Poll: Most of the major underlying problems with the economy have been fixed.

Please vote in this poll using the sidebar.

Most of the major underlying problems with the economy have been fixed.

  • Strongly Agree (2%, 2 Votes)
  • Agree (6%, 7 Votes)
  • Neutral (5%, 6 Votes)
  • Disagree (19%, 23 Votes)
  • Strongly Disagree (70%, 86 Votes)

Total Voters: 123


This poll will be active and displayed on the sidebar through 01.02.2010.

0.00 avg. rating (0% score) - 0 votes

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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

58 comments:

  1. 1
    Scott Weitz says:

    If printing money, and misrepresenting stats is fixing the problem, then we’re starting another era of prosperity.

  2. 2
    Herman says:

    This is a troll poll.

  3. 3
    seattle says:

    Yes, issues are one for now to a good extend. The stock market rally has started and the next wave of housing bubble is on the way. This is how our economy works. Manipulation of interest rates, federal assistance for home buyers, banks and investment firms. This will work as long as there is no other economic power to compete with the USA and rest of the world is willing to sell stuff to us in exchange of dollars – poor Chinese workers especially are willing take a pittance to produce goods for us :-). . This is good in one way as it helps us enjoy good life with no hardship and effort.

  4. 4
    softwarengineer says:

    RE: Scott Weitz @ 1

    Jobless Recovery

    The banks can sing and stocks did well with temporary stimulus injections in 2009, meanwhile companies are learning to operate with part staffs and some temporaries to milk profits with a smaller salary base, for now.

    What happens when the borrowing binge:

    ends when China, etc., refuses to lend us more?

    interest rates go through the roof to attract more stimulus debt money in 2010?

    commercial real estate foreclosures hit bad in 2010?

    On health care reform, you know the bill we vote on, that absolutely no one understands, just like the stimulus bonuses biils they pushed through as imminent:

    what is the monthly payments from the private plans ($600-1000/mo?)?

    what good is letting 55 YOs and older not qualified for Medicare, get Medicare, but at $600/mo?

    with no public option, we can’t afford anyway, aren’t we just back to square one anyway?

    what does $500B cuts in Medicare mean, i.e., doubling of the deductables?

    is taxing employer furnished health care going to be implemented and/or doubling of the private insurance deductables?

    do you go to jail if you don’t pay $600-1000/mo for mdical insurance, you can’t afford anyway?

    will it all cost a bunch more and give us nothing more than we have now?

    Sounds like the only slamdunk winners in health care reform are the medical insurance companies collecting monthly takes.

  5. 5

    None of the underlying problems with the economy have been fixed, but maybe we’ve succeeded in delaying imminent collapse. It would take enormous political courage to fix the underlying problems, and there are very few politicians of either party who are willing to alienate their patrons in order for this to happen.

  6. 6
    pfft says:

    RE: Scott Weitz @ 1 – I thought we were borrowing money? which is it?

  7. 7
    pfft says:

    I predict that many in this discussion will still have a march 2009 mindset and ignore everything bad that happened in 2008. people are anchoring to the panic and won’t see that things are getting better. they won’t even admit to things being less bad.

    “The focusing effect (or focusing illusion) is a cognitive bias that occurs when people place too much importance on one aspect of an event, causing an error in accurately predicting the utility of a future outcome.”

    “Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions.”

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

  8. 8
    mydquin says:

    By pfft @ 6:

    RE: Scott Weitz @ 1 – I thought we were borrowing money? which is it?

    LOL… we are printing money that we can lend to ourselves.

  9. 9
    mr.finviz says:

    Hell no. The unemployment keeps rising. The interest rates are zero. Look out when the Fed actually starts raising interest rates, we are in for a double dip.

  10. 10
    pfft says:

    “None of the underlying problems with the economy have been fixed, but maybe we’ve succeeded in delaying imminent collapse.”

    housing went bust
    consumer spending tanked
    savings rate zoomed higher
    many banks went under/financiers lost jobs
    credit it tight
    debt levels are down

    is that nothing?

  11. 11
    AMS says:

    13:35 PM PT – 0 Votes & 10 comments

    lol.

  12. 12
    Lake Hills Renter says:

    “Sorry, there are no polls available at the moment.”

