Reuters and Bloomberg Roubini Reports from Italy
From Reuters: Roubini: “U-Shaped” Recovery is Possible
From Bloomberg: U.S. Dollar Will Weaken, Currency Crash Possible, Roubini Says
The text for these reports is below:
CERNOBBIO, Italy (Reuters) – Nouriel Roubini, a leading economist who predicted the scale of global financial troubles, said a U-shaped recovery is possible, with leading economies undeperforming perhaps for 3 years.
He said there is also an increasing risk of a “double-dip” scenario, however.
“I believe that the basic scenario is going to be one of a U-shaped economic recovery where growth is going to remain below trend … especially for the advanced economies, for at least 2 or 3 years,” he said at a news conference here.
“Within that U scenario I also see a small probability, but a rising probability, that if we don’t get the exit strategy right we could end up with a relapse in growth … a double-dip recession,” he added.
Roubini, a professor at New York University’s Stern School of Business, said he was concerned economies which save a lot, such as China, Japan and Germany, might not boost consumption enough to compensate for any fall in demand from “overspenders” such as the United States and Britain.
“If U.S. consumers consume less, then for the global economy to grow at its potential rate, other countries that are saving too much will have to save less and consume more,” he said.
“My concern is that for a number or reasons … (it is unlikely that) countries like China, other emerging markets in Asia, Japan, Germany in Europe, will have a significant increase in the consumption rate and a reduction in the savings rate.”
Roubini said he thought central banks should pay more attention to asset prices when deciding interest rate policy and encouraged U.S. Federal Reserve Chairman Ben Bernanke to follow this route.
“I think that asset prices, asset bubbles should become much more important in the setting of interest rates, in addition to concerns about inflation and growth. (Bernanke’s) views until now have been different. Hopefully this crisis has taught a lesson.”
Roubini’s outlook remains downbeat, however.
“I think that too many people are hopeful that everything is fine and unfortunately the road ahead is going to be at best bumpy, if not worse,” he said.
(Reporting by Jo Winterbottom; editing by Chris Pizzey)
Sept. 4 (Bloomberg) — The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt, said New York University Professor Nouriel Roubini, who predicted the financial crisis.
“If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar,” Roubini said in an interview today in Cernobbio, Italy. “The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen.”
Roubini said he didn’t see a risk of a dollar crash in the “‘short term.” The value of the U.S. currency relative to currencies such as the yen or the euro “cannot change too much compared to current levels because if the dollar were to weaken a lot and the euro strengthen a lot, that’s going to warp any chance for the European economy to recover, same argument as to the yen,” he said.
“Most of the adjustment of the dollar in the future has to occur relative to China, relative to emerging Asia and relative to some of the other commodity exporters in the world, whether these are advanced economies or emerging markets,” he said.
Foreign creditors need assurances that the U.S. will address its deficit, Roubini said.
“Unless in the medium term these issues of fiscal sustainability are addressed, and unless we mop up that excess liquidity from the financial system, eventually the financial markets and the foreign creditors of the United States might get more concerned about the sustainability of the U.S. fiscal deficit and about the U.S. being tempted to use the inflation tax as a way of resolving its private and public debt problems,” he said.
By Sonia Sirletti and Jeffrey Donovan
326 Responses to “Reuters and Bloomberg Roubini Reports from Italy”
I am the first. It feels so good
So the Market watch headline reads as follows”"Friday focus rests on jobsJobless rate hits 26-yr. high”yet stocks are up- what the heck is the rational behind wall street? Is it being propped up in light of the upcoming G20 summit here this month???Any guesses as to what might come out of that meeting?
“U” Shaped Recession May make SenseIf the recent 2009 problem(s) with college professional job scarcity and its concurrent 85% spike in professional unemployment is explained away.See the rest of the article:http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/02/06/national/a152330S41.DTL
As always, for those interested I have a new post up at The Light Of Day:http://medic-thelightofday.blogspot.com/2009/09/letter-to-our-president-and.html
What happens to real estate prices if the dollar crashes? What happened to real estate in countries like Argentina and Russia when their currencies crashed, did prices go up priced in their domestic currencies or did they stay the same? Also does high unemployment and weak consumer spending outweigh inflationary pressures caused by excessive government spending?
Medic,Why does the fact that the politicians have provided such obscene welfare for the rich mean they should also provide socialized medicine for the not-so-rich?Doesn’t it seem better not to divorce the benefit of health insurance from the necessity of holding down a job?No one ever deleverages who is bailed out.The leadership of this country should encourage the work ethic, not discourage it. The Public Option, as touted by our supreme leader, encourages Americans to be lazy.
Can someone please articulate what trade-weighted means in the context of NR’s sentence :“The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen.”
U Mean this sort of U ?~_____________~
Words to live by:No one ever deleverages who is bailed out.There’s your work ethic ChiggyBoy.
As a provider you know as well as I that rising costs affect us all. It’s not about giving something away, it’s about protecting all of us from the disaster that looms too large.Why should we have to pay a private insurer (through the nose I may add) for the privilage of being denied if they deem our request for care too expensive? Why, on top of that, should workers be asked to shoulder the burden of paying for a health care insurance system (think Medicaid) that reimburses at low rates and tries to cover too many, yet we cannot also participate?Bottom line is this: Create a system that covers the basics for all; tax something no one is excluded from using so everyone pays something; and remove the threat of constant legal action for any mistake.You do that, you have made a fantastic leap from where we are today.BTW – if I don’t have to pay insurers $6000-$7000 a year in premiums to cover my family, I can afford to pay higher taxes to fund a system that I can also utilize.
Previous Post: “In light of the G20 summit this month. Any guesses as to what will come out of that meeting?”——————————-RESPONSELet me tell you something …The world’s Central Bankers are starting to look like a bunch of old men at a Greek wedding who are all stumbling frantically in search of the restroom.These guys are holding meetings, debating currencies, buying bad assets, and wondering how they can please their political masters. Meanwhile, the massive liquidity that they have injected has blown a quadrillion-dollar bubble in the global derivatives trade. Talk about putting a nuclear bomb in the international financial system. But can these guys be responsible for this … heck NO!PeteCA
Why should we pay a private insurer to deny care because it’s too expensive? Why should anyone pay for a government bureaucrat to deny a request for care because it’s too expensive (Obamacare)? Why should we pay for Medeicare when we get no benefit?To be honest, I don’t think we should pay for anything that is too expensive or for which we get no benefit. Three wrongs do not make a right.Don’t give me the argument that the government’s administrative costs are only 6% when the private insurers’ are close to 30% I can think, and I can add. If Medicare wastes 23% on fraud and abuse, you have to add that to their administrative costs. The bottom line is you’re “administrative costs” are going to be at 30% no matter what.Come to think of it, if there really is 23% fraud and abuse in Medicare (hey that’s the figure I hear from the lefties, don’t blame me), you can’t get that done unless the bureaucrats in Medicare are on the take.When I graduated from medical school in Canada every physician had the same medical malpractice insurance premium—-it was $12.00 per year. No, that is not a typo. So I’m all in favor of getting the attorneys out of the business of practicing medicine with 20-20 hindsight, as has been done in Canada. In Canada attorneys work for a fixed tariff based on the type/complexity of case they take on, not a percentage of the lottery.We need to tweak the system we have. But let’s start with just a few changes to minimize the unintended consequences. No more denials for pre-existing conditions in exchange for tort reform and liberalization of the use of Medical Savings Accounts.We already pay enough taxes to cover this.Health insurance should not be considered a right, it should remain a benefit you work or pay for.
what if you are poor and disabled like I am?
The price of real estate is dependent on the carrying cost of the property (taxes, maintenance, mortgage), plus the income of the average buyer (income). As the dollar declines, maintenance will become more expensive as imports (light bulbs, plywood, sheetrock, copper) become more expensive in dollar terms. Jobs will be lost and income reduced by a sharp dollar decline in the short term, so spending will go down. This will increase taxes as spending decreases, and mortgage rates will go up as treasury rates increase. Income will go down, so the carrying capacity of the average buyer will go down, as the cost of owning property increases. This will force property prices down. This will make more homeowners underwater in their mortgages, increasing defaults. This will kick off a deflationary spiral in property values, until they reach a level where median house price is 2.5x median income, or 10x monthly rent.
“… level where median house price is 2.5x median income. . .”Which is precisely where they SHOULD be. That’s affordability defined.
Healthcare is already a right in the US. Show up in an emergency room, and you will get treatment, insurance or no. Unfortunately, the ER is the MOST EXPENSIVE place to get primary care. Providing basic primary care for all would reduce costs.
The world’s Central Bankers are starting to look like a bunch of old men at a Greek wedding who are all stumbling frantically in search of the restroom.These guys are holding meetings, debating currencies, buying bad assets, and wondering how they can please their political masters. Meanwhile, the massive liquidity that they have injected has blown a quadrillion-dollar bubble in the global derivatives trade. Talk about putting a nuclear bomb in the international financial system. But can these guys be responsible for this … heck NO!@ PeteCA on 2009-09-04 16:02:03With respect, I question your choice of the term “starting”.Ho hum
By Ambrose Evans-Pritchard Economics Last updated: September 4th, 2009From CernobbioIf arch-bear Nouriel Roubini has really thrown in the towel on our Great Contraction – as often claimed – this was not obvious here on the shores of Lake Como in Italy.Speaking at the Ambrosetti Workshop – a sort of Davos/Bliderberg for food-loving policy elites – he said the best we can hope for is a long-hard slog for two or three years, with a rising risk of a double dip into “W-shaped” recession.The poll of the 200 or so participants at the Villa D’Este (an ultra-posh hotel on the lake: Telegraph hacks stay up the hill in cheaper digs) found that the great majority expect the crisis to end in the second half of 2010. This is much later than the implicit assumption of the markets, which expect rate rises by January.I grimly voted for option five: that the crisis would continue to worsen, by which I mean that the legerdemain of shifting losses onto the shoulders of the taxpayer – pushing the public debts to 100pc of GDP on both sides of the Atlantic, and 200pc in Japan – conjures away nothing. It merely stretches out the damage, and alters its shape.Dr Doom said governments have indeed prevented a free-fall at contraction rates of 10pc (annualized) into what threatened to become a great depression. What do you expect after cutting rates to zero and blitzing of state support? The US alone has lavished $3 trillion of stimulus. “They got religion and brought out all their weapons from bazookas to missiles,” he said.So yes, states have stepped in to offset the collapse in private spending. This cannot continue for ever. At some point, private demand must pick up the baton. It is not doing so yet. Indeed, it can’t.US unemployment has just jumped from 9.4pc to 9.7pc. Less known, there has been a “mass reduction” of hours worked. Average wage growth has been falling so fast that it may soon turn negative.House sales have bounced a little after falling 80pc from bubble peak but there is still such an overhang of unsold properties on the market that it would take a total shut-down of the US construction industry for a year to clear the excess.House prices have already fallen 28pc. He expects another 12pc haircut, taking it to 40pc from peak to trough, enough to tip a very large proportion of all US mortgage holders into negative equity.“This was not a crisis of panic. It is crisis of massive deleveraging. The shadow banking system has disappeared.”The root problem is that the deficit spenders of the Anglosphere, Club Med, and Eastern Europe are being forced to retrench: yet the surplus exporters of Germany and Asia cannot — or will not — create enough demand to compensate. China is growing fast but it has a GDP of $3 trillion, far too small to lift the $40 trillion bloc of OECD economies (North America, Europe, Japan) out of the quagmire.If the governments of the West misjudge the structural severity of this crisis they will risk repeating what happened in 1937-1938 in the US, and 1998-2000 in Japan, when premature tightening tipped each country back into slump.So no, the lugubrious Nouriel did not strike me as a quitter on this one. By the way, I deplore the spate of recent articles calling him “False Prophet” or worse – combing through everything he has said over the years to expose inconsistencies. The world economy is a fiendishly complicated mechanism. The picture changes all the time as geo-politics intrudes, and market psychology goes through its convulsions. Emergencies call for action that one might abhor in different times. To be rigid is to be mindless.Roubini has been consistent for a very long time on the one point that matters: that debts were too high, are still too high, and must inflict lasting damage.He had a clutch off allies at Villa D’Este. Jean-Paul Fitoussi, the head of France’s Observatoire, said nothing useful could be inferred from the quirk that France and Germany both eked out 0.3pc growth in the second quarterly, technically ending recession. Their economies have shrunk by 7pc and 6pc respectively.“20 million jobs have been lost in the industrialized countries. It is frightening,” he said.The great error is to think of this as a financial crisis. Bank failures are a symptom, not the cause. He said there was “a structural weakness in global demand” that has been building for a quarter century.He despairs of the role being played by Europe. The biggest economic power sits like a “silent passenger” waiting for everybody else to pull it out of slump (Some would say free-loading on Anglo-Saxon and Asian stimulus). He calculates that Europe’s stimulus has been a quarter of that seen in other countries, in proportion to GDP.What is to be done? Roubini says the United States (but the same goes for almost all the old powers) must set out a clear plan to bring its colossal deficits under control step by step, year after year, to kick in after the worst of the crisis has abated.Any attempt by the US to inflate its way out of this debt trap risks setting off a “disorderly collapse of the dollar”.Washington will not opt for this deliberately. Unfortunately, it may drift into such an outcome as the path of least political resistance.Yes, but I can see plenty of other candidates for this sort of beggar-thy-neighbour somnambulism.Others may yet beat the US to currency debauchery.
I guarantee you that if you don’t have to pay insurers $6k to $7k a ýear for coverage, you will pay at least that much in taxes to provide for the costs of the “free” coverage you will receive.
You will feel richer as your house resumes its upward climb in value, even though your debased “wealth” will buy fewer and fewer goods and services per unit of currency. Meanwhile I will occasionally repatriate some of my euro holdings to buy more beach property at relatively bargain prices (Florida is already cheaper than Majorca, and much nicer in many respects). Of course my loving govt and its supreme leader will no doubt end up seizing my domestic holdings in their never ending lust for taxes to feed the beast.
Reminds me of the old line about not having to outrun the bear, just the other guy. At some point they are going to turn on each other, barriers to trade and competitive devaluations are going to rule the day, and it will be the 1930′s all over again.
I mentioned in another thread that a number of Brit fund managers are now saying the UK will have a “square root” recovery, with a flat line lasting through 2011. Seems optomistic when you take a broader set of realities into account.BTW, UKDMO all but confirmed they intend to inflate their way out of debt by not issuing Index-linked Gilts because they are too expenseive and no-one will buy them. Hmmm. Is that only bass-ackward to me?
Again, you don’t have to outrun the bear, just the other guy. It’s just a matter of time before the pols and central bankers resort to their tried and true old ways and then it will be 1937 all over again.
I’m not looking for “free” care. I’ve never said it – never even mentioned it.What I want is “reasonable” care where I won’t have to wonder if something is covered or if some insurance company employee’s bonus depends on figuring out how to deny me.I will happily pay for a realistic system that covers the basics for all.
Actually, if you figure in all the free care the ER docs provide, average ER charges per patient are a little cheaper than having your care at the family doc’s offc. Think about it: do you see fancy pictures and nice furniture at the ER or at your doc’s offc? This argument that ER care is the most expensive way to provide care is a total canard. But I wouldn’t expect you to know that. The media won’t challenge the popular politicians who have sold them this nonsense.
Medic:I think you’ve succinctly stated the case when you said “Create a system that covers the basics for all.” The point is that the government need not cover everything for everyone, but should cover basic health care — however we, as a society, define that — so that non-essential, elective procedures can be paid for in cash or through supplemental private coverage.This currently works well in practice. Consider Medicare, which covers medical services up to a certain level. A Medicare-eligible recipient can purchase supplemental coverage through, say, AARP to make up the difference.In France, everyone pays about 20% of their income for basic governmental health care, and something like 98% of the French have supplemental private coverage for services over and above those considered basic and provided by the government. The French are, by and large, very proud of the fact that they do not have a socialized medical system as found in Canada and the U.K. (I say that in anticipation of those who would deride inaccurately the French system as “socialist medicine.”SWK
22 percent of claims for health insurance coverage or reimbursement are denied. That leads to social instability through consumer debt defaults and bankruptcies (over half due to medical costs) and an embedded, permanent underclass. And that’s the lucky insured part of the population! For the uninsured it is much, much worse.The system has failed. The state has to intervene (as it does in all civilised countries in the world) to ensure that medical care and public health costs are socialised for the social good and social stability.
Here’s the way the insurance companies do it. When they receive an expensive bill that they think they MIGHT be able to deny part of…….they deny it. If you appeal it, they just automatically deny it again, they don’t even look at the particulars of the case, they just write you some off the wall excuse.They’ll keep on doing this as long as they think they don’t have to consider you seriously; after all, looking seriously at the particulars of a medical case takes time and requires expensive medical expertise…….not good for the bottom line.Once they get the notion that you are a pitbull about them paying, usually about the THIRD TIME YOU HASSLE THEM, they still don’t look at those medical particulars–that takes time and requires some expensive medical expertise–not good for the bottom line……they just pay the bill.They tell you they’ve decided to make an exception because you’ve always been such a great client, yada, yada….nonsense.Most people just stop here and are relieved. They have been through a lot and are glad to have it over with. They never understand that this procedure is actually fairly effective “risk management” for health care insurers.Now……would any of the rest of you like to know how the government “risk managers” do it in socialized medicine?
@ Free Tibet and @The Alarmist:Thanks for your constructive comments on the preceding thread, guys. I’m sure you both appreciate that while I try to maintain an even keel most of the time, I’m all too human and every once in a while, I just relish blowing a gasket and going postal (no offense, you post office workers out there) on certain dunderheads who, as Medic so aptly put it, insist on “poking the skunk” (I’m a fairly big guy, and my oldest son refers to those who attempt to taunt me for sport as “poking the bear”). As a Southern lawyer and an American of Scottish heritage, I’m perfectly at ease with direct confrontation, verbal or otherwise, and I don’t and won’t tolerate passive-aggressive pantywaists who don’t have the good manners or good sense to be generally respectful in their personal disagreements of opinion with others (I would never suggest, for example, Alarmist, that you were in any way stupid for the trepidation you expressed about the President’s forthcoming talk to the nation’s schoolchildren, as it was conveyed with elegance and sincerity — I don’t happen to share your concerns or believe they are well-grounded in fact, but nonetheless, you are an obviously intelligent and caring person, and I can at least appreciate how you might feel conflicted about the matter).Anyway, goodnight to all, including my dear adversary, Pokemeister Chignos. I am taking my boy to Florida’s third largest freshwater spring tomorrow for some cooling off in the 10,000 gallons of clear H20 that pour from the aquifer each minute!SWK
I’ve gotta say, fellas, it is so nice to have our Two Petes back.
Good grief SWK, surely you are not advocating an additional 20% income tax (plus whatever it costs to “supplement” your insurance) so that we can adopt the French health insurance model????Please tell me that 20% was a typo.
SWK, you were in rare form,and you’re still aces in my book. I’d hate to be on the other side of you in litigation. There aren’t too many people who can deliver a tongue-lashing (so to speak) with such precision of phrase. As for Chignos, I’ve got to admire someone who has the cojones to try and take you on. Bravo to the both of you. The Clash of the Titans of the RGE blog posters; what a show!Here’s wishing everyone a safe Labor Day weekend. Get out and see a parade somewhere if you can and remember what Labor Day commemorates.
How many Americans will go BK once the government revalues the currency? That will be the result, inevitably, of continued federal government overspending and deficits. Guaranteeing health insurance for everyone will blow a budget hole so big as to guarantee a new revalued currency. Hey, if that’s what you average Joe/Janes want, bring ‘er on baby, I’m ready.
Well, AJ and SWK—ya know what the cat said who was humpin’ the skunk?”I ain’t had all I want but I’ve had about all I can stand.”
The US Constitution can be printed in less than three typed pages. I see no reason health care reform should take 1000 pages. Three simple rules:1. No pre-exhisting condition clauses. Let the insurance companies figure out how they are going to deal with this.2. Providers can NOT charge a self paying patient more than 10% above the average negotiated insurance plan. People can afford to pay what insurance companies pay, they just can not afford the inflated prices.3. Liability reform. Doctors have developed a pattern of defenssive medicine that is costing us tremendous amount of dollars.
