rate this comment: Thumb up 0

  41. 41
    David Losh says:

    RE: Scotsman @ 38

    Health Care Reform was never a possibility. In my opinion most people don’t pay attention to health care and only watch health insurance premiums. People never look at what they get for what they pay.

    Like I said, that’s another discussion. He did manage to get a health care reform package passed, and in truth, what it contains makes no difference. It’s an industry that needs sever legislated change, and this is just a very small part of that. Health care reform is my number one priority so I am very happy with Obama.

    The Tea Party on the other hand should read Treason. The sole function of the movement was to attack this President, the same as Republicans feel that little George W. was attacked. I don’t see an end to the damage little George did. He was worse than a puppet by slaughtering thousands of Iraqis, bombing infrastructure that caused millions to suffer, then hiring his dad’s buddy, and Vice President, to do the repairs. Again a topic for another time.

    The tea party made it into the House with a mandate to reduce the deficit. Not one member of the tea party, or Republican Party has done anything to address the deficit. They are only talking, once again, about abortion, and getting rid of any social programs or environmental protections.

    The Republicans, once again, have another chance to redeem a pathetic political sham, and brought us a paltry $61 billion is bogus spending cuts. The people who should feel used, and abused are the ones who once again voted them into this lame duck session. Let’s get rid of them and get on with building a nation.

    Rate this comment: Thumb up 0

  42. 42
    Macro Investor says:

    Here’s some easy math. Both parties claim they want to cut spending by $4 trillion over 12 years. Remember GDP = Gov Spending + Investment + Consumption + Net Exports.

    GDP is now $14.9 trillion. So the cut is a 27% total reduction of GDP. Annually 2.2%. So if both parties get their way, we are virtually guaranteed of recession for 12 years. Sounds like a great time to buy a house :)

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

    Rate this comment: Thumb up 0

  43. 43
    Kary L. Krismer says:

    By David Losh @ 41:

    Health Care Reform was never a possibility. In my opinion most people don’t pay attention to health care and only watch health insurance premiums. People never look at what they get for what they pay.

    Like I said, that’s another discussion. He did manage to get a health care reform package passed, and in truth, what it contains makes no difference. .

    You’re very close to understanding. The problem is exactly as you note: “People never look at what they get for what they pay.” That’s because they have insurance. Obamacare is more insurance, and that’s why your last sentence is wrong. It matters a lot what the health care reform legislation looked like. Obamacare is 100% the wrong direction, but President Obama did little to guide the legislation when it was being sent through Congress. He took your approach, that it didn’t really matter what it provided. He just wanted to be able to say he managed to get something passed.

    Rate this comment: Thumb up 0

  44. 44
    Blake says:

    RE: Kary L. Krismer @ 43
    Exactly right Kary…
    Obama let Congress draft the Health insurance reform (it was actually health INSURANCE reform and not health CARE reform)… and we all know how corrupt Congress is! Huge mistake and puzzling because Obama really didn’t campaign on the issue, bungled it, and it is now a stinkin’ mess hung around the Dem’s neck while it should more appropriately be called RomneyCare since it was modelled on Mitt Romney’s “reforms” and was written largely by the insurance lobbyists!!

    Liz Fowler, a Vice President for Wellpoint – the largest health insurance company in the US – left Wellpoint to serve as Senator Max Baucus’ chief health counsel to draft (quoting Sen. Baucus) “the document which became the basis, the foundation, the blueprint from which almost all health care measures in all bills on both sides of the aisle came.”
    http://fdlaction.firedoglake.com/2010/03/29/baucus-thanks-wellpoint-vp-liz-fowler-for-writing-health-care-bill/

    Any wonder that there is little or no cost control in the “reform” and health insurers’ stocks went up sharply when it was passed? Of course if we would reign in costs, it would reduce profits… and we can’t do that right? The Medical Industrial Complex is one big, powerful gravy train… But health care costs are a huge burden on our country: affecting manufacturing (how much more does a Ford F-150 cost due to the cost of health care for the workers?), medicare, medicaid, etc. etc…

    … I shouldn’t complain, I work within the Medical Industrial Complex! ;-)

    Rate this comment: Thumb up 0

  45. 45
    pfft says:

    By Kary L. Krismer @ 28:

    I read the text of President Obama’s deficit speech. It reads like the assignment of a high school student who waited until the last night before starting a paper. Very little in it:

    http://blogs.wsj.com/washwire/2011/04/13/text-of-obama-speech-on-the-deficit/

    Four areas of action.

    1. Continue the cuts just demanded by the Republicans into the future to save $750B over 12 years.
    2. Cuts to defense.
    3. Make Medicare/Medicaid more efficient. Where have we heard that before.
    4. Tax increases on the rich.

    Other than the defense cuts, which have been discussed a bit before, there’s really nothing new.

    yeah nothing new except $4 trillion in cuts.

    Rate this comment: Thumb up 0

  46. 46
    pfft says:

    By Scotsman @ 32:

    RE: Kary L. Krismer @ 31

    “when President Obama was selected as the nominee for the Ds, the extent of our economic crisis wasnâ��t known”

    Not true. David Walker (served as United States Comptroller General from 1998 to 2008) has been running around the country for over a decade telling people the fiscal structure of the government was going to collapse. Lots of people have know for sometime that the entitlement systems were going broke and would not be salvageable. But the all chose to just kick the can down the road until the collapse of housing forced the whole mess to the surface.

    people have been warning for decades. we didn’t collapse because of entitlements. we collapsed because of the housing bubble.

    we’re fine. the market says so.

    Rate this comment: Thumb up 0

  47. 47
    pfft says:

    By Scotsman @ 33:

    Far too many think the solution to current fiscal problems should come as tax increases. Our own pride and joy, pfft, is convinced that the “Bush tax cuts” ( which were tax rate extensions, not cuts) are largely responsible for current deficits. It’s just not true.The WSJ came out with an analysis today that proves tax increases alone won’t solve the problem. Take a minute to think about what follows- it is the best example of just how broke we really are, and shows how we will never be able to recover without drastic cuts to the social programs that constitute the overwhelming majority of U.S. spending:”According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americansâ��most of whom are far from wealthyâ��were taxed at 100%, it wouldnâ��t cover Mr. Obamaâ��s deficit for this year.”Yes- even if we took it all, we would still be short- and by an ever increasing amount each subsequent year.Life as we’ve known it in this country is about to come to and end.

    who said we were going to close the deficit in one year? nobody. another worthless WSJ article.”Our own pride and joy, pfft, is convinced that the “Bush tax cuts” ( which were tax rate extensions, not cuts) are largely responsible for current deficits. It’s just not true.”not just the two unfunded tax cuts. it was the unfunded medicare part d and the two unfunded wars. our deficit and our debt would be much lower without those.Whose Deficit Is It, Anyway?
    http://www.offthechartsblog.org/whose-deficit-is-it-anyway/in 2019 the majority of the deficit is from bush’s unfunded wars and unfunded tax cuts for the rich.

    Rate this comment: Thumb up 0

  48. 48
    Kary L. Krismer says:

    By pfft @ 45:

    By Kary L. Krismer @ 28:
    I read the text of President Obama’s deficit speech. It reads like the assignment of a high school student who waited until the last night before starting a paper. Very little in it:

    http://blogs.wsj.com/washwire/2011/04/13/text-of-obama-speech-on-the-deficit/

    Four areas of action.

    1. Continue the cuts just demanded by the Republicans into the future to save $750B over 12 years.
    2. Cuts to defense.
    3. Make Medicare/Medicaid more efficient. Where have we heard that before.
    4. Tax increases on the rich.

    Other than the defense cuts, which have been discussed a bit before, there’s really nothing new.

    yeah nothing new except $4 trillion in cuts.

    Do you even bother to read the post you’re responding to before you post?

    Rate this comment: Thumb up 0

  49. 49
    pfft says:

    By Scotsman @ 38:

    I don’t know David- seems to me Obama has pretty much broken every promise he made or at a minimum failed to implement the change he wanted. His big achievement, health care reform, has a national popularity polling of something like 35% and will most likely never come to pass.

    another grossly misleading scotsman post.

    Rate this comment: Thumb up 0

  50. 50
    Scotsman says:

    RE: pfft @ 47

    “the majority of the deficit is from bush’s unfunded wars and unfunded tax cuts for the rich”

    Kary’s right- you don’t/can’t read, or you would have caught this- which you even quoted in your ‘rebuttal':

    “According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans, most of whom are far from wealthy, were taxed at 100%, it wouldn’t cover Mr. Obama’s deficit for this year.”

    I would think that pretty much takes care of the idea that all we have to do is tax the rich. I mean, if taking everything over a measly $100 grand won’t fix the problem then we must have something else going on. Meanwhile Krugman is running around in a straight jacket saying “we need to keep spending, and should spend even more.” I hear there are only about 60 people in the whole country who even bother to read that fool’s column any more.

    Rate this comment: Thumb up 0

  51. 51
    Scotsman says:

    RE: pfft @ 49

    Well let’s review:

    Gitmo closed? No, expanded.

    Out of Iraq? No, into Libya and ramped up in Afghanistan.

    Deficit reduced- cut in half? Please, get serious!

    Most transparent administration ever? We can’t know what we don’t know.

    An end to the lobbying revolving door? Complete fail- count his exemptions.

    An end to partisanship? Please- go to the back of the bus.

    Health care reform? Try health insurance crappola with extra fail on top.

    Need I go on?

    Rate this comment: Thumb up 0

  52. 52
    Blurtman says:

    The Curious Debt Ceiling Extension Debate seems to center on the notion that a failure to extend the ceiling would trigger a USG default on debt, and cause a run-up in interest rates and other calamatous events. But paying off existing bond holders and having enough money to pay those who cash in early is not going to use up the entirety of the borrowed money under the current unextended debt ceiling. So what is going on?

    Rate this comment: Thumb up 0

  53. 53
    Kary L. Krismer says:

    By Scotsman @ 51:

    Health care reform? Try health insurance crappola with extra fail on top.

    Pfft doesn’t understand why insurance is a bad thing, He thinks that insurance just means that people are magically taken care of and that with more insurance everything will be fine and dandy, because the insurance company will pay for everything.

    Rate this comment: Thumb up 0

  54. 54
    David Losh says:

    RE: Kary L. Krismer @ 43

    That’s because you, like most Americans are new to the debate. I have always been uninsurable. In order for me to have health insurance I need to be in a group plan of at least five people, The bigger the pool the better. Corporate coverage is best for me.

    Even at that there is the loop hole of a pre existing condition or that my health insurance coverage may not cover the treatment. It really doesn’t matter. It’s only important in that I do understand the legislation. I’ve worked a lot with health care over many decades only to see it revert to something worse than it was before.

    Bottom line is that people die. How you die is the important issue. End of life issues are all that matter in the debate.

    Insurance, like banking, is out of control. Banking and Insurance are drains on the economy, but by a perversion have become the only economy we have. We call them the “financial markets.” Again unimportant to this thread.

    Obama saw an opportunity, along with other Democrats, and seized the opportunity. It is a huge step forward. Prescription drugs are a big problem that little George dumped on the American tax payers, and we can couple that with a huge tax break for the extremely wealthy.

    The health care reform was for a single payer, government run program, that we will have within ten years. Some Republican will probably propose it, and it will pass, but it is the only option we have.

    Like housing the medical industry is toast. It is over supplied, both nationally, and globally. Insurance, like mortgage money will find other, more profitable, scams to run on the global economy.

    Rate this comment: Thumb up 0

  55. 55
    Scotsman says:

    RE: David Losh @ 54

    “Like housing the medical industry is toast”

    Heh. I’d like to introduce you to someone that is rapidly becoming the most powerful, consistent, and effective voting block this country has ever known- Baby Boomer. He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    Rate this comment: Thumb up 0

  56. 56
    David Losh says:

    RE: Scotsman @ 51

    And you, like most Americans have no clue about Northern Africa or the Middle East.

    Little George engaged in the worst military blunder in history. Rather than have limited engagement in Afghanistan with the mandate to kill Osama Bin Laden little George followed up on his father’s threats to invade Iraq for no reason. The military morons, that we give billions of dollars to convinced little George we could invade Iraq, when the same military advisers told George’s daddy an occupation of the country was impossible, which it is. This time the thinking was that if we “bomb them back to the stone age” we can roll across the country, seize the oil fields, protect our National Interests, and have a victory, Mission Accomplished. Well we sent in the National Guard, without body armor, whatever the heck that means, and an under prepared military back up plan. We got the heck kicked out of us, and that is continuing today.

    But wait, there is more. We killed Saddam’s sons, in a cowardly attack, then put the bodies on display. We then filmed the hanging of Saddam who died like a man.

    We will never, ever, militarily recover from these actions.

    Obama, like so many politicians thought he could follow the mandate of the people. The problem is that tribal law, rather than the democracy we live by, will take over.

    The Middle East, and Northern Africa for that matter, are an extension of World War II. The “Allies” carved up Africa, and oil, as they saw fit. Little George screwed all of that up.

    Now on top of our occupation of two countries, that don’t want us there, we have a global economic collapse that every body is talking about. If we pull out of Iraq, and Afghanistan, as we should, there will be in fighting between the tribes. Many deals, treaties, and contracts will be broken. No one, no tribal leader, will pay any attention to the political will of the failed policies of the United States, or Europe.

    Now does Obama want to be responsible for the collapse of the Middle East? Are you forgetting we have a deal about Israel? Really what do you think is going to happen to Israel if we leave Iraq? Do you think little George thought about that?

    Then we have an even bigger problem with terrorists. Holy Cow! What a frigging mess. Gitmo? By now Obama must be shaking his head trying to figure out what went on there. What a frigging mess.

    Do you even follow terrorism? Do you have any idea of what we have in Gitmo? We’ve got nothing but another global embarrassment. Only a moron, listening to the same military advisers that sent the National Gaurd into harms way, would round up a bunch of random people and corral them in a corner of a communist country. Just let some reasoning shine on that for a moment. Guilty or innocent makes no difference. We are stuck with a bunch of random people who can never see the light of day.

    You keep saying we can’t blame Bush, but for one little guy he did eight years worth of very bad things for this country, the tax payers, and the world.

    We are defeated. It’s the collapse you keep talking about. Now we have Republicans doing more damage by the day while they discuss abortion. We all know that if we focus on saving money by cutting social programs the social unrest will divert attention from the important issues, like total global economic collapse.

    Rate this comment: Thumb up 0

  57. 57
    David Losh says:

    RE: Scotsman @ 55

    I’m a boomer, want my free health care, know that is fully funded, and available.

    Health care is a very simple, and affordable thing to provide. Number one you pay for it. Get rid of all but catastrophic insurance, have that pool be government run, and operated. If you want private insurance, clinics, and doctors by all means you can have them.

    Like I said Health Care is cheap, and easy to provide. It would take very little legislation. It would require attention from politicians with the incentive to make those changes. The insurance industry is powerful, but like I said, they will be moving on.

    Boomers are expensive. Where are the massive profits going to come from if boomers actually start asking for health care from the health insurance industry?

    Rate this comment: Thumb up 0

  58. 58
    Kary L. Krismer says:

    By David Losh @ 54:

    I have always been uninsurable. In order for me to have health insurance I need to be in a group plan of at least five people, The bigger the pool the better. Corporate coverage is best for me.

    Even at that there is the loop hole of a pre existing condition or that my health insurance coverage may not cover the treatment. . . .

    Prescription drugs are a big problem that little George dumped on the American tax payers, . . ..

    David, there are a lot of new rules at the state level, a couple of years older than Obamacare, that make you more insurable now than what you were. For example, if you were on a group policy within the past X months (or days I don’t remember) you can get an individual policy without the pre-existing conditions limitation. The problem is, more people with pre-existing conditions go that route than those without, so that drives up the cost of individual policies.

    I don’t understand though your comment about Bush and prescription drugs. If you don’t think that expanding prescription drug coverage was good, how can you think Obamacare is good?

