Global Economic June 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.

429 comments:

  1. 251
  2. 252
    pfft says:

    By Scotsman @ 240:

    RE: Kary L. Krismer @ 239

    And our portion equates to one and a half days of consumption. Pure politics.

    28 countries participated. it’s not like libya isn’t happening too along with the euro debt crisis.

  3. 253
    pfft says:

    how come nobody ever defends austerity here? you guys wanted it and it’s failed in every country it’s been tried. just look at all the countries where bond yields are much higher a year or so later.

    http://www.calculatedriskblog.com/2011/06/greece-update-and-european-bond-and-cds.html

    meanwhile the stimulus countries are chugging along.

  4. 254
    David Losh says:

    RE: pfft @ 253

    You should read up on the EEC. All of Europe has austerity programs to reduce debt burdens. The bond market is responding to governments that may default, will default, are going to default, don’t care if they default, will never pay the money back, or pay any attention to bond ratings, or prices.

  5. 255
    Blurtman says:

    RE: pfft @ 246 – I don’t think you will settle this argument until you define the terms of success and failure, or work, and not working. And also the time frame to achieve these results, too. So here is my suggestion – peak employment with a stable or rising standard of living.

    US stimulus, currently – Fail.

  6. 256
    pfft says:

    By Blurtman @ 255:

    RE: pfft @ 246 – I don’t think you will settle this argument until you define the terms of success and failure, or work, and not working. And also the time frame to achieve these results, too. So here is my suggestion – peak employment with a stable or rising standard of living.

    US stimulus, currently – Fail.

    if the stimulus failed it was because there was too little not too much.

    Economists agree: Stimulus created nearly 3 million jobs
    http://www.usatoday.com/money/economy/2010-08-30-stimulus30_CV_N.htm

    imagine if we had spent what we were supposed to according to what people like dean baker and paul krugman said?

  7. 257
    pfft says:

    it’s pretty clear that meredith whitney’s 15 minutes are over.

    Nevada State Treasurer Takes on Meredith Whitney
    http://www.cnbc.com/id/43525456/

  8. 258
    David Losh says:

    RE: pfft @ 256RE: pfft @ 257

    Define jobs, in the 3 million range. What I found interesting is that banking is considered a service sector job. That was the job growth that people talked about. Lots of jobs have been created to handle foreclosures, collection of bad debt, bankruptcy, figuring new fee schedules for people still having money, bank tellers, sales people for worthless insurance programs, or stock portfolios. Many new jobs have been created for those low wage, debt slaves.

    Let’s take a Geiko with it’s unprecedented growth, oh yeah, they are losing to Progressive, or is it Nationwide, and we can always switch to All State. Please take a minute to look at the nonsense called our economy.

    As far as Nevada goes, they are in much worse trouble than the numbers show. Losing the housing sector may boost numbers temporarily. More people not paying mortgages increases the illusion of more cash in the system. I’ll go on about Nevada another time, but Merideth is only pointing out the obvious.

    I’m still trying to figure out why the demand for oil is so high, and never seemed to take a down turn.

  9. 259
    Blurtman says:

    Emblematic.

    “California officials say the state saved hundreds of millions of dollars by turning to China.” – to manufacture the bridge decks for the replacement Oakland Bay bridge.

    What is the unemployment rate in California, again?

  10. 260
    pfft says:

    By Blurtman @ 259:

    Emblematic.

    “California officials say the state saved hundreds of millions of dollars by turning to China.” – to manufacture the bridge decks for the replacement Oakland Bay bridge.

    What is the unemployment rate in California, again?

    how many more bridges can they fix with the money saved? the more bridges they can work on the more jobs created even if they aren’t jobs for manufacturing the bridge decks. are you advocating government waste?

  11. 261
    Blurtman says:

    RE: pfft @ 260 – Yep. It really seems to be working.

  12. 262

    By Blurtman @ 259:

    Emblematic.

    “California officials say the state saved hundreds of millions of dollars by turning to China.” – to manufacture the bridge decks for the replacement Oakland Bay bridge.

    What is the unemployment rate in California, again?

    It actually increases employment in California in the long run, because in 5 years the defective bridge decks will need to be replaced.

    Didn’t the new Tacoma Narrows spans come from Korea?

  13. 263
    Blurtman says:

    RE: Kary L. Krismer @ 262 – Not to mention replaced autos lost in the collapse.;>)

  14. 264
    pfft says:

    enjoy austerity just don’t forget to lock your doors!

    Texas Mayor Warns Residents To ‘Bolt Your Doors’ After City Lays Off Entire Police Force
    http://www.businessinsider.com/texas-mayor-warns-residents-to-bolt-your-doors-after-city-lays-off-entire-police-force-2011-6#ixzz1Qbk1KTrO

    don’t worry though, this WILL create jobs. higher unemployment creates jobs. we all know that.

  15. 265
    pfft says:

    By Blurtman @ 61:

    RE: pfft @ 260 – Yep. It really seems to be working.

    if the state paid double for the steel they’d run a story about how we paid double to enrich union bosses instead of getting the best and cheapest steel…

  16. 266
    Blurtman says:

    RE: pfft @ 265 – Yes, if every US citizen only bought foreign made goods, think of all the money we’d save. Why, we’d be rich!

  17. 267
    pfft says:

    By Blurtman @ 266:

    RE: pfft @ 265 – Yes, if every US citizen only bought foreign made goods, think of all the money we’d save. Why, we’d be rich!

    you know that is nonsense and not what I meant so why do you bother to post it? stop trolling.

  18. 268
    pfft says:

    austerity is working!

    Missouri Gov. Jay Nixon Cuts Help For Abused Children To Pay For Disaster Relief
    http://thinkprogress.org/politics/2011/06/28/255945/missouri-gov-nixon-cuts-help-for-abused-children-to-pay-for-disaster-relief/

    Rick Scott Tried To Disband The Florida Highway Patrol
    http://thinkprogress.org/politics/2011/06/28/256550/rick-scott-highway-patrol/

    why are these workers striking? don’t they know that higher unemployment and lower wages will bring on recovery?

    Greek workers begin two-day general strike – in pictures
    http://www.guardian.co.uk/world/gallery/2011/jun/28/greek-workers-general-strike-in-pictures

    all you austerians, where are the pro-austerity protestors?

  19. 269
    pfft says:

    look at that austerity creating jobs!

    Austerity engulfs the high street
    Thorntons joins growing list of casualties in a week of retail misery that could cost 10,000 jobs
    http://www.guardian.co.uk/business/2011/jun/28/austerity-high-street

  20. 270
    Ben says:

    RE: pfft @ 269 – Yep. They just don’t get that they should follow Krugman’s advice to depreciate the currency and borrow and spend their troubles away.

    And when that doesn’t work, depreciate and borrow and spend some more…..

    Free money for everyone…..

    /sarcasm

  21. 271

    On the topic of nonsense studies, here’s one on speculation:

    http://blog.seattlepi.com/transportation/2011/06/30/study-oil-speculators-costing-drivers-41-extra-per-month/

    I love the simplistic analysis. Morons.

  22. 272
    pfft says:

    By Ben @ 270:

    RE: pfft @ 269 – Yep. They just don’t get that they should follow Krugman’s advice to depreciate the currency and borrow and spend their troubles away.

    And when that doesn’t work, depreciate and borrow and spend some more…..

    Free money for everyone…..

    /sarcasm

    exactly. you actually have it right you just don’t know it.

    Compare Iceland to Estonia, Greece or Ireland and you’ll see that the Krugman’s of the world were right.

    Depreciation of the currency works. The gold standard the Euro provides has failed. We can now see real-time why we left the gold standard. it’s not flexible enough.

  23. 273
    pfft says:

    ben- austerity was supposed to inspire “confidence” and hence the economy would recover. why isn’t it in the UK? what not Greece, Spain, Portugal and Ireland?

  24. 274
    David Losh says:

    RE: pfft @ 273RE: pfft @ 272

    You got the currency part of the equation right, but you are failing with the austerity.

    Default, quick default, quick governemt default by Ireland, Greece, Spain, and Portugal would be a good start to economic recovery. The return to currencies tied to an economy would be better than this blanket dream of, as you say, the “gold standard” of the Euro.

    The introduction of the Euro was, in my opinion, a misstep in global economic development. They, we, should have learned from the disaster of the USSR.

  25. 275
    David Losh says:

    RE: Kary L. Krismer @ 71

    The in depth analysis also claims that speculators drove up the price of gasoline.

    Your supply and demand argument makes no sense. If it were supply and demand the price of oil would be falling.

    You are using nickle and dime fluctuations in production as proof that there is this a huge deficit in available oil for refinement, or that there is a huge deficiency in refinement for the crude.

    What it has come down to, repeatedly, for decades is speculators yelling fire to create volatility.

    Look at oil company wind fall profits, look at speculator profits.

    Your fascination with energy companies as a way to create wealth is amazing considering how many people suffer in the process.

  26. 276
    pfft says:

    can’t criticize krugman anymore, not that you could really before.

    Barack Herbert Hoover Obama
    http://krugman.blogs.nytimes.com/2011/07/02/barack-herbert-hoover-obama/

  27. 277

    By David Losh @ 75:

    The in depth analysis also claims that speculators drove up the price of gasoline.

    Your supply and demand argument makes no sense. If it were supply and demand the price of oil would be falling. .

    David, that study is complete non-sense. For one thing, there was “speculation” going on during the periods their base pricing, so they’re not comparing prices without speculation to prices with. Whatever entity is paying their salaries is getting ripped off.

    Second, to the extend that you want to try to claim that supply and demand is not driving prices, please cite to some statistics to support that claim. I’ve done so in the past to refute your claims, but all you seem to have is a completely unfounded belief that demand is not rising relative to supply.

    Third, of course oil companies are making a lot of money. They own a lot of oil and oil is in relatively short supply. When there’s even less oil they will make even more money! That’s the way supply and demand works.

  28. 278
    David Losh says:

    RE: Kary L. Krismer @ 277

    Sorry, but we just saw the United States government pull out reserves. How many reserves are there around the world? Lot’s.

    Then you have this from Forbes: http://www.forbes.com/2010/01/21/biggest-oil-fields-business-energy-oil-fields.html

    “Given the size of Iraq’s undeveloped giants there are no technical reasons why within 10 years the country can’t supplant both Iran and Russia to become the world’s No. 2 oil producer after Saudi Arabia.”

    Iraq itself shows the top three spots of the world’s biggest oil reserves. The world has sweet heart deals there, because the “allies” invaded.

