Weekly Open Thread (2015-05-11)

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Here is your open thread for the week of May 11th, 2015. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

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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.

21 comments:

  1. 1
  2. 2
    Blake says:

    Essential problem with the economy and bankruptcy of the Fed’s policies…
    https://confoundedinterest.wordpress.com/2015/05/11/recovery-average-credit-multiplier-is-zero-m1-multiplier-remains-below-1-0-at-0-74/
    -snip-
    The M1 Money Multiplier remains below 1.0 indicating that for every dollar created by the FED (an increase in the monetary base M0) will result in a <1 dollar increase of the money supply (M1).

    This would help explain the seemingly forever declining M2 Money Velocity.

  3. 3
    Blake says:

    Guide to the “secular stagnation” debate. http://t.co/9gmUJIlrub
    -snip- Summers argues even if the real interest rate consistent with full employment is positive it may be so low as not to be compatible with financial stability. He observes that low interest rates increase risk-taking on the part of investors, promote irresponsible lending practices and make Ponzi financial structures look relatively attractive.

    Paul Krugman has flagged the possibility the US economy may have been trending towards negative interest rates for some time, arguing that in recent decades periods of economic expansion have been largely driven by repeated ‘bubbles’. So how can you reconcile repeated bubbles with an economy showing no signs of inflationary pressures? Summer’s
    answer is that we may be an economy that needs bubbles just to achieve something near full employment – that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn’t just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s.

  4. 4
    pfft says:

    By Blake @ :

    Essential problem with the economy and bankruptcy of the Fed’s policies…
    https://confoundedinterest.wordpress.com/2015/05/11/recovery-average-credit-multiplier-is-zero-m1-multiplier-remains-below-1-0-at-0-74/
    -snip-
    The M1 Money Multiplier remains below 1.0 indicating that for every dollar created by the FED (an increase in the monetary base M0) will result in a <1 dollar increase of the money supply (M1).

    This would help explain the seemingly forever declining M2 Money Velocity.

    congrats! you finally figured out we are in a liquidity trap! welcome to 2008.

    This economic recovery can’t get any respect
    http://www.businessinsider.com/this-economic-recovery-that-cant-get-any-respect-2015-5

  5. 5
    Blurtman says:

    Infinite periodicity is a straight line, and so we must have more bubbles and more frequently.

  6. 6
    pfft says:

    By Blake @ :

    Guide to the “secular stagnation” debate. http://t.co/9gmUJIlrub
    -snip- Summers argues even if the real interest rate consistent with full employment is positive it may be so low as not to be compatible with financial stability. He observes that low interest rates increase risk-taking on the part of investors, promote irresponsible lending practices and make Ponzi financial structures look relatively attractive.

    Paul Krugman has flagged the possibility the US economy may have been trending towards negative interest rates for some time, arguing that in recent decades periods of economic expansion have been largely driven by repeated ‘bubbles’. So how can you reconcile repeated bubbles with an economy showing no signs of inflationary pressures? Summer’s
    answer is that we may be an economy that needs bubbles just to achieve something near full employment – that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn’t just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s.

    everyone freaks out bubbles. Bubbles have been with us forever. central bank or no central bank(remember from history class the central banks has been very controversial and for a while we went without one). you really can’t prevent bubbles. they happen. you can’t prevent people from being overzealous about an asset class. it will happen. you just have to control the damage or tamp it down. bubble are basically like fashion trends.

  7. 7
    pfft says:

    The parties are not the same. anyone who says so hasn’t been paying attention and is a fool.

    Jeb Bush Would Have Authorized Iraq War — Even Knowing What We Know Now
    http://www.npr.org/blogs/itsallpolitics/2015/05/11/405961442/jeb-bush-would-have-authorized-iraq-war-even-knowing-what-we-know-now

  8. 8
    whatsmyname says:

    So if we divide all the money between billionaires and China, then take steps to see that the billionaires pay ever less wages for domestic consuming workers and less taxes for production of government services; it is the Fed’s fault that money velocity slows. And has been thus since Reaganomics, er, I mean the 1980’s. O.K.

  9. 9
    The Tim says:

    RE: pfft @ – If you are wondering why your comments keep going into moderation instead of posting right away, it is because you keep mis-typing the fake email address that you use in the comment form.

    Make sure you use the same one every time without typos if you want your comments to be posted right away.

  10. 10
    redmondjp says:

    By pfft @ :

    The parties are not the same. anyone who says so hasn’t been paying attention and is a fool.

    Jeb Bush Would Have Authorized Iraq War — Even Knowing What We Know Now
    http://www.npr.org/blogs/itsallpolitics/2015/05/11/405961442/jeb-bush-would-have-authorized-iraq-war-even-knowing-what-we-know-now

    And so would have Hillary.

    Try again!

  11. 11

    RE: The Tim @ – There’s that memory problem pfft has showing itself again. ;-)

  12. 12

    When you think about the impact that lower interest rates have on stimulating the economy, and then look at the reduced cost of energy, our economy should really be booming, but it’s not. So rather than people asking here what will happen when interest rates rise, the better question might be what will happen if energy costs rise?

