Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

189 responses to “Global Economic August Thread”

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  1. Scotsman

    RE: pfft @ 98

    Oh yeah- it’s great! Markets have lost a couple trillion dollars, growth has slowed, lots of talk about the coming double dip, percentage of the population employed is hitting new lows, home prices continue to fall, no solution to the debt crisis in sight, etc. And like I said- even Krugman says it’s bad. That’s bad.

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  2. pfft

    By Blurtman @ 100:

    RE: Scotsman @ 97 – “Obama’s turned into the second coming of Herbert Hoover.” – Krugman.

    while I don’t support obama’s debt ceiling deal he didn’t raise taxes and enact austerity like Hoover did. We are only getting $20 billion of austerity this year. Not Hooveresque.

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  3. pfft

    By Scotsman @ 1:

    RE: pfft @ 98

    Oh yeah- it’s great! Markets have lost a couple trillion dollars, growth has slowed, lots of talk about the coming double dip, percentage of the population employed is hitting new lows, home prices continue to fall, no solution to the debt crisis in sight, etc. And like I said- even Krugman says it’s bad. That’s bad.

    basically it’s just like last year in the Spring when everyone was predicted a double-dip. How did that work out?

    “growth has slowed”

    slowed. exactly.

    that is not bad. this is bad:

    http://seattlebubble.com/blog/2010/06/29/case-shiller-seattle-finally-sees-a-tax-credit-price-boost/comment-page-1/#comment-104372

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  4. pfft

    definitely a tea party/republican downgrade according to standard and piss poors.

    “From the S&P statement: “The political brinkmansh­ip of recent months highlights what we see as America’s governance and policymaki­ng becoming less stable, less effective, and less predictabl­e than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

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  5. Scotsman

    RE: pfft @ 103

    You’re right- that is bad. Even giving you the benefit of an extra 6 months the picture has significantly deteriorated. Debt is up, growth is non existent, fewer people are employed while unemployment has run out for many, none of the structural problems have been addressed, and now the markets are getting hammered. We’ve seen 20% taken off the markets in the last two weeks- real wealth that people don’t have any more. Tonight’s Dow futures are already off hundreds of points. Obama is quickly proving himself a totally ineffective leader on pretty much all the important issues, so we can’t expect the ship of state to turn anytime soon.

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  6. Scotsman

    RE: pfft @ 104

    It’s too bad you never understood this basic truth:

    “Keynesianism is blind to the black hole of debt: at a certain threshold (event horizon), the ability and/or willingness to borrow more vanishes. No amount of monetary easing or shoveling new money into banks can spark new debt and spending.”

    In other words, nothing will work now:

    http://www.oftwominds.com/blogaug11/liquidity-trap-8-11.html

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  7. Blurtman

    RE: pfft @ 102 – So Krugman is wrong then? OMG!

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  8. Taco

    By pfft @ 104:

    definitely a tea party/republican downgrade according to standard and piss poors.

    â��From the S&P statement: “The political brinkmansh­ip of recent months highlights what we see as Americaâ��s governance and policymaki­ng becoming less stable, less effective, and less predictabl­e than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

    Huh? The last I checked, the coordinated efforts of 150+ privately-owned central banks had the greatest impact on the global economy.

    The Tea Party does not own a single central bank. Riding the coattails of a paid-for anti-Tea Party blitz that’s circulating the Internet, I see… the communitarians are using central banker fiat money to further taint the Tea Party image, to ensure a communitarian makes it into the oval office in 2012 without a hitch.

    Glad to see you folks are worried. You need more of that. You would think that with so much fiat, this would not be an issue, verdad?

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  9. Kary L. Krismer

    RE: Blurtman @ 100 – I would agree, but I wouldn’t necessarily blame President Obama for that. He doesn’t control public perception and doesn’t control Congress. I’ve said all along that the stimulus should have been more concentrated–of shorter duration. The public doesn’t have the appetite for these things long term, and members of Congress react to that.

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  10. Trigger

    It looks like the easy way out again.

    The Fed is bullish and will keep the interest rates VERY LOW! Wow – cool stuff.

    Then there will be more printing.

    And in the end there will be a big rally! We went up more than 400 points. Way to go. We are in a jolly mood.

    So financial engineering wins again.

    See Scotsman – I told you. Nobody will ever out print us. As such the austerity mess can be thrown away to a garbage can. Printing is the solution.

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  11. Blurtman

    RE: Trigger @ 110 – If the USD and Euro race to the bottom and maintain the status quo exchange rate, what happens?

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  12. Blurtman

    RE: Kary L. Krismer @ 9 – Obama’s leadership style is:

    A. Aloof but effective
    B. Aloof to mask general cluelessness
    C. Aloof due to smoking “California tobacco”

    And bonus question: Who might be a better president?

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  13. Trigger

    RE: Blurtman @ 11 – I think we are all in the business of finding quickie, easy solutions. They are the best.

