can’t resist – last in an inverse uninverse

Let me think about that for a spell before congratulating you.

@blind on 2009-09-08 09:50:25 (previous)The traveler soon learns that the only way to come to know a city is to form a mental map of it, however provisional, and begin to find his or her own way around it is to visit it alone, preferably on foot, and then become as lost as one possibly can.From Michael Chabon’s – Manhood for Amateurs: The Wilderness of Childhood

t,and mog, and et. al. lost is the right word.. from ….http://www.ft.com/cms/s/0/45d46f78-9bdc-11de-b214-00144feabdc0.html.sorry for length of post but the lack ofspecificity and clarity in the use of theword “adult” in that important piece “crude realities of diplomacy” could lead one to very sad, mistaken and regrettable conclusions based on misunderstanding, presumption and childish faithin the authority of “adulthood”. so let’sneglect the definition or description of “adult”as it relates to insects or jackals or otherself serving hyena types and just stick to the human, as i’m sure the author has assumed wewould.note. western civilizations entire infrastructure physical, financial is predicated on energy, bychoice is heavily dependent on oil and gas. bychoice. the idea that there is inevitabilityat play that will relieve anyone from theresponsibility of the consequences resultingfrom their adult choices is abhorrent. adultsare primarily responsible for their actions.they are held accountable. the western politician lives in two worlds, retreating from responsibilityand accountability in the one to enjoy his/herrewards in the other. the citizen has no such option in this life. no state house to retirefrom to return home to public life. he is notso “adult” or so civilized. he is spoken to as a child who lives in a shack but he knows it andwhen he does he becomes adult. the lying adulthas no children, he has dependents and liabilities..it is the confluence of the characteristics and qualities of oil, gas and associated technology, their functional usefulness, historic and current ubiquity and quantities available for further use in relation to existing investment and asset depreciation and potential profitability that is stifling alternatives. peaceful alternatives. job creating alternatives that would alleviate the “inevitable” suffering of the innocent, the moral decay of the adult majority.ie. they are afraid to let go of the gooses neckwhile it still may pinch out eggs even whilethe gooses chicks go starving.what “adult” would avoidably and intentionally and knowingly have it’s children born with the blood of the innocent staining their undeveloped hands from the beginning. no adult would, maybe a sick adolescent, depending i guess on your use of the word “adult”. …but these politicians will not claim responsibility, adult, in the end they will blame “the world”. the children will suffer the sins of the father, (adult).Adulthttp://en.wikipedia.org/wiki/Adult.This article is about the human developmental stage. For the adult insect stage, see Imago. For the band, see ADULT….The term adult has at least three distinct meanings. It can indicate a biologically grown or mature person. It may also mean a plant, animal, or person who has reached full growth or alternatively is capable of reproduction, or the classification legal adult, generally determined as a person who has attained the legally fixed age of majority; as opposed to a minor.Adulthood can be defined in science, psychological adult development, law, personal character, or social status. These different aspects of adulthood are often inconsistent and contradictory. A person may be biologically an adult, and have adult behavior but still be treated as a child if they are under the legal age of majority. Conversely one may legally be an adult but possess none of the maturity and responsibility that define adult character.Coming of age is an event; passing a series of tests to demonstrate the child is prepared for adulthood; or reaching a specified age, sometimes in conjunction with demonstrating preparation. Most modern societies determine legal adulthood based on reaching a legally-specified age without requiring a demonstration of physical maturity or preparation for adulthood.Some propose that moving into adulthood involves an emotional structuring of denial, suggesting this process becomes necessary to cope with one’s own behavior, especially in uncomfortable situations, and also the behavior of others.Contents* 1 Biological adulthood* 2 Legal adulthood* 3 See also* 4 References* 5 External links[edit] Biological adulthoodHistorically and cross-culturally, adulthood has been determined primarily by the start of puberty (the appearance of secondary sex characteristics such as menstruation in women, ejaculation in men, and pubic hair in both sexes). In the past a person usually moved from the status of child directly to the status of adult, often with this shift being marked by some type of coming-of-age test or ceremony.Today as in the past, most medical and general English dictionaries define childhood as the period from infancy to puberty, thus historically adulthood began with puberty. After the social construct of adolescence was created, adulthood split into two forms: social adulthood and biological adulthood. Thus, there are now two primary forms of adults: biological adults (people who have attained reproductive ability, are fertile, or who evidence secondary sex characteristics) and social adults (people who are recognized by their culture and/or law as being adults). Depending on the context, adult can indicate either definition.Although few or no established dictionaries provide a definition for the two word term biological adult, the first definition of adult in multiple dictionaries [1][2] includes “the stage of the life cycle of an animal after reproductive capacity has been attained”. Thus, the base definition of the word adult is the period beginning at puberty. Although this is the primary definition of the base word adult, the two word term biological adult stresses or clarifies that the original definition, based on the beginning of puberty, is being used (that is, the organism has matured to the biologically important point of being able to reproduce).Although there is no scientific agreement on when physical maturation completes (though most would agree it typically occurs somewhere between the ages of 19 to 21 depending on what parts of the human body one is focusing on), in modern society social adulthood somewhat corresponds to the completion of physical maturation. Because the term adult is most often used without the adjective social or biological, and since the term is frequently used to refer to social adults, some writers have mistaken the meaning of the two word phrase biological adult to begin at the end of physical maturation rather than the onset of puberty, hence readers should note the context where the term is used, in case the usage is incorrect.In modern developed countries, puberty and therefore biological adulthood generally begins around 10 years of age for girls and 12 years of age for boys,[3] though this will vary from person to person.In western countries the relevant age points largely correspond to divisions in the educational system. Young people in grade school are generally not adults (up to about 12 years of age), those in junior high school (11 to 15) and high school (14 to 18) are biological adults but for most purposes are not social adults, and those who have graduated from high school (18 or over) are often recognized as social adults in addition to being biological adults.[edit] Legal adulthoodMain article: Age of majorityLegally it means that one can engage in a contract. The same or a different minimum age may be applicable to, for example, parents losing parenting rights and duties regarding the person concerned, parents losing financial responsibility, marriage, voting, having a job, being a soldier, buying/possessing firearms (if legal at all), driving, traveling abroad, involvement with alcoholic beverages (if legal at all), smoking, sex, gambling (both lottery and casino) being a prostitute or a client of a prostitute (if legal at all), being a model or actor in pornography, etc. Admission of a young person to a place may be restricted because of danger for that person, concern that the place may lead the person to immoral behavior, and/or because of the risk that the young person causes damage (for example, at an exhibition of fragile items).One can distinguish the legality of acts of a young person, and of enabling a young person to carry out that act, by selling, renting out, showing, permitting entrance, participating, etc. There may be distinction between commercially and socially enabling. Sometimes there is the requirement of supervision by a legal guardian, or just by an adult. Sometimes there is no requirement, but just a recommendation.With regard to pornography one can distinguish:* being allowed inside an adult establishment* being allowed to purchase pornography* being allowed to possess pornography* another person being allowed to sell, rent out, or show the young person pornography, see disseminating pornography to a minor* being a model or actor in pornography: rules for the young person, and for other people, regarding production, possession, etc. (see child pornography)With regard to films with violence, etc.:* another person being allowed to sell, rent out, or show the young person a film, a cinema being allowed to let a young person (under 17) enterThe legal definition of entering adulthood usually varies between ages 15–21, depending on the region in question. Some cultures in Africa define adult at age 13.According to Jewish tradition, adulthood is reached at age 13 (the age of the Bar Mitzvah), for Jewish boys, for example, were expected to demonstrate preparation for adulthood by learning the Torah and other Jewish practices. The Christian Bible and Jewish scripture has no age requirement for adulthood or marrying, which includes engaging in sexual activity, however the age of consent for sexual relations in the Vatican is 12. According to The Disappearance of Childhood by Neil Postman, the Christian Church of the Middle Ages considered the age of accountability, when a person could be tried and even executed as an adult, to be age 7 .In most of the world, including most of the United States, parts of the United Kingdom (England, Northern Ireland, Wales), India and China, the legal adult age is 18 for most purposes, with some notable exceptions:1. the United Kingdom: Scotland (16)2. South Korea & British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Yukon Territory in Canada and Nebraska and Alabama in the United States (19)3. Indonesia and Japan (20)

Mog, I didn’t respond because the comment directed at you was so infantile that it resonated with zero decibels…similar in impact to the silent radio waves that broadcast the hatred of Limbaugh’s sick society thru your kitchen everyday. If we were as formidable as we imagine we are…such tripe would pass with similar effect…mere vibrations.

Penultimate, or second thereto. Remember, you’re in an inverse universe.SWK

Very good analysis Mr. Roubini!But concerning the proposed solutions I can not agree so fast. Govt solutions always implies more discretionary wealth redistribution.For example,NowPeople have trash bought with TARP money.and banks have cheap stocks bought using their “too big to fail” protected money including TARP.Nice swap!What is the next loss to be socialized?————————-

http://www.nytimes.com/2009/09/06/business/06insurance.html?_r=1&th&emc=th.Back to BusinessWall Street Pursues Profit in Bundles of Life InsurancePublished: September 5, 2009…..Spreading the RiskTo help understand how to manage these risks, Ms. Tillwitz and her colleague Jan Buckler — a mathematics whiz with a Ph.D. in nuclear engineering — traveled the world visiting firms that handle life settlements. “We do not want to rate a deal that blows up,” Ms. Tillwitz said.The solution? A bond made up of life settlements would ideally have policies from people with a range of diseases — leukemia, lung cancer, heart disease, breast cancer, diabetes, Alzheimer’s. That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet.As an added precaution, DBRS would run background checks on all issuers. Also, a range of quality of life insurers would have to be included.To test how different mixes of policies would perform, Mr. Buckler has run computer simulations to show what would happen to returns if people lived significantly longer than expected.But even with a math whiz calculating every possibility, some risks may not be apparent until after the fact. How can a computer accurately predict what would happen if health reform passed, for example, and better care for a large number of Americans meant that people generally started living longer? Or if a magic-bullet cure for all types of cancer was developed?If the computer models were wrong, investors could lose a lot of money…….comment: we have become zombies who would betand pray for disease to make us rich. wow.i think this must be the bottom. if not,well, it just must be. there is nothing beneaththis. nothing. not even nothing. nothing wouldbe an improvement. yes lost. and speaking ofwhat the politicians know, they know that you, andeveryone you know, are suffering from an historicand culturally induced form of hypnosis thatrenders you entirely hopeless and helpless asthey have all of the money and credit and youhave legally and rightly accepted all of theliability and risk. aaannndd… would you liketo buy a health care security?absurd would be straightforward at this point..could it be that the insurance companies have losttoo much to cover the policies they hold? maybe youwould like to buy after the bankers take a bite?holy f…?

No, after a second look, you’re right SWK.

u,hunter s. thompson said…”when the going gets weird, the weird turn pro”.and we are well past that point. hopefully,the entire collapse of human consciousness willnot destroy the atmosphere and oceans so thatwhen i crawl into the surf, through the sandand soil on the strand, that interface ofsea and atmosphere will remain, where energyis yet rushing, one to the other, and a man can still float, facing the sky.peas..ps. take liberties. ( life ) while it/they last/s.

psss..i think sick and dying is the new black.let us move it along and make some money.peas.psss. what do you think?

Is it any wonder why all the repulsive attacks against fair health care? These slimes cannot justify themselves and are forcing the government to protect them so that they can continue to rip people off!

Back in the 19th century, when reformers proposed legislation in England setting the legal age for prostitution as 12, the act was opposed in Parliament by more conservative members who argued that it would leave too many poor children without a means a livelihood.Prostitution was legal throughout the United States until 1910-15, when it was banned as part of the Temperance movement with the rise of aggressive, politicised Christians.

Hard to find the words “temperance” and “christian” in the same sentence today… My history on this might not be what it should be (any enlightenment would be appreciated), but what was their rationale?Perhaps, for the fundamentalists anyways, they needed kids in front of cannons.I’m pretty sure that the Free Thinkers (whom history hides) were always against these (foisting young children into adulthood) things.

@Guest”I’m pretty sure that the Free Thinkers (whom history hides) were always against these (foisting young children into adulthood) things.”Libertarian economic theory would have no laws imposed on an individual and their entrepreneurial spirit – child labor is God given inalienable right.Liberty über alles!

What do “libertarian economic theories” have to do with Free Thinkers/thinking? Do enlighten me.

Freedom, liberty, the natural state of man unhampered by the impositions of an overbearing government and its mob rule imposing restrictions on free enterprise.You’re messing with the primal forces of nature. Child labor is good for business and profits. Just ask GAP, Nike or any number of American corporations with sweatshops around the globe. Profits! Profits! Profits! And cannon fodder too.

Ha!Bankruptcy threat brings new concept to the Cayman Islands … taxesThe white sands of Seven Mile Beach on Grand Cayman have long caressed the toes of the world’s wealthiest financiers, who flock to this balmy spit to avoid the taxman’s prying eyes.But the world’s biggest hedge-fund venue and fifth-biggest bank centre is now threatened, as the government of the Cayman Islands heads for bankruptcy — unable to pay its own staff and facing the prospect of introducing taxes as income from the world’s shrunken financial system collapses.http://www.guardian.co.uk/world/2009/sep/01/cayman-islands-tax-haven-bankrupt

hmmm…Switzerland, that country were stores are closed on Sundays and otherwise after 7PM, has been found most competitive.They should have given that price to Singapore. People call New York the city that never sleeps but I think those people have never been to Singapore;-)Swiss topple U.S. as most competitive economy: WEFhttp://www.reuters.com/article/businessNews/idUSTRE58718620090908?feedType=RSS&feedName=businessNews

GENEVA (Reuters) – Switzerland knocked the United States off the position as the world’s most competitive economy as the crash of the U.S. banking system left it more exposed to some long-standing weaknesses, a report said on Tuesday.

And we wonder why “‘They’ hate us?” Yeah, let’s spread This “democracy” around, they’ll love it!

“You’re still not making the connection that Free Thinkers = Libertarians.”Are Free Thinkers, Libertarians? I’m asking.

I’d argue that with some exceptions most all MOG’s posts ARE related to economics.

And to clarify, freethinkers can think whatever, but their thought is based on reasoned, critical thinking, not bound to any dogma. Like any other group, I could not speak for it in its entirety, but, as a “group,” I could go so far as to say that there’s very little chance that they could come up with the notion that child labor (prostitution or other) is a good thing: it wouldn’t likely be accepted within any set of laws that freethinkers would likely have influence over.

I agree with Jason B.

MOD your are sh!t head change your fuc!!g name. Your are a motherof a dog and you know what they call the m of dog.

dame those Christians, no wonder hard to find hooker on the street. =D

Then go!

First, people would have to know about it. It has been weeks since this broke, but it has yet to be seen or heard in any MSM I am aware of.What should have us all trembling in our booties is the campaign finance case the Supreme Court is chewing on now. This one forthcoming decision could completely end the the tenuous ties our political system still has to the original intentions of our founding fathers. Money =’s speech. Corporations = citizens. George Orwell reigns.Independent Contractor

Yes, good comments. Sooner or later, however, all of this stuff WILL get purged: bad things eventually fail.

I see a deliberate pattern. It’s “Oligarch-Friends-ism”!

Sooner or later, we are all dead. Don’t hold your breath.What have you seen actually ‘changed’ in the past 30 years? Re-arranging the deck chairs does not count.But, I’ll give you this. Your sanguine attitude puts you in good company – with SWK ;~)Independent Contractor

The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years. Base on recent years data it was not surprising the Fund ran a deficit in August. But the magnitude of the shortfall was a surprise to me. This deficit is now the seventh in the past twelve months. That pace has never been seen before.We deal with very big numbers these days. 100rds of billions and trillions are how we measure things. So a $6b monthly deficit for the Fund would appear to be a ho-hum. That is not correct. This is an important number.The Actuarial analysis of the Fund is misdirected. Their focus is based on the future value. It should be focused on the here and now. In the June annual report the Trustees concluded that the Fund would be broke in 2037. This conclusion is so far into the future that it is easy for everyone involved to say, “this is a next year problem, health care comes first”. Stephen Goss the Fund’s head honcho said as much in a recent interview.While there is a political case that we have to prioritize health care as an issue, it is wrong on a purely economic basis to ignore the exploding problems at the Fund. Every month that the status quo is allowed to continue makes the cost of the ‘fix’ that much larger. Based on the past twelve months performance I now estimate that the Net Present Value of future committed liabilities is in deficit by $7 trillion. To plug this sized hole would require a significant increase in payroll taxes. That isn’t going to happen. Raising payroll taxes by 4% would kill the economy. No White House economist would advocate that. The alternative of cutting benefits would be very unpopular. There are currently 52 million beneficiaries of the system. A lot of them vote. To shore up the fund would require across the board cuts greater than 20%. While that may not be a hardship for some it most certainly will be for others. The only way to address this inequity will be a means test.The August deficit reconfirms that the Funds foundations are wobbly. Some observations:-In August the US Treasury had to borrow an additional $6 billion in the public market to finance the cash shortfall of Social Security. We already have too much paper for sale to fund the budget deficit. SS added to the supply problem last month.-The 2037 Future Value of the August deficit is -$17b based on a 4% return. What this means is that there will be a very significant revision in the 2037 drop-dead date. Based on current trends the go broke date is closer to 2025.-This is not just a bad month. The net decline in the Funds assets for June/July/August comes to $7 billion. In 08 that period was in surplus by $5 billion, In 07 it was +$7b and in 06 it was +$13b.-The decline in payrolls is hurting the Funds’ top line. January-July 2009 payroll tax receipts were down from 2008 by $5 billion or 1%. While the monthly declines in payrolls will fall over the next six months it is unlikely that there will be much net increase either. It will be a very long time before we see monthly gains of 250k. Without that kind of growth the Fund will quickly fall into annual deficits.-The expense side is exploding. The September monthly benefits cost will be $56.6b up from $51.5 in 2008, a 10% increase.-In 2007 the SSTF produced a surplus of $191b that it invested in the US economy. This year it will be closer to $100b. Based on the current trends that surplus will be gone by 2012. Six years earlier than the Trustees forecast in June of this year.SS is the mother of all systemic risks. Even the debate on this topic brings risk. It will expose an additional $7trillion unfunded liability. Another reason for holders of dollars to worry.There is no fix to this. Raising taxes is a dead end. Age warfare is a possible social consequence. The really bad news is that no one will touch this for another year. By then it might be too late.