CHINA AND THE BUZZ OF A PENDING BANK DEFAULTThe Reuters report cited six foreign banks (including Goldman Sachs, UBSand JP Morgan) that received letters indicating that the Chinese StateOwned Enterprises (SEOs) would be given the green light to default ontheir CDO and CDS derivatives.Here’s a brief overview of what might happen should the SOE companies,and others, default. The banks, namely Goldman Sachs, J.P. Morgan andfrom other accounts possibly Deutsche Bank will find themselves LONG onoil futures with no customers on the short side of the derivatives. Thiswill most likely lead the banks to sell the excess oil futures without acare for the price. This is no different than what happened when BearStearns was forced to sell off their gold futures in March of 2008 whichthen resulted in a sharp downturn in the price of Gold. If China SOEs dodefault, Goldman Sachs could loose an estimated $15 billion dollars andbegin a chain-reaction among major Western banks.But in reality, we do not need default, just “potential default” tospark an economic crisis. The Chinese market has corrected 25%. Thisnews broke this past weekend. New York saw a sharp sell-off on Monday.Buzz of a bank default hit the floor. The rumor did not abate and theselling intensified. The selling carried over into Tuesday. Gold, aclassic hedge against troubled times has broken out to the upside, Chinahas purchased 50 billion in IMF bonds and has been questioning the USdollar now for upwards of a year. China was up 5% overnight and Gold hascontinued to climb this morning to close for the weekend at $950/oz.More details at:http://thefundamentalview.blogspot.com/2009/09/china-and-buzz-of-pending-bank-default_03.htmlChinese sovereign wealth fund dumping dollars for strategic investmentslike goldhttp://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=88400&sn=DetailChina to buy first IMF bonds for 50 billion dollarshttp://www.google.com/hostednews/afp/article/ALeqM5jTgJWsIAIcE5WSNnXoX6o-Ewo7bwBeijing’s derivative default stance rattles markethttp://www.reuters.com/article/fundsFundsNews/idUSPEK36146520090831
Analyzing why people play golf is like exploring the intricacies of string theory – there are so many permutations lacking scientific observation that physicists or golfers can pretty darn well say anything they like and the explanation might stick. When it comes to whacking that little white ball, the possibilities are nearly endless: People play to relax, to be with friends, to get close to Mother Nature, to enhance business connections, to compete and excel. Gosh, I don’t know, the Zen explanation for why we play golf could even resemble the old saw about climbing a mountain: People golf because it’s there. Whatever the reason, it is the most frustrating, damnable game ever conceived – alternately elevating and depressing you within the span of mere minutes. I love golf. No, I hate it.Personally, the reason that golf draws me to its intricate web of psychological entrapment is epitomized by a simple six-inch trophy: a chartreuse ball resting on top of its ebony base, preening on a bookshelf in the family room at our desert home. Its inscription reads, “Hole in one, March 15th, 1990, 14th hole Desert Course, 155 yards.” Well and good, I suppose – the ace of my life – except it wasn’t. It was the ace of my wife. Above the inscription rests the name Sue – not Bill – Gross. It was a great shot but it wasn’t my shot, and I guess therein lies the explanation for why I continue to tee it up.Actually, two years ago I did tee it up in the sweltering 105° June heat of the Palm Springs desert. No one, of course, was crazy enough to be with me including my “ace” role model wife who was sipping a cool lemonade in the comfort of our air-conditioned home. Now, there is an “unwritten” rule in golf that in order to be official, a hole-in-one has to be witnessed, and that you have to play a full 18 holes. Otherwise, I suppose, you could stand on the tee with a bucket of balls and hit hundreds or thousands until one of the little guys went in – whatever. The fact is, on this particular day, I was playing only one ball, but I was alone, and – good God! – it went in! The trophy with ebony base and spanking white Titleist ball would read: “Hole in one, June 7th, 2007, 17th hole, Mountain Course, 139 yards.” Or was it? Does a falling tree make a sound in the middle of a forest if no one’s there? Is a hole-in-one a hole-in-one if no one else saw it? I say emphatically – yes! That damn ball went in and later that day Sue agreed with me (although she had a funny look in her eye – especially since she didn’t know a thing about the rules of golf). No one else though. No one else agrees with me. Not a soul. I suspect they’re jealous and, in fact, I’ve seen a few of them hitting buckets of balls at dusk from that very same tee when they think nobody’s looking. I’m watching, though, which brings up a funny question. If they sunk one, would theirs be a hole-in-one because I was a witness? Like I said – a damnable game.“Is a hole-in-one a hole-in-one” may not strike you as the most critical question of the hour, and I would readily agree. “Will we have a New Normal global economy (and investment market)?” would probably usurp it on even Tiger Woods’s top ten list. This “new” vs. “old” normal dichotomy was perhaps best contrasted by Barton Biggs, as I heard him on Bloomberg Radio in early 2009, when he said he was a “child of the bull market.” I thought that was a brilliant phrase, and Barton is a brilliant phrase-maker. He went on to say though, that his point was that for as long as he’s been in the business – and that’s a long time – it has paid to buy the dips, because markets, economies, profits, and assets always rebounded and went to higher levels. That is not only the way that he learned it, but that is the way, basically, that capitalism is supposed to work. Economies grow, profits grow, just like children do. I think that’s why he said he was a child of the bull market, not just because he had experienced it for so long, but also because economic growth and higher asset prices are almost invariably a natural evolution, much like the maturation of a person. That’s how people grow, and so I think Barton was saying that capitalism just grows that way too.Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation. All of those three in combination, to us at PIMCO, means that if you are a child of the bull market, it’s time to grow up and become a chastened adult; it’s time to recognize that things have changed and that they will continue to change for the next – yes, the next 10 years and maybe even the next 20 years. We are heading into what we call the New Normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave.This focus on the DDRs – delevering, deglobalization, and reregulation – may be conceptually understandable, but nevertheless still a little hard to get one’s arms around. Why would they necessarily lead to a new, slower growth normal? A little easier to grasp might be the following approach, which feeds off the same concept, but which extends it a little further by suggesting that DD and R lead to a number of broken business or economic models that may forever change the world we once knew and make even Barton Biggs a chastened adult. They are as follows:American-style capitalism and the making of paper instead of things. Inherent in the “great moderation” of the past 25 years was the acceptance of a sort of reverse mercantilism. America would consume, then print paper assets and debt in order to pay for it. Developing (and many developed) countries would make things, and accept America’s securities in return. This game is over, and unless developing countries (China, Brazil) step up and generate a consumer ethic of their own, the world will grow at a slower pace.Private vs. public-driven growth. The invisible hand of free enterprise is being replaced by the visible fist of government, a temporarily necessary, but (if permanent) damnable condition itself in terms of future growth and profits. The once successful “shadow banking system” is being regulated and delevered. Perhaps a fabled “110-pound weakling” may be an exaggeration of where our financial system is headed, but rest assured it will not be looking like Charles Atlas anytime soon. Prepare to have sand kicked in your face, if you believe you are a “child of the bull market!”Global economic leadership. It’s premature to award the 21st century to the Chinese as opposed to the United States, but if the last six months have been any example, China is sort of lookin’ like Muhammad Ali standing over Sonny Liston in 1964 yelling, “Get up, you big ugly bear!” Not only has China spent three times the amount of money (relative to GDP) to revive its economy, but it has managed to grow at a “near normal” 8% pace vs. our “big R” recessionary numbers. Its equity market, while volatile and lightly regulated, has almost doubled in twelve months, making ours look like that ugly bear instead of a raging bull.United States housing and employment. Old normal housing models in the U.S. encouraged home ownership, eventually peaking at 69% of households as shown in Chart 1. Subsidized and tax-deductible mortgage interest rates as well as a “see no evil – speak no evil” regulatory response to government Agencies FNMA and FHLMC promoted a long-term housing boom and now a significant housing bust. Housing cannot lead us out of this big R recession no matter what the recent Case-Shiller home price numbers may suggest. The model has been broken if only because homeownership is declining, not rising, sinking to perhaps a New Normal level of 65% as opposed to 69% of American households.Similarly, the financialization of assets via the shadow banking system led to an American era of consumerism because debt was available, interest rates were low, and the livin’ became easy. Savings rates plunged from 10% to -1%, as many (if not most) assumed there was no reason to save – the second mortgage would pay for everything. Now things have perhaps irreversibly changed. Savings rates are headed up, consumer spending growth rates moving down. Get ready for the New Normal.I could go on, reintroducing the negatives of an aging boomer society not just in the U.S., but worldwide. Increased health care may be GDP positive, but it’s only a plus from a “broken window” point of view. Far better to have a younger, healthier society than to spend trillions fixing up an aging, increasingly overweight and diabetic one. Same thing goes for energy. Far easier and more profitable to pump oil out of the Yates Field in Texas or even Prudhoe Bay than to spend trillions on a new “green” society. Our world, and the world’s world, is changing significantly, leading to slower growth accompanied by a redefined public/private partnership.The investment implications of this New Normal evolution cannot easily be modeled econometrically, quantitatively, or statistically. The applicable word in New Normal is, of course, “new.” The successful investor during this transition will be one with common sense and importantly the powers of intuition, observation, and the willingness to accept uncertain outcomes. As of now, PIMCO observes that the highest probabilities favor the following strategic conclusions:Global policy rates will remain low for extended periods of time.The extent and duration of quantitative easing, term financing and fiscal stimulation efforts are keys to future investment returns across a multitude of asset categories, both domestically and globally.Investors should continue to anticipate and, if necessary, shake hands with government policies, utilizing leverage and/or guarantees to their benefit.Asia and Asian-connected economies (Australia, Brazil) will dominate future global growth.The dollar is vulnerable on a long-term basis.Like playing in an Open Championship, future golfers/investors need to play conservatively and avoid critical mistakes. An “even par” scorecard (plus some hard earned alpha) may be enough to hoist the trophy in a New Normal world. Holes-in-one? Maybe if you’re lucky. But make sure someone’s watching, and that their eyes are focused on the New Normal. As for golf, even Sue, my only supporter, has asked me to move my ball, on its own ebony base, away from her more authentic and perhaps the still solitary ace made by Gross family golfers. What a damnable condition.William H. GrossManaging Director
I call bulls..t SWKn its 2000 assessment of world health care systems, the World Health Organization found that France provided the “best overall health care” in the world. In 2005, France spent 11.2% of GDP on health care, or US$3,926 per capita.Somewhat LESS than your claimed 20%
“In most quarters, there is a feeling we should move away from the dollar system. The question is do we do it in an orderly way, or a chaotic way,” Stiglitz said. “The size of the deficit and the size of the balance sheet of the Fed have just increased the anxiety and the desire that something be done.”andThe lack of coherent financial reform from the Obama Administration, and their ludicrous proposal to create a ‘super-regulator’ in the privately owned Federal Reserve, after a landslide victory in an election based on change and reform, is an outcome almost too bizarre to be believable. Unless, that is, you accept that Obama and those around him are either incredibly naive or corrupt. We suspect that as in all things it is some of both.By the way, in case you missed it, Charlie Rangel, in charge of Ways and Means and the major proponent of a new military draft, is being investigated as another tax cheat among the Democratic leadership.Do these people take us for imbeciles? Do they think that the world does not see their corruption, their greedy, devious nature when it is not masked by a captive media, and is not repelled by it?In 2005 we forecast this very outcome, that Wall Street and their cronies would push their schemes beyond all reason, like drunk drivers or addicts who cannot quit, until they create a cathartic, catastrophic event which will cause someone to finally take away their keys at the last.That time is approaching. No one can predict exactly when, but it is there. Make sure you are wearing your seat belts.”There is precious treasure and oil in the house of the wise, but a fool consumes all that he has and saves none.” Proverbs 21:20″Ho hum
I think government should focus on the long term policy issue rather than short term stimulus policy. Now economy is back to normal with increasing economic growth, strong investor from rising stock prices, commodities prices and the strong expectation on rising price from ISM-price paid index. This means we are normal and maybe more than normal because ISM-Price paid index shows the very high inflation. Meaning that all stimulus policy both fiscal and monetary policies will affect only price now from the current expectation. Surely, we will have the high inflation and this will kill economy and create the instability in the economy. We face a lot of bubbles and crashes and governments are prone to growth policy rather than long-term policy from stability and now we have Tech bubbles, Subprime bubbles and we have only rising unemployment with higher cost of living. We cheat the unemployment rate that we change methodology; so we have 9.7% rather than 16% from we used to have 3%. How can we call this is the right policy? I think if all policy makers do not change their views to focus long term problems such as low saving rate, over-consumption, over-debts, rising aging people, healthcare problems, uncontrollable budget debts and deficit. We will have only high unemployment with high cost of living at the end and this is from the wrong policy from short-term growth rather long-term growth with stability.
The missing “e” is propping up Wall Street.
Boring — even if it is from Pimco.
Yes, bubbles and crashes seem to occur in spite of what our govt leaders do to “permanently fix the problem”-remember dot.com bust, Enron, etc?How about this: the savings rate should equal (or be 1% less) whatever the banks charge to lend us money; they charge us 6%, then let us save at 6%, etc. Next, Reduce the ridculous consequences of unrestrained leverage by requiring ALL individuals and corporations to put at least 20% down on all purchases (includes financial instruments) and allow no more than 5:1 leverage factor. Add to that strict term limits, full transparency and accountability and capitalism with democracy may be able to survive into the next millenium.
The size of the balance sheet of the Fed means nothing if the increase is just an A-B-A money circle designed to pump income into the B banks.The South Park episode this week where your voting choices are crap or more crap hit the nail on the head. As for a landslide, that was only in the Electoral College. One man one vote means the rabbits will inherit the Earth.
Yes, I’ve grown tired of your scent, Skunky (while I’m sure you fancy yourself the HUMPER, the rest of us know otherwise!). I’ll say this for you, Chignos: you’re a stoat of a man! Found a great snapshot of you here, my friend: http://oyebilly.files.wordpress.com/2008/12/stoat.jpg.SWK
Our politicians have simply “kicked the debt can a little further down the road” except that can now holds trillions more than it did a year or two ago and has become too big to kick much further. Once it stops, interest on this debt will require much higher taxes or inflation which will destroy the currency and American’s standard of living.
The unfunded liability of Medicare alone is enough to blow a hole in the Federal budget. Until Medicare becomes a more extreme version of ration care it will not be affordable. SWK’s 20% is about right if we want to continue the Medicare level such that it is actually paid for.Everything has to be put on a strict budget – just like a responsible household would do if it wants to stay solvent.There are so many things wrong with our country – the looming wreck is going to be awful – how can it possibly be otherwise.
@ Ghignos: Yes, I advocate a French-style heath care system. As Guest following you commented, it costs about half per capita of what we have now, even with the government tax portion.@ Guest: I don’t think 20% is too high for basic/catastrophic health care, but I believe I did get my number off somewhat. The 20% includes both contributions from employees AND their employers. See, e.g., http://www.civitas.org.uk/pubs/bb2France.php (there are other sources to cite to verify this, but bottom line, about 20-25% of French national income goes to the basic government health care component of the system.SWK
Constitutions set out broad principles of power and authority, and thus can (and should) be relatively concise. Legislation is far more complicated, and has to authorize specific features in detail. The statutory authority is just the beginning of the complexity. Even more byzantine are the federal rules and regulations to implement statutes (see, e.g., the Code of Federal Regulations).SWK
Why do corrupt world cronies not follow the example of the japanese?Old-fashioned behavior?”Shokei Arai, the Japanese lawmaker at the center of a growing corruption scandal, committed suicide today in a Tokyo hotel room, hours before he was to have been arrested.”"Toshikatsu Matsuoka served as the Minister of Agriculture, Forestry and Fisheries from September 26, 2006 under the Abe cabinet. He committed suicide in 2007 in the middle of a financial scandal.”———————————Instead they almost say: I am corrupt, fools andI will keep stealing you wealth.
ROME is burning folks. Can’t we keep our eye on the ball?
So the Chinese government will not bail-out/bail-in any of their banks it seems. Good for them. I hope this begins a process that will flush all this derivative crap down the drain and everyone who gamed the system using them. Look out below.
here we have it, Obama, Pelosi, Geithner Scumbag Co. stealing from private hard working people to fund public lazy officials.http://www.safehaven.com/showarticle.cfm?id=14404&pv=1&FORM=ZZNR3“Want to know where wages are rising? Think federal government workers. The gap between civilian and government workers was less than $13,000 nine years ago, but now is almost $30,000. Inflation has been 24%, but government wages are up 55%.”YES WE CAN RAISE TAX AND PAY PUBLIC WORKERS. YES WE CAN!!! YES WE CAN!!!
they must have used stimulus to do higher pay for government workers. private sector are getting layoff and paycut.Obama, Pelosi, Geithner Scumbag Co will take credit for stimulating higher government workers pay.YES WE CAN RAISE TAX AND RAISE PAY FOR GOVERNMENT WORKERS. YES WE CAN!!! YES WE CAN!!!
“Expect to see a big push for another large stimulus package next spring”to further stimulate government workers’ pay!!!!YES WE CAN RAISE TAX AND DO ANOTHER STIMULUS AND RAISE PAY FURTHER FOR GOVERNMENT WORKERS. YES WE CAN!!! YES WE CAN!!!
John MauldinWe would like to believe that the economy is going to go roaring right back to steady 3%-4% growth. But we still haven’t seen compelling facts to support that view.The bullish argument is that this is simply the way economies recover. And the stimulus-fueled rebound of Q2 and Q3 has certainly been v-shaped (see chart at right–which will continue up and to the right in Q3).But this argument does not explain how consumer spending is going to quickly rev back up to sustainable 3%-4% growth in the face of massive debts, 10% unemployment, huge government deficits, tight credit, and a weak housing market–or that, if consumer spending does not recover, where else the spending is going to come from.The bearish case, meanwhile, is that this recession is different–a deleveraging recession–and that full recovery will take years. The key element of this latter view is ongoing weakness in consumer spending. To wit:Consumers still account for 70% of the spending in the economyConsumer spending growth will be constrained by the facts thatconsumers still have debt coming out of their earsunemployment is 10% and risingBusiness spending (the other 30% of the economy) depends to some extent on consumer spendingWith that as the backdrop, we just don’t see how we quickly return to the Old Normal–with a couple of 5%-7% growth years first to make up for lost time.We’re all ears, though. If you have any good theories, please send them along.In the meantime, here’s the latest thinking from John Mauldin, who is (almost) as bearish as ever. Specifically, he’s predicting that the economy will be back in recession by early next year.Unemployment Was NOT a Green ShootBut quickly, let’s look at today’s unemployment numbers. This was not the way one would want to celebrate Labor Day. Unemployment rose to 9.7%. Some take comfort in that unemployment in the Establishment Survey (where they call existing business and poll them) was only down by 216,000, which admittedly is better than 600,000 but is still a very bad number. Rising unemployment is not the stuff that inflation is typically made of. And there are reasons to think the picture may be worse than that. Here are a few thoughts from David Rosenberg:”What was really key were the details of the Household Survey, which provide a rather alarming picture of what is happening in the labor market.”First, employment in this survey showed a plunge of 392,000, but that number was flattered by a surge in self-employment (whether these newly minted consultants were making any money is another story) as wage & salary workers (the ones that work at companies, big and small) plunged 637,000 — the largest decline since March (when the stock market was testing its lows for the cycle). As an aside, the Bureau of Labor Statistics also publishes a number from the Household survey that is comparable to the nonfarm survey (dubbed the population and payroll-adjusted Household number), and on this basis, employment sank — brace yourself — by over 1 million, which is unprecedented. We shall see if the nattering nabobs of positivity discuss that particularly statistic in their post-payroll assessments; we are not exactly holding our breath.”The ISM numbers came out this week and, while manufacturing is up, the service industry (which is far larger) is still contracting, and the employment elements in the surveys show employers are still planning to cut jobs. Think about almost 11% unemployment next summer in the middle of the political season. Watch the competition among politicians to demonstrate they care and “get it.” And watch as they spend your money to show how much they care.And from the above mentioned Liscio Report: “As we outlined back in May, financial crises hammer employment, resulting in average losses of 6.3% followed by a long flat line. We hate to point it out, but we’re currently down 4.8% from the December 2007 onset, and if US job losses in this recession stay in line with the major financial recessions in “advanced” countries studied by the IMF, we stand to lose another 1.8 million jobs. Some of those will likely be taken out in upcoming benchmarks, stimulus money has some clout, and no one has a reliable crystal ball, but we need to remember where we are in a painful cycle if we see some hopeful flickers.”That would take us to well over 11% unemployment.Interesting statistic. Want to know where wages are rising? Think federal government workers. The gap between civilian and government workers was less than $13,000 nine years ago, but now is almost $30,000. Inflation has been 24%, but government wages are up 55%. According to a recent release from Rasmussen Reports, a government job remains “the top employment choice in today’s economic environment.”States, counties, and cities are having to make deep cuts, in both jobs and programs. Today’s Wall Street Journal talks about the cuts in state after state. States cannot print money like the US can, so at some point they have to either raise taxes or cut spending to balance their budgets. Raising taxes just makes it less profitable for businesses to remain in your state. There is a very high correlation with high state taxes and unemployment.The following chart shows how rapidly income taxes are falling. Sales tax receipts are down. At some point voters are going to demand that their federal government show some of the same restraint that households, cities, and counties are being forced into. My bet is that next year raises for government workers, even those in unions, will come under attack. They won’t be cut, but watch as political backlash builds.Without federal stimulus, the GDP of the US would have been over minus 6% in the second quarter, not the minus 1% it was. The third quarter would be flat to down and not the plus 3% it is likely to be. Housing and autos will turn down as the stimulus on those markets goes away.I think it is very possible we will see a negative GDP by the first quarter of next year. Unemployment will still be rising. Deflation will be more of a problem, because the housing component (the largest portion of the consumer-inflation index), based roughly on rentals, is clearly under pressure. While we don’t have enough space this week to go into detail, savings are up and consumer spending is down. Without the stimulus, things would be much worse.Here’s the kicker. Expect to see a big push for another large stimulus package next spring (and maybe sooner), as the effects of the current one wear off. The government wants to bring back demand by getting consumers to spend again. And you can count on unemployment benefits being extended. A tax holiday on Social Security taxes below a certain income? In the short run they can do it, but at a long-run cost.It is going to be hard for a Democratic administration to not push for another large stimulus. That is what Krugman and his fellow travelers will be pushing. Classic Keynesian thinking wants both for the government to run large deficits and for the central bank to print more money. Remember, last year I said that the Fed would print a lot more money than they are talking about in the current plans. They are going to have the cover to do so, because deflation is going to be seen as the problem.Next week, we will look at money supply and the velocity of money, savings, consumer demand, and more as we further explore the complex molecule that is deflation.But one last thought, as I have had a lot of questions on gold recently. “Isn’t gold telling us that inflation is coming back?” The answer is no. Since the early ’80s the correlation between gold and inflation has dropped to zero. Gold has had very little to say in the last 30 years about inflation.But what it may be saying is that paper currencies are a problem. Gold is going up not only in dollar terms, but in euros, pounds, yen, and more. My view is that gold should be seen as a neutral currency. The dollar is the worst currency in the world, except for all the others. Is it possible the Fed will not respond and print more money next year? Sure. And the dollar could rise as deflation kicks in. The only time we saw the purchasing power of the dollar rise in a sustained manner was during deflation, in the last century.The race is not always to the swiftest or the fight to the strongest, but that’s the way to bet. And right now, my bet is the Fed will print money to fight a double-dip recession and deflation. And gold would be one way to play that bet.You can sign up for John Mauldin’s weekly email here >
Look What’s Happening To Tax Receipts…http://www.businessinsider.com/henry-blodget-look-whats-happening-to-tax-receipts-2009-9
They can raise hem all they want, bottom line is Recipets will keep plunging. You cannot get blood out of rock. with 15 million unemployes good luck. Raise them on those still working and you’ll see unemployment shoot even higher and more finacial system meltdowns….
a brilliant commentary on gold over at ZeroHedge by one of their contributors:http://www.zerohedge.com/article/gold-and-systemic-crisis#comment-59879
Boring? From my perspective, it is self-serving tripe from an egomaniac….one of the thieves and corruptors of capitalism.How about this quote: “Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation.” These things are happening, but they are the results, not the reasons. His “invisible hand of free enterprise” long ago morphed into the invisible hand of financial kleptocracy. His “once successful shadow banking system” is why we are watching the worldwide economy slowly circle the toilet bowl.He also knows the world has a problem if China is expected to provide ‘global economic leadership”. Our GDP is 5 times larger than theirs and when we stop buying, they stop selling. Plus, they have a command economy based on slave wages. We will all be dead before they develop a “consumer ethic”, whatever that actually means.PimpCo is the Goldman Suchs of the bond market with a lip-lock on the federal teat.Independent Contractor
People easily become distracted and focus on petty crap, which is one of the reasons at the heart of why Rome is burning in the first place. It doesn’t take too much skill to distract the public from the important issues. Sad.