    Printing is easy. No biggie. Just print and you are done.

    The hard part is what Scotsman is proposing. On top of this he requires people to watch the spending and really uncool stuff like this. Printing is easier. Out of cash – go get it from the printing press.

    And then you can relax more and take in the sun rays. You do not have to worry or think too much.

    There is no alternative to EURO and USD. Basically all people have to be happy with the printing. They can also relax knowing that they hold the right currencies.

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  14. pfft

    By Scotsman @ 106:

    RE: pfft @ 104

    It’s too bad you never understood this basic truth:

    “Keynesianism is blind to the black hole of debt: at a certain threshold (event horizon), the ability and/or willingness to borrow more vanishes. No amount of monetary easing or shoveling new money into banks can spark new debt and spending.”

    In other words, nothing will work now:

    http://www.oftwominds.com/blogaug11/liquidity-trap-8-11.html

    1. we’re in a liquidity trap, read up on it.

    2. our borrowing costs(interest payments as a %/GDP are at 30-year lows

    3. “No amount of monetary easing or shoveling new money into banks can spark new debt and spending.”

    ahhhh, that’s why you enact keynesianism…

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  15. pfft

    By Taco @ 8:

    By pfft @ 104:
    definitely a tea party/republican downgrade according to standard and piss poors.

    �From the S&P statement: “The political brinkmanshÃ�­ip of recent months highlights what we see as America�s governance and policymakiÃ�­ng becoming less stable, less effective, and less predictablÃ�­e than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

    Huh? The last I checked, the coordinated efforts of 150+ privately-owned central banks had the greatest impact on the global economy.

    The Tea Party does not own a single central bank. Riding the coattails of a paid-for anti-Tea Party blitz that’s circulating the Internet, I see… the communitarians are using central banker fiat money to further taint the Tea Party image, to ensure a communitarian makes it into the oval office in 2012 without a hitch.

    Glad to see you folks are worried. You need more of that. You would think that with so much fiat, this would not be an issue, verdad?

    what? this is a tea party downgrade no doubt. S&P put it right in their report. it coudln’t be much clearer. the bankers were the one’s who wanted the tea party to back off.

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  16. pfft

    By Blurtman @ 12:

    RE: Kary L. Krismer @ 9 – Obama’s leadership style is:

    A. Aloof but effective
    B. Aloof to mask general cluelessness
    C. Aloof due to smoking “California tobacco”

    And bonus question: Who might be a better president?

    if you notice he always wins though. even if he doesn’t seem to get much of what he wants the republicans to things in such an awkward and mean-spirited way they always look like the bad guys.

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  17. pfft

    By Trigger @ 13:

    RE: Blurtman @ 11 – I think we are all in the business of finding quickie, easy solutions. They are the best.

    Printing is easy. No biggie. Just print and you are done.

    The hard part is what Scotsman is proposing. On top of this he requires people to watch the spending and really uncool stuff like this. Printing is easier. Out of cash – go get it from the printing press.

    And then you can relax more and take in the sun rays. You do not have to worry or think too much.

    There is no alternative to EURO and USD. Basically all people have to be happy with the printing. They can also relax knowing that they hold the right currencies.

    who is printing? I thought we had gigantic debts? which one is it this week?

    by the way probably no president have ever done more to cut money from the budget than obama. he’s cut probably almost ten trillion.

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  18. Blurtman

    RE: pfft @ 117 – Slowing the rate of increase in spending is not the same as cutting spending.

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  19. Blurtman

    RE: Trigger @ 13

    Those Magnificent Men In Their Flying Machines.

    They Go Up, Tiddly, Up, Up.

    They Go Down, Tiddly, Down, Down.

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  20. Scotsman

    RE: pfft @ 117

    “. he’s cut probably almost ten trillion. ”

    Total B.S. A new low, even for you.

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  21. Scotsman

    “The bond market is telling you that there will be no material economic growth for the next two years and that a deflationary depression is the economic path that will be followed”

    http://market-ticker.org/cgi-ticker/akcs-www?post=191850

    Yeah, but those interest rates are low! (No, no- not the real rates, the nominal rates. Well, OK, all of them.)

    With these low, low rates we should have some more. . .STIMULUS!- we can afford it!

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  22. pfft

    By Blurtman @ 118:

    RE: pfft @ 117 – Slowing the rate of increase in spending is not the same as cutting spending.

    sure it is.

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  23. pfft

    By Scotsman @ 20:

    RE: pfft @ 117

    “. heâ��s cut probably almost ten trillion. ”

    Total B.S. A new low, even for you.

    nope.

    $2 trillion or so from deficit reduction.
    $250 from obamacare in the first ten years
    $1.2 trillion over the next 20 years

    dean baker says healthcare has a trillions in savings in indirect costs. so it’s probably closer to $5-6 trillion dollars saved just from the deficit.

    lower healthcare costs in general save trillions to ordinary people and saves lives.