    Demand on the other hand plummeted in 2008: http://www.ft.com/intl/cms/s/0/bcda848c-c62a-11dd-a741-000077b07658.html#axzz1R4Cv2X3R

    and today “Texas light sweet crude oil prices continued falling Monday on concerns about slowing global demand and the impact of Saudi Arabia’s oil output hike.” and ” Trading was also influenced by the looming end of the U.S. government’s bond buying program later this month and the effect of China’s inflation problems on the dollar.”
    http://www.thestreet.com/story/11150884/1/oil-prices-weaken-on-demand-outlook.html?cm_ven=RSSFeed

    I know it’s hard to filter through the hype of the markets “selling” you the idea we have market volitility, but the internet has done that. It’s easy to inject a bunch of internet chatter to make things look more volitile than they actually are.

    Let’s take Libya, because I just posted the news from Iraq. Invading Libya means more oil on the street, not less. Oil will get dumped onto the global market to rebuild Libya. Speculators are making profit now because the margins will shrink.

    For having such a fascination with energy you still cling to this idea Enron had no hand in an energy crisis when it’s been proved market manipulation added to the hysteria.

    Oil is a dinosaur. It’s another example of a free market that was bought up into a global monopoly. Banking is today’s example, oil is from our distant past.

    Government needs to intervene.

  29. 279
    David Losh says:

    RE: Kary L. Krismer @ 77

    While I’m waiting for my comment to mderate let just say that the study is the same as looking at consumer confidence trends, or mortgage interest rates as a way to gauge a market. The study took a method and followed it to a conclusion.

  30. 280

    RE: David Losh @ 78 – Okay, I guess I guess I needed to be more specific. Current supply and demand. Show some stats where current supply is much greater than current consumption.

    The US and other countries pumping out reserves has probably had a downward effect on price. That’s the type of thing I’m talking about with supply, but that’s not a sustainable supply.

    The story on Iraq is not current supply so it won’t affect the current price. And while they’re developing that supply, other sources of supply are being depleted, just as for example, as how the Alaska pipeline is only processing a fraction of what it was in the early days because the wells are being depleted.

    And really, a cite to 2008? This is 2011. Prices declined because of a world wide recession. Perhaps you frequent a website or two that might have referenced that a time or two. ;-)

    In case you didn’t, there was a world wide financial crisis which arose at the end of 2008 and caused virtually every economy in the world to turn south. That in turn meant that they didn’t consume the same amount of oil, which in turn meant prices dropped. As those economies recover the opposite occurs. Again this is 2011.

  31. 281
    David Losh says:

    RE: Kary L. Krismer @ 280

    The biggest oil fields link is 2010, that talks about Iraq, and those fields are coming on line.

    The great and beautiful thing about the supply of oil is that you can’t show it.

    You’re thinking that Europe, and the United States dumping reserves was for the benefit of the people? Come on, the world is swimming in oil because production didn’t stop in other countries it just stopped here, as you pointed out in the pipline case. The pipeline is running at low capacity because Palin put a tax on that oil.

    Demand dropped in 2008 while supply kept pumping. This last spike in pricing is all about greed.

    Geez, I could go on with this all day long, but you just follow the market reports.

  32. 282
    pfft says:

    anyone else find it funny that not raising the debt ceiling is unconstitutional?

  33. 283

    RE: pfft @ 82 – I could see a possible argument that having a debt ceiling limit is unconstitutional, but I don’t think there’s any argument at all that requires Congress to pass legislation or the President to sign it if it is passed.

  34. 284
  35. 285
    pfft says:

    By Kary L. Krismer @ 83:

    RE: pfft @ 82 – I could see a possible argument that having a debt ceiling limit is unconstitutional, but I don’t think there’s any argument at all that requires Congress to pass legislation or the President to sign it if it is passed.

    no it IS unconstitutional.

    “The validity of the public debt of the United States, authorized by law…shall not be questioned.”

    http://tpmdc.talkingpointsmemo.com/2011/07/constitutional-crisis-the-political-and-legal-risk-of-ignoring-the-debt-limit.php?ref=fpblg

  36. 286
    Voight-kampff says:

    RE: pfft @ 285

    After reading the article you link to, it appears it is highly up for debate as to whether it would be construed as unconstitutional and seems to have as many arguments “for” as “against”.

  37. 287

    By Voight-kampff @ 86:

    RE: pfft @ 285

    After reading the article you link to, it appears it is highly up for debate as to whether it would be construed as unconstitutional and seems to have as many arguments “for” as “against”.

    And beyond that, assuming the argument is valid, it seems to go more to my argument that the debt limit is unconstitutional–something pfft claimed was wrong. :-D

  38. 288
    Blurtman says:

    RE: pfft @ 285 – A lot of folks believe that the public debt does not include intergovernmental debt, i.e. the spent Social Security trust fund, and empty Medicare trust fund.

  39. 289
    pfft says:

    By Blurtman @ 288:

    RE: pfft @ 285 – A lot of folks believe that the public debt does not include intergovernmental debt, i.e. the spent Social Security trust fund, and empty Medicare trust fund.

    they’re wrong.

    “the spent Social Security trust fund”

    the money is in US treasuries. where are they supposed to put it where it isn’t spent?

    do you realize that everytime a loan is made there is not actual money left it’s spent on something?

  40. 290
    pfft says:

    By Voight-kampff @ 86:

    RE: pfft @ 285

    After reading the article you link to, it appears it is highly up for debate as to whether it would be construed as unconstitutional and seems to have as many arguments “for” as “against”.

    not by my reading. the constitution is pretty clear. we can’t default.

  41. 291
    Blurtman says:

    RE: pfft @ 289 – The SS trust fund money has been spent and replaced with special treasuries. These treasuries bear no CUSIP number and cannot be traded in the open market. Unlike unspecial treasuries. the value of these special treasuries is not set by the market. The entirety of this debt is intergovernmental. None is owed to Chinese, Japanese, pension fund or other investors. The argument has been made that this is not public debt. Consider that the money in the trust fund has been borrowed from the public. I certainly hope the argument is incorrect, but my research on the issue of the SS trust fund has been more accurate than yours.

    A seperate issue – consider that if the special treasuries are redeemed through the issuance of unspecial treasuries, American citizens will be faced with double taxation – first as SS payroll deductions, and then as federal income tax to pay interest on the unspecial treasuries.

    Further, as I had claimed, Geithner has been shown to be FOS yet again. His claim that a default on any USG obligation would send the bond markets into a panic is as has been stated absolute nonsense. I trust you had read the previously supplied link indicating that the Treasury had missed a special treasuries coupon payment to the SS trust fund. Note that the bond market did nto even blink. (http://market-ticker.org/akcs-www?post=189249)

    Further, a default on promised SS benefits concerns the bond market not at all. That is, delivering less and less benefits to SS recipients does not matter to the bond market.

    I am not lobbying for the dissolution of SS and the cessation of benefits. But I think it is important to consider the issue of debt obligations carefully.

  42. 292

    By pfft @ 290:

    By Voight-kampff @ 86:

    RE: pfft @ 285

    After reading the article you link to, it appears it is highly up for debate as to whether it would be construed as unconstitutional and seems to have as many arguments “for” as “against”.

    not by my reading. the constitution is pretty clear. we can’t default.

    But assuming that’s your reasoning, it doesn’t mean Congress has to act to increase the debt limit. It means imposing the debt limit itself is unconstitutional. Both the existing one and any future ones. What they should do is repeal the debt limit. There’s no reason for it to exist, and it was a stupid idea. I’m not even sure why we have one.

  43. 293
    Ben says:

    RE: pfft @ 284 – First rule of prediction: Never give a hard date for a major prediction. We learned that yet again on May 21st and we’ll learn it once again October 21st and in December of 2012. :-)

    Depsite the preceding advice about hard dates, I stick to my prediction a month or two ago about the GDP wheels coming off the bus sometime this year. It’s not a hard line in the sand date anyway. You ought to agree with me (for the wrong reason) as good Keynesians will always say any stimulous is NEVER large enough.

  44. 294
    pfft says:

    By Kary L. Krismer @ 292:

    By pfft @ 290:

    By Voight-kampff @ 86:

    RE: pfft @ 285

    After reading the article you link to, it appears it is highly up for debate as to whether it would be construed as unconstitutional and seems to have as many arguments “for” as “against”.

    not by my reading. the constitution is pretty clear. we can’t default.

    But assuming that’s your reasoning, it doesn’t mean Congress has to act to increase the debt limit. It means imposing the debt limit itself is unconstitutional. Both the existing one and any future ones. What they should do is repeal the debt limit. There’s no reason for it to exist, and it was a stupid idea. I’m not even sure why we have one.

    I agree.

    2/3 of the debt was run up by republicans and during the bush years the debt ceiling was raised by $4 trillion.

  45. 295
    pfft says:

    By Ben @ 93:

    RE: pfft @ 284You ought to agree with me (for the wrong reason) as good Keynesians will always say any stimulous is NEVER large enough.

    the amount of stimulus is a very easy calculation. what is the difference between what the economy could produce and what it is actually producing. whatever stimulus you have should be enough to bridge that gap.

  46. 296
    One Eyed Man says:

    RE: Ben @ 293

    So what was your hard prediction? Did you predict negative GDP for a quarter in 2011 per BEA or whatever government entity calculates that number?

  47. 297
    David Losh says:

    RE: Blurtman @ 288

    Let’s start with Medicare, and carry that over into a socialist agenda. Social Security can be easily funded by our government.

    First we convert medicare to single payer, government run health care, and incorporate all the medicare infrastructure.

    Second we expand all existing government run programs for food, and housing to include the elderly.

    Last we do away with all government sector employee pension plans and incorporate that money into social programs for the elderly.

    It’s all legal, and on it’s way. If you have a government job you work for the people.

  48. 298
    David Losh says:

    RE: One Eyed Man @ 96

    It’s obvious to me that Spain, Greece, Italy, and Ireland should nationalize the banking system in each country. They should default quickly, and do away with the Euro, to return to their own currencies. If they wanted to make a separate free trade agreement, then they should be allowed to, and probably have closer ties to Northern Africa than to Europe.

    That will put the GDP question into perspective.

  49. 299
    pfft says:

    Krugman on the triumph of keynes.

    Mr Keynes and the moderns
    http://www.voxeu.org/index.php?q=node/6668

  50. 300
    David Losh says:

    RE: Kary L. Krismer @ 280

    OK Kary, you ignore my reasoning on oil prices, but why is the price of oil down because the job market is weak?

  51. 301
    Matthew says:

    Nice jobs report this morning. UE at 9.2%. Time for QE3 already? Where is PFFFT’s recovery? I thought everything was fine in the land of Keynes!

  52. 302

    By David Losh @ 100:

    RE: Kary L. Krismer @ 280

    OK Kary, you ignore my reasoning on oil prices, but why is the price of oil down because the job market is weak?

    ??? A weak job market would mean lower demand for oil (and probably lower consumption too). That would lead to lower prices.

