Global Economic May 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.

327 comments:

  1. 1
    Blurtman says:

    (Re-posted from previous thread.)

    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/

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  2. 2
    David Losh says:

    reposted

    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, or 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?

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  3. 3

    RE: David Losh @ 2 – Production isn’t a constant, and it shifts. For example, it’s claimed that our ethanol production doesn’t really save any energy because it takes as much energy to produce it as what is produced. But what it does do even if that claim is disputed or false, is take away land which would otherwise be growing food. That drives up the price of food (and not just corn).

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  4. 4
    pfft says:

    By Blurtman @ 1:

    (Re-posted from previous thread.)

    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.

    yeah because the last thing we need is flexibility.

    remember republicans wanted to pay china first before anyone else? even americans.

    country first?

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  5. 5
    Blurtman says:

    RE: pfft @ 4 – The Fed is the largest holder of US debt, followed by countries including China and Japan, and of course, city and state governments, pension funds, insurance companies, mutual funds.

    No one is suggesting that China be paid first, only that paying everyone is possible without extending the debt ceiling, and that these folks, all of them, Americans and furreigners alike, be given top priority. It is troubling that Geithner claims that they will not be given priority, and equally troubling that he claims there will not be enough money to pay them. The former is a policy preference, the latter an out and out lie.

    In some people’s minds, the party is over, it is just a matter of how fast the punch bowl is taken away. And not the low interest rate punch bowl. That seems to be unmovable.

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  6. 6
    pfft says:

    By Blurtman @ 5:

    RE: pfft @ 4 – The Fed is the largest holder of US debt, followed by countries including China and Japan, and of course, city and state governments, pension funds, insurance companies, mutual funds.

    No one is suggesting that China be paid first, only that paying everyone is possible without extending the debt ceiling, and that these folks, all of them, Americans and furreigners alike, be given top priority. It is troubling that Geithner claims that they will not be given priority, and equally troubling that he claims there will not be enough money to pay them. The former is a policy preference, the latter an out and out lie.

    In some people’s minds, the party is over, it is just a matter of how fast the punch bowl is taken away. And not the low interest rate punch bowl. That seems to be unmovable.

    1. the debt is held 70% by Americans.

    http://www.econbrowser.com/archives/2010/07/whos_buying_all.html

    2. “No one is suggesting that China be paid first”

    yes.

    ‘Pay China First’ — Republicans’ Wild Plan To Avoid U.S. Debt Default
    http://tpmdc.talkingpointsmemo.com/2011/01/pay-china-first—-republicans-wild-plan-to-avoid-us-debt-default.php

    3. “The former is a policy preference, the latter an out and out lie.”

    no. simple math shows it’s true. it will be tough to make a cut in SS and defense spending in a time of war and during an election. who knows how long the debt ceiling fight could go on.

    4. “In some people’s minds, the party is over”

    government spending has not grown that much. spending is not out of control. we have a deficit because of the bush great recession, the bush tax cuts and his unpaid for social programs and wars. 2/3 of the debt is from republican presidents.

    5. this is all a ruse to hold the budget hostage to republican social demands like abortion, tax cuts for the rich and tax cuts for corporations which have little to do with the deficit.

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  7. 7
    David Losh says:

    RE: Kary L. Krismer @ 3

    Ethanol drives up the price of many products, such as meat.

    We are way beyond the 1970s or what the commodities market was before financial modeling. A computer can make global calculations based on a lot of things. Here in the United States we have alternative choice in foods. In part of Mexico, to follow the ethanol line of thinking, corn is the main staple in the diet. When we play games with our government changing ethanol per cent in gasoline it changes the price base of corn.

    In other words, corn will be sold to whoever pays the premium. Gas wins, and people go hungry. It’s the same for all speculation in commodities. The production doesn’t change, the supply doesn’t change, the need for the commodity doesn’t change, the demand doesn’t change.

    Only the price of the speculation changes.

    So if you’re think grain silos of wheat, or tankers of oil, along with bushels of corn, they are constantly moving in the market place; only the price changes.

    At some point the price will crash. Speculators will sell short. They sell short because the consumer base can no longer absorb the costs. In a way financing has created this false inflation in the market place, because we are only trading paper in this process.

    The good news in all of this is that no one really cares about the product, the produce, the perishables. The commodities market is far removed from the end product, and that product, once it pays a determined return can be dumped into programs like Food Stamps, relief efforts, or global charities.

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  8. 8
    David Losh says:

    Well let’s talk Barrack Obama killing Osama Bin Laden. That is one big campaign promise kept that will change our global economic discussions. The question is if the target of Qaddafi was a diversion, or a calculated strategy to change the face of terrorism.

    Whatever credibility the United States lost in the past ten years Obama regained this week end.

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  9. 9
    David North says:

    By David Losh @ 8:

    Whatever credibility the United States lost in the past ten years Obama regained this week end.

    A step forward, and a really big one, yes. Regaining all of what’s been lost in recent years (pick whatever number of years that suits your political leanings) will take a lot more than this. But it is a big deal!

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  10. 10

    RE: David Losh @ 8 – It’s just another Obama flip-flop. During the campaign he was in favor of using drones, and instead he used Seals! ;-) :-D

    Seriously, it just shows the good that can happen from staying on task.

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  11. 11
    David Losh says:

    RE: Kary L. Krismer @ 10

    No, he said our intent was to kill him. We needed to kill. We needed to shoot him in the head. We needed it to be a personal attack directed at the evil doer. What Obama did is legal under Islamic Law. It was the best that could have been done. Dumping the body in the ocean was the best solution. The body is intact to enter into whatever his fate will be.

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  12. 12

    RE: David Losh @ 11 – My first paragraph was a joke. I think it would be difficult to be critical of taking out Osama.

    Rate this comment: Thumb up 0

  13. 13
    Blurtman says:

    RE: David Losh @ 8 – A definite plus for the USA and the world. One problem – Pakistan was shielding him. They have nukes.

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  14. 14
    Ben says:

    RE: pfft @ 6
    ***************************************************************
    1. the debt is held 70% by Americans.

    http://www.econbrowser.com/archives/2010/07/whos_buying_all.html
    **************************************************************
    Nice. Year and a half old data from December 2009. QEx never happened, right? I wonder what the data looks like as of 4/30/2011. Go find that for us. TIA.

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  15. 15
    David Losh says:

    RE: Blurtman @ 13

    Pakistan has a lot to answer for. The important thing is that this was a personal kill. The body was disposed of efficiently in accordance with Islamic custom. Burial at sea, I think, is acceptable.

    Little George made a huge mistake of publicizing photos of Saddam’s sons. It was bad that they allowed filming of the hanging, but it showed Saddam dying like a man. Those were very bad mistakes, very bad.

    Obama has shown himself to be a leader. We’ll see what Momar Kaddafy does, but it would be smart for him to have a cease fire, set up a tribal meeting, and find a way out. It’s unfortunate we killed his son, and grand children. There again Momar could have come to an agreement with NATO any time.

    What has happened in Northern Africa, and the Middle East, is historic. The United States has never, in my recollection, shown a leadership role. We have always been the followers, the whiners, and manipulators.

    The nukes have no place in these conflicts. The only reason they exist is because Israel has nukes. It would be against Islamic law to use them, but terrorist might.

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  16. 16
    Blurtman says:

    Debt-Limit Deniers Don’t Buy ’Chicken Little’ Warnings

    A growing number of Republicans are scoffing at warnings that failing to raise the U.S. debt limit would trigger a financial catastrophe. Treasury Secretary Timothy Geithner’s cautions are merely aimed at stampeding Republicans into lifting the $14.3 trillion limit, said Toomey.

    “They don’t want to make any concessions on spending,” he said. The administration is using the specter of a government default “as a cudgel to beat Republicans into submission and to prevent any real cuts” in the federal budget, he said

    http://www.bloomberg.com/news/2011-05-02/debt-limit-deniers-say-geithner-tries-to-stampede-republicans-on-debt-vote.html

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  17. 17
    Scotsman says:

    RE: pfft @ 4

    “remember republicans wanted to pay china first ”

    Gotta link for that?

    Edit- OK, I found your link. What a sophmoric piece of journalism. NO WHERE does it suggest China would be paid first, only that creditors be paid first. I’m not surprised a liberal teet sucker couldn’t understand that concept- gotta keep the milk flowing.

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  18. 18

    RE: Scotsman @ 17 – I always assumed the China first thing was a reference to their holding our debt. I’m not aware of any other reason we’d be giving China money.

    I’d agree it’s over the top, sort of in the same way there are claims made that Rep. Ryan is going to end Medicare.

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  19. 19
    whatsmyname says:

    By Scotsman @ 17:

    RE: pfft @ 4

    “remember republicans wanted to pay china first ”

    Gotta link for that?

    Edit- OK, I found your link. What a sophmoric piece of journalism. NO WHERE does it suggest China would be paid first, only that creditors be paid first. I’m not surprised a liberal teet sucker couldn’t understand that concept- gotta keep the milk flowing.

    Indeed, let’s keep our priorities straight. A legal obligation isn’t really a legal obligation unless it is to capital. We just need a law to say so. Why don’t these people know their place?

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  20. 20
    pfft says:

    By Ben @ 14:

    RE: pfft @ 6
    ***************************************************************
    1. the debt is held 70% by Americans.

    http://www.econbrowser.com/archives/2010/07/whos_buying_all.html
    **************************************************************
    Nice. Year and a half old data from December 2009. QEx never happened, right? I wonder what the data looks like as of 4/30/2011. Go find that for us. TIA.

    the numbers aren’t going to be much different.

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  21. 21
    pfft says:

    so how’s that austerity going one year later?

    Portugal Bailout Agreement: €78 Billion
    http://www.calculatedriskblog.com/2011/05/portugal-bailout-agreement-78-billion.html

    austerity is a complete failure.

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  22. 22
    pfft says:

    By Blurtman @ 16:

    Debt-Limit Deniers Don�t Buy �Chicken Little� Warnings

    A growing number of Republicans are scoffing at warnings that failing to raise the U.S. debt limit would trigger a financial catastrophe. Treasury Secretary Timothy Geithner�s cautions are merely aimed at stampeding Republicans into lifting the $14.3 trillion limit, said Toomey.

    �They don�t want to make any concessions on spending,� he said. The administration is using the specter of a government default �as a cudgel to beat Republicans into submission and to prevent any real cuts� in the federal budget, he said

    http://www.bloomberg.com/news/2011-05-02/debt-limit-deniers-say-geithner-tries-to-stampede-republicans-on-debt-vote.html

    in the next year a trillion dollars of debt will have to be issued.

    cut $2 trillion from the budget and you might have a point. that is not possible though.

    this is absurd.

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  23. 23
    pfft says:

    By Scotsman @ 17:

    RE: pfft @ 4

    “remember republicans wanted to pay china first ”

    Gotta link for that?

    Edit- OK, I found your link. What a sophmoric piece of journalism. NO WHERE does it suggest China would be paid first, only that creditors be paid first.

    yes, everyone before US citizens.

    New Republican legislation in the House and Senate would force the U.S. government to reroute huge amounts of money to China and other creditors in the event that Congress fails to raise its debt ceiling.

    If passed, Toomey’s plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury

    so it’s even worse, they’d pay Goldman Sachs first before grandma.

    why would they pay anyone first? why wouldn’t they just pay whomever is owed?

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  24. 24
    Blurtman says:

    RE: pfft @ 22 – No, even using your multiplier, there is more than enough money to pay bondholders. That is not the issue. The issue is what gets cut if more debt is not issued. It is only opinion that in the event of no debt ceiling extension, bondholders will not be paid. It is fact that there is more than enough money to pay bondholders. It is a lie by Geithner to claim otherwise. He is substituting opinion and policy preference for fact.

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  25. 25
    Blurtman says:

    RE: pfft @ 23 – Nonense. The claim is to pay all bondholders. Your illegitimate discourse labels you clearly as a troll. Someone who even refutes his own links. Don’t you have betetr things to do with your time?

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  26. 26
    Blurtman says:

    Amazing! Eric Holder on C-Span. John Conyers asks him what he is doing to prosecute Wall Street fraud, and Holder launches into a speech about why it was great to protect America by nailing bin Laden.

    Bin Laden, Place Holder’s pathetic shield against all of his incompetent bungling and criminal collusion. Amazing!

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  27. 27
    pfft says:

    By Blurtman @ 24:

    RE: pfft @ 22 – No, even using your multiplier, there is more than enough money to pay bondholders. That is not the issue. The issue is what gets cut if more debt is not issued. It is only opinion that in the event of no debt ceiling extension, bondholders will not be paid. It is fact that there is more than enough money to pay bondholders. It is a lie by Geithner to claim otherwise. He is substituting opinion and policy preference for fact.

    you don’t seem to understand the basic question.

    why would we cut spending by $2 trillion dollars and not touch debt payments? you are not putting together a politically or morally viable plan.

    the US has to issue at least $1 trillion worth of debt. we aren’t going to pay the mortgage instead of the food bill or the heating bill.

    you want China to get their money and grandma to get her SS check cut drastically. if you think that will happen my god you don’t know politics.

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  28. 28
    pfft says:

    By Blurtman @ 25:

    RE: pfft @ 23 – Nonense. The claim is to pay all bondholders. Your illegitimate discourse labels you clearly as a troll. Someone who even refutes his own links. Don’t you have betetr things to do with your time?

    what?

    read again. they admitted it.

    If passed, Toomey’s plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury — that is, if the U.S. hits its debt ceiling. Republican leaders insist they will raise the country’s debt limit before this happens.

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  29. 29
    David Losh says:

    RE: pfft @ 27

    That is the point; it is politics.

    When you look at the debt charts and the spike in spending to debt it’s obvious, to me, that there will need to be a correction. Now would be the time to do that. We can, in fact cut spending, and raise taxes. We can hold the debt ceiling. The politics would be to change some core programs like Social Security, Medicare, and military spending. We can also cut millions of government jobs, programs, and agencies.

    If any one is thinking we can grow our production to match debt they are delusional. We set up, and have a private enterprise system, at some point it will need to stand on it’s own.

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  30. 30
    Blurtman says:

    RE: pfft @ 28 – Debating with you is like picking off deer at the salt lick in your backyard. You are disingenuous and lazy, and you are a troll.

    Here is a link to who owns the US debt:

    http://politicalcalculations.blogspot.com/2011/01/who-owns-us-national-debt.html

    Here is a quote from this link:

    “The United States’ total public debt outstanding was approximately $13.562 trillion at the end of the government’s fiscal year on 30 September 2010. As of 4 January 2011, the United States’ total public debt outstanding has surpassed 14 trillion dollars and is continuing to grow rapidly.

    Despite that near half-trillion dollar increase, the percentage composition of who owns the U.S. national debt shown in the chart above is relatively unchanged. On the whole, U.S. individuals and institutions, when including the Social Security, U.S. Civil Service and Military trust funds own 62.2% of the U.S. national debt, while foreign nations own the remaining 37.8%. ”

    Guess who owns the most? US citizens and US institutions including the Social Security Trust Fund. So one could argue that not paying existing bondholders the number one priority would mean not paying the Social Security Trust Fund.

    In the link you posted you disingenuously use the posturing of a Treasury department hack who misrepresents who would get paid – i.e., China and investment banks, without including US citizens, the Social Security, U.S. Civil Service and Military trust funds. Of course you welcome this hack’s posturing as it supports your own biased viewpoint. But the hack and you are not being truthful. As the link illustrates, China is not the majority owner of US debt, and the Social Security, U.S. Civil Service and Military trust funds own a lot, and so these trust funds also get paid if we make bondholders the top priority.

    Also see:http://www.cnbc.com/id/29880401/The_Biggest_Holders_of_US_Government_Debt?slide=16

    “1. Federal Reserve and Intragovernmental Holdings
    US debt holdings: $5.351 trillion

    That’s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.351 trillion in US Treasury debt. This is the most recent number available (Sept 2010), and marks an all-time high.”

    You are a troll. I don’t understand you motives, and do not want to.

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  31. 31
    What's my name says:

    RE: Blurtman @ 30
    The Toomey bill specifies debt “held by the public”. Stiffing the government generally,and the SSI trust fund in particular is part of the ideology behind these bills.

    So if you remove the $5T in debt held by the government and recalculate, who owns the majority of what remains?

    The treasury hack’s point is that if you pay the bank, but don’t pay the utility bills, you haven’t avoided wrecking your credit. You just insured that the bankers got everything that was to be had.

    These results don’t seem in line with the values you have previously posted. I think you are being had.

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  32. 32
    One Eyed Man says:

    “TrimTabs Explains Why A Weaker Non-Farm Payroll Number Is Coming On Friday”

    http://investmentwatchblog.com/trimtabs-explains-why-a-weaker-non-farm-payroll-number-is-coming-on-friday/

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  33. 33
    David Losh says:

    RE: One Eyed Man @ 32

    There was no inflation. A rise in prices to pay for rampant speculation is a spike, the same as 2008 was a spike.

    Maybe I’m following this more closely than I should. It makes sense though that gas prices will rise, all prices will rise, but a decrease in wages from even last month will put an end to any kind of growth.

    Here in the United States we can absorb these kinds of price hikes. In other parts of the world there will be a severe back lash.

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  34. 34
    One Eyed Man says:

    I don’t necessarily agree with Madeline Schnapp, but I generally think Trim Tabs employment numbers have been more accurate than BLS, or at least been ahead of BLS on changes in the trend. I also found it interesting that Trim Tabs said the following:

    “Wages and salaries increased an adjusted 5.3% year-over-year in April, down from 8.6% y-o-y in March. While moderate economic growth is characterized by year-over-year increases between 5.0% and 5.5%, growth decelerated throughout April.”

    Apparently payrolls are up despite what the bears might say.

    I also find it interesting that no one discussing weakening employment growth has mentioned the situation in Japan. I thought it would probably cause some businesses to freeze hiring plans until they saw how certain issues would play out. I’m also a little surprised that the YOY change in gas prices was 71%, assuming that number is reported accurately. I don’t recall gas being below $2.50 a yr ago. And if you think energy is volitile I guess the government agrees and that’s why its not part of the core, despite those who think its all government voodoo.

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  35. 35
    David Losh says:

    RE: One Eyed Man @ 34

    Riddle me this Batman; the price of oil went down today based on the increase in unemployment filings, and weak employment data in general.

    Interest rates are also headed down which indicates to me a lack of growth. Growth is actually very weak in spite of the spike in oil prices.

    In the face of all the good news we have had these past couple of months, or weeks, it looks like the core of our economy is stable. There is nothing in anything that I read that would indicate inflation, no matter how many times the word is thrown around.

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  36. 36
    Ben says:

    RE: David Losh @ 35http://bpp.mit.edu/

    “There is nothing in anything that I read that would indicate inflation, no matter how many times the word is thrown around.”

    You and Krugman may have something in common. :-)

    http://www.onecitizenspeaking.com/WindowsLiveWriter/monkeys.jpg

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  37. 37
    The Tim says:

    RE: Ben @ 36 – Did somebody say Krugman?

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  38. 38
    David Losh says:

    RE: Ben @ 36

    How do you figure? The oil industry raises prices and the price of every thing goes up. I don’t see that as inflation.

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  39. 39
    David Losh says:

    RE: Ben @ 36

    From your link http://www.econbrowser.com/archives/2011/02/new_indications.html

    Inflation at 1% to 1.6%

    With the amount of trillions of dollars, Euros, Yen, and Yuan dumped into the global economy, interest rates at historic lows, and the price of oil going up because we have volitility in the Middle East, I would expect inflation closer to double digits.

    That’s why I call it a spike, like 2008.

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  40. 40
    David Losh says:

    RE: Ben @ 36

    From your own link http://www.econbrowser.com/archives/2011/02/new_indications.html

    Showing inflation at 1% to 1.6% even with trillions of dollars, Euros, Yen, and Yuan thrown at the global economy. Coupled with the spike in oil prices, and historically low interest rates, I would expect inflation to be closer to double digits.

    I think this is a repeat of 2008 where the consumer base has no ability to absorb the price increases. Commodities don’t equate assets.

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  41. 41
    David Losh says:

    what happened to my comment?

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  42. 42
    David Losh says:

    that worked, let’s try it again.

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  43. 43
    David Losh says:

    RE: Ben @ 36

    From your own link http://www.econbrowser.com/archives/2011/02/new_indications.html
    shows inflation at 1% to 1.6%.

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  44. 44
    David Losh says:

    RE: Ben @ 36

    The site doesn’t like the link.

    Anyway if you read Econobrowser from your own link it shows inflation at about 1% to 1.6%. With the trillions of dollars, Euros, Yen, and Yuan thrown at the globale economy, coupled with historically low interest rates, with the spike in oil prices I would expect inflation to be close to double digits.

    I think this will be like 2008 where the consumer base is restricted from absorbing the price increases. Commodities don’t equate assets.

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  45. 45
    Ben says:

    RE: David Losh @ 38 – That’s why my post was funny. Prices going up all around you and you don’t see inflation. : -)

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  46. 46
    Scotsman says:

    RE: pfft @ 28

    “Social Security beneficiaries and other citizens owed money by the Treasury”

    Rude surprise- social security is legally nothing more than a tax. There is no contractual obligation to pay any of the funds collected to the beneficiary’s. The government can cut it off at any time any be completely within the law. Think about that for a moment. These guys aren’t dumb. Same with prescription benefits, etc.

    But, bonds are a legal obligation, so they should come first, and would in any court of law, because they are a contract.

    You say austerity doesn’t work, as though it is some magic elixir that should fix all our problems. It won’t fix them in the short term. People will have to get by with less, i.e. a lower set of expectations and a lower standard of living. There will be great riots, but nothing will change. Cash flow sets the limits, and the U.S. is only one increasingly smaller and more fragile player in a world economy.

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  47. 47

    By Ben @ 42:

    RE: David Losh @ 38 – That’s why my post was funny. Prices going up all around you and you don’t see inflation. : -)

    What Dave is saying is the price of one commodity going up–oil–is not inflation, even though that works it’s way through the economy into other products. It’s just the price of one product going up. There are people with doctorates in economics who would say the same thing.

    I’ve also said much the same thing, but I express the thought more as being it’s not the type of inflation the fed needs to do anything about, and that it’s counter-productive if they do because they would be clamping down on economic growth.

    Let’s put it this way. Back in the 70s they cut the speed limit to 55 to save fuel and import less oil. Let’s say this time the government instead dictates that every person and company only use 95% of the oil, gas and electricity that they used the year before. That would reduce the price of oil too, but absent efficiency gains it would also mean a 5% reduction in GDP–a fairly catastrophic result. If fighting inflation requires a similar drop in oil prices, you’d get a similar drop in consumption of oil and GDP, and that would not be a good thing. It would be better to simply let the price of oil rise and let other competing forms of energy eventually come into play.

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  48. 48
    Ben says:

    RE: Kary L. Krismer @ 44http://en.wikipedia.org/wiki/Biflation

    I think the biflation scenario is still in play.

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  49. 49
    whatsmyname says:

    By Scotsman @ 46:

    RE: pfft @ 28

    “Social Security beneficiaries and other citizens owed money by the Treasury”

    Rude surprise- social security is legally nothing more than a tax. There is no contractual obligation to pay any of the funds collected to the beneficiary’s. The government can cut it off at any time any be completely within the law. Think about that for a moment. These guys aren’t dumb. Same with prescription benefits, etc.

    But, bonds are a legal obligation, so they should come first, and would in any court of law, because they are a contract..

    Look, we’re being cute again. There is no “contractual” obligation to collect taxes, or enforce most other federal laws either. However, the government has a legal obligation to execute all the laws Congress has passed, provided that they have not been struck down by the courts. The government can cut off SSI, etc. and be completely within the law – so long as Congress passes a law that says so. They could with equal legality tax maturing bonds and interest at 100%, – if Congress passed the law. Absent those changes, there is no legal imperative to favor (or disfavor) bondholder claims. Even your tools in Congress realize this; hence the introduction of these new bills.

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  50. 50
    Blurtman says:

    RE: What’s my name @ 31 – Let’s re-wind to what my initital argument has been – that there is way more than enough money to pay existing bondholders, i.e., Americans, Chinese, Japanese, Martians, trust funds, insurance companies, Ma & Pa Kettle, without extending the debt ceiling. That is an irrefutable, mathematical fact. Also, my argument has been therefore, that once again, Tim Geithner has lied.

    I don’t give a hoot about any bill by any congress critter one way or the other. The argument of the Republicans lays out the fact that there is more than enough money, but they are as disingenuous as the Democrats who are motivated to lie about a bondholder default.

    As I have said repeatedly, in America you can have any soda pop you desire, as long as it is Coke or Pepsi. Also, keep the citizens dumb and compliant with untruthful soundbites and hot button issues.

    They are both FOS and Geithner is a chronic and not very clever liar.

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  51. 51
    pfft says:

    Oh I am sure I just ruined a lot of weekend’s.

    Claim: Krugman is top prognosticator; Cal Thomas is the worst
    http://www.poynter.org/latest-news/romenesko/130485/claim-krugman-is-top-prognosticator-cal-thomas-is-the-worst/

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  52. 52
    pfft says:

    By Blurtman @ 30:

    RE: pfft @ 28 – Debating with you is like picking off deer at the salt lick in your backyard. You are disingenuous and lazy, and you are a troll.