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

2 out of 5 working-age Californians jobless -40%Sunday, September 6, 2009On this Labor Day weekend, many Californians find themselves more in need of work than a holiday.A report released Sunday says two of five working-age Californians do not have a job, underscoring the challenges in one of the toughest job markets in decades. A new study has found that the last time employment levels among this group were this low was February 1977.The study was done by the California Budget Project, a Sacramento-based nonprofit research group that advocates for lower- and middle-income families. The report said that California now has about the same number of jobs as it did nine years ago, when the state was home to 3.3 million fewer working-age people.Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/06/state/n000211D96.DTL#ixzz0QcqB9EBu

A little early to make the call. It could just be a speculative blip. Why give so much credence to a man who could not see past his own policies?

IC:You are spot on about the “Hillary Video” case coming up this month in the USSC. It could be the last chance for the country to pull free of the powerful vortex into which unbridled corporatatism, like a big black hole inhaling everything close to it, threatens to suck the life from what’s left of our democratic republic.SWK

As now he is out of the FED, he can desire to recoup his prestige as a good economist. (do you remember he was considered by many as “the master” ?) Perhaps he knew that was risky. See what Katz wrote below:”Paper money is not some brilliant new economic theory. It is nothing more than government sanctioned counterfeiting. The counterfeiter may get rich, but only because the rest of us get poor. The counterfeiters themselves love it, and they handsomely reward those immoral enough to shill for them. Alan Greenspan is a good example. In the 1960s, I used to attend his lectures at which he denounced paper money. Then, when the bankers waved money and fame in front of his face, he was only too happy to do their bidding. Printing money does not create wealth. It is great for the counterfeiter personally. It makes him wealthy, but it makes everyone else poor. And it has never brought the slightest benefit to any country in the history of the world.”

Amen, ‘bro.Now, how do we wake up the rest of America?I swear, the tricks of distraction the PTB and their hand-maidens, the MSM, use against the American public is criminal. We are busy going nuts over medical care while the FED gives trillions to the financial industry. Something that could end our way of life is up for debate and decision, and hardly a word mentioned to the general public. Bring up the subject with people, and they look at you like you have 2 heads. It has not even been raised on this esteemed board, and I wonder how many don’t really know what we are talking about?I do not feel good about this & am reminded of the last lines of T.S. Elliot’s Hollow Men…”This is the way the world ends. Not with a bang, but a whimper”.More appropriate to this board might be this one from Lawrence Ferlingehitti:”I think if there’s a great depression there might be some hope.”Shame on us.Independent Contractor

“AP – Economic activity is stabilizing or improving in the vast majority of the country, according to a new government survey, adding to evidence that the worst recession since the 1930s is over”What is fascinating to me is that from where I sit I see nothing but ongoing recession/depression. Empty shopping malls, more friends and family out of work, stagnate real estate markets. These kind of headlines will simply make more Americans realize that our government and the MSM cannot be trusted.

Don’t Look for Any Common Sense Plan By the Uncontrolled Population Growth EnthusiastsThis group just does what they want in a “knee jerk” brainless way IMO; they simply lack science and good old common sense.Their push for more insane job competition during depression level unemployment [calculated honestly] in America makes about as much sense as saying the recession is over in America with depression level unemployment getting worse and worse.

Anyone notice all the drips recently about most or all of the bailed out companies will never be able to pay back their bailouts….BEND OVER AVERAGE JOE AMERICAN, theres a lot more to come….http://www.businessinsider.com//auto-bailout-losses-2009-9SHOCK: Taxpayers Face Big Losses On $81 Billion Auto BailoutShocker: taxpayers probably aren’t going to get most of their auto-industry bailout money back.AP: Taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report to be released

U.S. has begun to drain liquidityPosted by Edward Harrison on 9 September 2009 at 11:01 amI just received notice that the FDIC Board has approved the phase out of the Temporary Liquidity Guarantee Program (TLGP) in a first clear sign that the U.S. Federal Government has started policy normalisation.The FDIC Board today adopted a Notice of Proposed Rulemaking (NPR) that reaffirms the expiration of the debt guarantee component of the Temporary Liquidity Guarantee Program (TLGP) on October 31st, 2009. Under the NPR, the Federal Deposit Insurance Corporation will seek comment on whether a temporary emergency facility should be left in place for six months after the expiration of the current program.”The TLGP has been very effective at helping financial institutions bridge the uncertainty and dysfunction that plagued our credit markets last fall,” said FDIC Chairman Sheila C. Bair. “As domestic credit and liquidity markets appear to be normalizing and the number of entities utilizing the Debt Guarantee Program has decreased, now is an important time to make clear our intent to end the program. It is also important to note that the FDIC has collected over $9 billion in fees associated with this program. The FDIC will be using some of this money to off set resolution costs associated with bank failures.”I view this announcement as confirmation that the Obama Administration sees the financial crisis as over and is declaring victory. I would anticipate other policy announcements from the Administration and/or Federal Reserve to reflect this view.Just yesterday Zero Hedge reported that the money stock is now falling, another clear sign that the excess liquidity about which inflation hawks have been concerned is being drained. In the main, one should take this premature ‘tightening’ bias as bearish for equities and bullish for government bonds.While I had anticipated the Fed and the Obama Administration would be loath to cut the recession short and would maintain accommodative fiscal and monetary stances, this announcement is the first contrary indicator.http://www.creditwritedowns.com/2009/09/u-s-has-begun-to-drain-liquidity.html

FYIZero Hedge has started a petition to Break Debt Habit and Freeze The Debt CeilingA Zero Hedge Petition: Break Debt Habit, Freeze The Debt Ceiling

check out this post and graph from Tim Knighthttp://slopeofhope.com/2009/09/the-eerie-calm.html

I’m sure everyone here watches Doug Short’s Four Bears Chart:http://dshort.com/charts/bears/four-bears-large.gifAnd it’s starting to look like a recovery with the S&P at -34%, up 57% from the low six months ago.But now look at these charts from the engineer “Thought Offerings”http://www.thoughtofferings.com/The third chart down shows, compared to the Great Depression, the trend in dividends and earnings is scary similar to the Great Depression when comparing operating earnings today with reported earnings back then (operating earnings was not an accounting method back then). Reported earnings have fallen off a cliff, even when compared to the Great Depression.So, even though the big five banks have boosted stock prices; operating and reported earnings reveal it’s a head fake.

Fame attracts attention– both positive and negative. But it wasn’t the prediction part that leads credence to the professor– it was th fact that he precisely described how things would unfold. It wasn’t that xyz will happen, but the whole process of it happening, that the professor rightly predicted.

Sorry .. last 4 words above should say – it can’t be good.

Yeah, like there’s no Democrat on K street (or in jail for pedophelia). Not.

But it’s mostly members of the GOP, those big hypocrites that they are, who are predominately cheating on their wives, playing around in bathroom stalls etc.What’s it like to defend the likes of these folks?P.S. I don’t ascribe to ANY “Party” (I’m a freethinker).

I’ve seen that the corrupt system is hanging itself. One has to have a complete picture of things to see this.

Pete,I don’t believe that hyperinflation is even necessary for people to start working outside the existing currency system. If people don’t have any money then they are going to do straight bartering. And in the end, bartering will stand when nothing else will.

But, what are people going to be doing when they’re all unemployed?Me (or someone like me) has been suggesting that we’re all going to be spending more time toiling in the soil… this will keep us fed as well as “preoccupied.”

http://www.methuselahfoundation.org/http://en.wikipedia.org/wiki/Life_extension

The crisis is of energy, insufficient energy to keep fueling the growth bubble.The petrodollar is collapsing, and nothing that replaces is will be able to produce the levels of “positive” growth that previously occurred: it’s negative growth from here on out.

These are the kinds of posts I come here to read, not the MOG screeds with their associated drama.

And I come here not to read about others stating what they do or don’t want to read! Translation: who care what you think! No one’s taking a poll! (no, I’m not MOG!)

I called third last week.

Damn good job, WW.

Mark? Is that you speaking?

And YOUR value is, what?

The Coming Consequences of Banking Fraud“The Double Dip Recession, or the “W” shaped recovery that a minority of economists, such as Joseph Stiglitz, is now stating as a strong possible outcome of this current rally, should not be discussed in the realm of economics but rather in the more apropos realm of financial fraud. The fact that the upleg of the “W” shaped recovery that is occurring now will inevitably crumble in spectacular fashion will not be a result of any free market principle, but rather the direct consequence of a fraudulent scheme executed by an elite global financial oligarchy, otherwise known as Central Banks.”… Most people today can not even fathom how bad the situation will become primarily because of all the secrecy that the banksters have engaged in – in US Treasury markets, the gold markets, the US dollar markets, agriculture commodities, stock markets, and financial markets – in hiding reality from the people.Most people today can not even fathom how bad the situation will become primarily because of all the secrecy that the banksters have engaged in – in US Treasury markets, the gold markets, the US dollar markets, agriculture commodities, stock markets, and financial markets – in hiding reality from the people…. Remember that it is only the timing of this decline that I am uncertain of, but I am very certain that a significant decline of a shocking nature is coming… J. S. Kimhttp://seekingalpha.com/article/160619-the-coming-consequences-of-banking-fraud

Wolf … I think there’s a growing awareness in America now that we could end up in a hyperinflation scenario. At least amongst the citizens who are paying attention to the problem (not the Obama administration). And by the way … I always felt that the Bank of Japan (BOJ) should have been hung, drawn and quartered for allowing the masive carry trade baed on the yen. They could have instituted controls, or a system of fees, that would have made it impractical for overseas investors to borrow yen at very low rates and take the money out of the country. But they did not – because (of course) thay actually made a ton of money from the interest payments on the carry trade. Disgusting. But … it is what it is.I still think a key factor in the current situation is the peg of the yuan (renminbi) to the US dollar. At some point the Chinese have to drop it. But that won’t happen until internal inflation within China reaches horrendous levels. So I guess they are not there yet.PeteCA

Ohh and by the way … the argument that you are making Wolf – namely that the sovereign balance sheet should have been used for re-building future economic activity – is essentially the same approach advocated by the opponents of the rescue of the Wall Street banks. One of the most eloquent advocates for this approach was John Hussman at Hussman Funds, who argued strenuously that the big banks that failed should have been allowed to fail. In other words, the losses at these banks should have been carried by the bond holders. Other commentators (myself included) have pointed out that if the big banks had been allowed to fail, and the Government had used the “stimulus money” to create a new banking system, we could have been a lot better off. Naturally, the managers for the new banking system would have been drawn from the remaining banks in the USA which had remained profitable (i.e. were not involved in scandalous trading activities). But as we all know – none of this took place. The actual path chosen by Bernanke, Paulson and Geithner lends credibility to theories that the Gov’t has been using some of these big banks to conduct covert trading in the US futures markets that supports favorable pricing policies for the United Sates (e.g. adjustments to the price of oil, gold, and interest rates on bonds).PeteCA

Govt survey : “Economic activity is stabilizing or improving in the vast majority of the country”Where ?Oh, I forgot !After you slice the throat of a pig, the bleeding slows down after awhile…

Obamacare if passed in its current form will have almost 10 Trillion of unfunded liabilities… Add that to the revised close to 50 Trillion Medicare unfunded liability by 2017 or so, and the fact that SS could have 15 Trillion by the year 2023 and you a total Economic disaster waiting. The only question is when? SS tax recipets are down 6 consecutive months now, pushing up its problem from sometime in the 2030′s to 2023 or there abouts. Some are even saying SS could be broke around the same time as medicare.

Removing Medical Insurance Tax-Exempt StatusThat is how they are going to pay for Universal Healthcare.

I smell a tax code change in our future – perhaps a flat tax that is not levied on only the working class.Nah, a tax cut would be more effective – clearly they result in higher tax revenues overall – right Chairman Greenspan?

Examples of smart guys – see their bonus (try to find out your contribution)http://www.cnbc.com/id/30502091

Speaking of Slicks, feral, their MO and depression:http://www.bloomberg.com/apps/news?pid=20601109&sid=aNFuVRL73wJcIt has NOT stopped – it has just shifted to new “opportunities”. By the way, the Bank of ….. has another bridge for sale, marketed by Vulture Droids LLB, a Leader of Innovative financial Instruments, rated AAA by S& x. who also serendipitously sell future death & funeral insurance.Your life, your life a few grocery vouchers for your life and the lives of your friends and family. The Reign of the Slicks!!!!!!!!!!!! (er, leadership)Ho hum

The action in equity and credit markets continues to confirm that markets are short term oriented. I have no doubt the Professor is making valid points but his are long term forecasts with a high degree of uncertainty. The Professor is not alone. Dr. Hussman has remained a bear throughout the latest rally. In terms of short term economic forecasting and what to expect from the markets short term, Achutan & Co. have done a much better job.

“If Bernanke increases the Fed’s debt monetization scheme of $300B that is scheduled to end in October, the Chinese and Mr. Market will be very unhappy. The dollar will tank further; gold, oil and commodities should surge. This action should actually force bonds lower.If Benito refrains from further debt monetization, US dealers will be holding the bag and the short-term outlook for bonds would be negative.Bernanke will soon be forced to choose between saving the dollar and bonds or stocks.In the mean time, we continue to believe that although stocks are overextended any September pullback will be modest unless new developments appear. We also think it is still too early to short stocks or play for a significant decline.And as we recently stated, because any meaningful rally from here is likely to be the product of funny money, dollar debasement plays should outperform other stock market sectors.”http://www.ritholtz.com/blog/2009/09/bill-king-bond-divergence/

I smell a bear trap.Remember that Greenspan has been complicit in manipulating the price of gold through secret gold leases and gold swaps with the bullion banks for the past 25 years. And the IMF gold released by agreement earlier this year has not yet been sold in the market.Greenspan is teeing up the gold bugs for an almighty drive into the rough with the next orchestrated market crash.While I do think fundamentals are changing with China now seeking physical delivery of its gold, the Fed and its cronies have at least one more chance to punish the bears and incite another “flight to safety” rally in Treasuries.

It Used To Be – IF YOU DON’T WORK YOU DON’T EAT!Wow! Where do we go from here?

This is why socialism is our only option going forward capitalism is dead for a ton of reasons.

