Frontrunning: August 11

Tyler Durden's picture
  • U.S. Is Bankrupt and We Don't Even Know: Laurence Kotlikoff (Bloomberg)

Some doctrinaire Keynesian economists would say any stimulus over the next few years won’t affect our ability to deal with deficits in the long run. This is wrong as a simple matter of arithmetic. The fiscal gap is the government’s credit-card bill and each year’s 14 percent of GDP is the interest on that bill. If it doesn’t pay this year’s interest, it will be added to the balance. Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue. My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”

  • So much for that whole "austerity" thing: Zapatero considers easing austerity (FT):
    so let's recap - fake financial stability, fake austerity, fake bond
    auction results, fake (and delayed) accounting standards (Basel III) - Europe sure has gotten the hang of Keynesianism
  • Is tide turning for realizing CMBS losses? MBIA Says It Will Have C.M.B.S. Losses (NYT)
  • Bank of England warns UK recovery will be weaker than hoped (Telegraph); Bank of England Cuts Growth Outlook, Sees Inflation Undershoot (Bloomberg)
  • The latest bailout for public unions and spendthrift states (WSJ)
  • China Output Growth Weakens; Inflation Accelerates (Bloomberg)
  • Unemployment Drives More US Home Sellers to Cut Price (Reuters)
  • Pimco Says Fed Policies `Good for Risk Assets,' Won't Reduce Unemployment (Bloomberg)
  • Future of the EU Is Up for Grabs (WSJ)
  • The Labor Market's Teenage Wasteland: Chris Farrell (Bloomberg)
  • Credit Easing Goodbye - Quantitative Easing Ahoy! (Merk Funds)
  • Economists Cut U.S. Growth Forecasts as Companies Limit Hiring (Bloomberg)
  • US House Agrees $26bn In State Aid (FT)
  • Sweden Banks in Record Rally as Baltics Avoid Default (BusinessWeek)
  • For the Bank of England, an Economic Balancing Act (WSJ)
  • Louisiana Declares Emergency as Gulf Storm Builds (Bloomberg)
  • In case one was wondering what Krugman's opinion is: The Focal-Point Fed (NYT)
  • Firms Spend More—Carefully (WSJ)
  • The Hudson Institute Economic Report (THI)
  • Our Exhausted Monetary Policy Arsenal (IBD)

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Archimedes's picture

We may be in a really bad spot! I might even say we are F*^ked! I am reminded of that book title "Things fall apart" by Chinua Achebe .... 2011 is going to be nasty..if we make it till then.

Careless Whisper's picture

front run this too:

she was bankrupt 20 years ago. now she's about to give her opponent a chance to work at aetna, hartford, or any of the other ct insurance companies:


Headbanger's picture

Nahh, we know it but everybody is still enjoying blissful denial.

Careless Whisper's picture

oh puhleeze, what will it take for peeps to realize that this guy is a total scammer? when he had his hedge fund, his wife, "the trading goddess", made all the good trades, while she sent this idiot to starbucks to get her a latte.

bonddude's picture

Wow . Finally. The way the FDIC is killing small banks

on CRE mark-downs I was wondering when the shit

would hit the fan.


Looks like the MBIA dam has sprung a few more holes

that they can't hide. 


How long before the US bailout of CMBS ?

Caviar Emptor's picture

In The Double Whammy Economy, or like we call it, Home. 

In full flower again today: ballooning trade deficit (inflationary) after the Fed downgrades the economy (deflationary). UK and CHina economies are cooling (deflationary) but both report unacceptably high CPI (inflation, Beetchzez!). There are state bailouts coming + QE lite (inflationary) while mortgage aps decline amidst record low mortgage rates (deflation!). 

What is a good ole Fed boy to do!

bugs_'s picture

go hang out with equally deluded supply-siders

sounds like this guy is "an independent"

EscapeKey's picture

Federal workers earning double their private counterparts

LOL! "Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs"


gmak's picture

Well that seems reasonable..... [sarcasm off]

ZeroPoint's picture

Laurence Kotlikoff says double personal income taxes. I don't see how this can happen unless he wants to increase homelessness and even further economic retraction. Families are struggling enough as it is. 

How about we levy tariffs on imported junk, and thus force manufacturing back to America. At least then consumers can decide what they will pay more for instead of just having money taken away because ideaologues have drained the coffers dry.


goldfreak's picture

thats not what he said...