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  24. pfft

    By Scotsman @ 21:

    “The bond market is telling you that there will be no material economic growth for the next two years and that a deflationary depression is the economic path that will be followed”

    http://market-ticker.org/cgi-ticker/akcs-www?post=191850

    Yeah, but those interest rates are low! (No, no- not the real rates, the nominal rates. Well, OK, all of them.)

    With these low, low rates we should have some more. . .STIMULUS!- we can afford it!

    EXACTLY. the multiplier is positive. it will send people to work.

    you’ve been wrong about that and you know it. you’ve been wrong for over a year!

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  25. pfft

    oh, and of course you’d quote denninger. the guy is a clueless tea partier. he makes hyperbolic statements all the time.

    tea party is all you need to know.

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  26. Scotsman

    RE: pfft @ 123

    Another perfect illustration of just how clueless and/or dishonest you are. First you claim Obama has made the cuts, $10T of them, then you cite $3.5T in federal budget cuts over a 20 year time span, (like those will realy happen) then you claim another $6T in indirect savings ( like those will really happen) and somehow think they are part of the budget. Here’s a clue- 3.5 is not equal to 10. If you can’t do basic math there’s no hope. ‘Nuff said.

    You are a big part of the reason one can’t believe much of what is found on the internet. Maybe you are just a paid troll.

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  27. Scotsman

    RE: pfft @ 24

    “EXACTLY. the multiplier is positive.”

    Um, no- the multiplier is negative. Pesky math- keeps harshing on your trip.

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

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  28. Blurtman

    RE: pfft @ 122 – No, that is an increase in spending.

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  29. Kary L. Krismer

    Reading this, it sounds like 1/4 of the debt panel will be filled with people unlikely to do anything about the real problem–entitlements.

    http://seattletimes.nwsource.com/html/localnews/2015862842_murray10m.html

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  30. David Losh

    Entitlements!!!

    Here’s an article about Social Security: http://www.dailymarkets.com/economy/2011/07/22/the-only-social-security-reform-worth-considering-raising-the-ceiling-on-income-subject-to-it/

    It oulines the basics, but never touches on the actual solution which is to make Social Security universal, like Health Care.

    The United States is so afraid of communism, and socialism that it never looks at the drag poverty has on the economy. We are stuck with the idea that we need serfs to keep cheap labor hungry, and ready for any task, like going to war, or building new castles.

    We have billions of people to provide cheap labor. We don’t really need to keep our own population in poverty, any more.

    All of our budget problems can be addressed with cut’s, and taxes.

    We need taxes that make sense. You can’t tell me that we just had an explosion of wealth, and yet they can’t afford to pay taxes. Some how our economy is declining while the number of people who are considered wealthy is growing. Corporate profits keep growing yet our government can’t balance a budget.

    I’m thinking more about the millions of auto industry, and construction industry standards, and codes that prevent innovation. We call it safety, but it just perpetuates tired design. No one wants to innovate, because the people in government just don’t understand, and we have to get plans approved in order to build, construct, and progress.

    What always gets me is that when we talk cutting government we start with EPA, which is designed for big ticket items. We never talk about those little agencies that are still regulating the buggy whip industry.

    It’s all incremental, but we have the money. Our government can balance the budget, and honor our entitlement obligations.

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  31. David Losh

    RE: Scotsman @ 27

    You’re going to need to explain that graph to me.

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  32. Blurtman

    RE: David Losh @ 130 – It is worthwhile to remind people that SS is quite solvent. It should not have lent its money to a borrower who is not.

    SS “entitlement” reform will be a smokescreen to get an irresponsible borrower off the hook buy reneging on its obligations. It will not be done because SS is in any danger. It has close to a $3 trillion surplus!

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  33. Kary L. Krismer

    RE: Blurtman @ 132 – It may be solvent, but wasn’t this last year the first time it didn’t bring in what it paid out? If I’m recalling correctly, that was more due to a poor economy than anything else, but the expected outflows are expected to increase well into the future.

    To use an analogy, I might be solvent now, but that doesn’t mean I have enough set aside to retire at age 65. The question isn’t solvency, but whether there’s enough solvency.

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  34. Matthew

    The Fed is going to keep interest rates at near 0 for the next 2 years or so… LOL… Lost decade anyone?

    Quick, where is Deejayoh with his “WE ARE NOT JAPAN” reply.

    He’s right, we are worse off!

    Wow Bernanke looks like a beaten man!

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  35. David Losh

    RE: Kary L. Krismer @ 133

    You should read the link I posted, it explains that.

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  36. David Losh

    RE: Blurtman @ 32

    No one would have ever expected an attack on United States soil, or the retaliation. In the process we spent more money without any consideration about a future economic down turn.