President Obama’s national health care agenda is big, bad, and bold. It is also better in various important respects than what we have currently. However, it is fatally flawed. The seriousness of the flaws outweighs the plan’s efficacies and virtues. As a result, the U.S. Congress should reject this legislation and address the fact that the nation consumes too much expensive but ineffectual health care.Prepare for profound government growth and a shrinking private sector apart from health care. It won’t be long until the majority of our economy is staked on deficient education, ineffectual health care, predatory financial services, big bureaucracy, monetary redistribution, imperialist defense and surveillance style homeland security. We will be highly dependent upon foreigners for much of the rest, weakened by excessive immigration, debt and hedonistic habits. We are the new Rome at the old sunset, our tipping point reached, symbolically perhaps, in April 2008 when world population reached 6.66 billion (per http://www.About.com).The $900 billion Obama national health care plan is essentially bailout number two – this time for a failed Medical Street. Like the Wall Street bailout, Congress will make wrong choices because the pressure to act is great and there is no momentum for a wise alternative. The Republican options simply cater to a different set of special interests. The common good cannot be well served when both sides are endeavoring to grease the palms of key constituencies.Our nation needs to move beyond a polarized debate and investigate this policy crossroads. Obama pledges a revenue neutral plan, but that idea is as specious as the one a decade ago that projected massive federal surpluses far into the future. Today’s economists have a knack for looking through dark glass and seeing whatever they want. It is an age of delusions as evident in religion, education, sex, consumerism and speculation. So, what can we expect from politics when it is front-loaded with vested interests?President Obama’s national health care speech on Sept. 9 was eloquent and stirring, but not equal to the best presidential speeches of the pre-television era – speeches written by statesmen and articulated without teleprompters. We are left hoping that an elocution that matched some of President Reagan’s best performances does not prove to conceal such seriously errant projections as camouflaged by Reagan’s oratorical skills. Reagan did not anticipate the enlargement of debt generated by his supply side initiatives. Nevertheless, it was that debt that pulled the nation toward unsustainable economic growth.While the Obama camp shows political adeptness in moving away from some of the discredited language of universal health care, Americans are left with important questions. One key question is this: How can an administration dramatically expand societal access to “get as much as you can take” medical care while maintaining care quality, choice in accessing preferred providers, and a reduction in national health care expenditures? Like the old saw goes: If it sounds too good to be true, it probably is. We’re still experiencing fallout from the previously fashionable idea that housing values take a one-way trip up.There is so much to be enjoyed in life that many people will pull out all the stops to get every bit of technologically advanced medical care they can obtain for themselves and loved ones. Since care costs are often socialized, little conscience is left about the intemperate use of health care benefits. Indeed, doctors and hospitals have little incentive to consider the alternative costs of societal expenditures on health care, especially in an environment where it is unfashionable to put any limitations on the value of an American life. Granted, there is an ethical reality here that deserves exploration as well as a cost and benefit equation. However, both considerations rest outside the typical range of politically viable dialogue.The cold truth is that medical technology and drug innovation has outstripped the nation’s ability to pay for everyone to experience “the full health care life.” The political rhetoric is that in a rich nation, no one should have to go without health care. Granted, we can’t afford to give everyone a McMansion, a Mercedes Benz, and a month on a Parisian holiday. But, dang, if some people don’t shout “social injustice” at the mere vocalized doubt of whether every American can be afforded a government checkbook if their health heads downhill.According to data at Bankrate.com, the Federal Reserve estimated the median American HOUSEHOLD net worth at about $86,000 shortly before the financial crisis struck (2007). While the median value is less than the average, we’re left with the problem of how to give EVERYONE full quality end-of-life medical care when that care involves at least five times greater costs then encountered before the last year of life. Indeed, at a time that financial advisors are encouraging well-heeled couples to put aside several hundred thousand dollars to pay for Medigap insurance premiums, is anyone considering where this kind of money comes from? Should the nation’s entire net equity be consumed on health care? Obviously, something must give.A hospital can generate $150,000 of services for a heart patient, only to release in many cases a person whose days are numbered. It is a lot easier to spend $150,000 on medical treatment for an ailing body than to manufacture and install $150,000 of solar power equipment. With treatments running several thousand dollars a pop, a needle stick here and a few pills there can quickly add up to more than the cost of a student’s university education. Where should a nation’s priorities be when human bodies are BORN TO DIE and health care has invented countless ways to make the dying process infinitely expensive?The raw truth is that nationalized health care in its planning stages is a far-reaching tax scheme that rewards moral hazard and redistributes wealth. (The current insurance environment is even less defensible!) Those who carefully maintain their health through self-discipline and moderate lifestyles must subsidize the behavioral proclivities of those who put a premium on intemperately maximizing self-gratification or foolishly failing to demonstrate basic competency in self care. How does this strategy build national greatness? Indeed, we will soon tax the families of those who die courageously (i.e., without heroic measures to prolong degraded life) so we can do homage to those who expect others to subsidize their inability to let go.If people want to prolong their largely unsustainable lives by every means on their own earned dime, that’s their business. But when they take government money (other people’s labors) and exploit medical technology to do it, that’s social injustice – regardless of whether they’re rich or poor.President Obama is correct in arguing that something must be done to mitigate risks that people face of being wiped out financially when a simple medical procedure in a hospital turns into a six-figure trauma due to a surgical infection or complications. Middle class lifetime savings should not be risked by stepping through a hospital door. We need a new generation of medical practitioners who can provide low cost services that are both physiologically effectual and affordable to working class people. This means moving away from the ‘pop-a-pill’ regime to a holistic medical philosophy that allowed many of our responsible grandparents to live fairly full lives into their 80s and 90s, and with relatively little medical intervention. In short, we are well-advised to resize the health care sector from 16% to 10% of GDP, while trimming the federal government’s role from over 30% of GDP to less than 20%. Properly designed, government need not be big to be effectual.Let’s applaud President Obama for recognizing the social injustice of combining high cost medical care for simple procedures with high cost health insurance. But let’s also applaud those who insist that a reformation of lifestyle choices, dietary habits and reproductive assumptions must rationally accompany successful reform of health care. There must be rewards for those who succeed in doing good and penalties for those who slack off.We’ll get change shortly, rest assured. We’ll also pay dearly for the changes just as we pay exorbitantly for our current madness. At least with the change we’ll be out of the fire and into the frying pan – whatever that’s worth.

Must read! Jesse’s Cafe Americain has a link to a PDF of a motion for dismissal in the 2003 case of Blanchford v. Barrick Gold and JP Morgan, a case asserting direct manipulation of the gold market. The motion seeks the case be dismissed because the central banks who lease/swap gold to the bullion banks, the other bullion banks and the other major gold producers are not parties to the action. It explicitly concedes the mechanisms by which the market is manipulated in black and white, but argues that the case can’t stand because central banks are immune and many other parties to the manipulation are foreign so can’t be joined.Read it all: http://www.lemetropolecafe.com/img2003/memoformotiontodis.pdfThe main authority cited for central bank immunity is a law review article: Ernest T. Patrikis, Foreign Central Bank Property: Immunity from attachment in the United States, 1982 Univ.Ill.L.R. 265, 274 (1982).Who is Patrikis? He was the long time General Counsel and First Vice President of the Federal Reserve Bank of New York. Where did he go? He became General Counsel of AIG.

Yes, when you consider monetary policy and corresponding easing. This time we experienced actual injections that were immediate rather than a slow trickle of money off the sidelines.

Not me! I’m a shootin’ me squirrel!SWK

Socialism would be welcomed when held up to everything that the evidence suggests that we’re going to get.Of course, that all depends on which side of the corporatist / totalitarian fence one falls on.

Boy, ain’t that the truth!SWK

Obama’s healthcare advisor, Dr. Ezekial Emanuel, is not a difficult man to understand. He clearly doesn’t believe the State should pay expensive medical costs for individuals with terminal illnesses, aging people, infants, those who do not “ensure future healthy generations”…The problem develops, however, with the fact that he clearly believes that the State should be given permission to make these decisions; not insurance companies and certainly not the individuals themselves. His advice and support for a single-payer system and the rush to get Obamacare established identifies his purpose. With all Dr. Emanuel has stated, he goes even further. His brand of bioethics would begin the selection of withholding medical treatment from individuals, not only on age or status of illness, but on their worth as citizens. Or to put it more simply, on who deserves to live. Dr. Emanuel makes it crystal clear, just read the words he’s written. In the final analysis who would make these end-of-life decisions? Well, if no one else is willing, I guess he, White House hammer brother Rahm, and Hollywood CEO hammer Ari, would have to do it.Here are Dr. Emanuel words, taken from the WSJ’s “Dr. Ezekiel Emanuel Wants Health-Care Rationing”:“Dr. Emanuel argues that to make such decisions [whose life is worth saving], the focus cannot be only on the worth of the individual. He proposes adding the communitarian perspective to ensure that medical resources will be allocated in a way that keeps society going: ‘Substantively, it suggests services that promote the continuation of the polity—those that ensure healthy future generations, ensure development of practical reasoning skills, and ensure full and active participation by citizens in public deliberations—are to be socially guaranteed as basic. Covering services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic, and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia.’” (Hastings Center Report, November-December, 1996)The bioethicist also puts the youngest at the back of the line: “Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments…As the legal philosopher Ronald Dworkin agrues, “It is terrible when an infant dies, but worse, most people think, when a three-year-old dies and worse still when an adolescent does,’ this argument is supported by empirical survey.” (thelancet.com, Jan. 31, 2009).The WSJ link includes among other things, a graph of Dr. Emanuel’s Reaper Curve–Principles for Allocation of Scarce Medical Interventions” The Lancet, January 31, 2009. Dr. Emanuel used the Reaper Curve chart in a Lancet article to illustrate the ages on which health spending should be focused.In The Reaper Curve, the “Probabililty of receiving an intervention” ranges from “Minimum” to “Maximum,” Ages 0 to +70, with practically zero care below age 1 year rising to “Maximum” care at about age 23, with chances of “intervention” falling constantly until age 53 where it takes a sharp swing downward to nearly “Minimum” care for those in their late fifties and beyond.http://online.wsj.com/article/SB10001424052970203706604574374463280098676.html

This one is a must read. IMO, we will live long enough to see an improved remake of the current financial crisis.Lehman Monday Morning Lesson Lost With Obama Regulator-in-Chiefhttp://www.bloomberg.com/apps/news?pid=20601170&sid=aUTh4YMmI6QE

Look, my legal paradigm tends towards natural law, not logical positivism, so I appreciate assertions regarding the “worth of the individual.” That being said, society has limited health care resources that must be used more efficiently.For example, the current fee-for-service model probably can be replaced with something better. As Peter G. Peterson, Secretary of Commerce under President Nixon, has pointed out, “During the last six months of life, Medicare patients in Miami are treated by twenty-five specialists on average; in Minneapolis, by fewer than four specialists. Yet the result is the same: all of these patients die in six months. Using such data, some experts estimate that nearly one-fifth of total Medicare expenditures provide very little or no benefit in terms of survival or quality of life.”I don’t think this makes sense when millions of people in this country don’t even receive basic health care services. I believe this is Dr. Emmanuel’s point of reference, too. He does not assert that people with terminal illnesses, the elderly, infants, and others should not receive health care services, but that sometimes the services they receive are not sensible in terms of benefit to the patient or to society at large. It is a waste to spend limited health care resources in ways that do not help patient outcomes or quality of life, especially when there are many other citizens who could benefit, and more effectively so, from a better allocation of health care resources.This is one reason that the share of GDP taken up by medical services in the U.S. is roughly twice that of the rest of the developed world, without any significance in health outcomes (and, in fact, we are far lower than many countries in terms of a number of objective health outcome metrics). I think we can do better in terms of providing basic care through a blended public-private system.Dr. Emmanuel has said he believes society needs to determine what constitutes an appropriate basic level of health care, and that the government should guaranty that level of health care for everyone. He does not say people should not have the right to get non-basic or elective care, but that the government shouldn’t have to pay for that non-basic or elective care. This is no different, really, than someone who receives basic health care services through Medicare, but purchases supplemental coverage from the private sector to pay for things Medicare does not cover, e.g., supplemental coverage through AARP’s United Health Options plan.I think the WSJ is being disingenuous and, frankly, slanderous in its portrayal of Dr. Emmanuel as a cold-hearted monster. He’s a bioethicist, not a Dr. Frankenstein. His arguments are generally sound and well grounded in fact and judgment.SWK

How would you lawyers know what arguments are ethical in the field of practicing medicine? You don’t know the first thing about actually having the responsibility of patient care……and you never will.How about volunteering to get you greedy demagogic noses out of the business of second guessing doctors with junk lawsuits? Why not tell Americans the true costs of defensive medicine? This is especially important in expensive end of life issues.My estimate is that when given the facts, most people would decide to forego many expensive medical treatments. Were it not for fear of being sued, your doctor might tell you the facts. Here’s a perfect example your doctor won’t tell you for fear of the consequences: taking cholesterol medication religiously for 20+ years may prolong your life, on average, by two months.As an “experienced” physician, my estimate is that at least 40-50% of health care costs could be avoided if junk lawsuits were not allowed, as in most other civilized nations. Unless the health care debate starts to turn on what physicians have to say, not the trial lawyers supporting the Dems and Obama, Americans can kiss their audacious hopes for meaningful health care reform good-bye……and while they’re at it…………. Pelosi’s Congress’ golden patute.

As you clearly have demonstrated (of yourself)!Now then, go away!

I fully understand what you and Wolf are saying, but I also believe that you can’t hope to rectify a system that is fundamentally/critically flawed. Remember, it’s all a Ponzi Scheme, no matter who is in charge (banks, government, “the people,” etc.), changing who is in control, how much regulation or non-regulation is in place, it doesn’t matter. It’s a “growth” system.

We’re still missing the elephant in the room- our food system. As Kissinger said: “Control the food and you control the people.” He didn’t say: “Control medicine and you control the people.”Medicine is pretty much an outgrowth of our food system. We’re in complete denial about all of this.While you froth about the Dems, the “Socialists” and whatnots, the food system cranks along, making everyone worse and worse. And, my friend, That is not good for YOU!I want better health, not better health “care.” And, I’m not going to get it from the left’s health care system nor from the right’s corporate food system.Get this: It’s the SYSTEM. It’s not how it’s run; it’s not some left vs. right B.S..