    Rate this comment: Thumb up 0

  59. 59
    DeeDee says:

    I sold my house in Canada in late 2007, moved to Seattle and rented a house in Issaquah Highlands and one in Bellevue. I have since moved and am renting a house in Iowa. I was a business owner, now I am unemployed. I feel the last couple of years has given me a unique opportunity to study economics and specifically housing. I find it so interesting and have now had a perspective in 3 very different environments. I thought I would share a recent CBC headline about the Canadian Housing Market…the similarities to the US just before the correction is very clear to me – however, just like the US – most Canadians do not see it coming.http://www.cbc.ca/news/business/story/2011/03/15/crea-housing-february.html

    Rate this comment: Thumb up 0

  60. 60
    Kary L. Krismer says:

    By Scotsman @ 55:

    Heh. I’d like to introduce you to someone that is rapidly becoming the most powerful, consistent, and effective voting block this country has ever known- Baby Boomer. He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    I’m at the tail end of the boomers (I think), but not at the 55 safety age of Ryan’s proposal, and I’m not opposed to the idea of Medicare/Medicaid reform. I don’t think I like his Medicaid proposal, but I don’t mind at all the idea that Medicare would become somewhat needs based.

    Rate this comment: Thumb up 0

  61. 61
    David Losh says:

    RE: Kary L. Krismer @ 58

    How many drugs do you take? How many prescriptions? How many do you need? That’s a decision you and your doctor need to make together?

    Come on, health is diet, and exercises. Nutrition, water, vitamins, and a systematic routine cures most anything. Prevention is worth a pound, literally, of cure.

    Prescription drugs are a racket. They are a lie, swindle, snake oil, and extremely profitable to the pharmaceutical industry and doctors specifically.

    In other words prescription drugs are a swindle that has nothing to do with health care.

    Obama Care was a single payer expansion of a tried, and true government program. Republicans, and the Tea Party obstructed that plan, but Obama got legislation on the books any way.

    We are waiting for the Tea Party to get done talking about abortion before the next push to get single payer government run health care, commonly referred to as Universal Health Care.

    Rate this comment: Thumb up 0

  62. 62
    Kary L. Krismer says:

    RE: David Losh @ 61 – David, the reason prescription drugs are so expensive is because of insurance. I’ve given the example of Prilosec vs. Prilosec OTC many times, where the prescription product is something like ten times more expensive. The problem isn’t with prescription drugs, as you claim, because clearly they can do some good in the appropriate circumstances. But when you throw insurance into the mix, the price goes way up. That’s what’s been happening with health care costs and what will happen even more as Obamacare kicks in.

    I’m not sure why you’re saying Obamacare is single payer.

    Rate this comment: Thumb up 0

  63. 63
    Macro Investor says:

    By Kary L. Krismer @ 60:

    By Scotsman @ 55:
    Heh. I’d like to introduce you to someone that is rapidly becoming the most powerful, consistent, and effective voting block this country has ever known- Baby Boomer. He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    I’m at the tail end of the boomers (I think), but not at the 55 safety age of Ryan’s proposal, and I’m not opposed to the idea of Medicare/Medicaid reform. I don’t think I like his Medicaid proposal, but I don’t mind at all the idea that Medicare would become somewhat needs based.

    You guys put me in the awkward position of actually defending Obamacare. How do we get people to start saving for their critical retirement and health needs, instead of spending everything they have on consumer crap? It’s a terrible problem. Part of the reason costs are so out of control is a significant number of people just show up at hospitals with no means to pay.

    Obamacare at least forces them to have some kind of insurance, instead of being total leeches on society. Call it forced self reliance. At least they have to pay something.

    That is what social security was supposed to be. A forced retirement plan for all those short sighted enough not to save (or for those that really can’t). But gov screwed that up by taking the fund and spending it on other things. Now we just need to a way to force the federal gov to save for the future ;)

    Rate this comment: Thumb up 0

  64. 64
    Ben says:

    RE: pfft @ 24 – I’m not convinced that GDP growth is self sustaining by that weak reply! That’s all you’ve got? Keep trying, though. You have a reputation to live up to.

    Downward GDP revisions galore this week. In fact, my prudent bearish POV has been augmented this week.

    Rate this comment: Thumb up 0

  65. 65
    David Losh says:

    RE: Kary L. Krismer @ 62

    Obama Care, as you call it is what the Republicans pushed through Congress. Obama care as it stand is a Republican product. It is a gift to the Insurance Industry to steal as much as they can until the legislation is changed.

    The Obama proposal was for single payer, government run Universal Health Care. Even though he said it wasn’t, that is what we want.

    Rate this comment: Thumb up 0

  66. 66
    Kary L. Krismer says:

    By Macro Investor @ 63:

    By Kary L. Krismer @ 60:
    By Scotsman @ 55:
    Heh. I’d like to introduce you to someone that is rapidly becoming the most powerful, consistent, and effective voting block this country has ever known- Baby Boomer. He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    I’m at the tail end of the boomers (I think), but not at the 55 safety age of Ryan’s proposal, and I’m not opposed to the idea of Medicare/Medicaid reform. I don’t think I like his Medicaid proposal, but I don’t mind at all the idea that Medicare would become somewhat needs based.

    You guys put me in the awkward position of actually defending Obamacare. How do we get people to start saving for their critical retirement and health needs, instead of spending everything they have on consumer crap? It’s a terrible problem. Part of the reason costs are so out of control is a significant number of people just show up at hospitals with no means to pay.

    I agree freeloaders are a part of the problem, although I don’t necessarily agree that’s driving up costs of healthcare (hospital ER billing is not equal to cost). I just think that by adding more insurance to a system suffering rising costs as a result of too much insurance that the fix will be very destructive.

    Rate this comment: Thumb up 0

  67. 67
    David Losh says:

    RE: Kary L. Krismer @ 62

    The Medicare Perscription Drug Plan that Bush wanted gave Prilosec the ability to charge whatever it wanted at the government’s expense. It was used as an example of what would happen to Health Care if government intervened. It was a perversion that sounded good, but was actually another gift to drug companies, and insurance plans.

    I also question whether you understand how insurance works. I mean the whole industry.

    Rate this comment: Thumb up 0

  68. 68
    Kary L. Krismer says:

    By David Losh @ 65:

    Obama Care, as you call it is what the Republicans pushed through Congress. Obama care as it stand is a Republican product. . . .

    The Obama proposal was for single payer, government run Universal Health Care. Even though he said it wasn’t, that is what we want.

    The first part is revisionist history. Obamacare passed when the Ds controlled the House, the Senate and the Executive branch. It passed mainly on the votes of Ds, but unfortunately some Rs joined in to get it past the filibuster stage.

    Obama very well have been for single payer, but he really wasn’t saying much of anything when it was working its way through Congress. He was missing in action, as he was during the recent budget debate.

    Rate this comment: Thumb up 0

  69. 69
    Kary L. Krismer says:

    By David Losh @ 67:

    The Medicare Perscription Drug Plan that Bush wanted gave Prilosec the ability to charge whatever it wanted at the government’s expense. It was used as an example of what would happen to Health Care if government intervened. It was a perversion that sounded good, but was actually another gift to drug companies, and insurance plans. .

    I agree it was a gift to drug companies, but I don’t think it allowed them to charge “whatever they wanted.” But it did shift the demand curve significantly, and that results in higher prices.

    Rate this comment: Thumb up 0

  70. 70
    David Losh says:

    RE: Kary L. Krismer @ 66

    Of course it’s destructive. That’s what Republicans want. Republicans want to destroy this country in favor of a nobility system where we all work for a mega corporation that will pay for our care, feeding, health care, and retirement, or not as the corporation chooses.

    The Republicans took Reagan era talking points and have continually fed government policy in favor of the extremely wealthy. This is just another very small part of that.

    Rate this comment: Thumb up 0

  71. 71
    David Losh says:

    To be back to the point of this thread Obama hasn’t done enough to curb business in favor of the consumer. The consumer continues to pay more for less through unrealistic financing options. Insurance is just on small part of that unrealistic financing.

    In the mean time the big money is made by trading on the desperation of the very poor who try to get any leg up on a system designed to cause oppression. A person may think they are taking two steps forward when they are actually getting pushed back. Financing is a big part of that.

    Rate this comment: Thumb up 0

  72. 72
    Kary L. Krismer says:

    By David Losh @ 70:

    Of course it’s destructive. That’s what Republicans want. Republicans want to destroy this country in favor of a nobility system where we all work for a mega corporation that will pay for our care, feeding, health care, and retirement, or not as the corporation chooses.

    Those Republicans are tricky devils. They get the Democrats to enact major legislation, and then just so the Ds don’t know they’ve been tricked, the Rs work to repeal it!

    Rate this comment: Thumb up 0

  73. 73
    Kary L. Krismer says:

    By David Losh @ 71:

    To be back to the point of this thread Obama hasn’t done enough to curb business in favor of the consumer. .

    I could agree with that, and a lot of the rest of that post. What he has done is mainly rhetoric that has helped increase campaign contributions to Rs.

    Rate this comment: Thumb up 0

  74. 74
    pfft says:

    By Scotsman @ 51:

    RE: pfft @ 49

    Well let’s review:

    Gitmo closed? No, expanded.

    Out of Iraq? No, into Libya and ramped up in Afghanistan.

    Deficit reduced- cut in half? Please, get serious!

    Most transparent administration ever? We can’t know what we don’t know.

    An end to the lobbying revolving door? Complete fail- count his exemptions.

    An end to partisanship? Please- go to the back of the bus.

    Health care reform? Try health insurance crappola with extra fail on top.

    Need I go on?

    you only made one good point and that was gitmo.

    “An end to partisanship? Please- go to the back of the bus.”

    please. half your party doesn’t even think Obama is a US citizen.

    enjoy loosing again in 2012.

    “into Libya and ramped up in Afghanistan.”

    so? we have little involvement in Libya.

    Rate this comment: Thumb up 0

  75. 75
    pfft says:

    By Kary L. Krismer @ 53:

    By Scotsman @ 51:
    Health care reform? Try health insurance crappola with extra fail on top.

    Pfft doesn’t understand why insurance is a bad thing, He thinks that insurance just means that people are magically taken care of and that with more insurance everything will be fine and dandy, because the insurance company will pay for everything.

    again for the one thousandth time. in europe everyone is insured and costs are half. you can’t seem to understand that.

    “because the insurance company will pay for everything.”

    that is why there is a mandate genius. it brings costs down for the insurance companies.

    less insurance is not the answer. why can’t you get that? if less insurance were the answer we’d have a great system because so many have lost theirs.

    Rate this comment: Thumb up 0

  76. 76
    pfft says:

    By Scotsman @ 55:

    RE: David Losh @ 54 He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    hey genius they paid taxes for them.

    can you people possibly be this dumb?

    Rate this comment: Thumb up 0

  77. 77
    pfft says:

    I don’t understand though your comment about Bush and prescription drugs. If you don’t think that expanding prescription drug coverage was good, how can you think Obamacare is good?

    here is the problem with the bush prescription drug program.

    1. the donut hole
    2. no bargaining power. yes, the government cannot bargain to bring costs down.
    3. it wasn’t paid for.

    typical bush strategery!

    Rate this comment: Thumb up 0

  78. 78
    pfft says:

    By Ben @ 64:

    RE: pfft @ 24 – I’m not convinced that GDP growth is self sustaining by that weak reply! That’s all you’ve got? Keep trying, though. You have a reputation to live up to.

    Downward GDP revisions galore this week. In fact, my prudent bearish POV has been augmented this week.

    and my bullish position has been right for almost two years! I”m sure you’ll be right for a few weeks, maybe even some months. congrats.

    Rate this comment: Thumb up 0

  79. 79
    Kary L. Krismer says:

    By pfft @ 74:

    so? we have little involvement in Libya.

    I’m almost old enough to remember when they said the same thing about Viet Nam. (Not that Libya is another Viet Nam.)

    As to the end of partisanship, President Obama not slap Pelosi down for saying something to the effect: “We wrote the bill because we won the election.” In fact, he said something similar himself! So just how is that fulfilling his campaign rhetoric?

    Rate this comment: Thumb up 0

  80. 80
    pfft says:

    By Kary L. Krismer @ 66:

    By Macro Investor @ 63:
    By Kary L. Krismer @ 60:
    By Scotsman @ 55:
    Heh. I’d like to introduce you to someone that is rapidly becoming the most powerful, consistent, and effective voting block this country has ever known- Baby Boomer. He’s getting on in years and is very concerned about getting his entitlements- all of them- especially the free drugs, medical care, and a pension. And I assure you he will take from the rest of us until the checks bounce.

    I’m at the tail end of the boomers (I think), but not at the 55 safety age of Ryan’s proposal, and I’m not opposed to the idea of Medicare/Medicaid reform. I don’t think I like his Medicaid proposal, but I don’t mind at all the idea that Medicare would become somewhat needs based.

    You guys put me in the awkward position of actually defending Obamacare. How do we get people to start saving for their critical retirement and health needs, instead of spending everything they have on consumer crap? It’s a terrible problem. Part of the reason costs are so out of control is a significant number of people just show up at hospitals with no means to pay.

    I agree freeloaders are a part of the problem, although I don’t necessarily agree that’s driving up costs of healthcare (hospital ER billing is not equal to cost). I just think that by adding more insurance to a system suffering rising costs as a result of too much insurance that the fix will be very destructive.

    millions of people have lost their insurance and you think too many have insurance. you think not enough people are dying from lack of healthcare. we need more?

    Rate this comment: Thumb up 0

  81. 81
    Kary L. Krismer says:

    By pfft @ 75:

    By Kary L. Krismer @ 53:
    By Scotsman @ 51:
    Health care reform? Try health insurance crappola with extra fail on top.

    Pfft doesn’t understand why insurance is a bad thing, He thinks that insurance just means that people are magically taken care of and that with more insurance everything will be fine and dandy, because the insurance company will pay for everything.

    again for the one thousandth time. in europe everyone is insured and costs are half. you can’t seem to understand that.

    Because it’s not true? For the one thousandth and one time, there’s a difference between government programs and insurance.

    Rate this comment: Thumb up 0

  82. 82
    pfft says:

    By Kary L. Krismer @ 79:

    By pfft @ 74:
    so? we have little involvement in Libya.

    I’m almost old enough to remember when they said the same thing about Viet Nam. (Not that Libya is another Viet Nam.)

    As to the end of partisanship, President Obama not slap Pelosi down for saying something to the effect: “We wrote the bill because we won the election.” In fact, he said something similar himself! So just how is that fulfilling his campaign rhetoric?

    obama has bent over backwards for the republicans and they’ve just called him a socialist, a rascist, a commie, a dictator and a kenyan! donald trump has rocketed to the top of the republicans polls by being a birther. republicans filibustered EVERY SINGLE BILL.

    do you people not have televisions? do you people not read the paper? do you just play angry birds?

    obama is so conciliatory to republicans the left calls him the conceder-in-chief.

    Rate this comment: Thumb up 0

  83. 83
    pfft says:

    By Kary L. Krismer @ 81:

    By pfft @ 75:
    By Kary L. Krismer @ 53:
    By Scotsman @ 51:
    Health care reform? Try health insurance crappola with extra fail on top.

    Pfft doesn’t understand why insurance is a bad thing, He thinks that insurance just means that people are magically taken care of and that with more insurance everything will be fine and dandy, because the insurance company will pay for everything.

    again for the one thousandth time. in europe everyone is insured and costs are half. you can’t seem to understand that.

    Because it’s not true? For the one thousandth and one time, there’s a difference between government programs and insurance.

    how? everyone is covered? if everyone being covered drives up costs how does Europe cover everyone and costs are half per capita?

    millions have lost their health insurance and costs have not come down.

    Rate this comment: Thumb up 0

  84. 84
    Blake says:

    RE: David Losh @ 65
    re: “The Obama proposal was for single payer, government run Universal Health Care.”

    No you are wrong… Obama never spoke out for single payer and his campaign platform ideas for health reform were worse than Hillary Clintons… and neither of them were for govt run health care or single payer! (Believe me… I’ve been actively working for single payer since the late 1980s. Germany’s system would be the best model)

    Prescriptions are out of control… “Ask your doctor about…” the little purple pill.
    People have wayyy too many meds as it is. There is only so much meds can do to address the effects of lifestyle (lack of exercise and poor diet) and stress ( – – I work on heart disease).
    **The biggest problem with our “sick care” system is that it is designed to maximize profits**

    Rate this comment: Thumb up 0

  85. 85
    David Losh says:

    RE: Blake @ 84

    You are correct he never said that he wanted government run single payer. I tried to cover myself with “Even though he said it wasn’t, that is what we want.” I still say that is what we want.

    Rate this comment: Thumb up 0

  86. 86
    David Losh says:

    RE: Kary L. Krismer @ 72

    The Republicans didn’t have the votes to stop Health Care Reform so they changed it into an insurance company give away. In the mean time they did encourage the fight against health care through supporting the Tea Party. They made it a big government issue.