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  37. Blurtman

    RE: David Losh @ 136 – Who could have expected Iraq to attack the USA? If only we had a competent National Security Advisor at the time. I am sure that person was fired immediately!

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  38. Blurtman

    RE: Kary L. Krismer @ 33 – The $49 billion shortfall in 2010 is approximately 1.8% of the SS fund’s reserves. So if the gov spent $695 billion on SS, it also took in $646 billion.

    Here is a decent link that discusses SS. It will run into problems in the future, but it is OK for now.

    http://www.ssa.gov/oact/trsum/index.html

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  39. David Losh

    RE: Blurtman @ 137

    OK, that was funny.

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  40. pfft

    By Scotsman @ 127:

    RE: pfft @ 24

    “EXACTLY. the multiplier is positive.”

    Um, no- the multiplier is negative. Pesky math- keeps harshing on your trip.

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

    no. when the government spends money it spends money. hence the positive multiplier.

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  41. pftt

    By Scotsman @ 126:

    RE: pfft @ 123

    Another perfect illustration of just how clueless and/or dishonest you are. First you claim Obama has made the cuts, $10T of them, then you cite $3.5T in federal budget cuts over a 20 year time span, (like those will realy happen) then you claim another $6T in indirect savings ( like those will really happen) and somehow think they are part of the budget. Here’s a clue- 3.5 is not equal to 10. If you can’t do basic math there’s no hope. ‘Nuff said.

    You are a big part of the reason one can’t believe much of what is found on the internet. Maybe you are just a paid troll.

    my source is the Congressional Budget Office.

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  42. pftt

    By Blurtman @ 32:

    RE: David Losh @ 130 – It is worthwhile to remind people that SS is quite solvent. It should not have lent its money to a borrower who is not.

    as a percentage of GDP our interest rate expenses haven’t been this low since the 1970s.

    the of course the yield of the 2-year bond is 0.20% so yes our insolvent government is loaned money at less than 1/2 of a percent. actually it’s less than 1/2 of 1/2 of a percent!

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  43. pfft

    proof that we need another stimulus. One that will close the $900 trillion dollar output gap and put millions to work. the way to get the deficit down is to get people back to work and paying taxes.

    The Waste
    http://krugman.blogs.nytimes.com/2011/08/11/the-waste/

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  44. pfft

    green jobs boom

    Clean energy is now creating more jobs for the energy produced than coal or natural gas, and solar energy is the fastest growing industry in the United States, according to industry and academic sources.

    In the first quarter of this year, the solar industry installed 252 megawatts of electric capacity, an increase of 66 percent from last year. There are now almost 3,000 megawatts of solar electric power in the U.S, enough to power 600,000 homes. Production of panels went up almost a third.

    http://idealab.talkingpointsmemo.com/2011/08/clean-energy-is-booming-and-creating-jobs.php?ref=fpblg

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  45. pfft

    CBO schools us all on the stimulus.

    “When demand for goods and services falls short of the economy’s ability to produce them, as is the case currently, increasing government spending can increase aggregate demand and thereby narrow the gap between the economy’s actual and potential levels of output,” Elmendorf writes.

    Cut And Grow Fail: CBO Schools Tea Party Freshman In Basic Economics
    http://tpmdc.talkingpointsmemo.com/2011/08/cut-and-grow-fail-cbo-schools-tea-party-freshman-in-basic-economics.php?ref=fpb

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  46. Scotsman

    Government intrusion into the economy and the markets have actually made things worse, not better. The economic stats confirm this assertion. The unemployment rate is higher, economic growth is lower (2007–2010 real GDP decreased at an annual rate of -0.3 %), and inflation rates have grown since the bottom of the recession. All we have to show for this intrusion into the economy by the government is a higher inflation rate.

    What accounts for this mismatch between economic strategy and economic outcome? The old economic and financial models seem to be breaking down. They were designed to work in an economy that was unencumbered by debt. The consumer debt supercycle ended in 2008. We moved on to the government debt supercycle which will also come to an end. We are now entering the final stages of the endgame which will lead to an earth shattering currency crisis centered on the US dollar.

    http://www.financialsense.com/contributors/james-j-puplava/2011/08/09/no-way-out-part-one-financial-risk

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  47. Scotsman

    It is obvious that the US will be unable to “grow” its way out of its debt problems. To do that would take economic growth rates of 10% or more—these growth rates would have to be sustained for several decades.

    The more likely approach is a combination of strategies that will involve spending cuts, tax increases, and a healthy dose of inflation. The US will likely be inclined to use the same strategy that it used to reduce our debt after World War II. Economists refer to this strategy as “financial repression.” Financial repression involves keeping interest rates artificially low and running a higher inflation rate. The artificially low interest rates enable the government to finance its deficits at an artificially low rate of interest. This reduces the size of the deficit and the interest costs the government has to pay its bond holders. At the same time, running higher rates of inflation allows the government to grow the economy in nominal terms (GDP increases as the cost of goods and services rise due to inflation), which reduces the size of the deficit when compared to the nominal value of GDP.

    http://www.financialsense.com/contributors/james-j-puplava/2011/08/09/no-way-out-part-one-financial-risk

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  48. Blurtman

    RE: pfft @ 145 – Amazing! Hasn’t this field progessed beyond Econ 101? Knowledge is definitely not the regurgitation of senseless dogma.