Who were his biggest campaign contributors?Don’t blame me, I voted for Nader…

to add to the misery of regrets and consequencessprouting like weeds to be watered there is thiscontrary caution to consider. the double dip. firstyou make a poor decision and pay for IT with borrowedmoney, then you see the folly, but continue to pay, livingwith the worthlessness of your investment, own it, then paying thrice to remove IT. the disposable ethic for the disposable economy as quality would just destroy needed financial velocity (money). systemic junk underpinning.a brazilian rube goldberg concoction with all associatedwarranties, legally binding stipulations and non redemablepreamble. anyway…..http://www.debtdeflation.com/blogs/.Michael Hudson Public Talk Sydney Friday October 23Published in September 11th, 2009The renowned non-orthodox economist and economic historian Dr. Michael Hudson will be visiting Australia in October.Michael is another of the handful of economists who predicted the Global Financial Crisis, and he has since worked intensively with the governments of Iceland and Latvia to attempt to pull them out of the economic quagmire. He shares my expectations that the “green shoots” being spied by more conventional thinkers will wither under the weight of the private debt that created this crisis in the first place (and whose existence has been ignored in all the rescue plans to date)…. and argues that we may have to revisit what we once thought was the Biblical practice of “Debt Jubilees” to overcome our modern dilemma.So it will be a great night, but there is a problem–funding. In this “free market system”, while bankers still pay themselves multi-million dollar salaries, it is difficult to get financial support for contrarian thinkers. So I’m trying to help by making a personal donation of $100 to Michael’s expenses, and by encouraging blog members to also chip in via the PayPal Donation widget on this site..“Green shoots” are appearing everywhere—just read the newspapers, and you can be assured that we’ve turned the corner. Bar the latest rise in US unemployment—up 0.3% to 9.7%, after falling 0.1% the previous month—there’s nothing but good news as far as the eye can see.Unless, that is, you take a look at a wider range of data, as economic historians Barry Eichengreen and Kevin O’Rourke have been doing in their series “A Tale of Two Depressions”.They have now published three installments of this study, which collates data from a number of countries and compares it to the same information in the 1930s—taking June 1929 as the starting point for the Great Depression, and April 2008 as the same for our current “Great Recession”.Their latest installment was published on September 1st, and it does indeed show some signs of a turnaround—“green shoots” perhaps. But their comparison of today with the 1930s still reaches the conclusion that “today’s crisis remains dramatic by the standards of the Great Depression”.The key improvement they see in the current data over that for the 1930s is an uptick in world industrial production, which has risen by about 2% (compared to peak output in April 2008) in the last four months from its low of 88%. This now puts it substantially above the comparable period in the 1930s, when by this stage industrial output had fallen to 81% of its peak.However, they express the concern that this turnaround reflects the gigantic government stimuli that have been applied in the last year, and the continuance of a positive trend now relies upon the private sector taking over:“The question now is whether final demand for this increased production will materialise or whether consumer spending, especially in the US, will remain weak, causing the increase in production to go into inventories, leading firms to cut back subsequently, and resulting in a double dip recession.”There are signs of good news elsewhere too—notably in stock markets and world trade. However, these aren’t as robust as a focus solely on the US indices and Japan’s exports might imply. Though world stock markets have rebounded, they are still slightly below their comparable levels in the 1930s.The world trade figure is more telling. Neoclassical economists have often pointed at restrictions to world trade as one reason the Great Depression was as bad as it was—citing in particular the Smoot-Hawley Tariff Act in the United States. In fact this Act was signed into law in June 1930, one year after Eichengreen & O’Rourke’s reference date for the start of the Great Depression. By that time, world trade had already fallen about 8% below its peak level; 3 months later had fallen a further 2%.15 months into our modern-day crisis, and with no such protectionist legislation even being contemplated, world trade had fallen 20% below its peak.The recent 1% uptick in world trade volumes is welcome, but it still puts us well below the 1930s.This in itself is a reflection of how much world industrial output has been globalised in the last thirty years, which is in part why the crisis spread very rapidly from the USA to the rest of the world. In the 1930s, the vast majority of the USA’s industrial needs were met by its own factories, so the downturn hit its own industries and workers first and hardest. Today, the heavy blows also fell on the world’s industrial exporters—notably Japan and Germany.One obvious statistic that Eichengreen and O’Rourke don’t use is the unemployment rate. I suspect this might reflect justified skepticism about the comparability of the modern measure to the old; the current ILO definition is so tight that recorded unemployment today is far lower than it would be were the 1930s standard applied (conversely, there were many Swagmen in the 1930s who would be classified as fully employed on the current standard).A more comparable statistic for the USA is the U-6 measure, which includes most (but not all) discouraged workers. That now stands at 16.8%, up from 16.3% last month—versus the official rate of 9.7%. And though recorded unemployment is worsening much more slowly than in the 1930s, the U-6 measure is deteriorating more quickly now than it did in the 1930s, and it started at a far worse position.A similar pattern applies in Australia. Roy Morgan Research prepares a U-6 like-measure that now stands at 16.6%—and their survey also disputes the ABS’s measure of formal unemployment rate, which they put at 7.8%, 2% higher than the ABS.So “green shoots”, or selective reporting? There is no doubt that the immense government stimulus packages across the world have slowed the rush into Depression. But the force that caused the crisis in the first place—excessive private debt accumulated in a Ponzi Scheme laundered through share and house-price bubbles—is still with us. Until that debt is addressed, the downward rush of deleveraging is likely to resume as soon as governments wind back their spending in the false hope that the crisis is over.I’ll finish with an extract from what has become one of my favourite daily reads—the “News from 1930” blog. On Thursday September 4th 1930, the Wall Street Journal reported that the Harvard Economic Society said there is “every prospect that the [business] recovery … will not long be delayed.”Debtwatch No. 38: The GFC—Pothole or Mountain?Published in August 30th, 2009Posted by Cassander in Debtwatch167 Comments“The Marxian view is that capitalistic economies are inherently unstable and that excessive accumulation of capital will lead to increasingly severe economic crises. Growth theory, which has proved to be empirically successful, says this is not true.The capitalistic economy is stable, and absent some change in technology or the rules of the economic game, the economy converges to a constant growth path with the standard of living doubling every 40 years.In the 1930s, there was an important change in the rules of the economic game. This change lowered the steady-state market hours. The Keynesians had it all wrong.In the Great Depression, employment was not low because investment was low. Employment and investment were low because labor market institutions and industrial policies changed in a way that lowered normal employment.”Obviously, I did not write the above. The author was instead Edward C. Prescott, who shared the 2004 Nobel Prize in Economics for the development of real business cycle theory, in his 1999 paper “Some Observations on the Great Depression” (Federal Reserve Bank of Minneapolis Quarterly Review, Winter 1999, vol. 23, no. 1, pp. 25– 31).This statement is remarkable for a number of reasons I’ll discuss below. But though it is extreme, it does express a belief that is endemic in neoclassical economics, that a market economy is inherently stable and will always return to a stable growth path after a shock.That common belief lies behind the expectations of economists that, now that the GFC has played itself out, the economy will return to trend growth and the emergency measures that attenuated its impact can be withdrawn.From this perspective, the GFC was a “pothole in the road” caused by the Subprime crisis, a “change in the rules of the economic game” which is now behind us. With the damage caused by the crisis largely contained, normal economic growth can resume. Over time, the unemployment rate will return to pre-crisis levels as the economic car resumes its steady speed along the highway of history.The alternative perspective is that the GFC was more akin to an abrupt change in the terrain. The “economic car” had been coasting downhill with the gravity of ever-increasing private debt adding to the speed of the car. With the GFC we reached the bottom of the hill, and the car now has to drive uphill as it attempts to maintain its previous debt-enhanced speed while also reducing debt.Visually at least, the “change in terrain” analogy stands up better than the pothole. I normally show the debt to GDP ratio as a rising function, but the economy’s speed gets a boost as the increase in debt makes a positive contribution to aggregate demand, and is slowed down when deleveraging reduces demand. So turning the ratio upside down may give a better idea of the depth of the “Valley of Debt” into which we have fallen:When Australia began its most recent descent into debt in mid-1964, the average annual increase of 4.2% in the ratio added only a trivial amount to aggregate demand—since at the time debt was a mere 25% of GDP. But at the end of the debt bubble in 2008, when debt had become 165% of GDP, that same rate of debt growth added a huge amount to demand—the economic “car” gained speed as the slope of the debt mountain increased.We hit the bottom of that mountain in March 2008, and now we’re starting to climb out of the valley—though not yet in absolute terms, since thanks to the First Home Vendors Boost, mortgage debt is still growing as business busily delevers (see comments on the data, below). But once deleveraging takes hold, the acceleration caused by racing down Debt Mountain will be replaced by an economic car straining up the Mount Debt Reduction. This change in the terrain will constrain private economic performance until debt has fallen significantly, as it did after the 1890s and the 1930s.A similar, if more extreme, picture applies in the USA, where private debt is now 300% of GDP. In contrast to Australia, the USA’s debt ratio began to rise as soon as WWII ended: on average, US private debt rose 2.9% faster than GDP every year until 2008, taking the debt ratio from 45% at the end of the War to 300% now. Deleveraging from this level of debt must exert a substantial break on economic performance, by diverting income from expenditure to debt reduction.I am therefore one of a minority of economic commentators who regard “deflation and deleveraging” as the main dangers facing the global economy in the near future (curiously, this minority might include Australian Prime Minister Kevin Rudd). From my perspective, the Global Financial Crisis marks “a change in the terrain”: for decades, rising debt has turbocharged economic performance; now falling debt will be a drag on economic activity.The vast majority of economists who perceive the GFC as a pothole on the road that is now behind us do not consider debt and deleveraging in their analysis. Their models have neither credit nor money nor private debt in them, so from their point of view, there is no terrain at all beneath the car—merely a long flat highway of history along which the economic car drives at the speed it is underlying “real” economic performance.This failure to even consider the role of private credit in a capitalist economy is an endemic weakness in conventional “neoclassical” economics, which ignores the dynamics of credit for a variety of reasons that are both ideological and illogical…..geeze that was long, apologies.ps.so if i break my leg, or cut myself drinkingmoon shine from a razor edgy tin can and go to thehospital or dr. for treatment a technologist, lawyer,pharmaceutical concern, insurance interest, banker, politicalparty and space agency must receive a cut, piece of theaction. right? right. and more… and that is beforeit is socialized. post modern i say. anddd..who is it that wants to deny treatments for the poor bastardwho pays for medical insurance for 30 years, never making aclaim, and then makes one at 60 and is denied treatment?where is he?

MOGPlease change your name. It offends a lot of people.Or atleat you can use its abreviation if possible.Your kindness would be highly appreciated. Thank you(not Guest on 2009-09-09 06:04:37)

Being somewhat surprised that nobody has commented on my post:”I think what you need to hope for is that the people do find alternative mediums of exchange that are acceptable yea be it barter, silver, promissory notes, gold, or many other innovative “currencies” that I am sure will soon appear; always does in disparate demographies.Let the USD remain by being imposed under Law, and hyperinflation will surely be the outcome.@ PeterJB on 2009-09-10 05:39:12 “(snipped by me)Doesn’t anyone see an obvious reaction, connection and or correlation by the “real economy” – that is, itself; here?Or, when the confidence in the government collapses, we make other arrangements (I’ve been doing this all my life as I have never had any faith in any government) and when such a move becomes popular, an alternative currency transpires – which, of course, is immediately set upon by the ‘true believers’ and faithful warriors all = but,in demographics, as in topographics, sword wielding idiots (Sorry I meant bureaucrats) er, morons, cum faithful serpents (?), can’t be slithering everywhere at all times (and alas, they ain’t that smart anyway) and lots of good cultural, of the soil, stuff falls through the cracks.In fact, the ‘essence’ (the physical Laws) always, a priori, falls through the cracks and survives (basic physics).He he heh – Ben and Tim are pushing it uphill where O is the fall guy (the Fluff and the dangerous one).But, why does not anyone see that fiat currency is the temporary and convenient declaration of the real economy (read: a fashion statement) – change or shift the focus – and it inflates , where mileage certainly varies. Perhaps I am just not explaining it clearly but I see it clearly and it’s a joke! A sad joke on the innocent who will pay; no doubt.I worry about the innocent and those who reject respect and responsibility.Ho hum

I worry sometimes that Iraq was the template for martial law in the US, in which case your “alternative currency” would be met with police/troops breaking into homes in the middle of the night, searching for and confiscating any “alternative currency” assets (foreign currency, gold, silver, etc.), and no recourse at law for the ruined families.The US now has about 500,000 troops who have lived and worked the pattern in Iraq, finding and seizing all the US dollars that were the store of wealth of virtually every middle class Iraqi family against the untrusted Saddam and his worthless Saddam dinar. Informers were paid to identify families with wealth stored in their homes, and these tips of “suspected insurgents” justified the raids, brutality and thefts. Those dollars and metals taken in the raids were never reported, and never officially recorded as confiscated, but the families are left poor and homeless and often fatherless and brotherless all the same.One reason the war is so much less popular with troops now is that all the easy pickings are long gone. Fewer soldiers and mercenaries are returning home with chests of cash and gold. Maybe the government knows that tempted with the ability to target their own fellow citizens, many soldiers and mercenaries would happily re-up.Gun and ammo sales are at record levels in the US. It isn’t only the government you need to fear, but the government certainly is capable of being the best organised at mass confiscation.

Did Kissinger say this before or after his quadruple bypass surgery?Seriously, Guest, you’re not going to get a reformation in the food system because people love their Big Macs………with fries. Ain’t gonna happen.I’m all in favor of your backyard garden. But when you’re talking about controlling people, you’re better off to listen to Mao:”Power devolves from the barrel of a gun.”Are you advocating food police?

“The only people who got the recent market “right” were either lucky or understood that the Fed is pumping money through JPM, Goldman, et al.”I do not agree with this. If you read my posts from earlier in the year I called the turn-around in the economy/market earlier than most based on the evidence provided by Achutan’s data. Buy and read their little book. I used to be build complex statistical models for a living and I can attest that their “back box” works.

Because it’s highly profitable for the pharmaceutical corporations. And, in case people have been missing it, they and the defense contractors are now kind of joined at the hip, the “glue” being “terrorism” (biological crap that we have to be “protected” against- figure in all the current trendy viri)

I agree. 300 million citizens and over 1 billion privately owned guns. As Jefferson said, “Where the people fear the government there is tyranny; where the government fears the people there is freedom.”

Octavio,I started following the ECRI about 12m ago and their calls have been absolutely stellar. There is an economic recovery underweigh apparantly. However devaluation is a pretty easy way to generate economic growth. Gold will continue to outperform.CheersRED

There has got to be a way out of this morass. Frugal Americans who worked hard to build a small place of personal, financial safety are being plundered by the Fed banking cartel and their duplicitous criminal politicos in Congress and the Oval Office. With no relief in sight.And now, as James Quinn in “Living in Beverly Hills” put it on Sept. 9: “The consumer is tapped out. The median 401k balance in the U.S. is $26,000. Boomers realize they are 60 years old and have $50,000 of retirement savings and $30,000 of credit card debt.”In this hard hitting piece, Quinn makes the case that middle class tax payers, the responsible and frugal, have had to come to the “rescue” again and again to provide TARP and other “relief” for criminal bankers who deliberately orchestrated this debt Ponzi to get richer, enriching the profligate poor along the way to keep them from rebelling: “Our elected officials, Federal Reserve and banking cartel have chosen to buy off the poor at the expense of the middle class, so the rich can get richer. Easy money allows the poor to live like the rich.”Charges Quinn: “As the financial system came crashing down due to the millions of bad loans made by the banking cartel, their protectors Hank (Goldman) Paulson and Ben (Helicopter) Bernanke funneled TRILLIONS of your tax dollars and your children’s tax dollars to the banks that committed these crimes.”As a result, homeowner’s equity has plunged from 70% in 1980 to 45%. “The Federal Reserve created spiral in prices upward has trapped millions of latecomers in houses that are worth 20% to 30% less than the mortgage debt that is strangling them. Over 16 million home occupiers (not homeowners) are underwater in their mortgage.”Confounded by all the BMWs and Mercedes on the road and along curbs of poor neighborhoods compared with the number of people with enough income to own one, Quinn’s research found “the whole sordid story.”According to the Federal Reserve, “consumer non-revolving debt grew from $300 billion in 1980 to $1.6 trillion today. About $1 trillion of this is auto loans. The average automobile loan today is for 63 months, with some going as high as 84 months, compared with an average of less than 48 months in the early 1990s.” The average loan amount is now $29,000; it was $17,000 in 1997.Who’s benefiting from the Rising Debt Era? Says Quinn, “The beneficiaries were Bank of America, Citicorp, Wells Fargo, JP Morgan and the other members of the cartel. The 10 biggest banks in the country control 48% of all deposits, 50% of the mortgage market, and 87% of the credit card market, supported and protected by the Federal Reserve and Treasury Department. The ‘too big to fail’ continue to get bigger, as the FDIC will shutter 500 smaller banks in the next year.”And the fat lady hasn’t sung yet: “Government now wants you to pay more so the poor will have health insurance when they get injured in a BMW accident.”Americans are going to pay the price for this fleecing for a long time to come: “Consumer credit debt is $2.5 trillion… The pundits and economists predicting a strong economic recovery are blind to the truths of consumer debt. With actual unemployment exceeding 16.8%, 9 million people forced to work part-time wanting to work full-time, the work week at all time lows, and banks shutting down credit lines, consumers will be reducing or defaulting on their debt for years. With 70% of the economy dependent on consumer spending, there is absolutely no chance of a strong recovery.”The next shoe to drop is Alt-A, the reset crisis that will begin in 2010. These loans, according to Quinn, already have delinquency rates of 33% even before the reset kicks in. “There is no evading this calamity. There is also no doubt how the Federal Reserve, Treasury, and government politicians will handle this next emergency. If you lived in a modest home, made your mortgage payments, didn’t use your home equity to buy a Mercedes ML350, and pay your taxes, the government will seize you taxes again and dispense them to the profligate borrowers and criminal bankers. You will pay your mortgage and the mortgages on millions of other houses.”Quinn is a senior director of strategic planning for a major university.http://www.financialsense.com/editorials/quinn/2009/0909.html

That chart (Dow to Gold) is actually one of THE most important charts right now. It’s a very useful barometer of what’s really going on in the system, even if you are not traing in equities or the precious metals.PeteCA

Looking at this problem another way – I’m talking about the huge number of Alt-A resets that are hitting the US mortgage market right now – this is the next wave of a decline in credit quality in the USA. It will, o course, hits the banks fair and square in a place that hurts … namely the reserves that they (supposedly) set away to cover losses from delinquent mortgages. But it will also put more pressure on the market for homes. There was quite a good article about this … I’ll try and post it below.PeteCA

$1 BILLION SPENT ON CARE FOR ILLEGAL IMMIGRANTS | The Monterey County HeraldBy Karen de Sá / Media News 09/11/09The latest dust-up over President Barack Obama’s health-care-for-all mission — the congressman who angrily called Obama a liar during a nationally televised speech — underscored conservatives’ fears that illegal immigrants would benefit from efforts to expand coverage.But if immigrant-rich California is any indication, there are already millions of undocumented immigrants on publicly funded health plans — and it comes at a cost to taxpayers.While the vast majority of federal benefit programs bar those who cannot present proof of citizenship, California has been more generous than other states. Taxpayers here contribute more than $1 billion each year to cover the health care costs of those who are in the country illegally.The California Department of Health Care Services estimates 768,400 undocumented immigrants will receive coverage this fiscal year through Medi-Cal, the health program funded by state and federal tax money. The cost: $1.2 billion. While people without documentation aren’t eligible for the full menu of comprehensive health care other low-income residents receive, those who show up at emergency rooms are covered.Another state and federally funded program, Access for Infants and Mothers, serves pregnant women whose income is slightly higher than Medi-Cal eligibility allows. That program enrolls 12,000 women statewide at a cost of $123 million, according to the Legislative Analyst’s Office. Some participants are presumed to be undocumented, said Lisa Murawski of the analyst’s office, although no questions are asked.According to the most recent estimates by the Public Policy Institute of California, there were 2.8 million illegal immigrants here in 2006 — one-quarter of the nation’s total…