But, but, but… those Federal workers are those who have had a large hand in helping our elected officials get elected. Certainly they deserve something for their over-the-top civic duty of getting the vote out!
BUT YES WE CAN!! YES WE CAN!!!! YES WE CAN RAISE GOV WORKERS PAY.and we dont care about bottomline, cuz YES WE CAN!! YES WE CAN!!!!
and of course, WE CAN RAISE THOSE FEDERAL WORKERS PAY HIGHER AND HIGHER.http://sendables.jibjab.com/originals/hes_barack_obamaYES!! WE CAN!!YES!! WE CAN!!
Can you say, UNSUSTAINABLE.
I’ve been trying to run this down since the story was broken by <9a href=”http://english.caijing.com.cn/2009-08-28/110230655.html”>caijing.<9/9a9> There haven’t been many details and so I’m not sure. But I think it’s a red herring. What kind of derivatives are there on commodity contracts? Futures. And brokers or GS and JPM don’t do counterparty risk on futures. There is margin posted. Chinese SOE’s can’t walk away from those.It would be expected too that Chinese SOE’s would also own derivatives on foreign exchange. That hedging has usually been done in the futures market too. So, exactly which derivatives are we talking about? I can find nothing.
Good GoshAre you suggesting we put attorneys out of business in medical practice? LOL
Stupor Bowl Season is StartingNow we can numb our brains watching gladiators in the Coliseums…all is well now.
YES!! WE CAN!!just arrest those tax evader. and raise tax on those who makes 125k above for couple and 75k above for single. raise the tax, TAX, TAX!!YES!! WE CAN!!
or we issue more muni bond and treasury!!! YES!! WE CAN!!
taken from somewhere on the netAnonymous said…Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any ‘humanitarian’ progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the ‘charitable’ contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and ‘good will’ all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to ‘federal tax revenue’. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN’T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can’t afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can’t even afford basic health care. ALL BECAUSE OF GREED. I really don’t blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can’t be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about ‘jealousy’, ‘envy’, or ‘socialism’. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.April 2, 2008 2:52 AM
sure it is sustanable. just raise TAXYES!! WE CAN!!
25% for health care? fuggitaboutit
let’s put attorneys outta bizness period. we have way too many laws/lawyers/judges. it’s costing way too much. the next candidate that promises s/he’ll start repealing unnecessary laws on the books gets my vote!!!
That strict budget ain’t gonna happen. No way to buy votes with a strict budget. Get used to it, the government is BK. Serves them right.
Are you sure that’s not one, w/split personalities?
There will always be rich people. There will always be poor people. And there will always be greed. Sorry. Thats the way it is. Get over it.
Speaking of Desperate times and Desperate people:Australia – Caveat Emptor – A State of ExtremisHere in Australia the Telecommunications industry is dominated by well connected corporates that seemingly have convinced government (such as it is) that it is their best interests (taxation revenues) to just shut the eyes and bind the hands of the regulators and permit the open gouging of the public.What is interesting is that the techniques for sales and marketing telephones, mobiles, ADSL ++++, mobile Internet, broadband etc., etc. are exactly the same as it was for selling houses (I do not use the term ‘home’ out of distinction).That is to say, these desperadoes, er, slicks and their teams of help, technical and sales, will say anything to get a contract where “contracts” mean commissions. Ask any of these people to expose a contract, together with “fine print” and they either refuse, refer you to a website or just hang up.Contracts MUST BE for 24 Months: Don’t want a contract well, expect to pay a premium and be downgraded throughout your services to total dysfunctionality.All contracts have iPhones and the like: FREE – Oh sure! Work out the details and we are paying over A$2000 per iPhoneALL Phones sold in Australia are mostly Locked, or IOW you don’t own the phone you lease it to use the lousy services offered by the Slick you signed with. Oh, talking about signing – No need, just mumble Yes over the recorded phone conversation and its straight to the Legal File – ready to send to Dunn & Bradstreet who wants to destroy your Credit Rating and say so! Yes, you can unlocked a phone for anything from $500 to $30 but the software crap left inside renders it useless. Want legal representation in your fight against the cabel Slicks well your Lawyer wants $2000 in up front fees?And it goes on – algorithmic billing, credit drops from pre-paid is common where on has $350 credit and 2 hours later after making $10 worth of calls your credit is reduced to $150. Help: “You don’t understand Sir, you are making International calls – can we upgrade your services to $1400 per month Sir and you can have unlimited calls – of course Sir, on a 24 month contract.”Pre-paid – That is pay up front – the worst service and the highest cost per calling unit and higher credit drops. And it goes on and gets worse where the Slicks have automated SMS 19…. number servers under their beds that send calls to anyone particularly children and pensioners without subscription and knowledge, charge anywhere from $5 to $30 if deleted or viewed – all with a priority billing arrangement with the main carrier org.Now, this is similar to houses where it is the contract with Full Recourse is sought because the value of the bandwidth itself is negligible but these contracts -Read: Mortgages – are as valuable as Gold and are being sought aggressively and with total impunity and totally without morality, ethics and or regulation! It is the signature of social ‘extremis’ a feeding frenzy on your fellow man!Add to all this doubling electricity and Gas prices, food prices, unemployment, rates, bureaucrat and political costs, government services costs, parking fees, fuel costs (government extracts a ~50% tax on all fuels)… and I get the impression that the end is accelerating towards us – the day of reckoning, quickening in a milieux of humids and sweaty desperations.The OECD release a paper praising Australia for have the highest charge rates in the World but they omitted the fact that Australia has the slowest bandwidth speeds and highest unreliability of services. A check on international Internet speed test sites confirms this shame and last week the whole of Australia went down through the incompetence of the government supported carrier, Telstra. Of course they blamed others… just like the help. It’s a culture of projecting blame.Mileage does vary (but not much).The point? The point is that bandwidth in Australia is being dominated by the same culture that created the sub prime mortgage sales. The sub prime disease has not been eradicated – it has just shifted to a new context.Ho hum
Chignos, my dear, you are, as they say in these parts, a real piece of work. Your misguided attempts to best kilgores in any argument are highly entertaining, so if I may say so, thanks for the memories.
Apology Alert:I forgot to highlight the fact that a long time ago on the RGE Blog here I made a statement that the sub primes were a or acted similar to a virus and,my observations here in Australia in the Telecommunication Industry, tends to support my theory.And also I said so long a go that house prices where not being set by demand for homes per se, but by the pure demand for mortgages, alone and a priori. The Telecommunication industry here is aggressively ramping up the costs of bandwidth desperately with every con possible while the regulators spend all their time, well, doing what bureaucrats do – ie. destroy civilization for political reward. That is they are playing out Enron tactics and sub prime misrepresentations, across the board, with full legal resource and fear techniques on those that cannot protect themselves.Again, I believe my theory is correct – albeit simply put.Caveat Emptor – It is the Time of the FeralHo hum
perhaps the most disturbing Marc Faber interview everhttp://www.youtube.com/watch?v=yNFqFXrt8nU
“20 million jobs have been lost in the industrialized countries. It is frightening,” he said.This in itself is not frightening (what industrialized countries?). What is frightful is that there have been no signs of a revolution.
This is not the point. The point is that WE must put THEM in big trouble. Once and for all. Amen.
PeterJB,Remember Gresham’s Law (bad money drives good money out of circulation). However, this principle can also be applied to human behavior in organizations. If, for example, bad behavior reaches a tipping point in an organization it becomes increasingly hard for any individual to behave in a good way especially when one sees corruption being rewarded and honesty becoming a self-sacrifice.
The unintended consequences of all this money printing are starting to be noticed. The Six Million Dollar Man says he’s only half the man he used to be. He was interviewed while buying a million dollar baby in a five and ten cent store.A man went to the doctor. The doctor asked him how he felt. The man said he felt like a million bucks. The doctor told him to get his affairs in order.
Is your real name Dick the Butcher, Guest?In William Shakespeare’s Henry VI, Part 2, Act IV, Scene 2, Dick the Butcher famous declares, “The first thing we do, let’s kill all the lawyers.” In the play, Dick the Butcher was one of the disciples of anarchist character Jack Cade, whom Shakespeare depicts as “the head of an army of rabble and a demagogue pandering to the ignorant,” in his quest to overthrow the government of the day. The first thing any potential tyrant must do to eliminate liberty is to “put attorneys outta bizness period.”SWK
WRAPUP 1-US commodities rattled by China derivatives stance[blockquote]China, the world’s top importer of soybeans, has been an aggressive buyer of U.S. supplies, helping drive prices higher as stockpiles fell to the lowest level in over three decades.
I’m not an economist, just a concerned citizen, but I could have given a more coherent interview that Mr. Faber.Vague generalizations, money printing, arm waiving, quantitative easing, “economy stablized,” Australians work harder, etc.Geese, come on Marc, the real economy has ground to a halt with the double whammy of no credit and consumer retrenchment. All the money has gone to the banksters in exchange for fraudulent loan portfolios. And now the banksters are using the cash to run-up their own stocks.Oh, and a machine gun is not so important if, as you say, collapse is 3-5 years from now.
One article quotes the latest newly jobless figures at 577,000…..another says it 210,000 but that’s good because it was “less than expected.” Expected by whom? The only thing I expect from all these news articles is continual confusion about what is really going on. These guys in the news have no idea what’s really going on. Cancel your subscription.
Get a room U 2 …
The seems to be nothing to the rumor that Obama has lockjaw. His jaw and associated anatomy are working just fine (although there is some supposition that this might not be the case for some parts of his head well above the jaw). Anyway, he is now jawboning elderly Americans to save money for their retirement.There are two classes of elder Americans–the senile elderly and the non-senile elderly. Some senile elderly might well be interested in a dollar account to save money for their future, but the non-senile elderly are much more likely to spend their money while they can still get something for it. I assume that Obama is addressing the non-senile elderly (but who really knows?).I have an idea that would really be good for elderly Americans and would certainly encourage them to save money for their yonder years.. Pass a law that any American citizen over 40 years could open up and auxillary gold account to his social security account. Any holder of a gold account could deposit up to ten thousand year-2010 taxfree dollars into his account in each year. The federal government would be required to buy gold at the current market price and put it into the account. The gold would be the property of the account holder and could not be used by the government for any other purpose. The government would also add gold to the account at 10 percent of the account balance as a “stimulus” to saving.Any account holder at age beyound fifty five or with a disablility could withdraw any amount at any time in gold certificates or in the any one of the ten most used currencies. Again, all money would be tax free at deposit, while in the account, and upon withdrawal.How about it, Obama? It’s “put-up or shut-up” time. Are you really capable of helping someone other than the super rich?Or are you just giving a warning to the elderly that their social security and other pension monies most likely won’t be there when they need it to survive?
I like Marc Faber – a real straight shooter.
In 5-10 years the real crisis will hit – the whole system will collapseWho on earth would have faith in any American administrationBen Bernake saved five people (banks) – the rest of the USA drownedBuy a machine gun…
Marc is invested in gold and his doomsday speeches is good business for him and his clients. He is also a textbook case of a capitalist fundamentalist who cannot see beyond the system. This is his strength and also his ultimate delusion (not to mention the future big trouble for his investors). He critiques the FED and the White House for “corrupting” capitalism. But they have “corrupted” the damn thing only because it was the only way to save it, or more correctly, to postpone its demise. It was supposed to have been over and done with by the 1940s and only thanks to Herr Hitler capitalism was given a postponement. The Soviet Union was very useful too. The Cold War required significant redistribution of wealth in the West to keep its workers loyal. Reagan and Thatcher put an end to that social contract and began shipping industrial jobs abroad. Real wages in the West began to fall, but someone had to buy what 200 million coolies and other wretched of the earth were producing for the expected super profits of Western investors. So the FED had found an elegant solution to this problem. If Western workers coul no longer buy things from their wages, we’ll lend them money to. In this way we’ll profit from both ends: from the surplus value produced by the coolies and other colored people and from loansharking our own work force. And to make them feel good about this we’ll create a housing buble. Thi si swhat Marc can’t get. He believes that capitalism is some kind of a perpertuum mobile that would deliver us happy and prosperous right on time for the second coming if only evil politicians don’t “corrupt” it. But Marc is smart enough to understand that when and if it comes to the machine gun and the farm he and his clients have no chances to hold to their gold against those without farms and bullion but with a plenty of machine guns or even only machetes. So in the final analysis it is the Fed and Obama who are better custodians of the capitalist system than its fundamentalist defender Faber.
Ned’s comment = sheer ignorance, bovinity, fatalism, cowardice. How pathetic. Crouch down and lick the hands that feed you, Ned, and may posterity forget that you were our countryman.
Obama is a fake, an arrogant lightweight chain smokerwho can read a teleprompter and has a low baritone voice(because he still smokes—eeeeeeuuugag for the ladies………./”’
Globally, buying and selling has almost stopped. The US consumer is going to be gone for several/many years. Growth anywhere is going to be minimal. What can it be to start things running again? All I can see is the US defaulting and the rest of the world picks a currency and moves on without us. I think we are done. I cannot see a fix for us. Any of you see a fix?
Your incessant, inane garbage makes this forum hard to read. Were you toilet trained at gunpoint or something? Whatever, please cease making the rest of us pay for your personal problems. Stop endlessly re-posting this mindlessness.
Simple, he’s asking all three countries to make similar bad decisions for their currencies. If one should prove to be fiscally prudent then it would force a deleveraging process and we would likely see a currency spike. This would result in a rapid repatiriation of currencies (similar to last year), volatility would spike and depending on your currency you would either see a sharp upward/downward repricing of assets.
There will always be anonymous posters. Get over it.
You’ve got *my* respect, Harley.
Thanks but my observation is that “the con” has become THE way of life And state of play, where nobody has protection from this feral’ nobody; in Australia we are all victims – and the ruling theme is to lie and evade.A sad day when the Slicks rule in return for paying tribute to the Crown. How many times have we seen this?Ho hum
At least I have a name. You are a troll that let our sons and daughters be cannon fodder for nothing.
It’s no surprise that the intellectually lazy – and sad cowards who promote the sad lie that economic justice is simply not possible – are incapable of seeing the answer.
absolutely wrong again, Ned. me an’ the ghost of Smedley Butler are best friends. the real heroes are the ones who have grown bold and brave enough to reject war altogether.i’m already against the next war, and the one after that, and the one after that.difference between you and me is that eye nose how to stop war forever.
obama was groomed and hired to give american imperialism a facelift after dickwad cheney mussed up the former facade. sure do wish his forked tongue would fall out of his face.
August 14-16, 2009Green Shoots or Scorched Earth?Bulletins From ClunkervilleBy MIKE WHITNEY”Is the economy really recovering or is it all just hype?”…….”Can you believe it? The Fed is drafting a gaggle of professional speculators just to keep all its balls in the air. What a joke. This isn’t a recovery; it’s a sit-com. “.http://www.counterpunch.org/whitney08142009.html.and this….Dear Dr. Science,Just exactly what is virgin olive oil?from Bill K. of San Bruno, CA..You are, of course, referring to Popeye’s female friend, Olive Oil. Little is known about the relationship that Popeye and Olive shared through 40 years of rescuing her from the chauvinistic, harassing grasps of Bluto, or Brutus as he was sometimes called. Science does not know what level of intimacy these two cartoon characters enjoyed and, frankly, this Scientist doesn’t care. The fact that you should be so interested in the private affairs of a pair of two dimensional drawings indicates you have taken a mighty small bite of what the world has to offer and have chewed that bit far too well. I recommend therapy and the sooner, the better…………………………………………….Gold Star Questionfrom Nathan H. of Loveland, ColoradoI heard that 3 out of 4 people make up 75 percent of the world’s population. What about the other 1 out of 4?……………………..that said….when people organize and start refusing to acceptthe blatant violations of environmental and individual integrity and liberty things mightchange. you have to think government employees,politicians, etc. do what they are told to do.it is their nature to perform in this way, likea soldier or a ball player.organize and tell them what to do. they will do it,especially well if what they are told actually makessense and is generally good! focus. tell them whatneeds to be done, explain to them what their properjob description looks like. they are public servants,remember..the fix.defaults and asset deflation. the world does notneed an american economy based on fictitious financial products and accountants cooking books.the world also doesn’t need a psychotic internationalpolice force feeding itself on slave labor. it doesn’t need an american population of self deluded,angry, arrogant and ignorant self important hungry, empty suited ghosts attempting to feed at their tables.if we need to lead the world, we first need to learnsomething about leadership, something we have notrealized. it comes from humility, insight and integrity. from compassion, actually from loveand the heart, but that isn’t enough. you alsohave to have vision which implies understandingof the natures of man, self, people in groups,relations to environments and ecologies, all the sciences that the universities are so inclined to profess.all that the business schools have no time for becauseit doesn’t make money. all that the political parties have disregarded in favor of total enslavement to the fiat pyramid scheme where the richest demand/extort free money to collect interest for being economically irrelevant and actually destructive.the stuff of leadership. we need that.i can’t help but think this D2 is just collapseof casino consciousness. good rid-dens, sweet.there is a limit to available time for sentientbeings in this life. the b.s. crowds out thereal work that need be done and we are inundatedwith b.s. because it serves its masters well.the fix. focus. evaluate and focus, then organizeand fix it. make it right. imbalance to balance.problem, people have focused their identities, socialinteractions, education, loyalties, dreams andwishes around…..money. whatever that means.so what is the fix?suffering, the only teacher for which man has anyrespect. it doesn’t look good as the criminal,fraudulent and bloated will engineer their escapefrom the lesson, or will they? mysterious ways andall. rather..what would be beneficent is if the qualities of thetalented and the good and those with integrityand insight were rewarded and their qualitieswere spread/shared among populations.then we wouldn’t be dubbed clunkerville borrowinghalf a million dollars to live in a shack and sendour kids to school while the stress of monthly payments destroys the shreds of your sanity andrelationships. the system has deteriorated tothe point that there is no more doing the right thing, there is only doing what is best for you.integrity is gone because the system does notthrive on it, it selects against it. in fact ithas been redefined with derogatory slant. and whathas this done to the families, relationships,education…perhaps this was just the way of theworld for a time, perhaps a long time.it is just business. life is a business.i think it was snooks eaglin ” love ain’tnothin’ but a business goin’ on “. sort ofa blues shuffle national anthem..ps. that said, all laws are fuzzy in realityregardless of how many times the word shall isemployed,( you really can’t codify future adaptation) still there is a difference betweenfuzzy and holographic and there appear no lawswhatever in the shadow lands of the casino for therich, armed and dangerously depraved. they wanteven that that is nailed down, and they want thenails!the fix is in exercising your right to free speech,freedom of assembly, etc.faith is good. faith that if you do the right thingas best you can see, that the stage will be set forsomeone else to do the right thing also, i know,these people have been termed suckers, you see?that’s what happened to integrity. now we mustpay one way or another. the words will be there.not to worry. we are dealing with a self inflictedcrisis in confidence dictated by employment dynamics for the sake of fiat currency aggrandizement. how bizarre.