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  49. Kary L. Krismer

    The SEC wants to know which S&P employees knew about the downgrade in advance.

    http://www.msnbc.msn.com/id/44121367/ns/business-stocks_and_economy/

    They should probably send in inquiry to the White House too, for there were a number of indications they knew it was coming. :-D

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  50. whatsmyname

    By Scotsman @ 146:

    Government intrusion into the economy and the markets have actually made things worse, not better. The economic stats confirm this assertion. The unemployment rate is higher, economic growth is lower (2007�2010 real GDP decreased at an annual rate of -0.3 %), and inflation rates have grown since the bottom of the recession. All we have to show for this intrusion into the economy by the government is a higher inflation rate.

    Post hoc, ergo prompter hoc.
    Common fallacy, or the first rule of Scottish economics?

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  51. David Losh

    RE: Scotsman @ 147RE: Scotsman @ 146

    What have you done with Scotsman?

    Those links actually have good information, without the ads for gold, or super seeds.

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  52. pfft

    By Scotsman @ 146:

    Government intrusion into the economy and the markets have actually made things worse, not better. The economic stats confirm this assertion. The unemployment rate is higher, economic growth is lower (2007�2010 real GDP decreased at an annual rate of -0.3 %), and inflation rates have grown since the bottom of the recession. All we have to show for this intrusion into the economy by the government is a higher inflation rate.

    What accounts for this mismatch between economic strategy and economic outcome? The old economic and financial models seem to be breaking down. They were designed to work in an economy that was unencumbered by debt. The consumer debt supercycle ended in 2008. We moved on to the government debt supercycle which will also come to an end. We are now entering the final stages of the endgame which will lead to an earth shattering currency crisis centered on the US dollar.

    http://www.financialsense.com/contributors/james-j-puplava/2011/08/09/no-way-out-part-one-financial-risk

    I like jim alot. I’ve learned a lot from him but he’s wrong.

    you just have to look at yield on government debt to know that. we’re in a liquidity trap. this is 3 year old news to people like krugman.

    “All we have to show for this intrusion into the economy by the government is a higher inflation rate.”

    things would be worse if we hadn’t “intruded” on the economy.

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  53. pfft

    By Scotsman @ 47:

    It is obvious that the US will be unable to “grow” its way out of its debt problems. To do that would take economic growth rates of 10% or moreâ��these growth rates would have to be sustained for several decades.

    The more likely approach is a combination of strategies that will involve spending cuts, tax increases, and a healthy dose of inflation. The US will likely be inclined to use the same strategy that it used to reduce our debt after World War II. Economists refer to this strategy as “financial repression.” Financial repression involves keeping interest rates artificially low and running a higher inflation rate. The artificially low interest rates enable the government to finance its deficits at an artificially low rate of interest. This reduces the size of the deficit and the interest costs the government has to pay its bond holders. At the same time, running higher rates of inflation allows the government to grow the economy in nominal terms (GDP increases as the cost of goods and services rise due to inflation), which reduces the size of the deficit when compared to the nominal value of GDP.

    http://www.financialsense.com/contributors/james-j-puplava/2011/08/09/no-way-out-part-one-financial-risk

    ” Financial repression involves keeping interest rates artificially low and running a higher inflation rate. The artificially low interest rates enable the government to finance its deficits at an artificially low rate of interest.”

    oh god this is so wrong. the government doesn’t keep anything artificially low. we have an oversupply of savings and we are in a liquidity trap. that’s why rates are so low. people are also afraid of the stock market.

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  54. pfft

    By Blurtman @ 48:

    RE: pfft @ 145 – Amazing! Hasn’t this field progessed beyond Econ 101? Knowledge is definitely not the regurgitation of senseless dogma.

    this literally IS econ 101. keynesianism in a liquidity trap is like 60 years old. it worked here as much as it was tried.

    explain to me how spending hundreds of billions of dollars doesn’t have a positive effect on the economy?

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  55. pfft

    By David Losh @ 51:

    RE: Scotsman @ 147RE: Scotsman @ 146

    What have you done with Scotsman?

    Those links actually have good information, without the ads for gold, or super seeds.

    at least he linked to someone who knows something instead of a fiction writer and a crazy tea partier.

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  56. pfft

    by the way let’s look at how much of a burden all this debt is.

    cost of stimulus in 2013:

    $51 billion dollars. OH MY GOD that will sink the economy. morons.

    cost of bush tax cuts that year:

    $385 billion

    cost of bush’s wars.