  13. 13
    pfft says:

    By mr.finviz @ 9:

    Hell no. The unemployment keeps rising. The interest rates are zero. Look out when the Fed actually starts raising interest rates, we are in for a double dip.

    unemployment went down and jobs losses have slowed to a trickle. unemployment is a lagging indicator anyways. rising rates are a good thing because they mean that the economy is recovering and people are ditching bonds for stocks.

    in 1994(or 93?) the bond market sold off big time and we had orange county, if you sold stocks or were bearish on the economy you were disastrously wrong.

  14. 14
    pfft says:

    “What Does Fighting The Tape Mean?
    The action of placing a trade or trades that go against the ticker tape.”

    http://www.investopedia.com/terms/f/fightingthetape.asp

    spring 2009: the bank stress tests are a sham

    green shoots are more like brown weeds

    summer 2009: the stock market is going up on very weak volume

    fall 2009: the market has gone too far too fast

    winter 2009: double dip

    the stock market is a casino

    the stock market is rigged

    greece is in trouble! greece is in trouble! don’t forget dubai’s default.

    meanwhile I read today that investors pulled money out of stock funds in 2009 and invested them in bond funds and missed the rally. typical retail investors. if the are pouring into bond funds it means we are recovering. when the money is pouring into stocks and nobody wants bonds you know to start looking for the end.

  15. 15
    pfft says:

    spring 2010 worries

    commercial real estate

    interest rates

    the dollar

    summer 2010

    commodities prices are rising

  16. 16
    Cheap South says:

    No votes, no way to vote; but shows 100% Strongly disagree. This looks like a Fox News poll.

  17. 17

    RE: pfft @ 13
    I’m really happy to see someone so optimistic about the economy. I wish I could share those feelings.
    Rising interest rates doesn’t really mean the economy is recovering, necessarily. In a perfect world, there would be a little controlled inflation, to continue to make US treasuries attractive. But rates have been kept artificially low, in my opinion, in order to get some growth into the economy. It’s worked, to a small extent. But they can’t afford to keep rates that low, and the recovery, if there really is one, is very fragile iffy, vulnerable, and not necessarily sustainable. A rise in interest rates, even a fairly modest rise, could just kill this weak recovery in it’s tracks. I’d like to feel differently, but I just don’t see significant differences between Bernanke, Paulson, and Alan Greenspan. I don’t think they’re looking out for the good of the average American, but rather to fatten the corporate earnings of their pals in the investment banking and brokerage communities.

  18. 18
    The_Dude_Abides says:

    RE: pfft @ 13
    Pfft – do you remember why OC went TU?
    Derivatives.
    :)
    Same as it always was…….

  19. 19
    softwarengineer says:

    RE: Ira Sacharoff @ 16

    Exactly IRA

    My matching funds in stock stimulus debt gains did well in 2009….but only on the premise of debt to the banksters, when the debt ends, then what?

    Think of it like this Pfft, if you used a credit card and had a great $25K 2009 summer vacation, this year was better than 2008….but you’re running on debt and when the debt goes [it will]….so goes your phony prosperity…it wll go pfffttt [like a balloon deflating]…and you’ll be paying for this year’s vacation until 2014 at $800/mo and 23% interest.

    Real prosperity doesn’t feed on debt it creates equity and jobs.

    And to say 10% unemployment excluding giveups and severely underemployed means unemployment has settled down, I’ve got a Great Depression bridge I can sell ya.

  20. 20
    The Tim says:

    Argh, sorry, the poll wasn’t open. Been having a bit of trouble with the polls plugin and didn’t realize it hadn’t opened the poll.

    P.S. RE: Cheap South @ 16 – The 100% “Strongly Disagree” thing was merely an artifact of the way the poll plugin displays polls with no votes. The last vote always shows 100% when there are zero votes, and “Strongly Disagree” just happened to be last.

  21. 21
    fabuladocet says:

    By pfft @ 7:

    …people are anchoring to the panic and won’t see that things are getting better. they won’t even admit to things being less bad.

    “The focusing effect (or focusing illusion) is a cognitive bias that occurs when people place too much importance on one aspect of an event, causing an error in accurately predicting the utility of a future outcome.”