TO: KIRCHNER and HARTWICH:It is the Professor’s custom not to offer point forecasts but to outline an analysis of the current economic landscape and potential risks.Professor Roubini brought his experience with financial crises in emerging markets to bear on the U.S. condition and found parallels. Unfortunately many of potential problems which he warned about did materialize. In contrast the herd of economists, from Keynesians, to monetarists, to “free market” ideologues, got literally everything wrong with catastrophic consequences.The professor has been consistent in warning about the potential for a U.S. currency crisis. The analysis is quite simple: the U.S. condition (weak and overextended banking system, persistent current account deficit, unsustainable fiscal deficits, expansive monetary policy with the potential for inflation and/or dangerous asset bubbles, weak regulation, persistent and rising unemployment/weak household and consumer sector, unresolved problems in housing sector, a “bulge” of leverage in the corporate sector) has become in some ways analogous to those of emerging market countries at the times preceding their subsequent currency crises. Such countries include Mexico in 1994, a variety of Asian countries in 1997, Pakistan, Ecuador and Russia in 1998, Turkey and Argentina in 2000 and Uruguay in 2001, and even Iceland in 2008-9. In fact there are additional comparisons related to the potential for a political crisis in the U.S. — precipitous decline in President Obama’s approval and societal fissures which reveal themselves in debates over health care, immigration and tax policy and the looming problem of income inequality which has seen the U.S. in 30 years move from the Gini-coefficient neighborhood of western European democracies to that of the countries like the Phillipines, Ivory Coast and Mexico — and the unprecedented assumption of risk by the Fed and Treasury through socialization of losses. While Prof. Roubini estimates the government’s financial sector support exposure at $13 trillion, the SIG-TARP report put the gross exposure at $23 trillion—compare these amounts to the $33 trillion total of all U.S.$ debt according to Fed Release Z.1, table D and a nominal dollar GDP of approximately $14 trillion. It could be argued that essentially the Fed and Treasury have written a naked put on U.S. dollar financial sector obligations; perhaps they have created a moral hazard problem of unparalleled dimension. Of course a major distinction lies in the fact that the foreign debt of the U.S. is denominated in its own currency which also happens to be the world’s reserve currency. Presumably this unique role of the dollar and the position of U.S. as the world’s largest economy with a stable political history form the basis for “American exceptionalism” and support for the argument that “It can’t happen here.”As far as the outlook for the economy, Prof. Roubini has pointed out that GDP growth is supported by unprecedented and unsustainable fiscal stimulus; in fact the President’s own Report dated September 10, 2009 claimed that “Estimates of the impact of the ARRA made by comparing actual economic performance to the predictions of a plausible, statistical baseline suggest that the Recovery Act added roughly 2.3 percentage points to real GDP growth in the second quarter and is likely to add even more to growth in the third quarter.” Prof. Roubini also points out that the U.S. consumer comprises in excess of 70% of the U.S. economy, and that the U.S. consumer remains highly leveraged, with diminished wealth and, increasingly, unemployed. The U.S. does not have the option of exporting its way to growth—in fact the world has typically seen the U.S. as the “engine of growth” by virtue of its imports. The economy continues to be vulnerable to shocks, such as the spike in oil prices in 2008. A reasonable person might conclude that in fact the burden of proof is not upon Prof. Roubini but upon those who claim that the U.S. economy can grow at a rate close to potential when the effect of stimulus has worn off. Some might reasonably conclude that it is easier to demonstrate that the U.S. economy is more like the tallest house of cards ever built. And indeed some houses of cards stand for a long, long time—even though they are indeed houses built from cards.Certainly if a currency crisis were to materialize in respect of the dollar, the U.S. has painted itself into a corner with no leeway to raise short-term interest rates: 1. an interest rate increase would kill any chance for economic growth and cause great domestic political problems; 2. the positive yield curve provides intravenous life-support for the U.S. financial system which collectively resides in the “angel ward”; 3. the Fed’s own massive balance sheet consists of long-term fixed rate securities (of uncertain quality) financed with floating rate short-term debt.The Australian think tank researchers seem to portray the views of Professor Roubini as out of the mainstream. Perhaps, in fact, the views of Prof. Roubini are the consensus of those outside the admittedly very large orbit of the Federal Reserve Bank’s influence (see, e.g. http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html). In an interview of Zhu Min, Bank of China Vice President, with Bloomberg this week Mr. Min warned that the liquidity created by central banks may cause “bubbles in commodities, stocks and real estate.” Q. “Is overconfidence the biggest risk to the recovery?” A. “It’s not only overconfidence, it’s overmyopic: Wall Street feels the crisis never happened. It seems to me the financial crisis is not over yet, but it has stabilized from a cliff drop. That’s one thing. The real economic crisis is just starting.” This is the voice of the U.S.A.’s leading creditor.Perhaps an analogy could be drawn: into a doctor’s office walks a wealthy man 150 pounds overweight who smokes a pack of cigarettes and drinks 2 six-packs of beer daily and he complains of not feeling well. A doctor could prescribe a smorgasbord of medications to be paid for in full by insurance, and the patient might follow this regimen, feel much better as a result and be pleased with the result. Another physician, say Dr. Roubini, might tell the patient that medication could make the patient feel better but statistical research also indicates that the patient faces risks of numerous diseases, including some which are quite serious, even fatal. The patient might be quite unhappy with Dr. Roubini and reject the advice because he likes his lifestyle…and the patient might or might not succumb to the diseases-there are no certainties, just research-based probabilities of outcomes with varying ranges of uncertainty.As for the tone of the “researchers” comment and some aspersions cast upon Dr. Roubini, I wonder if they are consistent with the nature of scholarly debate, and certainly they do seem contrary to the avowed mission of the think tank where they work: “The CIS aims to build a better society.”

A very good article on the economy in California and the impact of job losses on this state. Recovery … what recovery??? Notice that manufacturing in the “golden state” has lost over 11% employment due to the current recession. California is now deep, deep in an economic hole and has little choice but to slash spending, increase fees for public services, and increase taxes. Not exactly an environment that encourages innovation, risk-taking, or small business growth.California Job Market in CrisisThe rest of the info on the link, below the latest news about California, is also very good reading.PeteCA

What’s really at stake in your example isn’t bashing illegal immigrants, or immigrants in general. Its the American Organised Crime that hires the slaves, instead of the masses of legal unemployed Americans for reasonable wage rates with benefits. A blogger above made it clear with news URL from San Francisco: 4 out of 10 working age Californians are unemployed.I’d add too, from an article from my Overpopulation website [its under softwarengineer on a Yahoo search] in part:”…We could pay them $50/hr and it wouldn’t matter much for our like Safeway food prices too.Article in part:“…Consumers benefit from low farm wages, but less than many people believe: Farm wages constitute a surprisingly small part of the prices consumers pay at the grocery store. Farmgate prices average approximately one-third of retail prices, and labor costs represent approximately one-third of farmgate prices for fruits, vegetables, and horticultural products. This means, for example, that a 10-percent increase in farm wages would increase retail prices by at most 1 percent….”The rest of the URLhttp://www.urban.org/pubs/pap/summary.htmlMost of what drives food increases has nothing to do with hiring low wage farm slaves, its packaging, like glass, aluminum and plastics….and the diesel to deliver the food [all driven higher by recent overpopulation driving energy higher and higher in price]….but let’s not forget one key food cost impact, especially the like Safeway profits [LOL]Even America’s water shortages delta’s worsening, mainly due to uncontrolled overpopulation/immigration since 1990, adds costs and energy use to food….the deeper we dig for water the more energy it costs to pump it out. The Baby Boomers did good with their negative fertility rate since 1990, but only scientists types like me give them environmental kudos for a job well done, not corporate power political lobbyists for slave wages and lower RE prices.But I’m just a scientist type who talks pragmatic. Go ahead, call me a hater for telling the truth, but you know, science truth has absolutely nothing to do with brainless defamation of character against me or unscientific pig-headed politics, clearly controlled by big corporations seeking slave wages anyway….”Imagine too, if California had a fair/legal/decent wage rate for the dangerous job of picking produce from high tree branches; there’d be more than ample state taxes to get the unemployed teachers back to work too. Assuning California’s population reduces too, the high per capita American energy demand reduces [automobile use is just a small part of per capita energy use in well fed America]….food prices with be mitigated substantially and CO2 reduction too.

MOGAll the people that use this forum, including you, should be free to post their opinion.Also, I think that guy that offended you is not intellectually able to discuss ideas.However, I think you are also making some bad mistakes:1) provoking people calling them Rats apparently to all of us, because you are complaning about our posts here.2) If I am right (I am not 100% sure because apparently you didnt sign with MOG the post of last thread), you are the author of this response to NED”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.”If the Guest were in fact you: Dont you think this is an provocative, aggressive way to discuss?3) In this post you seem to want to direct the forum when you write “When I’ve time to write replies, they will appear THERE, and I’ll give just the link and a short notification in whatever thread is current at the time.”Therefore, after defending you from that absurdity,(after all you was angry because we did not defend you) and supporting your arguments against the coward Guest, I am going out of this mess.

I think a big move on gold is coming. Not so certain, as Schiff, about the direction.

I’ve got no problem if people want to cover short (or long) positions – esp. to take a profit. That’s very sensible investing.But I’m not sure that I see a bottom in the data that’s shown for the unemployment figures for CA. I’ll certainly concede that unemployment is a lagging indicator, so a turnaround (when it does occur) may be a valuable economic sign. But we don’t have a turnaround yet, and all those unemployed people are not going to be buying products or paying much in the way of rent (or taxes!!).The USA has only just started the process of reducing its overall credit burden. And yes – credit is a burden (except to the banks who colelct interest). The “bust” phase of this cycle could easily last a decade – maybe two. The economic data that was released this week may indicate that peak credit for the USA has just recently occurred, which means we are now on the downslope for total credit (as a percentage of GDP). But we have a long way to go, and in my view the Fed is wearing rose-colored glasses if they think they have got this thing licked. I do agree, though, that the present rise in the Dow counts as a “bull market” – if you base the decision purely on percentage recoveries. The issues you need to decide are: (1) Is this a short-lived bull in a long-term bear market and (2) If the Dow is measured in constant dollars (inflation-adjusted), are you making money by being in $INDU? But I agree that a short position on $INDU could be a loser in the near term.PeteCA

Very good points, wdm!A curiosity: Who are you, wdm? I didnt see you on the 3 last threads. NR staff?

pjb,maybe because it lets people off the “hook”,so to speak. attention, compassion receivedperhaps, expectation and responsibility averted.also as was observed there is money in it.?natures way of bringing people together, emotionally?illness and disease focus the attention of manon his condition, capacities and function as heexists in his milieu. ( i never know how to spell thatword ).i’m not sure i understand the depth of the question.@ blindman on 2009-09-11 15:40:42In this tense, the spelling is correct – and I believe that you have the grasp of a fashion statement; a sad fashion statement – loneliness and boredom and the need for attention a sick and dying society where leadership neither cares and is apathetic as well as inept. There is no radial compassion just pretence and desperation.If we think in principles and analogies, we experienced this globally during the period Circa 1300 BCE and which was termed a common insanity.The proof and the solutions remain in physics, which, of course, we will choose to ignore at all cost; such is the state of leadership.Ho hum

Where the hell did you come up with those stats? Fantasy land? I know a lot of returned soldiers from the beginning of the occupation and I promise you none of them came home with chests of cash and gold, you damned idiot.

I greatly admire James Quinn. He has a gift for words and tells it like it is:People are not merely financially irresponsible on a large scale.They are “numb-nuts”.I could not have stated it better myself.

@”If we think in principles and analogies, we experienced this globally during the period Circa 1300 BCE and which was termed a common insanity.”are you saying the “common insanity” was wrongly termedinsanity or was it really sanity?physics is bound by principle and analogy, where insanityis not always so encumbered and actually sanity at itsbest seems to be beyond these two also (principle andanalogy). Physics.i am anticipating a moment of awakening. a rising ofthe tide where people wake up one day and suddenlya large and influential segment of the populationjust are different, or get it. a fruit of suffering?then again i have been accused of being insane onmore than one occasion.best est…

@ blindman – the one that sees better than mostI am saying that the same “common insanity” of Circa 1300 BCE appears to have the tiller of global governance at the present time – which means by common consent but demographically speaking where mileage varies: it appears as pure insanity as I see no reason, logic or intellectual presence, at all, in any decisions, actions and speeches anywhere. This indicates to me that entropy is the driving force of global civilization and we, the not-so-sentient human beings, are not in control and the global socio-economic management is in the hands of Universal Principles expressed as Parochial Principles by “physical” forces not understood by the incompetent and ignorant leadership du jour – where “physical” infers the route to the necessary understanding to be through physics and not, a priori, faith-based superstition.This must be a good thing in the end for there is no doubt that global leadership don’t have the slightest idea of what is going on and see, as always, the only answer to be totalitarianism, state and military imposition, warmongering, apl;lied death and torture, corrupt[tion, theft, deceit, and all those usual things that happen so repeatedly over written historic times, ad nauseum, all of which ends in a disaster for humanity.If you are insane then I am with you!Insanity, is change, entropy, chaos; the moment between first and second gear when your foot in firmly on the clutch.The “moment of awakening” to which you refer is “consilience” and as everything else it evolves and differentiates, but Yes, hence is the way forward in any dynamic intelligence where we must remember that a changing of gears suggests a ratcheting of torsions between two simultaneous forces of equal power.May I also join and accuse you of being insane? Respectfully, mais oui.I might add that in the ancient Hebrew, there is no real recognition for the present moment, only past and future where it appears clear that those ancient ones considered the present moment as the abyss or hell – of the time of shalom ie to become or becoming. This tends to agree with physics except that the ‘present moment’ must and does exist.Ho hum

I am not a fan of Elliott Wave Theory because of the horrible timing of Robert Prechter, considered the main expert on EWT. He didnt see the commodity boom from 2003-2007 and only kept predicting the crash.However, Prechter deserves to be recognized as one of the pioneers (2002)in predicting this mess, maybe before all Dr. Dooms (Schiff, Faber,NR,etc.). and desconsidering his EWT timing his book is interesting.In this case I tend to agree “in part” with EWT prediction. In part because the only thing I dare to predict is a “short/medium-term” DOWN move.I “tend” because if gold for any reason (chinese, etc…) keeps rising, I bet an explosive move up would be the result as the big short sellers’ position would have to be covered.(Perhaps even the govt would help the short sellers as they hate gold because gold shows their nasty work on the printing press.So, be prepared!

To:FAMCThank-you for the kind words.I am not affiliated with RGE, but I am quite concerned about what appears to be increasingly dangerous economic policy in the U.S.wdm223

Thank you Wolf and LB. Those are fascinating, intelligent posts.

Once again, you are being ridiculous, Chingos. First, you are always assuming limitations on the knowledge of others. For all you know, I hold an M.D. and practiced medicine before becoming a lawyer.Second, and more importantly, one does not have to be a physician, or know anything about “actually having the responsibility of patient care,” to “know what arguments are ethical in the field of practicing medicine.” Most bioethicists are NOT medical doctors, and merely being a medical doctor does not, ipso facto, qualify one as such. Make fun if you like, but I do have a background in philosophy, and I have studied medical ethics. I also have had the heavy burden of defending human life in a court of law, so please don’t try to tell me that you and your professional peers have some monopoly on understanding the nature of real responsibility vis à vis other people.Third, as an aside, as do any number of lawyers, I know enough about the practice of your field to kick your dumb ass up and down the inside of a courtroom should you ever commit medical malpractice.Fourth, if you are actually practicing medicine the way you say you are — not telling the patients the facts which they need to make an informed decision and practicing “defensive medicine” that involves undertaking diagnostic and treatment procedures that you do not believe are necessary or are not in your patients’ best interests, but only in yours — then YOU are committing MEDICAL MALPRACTICE AND BATTERY on your patients, AND VIOLATING your HIPPOCRATIC OATH.Fifth, if you want facts, I’ll give you some REAL facts to chew on:The Annenberg Center’s “Factcheck.org” challenged the insurance industry’s misuse of statistics and argument that medical malpractice limits would save health care costs based on considerations like defensive medicine in a study entitled, “Insurance Industry Ad Makes Fishy Claim About Lawyers; Lobby groups fight like animals over health care costs – implausible statistics vs. fact-free stereotypes,” April 19, 2005.http://www.factcheck.org/politics/insurance_industry_ad_makes_fishy_claim_about.html.The Congressional Budget Office, in “Limiting Tort Liability for Medical Malpractice” 1, 6 (Jan. 8, 2004) said: “Malpractice costs account for less than 2 percent of [health care] spending,” and “savings from reducing defensive medicine would be very small.” The study further suggested that limiting tort liability would have no significant impact on health care spending, saying, “[S]ome so-called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive (albeit small) benefits to patients….”Katherine Baicker and Amitabh Chandra produced a study for The National Bureau of Economic Research entitled, “The Effect Of Malpractice Liability On The Delivery Of Health Care,” Working Paper 10709, (August 2004) in which they concluded, “The fact that we see very little evidence of widespread physician exodus or dramatic increases in the use of defensive medicine in response to increases in state malpractice premiums places the more dire predictions of malpractice alarmists in doubt. The arguments that state tort reforms will avert local physician shortages or lead to greater efficiencies in care are not supported by our findings.”A General Accountability Office (GAO) study, “Analysis of Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” GAO-03-836, Released August 29, 2003, noted that everything from low response rates to surveys (10 and 15 percent) and the general failure of surveys to indicate whether physicians engaged in “defensive behaviors on a daily basis or only rarely, or whether they practice them with every patient or only with certain types of patients,” the GAO found both AMA and American Academy of Orthopedic Surgeons surveys on defensive medicine HIGHLY UNRELIABLE” [N.B - This is my emphasis...swk]. “Officials from AMA and several medical, hospital, and nursing home associations in the nine states we reviewed … cited surveys and published research but could not provide additional data demonstrating the extent and costs associated with defensive medicine.” The study went on to state that, “Some officials pointed out that factors besides defensive medicine concerns also explain differing utilization rates of diagnostic and other procedures. For example, a Montana hospital association official said that revenue-enhancing motives can encourage the utilization of certain types of diagnostic tests, while officials from Minnesota and California medical associations identified managed care as a factor that can mitigate defensive practices” and that “According to some research, managed care provides a financial incentive not to offer treatments that are unlikely to have medical benefit.” [N.B. - Unfortunately, I know from personal experience that managed care provides a financial incentive to the insurance companies not even to provide the treatments that may be MOST LIKELY to have a medical benefit....swk].In a study by the Office of Technology Assessment (OTA) of the U.S. Congress, “Defensive Medicine and Medical Malpractice,” OTA-H–6O2 (1994), the authors concluded: “Even before the widespread onset of managed care, the congressional Office of Technology Assessment (OTA) found that less than 8 percent of all diagnostic procedures were likely to be caused primarily by liability concerns. OTA found that most physicians who “order aggressive diagnostic procedures . . . do so primarily because they believe such procedures are medically indicated, not primarily because of concerns about liability.” They further concluded that the effects of so-called “tort reform” on such defensive medicine practices “are likely to be small.”I understand that as a professional who works in the field every day, anecdotal evidence and your personal experiences shape your views on this issue. Still, I think there is an objective argument to be made that the high cost of health care is less a function of “defensive medicine” practices, and would be less benefitted by capping recovery in tort for medical malpractice, than you and other “experienced” physicians apparently imagine.It is difficult, Chingos, to be respectful of you and your views when you are so disrespectful and, indeed, dismissive of the view of others. You certainly must have noted my comments on past threads regarding the relatively large number of M.D.s in my family, and I assure you that they do not all agree with your myopic views on health care reform. Quit attacking me for being a lawyer, and start addressing my arguments instead of making uninformed hypothetical assertions that don’t have anything to do with what I’ve said.SWK