oh yea..triage looks like murder. medics know this dynamic, no?too ill to survive. doomed! yet, there comes a time whenyour resources must be allocated, limited as they are in acultural and hierarchical context, neglect must take it’s toll,and consumption ensues. yet some forms thrive on neglect. we term / call this triage…or life anddeath.we know it is based on sovereignty and credit, that is speculation and future expectation granted to “authority” deemedinsightful to function structurally for their recompense.? ha, he.be it dreaming public representatives and peoples or privateincorporation, partnerships, trusts or other peoples arrangementsindependent and / or international, locally in-discriminant.but.. no. and so….we finance the irresponsible, global, too large to function ( for whom?)to devourthe local too responsible to compete in the realm of the insane.so here we are and here we go…under the guise, it seems, that to destroy the smalldoes less damage, in terms of “numbers” destroyed, than appearsotherwise, never stopping to think of structure or systemicdynamics, opportunities for individuals rather than global institutionalagents( the mindless global zombies ) so.. fascist danger lurks/rules..too big to destroy. that would be suicide / murder. now…triage be suicide / murder. so..that part of the corrections is purely theoretic. good bye entire analysis, welcome home fascism.let us invigorate the large, defense dept financing and money( drug ) laundering globalists so as to buy the assets of thecommunity institutions, cheap, and let us call this triage of sorts…globalism has its disorienting shards to pierce the flesh andintegrity of the common man/woman but tents provide shelter as dobridges and over passes, more reliable than government orother forms of commerce is physical infrastructure. infrastructure, intelligence or intellect incarnate, yes, and look at the pantheon, then look at our other structures. then look atthe homeless, then / and do the math. you seee.. we are notabout us, we are about that which destroys us. let us proceed…and there was this from one year ago, nearly..remembrance of times gone buy buy buy. sell sell sell…..pulled from this very blog , note dates.. revisit as inclined. apologies available upon requested…………………………..it was said…”Apologies as I repost this as I am yet uncomfortable with this threading system:@ Phil and Guest (above).Thank you for your comments but I tend to disagree with the final analysis in which you obviously find despair and frustration.Firstly I believe that most men are good and that the human spirit is infinite in possibility – and should be allowed to soar only limited by qualitative constraints (and circumstances).Secondly, the US Constitution is not only a remarkable document but it is a profound expression of an intellectual socio-economic system based in experience, science and intellect; it is unique. It was born out of a similar system to where it is now returning.Thirdly, power corrupts and produces greed, avarice, and applied crasse stupidity; etc., etc. We know all this; No man can be trusted, a priori. (emotionally phrased)Fourthly, I believe that “the science of economics (sic)” is treated as a faith-based” religion, complete with ritual, superstition, dogma, priests, high priests, pope and warrior priests; it is a religion that needs support to ensure that it stands; as do all religions or “faith-based” systems. Or, in practice, where prayer works better when a offering is extended.And lastly, for the moment, faith-based belief systems don’t work; physics works as physics is the science of how things work. The Laws of Physics are inviolate where you cannot make something out of nothing (ex nihilo).The US Constitution was not a “faith-based” economic system and it allowed the human spirit to soar as is well in evidence. And, no, I agree, it only took a short interval until the shredding of this Declaration of the human spirit commenced, to something out of which the Constitution and hence the USA was borne.However, the US has many of the greatest and finest Universities and learning Institutions in the World; the greatest technologies the greatest of all expressions of human advances yet, the peoples of this great Nation, have allowed the emotionally bent, faith-based system to dominate and destroy, rather than to lean towards its intellect and historical creation, which gave the milieux for the human spirit to go forth unimpeded by stupidity and incarceration.In conclusion to this response then, it is not private gangs or financial criminals per se; the problem rises from the corrupted human spirit (“Leadership”)that has fed at the consensual trough of faith-based distortion of a sound socio-economic system that has resulted in a total distortion of accord and logic in favour of even, that originating distorted system of fractional reserve banking. It should be noted that this system was found corrupting and invalid in the times of the early Greeks, onwards through the Dark Ages, through the Venetian Period and onto the times of Napoleon and then further through the times of Colonial India (etc.,). Why then do we persist in such a abomination and seat of corruption to found our socio-economic system? In the USA you didn’t!!!!!! and that is the point!!!!!!!In other words, to point, Mr. Benanke should have known this but his actions have been in favour of the “status quo” and the continuity of destruction of the free-market system which the US Constitution originally granted and declared, ad nauseum.Mr. Benanke just conceded that which the banking and financial industries lobbys’ demanded and granted the continuance of decay of the American system. Sadly but an act true to and consistent with a “faith-based” system. You don’t need a PhD to be a “warrior priest”.The USA was once the greatest Nation on this planet and could be again, if and only if, it can get back to the correct fundamentals of a non faith-based socio-economic systems and then all these persons that you both depict as criminal would be qualitatively constrained in their soaring the possibility and would becomes, instead, hero’s.The irony to all this faith-based system stuff, is that the riches, wealth and power is far less in possibility than the “non-faith-based” system where those that try and get caught, become criminal and die in shame.”Ho humReply to this comment By PeterJB on 2008-09-12 17:28:10″”.my comment: “we are rolling” t.w.and continue to roll…..and “restraint” is not part of the vocabulary at this timeand the term “qualitative” is now anachronistic as relating tocontemporary valuation and associated socio-political dogma. woof, woof.re .. canine auditory approximation as it phoneticallytranslates.woof.we have pricing chaos in markets? is thatby design as all the sane are sidelined yetthere is no side line and the few players leftin the casino have free access to “chip” production.shaping up to be one big land/value grab.i swear, i will stop drinking while writing.
Hey, what did Outer Beltway (and company)’s Brain Trust ever come up with? Anybody know what that group is up to these days? What they’re recommending, supporting, or opposed to?Hey also, does anybody know what ever happened to, or result of, Dr. Roubini’s facebook call to clawback-the-bonuses?
The leadership of this country should encourage the work ethicPeople are tired of talk (or perhaps the fact that they aren’t is why this charade continues?). It’s action that’s required. The “leaders” don’t work, so their calling for others just typifies why there’s such a chasm between what needs to be done and what is actually being done.
Those taxes that you are bitching about are the firewall between the snobbish and the poor.I agree that it would be good for such taxes to be reduced, as I’m looking for a good show to see how fast the actual non-producing rich can move their lazy butts.
You’re good!I was about to rail against this tripe, but there, thankfully, to preserve my words, was you to cap it most eloquently!Mostly, however, I had to gasp at the childish thought that growth can somehow happen by shear will: nature (read “natural resource’” has the word here, not “business,” not “government,” not some egotist).
Peter, here’s commentary on “leadership” for you:After Obama
The problem is of power distribution. Advocating that more power be concentrated to resolve issues of too-concentrated power is, well, you know, not going to get us there…
A product of Reagan’s policy vis a vis mental health?Back on point… I suspect, however, the banksters’ take is far greater than this difference.I’m still siding with folks like this, though not for what they believe is going to be their personal benefit, but because they believe that they will benefit. When the likes of them suffer horrendously then I figure this will help purge us of such myopic non-thought, will move us forward as a species.
GO AWAY, YES, GO AWAY!
You’re kidding yourself; you won’t stop drinking.
I couldn’t get past the first sentence. What a self-important boor.
It must be what they teach MBA’s. Our wizards of business ‘science’ are polluting the earth.Independent Contractor
Nice one, YTAI… SWK
ditto that – I find myself read the follow on much less these days, and when I do there are only specific authors I look for, and always enjoy.
YES!! WE CAN!!we will not go away. we will raise tax and raise gov workers pay. THE HOPE IS BACK YES!! WE CAN!!
Faber forgot the kalashnikov vodka, the only product that gave money to the inventor of AK-47.Drunk men will not perceive the evil.Perhaps an indicator followed by a famous analyst some years ago can be become very useful for trading on the next 5-10 years: correlation of the number of serial killers with the Dow.
Section 945A of the Corporations Act – who did this protect?
Free Tibet worked with them, maybe he has a comment.
http://www.globalresearch.ca/index.php?context=va&aid=15061How to Reverse Financial Tyranny: “We Shall Prevail”Text presented to the American Monetary Institute 2009 Conferenceby Richard C. CookSeptember 4, 2009The world’s most important gathering of monetary reformers takes place each year in Chicago at the American Monetary Institute’s annual conference. This year’s event takes place September 24-27 at Roosevelt University . Chairing the conference is Stephen Zarlenga, AMI director and author of the landmark book “The Lost Science of Money.” For information and the list of speakers, including monetary economist Michael Hudson, see the AMI website at http://www.monetary.org/2009schedule.html. While personal matters will prevent me from appearing on-site, I have sent the following remarks. Segments of my six-part DVD, “Credit as a Public Utility,” will also be shown.It is not difficult to come up with methods to solve today’s economic crisis through monetary reform. Many of us are doing it. The key, as I have been writing for the past several years, is to treat credit as a public utility, not the private property of the world’s financial elite.If we truly adhered to this concept, we would be able to see that a debt-based monetary system, where money only comes into existence through bank lending, can succeed only in isolated circumstances when a growth bubble outpaces the ability of the public to pay interest charges for the privilege of having money to spend and thereby to survive.Whenever the growth bubble fails, as we have seen over the last three years, the system crashes, the financiers pick up assets for pennies on the dollar, and the cycle starts again. It seems haphazard and unpredictable, but we all know that the system was designed this way and that only the wealthy profit in the long run.The rich use governments, through which they control politicians, bureaucrats, and covert operatives, to protect and enhance their power. Democracy is subverted. Once the rich have their host country firmly under control, they branch out to the rest of the world. The key then becomes the use of financial power to control the world’s resources through trade and currency manipulation and the management of legal codes and institutional rulemaking.If social classes within the host country or foreign nations victimized by financial hegemony should happen to rebel, police and military forces are deployed to crush the rebellion. Educational systems and the mass media are employed to brainwash civilian populations by keeping them docile and compliant. A host of methods are employed, including false-flag terrorist events, to instill fear in the population and keep them beholden to the authorities for protection. Because the financial elite are parasites who kill their hosts, they must constantly ensnare new victims.The foregoing is a complete picture of the present world situation. The last two hundred years have been marked by the march toward world conquest by the money-masters through the Anglo-American military-financial-intelligence colossus, combined with their bought-and-sold allies from the privileged classes of subservient nations.The outcome was in some doubt during the 1970s in the aftermath of the Vietnam War. But beginning with the Reagan Doctrine in the 1980s, where a decision was made to gobble up the world one small country at a time, the march forward resumed. The 1990-91 Persian Gulf War, the carving up of Yugoslavia later in the 1990s, and the conquest of Iraq and Afghanistan most recently have brought the Western alliance to the borders of Russia . The attack now continues through the Caucasus region, even as Iran and Pakistan are being isolated.It may be controversial to say that Russia is the target. Why might this be so? It’s because the financial takeover by the West in the 1990s didn’t work. An independent Russia has made a comeback. They have a lot of nuclear weapons and know how to use them. The collapse of the Soviet Union, leaving the U.S. “the world’s only superpower,” created a far more perilous imbalance than most people are aware of. It’s an imbalance that has caused Western military planners—for instance with NATO—to dangerously overreach.The big question geopolitically is whether China can be induced to stand with the West. This was the objective of the effort beginning around 1971 under President Richard Nixon’s “Opening to China ” to incorporate China into the Western financial system. But today China increasingly seems to be standing alone, with the makings of a self-sufficient banking and industrial complex—and a stable currency—that is defying Western attempts at control.Will there be an “oriental surprise?” Will China reach a point where it makes an irreversible decision to side with Russia or stand against the West? No one knows. Henry Kissinger wrote in the Washington Post on August 19, 2009, that keeping China as a friend to the West is essential for the “New World Order.” And yes, he used those words—this is not a big secret. The winds of change are also blowing in Japan , where the pro-American ruling party has just been voted out.Personally, I find this struggle for world domination repugnant—the complete triumph of the rule of materialism and violence. As Rodney King said, “People, I just want to say, you know, can we all get along?” Indeed, why can’t we see that life on earth, as Pope Benedict XVI recently pointed out in his encyclical Caritas In Veritate, is a gift from God to man, a gift that bestows on all of us the duty to treat each other fairly and with compassion?So, in the face of the current world horror, what chance do monetary reformers have to be heard?The answer, I believe, is that we are being heard. My mind goes back to 2003, only six years ago, when Stephen Zarlenga came to my office at the U.S. Treasury Department in Washington , D.C. , where I had booked him to give a presentation based on his book, The Lost Science of Money. Later I worked with Steve on his first draft of the American Monetary Act. The time came when Steve began to meet with Congressman Dennis Kucinich, briefing him and others in Washington on monetary ideas.So much has happened since then. So many more people have become aware of the evils of the debt-based monetary system. We have seen Congressman Ron Paul ignite a national storm of revulsion against the Federal Reserve System. There is now even hope that the American Monetary Act might be introduced on the floor of Congress.But it is also perfectly obvious that this is only a start. The start, however, has been made, though there’s a long way to go.We’ve had promising starts before. Back in the latter part of the 19th century, the American public were far more attuned to ideas of monetary reform than at any time since. There was then a Greenback Party that elected members of Congress and ran candidates for president. The Populist Party understood monetary issues and the importance of a flexible and expansive currency. Henry George became the leading author of the day with his reformist ideas based on the principle that the earth was a commons from which all have a right to benefit.But then, when the international bankers finally succeeded in taking over the country through the passage of the Federal Reserve Act of 1913, the curtain fell. It wasn’t an iron curtain; it was a red velvet curtain, such as graced the windows of the rich financiers of the age who benefited. These financiers started two world wars to consolidate their dominion. They may yet start a third. The Reagan Doctrine may have made it inevitable.But I do not believe the warmongers will have the last say. Even if they bring down upon us another world catastrophe, those who believe in the better side of humanity will eventually win, because our cause is just and our ideas are based upon truth. Without monetary reform there can never be economic democracy. But with it perhaps the chief cause of war can be eliminated: the unjust distribution of wealth among people and nations, where some get far too much and many get nothing.I strongly support the American Monetary Act, the movement for a basic income guarantee, and proposals supporting citizens’ dividends such as those of the Social Credit movement or the ones already in place through programs like the Alaska Permanent Fund. Even if such measures are not immediately implemented, the effort to promote them serves the purpose of educating millions of people.Our present responsibility is getting the word out that there is indeed a far better way to do things and that real change is possible. That money and credit can empower people, not just enslave them. That debt is unnecessary when credit is viewed as a public utility. That technology when properly distributed can free people for higher intellectual and spiritual pursuits, not just eliminate jobs and force millions of people into bankruptcy and starvation. That, as Henry George and his successors have made clear, resources are for everyone, not just a few.I have come up with my own proposal for immediate relief that I call “The Cook Plan.” One of the worst myths of our time is that for government to spend money it can only collect that money ahead of time through taxes or by borrowing. “The Cook Plan,” instead, would have the government print and distribute vouchers in the amount of $1,000 a month to any adult resident who applied.The vouchers could be spent on necessities of life such as food, housing, clothing, transportation, or communication. They would then be deposited in a series of community savings banks and used to capitalize low-interest lending to individuals, students, small businesses, and family farms. The backing for the vouchers would be the new economic production they would engender at the grassroots level of every community.This measure alone would take a giant step toward bringing about a healthy U.S. and world economy at the level of “We the People,” rather than the fruitless and hypocritical attempt to create “recovery” through bank lending and government deficit spending. “The Cook Plan” has met a positive response from around the world during the several months since I proposed it.My views, while economically sound, have a spiritual basis. I believe in God, and I believe that man was created in the image of God. I believe that a world where we love our neighbor as ourselves and implement this love through social and economic policy is not just a dream, that it is the only practical way to live.I believe in the family of man and the responsibility of man to be a good steward of the earth and the environment. I believe financial tyranny has done its best to destroy these values. But I see an upsurge of desire and commitment among people for a new day, a truly democratic society, and a life on earth that is organized and conducted sanely, compassionately, and wisely.Those who attend such events as the American Monetary Institute’s 2009 conference understand all this. Together we will continue to work toward our ideals, no matter what disasters may intervene. It will take time and hard work, but we and those who come after us shall prevail.Richard C. Cook is a former federal analyst who worked for 21 years for the U.S. Treasury Department. His book “We Hold These Truths: The Hope of Monetary Reform” is now available. He is also author of a book on the space shuttle Challenger disaster. His website is http://www.richardccook.com.
Would seem to have fallen on its face. Disappointing. There was a lot of smart people involved. Now disorganized.
Thank you. I had seen that article and I still don’t get it. What OTC derivatives? I’ve got some experience in these foreign markets and I don’t know how that works.I wonder if we are not talking about what I would call “trade finance”. That would be agreements between a buyer and his bank. And the relationships between the buyers’ banks and their “correspondent” international banks. If the threat of default is between a Chinese state bank acting on behalf of the importer and western correspondent banks acting as intermediates to exporters then selling to China will become as dangerous as selling to Nigeria. I can’t see the Chinese letting that happen. No way. They require the import of raw material. And lots of those obligations can be hedged in the futures market. But lik I said – margin. So, again. I don’t understand the structure.
The other thing. Chinese SOE’s have almost certainly caused commodities prices to over-shoot. If now they fear they won’t be able to honor their contracts you can be sure they will need to renegotiate. So, I see this as a negotiating ploy.And as an exporter you have to know when your good customer just cannot comply with previous agreements. And you have to be flexible. Circumstances do change. I don’t know what kinds of committments (hedges)an exporter would have made to hedge his costs in beans for example. That flexibility has its costs too.
A ridiculous proposal with no chance of coming to fruition. Your concept of the basic goodness of man is pie-in-the sky. Giving everybody $1K/mo for basic necessities rewards lazy behavior, discourages working for a living. Your idea of God is that he created this world and now is just sitting back watching man manage it? I don’t believe that, I believe God has this world well within His controlling hand. If you cannot see what His purposes are, that just confirms that you are not God.
I’ve read the conference schedule and list of speakers and presentations. Wow. And Wow some more. I want to attend so badly I can taste it. Alas, so close to Chicago – and so damn far from $395. It’s the economic Senior Prom, and me with no date! I think I’m going to write to them anyway, and ask if there’s any way an unaccredited nobody like me can be allowed to sit in on any of it.Is anybody else here going, by any chance? If you do, I expect reports!http://www.monetary.org/2009schedule.html
To which country or state does this at apply? Australia?SWK
Might as well give up and revert to the dark ages
Who are you talking to, 11;44? Richard C Cook, the author of the piece? ? (the cluephone rings) Um, He ain’t here, Binky. But – good news – you CAN enlighten him as to what God thinks and doesn’t at his own link, found above, if you like. At the same time you can alert him to WHY the proposal he’s wasting his time and energies on is ridiculous – you know, giving him the logic and sound reasoning you surely have behind your argument – and you can also directly disabuse him of the silly notion of humanity’s goodness and notify him of the zero chance for the Monetary Reform Act to be legislated by popular demand. I bet He’d really appreciate hearing the groundbreaking earthshaking way you have found to KNOW what, well, any rational person will readily admit is IMPOSSIBLE for you to know.Let us know what he replies to you?
@YES!! WE CAN!!Go ahead and continue with your mocking mental masturbatory chanting instead of engaging in constructive dialogue with those with whom you think you disagree. You are succeeding only in manifesting to the world your own blind ignorance and intolerance in the process. You’re certainly not convincing anyone but those who already agree with your pathetically close-minded and myopic ideas about politics and the economy.The reality is that despite all of the outlandish slubbering coming from the increasingly desperate, roinous, and neotenous minority that is the far right, this country has shifted to the left and will continue in that direction for years and years to come. You might as well get used to it.SWK
@YES!! WE CAN!!Go ahead and continue with your mocking mental masturbatory chanting instead of engaging in constructive dialogue with those with whom you think you disagree. You are succeeding only in manifesting to the world your own blind ignorance and intolerance in the process. You’re certainly not convincing anyone but those who already agree with your pathetically close-minded and myopic ideas about politics and the economy.The reality is that despite all of the outlandish slubbering coming from the increasingly desperate, roinous, and neotenous minority that is the far right, this country has shifted to the left and will continue in that direction for years and years to come. You might as well get used to it.SWK
I think problems in getting posts where I want them to go seem to get worse as the total number of posts in a thread increases. This is a duplicate of a reply to an earlier post. Sorry for the unintended redundancy.SWK
k,here is the thing. when you hit “reply tothis comment” the dialog box is below.then the page refreshes and the dialog boxappears again but it is the dialog box at the bottomof the page. you need to scroll back up the threadto find the box you really want. and don’tforget to copy (save) your comment should thepost mysteriously disappear! happens enough.
That’s basically what I’ve concluded. There is no reasoning with the irrational hysteria that has infected the minds of this ever-decreasing segment of society. The louder and more paranoid they get, the surer I am that their days are numbered. It’s a death wail.The best thing to do is just keep out-voting them.
So let me see if I’ve got this straight. I should not be allowed to believe that God is in control of what is happening in this world……because you are His Mother?
Mother of God is gushing over the economic Senior Prom.
kilgore, you are a sick man. actually what “@YES!! WE CAN!!” posted can be considered right. your post is copying your own words “succeeding only in manifesting to the world your own blind ignorance and intolerance in the process” The reality is probably not too far from what “@YES!! WE CAN!!”
Kilgores? A sick man?I hope it’s contagious.
Senior Prom as in big event one eagerly looks forward to, Guest. Something wrong with that??ANYWAY, Right now I’m reading THIS page at AMI website – and woohoo what a read!!HEY KILGORES AND BLINDMAN: if you can find time, i’d LOVE to hear what you 2 especially think about this article AND the comments there. I’m not finished reading them all, but so far it’s one gem of a page!http://moneyreform.wordpress.com/2009/08/24/why-states-going-into-the-banking-business-would-be-a-distraction-not-a-solution-to-their-fiscal-problem-by-jamie-walton-ami-researcher/
Can I lick his kneecaps to see if I can be the first lucky dog to catch whatever he’s got? Can I, can I, please, can I?
Hey? Has anybody here read Zarlenga’s “The Lost Science of Money”?
@ Guest on 2009-09-01 09:46:53Who wrote on the post:Ian Bremmer and Nouriel Roubini: Don’t Expect the U.S. and China to Form a ‘Strategic Alliance’ Anytime Soon (If I post links they spoil page format)
PeterJBYou know a bit about china.What is your take on the issue, [strategic Chinese/American alliance] keeping in mind that there is newparty in power in japan, who made a compaigne promis tore evaluate US-japan relationship and also to form stretegic relationshipwith asian countries namely china?