  53. 303

    By Matthew @ 1:

    Nice jobs report this morning. UE at 9.2%. Time for QE3 already? Where is PFFFT’s recovery? I thought everything was fine in the land of Keynes!

    I’m not sure why you think this somehow disproves Keynes. State and local governments are laying off people like mad. That’s less spending and Keynes would predict that would translate into lower GNP.

  54. 304
    Blurtman says:

    RE: Matthew @ 1 – It’s obviously explained by the wealth effect. People have so much wealth, they’ve decided to take the summer off. ;>)

  55. 305
    David Losh says:

    RE: Kary L. Krismer @ 302

    That is what speculation is all about. However, the job reports have been weak for a long time. Many economic numbers indicate stagnation, yet production continues.

    That is where the reserves come in.

    The bottom line is that the price of oil should be very cheap. It’s not. That is because it is trading at a speculation level rather than in the real world.

  56. 306

    RE: David Losh @ 5 – David, you need to start stating some facts, rather than your opinion of the world which is based on God knows what.

    What mechanism do you think exists that somehow ensures speculators make a profit, such that if they buy a future at $X they can sell it at $X + $Y? There is no such mechanism and your statements that oil should be cheap are based on nothing.

  57. 307
    David Losh says:

    RE: Kary L. Krismer @ 306

    It’s very simple. My reasoning, and I have put up links to show it, is that the theory of peak oil was developed before some major changes in the global economy. The projected target date for the point when oil production would get so hard it would drive up the price of oil was 2020. At that time development of alternative energy would become more cost effective.

    Since that time the demand for oil in China has dropped, and according to some people China is heading for an economic crisis. We invaded Iraq and are in the process of bringing more productive oil fields on line. As a matter of fact, while production in Libya has been stalled, Saudi Arabia agreed to cover the short fall, yet it’s pretty clear that was unnecessary, but the offer was made. Last would be that we know oil production in Libya will continue, and probably increase.

    All of this time the development of alternative energy continues. Alternative energy may be expensive, but it is there. We’ll comfortably meet that 2020 dead line with more oil, and more alternatives.

  58. 308
    David Losh says:

    Actually I wanted to advance another wild theory today.

    In the 1970s a guy, some guy, I forget who, wrote a book about Japan. He was saying that Japan was engaged in a nationalized effort to economically dominate their corner of the world. He referred to it as an economic war.

    We’ve kind of forgotten about Japan except as having a lost decade. They are still an economic power house, but not as dominate as they may have once thought they could be.

    What I started thinking this past week is that Germany seems to be at the center of the Euro economic crisis. What if Germany, or the combination of European countries, had the idea they could economically achieve what two world wars failed to accomplish?

  59. 309

    RE: David Losh @ 7 – You’re only addressing supply, which is only half the equation, and also have not stated at all how you think buying a future for $X guarantees that you can sell in the future at a profit and drive up prices.

  60. 310
    David Losh says:

    RE: Kary L. Krismer @ 309

    Ah, the demand has fallen. That should be obvious to every one. Production continues. It’s like the building craze in China. They have to go on or risk putting people out of work.

    What we’re seeing right now, in my opinion, is the clearing of past future’s market speculation. Lot’s of bets that were made during the global economic expansion still have to be paid off.

    In other words, there is no reason for this year’s spike in oil prices. It just looks good on paper, and the profits are extremely real. The consumer is paying a high price to clear the books of petro dollar speculation.

    I’m going to raise the question again in another way. What’s going to happen when the consumers wake up, and stop paying? Isn’t that what all the concern is about?

  61. 311

    By David Losh @ 310:

    RE: Kary L. Krismer @ 309 – Ah, the demand has fallen. That should be obvious to every one.

    Maybe I need to make this clear, but stating something should be obvious is not citing to a fact. What you need is something like this, but something that says something entirely different.

    http://www.economist.com/blogs/dailychart/2011/06/oil-production-and-consumption?page=1

    Or something that says something entirely different than page 3 of this PDF.

    http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_report_2011.pdf

  62. 312
    David Losh says:

    RE: Kary L. Krismer @ 311

    You’ve posted these before, and you need to look at them again. These are BP reports that indicate the same slight consumption that out strips production.

    Let me just point out the obvious, again, that according to the graphs shown there is no decrease in consumption in Asia-Pacific, even though it does indicate a flattening of the consumption in North America.

    In my opnion Asia-Pacific will continue to take delivery even though consumption is down.

    In other words, it’s also my opinion that the price of oil, and oil futures should be hitting a brick wall, soon.

  63. 313

    By David Losh @ 312:

    RE: Kary L. Krismer @ 311 – You’ve posted these before, and you need to look at them again. These are BP reports that indicate the same slight consumption that out strips production.

    You do realize that is exactly a situation that leads to and supports higher prices, right? Higher prices are what keeps consumption in check. But for higher prices we’d have lines at the gas station and stations running out of gas.

  64. 314
    David Losh says:

    RE: Kary L. Krismer @ 313

    That is a very tired argument.

    There’s a term that I have avoided in these discussion, but it was linked to in another comment on another thread, it’s petrodollars, as opposed to the petroeuro.

    It really makes no difference. Currencies show the strength of a Nation. Our currency is tied closely with the price of oil. We prop up the price of oil to prop up our currnecy values.

    A lower price of oil would bolster an economic recovery, which we need, globally. The United states needs to move on from where we were as a Super Power to becoming an economic dynamic. We refuse to do that in favor of giving away profits to oil company interests.

    Oil should just be allowed to play out. Consumers are already paying the high price of oil. The next question is what gives in the family budget to continue to pay to drive to work? What will we spend less on to pay the higher prices for commodities? How much stress can our economy take before something like the Tea Party happens?

    No, higher prices at the pump are killing our economy, and our fight to maintain the value of the petrodollar is killing the global economy.

    You should really get out ot the house more. In my opinion we have become a society that looks at the statistics that are fed to us by the very companies that depend on high stock prices. Once you look up from the data you can see other things are going on.

    Actually, I think every American should see Nothern Africa from Morocco, to Jordan, and that includes Palastine. It’s a much different perspective.

  65. 315

    By David Losh @ 314:

    RE: Kary L. Krismer @ 313 – That is a very tired argument.

    That’s what the Davis Administration said in California before they wised up. Unfortunately before they wised up they bankrupted two major utilities and took California from a state with a $20B surplus to a state on the verge of bankruptcy. All because they didn’t understand simple economics.

    “Tired” simply means you don’t understand simple and basic economic concepts, like apparently the indisputable fact that higher prices will result in lower consumption.

  66. 316

    By David Losh @ 14:

    Our currency is tied closely with the price of oil. We prop up the price of oil to prop up our currnecy values.

    You do realize that there’s an inverse correlation there, right? The stronger the dollar, the lower the price of oil.

  67. 317
    David Losh says:

    RE: Kary L. Krismer @ 316

    I also understand that ours isn’t the only currency in the world. The Euro, which Saddam made the the mistake of choosing, is having a sever crisis, yet it remains propped up. What makes sense is the Petroruble for China, but they are talking about changing global currency domination. Does that mean we will have the petroyuan? That could be, but Russia may not accept that.

    You have made my point about the dollar being tied to the price of oil, but I’m not sure how that would relate to the profits to the oil companies.

  68. 318
    David Losh says:

    RE: Kary L. Krismer @ 15

    Please give up the California argument. It has no place here. The Davis administration had no control over the value of the currency, interest rates, oil production, delivery, reserves, or the ability to invade Iraq, or bomb Libya.

    Lower consumption is the last thing we need right now.

  69. 319

    By David Losh @ 318:

    RE: Kary L. Krismer @ 15

    Please give up the California argument. It has no place here. The Davis administration had no control over the value of the currency, interest rates, oil production, delivery, reserves, or the ability to invade Iraq, or bomb Libya.

    Lower consumption is the last thing we need right now.

    The California argument pertains to their man-made electrical shortages, so none of the things you mentioned have any relevance to that.

    If you want lower oil prices you either need more production capacity or less consumption. There are no other legitimate choices (meaning price controls don’t work).

  70. 320

    By David Losh @ 17:

    You have made my point about the dollar being tied to the price of oil, but I’m not sure how that would relate to the profits to the oil companies.

    But again, it’s an inverse correlation. The stronger the dollar the lower the price of oil.

    I’m not sure either off the top of my head how the dollar affects oil company profits. If the dollar falls, oil prices go up because of the currency issue and higher consumption elsewhere. If you’re talking about the profit of oil companies in US dollars, that would probably mean higher profits overall, because of the higher price and our economy using so much oil, but I’m not sure.

  71. 321
    David Losh says:

    RE: Kary L. Krismer @ 15

    You’re basing your entire argument on one phrase, February 2001, California governor Gray Davis stated, “Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes.”

    You’re ignoring the deregulation of wholesale prices, while maintaining a cap on retail prices as a cause for the black outs. Then you are trying to tie that in to the budget deficit caused by the crash of the dot com markets.

    California should have been a warning for banking deregulation, or cross overs that allow speculators to be in control of the free market system.

    You’re making my arguments rather than refuting them.

  72. 322

    By David Losh @ 321:

    RE: Kary L. Krismer @ 15

    You’re basing your entire argument on one phrase, February 2001, California governor Gray Davis stated, “Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes.”

    No, there were other similar comments. In addition, I’m basing my argument on the fact that was correct. Raising rates was what was needed and raising rates was what in fact solved the problem. They resorted to that after bankrupting two large utilities and using over $20B in state funds to prop up the unsustainable system.

    You’re ignoring the deregulation of wholesale prices, while maintaining a cap on retail prices as a cause for the black outs. Then you are trying to tie that in to the budget deficit caused by the crash of the dot com markets.

    I’m not ignoring the things you mentioned in the first sentence. That’s in fact what I’m saying. Deregulating the wholesale while capping the retail was the problem.

    The dot com crash had nothing to do with it. I’m talking about California spending real dollars on dealing with the electrical crisis. And the utilities did not go bankruptcy because of the dot com crisis.

    California should have been a warning for banking deregulation, or cross overs that allow speculators to be in control of the free market system.

    No, California should have been a warning not to do stupid deregulation. Anyone with 10 college credits of economics would have realized how stupid their system was.

    As to the speculators, you’re really missing the point. To the extent they affected prices at all it was by actually limiting the production (getting production taken off line). That’s what you don’t understand about the oil issue–speculators don’t make the oil pumped out of the ground disappear.

    Also, again you’ve fallen hook line and sinker for the speculation argument put forward by the politicians that caused the crisis. Again, tell me if Enron took over $20B of money from California, and a lot more from various utilities (including those in Washington), just how did they manage to go bankrupt? It’s nonsense. Their profit and their impact was minor in the overall scheme of things.

  73. 323
    David Losh says:

    RE: Kary L. Krismer @ 20

    This is the global economic thread. Our oil companies have a big stake in selling oil in dollars. That’s what is being attacked.