    Here is a link to who owns the US debt:

    http://politicalcalculations.blogspot.com/2011/01/who-owns-us-national-debt.html

    Here is a quote from this link:

    “The United States’ total public debt outstanding was approximately $13.562 trillion at the end of the government’s fiscal year on 30 September 2010. As of 4 January 2011, the United States’ total public debt outstanding has surpassed 14 trillion dollars and is continuing to grow rapidly.

    Despite that near half-trillion dollar increase, the percentage composition of who owns the U.S. national debt shown in the chart above is relatively unchanged. On the whole, U.S. individuals and institutions, when including the Social Security, U.S. Civil Service and Military trust funds own 62.2% of the U.S. national debt, while foreign nations own the remaining 37.8%. ”

    Guess who owns the most? US citizens and US institutions including the Social Security Trust Fund. So one could argue that not paying existing bondholders the number one priority would mean not paying the Social Security Trust Fund.

    In the link you posted you disingenuously use the posturing of a Treasury department hack who misrepresents who would get paid – i.e., China and investment banks, without including US citizens, the Social Security, U.S. Civil Service and Military trust funds. Of course you welcome this hack’s posturing as it supports your own biased viewpoint. But the hack and you are not being truthful. As the link illustrates, China is not the majority owner of US debt, and the Social Security, U.S. Civil Service and Military trust funds own a lot, and so these trust funds also get paid if we make bondholders the top priority.

    Also see:http://www.cnbc.com/id/29880401/The_Biggest_Holders_of_US_Government_Debt?slide=16

    “1. Federal Reserve and Intragovernmental Holdings
    US debt holdings: $5.351 trillion

    Thatâ��s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.351 trillion in US Treasury debt. This is the most recent number available (Sept 2010), and marks an all-time high.”

    You are a troll. I don’t understand you motives, and do not want to.

    go back and read the bill. SS would have to get in line.

    here is a real-world question. suppose by some quirk in debt issuing we didn’t have a enough money one month. would you be ok if the government skipped a social security check for one month? maybe not fund the millitary for a month to make a debt payment?

    you just don’t fundamentally understand politics or math. you have to cut a trillion or so from the budget if you aren’t going to issue debt. even the republican budget requires a raising of the debt ceiling.

    the market is simply not calling for a reduction in spending or not raising the debt ceiling.

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  53. 53
    pfft says:

    nobody here posted how many jobs we added this month? I am not shocked with this crowd.

    U.S. Payrolls Grew 244,000 in April; Unemployment at 9%
    http://www.bloomberg.com/news/2011-05-06/u-s-payrolls-increased-244-000-in-april-unemployment-rate-climbs-to-9-.html

    The economy has generated 760,000 private jobs in the past three months, the report showed.

    In April we added the most jobs we’ve added in 5 years!

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  54. 54
    Ben says:

    RE: pfft @ 51http://www.economicpolicyjournal.com/2011/04/krugman-gets-it-ron-paul-is-having.html

    “How Krugman can not see the inflation swirling around him or the fact that employment is starting to tick up (especially in the tech sector) is amazing, but he does know Ron Paul is coming. One out of three for Krugman isn’t bad.”

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  55. 55
    Ben says:

    RE: pfft @ 53http://www.zerohedge.com/article/nfp-ex-mcdonalds-and-birth-death-7k

    “Today’s BLS of 244K is great… until you exclude the 62K from McDonalds hirings, and 175K from the Birth Death Adjustment, and end up with…. +7K jobs.”

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  56. 56
    pfft says:

    By Ben @ 54:

    RE: pfft @ 51http://www.economicpolicyjournal.com/2011/04/krugman-gets-it-ron-paul-is-having.html

    “How Krugman can not see the inflation swirling around him or the fact that employment is starting to tick up (especially in the tech sector) is amazing, but he does know Ron Paul is coming. One out of three for Krugman isn’t bad.”

    inflation is low. bernanke can’t raise rates because of commodity prices. it’s clear those are driven by emerging market demand.

    ron paul thinks inflation is above 10% and he thinks shadowstats has credibility! what a dope.

    “or the fact that employment is starting to tick up”

    ?

    commodity prices just crashed serving to only vindicate krugman and bernanke even more.

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  57. 57
    pfft says:

    By Ben @ 55:

    RE: pfft @ 53http://www.zerohedge.com/article/nfp-ex-mcdonalds-and-birth-death-7k

    “Today’s BLS of 244K is great… until you exclude the 62K from McDonalds hirings, and 175K from the Birth Death Adjustment, and end up with…. +7K jobs.”

    seriously? prior months were also revised up.

    you people are unbelievable.

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  58. 58
    whatsmyname says:

    RE: Blurtman @ 50
    I am not absolutely clear as to the argument that you are making.

    Are you saying that there is enough money for the government to pay all of its obligations without increasing the debt ceiling? That doesn’t seem to be what your quoted sources are saying; but if it is, I would love to see the numbers.

    Or are you saying that the government has enough money to pay all of its bond obligations (if it defaults on other legal obligations, and we just don’t mention those defaults)? That, to me, would be using a dishonest soundbite.

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  59. 59
    Blurtman says:

    RE: whatsmyname @ 58 – The latter. I am saying that we have more than enough money to pay existing bondholders without extending the debt ceiling, and that to equate not extending the debt ceiling with a default on US Treasuries, as Tim Geithner has claimed, is an out and out lie. No one is arguing that not extending the debt ceiling would not cause a funding problem for diverse other programs as mentioned frequently. You can call this a default, too. But let’s be precise. My point is that Tim Geithner has lied once again, presumably for political reasons, or perhaps he can’t help himself.

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  60. 60
    Blurtman says:

    RE: pfft @ 52 – It is irrefutable that by not extending the debt ceiling there will not be enough money for already budgeted programs, barring an extraordinary increase in revenues. However, across the board cuts, including to current bondholders, is but one potential scenario. Another is across the board cuts to every program except current bondholders. And there are multiple permutations of what might happen besides these two if the debt ceiling is not extended. It is , however, a categorical lie to state that not extending the debt ceiling means that current bondholders will not be paid. That is but one possibility, and not a mandatory one.

    In any event, the discussion of what might happen if the debt ceiling is not extended is moot as it will be extended. It will be interesting to see what gets cut and by how much. And while much media coverage concerns what gets cut, it would be interesting to see what steps are taken to enhance revenues. The oil company tax cuts are a step in the right direction. Ending the Bush tax cuts. Repealing capital gains tax cuts. And taxing the crap out of anyone who voted for the war criminal president. In fact, anyone who voted to re-elect W should be branded with a big M on their forehead, and shunned.

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  61. 61

    By whatsmyname @ 58:

    Are you saying that there is enough money for the government to pay all of its obligations without increasing the debt ceiling? That doesn’t seem to be what your quoted sources are saying; but if it is, I would love to see the numbers.

    Or are you saying that the government has enough money to pay all of its bond obligations (if it defaults on other legal obligations, and we just don’t mention those defaults)? That, to me, would be using a dishonest soundbite.

    I think you need to go somewhere in-between. Does the government bring in enough money to pay for the bonds, entitlements and essential government personnel without raising the limit. And I’d include the military in the essential category, but I don’t think they typically are.

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  62. 62

    By Blurtman @ 60:

    n fact, anyone who voted to re-elect W should be branded with a big M on their forehead, and shunned.

    Why not punish those actually responsible. Those voting for Gore and Kerry in the primaries. :-D

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  63. 63
    Blurtman says:

    RE: Kary L. Krismer @ 62 – I find it hard to believe either choice, although certainly not optimal, could have been worse.

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  64. 64

    RE: Blurtman @ 63 – I just meant the choices were bad. Back in 2000 I said the Ds and Rs both picked the only candidate that could lose to the other. I had no idea how close that was to being right! :-D

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  65. 65
    pfft says:

    By Blurtman @ 60:

    RE: pfft @ 52 – It is irrefutable that by not extending the debt ceiling there will not be enough money for already budgeted programs, barring an extraordinary increase in revenues. However, across the board cuts, including to current bondholders, is but one potential scenario. Another is across the board cuts to every program except current bondholders. And there are multiple permutations of what might happen besides these two if the debt ceiling is not extended. It is , however, a categorical lie to state that not extending the debt ceiling means that current bondholders will not be paid. That is but one possibility, and not a mandatory one.

    In any event, the discussion of what might happen if the debt ceiling is not extended is moot as it will be extended. It will be interesting to see what gets cut and by how much. And while much media coverage concerns what gets cut, it would be interesting to see what steps are taken to enhance revenues. The oil company tax cuts are a step in the right direction. Ending the Bush tax cuts. Repealing capital gains tax cuts. And taxing the crap out of anyone who voted for the war criminal president. In fact, anyone who voted to re-elect W should be branded with a big M on their forehead, and shunned.

    you just don’t understand politics.

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  66. 66
  67. 67
    Blurtman says:

    Tim Geithner, enemy of the people, and Obama’s choice. Supporter of financial terrorism.

    “Ireland’s Last Stand began less shambolically than you might expect. The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. Lenihan was overjoyed, according to a source who was there, telling the IMF team: “You are Ireland’s salvation.”

    The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US treasury secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are.”

    http://www.irishtimes.com/newspaper/opinion/2011/0507/1224296372123.html

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  68. 68
    What's my name says:

    By Blurtman @ 59:

    RE: whatsmyname @ 58 – The latter. I am saying that we have more than enough money to pay existing bondholders without extending the debt ceiling, and that to equate not extending the debt ceiling with a default on US Treasuries, as Tim Geithner has claimed, is an out and out lie. No one is arguing that not extending the debt ceiling would not cause a funding problem for diverse other programs as mentioned frequently. You can call this a default, too. But let’s be precise. My point is that Tim Geithner has lied once again, presumably for political reasons, or perhaps he can’t help himself.

    Well, this is good news certainly. By the same logic, there is more than money enough to pay for all our social programs plus have a large surplus. And people who say that there isn’t enough are liars, presumably for political reasons. (This is not to be construed as arguing that funding bond repayments won’t be a problem.)

    A treasurer’s job is to see that an organization can fund its activities. It is not to pretend everything is OK whilst one conspires to quietly default on items of his own choosing. I’m afraid you have the playing politics part exactly backwards. (I can’t believe you have got me defending Tim Geithner).

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  69. 69
    One Eyed Man says:

    RE: Blurtman @ 60

    Don’t wade too deep in bitter creek big guy. I’m not a religious person, but I still believe that bitterness is like a festering emotional disease of the soul. As painful as it is to acknowledge that many Americans probably believe the death of bin Ladin vindicates Cheney and W’s human rights record, bitterness probably won’t help fix the root problems. If anything, it often exaccerbates the problems by justify people’s decision (on both sides of any conflict) to discard their ideals in exchange for revenge and/or security. My apologies for getting all preachy cause I ain’t no F’n saint.

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  70. 70
    Blurtman says:

    RE: What’s my name @ 68 – No, you are being facetious. There is not more than enough money for 2011 budgeted social programs, defense and the other less large programs. To fund everything, it is proposed that the debt ceiling be extended by one trillion.

    2010 interest on the national debt – $164 billion. A fraction of the total $3.5 trillion 2010 budget (4.69%). Those are facts. If you are short a trillion, there is more than enough money to pay the interest on the national debt.

    Even if you accepted the theory of a further decline in revenues that an end to further borrowing is alleged to will have caused, there will still be more than enough money.

    I am not faulting Geithner for trying to get everything funded. I am merely expressing dismay and disgust at his use of lies to do so. He lied about not knowing about the AIG bonuses. He defense about why he did not regulate the Wall Street banks as NY Fed chief was a joke. (“Don’t blame me, I wasn’t doing my job.”) He is a banking oligarchy lacky. He is part of the problem.

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

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  71. 71
    Macro Investor says:

    Many of you have brought up the 62,000 McDonalds jobs. But have you thought through what that means? Do you really think somehow the restaurants can suddenly absorb that many more workers? No. What’s really happening is McD’s is hiring minimum wage part timers, AND REPLACING higher wage full timers who have seniority. Essentially this is outsourcing the only way a local service can.

    BTW, does anyone think Boeing is not outsourcing higher wage union jobs in Puget Sound for lower wage non-union jobs? This is the new trend. If it’s not practical to send the jobs to 3rd world countries, at least send them where there aren’t unions, or trade older more expensive workers for newer, hungrier part timers.

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  72. 72
    What's my name says:

    RE: Blurtman @ 70
    Whoa there. I didn’t say anything about funding defense and other less large programs. I was only “prioritizing” social programs. I will admit you got me on the math for the big surplus. And yes, I am being facetious, but it illustrates the point. Have we compartmentalized away the bigger part of the truth? For a treasurer, if you’re short, you’re short.

    I will also grant you that there is a political consideration. House Republicans would like to push the Adminstration to give them backdoor legislation (program cuts) that they can not pass or don’t want the responsibility for passing by getting Treasury to use its purse to effectively usurp legislative power. It’s lose/lose for Treasury and the Administration, who would have to be fools to give them that. In this instance, Geithner is motivated to resist the little corruption of extralegal prioritizing, and simply make payments as they come due. If he does the right thing, then it is true that he will possibly run out of money unless the debt ceiling is raised.

    A thought experiment: My car is in the shop. I know that I “could” steal my neighbors car, (he always leaves the keys in) and drive over to your house. Am I am a liar when I tell you that I’m not coming over to play cards because I have no wheels?
    Does the answer change between (scenario 1) You know that I am fully commited to never steal anything, and (scenario 2) You know that I steal cars all the time?
    Is what I should do independent of scenarios 1 and 2?

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  73. 73
    One Eyed Man says:

    RE: What’s my name @ 72 -Nice thought experiment in “situational ethics” and/or moral “relativism.” For those who don’t believe in “relative truth” please review Heisenbergs Uncertainty Principle, General and Special Relativity, the Star Trek episode entitled “The Observer Effect”, and “Nights in White Satin” by the Moody Blues.

    The only thing that would have made your comment more interesting for me is if you had perhaps used Rocky and Bullwinkle as characters, offered free popcorn, or been able to incorporate something into the story line that would provide me vicarious sexual gratification (none of which would have helped your point but all of which I find at least moderately entertaining).

    I believe that “What’s my name’s” point doesn’t necessarily deny the potential truth of Blurtman’s conclusion. It merely denies the conclusion that Blurtman’s position would be the only internally consistent (truthful?) view based upon the perspective of the observer.

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  74. 74
    Blurtman says:

    RE: One Eyed Man @ 73 – Mathematics is about as close to absolute truth as there is. Of course this assumes that we all agree on the basics, that 1+1 = 2, etc. Hard to be subjective about that. And it is a mathematical fact that there is more than enough money to pay for less than 5% of the budget, whether it was for porn subscriptions for the SEC, drones to kill American citizens, or whatever.

    The problem is that literal truth is a casualty of the immediate pleasure demanding, push button, narcicistic brain, but perhaps that is a bit over the top.

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  75. 75
    Blurtman says:

    RE: What’s my name @ 72 – Never let a good crisis go to waste. Both sides are playing political football with the issue and both sides suck. You don’t need a thought experiement to understand the basic facts here, They are pretty black and white. Truth is the casualty.

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  76. 76
    One Eyed Man says:

    RE: Blurtman @ 74

    I agree with much of what you say Blurtman. Geithner is a banker at heart and asking him not to favor the financial system is a little like asking the cougar not to rip out bambi’s throat. But I think there’s a problem with the math that underlies your conclusion about Federal Debt default. The problem is that it ignores default caused by the failure to pay principal on bonds that mature. I haven’t read all the discussion and I don’t always think of everything so I may be wrong. But I don’t recall reading it in the discussion and I don’t think that your cash flow argument takes principal repayment on maturing bonds into account.

    “Through Tuesday, the Treasury has received a little less than $1.3 trillion in taxes for fiscal year 2011, but has made payments of almost $7 trillion. The reason the payment number is so large is because it includes funds that were paid to Treasury’s lenders, whose securities matured and needed to be paid off.”

    The Federal revenues may be far more than sufficient for the Treasury to pay interest on the
    debt as it comes due by marshalling payments. But it probably won’t be sufficient to repay principal. A new bond issue probably has to be sold to generate the cash to repay the old bond issue. While both the new and the old bond issue are outstanding, the debt ceiling would be violated.
    http://www.thefiscaltimes.com/Columns/2011/05/06/Debt-Ceiling-May-Come-Crashing-Down-on-Treasury.aspx

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  77. 77
    Blurtman says:

    RE: One Eyed Man @ 76 – Great story. As you and the author imply, a rolling loan gathers no moss. So repaying matured loans, or any loans that are cashed in, with money from new loans would be a wash and would not increase the total debt. I think the story runs out of gas when it fails to, as you have not, discuss the timing of rolling over the debt and the possibility of exceeding the debt ceiling due a lag, and also when it muddles, as everyone seems to do, spending on all programs with spending on the debt.

    Bartlett himself seems to say it is not the rolling over that is the problem but the need to borrow additonal monies.

    “In almost all cases, these securities were rolled over; in effect, the Treasury simultaneously paid to and borrowed from the same people and institutions.

    But of course, because the federal government runs a budget deficit, the Treasury must borrow a little more on most days.” Note he says “simultaneously.”

    Your objection that a lag, even though a wash, would cause the debt ceiling to be temporarilly exceeded may be true, but it may be false. I fail to see how the Bartlett story supports your viewpoint., but absent such information, it is unknowable.

    If you have any links to stories that discuss the mechanics of rolling over the Federal debt, please provide them. I would doubt they exist, at least in the present day context.

    Kudos to Bruce Bartlett, BTW, at least for half of the title of his book. In 2006, he published Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy

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  78. 78
    Scotsman says:

    Pfft- how does this story end?:

    National debt growing at 12% annually through new additions plus interest rolled in at 3% for 15% total.

    Organic GDP probably negative, but reported as about 3%- equal to interest on the debt.

    Wages flat or falling (not to be confused with personal income which includes new debt and transfers, such as food stamps, SSI, etc.).

    Inflation- tough to measure- up for essentials, down for discretionary purchases, especially large assets, but generally less than or equal to reported GDP growth.

    In short, we certainly aren’t growing our way out of the debt, we aren’t inflating our way out, and we aren’t earning our way out. How long do you think we can continue as we have? What will change to bring things back into sustainable balance?

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  79. 79
    Macro Investor says:

    RE: Scotsman @ 78

    Silly Scotsman, why bother with all that. The market is up and Krugman says we can borrow much, much, much more. Stop thinking beyond that. /sarcasm

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  80. 80
    One Eyed Man says:

    RE: Blurtman @ 77

    I don’t know of anything discussing the issue of refinancing lag. Because the debt ceiling is a man made legal issue, it may be that the current debt ceiling law avoids the problem by specifically allowing a refinance for the same principal amount despite the lag. Then again, maybe the Treasury isn’t bound by the same legal and ethical restrictions as you and I and can “kite” checks for the refi before the sale of the new bonds to avoid a technical violation of the debt ceiling.

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  81. 81
    pfft says:

    By Scotsman @ 78:

    Pfft- how does this story end?:

    National debt growing at 12% annually through new additions plus interest rolled in at 3% for 15% total.

    Organic GDP probably negative, but reported as about 3%- equal to interest on the debt.

    Wages flat or falling (not to be confused with personal income which includes new debt and transfers, such as food stamps, SSI, etc.).

    Inflation- tough to measure- up for essentials, down for discretionary purchases, especially large assets, but generally less than or equal to reported GDP growth.

    In short, we certainly aren’t growing our way out of the debt, we aren’t inflating our way out, and we aren’t earning our way out. How long do you think we can continue as we have? What will change to bring things back into sustainable balance?

    wow, you’re going to great lengths to deny the economy is recovering. the amount that government is spending is not a concern. we have deficits because of the faltering economy.

    no comments on all the jobs created last month? you missed your usual posting of the ADP report…

    “Wages flat or falling”

    no. wages are up about 1%.

    “Inflation- tough to measure”

    no, we measure that and it’s low.

    we are far from the economic disaster you predicted.

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  82. 82
    pfft says:

    By Scotsman @ 78:

    Pfft- how does this story end?:

    National debt growing at 12% annually through new additions plus interest rolled in at 3% for 15% total.

    Organic GDP probably negative, but reported as about 3%- equal to interest on the debt.

    Wages flat or falling (not to be confused with personal income which includes new debt and transfers, such as food stamps, SSI, etc.).

    Inflation- tough to measure- up for essentials, down for discretionary purchases, especially large assets, but generally less than or equal to reported GDP growth.

    In short, we certainly aren’t growing our way out of the debt, we aren’t inflating our way out, and we aren’t earning our way out. How long do you think we can continue as we have? What will change to bring things back into sustainable balance?

    I’d like another shot at this question.

    I could not make a better case for stimulus, deficit spending, tarp, bailouts, food stamps and unemployment insurance than you did right there!

    glad you think counter-cyclical(like the stimulus) economic policies are good!

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  83. 83
    Scotsman says:

    RE: pfft @ 82RE: pfft @ 81

    Two posts and you still haven’t answered the question. The question is: how does it end? I’ll make it very simple for you. Debt and GDP are now equal. Debt is growing at 15% while GDP grows at 3%. Nobody has a corrective plan with a chance in hell of passing on the table, let alone in place and working, so we can assume those numbers won’t be changing anytime soon. What can we expect in the future? Prove yourself more than a mindless troll and show us the way out.

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  84. 84
    Macro Investor says:

    RE: Scotsman @ 83

    He answered it in 81. “The amount of debt is not a concern.”

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  85. 85
    pfft says:

    By Scotsman @ 83:

    RE: pfft @ 82RE: pfft @ 81

    Two posts and you still haven’t answered the question. The question is: how does it end? I’ll make it very simple for you. Debt and GDP are now equal. Debt is growing at 15% while GDP grows at 3%. Nobody has a corrective plan with a chance in hell of passing on the table, let alone in place and working, so we can assume those numbers won’t be changing anytime soon. What can we expect in the future? Prove yourself more than a mindless troll and show us the way out.

    debt is growing at 15%? where do you get that?

    “Nobody has a corrective plan with a chance in hell of passing on the table, let alone in place and working, so we can assume those numbers won’t be changing anytime soon.”

    yes both Obama and the Progressive Caucus have budgets that balance the budget each by 2020.

    I prefer the Progressive budget.

    The courageous Progressive Caucus budget
    http://www.economist.com/blogs/democracyinamerica/2011/04/debt_proposals

    how many times have I said that later when we have economic growth we’ll cut spending and probably raise taxes? history says we don’t have to have a balanced budget anytime soon.

    “Prove yourself more than a mindless troll and show us the way out.”

    your economic predictions have been a disaster and I’m a mindless troll?

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  86. 86
    Scotsman says:

    RE: pfft @ 85

    “debt is growing at 15%? where do you get that?”

    I can’t even get past your first sentence before grinding to a halt. I explained the 15% in comment #78, but if you had any understanding of what is happening I wouldn’t have had to explain it- you would have known it yourself by doing a little 5th grade math. How can we have a discussion if you don’t understand the basics?

    None of the budget proposals- the president’s, the Republican’s, or your “people’s budget” are built on realistic expectations, and none of them will ever balance the budget in reality. But we don’t even need to have that discussion, because none of them have a chance in hell of ever becoming law. Current government can’t even agree on how to cut $40 billion for the year, but you expect them to step up and cut $trillions? I’ve already shown there isn’t enough potential revenue in tax increases to make up the difference. And that doesn’t even get into a discussion about the static nature of the underlying assumptions.

    My economic predictions have been coming true every day- you’re living them. I’ve missed on one- the collapse of the equities markets- by a few months. Math and cash flow still rule the day though- wait and see.

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  87. 87
    Scotsman says:

    New study confirms adding debt for stimulus just makes it worse. Keynes has more lives than a cat, but his ideas will eventually die:

    http://hotair.com/economy-debt-spending/2011/05/09/aggregate-debt-drove-economic-damage-in-great-recesssion/

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  88. 88
    whatsmyname says:

    By Scotsman @ 87:

    New study confirms adding debt for stimulus just makes it worse. Keynes has more lives than a cat, but his ideas will eventually die:

    http://hotair.com/economy-debt-spending/2011/05/09/aggregate-debt-drove-economic-damage-in-great-recesssion/

    Is it nit picking to doubt that a two page article on a think tank site constitutes a study?

    If you follow the link to the article Hot Air is referencing, author Polina Vlasenko is merely proposing that the aggregate debt at the start of a recession determines the severity. She is very clear that it doesn’t matter how much of the debt is public or private. She says nothing about the effectiveness of stimulus on the recovery.

    Her worry is that deficit funded stimulus would put you in a deeper aggregate debt position for the next recession, (assuming it isn’t reduced before then), causing the above mentioned exacerbation. So apparently one should pay the debt down in good times. How very….Keynesian.

    Her hero in the countries examined? Canada; clearly a model for us all. They have a mechanism for keeping total debt down, despite the fact that their household debt is very similar to that of the US and Japan. I think it’s called progressive and significant taxation. Whatever it is, I know we’ll agree that we need to be more like Canada.

    She also noted in looking at Japan that a higher savings rate did not appear to help. I’ll want to remember that for next time someone tells me about the poor savers shouldering the salvation of our economy.

    Great article. Do you have any more like this?

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  89. 89
    whatsmyname says:

    RE: One Eyed Man @ 73

    “The only thing that would have made your comment more interesting for me is if you had perhaps used Rocky and Bullwinkle as characters, offered free popcorn, or been able to incorporate something into the story line that would provide me vicarious sexual gratification”

    http://www.youtube.com/watch?v=OCGgmC0PvA0&feature=fvwrel

    Thanks for your kind words. I can’t help with the popcorn, but this covers the rest for me.
    I always had a thing for Natasha.