    $185 billion

    http://www.cbpp.org/images/cms/12-16-09bud-rev6-28-10-t11.jpg

    cost of the extension of the bush tax cuts.

    $3.7 trillion dollars.

    in 2019 if the bush tax cuts weren’t renewed our deficit would go from an estimated $1 trillion down to about $300 billion…

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  57. David Losh

    RE: pfft @ 154

    Because it makes no difference how much the government invests, prints, or spends, that’s the end result of the liquidity trap you’ve mentioned a dozen times, twice here.

    Our government can implement cost cutting, and tax increases to make this the last country standing in the currency wars.

    There is really nothing to it, and the middle class would hardly feel a thing.

    People have allowed me to throw around the word wealth, and single out the wealthy. No one challenges me. Why?

    What is it about that 2% of the global population that we all allow them to run things? There are more of us than there are of them.

    There was a long discussion on the radio about redistribution of wealth. Every body is against that because there is no accomplishment to getting a hand out. Over centuries it’s been proved that the 2% have that feeling of power, because they built wealth, or maintained it. They are the accomplished ones, that we all admire.

    OK? Are you with me so far? That 2% has nothing to do with the governments. That 2% doesn’t need any thing. The government is there to keep the rioting to a minimum.

    That’s where all of your theories go sideways. We have never had so much wealth. There is more than enough money to do everything, we just don’t have a plan.

    I pick on Bill, and Melinda Gates, because they are a perfect example of misdirected wealth. Warren Buffet is another bafoon. The wealthy of the world are ridiculous. There is no leadership where it could do some good.

    There is no military might, so government is a useless set of sabre rattlers.

    So you should come up with some other idea about where the money is coming from to fix the damage that has been done by the politicians.

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  58. One Eyed Man

    RE: Scotsman @ 147

    I concur. IMO that’s the most probable form that our long, slow “recovery” will take.

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  59. Kary L. Krismer

    RE: One Eyed Man @ 158 – Don’t be silly. In just over a year the Supreme Court will uphold Obamacare, and that will free the way for Congress to pass all sorts of laws forcing people to buy things to improve the economy! :-D

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  60. Blurtman

    RE: pfft @ 154 – That is a simple question, and as usual, the devil is in the details. If you USG seeks to purchase $1 billion of widgets from my hypothetical business, I might thank them for the order and produce the requested product in China. Sustainability is also an important metric. If I hired a US workforce to make the widgets, perhaps these folks would go out and buy houses. But once the USG order was filled, perhaps they would be laid off, and their homes foreclosed upon.

    Overall, IMHO, it is best if the stimulus is sustainable and not funded through debt. One solution might be a positive trade balance, that is, demand for US goods and services which is sustainable employing US workers.

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  61. Kary L. Krismer

    RE: Blurtman @ 160 – I still think the best solution is to repeal the corporate income tax. That would make doing business here more attractive, and I suspect that more would be gained in personal income taxes than lost in corporate taxes, especially after you consider the multiplier effect on spending.

    According to this link it’s only 15% of tax revenues:

    http://askville.amazon.com/percentage-revenue-income-tax/AnswerViewer.do?requestId=6872434

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  62. David Losh

    RE: Kary L. Krismer @ 161

    Ireland is a perfect example of why that doesn’t work.

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  63. David Losh

    RE: Blurtman @ 60

    Yes, trade agreements would be a much better use of our government’s time.

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  64. Kary L. Krismer

    RE: David Losh @ 62 – You can’t just look at a country and decide something doesn’t work based on one factor.

    You logic is flawed. Japan has corporate income taxes, therefore corporate income taxes cause tsunamis.

    Repealing the corporate income tax would lead to more corporate activity in this country. More corporate activity would mean more jobs in this country.

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  65. David Losh

    RE: Kary L. Krismer @ 164

    Iceland is another example.

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  66. David Losh

    RE: Kary L. Krismer @ 64

    Actually, you seem to me to have the opinion that corporations can do no wrong.

    What would happen, the same as always happens, is that corporations will run dollars, Yuan, Rubles, or Rupees through the United states, and on to the next place they can make a profit.

    pfft is right about the liqiudity trap, and doing away with the corporate tax, though it sounds like a great idea, won’t help any.

    What we need is trade agreements to get money moving. The days of in country velocity, like China is finding, are going to be very hard to get back. Consumers want more, at a reduced price.

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  67. Kary L. Krismer

    By David Losh @ 66:

    RE: Kary L. Krismer @ 64 – Actually, you seem to me to have the opinion that corporations can do no wrong.

    No, I just don’t have the simplistic, naive if not bigoted view that anything a corporation does is evil.