    “Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions.”

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

    There are many cognitive biases to be wary of. Focusing too much on this one is in itself a potential anchoring bias (meta-anchoring?).

  22. 22
  23. 23

    Clearly we’re going to be in debt for a long time–aren’t they trying to lift the debt limit in Congress again?
    Unbelievable.

    The housing numbers haven’t been bad lately. Artificial government intervention or not, the numbers have been decent. Next year is a big question mark.

  24. 24

    This poll cracks me up. Clearly everyone here is going to disagree with the statement. I love that we still only have 4 votes and they are all “Strongly disagree.”

  25. 25
    Scotsman says:

    RE: Seattle Homes @ 23

    “only have 4 votes and they are all “Strongly disagree”

    Clearly a contrarian indicator. Massive inflation is just around the corner. Buy now or be priced out forever. ;-)

  26. 26
    fabuladocet says:

    By Seattle Homes @ 23:

    This poll cracks me up. Clearly everyone here is going to disagree with the statement. I love that we still only have 4 votes and they are all “Strongly disagree.”

    Now be nice. This might not be the most objective blog around, but – wait, aren’t you Sam DeBord, co-owner of Greater Seattle Realtors @ Seattle Home.com? May I interest you in a hot steaming mug of STFU?

  27. 27
    old timer says:

    ““Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions.””
    Anchor to this bit of info sweetie:
    We have borrowed more than we can possibly repay.
    The debt, which continues to grow, has long since outrun
    our capacity to carry.
    What good can possibly come of this factoid?
    Back to your Kool-Aid.

  28. 28
    AMS says:

    RE: Seattle Homes @ 24 – “Clearly everyone here is going to disagree with the statement.”

    What makes it so clear?

  29. 29
    pfft says:

    By old timer @ 27:

    “â��Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily, or â��anchor,â�� on one trait or piece of information when making decisions.â��”
    Anchor to this bit of info sweetie:
    We have borrowed more than we can possibly repay.
    The debt, which continues to grow, has long since outrun
    our capacity to carry.
    What good can possibly come of this factoid?
    Back to your Kool-Aid.

    who has borrowed more than they can possibly repay? not the US gov’t, they are borrowing for thirty years at historically low rates. they aren’t even close to getting to a point where they can’t pay interest.

    I don’t see any evidence that we’ve run out of our capacity to carry debt. where do you? interest rates are very low.
    anyways, consumers are paying down debt and increasing savings.

  30. 30
    Scotsman says:

    RE: pfft @ 29

    What effect will this have if it comes to pass? I’ve noticed 10 year rates have already moved up from 3.2 to 3.8% over the last couple of weeks:

    Dec. 28 (Bloomberg) — If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.

    Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said. ”

    Forget the rising mortgage rates. At what rate does the U.S. government run out of capacity to pay interst only on the debt?

  31. 31
    One Eyed Man says:

    It’s pretty obvious that the economy still has plenty of problems. And certainly, one can make a well grounded case that many of the positive statistics in the economy are at least in part the result of government intervention. And one can also make a case that the ability of our government to intervene will wane and the economy will slide backwards. But there are, never the less, a number of positive economic statistics that people here (other than pfft) are dismissing, if not ignoring:

    1. GDP has been positive for two quarters.
    2. CPI is positive at present.
    3. Goldman Sachs says that banks have now recognized at least 60% of the 2.6 trillion in losses they estimate from the housing bubble.
    4. US job losses per month peaked at 750K last Feb and are currently a third of that according to Trim Tabs and less according to BLS.
    5. The US economy is creating tens of thousands of new jobs every month. Unfortunately those jobs are in other countries.;-) But that’s global capitalism. As we all know, all other things being equal, jobs will move to markets where labor is prevalent and cheap. What’s the matter? Don’t you like global free market capitalism?

    So are you all just going to whine? If we don’t have any answers besides “let the economy reset” we’re in big fucking trouble and mounting debt isn’t our only major problem. Maybe the economy is resetting and the new normal is going to be 20% unemployment at 20% lower incomes because BRICK and 3rd world labor is cheap, available, and not as risky as it used to be.