I have wanted to have a crack at that. But it’s complicated. So, long weekend, not much to do… And a long thread with a lot of long posts. Here goes. The short answer, which I believe agrees with our Professor – the Chinese/American alliance is a long shot and it hasn’t a lot to do with Japan.Remember that diagram you were shown in school that was used to illustrate the Copernican sun-centered solar system? The one with the concentric circles representing the planets’ orbits around a central star? And the different sized dots on the circles representing the planets themselves? Start with that. Now replace the sun with China. China is the center of gravity. A red giant which has expanded and consumed the orbits of Hong Kong and N. Korea. Or you can say eclipsed if you prefer. On the next orbit out Taiwan, Thailand, Indonesia, and Malaysia. Then, Singapore, Japan & S. Korea. Then the commodities producers Australia & Brazil. And the Africans, scattered about more like an asteroid belt. All of this in orbit around the same massive, and maybe unstable, star. Someplace lost in space is India. Another giant. Alone, thinking itself the center of the universe too. But it is not. And then there’s the US and that’s where the simplicity of the Copernican diagram breaks down. The US and China are in orbit about each other. A binary universe. The US is the larger – depending on the measure. Not so much so by the measure of purchasing power parity. But less dense (we might say more dense if we are permitted to use dense as a figure of speech). Still, less massive, less gravity. Less… consequential. And in the end the lesser gravity will be made clear once the true measure of mass is ascertained. Our instruments are not yet calibrated for that.And this binary orbit produces stresses. Each one on the other. Tidal forces. Seismic forces. Forces that rift continents and collide worlds.Or, you can chuck that whole analogy and see it all as a pyramid in which the world’s savers including those Chinese savers are exploited to feed a global financial capital parasite. But those are just metaphors.We each have our shtick. We each see this recession from our own perspective. The realtor sees the housing crisis. The banker a lack of liquidity. The car dealer something else. I’m the global markets guy. In my view the China/America trade relationship (more precisely the Asian development model and the US complacency that it has created) is responsible for the whole calamity.China has embarked upon building an industrial economy which she has never needed. It was the west, with a limited labor resource, that needed to industrialize. It was in the west where there wasn’t enough labor to farm the land available. China never needed that. Why does China want to build an industrial economy now? The only thing I can come up with is that we’ve sold that American dream globally. The whole world wears blue jeans, sneakers, smokes American cigarettes and listens to rock-n-roll music while they sit in big cars on the world’s longest parking lots. Is that wealth? In China they think so. They’ve bought into it. In some ways they are not so different. And maybe there’s a better explanation.An aside: I’m ok with the cigarettes and big cars. Though I don’t smoke. But that music? That’s what my generation leaves behind? Long live rock-n-roll? How could we do that? /* /* /* (me banging head). And there are things we never consider. Things we don’t even think about. Things we take for granted, but that others don’t. A guy once asked me how anybody could ever be talked into drinking a second beer? Good question. I don’t know! But I told him I can drink two at a time! And asked how he could choose to eat with sticks after seeing somebody else eat with a fork. He said something, but I didn’t understand. These are mysteries. Ok. Ok, I’m drifting here. Point is that there are things we will never understand. How do you coordinate that? Let’s get back.So, in order to develop that industrial economy China has chosen to follow a 1960’s Japanese development model. Japan being a country of 130 million. Korea, a country of 50 million, did so too. It worked for them. Or, seemed to. China is a country of 1300 million people. Who in their right mind thinks they can do what Japan & Korea have done; build industrial economies on the backs of a saturated and demographically mature US consumer market, and cheap energy? It was never going to work. It defies logic. It defies gravity. Now that we’ve proven so we’ve got to undo that entire construct. And it’s not just a banking problem. See Michael Pettis for a better explaination.http://mpettis.com/2009/06/trade-%e2%80%93-it%e2%80%99s-not-just-the-currencyFrom the other side, the western side, is a continuing need for less expensive labor. The west has been eager to tap that resource. We’ve “restructured” our companies to be able to do so. We no longer keep production as captive part of a vertical enterprise. We have developed horizontal enterprises which can source their production from any of a number of suppliers. We have “China +1” policies. That is that we source from China plus one other place, in case something were to happen to the Chinese production. Preferably that other place will be even less expensive. In the process production is commoditized. The labor component of production is reduced to where it can barely support a Chinese family. Those jobs we outsourced aren’t coming back. We have overcome the constraint that was responsible for the industrial revolution. Labor shortage. Work, as we have known it, may never again create the value that will move civilization forward. (If that was forward. There may be arguments.) I call it industrial counter-revolution. An industrializing China changes everything. Everything.Still, it might have worked. Though I expected short-term imbalances myself. I had always expected that as the Chinese became more wealthy it would create markets for the goods we were to continue to produce. Wrong! I just never imagined the magnitude of the imbalance. It’s hard for us westerners to grasp the magnitude of China. I’ve said it’s like contemplating stars.As far as I know it was Professor Roubini who first understood the unsustainable balance sheet effects. He wrote a paper with B. Setser in 2004, “The US as a Net Debtor: the Sustainability of the US External Imbalances”. I hope you can look it up. It was a seminal paper.All that is over. Failed. The surprise is only that the wheels came off first in the US housing market. Our response in the west has been to shore up consumer demand – by infusing capital into the finance (speculative) sector which hasn’t reached the consumer. And the response in China has been to infuse capital into the export sector. Too much of which has probably gone into the speculative (finance) sector. We might hope that these combined stimuli have broken the fall. Our Professor is one who advocated that policy. And the argument has been that not to do so would have allowed the downturn to overshoot and to have lost the capital that will be necessary for investment in the future and for the restructure of our economies. Maybe so. But we haven’t fixed anything. Now we still have to repair the balance sheets and we have even further to go. Maybe twice as far.And we will have to restructure our entire economies to do it. Completely restructure. It will take years. It is not enough to just recapitalize the banking system and throw more money down the same hole. It’s a do over. We must do over that development model which began in Japan and ended in China and the US roll in it. The US must save more and produce more. The Chinese must consume more and open their market in ways which they have been unwilling to do. It will be painful. Painful. Painful to everybody and most especially to the Chinese who are likely to suffer worse unemployment and social disruption than we here in the consuming countries. Remember the stories from last year when the toy industry collapsed in Guangdong Provence and 2 million workers lost their jobs? Maybe there is some doubt about the figures. There usually is some doubt about Chinese figures. I’m not so sure about our own figures either. But 2 million workers? See what a small change in demand can do? I would suggest that the greater restructuring must come from within China (gravity). And the greater pain which I believe will be felt there will make that restructuring more difficult. The likelihood of that coming together given the different interests?So, it’s not just a question of recapitalizing our banks. Or, re-regulating our financial institutions. Or, capping executive pay. We must restructure our companies and the very way we create value from work. And the overwhelming immediate concern, is to begin to make productive investments rather than to allow an overweight and parasitic financial system to continue to pour more and more of our scarce resources into the same tired, unproductive, money changing centers.There is a good discussion of saving & investment at ZH.http://www.zerohedge.com/article/what-makes-us-invest-moreIt will require close coordination, commitments, understandings and compassion. On both sides. I don’t know much, really anything, about the internal debates in Chinese govt. policy. Some of what I’ve been reading would indicate there is a serious debate within those circles. But we ourselves have a populist Congress. Is it likely they are even able to grasp the issue? Can they be bothered by anything beyond their own reelection? I don’t see how we in the US are even in a position to debate the real issues. And almost certainly, given even the most optimistic scenarios, before the readjustments can be made the world will have changed again.
Now look at them yo-yos….thats the way you do itYou play the guitar on the mtvThat aint workin…….thats the way you do itMoney for nothin and chicks for freeNow that aint workin……thats the way you do itLemme tell ya them guys aint dumbMaybe get a blister on your little fingerMaybe get a blister on your thumbWe gotta install microwave ovensCustom kitchen deliveriesWe gotta move these refrigeratorsWe gotta move these colour tvsSee the little faggot with the earring and the makeupYeah buddy thats his own hairThat little faggot got his own jet airplaneThat little faggot hes a millionaireWe gotta install microwave ovesnsCustom kitchens deliveriesWe gotta move these refrigeratorsWe gotta move these colour tvsI shoulda learned to play the guitarI shoulda learned to play them drumsLook at that mama, she got it stickin in the cameraMan we could have some funAnd hes up there, whats that? hawaiian noises?Bangin on the bongoes like a chimpanzeeThat aint workin….thats the way you do itGet your money for nothin get your chicks for freeWe gotta install microwave ovensCustom kitchen deliveriesWe gotta move these refrigeratorsWe gotta move these colour tvs, lordNow that aint workin……thats the way you do itYou play the guitar on the mtvThat aint workin……..thats the way you do itMoney for nothin and your chicks for freeMoney for nothin and chicks for free(this analyst’s ethic is why we’re in Dire Straits)
What is your fix Mr.Coward? I’m listening.
Can’t you go back to the farm, the moon, Jupiter, or wherever it is you came from?
So, if your thesis holds water, then the airlines could also default on their oil hedge bets that are costing them hundreds of millions of dollars and hope to negotiate a more reasonable reality? Well, I guess they are they too small to matter.
This blog has seriously deteriorated.
g,in what respect?
These are your words, not mine, Ned: “There will always be rich people. There will always be poor people. And there will always be greed. Sorry. Thats the way it is. Get over it.”That’s cowardspeak, Ned. Fatalism is a self-fulfilling prophesy, Ned. Every single time, Ned. Your words encourage an irrational idea, Ned – and just when people desperately need to think rationally. It’s a sad shame you felt the compunction to follow up that post with your advice to others to fail to let the extreme richpoor wealthgap matter to them. It should matter to them as their first prioroity – because, in case you hadn’t noticed, your, and their, society is being shaken to pieces by the extreme extremes of wealth maldistributed beyond belief and all sense right round this weary, worried world.The Chinese have a saying, Ned: The man who says it can’t be done should get out of the way of the man doing it.
Does your god by any chance…have a human body and an aged face and a white beard…and he wears white robes and sits on a throne in the clouds…handing out brain tumors to children?
No, I can’t. My wings are still in pristine condition, but I blew all my travelmoney on whiskey and poker and had to hock my eyegoggles. And God knows I can’t fly without my eyegoggles; they’re prescription.Next question?
Blindman,You are assuming the Constitution still holds sway, and not being corrupted and stretched by TPTB. I’ll admit the Constitution of the US is an incredible governing doctrine created by similarly incredible people. They set the framework for a powerful society but it can only work if the people ensure that its principals are followed. I DON’T SEE THAT ANYMORE.From where I sit, I see a government no different from the one in Indonesia, Facist Spain, Argentina etc etc: Capitalistic Cronyism. The citizens are either too blinded, too apathatic, or too stupid to realise what is happening. And the few who are shouting out seems to be drowned out by the noise of reality TV and talking heads. What is the point?
Bingo. Every unnecessary suffering we have in this weary, worried world traces back to one crucial, fundamental mistake in human thinking:Everyone still believes in having the chance to get money for no work.I am the only person on this board who proposes to stop paying people for things that are not work.
A Digression:Has anyone wondered why we are still looking at data that is massively massaged by seasonality factors, or illogical adjustments? One of the issues I have had with data that we look at is the fact that most of the regression and seasonality adjustments were made during the last 15 years, where there has been a series of massive bubble blowing. Even if we look back, 20-30 years, it still will not take into account the kind of economic changes that is taking place. Therefore, one must question the validity of these adjustments and not to accept them as correct or accurate. Clearly one of this is the birth/death model adjustments. In a normal inventory-driven recession, the birth/death model may truly capture the job creation of small businesses which take over from ones that have ceased business. HOWEVER, in the case of this one, clearly that adjustment is wrong. An alternate measure of job losses, the ADP data, includes small business and has declined CONSISTENTLY throughout this cycle and throws into question the validity of the birth/death adjustment. Similarly, we saw problems with the most basic of employment data, initial claims. In the month of May, June and July, we saw the unseasonality of auto closures play havoc with those numbers. And I think that most of the seasonality adjustments in data will distort the real economic conditions because in this crisis, NOTHING IS SEASONAL… or rather the seasons have changed.To get a clearer picture on how the world is REALLY doing, there are precious few data that we can gleam an idea from. I have tried to look at power consumption, trade volumes, tax receipts, corporate sales to get an idea of what the real world is doing. What do you look at??
SWK, I don’t think that the US is moving leftwards. But at any rate, thanks for pounding MR/MRS CAPS. Hmm, could this be our old “friend” STOCKS GOING GREEN?
ANYTHING that attempts to concentrate power is destined to collapse.
Two questions:From where do you pick your data? What data you use that is not provided also without adjustment?Sometimes 2 versions are available (sa and not adjusted)Do you know the specific procedure to seasonality adjustment in each case? That is, the detailed math procedure ?I know X-12-ARIMA developed to the US Census Bureau is used on several official data but I do not know the updating frequency you complain about. Another possibility would be to use local linear regression but I think we need to know the official procedure even if some more appropriate method should be used.
“economic justice” is code for”just let me rule over you and tell you what ‘economic justice’ I’m going to impose on you. I know what is best for ‘society’, and funny thing, that just so happens to benefit me also. If you want it to benefit you, just sign up for my team and start sucking up.”you are a tyrant-wannabe, probably female
I suppose so, morbid. Don’t know about airline hedges specifically.
Fathom this MOG, if you’ve ever attained a profound neuron:Unless one really knows evil (call it a brain tumor in a child) one would never truly appreciate wondrous good (call that a Shostakovich symphony).God has allowed both so that you’ll be able to love.
And you’re just the person to tell us all what is and is not work, right?It doesn’t sound like you know how to love.
If you run out on the track during a caution you might get the lucky dog. We’d all prefer it if you just got ran over.
I lived in facist Spain and would tell you this is very different. Would tell you also that the difference doesn’t have to do with cronyism.
Then how can you be for the “Cook Plan” above, which hands out $1K for nothing? Did you read the post? Are you the chick for free?
The Chinese saying is great. I know what your saying. Grab our balls and kill the bastards. Right. How would you start to kill the bastards? Start with well placed IEDs and then take the wealth of the rich and distribute it to the poor? I’m just a Joe on the street. How or where would you start to change the mess?
Wolf … there’s actually a pretty good opportunity for a private entity to do a better job of analyzing and presenting this data. People like John Williams at ShadowStats are doing some of this stuff – but it could be done on a grander scale. Very definitely, the data being released seem to be massaged in ways that often destroy its credibility.For some time I have posed the question here – what data does the Fed use in its own models. Bernanke is known to be a loverl of economic models. But if the Fed wants accurate predictions, then they cannot possibly be using the codswallop that passes for normal economic news. Does this mean that secretly they have their own “realistic” estimates for jobs, unemployment, GDP etc? It makes you wonder.PeteCA
Thanks. I’ve been trying to at least copy my stuff so I can re-post if I lose it without actually having to re-create it from scratch, but I guess I’m an old dog and never seem to learn this new trick… SWK
Short on numbers, long on opinions…
It is hilarious how people are objecting to Obama’s school speech. Also, the whole debate about healthcare is stupendous. It is being asserted that Obama is a socialist because of that 700-800 Billion dollar plan forthe next whatever amount of years. I just don’t see where is capitalism when Trillions are thrown in bank bail-outs? Who is crying socialism then?Unfortunately, I have no respect for the Republican party, it has lost its soul. The only few republicans that I sincerely respect are the ones that are liberterians, such as Senator Ron Paul. They are consistent. Besides, literally trillions and trillions of dollars are on the hook for the banks and Obama is a “socialist” ‘because’ of a 700-billion dollar healthcare plan for the next 10 or so many years? Healthcare bing a matter of life for many people…It is just ludicrous. Creation of wealth is being tampered with on an unprecedened basis, allocation of capital being consigned to bussinesses which were imprudet and have failed, and there is an uproar because of a healthcare plan which is peanuts in comparison over such a long period of time, which can actually help a few people?How can it be socialism when there is a “minor” redistribution of wealth, when it isn’t socialism when there is a major, a 23.7 trillion dollar humongous, distortion in te “creation of wealth”.
Yep I know the 12-month ARIMA, which means that current data could well be distorted. It will adjust over time but it will be late to act on it. As for NSA data, it doesn’t really tell anything without context, ie compared with what? So using NSA again may not be the right way to do it. What I am looking for is data that has little impact from seasonals, from it has adjustments but reasonal seasonal adjustments that are not crisis impacted, eg consumption (driven by holidays, school etc)I guess what I want to see is ACCURATE data.
w,i don’t know what the point is other than life? but…( side note )..complexity swings into simplicity and thepoint may become evident for those witheyes open and prepared to comprehendits appearance. simplicity is underratedand sometimes less is more. comprehensionis fundamental and sometimes the detailsjust overwhelm the processor and render itinept. personal problem.? the times? thetime of man?i think people really just want lessthan the global economy requires they demandand it seems that system is striving toreward those with insatiable appetite?or people want less of what is available tothem and more of what is unavailable? eitherway there is dissatisfaction and starving in thebelly of the whale, as in it is common for a,say, 400 lb. person to die of malnutrition. itis a question of quality.so for the global system to propagate itself. growth phase / death phasein ecology they occur simultaneously but fordifferent organisms. or culturally… “organic growth”? separation, decanting of economies eachwith its own realm of dominance yet connectedlogically yet unpredictably through energy discharges or transfers.?.technology. the structural refinement of theinorganic or organic in service of the designer..of a new life form or new environment?and occupation of new environments by technologyand designers intents appearing chaotic to onerealm as energy, value, resources seems todisappear into thin air, space.perhaps related totechno logic occupation by the orbiting satellitesof the planet and the burgeoning virtual “world”.perhaps the next “real estate” bubble as wassuggested above (pjb)? the real estatevirtual credit bailout supplying finance tooccupy the orbit space thereby completing adecanting phase of internationally agreeddomains of influence?these types.the virtual space financiers?.to your statement and question, yes. you said it..we are being spoon fed feces. obviously not forour health, maturation or enlightenment. theconstitution is permissive in that it allows for that and it allows for resistance to it, theindividual intellect being empowered through its own natural integrity and capacities liberated, yetsocially responsible. we, us.the “fascism” complaint stems from the predjudiceagainst the “we the people” in favor of a systemof finance that remains nameless, is not a person,has no community affiliation and obviously hasunstated global and international agendas andambitions that it seeks to finance either onsome books, off some books, on some backs andruthless as required. and hush hush….in conclusion ( for now ) i don’t know howwe fix the broken heart of man besides moresuffering.ps. i think mog’s link is interesting. ami.their agenda seems to address the “fascist”finance complaint directly. we need to getover this idea that killing people is a formof diplomacy or we need to call ourselvesby a a name other than homo sapien, maybehomo zombius.pss. when the well runs dry then the level ofattention and interest in matters will increaseand we will be astonished at the simplicityand clarity, hopefully favorably. moments oftruth. there are people who study this. i thinkthey are disaster psychologists or like that.?some conclude it actually brings out the best inindividuals, but the worst in “authorities”.hmmm? consciousness rules……
Ah, Mark, but hope springs eternal in the hearts of the liberal-progressives!Actually, I think “hard left” might just tilt this country back from “hard right, just shy of fascism” to “moderate conservatism,” which would be fine by me.SWK
I’m very well aware that good and evil exist because everything is recognized through its opposite – but that was not your argument. Your argument was that God controls what goes on here on earth. You don’t see the difference between good and evil existing as part of God’s plan (his scientific name is existence eternally existing), and God as puppeteer controlling events on Earth? You’re not capable of making the distinction? Oh dear. Time for you to build some mental muscle then.
>Unfortunately, I have no respect for the Republican party, it has lost its souI think you’ve hit the nail on the head, Guest. The real “RINOs” (Republicans In Name Only) are actually the ones who’ve come into power in the GOP over the last 30 years and whose dregs continue to drag the party down. I know some folks here will find this astounding, but I have been a Republican twice and a Democrat twice in nearly 35 years of being eligible to vote. I have voted for third party candidates for president in no less than three presidential elections because, frankly, BOTH of the major parties are too beholden to industry interests, too entranced by the lust for political power, and all too willing to abandon principles and the public interest for the sake of expedience and cheap notoriety.SWK
What seriously mindless hogwash. You must be twins – because no one person could be that stupid.People who are working to see economic justice prevail – by getting legislation using democratic principles and majority consensus demand – are the ONLY people who are committed to seeing that it becomes impossible for themselves to have power over anybody – precisely by doing the only thing that CAN do that – making it impossible for anybody to have power over anybody else.What do you have against justice? You’re BONKERS!
Ned, you most definitely do NOT know what I am saying – you’re nowhere in the same universe with what I say. And now I’m through talking to you because you’re just being disingenuous and you have no right whatsoever to try to make it appear I would ever be for killing the rich or anybody else.
Don’t be ridiculous. It’s not me who decides what work is and isn’t – the natural world has decided that for all of us. If you need me to draw you a picture of the situation that exists in reality, just ask.
Of course this recession will be W-shaped. That’s the middle initial of the guy who was in charge when all of this started.
What is with some of you people’s pathetic disingenuousness? If you actually are interested in getting an answer to your first question, you can have it after you take back your petty slur attempts that followed it.
Good one. Actually, I think there were plenty of others to share the blame, but W remains a worthy target or wrath.SWK
Your fifth-grade English teacher just asked me to bite you on 2 of your 3 ankles for making her look bad.
numbers to do just what with?
1 2 3 4 5 6 7 8 9 0There! Now you’ve got all the numbers that one can use to run a civilization. Please send your check or money order to…
P.S. If you’re still not happy with this blog, then send me a check for $25 and I’ll see to it that you are $25 poorer- yes, I guarantee it! That’s REAL performance that you can believe in!NOTE: Subsequent payments might be required in order to alleve you of your obvious discomfort. But, and I guarantee this, at some point (when you can no longer afford an internet connection), you WILL no longer suffer from these horrible troubling problems! All these others posting here are just posers, offering NO solutions- ha!