    For example, a lot of people will complain about the profits of insurance companies in health care, when in fact their profits are minimal. Or my favorite was the morons in California complaining about their utilities during the energy crisis there, not realizing that their utility was buying $100 of energy and selling it for $50.

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  68. David Losh

    RE: Kary L. Krismer @ 167

    That’s misdirection. Profits of Health Insurance companies pale in comparison to the number of granite styled entrance ways into hospitals, or the price of medical equipment, or resale of medical equipment to the Third World, or what the cost is of setting up clinics in emerging markets, and the list goes on.

    Then you want to use paper losses, like for Enron, to to mask market manipulation. Friday’s conviction is just a small part in a over all scheme: http://www.lasvegassun.com/news/2011/aug/12/us-enron-merrill-lynch/

    Corporations will only flow through profits to the lowest bidder. There is nothing that says the economy will benefit. If you’re not keeping track corporations are now entities, with rights.

    It’s just my opinion that corporate culture is out of control. It’s a haven, a pirate cove, of under reported profits, and trickery. I don’t think giving corporations more of a tax break will benefit any one.

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  69. Scotsman
  70. Pegasus

    Worth a read to see how the system works to protect the banksters:

    http://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817

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  71. Blurtman

    RE: Pegasus @ 170 – A CEO of a large investment bank commits massive fraud, enriching himself in the process. In this backwards country, the CEO uses his influence and connections to become the Secretary of the Treasury, where he then demands a blank check to bail out his former employer whose misdeeds have bankrupted the company. He also engineers a no prosecution policy, as if that were at all necessary anyway. He then works with the equally corrupt head of the country’s central bank to dump these bad investments on the general public. And the corrupt Congress mandates that fraudulent accounting practices be enforced, lest the truth become too visible.

    In what backwards banana republic could such outrageous practices occur? Bolivia? No. Ecuador? No. Brazil? Heavens no. Give up? The answer: It is the United States of America.

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  72. Blurtman

    RE: Scotsman @ 69 – Braniac Bernanke bailed out the wrong sector.

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  73. Scotsman

    Is this it? TNX dipped below 2%, within a few points of the all time GD low. Unemployment claims headed back up. Philly Fed index with a huge miss, -31 verses expectations of +3. Markets are diving, Europe is really hurting, especially their banks. Big O is on vacation.

    Gonna be a pretty quiet Fall selling season for the housing markets.

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  74. Blurtman

    The general public is starting to become concerned. The herd is getting spooked. Mooooooo……

    Rate this comment: Thumb up 0

  75. Blake

    By Blurtman @ 171:

    RE: Pegasus @ 170 – A CEO of a large investment bank commits massive fraud, enriching himself in the process. In this backwards country, the CEO uses his influence and connections to become the Secretary of the Treasury, where he then demands a blank check to bail out his former employer whose misdeeds have bankrupted the company. He also engineers a no prosecution policy, as if that were at all necessary anyway. He then works with the equally corrupt head of the country’s central bank to dump these bad investments on the general public. And the corrupt Congress mandates that fraudulent accounting practices be enforced, lest the truth become too visible.

    In what backwards banana republic could such outrageous practices occur? Bolivia? No. Ecuador? No. Brazil? Heavens no. Give up? The answer: It is the United States of America.

    Sounds like Italy with Berlusconi… good role model for the US of A!?
    Reminds me of an old joke:
    In heaven: The French do all the cooking, the Germans fix things, the Brits run the police, the Swiss run the government and the Italians are the lovers.
    In Hell: The Brits do all the cooking, the French fix things, the Germans run the police, the Swiss are the lovers… and the Italians run the government!

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  76. Scotsman

    “If the federal government’s regulatory operation were a business, it would be one of the 50 biggest in the country in terms of revenues, and the third largest in terms of employees, with more people working for it than McDonald’s, Ford, Disney and Boeing combined.
    Under President Obama, while the economy is struggling to grow and create jobs, the federal regulatory business is booming.
    Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual “Regulator’s Budget,” compiled by George Washington University and Washington University in St. Louis.
    That’s at a time when the overall economy grew a paltry 5%.
    Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.”

    http://www.investors.com/NewsAndAnalysis/Article/581555/201108151901/Regulatory-Agencies-Staffing-Up.htm

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  77. Blurtman

    RE: Blake @ 175 – I had dinner with some old friends in Bezerkeley a few months back, and that was their conclusion, which they did not seem to think was all that bad. That is, that the USA becomes the new Italy.

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  78. Sweet Pea

    This speaks directly to some of the issues raised in a previous discussion on tax rates across income/wealth spectrums. The world is full of self-serving wealthy people, including Warren Buffett. This is not the first time I’ve heard grumblings about his real motivation for leaving it all to a foundation.

    http://www.businessinsider.com/hedge-fund-managers-blast-self-serving-buffett-2011-8

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  79. Kary L. Krismer

    Sorry I don’t have a link handy, but California’s unemployment rate is apparently 12% with only 4,500 jobs added last month!