    I don’t particularily care for T. Boone Pickens, but right now he’s got the only plan that will provide significant new domestic employment while decreasing the balance of trade deficit. Maybe you should send an email to Maria or Patty or whoever your congressman is. It’s more constructive than whining. Or if your just a lazy capitalist in the investor class, buy some Clean Energy Fuels Corp.

    For purposes of full disclosure, I started buying Clean Energy Fuels Corp last month. That’s the CNG infrastructure company controlled by Pickens. I’m not much of a capitalist, but I’ll need the money to pay my medicare premiums now that I’m over 55 and likely to eventually end up with the public option.;-)

  32. 32
    Scotsman says:

    RE: One Eyed Man @ 31

    As your points one through four above illustrate the economy has temporarily rebalanced at a reduced level of output, so unemployment growth has slowed, some profitability has returned and the banking system is temporarily stabilized. But let’s not confuse temporary stability with growth and prosperity. Having caught a branch, stopping your fall to the canyon’s bottom is not the same as climbing back out and continuing your jog along the rim.

    There’s plenty of good analysis that shows the majority of the turn around in GNP came from government stimulus, and that when the stimulus stops, so does the rebound. There is no fundamental recovery underway at this time.

    We need to ADD 250,000 jobs a month just to keep even with population growth, so even 100,000 new jobs a month means we’re still watching unemployment rise. But that’s a dream- we’re still losing hundreds of thousands of jobs a month. Rising unemployment means less consumption and falling tax revenues for the government, a difficult cycle to turn around with only government sponsored stimulus.

    The impression of mild inflation is a statistical fiction created by altering the mix and definition of those items selected for inclusion in the “basket of goods purchased.” The vast majority of things actually purchased are cheaper today than they were a year ago.

    Most will agree we need to see two things for a brighter future to emerge- continued investment in production (higher employment and productivity/wages) and a stable government that can meet its obligations without destroying the monetary base through excessive borrowing or blatant printing. As the two following charts show we don’t have that at this time, suggesting the underlying problems have not been fixed.

    http://4.bp.blogspot.com/_pCDyiFUv9XU/Szff2lIkHxI/AAAAAAAAHyE/xrI-

    http://4.bp.blogspot.com/_pCDyiFUv9XU/Szff2wETCRI/AAAAAAAAHyM/xBHHgQH-

  33. 33
  34. 34
    Cheap South says:

    RE: The Tim @ 20 – No need to explain. This is a very informative website. The poll just reminded me of Stephen Colbert when he used to ask his guests: “George W. Bush; great president or best president ever?”.

  35. 35

    When you start seeing articles like this, it can only mean that complete recovery is just around the corner. ;-)

    http://www.msnbc.msn.com/id/34601256/ns/business-us_business/

  36. 36
    David Losh says:

    If you take housing, consumer credit, and banks out of the equation we should be on our way to economic recovery.

    There are so many things we need to do and so little time to get them done. If there is a growing population problem then we need to address that. If there is a need to increase the manufacuring base we need to do that. If the government needs to raise capital, you don’t like health care, or those jobs are going over seas, well, you’re an America and you can do anything, anywhere.

    Do something today, do anything today that will be a solution.

  37. 37
    One Eyed Man says:

    RE: Scotsman @ 32

    Scotsman, I don’t disagree with what you say. I tried to acknowledge that in the first paragraph of comment 32. In the long term, I view the current positive economic numbers as to some degree just a slowing of downward economic momentum as the US economy moves toward a new equilibrium with the emerging market economies. But there are at least some things we can do to change that and the current respite may be one of the few chances we will get to implement constructive changes.

    I’ve been screaming about increasing debt since the Reagan administration but debt is just one part of the problem and I’ll discuss budget cuts later. We’re now increasingly buying our labor and our energy from foreign markets. If unemployment and underemployment in the Brick countries and the 3rd world is at 40% on average (that’s just a hypothetical number), we need at least some solutions that can’t be outsourced. Installing infrastructure to use fuels from north america like CNG is one of the few solutions that meets that criteria. If the government has to fund some of it, its still a good investment for the country.