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  90. 90
    Scotsman says:

    RE: whatsmyname @ 88

    “Great article. Do you have any more like this?”

    Of course, the proverbial “thousand words” in a format even you can understand. When juxtaposed to the article referenced above we have two thirds of a delightful triptych. The final frame will be historic, if you get my drift:

    http://market-ticker.org/uploads/2010/Mar/Diminishing-Prod.jpg

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  91. 91
    whatsmyname says:

    RE: Scotsman @ 90
    I am loathe to claim understanding of any chart of whose assumptions I have no knowledge.

    But assuming, for the sake of argument, that it is correct and legitimate in its context; the implication of the aforementioned juxtaposition is clear: We got’s to raise taxes quick!!!

    You are one tough liberal.

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  92. 92
    pfft says:

    By Scotsman @ 87:

    New study confirms adding debt for stimulus just makes it worse. Keynes has more lives than a cat, but his ideas will eventually die:

    http://hotair.com/economy-debt-spending/2011/05/09/aggregate-debt-drove-economic-damage-in-great-recesssion/

    seriously? have you seen what austerity has done to greece, Ireland, portugal and now the UK?

    all of the stimulus countries are doing well.

    good job at posting something that krugman didn’t debunk a week ago.

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  93. 93
    pfft says:

    By Scotsman @ 86:

    RE: pfft @ 85

    “debt is growing at 15%? where do you get that?”

    I can’t even get past your first sentence before grinding to a halt. I explained the 15% in comment #78, but if you had any understanding of what is happening I wouldn’t have had to explain it- you would have known it yourself by doing a little 5th grade math. How can we have a discussion if you don’t understand the basics?

    None of the budget proposals- the president’s, the Republican’s, or your “people’s budget” are built on realistic expectations, and none of them will ever balance the budget in reality. But we don’t even need to have that discussion, because none of them have a chance in hell of ever becoming law. Current government can’t even agree on how to cut $40 billion for the year, but you expect them to step up and cut $trillions? I’ve already shown there isn’t enough potential revenue in tax increases to make up the difference. And that doesn’t even get into a discussion about the static nature of the underlying assumptions.

    My economic predictions have been coming true every day- you’re living them. I’ve missed on one- the collapse of the equities markets- by a few months. Math and cash flow still rule the day though- wait and see.

    “I explained the 15% in comment #78,”

    yeah I’d like to know how you go there?

    “My economic predictions have been coming true every day- you’re living them. I’ve missed on one- the collapse of the equities markets- by a few months.”

    really?

    “I’ve already shown there isn’t enough potential revenue in tax increases to make up the difference.”

    no you didn’t. you posted some hack link about how we could take all the rich’s money and it wouldn’t balance the budget. nobody said it would. tax increases on the wealthy coupled with deficit reduction, a decrease in stabilizer payments(like unemployment insurance and food stamps) and increased tax revenues as more people are back to work will do the trick.

    now that ryan backed off his plan to destroy medicare he’ll never balance the budget ever.

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  94. 94
    pfft says:

    By whatsmyname @ 88:

    By Scotsman @ 87:
    New study confirms adding debt for stimulus just makes it worse. Keynes has more lives than a cat, but his ideas will eventually die:

    http://hotair.com/economy-debt-spending/2011/05/09/aggregate-debt-drove-economic-damage-in-great-recesssion/

    Is it nit picking to doubt that a two page article on a think tank site constitutes a study?

    If you follow the link to the article Hot Air is referencing, author Polina Vlasenko is merely proposing that the aggregate debt at the start of a recession determines the severity. She is very clear that it doesn’t matter how much of the debt is public or private. She says nothing about the effectiveness of stimulus on the recovery.

    Her worry is that deficit funded stimulus would put you in a deeper aggregate debt position for the next recession, (assuming it isn’t reduced before then), causing the above mentioned exacerbation. So apparently one should pay the debt down in good times. How very….Keynesian.

    Her hero in the countries examined? Canada; clearly a model for us all. They have a mechanism for keeping total debt down, despite the fact that their household debt is very similar to that of the US and Japan. I think it’s called progressive and significant taxation. Whatever it is, I know we’ll agree that we need to be more like Canada.

    She also noted in looking at Japan that a higher savings rate did not appear to help. I’ll want to remember that for next time someone tells me about the poor savers shouldering the salvation of our economy.

    Great article. Do you have any more like this?

    oh this was excellent. I stand in awe sir.

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  95. 95
    pfft says:

    lest we forget how much of a debt disaster austerity would be:

    With no special government intervention, the 2010 deficit would have passed $2 trillion, according to their model. It would have reached $2.6 trillion in fiscal 2011 and $2.25 trillion in 2012.

    Washington Saved Our Economic Hide
    http://www.creators.com/liberal/froma-harrop/washington-saved-our-economic-hide.html

    this year alone our debt would be $1 trillion higher.

    you are not a serious debt fighter scotsman. you proved that.

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  96. 96
    Scotsman says:

    RE: whatsmyname @ 91

    I appreciate an honest man, and I’m sure I’d enjoy spending time with you solving the world’s problems over a beer. But this calling me a liberal has got to stop! ;-)

    Further, in the spirit of the times, I’m all for raising your taxes- but assure you I already pay enough for the government I get.

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  97. 97
    Scotsman says:

    RE: pfft @ 95RE: pfft @ 94RE: pfft @ 93

    ““I explained the 15% in comment #78,”
    yeah I’d like to know how you go there?”

    Same way I “go” anywhere- down with the zipper, out with the snake, let it drain. Duh.

    Hey- did you read Krugman’s latest- sounds like he’s starting to change his tune- whoa!!!:

    “The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.”

    http://jhaines6.wordpress.com/2011/05/09/the-unwisdom-of-elites-by-paul-krugman/

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  98. 98
    whatsmyname says:

    By Scotsman @ 96:

    RE: whatsmyname @ 91

    I appreciate an honest man, and I’m sure I’d enjoy spending time with you solving the world’s problems over a beer. But this calling me a liberal has got to stop! ;-)

    Further, in the spirit of the times, I’m all for raising your taxes- but assure you I already pay enough for the government I get.

    I totally understand. That’s why I’m trying to get you some better government…
    … not that you’re likely to recognize it as such. But them’s the breaks.

    Cheers,

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  99. 99
    pfft says:

    By Scotsman @ 97:

    RE: pfft @ 95RE: pfft @ 94RE: pfft @ 93

    “â��I explained the 15% in comment #78,â��
    yeah Iâ��d like to know how you go there?”

    Same way I “go” anywhere- down with the zipper, out with the snake, let it drain. Duh.

    Hey- did you read Krugman’s latest- sounds like he’s starting to change his tune- whoa!!!:

    “The fact is that what weâ��re experiencing right now is a top-down disaster. The policies that got us into this mess werenâ��t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people â�� in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.”

    http://jhaines6.wordpress.com/2011/05/09/the-unwisdom-of-elites-by-paul-krugman/

    I didn’t understand anything you wrote.

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  100. 100
    pfft says:

    Mr Angelides I think said that investigations may lead somewhere finally.

    http://www.bloomberg.com/video/69506702/

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  101. 101
    Scotsman says:

    RE: pfft @ 99

    “I didn’t understand anything you wrote.”

    No sh*t, Sherlock.

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  102. 102
    pfft says:

    By Scotsman @ 101:

    RE: pfft @ 99

    “I didnâ��t understand anything you wrote.”

    No sh*t, Sherlock.

    you and blurtman have been making less and less sense lately. you’ve both also called me a troll lately. must be the stress of that good jobs report!

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  103. 103
    Blurtman says:

    RE: pfft @ 102 – Even the average LA Times reader comprehends what is happening.

    “tiktin at 6:55 PM May 9, 2011
    Geithner says the government would have to default on the national debt if congress doesn’t raise the debt ceiling?What a liar! The government takes in around 2 trillion dollars a year in taxes. Interest on the national debt is 197 billion a year. The debt ceiling has nothing to do with it. The government can go right on paying the interest and rolling over the principal whether the congress raises the detb ceiling or not. There has to be special place in hell for people like Geithner. At the very least he ought to be arrested and sent to jail for perjury.”

    http://discussions.latimes.com/20/lanews/la-na-budget-20110510/10?page=2

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  104. 104
    pfft says:

    By Blurtman @ 103:

    RE: pfft @ 102 – Even the average LA Times reader comprehends what is happening.

    “tiktin at 6:55 PM May 9, 2011
    Geithner says the government would have to default on the national debt if congress doesn’t raise the debt ceiling?What a liar! The government takes in around 2 trillion dollars a year in taxes. Interest on the national debt is 197 billion a year. The debt ceiling has nothing to do with it. The government can go right on paying the interest and rolling over the principal whether the congress raises the detb ceiling or not. There has to be special place in hell for people like Geithner. At the very least he ought to be arrested and sent to jail for perjury.”

    http://discussions.latimes.com/20/lanews/la-na-budget-20110510/10?page=2

    yeah we’ll just skip a SS payment or maybe even medicare spending! yeah!!

    you never answered my question. say there is a quirk and most of a month’s budget will be the debt payments. should we skip a month’s SS check?

    republican’s even admitted we might not be able to fund some programs at some point.

    If passed, Toomey’s plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury — that is, if the U.S. hits its debt ceiling. Republican leaders insist they will raise the country’s debt limit before this happens.

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  105. 105
    pfft says:

    after a week or two I still can’t get blurtman to post an article that not raising the debt ceiling is no big deal.

    What actually happens if the U.S. hits the federal debt ceiling?
    http://www.salon.com/news/feature/2011/04/11/debt_ceiling_what_happens/

    the government would have to either authorize an increase in the debt limit or cut $738 billion in federal spending in the span of six months, with severe consequences for the economy.

    less spending=less employment=less tax revenue=MORE DEBT!

    I love my equations.

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  106. 106
    One Eyed Man says:

    RE: whatsmyname @ 89

    Thanks! I needed cheering up.

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  107. 107
    Ben says:

    RE: pfft @ 105 – Hmmmm…..

    pfft says: austerity = living within your means = fail

    pfft also says: profligate spending = unlimited debt = healthy economy

    Why does everyone spend so much time arguing with pfft about nonsense? I pop in in one and a while to chuckle at the goings on.

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  108. 108
    Blurtman says:

    RE: pfft @ 105 – Well, your jousting at windmills with strawmen remains unabated. No one said everything could be funded without extending the debt ceiling. And for the record, numerous links were posted, easy to find as they are everywhere, regarding the obvious fact that there is more than enough money to pay bondholders, without extending the debt ceiling, and ergo, Geithner is a terrible liar. And once again, you are wrong.

    it is curious that with so much ostensibly at stake, Geithner would not seek to calm the world’s financial markets and announce that bondholders will be paid first, with or without an extension of the debt ceiling. I mean, if Armageddon were at hand, you think he would try to sooth the markets. Unless of course he is FOS and that is not the concern at all. You can already see interest rates starting to rise as we are delaying payments to those serving in the military. Oh wait, nobody really cares. Hmmmmm…

    I will listen to Ben and quit responding to your posts as it is a waste fo time. You are disingenuous, and seem to come here for abuse. Kind of like the old Monty Python skit.

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  109. 109
    whatsmyname says:

    By Blurtman @ 108:

    RE: pfft @ 105
    …..No one said everything could be funded without extending the debt ceiling
    …… there is more than enough money to pay bondholders, without extending the debt ceiling.

    You mean there is plenty of money to pay bondholders if he steals it from someone else? Perhaps the thought experiment about the liar and the thief was worth looking at after all.

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  110. 110
    David Losh says:

    RE: Scotsman @ 86RE: pfft @ 85

    Let’s seriously talk about the budget, because there is plenty to cut. It’s absolutely ridiculous to compare the United States to Japan, or Greece, or Ireland. We have military contractors in every frigging country on earth. It’s $43 Billion for Homeland Security, $55 Billion for CIA, $100 Billion for military contractors, while only $2 Billion for the DEA?. I doubt that very much. Add that to the $621 Billion of defense spending.

    Oh heck let’s put in this graph set http://www.warisbusiness.com/458/news/fun-with-charts-military-contractor-spending-outstrips-rest-of-us-govt/

    In other words we spend more money on bogus make work projects that just piss every body off than we do on social, or health programs for our own people. We are a joke the world over for what we spend on protecting the world when we can’t take care of ourselves.

    No one in the world is impressed by our military. We are fat pampered tough guys, and gals, that we ship around the world over equiped, and are horriied when they die. Our enemy has a pocket knife and is starved to desperation. If they die killing the enemy, or starve to death, they win.

    We have military think tanks that fund satalite projects. We spent billions of dollars on drone projects blowing up mountain sides killing civilians until one day we get a phone call, air lift to Pakastan, and put a bullet in a guy’s head.

    To add insult to injury the people we are protecting are the very wealthy, world wide, who have the lowest tax rate of any country on earth. We spend more, to collect less in taxes.

    Help me out with that reasoning. We don’t want to tax the wealthy, but we do want to send military aid to protect oil, and drug company interests around the globe. We want to protect American business interests, paid for by the middle class, so the very wealthy can do business more easily, while they pay less in taxes.

    Is that right? Is that what you all really want?

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  111. 111
    David Losh says:

    RE: Blurtman @ 108

    pfft is a paid blogger who has brought a lot to the the discussion here. He has presented good links on a variety of topics.

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  112. 112
    pfft says:

    By Ben @ 107:

    RE: pfft @ 105 – Hmmmm…..

    pfft says: austerity = living within your means = fail

    pfft also says: profligate spending = unlimited debt = healthy economy

    Why does everyone spend so much time arguing with pfft about nonsense? I pop in in one and a while to chuckle at the goings on.

    who said unlimited debt?

    how is austerity working in portugal, greece, ireland and now the UK? not very good.

    austerity is not expansionary. it’s contractionary. it makes it harder to pay debt not easier.
    austerity is more debt not less. this was predicted when austerity was drawn up by people like krugman

    the way to get an economy growing is to get people back to work not lay them off or cut their wages.

    many of those economies were not profligate. many of those economies pre-great recession were in surplus.

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  113. 113
    pfft says:

    By Blurtman @ 108:

    RE: pfft @ 105 – Well, your jousting at windmills with strawmen remains unabated. No one said everything could be funded without extending the debt ceiling. And for the record, numerous links were posted, easy to find as they are everywhere, regarding the obvious fact that there is more than enough money to pay bondholders, without extending the debt ceiling, and ergo, Geithner is a terrible liar. And once again, you are wrong.

    it is curious that with so much ostensibly at stake, Geithner would not seek to calm the world’s financial markets and announce that bondholders will be paid first, with or without an extension of the debt ceiling. I mean, if Armageddon were at hand, you think he would try to sooth the markets. Unless of course he is FOS and that is not the concern at all. You can already see interest rates starting to rise as we are delaying payments to those serving in the military. Oh wait, nobody really cares. Hmmmmm…

    I will listen to Ben and quit responding to your posts as it is a waste fo time. You are disingenuous, and seem to come here for abuse. Kind of like the old Monty Python skit.

    you still just won’t answer the question. how hard is it? I”ll try again.

    if we have to skip a month’s SS payment to pay the national debt do you think we should do it? should we pay bondholders, which is easy like you said, or SS recipients?

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  114. 114
    pfft says:

    By David Losh @ 111:

    RE: Blurtman @ 108

    pfft is a paid blogger who has brought a lot to the the discussion here. He has presented good links on a variety of topics.

    you really have to get over this paid blogger nonsense.

    financial indicators show a big rebound.

    Financial conditions have turned healthy
    http://scottgrannis.blogspot.com/2011/05/financial-conditions-have-turned.html

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  115. 115

    By David Losh @ 111:

    RE: Blurtman @ 108

    pfft is a paid blogger who has brought a lot to the the discussion here..

    I would like to know who you think is paying pfft. And I want specifics–name, address and phone number, because I want to try to get paid too! ;-)

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  116. 116
    Ben says:

    WOW. Either Krugman or Bill Gross is going to spectacularly wrong in their prediction. I go with Bill Gross, who has $billions of skin in the game.

    http://www.housingwire.com/2011/05/11/krugman-welcomes-qe3-sees-continued-economic-malaise?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29

    There is nothing in housing data to suggest the market will come roaring back anytime soon, according to Paul Krugman, economist and columnist at The New York Times.

    Instead, it’s likely any positive movement in housing will be gradual as a depressed U.S. economy continues with low interest rates that “will last for quite a while,” Krugman said at HousingWire’s REthink Symposium.

    “We will be seeing low interest rates for a very long time,” the Nobel laureate said. “The thing about housing … housing prices were stable for a long period of time, then they soared and came back down.”

    http://www.zerohedge.com/article/so-much-pimco-buying-bonds-short-duration-weighted-treasury-exposure-hits-whopping-23-cash-s

    So much for all the conspiracy theories that Bill Gross was capitulating in his short position against US debt even as he continued to bash US fiscal and monetary policy. According to just released April data for the flagship Pimco $240 billion Total Return Fund (which saw a $4.2 billion increase in AUM in the month), Bill Gross actually added to his short position against US government debt, bringing total market value exposure to 4% of AUM or ($10) billion. More amazing is that on a Duration Weighted Exposure basis, the firm’s Treasury short is 23%, read that again, 23%!

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  117. 117
    One Eyed Man says:

    RE: Ben @ 116

    Their positions aren’t mutually exclusive. A 100 bais pt rise (a 30%increase in rate) in the 10 yr over the next one to three years would seem to have a reasonable probability and would make both positions accurate. Rates will likely stay low by themselves if the economy tanks and money flows from equities to Treasuries. And if rates start moving up too fast employment will be at risk and you’ll see QE3. So far rates haven’t moved up in the face of QE and its likely that would continue to be the case at least for another round of QE. The only scenarios where rates move up significantly without QE3 is if we get a strong recovery which hasn’t happened so far and doesn’t look likely from here.

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  118. 118
    Blurtman says:

    RE: whatsmyname @ 109 – Stealing it from somebody else? That is logically wrong on so many levels, although I suppose emotionally satisfying.

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  119. 119
    pfft says:

    By Kary L. Krismer @ 115:

    By David Losh @ 111:
    RE: Blurtman @ 108

    pfft is a paid blogger who has brought a lot to the the discussion here..

    I would like to know who you think is paying pfft. And I want specifics–name, address and phone number, because I want to try to get paid too! ;-)

    the healthcare plan is tops! you couldn’t pay me enough to argue with you people.

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  120. 120
    pfft says:

    By Ben @ 116:

    WOW. Either Krugman or Bill Gross is going to spectacularly wrong in their prediction. I go with Bill Gross, who has $billions of skin in the game.

    just because you manage billions doesn’t mean you’re right. bill miller was a star who managed billions and he basically ruined his reputation during the panic of 2008. he bought financials on the way down! ken fisher had billions of skin in the game and he was wrong too.

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  121. 121
    pfft says:

    By Blurtman @ 118:

    RE: whatsmyname @ 109 – Stealing it from somebody else? That is logically wrong on so many levels, although I suppose emotionally satisfying.

    if it’s your SS payment that you paid taxes on for years you might have a different view. a large portion of SS recipients depend on SS for most of their income.

    gotta pay those bondholders first though! timmay is stewpit.

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  122. 122
    whatsmyname says:

    By Blurtman @ 118:

    RE: whatsmyname @ 109 – Stealing it from somebody else? That is logically wrong on so many levels, although I suppose emotionally satisfying.

    Easy pickens, eh? One supposes you might have demonstrated the illogic on at least one level. If you could.

    Back in the old days when I was young, there was a colloquialism about robbing Peter to pay Paul. This was generally used to describe people who were unable to meet their full obligations in the very act of “prioritizing.” It was a recognition that making one party whole at the expense of another really was to rob that other. Is this too nuanced for you?

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  123. 123
    Blurtman says:

    RE: whatsmyname @ 122 – Neither Peter nor Paul own the money, so you cannot rob someone of something they do not own.

    My point is that Getihner is lying, that there is more than enough to pay the bondholders.

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  124. 124
    whatsmyname says:

    By Blurtman @ 123:

    RE: whatsmyname @ 122 – Neither Peter nor Paul own the money, so you cannot rob someone of something they do not own.

    My point is that Getihner is lying, that there is more than enough to pay the bondholders.

    It’s a short trip to the dictionary if you are unaware of the word’s meaning. One meaning of the word “rob” at Dictionary.com is “to deprive (someone) of some right or something legally due”. Most dictionaries will carry a similar definition. You can not logically make an argument based upon redefining a common word to not mean what it actually does mean.

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  125. 125
    David Losh says:

    RE: pfft @ 119

    Exactly! You made masterful Health Care arguments, then transitioned into global economy. It’s a beautiful thing to watch.

    Judging by my own time spent blogging there is no way you could be so cohesive in your links by just following these threads. You’d have to spend more time online.

    If you are just some guy in his parents basement then I apologize. However my conclusion is that you contribute more than just expressing opinions. If you don’t have a link back to yourself then it’s logical that you are paid in some other way.

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  126. 126
    pfft says:

    By Blurtman @ 123:

    RE: whatsmyname @ 122 – Neither Peter nor Paul own the money, so you cannot rob someone of something they do not own.

    My point is that Getihner is lying, that there is more than enough to pay the bondholders.

    yeah we’ll just cut $700 billion from the budget but pay the bondholders. that will work.

    you want to skip grandma’s SS payments to pay bondholders.

    shouldn’t you be screaming massive fraud?

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  127. 127
    pfft says:

    By David Losh @ 125:

    RE: pfft @ 119

    Exactly! You made masterful Health Care arguments, then transitioned into global economy. It’s a beautiful thing to watch.

    Judging by my own time spent blogging there is no way you could be so cohesive in your links by just following these threads. You’d have to spend more time online.

    If you are just some guy in his parents basement then I apologize. However my conclusion is that you contribute more than just expressing opinions. If you don’t have a link back to yourself then it’s logical that you are paid in some other way.

    all of this is real easy. first of all I’m a bit younger than you guys so I grew up with computers/video games and etc. second of all I’ve been reading political blogs for almost a decade. the internet is a great thing. you can use google to come across a lot of expert opinions. I just follow about 5 political/economic blogs that give me most of my informations. plus I think I can type faster than you old fogies!

    it’s not that hard with the internet to get enough info to be a pseudo expert on a message board.

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  128. 128
    David Losh says:

    RE: pfft @ 127

    Let me take that point by point. at 18 you started reading political blogs. Why? Why would you? That puts you at about 30. Then you start following plolitical/economic blogs, but you come here to fight, the good fight, with bubble bloggers by taking the green shoots view.

    At the same time you are johny on the spot to reply to my reply and this is the only blog I follow outside of my own, so you must monitor here. Why?

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  129. 129
    pfft says:

    By David Losh @ 128:

    RE: pfft @ 127

    Let me take that point by point. at 18 you started reading political blogs. Why? Why would you? That puts you at about 30. Then you start following plolitical/economic blogs, but you come here to fight, the good fight, with bubble bloggers by taking the green shoots view.

    At the same time you are johny on the spot to reply to my reply and this is the only blog I follow outside of my own, so you must monitor here. Why?

    “Let me take that point by point. at 18 you started reading political blogs. Why? Why would you?”

    why? really?

    “you come here to fight, the good fight, with bubble bloggers by taking the green shoots view.”

    I didn’t take the view of green shoots. the data led me too that view. green shoots has been proven right by the way.

    “At the same time you are johny on the spot to reply to my reply and this is the only blog I follow outside of my own, so you must monitor here. Why?”

    I don’t know what you mean.

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  130. 130
    David Losh says:

    I only watch this site while I’m working. I post a reply to your reply and you reply, so you must also have this site on a seperate screen or on your bottom bar to toggle to from time to time.

    Why, why here?

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  131. 131
    Blurtman says:

    RE: whatsmyname @ 124 – Who is legally due what. Please cite the relevant laws.

    Dreading analogies: You are at a meeting providing box lunches. You get one, but the last 10 people in line do not. Did you steal theirs?

    Imagine if Geithner, who has a history of admitting to not doing his job, fails to placate the bond market, who believe that the USG will default on bond payments. Existing bondolders see the value of their investments plunge. The market for US debt dries up. Interest rates go up, the cost of re-fi goes up, interest rates on future bonds go up, and there is even less money for SS, defense, medicaire, medicaid, etc.

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  132. 132
    whatsmyname says:

    RE: Blurtman @ 131
    “Who is legally due what. Please cite the relevant laws.”
    Since the dawn of civilization the workman has been due his wages, the vendor has been due payment for his goods, and entitlements are paid under laws you must be familiar with. All government spending is authorized by law. I don’t mind a quick trip to the dictionary, but I am not sorting through 60 years of congressional bills to prove that which should be intuitively obvious to the casual observer.

    “Dreading analogies: You are at a meeting providing box lunches. You get one, but the last 10 people in line do not. Did you steal theirs?”
    Two problems here. First, this question would be analogous to asking if Geithner paid the bondholders, then would the bondholders be stealing the funds that were shorted to others. No one is making this argument, so that when I agree that I am not stealing anyone’s lunch, it has no bearing on our actual discussion.
    Second, if we were to take the extra step of converting your question to the more analogous question of whether the sponsors of the lunch were stealing from the last 10 people in line, we lack the information/assumptions to make this determination. Were the people enticed to the meeting with the promise of boxed lunches? Did they pay for boxed lunches? Was the answer to one of the prior questions “yes”, compounded by the fact that the sponsors knew in advance that they did not have enough lunches? Given another yes, did the sponsors neglect to make an effort to provide lunches for the last 10 people in line? If so, then yes, the sponsors were stealing.