    Republicans are actually the big government party. Republicans support insurance, oil, pharmaceutical, agri business, and financial institutions. We spend trillions of dollars protecting our global business interests.

    Rate this comment: Thumb up 0

  87. 87
    David Losh says:

    RE: Kary L. Krismer @ 79

    Gaddafi would have killed thousands of people. He was given no choice. Viet nam on the other hand was a fight against communist oppression that had gone on before we got there.

    Rate this comment: Thumb up 0

  88. 88
    Blurtman says:

    RE: David Losh @ 87 – According to a Lancet article by Johns Hopkins epidemiologists, during the invasion of Iraq, 100,000 civilians, mostly women, children and the elderly were killed by coalition firepower, primarily airpower. Blown up, burned alive. Not to mention the hell that was unleashed afterwards. Should China have bombed the USA to prevent these deaths?

    Rate this comment: Thumb up 0

  89. 89
    Blurtman says:

    Morgan Stanley Deabeats Walkaway. Cash out on a re-fi, and then refuse to pay.

    Morgan Stanley fund fails to repay debt on Tokyo property
    (Reuters) – A Morgan Stanley property fund failed to make $3.3 billion in debt payments by a deadline on Friday, handing over the keys to a central Tokyo office building to Blackstone (BX.N) and other investors, the largest repayment failure of its kind in Japan.

    It marks the latest fallout from a series of highly leveraged investments by Morgan Stanley (MS.N), one of the most aggressive investors in worldwide property markets before the global financial crisis.

    The $4.2 billion MSREF V real estate fund missed its April 15 deadline to repay 278 billion yen($3.3 billion) worth of debt packaged in commercial mortgage-backed securities on the 32-storey Shinagawa Grand Central Tower, a property which has seen its value plunge, two people involved in the transaction said.

    They spoke on condition of anonymity due to the sensitive nature of the matter.

    A Morgan Stanley spokeswoman in Tokyo declined to comment. A New York based spokesman for Blackstone, which holds the most junior portion of the debt and gains the right to market the building for seven months, was not immediately available for comment.

    MSREF V bought the Shinagawa property for 140 billion yen in 2004 from Mitsubishi Corp (8058.T) and Mitsubishi Motors (7211.T). The building now houses Microsoft’s Japan offices among other tenants.

    Morgan Stanley repackaged the loans into 125 billion yen worth of CMBS in 2005, according to a website for Morgan Stanley.

    Taking advantage of a run-up in property prices, MSREF V refinanced its debt on the Shinagawa property in 2007 with new debt worth 278 billion yen, twice the value of its purchase and likely yielding a tidy profit for the fund.

    The refinanced debt was sold in six different tranches by Morgan Stanley to investors.

    http://www.reuters.com/article/2011/04/15/us-morgan-stanley-real-estate-idUSTRE73E63E20110415

    Rate this comment: Thumb up 0

  90. 90
    David Losh says:

    RE: Blurtman @ 88

    Iraq was by all means a mistake. Yes some one should have stopped us.

    Libya was a mistake in that we should have mediated with Mubarak in Egypt. Tunisia was also a mistake in that we should have, all of Europe should have, helped to make a transition.

    Actually we should have been stopped in our insane Quantitative Easing measures, both here, in Europe, and China.

    In my opinion Obama could have negotiated with tribal leaders across North Africa. The civil war in Iraq won’t be settled without Iran. Afghanistan and Pakistan should be included in those talks.

    The real question is why we care, or why any one would care. We don’t need the oil, this isn’t 1950, we have alternatives, so in my opinion stability, for us, would be by leaving the area. Politicians talk about Israel, but they are a free State who will have to, at some point, begin negotiating their own treaties.

    Rate this comment: Thumb up 0

  91. 91
    Blurtman says:

    RE: David Losh @ 90 – Politics. If Oabama did not intervene in Libya, he would have opened himself up to an attack by the Repubs and Repub candidates as being weak. The Repubs beat the Dems over the head with this after 9/11.

    Rate this comment: Thumb up 0

  92. 92
    Blurtman says:

    Ray LaHood is being grilled over the sleeping air traffic controllers. Where the heck are the sleeping regulators who allowed Wall Street to commit massive fraud? Why haven’t they been grilled on the news shows?

    Instead, bullturd bios are written after these boobs leave public office.

    “During his tenure at the SEC, Chairman Cox made vigorous enforcement of the securities laws the agency’s top priority….”

    http://www.sec.gov/about/commissioner/cox.htm

    Rate this comment: Thumb up 0

  93. 93
    Kary L. Krismer says:

    Pfft missed an article about booming economic activity:

    http://www.mercurynews.com/business/ci_17863506?nclick_check=1

    Rate this comment: Thumb up 0

  94. 94
    David Losh says:

    RE: David Losh @ 87RE: Blurtman @ 91

    The choice to bomb military capability in Libya was a good alternative. Obama did well, once again, in showing himself to be an effective leader.

    What I think he should do is call for a meeting of tribal leaders to sit down with the politicians in the region. In my opinion this should be a set of meeting for the countries across Nothern Africa; Morroco, Algeria, Libya, and Egypt. A second set of meetings should include Turkey, Lebanon, Syria, Iraq, Iran, Afganistan, and Pakistan.

    Obama should schedule, and sit down for a set of talks, There doesn’t need to be any accords it would simply be a recognition of the tribes.

    Gadaffi is a great man, great leader. Saddam was a great man. The fact we, and I mean Europeans, want to have nobility to run our lives shouldn’t dictate how the rest of the world lives.

    Rate this comment: Thumb up 0

  95. 95
    Kary L. Krismer says:

    By David Losh @ 94:

    Obama did well, once again, in showing himself to be an effective leader.
    . . .
    Gadaffi is a great man, great leader. Saddam was a great man.

    ?????????

    Rate this comment: Thumb up 0

  96. 96
    Ben says:

    RE: Kary L. Krismer @ 93 – There are prosperous sectors – IT appears to be one of them this time around. Back in 2001 – 2003 things were not so good for IT. It appears the public NEEDS the latest handheld and tech gadget in this time period.

    David, ditto Kary’s ?????? on the great leader references. Wassup wth that?

    Rate this comment: Thumb up 0

  97. 97
    David Losh says:

    Leadership is different from politics.

    Obama ordered military stikes on Libyan military targets, turned the operations over to NATO, and now has a stand off. He made a choice and followed through. He showed commander qualities.

    Saddam claimed slant drilling from Kuwait and invaded in another claim of repatriating the Kuwait to Iraq. He made a choice and folowed through. George the First made a choice to abandon the region after determining he was in over his head with a military operation who only secured burning oil fields.

    Kaddafi has always been a leader.

    Here in the United States Ronald Reagan is the only Presidential leader I can think of in my life time.

    Rate this comment: Thumb up 0

  98. 98
    David Losh says:

    When you go to Africa, Northern Africa, it’s a step back in time. Actually in most corners of the world there is a culture that is based on stregth of character rather than what is politically acceptable. That’s how we end up with a Tea Party movement.

    My point is that we may be a time when economic theory may not work globally, and it may be time to deal with real issues especially involving oil rich regions. In my opinion, with the internet, we are well past a point where politicians can just decide to carve up a region, pit one country against another, and call it good.

    I really think that the days of figure heads we, I mean Europeans, put into power are over. Gaddafi is a leader of people. He is a tyrant for sure, the people are afraid of him, but he is a leader in the region that will need to be brought to the table.

    Obama so far has proved to me he is a leader possible of great things, but he is after all just a politician.

    Rate this comment: Thumb up 0

  99. 99
    pfft says:

    By Blake @ 84:

    RE: David Losh @ 65
    re: “The Obama proposal was for single payer, government run Universal Health Care.”

    No you are wrong… Obama never spoke out for single payer and his campaign platform ideas for health reform were worse than Hillary Clintons… and neither of them were for govt run health care or single payer! (Believe me… I’ve been actively working for single payer since the late 1980s. Germany’s system would be the best model)

    Prescriptions are out of control… “Ask your doctor about…” the little purple pill.
    People have wayyy too many meds as it is. There is only so much meds can do to address the effects of lifestyle (lack of exercise and poor diet) and stress ( – – I work on heart disease).
    **The biggest problem with our “sick care” system is that it is designed to maximize profits**

    obama was for single payer but he said our system wouldn’t handle it. what he basically did was pre-concede again to Republican talking points. if he had said single payer he probably could have bargained down to a public option. sigh.

    Obama Touts Single-Payer System for Health Care
    http://blogs.wsj.com/washwire/2008/08/19/obama-touts-single-payer-system/

    “*The biggest problem with our “sick care” system is that it is designed to maximize profits**

    amen brother

    Rate this comment: Thumb up 0

  100. 100
    Blake says:

    Nouriel Roubini:
    http://english.aljazeera.net/indepth/opinion/2011/04/2011415133455105416.html#
    -snip- I recently took two trips to China just as the government launched its 12th Five-Year Plan to rebalance the country’s long-term growth model. My visits deepened my view that there is a potentially destabilizing contradiction between China’s short- and medium-term economic performance.

    China’s economy is overheating now, but, over time, its current overinvestment will prove deflationary both domestically and globally. Once increasing fixed investment becomes impossible – most likely after 2013 – China is poised for a sharp slowdown.

    Overinvestment is the problem

    The problem, of course, is that no country can be productive enough to reinvest 50 per cent of GDP in new capital stock without eventually facing immense overcapacity and a staggering non-performing loan problem. China is rife with overinvestment in physical capital, infrastructure, and property.

    Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment – including East Asia in the 1990’s – have ended with a financial crisis and/or a long period of slow growth.
    -end quote-

    IMO… next big recession/crash after 2012/2013…

    Rate this comment: Thumb up 0

  101. 101
    One Eyed Man says:

    RE: Blurtman @ 92

    “Ray LaHood is being grilled over the sleeping air traffic controllers. Where the heck are the sleeping regulators who allowed Wall Street to commit massive fraud? Why haven’t they been grilled on the news shows?”

    We’ve all seen this story before, but If there’s any grilling, I think it will have to be a weenie roast.

    http://abcnews.go.com/WN/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10451508

    The regulators weren’t asleep. They “fiddled” while the economy “burned.”

    And I thought baseball was the national pass time. Despite my repurtation, I’m way too scared of my wife to leave pecker tracks all over the internet. I just filed my tax return and after writing that check, this is as close as the words wood and pecker get for me.

    http://www.bing.com/videos/watch/video/woody-woodpecker-new-ya-gonna-eat-that-chilly-and-hungry/42b1269e151cbf8c6cb742b1269e151cbf8c6cb7-767899205936?q=woodie+woodpecker&FORM=VIRE5

    Rate this comment: Thumb up 0

  102. 102
    David Losh says:

    Even though China’s growth is staggering it needs to be put into perspective. In my opinion it’s a global perspective. There is no way China will produce an intellectual property sector that will rival anywhere. They won’t educate their way to prosperity. There will be no research and development, race to the moon, or strong financial market.

    China has to feed over a billion people every day. The day they start having massive starvation is the end of China. They may have a billion consumers, but the price per day, just to eat, is as much of an economy as the country can afford.

    OK? have I said that enough times? Because it ties back to Northern Africa, and goes back to the war between Eritrea, and Ethiopia. That also involved a food crisis, and famine. Now how was that possible? There is more than enough land to grow food, and by now enough resources to distribute the produce, so how is there famine?

    It must be the lack of mobility.

    Rate this comment: Thumb up 0

  103. 103
    Blurtman says:

    Why Listen to S&P on US Debt?

    There is an old Wall Street joke about analysts: “You don’t need them in a Bull Market, and you don’t want them in a Bear Market.”

    Which brings me to Standard & Poor’s. They put a “negative” outlook on the U.S. AAA credit rating, citing rising budget deficits and debt.

    To which I say “Who Cares?”

    Its not that I disagree with their assessment — I do not — but I pay it little heed. It was much more important to me as an investor that PIMCO’s Bill Gross was out of Treasuries a month ago (and indeed, is short) than what S&P says. That was all any bond investor needed to know — no ratings agency necessary.

    If ever there was an organization more corrupt, incompetent, and less capable of issuing an intelligent analysis on debt than S&P, I am unaware of them. Why do I write this? A huge part of the reason the US is in its awful financial position is due to the fine work of S&P.

    Consider what Nobel Laurelate Joseph Stiglitz, economics professor at Columbia University in New York observed:

    “I view the ratings agencies as one of the key culprits. They were the party that performed that alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the ratings agencies.”

    Hence, the “negative outlook” of US debt has come about because the inability of Standard & Poor’s to have performed their jobs rating mortgage backed securities. Ultimately, this enabled the entire crisis, financial collapse, enormous budget deficit and now political over the debt ceiling.

    http://www.ritholtz.com/blog/2011/04/why-listen-to-sp-on-us-debt/

    Rate this comment: Thumb up 0

  104. 104
    pfft says:

    By Blurtman @ 103:

    It was much more important to me as an investor that PIMCO�s Bill Gross was out of Treasuries a month ago (and indeed, is short) than what S&P says. That was all any bond investor needed to know � no ratings agency necessary.

    why? he’s been as right as he’s been wrong on a lot of issues.

    Bill Gross’s Treasury Short Already Looking Like His Second Debacle In Just Over A Year
    http://www.businessinsider.com/bill-grosss-treasury-short-already-looking-like-his-second-debacle-in-just-over-a-year-2011-4#ixzz1JvrEuudh

    Gross predicts Dow 5,000
    Influential Pimco bond manager sees stocks moving lower before recovery begins.
    September 6, 2002: 5:10 PM EDT
    http://money.cnn.com/2002/09/06/markets/pimco/

    Bill Gross: DOW To 5,000 Unless We Do Everything Right
    Henry Blodget | Dec. 3, 2008, 9:04 AM
    http://www.businessinsider.com/2008/12/bill-gross-dow-to-5000-unless-we-do-everything-right#ixzz1JvrdYoZO

    Rate this comment: Thumb up 0

  105. 105
    Blurtman says:

    RE: pfft @ 104 – OK, so Gross is wrong sometimes. But Ritholz is saying that even a wrong Gross is more reliable that a corrupt S&P. One huge mistake that Obama made is not restoring faith in the US financial system. Now we have a corrupt rating agency whose view is supposed to be regarded as credible.

    Reminds me of the story of the traveler who encounters a man at a crossroads and asks him which of the three roads takes him to safety. The man is a chronic liar, and so the traveler must structure questions that will reveal the truth. Or, as Ritholz concludes:

    “Why we even have Nationally Recognized Statistical Rating Organization (NRSRO) any longer following their payola =driven corruption, their gross incompetency and their inability to discharge their basic duties is beyond my understanding.”
    —–
    “The single most important factor in the SEC staff’s assessment of NRSRO status is whether the rating agency is “nationally recognized” in the United States as an issuer of credible and reliable ratings by the predominant users of securities ratings.”

    Moody’s and S&P are now nationally recognized as NOT being an issuer of credible and reliable ratings. In fact, they are credited with having caused this economic crisis.

    So why didn’t Moody’s and S&P lose their NRSRO status?

    Rate this comment: Thumb up 0

  106. 106
    Blake says:

    RE: Blurtman @ 103
    Yesterday I laughed my a$$ off when I saw S+P issue their ‘negative warning’ on US credit, then watched US bonds RALLY!!! Hah hah ha ha… tells you how much clout the S+P has… perhaps Moody’s will line up next for abuse.

    Yves Smith nailed it on this one last night:
    S.&P. Should Be Embarrassed
    Updated April 18, 2011, 08:57 PM

    The United States is simply not at risk of default. Default is impossible for a sovereign currency issuer.

    The whole premise of the rating is incorrect.The Standard & Poor’s rating firm should be embarrassed. If there is any political judgment at work here, it is S.&P. falling for politically motivated scare mongering. But given its track record with mortgage securities and collateralized debt obligations, why should we be surprised to see a rating agency relying on conventional wisdom rather than analysis?

    The whole premise of the rating is incorrect. The U.S. may eventually experience unacceptable levels of inflation, but the experience of Japan shows that stop-and-start fiscal stimulus is more likely to result in protracted near-term deflation.

    Every time Japan tried to lower its public-debt-to-gross-domestic-product ratio by cutting spending, the resulting drop in economic activity actually made that ratio worse. We are seeing the same results in Ireland and Latvia. The United Kingdom tried the same experiment 10 times in the last 100 years, and every time it got the same results: cutting spending to reduce budget deficits results in a fall in G.D.P. that makes the debt burden worse, not better.