    As the risks associated with deploying capital overseas decrease, and the cost of ocean transportation remain low, manufacturing jobs will continue to move over seas to exploit cheap labor. That’s why we are becomeing a service economy. They currently can’t make your Big Mac in Batswana Land because it’s cold by the time it gets here. If they ever get the teleporter to work, the Big Mac will be made in Batswana too. It’s a fact of life. We are creating the innovations that will export our jobs. But we might as well be the ones to invent the new technologies because someone else will eventually do it if we don’t. An R & D tax credit and investment in education are probably costs we should incur even in a time of high debt and budget crisis.

    I’m not a big crap and trade fan. Even if crap and trade is necessary to save the world, it will be a huge tax on the US economy and probably crush small business growth. The Pickens plan might not replace crap and trade but it will help with both environmental issues and economic issues and may decrease the preceived need for crap and trade and the painful near term economic effects of a crap and trade plan.

    But we obviously need more solutions, not just a description of the problems. My other solutions are even less popular as they involve major budget cuts to help balance the budget. They include the following: substantial military cuts totalling at least 100 billion per year; a form of part time work fair in a controlled living environment to replace the current welfare system; and, what amounts to rationing of government healthcare to the elderly (medicare) where costs are high and the return on investment is low.

    The political right will fight the first cut and the left will fight the last two. Absent some political subtrifuge like burying medicare reimbursement cuts in a 2000 page health care reform bill, these proposals have little or no chance. But I think that if the republicans and blue dogs are smart, they will try to trade medicare reimbursement cuts for a few votes on the healthcare reform bill. Unfortunately everyone knows that seniors vote and the prime directive in politics is to get re-elected, so it probably won’t happen if the cuts can be traced to some politicians vote.

    Finally, just remember one final thing about fixing the economy. If unemployment reaches a certain level, you will have civil unrest and increased social violence as people protest and others rob and steal to survive. Totally disassebling the social welfare state probably isn’t a viable alternative if it leaves too many people on the street, even if you could get the needed votes.

  38. 38
    softwarengineer says:

    RE: One Eyed Man @ 37

    You Forgot One Main Root Cause to the Problem

    World/American population density, as it stands today, cannot ever sustain a good longterm economy again.

    We’re simply out of trees, oil, water, fish,etc….if the earth went to 1-2 billion from its current 6.8 billion and everyone made $40K a year, the world trade economy could work well. But when overly populated countries who manufacture pay their workers $2K/yr, the lower population density developed countries, like America, are shafted in free trade.

    Service jobs with debt are just a short lit fuse to the “lack of manufacturing jobs” bomb at the end of the fuse.

    Its that simple and the demography fix will take decades. This isn’t politically incorrect news to go into economic denial over either, its pure science.

  39. 39
    AMS says:

    “If unemployment reaches a certain level, you will have civil unrest and increased social violence as people protest and others rob and steal to survive.”

    Do not equate unemployment with lack of income. I keep thinking I should compute the maximum number of weeks a person could go unemployed in Michigan and still qualify for unemployment. One would have to pick the correct person to maximize the weeks, but I am guessing that it’s close to two years, approximately an extension of 1.5 years beyond the standard 0.5 year period.

    And the governmental intervention doesn’t stop there…

  40. 40
    AMS says:

    RE: softwarengineer @ 38 – We may be out of trees, but we sure have a lot of homes…

  41. 41
    shawn says:

    RE: softwarengineer @ 38 – Science lesson for SWE, a new “theory” is not called science. If you are going to say that something is “science”, I suggest you read up a bit on what science is. Please though, entertain us, please post your scientific proof via the scientific method. I do predict that you won’t post it because you don’t even partially understand that the “stuff” you are posting is not “science”, but rather an opinion based on another’s opinion.

  42. 42
    k2000k says:

    By softwarengineer @ 38:

    RE: One Eyed Man @ 37

    You Forgot One Main Root Cause to the Problem

    World/American population density, as it stands today, cannot ever sustain a good longterm economy again.

    We’re simply out of trees, oil, water, fish,etc….if the earth went to 1-2 billion from its current 6.8 billion and everyone made $40K a year, the world trade economy could work well. But when overly populated countries who manufacture pay their workers $2K/yr, the lower population density developed countries, like America, are shafted in free trade.

    Service jobs with debt are just a short lit fuse to the “lack of manufacturing jobs” bomb at the end of the fuse.