    “Imagine if Geithner, who has a history of admitting to not doing his job,”
    Irrelevant.

    ” fails to placate the bond market, who believe that the USG will default on bond payments. Existing bondolders see the value of their investments plunge.”
    A personal bummer for many, kind of like happened with homeowners. Equality anyone?

    “The market for US debt dries up. Interest rates go up, the cost of re-fi goes up, interest rates on future bonds go up, and there is even less money for SS, defense, medicaire, medicaid, etc.”
    Here is the crux of your argument. You are very fearful about this admittedly bad outcome, and will do anything to avoid it. But if investors see that the USA won’t pay all of its obligations, the credit suffers anyway and all the above still happens. I’ve mentioned this before. You alluded to this yourself in post 108 where you claim that rates are going up because of current slow pay to the military. How long do you think one can retain any standing in the market with the argument that sure, I’m a deadbeat, but I’ll always pay you? If you don’t keep your obligations, people will recognize that you don’t keep your obligations, no matter how badly you wish otherwise.

    Fortunately, a plurality of the Republicans who are playing you recognize this too. You will soon see Senator Boner recreate the Cleavon Little hostage taking scene from Blazing Saddles. The Tea party will hope he shoots. The stupid/corrupt Democratic party will give him something, and he will back down. Then Reps and Dems will go home with a victory.

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  133. 133
    Blurtman says:

    RE: whatsmyname @ 132 – No relevant laws cited. Thought so. You lose that one. It’s not stealing. If it were, someone would be going to jail. No one is even being threatened with jail.

    There is so little respect for facts these days. “It is like” is not the same as “it is.” “I feel like it is” is not the same as “it is.”

    The money working folks paid into SS entitles them to nothing. That money went to pay other folks’ SS. And the surpluses were appropriated by the gubberment and replaced with gubberment IOU’s.

    I hate analogies as they can always be objected to. Why? Because “it is like” is not the same as “it is.”

    You misunderstand what I had stated, Payments have been delayed to the military, with no effect on bond rates. You, like Geithner, are trying to equate not paying for programs with not paying bondholders (default). Not the same at all. Just ask the market. This is why Geithner is a pathetic liar.

    I think the debt ceiling will be extended. We’ll see what gets traded for the extension. But clearly, there is more than enough money to pay bondholders. Whether you think they should be given priority is another issue entirely.

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  134. 134
    whatsmyname says:

    RE: Blurtman @ 133RE: Blurtman @ 133
    “No relevant laws cited. Thought so. You lose that one.”
    This is simply beyond obtuse.

    “It’s not stealing. If it were, someone would be going to jail. No one is even being threatened with jail.”
    Check your dictionary. Stealing has meaning beyond the current penal code.

    “There is so little respect for facts these days.”
    Spoken by a man with no respect for words. How can there be facts if words have no meaning?

    “It is like” is not the same as “it is.” “I feel like it is” is not the same as “it is.””
    You would fault me for addressing your own (ridiculous) analogy?

    “The money working folks paid into SS entitles them to nothing. That money went to pay other folks’ SS. And the surpluses were appropriated by the gubberment and replaced with gubberment IOU’s.”
    Actually, the government pays out SS because there is a law telling them to do so. Your ignorance of the facts does not change the facts.

    “You misunderstand what I had stated, Payments have been delayed to the military, with no effect on bond rates.”
    Give you that one. I missed the sarcasm.

    “But clearly, there is more than enough money to pay bondholders.”
    Yes, if you are immune to content, context, and can remember your talking point. Congratulations. Enjoy the tea.

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  135. 135
    Blurtman says:

    RE: whatsmyname @ 134 – Labels – really, your inaccurate use of them speaks for itself. I am not a tea party member. Now what do you say? Debate the issues, oh, heavens, no!

    If there is a law regarding SS payments, it must be easy to find. I am always eager to learn more. Link? If that is the case, than certainly the debt ceiling must be extended, right? So why the controversy then? If the debt ceiling were not to be extended, certainly you could cite a law that would threaten to incarcerate the no voters? And certainly Geithner would be waving this flag, no? Unless, of course, ….

    No, stealing has no meaning beyond the penal code, and if that were the case, would need to be addressed in the penal code. Here is a question – does a beneficiary of affirmative action steal a spot from a more deserving candidate? Careful.

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  136. 136
    David Losh says:

    RE: whatsmyname @ 132

    Actually Social Security, Medicaid, and Medicare could be made to stand alone. Bush wanted to privitize Social Security, and every one wants universal health care. Problem solved.

    We can cut the military which the entire world wants, and stop our presence globally. Second problem solved. We can default on the $5 Trillion we owe ourselves, and still pay bond holders.

    We can close tax loop holes, cut government spending on corporate welfare, and not be raising taxes.

    The debt ceiling debate is a farce. Boehner should be in the cell next to Geitner, but that would be asking too much. We should just stick with the basics.

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  137. 137
    whatsmyname says:

    RE: Blurtman @ 135
    It should be obvious from my early posts that I do not think you are a member of the tea party. The reference was intended as a scornful reminder of your allies with on this issue. I have offered many points in the debate, and they are memorialized in above posts. I am happy to let them stand for others to evaluate.

    I am not your research butt boy. Are you taking the position that SS payments are not made under defined law? I would be happy enough if you would clearly own that position for all to see.

    Your strawman about incarcerating “no” voters plus your insistence that stealing has no meaning beyond the penal code seems to infer your frame of legal reference is inordinately weighted in criminal justice, but who’s to say? If you truly believe that there is no stealing outside of penal law, (and you’ve certainly demonstrated no higher scruple), you may yet have the opportunity to learn more about this via the civil courts.

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  138. 138
    pfft says:

    Alan Blinder says without all the stimulus and government measures unemployment right now would be at 16%.

    http://www.bloomberg.com/news/2011-05-12/blinder-calls-for-more-fiscal-stimulus-to-boost-jobs-video.html

    Belarus devalued by 25%. I predict they will do better than many of the austerity countries even though it doesn’t appear that it is a total market economy.

    Belarus Economic Crisis Deepens as Currency Plunges
    http://www.nytimes.com/2011/05/12/world/europe/12belarus.html?_r=2&scp=2&sq=belarus&st=cse

    I’d rather be Iceland or Belarus than the PIGS. some of the PIGS won’t grow until 2013.

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  139. 139
    Ben says:

    RE: pfft @ 138http://www.zerohedge.com/article/alan-blinder-fires-first-shot-across-qe3-bow-says-we-need-more-stimulus-boost-employment

    A little under a year ago Moody’s Mark Zandi and Princeton economist and former Fed vice chairman Alan Blinder penned a paper titled “How we Ended the Great Recession” which did nothing but extoll the virtues of spending trillions in both fiscal and monetary stimuli and preventing U3 from hitting 16% (of course how one proves a counterfactual is irrelevant: just remember – if the Fed disclosed its top secret bailout plans the world would end. Same thing here – accept it – after all the guy is a professor at Princeton). In a nutshell Blinder is nothing but Paul Krugman on steroids: a man who believes that there is nothing worse in this world than establishing fiscal (and monetary) discipline now. Well, in an interview with Tom Keene earlier, Blinder fired the first shot across the QE3 bow, telling his Bloomberg host that the US needs “somewhat more” fiscal stimulus once again in order to boost employment (hold on: didn’t we end the Great Recession, and certainly the normal one in the summer of 2009 according to the NBER?). How this would be accomplished in the current climate is not explained. Instead what Blinder says makes one wonder just who is on the tenure committee at Princeton – when asked how we bring the deficit in without austerity, the Princetonian responds: “Unfortunately I think it is very subtle for most political processes especially for the political process in the US. What we should be doing is somewhat more fiscal expansion but at the same time legislating into law fiscal consolidation for the future. Starting 2 years from now, 3 years from now, 18 months from now. But not now.” Of course never now: why bite the bullet now when it can be kicked to some other administration in the indefinite future? Especially when tenure money and/or Wall Street bribes are at stake…

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  140. 140
    pfft says:

    By Ben @ 139:

    RE: pfft @ 138http://www.zerohedge.com/article/alan-blinder-fires-first-shot-across-qe3-bow-says-we-need-more-stimulus-boost-employment

    A little under a year ago Moody’s Mark Zandi and Princeton economist and former Fed vice chairman Alan Blinder penned a paper titled “How we Ended the Great Recession” which did nothing but extoll the virtues of spending trillions in both fiscal and monetary stimuli and preventing U3 from hitting 16% (of course how one proves a counterfactual is irrelevant: just remember – if the Fed disclosed its top secret bailout plans the world would end. Same thing here – accept it – after all the guy is a professor at Princeton). In a nutshell Blinder is nothing but Paul Krugman on steroids: a man who believes that there is nothing worse in this world than establishing fiscal (and monetary) discipline now. Well, in an interview with Tom Keene earlier, Blinder fired the first shot across the QE3 bow, telling his Bloomberg host that the US needs “somewhat more” fiscal stimulus once again in order to boost employment (hold on: didn’t we end the Great Recession, and certainly the normal one in the summer of 2009 according to the NBER?). How this would be accomplished in the current climate is not explained. Instead what Blinder says makes one wonder just who is on the tenure committee at Princeton – when asked how we bring the deficit in without austerity, the Princetonian responds: “Unfortunately I think it is very subtle for most political processes especially for the political process in the US. What we should be doing is somewhat more fiscal expansion but at the same time legislating into law fiscal consolidation for the future. Starting 2 years from now, 3 years from now, 18 months from now. But not now.” Of course never now: why bite the bullet now when it can be kicked to some other administration in the indefinite future? Especially when tenure money and/or Wall Street bribes are at stake…

    biting the bullet is higher unemployment, more debt and a longer recession?

    I’d rather be the US than Greece. Remember when Greece was the role model for Ireland?

    thanks but no thanks.

    “In a nutshell Blinder is nothing but Paul Krugman on steroids: a man who believes that there is nothing worse in this world than establishing fiscal (and monetary) discipline now.”

    how are those austerity countries doing? terrible. still aren’t growing. keynes was right.

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  141. 141
    pfft says:

    Just in case people forget, stimulus worked all over the world.

    Research Desk responds: How do stimulus size and economic growth compare internationally?
    http://voices.washingtonpost.com/ezra-klein/2010/06/research_desk_responds_how_do.html

    Two stimulus countries, Norway and Sweden, are considered very safe investments and their economies are doing well. Remember in the 1990s Sweden did a massive bailout of it’s banking sector. I am sure there were people who said this would lead to a bigger crisis down the road but 20 years later they are a model in a good way.

    Stopping a Financial Crisis, the Swedish Way
    http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?_r=1

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  142. 142
    David Losh says:

    RE: pfft @ 141

    Norway has no economy, Sweden isn’t far behind.

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  143. 143
    David Losh says:

    RE: pfft @ 138

    Belarus has a currency the PIIGS don’t. We’ve been over that.

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  144. 144
    David Losh says:

    RE: pfft @ 138RE: pfft @ 140

    What you never address is that employment has many forms. Self employment is the only way to economic freedom from an individual stand point. All of the jobs that are being lost leaves another opportunity to create more business.

    The great thing about the United States is that we allow people, all people, globally, to do business here. You either form a business, become productive, or go back to Russia, China, or some other commie country.

    If you work a corporate job you are on welfare.

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  145. 145
    David Losh says:

    Why not a post a complete thought about how Real Estate has fallen from being an asset class to a debt instrument?

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  146. 146
    Blurtman says:

    RE: whatsmyname @ 137 I am taking the position that it is not stealing to pay the bondholders first. I am taking the position that there is no law that would define that action as stealing. I am taking the position of truth.

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  147. 147
    Blurtman says:

    RE: David Losh @ 136 – Never let a good crisis go to waste. Both sides are playing fast and loose with the truth to advance their respective agendas. Pathetic, but typical.

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  148. 148
    whatsmyname says:

    RE: Blurtman @ 146
    As there seems to be no statutory law dealing with this narrow question, your position is not disproven.

    The exact same holds true for Geithner’s position.

    I’m no attorney, but if it ever got to court, the closest precedent I can think of is the lookback and possible disgorgement of preferential pre-filing payment patterns from an insolvent company in BK. Advantage Geithner.

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  149. 149
    Blurtman says:

    RE: whatsmyname @ 148 – Well stay tuned. The debt ceilng gets extended with token cuts to the poor. Maybe Obama can wrangle tax increases on those making over 1 million per year, like Kary and Dave. But just this once.

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  150. 150
    pfft says:

    By David Losh @ 142:

    RE: pfft @ 141

    Norway has no economy, Sweden isn’t far behind.

    seriously? those two countries are always near the top of the list as far as highest standards of living.

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  151. 151
    pfft says:

    By David Losh @ 143:

    RE: pfft @ 138

    Belarus has a currency the PIIGS don’t. We’ve been over that.

    some people don’t get it.

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  152. 152
    pfft says:

    By David Losh @ 144:

    RE: pfft @ 138RE: pfft @ 140

    The great thing about the United States is that we allow people, all people, globally, to do business here.

    and they don’t anywhere else?

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  153. 153
    pfft says:

    By Blurtman @ 147:

    RE: David Losh @ 136 – Never let a good crisis go to waste. Both sides are playing fast and loose with the truth to advance their respective agendas. Pathetic, but typical.

    let’s talk about fast and loose. for all your constant screaming of massive fraud you ignored the big insider trading case and a big muni case that had a big settlement and some people went to jail. you just mindlessly rail against the government without pointing out what they do right.

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  154. 154
    David Losh says:

    RE: pfft @ 150

    I’ll go over that another time, but standard of living has nothing to do with economy.

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  155. 155
    pfft says:

    By David Losh @ 154:

    RE: pfft @ 150

    I’ll go over that another time, but standard of living has nothing to do with economy.

    wrong.

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  156. 156

    By pfft @ 150:

    By David Losh @ 142:
    RE: pfft @ 141

    Norway has no economy, Sweden isn’t far behind.

    seriously? those two countries are always near the top of the list as far as highest standards of living.

    I think David thinks they have a high standard of living because they get to hang out with hot blond chicks in bikinis.

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  157. 157
    Scotsman says:

    RE: pfft @ 127

    “it’s not that hard with the internet to get enough info to be a pseudo expert on a message board.”

    “Pseudo” is the operative word. Expert is what you aren’t. There’s a difference between reading and comprehension, as you so ably demonstrate. And following five or six left leaning websites hardly gives you an understanding of the underlying mechanics, although your repetition of partisan talking points is spot on.

    Your posts here aren’t reasoned responses, just a splattering of tangential cut-and-paste rebuttals that fail to capture the whole of the argument. The one constant that underlies your arguments is the liberal belief that feelings are more important than logic, and that somehow one plus one can be made to add up to three.

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  158. 158
    Macro Investor says:

    Why does Pfft spend his time at Seattle bubble, regurgitating pro-liberal happy green shoot talk that he cut/pasted from 5 other blogs (as he put it)? What does he get out of it? Why does he never comment on Seattle or real estate? He only seems to repeat the current spin put forth by the democrats in gov, the bankers, the fed, the National Association of Realtors and their supporters in the media — that the economic data doesn’t matter, the stock market is up.

    Ask yourself why, then understand that all these organizations pay PR firms to get “the word” out to blogs and grass roots organizations. In my opinion it is highly likely Pfft is a paid blogger. There are many of them out there, don’t kid yourself. The fact that he never comments on local real estate convinces me he’s a troll.

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  159. 159
    Blurtman says:

    “Rather than bailout the banks — Iceland could not have done so even if they wanted to — they guaranteed deposits (the way our FDIC does), and let the normal capitalistic process of failure run its course.

    They are now much much better for it than the countries like the US and Ireland who did not.”

    http://www.ritholtz.com/blog/2011/05/how-to-handle-a-financial-crisis-like-iceland/

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  160. 160
    David Losh says:

    RE: pfft @ 141

    “Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits.” https://www.cia.gov/library/publications/the-world-factbook/geos/sw.html

    In the case of the United States stimulus didn’t translate into a welfare society as much as the right wing wants to make that claim. Our stimulus went to corporate welfare for the tinkle down effect.

    You can’t equate a standard of living based on a socialist system to what we do.

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  161. 161
    Scotsman says:

    RE: Blurtman @ 159

    How true- they are on the road to health, having survived the dreaded “austerity”, while we continue to muddle slowly downhill. My favorite comment from the linked article:

    “Interesting that the Swedes, supposed socialists, held closer to the tenets of capitalism than the supposed practitioners of unfettered capitalism here in the US.”

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  162. 162
    David Losh says:

    RE: Blurtman @ 159

    Iceland is another interesting lack of economy. Through bankruptcy the financial sector, which chose Iceland for it’s lack of over sight, or sophistication, packed up, and took all profits to other countries. The bankers made money, paid low taxes, and left. http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Intl%20Tax%20and%20Business%20Guides/2011/dtt_tax_highlight_2011_Iceland.pdf

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  163. 163
    David Losh says:

    RE: pfft @ 155RE: Scotsman @ 161

    When visiting Canada I’m always struck by the high standard of living. If I lived in Canada I would want to have a fat government job because to me that is the top of the food chain there.

    If you look at the tax rates of Sweden you see the same thing.

    What I think happened in some countries that had less over sight of financial markets were that they became havens for financial pirates. I don’t know that for a fact, but it does seem to me that financial market roamed the globe looking for these safe havens.

    What I know for sure is that all capitalism is afraid of a military change in places like South America, or Africa. That volitility adds to profits, but is risky to have your money sit for long.

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  164. 164
    Blurtman says:

    “The Medicare hospital insurance fund for seniors is now projected to run out of money in 2024, five years earlier than last year’s estimate. The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate. Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits, the report said.

    More immediate bad news for seniors: After they’ve gone two years with no cost-of-living increase in Social Security payments, the trustees project a 0.7 percent increase for next year, a raise so small that it will probably be wiped out by higher Medicare Part B premiums for most beneficiaries.”

    Not a badly written story: http://www.kcby.com/news/business/121832914.html

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  165. 165
    Macro Investor says:

    By Blurtman @ 164:

    “The Medicare hospital insurance fund for seniors is now projected to run out of money in 2024, five years earlier than last year’s estimate. The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate. Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits, the report said.

    More immediate bad news for seniors: After they’ve gone two years with no cost-of-living increase in Social Security payments, the trustees project a 0.7 percent increase for next year, a raise so small that it will probably be wiped out by higher Medicare Part B premiums for most beneficiaries.”

    Not a badly written story: http://www.kcby.com/news/business/121832914.html

    By 2024 social security and medicare will only be for the disabled and truly needy. That’s where the $ will run out. It should have been that way from the beginning. In a free society, gov has no business robbing from all of us to pay for dopes who don’t prepare for retirement.

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  166. 166
    pfft says:

    By Scotsman @ 157:

    RE: pfft @ 127

    “itâ��s not that hard with the internet to get enough info to be a pseudo expert on a message board.”

    “Pseudo” is the operative word. Expert is what you aren’t. There’s a difference between reading and comprehension, as you so ably demonstrate. And following five or six left leaning websites hardly gives you an understanding of the underlying mechanics, although your repetition of partisan talking points is spot on.

    Your posts here aren’t reasoned responses, just a splattering of tangential cut-and-paste rebuttals that fail to capture the whole of the argument. The one constant that underlies your arguments is the liberal belief that feelings are more important than logic, and that somehow one plus one can be made to add up to three.

    and yet I said you were wrong in predicting economic disaster and I was right. #clearly winning.

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  167. 167
    Blurtman says:

    RE: Macro Investor @ 165 – If you are paying into SS, you are paying for those who did not save for retirement as well as those that did. Means testing may occur before your scenario plays out to the extent you describe. The gubberment has been recommending that folks set up 401k’s for the last 30 years or so. The median 401k balance for those close to retirement was $60-100,000 in 2007. It may be less than that now. That may mean that most folks will require SS.

    http://www.401kplanning.org/top-401k-planning-questions-and-answers/what-is-a-401k-plan/what-are-average-retirement-savings-for-different-age-groups/

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  168. 168
    pfft says:

    By Macro Investor @ 158:

    Why does Pfft spend his time at Seattle bubble, regurgitating pro-liberal happy green shoot talk that he cut/pasted from 5 other blogs (as he put it)? What does he get out of it? Why does he never comment on Seattle or real estate? He only seems to repeat the current spin put forth by the democrats in gov, the bankers, the fed, the National Association of Realtors and their supporters in the media — that the economic data doesn’t matter, the stock market is up.

    Ask yourself why, then understand that all these organizations pay PR firms to get “the word” out to blogs and grass roots organizations. In my opinion it is highly likely Pfft is a paid blogger. There are many of them out there, don’t kid yourself. The fact that he never comments on local real estate convinces me he’s a troll.

    here we go again! you guys really need to get over yourselves.

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  169. 169

    RE: Blurtman @ 164 – I brought that up in the Medical thread and pointed out that Ryan’s plan wouldn’t have affected anyone until 2026, when those 50 now turn 65. This news indicate the system will be bankrupt before then!

    Clearly something needs to be done, but that isn’t necessarily Ryan’s plan.

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  170. 170
    pfft says:

    By Scotsman @ 161:

    RE: Blurtman @ 159

    How true- they are on the road to health, having survived the dreaded “austerity”, while we continue to muddle slowly downhill. My favorite comment from the linked article:

    “Interesting that the Swedes, supposed socialists, held closer to the tenets of capitalism than the supposed practitioners of unfettered capitalism here in the US.”

    austerity in real-time has proven to be a disaster. that is a proven fact. there is no debating it.

    by the way sweden did have a recent stimulus package.

    Sweden announces $1B economic stimulus package
    http://articles.economictimes.indiatimes.com/2008-12-05/news/28406554_1_riksbank-swedish-central-bank-repo-rate

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  171. 171
    pfft says:

    By Blurtman @ 164:

    More immediate bad news for seniors: After they’ve gone two years with no cost-of-living increase in Social Security payments

    yeah because we had deflation so in real terms there was.

    Q. Why is there no COLA for 2011?

    A. By law, Social Security and Supplemental Security Income benefits increase automatically if there is an increase in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the year in which a COLA was last determined to the third quarter of the current year. This year there is no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2010.

    If there is no increase, there can be no COLA

    http://www.ssa.gov/cola/2011/2011faqs.htm#q3

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  172. 172
    pfft says:

    By Macro Investor @ 165:

    By Blurtman @ 164:
    “The Medicare hospital insurance fund for seniors is now projected to run out of money in 2024, five years earlier than last year’s estimate. The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate. Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits, the report said.

    More immediate bad news for seniors: After they’ve gone two years with no cost-of-living increase in Social Security payments, the trustees project a 0.7 percent increase for next year, a raise so small that it will probably be wiped out by higher Medicare Part B premiums for most beneficiaries.”

    Not a badly written story: http://www.kcby.com/news/business/121832914.html

    By 2024 social security and medicare will only be for the disabled and truly needy. That’s where the $ will run out. It should have been that way from the beginning. In a free society, gov has no business robbing from all of us to pay for dopes who don’t prepare for retirement.

    we tried that and it didn’t work so we have SS. SS also isn’t just for retirees.

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  173. 173
    Blurtman says:

    RE: Kary L. Krismer @ 169 – Not to worry. The recovery will fill up those coffers lickety-split. Odd that the story that projects funds running out sooner than expected does not factor in the recovery. Hmmmmm….

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  174. 174
    Scotsman says:

    RE: pfft @ 166

    “I said you were wrong in predicting economic disaster and I was right”

    I’m wrong? Seems to me we’re living economic disaster right now- 16% real unemployment, 50% if you’re young and black, $6 trillion of net worth lost for the middle class and still growing, rising commodity prices and inflation at almost 6%, governments at all levels cutting back or insolvent, etc. Of course you call it recovery because HuffPo tells you to, and you’ve never taken the time to leave the basement and check out the real world.

    I’m starting to believe you don’t have a job, or at least have very little contact with average people and their everyday problems. Nobody can be that blind to reality.

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  175. 175
    David Losh says:

    By pfft @ 152:

    By David Losh @ 144:
    RE: pfft @ 138RE: pfft @ 140

    The great thing about the United States is that we allow people, all people, globally, to do business here.

    and they don’t anywhere else?

    In most countries generational wealth prevents, or inhibits, people from staking a claim to develop wealth. We allow people to buy property, and businesses from all over the world.

    Many of the people who come here from other countries never had the opportunity to own a business let alone be able to amass a fortune.

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  176. 176
    pfft says:

    By Scotsman @ 174:

    RE: pfft @ 166

    “I said you were wrong in predicting economic disaster and I was right”

    I’m wrong? Seems to me we’re living economic disaster right now- 16% real unemployment, 50% if you’re young and black, $6 trillion of net worth lost for the middle class and still growing, rising commodity prices and inflation at almost 6%, governments at all levels cutting back or insolvent, etc. Of course you call it recovery because HuffPo tells you to, and you’ve never taken the time to leave the basement and check out the real world.

    I’m starting to believe you don’t have a job, or at least have very little contact with average people and their everyday problems. Nobody can be that blind to reality.

    you can’t admit you’re wrong. just like softwarengineer you make up new stats like your unemployment rate.