    We are in, in my opinion, a currency war. Oil is a weapon.

    Your arguments are well founded, just limited in scope. It’s this global economic manipulation that has to change.

    The claims I’m making are that the Euro was a bad mistake. I know they wanted to play into the Super Power theme, but they are simply to disjointed with long histories of war fare.

    My further opinion is that Russia, and China will enter into an energy pact to trade oil for a new currency, or in Rubles. That’s where we are heading, and that would severly impact, and, again my opinion, lower the price of oil.

    We need to have lines at the gas station, we need to increase energy consumption, we need to get the price of transportation lower. I don’t see us running out of oil. I do see the ability for finding alternative energy sources that will present more diverse profit opportunities.

    Or you can take the Scotsman’s view of armed militants in the streets.

  74. 324
    David Losh says:

    RE: Kary L. Krismer @ 22

    They went bankrupt to retain profits. Come on, this is simply an example of where speculators didn’t need to create new energy sources becuase there was more money to be made by playing the system that was in palce.

    You’re right, it takes two minutes to figure out that wholesale deregulated, retail regulated, hmmm, is there a profit potential in there that doesn’t require capital expenditure? Hmmm, let’s see.

    We are in the same position today with banking.

  75. 325

    By David Losh @ 24:

    RE: Kary L. Krismer @ 22

    They went bankrupt to retain profits.

    You’re going to have to explain how that one works, because bankruptcy doesn’t work that way.

    The reason Enron went bankrupt had nothing to do with trading energy, and had to do with the fact that the business in other areas was not making as much money as claimed, and was in fact losing money. It’s sort of like Boston Market, but on a much larger scale. Enron was an accounting scandal before they were a speculator scandal, and the reason they became the latter was because they were an easy target because of the former. They were a bunch of crooks.

  76. 326
    David Losh says:

    RE: Kary L. Krismer @ 325

    The bankruptcy cleared the books, once, and for all. If I recall correctly, because this is ancient history that has nothing to do with anything being discussed here, only one person went to jail.

    And can you please define losses. Where did that money get lost to?

  77. 327

    RE: David Losh @ 26 – As I recall, they were booking revenue that was speculative at best, and never materialized. Much of their income was phantom income, but the expenses of the business were real.

  78. 328
    David Losh says:

    RE: Kary L. Krismer @ 327

    Well, yeah, the expenses are very real, like salaries, bonuses, benefits, perks, and, yes, expenses, like dinners out, cars, boats, hotels….

  79. 329
    David Losh says:

    Look, let’s take Enron as an example. It wasn’t a company as much as it was a profit center. All they needed was a place to catch dollars. They had no product to sell, they were only selling the idea of having a product. They were the ultimate middle person.

    They found a loop hole between regulation, and deregulation then exploited that to show a need for the “service” they were providing.

    Yes, it was all accounting. There was nothing there, but profit, and expenses.

    The same thing is playing out all over the world. There is a lot to unwind, mostly in the financial sectors, not so much in energy any more.

    The speculation in energy today is child’s play compared to the larger issue of currency. Oil is no longer tied to gold, gold is no longer tied to currency.

    We are at the ultimate turning point of who was right, and who was wrong. Who is the super power, and who is the axis of evil?

  80. 330

    By David Losh @ 29:

    Look, let’s take Enron as an example. It wasn’t a company as much as it was a profit center. All they needed was a place to catch dollars. They had no product to sell, they were only selling the idea of having a product. They were the ultimate middle person.

    You need to do a little bit of reading so that you can understand Enron.

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

    Pay particular attention to the sections on Revenue Recognition, Mark-To-Market Accounting and Special Purpose Entities. Also note that the California energy crisis is hardly mentioned and that Enron went into bankruptcy during the period they were supposedly causing the California energy crisis. That Americans fell for the politicians’ scapegoating of Enron in the California energy crisis is just further evidence of how incredibly gullible they are.

  81. 331
    pfft says:

    By Matthew @ 301:

    Nice jobs report this morning. UE at 9.2%. Time for QE3 already? Where is PFFFT’s recovery? I thought everything was fine in the land of Keynes!

    same thing happened last year.

    “I thought everything was fine in the land of Keynes!”

    we didn’t really try keynes. keynes-lite.

  82. 332
    David Losh says:

    RE: Kary L. Krismer @ 330

    What are you talking about? There was no energy “crisis” in California. It was an accounting trick. Speculators were given the right to cut supply. That was a regulation issue. You’ve made that point repeatedly, but it has nothing to do with todays oil speculation.

    Enron was a black hole of mumbo jumbo. A lot of people made a lot of money. Enron was just a physical address to run the money through.

    Geez.

  83. 333
    pfft says:

    it’s official, obama is a disappointment.

    Obama Urges Dems To Accept Changes To Medicare, Social Security
    http://tpmdc.talkingpointsmemo.com/2011/07/obama-urges-dems-to-accept-changes-to-medicare-social-security.php?ref=fpb

  84. 334
    Blurtman says:

    RE: pfft @ 333 You catch on real quick.

  85. 335

    By David Losh @ 32:

    RE: Kary L. Krismer @ 330

    What are you talking about? There was no energy “crisis” in California. It was an accounting trick. Speculators were given the right to cut supply. That was a regulation issue. You’ve made that point repeatedly, but it has nothing to do with todays oil speculation.

    Dave, take an economics class or two. But for the restrictions on raising consumer prices, the situation would not have existed to have taking supply off line have any significant impact on price.

    I’ll agree there was no energy crisis in that it was completely man made by California politicians and regulators who refused to raise consumer prices until the California was on the brink of bankruptcy.

  86. 336

    RE: pfft @ 33 – Entitlements do need to be changed to make them more sustainable. I just don’t think changing them in this particular process is a good idea at all. We need well thought out changes, not something thought out under the pressure of an artificial deadline.

  87. 337
    David Losh says:

    RE: Kary L. Krismer @ 335

    Wait a minute, I think my handle on Enron is firm enough without more economics classes.

    You’re fascinated with this idea that energy should be a free market. Well, I think you are right.

    You have blinders on. You are focused on Enron for reasons I can’t comprehend and try to use Enron as an example of energy policy gone wrong.

    Today’s speculators are actual players in the oil futures market. These are real people, with real dollars, who are buying, selling, and trading product that is in transit, or reserves, refinement, or not, as the case may be.

    My point is that demand for oil is down. You keep pointing to consumption charts, that I question. Consumption may be different from demand.

  88. 338

    By David Losh @ 337:

    RE: Kary L. Krismer @ 335 – You’re fascinated with this idea that energy should be a free market. Well, I think you are right.

    . . .

    My point is that demand for oil is down. You keep pointing to consumption charts, that I question. Consumption may be different from demand.

    I wouldn’t necessarily say energy should be a free market, but it’s a disaster to have the wholesale side be a free market and the consumer side be regulated. That’s what California did because they thought prices would only go down. It’s sort of the flip side of some people thinking housing prices could only go up. Things don’t tend to work that way.

    As to the last point, the reason I’m using consumption rather than demand is because demand is something different because at any one time point demand would indicate there would be a different amount of oil consumed at different prices. For example, your personal demand for gas in August 2011 at $3.00 a gallon might be 100 gallons, and your demand at $4.00 a gallon might be 75 gallons. If you buy 80 gallons in August, that’s your consumption, and it would tend to indicate that gas was priced somewhere between $3 and $4 a gallon. Demand determines overall consumption, but when you’re looking at changes over time the only real numbers you can get are consumption.

  89. 339

    David, BTW, I was doing a little research on how California spent so much money. Unfortunately most the news reports require that you pay for the full story, but it did help with my recollection.

    The two large utilities ran up so much debt that no one would sell to them. One had something like 9 billion in debt. So California started standing behind the purchases of power for the utilities, spending millions of dollars each day just so that they wouldn’t have to raise consumer electrical rates. At one point the legislature authorized $10B just for these purchases.

    My joke at the time was that in most state you paid for electricity based on your electrical bill, but in California is was part of your income tax.

    In addition, their consumption of electricity was so high that it was taxing the major transmission lines. That’s why there was that one Enron tape of the traders cheering a wildfire. Even with more generation facilities they would have probably had blackouts. Higher electrical rates for consumers was the cure for that problem too.

  90. 340
    Blurtman says:

    RE: Kary L. Krismer @ 336 – I think the term “entitlement” has a perjorative connotation, implying undeserved monies paid at someone else’s expense. There is no reason that the POTUS of anyone else should threaten to not issue Social Security checks. The USG owes the SS trust fund over 2.5 trillion dollars. Social Security tax dollars have been spent to fund tax cuts, pay for military hardware and other items unrelated to Social Security. I know folks winced when Bush suggested that the fund be privatized which it should not be. But as payment of owed monies by the USG is in doubt, the trust fund should diversify its investment beyond USG “special treauries.”

    Further, Obama has threatened that SS payments will not be made if the debt ceiling were not extended. He did not say that USG bondholders would not be paid, and so Obama has basically created more risk for the “special treasuries” that have been deposited in the SS trust fund. Therefore the interest payments on these treausuries must be greater than for the non-special treasuries.

  91. 341

    By Blurtman @ 40:

    RE: Kary L. Krismer @ 336 – I think the term “entitlement” has a perjorative connotation, implying undeserved monies paid at someone else’s expense. There is no reason that the POTUS of anyone else should threaten to not issue Social Security checks.

    If you only have X dollars you can pay out, and Y dollars of payments to make, you have to make choices if Y is greater than X. So there is a possible reason not to issue SS checks (note the use of the term possible).

    I agree with you about the use of the term entitlements, but it also reflects how people think. They think it’s something the government must provide, and in it’s current form or better.

  92. 342
    Blurtman says:

    RE: Kary L. Krismer @ 341 – OK, so let’s include payments to bondholders under the entitlements umbrella.

  93. 343

    RE: Blurtman @ 342 – That’s one extreme. The other is we could treat them like the former GM bondholders. ;-)

  94. 344
    Blurtman says:

    RE: Kary L. Krismer @ 343 – The USG = GM? Hmm…. not good.

  95. 345

    Not a fan of the USG Corvette? ;-)

  96. 346
    Blurtman says:

    RE: Kary L. Krismer @ 345 – My fave GM mobile was the Pontiac Aztek, a car(?) that seemed to be a chaotic combination of the worst styling details from several unrelated cars. Unfortunately, I notice some of that same styling disaster flair in the Chevy Volt.

  97. 347
    pfft says:

    totally predictable.

    Defaults fell 60 percent in the first half of 2011 compared with the same period last year, including a $12.5 million Austin, Texas, apartment project that made a late payment in June, according to Distressed Debt Securities Newsletter.