Despite Recession and Spending Cuts, Sales of US Weapons SoarItaly’s arms sales are second? Hmm… when you think about Italy what political ideology comes to mind?
See what I mean.
You can post long links. Just break the link up by hitting the return key within it. The link will still work.
Maybe if she’s a cute chick they’ll let her into the conference.
While sitting here doing the math,The economy’s taking a bath.Be that as it may we have SWK,To help us to target our wrath.
The validity of your thinking is right up there with those who criticized Obama for having a middle name common to Islamic peoples.
US Hypocrisy Astonishes the Worldby Paul Craig RobertsAmericans have lost their ability for introspection, thereby revealing their astounding hypocrisy to the world.US War Secretary Robert Gates has condemned the Associated Press and a reporter, Julie Jacobson, embedded with US troops in Afghanistan, for taking and releasing a photo of a US Marine who was wounded in action and died from his injury.The photographer was on patrol with the Marines when they came under fire. She found the courage and presence of mind to do her job. Her reward is to be condemned by the warmonger Gates as “insensitive.” Gates says her employer, the Associated Press, lacks “judgment and common decency.”The American Legion jumped in and denounced the Associated Press for a “stunning lack of compassion and common decency.”To stem opposition to its wars, the War Department hides signs of American casualties from the public. Angry that evidence escaped the censor, the War Secretary and the American Legion attacked with politically correct jargon: “insensitive,” “offended,” and the “anguish,” “pain and suffering” inflicted upon the Marine’s family. The War Department sounds like it is preparing a harassment tort.Isn’t this passing the buck? The Marine lost his life not because of the Associated Press and a photographer, but because of the war criminals – Gates, Bush, Cheney, Obama, and the US Congress that supports wars of naked aggression that serve no American purpose, but which keeps campaign coffers filled with contributions from the armaments companies.Marine Lance Cpl. Joshua M. Bernard is dead because the US government and a significant percentage of the US population believe that the US has the right to invade, bomb, and occupy other peoples who have raised no hand against us but are demonized with lies and propaganda.For the American War Secretary it is a photo that is insensitive, not America’s assertion of the right to determine the fate of Afghanistan with bombs and soldiers.The exceptional “virtuous nation” does not think it is insensitive for America’s bombs to blow innocent villagers to pieces. On September 4, the day before Gates’ outburst over the “insensitive” photo, Agence France Presse reported from Afghanistan that a US/Nato air strike had killed large numbers of villagers who had come to get fuel from two tankers that had been hijacked from negligent and inattentive occupation forces:”‘Nobody was in one piece. Hands, legs and body parts were scattered everywhere. Those who were away from the fuel tanker were badly burnt,’ said 32-year-old Mohammad Daud, depicting a scene from hell. The burned-out shells of the tankers, still smoking in marooned wrecks on the riverbank, were surrounded by the charred-meat remains of villagers from Chahar Dara district in Kunduz province, near the Tajik border. Dr. Farid Rahid, a spokesperson in Kabul for the ministry of health, said up to 250 villagers had been near the tankers when the air strike was called in.”What does the world think of the United States? The American War Secretary and a US military veterans association think a photo of an injured and dying American soldier is insensitive, but not the wipeout of an Afghan village that came to get needed fuel.The US government is like a criminal who accuses the police of his crime when he is arrested or a sociopathic abuser who blames the victim. It is a known fact that the CIA has violated US law and international law with its assassinations, kidnappings and torture. But it is not this criminal agency that will be held accountable. Instead, those who will be punished will be those moral beings who, appalled at the illegality and inhumanity of the CIA, leaked the evidence of the agency’s crimes. The CIA has asked the US Justice (sic) Department to investigate what the CIA alleges is the “criminal disclosure” of its secret program to murder suspected foreign terrorist leaders abroad. As we learned from Gitmo, those suspected by America are overwhelmingly innocent.The CIA program is so indefensible that when CIA director Leon Panetta found out about it six months after being in office, he cancelled the program (assuming those running the program obeyed) and informed Congress.Yet, the CIA wants the person who revealed its crime to be punished for revealing secret information. A secret agency this unmoored from moral and legal standards is a greater threat to our country than are terrorists. Who knows what false flag operation it will pull off in order to provide justification and support for its agenda. An agency that is more liability than benefit should be abolished.The agency’s program of assassinating terrorist leaders is itself fraught with contradictions and dangers. The hatred created by the US and Israel is independent of any leader. If one is killed, others take his place. The most likely outcome of the CIA assassination program is that the agency will be manipulated by rivals, just as the FBI was used by one mafia family to eliminate another. In order to establish credibility with groups that they are attempting to penetrate, CIA agents will be drawn into participating in violent acts against the US and its allies.Accusing the truth-teller instead of the evil-doer is the position that the neoconservatives took against the New York Times when after one year’s delay, which gave George W. Bush time to get reelected, the Times published the NSA leak that revealed that the Bush administration was committing felonies by violating the Foreign Intelligence Surveillance Act. The neocons, especially those associated with Commentary magazine, wanted the New York Times indicted for treason. To the evil neocon mind, anything that interferes with their diabolical agenda is treason.This is the way many Americans think. America über alles! No one counts but us (and Israel). The deaths we inflict and the pain and suffering we bring to others are merely collateral damage on the bloody path to American hegemony.The attitude of the “freedom and democracy” US government is that anyone who complains of illegality or immorality or inhumanity is a traitor. The Republican Senator Christopher S. Bond is a recent example. Bond got on his high horse about “irreparable damage” to the CIA from the disclosures of its criminal activities. Bond wants those “back stabbers” who revealed the CIA’s wrongdoings to be held accountable. Bond is unable to grasp that it is the criminal activities, not their disclosure, that is the source of the problem. Obviously, the whistleblower protection act has no support from Senator Bond, who sees it as just another law to plough under.This is where the US government stands today: Ignoring and covering up government crimes is the patriotic thing to do. To reveal the government’s crimes is an act of treason. Many Americans on both sides of the aisle agree.Yet, they still think that they are The Virtuous Nation, the exceptional nation, the salt of the earth.
The CIA is a tool, a tool of fundamentalist forces, ones that are no different than that which they purport to eliminate. I think that Michael Baigent has it right:Racing Toward Armageddon
I think the Fed uses the same data most economists use but have their own thresholds for action and rely more on longer term averages such as annually or semi-annually until things drastically deviate from their “norm” and then they pay more attention to quarterly and monthly. This would explain why they are always “behind the curve”, seemingly slow to identify and rectify problems in the system. It also follows the govt’s philosophy that they know best what and how much information the general public (their employers, BTW) should be told or can handle. And unfortunately, as the monster grows larger it becomes more grotesque!
If you are striving to make it impossible for you to have power over anyone else, I have agree with you: that’s a good idea.
The Buyback BoondoggleCompanies spend lavishly on share repurchases, slowing innovation and job creationAs the unemployment rate hovers near 10%, the economic debate is focused on how the government should aid recovery. (More stimulus spending? Tax cuts?) But it’s business’ task to get the economy back on track—by investing in innovation and job creation. And if the recent past is any guide, corporations may stall the recovery by investing instead in something else: stock buybacks.America urgently needs a debate on stock buybacks. There is no sound economic rationale for these investments. Justified by the notion of maximizing shareholder value, they do nothing for the economy—and a lot for CEOs receiving stock-based compensation.The amount of money spent on buybacks is staggering. From 1997 through last year, 438 companies in the Standard & Poor’s 500-stock index spent $2.4 trillion on them. In 2007, as profits soared, the average buyback bill for each was about $1.2 billion—a record amount. And faced with a dramatic drop in their combined net income in 2008, these companies trimmed buyback spending, but not proportionately: The buyback-to-profit ratio, which was already unprecedented in 2007, more than tripled in 2008, from 0.90 to 2.80.CASH DRAINUnfortunately, buybacks are rampant in industries where investment in innovation is crucial—energy, technology, and pharmaceuticals. ExxonMobil (XOM), America’s No. 1 repurchaser, spent $144 billion to buy back shares from 2000 through 2008—and almost $8 billion in first quarter 2009, the equivalent of 173% of its net quarterly income.And five high-tech leaders—Microsoft (MSFT), IBM (IBM), Cisco Systems (CSCO), Intel, (INTC) and Hewlett-Packard (HPQ)—are in the Top 10 of repurchasers, each having spent more on buybacks than on research and development from 2000 through 2008. (While spending $73 billion to buy its own stock, IBM increased its offshore employment by 133,000, reducing U.S. jobs by 36,000.) Pfizer (PFE), Johnson & Johnson (JNJ), Amgen (AMGN), and Merck (MRK) have been big repurchasers, too, even as they have argued against regulating U.S. drug prices on the grounds that profits are needed to fund research. From 2000 through 2008, Amgen’s repurchases cost the equivalent of 116% of its net income.The downturn has slowed buyback activity. But consider this: Some companies that fell into financial distress were previously among the largest repurchasers. If bailed-out General Motors (GM) had banked the $20.4 billion distributed to shareholders as buybacks from 1986 through 2002 (with a 2.5% aftertax annual return), it would have had $35 billion in 2009 to stave off bankruptcy and respond to global competition.And the bailed-out banks? Eight of the biggest spent a total of $182 billion on buybacks from 2000 to 2007. That reduced their ability to cover their bets on derivatives, exacerbating the crisis they created in the first place.The experience of this decade suggests that when profitability returns, buybacks will again be a top priority for corporations—at the expense of initiatives that could help spur a solid recovery.Executives claim stock repurchases are financial investments that signal confidence in the company’s stock price. Yet companies never sell the bought-back shares at higher prices to cash in on these investments. (To do so would be to signal to the market that the share prices had peaked.) It is the executives themselves who frequently benefit from price boosts generated by repurchases—by selling their personal shares after exercising stock options.One way to prevent this is to ban buybacks by big corporations using them solely to manipulate their share prices. Such a ban would not apply to repurchases by small companies or to coordinated, transparent efforts to buy back shares to prevent a market collapse. What would be eliminated would be buybacks that help top executives reap outsized pay rewards.If we want to encourage innovation and job creation, we need to question the value of stock buybacks—as well as, eventually, the mantra of “maximizing shareholder value” that justifies them.All of America’s stakeholders—consumers, workers, retirees—should demand that their elected representatives scrutinize how corporations at the heart of the U.S. economy are choosing to allocate the nation’s resources.http://www.businessweek.com/magazine/content/09_34/b4144096907029.htm
Ah, now you’re finally getting it. We’re truly no interested in whatever your minimalist mind can spew. Not that that will stop you.
I had to make sure you would get what I meant.
Oh, I can see the distinction. I just don’t believe in your God, which in fact is you.
Companies are retrenching, as they don’t have any clear direction to go. There’s a major paradigm shift going on; apparently the author doesn’t see this, sad.And it won’t get any more clearer, not unless that it is, instability can be classified as clear.
The author of this article is mentally retarded.
“Less Bad” Is Indeed BetterSaw that headline this morning…. jsut like green shoots… all buzz words. BAD is BAD. over 30 million people unemployed is BAD40 million on Food stamps is BAD50 million with no Health is BAD2 trillion annual deficit is BAD13 Trillion total Deficit is BADThe Econeomy is BAD, period!And there are no fixes that are working, period!And the BADDEST of it all is there are NO JOBS and there are no NEW JOBS being created…LESS BAD is not Better, period! BAD is BAD!
are you an executive that is paid with call options?
To improve the blog, people should post using their “unique names”, including you, dear Guest. We do not know who is Guest.
Nice poem. Not sure if you’re agreeing with me or poking a little fun at me, but I appreciate the creative effort nonetheless…SWK
Happy Labor Day, everyone! I find it ironic that Labor Day is a day of No Labor. SWK
That would be the ‘W’ administration in conjunction with Greenspan and the rest of the free market fundamentalists, whose absolute incompetence will be recorded in history FOREVER!Republican twits obviously can’t distinguish between objective criticism of economic / fiscal policies and partisan politics – therein lies the root of our demise.
I’m not astounded at all. Unlike others, it’s obvious that your intelligence isn’t limited by ideology or empty-headed partisan blather.
There is indeed mean-ness in your meaning-less posts. Please keep it coming. The comic relief you dolts provide me makes me laugh out loud and re-energizes me. I just couldn’t keep going if you stopped providing my daily dose of hilarity. Now, if only you had some nice pupperoni in your pocket…
Like you, SWK, I tend to vote for the candidate or the situation as I see fit. Over the past 44 years, I admit to voting much more often for Democrats. This last time I did not, and my wife was shocked that I would cast a vote for McCain, expecially after the ghastly experience of the past 8 years.But, I was not really voting for Mccain. I was voting for divided government, for a multitude of reasons. It was obvious that the Dems would control Congress, and when the same party controls both ends of Pensylvania Avenue, watch out.Not that I believe either party works for the people anymore. They simply counterbalance one another to prevent even more mischeif.Independent Contractor
Sweet Jesus, how tragicomedic is it that you are actually PROUD to confess you are being disingenuous? How dangerous for everyone around you is it that you are not capable of being sober, serious and reality-based? How hilariously arrogant is it that you really have deluded yourself you speak for the whole board! LOL!
Once again you fail to make a crucial distinction, my leetle rutabaga. Knowing that it is impossible for anything and anybody to be separate from God – whose self-proclaimed name is Existence Eternally Existing – does not equate with thinking a person is God. (Not that you’re going to understand any of this. Adult infants like yourself never do.)
If he drinks himself unconscious, he’ll still be able to out-think you.
Listen to your self-harming puny idiot self. You’re afraid to grow up and become the Global Emperor of your own life. You despise me because I am unafraid. You don’t actually give a shit about others having power over you. You’re happy to be relieved of all responsibility. Go crouch down and lick the hands that feed you, you mindless, spineless coward.
for clarity, 11:28 is speaking to 07:42
actually, 08:18 is by definition a troll.thanks for the article exposing one of the truly obnoxious number of legal thefts, 07:47
haha, I bet kilgores might want it to be a day of extralabor;-P
I don’t know if this interests anyone but it seems to be big so I am posting part of it here…FBI Whistleblower: Hastert, Burton, Blunt, Other Members of Congress ‘Bribed, Blackmailed’http://www.huffingtonpost.com/brad-friedman/fbi-whistleblower-hastert_b_277704.html
Breaking Down the Under-Oath Disclosures of the Formerly-Gagged Sibel Edmonds…It has now been over a week since the video tape and transcript from the remarkable 8/8/09 deposition of former FBI translator-turned-whistleblower Sibel Edmonds was publicly released. Previously, the Bush Administration invoked the so-called “state secrets privilege” in order to gag Edmonds, in attempting to keep such information from becoming public.The under-oath, detailed allegations include bribery, blackmail, espionage and infiltration of the U.S. government of, and by current and former members of the U.S. Congress, …
I tend to agree with you, IC. I didn’t think much of President Clinton, especially during his second term — I thought President Nixon was more liberal — but while mostly serving as a caretaker, President Clinton did offset the Mr. Gingrich’s “Contract ON America” (as I prefer to call it) crowd. In the sort of economic and financial crisis we’ve entered now, however, it seems to me that solid control by a single party is inevitably necessary to effectuate any substantial change. I appreciate your rationale for voting in ordinary times, but these are not ordinary times. We’ll have to keep a close eye on the Democrats, however, because they will inevitably succumb to power gluttony just as the Republicans did of late, and that’s when the real mischief begins.SWK
Someone posting lyrics, whether as blindman or Guest, is still someone posting lyrics. And screeds by YES WE CAN are still screeds.
Food for thought:When is an equity rally actually symptomatic of an inflationary environment to come?http://ftalphaville.ft.com/blog/2009/09/07/70361/a-zimbabwe-rally-effect/The UN’s Conference on Trade and Development put out a somewhat forthright view on the subject of international-reserve currencies on Monday. In no uncertain terms, the UN appears to be calling for the end of dollar hegemony.http://ftalphaville.ft.com/blog/2009/09/07/70386/un-weighs-in-on-the-dollar-reserve-debate/
Hi PeterYes, its shifted in America too.Now its 3.5% down loans to an undeserving group like as low as 600 credit ratings, during -15% home price declines per year….its called FHA and WSJ predicts a slam dunk big bail out for the shifted subprime FHA entity soon, at a theater near you too.
Perhaps, but at least you know who to blame.The name is a necessary but not sufficient condition. We have so many Guests here that we do not know who is who.
Thank you John.
Screed? Define please…
Calling for something and having it actually happen are two different things. So far as I know, our government has been calling for more jobs and it has not happened, just less fewer jobs (there, that’s the way to look at it, less fewer jobs, a slower second derivative of job loss). Replacing a currency is no mean feat. If it will happen, it will probably take years and years and years.
…Undeterred, Wall Street is racing ahead for a simple reason: With $26 trillion of life insurance policies in force in the United States, the market could be huge.Not all policyholders would be interested in selling their policies, of course. And investors are not interested in healthy people’s policies because they would have to pay those premiums for too long, reducing profits on the investment.But even if a small fraction of policy holders do sell them, some in the industry predict the market could reach $500 billion. That would help Wall Street offset the loss of revenue from the collapse of the United States residential mortgage securities market, to $169 billion so far this year from a peak of $941 billion in 2005, according to Dealogic, a firm that tracks financial data.Some financial firms are moving to outpace their rivals. Credit Suisse, for example, is in effect building a financial assembly line to buy large numbers of life insurance policies, package and resell them — just as Wall Street firms did with subprime securities…
Entire NYT article => Back to Business: Wall Street Pursues Profit in Bundles of Life Insurance
Positively Titillating !I hope BF does go on Rachel Maddow’s show or HBO Real Sex with this one.
Thanks dude – keep’em coming …
Thank you kilgores. The same to you and yours. When I think of the struggles of organized labor to obtain a measure of dignity for the American worker,to gain a fair share of the properity they produce, to work in safe conditions and of all the other benefits trade unionism wrested from our financial system, I am saddened. All of the prosperity I enjoyed while growing up in a working class family, is a result of collective bargaining instead of begging. The education, housing and medical care I received is a result of the same. I lived a middle class life style, educated four kids and ultimately retired after working two jobs for thirty years. I was able to do so because of the labor movement in America and I am very grateful for it.Now, the American worker is being asked to compete head to head, with a Chinese or Bangladeshi worker in the name of globalization. In return, we get to buy things at Walmart for very reasonable prices. When we do so, we are feeding on ourselves. We have to change the game. We need some wholesome nationalist protectionism with regard to labor. We need to recover some of our manufacturing base so it includes more than armaments and agricultural products. The status quo is not sustainable environmentally, economically or socially.I hope you enjoy your day.
And when it comes to keeping us informed MM, you are BAD! (which of course means good).
On the other hand – jacking off the mocking mental masturbators of the blog is pleasing to them and encourages them to continue what it is that you so disdain.ps. love the alliteration
‘Begins’ = future tense. It ‘began’ when the oath of office was administered.This administration is very much like the last one, and seems to be carefully cataloging and preserving most of their scary tendencies.I sometime wonder what would have happened with all the various bailouts had McCain been in charge. Would we have Geithner, Paulson, et al? would Congress have approved all they signed off on under this President? Would there be better oversight?It’s the economy, stupid, and the ship has been cast upon the waters. It is a leaky boat, and I doubt we can bail fast enough to keep it floating. We have already been sold down the river of financial interests.Independent Contractor
Bwaaahhh. You hurt me so bad!!! (when do we have sex, baby?)
Most Americans have no respect for the unconstitutional way the Rip-off-publicans and the Demon-cats have been buying votes. Ron Paul’s ideas are superb. Just one thing to understand: just because the banksters have ripped off $23T it still isn’t ok for Obama to waste another $800B on health care. Both are unconstitutional. Both programs steal from one group of Americans to give to another group. Neither is worse than the other. Both are immoral.
Gold is now moving to cross the $1,000/oz level at this time. That puts the “golden currency” on track to blow past the previous level of resistance.There were some very good comments about gold and Chinese buying in precious metals at this link:Chinese Buying Dips In Gold PriceAlthough the Chinese have been trying to buy precious metals, oil, and commodities on the dips in price, there will come a time soon when they will need to be more aggressive with their strategy. Right now, for example, it really doesn’t matter if they make a bigger buy of gold – since the price is likely to jump anyway. But very soon there will be competition both from other countries (Japan, Middle East) who are either trying to move more aggressively away from the US dollar or to establish a more sound basis for their own currency system. So even the big players can afford to “put more chips on the table” as the stakes get raised in the game of exiting positions based on US assets.Purely my opinions, and any risks in investing are totally assumed by the buyer (who should do their own independent research).PeteCA
Tomorrow morning will be the BIG TEST in gold.We should see the IMF and Central Banks slap it back down, but then what.Will it stay down $10-50/oz for the next few days as it has in the past? Or will it jump back with a vengeance?