    The remedy should be to get private sector debt loads down via encouraging debt restructuring and write-offs, and using well targeted fiscal stimulus to offset the impact of those efforts. But S.&P. instead would have us do the economic equivalent of trying to cure an infection by using leeches.

    Misguided cures killed a lot of patients and are killing a lot of economies.

    Rate this comment: Thumb up 0

  107. 107
    Blurtman says:

    Back in 2007 approximately, definitely before 2008, and maybe as early as 2006, I began describing the Goldman Sachs Fraud machine which is to create faulty securities, sell them to suckers, and then short the crap out of them, adding absolutely no value to society, and representing massive securities fraud. I began posting initially on Bob Reich’s blog when that was possible, and Naked Capitalism.

    And now, after a Senate investigation, Carl Levin validates this reality. Here is Max at his usual over-the-top best describing why Blanfein and Hank Paulson should be in jail.

    http://www.youtube.com/watch?v=0z7InFcD5v0&feature=player_embedded#at=447

    It starts at 00:38.

    This massive fraud brought down the world’s economies, and made Wall Street investment bankers even richer.

    These cretins should be jailed. Perhaps it is time to start executing them.

    And here is what I posted way back when about Obama. Sad.

    “Obama continues to be a great disappointment. His latest unbelievable comment regarding the heads of Goldman Sachs and JP Morgan: “I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”

    Frankly Mr. President, anyone who enriches themselves by selling fraudulently rated securities around the world on such a massive scale as to cause a depression should not be called “savvy businessmen.” They should be called “inmate.””

    People will forget that once upon a time, this was a much better country.

    Rate this comment: Thumb up 0

  108. 108
    Scotsman says:

    RE: Blake @ 106

    “The United States is simply not at risk of default”

    The issue isn’t just default- it’s whether an investor is likely to lose money on the bonds, in this case through dilution (currency devaluation), a future change in interest rates, or unanticipated inflationary pressures. Since all of those are increasingly realistic possibilities the downgrade is warranted. The analysis takes into consideration, indeed emphasizes, the sovereign nature of the issuer and additional negative impacts only they can create.

    Rate this comment: Thumb up 0

  109. 109
    Scotsman says:

    RE: pfft @ 104

    Please explain what a piece from Sept. 2006 and a piece from Dec. 2008 have to do with Gross’s decision to pull out of U.S. treasuries this spring- 2011. Sure, he missed on the earlier timing- like a lot of folks, because he thought the government would follow the law. He didn’t think they would run $1.5T deficits for years on end. And he though the Fed would follow it’s mandate, nothing more. But given current facts you think he’s still wrong?

    Rate this comment: Thumb up 0

  110. 110
    David Losh says:

    RE: Scotsman @ 109

    Explain Treasuries to me because they are the play things of the political investor. It makes no difference to how much steak I eat in a week.

    All of the fuss about our debt to GDP is purely political. We won’t default because we are too big to fail. Seriously we have sectors of our economy that are completely frivolous. We have a ridiculous amount of pure waste, that people talk about, but no one will ever touch.

    The United States government funds the entire world. It’s just stupid how much money we have circulating every day. Those are real dollars by the way.

    I would kind of like to see what country has more wealth, reserves, production, and financial sector activity than us. We exported the Mortgage Backed Securities scam by will, shear will. We, as a consumer base have the ability to pay off debt, we have a bankruptcy mechanism to clear debt, and we have an economy that can produce an increase of personal, house hold wealth.

    In other words the United States economy will prosper while other economies, like Europe, will collapse. In my opinion we will be the dominate currency by virtue of being the only currency based on a growing economy.

    In the world of fiat currency I would trust the United States, and I think the rest of the world will also.

    Rate this comment: Thumb up 0

  111. 111
    David Losh says:

    RE: Scotsman @ 108

    I saved this as a separate comment because it is irrelevant on a global scale.

    Rate this comment: Thumb up 0

  112. 112
    One Eyed Man says:

    From 3 weeks ago:

    “TrimTabs Investment Research slightly contradicted the ADP report Wednesday, saying the economy actually created 293,000 new jobs in March, beating out early estimates.”

    http://www.housingwire.com/tag/trimtabs-investmetn-research

    Rate this comment: Thumb up 0

  113. 113
    One Eyed Man says:

    RE: One Eyed Man @ 112

    Same subject, but including Trim Tab’s concerns about unsustainability after the end of QE2.

    http://articles.orlandosentinel.com/2011-04-07/business/os-ceos-feeling-better-jobs-appearing-but-too-soon-to-exhale-20110407_1_ceo-confidence-economy-new-jobs

    Rate this comment: Thumb up 0

  114. 114
    Scotsman says:

    RE: David Losh @ 110

    ” We won’t default because we are too big to fail.”

    Like Rome?

    Remember when Great Brittian ruled the world?

    Remember when Spain was an economic powerhouse, it’s treasury full of gold?

    As a couple hundred million Americans become increasingly socialistic, regulated, micro-managed, and complacent while billions of Chinese become more capitalistic and eventually free, who rules whom?

    Rate this comment: Thumb up 0

  115. 115
    Scotsman says:

    RE: One Eyed Man @ 113

    I’m betting QE doesn’t end in June. Where else will we find all that money at rates that allow us to continue to function?

    Rate this comment: Thumb up 0

  116. 116
    Kary L. Krismer says:

    President Obama reached a new low today, promising to waste more taxpayer money on yet another investigation of high oil/gas prices. How many times will the citizens fall for this political BS? This pattern repeats itself over and over with investigation after investigation that finds nothing, other than a lot of empty space in the heads of this state’s Senators.

    Rate this comment: Thumb up 0

  117. 117
    David Losh says:

    RE: Scotsman @ 114

    What are you talking about? We have low taxes, no regulation, no entitlements, no education, no health care, no social safety net. We do have prisons, the mentally ill walking the streets, criminals in charge of banking, a completely lawless society where tax evasion is the greatest crime that can be committed.

    We have an economy with a military backing.

    Rate this comment: Thumb up 0

  118. 118
    David Losh says:

    RE: Kary L. Krismer @ 116

    Well, it worked last time, and I really am suspicious of why gas prices are so high. There’s no reason for it. Every excuse has been quashed.

    Rate this comment: Thumb up 0

  119. 119
    pfft says:

    By Scotsman @ 109:

    RE: pfft @ 104

    Please explain what a piece from Sept. 2006 and a piece from Dec. 2008 have to do with Gross’s decision to pull out of U.S. treasuries this spring- 2011. Sure, he missed on the earlier timing- like a lot of folks, because he thought the government would follow the law. He didn’t think they would run $1.5T deficits for years on end. And he though the Fed would follow it’s mandate, nothing more. But given current facts you think he’s still wrong?

    he’s already been wrong once in the recent past.

    the fact is nobody knows what’s going to happen. give me the most respected forecaster and I can give plenty of times they have been wrong.

    “Sure, he missed on the earlier timing- like a lot of folks, because he thought the government would follow the law.”

    if he’s such a great forecaster he should have seen that coming. maybe people just shouldn’t make forecasts? people pay him to figure that out.

    Rate this comment: Thumb up 0

  120. 120
    Scotsman says:

    RE: David Losh @ 117

    Sorry, I forgot. Thank gawd Obama brought change.

    http://visibility911.com/ford/wp-content/uploads/2009/11/bush-obama.jpg

    Rate this comment: Thumb up 0

  121. 121
    pfft says:

    By Scotsman @ 120:

    RE: David Losh @ 117

    Sorry, I forgot. Thank gawd Obama brought change.

    http://visibility911.com/ford/wp-content/uploads/2009/11/bush-obama.jpg

    if they are the same why did the Republicans in the Senate filibuster a record number of times?

    I already debunked your little list, are you still spouting the same lines?

    I guess since bush and obama are the same you are voting obama this time?

    Rate this comment: Thumb up 0

  122. 122
    pfft says:

    you guys get it now?

    What Japanese market participants understand that Western rating agencies do not is that fiscal deficits generated during a balance sheet recession are the result of economic weakness triggered by private-sector deleveraging, and that the private savings needed to finance those deficits are by definition made available at the same time.

    In other words, such conditions lead to a substantial surplus of savings in the private sector. What makes an economy under such conditions fundamentally different from an ordinary economy (i.e., one that is not in a balance sheet recession) is that those savings are plentiful enough to finance the government’s deficits.

    Richard Koo Explains Why The S&P’s Downgrade Is Totally Absurd
    http://www.businessinsider.com/sp-downgrade-us-outlook-negative-2011-4#ixzz1KDtMHk5d

    no free lunch just simple economics.

    the private savings needed to finance those deficits are by definition made available at the same time.

    Rate this comment: Thumb up 0

  123. 123
    Scotsman says:

    RE: pfft @ 122

    What a load of crap. Yup, as soon as the U.S. deficit is 200% of GDP we will be as prosperous as. . . Japan! He clearly doesn’t understand the social and reporting differences between Japan and the U.S. We don’t have the personal savings rate Japan does, and our Fed reports any increase in net worth as an increase in savings- even if that increase comes from debt reduction. . or default. They both show up as the same increase in net worth, or savings.

    But this is the best part- he’s speaking at a George Soros event about how QE2 is a massive failure. Are you going to believe someone who thinks stimulus is a massive fail? You, it’s greatest defender? How would this change your argument about Bill Gross and the inconsistencies in his record?? Ah, the internal conflicts must be raging in your little head.

    http://www.businessinsider.com/richard-koo-quantitative-easing-2011-4

    Rate this comment: Thumb up 0

  124. 124
    David Losh says:

    RE: Scotsman @ 123

    The United States has so much money that it could never spend it all. Japan is a rock in the ocean that has earth quakes, and got nuked, by us. They thought the Emporer talked to God, or was God until Word War II.

    The American people don’t need to save, or can’t save because there is always massive amounts of money to be made. That’s why we don’t have any entitlement programs, and the ones we have the Republicans want to take away.

    Money is literally laying in the streets, as long as you fit the profile. Once you step outside of the profile then yes, we are just like Japan. We must conform to some acceptable sub type, then, then we can have all the money we want.

    So I don’t know what you are talking about. This debt thing, the currency thing, the Treasuries, they are all meaningless.

    Now Obama knows that. You aren’t getting it, but Obama gets it. I like what he did today about wanting to probe why gas prices are so high. That’s the one that always gets me; the gas prices. Any little trouble and gas companies get a wind fall profit. Why do we allow that?

    Banks are completely unregulated, financial markets can just make stuff up and call them assets, and we don’t allow certain drugs because that would hurt our manufacturing base?

    The United States has more money than they know what to do with.

    Rate this comment: Thumb up 0

  125. 125
    Kary L. Krismer says:

    By David Losh @ 118:

    RE: Kary L. Krismer @ 116

    Well, it worked last time, and I really am suspicious of why gas prices are so high. There’s no reason for it. Every excuse has been quashed.

    What are you talking about? Prices went down last time because the world went into recession. Much less demand. And no excuses have been quashed this time. We have higher demand and a lower dollar, both of which mean higher prices.

    Rate this comment: Thumb up 0

  126. 126
    Scotsman says:

    RE: David Losh @ 124

    “The United States has so much money that it could never spend it all.”

    Not true. Yes, we have a ton of money- but we have already committed to spend more than we have. That’s the entire problem. We’ve been on a 30 year bender and now it’s time to sober up. Gonna be one hell of a hangover.

    You never have any numbers in your posts- you should try to add some in. Working through them to complete your comments will aid comprehension. Feelings are good, but reality constrains.

    Rate this comment: Thumb up 0

  127. 127
    pfft says:

    By Scotsman @ 123:

    RE: pfft @ 122

    What a load of crap. Yup, as soon as the U.S. deficit is 200% of GDP we will be as prosperous as. . . Japan!

    so know that you are proven wrong you’ll change the subject? 70% of the debt of the US government is held by us. savings sky-rocketed during the recession and we bought most of the debt.

    I am not the biggest fan of QE2 so it doesn’t matter.

    “he’s speaking at a George Soros event about how QE2 is a massive failure. Are you going to believe someone who thinks stimulus is a massive fail?”

    he didn’t say QE2 was a massive failure and he wants more stimulus not less. where did you get that?

    Rate this comment: Thumb up 0

  128. 128
    pfft says:

    By Scotsman @ 126:

    RE: David Losh @ 124We’ve been on a 30 year bender and now it’s time to sober up.

    actually no. republicans have. both carter and clinton reduced the deficit. reagan, bush 41 and bush 43 upped out debt/gdp ratio.

    Rate this comment: Thumb up 0

  129. 129
    David Losh says:

    RE: Kary L. Krismer @ 125

    Am I really looking up the demand for oil that your are claiming is higher now than it was in 2008? OK, I’ll get to that. I suppose I can Google.

    I would also like to add we have less Gulf oil, and Alaska oil, and prices didn’t climb until Libya.

    Rate this comment: Thumb up 0

  130. 130
    David Losh says:

    RE: Kary L. Krismer @ 125

    Fortunately all the charts are on the same page http://omrpublic.iea.org/

    High oil prices collapsed the demand. The supply is steady, demand is down, so prices should be down, and there is speculation that oil prices will once again collapse.

    There is no reason for gas to be $4 per gallon other than wind fall profiteering.

    Rate this comment: Thumb up 0

  131. 131
    David Losh says:

    RE: Scotsman @ 126

    Like I said, I can Google. In a lot of cases I agree with you. You’re on a bender about enetitlements which really bothers me. The United States government is giving away money all over the world. Mexico, and Canada, South America, and Africa have a social agenda. Here in the United States, the richest country on earth, we have the mentally ill walking the streets. Veterans are holding up card board signs asking for money. The elderly? The poor? you really want to look at that? OK

    Rate this comment: Thumb up 0

  132. 132
    David Losh says:

    RE: Scotsman @ 126

    First let’s put in welfare, everybody’s favorite: http://www.usgovernmentspending.com/welfare_chart_40.html

    Next let’s put in Social Security: http://www.cbo.gov/doc.cfm?index=5530&type=0&sequence=0 in dollars and cents http://www.federalbudget.com/

    I couldn’t pass this one up because it’s typical of how the United States “loses” money: http://www.foxnews.com/politics/2011/04/22/bp-cut-tax-13b-losses-spill/ it’s fox news so you know it’s legit.

    So the revenue is about $2Trillion: http://www.usgovernmentrevenue.com/#usgs302a

    You also get all the doom of the deficit, social security, and interest paid on debt. OK so far?

    Now let’s throw medicare under the bus: http://www.kff.org/medicare/upload/7305-05.pdf

    Actually if you look at the total CBO projection, it just isn’t that bad: http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf

    Actually it surprises me that you would think I just make random comments. I read the same stuff you do, well, within reason, you do find some pretty bizarre stuff, but it’s just not that bad.

    What is bad is a blog post like this: http://blog.heritage.org/2010/02/05/past-deficits-vs-obamas-deficits-in-pictures/ OMG a $2Trillion dollars in deficit spending!!!

    The end result is a 29% increase in corporate profits: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

    But enough about that it’s more about the fact we spend about the same in social programs as France, and Australia, but our debt is: http://www.politicususa.com/en/debt-social-programs

    It just bother me when people say we are an entitlement state so that’s why we have this huge deficit. You should be looking at corporate welfare a little more closely.

    Rate this comment: Thumb up 0

  133. 133
    Kary L. Krismer says:

    By David Losh @ 130:

    RE: Kary L. Krismer @ 125

    Fortunately all the charts are on the same page http://omrpublic.iea.org/

    High oil prices collapsed the demand. The supply is steady, demand is down, so prices should be down, and there is speculation that oil prices will once again collapse.

    There is no reason for gas to be $4 per gallon other than wind fall profiteering.

    You really need to learn how to read graphs!

    The site you posted shows that world production (improperly labeled as supply) went from 84.5 in the first quarter of 2009 to just under 89 today. Consumption (improperly labeled as demand) went from 84.5 to just over 90. (Note that the supply data goes back further than demand.)

    So the consumption exceeds the production by over 1M barrels a day! Prices are rising because of that.

    Rate this comment: Thumb up 0

  134. 134
    David Losh says:

    RE: Kary L. Krismer @ 133

    You’re not getting the time line. We have had reduced output for a year with a growing demand. Libya cut out put by 70% with OPEC fulfilling it’s committments. In other words, there really is no reason for a spike in gas prices.