Swine Flu Vaccine Will Be Too Late to Prevent Pandemic, Experts SayBy DONALD G. McNEIL Jr.Several prominent epidemiologists are warning that even though the new swine flu vaccine works much better than expected, it will still come too late to blunt the peak of this season’s pandemic.The epidemiologists said Friday that they expected the peak to come as early as next month, long before enough vaccine to protect all 159 million Americans who need it most will be ready.http://www.nytimes.com/2009/09/15/health/12flu.html?_r=1&hp=&pagewanted=print

U.S. to Impose New Tariffs on Tires Made in ChinaBy THE NEW YORK TIMESWASHINGTON — The White House said Friday evening that President Obama signed an agreement to impose an increased duty on tires from China “to remedy a market disruption caused by a surge in tire imports.”Robert Gibbs, the White House press secretary, said that the president had accepted the recommendations from the United States Trade Representative, Ron Kirk, in the continuing trade dispute with China. The decision came in advance of a deadline next Thursday in the case.“As part of its accession to the World Trade Organization, China agreed to a special safeguard mechanism that would allow its trading partners to implement remedies in response to import surges and under other circumstances,” Mr. Gibbs said in a statement. “The president decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case.”http://www.nytimes.com/2009/09/12/business/global/12tires.html?hp=&pagewanted=print

g,or it may be best you go nowhere near the vaccine?never trust the times. tools of the medical industrialcontext?

According to Minsky, corruption is cyclical, growing as bubbles inflate. Those that make excess bubble profits, invest some of those profits in bribing politicians to keep inflating the bubbles. This is most clearly seen in the US in real estate, where developers and bankers and intermediaries too easily corrupt local and national politicians into subsidising a huge range of bubble props (mortgage tax relief, eased zoning, deregulation of securitisation, low interest rates, etc.).Nothing succeeds like success. Nothing exceeds like excess.

Peter Schiff says he is heavily invested in gold. So he wouldn’t just be trying to up the demand and hence the price, would he?Also from what many have seen, gold is not at all a good hedge against inflation. It is merely the thought that it is a good hedge against inflation that drives the price up in parabolic arcs from which it quickly retreats, as in the 1980′s. I don’t recall inflation abating after that run up.I hear that Peter Schiff was one of those who saw this crisis coming. I think we need to dispel the idea that that alone gives him credibility. I would be more interested in analyzing his reasons. As far as I can tell, he thinks money printing is the whole story. But the Japanese also printed money and did QE–that was after the collapse in their real-estate market and stock market, when prices were declining precipitously, just like what we see now in the US. Did they experience hyper-inflation from that? He bases his ideas on simple concepts such as more money chasing the same supply of goods equals inflation, hence we must have inflation. That is easily sold to his gullible readers who then go out and buy gold only to get caught in a $100/oz precipitous drop in the gold price. Gold is extremely volatile and behaves almost like a penny stock, so if you do any kind of sensible position sizing, you are certain to not to make any money.The other thing that gets my goat are people who tell you to go out and buy after the price has already risen substantially. That’s the tell for all bogus financial advisors. Wait until the price is low and everyone has bailed if you want to make money. That said, I am now prepared to watch gold go up in another parabolic ark. Does that invalidate the idea that you should buy low and not chase prices, especially when everyone else is on board the latest investment craze? It’s no fun being left behind, but long term, buying low is the better strategy.Peter Schiff, like many gold bugs who write articles for the likes of Kitco or Safehaven (which also have some very good articles) are great story tellers. Good stories are the drug that gets people to buy. That’s why they wait until the price has been run up to start hawking their wares. You are already half-sold on the idea and the story tellers just give you that small nudge to get you to help run the price up another 10% before the next leg down. We are always suckers for used car salesmen–something about their plaid jackets and Andrew Carnegie toothy grins–their “can do” optimism and sincerity (don’t get me started on sincerity!) that we Americans treasure above all else.Anyone seen Obama lately? Where’s Obama?

You are hypercritical MOG, possibly terminal.

Lemme aks you sumthin’,Kilgores.If I called you a dumb ass, myopic, and told you to fuck off (as you have done to me), would you be more respectful of my views? If that’s what it takes, please let me know so I can decide whether or not to sink to your level.I had the opportunity to become a lawyer as well as physician, but decided to take care of patients for 30+ years instead. So, I don’t have a bunch of fancy credentials or book/article reading clogging up my mind. All I have is straight on experience.Now that I have retired from my private practice, I can authoritatively say that you nor any other lawyer would ever be able to “kick my dumb ass up and down the inside of a courtroom” because……….in 30+ years of practicing medicine………my patients NEVER sued me.Several posts ago you stated you had some Scottish heritage, well good for you. Perhaps you’ll appreciate the following.Several posts ago I encouraged you to give whatever the highest bill was to the offering at your local church just as an experiment to see if God would bless it. You declined, came back at me with some off-the-wall excuse.Well, I didn’t decline. That week in church I found that I had a $100 bill as the highest denomination in my pocket. Now, it’s not without trepidation that I somewhat apprehensively put that bill in the offering when it came by. It’s always like that when you trust God.That weekend I bogeyed the 18th for a 65, old Scot.Now, this is an economics blog, so that’s why I have to mention that my definition of true success/wealth in this world is being able to shoot your age. I won’t tell you precisely how close 65 is to that, but suffice it to say I consider that round of golf a direct blessing from God.Tonight the largest bill was $50. Tomorrow and Sunday we get to play again. As a person of Scottish heritage myself, is any of this starting to ring true with you? We aren’t getting any younger. How’s if we call a truce?

PJB”This tends to agree with physics except that the ‘present moment’ must and does exist.”I dont know much about physics but i cant wrap my mind around your statement.I think only past and future exist. When we start deviding time even a secondcould be split into billion trillion slices. so humans realize time when its already past, hence passage of time.

Music to my ears! A truce it shall be, Chingos! I will even go so far as to offer my apologies for any personal insults I may have directed at you in frustration in the past, and I pledge to try my best — for I remain all too human — to exercise more effective restraint in future. Looks as if the $50 you put in the plate this evening may have paid off early for you! Still hope you have a fine game tomorrow, though.So, as to your Scottish heritage, are you of Highland or Lowland stock? My people were a Sept of the Clan McDuff, if you had not already figured that out from my handle.Slainte,SWKSWK

“Rats” is just an expression used in America, FAMC. It means the same as “darn it”. I was not calling anyone a rat – not at all. Is it a bad thing I was trying yet again to direct discussion of this back to the past thread to contain it there??? I’ve done what I can to keep this block from expanding, but I can’t seem to convince others to reply in the original block.

Moderated by what? A. Solzhenitsyn thought knowing God was the only effective moderator of the ego.

And GOD is always striving for further EVOLUTION! And as a species we are DEVOLVING!You tell me where this puppy is heading. Look out below.

In psychology JB’s comments are thought of as “enduring the tension of the opposites.” Without the opposites there would be no energy flow, no “life.” Think HOT vs COLD. Think “If you don’t work, you don’t eat.” Think “Welfare state vs outcome.”The USA has done everything in its power to do a reverse Hitlerism, i.e., do everything possible within the power of our medicine, caring, etc. to promote life of everything to the point that we pollute the gene pool – something Nature would never on its own allow to happen.We have lost touch with the DARK side of the force. But Nature delights in Nature. Nature rules Nature.Look out below.

PBA pleasure to read your post. Very interesting feedback.Well, I am not a fan of Schiff nor a fan of any analyst on financial market anymore. What I learned is that is very dangerous to trade based on gurus. However Schiff is sometimes “inspired”.———————–Concerning gold, Doug Hornig wrote “As recently as 2002, the private ownership of gold was prohibited in China. You could be jailed if caught with any in your possession. Beginning in 2009, in a stunning about-face, the central government removed all restrictions. In fact, as Mineweb and other sources report now it’s actively pushing folks to buy some personal metal, with China’s Central Television, the main state-owned television company, running news programs cum infomercials, letting the public know just how easy it is to purchase gold and silver as an investment.”—————–Is this an important factor?IMHO Gold has a greater probability to make a DOWN move (short term). The fight on $1000 have been a big fight, probably with central banks help.You wrote:”gold is not at all a good hedge against inflation. It is merely the thought that it is a good hedge against inflation that drives the price up in parabolic arcs from which it quickly retreats, as in the 1980′s. I don’t recall inflation abating after that run up.”Perhaps gold has not been a so good hedge (as you said there was no deflation but only desinflation) but consider the gold acceleration (speculative) premium.Efficient Market Hyphotesis (mainly Strong form) is a “beautiful joke”. Louis Bachelier’s thesis needs an updateWhat about 150 oil down to 30 so fast?No one knows the future.—————Concerning the inflation x deflation debate we have a problem here i.e. the DEFINITION of inflation.1) The Classical definition is money supply expansion. But what money supply aggregate to use?M1, MZM, M2, M3(that FED dont publish anymore -was “expensive” to mantain) ?2) However, People and many economists talk about inflation meaning Price Inflation (how we perceive inflation).Use CPI or PPI?What is an appropriate general price level measure?Why did the bureau substitute rents for house prices some years ago?So house prices dont enter general price level! Commodities also? and Stocks also because they are financial assets.In fact you have your own measure of inflation based on what you use (or would like) to buy. And the “fair” substitution policy on the CPI is a fraud. see John Williams shadowstats.—————–However one thing is sure:A MASSIVE WEALTH REDISTRIBUTIONor as Schiff wrote: (maybe the best statement of the article)”When governments act to prop up sagging markets, or bailout investors or depositors of failed institutions, they create inflation (print money) to pay for it. This, in effect, transfers capital from prudent investors to speculators. At the same time, it pulls the rug out from under the safest vehicles of traditional investment – bonds and cash. It becomes hard for investors to protect their principal, much less grow their wealth. Some turn to gold, with its historically guaranteed ‘floor’ against losses, and others start making ever riskier investments to try to ‘beat’ the inflation rate.”Repeating: A WORLDWIDE MASSIVE UNFAIR WEALTH REDISTRIBUTION via TPTF dollars.

Doug Noland:And No Dialing Back:CNBC’s Steve Liesman: “Mr. Secretary, how much concern do you have right now – how much pressure are you under right now to dial back on these programs. Dial back spending. Dial back – getting to the audience question right there that I think is critical and that is really indicative of how Americans feel: Get the government out of the private sector. How much pressure are you under right now?”Treasury Secretary Geithner: “No one is going to be more eager than I am. You’re just not going to care about that more than me. We do not want to be in any of these institutions a day longer than is necessary. And look at what we have already done. We already have $80bn of capital coming back into the Treasury. If you look at what I said today in my testimony on the hill, we’ve seen these emergency programs we put in place already be used at a tiny fraction of their scale in emergency. We designed these things so that they would not be used a day longer than necessary.But we’re going to be careful not to withdraw too soon. Again, the classic mistake countries make in crisis is that they put on the brakes too early and reignite the recession, ultimately at much greater fiscal cost and much greater damage to the economy. So that’s the balance we’ve got to get right. And we are not now at the point – even though the challenge is shifting – we’re a bit moving now from emergency to the harder challenge, frankly, of repair and recovery. That’s going to change the mix of what we do. We’re going to get out and walk these things back as soon as we are confident we can get out of this thing.”September 10 – Bloomberg (Jody Shenn): “‘Credibly’ privatizing Fannie Mae and Freddie Mac… may be too difficult given the precedent set by the Treasury Department’s financial assistance, according to a Government Accountability Office analysis. ‘The financial markets likely would continue to perceive that the federal government would provide substantial financial support to the enterprises, if privatized as largely intact entities, in a financial emergency,’ the GAO said… ‘Consequently, such privatized entities may continue to derive financial benefits, such as lowered borrowing costs, resulting from the markets’ perceptions.’ The Treasury today reiterated that the government intends to make recommendations on Fannie Mae and Freddie Mac next year… ‘Any transition to a new structure would need to consider the enterprises’ still-dominant position in housing finance and be implemented carefully (perhaps in phases) to ensure its success,” the GAO said.”My interest is not in taking shots at today’s policymakers. They have been faced with incredible challenges, and proceed now on a course they hope and believe is best for returning the country to sound footing. And while I disagree strongly with the current path of policymaking, it has been predictable. From a policymaking perspective, the greatest error came with the Greenspan/Bernanke Fed’s failure to act to rein in systemic Credit excess, asset inflation, and financial Bubbles. Many belatedly recognized the Fed’s failings, yet few today appreciate that the costs and risks of flawed analysis and theories only keeps mounting.I retain keen interest in debunking the Fed’s thesis – articulated most clearly by then Fed governor Bernanke – that central banks should avoid the business of popping Bubbles and instead focus on post-Bubble “mopping up” strategies. It was, after all, post-Russia/LTCM “mopping up” that fueled the tech Bubble, and then the post-Tech and 9/11 mopping fostered the Wall Street/mortgage finance Bubble. And the latest big mop up job sets the stage for perhaps the greatest Bubble all them all – the Global Government Finance Bubble.They appear as free lunches at the time, but there are myriad financial and economic costs associated with government intrusions into the marketplace. Most are subtle and tend to remain quiescent for years. When (market pricing, resource allocation and economic impairment) distortions do eventually manifest into a crisis, policymaking will have a strong proclivity to treat misdiagnosed ills with only greater government manipulations and intrusions. And the greater the degree of intrusion into the markets, the greater the ongoing costs involved. Huge intrusions ensure open-ended government involvement and increasing governmental command over the economic system.As much as I believe Secretary Giethner is speaking earnestly, there is no way at this point government influence in the marketplace can be meaningfully dialed back. The damage has been done – historic distortions to both the financial system and real economy. The damage began with the activist Greenspan Fed manipulating interest rates, promising market liquidity, and pandering to the leveraged speculators. The damage worsened as the government-sponsored enterprises came to dominate our nation’s market for housing finance. And the damage turned unmanageable when the markets listened back in 2002 to Dr. Bernanke profess the virtues of helicopter money and whatever other unconventional measures the central bank might deem worthwhile.Federal government finance (Treasuries, agency debt and GSE MBS) has expanded about $2.0 TN over the past year. I expect it to inflate another $2.0 TN over the coming twelve months. The private sector Credit apparatus is simply not up to the task of generating the necessary $2.5 TN (or so) of total system Credit expansion necessary to sustain the current economic structure. In this post-Wall Street Bubble environment, only government and government-related Credit retains sufficient “moneyness” in the marketplace. Systemic reflation today depends on a massive inflation of this government helicopter “money.”This week’s GAO analysis on the GSE’s was spot on and certainly applies to more than just the GSEs: “The financial markets likely would continue to perceive that the federal government would provide substantial financial support to the enterprises, if privatized as largely intact entities, in a financial emergency.” Over five Trillion – and counting – of GSE securities are valued and traded in the marketplace as (money-like) government-backed obligations. Policymakers would not today risk the negative financial and economic ramifications from dialing back from Washington’s explicit and implicit guarantees.And as much as moral hazard and “too big to fail” are recognized as fundamental facets of the previous Bubble excess, our policymakers have nonetheless been compelled to expand only further toward backstopping the entire Credit system. Obviously, the GSE’s were too big to really fail, while markets appreciate that policymakers now believe it was a mistake to allow Lehman to collapse. The markets – more than ever before – operate with the view that policymakers have no tolerance for a major financial institution failure.When one contemplates the issue of “getting the government out of the private sector,” these various market liquidity support programs being wound down are an insignificant issue. Fundamentally, for the economy to move toward sounder and sustainable footing would require at least a semblance of a market-based Credit pricing mechanism. Regrettably, the vast majority of system Credit today is “public.” Government intrusion chiefly dictates the cost of finance and the allocation of financial and real resources. Furthermore, I would argue that the limited amount of private sector debt being issued these days is dependent upon the system-stabilizing effects of massive government debt issuance and spending.As I have stressed repeatedly, in the neighborhood of $2.5 TN of non-financial Credit growth is required to stem systemic implosion – a massive Credit expansion with only our federal government up to the challenge. It is this fundamental facet of Bubble economies – a maladjusted economic structure sustained only through ongoing Credit excess – that prohibits Washington from extricating itself from very public “private sector” intrusions. Fixated on the notion of sustainable recovery, policymakers will not be dialing back from massive borrowing, spending, or market backstopping endeavors. And this gets to the core of the unquantifiable costs of failing to rein in Credit and asset Bubbles.As I have written over the years, the entire notion of “mopping up” is as flawed as it is dangerous. Clearly, the notion of inflationism remains as seductive as it has throughout history. If, God forbid, deflation ever becomes a risk the central bank must aggressively raise the price level to preclude a downward spiral. We heard this dogma in the early nineties, heard it again earlier this decade, and have had it repeated too often over the past year.And the more intense the necessity to reflate – the greater the government’s evolving role throughout both the financial and economic systems. This is a fact of life, human nature and politics. And at the end of the day inflationism tends toward socialism. And there is only one way to reverse this course; it is anything but painless. The economy must be weaned off of Credit and financial excesses and government intrusions – and allowed to proceed through the arduous task of adjustment and rebalancing. Choosing instead a course of sustaining current financial and economic structures implies a huge and ever-expanding role for the government. There will be no dialing back.Many hope the private-sector can again rise to the occasion. It is expected that as recovery gains a foothold private sector borrowing and lending will increase, tax receipts will rise, and the government enjoy the luxury of dialing back as the system normalizes. I don’t expect this dynamic to work as it has traditionally because of the confluence of Bubble economy Credit requirements, acute private sector Credit system impairment, and the government’s predominant influence on the recovery.The dynamic today is one of a shallow recovery induced by a flood of government borrowing and spending and marketplace intrusions. Rampant financial speculation has reemerged, which leaves the marketplace increasingly vulnerable to any serious move to dial back. In a normal recovery, the system tends to gain strength and stability over time. Credit requirements are manageable, and speculative excesses have been largely wrung out of the system. In stark contrast, today’s combination of huge Credit expansion and a highly speculative financial backdrop ensures only more acute systemic fragilities over time. And the distorted marketplace will simply not function well at even the notion of fiscal and monetary exit strategies.Conceptually, somewhere along the line there reaches a tipping point where government intrusions are no longer stabilizing. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy.http://www.safehaven.com/article-14459.htm