Hello Americans. I am your friendly Wall Street banker. I wear a nice suit, drive a nice car, and dine at the ritziest restaurants in town. You’ll never see any dirt under my finger nails.I have nothing to offer society. That is why I can spend all my time scheming how to rob you from cradle to grave. While you are all working to feed me, clothe me, protect me, shelter me, keep me healthy and free, I can devote my life to doing what I do best: Separating you from your money. I am in the money business, so naturally, I am supposed to make money, lots of it, even when I screw up. If I still can’t do it the “old fashioned way”, then I can call on my well connected politician friends for a few favors. I can lie, steal, cheat. But I thank you all for being such chumps and making me so rich.OK, so I decompensate once in a while. I think it’s because this thread is getting stale.For more interesting topic please check Hellasious’ blog http://www.suddendebt.comMy wife is from Philippines and there it has been all the rage to go into nursing with the goal of leaving for lucrative nursing jobs in the West. Even the doctors there are going into nursing! Actually what is happening is the diploma mills are spewing forth more graduates than can find internships in the Philippine hospitals, a prerequisite for certification in Philippines. Half the graduates can’t pass the Philippine Nursing Boards, and many, like one of my wife’s cousins who I put through nursing school, wind up as maids or “helpers”, not nurses, in far off lands -she is currently in Dubai.Interestingly, the govt already pays for nearly one half the health care dollar through Medicaid, Medicare, armed forces, govt workers, tax deductions, medications, etc. In a manner like cash for clunkers, the govt, it seems, could pump money through the health care system to inflate another bubble.On the other hand, it may be the bankers who say to Americans “F you ” we’ve got our money. There is no more left for you. We don’t want to risk any inflation now do we? We’ll have to cut spending.So maybe there won’t be all those nursing and health care related jobs.In view of this dilemna, I told my in-laws not to waste time with the nursing racket in Philippines. The door is wide open to become a doctor there. I think in a few short years, there may be a shortage of doctors here, especially in primary care. Too much debt, too much hassle, and too little reimbursement to justify going into medicine here. And that’s assuming the US doesn’t pull a Massachusetts, whereby with state coverage, everyone is crawling out of the woodwork to get health care.So may we get an influx of relatively low paid foreign doctors in a few years? I don’t know.We’ll see what emerges from Obama’s health care cauldron of goblins, ghouls and witches.
Northwest Mutual just loaded up $400 million in gold.
What can I say? I am Italian.
Draw me that picture.
I’m a bit more sanguine that you, IC, and than most of the other folks who post here. High expectations for a leader give rise to even higher disappointment. I am reminded of the words of Teddy Roosevelt, which my father inscribed into a plaque and gave me to hang outside my office door:It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.I think President Obama is tackling a huge and impressive agenda of change. If he can accomplish just 10% of what he would like to accomplish, I think he’ll be doing very well indeed in this challenging political and economic environment.SWK
WB:Economic cannibalism is, indeed, a terrible thing. It tastes good for a while, until you realize just what you’re eating…SWK
“loansharking our own workforce”–very good!
I fully expect to see some kind of attempt by the Central Banks to attack gold. But to tell you the truth – at this stage it’s futile.First of all, look at my argument above. I don’t need to sell this story – it sells itself. Japan has GOT to move to diversify, and that’s what the new gov’t has promised there. The Middle East kingdoms have GOT to move to stabilize their currencies against something other than the dollar, and for them a gold standard makes sense both practically and for religious reasons. China cannot sit around too long here, or they will take the brunt of losses as US assets (read bonds) get dumped.For quite a long time the diversification out of the US dollar was just a “small trickle” of activity. I think we have now reached the point where this broadens to a “steady stream” of activity. It’s not a collapse yet, but the pace of activity will pick up.PeteCA
“religious reasons”yup, money based on usury and speculation is “harram”if im right, even Christian considers usury as illegal, not sure about excessive speculation??money should be backed/peg by something stable, or at least scarce in nature not printed papers…
It will be a cold day in hell before people stop posting music lyrics on economic blogs.
Well, it’s “morning,” and gold is currently at $1,008/oz USD.
The “W” thing is purely economic-speak. The application was humor; but most right-wingers don’t quite catch on with humor: their mechanisms are presented in stuff that more closely resembles hate speech (such as you note).
Cook is a good guy. He understands that the US imperialism has destroyed the American people. He just doesn’t want to acknowledge that the American people have been willing accomplices and beneficiaries of their imperialism. So now when the Titanic hit the ground they NATURALLY and INEVITABLY drift towards FASCISM rather than SOCIALISM.
We must do over that development model which began in Japan and ended in China and the US roll in it. The US must save more and produce more. The Chinese must consume more and open their market in ways which they have been unwilling to do. It will be painful. Painful. >>Painful is not the problem. Useless is. It’s the same story as with Faber–late capitalism has succeeded in killing social imagination and understanding of broader issues. You have to ask yourself: What will happen AFTER all that pain have been endured? What will happen after the United States have begun producing and saving while the coolies have become consumers of US goods? Where will capitalists invest their capitals if the wage differential between the imperialist and neocolonial working classes is no more? At that point a world-scale annihilation of productive forces or a world revolution will be the only choices. So much for the pain to endure, and so much for that old mole of history.
And one would want to acknowledge the/this connection?
The Dr. appears to have prognosticated well in his latest.Nobody Liking Dollar Deficits Makes Rogoff Traders’ Favorite
Sept. 8 (Bloomberg) — For the first time in at least two years, deficits are starting to matter to currency investors, and that may be bad news for the dollar.
Denninger’s latest “Labor day musings” is a must read/see (great video) :http://market-ticker.denninger.net/archives/1415-Labor-Day-Musings-Part-II.html“We can either have a bad economy now, or a potential collapse of our society later…”
http://www.calculatedriskblog.com/2009/09/one-family-option-arm-failed.htmlyes indeed, this Kempffs guy is an idiot and a pathetic borrower.
Somehow, this guy reminds me of the American politico-financial elite.
President Obama’s Bad History LessonPosted by J.H. Huebert on September 7, 2009 08:11 PMOf all the ridiculous things in President Obama’s prepared remarks for America’s schoolchildren, this is the funniest and saddest:The story of America isn’t about people who quit when things got tough. It’s about people who kept going, who tried harder, who loved their country too much to do anything less than their best. It’s the story of students who sat where you sit 250 years ago, and went on to wage a revolution and found this nation.Of course, many of America’s founders did not sit in school, let alone a compulsory, government, mindless-drone-factory school as we have today because they didn’t exist and weren’t necessary. For example, George Washington dropped out of school at age twelve. Benjamin Franklin dropped out of school at ten, then proceeded to educate himself, as he documented in his must-read Autobiography.If these men had been subject to compulsory schooling controlled by a central government, we probably never would have heard of them, and we definitely wouldn’t have had a revolution. The founders were deeply flawed, of course, but such virtues as they had are precisely the virtues government schools attempt to destroy in the interest of forming unthinking obedient citizens. As usual, Mencken put it best:The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to down dissent and originality. That is its aim in the United States, whatever pretensions of politicians, pedagogues other such mountebanks, and that is its aim everywhere else…. Their purpose, in brief, is to make docile and patriotic citizens, to pile up majorities, and to make John Doe and Richard Doe as nearly alike, in their everyday reactions and ways of thinking, as possible.And of course that’s the purpose of Obama’s speech, too. What a brazen attempt to rewrite history — and to pound into their heads that it’s always been this way.
So, who is paying you to post this? Are they taking applications? I would like to try it, but only for pay.
Perhaps a bigger crime is the US’s military expenditures that end up producing cripples (as well as dead bodies). The mental products are generally still repairable, but yes, it’s education system is yet another example of why centralized governments/power are always destined for failure.
Is there anything in our country that is not broke and has the stench of greedy profits attached to it?California’s Real Death Panels: Insurers Deny 21% of ClaimsWed Sep 2, 2009 3:41pmPacifiCare’s Denials 40%, Cigna’s 33% in First Half of 2009OAKLAND, Calif., Sept. 2 /PRNewswire/ — More than one of every five requestsfor medical claims for insured patients, even when recommended by a patient’sphysician, are rejected by California’s largest private insurers, amounting tovery real death panels in practice daily in the nation’s biggest state,according to data released today by the California Nurses Association/NationalNurses Organizing Committee.http://www.reuters.com/article/pressRelease/idUS202570+02-Sep-2009+PRN20090902?
Britain was near the verge of a bank shutdown last year … at least according to this article:Britains Banks Closer to Shutdown Than Many BelievedI have a feeling we have not seen the end of this yet.PeteCA
How Did Economists Get It So Wrong?8 pages of krugman… guess he was not one of them…http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=1&
http://www.ft.com/cms/s/0/45d46f78-9bdc-11de-b214-00144feabdc0.html.The crude realities of diplomacyBy Gideon RachmanPublished: September 7 2009 19:32 | Last updated: September 7 2009 19:32…..”As Daniel Yergin, a leading historian of the oil industry, puts it: “It is oil that makes possible where we live, how we live, how we commute to work . . . Oil and gas are the essential components in the fertilizer on which world agriculture depends; oil makes it possible to transport food for the totally non-self-sufficient megacities of the world.”Politicians know all this. They know that voters will punish them if fuel prices soar, or if there are electricity shortages. But they also know that if they openly put the search for oil at the heart of their foreign policies, they are liable to be denounced as cynical and immoral. When it comes to energy security, western politicians treat their voters like children – and behave like adults in private.”….comment: this is rome where all roads lead andwhat is wrong with his use of the word “adults”?
Bernanke’s mega-put is just one further step along a path that was established long ago, back in 1913 when the Federal Reserve was founded.Over the past century, we have moved away from a system where bank shareholders and senior executives paid dearly for bad management–and toward a system where fired bank bosses make off with fortunes or launch brilliant political careers. No one is on the financial hook, other than the taxpayer.http://www.tnr.com/article/economy/the-next-financial-crisis?page=0,2
Oh, it’s not the military and religious institutions that pump out docile, patriotic citizens who all think alike, it’s the public school system.Yeah, that’s it. Sure.
Americans are infantile. It’s systemic.
Socialism for the rich and free markets for the working class, is fascism.It’s the latest manifestation of eugenics – lipstick on a pig, if you will.
Here’s the way the insurance companies do it. When they receive an expensive bill that they think they MIGHT be able to deny part of…….they deny it. If you appeal it, they just automatically deny it again, they don’t even look at the particulars of the case, they just write you some off the wall excuse.They’ll keep on doing this as long as they think they don’t have to consider you seriously; after all, looking seriously at the particulars of a medical case takes time and requires expensive medical expertise…….not good for the bottom line.Once they get the notion that you are a pitbull about them paying, usually about the THIRD TIME YOU HASSLE THEM, they still don’t look at those medical particulars–that takes time and requires some expensive medical expertise–not good for the bottom line……they just pay the bill.They tell you they’ve decided to make an exception because you’ve always been such a great client, yada, yada….nonsense.Most people just stop here and are relieved. They have been through a lot and are glad to have it over with. They never understand that this procedure is actually fairly effective “risk management” for health care insurers.
I think HL Menken got paid for posting this, but am not sure you can get paid for yours.
Calling it “risk management” doesn’t change what it is.Lipstick on a pig.
Chignos -You recently invited me to pray and told me that if I were fortunate, god would reveal himself to me. As a product of a Catholic upbringing, I would ask if you do not see the similarities in what you deem our educational system to be and those of the organized religions. (BTW – it has not escaped me that you are a product of a Canadian educational system, thus your opinion is not based on your own experiences in a U.S. classroom – but I digress….)If you are right, then they both want the same thing – a “flock” that follow without questions. And you know what kinds of flocks sheppards lead don’t you? That would be sheep…..
Krugman is so glib about chastising economists who won’t give up their obviously false assumptions. But would he give up his notion that fiat currency and fractional reserve banking are the real reason we have prolonged recessions/depressions? I doubt it. If the Fed is dissolved, he’ll be out of a job–as will most economists.
No, lipstick on a pig is when you decide to “fix it” and pay a bunch of incompetent government bureaucrats to do the same job as the risk managers, only it ends up costing you 25% more in income taxes.The public option=Socialized Medicine=Lipstick on a pig.
A majority of Americans want affordable public healthcare and are willing contribute a portion of their tax dollars to fund such an enterprise.Health insurers are a needless parasitic bureaucracy granted license to feed on the public’s misery under the guise of market competition.There’s a market for both options.
Why? What is the point of posting lyrics on economics blogs? It’s kind of like on-line graffiti.
I’m starting to not buy all this collapse stuff. Maybe that’s a contrary indication.
I think the Catholic church has a lot to answer for, just like the public schools. By the way, I went 1-college in the US, Med School in Canada. Learning to think for yourself starts with knowing you are free from condemnation and guilt, despite your mistakes.The forgiveness of sins Christ provides by his sacrificial death on the cross is the source of this freedom, therefore is the source of all freedom. That’s the part George Bush didn’t understand about radical Muslims. They don’t want freedom/democracy, they want a caliphate. They want to be led. Christians (notice I didn’t say Catholics) don’t want to be led.The public school system has had a devil of a time figuring out what they could substitute as a coherent philosopy of life since the Supreme Court ordered the Bible out of the classroom. Mostly what I have seen from “educators” is confusion and argument loosely termed “secular humanism.” It’s a kind of I’m OK you’re OK psychobabble nonsense that assumes man is basically good, and that if you know the good you’ll do the good, etc., etc.Now, everyone recognizes what a pathetic expensive failure public education has become. When our teenagers are shooting each other it’s harder to believe somethng has not gone terribly wrong.Politicians like Obama want to exploit whatever demagoguery might be available, hence his latest foray into the public school system. Never mind that his policies are bankrupt and his philosophy totally discredited. He’s the President, and furthermore he’s our first African American President. So….no matter what he says about our heritage, we need to just take it for the gospel truth…..and by the way isn’t he handsome with that baritone voice? Don’t even think about mentioning that he’s underweight and he only has that voice because he still oversmokes cigarettes. You’ll be deemed a racist.I don’t know about others, but I’m getting about as tired of hearing black demagogues use the “R” word as blacks are of hearing KKK sympathizers use the “N” word.If you decide to think for yourself (divorce from the sheeple), you better understand where that freedom of thought comes from, otherwise you’ll likely fall victim to the latest demagoguery.I didn’t suggest that you become a follower of any organized group. All I said was that I think it could benefit you to pray, in the privacy of your closet, in any way you see fit, that God would reveal Himself to you.I am glad and thankful to be in Jesus’ fold.
MOG, Still waiting…..
I am happy for you.I’m good too. Let’s leave it at that and perhaps we can continue a civilized discourse.
Gates says her employer, the Associated Press, lacks “judgment and common decency.”This is the guy who has undermined the US Constitution since the 1970s by falsifying the CIA intelligence analysis. Gates was behind the October Surprise that was basically a coup d’etat that brought Reagan and Bush to the White House and and a counterrevolution against all the political and economic achievements of the working-class America. Today, this guy, with his German pro-Nazi family history, is conspiring against Russia with the likes of Biden, Brzezinski & Co.
One thing wrong is that he is saying that adults, by definition, believe the ends justify the means.
An agency that is more liability than benefit should be abolished.>>Soon the CIA abolish this country than allow us to abolish it. This monster of the military-intelligence-industrial complex is at the heart of darkness that has enveloped us. As to Roberts, he is what I would call a true American from the tribe of the last Mohigans.
In the case of our need for oil and the resultant foreign policy, one can make a good case that the ends do justify the means. That’s why we’re essentially unchallenged in Iraq.
you are an idiot chignospeople like you give schools bad name. I don’t think that youhave the intellect to make to a med school you are a liar.So shut the f up and move some where else.
To Dr. Nouriel Roubini,To the moderators of this forum,And to all who post comments here.Ladies and Gentlemen, the post below – the likes of which I had not seen here before – was directed at me yesterday:Bwaaahhh. You hurt me so bad!!! (when do we have sex, baby?)By Guest on 2009-09-07 18:51:58Let me be clear as a bell: I am unbothered by insults, but that post by Guest at 18:51 is not an insult. It is a very nasty personal attack unique for being loaded with targetted sexual aggression that I refuse to tolerate in silence and do denounce unequivocally . Although the sorry excuse for a human male who perpetrated that attack has dishonoured only himself by posting it, I am appalled that 1) it has not been deleted and the poster banned permanently, and 2) no person posting to this board was disturbed to witness such an attack take place within their community. As a result of this revealing incident, let it be known that although I will continue to post exactly as pleases me: 1) I will never again answer a question from anyone who remains anonymous, and 2) my former affections for the members of this board have been destroyed by a silence too callous, and they no longer exist.
You missed the point and added 0.
M.O.G.You are right to be upset with the other members of this board for their silence. There is no way to prevent agressive mental illness from popping up on an open forum like this one, but for it to be met with silence is reprehensible. I’m sorry I missed it. Please reconsider your options with regard to this matter.
We have enough “smart” people, what we need are “wise” people, sigh. They, as much as their hearts were in it, failed to address the fundamentals of growth (at least I never saw this as their starting point, which it should have been [which left me out of the equation, which I saw as doomed to fail without this foundational consideration]).
The intent is to provide insight from an artistic side. Art has, and always will have, a far superior way of communicating realities, of cutting through the techno-fascist jargon meant to control us all.Does every piece of art hit its target? Well no, but at least it adds color in what would be an otherwise colorless world.Consider the point that the fewer words used to accurately define something the better. Then consider poetry (which I suck at).
I agree on principle. But, and I think that I’d heard, of all people, George Will state that someone once stated that social programs were necessary for capitalism to work. Capitalism’s very goal is to concentrate power; this is in violation of natural laws and cannot persist in any significant imbalance: and we know what happens when there are big imbalances; needless to say it’s not in the best interest of the power-holders to realize when they’ve concentrated too much power.As much as I agree with the fundamentals that Ron eschews, they cannot overcome the existing built-in imbalances. Why? Because power doesn’t cede anything without a fight, and power has ALL the fight (best that those without power can do is to remove themselves from the system, which is what I advocate). If you don’t follow what I’m saying here, then perhaps this example:You give me ALL of your money and I enact laws that protect me keeping that money for, say, 200 years. Yes, I’ll be dead by then, but my offspring will continue to profit by this arrangement. After that 200 years then the laws get leveled (say by someone like Paul). What would things look like? Same as they are now. Those in power would be employing their protectors (refer to current US military budget), their praetorian guards.
“God” looks down upon a battle going on between two opposing factions of which each are proclaiming that “god” is on their side, and, exclaims “god”: “Good god, I’ve got my work cut out for me!”It’s always about superiority (over others). As a Free Thinker I can rise above all this; I need not accept what is one of many similar stories (read “anecdotals”) of virgin births and what not.If Jesus was “lord,” then who was “god?” If that was Jesus, then why did Jesus knowingly kill “god?” (he, of story fame, could have avoided placing himself into that situation).How interesting it is that these modern religions, all squaring off against one another (like big corporations looking to wipe out each other), are ALL patriarchal. This, by default, casts women as inferiors. Yeah, that sounds like a compassionate god to me!Don’t get me wrong, there are some wise things presented in these religious screeds, but there are also some horrific ones as well, and pretending that one’s religion is totally without them and that the “others’” religions are based on evil is nothing more than crap, propaganda!OK, who made god? And why, if “man” is in “his” image, does “man” have nipples when they serve no purpose? Clearly a design flaw by the all omnipotent.You’re desire, Chignos, is pretty clear. You wish to drive all of mankind toward Armageddon. Pretty big gamble, given that the entity who drew up the “plan” has never been proven to exist. Risk the entire world to such a scam? Insanity is the word that best describes this. I fear your religion every much as I do those “evil” religions that you fear. But, get your delusions off the controls of power will you? Get out of government and let your “god,” who clearly already has this thing all mapped out, take care of it. But no, you and your ilk wouldn’t do this because it’s about punishment and control, it’s about YOUR power!
I say that we should just continue to allow the wealthy to further concentrate their power until the backlash comes that wipes them all out. Yeah, great plan Oh compassionate one, follower of “Christ!”
Economists, marketing types, and, your favorite, insurance people (as in the health care industry)! All provide exactly NOTHING to the world of production.
Me too, although not necessarily speaking for all “Guests.” But… sometimes it’s best to not egg such morons on. Sorry
Really good analysis, beautifully written! Thanks.
Really good analysis, beautifully written! Thanks.
My appologies too MOG -I am guilty of (as are many here, I think)scrolling past posts I have read previously. I often miss add-ons unless I am looking at something that caught my attention previously or for a response to something I may have added.You are correct to be offended and we should all be more attentive to posts and responses that do not meet even minimally decent standards.
While U missed the comment, I certainly condemn it. Immaturity, disrespect and childishness are the kindest words I can use to describe those comments; yet, I hope this “guest” realizes his mistep and seeks help.
correction: should have read “while I missed the comment…”
STILL NO JOBS!Rest at:http://www.marketwatch.com/story/hiring-plans-drop-to-record-low-manpower-2009-09-08Job outlook hits worst-ever levelEmployers’ hiring plans at lowest point in Manpower survey’sSAN FRANCISCO (MarketWatch) — Employers’ hiring plans for the upcoming fourth quarter dropped to their lowest level in the history of Manpower’s Employment Outlook Survey, which started in 1962.A net -3% of employers said they’ll hire in the fourth quarter, down from -2% in the third quarter, on a seasonally adjusted basis, according to the Milwaukee-based firm’s survey of more than 28,000 employers. Before this year, the survey’s previous low point was a net 1% hiring outlook for the third quarter of 1982.