    In addition it’s “In all, global runs are seen averaging 74.5 mb/d in 2Q11, down from 74.6 mb/d in 1Q11.”

    Rate this comment: Thumb up 0

  135. 135
    Kary L. Krismer says:

    RE: David Losh @ 134 – Looking at that site further, it appears the timeline on demand is messed up, or else it’s making predictions. I suspect it’s just off a year on the labels.

    But there is nothing there indicating “less output for a year with growing demand” because it’s showing increasing output. But if we did have that situation, that would mean higher prices too!

    Rate this comment: Thumb up 0

  136. 136
    Scotsman says:

    Hey pfft- underware sales are up and many see it as a legitimate indicator of recovery. If cnbc says it’s true- it must be true. I’d go all in at this point if I were you.

    http://www.cnbc.com/id/42703252?__source=otbrn%7Coutbrainext%7C&par=otbrn&__source=otbrn%7Coutbrainext20110423030445%7C&par=otbrn

    Rate this comment: Thumb up 0

  137. 137
    David Losh says:

    RE: Kary L. Krismer @ 135

    The United State experienced a shut down on the Gulf Coast, plus reduced out put from Alaska due to the Palin tax. Those were over looked until Libya. Well Libya is a part of a larger OPEC so that really shouldn’t have been an immeduate trigger to higher prices.

    In my opinion the higher prices are a direct assault on Obama’s policy of bombing Libya. It’s an excuse for higher profits, while causing another problem for Obama.

    The conclusion to your comment for me is that Obama is taking appropriate action by investigating the higher prices. He’s under attack, and is responding, for the good of the consumer.

    Rate this comment: Thumb up 0

  138. 138
    Kary L. Krismer says:

    By David Losh @ 137:

    RE: Kary L. Krismer @ 135 -The United State experienced a shut down on the Gulf Coast, plus reduced out put from Alaska due to the Palin tax. Those were over looked until Libya.

    I think they were overlooked because they never existed! :-D

    Drilling was shut down in the gulf, not production on existing wells. That would have sent prices skyrocketing. I’m not sure what you’re talking about with the Palin tax, but I doubt anything she did actually impacted the shipping of oil.

    Rate this comment: Thumb up 0

  139. 139
    Kary L. Krismer says:

    By David Losh @ 137:

    The conclusion to your comment for me is that Obama is taking appropriate action by investigating the higher prices. He’s under attack, and is responding, for the good of the consumer.

    He’s just being the typical politician trying to point blame so that he is not blamed. As I said above, this happens every time the prices go up and then the result of every investigation going back as far as I remember is they find no wrongdoing.

    Rate this comment: Thumb up 0

  140. 140
    David Losh says:

    RE: Kary L. Krismer @ 138

    Oil through the pipe line is down due to an increase in the tax. That tax oddly enough is also given back to the people of Alaska. It’s a sharing the wealth kind of thing.

    The one well was producing, and there was a cease of operations.

    There will be no wrong doing this time. We allow for oil companies to make profits, it’s a private enterprise. That is a debate for another time because in turn we spend billions of dollars protecting oil interests in the name of National Security.

    Rate this comment: Thumb up 0

  141. 141
    Kary L. Krismer says:

    By David Losh @ 140:

    RE: Kary L. Krismer @ 138 – Oil through the pipe line is down due to an increase in the tax. .

    Given the price of oil today that makes no sense at all, unless the tax increases more than a dollar for every dollar of price increase.

    I suspect what you’re seeing is just the lack of new drilling. Oil wells become less productive over time. Of course, if allowed to drill (environmental), the oil companies would drill more new wells with a lower tax than with a higher tax. And they’ll call for lower taxes. But with the price of oil over $100 right now, the tax would need to be really high to prevent them from drilling.

    Rate this comment: Thumb up 0

  142. 142
    Kary L. Krismer says:

    By David Losh @ 140:

    Oil through the pipe line is down due to an increase in the tax.

    Here’s an interesting article from 1987 where they talk about the lifespan of the pipeline being dependent on the lifespan of the oil field. Original estimates were that the oil would be depleted right about now, an that the peak flow would peak in 1986, but in 1987 they thought it would peak in 1989.

    http://articles.latimes.com/1987-06-14/news/mn-7184_1_trans-alaska-pipeline/9

    Rate this comment: Thumb up 0

  143. 143
    Blurtman says:

    China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings

    Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions).

    As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.

    http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings

    Rate this comment: Thumb up 0

  144. 144
    Blurtman says:

    Stockman Tells the Hard Truth on Taxes & Spending

    “The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains. The former destroyed the nation’s capital markets, fueling huge growth in household and business debt, serial asset bubbles and endless leveraged speculation in equities, commodities, currencies and other assets.

    At the same time, the nearly untaxed windfall gains accrued to pure financial speculators, not the backyard inventors envisioned by the Republican-inspired capital-gains tax revolution of 1978. And they happened in an environment of essentially zero inflation, the opposite of the double-digit inflation that justified a lower tax rate on capital gains back then — but which is now simply an obsolete tax subsidy to the rich.”

    http://www.ritholtz.com/blog/2011/04/stockman-tells-the-hard-truth-on-taxes-spending/

    Rate this comment: Thumb up 0

  145. 145
    Scotsman says:

    Wow- even the NYT admits QE and stimulus are a bust in terms of real growth. Krugman will be bummed.

    http://www.nytimes.com/2011/04/24/business/economy/24fed.html?_r=1&partner=rss&emc=rss

    Rate this comment: Thumb up 0

  146. 146
    David Losh says:

    Well then let’s talk debt ceiling.

    http://www.reuters.com/article/2011/04/04/us-usa-budget-debt-idUSTRE7335BY20110404

    I hope we’ve debunked the entitlement populace excuse for our excessive debt. It’s as said that most people don’t understand the dynamics of wealth, thrue wealth, inherited wealth, because it’s just now becoming a problem.

    I’d like to explore where real cuts in our budget can come from. I like cutting or eliminating the department of commerce, stopping farm subsidies, stopping oil interest protections, especially while we pay higher prices for gas, and massive tax benefits to the wealthy class that most of us will never qualify for.

    Rate this comment: Thumb up 0

  147. 147
    Blurtman says:

    RE: David Losh @ 146 – This poorly written story continues the lies of Geithner. Don’t journalists bother to at least think if not research their stories?

    If the debt ceiling is not extended, there will be more than enough money to pay existing bondholders. There will be no default. The writer of this Reuters story either does not understand. or chooses to misrepresent, the difference between paying for programs, and paying interest on existing debt. Perhaps this story is a plant, who knows?

    Don’t believe me. Denninger explains in his usual style: http://market-ticker.org/akcs-www?post=184836

    Rate this comment: Thumb up 0

  148. 148
    pfft says:

    By Scotsman @ 136:

    Hey pfft- underware sales are up and many see it as a legitimate indicator of recovery. If cnbc says it’s true- it must be true. I’d go all in at this point if I were you.

    http://www.cnbc.com/id/42703252?__source=otbrn%7Coutbrainext%7C&par=otbrn&__source=otbrn%7Coutbrainext20110423030445%7C&par=otbrn

    shouldn’t you concentrate on being embarrassed about your disastrous economic call? how do you call me out when I was right and you were wrong? so very very wrong.

    Rate this comment: Thumb up 0

  149. 149
    pfft says:

    By Blurtman @ 144:

    Stockman Tells the Hard Truth on Taxes & Spending

    �The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains. The former destroyed the nation�s capital markets, fueling huge growth in household and business debt, serial asset bubbles and endless leveraged speculation in equities, commodities, currencies and other assets.

    At the same time, the nearly untaxed windfall gains accrued to pure financial speculators, not the backyard inventors envisioned by the Republican-inspired capital-gains tax revolution of 1978. And they happened in an environment of essentially zero inflation, the opposite of the double-digit inflation that justified a lower tax rate on capital gains back then � but which is now simply an obsolete tax subsidy to the rich.�

    http://www.ritholtz.com/blog/2011/04/stockman-tells-the-hard-truth-on-taxes-spending/

    the truth is tax revenues are near a 60 year low because of the great recession and the bush tax cuts. the rich have had rising incomes coupled with lower tax rates.

    Rate this comment: Thumb up 0

  150. 150
    pfft says:

    By Scotsman @ 145:

    Wow- even the NYT admits QE and stimulus are a bust in terms of real growth. Krugman will be bummed.

    http://www.nytimes.com/2011/04/24/business/economy/24fed.html?_r=1&partner=rss&emc=rss

    krugman never said QE2 was going to do anything special. nice try though.

    Rate this comment: Thumb up 0

  151. 151
    pfft says:

    By Blurtman @ 147:

    RE: David Losh @ 146 – This poorly written story continues the lies of Geithner. Don’t journalists bother to at least think if not research their stories?

    If the debt ceiling is not extended, there will be more than enough money to pay existing bondholders. There will be no default. The writer of this Reuters story either does not understand. or chooses to misrepresent, the difference between paying for programs, and paying interest on existing debt. Perhaps this story is a plant, who knows?

    Don’t believe me. Denninger explains in his usual style: http://market-ticker.org/akcs-www?post=184836

    have you posted a credible source yet for your claims?

    Rate this comment: Thumb up 0

  152. 152
    Blurtman says:

    RE: pfft @ 149 – I don’t see too many W bumper stickers anymore. Nor do I find too many people that will admit voting for the war criminal. We’ll see if Oabama ends the Bush tax cuts.

    Rate this comment: Thumb up 0

  153. 153
    Blurtman says:

    RE: pfft @ 151 – Well, let’s start with this:

    “The United States takes in about $2 trillion in taxes a year. The total interest paid last year was about $180 billion, a ridiculously low blended rate, but that’s what ZIRP (zero interest rates by The Fed) get you.

    Let’s assume for a moment that the blended rate was to more than double, to 4%. That would be about $560 billion in interest a year, including interest on the Social Security and Medicare “trust funds” (which aren’t trust funds, but I’ve been over that before.)

    $560 billion is about one quarter of the tax revenues that the government takes in. So even were interest rates to more than double The United States would not default.”

    If paying interest on the outstanding debt goes to the front of the line, as it should since armageddon would apparently result if we default, then there seems to be more than enough money to pay interest on the debt. Might have to cut other programs, but that would not be default.

    Rate this comment: Thumb up 0

  154. 154
    David Losh says:

    RE: Blurtman @ 147

    I picked a pretty nuetral link to start this discussion. There are the Tea Party canidates, and I mean canidates who got in to office based on hysteria so they need to keep campaigning, who claim we can pay bond holders and shut down Social Security type programs. Those tactics will carry us through July before there needs to be a better plan put into place.

    Rate this comment: Thumb up 0

  155. 155
    David Losh says:

    RE: Blurtman @ 153

    You are correct. My question is what to cut. Cutting Social Security would get any one voted out of office. So what makes sense to cut?

    Rate this comment: Thumb up 0

  156. 156
    Blurtman says:

    RE: David Losh @ 155 – I find it troubling to see a Treasury Secretary blatantly lie, yet again. It doesn’t help and contributes to the lack of understanding of what is really going on.

    You will have to refresh my memory on SS. I thought it was sufficiently funded to cover current obligations.

    Rate this comment: Thumb up 0

  157. 157
    Kary L. Krismer says:

    By Blurtman @ 156:

    You will have to refresh my memory on SS. I thought it was sufficiently funded to cover current obligations.

    It’s still money out, although that’s relatively new with the aging population and the recession combined. To make it really viable they either need to increase revenue or reduce/eliminate benefits for wealthy people.

    Rate this comment: Thumb up 0

  158. 158
    pfft says:

    By Blurtman @ 153:

    RE: pfft @ 151 – Well, let’s start with this:

    “The United States takes in about $2 trillion in taxes a year. The total interest paid last year was about $180 billion, a ridiculously low blended rate, but that’s what ZIRP (zero interest rates by The Fed) get you.

    Let’s assume for a moment that the blended rate was to more than double, to 4%. That would be about $560 billion in interest a year, including interest on the Social Security and Medicare “trust funds” (which aren’t trust funds, but I’ve been over that before.)

    $560 billion is about one quarter of the tax revenues that the government takes in. So even were interest rates to more than double The United States would not default.”

    If paying interest on the outstanding debt goes to the front of the line, as it should since armageddon would apparently result if we default, then there seems to be more than enough money to pay interest on the debt. Might have to cut other programs, but that would not be default.

    “The total interest paid last year was about $180 billion, a ridiculously low blended rate, but that’s what ZIRP (zero interest rates by The Fed) get you.”

    it’s more than that. it’s around $250 billion. the Fed doesn’t set rates. it follows the market. the reason why rates are so low is that the savings rate zoomed and swelled bank deposits while fewer deposits were loaned out. simple supply and demand.

    fewer loans=lower interest rates.

    “Let’s assume for a moment that the blended rate was to more than double, to 4%. That would be about $560 billion in interest a year, including interest on the Social Security and Medicare “trust funds” (which aren’t trust funds, but I’ve been over that before.)”

    1. the US needs to issue more debt how can you say that not being able to do that would not be a problem?

    2. “”trust funds” (which aren’t trust funds, but I’ve been over that before.)”

    yes they are. they hold government bonds that are about the same as any other bond out there. the only difference is that they can’t be sold on the open market.

    why are government bonds held by SS any different than other government bonds? is your agenda to use that to cut SS?

    Rate this comment: Thumb up 0

  159. 159
    Blurtman says:

    RE: pfft @ 158 – My point has been that it is incorrect, and a blatant lie, to state that not extending the debt ceiling would mean a default on US Treasury bonds.

    I did not say that not being able to do that would not be a problem.

    The truth is that without extending the debt ceiling, there is more than enough money to pay interest on the debt.

    Rate this comment: Thumb up 0

  160. 160
    David Losh says:

    RE: Blurtman @ 156

    Scotsman set me off when he called Americans an entitlement populace. That’s simply not true. The debate in Congress, and subsequent reporting is that we will need $100 Trillion dollars to cover Social Security, and I think Medicare, but I really don’t know, or care. It’s a scare tactic.

    You are correct there is more than enough money. We take in enough money even with extremely low tax revenues. The lowest tax revenues in many years, again, I don’t care. Our federal government takes in a good amount of money, and will continue to take in a lot of money.

    The two things the right wing fringe element are pushing is we have huge government spending, and they want to lower taxes. We do spend a lot of money, and our government is one of the greatest make work programs in the world. That’s true. We also have one of the lowest tax rates in the world.

    I have my own ideas about what can be done to balance the budget and pay off the deficit. I’m more interested in what others think.

    My point is we have no social safety net from decades of cutting services to the poor. We have extremely low tax revenue by giving huge tax breaks to the wealthy. The middle class will be paying for all of this for decades to come if the cycle continues.

    Rate this comment: Thumb up 0

  161. 161
    Blurtman says:

    RE: David Losh @ 160 – Here is the FY2010 pie chart.

    http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg

    So perhaps means testing for SS and Medicare, and then cuts to Defense, State Department/Int’l Programs, to start. Shorten the ever extending reach of empire.

    Note that interest on the debt accounted for 4.63% of total spending.

    Rate this comment: Thumb up 0

  162. 162
    pfft says:

    not liking that austerity in Detroit.

    YOUNG MOTHER DESCRIBES OCCUPATION OF CATHERINE FERGUSON ACADEMY
    http://voiceofdetroit.net/?p=6582

    Rate this comment: Thumb up 0

  163. 163
    pfft says:

    By Blurtman @ 159:

    RE: pfft @ 158 – My point has been that it is incorrect, and a blatant lie, to state that not extending the debt ceiling would mean a default on US Treasury bonds.

    I did not say that not being able to do that would not be a problem.

    The truth is that without extending the debt ceiling, there is more than enough money to pay interest on the debt.

    are you ever going to post a link? ever?

    Rate this comment: Thumb up 0

  164. 164
    Blurtman says:

    RE: pfft @ 163 – See 147. If you don’t agree with the analysis, please post a link with counter analysis, not just opinion or lies, i.e., Geithner. What percent of annual spending goes toward paying interest on the debt?

    Rate this comment: Thumb up 0

  165. 165
    David Losh says:

    RE: Blurtman @ 161

    The problem with the charts is that it shows the elephant in the living room, but not the nuances. We can convert defense spending into more tax revenue generating activity. Defense spending is a complete loss except it accounts for a durable goods job base. If we get rid of defense we lose jobs.

    On the same hand if we get rid of some of the waste in propping up corporate profits we also get more economic activity. Corporations that are given free money have a tendency to send it into emerging markets to make a quick buck. That taxable income may stay out of the country in places where taxation is a loop hole, like the Cayman Islands.