I have been critical of AEP in the past, but he seems to get better and better as the financial meltdown persists. He is often ahead of the curve in speaking the uncomfortable truth about the dire prospects of the global economy, and has the intellectual range to put it in a historical and political context. He may once have been a Murdoch-owned tool, but I’m willing to forgive him that as his writings in recent years have more than redeemed him.

This conversation was Overheard at a Brooklyn OTB:“Hey Pauli! What’s dis stuff ‘bouta black schwantz? Dey talkin’ ’bout da president?”“Naw it ain’t dat, Vinnie. It’s what dey call sumpin’ dat hardly never happens but den it happens ennyways, like if yer mudder ever says no.”“I tole ya before, Paulie. No mudders, awright? What’s dat got ta do wit anyting, anyhow?”“Whada I look like, an expoit on boids or sumpin’? Da economy is inna terlit. Dat’s what dey mean. Everybody is in hock, ‘specially da gubmint. Dere runnin’ from one shy to anudder just tuh pay da vigorish. Meanwhile da polticians bin dippin’ dere beaks like crazy an’ nobody bin watchin’ da store. Know what I mean, Vinnie?”“Dis is gettin’ scary, Paulie. What’s gunna happen when no shys lend to ‘em no more.?”“No sweat, Vinnie. Dey jist pull out the ole printin’ press an’ go to town. Dey pay off da shys wit’ funny money an’ it’s all legit.”“I don’t know, Paulie. I tink I like da way we do it better. Everybody knows who ya gotta pay an’ what happens when ya don’t. Dat way, everybody gets taken care of. Hey, will you look at dat. Dere’s a hawse inna toid name o’ Black Swan. Ya tink da fix is in?”“You kiddin’ me? Da fix is always in.”

PJB”This tends to agree with physics except that the ‘present moment’ must and does exist.”I dont know much about physics but i cant wrap my mind around your statement.I think only past and future exist. When we start deviding time even a secondcould be split into billion trillion slices. so humans realize time when its already past, hence passage of time.@ Guest on 2009-09-12 02:39:50I have been somewhat started by this comment and have therefore given it some consideration; I comment then as follows:There can be little debate as to the fact that a present moment exists for not only has it been the subject of enormous debate over many millennium, and our (human) development of the mathematical zero and the following usage and dependence emulates this moment is all aspects of society. The present moment is conditional to existence and the rise of the creative consciousness via the translation of the esoteric to the exoteric or technology, via the intelligence functionality common to all life.However, I have been observing for many years, and find in most annoying, – where you state; “so humans realize time when its already past” – that this is so, but where the reference backwards is not historical per se, but is limited to almost nothing, or IOW, the facts utilized by the majority of the population are emotionally founded and so provide no real data, considered, or formulated foundation for projecting intellectually forward, that is to say, the short term future is anticipated emotionally in terms of material wish. This leaves society, the majority of society functioning not on facts, but wishes and self interests; or, we are not functioning as homo sapien sapien but as a family of fungal mats in collectivist mode (automatic pilot) and hence, we will be subjected to the ravages, rages and furies of the Universal forces and Laws as concurrent within our environment.Until that time when we attempt and rise to become of our sentient capacity in evolution, we will continue to suffer the vagaries of the collective censensuality of the ignorance of blind faith.What is done is done and all the king’s men will not put in back again and the global socio-economic collapse is dynamically accelerating and it is time to desist in destroying humanity for the sake of a few and stop the denial – it is time to redesign and rebuild but for this we need three things:1. Leadership – Status: none available2. Technical Design Team – Status: Available and willing but not acceptable to existing “leadership”*.3. System design and proven fundamentals – Status: Available but unacceptable to existing “leadership”*.* and all that hangs off it.Therefore, if one utilizes neurological functionality and capacity, the immediate future looks very bleak indeed and worse, the current facts strongly imply a major global socio-economic disaster of enormous proportions.OTOH is one flaunts denial and embraces the position of the three monkeys and wishes for the gods to kissy kissy and make everything better, then the present moment is warm and rosy.Ho hum

I have just stumbled upon this article at the BBC.http://news.bbc.co.uk/2/hi/science/nature/8248589.stmThis perhaps goes a long way to explain the socio-economic collapse when those of “leadership” with all those resources were full-ahead-sleep mode.Personally, I thought it was normal;-)>ho hum

Thank-you. I’d written a response to this uninformed, agenda drive tripe but decided against posting it.You’ve managed to capture my sentiments.

It’s no wonder …Charles Darwin film ‘too controversial for religious America’A British film about Charles Darwin has failed to find a US distributor because his theory of evolution is too controversial for American audiences, according to its producer.http://www.telegraph.co.uk/news/worldnews/northamerica/usa/6173399/Charles-Darwin-film-too-controversial-for-religious-America.html

BERLIN (AP) — The global economic crisis isn’t over yet, despite positive signals from Europe’s biggest economies, the head of the International Monetary Fund warned in comments published Saturday.More work also needs to be done on financial-sector regulation, IMF Managing Director Dominique Strauss-Kahn was quoted as saying in an interview with German weekly Der Spiegel ahead of the Group of 20 summit in Pittsburgh Sept. 24-25.”In the minds of too many — not only regular people but also top politicians — the financial crisis is already behind us,” Strauss-Kahn said, according to the report.”That way of thinking is dangerous,” he was quoted as saying. “The global economic crisis continues despite the fact that Germany and France saw some positive growth figures for the last quarter.”

“Deterioration of work ethics “…leave out the word “work” and i think this statement is more true.

I am reading this article now (Deflation, first part), but I think John is not a good analyst. Only his statement”As McCulley quipped to me this spring, when I asked him if he was concerned about inflation, with all the stimulus and printing of money we were facing, “John,” he said, “you better hope they can cause some inflation.” And he is right. If we don’t have a problem with inflation in the future, we are going to have far worse problems to deal with”He ignores that inflation is a general (AVERAGE of goods) price level. He associates inflation with high wages but the fact is that wages are constrained by a high unemployment and inflation is now appearing on commodities, pushed by TBTF institutions, and that can propagate to goods. This will mean stress to the unemployed.He needs to understand that some disagregation is a must here.If your head temperature is 80 degrees and your legs are 0 degrees, we can eventually get a nice AVERAGE temp, so that if the commodities and stocks are not appearing on CPI it is not a simple inflation boost (high CPI) that will prop up economy.Back to the article…

No worries, Michelle. Once Obama divorces the benefit if health insurance from the necessity of holding down a job, the lazy have even less reason to show up for an interview. It’s a kind of preselection for the best workers. And it’s just in time….because with all the new technologies in the workplace, fewer and fewer FTEs are needed.

http://www.youtube.com/watch?v=40FjQH3Xw0M&feature=related

PJB”I think as I have already stated that we have bred our own demise”Again statement is true on a shorter time scale but even if we had NOTbred our own demise universe as a whole was doomed at the moment of its conception. Was it not? Remember physics.:)@ Guest on 2009-09-13 03:57:19Answer: Not necessarily so. Humanity and not the Universe(s)- that is, within the context of the discussion /statement, is an emergent phenomenon striving for sustainability – this time around; it would be easier and probably more profitable, to not breed our own demise and use some reason so as to be in accord with Universal Principles.What conception? I don’t remember that! Ho hum

Peak oil is officially here.The last few decades of growth have been driven by cheap energy and debt. And in the near future at least cheap energy is going to be less readily available – unless there are plans to steal what’s left .Until economically viable and usable alternates to cheap energy are invented the growth overall is going to decline. We are going to have to get used to doing without a lot of ‘luxuries’ we took for granted.

I think its human nature that is the translator more than anything else.I beleive that human nature can be tamed thats why we have big brains.I would also say that morality and ethics should be above survival instictswhat say you?@ Guest on 2009-09-13 04:23:43I doubt that it is “human” nature per se but agree that it is the “collective human nature” that is the nature of the organization which nature in not representative of any individual human. The nature of the collective which I term as the fungal mat (a fungus), is fashionable morality and a priori default survival at any cost; not so the individual Man.I hold that the nature of life is to *individually* evolve through the evocations of risk and probabilities.”Tamed”? – Do you mean domesticated? Have you ever witnessed how they tame an elephant – if you had you would never make this statement. Torture is the source of taming.”Big Brains”? In the stomach or cranium? You mean neurological circuitry? “Brain” is a misnomer.A Man will do what a Man must do while men run and hide, etc.PS, if I may (apologies to the blindman) – the Big Bang is a poor joke gone wrong – no such event took place! No evidence – no math just pseudo academics looking for Nobel Prizes…Ho hum

PJB”Tamed”? – Do you mean domesticated? Have you ever witnessed how they tame an elephant – if you had you would never make this statement. Torture is the source of taming.Yes i have seen elephant being tamed:). I am native of such country. I agree torture part of the statement thats why relegion says to tame it now for the sustainability and greater good now or there would be punishment afterwards:)For everything there is a downside and upside what makes us human is the ability to measure the downside and upside risk in making a choice. By all this i’m not preaching but trying myself to understand and to do this i have to throw my thoughts in the open and see if they could be countered LOGICALY.As for the big bang, a lot of understanding that we have of the PHISICAL LAWS ;that you so prudently speak of, comes from that model. I don’t know if you are a string theory beleiver but the fact is logic still stands of my statement that you were refering to.No punn intended Always enjoy your posts. Cheers

Another thanks @ Guest on 2009-09-12 16:55:12.

IC:Afraid I missed it…busy day yesterday. Perhaps they will re-air.I did write a letter to the local newspaper yesterday on the Hillary Movie case. Don’t know if they’ll publish it, but here’s what I said:”The case of Citizens United v. Federal Election Commission, now pending before the U.S.Supreme Court, does indeed pose a threat to federal campaign finance laws that attemptto reign in the pernicious influence of for-profit corporations on the democratic process.The Times urges that the High Court “stick to precedent,” as long-standing judicialprinciples require it to do, in upholding the decisions of lower federal courts that affirmedthe constitutionality of the campaign finance law at issue. Had the Court followedprecedent in 1889, however, we would not be where we are now.”It was in that year that the Court, in Minneapolis & St. Louis Ry. Co. v. Beckwith, firstrecognized the personhood of corporations within the meaning of the clauses in theFourteenth Amendment to the Constitution concerning the deprivation of property, andconcerning the equal protection of the laws. Although the court cited as precedent for thisconclusion one of its own decisions from 1886, Santa Clara County v. Southern PacificRailroad, the latter case had no precedential value, because the issue of whethercorporations were persons within the meaning of the constitution was not even before theCourt in Santa Clara.”In that case, the Court had merely opined that “The court does not wish to hear argumenton the question whether the provision in the 14th Amendment to the Constitution, whichforbids a State to deny to any person within its jurisdiction the equal protection of thelaws, applies to these corporations. We are of the opinion that it does.”"In tandem, these two cases represent a rare, real-life example of improper legislation fromthe bench. Signficantly, while the High Court was extending constitutional rights to artificialcorporate “persons,” it began systematically narrowing the rights of real people andcitizens, African-Americans, to their constitutional rights. Plessy v. Fergusson, for example,which upheld as constitutional state laws that enforced segregation by race as long asthere was provision for “separate but equal” accommodations, was decided in 1896, amere seven years after the Minneapolis and St. Louis Ry. Co case, and the so-called “JimCrow” laws thereby remained in effect until the Civil Rights Movement led to theiroverthrow a half a century later.”For 120 years now, the High Court has been continually expanding the constitutional rightsof corporations — neither “born” nor, properly speaking, “naturalized” citizens — that werenever intended to be recognized as persons for purposes of the U.S. Constitution. Thisliterally unprecedented extension of constitutional rights to corporations, including ever-widening rights of free speech (first recognized by the High Court in 1936 in Grosjean v.American Press Co.), poses perhaps the greatest threat to our political and economicsystem that we have ever faced. The court should exercise this opportunity, not only touphold campaign finance laws, but to reverse once and for all time its long-standing andbaseless recognition of corporations as “persons” under the U.S. Constitution.”What do you think, IC?SWK

Saw a bumper sticker the other day that cracked me up: “In Darwin We Trust.” I, for one, certainly believe in evolution, but I trust in God as the author of evolution and of all other things and processes of Creation.It never ceases to amaze me how many people in America embrace literally the story of creation set forth in Genesis, rather that appreciating it as a multi-layered allegory that is not incompatible with the scientific theory of evolution, which has yet to be disproved or even seriously questioned empirically. From what I can make out, the ‘A PRIORI notion of so-called “Intelligent Design” certainly doesn’t begin to qualify as a scientific refutation of the A POSTERIORI concept of evolution. One thing is for certain: the “religious America” that would find a film on Charles Darwin “too controversial” is not the religious environment from which I come that accepts scientific principles as not incompatible with a belief in God.SWK

Your self-congratulatory hubris will be your undoing. I would put money on it.

Testing a response to your test.

Canadians are talking about this issue as wellI think you would like to read a book(Wealth by Stealth) by Harry Glasbeek UofT law professor written around 02.How tricky it is to change(behaviour/beliefs) when it is the law.The book is a lovely synopsis of self interest trumping disinterest.

IC:One solution would be to educate the public and initiate efforts to amend the U.S. Constitution to delimit corporate rights. Interestingly, the current South African Constitution, adopted at the end of 1996 (following the fall of aparteid), contains a bill of rights which applies to both natural and juristic persons; however, as applied to the latter, it specifies that “A juristic person is entitled to the rights in the Bill of Rights to the extent required by the nature of the rights and the nature of that juristic person.” I suspect any effective amendment to the U.S. Constitution would have to be more specific than this in order to overrule existing court precedent. I have no problem in general allowing corporations procedural due process, for example, but they damn well shouldn’t have a say in political campaigns.SWK

Chignos, I’m with you on this one! (a very rare occasion indeed!)

Yeah, that’s pretty funny… Most are just cannon fodder dregs that the ruling rich use and toss away… Only if you’re one of their top-level accomplices (Like Tommy ‘gun’ Franks) do you swagger home with riches.

God provides a brake on the excesses of the ego by fostering a senseWell, one could translate that to any number of cause and effect relationships. And, if you were to note all the misdeeds by the so-called religious (those that opening chastise those who don’t profess in their belief of some religious dogma), then that notion of any such brake providing a check on the ego doesn’t seem to be all that powerful.