    “Of course you call it recovery because HuffPo tells you to”

    I don’t read the Huffpo and the data tells me recovery. obama has added more jobs than bush did in his whole 8 years.

    “rising commodity prices and inflation at almost 6%”

    there you go again making stuff up. I guess you haven’t seen the little commodity crash we just had? inflation was at a 4.8% annualized rate last month. the forecast is 3.2% for the year.

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  177. 177
    Scotsman says:

    RE: pfft @ 176

    Oh, sorry, I forgot you believed/worshiped the government and their manipulated statistics. I was going off of something more consistent:

    http://www.shadowstats.com/

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  178. 178
    Blurtman says:

    Interesting perspective: “Mr. Druckenmiller had already recognized that the government had embarked on a long-term march to financial ruin. So he publicly opposed the hysterical warnings from financial eminences, similar to those we hear today. He recalls that then-Secretary of the Treasury Robert Rubin warned that if the political stand-off forced the government to delay a debt payment, the Treasury bond market would be impaired for 20 years.

    “Excuse me? Russia had a real default and two or three years later they had all-time low interest rates,” says Mr. Druckenmiller. In the future, he says, “People aren’t going to wonder whether 20 years ago we delayed an interest payment for six days. They’re going to wonder whether we got our house in order.”

    Mr. Druckenmiller is puzzled that so many financial commentators see the possible failure to raise the debt ceiling as more serious than the possibility that the government will accumulate too much debt. “I’m just flabbergasted that we’re getting all this commentary about catastrophic consequences, including from the chairman of the Federal Reserve, about this situation but none of these guys bothered to write letters or whatever about the real situation which is we’re piling up trillions of dollars of debt.”

    Some have argued that since investors are still willing to lend to the Treasury at very low rates, the government’s financial future can’t really be that bad. “Complete nonsense,” Mr. Druckenmiller responds. “It’s not a free market. It’s not a clean market.” The Federal Reserve is doing much of the buying of Treasury bonds lately through its “quantitative easing” (QE) program, he points out. “The market isn’t saying anything about the future. It’s saying there’s a phony buyer of $19 billion of Treasurys a week.”

    http://www.zerohedge.com/article/druckenmiller-calls-out-treasury-ponzi-scheme-its-not-free-market-its-not-clean-market-ident

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  179. 179

    Here’s an article explaining some of the reasons there haven’t been Wall Street prosecutions.

    http://www.msnbc.msn.com/id/43024309/ns/business-us_business/

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  180. 180
    David Losh says:

    RE: Kary L. Krismer @ 179

    Well, yeah, it’s all legal. There are thousands of loop holes that are legal. There is no way for any government to anticipate what some scum will do next. There are so many laws on the books that what we are doing right now is illegal, and we are getting away with it because of some loop hole, some place. Banking, and finance laws are especially subject to exploitation because no one has died. There are no physical injuries to point to, no babies, or animals have been hurt.

    Let’s take our favorite, strategic default. It’s legal. LLCs are legal. Buying a property you once owned at auction is legal. Bankrupting your LLC is legal. Accumulating hard assets, such as gold, is legal. Buying gold with credit cards while not having any income is legal. Going bankrupt is legal or simply not paying is legal. Taking out insurance on some one, or something you know is going to have problems is legal. Demanding payment on accounts that have been settled is legal. Threatening a persons credit rating is legal.

    There are all kinds of things that are legal that you may find morally reprehensible.

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  181. 181
    Blurtman says:

    RE: Kary L. Krismer @ 179 – Perhaps 10 years from now, this story will seem as ludicrous as the Forbes pro-RE bubble story posted by the Tim. Possibly because both businesses, Forbes and Businessweek, cater to the FIRE industry. As has been seen with S&P and Moody’s, execs will destroy their firm’s credibility for the quick buck.

    The article is a poorly reasoned fluff piece that uses the following ridiculous line of reasoning: Despicable things happened that weren’t technically legal, so no one is going to jail. Illegal things happened that did not cause the crisis, so no one is going to jail.

    It is clearly and legally fraud to knowingly misrepresent the risk of securities you sell. The fact that Wall Street execs knew they were committing fraud is well documented, e.g. selling sacks of cr*p to clients represented as great deals.

    For a more detailed rebuttal of this industry sponsored propaganda, see: http://market-ticker.org/akcs-www?post=186060

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  182. 182
    Blurtman says:

    RE: Blurtman @ 181 – Correction: “Despicable things happened that weren’t technically illegal, so no one is going to jail.” Dang, the editing function on this blog is useless.

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  183. 183
    David Losh says:

    RE: pfft @ 170

    Did you read where the “stimulus” was going?

    It’s all about jobs. Here, in the United States, banking is considered a part of the service sector. If you search banking jobs you see it’s global. We dump money into keeping the banking sector solvent so we can maintain those jobs, in my opinion. Sweden looks like it is more interested in manufacturing, and ultimately exports.

    More stimulus in this country will go to the bond market. It’s much more important for our politicians to maintain our paper wealth rather than provide jobs to people who work for a living.

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  184. 184

    RE: Blurtman @ 181 – I don’t think it’s as much of a fluff piece as some of the contra articles.

    Bad things happening do not equal a crime, except in banana republics and within the city limits of Seattle. To be a crime it has to be illegal beforehand, not just because something bad happened and after that someone decides someone should pay by possibly going to jail.

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  185. 185
    Blurtman says:

    RE: Kary L. Krismer @ 184 – Agreed.

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  186. 186
    pfft says:

    By Scotsman @ 177:

    RE: pfft @ 176

    Oh, sorry, I forgot you believed/worshiped the government and their manipulated statistics. I was going off of something more consistent:

    http://www.shadowstats.com/

    shadow stats is a joke. according to them the economy is contracting by 7% this year while adding jobs! of course you would be fooled.

    “manipulated statistics”

    prove it.

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  187. 187
    Scotsman says:

    Here’s some reality on the debt limit/default debate. I had a few econ classes with Stan- he was/is a very bright guy and very down to earth. I never would have guessed he would go on to such fame, as his interests back then were in academics:

    http://online.wsj.com/article/SB10001424052748703864204576317612323790964.html?mod=WSJ_Opinion_LEADTop

    “‘A financial crisis is surely going to happen as big or bigger than the one we had in 2008 if we continue to behave the way we’re behaving,” says Stanley Druckenmiller, the legendary investor and onetime fund manager for George Soros. Is this another warning from Wall Street that Congress must immediately raise the federal debt limit to prevent the end of civilization?

    No—Mr. Druckenmiller has heard enough of such “clamor and hyperbole.” The grave danger he sees is that politicians might give the government authority to borrow beyond the current limit of $14.3 trillion without any conditions to control spending. “

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  188. 188
    Scotsman says:

    RE: pfft @ 186

    Let’s look at the Bureau of Labor Statistics data.

    During the Bush presidency, net total employment went up by 1.08 million jobs. So far, during the Obama presidency, total employment has been reduced by 3.3 million jobs.

    What was your claim?

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  189. 189
    pfft says:

    By Scotsman @ 188:

    RE: pfft @ 186

    Let�s look at the Bureau of Labor Statistics data.

    During the Bush presidency, net total employment went up by 1.08 million jobs. So far, during the Obama presidency, total employment has been reduced by 3.3 million jobs.

    What was your claim?

    Obama Created More Jobs In One Year Than Bush Created In Eight
    http://thinkprogress.org/2011/01/07/obama-more-jobs-bush/

    “So far, during the Obama presidency, total employment has been reduced by 3.3 million jobs.”

    those are from the bush recession.

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  190. 190
    pfft says:

    By Scotsman @ 187:

    Here’s some reality on the debt limit/default debate. I had a few econ classes with Stan- he was/is a very bright guy and very down to earth. I never would have guessed he would go on to such fame, as his interests back then were in academics:

    http://online.wsj.com/article/SB10001424052748703864204576317612323790964.html?mod=WSJ_Opinion_LEADTop

    “‘A financial crisis is surely going to happen as big or bigger than the one we had in 2008 if we continue to behave the way we’re behaving,” says Stanley Druckenmiller, the legendary investor and onetime fund manager for George Soros. Is this another warning from Wall Street that Congress must immediately raise the federal debt limit to prevent the end of civilization?

    Noâ��Mr. Druckenmiller has heard enough of such “clamor and hyperbole.” The grave danger he sees is that politicians might give the government authority to borrow beyond the current limit of $14.3 trillion without any conditions to control spending. “

    spending is not the problem. it’s the unemployment situation that is too high. we have a deficit because of the bush recession, not out of control spending. certainly not because of obama’s “out of control” spending. we need to increase taxes on the rich. that is what the people want, not cuts.

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  191. 191
    One Eyed Man says:

    RE: Scotsman @ 188

    If I had Horsey’s talent I’d draft a cartoon titled “How Bush Created 8 Million Bubble Jobs.”

    It would show George W on his knee’s in front of Uncle Sam saying “I need jobs to justify the tax cuts” and Uncle Sam saying “Blow Me.”

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  192. 192
    Blurtman says:

    George W. Bush was the worst president of all time. It was expected that would be the case before he took office. But not only was he an absolute zero on mismanaging the economy, he was a despicable bag of dirt regarding the Iraq war. He is a boastful draft dodger who killed thousands of Iraqi women and children, and then exhibited the in-bred lack of conscience by joking about the rationale for killing these people. His landing on the USS Abraham Lincoln was totally farcical. Anyone who voted for this disaster after his first term in office needs to do some serious self-examination.

    “On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially.

    The Census’ final report card on Bush’s record presents an intriguing backdrop to today’s economic debate. Bush built his economic strategy around tax cuts, passing large reductions both in 2001 and 2003. Congressional Republicans are insisting that a similar agenda focused on tax cuts offers better prospects of reviving the economy than President Obama’s combination of some tax cuts with heavy government spending. But the bleak economic results from Bush’s two terms, tarnish, to put it mildly, the idea that tax cuts represent an economic silver bullet.

    Economists would cite many reasons why presidential terms are an imperfect frame for tracking economic trends. The business cycle doesn’t always follow the electoral cycle. A president’s economic record is heavily influenced by factors out of his control. Timing matters and so does good fortune.

    But few would argue that national economic policy is irrelevant to economic outcomes. And rightly or wrongly, voters still judge presidents and their parties largely by the economy’s performance during their watch. In that assessment, few measures do more than the Census data to answer the threshold question of whether a president left the day to day economic conditions of average Americans better than he found it.
    If that’s the test, today’s report shows that Bush flunked on every relevant dimension-and not just because of the severe downturn that began last year.”

    http://www.theatlantic.com/politics/archive/2009/09/closing-the-book-on-the-bush-legacy/26402/

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  193. 193
    Scotsman says:

    Hey pffffft- another AGW “believer” comes clean and gets off the bus:

    “David Evans is a scientist. He has also worked in the heart of the AGW machine. He consulted full-time for the Australian Greenhouse Office (now the Department of Climate Change) from 1999 to 2005, and part-time 2008 to 2010, modeling Australia’s carbon in plants, debris, mulch, soils, and forestry and agricultural products. He has six university degrees, including a PhD in Electrical Engineering from Stanford University. The other day he said:
    The debate about global warming has reached ridiculous proportions and is full of micro-thin half-truths and misunderstandings. I am a scientist who was on the carbon gravy train, understands the evidence, was once an alarmist, but am now a skeptic.
    And with that he begins a demolition of the theories, premises and methods by which the AGW scare has been foisted on the public.
    The politics:
    The whole idea that carbon dioxide is the main cause of the recent global warming is based on a guess that was proved false by empirical evidence during the 1990s. But the gravy train was too big, with too many jobs, industries, trading profits, political careers, and the possibility of world government and total control riding on the outcome. So rather than admit they were wrong, the governments, and their tame climate scientists, now outrageously maintain the fiction that carbon dioxide is a dangerous pollutant”

    http://hotair.com/archives/2011/05/15/former-alarmist-scientist-says-anthropogenic-global-warming-agw-based-on-false-science/

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  194. 194
    Scotsman says:

    RE: Blurtman @ 192

    Thank gawd we have Obama to straighten this whole mess out, eh? I can’t wait to hear your explanation of how the fact that we now have more wars, more unemployment, more regulation, more suffering and poor, more debt, more income inequality, in fact pretty much more of everything negative Bush is supposedly responsible for than we did three years ago. And this is in spite of the fact that democrats have controlled either a majority or all of the legislative process for the past 4 years.

    In 2020, will it still be Bush’s fault, or will you have finally moved on? Maybe then it will all be Palin’s fault?

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  195. 195
    Blurtman says:

    RE: Scotsman @ 194 – I would be the first to agree that we need better choices. But George W. Bush was an absolute disaster on the basis of his own rotten record, irrespective of comparisons to Obama. And Obama still has one year or five to go.

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  196. 196
    pfft says:

    By Scotsman @ 193:

    Hey pffffft- another AGW “believer” comes clean and gets off the bus:

    the vast majority of scientists disagree. his claims are over 4 years old but you treat it like breaking news.

    NOAA: 2010 Tied For Warmest Year on Record
    http://www.noaanews.noaa.gov/stories2011/20110112_globalstats.html

    Even if global warming isn’t real we still win buy saving money and reducing pollution.

    you believe in pollution right?

    a quick google search finds many rebuttals.

    “I am not a climate modeller”
    http://www.desmogblog.com/node/3228

    The Australian’s War on Science XV
    http://scienceblogs.com/deltoid/2008/07/the_australians_war_on_science_16.php

    when he was proven wrong he said that the models “got lucky.”

    David Evans on GHGs
    http://davidappell.blogspot.com/2008/07/david-evans-on-ghgs.html

    good try. he’s only a mathematician. next.

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  197. 197
    pfft says:

    By Scotsman @ 194:

    RE: Blurtman @ 192

    Thank gawd we have Obama to straighten this whole mess out, eh? I can’t wait to hear your explanation of how the fact that we now have more wars, more unemployment, more regulation, more suffering and poor, more debt, more income inequality, in fact pretty much more of everything negative Bush is supposedly responsible for than we did three years ago. And this is in spite of the fact that democrats have controlled either a majority or all of the legislative process for the past 4 years.

    In 2020, will it still be Bush’s fault, or will you have finally moved on? Maybe then it will all be Palin’s fault?

    bush tanked the economy. end of story.

    “we now have more wars”

    obama is really to blame for Libya? I blame the LIbyan government. who do you blame? Obama did exactly what he said he would. He said he’d ramp down Iraq(which he did) and concentrate on Afghanistan which Bush ignored because he lied his way into Iraq.

    Obama said he’d get Bin Laden and he did. Bush had 8 years and he didn’t. Bush said he didn’t spend much time on Bin Laden. Bush is one of the worst presidents in American history.

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  198. 198
    pfft says:

    By Blurtman @ 195:

    RE: Scotsman @ 194 – I would be the first to agree that we need better choices. But George W. Bush was an absolute disaster on the basis of his own rotten record, irrespective of comparisons to Obama. And Obama still has one year or five to go.

    Obamacare and getting Bin Laden has put Obama on the cusp of becoming a great president. tens of millions of people will owe their health to what he passed even in all it’s faults. to become a great president he needs to prosecute wall street and find a way out of Afghanistan that leaves us safer. His biggest failure so far is not getting a climate bill.

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  199. 199
    Blurtman says:

    RE: whatsmyname @ 148 – BTW, please alert the authorities. The SS and Medicaire trust funds contain no money. It was stolen by our elected officials. Test your thesis and have them arrested.

    http://www.washingtonpost.com/wp-dyn/content/story/2010/08/10/ST2010081000480.html?sid=ST2010081000480

    http://www.cato-at-liberty.org/the-social-security-and-medicare-trust-funds-are-a-whats-the-word/

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  200. 200
    whatsmyname says:

    By Blurtman @ 199:

    RE: whatsmyname @ 148 – BTW, please alert the authorities. The SS and Medicaire trust funds contain no money. It was stolen by our elected officials. Test your thesis and have them arrested.http://www.washingtonpost.com/wp-dyn/content/story/2010/08/10/ST2010081000480.html?sid=ST2010081000480http://www.cato-at-liberty.org/the-social-security-and-medicare-trust-funds-are-a-whats-the-word/

    I hate to rip on you after your very attractive post 192, but
    A. It was you that confuses rule of law with the criminal code, and
    B. There’s nothing new here. Try telling the CATO Institute that a private trust fund with only treasuries in it has no money. They would be most insistent that those are paid, whatever the necessary measures. Perhaps we would be better off if SS held obligations from WAMU instead?

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  201. 201
    pfft says:

    By Blurtman @ 199:

    RE: whatsmyname @ 148 – BTW, please alert the authorities. The SS and Medicaire trust funds contain no money. It was stolen by our elected officials. Test your thesis and have them arrested.

    http://www.washingtonpost.com/wp-dyn/content/story/2010/08/10/ST2010081000480.html?sid=ST2010081000480

    http://www.cato-at-liberty.org/the-social-security-and-medicare-trust-funds-are-a-whats-the-word/

    so US bonds aren’t assets? great then we don’t have to worry about the deficit and just keep spending!

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  202. 202
    Blurtman says:

    RE: whatsmyname @ 200 – The WAPO article describes the mechanism by which SS recipients are paid. If outflows are greater than inflows, as currently seems to be the case in spite of the recovery, those IOU’s in the trust fund need to be cashed in. The SS recipients cannot be paid with these IOU’s, however. So Treasury has to issue new bonds when the trust fund IOU’s are called, and the cash so generated makes up the difference. So really, what is in the trust funds are promises to make good on the borrowed, or as you prefer, stolen money, and if Treasury can borrow no more, the SS recipients do not receive their checks. So from a valuation perspective, the risk of these IUO’s is currently quite high, and their face value decreased substantially.

    Incidentally, the money that should have been kept in the trust fund was used to pay real bills, with the real trust fund money. You know, to pay military contractors (where do you think the cash on those pallets in Iraq came from), and other legitimate bills. So using your logic, this money was stolen by other programs. Got git ‘em.

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  203. 203
    Blurtman says:

    Incidentally, the SS trust fund contains “special Treaury bonds.” Basically, accounting entries (or “funny money” as described in the WAPO article) that are not liquid or tradeable on the open market. Only Treasury can redeem them, by issuing Treausry bonds, unless of course, they cannot. The money is gone, spent by Republicans and Democrats alike. New party anyone? And no, not Tea, please.

    “The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.”

    http://www.ssa.gov/pressoffice/factsheets/WhatAreTheTrust.htm

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  204. 204
    whatsmyname says:

    RE: Blurtman @ 202
    You really are too funny. All treasuries are IOU’s.

    How do you think our government funds the redemption of privately held T-bonds? He makes the point that the government’s IOU’s to itself aren’t in cash. Guess what, neither are their IOU’s to private bondholders. Redemptions into the deficit all get funded the same way – replacement T’s. Cash is fungible.

    Your argument to date? I have a T-bond, there is plenty of money to pay me; he has a T-bond, the money is all gone.

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  205. 205
    whatsmyname says:

    RE: Blurtman @ 203
    So you think that trading the bonds on the secondary market makes the credit behind them stronger?

    Both types are only redeemable by the treasury. Both types are guaranteed by the government.

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  206. 206
    Blurtman says:

    RE: whatsmyname @ 205 – I think you are losing the debate with yourself. Post 205 seems to have answered Post 204. I can step in any time you want, but perhaps in a few more posts the light bulb will turn on.

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  207. 207
    pfft says:

    By Blurtman @ 203:

    Incidentally, the SS trust fund contains “special Treaury bonds.” Basically, accounting entries (or “funny money” as described in the WAPO article) that are not liquid or tradeable on the open market. Only Treasury can redeem them, by issuing Treausry bonds, unless of course, they cannot. The money is gone, spent by Republicans and Democrats alike. New party anyone? And no, not Tea, please.

    “The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.”

    http://www.ssa.gov/pressoffice/factsheets/WhatAreTheTrust.htm

    those bonds are just like any other us bond except it’s not able to be sold on the open market. the SS trust fund gets cash when it needs it. I think it’s redeeming them right now for cash right now because SS is spending more money than it’s taking in in tax.

    whenever someone borrows money it almost always is “gone” to pay for a house, car and etc.

    “The money is gone, spent by Republicans and Democrats alike.”

    that’s true for almost all money that is lent to the government or to anyone really. those bonds are as valid as any other bond issued by the government. there is zero chance the government will default on it’s obligations to SS unless republicans do something stupid.

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  208. 208
    pfft says:

    By whatsmyname @ 204:

    RE: Blurtman @ 202
    Your argument to date? I have a T-bond, there is plenty of money to pay me; he has a T-bond, the money is all gone.

    yep.

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  209. 209
    whatsmyname says:

    Blurtman @ 206
    Nonsequitor. Perhaps if you were to try and spell out an actual argument, you might see that. I am frankly unable to tell from this post what words you are re-defining.

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  210. 210
    Blurtman says:

    RE: whatsmyname @ 209 – Ok, so were are having two different debates here, I think. One, the issue of whether “deafulting” on SS benefits is a civil or legal infraction. Let’s table that one for now, but not for too long.

    The other, that Tim Geithner lied when he said that if we do not extend the debt ceiling, we roil the bond market as we will default on UST’s that are held by the bond market.

    So mathematics has show that there is more than enough money to pay bondolders as interest on UST’s is a fraction of the total budget, with or without a debt ceilng extension.

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  211. 211
    whatsmyname says:

    By Blurtman @ 210:

    RE: whatsmyname @ 209 – Ok, so were are having two different debates here, I think. One, the issue of whether “deafulting” on SS benefits is a civil or legal infraction. Let’s table that one for now, but not for too long.

    The other, that Tim Geithner lied when he said that if we do not extend the debt ceiling, we roil the bond market as we will default on UST’s that are held by the bond market.

    So mathematics has show that there is more than enough money to pay bondolders as interest on UST’s is a fraction of the total budget, with or without a debt ceilng extension.

    No, today’s argument starts with your assertions on post 199 that
    1. I claim there is a criminal law aspect to defaulting on SS payments or bonds. I do not. This is a straw man.
    2. That the money represented by SS held T-bonds is somehow more “gone” than that of other T-bonds. Not factually true. Ultimately repayment of the both types comes from the exact same sources.

    As to whether Geithner lied, I go back to post 148 wherein we lay out why neither your viewpoint, nor my construct of Geithner’s is disproven under the law as it stands. Calling Geithner a liar on this is intellectually the same as Geithner calling you a liar on this. If he were truly a liar, the Republicans you cite in post 1 would not need to pass new legislation to force the issue. The fact is that there is no law they can cite to compel him via the court to see things their (and your) way.

    Mathematics says that there is enough money to shower you and I both with $1B each. However, the law doesn’t currently provide for that. So we have to view the mathematics in light of what the law does allow. Bingo; goes right back to your argument with Uncle Tim.

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  212. 212
    Blurtman says:

    Now with regards to existing Special Treasury Bonds (STB’s) being equivalent to existing US Treasuries, they are clearly not equivalent. If the SS trust fund held exisiting US Treasuries, it could sell them in times of need on the open market, in which case they would be redeemed by the buyer of the Treasuries, not the US government. In the case of STB’s, the trust fund cannot sell these on the open market, they are illiquid. It must have the US Treasury redeem these IOU’s.

    So the market for US Treasuries is robust. The “market” for STB’s is quite constrained and their price and risk unknowable.

    Now you might say why would the secondary market buy UST’s if the USG defaulted on them? Well, there is more than enough money to pay existing bondholders and the rest can be rolled over without requiring a debt ceiling extension. Look at interest rates on UST’s now if you have any doubts.

    What about STB’s? Who knows, there is no market for them absent the USG. Do holders of UST’s give a crap about STB’s as Geithner claims? If Geithner says we will honor our commitments to UST’s, but everything else is up for grabs, if there were a maket for STB’s, their value would crash, but UST’s would not. That is the argument and has been all along. We are talking about markets that are quite diferent.

    Fungible? By law, no. UST’s cannot be substituted in the SS trust fund for STB’s. STB’s can be redeemed by the Treasury through the monies raised through taxation, balancing the budget, or issuing UST’s. Unless of course these avenues are closed. But by the very definition of “fungible”, they are not fungible.

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  213. 213
    David Losh says:

    I love the Social Security, Medicare debate. Scotsman and the dejayoo want to portray our system of elder care as some sort of entitlement welfare state program when it is actually individually funded.

    Congress can pass laws concerning Social Security, or Medicare at any time. They can raise the taxes to pay for those items. They can demand, and convert those “special” bonds into cash, or long term Treasury Bonds. Congress can do what ever it wants, but they are constrained by the senior citizen voting power.

    The Republicans are the ones who have systematically vilified those people concerned with the rights of seniors to the benefits of a life time of paying into this system. The fact is we were all forced to pay in no matter how obvious it was that there would never be enough money to pay out. We have effectively taken care of the World War II generation, and that’s it.

    The temptation is to shut the programs down. My preference is to expand the programs to be much more inclusive. That’s where the socialism lies.

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  214. 214
    David Losh says:

    RE: Blurtman @ 210

    You are of course right that Gietner lied, is lying, and is trying desperately to keep his job going. We are different than every country in the world in that we have military might.

    We can do whatever we want. The most significant thing we can do is make peace in the Middle East. Let’s call China, and Russia trading partners. We all have an interest in oil, for now, and an interest in border security.

    The main reason I voted for Obama is that he said he would sit down and talk with Amadinejad if given the opportunity. McCain kept insisting you can’t reason with these people. My contention is that we have to.