    We always look at the big cash outlays. That’s why Social Security, Health, and Social Services are always a target.

    Rate this comment: Thumb up 0

  166. 166
    Blurtman says:

    RE: David Losh @ 165 – GE receives its share of defense spending, doesn’t pay taxes.

    Here’s another look at 2010 spending. http://en.wikipedia.org/wiki/File:2010_Receipts_%26_Expenditures_Estimates.PNG

    Rate this comment: Thumb up 0

  167. 167
    pfft says:

    By Blurtman @ 164:

    RE: pfft @ 163 – See 147. If you don’t agree with the analysis, please post a link with counter analysis, not just opinion or lies, i.e., Geithner. What percent of annual spending goes toward paying interest on the debt?

    you orginally made the comment that geithner was confirmed liar and etc. you need to post a link. I didn’t not call anyone a liar.

    you first.

    Rate this comment: Thumb up 0

  168. 168
    David Losh says:

    RE: Blurtman @ 166

    > 2010 Revenue: $104.635 Billion
    > Number of Employees: 287,000
    > Market Cap: $210.03 Billion

    GE is the largest provider of sophisticated energy infrastructure in the world. This includes wind turbines, hydro-electric power, nuclear energy, and solar power–all of the strategic sources to reduce dependence on fossil fuel. It also has one of the largest water management businesses in the world. GE is also one of the world’s primary providers of highly advanced medical devices, MRI systems, nuclear cardiology, and oncology diagnosis. GE’s third strategic business is jet engines, which it designs and manufactures for both the aerospace and military sectors. GE specializes in the development of low-emission engines. GE is routinely on the list of companies which are granted the most patents by the US each year.

    Rate this comment: Thumb up 0

  169. 169
    pfft says:

    By Blurtman @ 166:

    RE: David Losh @ 165 – GE receives its share of defense spending, doesn’t pay taxes.

    Here’s another look at 2010 spending. http://en.wikipedia.org/wiki/File:2010_Receipts_%26_Expenditures_Estimates.PNG

    it’s not like GE has never paid taxes and I think it’s tax bill didn’t include all the local taxes it paid.

    Rate this comment: Thumb up 0

  170. 170
    Blurtman says:

    RE: pfft @ 167 – Geithner has stated numerous times that a failure to extend the debt limit would result in a default on our debt. Google it yourself.

    I have provided sufficiently detailed information to show that the interest on the debt is a fraction of total spending, and that even without an extension of the debt ceiling, there would be more than enough money to pay bondholders Therefore, it is not true that a failure to extend the debt limit would result on a default on our debt, and Geithner is a liar.

    Your turn.

    Rate this comment: Thumb up 0

  171. 171
    Blurtman says:

    RE: pfft @ 169 – Try that approach with the IRS.

    Rate this comment: Thumb up 0

  172. 172
    pfft says:

    By Blurtman @ 170:

    RE: pfft @ 167 – Geithner has stated numerous times that a failure to extend the debt limit would result in a default on our debt. Google it yourself.

    I have provided sufficiently detailed information to show that the interest on the debt is a fraction of total spending, and that even without an extension of the debt ceiling, there would be more than enough money to pay bondholders Therefore, it is not true that a failure to extend the debt limit would result on a default on our debt, and Geithner is a liar.

    Your turn.

    so you’re saying you’re not going to post a link? can’t back up what you say?

    Rate this comment: Thumb up 0

  173. 173
    pfft says:

    By Blurtman @ 171:

    RE: pfft @ 169 – Try that approach with the IRS.

    ? nobody said GE is doing anything illegal. shady? yes.

    GE said it all though. in the end their only legal duty is to shareholders.

    Rate this comment: Thumb up 0

  174. 174
    Blurtman says:

    RE: pfft @ 172 – “•A default would impose a substantial tax on all Americans. Because Treasuries represent the benchmark borrowing rate for all other sectors, default would raise all borrowing costs. Interest rates for state and local government, corporate and consumer borrowing, including home mortgage interest, would all rise sharply. Equity prices and home values would decline, reducing retirement savings and hurting the economic security of all Americans, leading to reductions in spending and investment, which would cause job losses and business failures on a significant scale.

    •Default would have prolonged and far-reaching negative consequences on the safe-haven status of Treasuries and the dollar’s dominant role in the international financial system, causing further increases in interest rates and reducing the willingness of investors here and around the world to invest in the United States.”

    http://www.treasury.gov/connect/blog/Pages/letter.aspx

    Wrong. If you pay the bondholders with the current money which is more than enough, there is no default.

    Pfft, I look forward to your link disputing this, but I doubt if I will see it.

    Rate this comment: Thumb up 0

  175. 175
    Blurtman says:

    Biggest Corporate Freeloaders

    Exxon Mobil
    Bank of America (how fitting!)
    GE
    Chevron
    Boeing
    Valero Energy
    Goldman Sachs
    Citigroup
    Conoco Philips
    Carnival Cruise Lines

    http://www.ritholtz.com/blog/2011/04/corporate-freeloaders/

    Rate this comment: Thumb up 0

  176. 176
    Kary L. Krismer says:

    RE: Blurtman @ 175 – You really shouldn’t cite to Senators for information. They’re professional liars. Note that many of those companies have had tough prior years, such as GE with it’s financial division and BOA with it’s picking up of Countrywide’s issues. But beyond that the site repeatedly refers to tax refunds and tax rebates (whatever those are), not tax liabilities.

    Not to say that the corporate tax situation isn’t screwed up and in need of reform. You’re just not going to learn that from that site.

    Rate this comment: Thumb up 0

  177. 177
    Kary L. Krismer says:

    By David Losh @ 168:

    RE: Blurtman @ 166

    > 2010 Revenue: $104.635 Billion
    > Number of Employees: 287,000
    > Market Cap: $210.03 Billion

    GE is the largest provider of sophisticated energy infrastructure in the world. This includes wind turbines, hydro-electric power, nuclear energy, and solar power�all of the strategic sources to reduce dependence on fossil fuel. It also has one of the largest water management businesses in the world. GE is also one of the world�s primary providers of highly advanced medical devices, MRI systems, nuclear cardiology, and oncology diagnosis. GE�s third strategic business is jet engines, which it designs and manufactures for both the aerospace and military sectors. GE specializes in the development of low-emission engines. GE is routinely on the list of companies which are granted the most patents by the US each year.

    Convenient how you ignore the division that would have suffered greatly during a recession.

    Rate this comment: Thumb up 0

  178. 178
    David Losh says:

    RE: Kary L. Krismer @ 177

    The finance division? It’s done well. GE has done very well. The point about GE not paying taxes is for a division.

    It really makes no difference. This list is of large targets. Many of the companies on the list show tax refunds which means they have paid.

    Rate this comment: Thumb up 0

  179. 179
    Kary L. Krismer says:

    RE: David Losh @ 178 – Losing $30 Billion during the crisis is doing really well?

    http://blogs.forbes.com/christopherhelman/2011/04/14/what-do-the-20-biggest-u-s-companies-pay-in-taxes/

    GE gets to carry those losses forward. You can’t just look at a single year of what a corporation earned and what taxes it paid that year.

    Rate this comment: Thumb up 0

  180. 180
    David Losh says:

    RE: Blurtman @ 174

    The chart you posted tells the story. Yes we can pay the debt, and I was surprised that it was such a small part of the over all budget. The chart also points out the problem of the entitlement, as dejayooh and Scotsman have pointed out. Social Security, Medicaid, and Medicare take up most of the pay outs. If you include just the debt we are paying out more than our income.

    If we stop paying what are called social programs, which they aren’t actually because we pay into those accounts through a dedicated tax, then we have the same auserity problems they have had in Europe.

    The accounting solution is to seperate Social Security, and Medicare out of the General Budget and have them stand alone. We could dedicate the tax to them, raise those taxes, and have those programs become viable once again.

    Then we can pay debt, then we can pay for other programs.

    Congress won’t do any of that. Congress, in an election year, Presidential election coming up, won’t do anything to help the economy.

    Rate this comment: Thumb up 0

  181. 181
    David Losh says:

    RE: Kary L. Krismer @ 179

    Yes those losses are doing very well in the over all portfolio that is GE. However GE Financial is the consumer debt division. We won’t know where it stands, ever, because it is that under world of consumer debt.

    As a bankruptcy attorney you know that the debt can be bought sold and traded for years.

    Rate this comment: Thumb up 0

  182. 182
    One Eyed Man says:

    RE: Blurtman @ 175

    Dam, I only hold 6 of the 10. How did I miss the other 4?

    Rate this comment: Thumb up 0

  183. 183
    Kary L. Krismer says:

    By David Losh @ 181:

    Yes those losses are doing very well in the over all portfolio that is GE. However GE Financial is the consumer debt division. We won’t know where it stands, ever, because it is that under world of consumer debt.

    Tax returns are based on actual results of transactions. Yes you can have situations where they have unrealized gains and losses on assets held, but that’s not at all what we’re talking about here. We’re talking about their tax liability on the recognized gains and losses, and carrying those losses forward. And to some extent we’re also talking about the credit companies get for paying taxes in other countries.

    Rate this comment: Thumb up 0

  184. 184
    Blurtman says:

    Trump plays the affirmative action card: http://www.youtube.com/watch?v=Q4ErRpD-dH4&feature=player_embedded

    If Obama was admitted to Columbia ahead of more qualified candidates on the basis of race, this could hurt his re-election chances.

    Rate this comment: Thumb up 0

  185. 185
    David Losh says:

    RE: Kary L. Krismer @ 183

    The tax returns of GE are a very small thing. They are after all one of the way to big to fail American Corporations.

    Rate this comment: Thumb up 0

  186. 186
    David Losh says:

    RE: Blurtman @ 175

    In that list only GE is an American Corporation that can have massive global impact if it weren’t allowed a lot of wiggle room. http://247wallst.com/2011/03/25/the-10-companies-that-will-save-the-american-economy/3/

    That’s where the copy came from.

    Rate this comment: Thumb up 0

  187. 187
    One Eyed Man says:

    RE: Blurtman @ 184

    I’m glad to see that Trump is so gracious about other people needing a 2nd chance. Its not like he ever needed a Mulligan. The bad student thing is certainly an interesting approach coming from a guy who only stiffed his creditors three times in the last 20 yrs by having his companies file Chapt 11. Of course I guess he can claim Obama lacks experience whereas he has the personal experience necessary for the big upcoming federal bankruptcy.

    Rate this comment: Thumb up 0

  188. 188
    Blurtman says:

    RE: One Eyed Man @ 187 – I don’t know what Trump’s game is. This seems to be going beyond self-promotion. Some of the mud he is throwing will stick. Affirmative action might be one that does.

    Rate this comment: Thumb up 0

  189. 189
    pfft says:

    austerity fails in real-time. it leads to more debt just like I said. “taking the hit” just doesn’t work.

    contractionary policies=less econonomic growth=less tax revenue=more debt

    What’s The Point Of Austerity Again?
    http://www.businessinsider.com/whats-the-point-of-austerity-again-2011-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29&utm_content=Google+Feedfetcher

    Rate this comment: Thumb up 0

  190. 190
    pfft says:

    By Blurtman @ 174:

    RE: pfft @ 172 – “â�¢A default would impose a substantial tax on all Americans. Because Treasuries represent the benchmark borrowing rate for all other sectors, default would raise all borrowing costs. Interest rates for state and local government, corporate and consumer borrowing, including home mortgage interest, would all rise sharply. Equity prices and home values would decline, reducing retirement savings and hurting the economic security of all Americans, leading to reductions in spending and investment, which would cause job losses and business failures on a significant scale.

    â�¢Default would have prolonged and far-reaching negative consequences on the safe-haven status of Treasuries and the dollarâ��s dominant role in the international financial system, causing further increases in interest rates and reducing the willingness of investors here and around the world to invest in the United States.”

    http://www.treasury.gov/connect/blog/Pages/letter.aspx

    Wrong. If you pay the bondholders with the current money which is more than enough, there is no default.

    Pfft, I look forward to your link disputing this, but I doubt if I will see it.

    I doubt you are going to post a link.

    I love your position. people like you said we’re hooked on debt. now though if we don’t have more debt we’ll be fine. which is it?

    Rate this comment: Thumb up 0

  191. 191
    pfft says:

    By Blurtman @ 188:

    RE: One Eyed Man @ 187 – I don’t know what Trump’s game is. This seems to be going beyond self-promotion. Some of the mud he is throwing will stick. Affirmative action might be one that does.

    brilliant political analysis.

    obama was elected president, obviously they made the right choice.

    Rate this comment: Thumb up 0

  192. 192
    Blurtman says:

    RE: pfft @ 190 – You are getting irrational. I have posted several links describing why Geitherner is lying, I have posted a link describing the lie in Geithner’s own words. Your turn to post a link disputing this, or, get off your parent’s computer before they ground you.

    There is nothing in anyhting I posted arguing for more debt. You are a real loon.

    Rate this comment: Thumb up 0

  193. 193
    Blake says:

    RE: One Eyed Man @ 187
    Trump “has the personal experience necessary for the big upcoming federal bankruptcy”
    LMAO!! …great one!!

    Blurtman: Dunno what Trump’s game is?? He has a huge HUGE ego… duh!
    The publicity is also good for all his other enterprises. I bet all his casinos and real estate may be losing money and on the brink of bankruptcy (again), but all his BS books and TV sh*t is making him rich.

    Rate this comment: Thumb up 0

  194. 194
    Kary L. Krismer says:

    RE: Blake @ 193 – The thing about Trump is his business involves taking great leveraged risk. Thus I don’t really care that a few of his projects have ended up in Chapter 11. I don’t see though how that is a quality we are looking for in a President. If anything, just the opposite.

    The thing that will keep him from going anywhere as a candidate (hopefully) is that he’s used to being able to say things and get away with it. My wife records The Apprentice and just in the past two weeks he’s made some rather inappropriate comments, IMHO. He would self-destruct in a debate (but I was saying the same thing about McCain four years ago, and he never did).

    Rate this comment: Thumb up 0

  195. 195
    Scotsman says:

    RE: pfft @ 173

    “in the end their only legal duty is to shareholders”

    Right. Especially since their CEO is best buds with the TelePrompTer Jesus. They are now officially above any law except serving the shareholders and the bonus receivers. And liberals thought the Koch brothers were bad.

    Rate this comment: Thumb up 0

  196. 196
    David Losh says:

    RE: Blurtman @ 170RE: Scotsman @ 195

    Blurtman has raised several excellent points in the discussion about the debt ceiling. The more I look at the over all budget the clearer it is that we have a managable deficit. It would would take hard choices.

    I can see that Social Security, and Medicare could be seperated from the general fund, raise the taxes, and have the programs be viable again. Raising the taxes on Social Security, and Medicare may not be popular, but it is possible.

    The other point about General Electric not paying taxes is something that we never look at. Huge corporations take money, make money, put money off shore, invest in emerging markets. Oil companies get huge tax breaks. In Venezuala they are imposing the wind fall profit tax, something we used to have.

    If things are as bad as you say then there are a whole host of solutions that can fix that. The solutions may be unpopular but so is economic collapse.

    Rate this comment: Thumb up 0

  197. 197
    pfft says:

    By Blurtman @ 192:

    RE: pfft @ 190 – You are getting irrational. I have posted several links describing why Geitherner is lying, I have posted a link describing the lie in Geithner’s own words. Your turn to post a link disputing this, or, get off your parent’s computer before they ground you.

    There is nothing in anyhting I posted arguing for more debt. You are a real loon.

    please repost credible links on why not raising the debt ceiling won’t matter.

    I have been asking for 2 days and you haven’t been able to.

    Rate this comment: Thumb up 0

  198. 198
    pfft says:

    By Scotsman @ 195:

    RE: pfft @ 173

    “in the end their only legal duty is to shareholders”

    Right. Especially since their CEO is best buds with the TelePrompTer Jesus. They are now officially above any law except serving the shareholders and the bonus receivers. And liberals thought the Koch brothers were bad.

    who said they were above the law? more wild conspiracy theories.

    are you a birther?

    are you a tenther?

    Rate this comment: Thumb up 0

  199. 199
    David Losh says:

    RE: pfft @ 197

    He did post the cash in cash out link which tells the whole story. You’re just looking past the line where it says potential disaster. It’s the part that says Mandatory Spending.