That’s excellent SWK, however……..(oh, oh, here it comes…)I wouldn’t be too quick to discard Intelligent Design. The more one studies the Bible the more one realizes the Genesis account of creation and the theory of evolution are incompatible. The more one studies math and physics, the worse the theory of evolution looks.Without an intelligent designer (God) to create this world, one cannot explain even Darwin’s simple cell, which as it turns out, isn’t simple at all–it’s mind-bogglingly complex. Darwin couldn’t have known this–no electron microscopes in the 1800s.The second law of thermodynamics states that all systems tend toward maximum randomness. Without something to sustain organization, life or wealth (hey, this is an economics blog after all and wealth is organization), this world would fly apart. To say that what we observe on this planet has come about by the random process of evolution is like saying this pile of junk scrap, given enough time, could somehow spontaneously assemble itself into a 767 Dreamliner.Intellectuals who refuse to believe in God have fashioned up this preposterous theory (just lately in the history of the world I might add) to explain how we got here because they want to be their own god. It’s a mental disorder. A colossal selfish (and self-deluding) rationalization. Their concept of God does not include the idea that God controls what time it is. They can’t fathom that God might be able to make it be whatever time He wants it to be. Evolutionists are linear time line limited. They believe that the speed of light is constant, but……..oh, oh……lately science is proving that the speed of light actually varies……hmmmm……Chuck Missler at http://www.khouse.org has an excellent scientific approach to the book of Genesis. It’s the kind of stuff your intellect is not complete without.Oh, and remember one more thing about Genesis:”In the beginning……………..there was no plagiarism.”

Oh, but the real problem, according to the likes of Michelle and Chignos, are:”illegal immigrants”"lazy, out of work people (who may or may not need medical assistance)

SWKIn the Hillary movie case isn’t the court also deciding whether unions should be allowed to run campaign ads all over TV during election season?Aren’t they also essentially considered “persons” under current campaign finance law?

Everybody is free to extrapolate as far as he wants, as long as he doesn’t harm others with his musings. My turn in this game:Hypervaluation of personal deity in action, as predicted. Devaluation of common currencies also observed these days. Human, the compulsive value seeker who isn’t ready to understand that the end of life is the end of value. He’s a little too young still, time will tell, so to say. MHO.

Just came back from the US, and must say I didn’t feel any of that deflation everyone keeps talking about. Prices at the stores, especially food prices, were no lower than last time, and gas was spiking up. TPTB were particularly interested in how much cash I was carrying in the form of Euros, which was amusing as well as annoying.It was drop-dead easy to get immediate service on a number of things where two years ago I might have had to wait a few days or a week to get an appointment. And cash was certainly king. The mood was largely subdued among a number of people I talked to, but at the same time there was no shortage of customers at Best-Buy on a weekday afternoon. Seems as they say that a recession is what happens to the poor guy next door.I didn’t see anyone starving; it’s amazing how fat poor people are in America. And I saw nobody dying in the streets from lack of medical care, although there was no shortage of murder/homicide reports on the various news channels … how’s all that social-welfare spending working out for you, America?I managed to ignore Prez O for a whole week and don’t feel any poorer for the experience. In fact, I tend to feel poorer whenever I do pay attention to what he and his minions are up to, so I may as well just stop paying attention and take the hits when they ulimately come.Picked up a copy of ‘The Forgotten Man’ and found it to be a fabulous read. It is amazing the parallels between the changeover from Hoover to Roosevelt and the changeover from W to O, and to see how activists the two ‘do-nothing’ presidents were and how much of a social experimenter and ‘righter of injustices’ both of the latter set themselves up to be. If history provides a good parallel (and when does it not), the US is heading for a somber decade.

I would personally favor no limits on campaign spending by any person, natural or legal, coupled with full disclosure of who is doing the spending. Limiting the ability to spend and air such material/ads/etc. is a direct abridgement of political speech and an indirect abridgement of free association, both as contemplated by the Founders, and generally serves to empower and further entrench the incumbents in elective office.In short, campaign finance ‘reform’ is evil.

” When we use language, our thinking is almost always limited by linear temporal concepts. Rarely do we write, read, speak anything eternal. And yet, that is exactly what science is encouraging us to do. Man has developed the scientific knowledge that the speed of light is not constant. If it can vary, we must begin to understand that there is something eternal, that there is a power in the universe that determines what time it is. “@ Chignos on 2009-09-13 22:40:25Agreed totally – it is sometimes appearing as a voice from somewhere else… Also agree with the Speed of Light as a variable but I believe the solution to be simple and at hand.From Zero Hedge I believe – an absolute truism: “It always takes ideology to consummate massive error.” The evidence is clear.And, there is much going on around the scientific World that make the institutional scientists scratch their heads these days, much and there will be much more.Think also of “Mass” and “closed systems” – but it is all there on my Blog clearly stated. My small contribution to humanity.Ho hum

I generally believe in the principle that one’s deeds actively shape past, present, and future experiences, sometimes in ways that we don’t perceive, and that our good works, undertaken in faith and humility, tend to lead to positive experiences for us in our lives — blessings — in many ways. As I’ve previously opined, however,I don’t happen to buy into Chingos’ notion that each good work, e..g., dropping a $50 bill into the collection plate at church, means I’ll get a surprise award from the Creator that week.In Chingos’ defense, I note that he didn’t specifically say that this “Let’s Make A Deal” system works only in his own church and religion. I do find it interesting that what he is describing sounds a lot more like the Hindu idea of Karma-phala (the fruits that derive from one’s own actions in life, whether good or bad) than the Christian principle of faith in which God’s grace is sufficient to absolve us of any sin, but grace does not free people from their duty to behave righteously and responsibly, even though such behavior will not ensure salvation or blessings (the Bible’s Book of Job teaches the importance of remaining righteous in our actions even if we lose our blessings from God).These are my own personal viewpoints, of course. I believe that God speaks to mankind through many different faiths, and that He is to various cultures and religions as is the hub to the spokes of a wheel. While the spokes appear separate and distinct, they all lead to a common center of being.SWKSWK

http://globaleconomicanalysis.blogspot.com/2009/09/us-fires-opening-salvo-in-trade-wars.htmlTrade war with Canada. Job well done by clueless Obama.

Chingos:No, unions are not incorporated and are not for profit entities. They are organizations of workers who acting together to secure favorable wages, hours, and other working conditions.SWK

Are the Roubini double-dip Concerns out of Mainstream?Professor John Taylor, Sept. 10, 2009 speech disputes the CEA claim that stimulus is working:“I can’t see any evidence the stimulus is working,” Taylor said at a Sept. 10 dinner in New York sponsored by the Hoover Institution, where he is a senior fellow.”Real GDP fell 1 percent in the second quarter compared with declines of 5.4 percent and 6.4 percent in the previous two quarters, respectively. It sure looks as if some kind of dam acted to hold the waters back in the April-to-June quarter.”The only component of final domestic demand to show an increase was government spending. Real consumer spending fell 1 percent, residential investment was down 22.8 percent and business fixed investment slumped 13.5 percent, all at a seasonally adjusted annualized rate.”If the stimulus were working as advertised, consumption would have increased”Taylor said.I guess Taylor says “No green shoots…only weeds.”WDM223

US Housing Crash ContinuesIt’s Still A Terrible Time To BuyFalling House Prices Are The Solution, Not The ProblemBy Patrick Killelea, last updated Sun 13 Sep 2009House prices will keep falling in most places because those prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer’s yearly income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the tenant’s yearly rent. Yet in coastal areas, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a “bargain” this time last year is already sitting on a very painful loss.It’s still much cheaper to rent than to own the same size and quality house, in the same school district. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6%, so it costs twice as much to borrow money to buy a house than it does to borrow (rent) the house itself. Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is three times the cost of renting. Buying a house is still a very bad deal for the buyer on the coasts, but it does make sense to buy in Michigan and some other places where prices have fallen into line with salaries and rents. Check whether you should rent or buy in your own area with this NY Times calculator.The bottom will be here when buying a house to rent out clearly makes money. Then you’ll know it’s safe to buy for yourself. At that point it will rent can cover the mortgage and all expenses if necessary, eliminating most of the risk. For a rough indication of the wisdom of buying a house, look at the yearly-rent/purchase-price ratio for the model of house in question:3% = do not buy6% = borderline9% = ok to buySo for example, it’s OK to pay $133,000 for a house that would cost you $1,000 per month to rent. That’s $12,000 per year in rent, divided by $133,000, so about 9%. But it is foolish to pay $400,000 for that same house, because renting it would cost you only 3% of that per year. Renting in that case means getting the use of the house for free, paying only the property tax and maintenance (which are about 3%).It’s a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. Prices fall as interest rates rise, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.It is definitely far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.First of all, your property taxes will be lower with a low purchase price.Second, a low price gives you the ability to pay it all off instead of being a debt-slave forever.Third, prices will definitely fall as interest rates rise — so paying a high price now may trap you “under water”, meaning you’ll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won’t be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes this possibility.The US economy will not recover until house prices are allowed to fall to prices buyers can easily pay on a normal salary. The primary evil in the economy is government “affordability” programs which encourage debt, making prices higher, not lower. True affordability is not more debt — true affordability is lower prices. The government’s false affordability programs have created more debt than can ever possibly be repaid. Credit rating agencies lied about the value of this debt, scaring off investors.When house prices finally fall to affordable levels, and foolish lenders and foolish borrowers are finally allowed to fail, then the economy will work again: there will be investment based on real production instead of on financial speculation, jobs will be created, and money will be earned and spent. Currently, we have no investment because the government is punishing savers and investors with policies that waste their honestly earned money to cover the foolish gambling losses of big banks.Prices disconnected from Gross Domestic Product. The value of housing in the US depends a lot on the value of what the US actually produces. Not only is the GDP decreasing, jobs are being lost in large numbers. It does not make sense to buy when more jobs will be lost and the price people can pay will decrease. Unemployment drives housing prices down. It also does not make sense to buy when your own job is in danger.Buyers borrowed too much money and cannot pay the interest. Now there are mass foreclosures, and Congress is taking a trillion dollars of your money to pay the mortgage investment losses for banks. The plan is to overpay the banks for bad mortgages, claiming that this will support the housing market. It will not work, since bank profits have nothing to do with housing prices. But it has protected Goldman Sachs from losses on their gambles, and even given them record bonuses at taxpayer expense. It is now clear that if you can get your CEO appointed Treasury Secretary, you can easily fleece taxpayers with no public protests against the banks — especially if you can distract taxpayers into protesting medical insurance reform instead.We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice — a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the press will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing too much money.Should taxes be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed or overpaid for a house? Should savers be forced to pay the debts of other people who cannot afford “their homes” no matter what price they paid or how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can to buy a bigger house, and don’t pay it back, knowing that Congress will force the real repayment obligation onto others, onto people who are living within their means, so that you can stay in “your home” rather than in a house you can actually afford. No one ever died because they had to rent, or to live in a house they could afford.Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get.A return to traditional lending standards means a return to traditional prices, which are far below current prices.Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he’s bankrupt in the real world.It’s worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby’s corruption of US legislators. On a $300,000 house, that’s $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.Shortage of first-time buyers. From The Herald: “We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don’t produce wealth, they merely transfer it from the young to the old – from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize.”High house prices have been very unfair to new families, especially those with children. It is foolish for them to buy at current prices, yet government leaders never talk about how lower house prices are good for pretty much everyone except bankers, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you’ll save more on your next house than you’ll lose in selling your current house. Every “affordability” program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac should be completely eliminated, along with the mortgage-interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable and stable housing market because of that.The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government ever talks about the obvious solution: less debt and lower house prices. The real result of every “affordability” program is to keep you in debt for the rest of your life so that you have to keep working. Lower house prices would liberate millions of people from decades of labor each. There is never anything in the press about the millions of people that were hurt and continue to be hurt by high house prices.The government pretends to be interested in affordable housing, but now that housing is becoming affordable, they want to stop it? Their actions speak louder than their words.Surplus of speculators. Nationally, 25% of houses bought the last few years were pure speculation, not houses to live in, and the speculators are going into foreclosure in large numbers now. Even the National Association of House Builders admits that “Investor-driven price appreciation looms over some housing markets.”Deflation. There is fear of inflation, but it’s not likely in the next few years. The actual amount of money created by the Fed lately is a trillion dollars, which sounds huge, but is small compared to the $10 trillion drop in housing “values” and another $10 trillion drop in stock market capitalization. The US government will not print extreme amounts of cash like Zimbabwe did, because significant inflation would mean that foreigners would no longer lend money to the US government unless interest rates were much higher to compensate them for inflation losses. Higher interest rates would push more people with adjustable mortgages over the edge, causing yet further problems. So the Fed won’t do it. The most likely scenario is like Japan: low inflation and low interest rates, with falling house prices for years to come.Fraud. It was common for speculators take out a loan for up to 50% more than the price of the house. The appraiser went along with the inflated price, or he did not ever get called back to do another appraisal. The speculator then paid the seller his asking price (much less than the loan amount), and used the extra money to make mortgage payments on the unreasonably large mortgage until he could find a buyer to take the house off his hands for more than he paid. Worked great during the boom. Now it doesn’t work at all, unless the speculator simply skips town with the extra money.Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.Failure to re-regulate finance. The Graham, Leach, Bliley Act did away with the depression-era safety constraints placed on banks. This paved the way for record profits in the finance industry and an effective takeover of the US government by large banks, which has not yet been reversed.The best summary explanation, from Business Week: “Today’s housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy’s long-term prospects will get worse or rates will rise. In either scenario, housing will weaken.”

If you want to take Stiglitz’ analysis a couple of steps farther you might wish to review a 1993 paper by Romer and Akerlof which was based upon early Stiglitz work:Looting: The Economic Underworld of Bankruptcy for ProfitNBER Working Paper No. R1869http://ssrn.com/abstract=227162WDM223

@ Chingnos – The proposition I put forth eliminates contributions from all but voters. Period, end of story. No corporations, no unions, no PACs, no 3rd party entities whatsoever. Why should it cost $14,000,000 to run a Senate campaign that pays $180,000 in salary? This guarantees that only those willing to sell themselves, or those with vast personal wealth, will even be candidates.@ Alarmist – So, any entity can spend any amount in any way and at any time they choose? If I understand correctly, you are in the camp that equates money with speech. Following that logic, no money = no speech. 3rd party, aggregated, focused funds can drown out community interest – the general interest.It is precisely this thinking that brought America to this place we find ourselves today – bankrupt, corrupt, and NO JOBS. Do you think this is what our Founders had in mind? Do you think they wanted to see our small businesses laid waste by blood-sucking corporate interests who send their lobbyists into Congress to write our laws? Do you think they were Free Trade fools willing to send our jobs off to countries that are nothing more than corporte states picking off our industries one by one? Do you think they would stand for this huge military-industrial complex eager to create mischeif around the world at the bidding of the corporate state? Do you really believe they would like to be corporate slaves?I guess we grew up in a different America and learned different history lessons.Independent Contractor

Below article is from The Onion, a parody paper…Nevertheless it brings up this question about to what degree the Florida hurricanes can affect banks bottom lines by destroying homes that may not be taken care of.Or can the banks charge off this sort of losses in their tax returns?Thousands Of Abandoned, Foreclosed Homes Threatened By Florida Hurricane

FORT MYERS, FL—In what forecasters are predicting will be the largest, most devastating disaster to hit Florida since the national economy collapsed, a Category 5 hurricane neared the Gulf coast this week, threatening thousands of repossessed and long deserted homes.According to meteorologists, the incoming tropical storm could leave as many as 3 million residents every bit as homeless as they’ve been for the past year or so.”Those who haven’t already lost everything to the housing-market crash are urged to evacuate their homes immediately,” said Robert Menken, head meteorologist at the National Weather Bureau. “That should be about 10 or 12 of you. Everyone else, please stay where you are, probably on the couch of some in-law who lives near Atlanta.”…

Full story at:http://www.theonion.com/content/news/thousands_of_abandoned_foreclosed?utm_source=a-section

All over the media they use talk about how we are were on the edge of the abyss last year. But ive never heard anyone detail what the outcome would have been if we went over the edge. what could have happened?

But in regard to campaign contributions, unions are treated the same as corporations. Essentially they are both super-persons, can contribute much more than any single voter. Isn’t that what the case before the Supremes is all about?

Responding to earlier post above…Dear Wild Bill,The case of Stephen Hawking is a good point. Like Einstein before him we have an overdeveloped, overexplored understanding of some of the underpinnings of Nature. Like this we developed the Atomic Bomb and nuclear power plants.The sheer willful act of endlessly trying to discover new things is not a good thing if the ego/ethics/morality of man cannot use these discoveries in a right way. Thus more and more man becomes GOD ALMIGHTY as he holds the capacity to destroy the world without having the necessary consciousness to act otherwise. Thus, Einstein and like ilk are not high in my book of evolved humans. They did not inquire of the creator if such discoveries are ready to be brought forth.Just before I responded to this comment I see that the latest sociopath Chavez leads Venezuela to Develop Nuclear Energy With Russian HelpYou tell me where our world is heading with all this so-called Evolution? Looks like DEVOLUTION to me.

new thread

Just curious, were you critical when Bush backed US steel?

Rarely do we write, read, speak anything eternal. And yet, that is exactly what science is encouraging us to doNo! Science says no such thing!This is the confusion that the anti-science (generally overly pro-religious) people create.Science is a process, a process that evolves: like the kind that allowed us to see that the world wasn’t flat.

sociopath ChavezYeah, like Bush wasn’t?It’s nuclear ENERGY, not nuclear bombs (like the US and Israel have plenty of).We wouldn’t be hearing any of this (as being “evil”) if it were US companies selling the equipment to Venezuela.Sigh, but anti-socialists/anti-commies never can see past the political curtains.