    Its that simple and the demography fix will take decades. This isn’t politically incorrect news to go into economic denial over either, its pure science.

    I have to disagree with you on this. Certain highly educated individuals have been claiming overpopulation problems since the 18th century, and they may have been right given the current technological ability of their society at that time, but technological advances have allowed humanity to increase in population without this ‘cataclysmic’ event that is predicted to happen because of overpopulation. There is still plenty of resources left on this planet to support a larger population, we just need to become efficient at utilizing them, and we will. I also find the concept of population control morally dubious given that an increasing population forces society to become more technologically innovative via the need for more efficiently utilize resources and the greater likelihood of major scientific breakthroughs because there more individuals that possess the facilities to discover them. If a person believes we need to lower our population size, then they have the option of not reproducing themselves.

  43. 43
    AMS says:

    RE: k2000k @ 42 – “but technological advances have allowed humanity to increase in population”

    Reminds me of Moore’s Law, which Moore declared dead, but it continues on today…

    The population has grown at about the same rate that productivity has increased.

    That said, I am sure there is an upper limit somewhere. I am also not convinced that increased population density results in better living conditions.

    I may have to read that darn book just to better understand the perspective.

  44. 44
    pfft says:

    “We’re simply out of trees, oil, water, fish,etc”

    have you seen the price of those lately? not exactly priced like we’re out.

  45. 45
    matsayswhat says:

    By Scotsman @ 32:

    RE: One Eyed Man @ 31
    Most will agree we need to see two things for a brighter future to emerge- continued investment in production (higher employment and productivity/wages) and a stable government that can meet its obligations without destroying the monetary base through excessive borrowing or blatant printing. As the two following charts show we don’t have that at this time, suggesting the underlying problems have not been fixed.

    This!

    pfft makes some strong arguments regarding signs that things are improving, but until we see the above, I don’t think we’ll really be on the road to recovery.

    CNG has popped up a few times in this thread and I couldn’t be more for it considering how much out country stands to benefit from transitioning our trucking infrastructure to use that or some other non petroleum based fuel. Eventually (and hopefully) we may also be looking at algae derived diesel, which given the uniqueness of our sun belt, has a lot of potential.

  46. 46
    The_Dude_Abides says:

    RE: One Eyed Man @ 31

    As per #3, yes, GS said the banks are through 60% of their RE losses, but then Moodys came out a few days later and said we were only 40% through it. I hope GS is right, cause I made some hefty bank bets in Feb/Mar of this year. I bought the banks because so many had already failed and I tried to pick the survivors. We’ll see.

  47. 47

    RE: Scotsman @ 25

    “Clearly a contrarian indicator. Massive inflation is just around the corner. Buy now or be priced out forever. ;-) ”

    I like that I’ll put it on my next blog post.

  48. 48

    RE: fabuladocet @ 26
    “Now be nice. This might not be the most objective blog around, but – wait, aren’t you Sam DeBord, co-owner of Greater Seattle Realtors @ Seattle Home.com? May I interest you in a hot steaming mug of STFU? ”

    Hey, I thought you started your comment with “be nice.” Oh well.
    I agree with most here that the economy has some serious issues ahead of it. 88% of voters agreed with me. I just think that we all knew which direction this poll was going to go.

  49. 49
    mukoh says:

    RE: shawn @ 41 – I would take odds on that though to effect that SWE tries to respond to this and fails absurdely, not following how a theory can become science. He reminds me of MOST commenters on zerohedge site.

  50. 50
    pfft says:

    “a stable government that can meet its obligations without destroying the monetary base through excessive borrowing or blatant printing. As the two following charts show we don’t have that at this time, suggesting the underlying problems have not been fixed.”

    why are gov’t interest rates so low? if what you say is true, why did investors pile into US debt even after TARP, the stimulus and every other alphabet soup program was well know?

    how can you say the underlying problems aren’t fixed?

    1. consumer spending plunged and savings soared.

    2. we had one of the longest recessions in forever

    3. housing tanked like never before

    4. we had an epic stock market panic

    how are those not addressing the underlying problems.