    Muni Default Plunge Belies Whitney as Borrowers Shun Insolvency
    http://www.bloomberg.com/news/2011-07-15/muni-default-plunge-belies-whitney-prediction-as-borrowers-shun-insolvency.html

  98. 348
    pfft says:

    By Kary L. Krismer @ 36:

    RE: pfft @ 33 – Entitlements do need to be changed to make them more sustainable.

    yeah like get rid of the bush tax cuts.

  99. 349
    pfft says:

    By Blurtman @ 34:

    RE: pfft @ 333 You catch on real quick.

    when he really puts an effort into things and is a liberal he’s great. when he’s playing the reaching across the aisle obama he’s not nearly as effective.

    when he called out paul ryan he basically ruined ryan’s political career.

    he could be a great liberal president and a great president if he could just clearly articulate a liberal policy and negotiate from a position of strength.

  100. 350

    By pfft @ 48:

    By Kary L. Krismer @ 36:

    RE: pfft @ 33 – Entitlements do need to be changed to make them more sustainable.

    yeah like get rid of the bush tax cuts.

    I would actually agree with you there, but differently. I think the length of the cuts was too long when passed. When they expired was a lousy time to have them expire, and it’s still a lousy time. It’s sort of like the original expiration date of the first time buyer credit. They needed to expire, but the date picked originally was stupid (it was in the late fall, early winter as I recall).

  101. 351
  102. 352
    Blurtman says:

    Mass psychosis in the US

    How Big Pharma got Americans hooked on anti-psychotic drugs.

    Has America become a nation of psychotics? You would certainly think so, based on the explosion in the use of antipsychotic medications. In 2008, with over $14 billion in sales, antipsychotics became the single top-selling therapeutic class of prescription drugs in the United States, surpassing drugs used to treat high cholesterol and acid reflux.

    Once upon a time, antipsychotics were reserved for a relatively small number of patients with hard-core psychiatric diagnoses – primarily schizophrenia and bipolar disorder – to treat such symptoms as delusions, hallucinations, or formal thought disorder. Today, it seems, everyone is taking antipsychotics. Parents are told that their unruly kids are in fact bipolar, and in need of anti-psychotics, while old people with dementia are dosed, in large numbers, with drugs once reserved largely for schizophrenics. Americans with symptoms ranging from chronic depression to anxiety to insomnia are now being prescribed anti-psychotics at rates that seem to indicate a national mass psychosis.

    It is anything but a coincidence that the explosion in antipsychotic use coincides with the pharmaceutical industry’s development of a new class of medications known as “atypical antipsychotics.” Beginning with Zyprexa, Risperdal, and Seroquel in the 1990s, followed by Abilify in the early 2000s, these drugs were touted as being more effective than older antipsychotics like Haldol and Thorazine. More importantly, they lacked the most noxious side effects of the older drugs – in particular, the tremors and other motor control problems.

    http://english.aljazeera.net/indepth/opinion/2011/07/20117313948379987.html

  103. 353

    RE: Blurtman @ 352 – That’s a tough one. For sales of some drugs, like say treating “restless leg syndrome” I would guess that most of the demand is created by advertising. But here it wouldn’t surprise me to learn that most people really are nuts! ;-)

  104. 354
    One Eyed Man says:

    RE: Scotsman @ 351

    Its unfortunate that the author only tells 75% of the story. The other 25% of no more free stuff is no more free wars and a smaller standing military. Just like we pay 17% of GDP for healthcare when the remainder of the industrialized world pays about 10%, we pay over 5% of GDP for our military when Europe and the rest of the industrialized world pays less than half of that. That 2.5% of GDP is 25% of our current budget deficit and a very significant portion of future budget deficits.

    If we’re going to slaughter some sacred cows, everybody’s ox should get gored. And if they don’t want to carve up the sacred cow they should have to buy it with increased current tax dollars. And please don’t tell me how its unfair because rich people pay all the income tax. The american worker making under the SSI cut off of over 100K pays about 15% of income for SSI and medicare (if you attribute the employer payroll tax to the employee, which is appropriate as it is a direct expense of that employee). I believe that means that the “working class” (and not those unfortunate rich people who only make 250K plus) pays most of the cost of those expensive entitlements.

    Those who don’t want to cut military spending, including a lot of tea party members and pseudo-libertarians, should be willing to be taxed enough to pay for what they bought. This isn’t 1776. King George is gone and we’re the only ones to blame for over spending and running up the debt. The teaparty members along with the rest of the US population already drank the tea. Now that the waiter is bringing the bill. If we want to claim to be a people of honor, we have to pay the check.

  105. 355

    Check out the price of gold. MSNBC is reporting that it’s up to $1600 an ounce.

    At this point I think all members of the Senate and House should have to disclose any gold holdings they have or have had in the past 60 days.

  106. 356
    Blurtman says:

    RE: Kary L. Krismer @ 353 – Realtors are driving the anti-psychotics market surge.

  107. 357
    Blurtman says:

    RE: One Eyed Man @ 54 – D**n straight! And I would urge that the USG convert all of those mysterious “special treasuries” in the SS trust fund into cash and or gold. Perhaps install Elizabeth Warren as trust fund administrator.

  108. 358
    David Losh says:

    RE: Kary L. Krismer @ 355

    That was the European market.

  109. 359
    pfft says:

    By Scotsman @ 351:

    The party’s over. No more free stuff:

    http://www.weeklystandard.com/articles/fling-welfare-state_576909.html?nopager=1

    the welfare state is doing good for most of europe…most of our deficts are bush’s unpaid for wars, medicare part d plan and his TWO! tax cuts for the rich.

    if we ended the TWO! bush tax cuts for the rich we would stabilize our debt to gdp ratios.

  110. 360
    pfft says:

    Critics Still Wrong on What’s Driving Deficits in Coming Years
    http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

  111. 361
    pfft says:

    By Blurtman @ 57:

    RE: One Eyed Man @ 54 – D**n straight! And I would urge that the USG convert all of those mysterious “special treasuries” in the SS trust fund into cash and or gold. Perhaps install Elizabeth Warren as trust fund administrator.

    cash and or gold. LOL. good plan. we’ll just leave $1 trillion in cash in a vault somewhere.

    what are you going to do when gold drops 50%? you gonna raise taxes? terrible plan.

  112. 362
    pfft says:

    the most underreported business story is global warming.

    Summer 2011 Proving to be One of the Hottest on Record
    http://www.crh.noaa.gov/news/display_cmsstory.php?wfo=ict&storyid=70907&source=0

  113. 363
    Blurtman says:

    RE: pfft @ 361 Let’s see – gold, cash, or even marketable US treasuries versus illiquid. non-marketable “special treasuries.” Hmmmm…which to have when cash is required?

    You will note that the POTUS threatened the payments to the beneficiaries of the SS trust fund. Why did he not also threaten payments to US treasury bondholders? And why, in contrast to that terrible liar Tim Geithner’s claims to the contrary, did not the bond market panic at this threatened default?

    Also, as there was a one sided default threat issed by the POTUS, interest rates on the “special treasuries” should have sky-rocketed. Where can we transparently view these rates?

  114. 364
    David Losh says:

    RE: Blurtman @ 357

    Cash, and gold!!!!!! Wow!

    Let’s see what kind of currnecy should we get that cash in? Gold? Gold? WTF would any one any where do with gold? Gold?

    Have you been listenining to Glenn Beck again? Should you get some super duper seeds to go with that gold?

  115. 365
    Blurtman says:

    RE: David Losh @ 364 – Gold is up 20% annually over the last 10 years. How about the Dow?

    Gold can be sold for currency, which can be used to pay SS benefits.

  116. 366
    David Losh says:

    RE: Blurtman @ 365

    Sold to who? Who would actually buy gold?

    The only allure gold has is that it goes up in price, kind of like the stock market.

    If any one, any player, were to actually start selling gold the price would plummet. Any one buying gold is only buying for the increase in price, which is by the way closely tied to inflation, or inflation fears.

    Gold itself has no value. It’s simply an idea of exchange.

  117. 367
    Scotsman says:

    RE: One Eyed Man @ 354

    “Those who don’t want to cut military spending, including a lot of tea party members and pseudo-libertarians. . .”

    You’re too caught up in the rhetoric of the left. I’m one of those “tea-party pseudo-libertarians” and I don’t have any problems with cutting the military. Nor do most of my like minded friends.

    There’s a major difference in both cost and intent between supporting a strong military (tea party) and being the world’s policeman while running all over the globe following one whim or another. We need a strong military. We don’t need to deploy as much as we do, and we certainly don’t need to supply military might for all of our “friends.” Our true national interests are much narrower than recent history suggests.

  118. 368
    Scotsman says:

    “There has not been one quarter in which actual economic expansion occurred, on net, funded by improvements in actual economic output since 1980 during the so-called “great economy” we have enjoyed over the last 30 years. Not one time, even with the introduction of the personal computer, the introduction of the Internet, and with the so-called “great productivity” improvements that we have been sold as “facts” by the so-called mainstream media. . . We have literally put the nation’s forward “progress” on the credit card in each and every three month period since 1980!”

    And now that the bill’s come due we don’t have anything real to pay it with. We are so screwed. . .

    http://market-ticker.org/cgi-ticker/akcs-www?post=190174

  119. 369
    Scotsman says:

    Top selling cars by country- USA likes Fords. .

    http://imgur.com/DvcrJ

  120. 370
    David Losh says:

    RE: Scotsman @ 368

    The points raised are valid, though the conclusions short sighted. We’re in a global economy. Those sheiks don’t care about us, or the oil. They care about the economy they have. That economy, as much as we try to portray it differently, has to do with what is right, or wrong for the nation, and it’s people.

    Our economy is supposed to be about what is right or wrong for the people of this country.

    Handing our economy over to a bunch of over bloated corporate interests didn’t work. People expecting the “company” to take care of them from cradle to grave just ran out of money.

    The government was forced to step in and infuse cash into a global economic system that was sucked, or bled dry. The telling fact is that it wasn’t just our government that suffered. Like in the Great Depression this was a global economic melt down, that, by the way, is continuing.

    We still have a lot of dominoes to fall. Europe is in trouble, China has unsustainable production, Russia is sitting on new found oil wealth, in my opinion, by once again nationalizing it’s oil production. Africa is on the verge of food wars, and my personal favorite is South America which is turning more leftist which each election.

    The biggest problem that I see is India, and how to address the needs of it’s growing population.

    Number one we need a global population discussion, coupled with global health care. OK I’ll give in to the Bill, and Melinda Gates debate. We do need a global health plan, I just resent the way they have gone about the presentation of global health issues. We need clean water, and a safe food supply, but I can see a need for global vaccination.

    Second we need a fair trade policy that is open and above board. No economy is going to survive in a vacuum. In order for all economies to survive we’ll need to see the excessive cash reserves just created circulating, globally.

    We do need an energy policy. We just need to replace oil, and work on battery technology.