Why Are Corporate Insiders Selling Their Shares?Any time corporate executives and directors are heavily selling their company’s stock there’s reason for concern. And lately they’ve been doing just that.Has the Stock Market’s Rally Run Its Course?The last time insider selling was as high as it is now was in the period from late 2006 to late 2007. It was right after that insider-selling surge that the stock market began its long painful decline, says Charles Biderman, CEO of TrimTabs, an independent institutional research firm.Biderman believes that insider trades shoot higher when there’s a disconnect between broad market opinions and what business executives feel in their gut. “When [insiders think] things are going better than most people think, they buy stock,” he says. “When things are going worse than people think, they sell.”(Read “Q&A: Why the Stock Market Looks Bullish for Autumn.”)That’s to say, insiders have no crystal ball but they often have access to up-to-the-minute sales data as well as firsthand impressions from their sales managers — and that gives them an inside track on what’s happening in the economy. When this special access leads them to be big sellers of their stock, well, it’s a vote of no confidence in their employer’s near-term future.Biderman has measured the ratio of insider selling to buying since 2004, and says historically the ratio is 7 to 1. (Insiders almost always sell more than they buy because they receive stock as part of their compensation.) Right now the ratio is 30, one of the highest he’s recorded. November 2007 is the last time the ratio even came close, at 24.Rest at:http://www.time.com/time/business/article/0,8599,1920635,00.html
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed’s thrall, the economists missed it, too.”The Fed has a lock on the economics world,” says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. “There is no room for other views, which I guess is why economists got it so wrong.”One critical way the Fed exerts control on academic economists is through its relationships with the field’s gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll — and the rest have been in the past.The Fed failed to see the housing bubble as it happened, insisting that the rise in housing prices was normal. In 2004, after “flipping” had become a term cops and janitors were using to describe the way to get rich in real estate, then-Federal Reserve Chairman Alan Greenspan said that “a national severe price distortion [is] most unlikely.” A year later, current Chairman Ben Bernanke said that the boom “largely reflect strong economic fundamentals.”The Fed also failed to sufficiently regulate major financial institutions, with Greenspan — and the dominant economists — believing that the banks would regulate themselves in their own self-interest.Despite all this, Bernanke has been nominated for a second term by President Obama.In the field of economics, the chairman remains a much-heralded figure, lauded for reaction to a crisis generated, in the first place, by the Fed itself. Congress is even considering legislation to greatly expand the powers of the Fed to systemically regulate the financial industry.Paul Krugman, in Sunday’s New York Times magazine, did his own autopsy of economics, asking “How Did Economists Get It So Wrong?” Krugman concludes that “[e]conomics, as a field, got in trouble because economists were seduced by the vision of a perfect, frictionless market system.”So who seduced them?The Fed did it.Three Decades of DominationThe Fed has been dominating the profession for about three decades. “For the economics profession that came out of the [second world] war, the Federal Reserve was not a very important place as far as they were concerned, and their views on monetary policy were not framed by a working relationship with the Federal Reserve. So I would date it to maybe the mid-1970s,” says University of Texas economics professor — and Fed critic — James Galbraith. “The generation that I grew up under, which included both Milton Friedman on the right and Jim Tobin on the left, were independent of the Fed. They sent students to the Fed and they influenced the Fed, but there wasn’t a culture of consulting, and it wasn’t the same vast network of professional economists working there.”But by 1993, when former Fed Chairman Greenspan provided the House banking committee with a breakdown of the number of economists on contract or employed by the Fed, he reported that 189 worked for the board itself and another 171 for the various regional banks. Adding in statisticians, support staff and “officers” — who are generally also economists — the total number came to 730. And then there were the contracts. Over a three-year period ending in October 1994, the Fed awarded 305 contracts to 209 professors worth a total of $3 million.Just how dominant is the Fed today?The Federal Reserve’s Board of Governors employs 220 PhD economists and a host of researchers and support staff, according to a Fed spokeswoman. The 12 regional banks employ scores more. (HuffPost placed calls to them but was unable to get exact numbers.) The Fed also doles out millions of dollars in contracts to economists for consulting assignments, papers, presentations, workshops, and that plum gig known as a “visiting scholarship.” A Fed spokeswoman says that exact figures for the number of economists contracted with weren’t available. But, she says, the Federal Reserve spent $389.2 million in 2008 on “monetary and economic policy,” money spent on analysis, research, data gathering, and studies on market structure; $433 million is budgeted for 2009.That’s a lot of money for a relatively small number of economists. According to the American Economic Association, a total of only 487 economists list “monetary policy, central banking, and the supply of money and credit,” as either their primary or secondary specialty; 310 list “money and interest rates”; and 244 list “macroeconomic policy formation [and] aspects of public finance and general policy.” The National Association of Business Economists tells HuffPost that 611 of its roughly 2,400 members are part of their “Financial Roundtable,” the closest way they can approximate a focus on monetary policy and central banking.Robert Auerbach, a former investigator with the House banking committee, spent years looking into the workings of the Fed and published much of what he found in the 2008 book, “Deceptionand Abuse at the Fed”. A chapter in that book, excerpted here, provided the impetus for this investigation.Auerbach found that in 1992, roughly 968 members of the AEA designated “domestic monetary and financial theory and institutions” as their primary field, and 717 designated it as their secondary field. Combining his numbers with the current ones from the AEA and NABE, it’s fair to conclude that there are something like 1,000 to 1,500 monetary economists working across the country. Add up the 220 economist jobs at the Board of Governors along with regional bank hires and contracted economists, and the Fed employs or contracts with easily 500 economists at any given time. Add in those who have previously worked for the Fed — or who hope to one day soon — and you’ve accounted for a very significant majority of the field.Auerbach concludes that the “problems associated with the Fed’s employing or contracting with large numbers of economists” arise “when these economists testify as witnesses at legislative hearings or as experts at judicial proceedings, and when they publish their research and views on Fed policies, including in Fed publications.”Gatekeepers On The PayrollThe Fed keeps many of the influential editors of prominent academic journals on its payroll. It is common for a journal editor to review submissions dealing with Fed policy while also taking the bank’s money. A HuffPost review of seven top journals found that 84 of the 190 editorial board members were affiliated with the Federal Reserve in one way or another.”Try to publish an article critical of the Fed with an editor who works for the Fed,” says Galbraith. And the journals, in turn, determine which economists get tenure and what ideas are considered respectable.The pharmaceutical industry has similarly worked to control key medical journals, but that involves several companies. In the field of economics, it’s just the Fed.Being on the Fed payroll isn’t just about the money, either. A relationship with the Fed carries prestige; invitations to Fed conferences and offers of visiting scholarships with the bank signal a rising star or an economist who has arrived.Affiliations with the Fed have become the oxygen of academic life for monetary economists. “It’s very important, if you are tenure track and don’t have tenure, to show that you are valued by the Federal Reserve,” says Jane D’Arista, a Fed critic and an economist with the Political Economy Research Institute at the University of Massachusetts, Amherst.Robert King, editor in chief of the Journal of Monetary Economics and a visiting scholar at the Richmond Federal Reserve Bank, dismisses the notion that his journal was influenced by its Fed connections. “I think that the suggestion is a silly one, based on my own experience at least,” he wrote in an e-mail. (His full response is at the bottom.)Galbraith, a Fed critic, has seen the Fed’s influence on academia first hand. He and co-authors Olivier Giovannoni and Ann Russo found that in the year before a presidential election, there is a significantly tighter monetary policy coming from the Fed if a Democrat is in office and a significantly looser policy if a Republican is in office. The effects are both statistically significant, allowing for controls, and economically important.They submitted a paper with their findings to the Review of Economics and Statistics in 2008, but the paper was rejected. “The editor assigned to it turned out to be a fellow at the Fed and that was after I requested that it not be assigned to someone affiliated with the Fed,” Galbraith says.Publishing in top journals is, like in any discipline, the key to getting tenure. Indeed, pursuing tenure ironically requires a kind of fealty to the dominant economic ideology that is the precise opposite of the purpose of tenure, which is to protect academics who present oppositional perspectives.And while most academic disciplines and top-tier journals are controlled by some defining paradigm, in an academic field like poetry, that situation can do no harm other than to, perhaps, a forest of trees. Economics, unfortunately, collides with reality — as it did with the Fed’s incorrect reading of the housing bubble and failure to regulate financial institutions. Neither was a matter of incompetence, but both resulted from the Fed’s unchallenged assumptions about the way the market worked.Even the late Milton Friedman, whose monetary economic theories heavily influenced Greenspan, was concerned about the stifled nature of the debate. Friedman, in a 1993 letter to Auerbach that the author quotes in his book, argued that the Fed practice was harming objectivity: “I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results,” Friedman wrote.Greenspan told Congress in October 2008 that he was in a state of “shocked disbelief” and that the “whole intellectual edifice” had “collapsed.” House Committee on Oversight and Government Reform Chairman Henry Waxman (D-Calif.) followed up: “In other words, you found that your view of the world, your ideology, was not right, it was not working.”"Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”But, if the intellectual edifice has collapsed, the intellectual infrastructure remains in place. The same economists who provided Greenspan his “very considerable evidence” are still running the journals and still analyzing the world using the same models that were incapable of seeing the credit boom and the coming collapse.Rosner, the Wall Street analyst who foresaw the crash, says that the Fed’s ideological dominance of the journals hampered his attempt to warn his colleagues about what was to come. Rosner wrote a strikingly prescient paper in 2001 arguing that relaxed lending standards and other factors would lead to a boom in housing prices over the next several years, but that the growth would be highly susceptible to an economic disruption because it was fundamentally unsound.He expanded on those ideas over the next few years, connecting the dots and concluding that the coming housing collapse would wreak havoc on the collateralized debt obligation (CDO) and mortgage backed securities (MBS) markets, which would have a ripple effect on the rest of the economy. That, of course, is exactly what happened and it took the Fed and the economics field completely by surprise.”What you’re doing is, actually, in order to get published, having to whittle down or narrow what might otherwise be oppositional or expansionary views,” says Rosner. “The only way you can actually get in a journal is by subscribing to the views of one of the journals.”When Rosner was casting his paper on CDOs and MBSs about, he knew he needed an academic economist to co-author the paper for a journal to consider it. Seven economists turned him down.”You don’t believe that markets are efficient?” he says they asked, telling him the paper was “outside the bounds” of what could be published. “I would say ‘Markets are efficient when there’s equal access to information, but that doesn’t exist,’” he recalls.The CDO and MBS markets froze because, as the housing market crashed, buyers didn’t trust that they had reliable information about them — precisely the case Rosner had been making.He eventually found a co-author, Joseph Mason, an associate Professor of Finance at Drexel University LeBow College of Business, a senior fellow at the Wharton School, and a visiting scholar at the Federal Deposit Insurance Corporation. But the pair could only land their papers with the conservative Hudson Institute. In February 2007, they published a paper called “How Resilient Are Mortgage Backed Securities to Collateralized Debt Obligation Market Disruptions?” and in May posted another, “How Misapplied Bond Ratings Cause Mortgage Backed Securities and Collateralized Debt Obligation Market Disruptions.”Together, the two papers offer a better analysis of what led to the crash than the economic journals have managed to put together – and they were published by a non-PhD before the crisis.Not As Simple As A Pay-OffEconomist Rob Johnson serves on the UN Commission of Experts on Finance and International Monetary Reform and was a top economist on the Senate banking committee under both a Democratic and Republican chairman. He says that the consulting gigs shouldn’t be looked at “like it’s a payoff, like money. I think it’s more being one of, part of, a club — being respected, invited to the conferences, have a hearing with the chairman, having all the prestige dimensions, as much as a paycheck.”The Fed’s hiring of so many economists can be looked at in several ways, Johnson says, because the institution does, of course, need talented analysts. “You can look at it from a telescope, either direction. One, you can say well they’re reaching out, they’ve got a big budget and what they’re doing, I’d say, is canvassing as broad a range of talent,” he says. “You might call that the ‘healthy hypothesis.’”The other hypothesis, he says, “is that they’re essentially using taxpayer money to wrap their arms around everybody that’s a critic and therefore muffle or silence the debate. And I would say that probably both dimensions are operative, in reality.”To get a mainstream take, HuffPost called monetary economists at random from the list as members of the AEA. “I think there is a pretty good number of professors of economics who want a very limited use of monetary policy and I don’t think that that necessarily has a negative impact on their careers,” said Ahmed Ehsan, reached at the economics department at James Madison University. “It’s quite possible that if they have some new ideas, that might be attractive to the Federal Reserve.”Ehsan, reflecting on his own career and those of his students, allowed that there is, in fact, something to what the Fed critics are saying. “I don’t think [the Fed has too much influence], but then my area is monetary economics and I know my own professors, who were really well known when I was at Michigan State, my adviser, he ended up at the St. Louis Fed,” he recalls. “He did lots of work. He was a product of the time…so there is some evidence, but it’s not an overwhelming thing.”There’s definitely prestige in spending a few years at the Fed that can give a boost to an academic career, he added. “It’s one of the better career moves for lots of undergraduate students. It’s very competitive.”Press officers for the Federal Reserve’s board of governors provided some background information for this article, but declined to make anyone available to comment on its substance.The Fed’s Intolerance For DissentWhen dissent has arisen, the Fed has dealt with it like any other institution that cherishes homogeneity.Take the case of Alan Blinder. Though he’s squarely within the mainstream and considered one of the great economic minds of his generation, he lasted a mere year and a half as vice chairman of the Fed, leaving in January 1996.Rob Johnson, who watched the Blinder ordeal, says Blinder made the mistake of behaving as if the Fed was a place where competing ideas and assumptions were debated. “Sociologically, what was happening was the Fed staff was really afraid of Blinder. At some level, as an applied empirical economist, Alan Blinder is really brilliant,” says Johnson.In closed-door meetings, Blinder did what so few do: challenged assumptions. “The Fed staff would come out and their ritual is: Greenspan has kind of told them what to conclude and they produce studies in which they conclude this. And Blinder treated it more like an open academic debate when he first got there and he’d come out and say, ‘Well, that’s not true. If you change this assumption and change this assumption and use this kind of assumption you get a completely different result.’ And it just created a stir inside–it was sort of like the whole pipeline of Greenspan-arriving-at-decisions wasdisrupted.”It didn’t sit well with Greenspan or his staff. “A lot of senior staff…were pissed off about Blinder — how should we say? — not playing by the customs that they were accustomed to,” Johnson says.And celebrity is no shield against Fed excommunication. Paul Krugman, in fact, has gotten rough treatment. “I’ve been blackballed from the Fed summer conference at Jackson Hole, which I used to be a regular at, ever since I criticized him,” Krugman said of Greenspan in a 2007 interview with Pacifica Radio’s Democracy Now! “Nobody really wants to cross him.”An invitation to the annual conference, or some other blessing from the Fed, is a signal to the economic profession that you’re a certified member of the club. Even Krugman seems a bit burned by the slight. “And two years ago,” he said in 2007, “the conference was devoted to a field, new economic geography, that I invented, and I wasn’t invited.”Three years after the conference, Krugman won a Nobel Prize in 2008 for his work in economic geography.One Journal, In DetailThe Huffington Post reviewed the mastheads of the American Journal of Economics, the Journal of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the Journal of Monetary Economics.HuffPost interns Googled around looking for resumes and otherwise searched for Fed connections for the 190 people on those mastheads. Of the 84 that were affiliated with the Federal Reserve at one point in their careers, 21 were on the Fed payroll even as they served as gatekeepers at prominent journals.At the Journal of Monetary Economics, every single member of the editorial board is or has been affiliated with the Fed and 14 of the 26 board members are presently on the Fed payroll.After the top editor, King, comes senior associate editor Marianne Baxter, who has written papers for the Chicago and Minneapolis banks and was a visiting scholar at the Minneapolis bank in ’84, ’85, at the Richmond bank in ’97, and at the board itself in ’87. She was an advisor to the president of the New York bank from ’02-’05. Tim Geithner, now the Treasury Secretary, became president of the New York bank in ’03.The senior associate editors: Janice C Eberly was a Fed visiting-scholar at Philadelphia (’94), Minneapolis (’97) and the board (’97). Martin Eichenbaum has written several papers for the Fed and is a consultant to the Chicago and Atlanta banks. Sergio Rebelo has written for and was previously a consultant to the board. Stephen Williamson has written for the Cleveland, Minneapolis and Richmond banks, he worked in the Minneapolis bank’s research department from ’85-’87, he’s on the editorial board of the Federal Reserve Bank of St. Louis Review, is the co-organizer of the ’09 St. Louis Federal Reserve Bank annual economic policy conference and the co-organizer of the same bank’s ’08 conference on Money, Credit, and Policy, and has been a visiting scholar at the Richmond bank ever since ’98.And then there are the associate editors. Klaus Adam is a visiting scholar at the San Francisco bank. Yongsung Chang is a research associate at the Cleveland bank and has been working with the Fed in one position or another since ’01. Mario Crucini was a visiting scholar at the Federal Reserve Bank of New York in ’08 and has been a senior fellow at the Dallas bank since that year. Huberto Ennis is a senior economist at the Federal Reserve Bank of Richmond, a position he’s held since ’00. Jonathan Heathcote is a senior economist at the Minneapolis bank and has been a visiting scholar three times dating back to ’01.Ricardo Lagos is a visiting scholar at the New York bank, a former senior economist for the Minneapolis bank and a visiting scholar at that bank and Cleveland’s. In fact, he was a visiting scholar at both the Cleveland and New York banks in ’07 and ’08. Edward Nelson was the assistant vice president of the St Louis bank from ’03-’09.Esteban Rossi-Hansberg was a visiting scholar at the Philadelphia bank from ’05-’09 and similarly served at the Richmond, Minneapolis and New York banks.Pierre-Daniel Sarte is a senior economist at the Richmond bank, a position he’s held since ’96. Frank Schorfheide has been a visiting scholar at the Philadelphia bank since ’03 and at the New York bank since ’07. He’s done four such stints at the Atlanta bank and scholared for the board in ’03. Alexander Wolman has been a senior economist at the Richmond bank since 1989.Here is the complete response from King, the journal’s editor in chief: “I think that the suggestion is a silly one, based on my own experience at least. In a 1988 article for AEI later republished in the Federal Reserve Bank of Richmond Review, Marvin Goodfriend (then at FRB Richmond and now at Carnegie Mellon) and I argued that it was very important for the Fed to separate monetary policy decisions (setting of interest rates) and banking policy decisions (loans to banks, via the discount window and otherwise). We argued further that there was little positive case for the Fed to be involved in the latter: broadbased liquidity could always be provided by the former. We also argued that moral hazard was a cost of banking intervention.”Ben Bernanke understands this distinction well: he and other members of the FOMC have read my perspective and sometimes use exactly this distinction between monetary and banking policies. In difficult times, Bernanke and his fellow FOMC members have chosen to involve the Fed in major financial market interventions, well beyond the traditional banking area, a position that attracts plenty of criticism and support. JME and other economics major journals would certainly publish exciting articles that fell between these two distinct perspectives: no intervention and extensive intervention. An upcoming Carnegie-Rochester conference, with its proceeding published in JME, will host a debate on ‘The Future of Central Banking’.”You may use only the entire quotation above or no quotation at all.”Auerbach, shown King’s e-mail, says it’s just this simple: “If you’re on the Fed payroll there’s a conflict of interest.”Elyse Goldberg, Julian Hattem, Jeff Muskus and Jenna Staul contributed to this report
You are a dip, MOG.
Saying that the FED and the Whitehouse “saved” capitalism is like saying that that during WW-II, Hitler saved the Jews. Capitalism is quite capable of “saving” itself (thank you very much) if the s**t for brains John Maynard Keynsians would just let it.Another Keynsian absurdity that does gripe me is they are always asking, “What good is gold? What can you do with it?”. Well, it does have certain limited applications in dentistry, electronics, jewelry, etc. But best of all, you can sell it or trade it for other vauluable things. This is true now, it was true before the beginning of recorded history, and it will probably be true thousands of years from now. There is a great debate today whether the value period of the dollar should be measured in days, months, or years (but cerainly not in decades!). Give me the gold, and I will, with great realish, kiss my dollars goodbye.
TO: CLUELESSRe: “Trade-weighted” referenceHere’s the way I interpret the meaning. Professor Roubini approaches his analysis of the present U.S. condition from the perspective international macroeconomics generally and more specifically in the context of an analysis of financial crises in emerging markets over the past two decades. In Chapter 2 of his book Bailouts or Bail-ins, Responding to Financial Crises in Emerging Economies, co-authored by Brad Setser and described by Lawrence Summers as “a useful tool for those confronting these crises”, Prof Roubini lists the following Sources of Vulnerability “common to most recent crises, though every crisis has its own specific causes”:“- large macroeconomic imbalances, such as current account, fiscal deficits or both, that led to the accumulation of large stocks of public and foreign liabilities- financing these deficits in ways – with short-term debt, foreign-currency debt, and with debt other than equity – that made countries vulnerable to liquidity runs and increased the risk of a fall in the exchange rate leading to a debt crisis because of the depreciation’s ‘balance sheet’ effect- doubts about the credibility of a country’s commitment to take the steps necessary to assure its long-term creditworthiness- fixed or semi-fixed exchange rates, which increased both the risk of a large current account imbalance and the risk that borrowers would underestimate currency risk and rely too heavily on foreign-currency debt- poor banking regulation, implicit and/or explicit governmental guarantees, and other microeconomic distortions which can lead to excessive investment and overreliance on dangerous forms of borrowing- political shocks-whether from elections, weakening governments, scandals, or political violence-that increase policy uncertainty and make investors trigger-happy- external shocks-commodity price shocks that deteriorate a country’s terms of trade, interest rate changes in the world’s major financial centers and sudden changes in the willingness of domestic and international investors to invest in risky assets…”The U.S. has a large macroeconomic imbalance – the deficit in current account resulting from large net imports – generated not the “good way” (productive investment in the traded sector), but in the bad way (excessive speculative investment in the non-traded sector, a decline in private savings and large fiscal deficits). In order for that current account imbalance to be corrected, a readjustment of the exchange rate relative to its trading partners is required, making imports from those countries more expensive for U.S. purchasers and making exports of U.S. goods cheaper for those partners. As an example, according to the BEA and US Int. Trade Commission respectively, the U.S. current account deficit in 2008 totaled $578 billion, and the 2008 merchandise trade deficit with China was $278 billion.It is not necessarily the case that these adjustments will occur in an orderly fashion. In the interim, Prof. Roubini implies that the U.S. economy may be walking a bit of a tightrope, inasmuch as it possesses many of the attributes of emerging market economies which have suffered severe currency crises.WDM223
pronounced account you carry
You actually make it seem so easy with your presentation but I find this topic to be really something which I think I would never understand. It seems too complicated and very broad for me. I’m looking forward for your next post, I’ll try to get the hang of it!