    I used to believe that most of the housing bears were the smart money. now I am not so sure. I suspect many have a constant bearish stance and just happened upon a housing bubble by sheer luck. that and the fact that given time a bubble will form in any asset class.

    how can so many supposedly smart seattle bubblers still believe things aren’t getting better. I get the sense that people think that things are actually WORSE after an epic bust.

    in 2108 they’ll be writing books about 2008.

    I was as bearish as anyone, but the facts have changed.

  51. 51
    shawn says:

    RE: mukoh @ 49 – He is very quiet when it comes to my posts. Though I do not want to humiliate him, but drive him to understand a few things:
    1) Opinions are great, just don’t present them as facts or as proven (esp. by directing us to a web site or book of opinions).
    2) It is very hard to correlate a cause to an effect and that it is easier to disprove a theory than it is to prove one.
    3) Some options can contain positions that are despicable and the onerous is on the person putting forth those opinions to know fully what they are promoting (xenophobia, etc.).
    4) That if one is going to argue, they should read up on what an argument is (at least to know that they need to fully investigate what is correct about the opposing position).
    5) That some critical thinking might do him some good (to not only evaluate his position validity, but how he arrived at it, his subjectiveness, his mindset, to analyze his analysis, etc).
    6) That he needs to brush up on his topic. He claims that magically the carrying capacity will all of a sudden quit adjusting to population growth. He has never addressed the achievements that some say population grow forced us to develop. He ignores compeltely the counter argument.
    7) I could go on forever…

  52. 52
    Sniglet says:

    I definitely come down on the side of saying that nothing has been fixed. Most of the “toxic” assets are still on the books, and things are only getting worse (just look at the CRE time-bomb, as the reserve cushions are eaten away). We are following an almost identical trajectory to what happened in Japan after 1989. Japan saw some recoveries which would last for a year or two, only to fall to new lows, in a cycle which has lasted for 20 years.

    Just like the US, Japan refused to deal with it’s problems, and delayed the purging of mal-investments, but this only led to dragging out their depression by decades.

    Also, keep in mind that this economic trauma is NOT a US only phenomena. Watch what is happening in Europe and China. European nations are in a world of hurt, and the future of the Euro is even in question, as we see strains increase between nations (e.g. Greece being unable to meet it’s financial obligations and other Euro nations unwilling to bail it out). There are a lot more Dubai World’s out there, on the brink of insolvency, which will be pushed over the edge in 2010.

    2009 has been the equivalent of 1930, when the Dow recovered most of the 1929 losses and the business press was giddy with optimism for having missed the bullet.

    The next show in our latter-day depression is about to drop in 2010.

  53. 53
    mukoh says:

    RE: shawn @ 51 – We should have taken the bet between this. He is not responding.

  54. 54
    explorer says:

    Agreed with Singlet. It’s all an illusionary Kabuki play. Dead Cat bounce. Sky will fall in mid 2010 for everyone but bankers, politicians, and die-hard corporatists.

    The rest of the population will violently revolt, outnumber and outsmart the military brigades called in from Colorado to supress it, and the survivors in the world will be then free to reset civilization and address the real problems in 2011. This frees up resources to get things done….

    Sound far fetched? Maybe, Maybe not. What is the alternative?

  55. 55
    mukoh says:

    RE: explorer @ 54 – Get to area 51 often?

  56. 56
    shawn says:

    RE: mukoh @ 53 – I am still an optimist, and am hoping he has an English 101 text and is reading up on the argument, maybe he will read the whole text? But yes more money lost due to the bubble, if only I had bet when I was not priced out ;)

  57. 57
    explorer says:

    mukoh @55: That was only half in jest. Actually, I prefer the Bermuda Triangle. I have learned the spots to avoid.

  58. 58
    David Losh says:

    RE: mukoh @ 53RE: shawn @ 56

    6.7 billion people on the planet. How much reading do you have to do?

    You asked, it’s been answered, so you ask again.

    The technology argument is like saying space exploration will save the planet.

    Here’s your reality. Population is an exponential problem, the more people, the more probability the population will grow, and grow more quickly.

    I think in one of your arguments you mention objecting to population control on moral principle. Is that another scientific basis?

    Actually I only responded because mukoh chimed in. It’s not really a discussion.

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