    We are a long ways from the Crusades, but not that far. We are a Christian country that has these right wing fanatical Christians killing abortion doctors, having Nazi gatherings, or burning the Koran. We are crazy Americans who claim they are unreasonable? We have a military presence in every country across Northern Africa that we figure can do us some good. They don’t occupy us.

    If Obama could come to an agreement for a peace dividend, we would have plenty of surplus.

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  215. 215
    whatsmyname says:

    RE: Blurtman @ 212
    Bonds can only be redeemed by the obligor. This may initially seem like a distinction without a difference, as it is true the STB’s can not be publicly traded. and are therefore less liquid. But the illiquidity affects the SSI’s ability to draw down money to fund SSI payments beyond tax collections, interest and maturing bonds, not the validity of the bond’s claims on the treasury.

    It is the same claim that gives tradable UST’s their value, and it means that lacking other means the treasury would need to fund current STB redemptions via issuance of UST’s. So the value of the “trust fund” is directly tied to the robustness of the UST’s. No need to worry about an imaginary secondary market or how it would value them under imaginary scenarios.

    When I say fungible; I am talking about the money in the Treasury, regardless of its origin.

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  216. 216
    pfft says:

    anyone who supports austerity should be ashamed of themselves.

    Money Troubles Take Personal Toll in Greece
    http://www.nytimes.com/2011/05/16/business/global/16drachma.html?_r=1&pagewanted=1

    Aris Violatzis, Anargyros D.’s counselor, says that calls to the Klimaka charity’s suicide help line have risen to 30 a day, twice the number two years ago.

    “We cannot imagine this,” Mr. Violatzis said. “We were once the 29th-richest country in the world. This is a nation in deep emotional shock.”

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  217. 217
    Blurtman says:

    RE: whatsmyname @ 215 – “But the illiquidity of the STB’s does not affect the validity of the bond’s claims on the treasury.” – No one has argued that.

    “It is the same claim that gives tradeable UST’s their value.” That is being debated. I don’t know how you would measure “sameness.” I am saying that Treasury can prioritize claims to prevent a UST bondholder default, and that the claims would then not be equivalent, and may not be so now anyway.

    “and it means that lacking other means the treasury would need to fund current STB redemptions via issuance of UST’s.” – Yes, if it can. And if it can’t, there is no legal recourse, and the UST market need not necessarily be roiled by a failure to pay STD’s if payment of existing UST obligations were so prioritized and communicated.

    “So the value of the “trust fund” is directly tied to the robustness of the UST’s.” Ahh, this has the sound of more Finance 101 bullshat. It sounds like it could be true, but it is not.. The “value” of the trust fund is tied to the robustness of the claim. If Geithner prioritized paying existing UST bondholders, UST’s would continue to be robust, but the value of the trust fund might not be if access to funding by these robust UST’s were uncertain or not available. They are not directly tied necessarily.

    Further, you omit the final point. The robustness of UST’s is not tied to the value of the SS trust fund, which is the point of this discsusion, which is where I originally came in, and which is what Geithner has claimed, afterall, and, therefore, Geithner is a liar.

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  218. 218
    whatsmyname says:

    1 “But the illiquidity of the STB’s does not affect the validity of the bond’s claims on the treasury.” – No one has argued that.”
    Just setting a full table; not everything I say is meant to contradict you.

    2 “It is the same claim that gives tradeable UST’s their value.” That is being debated. I don’t know how you would measure “sameness.”
    I would say the the government guarantee measures the sameness.

    3 “I am saying that Treasury can prioritize claims to prevent a UST bondholder default, and that the claims would then not be equivalent, and may not be so now anyway.”
    You are saying that, but not proving that. I can say that Treasury could prioritize the STB’s, and that the claims would then not be equivalent.

    4 “and it means that lacking other means the treasury would need to fund current STB redemptions via issuance of UST’s.” – Yes, if it can. And if it can’t, there is no legal recourse”
    If it can’t sell UST’s, then what is the value of UST’s at that time?

    5 “and the UST market need not necessarily be roiled by a failure to pay STD’s if payment of existing UST obligations were so prioritized and communicated.”
    This is briefly possible, but doubtful over any longer term. Deadbeat does not equal gold standard. Ever.

    6 “So the value of the “trust fund” is directly tied to the robustness of the UST’s.” Ahh, this has the sound of more Finance 101 bullshat. It sounds like it could be true, but it is not.”
    This is a little bit of a simplification because the trust fund is not intended to be portfolio. However, the need to get at the current portion is as good or as bad as T’s ability to get out UST’s at that time.

    7 “The “value” of the trust fund is tied to the robustness of the claim. If Geithner prioritized paying existing UST bondholders, UST’s would continue to be robust, but the value of the trust fund might not be if access to funding by these robust UST’s were uncertain or not available. They are not directly tied necessarily.”
    Restatement of points 3 and 4.

    8. “Further, you omit the final point. The robustness of UST’s is not tied to the value of the SS trust fund, which is the point of this discsusion, which is where I originally came in, and which is what Geithner has claimed, afterall, and, therefore, Geithner is a liar.
    I think this is restating point 5, and is only part of Geithner’s claim. Not proven, and in my opinion not likely.

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  219. 219
    David Losh says:

    RE: whatsmyname @ 218RE: Blurtman @ 217

    I think some definition is in order http://www.russell.com/us/education_planning/investing_basics/articles/stocks_and_bonds.asp

    Bonds have a face value. It’s either paid, on time, or in default to be paid at a later date.

    It’s interesting that you are discussing bonds due, and payable to American Citizens when they should have full faith in being repaid. Foreign debt is a different matter.

    The entire debt can be restructured. Gietner can present a plan. Anyone can submit a plan. The problem with politics is building consensus.

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  220. 220
    Blurtman says:

    RE: whatsmyname @ 218 – 4 “and it means that lacking other means the treasury would need to fund current STB redemptions via issuance of UST’s.” – Yes, if it can. And if it can’t, there is no legal recourse”
    If it can’t sell UST’s, then what is the value of UST’s at that time?
    – If new UST’s could not be issued by Treasury, they would not exist, so their value is a moot point.

    5 “and the UST market need not necessarily be roiled by a failure to pay STD’s if payment of existing UST obligations were so prioritized and communicated.”
    This is briefly possible, but doubtful over any longer term. Deadbeat does not equal gold standard. Ever.
    – Reality currently disgrees with your opinion. Geithner formally notified Congress that the government would halt its investments in two federal pension plans so it won’t exceed the borrowing limit. And Treasuries did what, exactly, in response? Of course a real world example would be helpful. I could propose Russia today, but that is not exactly the same thing. How about your example?

    6 “So the value of the “trust fund” is directly tied to the robustness of the UST’s.” Ahh, this has the sound of more Finance 101 bullshat. It sounds like it could be true, but it is not.”
    This is a little bit of a simplification because the trust fund is not intended to be portfolio. However, the need to get at the current portion is as good or as bad as T’s ability to get out UST’s at that time.
    – Right, tied to access to UST’s. You said “robustness.”

    8. “Further, you omit the final point. The robustness of UST’s is not tied to the value of the SS trust fund, which is the point of this discsusion, which is where I originally came in, and which is what Geithner has claimed, afterall, and, therefore, Geithner is a liar.
    I think this is restating point 5, and is only part of Geithner’s claim. Not proven, and in my opinion not likely.
    – Again, Geithner formally notified Congress that the government would halt its investments in two federal pension plans so it won’t exceed the borrowing limit. That is, he prioritized. I believe you lose.

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  221. 221
    whatsmyname says:

    “- If new UST’s could not be issued by Treasury, they would not exist, so their value is a moot point.”
    We were discussing the robustness of UST’s. If T can’t sell new UST’s, what is the robustness of existing UST’s?

    “- Reality currently disgrees with your opinion. Geithner formally notified Congress that the government would halt its investments in two federal pension plans so it won’t exceed the borrowing limit. And Treasuries did what, exactly, in response? Of course a real world example would be helpful. I could propose Russia today, but that is not exactly the same thing. How about your example?”
    Giethner is acting under a 1986 law treating this as a loan from the plans with explicit reassurances that the “loan” must be repaid. Is this in anyway similar to the extra-statutory, implied intention to default, prioritization plan championed by your new GOP friends? You’re right on one thing. Russia is different too.

    “- Right, tied to access to UST’s. You said “robustness.”
    Are you suggesting that the Treasury won’t have access to issuing UST’s? Or are we back to arguing that people will buy UST’s from each other, but not from Treasury?

    “- Again, Geithner formally notified Congress that the government would halt its investments in two federal pension plans so it won’t exceed the borrowing limit. That is, he prioritized. I believe you lose.”
    Again, an unattractive, but legally sanctioned loan can be compared to an extra legal default, but as someone (I can’t remember who) once told me, “I feel like it is” is not the same as “it is.”

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  222. 222
    pfft says:

    another “guru” stays too long at the table.

    A Major Bullish Sign, And A Huge Blow To Meredith Whitney
    http://www.businessinsider.com/california-revenue-exceeds-expectations-deficit-narrows-2011-5

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  223. 223
    Blurtman says:

    RE: whatsmyname @ 221 – 3 “I am saying that Treasury can prioritize claims to prevent a UST bondholder default, and that the claims would then not be equivalent, and may not be so now anyway.”
    You are saying that, but not proving that. I can say that Treasury could prioritize the STB’s, and that the claims would then not be equivalent.

    You are saying a lot, but proving nothing. Just your opinion, proven to be wrong, again.

    “Geithner also has authority to pay investors first for interest they’re owed on the debt, according to a decades-old legal opinion. A growing number of conservatives argue that by making interest payments first, the government could avoid default and the Obama administration’s predictions of economic Armageddon.”

    Hence, Geithner lied.

    http://www.washingtonpost.com/business/economy/treasury-quietly-plans-for-failure-to-raise-debt-ceiling/2011/04/21/AFmo5PtE_story.html

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  224. 224
    pfft says:

    By Blurtman @ 223:

    RE: whatsmyname @ 221 – 3 â��I am saying that Treasury can prioritize claims to prevent a UST bondholder default, and that the claims would then not be equivalent, and may not be so now anyway.â��
    You are saying that, but not proving that. I can say that Treasury could prioritize the STB�s, and that the claims would then not be equivalent.

    You are saying a lot, but proving nothing. Just your opinion, proven to be wrong, again.

    “Geithner also has authority to pay investors first for interest theyâ��re owed on the debt, according to a decades-old legal opinion. A growing number of conservatives argue that by making interest payments first, the government could avoid default and the Obama administrationâ��s predictions of economic Armageddon.”

    Hence, Geithner lied.

    http://www.washingtonpost.com/business/economy/treasury-quietly-plans-for-failure-to-raise-debt-ceiling/2011/04/21/AFmo5PtE_story.html

    it’s been a week and you still are trying to win an argument you are losing by using semantics. you haven’t said fraud in awhile though so you’ve got that going for you.

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  225. 225
    pfft says:

    oh my god finally.

    New York Investigates Banks’ Role in Fiscal Crisis
    http://www.nytimes.com/2011/05/17/business/17bank.html?src=twr

    Eric T. Schneiderman, the New York attorney general, has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.

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  226. 226
    whatsmyname says:

    By Blurtman @ 223:

    RE: whatsmyname @ 221 – 3 â��I am saying that Treasury can prioritize claims to prevent a UST bondholder default, and that the claims would then not be equivalent, and may not be so now anyway.â��
    You are saying that, but not proving that. I can say that Treasury could prioritize the STB�s, and that the claims would then not be equivalent.

    You are saying a lot, but proving nothing. Just your opinion, proven to be wrong, again.

    “Geithner also has authority to pay investors first for interest theyâ��re owed on the debt, according to a decades-old legal opinion. A growing number of conservatives argue that by making interest payments first, the government could avoid default and the Obama administrationâ��s predictions of economic Armageddon.”

    Hence, Geithner lied.

    http://www.washingtonpost.com/business/economy/treasury-quietly-plans-for-failure-to-raise-debt-ceiling/2011/04/21/AFmo5PtE_story.html

    This passes for proof in Blurtmanworld?

    You must have linked the wrong article. The opinion referenced in this article is a 1985 GAO opinion that the Treasury secretary “does have the authority to choose the order in which to pay obligation of the United State.” Hmm, so my theory of prioritizing the STB’s first may work after all.

    But wait, isn’t this the same GAO that according to your article “found that “general uncertainty” forced the Treasury to pay millions of dollars in higher interest rates in the months leading up to debt-limit increases in the early 2000s and again last year.”

    Also from your article: Bill Gross, who runs Pimco, the world’s biggest bond fund, said in an e-mail that failure to raise the debt ceiling would be “catastrophic — global investors would move money at the margin to countries which have their act together, interest rates might rise by 50 basis points overnight, the stock market would plunge.”” Not that Bill Gross has the kind of financial credibility you get from “a growing number of conservatives”.

    There are similar, though less dire quotes from former Secretary Robert Rubin, and Deputy Treasury Secretary Neil Wolin.

    Oh, I get it. You didn’t read page 2.

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  227. 227

    RE: pfft @ 225 – I don’t know I’d get too excited. Wasn’t it New York that totally screwed up the appraisal situation after they tried to fix that?

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  228. 228
    pfft says:

    By Kary L. Krismer @ 227:

    RE: pfft @ 225 – I don’t know I’d get too excited. Wasn’t it New York that totally screwed up the appraisal situation after they tried to fix that?

    I am not sure. are you talking about the mortgage servicing thing perhaps? robo-signing?

    I wonder if Cuomo passed over wall street fraud until after his election and just had the new AG take on wall street.

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  229. 229
    pfft says:

    By whatsmyname @ 226:

    By Blurtman @ 223:
    RE: whatsmyname @ 221Not that Bill Gross has the kind of financial credibility you get from “a growing number of conservatives.

    I laughed a lot.

    I wonder what Ronnie thinks of this?

    FLASHBACK: In 1983, Reagan Warned Of ‘Incalculable Damage’ If Debt Ceiling Wasn’t Raised
    http://thinkprogress.org/2011/05/16/reagan-debt-flashback/

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  230. 230

    By pfft @ 228:

    By Kary L. Krismer @ 227:
    RE: pfft @ 225 – I don’t know I’d get too excited. Wasn’t it New York that totally screwed up the appraisal situation after they tried to fix that?

    I am not sure. are you talking about the mortgage servicing thing perhaps? robo-signing?

    I’m talking about the middle-man entities that assign out the appraisers (I can’t remember what they’re called) which take a good portion of the appraiser’s compensation and send out people who don’t know the area.

    Washington had to pass legislation to fix the problem, as did a number of other states, and I think the Feds may have acted to correct some of the issues too.

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  231. 231
    Scotsman says:

    And the recovery roars on- missing on almost all cylinders:

    “If the trend outlined by the continuing stream of ugly data doesn’t reverse quickly, the paltry 1.8% growth we saw in the first quarter may well give way to a formal double-dip (triple-dip?), with economic activity sliding back into the red before the end of 2011″

    http://www.suitablyflip.com/suitably_flip/2011/05/with-recoveries-like-these.html

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  232. 232
    whatsmyname says:

    RE: Scotsman @ 231
    Good article. Odd, do you not think, that our recessionary fortunes seem to move in pretty close step with the price of oil/gasoline, yet housing is to blame for our problems?

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  233. 233
    Blurtman says:

    RE: whatsmyname @ 226 – You seem to be debating yourself again. I suppplied supporting information to my claim that Geithner could indeed pay bondholders first. You asked for proof. Yes, the supporting link indicates that Geithner has freedom to choose what to prioritize. That was never disputed. So the link was provided to validate my statement of ability to prioritize which you disputed. So you are worng, again.

    With regards to uncretainty leading to higher interest payments, again, a pro or con position has not been taken by myself. I have suggested that by indicating to the bond market that bondholders would be paid first, and that there is more than enough money to do so, would ameliorate the currently unmanifested uncertainty. To do so, of course, would remove the administration’s bargaining chip, and so it behooves front man Geithner to wave it around with abandon.

    You have indicated an unwillingness to supply any references to back up your opinions. Such refrences serve not only to educate the blog readers, but also oneself. Of course, it is your right to be ignorant. But it is pointless to engage in a legitimate debate with soneone who continually spouts off unsubstantiated positions, proven to be wrong.

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  234. 234
    whatsmyname says:

    RE: Blurtman @ 233
    Credit where credit is due. Your link 223 on May 16 does provide support for your much moderated statement that Geithner could choose to pay bondholders first. It also clearly undermines my suggestion that it might not be doable. But let’s be honest:

    This is the first actual evidential support you have provided since your original post dated May 1.

    It supports, not proves. I couldn’t find the original document on the GAO website, but the somewhat more complete quote from the opinion found here: http://www.businessinsider.com/tim-geithners-fault-if-the-us-defaults-2011-5 states that this is a tentative opinion based on limited research due to Packwood’s need for an immediate answer. Again, because it is fun to repeat, it is support not proof.

    You presented this article as evidence that my similar hypothetical that Geithner could prioritize the STB’s first is “proven wrong”, although it is equally supported by the GAO theory.

    It is regrettable that you don’t like the paucity of links I post. (I did point you to dictionary.com after all). However, most of your links could be shown to simply not support your argument except through fallacy. I felt that it was enough to keep you from using those to deceive yourself. This seems fair given your strong emotional outbursts regarding liars and disingenuous argumentation.

    I remain unsure exactly what opinions of mine are sufficiently important or pertinent that you wish me to back up with outside links. But to be honest, I am not even quite sure which statements of Geithner’s precisely qualify as “bullshat”

    I do know that your math on “who gets paid” failed to contemplate “who gets paid” after your favored course of action.

    I do know you have vocabulary problems with words like “stealing” and “default” and apparently “proven”, not to mention phrases like “legally due”, plus you seem to confuse “law” with the subset “criminal law”.

    I am glad you have not taken a pro or con standpoint on whether interest rates would be raised. You should be concerned however, that someone took your name in post 210, and called Geithner a liar for saying that the markets would be roiled.

    I find your views on treasuries inscrutable, and I am confused that you would consistently challenge me to prove the idea that SSI payments are a matter of defined law, but then fail to own the contra position. But perhaps you will eventually relent on your implied boycott to educate me further.

    One last thought. If you are at a party where all of your companions are drinking tea; you may wish to wonder at the host’s claim you have been served tea-flavored kool aide instead. Then again, you may wonder if there is a difference. At any rate, I offer this concession humbly, and hope that you will print it up to display on your cube walls.

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  235. 235
    Blurtman says:

    RE: whatsmyname @ 234 – “This is the first actual evidential support you have provided since your original post dated May 1.”

    Incorrect (again.) I posted several links illustrating what the USG spends its money on. These links demonstrated the relatively small size of the interest payments on the existing debt, whether the debt ceiling were extended or not. This proved to be educational for at least one reader. Your links at that point in time: zero. Just opinion, and one-sided demands for substantiating evidence.

    “You presented this article as evidence that my similar hypothetical that Geithner could prioritize the STB’s first is “proven wrong”, although it is equally supported by the GAO theory.” Again, incorrect. I never said that Geithner could not prioritze STB’s. In this position of STB payment prioritization, you must therefore validate that Geithner can prioritize. So you ask me to prove that he can prioritize while taking the odd supporting position that he can. You have a penchant for going nowhere in a circle and regarding that as progress. No matter,

    Now that we are over that hurdle, as Geithner can choose what to prioritize, and as there is more than enough money to pay bondholders, it seems to be a short jump to the fact that by failing to extend the debt ceiling, we are in no danger of defaulting on the debt, if Geithner chooses to prioritize paying the bondholders. Hence, to say otherwise as absoulte fact is a lie. It is merely a matter of preference, not absolute fact. Preference dictated by the goal of advancing an agenda.

    “Bullshat” equals lying. See above.

    “Law.” You introduced the topic. I don not consider it to be germaine to the discussion.

    ” do know that your math on “who gets paid” failed to contemplate “who gets paid” after your favored course of action” Right, that would be a massive discusion considering the number of programs. This one is already going on far too long.

    “Interest rates, roiling the bond marlket.” My exact position, and where I came into this debate, is that if Geithner were to prioritize paying bondholders, and communicate this, there would be no roiling.

    “Tea party.” Labels. Lying to advance agendas. Part of the problem that needs to be done away with, IMHO.

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  236. 236
    whatsmyname says:

    RE: Blurtman @ 235

    “Incorrect (again.) I posted several links illustrating what the USG spends its money on.”
    I do stand corrected. These were not points of contention between us, and you are a prolific, but not very entertaining writer. So I admit to not paying attention to some peripherals to our argument.

    “Again, incorrect. I never said that Geithner could not prioritze STB’s.”
    I will reprint your answer below so that you may see how I might have thought that you did:

    (me)”You are saying that, but not proving that. I can say that Treasury could prioritize the STB’s, and that the claims would then not be equivalent.”
    (you) “You are saying a lot, but proving nothing. Just your opinion, proven to be wrong, again.”

    “Now that we are over that hurdle, as Geithner can choose what to prioritize, and as there is more than enough money to pay bondholders,”
    We are over the hurdle that this position has some support, not that it is proved. These are distinctions you should learn before tossing around labels like “liar”.

    “it seems to be a short jump to the fact that by failing to extend the debt ceiling, we are in no danger of defaulting on the debt, if Geithner chooses to prioritize paying the bondholders. Hence, to say otherwise as absoulte fact is a lie. It is merely a matter of preference, not absolute fact. Preference dictated by the goal of advancing an agenda.”
    Well on that debt at least. Were not the congressional teabaggers (not affiliated with you in any way, let’s be clear) of which you spoke so approvingly in post 1 proposing legislation which would default on the government held part of the bonds? Is it less worthy to complain of their goal of advancing an agenda?

    “Law.” You introduced the topic. I don not consider it to be germaine to the discussion.”
    I can’t imagine why anyone would think law germane to a discussion of government operations.

    ” do know that your math on “who gets paid” failed to contemplate “who gets paid” after your favored course of action” Right, that would be a massive discusion considering the number of programs. This one is already going on far too long.”
    No, this goes to your argument with pfft about whether most of the money from bond payments goes to nationals or foreigners. You neglected to do the math about who gets payments to bondholders once the government bondholders are excluded.

    “Interest rates, roiling the bond marlket.” My exact position, and where I came into this debate, is that if Geithner were to prioritize paying bondholders, and communicate this, there would be no roiling.”
    This notion is contradicted by several notables quoted in your Wapo source. This is why I don’t post many links. I prefer using yours.

    “Tea party.” Labels. Lying to advance agendas. Part of the problem that needs to be done away with, IMHO.”
    Uh, oh. Should I get out yer cabin before black baby starts to barkin?

    http://www.theonion.com/video/semiliterate-former-gold-prospector-given-own-cabl,17408/

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  237. 237
    Blurtman says:

    RE: whatsmyname @ 236 – ““Incorrect (again.) I posted several links illustrating what the USG spends its money on.”
    I do stand corrected.” OK. This is the second or third time you so stand. Perhaps you really should investigate your own links and read them. As stated, not only are they educational to readers, but to oneself.

    ““Again, incorrect. I never said that Geithner could not prioritze STB’s.”
    I will reprint your answer below so that you may see how I might have thought that you did:”
    My remarks did not address the equivalence of the prioritizations, but of the claims, which I attempted to explain, e.g., liqudity, dependencies. In any event, as you finally agree that Geithner can prioritize, let’s leave it at that.

    “I can’t imagine why anyone would think law germane to a discussion of government operations.” Wrong, yet again. Not germane to whether Geithner had lied, not to government operations. I certainly hope your job does not involve some aspect of communications.

    “No, this goes to your argument with pfft about whether most of the money from bond payments goes to nationals or foreigners.” I had already stated this. Pay all UST bondholders, Ma and Pa Kettle, insurance companies, the Chinese, the Japanese, etc. You may recall the Ma & Pa Kettle part. I love those movies.

    “This notion is contradicted by several notables quoted in your Wapo source.” Well, you can pick whichever opinion you might like from the article, including those contradicting your own. But I prefer to look at reality. And as opposed to apparently what happened in 1995, and we are far beyond the point when they did then, rates are not moving. And for the record, Robert “Citigroup Crime Boss” Rubin’s remarks do not address the situation where a Treasury Secretary prioritizes paying bondholders first and so communicates that to the market. And the referenced GAO opinion regarding prioritization is more than opinion. Prioritization is what did occur in 1995-1996, what can occur now before a shutdown, and what will likely occur again if there is a shutdown.

    “Uh, oh. Should I get out yer cabin before black baby starts to barkin?” Funny bit, but as you are clearly unarmed, unecessary.

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  238. 238
    David Losh says:

    RE: Scotsman @ 231

    Turn on the babble filter because I’m going on a tirade.

    I read the report on the decline of building permits, completed projects, and the addition of a paltry 535K housing units.

    OMG we aren’t adding to the over supply!!! They aren’t building any apartments either. Everyone blames the shadow invetory of foreclosures, which they probably should, but the fact remains we have an over supply of housing units globally.

    We have never had a recession that housing didn’t lead us out of. Housing creates jobs, and pays $9K in taxes per unit.

    Well housing is done, stick a fork in it. You can look at oil, and food if you want, or pretend our current “inflation” is something other than wind fall profits, but the fact remains we are in a new era.

    So you can look at the old economy all you want to, or debate what Congress can do. The fact remains we need new ideas for a future economy.