    If that doesn’t improve, I wonder whether President Obama will be able to even carry California. In the P-I I read that an Oregon Democrat is questioning his ability to carry Oregon.

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  80. david2000

    As far as I know that the US defense budget is equal to the total defense budget of top 50 largest country in the world. Wow!!
    I have heard all kind of theories related to the debts in this forum.
    I am surprised that nobody touch this part. I guess that it’s the untouchable.

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  81. whatsmyname

    Hey, look here. Everything is alright again. You can go ahead and buy that house now.

    http://www.calculatedriskblog.com/2011/08/real-gross-domestic-income-above-pre.html

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  82. Scotsman

    RE: whatsmyname @ 181

    From your source:

    “However, by other measures – like real personal income less transfer payments and employment – the economy is still far below the pre-recession peak”

    Opps. And that GDP just got revised. . . down. Dang! We won’t even discuss how the government keeps moving the goal posts through the magic of statistics.

    Be patient- soon enough the government will be giving away houses.

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  83. Scotsman

    If anyone feels like reading about current economics I highly recommend this new site out of the UK:

    http://azizonomics.com/

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  84. whatsmyname

    By Scotsman @ 182:

    RE: whatsmyname @ 181

    From your source:

    “However, by other measures – like real personal income less transfer payments and employment – the economy is still far below the pre-recession peak”

    Don’t think I missed that, not to mention the crappy situations of people all around us. I just can’t resist a double irony.

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  85. David Losh

    RE: david2000 @ 180RE: Scotsman @ 183

    You’ve brought up a lot of great discussion points this past week. I think you said you did some home work, and this site is a departure for you.

    There are a couple of things that go back to the military budget. Obama was elected because he said he would get us out of Iraq, and Afganistan. I heard a Republican refer to Afganistan as Obama’s war.

    What I know is Osama bin Laden is dead, and another Al Quida leader in Pakistan is dead, as of this week end. The report from the military is that Al Quida is on the ropes. Wasn’t that the goal? There is also a transfer of $2 trillion in hardware from us, to the Iraqis, and Afganies. We need to end our involvement, in a timely manner.

    We can redirect our military presense. The article you linked to is referring to the Panama Canal days. What’s interesting to me is that the transfer of the Panama Canal to Panama never resulted in the catastrophy that was expected. Panama seems to be able to operate the Canal just fine.

    We can cooperate with foriegn governments without taking over. I think, in my opinion, Iraq, and Afganistan showed regime change doesn’t happen. Columbia is another United States military disaster. We can’t take kids, or insurance sales people, no matter how well trained they are, and put them in front of generational killers. A raid like against Osama, OK, but on the ground with people who kill for a living is really dicey.

    We can redirect military. We can redirect our budget.

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  86. Scotsman

    And you thought capitalism was dead. This is what you get when unregulated ( because it’s illegal- oh, the irony) capitalism goes to work:

    “from 1981 to 2002, marijuana’s potency increased by 145% and its price has declined 58% from 1990 to 2007″

    http://articles.cnn.com/2011-06-07/opinion/wood.failed.war.on.drugs_1_drug-war-drug-policy-mexican-drug-trafficking-organizations/2?_s=PM:OPINION

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  87. Kary L. Krismer

    Maybe the local T-Mobile jobs are not going away after all!

    http://www.msnbc.msn.com/id/44341803/ns/business-us_business/

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  88. Kary L. Krismer

    RE: Scotsman @ 86 – I wonder if the reduced price is due to lower demand or greater supply? With the job testing I would suspect the former.

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  89. Space Alien Magician

    RE: david2000 @ 180

    IMO, the reason for this is that the US dollar comprises 60% of all reserve holdings in the 150+ privately-owned central banks worldwide. This has allowed the US dollar to be diluted/inflated into oblivion and it does not collapse, since it is the world’s reserve currency. The central banks will still hold and transact in US dollars, regardless, lending stability to the system.

    Note that the shift away from the US dollar as the world reserve currency is well underway. the TBTF bailout money was primarily used to purchase infrastructure, land, and commodities overseas, in anticipation of a US dollar crash. This is a main reason why agricultural land and commodities are rising in value, worldwide (supply vs. demand).

    The US-based military industrial complex is dependent on the stability of the US dollar and its status as the world reserve currency in order to continue military spending at the current levels. This status allows for great abuses of the currency — such as creating USD at will and then swapping it for hard assets.

    Economist Michael Hudson has written extensively on this topic. He’s the guy who convinced Iceland’s government to default on their IMF loans. If you never heard of him you should introduce yourself.

    I can guarantee you that the majority of people reading this will sweep it under the carpet because they have not heard about any of this before. Others will form small groups here in which they will work to destroy the perceived value of this information. Such trust in the mainstream media and the mainstream blogs is quite impressive — like a faith-based religion.

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