    We have to have global infrastructure to “share the wealth.”

    We are way past, way past, monarchies. There is no going back to the people at the top dictating policy to the masses. We are way past anything Marx imagined.

    Until we have a global society we’ll, literally, be killed.

  121. 371

    By Scotsman @ 369:

    Top selling cars by country- USA likes Fords. .

    http://imgur.com/DvcrJ

    That’s amazing since when you buy one it lasts for over 22 years! ;-)

  122. 372
    Scotsman says:

    RE: Kary L. Krismer @ 371

    Yup, that was for you- I knew you’d like it. I was a bit surprised until I took a moment to think about it. Ford has had a real revival over the last several years- the stock is up six fold, the products are excellent, their reputation is strong and growing.

    Some of my business interests involve cars, and people often ask me what to buy. The current answer is anything from Ford or Hyundai. Past leaders- Honda and Toyota, are still strong, but not out in front on either quality or value for the dollars spent.

  123. 373
    Scotsman says:

    RE: David Losh @ 70

    I’m not sure we’ll ever have effective global government- there’s too much diversity in culture, values, resources, etc. We need the competition, less corruption, more cooperation on the big issues like environment, but not one single huge governing entity.

    As for the economy, you’re correct that the debt problem involves more than just the U.S. and the collapse will be global.

  124. 374
    One Eyed Man says:

    RE: Scotsman @ 367

    I’ve never considered you a pseudo-libertarian, but many are.

  125. 375
    Scotsman says:

    Dang those unintended consequences:

    “A new report out yesterday from The Heritage Foundation shows private sector job creation dropped dramatically almost immediately after President Barack Obama signed the Patient Protection and Affordable Care Act (a.k.a. Obamacare) into law.
    From the recession’s low point in January 2009 until April 2010, when Obamacare went into effect, the private sector created about 67,600 jobs a month. After the president signed PPACA into law, that number slowed to a meager 6,400 jobs a month — a more than 90 percent decrease or less than one-tenth the previous rate.”

    I guess the good news is you don’t need a job if you can get your health care for free. This also brings to mind the old addage that socialiusm is great . . . until you run out of other people’s money.

    http://www.heritage.org/Research/Reports/2011/07/Economic-Recovery-Stalled-After-Obamacare-Passed

  126. 376
    David Losh says:

    RE: Scotsman @ 373

    OK, I’m in kind of a difficult spot here, because my contention has been the European Economic Community would never work because for the thousands of years of war, in Europe, culminating in WWI, and WWII.

    Now I’m faced with global economic thinking. It’s hard to make the leap when everybody seems to be at each other throats all the time.

    My entire game plan has been to retire in another country. My first choice was Morocco, lately it has been Peru, maybe Ecuador. Today none of that seems possible.

    We are seriously considering Spain because it looks like it will be in default before my other alternatives. My example is Mexico. I have friends that retired there, or have property there, who are scared to death. They bought in on the way up, but it’s dangerous today.

    I look at Mexico as a microcosm of the world as it will be in another decade. The economy in Mexico keeps chugging along, but the disparity between wealth, and the work force has gotten to be a flash point. I know people blame drug cartels, but we are actually talking about a whole underground economy.

    Many of the “illegals” who were here working for wages are now relegated to that underground. The more desperation, the more violence. It’s just not here in the United States yet, but it’s coming.

    If we “fix” our economy that would bring in more people from outside. We have to fix all of it. There is no going back to WWII, or the dot com revolution. We have to fix all of the wish list on the link you posted, globally.

  127. 377
    David Losh says:

    RE: Scotsman @ 75

    The heritage foundation is a propoganda machine. It tries to prove that if we just let businesses, I mean corporations, do what they want, when ever they want, and have them not pay taxes, that those corporations will take care of everything.

    Well that didn’t work.

    We will probably need to unwind most of the corporate structure that has been built since the 1980s. You’ve shown that repeatedly. The United States government will have to step in to protect us from these unweildly corporate entities.

    Obama is nothing compared to what needs to be done.

    Health Care is only one thing the government needs to fix, it’s actually a small, easy thing. There are much bigger battles looming, over food, water, and energy.

  128. 378
    Blurtman says:

    RE: David Losh @ 366 – Price is set by buyers and sellers in all markets, except maniplated markets like US Treasuries, for example. If everyone sells RE, as you may have noticed, the price drops.

    I am not a gold investor. But I have investigated it and sellers of gold are also buyers. Like stocks there are transaction fees both ways. The history of gold as money exceeds that of any paper currency. All governments hold gold.

    The Dow has been flat over the last 10 years, BTW.

  129. 379
    Scotsman says:

    RE: David Losh @ 377

    “The heritage foundation is a propoganda machine”

    Not really, but if you don’t like the facts you can always attack the messenger, right?

    Maybe it’s coincidence, maybe there’s a relationship- a 90% drop in private sector job creation seems to at least suggest there might be a problem.

    You frustrate me David- the intellegence is obvious, but the unwillingness to travel outside the box of some past leftist indoctrination mystifies me.

    At what point does your cleaning/prep business cross the line from Ok to giant impersonal corporation?

    What we’re really talking about is nothing more than a structure of incentives or consequences for business behavior that doesn’t match up with your values, That’s all a corporation is. We need them to organize society. If you disagree with the organization plan, Ok, but change the incentives, don’t just vilify the responses produced.

  130. 380
    Blurtman says:

    RE: Scotsman @ 375 – Check out W’s abysmal job creation record, and McConnel’s wife as Labor(less) Secretary.

    And speaking of the broad pseudo category, I busted a gut recently watching John Wayne in the Longest Day. Similar to W, John Wayne bailed on military service. Unlike W, he bailed on fighting in the “noble war'” a real war in wich America had been attacked. And Like W, Wayne constantly pretended to be be quite the opposite, the original “bring it on” blowhard.

  131. 381
    Scotsman says:

    RE: Blurtman @ 380

    Is living in the past really all that productive? Please explain how tearing down now largely irrelevant past conservatives is anything but a poor substitute for meaningful discussion of current topics.

    The majority already knows that everything from early diaper rash infections to the current economic malaise is Booosh’s fault. Next, please. By the way, we’re half way through 2011- a full generation (or two) past where many liberal minds are stuck.

    I’m really not that harsh a person, but come on. . . .

  132. 382
    Blurtman says:

    RE: Scotsman @ 381 – OK, so you voted for Mission Accomplished, twice. I get it.

  133. 383
    Scotsman says:

    RE: Blurtman @ 382

    Naw, actually I didn’t- I’ve never been as enthusiastic about middle east adventures as many other conservatives. Given that I see much of that area as not much more than tribal stomping grounds for a bunch of eleventh century twits it’s hard for me to envision our bringing enlightenment to them, let alone democracy. When they want it, having watched enough of the rest of the world leaving them behind, maybe then real change can happen. I’m astounded at how our press/media and liberal leadership hold them up as some sort of enlightened society while they are despised in return. Would our women tolerate the treatment many middle eastern women put up with every day? Our gays? I doubt it, But then consistency verses hypocracy has never been their stong suit, especially when there’s a partisan objective to be served.

    There’s not much point in dwelling on the past. We wake up every morning in this country with a thousand choices on the table in front of us, yet can only see a handful of them. Why is that? Why do we limit our thinking in such conventional ways? We need to be looking around for some new approaches to life and the future and keep our eyes off the past.

  134. 384

    By Scotsman @ 72:

    RE: Kary L. Krismer @ 371

    Yup, that was for you- I knew you’d like it. I was a bit surprised until I took a moment to think about it. Ford has had a real revival over the last several years- the stock is up six fold, the products are excellent, their reputation is strong and growing.

    Some of my business interests involve cars, and people often ask me what to buy. The current answer is anything from Ford or Hyundai. Past leaders- Honda and Toyota, are still strong, but not out in front on either quality or value for the dollars spent.

    All those are good choices. Our other car is a Toyota, probably turning over 100,000 miles today. And the daughter has had really good luck with a Hyundai (bought used) and a Kia.

  135. 385

    RE: David Losh @ 76 – I’m not sure how hard it would be to do, or how expensive, but try Tahiti. Very mellow, and very beautiful.

  136. 386
    whatsmyname says:

    By Scotsman @ 379:

    RE: David Losh @ 377

    “The heritage foundation is a propoganda machine”

    Not really, but if you don’t like the facts you can always attack the messenger, right?

    Maybe it’s coincidence, maybe there’s a relationship- a 90% drop in private sector job creation seems to at least suggest there might be a problem.

    Take another look at Heritage’s chart. Losing 67,000 jobs less than the previous month is certainly good news, but it’s not job creation. In fact, the chart shows we didn’t have positive job creation until March – shortly before the legislation was signed, and at a point where it was fait accompli. Perhaps we should take a causative feather from Heritage’s cap and argue that Obamacare was the reason for positive job creation. Or perhaps we will content ourselves with the old saw that figures don’t lie, but liars figure.

  137. 387
  138. 388
    David Losh says:

    RE: Blurtman @ 78

    As much as governments hold gold we have currency tied to very different things, like the strength of the economy. I don’t like throwing in the fiat money argument because it is murky. The fact is though that the United States has a strong economy, even though we have a tremendous debt burden. The only question is if we can pay it off. We can.

    Gold, as a commodity is a pretty worn out notion. Oil, in a lot of people’s minds, took over as the commodity to back currency, and then that starts the petro dollar debate.

    So Social Security should be backed, wholly, totally, and completely by United states government, and it’s abilities to provide for the Public Welfare.

    I see a lot of solutions, but gold isn’t one of them. Currency is debatable, so the bonds will have to do.

  139. 389
    David Losh says:

    Gawd you have to love this line:

    Corporations

    “We need them to organize society.”

    Sorry that’s what government is for.

    Yes, I am as guilty as some, and probably most. I am the face of big business, that is growing every day.

    You do have to love this country. Everything is possible in the United states.

  140. 390
    Scotsman says:

    RE: David Losh @ 389

    “Sorry that’s what government is for.”

    What? You want government to stock the shelves in your local shopping center with the most competitive values, keep the tanks at the gas station full, decide which movies and TV shows are produced, that sort of thing? That’s all I meant by “organize.”

  141. 391
    Scotsman says:

    RE: whatsmyname @ 86

    Wow- you made me go back and look at it again. And while I’ll admit fewer lost jobs isn’t the same as jobs created me thinks thou doest complain too much. Come on, there was a pretty clear upward trend right up until the legislation took effect, then the line essentially went flat. But at least I got you to look at the link too. ;-)

  142. 392
    David Losh says:

    RE: Scotsman @ 391

    Let’s talk about jobs, especially Health Care jobs. PIMA medical is churning out low wage nurse assistant jobs every day. That hasn’t changed. The medical profession is estimated to add 3 million new jobs in the next few years.