    There is Social Security, Medicare, Medicaid, Other (which I take to mean other social and health services), then that little amount at the top of mandatory spending which is titled interest.

    What Blurtman is saying is correct, we can afford to pay bond holders, we can afford to make the interest payments. We would just need to cut Defense Spending, all other departments, and agencies.

    Technically we could do something, the reality is the lack of political will.

    So I agree that we will have to raise the debt ceiling, but we would also have to cut the deficit.

    Rate this comment: Thumb up 0

  200. 200
    Blurtman says:

    RE: pfft @ 197 – I never said not raising the debt ceiling would not matter. I said there is more than enough money to pay bondholders without raising the debt ceiling and that Geithner lied when he said not to raise the debt ceiling would trigger default by the USG. The links are all above. You cannot seem to comprehend written text, apparently believing that the excerpted Geithner letter to congress were my words. Pointlessly argumentative, ignorant and lazy is no way to go through life, son.

    Rate this comment: Thumb up 0

  201. 201
    Blurtman says:

    Central bank voodoo isn’t working
    Quantitative easing in all its many forms hasn’t helped

    Instead of being lent to customers, the reserves created by QE have persistently sat on bank balance sheets or been recycled into government securities. US commercial banks now have holdings of cash and government securities in excess of loans to customers. This echoes precisely what was observed in Japan when QE was implemented.

    The sclerotic credit growth reflects the fact that banks are capital constrained to varying degrees, due to losses and also planned increases in regulatory capital reserve requirements. A fragile financial system and the risk of funding shocks means that banks are husbanding liquidity. The uncertain economic outlook has also made banks cautious in extending credit to entities, other than those that are “too big to fail.”

    The general impact on real economic activity has been limited. The Fed’s QE programs to date have reduced long term interest rates, but bank credit has contracted, the housing market remains weak and economic recovery remains tentative. The experience is consistent with that of Japan where a prolonged period of QE did not result in economic recovery, growth, reduced unemployment or inflation.

    http://www.marketwatch.com/story/central-bank-voodoo-isnt-working-2011-04-27?pagenumber=1

    Rate this comment: Thumb up 0

  202. 202
    pfft says:

    By Blurtman @ 200:

    RE: pfft @ 197 – I never said not raising the debt ceiling would not matter. I said there is more than enough money to pay bondholders without raising the debt ceiling and that Geithner lied when he said not to raise the debt ceiling would trigger default by the USG. The links are all above. You cannot seem to comprehend written text, apparently believing that the excerpted Geithner letter to congress were my words. Pointlessly argumentative, ignorant and lazy is no way to go through life, son.

    I don’t think you understand. I said days ago to post something that said not raising the debt ceiling wasn’t a problem. I didn’t say link to what geithner said. post something like an op-ed or a blog post from something like cato or some hack republican economist. how hard is that to understand? it’s like pulling teeth. my guess is you can’t find it. if you could you would have posted it days ago.

    you posted a link from karl d. he’s a crazy tea-partier who used to have a newt gingrich gavel. who listens to him?

    Rate this comment: Thumb up 0

  203. 203
    pfft says:

    By Blurtman @ 201:

    Central bank voodoo isn�t working
    Quantitative easing in all its many forms hasn�t helped

    I posted links to krugman 6 months ago saying it wasn’t all that great.

    Rate this comment: Thumb up 0

  204. 204
    David Losh says:

    RE: pfft @ 202

    Oh, sorry, you are also correct there are no links like that. The entire economic system, as we know it, would collapse if we don’t raise the debt ceiling. That is very true.

    There is no political will to change our present course. My only question is where Scotsman sees Armageddon based on all the numbers presented in the past few days.

    It looks to me as though we have a manageable budget if Congress would work together. Both Bush, and Obama followed the same course of action by dumping in massive amounts of currency. It also looks like every major government player, except Russia, has done the same thing.

    I also don’t see why global corporations, who have benefited the most from this free currency, don’t step in to help make the economy more robust, and in turn pay a fair share of taxes.

    Rate this comment: Thumb up 0

  205. 205
    One Eyed Man says:

    T. Boone Pickens was on CNBC at 5AM today. He said an economist is a numbers guy who doesn’t have enough personality to be a CPA.;-)

    He also said he now has 200 sponsors in the House for a bill to provide 5 billion in tax credits over 5 years to subsidize the extra cost to put about 150,000 long haul NG fueled big rigs on the road. He said the sponsors were from both parties in about equal numbers. The bill will supposedly come up for a vote in May.

    Also on CNBC, Moody’s reported they had blow out first quarter profits. Its also rumored that they’ve reached a settlement decree with the Dept of Justice. The settlement will involve no monetary compensation but they’ll have to change their name to “Hank Moody’s,” their ratings will be called “Californications” and at the end of each rating they will include a required disclosure that states: “Why are you looking at us like we just _____ed your cat?”

    Moody’s ratings will now be available in the following format.

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

    Once again, my apologies to The Tim for the paragraph on Moody’s.

    Rate this comment: Thumb up 0

  206. 206
    DeeDee says:

    I’m hoping to start some conversation here about what to invest in other than a house…I am a renter because the math supports that it is best for now…..I am investigating what to invest in and I am in agreement with many of the regulars here that the economy is not stable. I avoided the housing crash and the stock crash by cashing out in 2007…now what? I would appreciate some intelligent input on this topic. I am thinking about investing in land…kinda wish I had 3 years ago.

    Rate this comment: Thumb up 0

  207. 207
    Kary L. Krismer says:

    By One Eyed Man @ 205:

    He also said he now has 200 sponsors in the House for a bill to provide 5 billion in tax credits over 5 years to subsidize the extra cost to put about 150,000 long haul NG fueled big rigs on the road.

    That would be good news for those who heat with oil.

    I wonder if that’s for the cost of the trucks or the fueling stations. I wouldn’t think the extra cost for the truck would be that significant, given what those things cost.

    Rate this comment: Thumb up 0

  208. 208
    Blurtman says:

    RE: pfft @ 202 – How about debating the issue itself? My position is that at about 5% of total spending, interest on the debt is in no danger of being unpaid, and therefore that the USG is in no danger of defaulting on its bonds, and therefore that Tim Geithner is lying when he claims otherwise.

    Rate this comment: Thumb up 0

  209. 209
    pfft says:

    By Blurtman @ 208:

    RE: pfft @ 202 – How about debating the issue itself? My position is that at about 5% of total spending, interest on the debt is in no danger of being unpaid, and therefore that the USG is in no danger of defaulting on its bonds, and therefore that Tim Geithner is lying when he claims otherwise.

    still can’t post a link huh?

    anyways you are wrong. the government has to issue a trillion or so a year in new debt to pay for the government. if they can’t they have to slash spending by more than a trillion dollars. do you really think they can do that and slash everything except debt payments? of course not.

    the catch is because fiscal contraction is contractionary, you have to cut more than a trillion dollars to get rid of the deficit because that will reduce revenues. there is no credible plan to cut a trillion from the government and not touch debt payments. the US would default.

    austerity FAILS real-time in Portugal and Greece. this was predicted by Keynesians before hand.

    Greek Deficit Exceeds Target Set by Bailout
    http://www.nytimes.com/2011/04/27/business/global/27euro.html?_r=2&scp=2&sq=greece&st=cse

    austerity reduces demand which lowers growth and tax revenues. that makes debt levels higher.

    the best way to deal with the deficit is to get people back to work paying it off. there is also the added benefit of less people collecting food stamps and unemployment which lowers the deficit.

    Rate this comment: Thumb up 0

  210. 210
    pfft says:

    By Blurtman @ 208:

    RE: pfft @ 202 – How about debating the issue itself? My position is that at about 5% of total spending, interest on the debt is in no danger of being unpaid, and therefore that the USG is in no danger of defaulting on its bonds, and therefore that Tim Geithner is lying when he claims otherwise.

    you are wrong about this point also. if the bond market doesn’t think issuing no more debt is good it would raise interest rates which would make interest payments much higher. we’d have to cut even more spending. this would reduce demand and cause more cuts. this is the austerity spiral happening in greece and portugal right now.

    Rate this comment: Thumb up 0

  211. 211
    pfft says:

    so sad.

    Deficit Hawk Drums Drown Out Cries of Jobless
    http://my.firedoglake.com/dakine01/2011/04/26/deficit-hawk-drums-drown-out-cries-of-jobless/

    Rate this comment: Thumb up 0

  212. 212
    Scotsman says:

    RE: One Eyed Man @ 205

    “Why are you looking at us like we just _____ed your cat?”

    OK, just when I think I’ve got an inkling of where your brain is at you pull this stuff. I did not see that one coming.

    What do you have against cats? Or are you “captivated” by them? ;-)

    Rate this comment: Thumb up 0

  213. 213
    David Losh says:

    RE: DeeDee @ 206

    I think the best investment is in small business. On my desk some place is a flyer from West Seattle Natural Energy. I haven’t researched the company at all. It’s here because I think it’s a great idea for a company that could expand in a number of ways.

    Let’s take something you love and look at the business aspects, or profit potential, of it.

    Think and Grow Rich is a book that I keep on my other desk, because it’s worth rereading. The guys who started the Red Balloon Company were just a couple of guys who saw balloon delivery in Phoenix, I think, and started that business here. They liked the concept, and grew into a global balloon enterprise.

    I prefer to have control over how much I win or lose depending on my own abilities. Other people invest in ideas that look good.

    I write a lot about a guy who buys Volks Wagen parts. It’s what he knows, makes a good living at it, loads up the bus, and makes rounds to swap meets. A woman, who has now passed, left an estate worth millions of dollars in Christmas Decorations. I’ve also said that I like cars. Some cars are worth garaging.

    There’s no limit to what you can make if you have a passion for something. If you just want to invest, short term business loans, within your own community, are something that I think will pay higher returns. You can buy a tile saw for a person who does tile, or do advertising for your local hair salon, start a service business for yourself, or sell a local product you believe in. That guy who sells bird houses? Builds them with scrap lumber, sells them for $30 and takes less than an hour to make.

    My opinion is that you have all the investment opportunity in the world within three miles of your home.

    Rate this comment: Thumb up 0

  214. 214
    One Eyed Man says:

    RE: Scotsman @ 212

    For the record, my love of animals including cats, is purely Platonic. That’s my story and I’m sticking to it. The quoted language is just a paraphrase of a line stolen from Duchovny in Californication ( a show in which he plays a depraved character named Hank Moody). It was intended to place Moody’s in the light Blurtman would cast Moody’s (depraved and beyond redemption). To some degree, I share Blurtman’s belief that ratings agencies are depraved, but I try not to begrudge anyone their right to redemption.

    Rate this comment: Thumb up 0

  215. 215
    DeeDee says:

    RE: David Losh @ 213 – I have also thought about investing in a Franchise or starting my own business..we owned our own computer consulting business for 12 years..I know the good and bad of that..our plans have changed now..my husband has a very good salaried job in his field, and I am one interview away from a good job as well…kids have started working and we are looking for a place to diversify our savings out of cash…I don’t have faith in real estate or the stock market. I think gold and silver are also a bubble (wish I rode that one on the way up to) but we are safe people…haven’t lost any money but haven’t made any either. I am worried about the US dollar.

    Rate this comment: Thumb up 0

  216. 216
    Scotsman says:

    RE: David Losh @ 213

    David, sometimes you nail it. This is one of them. Then there are other days. . . ;-)

    Rate this comment: Thumb up 0

  217. 217
    Blurtman says:

    RE: pfft @ 209 – Let’s stay on target. The debate is not whether austerity is good or bad, but whether Tim Geithner lied.

    The facts: USG spending – approximately $3.5 trillion. USG revenue – approximately $2.1 trillion. Interest payments as a percent of total USG spending – approximately 5% (around $200 billion.)

    To balance the budget would require approximately $1.4 trillion in spending cuts, or approximately 37% reduction in spending. There is more than enough room in the remaining $2 trillion to pay interest on the debt, even if as a result of the cuts, tax revenue would decline.

    You lose. Geithner lied.

    Rate this comment: Thumb up 0

  218. 218
    Blurtman says:

    RE: pfft @ 210 – Interesting perspective. So Greece should issue more debt then, to lower the interest rate on their existing debt. Sounds like a great plan!

    Rate this comment: Thumb up 0

  219. 219
    David Losh says:

    RE: DeeDee @ 215

    Silver, and gold are really a drain on your resources from a buy, and sell stand point. Buying is great, selling is difficult. Diamonds are also fickle. Jewelry however can be a great investment. You put it in a safety deposit box and forget about it. When you want to sell you take it out one piece at a time, put it on Craigslist, EBay, or whatever, call it a family heirloom, cry a little bit, and sell to a private party. You can buy using a little ad asking for a wedding set for cheap, or offer to purchase estate jewery.

    That’s just an example using gold as a starting point.

    You can do anything. The return on an investment can be for anything.

    If you live in Seattle maybe you know who Henry is. Henry did building art in Ballard, Fremont, and around. A woman I know bought some of his early work and just sold them to pay for her wedding.

    How about fishing poles, reed fishing baskets, or lures? Anything.

    Rate this comment: Thumb up 0

  220. 220
    David Losh says:

    RE: Scotsman @ 216

    I’m going to start dumping corporate welfare links here as a counter point to some of the links you put up about how screwed we are with the deficit.

    That’s not actually my point. Our tax system is all screwed up. Reagan started to fix it with the Grace Commission. Bush the first side tracked the spending with his no new taxes. Clinton raised taxes, then never addressed spending. Little George sold us all down the river by giving away the company store to his dad’s buddies.

    We need Congress to stop amending every piece of legislation with more give aways, usually to the very wealthy. We need a comprehensive set of spending cuts coupled with strategic tax increases, or at least plug some glaring tax loop holes.

    http://www.cato.org/pubs/handbook/hb105-9.html
    http://www.ourfuture.org/corporate-welfare

    Rate this comment: Thumb up 0

  221. 221
    Blurtman says:

    RE: David Losh @ 219 – Many folks warn about the impracticalities of owning gold. What is your experience cashing in something like Canadian Maple Leafs?

    It is hard to deny the long term trend in gold. $300 to $1,500 in 10 years is about a 20% average annual return. You would have doubled your investment in five years, and tripled it in seven.

    Rate this comment: Thumb up 0

  222. 222
    David Losh says:

    RE: Blurtman @ 221

    I took a hit on the conversion of gold, that’s what it’s called, conversion to cash. When I did I doubled my money in six months.

    Coins need a market place. At $300 you would be buying at $225, at $1500 you would be buying at $1200. You have to get a deal, or why buy it?

    Holding the gold is no picnic either. It needs to go in a safe, or safe deposit box.

    You are always selling the gold at a time of another investment opportunity so it isn’t always the right time to sell gold. The buyer pool is also very small and the people buying or selling gold are pretty tight with a buck.

    Rate this comment: Thumb up 0

  223. 223
    pfft says:

    By Blurtman @ 217:

    RE: pfft @ 209 – Let’s stay on target. The debate is not whether austerity is good or bad, but whether Tim Geithner lied.

    The facts: USG spending – approximately $3.5 trillion. USG revenue – approximately $2.1 trillion. Interest payments as a percent of total USG spending – approximately 5% (around $200 billion.)

    To balance the budget would require approximately $1.4 trillion in spending cuts, or approximately 37% reduction in spending. There is more than enough room in the remaining $2 trillion to pay interest on the debt, even if as a result of the cuts, tax revenue would decline.

    You lose. Geithner lied.

    it’s laughable to think that interest payments wouldn’t be touched. two of our biggest expenses are the military and SS. you think we’re going to cut those and not touch debt payments? you don’t know the budget or the politics then.

    “To balance the budget would require approximately $1.4 trillion in spending cuts, or approximately 37% reduction in spending.”

    wrong. remember we went over this again and again during the Greece crisis in 2010. reducing spending at a time like this reduces revenue because it depresses demand. the multiplier is 0.65. by cutting $1.4 trillion we’d still end up with $500 billion of new debt to issue only we can’t because we’ve reached the debt ceiling. #FAIL!

    in order to enact your cuts we need to cut $2 trillion. good luck with that while trying to not default.

    the math doesn’t add up.

    Rate this comment: Thumb up 0

  224. 224
    pfft says:

    By Blurtman @ 218:

    RE: pfft @ 210 – Interesting perspective. So Greece should issue more debt then, to lower the interest rate on their existing debt. Sounds like a great plan!