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  239. 239
    David Losh says:

    RE: whatsmyname @ 236

    Wellllllll now, it just goes to show that the argument here is if you are just plum ignrant, or what, for a boot full o’ dirt.

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  240. 240
    pfft says:

    By Scotsman @ 231:

    And the recovery roars on- missing on almost all cylinders:

    “If the trend outlined by the continuing stream of ugly data doesn’t reverse quickly, the paltry 1.8% growth we saw in the first quarter may well give way to a formal double-dip (triple-dip?), with economic activity sliding back into the red before the end of 2011″

    http://www.suitablyflip.com/suitably_flip/2011/05/with-recoveries-like-these.html

    it’s amazing with all your failed predictions you still write stuff like this.

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  241. 241
    pfft says:

    anyone else been laughing all day at newt’s implosion? this republican primary race is going awesome. the republicans are self-destructing. between their support for big oil tax breaks and getting rid of medicare obama will have an relatively easy time getting re-elected. the democrats will surely hold the Senate and will pick up a lot of seats they lost in the House. life is good!

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  242. 242
    Blurtman says:

    RE: whatsmyname @ 236 – BTW, this topic has already been more than beaten to death. If you want last words, go for it. But let’s move on.

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  243. 243
    Blurtman says:

    The Republicans are coming to grips with the realization that their ideas are so horesh*t that continuation of their usual policies will only make things intolerably worse. And so they have nothing. Big vacuum implosion.

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  244. 244
    pfft says:

    By Blurtman @ 243:

    The Republicans are coming to grips with the realization that their ideas are so horesh*t that continuation of their usual policies will only make things intolerably worse. And so they have nothing. Big vacuum implosion.

    I don’t know. Ryan just relaunched his medicare gift card plan on Monday. They are going to embrace everything that will make them a minority party for decades. sure they will win the odd backlash election. however, their demo is getting old and dying. hispanics are the fastest growing minority population and repubilcans are doing everything they can to lose the hispanic vote. they are cutting medicare which will seriously dampen their 2012 chances. they are for tax breaks for the wealthy, corporations and the big five oil companies. they are losing the present and the future. in fact they seem to race toward their own irrelevancy. cutting medicare is a losing strategy. they are pissing off hispanics with laws like in Arz. They have a very loud segment of their party that is anti-hispanic.

    all good news for democrats. enjoy years irrelevancy guys!

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  245. 245
    Trigger says:

    RE: Scotsman @ 231 – Scotsman – You still do not believe in the fact that the Fed can do anything including make the GDP grow in $$ terms. It just needs to print. You still underestimate the power of printing. I think we will never be out printed.

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  246. 246
    pfft says:

    By Trigger @ 245:

    RE: Scotsman @ 231 – Scotsman – You still do not believe in the fact that the Fed can do anything including make the GDP grow in $$ terms. It just needs to print. You still underestimate the power of printing. I think we will never be out printed.

    the US isn’t printing. it’s selling bonds. banks aren’t lending so inflation is kept down.

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  247. 247
  248. 248
    Blurtman says:

    RE: pfft @ 244 – Wait yet for the push button issues war. Gays, guns and God. And Obama is a foreigner and a Muslim. And he doesn;t care about jobs. What is this country coming to?

    Hispanics are a diverse group.

    Obama sure seems to love the banks. In most respects he cannot alienate large industrial behemoths, e.g., GE, as he needs the campaign money. He did save the US auto industry. And he is youthful and a great speaker.

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  249. 249

    RE: pfft @ 244 – From reading that you’d almost think the D’s never make any mistakes that effectively shoot themselves in the foot. ;-)

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  250. 250
    Blurtman says:

    RE: Kary L. Krismer @ 249 – Perhaps Obama should don a flight jump suit and shades and claim “Mission Accomplished.” Or, maybe, “Bring it on!” :?>

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  251. 251
    David Losh says:

    RE: pfft @ 244

    Well you should be paid.

    Yes the Republicans, and Tea Party are trying to put on a big show. Now there is a chair person of the Tea Party who is bashing Newt.

    It’s Paul Ryan? I don’t follow any more since he emerged from a budget meeting with the most limp set of proposals I’ve ever heard from a politician. He was supposed to be the great hope for the Republican Party the same as the Bobby Jindal guy with his man made sand bars in the Gulf.

    You really nailed it with the Hispanics and Arizona. We came back from Miami last week and come on, there is no way you are going to tell me we have borders with South or Central America. Come on, there are miles of open ocean with boats, and airplanes passing every direction.

    Arizona is a pimple on the ass of America with wide spread corruption. It’s a God fearing State, but the politicians are stirring the racial pot while ignoring deep seated fraud. In my opinion many of the developments there over a couple of decades are worse than Nevada, and the Las Vegas valley. Purely bogus suburbs have been springing up for years with the thinnest of economic incentives. Arizona has encouraged, in my opinion, the purchase of these properties by any means to generate some tax revenue. It was OK when Hispanics were buying up the carp, but now that the bubble is burst the last ones in are taking the blame for the collapse.

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  252. 252
    pfft says:

    By Kary L. Krismer @ 249:

    RE: pfft @ 244 – From reading that you’d almost think the D’s never make any mistakes that effectively shoot themselves in the foot. ;-)

    no I’ve got plenty of criticisms of obama.

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  253. 253
    Scotsman says:

    Hey pfft! Hey, OneEye!

    I want to believe! I want to see the light and smoke the pipe of recovery and good times for all. But to do so, I have to completely refute the argument put forth by this wack job. Can you show me the way?

    “There has been no economic recovery and we are in an economic Depression right now and have been since 2008.

    There was no economic recovery after the 2001 Nasdaq collapse. The government borrowed and spent about 5% of GDP at the time every year to fake a recovery and we ran a debt-based false “recovery” when in fact we were in a five year long recession marked by an orgy of false “wealth” through bubbling home prices.

    Now we’re borrowing and spending 12% – more than double that amount – a year to fake a recovery that has shown up in stock prices, and it mathematically must end the same way.”

    http://market-ticker.org/cgi-ticker/akcs-www?post=186444

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  254. 254
    Blurtman says:

    RE: Scotsman @ 3 – Borrowing metrics: interest payments as a percent of total budget. When is it too much? Debt as a percent of GDP. When is it too much?

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  255. 255
    One Eyed Man says:

    RE: Scotsman @ 3

    “There was no economic recovery after the 2001 Nasdaq collapse. The government borrowed and spent about 5% of GDP at the time every year to fake a recovery and we ran a debt-based false “recovery” when in fact we were in a five year long recession marked by an orgy of false “wealth” through bubbling home prices.”

    Although it may not have been clear to you, I have always been in general agreement with the above statement. While I’ll acknowledge that my comments are sometimes a bit cryptic and laced with dark, and often prurient humor, they have also acknowledge the truth of the above statement.

    Last week I mentioned that if I were a cartoonist, I would have drawn George W creating an economic bubble by actions analogous to performing a blow job on America (Uncle Sam). W’s tax cuts and the accompanying deficits and low interest rates were nothing but immediate and transitory economic gratification with no lasting benefit. They were in effect as transitory as a sodomy from a hooker. The result was that several percent of the economy was nothing more than financial pimps collecting other peoples money and loaning it to get rich quick addicts to gamble in the real estate and financial market place.

    After its over, all you’ve got are some sleazy memories and the lingering fear of STD’s. The economic activity of the last 10 years lacked the substance and commitment to the future of a lasting family relationship and investment in the future. It was only economic sodomy with an anonomous stranger. There was no act of procreation, no nurturing or child rearing and no commitment to building a sustainable future. In effect, the economy of the last decade was analogous to hookers, drugs and gambling.

    But if you immediately strip out the hookers, drugs and gambling, you suffer a huge loss of GDP not to mention all the unemplyed people who used to change the sheets at the No-Tell Motel. The question is then, how do we fix it without economic consequences that are more devastating than necessary. The answer probably isn’t a liquidation. America still has “going concern” value even without the financial hookers. Much of that value is probably lost (unnecessarily) if you liquidate.

    The appropriate answer as to how to preserve going concern value is to structure a work out or reorganization. A work out won’t save the dead tissue of the bubble. You won’t save the construction and financial jobs of the housing bubble. But hopefully you keep the economic impact of losing those portions of the economy from causing the collapse of everything else.

    In 2008, the powers that be took the position that it was necessary to save the financial system first. They did that thru TARP and the steep yeild curve of ZIRP. They threw in some financial stimulus and QE2. Would the patient have survived without these remedies? Maybe, but maybe not. Just because you don’t think you’ll have a car accident doesn’t mean you stop buying insurance. But whether you agree or not, those actions have arguably stabilized the patient and taken him out of the ICU. The financial system is functioning again.

    Is that “recovery?” Not exactly. Its only recovery if you think that being out of the ICU is “recovery.” But it is arguably the first step to saving America from Liquidation, and that is part of a process that could be described as recovery. That obviously begs the question, if we are in a process, what’s the next step.

    If the patient is now getting financial transfusions equal to 12% of annual GDP, how do you fix that. My answer is the same as it was several months ago. You preserve the functioning portions of the economy by structuring a workout. You have to do that by allowing the healing portions of the economy to fill the void as the artificial support is removed. That takes time, capital and cost restructuring, which are classic components of any reorganization.

    If you stop the transfusions cold turkey, you cause a collapse of too many vital systems for the patient to survive without drastic and unnecessary consequences. That doesn’t mean you keep the patient on the transfusions forever. It means you withdraw them at a rate that the economy can absorb, hopefully through growth in the private sector. If we have 2% real growth in the private sector, then you can probably cut spending by 1% of GDP per year without causing a collapse to growth.

    Do we really have 2% real growth? That’s an open question. Will the politicians agree to a long term plan to cut spending by 1% of GDP per year for the next 5+ years? That’s also an open question. But remember, we’ve already absorbing a large hit to GDP through state and local spending cuts (as shown in the 1st qt gdp numbers). The process has already started at that level. And government revenues at all levels are increasing which will help solve the problem if it continues.

    We also have private sector job growth of over a million jobs in the last year according to ADP and Trim Tabs as well as BLS. And moderate inflation of several percent may help eliminate the true cost of our debt assuming that borrowing rates don’t increase dramatically.

    Recovery is a process. It’s arguably ongoing. Globalization and other competitive forces, probably dictate that we cut military spending, healthcare spending, business tax rates and other budget items to be far closer to world averages. And low cost foreign labor may impact our average standard of living if we aren’t able to compensate fully by increasing productivity through technology and innovation. But it’s still in my opinion worth while for all parties concerned to pursue recovery thru a work out rather than a liquidatin. The GM employee’s took wage cuts and the bond holders took a huge haircut and conversion to equity. But if they hadn’t gotten the financing to do a reorganization the workers would all have been unemployed, and the plant and equipment may well have been worthless and yeilded nothing to bond holders and other creditors in a liquidation.

    Recovery doesn’t mean bring back the old bubble. But its not a liquidation either. Its probably a long slow process commonly referred to as a “workout” through a crafted plan of reorganization as described above.

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  256. 256
    David Losh says:

    Well, it’s actually very simple in a world of high finance money for debt swaps. We borrow to spend on debt.

    Let that sink in for a minute because every one here says the same thing; we borrow to pay debt, or interest on debt.

    Well, why does any one expect a return on that investment? Why is any one entitled to more than what was borrowed on a continueing basis? Why does compound interest, that is now due, and payable, have a higher priority than paying bills for goods, and services.

    Why is something for nothing more important than doing the work we need to do to keep the economy moving forward?

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  257. 257
    Blurtman says:

    RE: David Losh @ 6 – Well, you need more heroin, so the kids get no food.

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  258. 258
    Blurtman says:

    RE: David Losh @ 6 – Seriously, if we do not pay bondolders, interest rates shoot up, eating away at more of the moneys available to spend on other pograms. You really do not want to be in a situation where you have to borrow to pay off debt. as One Eye has eloquently described, discontinuous changes are usually unpleasant, and so the direction and rate has to be changed, but not overnight.

    But the gorilla in the room is the trade imbalance.

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  259. 259
    Scotsman says:

    RE: One Eyed Man @ 5

    Ok, fair enough, but to my mind too conventional and conveniently math free. The math for doing what bankers refer to as a “workout” is pretty grim and stretches out for decades. It’s complicated by the fact the the world is rapidly changing, equalizing in terms of technological advantages and production costs. This is not a good time for the U.S. to burden itself with high costs and low productivity gains due to outdated investment and non-productive (interest) capital allocations.

    To continue your medical analogy, the patient is indeed very ill and completely reliant on external support. We can keep her alive for decades, but she’ll still be a vegetable. The good news is she’s pregnant- a healthy baby lies inside, full of potential and all the traits that once made its’ parents a force to be respected and admired.

    Let the patient die while saving the baby. Cut away the dead flesh, the fat, the atrophied muscle, and focus on growing the still healthy core of what made this country great. We’ve defaulted several times in the past and survived, we can do it again. Let’s have a conversation as the political class says, and try to get it right this time.

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  260. 260
    One Eyed Man says:

    RE: Scotsman @ 9 -The thing that’s starting to baffle me is that despite any ideological differences you and I may have, I think if it was our job, you and I could sit down and put together a workable compromise deficit reduction plan in 30 to 60 days or less. Obviously we couldn’t work out all the details in a several thousand page budget, but we could probably work out the round numbers in the same manner that a Senator or Representative might set forth the numbers, leaving the micro management to staffers and bureaucrats.

    With due acknowledgment to how egotistical that may be, and my belief that many of the 400+ house members probably don’t have the intellect to do it, I think there are a significant number of people in both the House and Senate, including people from the Deficit Reduction Commission, Paul Ryan, and the “Gang of Six” that probably have the ability to recognize the need, understand both sides of various issues and propose reasonable and workable compromise solutions.

    Our political system may be known for checks and balances and the often resulting sluggish response to need, but I think its to the point now where even Patty Murray would say the situtation is dire. If Obama, or a bi-partisan coalition of Congressional leaders doesn’t take the lead on establishing fiscal responsibility soon, business leaders and the bond market will eventually feel they have no choice but to react accordingly. I think a lot of politicians don’t realize that Bernanke (despite what anybody might think of him) is holding off potential private sector spending cut backs, negative business sentiment and bond vigilantes with QE. Congress and Obama probably still have time for the calvary to reach the settlers before they’re over run, but they better get saddled up and moving or there will be a masacre with few if any survivors. Time is now probably of the essence. Playing politics for some sort of election blame game in 2012 is putting everybody at risk.

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  261. 261
    David Losh says:

    We haven’t heard much from Bernanke. Gietner has taken the lead after the Paul Ryan fiasco. Attacking social programs might, and I mean might of worked if it weren’t so off the mark to the wishes of the people. The Tea Party was infuriated by the spending to support the Health Insurance Industry. The Tea Party says that you are infringing on the rights of the citizens by forcing us to “buy” health insurance. The Paul Ryans want us to think that we passed single payer, government run health care, but that isn’t what happened.

    The Tea Party, and Republicans are at sever odds. That’s fine, but when you throw in Boehner who has some political agenda as yet to be determined we are only getting circular motions.

    The way I look at it no body is doing their job. Bernanke, and Geitner, or any committee in Congress can make a proposal to solve the budget “crisis.” My proposal would include separating out Social Security, and Medicare to be addressed another day. I would stop borrowing to pay on the $5 Trillion in US government debt. I would pay foreign debt with a proposal to pay it off. I would separate out those foreign debt holders as a priority.

    Taxes could be raised by 5% on those making over a million. We should have a committee to close tax loop holes especially those dealing with over seas investment, Cayman Islands comes to mind.

    We can cut a whole bunch, or suspend a whole bunch, of military spending on non essentials. Contractor accounts can be severally reviewed to get rid of programs that are detrimental to our National Security; there are lots of those that are only an irritant, war on drugs comes to mind.

    There’s a lot that can be done, but no one wants to risk a career over it.

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  262. 262
    Blurtman says:

    Throwing Israel under the bus, or, do some Palestinians have more rights than other Palestinians?

    http://abcnews.go.com/Politics/us-israel-tensions-high-obama-meets-netanyahu/story?id=13647528

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  263. 263

    RE: Blurtman @ 12 – Maybe we should fix the immigration problem by giving California and Texas back to Mexico? ;-)

    Seriously, I don’t know why President Obama thinks he can tell one country it should give up territory obtained in a war they he probably hardly remembers.

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  264. 264
    Blurtman says:

    RE: Kary L. Krismer @ 13 – No easy solutions. Killing the natives with disease or violence was a solution in the past, but I would not apply 1500-1800’s solutions to the 1940’s and beyond. Part of the problem is the hubris of Western powers determining cookie cutter style what would be countries in the Middle East. Why did they not also reincarnate Samaria? There are never enough good Samaritans around when you need one.

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  265. 265
    David Losh says:

    RE: Kary L. Krismer @ 13

    I was given a “tour” of a refugee camp in Jordan. It’s been there since World War II. Europe, and the United States decided to repatriate people to Israel and have defended that decision ever since. If you want to ignore the problem fine, no one really cares. However border protection in a nomadic culture, society, and lifestyle is problematic.

    In other words, we may have run off the indiginous people to south of the border we imagine, but it doesn’t change the fact that we are the invaders.

    Best of luck with that.

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  266. 266
  267. 267
    pfft says:

    calling blurtman…

    Justice Department Plans to Subpoena Goldman Sachs for Documents “Within Days”
    http://news.firedoglake.com/2011/05/20/justice-department-plans-to-subpoena-goldman-sachs-for-documents-within-days/

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  268. 268
    Blurtman says:

    RE: pfft @ 17 – Thank God for Carl Levin, most of the times. The GS business model – create toxic securites, pay Moody’s and S&P to rate this toxic swill as Triple A. You know what crap it is, so while you are telling your clients what a great buy it is, you take out multiple CDS on it and make lots of bucks. Think about it – Hank Paulson was CEO of GS when a lot of this was going on, and he lobbied the USG to bail out AIG so GS could collect on its winnings. Think about it again – when we bailed out AIG, we bailed out folks who were betting, not hedging. That is, we bailed out folks who did not hold the underlying securities that they bought CDS on. Bettors. The bookie went bust, so US taxpayers had to intervene. Tim Geithner. Ben Bernanke.

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  269. 269
    Scotsman says:

    RE: One Eyed Man @ 10

    I have no doubt we’d get along well. I value intelligence and wit, and will always listen to a well reasoned argument and go with what makes the most sense. It’s the non-thinking idealogical types that drive me nuts, and that’s not you.

    Could we come up with a solution to the current process? Sure, because we’re not running for re-election, and probably wouldn’t be as concerned with the background noise as others. Do those in D.C. really understand what’s coming? Some certainly do, most don’t care or understand, and apparently almost none are willing to take responsibility and lead- which means being the ones to deliver the bad news. I believe the vast majority of politicians run because they want attention, and want to be loved. They accomplish their goals by giving gifts to those who vote. Because of this, we’re screwed. There is absolutely no incentive in the current system, and the current environment, to do the necessary thing and take back from the people what the voting public thinks it’s owed. The system will choke on it’s own vomit before it quits the addiction. The adults willing to sacrifice while focussing on the longer term will certainly be out voted by self serving short term thinkers and the complacent who only see the cookie jar in front of them.

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  270. 270
    David Losh says:

    RE: pfft @ 16

    That was a useful article. It’s more to the point that we have a global unification of economic involvement.

    Let me put that another way, that in my opinion we are at the end of seeing who can produce the most garbage. If I had more time I would research when we had computer chip dumping that was intended to corner the market for computer goods. We’ve had several rounds of economic jousting that has just produced a bunch of crap that ends up in our land fills, and scrap heaps that are now headed back to China.

    If it’s true that we have a slow down on a global scale that would make anything possible. That was a great find.

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  271. 271

    By David Losh @ 20:

    If I had more time I would research when we had computer chip dumping that was intended to corner the market for computer goods.

    That’s not what it’s about at all. If effect the anti-dumping rules are anti-anti-trust, because it’s collaborating without being allowed to collaborate.

    In that particular market (computer components) the development of a product (e.g. a new style of memory) can be very expensive, but the production is cheap. Once the product is developed, if the market turns soft there’s a lot of incentive for a manufacturer to produce and sell cheap because they’re still making a lot of money off of each unit produced. It’s just that at such a price, they’re very unlikely to ever break even on that model, but if the market is soft for the product, selling as many as they can at a lower price is their best outcome. That then harms the other manufacturers, because it then makes it tougher for them to sell in a soft market. So the anti-dumping rules effectively prevent any of them from doing that.

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  272. 272
    pfft says:

    from my reading I am not sure if GS is in trouble. it could be semantics. Goldman was short but were they net short? was one part hedging a downturn but another was just putting GS in a neutral mortgage position. does it matter? did the whole company have to be hedging and if one was just short to make a profit does that matter as per Blankfein’s statement before Congress? I don’t know, if I did I’d be a lawyer.

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  273. 273
    pfft says:

    By Scotsman @ 19:

    RE: One Eyed Man @ 10There is absolutely no incentive in the current system, and the current environment, to do the necessary thing and take back from the people what the voting public thinks it’s owed.

    so what aren’t people owned? a honorable retirement? honorable care for the elderly? I’d love to hear this.

    you’re a deficit fraud. you wanted an extension of the unpaid tax cuts for the rich that would add trillions of dollars to the national debt. the healthcare bill was the biggest deficit reduction act in years and you’re against it. you were against the measure to save the economy from very high unemployment and even larger deficits. you talk a good debt game but when it comes down to it you act the very opposite of someone who is concerned about the debt and deficit.

    1. bush tax cuts are the largest components of our coming deficits

    2. the government rescue measure add little to the debt in the next years.

    3. the government rescue kept unemloyment lower and more paying taxes.

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  274. 274
    David Losh says:

    RE: Kary L. Krismer @ 21

    Not to be snide, but you missed my point. Business is war. Dumping computer chips, cars, car parts, fish, timber, and intellectual properties has been a staple for decades the same as out sourcing labor is today.

    We are now all in this same economic morass. You can talk jobs in South Carolina, or Seattle, India, or Mexico, even those cheap consumer goods from China, but the bottom line is no corner of the globe is immune from today’s economic slow down.

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  275. 275
    David Losh says:

    RE: pfft @ 23RE: pfft @ 22

    OK, you have me convinced that you actually have a point of view that is more than contrary.

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  276. 276
    David Losh says:

    RE: Scotsman @ 19

    “The adults willing to sacrifice while focusing on the longer term will certainly be out voted by self serving short term thinkers and the complacent who only see the cookie jar in front of them.”

    OK, you lost me. Both you and the One Eye Man, while eloquent, are also missing some key points.

    The short term thinkers are the bankers, financiers, and marketeers who are squirreling away trillions of dollars in cash in hopes of buying up some bargains. For whatever reason people from all over the world, who are the ones making the sacrifices, talk to me about what they want from the future. They want family cared for. They want to live work, survive, and die with dignity.

    Dying with dignity is an area of my expertise. As many people have said throughout history, it’s better to fight, and die in battle, than to live a life of desperation.

    Laugh if you want, but the people aren’t going to let 1% or 2% of the population keep our money. We aren’t in the Middle Ages, there are no new worlds to conquer, no diversion that will calm the masses.

    Government is to help keep a civilized discourse. Our government will either help for us to have an fair, and equitable redistribution of these stolen goods, and monies or the people will take it back independently.

    When you look at the migration of wealth into fewer, and fewer hands you get an idea of the magnitude of the problem. The fact government loop holes, and lack of regulation allowed this migration of wealth makes it worse.

    How will you address that? Do you really think this is a welfare to work situation?

    Well I think that yes I could spend more time building my personal wealth, it’s a stupid endeavor in life, or I can fight. Fortunately for me I have a good balance of both, but I applaud those people who make it a mission to protect us from the barbarians.

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  277. 277

    From this thread several months ago:http://seattlebubble.com/blog/2010/10/01/september-stats-preview-falling-into-fall-edition/By Pegasus @ 48:

    RE: Kary L. Krismer @ 47 – Thanks for the twist. Here is a link to that poor man’s new movie info that is suffering from…. honesty. The movie is called “Inside Job: Criminal Fraud in the Financial Services Industry” Hopefully you will catch what he caught…..Do your homework before you open your uninformed yap and cut this guy up…You will find that he has a big local connection and you probably use his product. His last film was nominated for an Oscar. What have you been nominated for…to take out the garbage?http://www.npr.org/blogs/monkeysee/2010/10/01/130273644/-inside-job-director-charles-ferguson-taking-aim-at-wall-street

    Okay, I’ve now seen the movie, and it anyone has an “uninformed yap” it’s the person(s) behind that fake documentary. That movie makes 60 minutes look like fair unbiased reporting.

    But on the issue at hand which where I first mentioned this person, and his spouting off about the lack of criminal prosecution without specifying any crimes, his entire movie hardly mentions crimes at all. He mentions two people who were acquitted, and then he has one guy being interviewed that lists of several companies which that person thinks had people in it that committed crimes. And from there he goes to Eliot Spitzer who suggests that the prosecutors could use the personal behavior of underlings (e.g. drugs and prostitution) as leverage to get testimony. That’s rather ironic! But it’s also not at all a substantive demonstration of any criminal activity, and again didn’t mention any specific crimes.

    But in any case, the style of the movie was simply to make an accusation and then never back it up. For example, he asked someone if they were embarrassed by the criminal activity in their industry. The person responded that he would need to be more specific about what incidents he was referring to and that criminal activity should never be tolerated. There was nothing later that backed up any claim of criminal activity.