    You might as well be talking McDonalds.

    In the mean time young farm land speculators are buying hundreds and thousands of acres of farm land based on the rise in food prices, and commodities.

    Here’s what’s interesting, the more farm land they own that doesn’t produce the more valuable the land is. If they can shrink the supply of food, or commodities, the prices go up, and the value of the land goes up. Funny, huh?

    Or let’s take McDonalds. Where does McDonalds make the money? This is just an interesting aside because really this goes on every day. McDonalds is in the food business. When they came out with the Chicken McSandwich they had already bought up as much chicken as they could. When they announced the new product there was already a chicken shortage, that they created. The price of chicken soared, it became public knowledge, and the price of the Chicken McSandwich went up.

    If you are pointing to health care legislation as an end of job creation that would be a false conclusion. We don’t need jobs. The American economy doesn’t need jobs. Ask JP Morgan, Bank of America, American Express, FedEx, Wal Mart, or even Home Depot, Sears also is a player in all of this.

    All American business needs is to cut costs, increase financing options, and carry on. Maybe they will bankrupt some under performing tenacles, but they will come back leaner, and meaner to boost profits so the stock price can continue to climb.

    American business doesn’t need jobs, and is looking to cut as many jobs as they can. Profits are based on profits rather than production. If you want production there are millions of manufacturing plants globally that are working way below capacity.

  143. 393
    David Losh says:

    RE: Scotsman @ 90

    Here’s what we need government to do. We need a social safety net, today especially for the elderly, the retirement age people. We need to make sure they are fat, happy, and secure. They bought, and paid for the system we have in place so they need to be rewarded, and I mean rewarded very well, extremely well, you, and I included.

    Young people, the new population, needs to be able to make strides for themselves, and learn from the mistakes already made.

    Let’s just take the Post Office for a minute. It’s a good example. The pension fund is the biggest expense, or will be in the next few years. Business for the post office is way down, it will really never come back, there is no research, and development in the post office. So within ten years that population will be living off of a shrinking pension fund pie, while revenue continues to drop.

    Is that the workers fault? Should postal employees been smarter? Maybe they should have invested better? Oh yeah, the stock market crashed, maybe they should have diversified? Oh yeah, the Real Estate market crashed, maybe they should of invested in emerging markets? oh yeah, emerging markets are tapped out, and they are killing each other for little trinkets, and economic territory.

    So you keep saying that job loss is the government’s fault, when actually it’s the coporation who are organizing society that are in charge of job creation.

  144. 394
    Blurtman says:

    RE: David Losh @ 388 – Social Security’s backing by the USG is not firm. We recently heard Obama threaten benefits payments.

    Why did he not threaten bondholder payments?

    Some folks have said that the “special treasuries” are absolutely equivalent to US treasuries, but for the non-marketability of the “special treasuries.” Reality, however, has shown this position to be quite incorrect.

  145. 395

    RE: David Losh @ 392

    You Got it David, Today’s Yahoo Finance Story Title says It All

    Fresh jobless claims rise unexpectedly Stocks open higher.

  146. 396
    Scotsman says:

    RE: David Losh @ 392

    “American business doesn’t need jobs, and is looking to cut as many jobs as they can.”

    That’s only one side of the coin. This is where your liberal myopia lets you down. What American business needs is customers- the other side of the equation. They control costs both to increase profits and too attract increasing numbers of customers by offering increased value. So sure, there’s a dividing line, and it gets pushed first one way and then the other. But you have to look at both sides, not just one. I know you know that as a business owner. I face the same issues- I want my employees to be happy, healthy, productive, and loyal. But I have to serve my customer’s interests too. It helps to see it not as a conflict, but as a balancing act, win=win with limits.

  147. 397
    Scotsman says:

    RE: David Losh @ 93

    See above- it’s a balancing act, and too important to give control to one entity, government or corporate.

  148. 398
  149. 399
    Blurtman says:

    RE: Scotsman @ 398 – Waiting for PolBeGone pest spray.

  150. 400
    whatsmyname says:

    By Scotsman @ 391:

    RE: whatsmyname @ 86

    Wow- you made me go back and look at it again. And while I’ll admit fewer lost jobs isn’t the same as jobs created me thinks thou doest complain too much. Come on, there was a pretty clear upward trend right up until the legislation took effect, then the line essentially went flat. But at least I got you to look at the link too. ;-)

    Not an upward trend, but a decrease in the downward trend, slowing as the job market hit the trough – and cleverly presented upside down. You could do the same thing with the housing data. Perhaps Obamacare killed the incredible housing recovery too.

  151. 401
    David Losh says:

    RE: Scotsman @ 396

    You are ignoring the fact that American business only needs to fund emerging market activity to make profits. They don’t have to have United States consumers to have profits. Profits drive Wall Street. Production is just something corporations do to funnel the money. It’s just like, or exactly like, money laundering.

    Financing is the end result. A little debt here, some interest income over there, multiple that by a few billion, and you have a securities market that can be bought sold, or traded for additional profits.

    The government needs to step in and spend our tax dollars on providing for the public welfare. We need protection from our own businesses. We need protection from the insurance, and banking sectors who are completely out of control.

    Who do we give more money to anyway? The government, the insurance companies or banking finance? I get confused, but know for a fact that my government needs to provide for th public welfare. I don’t see that in my credit card applications.

  152. 402
  153. 403
    pfft says:

    I haven’t been around for a week. Is everyone enjoying our heatwave courtesy of climate change?

    no amount of evidence unfortunately will convince the anti-science crowd.

  154. 404
    pfft says:

    By Scotsman @ 68:

    “There has not been one quarter in which actual economic expansion occurred, on net, funded by improvements in actual economic output since 1980 during the so-called “great economy” we have enjoyed over the last 30 years. Not one time, even with the introduction of the personal computer, the introduction of the Internet, and with the so-called “great productivity” improvements that we have been sold as “facts” by the so-called mainstream media. . . We have literally put the nation’s forward “progress” on the credit card in each and every three month period since 1980!”

    And now that the bill’s come due we don’t have anything real to pay it with. We are so screwed. . .

    http://market-ticker.org/cgi-ticker/akcs-www?post=190174

    people really think we haven’t grown since 1980? hilarious.

    the idiocracy has arrived.

  155. 405
    pfft says:

    By Scotsman @ 75:

    Dang those unintended consequences:

    “A new report out yesterday from The Heritage Foundation shows private sector job creation dropped dramatically almost immediately after President Barack Obama signed the Patient Protection and Affordable Care Act (a.k.a. Obamacare) into law.
    From the recessionâ��s low point in January 2009 until April 2010, when Obamacare went into effect, the private sector created about 67,600 jobs a month. After the president signed PPACA into law, that number slowed to a meager 6,400 jobs a month â�� a more than 90 percent decrease or less than one-tenth the previous rate.”

    I guess the good news is you don’t need a job if you can get your health care for free. This also brings to mind the old addage that socialiusm is great . . . until you run out of other people’s money.

    http://www.heritage.org/Research/Reports/2011/07/Economic-Recovery-Stalled-After-Obamacare-Passed

    it’s heritage so you can bet they are wrong. HCR doesn’t kick in significantly for awhile…

  156. 406
    pfft says:

    By Scotsman @ 81:

    RE: Blurtman @ 380

    Is living in the past really all that productive? Please explain how tearing down now largely irrelevant past conservatives is anything but a poor substitute for meaningful discussion of current topics.

    The majority already knows that everything from early diaper rash infections to the current economic malaise is Booosh’s fault. Next, please. By the way, we’re half way through 2011- a full generation (or two) past where many liberal minds are stuck.

    I’m really not that harsh a person, but come on. . . .

    polls show bush is still largely blamed for our economic mess.

    Public rejects GOP on debt, blames economy on Bush
    http://www.washingtonmonthly.com/political-animal/2011_07/public_rejects_gop_on_debt_bla030865.php

    next!

  157. 407
    pfft says:

    “From the recessionâ��s low point in January 2009 until April 2010, when Obamacare went into effect, the private sector created about 67,600 jobs a month.”

    what? there were only two months of jobs growth that entire time. why do you post such obvious nonsense from such an obviously biased source?

    this chart clearly shows that there were only 2 months of job growth during the time they talk about. they say private jobs but even dealing with government layoffs wouldn’t make the numbers work.

    http://www.washingtonmonthly.com/privatejobs_mar11.jpg

    basically Hertiage sucks but we already knew that.

  158. 408
    Blurtman says:

    Flogging the dead horse yet again, here is the soverign debt analyst at S&P stating that if the USG paid bondholders, but not others, there would be no default.

    http://video.cnbc.com/gallery/?video=3000035313

    Once again, Tim Geithner has been shown to be a terribble liar. As his claims to the contrary were obviously false, what is one to believe about Geithner?

    1.) believes that his words can sway anyone in spite of reality
    2.) really has no clue what he is doing
    3.) is lazy and just doesn’t care.
    4.) just wants to get on to the big office at Goldman Sachs
    5.) all of the above

    Can’t he do better than that? Jeepers, he is the head of the US Treasury!

  159. 409
    David Losh says:

    Just to finish with that oil conversation, the oil supply “jumped” today because release of those emergency oil reserves last month by the United States, and Europe. It was another $1 decrease in the oil future delivery price.

    $1?

  160. 410
    pfft says:

    By Blurtman @ 408:

    Flogging the dead horse yet again, here is the soverign debt analyst at S&P stating that if the USG paid bondholders, but not others, there would be no default.

    http://video.cnbc.com/gallery/?video=3000035313

    Once again, Tim Geithner has been shown to be a terribble liar. As his claims to the contrary were obviously false, what is one to believe about Geithner?

    1.) believes that his words can sway anyone in spite of reality
    2.) really has no clue what he is doing
    3.) is lazy and just doesn’t care.
    4.) just wants to get on to the big office at Goldman Sachs
    5.) all of the above

    Can’t he do better than that? Jeepers, he is the head of the US Treasury!

    so now you’re touting the ratings agencies?

    you’re favoring the rich over SS and medicare recipients? over paying our soldiers? your little plan only works in a fantasy world. Stiffing medicare and SS recipients is WORSE than a default.

    you’re in fantasy land.

  161. 411
    Blurtman says:

    RE: pfft @ 410 – No. Just that I have posted from several sources that illustrate that Geithner is a terrible liar. He and Larry Summers are a poor reflection on an inexperienced and eager to please Obama.

    I have berated Obama for threatening SS.payments, but not payments to treasuries bondholders.

    Geithner is the Christopher Cox of the Treasury Department. A W Bush like choice..

    Personally, I need to be convinced that Obama is anything more than a well spoken, well dressed man whose backup career choice was in corporate law.