    I didn’t say that. this should have been all thought out when the Euro was put together. it’s the original sin of the euro. greece if it had it’s own currency would be Iceland(who hasn’t been in the news in years) instead of greece. the currency would plunge and an export recovery would begin. grinding deflation makes repaying debt impossibel.

    what should have happened since greece has the euro is some combination of default(which would hurt German banks btw) and a low interest loan from the EU.

    the failure of austerity was predicting by the keynesians in the summer of 2010 by people you guys continually bash…

    Rate this comment: Thumb up 0

  225. 225
    Blurtman says:

    RE: pfft @ 223 – Whether or not Congress can agree on budget cuts is not the topic of the debate. Stay on target. Even under your scenario, $1.5 trillion would remain, more than enough to pay the current $200 billion in interest. it would be truthful if Geithner said that if we don’t extend the debt ceiling, we have to cut this much and cut these programs. If he did not want to induce a panic, he could say that even if these cuts were enacted, which he would not recommend nor foresee, bondholders would still be paid as there would be more than enough money and they would be at the front of the line. But to state categorically that no debt ceiling extension = default is an out and out lie. How can you logically aruge that no one would vote for this size of cuts, but that interest payments would be part of the cuts if enacted? Doesn’t have to be the case at all. Mathematically, it is obvious, hence he lied.

    Rate this comment: Thumb up 0

  226. 226
    David Losh says:

    RE: Blurtman @ 225

    Tecniquely he is correct we would default on something. Bonds are backed by trust. There would need to be a workable plan on the table that allowed for just paying bond holders while other committments were left unpaid. Default is default, it’s not an isolated incident.

    However, leaving Geitner? out of the equation, the United States, like any country, could stop the madness, and pay what it can afford to pay. To use the house hold budget as an example, if Americans just priotitized thier bills, and paid what was allowed in thier budgets, with a clear understanding they needed to pay off debt, we would all be more prosperious.

    Rate this comment: Thumb up 0

  227. 227
    Blake says:

    Not sure if Kary is reading this and still believes that speculators have NOT had an adverse affect on real food prices…
    http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?print=yes&hidecomments=yes&page=full
    -snip- The result of Wall Street’s venture into grain and feed and livestock has been a shock to the global food production and delivery system. Not only does the world’s food supply have to contend with constricted supply and increased demand for real grain, but investment bankers have engineered an artificial upward pull on the price of grain futures. The result: Imaginary wheat dominates the price of real wheat, as speculators (traditionally one-fifth of the market) now outnumber bona-fide hedgers four-to-one.

    Rate this comment: Thumb up 0

  228. 228
    Blake says:

    Guys… we just gotta start our own bank: Seattle Bubble Bank!?
    http://www.ritholtz.com/blog/2011/04/bank-arbitrage/
    -snip- Q2 2009, Citigroup received over $23 billion in Fed loans with an interest rate of 0.5% while holding $24.3 billion in U.S. government securities with an average yield of 2.3%.
    … Similar arbitrage has existed for the top 20 banks since the Fed took rates down to zero.

    The bailout has always been about rescuing the banks, their management, shareholders, and most especially, their creditors and bond holders.
    -end quote-

    Do the numbers… 1.8% of $23 billion = $414 million in profit!
    Heck, I could be a banker!!!

    Rate this comment: Thumb up 0

  229. 229
    pfft says:

    By Blurtman @ 225:

    RE: pfft @ 223 How can you logically aruge that no one would vote for this size of cuts, but that interest payments would be part of the cuts if enacted? Doesn’t have to be the case at all. Mathematically, it is obvious, hence he lied.

    mathematically huh? that’s all you’re considering? nothing political? sure during a war and a recovery from the bush great recession we’ll make deep cuts to SS and the military but keep paying those bond holders! yeah.

    Rate this comment: Thumb up 0

  230. 230
    Blurtman says:

    RE: David Losh @ 222 – I have never bought or sold gold, bur a few dealers (http://www.golddealer.com/) charge about 3% either way. So in a buy and sell round trip hypothetically one would lose about 6%. If you spread that out over several years, the hit gets averaged out. Nowhere on these dealers’ websites is a guarantee that they will re-purchase the gold.

    You are saying that gold is not very liquid I guess, but your 25% cut seems to be at odds with the advertised 3% re-purchase cut. Could you shed some light on this discrepancy?

    Rate this comment: Thumb up 0

  231. 231
    Blurtman says:

    RE: pfft @ 229 – Well, there is no way the debt ceiling will not be extended, and now we are getting somewhere. Geithner lied for politcal reasons as you insinuate. Imagine if he threatened the Republican House with having to slash Social Security and Medicare/Medicaid if the debt ceiling were not extended. Rosuing applause would result. Of course in Washington, what Geithner said would not be considered to be a lie, but a skillful spinning of the truth, I suppose. Part of the problem.

    Rate this comment: Thumb up 0

  232. 232

    RE: Blake @ 227 – Total BS.

    But where do you think these funds are storing all the food? Remember to actually affect the prices they have to hold the product off the market. Food might be a bit easier to store than oil, at least in some crops, but it’s still unlikely it’s something someone is going to do.

    Rate this comment: Thumb up 0

  233. 233
    Blurtman says:

    RE: David Losh @ 226 – Depends what your definition of “is” is, eh? Geithner is on the record of claiming a default on the national debt.

    “Treasury Secretary Timothy Geithner says Republican leaders have privately assured the Obama administration that Congress will raise the government’s borrowing limit in time to prevent an unprecedented default on the nation’s debt.”

    http://www.usatoday.com/news/washington/2011-04-17-debt-limit.htm

    Rate this comment: Thumb up 0

  234. 234

    By Blake @ 228:

    Do the numbers… 1.8% of $23 billion = $414 million in profit!
    Heck, I could be a banker!!!

    You must be quite the business person if you can run a company with no expenses! ;-)

    Rate this comment: Thumb up 0

  235. 235
    DeeDee says:

    RE: Blake @ 228 – this sounds interesting

    Rate this comment: Thumb up 0

  236. 236
    Blurtman says:

    The recovery gathers steam, or at least grease:

    “(Bloomberg) McDonald’s Corp. (MCD), the world’s biggest restaurant chain, said it hired 24 percent more people than planned during an employment event this month.

    McDonald’s and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000.

    The April 19 national hiring day was the company’s first, said Danya Proud, a McDonald’s spokeswoman. She declined to disclose how many of the jobs were full- versus part-time. McDonald’s employed 400,000 workers worldwide at company-owned stores at the end of 2010, according to a company filing.”

    http://www.doctorhousingbubble.com/economics-trends-wages-home-prices-lower-mcjobs-college-student-loan-bubble-debt-shadow-inventory/#more-4549

    Rate this comment: Thumb up 0

  237. 237

    RE: Blurtman @ 236 – Ignoring the employer, I’m not really sure that helps the economy because it probably to a great extent means some existing employees will work fewer hours. It might help the outflow of government funds to unemployment expenses.

    Rate this comment: Thumb up 0

  238. 238
    Blurtman says:

    RE: Kary L. Krismer @ 237 – Right. It is troubling, to say the least, that 1 million people applied for these jobs. It would be interesting to know the breakdown – chronically unemployed, seniors impoverished by the Fed’s low interest rate, money printing policies, unemployed college grads, etc. Not a good indication of what this economy has become and what it is by any stretch of the imagination, although I expect pffft to describe why this is actually a good sign.

    Rate this comment: Thumb up 0

  239. 239
    Blurtman says:

    One Million Exhausted Jobless Benefits in Past Year

    “Roughly 1 million people in the U.S. were unable to find work after exhausting their unemployment benefits over the past year, Labor Department data released Thursday suggest.

    Economists said the back-of-the-envelope calculation is yet another sign that the labor market remains weak.

    About 8.2 million idled workers were receiving unemployment benefits as of the week ended April 9, the Labor Department said in its weekly jobless claims report. This compares with about 10.5 million individuals at the same time last year, resulting in a decline of roughly 2.3 million people.

    The federal government estimates that the economy created 1.3 million jobs during the 12 months ended in March.

    “That leaves, roughly speaking, about 1 million people who have exhausted their unemployment benefits and have very likely not yet found a job,” said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York.

    But Nicholas Tenev of Barclays Capital said a precise figure is hard to calculate. He estimated the labor force has shrunk by 638,000 since March of last year, largely because of a demographic shift as baby boomers retire.

    “While we don’t have an estimate of our own of how many people have exhausted all their benefits and are unable to find work, 1 million sounds high to me,” Tenev said.”

    The analysis is a bit shaky. Of the claimed 1.3 million created jobs, new grads as well as those not on unemployment are filling these jobs, too, so it is very likely that the number of unemployed who have recently exhausted unemployement benefits in the last year and have no source of income is higher than 1 million.

    http://blogs.wsj.com/economics/2011/04/28/one-million-exhausted-jobless-benefits-in-past-year/

    Rate this comment: Thumb up 0

  240. 240
    David Losh says:

    RE: Blurtman @ 230

    Why would you buy gold at par? Let’s use the example of buying at $900 per ounce. You put it in the safe and wait. You are out of pocket $900 while you wait. It’s the lost opportunity cost. With $900 of investment capital I can do a lot of things to get a greater return over the course of time that it takes the gold to go up to $1500 per ounce.

    Gold is a real crystal ball investment. You could say gold always goes up, but you would be wrong about that, especially this time.

    Things will either go to heck quick, or they will get better. If things go to heck no one, and I mean no one, will be bartering in gold. That’s just ridiculous. You can’t eat gold. That’s why the super seeds people are making a fortune.

    If things get better people will convert back to cash, and opportunity.

    Rate this comment: Thumb up 0

  241. 241
    David Losh says:

    RE: Blurtman @ 238RE: Kary L. Krismer @ 237RE: DeeDee @ 235RE: Blake @ 228
    A bank is a good start. I have made money in all of the stupidest ways in the world. There is money in everything you can imagine.

    Micro loans are an excellent way to make money. A tile setter who was doing tub surrounds for us at $700 using subway tiles told me if he had one of those big a$$ tile saws he could do a lot more. We bought it, he did more jobs, that he found, paid us, plus interest, and expanded what we could offer to our clients.

    So let’s say it was $1000, he paid us back $1100 in six months, and we had a service that we could sell, and mark up.

    If you just look around there is money everywhere, and that’s what makes this a great country. Software Engineer keeps talking about illegal immigrants, and Scotsman is talking about welfare, or maybe they are both talking about the same thing I can’t keep track.

    The fact is that people come to this country because they are allowed to make money here. They may not have the right to work at McDonald’s, but they are allowed to have a business. All they have to do is figure out how to pay the taxes. We allow foreign investment.

    Two women I know sell tamales for events in town. They compete with each other. One is out doing the other.

    Labor is by far the greatest asset we have right now. Really, who wants to work at McDonald’s if they can make more money doing less work?

    Anyway it’s the end of the month so I just thought i would throw that out there.

    Rate this comment: Thumb up 0

  242. 242
    Blurtman says:

    RE: David Losh @ 240 – Speculation. The momentum is there, rightly or wrongly tied to a dropping dollar. It is enables a bit of diversification, too. BTW, if you can routinely turn your money into a 20% annual return, that is a money machine, so good luck in your ventures, that is great to hear. I’m looking at an almost nil savings rate and CD rate, and if you factor in inflation, a net negative return. I can sit out changes in gold for the long term, over which time I expect it to go up. I thought to go in at 1200. If I go in at 15-1600, and it drops to 1000, I can live with that. Is it speculation? Absolutely. Can I predict if and when it will drop? Nope.

    Rate this comment: Thumb up 0

  243. 243
    David Losh says:

    RE: Blurtman @ 242

    Every one is looking for a sit on your ess investment. It’s always about easy money. Microsoft rich, off of sitting at a computer is today’s thing. Gold is always the luxury investment.

    Let’s look at my point from a different way. If I buy a shovel for $20, and charge $15 per hour to dig, then my return is astronomical. If I buy 20 shovels and pay 20 people $10 per hour to dig, still bill out at $15 per hour, then I make $100 per hour, and it takes me four hours to recover my original investment, and anything I make above that is a return.

    All I need is a return on my investment. I’ve paid off my 20 shovels, I’ve paid off my workers, I get a return. After that I can gift each worker the shovel, each worker has an opportunity, and I always have the opportunity to do more.

    I know some one will say buy a back hoe, or some other cute remark, but the fact remains there is always more money. There is always a return on any investment, and if you want to wait, great, but you will always have a lost opportunity.

    Rate this comment: Thumb up 0

  244. 244
    pfft says:

    By Blurtman @ 236:

    The recovery gathers steam, or at least grease

    did you see cat earnings? not bad. the recovery is gathering steam there is no doubt about that.

    Rate this comment: Thumb up 0

  245. 245

    RE: pfft @ 244 – My cats are still unemployed. :-(

    Rate this comment: Thumb up 0

  246. 246
  247. 247
    Blurtman says:

    Geithner called out by Congress for his bullshat. Terrible choice for Treasury Secretary unless you are a Wall Street bank.

    H.R. 41 Full Faith and Credit Act – To require that the Government prioritize all obligations on the debt held by the public in the event that the debt limit is reached.

    http://www.opencongress.org/bill/112-h421/show

    “A pitiful scare tactic already being used by the Treasury Secretary in the debt ceiling debate is the threat of allowing the federal government to default on its obligations,” Jordan said. “This is government mismanagement at its worst. Secretary Geithner knows full well that he has the authority to prioritize federal spending so that default is not an option. This bill will take Secretary Geithner’s disastrous scenario completely off the table.”

    http://www.placercountyonline.com/2011/01/26/mcclintock-bill-would-prevent-us-from-defaulting-on-debt/

    Rate this comment: Thumb up 0

  248. 248

    RE: Ben @ 246 – That seems like an odd story. Cat is well known as the type of company whose sales recover before the overall economy recovers. If the article were written as an explanation as to why that is, that story would make a bit more sense. Instead it’s written as if they think they’ve uncovered some great secret or something.

    Rate this comment: Thumb up 0

  249. 249

    RE: Blurtman @ 247 – I like the fact that the second piece you posted links to and describes the contrary opinion. It’s fairly balanced. Here’s the contrary piece:

    http://www.treasury.gov/connect/blog/Pages/Proposals-to-Prioritize-Payments-on-US-Debt-Not-Workable-Would-Not-Prevent-Default.aspx

    Not answered by either is just where such a prioritizing would get us. I’m presuming all non-essential US Government employees would be laid off, but what about payments to military, social security, medicare, medicaid, etc.? If not raising the debt limit would be basically the same as not having a budget, then I would agree Geithner is over-stating the case. And I’d even agree he’s over-stating his case by making it sound as if there would be an immediate default on the debt instruments. But that doesn’t mean there wouldn’t be an effect beyond mere delay if entitlements were delayed.

    Rate this comment: Thumb up 0

  250. 250
    Blurtman says:

    RE: Kary L. Krismer @ 249 – Right. Not extending the debt ceiling would have to cause huge cuts to budgeted programs. That I don’t think, is at all debatable. But on the basis of his public statements, Geeithner is purposely mixing default on the national debt with cuts to programs. This serves to confuse the public, as well as the media, which is not hard to do, I guess.

    And it is extremely debatable if by cutting budgeted programs that the bond vigilantes would jack up rates on Treasuries. The opposite might very well occur.

    My point has been that Geithner has lied, and has lied transparently and poorly, which he has done several times publicly on major issues. He is a disgrace, but then again, so was Hank Paulson.

    Coke or Pepsi, that’s all you get.

    Rate this comment: Thumb up 0

  251. 251
    Ben says:

    RE: Kary L. Krismer @ 248 – its not disputable as it is from CAT executives. It’s always helpful to know the context before drawing conclusions.

    Rate this comment: Thumb up 0

  252. 252
    David Losh says:

    RE: Kary L. Krismer @ 232

    This is really the discussion that is important. Agribusiness, along with energy, is dominated by quick buck speculators who dabble in pushing up prices, of crashing prices as they buy long or short.

    There is no storage. It’s based on production numbers of phantom product that is always there. You don’t need to start, or stop production. You’ve pointed that out.

    The question is if production is a global constant, why is it so volatile?

    Rate this comment: Thumb up 0

  253. 253
    Blake says:

    RE: Kary L. Krismer @ 234
    How much overhead and staff would you need to borrow form the govt and buy the govt’s bonds?
    -snip- Q2 2009, Citigroup received over $23 billion in Fed loans with an interest rate of 0.5% while holding $24.3 billion in U.S. government securities with an average yield of 2.3%.

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.