    He had a number of basic errors in the movie to that indicates a failure to understand the topic covered. He referred to Fannie and Freddie as “mortgage lenders.” He stated the specific amount that the AIG bailout cost the taxpayer. He said the estate tax had been eliminated.You owe me one hour and 40 minutes of my life back. Watching moronic material like that was painful, and only someone who doesn’t understand our world would find the few good points (e.g that the rating systems suck) worth watching the whole movie.

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  278. 278

    RE: David Losh @ 24 – Not to be snide, but you missed the fact that I was only addressing one part of your post–dumping of computer parts. I was explaining why it tends to occur in that particular industry.

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  279. 279
    David Losh says:

    RE: Kary L. Krismer @ 28

    Again you missed the point. Explaining an industry from 1987 has no bearing on the business we are doing today. That is the point.

    Today we talk about out sourcing labor like it is a topic of conversation. It’s irrelevant because as time goes on labor, to the price of goods, will be homogeneous. We pay less in a country with a lower cost of living, but it will all be factored into the price of the product.

    What the article is indicating is that we have a global economy, that is slowing down.

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  280. 280
    Blurtman says:

    RE: pfft @ 22 – Perjury if that. That’ll teach ‘em. Yesiree.

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  281. 281
    Scotsman says:

    RE: pfft @ 23

    You’re like a old parrot, nothing more. Not a reasoned thought in your head. Give it up.

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  282. 282

    By David Losh @ 29:

    RE: Kary L. Krismer @ 28

    Again you missed the point. Explaining an industry from 1987 has no bearing on the business we are doing today..

    Wrong. The same factors affect that industry today. I’m not addressing your broader economic topics at all.

    I’m dealing specifically with an item which is somewhat fungible, has a low marginal cost to produce, but requires the sale of millions of units to break even due to high development costs. I’m not addressing labor markets, world economies, or anything else. I’m just trying to help you understand why there is “dumping” of such products, when there’s not dumping of other products, like say oil.

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  283. 283
    David Losh says:

    RE: Kary L. Krismer @ 32

    Once again Kary I understand the theory. My point is that today’s market place is vastly different than it was in 1987.

    The internet, and computer changed everything. I like the idea we can have these discussions on line. What I’m also fascinated by is that China wants to limit the internet. Al Quida uses the internet for propaganda. The uprisings in North Africa are helped, or encouraged by the use of “Face Book?”

    The financial system we have today is because computers can make complex calculations. Business models and scenarios are worked out in minute detail. We call it speculation, but it’s actually, as the other blog site says, a Calculated Risk. I’m questioning if it’s a risk at all, or just simple money in, profit out situation.

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  284. 284
    pfft says:

    By Scotsman @ 31:

    RE: pfft @ 23

    You’re like a old parrot, nothing more. Not a reasoned thought in your head. Give it up.

    I can give you the links and the math if you want(please please). you’re a deficit fraud.

    two links for everyone.

    When Doomsday Isn’t, Believers Struggle to Cope
    http://news.yahoo.com/s/livescience/20110521/sc_livescience/whendoomsdayisntbelieversstruggletocope

    austerity is failing again in real-time. keynes wins.

    30,000 Protesters Are Still Camped Out In Madrid As Spain Goes To The Polls
    http://www.businessinsider.com/spain-election-day-protests-2011-5#ixzz1N7IO9Sw7

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  285. 285
    pfft says:

    By Blurtman @ 30:

    RE: pfft @ 22 – Perjury if that. That’ll teach ‘em. Yesiree.

    you’re going to send someone to jail and ruin their career because of semantics on a subject that really doesn’t matter? the crisis didn’t happen because GS was short outright in one division but not net short or neutral…

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  286. 286
    pfft says:

    I’m sorry, one more link. the recovery measures that are supposedly to weigh our economy down are very small compared to everything else. tarp+recovery measures are one of the smallest components.

    What’s Driving Projected Debt?
    http://www.offthechartsblog.org/what’s-driving-projected-debt/

    in 2012 tarp+recovery measure will cost less than $80 billion. is that really going to collapse the economy or cause hyper-inflation? no.

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  287. 287
    Blurtman says:

    RE: pfft @ 35 – Contributing to the crisis was bankers knowingly selling garbage that did not conform to the representations made. Or, simple fraud. Throw in complicit rating agencies, and you have the recipe for disaster. As the GS execs know if GS made money or not, they may have lied. But perjury did nto cause the crisis. Simple and widespread fraud did. Just read the FCIC report and Congress’ report on the rating agencies. But, I waste keystrokes.

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  288. 288
    pfft says:

    By Blurtman @ 37:

    RE: pfft @ 35Just read the FCIC report and Congress’ report on the rating agencies.

    did you? the FCIC report is almost 600 pages.

    why did you change the subject?

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  289. 289

    RE: Blurtman @ 37 – I wonder what the rating companies’ definitions were, and if maybe people (e.g. those investing pension funds) just weren’t paying attention? I suspect they were half asleep anyway if they accepted any instruments that had 2nd mortgages.

    Rather obviously when you’re dealing with multiple deeds of trust in one device, you’re likely to have at least one default, even on the best ones. But that might be only 1% of the value of the entire instrument, and not a big deal. Rather clearly there definition of AAA couldn’t have excluded the possibility of only having one default. In contrast, when they’re rating a normal corporate or municipal bond, having a default would be huge. So there must have been some defining term of what they meant by AAA on these types of instruments.

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  290. 290
    Blurtman says:

    RE: Kary L. Krismer @ 39 – Well, nothing could be more thrilling than reading financial documents. But please can the revisonsist history.

    If you give securities AAA ratings and then in a few weeks or months it is being re-rated as junk, well,,,, incompetence, yea dats da ticket! Coburn and Levin deliver the one-two pucnh in this indictment of the ratings agencies.

    “WASHINGTON (Rachelle Younglai and Sarah N. Lynch) – Moody’s Corp and Standard and Poor’s triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings they slapped on complex mortgage-backed securities, a U.S. congressional report concluded on Wednesday.

    In one of the most stark condemnations of the credit rating agencies, a Senate investigations panel said the agencies continued to give top ratings to mortgage-backed securities months after the housing market started to collapse.

    The agencies then unleashed on the financial system a flood of downgrades in July 2007, the panel said.

    “Perhaps more than any other single event, the sudden mass downgrades of (residential mortgage-backed securities) and (collateralized debt obligation) ratings were the immediate trigger for the financial crisis,” the staff for Senators Carl Levin and Tom Coburn wrote in their report.”

    http://www.huffingtonpost.com/2011/04/14/credit-rating-agencies-crisis-congressional-report_n_849032.html

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  291. 291
    Blurtman says:

    Bring back the public stockades!

    “Marty Likier … put almost 20 percent down to purchase a $312,000 townhouse in Westmont in 2006 and lived there until two years ago, when he remarried and bought a home in Chicago Ridge. For a year he rented the townhouse. When a change in rules at the community meant Likier’s days as a landlord would end, he called his lender and asked if he could rework the loan, but he didn’t have enough equity left to refinance the $240,000 mortgage.

    Likier … decided last fall that the struggle wasn’t worth it.

    He listed the townhouse … [and has dropped the price to] $179,000, which is lower than the unit sold for when it was built in 1999. He stopped paying the mortgage in January and recently was served with foreclosure papers.

    Despite the fact that he and his wife are employed and have an annual household income near $150,000, he’s comfortable with his decision.
    A few comments:
    • These properties with large negative equity positions are like ticking time bombs for the banks. Eventually these owners will grew tired of the monthly loss, and try to take action. Corelogic reported there were 11.1 million properties with negative equity at the end of last year, and close to 5 million properties with more than 25% negative equity.”

    http://www.calculatedriskblog.com/2011/05/walking-away-in-chicago.html

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  292. 292
    Scotsman says:

    RE: pfft @ 34

    Thanks for the links- they are a perfect illustration of just how useless your comments are. The first is about a guy who has a history of inaccurately predicting the rapture- a Christan event- and you think it has something to do with economics? The second is supposed to be an illustration of austerity’s failure- protesters in Spain- when in fact the conservatives (i.e. those for austerity) just swept the elections by a margin of 10% or so, ending the rule of the socialist party.

    Completely wrong in every way, unreasoned, and a waste of bandwidth.

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  293. 293
    David Losh says:

    RE: Scotsman @ 42

    Actually those links are about the pfft argument with you. The end of the world didn’t come, and economic collapse may be just as much of a myth.

    The election in Spain was actually a referendum on people rejecting austerity.

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  294. 294

    By Blurtman @ 40:

    RE: Kary L. Krismer @ 39 – Well, nothing could be more thrilling than reading financial documents. But please can the revisonsist history.If you give securities AAA ratings and then in a few weeks or months it is being re-rated as junk, well,,,, incompetence, yea dats da ticket! Coburn and Levin deliver the one-two pucnh in this indictment of the ratings agencies.

    I’m not trying to defend the ratings agencies, because I’ve never thought much of them or the value of their services. I’m just suggesting that perhaps if you were investing pension funds and looked at what they claimed they were doing beforehand, that it would have indicated that it wasn’t a very useful service for such an instrument.

    If you think about it, to be able to effectively rate the instrument they had to be able to know the financial condition of every borrower. I’m sure they didn’t do that.

    Rather than think of what I’m writing as being a defense of the ratings companies, think of it as an attack on pension fund managers. They fell for the oldest con ever: That “secured by real estate” means safe.

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  295. 295

    RE: Blurtman @ 41 – I would point out three things.

    1. What he listed it for as a short sale might not be an indication of it’s value. For that I would point to now suspended agents Hellickson, who allegedly listed short sales for less than what a bank was likely to accept.

    2. At least in Washington state, someone making $150,000 a year would face the possibility of judicial foreclosure and a deficiency, especially if the property were a rental (not homestead).

    3. Corelogic’s numbers on houses underwater are pure fiction. They can’t tell that information any better than Zillow can tell the value of a house without going inside it. In fact it’s worse because to determine if a house is underwater, Corelogic needs to determine both value and debt, not just value.

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  296. 296
    Blurtman says:

    RE: Kary L. Krismer @ 44 – Sure, but pension funds and other investment entities are sometimes restricted from investing in anything but AAA. ANd no one would have expected securites rated triple A by the agencies to go so far bad so quickly.

    The investment manager of the King County pool’s defense for losing millions on SIV’s that quickly went south was that hey were triple A. Concealing risk is what the rating agencies were accused of. And why did they conceal risk? Because it was profitable to do so.

    http://www.bloomberg.com/news/2010-04-27/moody-s-s-p-lose-bid-to-dismiss-investor-suit-over-rhinebridge-siv-losses.html

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  297. 297

    RE: Blurtman @ 46 – I agree with all of that, but I still have a hard time with the pension managers’ claims given the fact that they are professionals charged with investing millions of dollars of other peoples’ money. It just seems like they were either incredibly naive or lazy.

    I don’t think this is an area where you use comparative negligence, like in an auto accident where one person can be 80% at fault and another 20% at fault, so you reduce the one person’s claim by 20%. If it were though, I’d reduce their claims against the ratings companies significantly. Alternatively, and what might make the most sense if you’re dealing with professional managers and not government employees (possibly immune from suit) would be to have the pensioners make a claim that their moneys were negligently mishandled by the managers. That way they could possibly recover either way.

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  298. 298
    Blurtman says:

    RE: Kary L. Krismer @ 47 – Larry Summers lost a ton of money managing the Harvard endowments funds. So perhaps your perception of fund managers is misguided.

    Well, now you are talking about solutions to make the investors whole. I think given the severe and widespread ramifications of the meltdown, folks should go to jail.

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  299. 299

    By Blurtman @ 48:

    Well, now you are talking about solutions to make the investors whole. I think given the severe and widespread ramifications of the meltdown, folks should go to jail.

    That’s where I disagree with you. Bad things happening, by themselves, are not criminal. But I wouldn’t recommend changing your opinion because that type of thinking will get you a very high paying job as an assistant to the mayor of Seattle. ;-)

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  300. 300
    pfft says:

    By Blurtman @ 48:

    RE: Kary L. Krismer @ 47 – Larry Summers lost a ton of money managing the Harvard endowments funds. So perhaps your perception of fund managers is misguided.

    Well, now you are talking about solutions to make the investors whole. I think given the severe and widespread ramifications of the meltdown, folks should go to jail.

    larry summers was not a manager of the Harvard endowments funds. he may have had a hand but he wasn’t a manager.

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  301. 301

    By Blurtman @ 48:

    RE: Kary L. Krismer @ 47 – Larry Summers lost a ton of money managing the Harvard endowments funds. So perhaps your perception of fund managers is misguided.

    BTW, that should be in past-tense–was misguided. Same for the capabilities of MBAs.

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  302. 302
    pfft says:

    more good news blurtman.

    U.S. State Legal Chiefs Sharpen Mortgage Investigation, WSJ Says
    http://www.bloomberg.com/news/2011-05-23/u-s-state-legal-chiefs-sharpen-mortgage-investigation-wsj-says.html

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  303. 303
    pfft says:

    By Scotsman @ 42:

    RE: pfft @ 34

    Thanks for the links- they are a perfect illustration of just how useless your comments are. The first is about a guy who has a history of inaccurately predicting the rapture- a Christan event- and you think it has something to do with economics? The second is supposed to be an illustration of austerity’s failure- protesters in Spain- when in fact the conservatives (i.e. those for austerity) just swept the elections by a margin of 10% or so, ending the rule of the socialist party.

    Completely wrong in every way, unreasoned, and a waste of bandwidth.

    a rough count shows you support programs(or weren’t in favor of programs) that will add at least $5 trillion to the national debt over the next ten years.

    the 2nd ten years will see obamacare save over a trillion dollars according to the CBO.

    on spain:

    His popularity has plunged since a U-turn last year forced him to bring in a strict deficit-cutting plan, which he has pledged to stick to, along with labour and pensions reforms.

    http://www.guardian.co.uk/world/2011/may/23/zapatero-socialists-defeated-peoples-party

    voters will vote you out in favor of anyone who is in a different party.

    “when in fact the conservatives (i.e. those for austerity) just swept the elections by a margin of 10% or so”

    link please.

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  304. 304
    Blurtman says:

    RE: Kary L. Krismer @ 51 – MBA – More Bad Actors.

    Rate this comment: Thumb up 0

  305. 305
    Blurtman says:

    RE: Kary L. Krismer @ 49 – Are public executions really a bad thing?

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  306. 306
    Blurtman says:

    RE: pfft @ 50 – Actually I chatted a few times with the King County pool’s investment manager. Nice fellow. Couldn’t go into specifics about a few things due to the lawsuits. Was shocked at the triple A to trash plunge.

    I had researched a few of the SIV’s and found information describing the imminent meltdown of the specific SIV’s prior to King County investing in them. So I think e-mails can be accessed at the brokers wh sold these describing them as pieces of dog doo. $10,000 gets you .01 point of the settlement money, but hurry, they are going fast!

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  307. 307
    pfft says:

    By Blurtman @ 56:

    RE: pfft @ 50 – Actually I chatted a few times with the King County pool’s investment manager. Nice fellow. Couldn’t go into specifics about a few things due to the lawsuits. Was shocked at the triple A to trash plunge

    that was then though. a lot of MBS has come back. the problem was they were illiquid assets that had to be dumped all at the same time by very large banks. what do you think would happen?
    see LTCM.

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  308. 308

    RE: pfft @ 57 – I don’t think they had to be dumped so much as no one really knew what they were worth–due to the issues I mentioned in my ratings comments. To know what they’re worth you need to know what’s going on with each of the parties to the deed of trust.

    Eli Broad, if I recall correctly, pumped a ton of money into buying those things at one of the early points in the crisis. I wonder how that investment turned out. Given the wave of refinancing resulting from low interest rates, I suspect he made a killing.

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  309. 309
    Blurtman says:

    RE: pfft @ 57 – Well, when the music stops, that is, when banks, realizing how deceptive they had been to customers like pension funds, no longer trust each other, I suppose illiquidity would set in.

    But illiquidity did not cause the ratings crisis. Rather, the ratings were adjusted downward, drammatically, when it was obvious that the tiple A rated securities were actually junk.

    How exactly can you sell a security to anyone that later you will claim cannot be valued due to complexity and opacity?

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  310. 310

    The Chrysler bailout is being repaid. Yet another cost of the bailout that was not a cost, and actually made the government some money (even ignoring the unemployment expenses that were avoided.)

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  311. 311
    pfft says:

    it looks like scotsman has been emailing krugman.

    Debt Arithmetic (Wonkish)
    http://krugman.blogs.nytimes.com/2011/05/24/debt-arithmetic-wonkish/

    The way the story is often told, deficits mean higher debt, which means higher interest payments, which can mean a spiral into bankruptcy. And qualitatively that’s not wrong. If you put numbers to it, however, for countries that are not facing huge risk premia, the spiral is very, very slow.

    As I’ve often written, we’re in a strange state now where people who actually take textbook economics and simple arithmetic seriously are seen as dangerously radical and irresponsible, while people who believe in invisible bond vigilantes and confidence fairies, who claim to know what the market will want even though there’s no sign of that desire in current asset prices, are viewed as Very Serious.

    brilliant and confirmed by the bond market for going on 4 years.

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  312. 312
    pfft says:

    By Blurtman @ 59:

    RE: pfft @ 57 – Well, when the music stops, that is, when banks, realizing how deceptive they had been to customers like pension funds, no longer trust each other, I suppose illiquidity would set in.

    But illiquidity did not cause the ratings crisis. Rather, the ratings were adjusted downward, drammatically, when it was obvious that the tiple A rated securities were actually junk.

    How exactly can you sell a security to anyone that later you will claim cannot be valued due to complexity and opacity?

    MBS are not liquid like stocks. heck even bonds aren’t all that liquid if they aren’t government bonds. even munis aren’t that liquid. one of the reasons bonds were downgraded most likely is because the models changed as the housing market crashed and recovery rates plunged. the models were wrong(garbage in garbage out).

    as an investor I wouldn’t blame the ratings agencies. as a citizen I would. if something is AAA and not a government security it is probably not AAA. if a bond is AAA but has a higher yield it probably isn’t AAA. many investors made the classic mistake of reaching for yield.

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  313. 313
    Blurtman says:

    RE: pfft @ 62 – Well. it is not as if we are arguing if AAA really meant AA. I don’t think investors should have recognized that AAA really meant C.

    Another reason why the MBS and related mortgage backed securities crashed is because they were loaded with junk mortgages. And one (not the only one) reason the ratings plummeted is because the banks that created the MBS knowingly misrepresented the quality of the mortgages, that is, they committed fraud. And it became apparent that the gold was really doggie doo.

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  314. 314
    pfft says:

    By Blurtman @ 63:

    RE: pfft @ 62 banks that created the MBS knowingly misrepresented the quality of the mortgages, that is, they committed fraud. And it became apparent that the gold was really doggie doo.

    not necessarily. that means that everyone knew that housing would tank and if that were true there wouldn’t have been a bubble.

    I know what you’re going to do. you’re going to post some emails where people said these mortgages were garbage. the fact is that there are hundreds even thousands of people working in these departments. one email may not represent the view of everyone or the people who matter- management and investors. like all assets there is ALWAYS someone who is bullish or bearish. there are always people who are right but too early and etc.r

    what you’re basically saying is that you think bankers are smart…

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  315. 315
    pfft says:

    the auto bailout has been a success.

    Chrysler Pays Back Rescue Loan
    http://www.nytimes.com/2011/05/25/business/25chrysler.html?_r=1

    great video about all the wrong republicans.

    “Let Detroit Go Bankrupt?”
    http://www.democrats.org/video/let_detroit_go_bankrupt

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  316. 316
    David Losh says:

    RE: pfft @ 64

    The banks were never the issue. It’s the people who packaged the debt for resale who most certainly knew they were bundling junk. The financial markets were buying what ever was available without consideration.

    The bubble happened because of the exhuberance of the economy. I, for one, saw a robust “global” market that was adding trillions of dollars in net worth. Feet on the ground never saw the over all picture that was a pile a poo.

    Banks, lenders, and financiers are paid to know what was in the pipe line. Claiming ignorance isn’t a defense. Not only that, they relied on the law. They followed the letter of the law. They had learned from the Savings and Loan scandal, and this time involved the consumer.

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  317. 317
    Blurtman says:

    RE: pfft @ 64 – Please read the Congressional report on the rating agencies. You will read there, as well as has been posted on blogs, rating agency managers ordering their analysts to not examine the mortgage files of the underlying mortgages securities they were rating. Why was that?

    The CitiGroup head auditor is on record stating 80% of the mortgages Citi was selling were non-conforming. Hardly isolated e-mail strawmen.

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  318. 318
    Scotsman says:

    “The truth? QE2 has created a massive new bubble in dollar-based financial assets, from stocks to gold. Meanwhile, it has had zero visible effect on the real economy.”

    ” Turns out the program has created maybe 700,000 full-time jobs — at a cost of around $850,000 each.

    House prices are lower than before QE2 was launched. Economic growth is slower. Inflation is higher.

    Yes, it’s sparked a massive boom on the stock market. . . But even the stock market boom hasn’t been what it appears. An analysis shows that most of the rise in the Standard & Poor’s 500 Index under QE2 has simply been a result of the decline in the dollar in which shares are measured.”

    http://www.marketwatch.com/story/qe2-was-a-bust-2011-05-21?Link=obinsite

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  319. 319

    By Scotsman @ 68:

    Yes, itâ��s sparked a massive boom on the stock market. . . But even the stock market boom hasnâ��t been what it appears. An analysis shows that most of the rise in the Standard & Poorâ��s 500 Index under QE2 has simply been a result of the decline in the dollar in which shares are measured.”http://www.marketwatch.com/story/qe2-was-a-bust-2011-05-21?Link=obinsite

    That doesn’t make a lot of sense. First, we’re Americans, so that decline is effectively irrelevant to us. If you were investing in foreign equities, that would be relevant. Second, unless foreigners investing here are expecting the slide of the dollar to turn around, that would cause less investment by foreigners in US equities, and a decline in stock prices.

    I would add, correlation does not prove causation.

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  320. 320
    Scotsman says:

    RE: Kary L. Krismer @ 69

    That’s not what’s going on here. It’s an accounting quirk where overseas operations of multinational companies (much of the exchange) look better than they actually are when adjusted for currency valuations on the home country’s books. You can even have falling sales and profitability, but when adjusted for changes in currency valuations suddenly profits appear and stock values soar. One of the great potential illusions of international business.

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  321. 321
    pfft says:

    By Blurtman @ 67:

    RE: pfft @ 64 – Please read the Congressional report on the rating agencies. You will read there, as well as has been posted on blogs, rating agency managers ordering their analysts to not examine the mortgage files of the underlying mortgages securities they were rating. Why was that?

    The CitiGroup head auditor is on record stating 80% of the mortgages Citi was selling were non-conforming. Hardly isolated e-mail strawmen.

    I wasn’t talking about the rating agencies. I was talking about the big banks.

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  322. 322
    pfft says:

    By Scotsman @ 68:

    “The truth? QE2 has created a massive new bubble

    I stopped reading right there. A massive new bubble? like 2000? idiot.

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  323. 323
    Scotsman says:

    Recovery is about to fall flat:

    “New orders for manufactured durable goods in April decreased $7.1 billion or 3.6 percent to $189.9 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 4.4 percent March increase. Excluding transportation, new orders decreased 1.5 percent. Excluding defense, new orders decreased 3.6 percent.”

    http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

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  324. 324
    Scotsman says:

    “U.S. commercial property prices fell to a post-recession low in March as sales of financially distressed assets weighed on the market, according to Moody’s Investors Service.

    The Moody’s/REAL Commercial Property Price Index dropped 4.2 percent from February and is now 47 percent below the peak of October 2007, Moody’s said in a statement today.”

    http://www.bloomberg.com/news/2011-05-23/u-s-commercial-real-estate-prices-decline-to-post-crash-low-moody-s-says.html

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  325. 325
  326. 326
    pfft says:

    By Scotsman @ 73:

    Recovery is about to fall flat:

    so you finally agree there was a recovery?

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  327. 327
    David Losh says:

    RE: Scotsman @ 74RE: Scotsman @ 73

    You happened to pick two of the articles that I was reading.

    First commercial Real Estate inflated before housing. You can blame Walgreen’s, Wal Mart, Chili’s, Outback, Urban Outfitters, and Starbuck’s. We don’t need them. They, in many cases were the anchors to residential housing development. What was missing is job centers. I would love to debate that because financing, banking sector jobs, over ran manufacturing in this country. Finance collapse means job loss.

    Durable goods isn’t far behind. If we don’t have factories, we don’t have equipment.

    We can also look at lending as killing durable goods. We can’t afford $1K for a washer or dryer. $500 gets you a base model of a stove. Forget about cars when GM introduces a tree hugger model, the Volt for $30K or was it $40K. We have the most screwed up sense of value in the world. We finance everything so money is no object. Let’s sell less for a higher price, that’s the Home Dopey motto.

    Did I forget to mention Home Dopey, and Lowe’s in the commercial Real Estate section?

    What you have pointed out is another area of opportunity. Commercial Real Estate is especially over built, but even at that it was twice over priced. First in terms of how many players would use the warehouse style of construction, and second is that as national franchises did income averaging it pushed up the price of all locations of retail space. The price per square foot was used to sell commercial paper that also ended up as security instruments.

    More plainly, there is a lot that can be done for cheap, and getting cheaper.

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