  162. 412
    Spherical says:

    RE: Blurtman @ 408 – Regarding the non-necessity of default: Based on current government receipts, the government would have four choices if the debt ceiling doesn’t rise:

    1) Pay bondholders, but pay for NO discretionary spending (bye-bye FDA, NASA, FBI, etc.), and still not have enough to pay non-discretionary (i.e. SS, medicare, medicaid get shorted).
    2) Pay all of non-discretionary with drastic cuts to discretionary. Bondholders get nothing.
    3) Pay all of discretionary with cuts to non-discretionary. Bondholders get nothing.
    4) Short everyone.

    So yes, we could avoid a technical default to bondholders. No, we can’t avoid it without creating a political, economic, and moral disaster. Whether option one would still result in a credit rating downgrade I think is an open question– a country that can’t pay its bills without burning down the house to do it doesn’t exactly inspire confidence.

  163. 413
    Blurtman says:

    US Government Says Geithner is Full of Shit:

    U.S. Contingency Plan Gives Bondholders Priority

    The U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official.

    http://finance.yahoo.com/news/US-Contingency-Plan-Gives-bloomberg-2604131065.html?x=0&sec=topStories&pos=main&asset=&ccode=

  164. 414
    Blurtman says:

    RE: Spherical @ 12 – Moody’s and S&P says the USG would not be in default if it prioritized paying bonsholders. In fact, Moody’s and S&P expect that to happen. That doesn’t mean the USG is off the hook for being in default, BTW, just that this would not be the cause.

    “(Moody’s and S&P)…already implicitly assumed that the Treasury would prioritize debt payments to preserve the U.S.’s rating.”

    http://finance.yahoo.com/news/U-S-Default-Is-Possible-atlantic-4262849159.html?x=0&sec=topStories&pos=5&asset=&ccode=

  165. 415
    Spherical says:

    RE: Blurtman @ 414 – Errr.. did you read the article you posted? It’s titled “U.S. Default Is Possible: Treasury May Not Prioritize Debt Payments.”

    Here’s the quote you posted and what comes after it: …”already implicitly assumed that the Treasury would prioritize debt payments to preserve the U.S.’s rating.

    And yet, the report above suggests that the agencies’ assumption is incorrect. If the debt ceiling is not raised and the Treasury uses its consequently insufficient funds to pay bills as they come due in August, then before long an interest payment will be missed.”

    Regardless, I was assuming in my earlier post that the Treasury would have the flexibility to prioritize payments. My point wasn’t that default has to happen, it’s that the President/Treasury would be left with a Sophie’s Choice if the debt ceiling isn’t raised.

  166. 416
    Blurtman says:

    RE: Spherical @ 415 – It would be an odd choice to place more credence in an author too lazy to have researched past crises and the USG’s capability to prioritize, than in Moody’s and S&P.

    Yes, obviously, if there is not enough to go around, proritizing might have to occur. As your assumption contradicts what has been stated by Tim Geithner, perhaps you may also share the belief that he is a terrible liar and full of shit.

  167. 417
    Spherical says:

    RE: Blurtman @ 416 – We’re talking about the same Moody’s and S&P that gave AAA ratings to junk CODs for years, right?

    As far the chocolate quotient of various politicians and appointees… for the most part, if it works in DC and wears a suit, it’s probably lying. I believe the PC term is PR. That’s not to say they don’t have good reasons for that, it’s just that they’re mostly political reasons. At the moment, what is happening is exactly what the politics demand. The publicly stated position of the administration is that Aug 2 is a hard line because that helps reinforce the urgency of making a deal, and it helps keep public pressure on the GOP (who polls show are taking a bigger beating in this than Obama). At the same time, they’ve got a lot of anxious millionaire and billionaire Wall Street donors who need reassuring that Obama isn’t as nuts as the Tea Party, and will take the necessary steps to prevent default, so there’s a lot of stage whispering (“leaks”) about how the bond holders will be taken care of.

    I’m entirely confident that everyone in DC understands that it’s just one big political theater… well, everyone but the Tea Party in the House, who honestly seem to think this is for real, and who are the only people that everyone should be well and truly afraid of.

  168. 418
    Blurtman says:

    RE: Spherical @ 417 – Yes, Moody’s, S&P, and Fitch are not to be believed, but then again, they are.

    Perhaps team Obama shoud pay more to these corrupt firms than the CDS holders.

  169. 419
    Scotsman says:

    RE: pfft @ 403

    While you were gone another giat hole was blown in AGW theory. Looks like the data doesn’t support the theory:

    “NASA satellite data from the years 2000 through 2011 show the Earth’s atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing. The study indicates far less future global warming will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dioxide trap far less heat than alarmists have claimed.”

    http://news.yahoo.com/nasa-data-blow-gaping-hold-global-warming-alarmism-192334971.html

    And another- don’t have the link handy, but the guy who did the polar bear stories was found a fraud and fired or something. Time to find a new religion.

  170. 420
    David Losh says:

    RE: Scotsman @ 419

    Less emissions mean the threat of global warming is diminishing. The bigger issue, and problem, is that people ignore the root cause of dumping pollution into the air. Open buring of fossil fuels like in the V8 engine with no filters dumps particles into the air. Smoke stacks without filters dumps dust particles into the air. If you live near the freeway you can expect black dust. Your children breath that. The smog is so bad some days there are alerts for people to stay inside.

    It makes no difference what the sceintists say. It’s not even a debate. It’s just common sense.

    For some reason I have yet to understand why people defend oil companies. People defend coal burning. Then we had the nuclear energy craze that has proved to be a disaster, literally.

    Now when it comes to putting solar panels up, or wind mills, you’re just a stupid hippie. What I would like to see is the cost benefits of sixty years of government expense for nuclear energy, compared to what we would have gotten if that money was spent on solar panel research, and storage battery technology.

    No matter what, we will have to have alternative energy resources.

  171. 421
    pfft says:

    By Scotsman @ 419:

    RE: pfft @ 403

    While you were gone another giat hole was blown in AGW theory. Looks like the data doesn’t support the theory:

    “NASA satellite data from the years 2000 through 2011 show the Earth’s atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing. The study indicates far less future global warming will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dioxide trap far less heat than alarmists have claimed.”

    http://news.yahoo.com/nasa-data-blow-gaping-hold-global-warming-alarmism-192334971.html

    And another- don’t have the link handy, but the guy who did the polar bear stories was found a fraud and fired or something. Time to find a new religion.

    it’s not religion it’s science.

    “While you were gone another giat hole was blown in AGW theory.”

    oh really? just like when the hacked emails proved climate change was a hoax? how did that work out? you never posted. why is that? they were all cleared!

    Probe clears scientists in ‘Climategate’
    http://www.usatoday.com/tech/science/environment/2010-07-07-climategate-investigation_N.htm

    yeah I guess climate change has been disproven.

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

    As for you article “debunking” climate change…it’s about the well-known climate denier roy spencer. Your article is written by the Heartland Institute, well-known right-wing denier organziation. it’s already been debunked.

    Climate Change Debunked? Not So Fast
    http://www.livescience.com/15293-climate-change-cloud-cover.htm

    next!

  172. 422
    pfft says:

    another link if someone wants it.

    Misdiagnosis of Surface Temperature Feedback
    http://www.realclimate.org/index.php/archives/2011/07/misdiagnosis-of-surface-temperature-feedback/

  173. 423
    Spherical says:

    RE: Scotsman @ 419 – Just a little perspective on the credibility of the authors of the “study”:

    “Study co-author Dr. Roy Spencer, a principal research scientist at the University of Alabama in Huntsville and U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer flying on NASA’s Aqua satellite, reports that real-world data from NASA’s Terra satellite contradict multiple assumptions fed into alarmist computer models.”

    That’s good ‘ol Roy Spencer, creationist and fellow at the ExxonMobil funded Heartland Institute, a libertarian think tank and propaganda machine whose past endeavors include working with Philip Morris to question the science linking second hand smoke and cancer. This guy is the official climatologist of the Rush Limbaugh Show, so that should give you an idea of what kind of objectivity he brings to the table.

    Everything this guy writes on global warming, just like everything the Heartland Institute puts out, follows the same trajectory.

    First, it gets published in a marginal journal with low standards so they can say it’s “peer reviewed.”

    Second, it hits the right wing blogs, where conservatives accept it uncritically and rejoice because it tells them what they want to hear.

    Third, actual scientists read it and shred the faulty logic, poor assumptions, and abysmal methodology.

    Fourth, it hits the the left wing blogs, who take the opportunity to gloat a little and trash the study’s authors and all the uncritical right wing blogs.

    Fifth, the right wing websites, who would never be caught dead reading a hostile left wing website and who would never read anything written by actual scientists (who they consider to either be part of the “liberal elite” or part of an ill-defined conspiracy), never hear about what poor “science” the study they’re celebrating actually is, and go right on believing that their anti-global warming position is so obviously correct that everyone else must either be fools or conspirators.

    I believe the link pfft posted is step three. I saw a bit of step four out there yesterday. Step five is clearly already under way.

  174. 424
    pfft says:

    well done spherical.

  175. 425
    David Losh says:

    RE: Spherical @ 423

    Let me clarify one thing about conservatives. Rush Limbaugh is a communist. Shaun Hannity is a lobbyist, and Glenn Beck is a snake oil sales man.

    No right thinking conservative gives any of those hucksters a second tought.

  176. 426
    pfft says:

    looks like austerity is coming to america.

    how is that working for Ireland, Greece, Portugal, Spain and Britain?

  177. 427
    Blurtman says:

    RE: pfft @ 426 – You’re going to have to define “austerity.”

  178. 428
    David Losh says:

    RE: pfft @ 426

    You don’t understand the austerity. Ireland, Greece, Portugal, Spain and Britain all gave up currency for the Euro. To start, the Euro was eighty cents to the dollar, now it’s $1.43.

    I tried to put the link, but it’s hinky. The volatility of the currency allowed Europeans, you know, the ones with the good jobs, to come in a buy up, or “invest” in those countries.

    The central Euro country of Germany has pulled in the financing that gave the illusion of prosperity so the countries you mentioned now have to find real currency to pay bills.

    For the United States it’s no big deal. The Republican whiners are about to lose the funding they rely on to keep lobbyists happy. We just need to cut military spending, health care insurance give aways, and stop propping up oil company profits. We are awash in cash money, dollars, that can be traded globally.

    So austerity won’t work for Ireland, Greece, Portugal, Spain and Britain. They need to cut ties with Germany, default, and go back to the currencies they abandoned.

    Yeah, I know England still has the Pound, but it was seriously diluted with the Euro nonsense.

  179. 429
    whatsmyname says:

    As President Chamberlain returns from the Reichspieker’s office having achieved change in our time, Ritholtz reminds that we still have bigger systemic problems that still somehow get no attention (in Congress, at least).

    http://feedproxy.google.com/~r/TheBigPicture/~3/X38iROK6ldY/

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