  13. 13
    Mike says:

    RE: Kary L. Krismer @ – Where is the reduced cost of energy having a positive impact? There’s a short term positive influence on day to day consumption, adding perhaps a few hundred dollars to the average consumer budget – then there’s the industrial impact of cutbacks in the production of fossil fuels creating a drain. The short term energy cost reduction doesn’t seem to be creating any new industries based on cheap fuel costs. Rather what we’re seeing is continued investment in alternate energy production, storage and conservation.

    In order for the current low energy costs to have much impact there would need to be a reasonable expectation that costs will continue to stay low. As of yet, few industrial companies producing or consuming large amounts of energy are betting on that.

  14. 14
    Blurtman says:

    Obushma gets hammered on TPP fast track authorization.

    Lawmakers in the United States Senate have thrown a wrench in a plan that would have given President Barack Obama “fast track” authority to advance a 12-nation trade deal between the US and Pacific Ring partners.

    In a 52-45 vote on Tuesday afternoon, the Senate opposed moving forward for now on the Trans-Pacific Partnership. A procedural vote required at least 60 “ayes” in order to let the Senate host discussions on whether or not to give the president so-called “fast track” authority on the matter. Failure to reach that threshold puts the future of the trade agreement in jeopardy.

    http://rt.com/usa/257981-tpp-senate-domocrats-vote/

    Commented the president: “We must expand The Empire.”

  15. 15
    pfft says:

    By redmondjp @ :

    By pfft @ :

    The parties are not the same. anyone who says so hasn’t been paying attention and is a fool.

    Jeb Bush Would Have Authorized Iraq War — Even Knowing What We Know Now
    http://www.npr.org/blogs/itsallpolitics/2015/05/11/405961442/jeb-bush-would-have-authorized-iraq-war-even-knowing-what-we-know-now

    And so would have Hillary.

    Try again!

    link?

    I’ll go first. Hillary called the Iraq War a mistake. Jeb has Bush and his old foreign policy blunderers are advisors.

    Meet Jeb Bush’s new foreign policy adviser: his brother
    http://www.msnbc.com/rachel-maddow-show/meet-jeb-bushs-new-foreign-policy-adviser-his-brother

    Jeb Bush’s dubious new pitch: ‘I am my own man’
    http://www.msnbc.com/rachel-maddow-show/jeb-bushs-dubious-new-pitch-i-am-my-own-man

    Hillary Clinton on Iraq vote: ‘I still got it wrong. Plain and simple.’
    http://www.washingtonpost.com/blogs/post-politics/wp/2014/06/05/hillary-clinton-on-iraq-vote-i-still-got-it-wrong-plain-and-simple/

  16. 16
  17. 17

    By Mike @ :

    RE: Kary L. Krismer @ – Where is the reduced cost of energy having a positive impact? There’s a short term positive influence on day to day consumption, adding perhaps a few hundred dollars to the average consumer budget – then there’s the industrial impact of cutbacks in the production of fossil fuels creating a drain. The short term energy cost reduction doesn’t seem to be creating any new industries based on cheap fuel costs. Rather what we’re seeing is continued investment in alternate energy production, storage and conservation.

    In order for the current low energy costs to have much impact there would need to be a reasonable expectation that costs will continue to stay low. As of yet, few industrial companies producing or consuming large amounts of energy are betting on that.

    You’re right that for maximum benefit you would need to have some assurance of lower energy prices for a reasonably long term, but how is that any different than interest rates (or tax cuts)?

    But to answer your question I was focusing more on the benefit to businesses, not consumers, but there is benefit on both sides. And yes, there are some companies where the lower energy prices actually hurt, but that’s a relatively small part of the total economy.

  18. 18

    RE: Kary L. Krismer @
    Long-term Oil Prices This Century Predicted for $100/bbl Oil

    Thank God for 31 mpg 6 cylinders and such; we’re using FAR less gas….as wages decrease with the NWO agenda in place, soon automobile manufacturing dwindles to nothing?

    That’s a god send too….there’s just too many different cars out there now, no one knows how to fix them or stock parts for all of them…hades, I go to the dealer garage(s) now and I’m the expert….LOL

  19. 19

    I’ll Stretch Myself On This Advice [My Tin Hat is On]

    I think Tim’s Everett House purchase makes far more sense than buying for 2-3 times as much for old stock near Seattle City Limits. Everett has FAR more parking, grocery stores and more upper middle class that qualify for buying in that neighborhood. Everett doesn’t have the insane bidding wars with equity rich or cash bag buyers. Everett has bus service to Seattle, that Tim is taking advantage of.

    Tim has all the cost advantages and the high priced units unskilled investors squabble over are far more risk.

  20. 20
    The Tim says:

    By softwarengineer @ :

    Everett has bus service to Seattle, that Tim is taking advantage of.

    Minor clarification: I take the train now. :)

  21. 21
    Blurtman says:

    Patty Sneakers and Maria say Yes to Fast Tracking the TPP.

    These are the ten Senate Dems who were in a White House meeting, earlier today, and enlisted to assist the GOP with giving President Obama fast-track approval tomorrow: Tom Carper (Del), and Sens. Michael Bennet (Colo.), Maria Cantwell (Wash.), Ben Cardin (Md.), Heidi Heitkamp (N.D.), Tim Kaine (Va.), Patty Murray (Wash.), Bill Nelson (Fla.), Mark Warner (Va.) and Ron Wyden (Ore.).

    http://www.nakedcapitalism.com/2015/05/give-the-democratic-trade-turncoats-hell-over-fast-track-vote.html

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