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GMI Describes "The Future Recession In An Ongoing Depression" In This Must Read Report

Tyler Durden's picture




 

Raoul Pal, who retired from managing money at the ripe age of 36, after co-managing GLG's Global Macro Fund, and the hedge fund sales business in equities and equity derivatives at Goldman among others, and has been publishing the attached Global Macro Report since, has just come out with the most condensed version of truth about our economic reality we have read in a long time. The attached report provides the most in depth observation on the "future recession in an ongoing depression" which is arguably the best way the describe the current economic predicament. Raoul goes all out in describing he worst recovery in history, touches on he complete disconnect between the bond world and the imaginary equity surreality, provides countless evidence the economy has not only not left the recession but is getting progressively deeper into it, shares several trade recommendations, and on occasion swear like a drunken sailor. A must read report for everyone who is sick of the CNBC/sellside daily onesided propaganda.

 

h/t Mike

 

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Tue, 08/03/2010 - 18:34 | 501850 equity_momo
equity_momo's picture

Thankyou very much for posting some GMI work. 

Tue, 08/03/2010 - 20:08 | 501999 Ragnarok
Ragnarok's picture

TD, PDF?

Tue, 08/03/2010 - 20:59 | 502058 Pamela Anderson
Pamela Anderson's picture

 GMI-August2010.pdf 

http://www.megaupload.com/?d=YN6TR8SO

You have to enter the 4 characters code and then click download, after that you wait like 30 seconds in the next window and then click on regular download.

Tue, 08/03/2010 - 21:21 | 502078 Ragnarok
Ragnarok's picture

Excellent! Thanks.

Tue, 04/26/2011 - 13:50 | 1208363 william.smith61
william.smith61's picture

Car Headlight Been warning folks since February that the rally's days are numbered and that we will revisit the old lows. Many are confused why my message is so different from all their Financial Advisors... Unfortunately, many are sticking with the advice of others because they prefer the "hope

Tue, 08/03/2010 - 21:29 | 502091 Lord Welligton
Lord Welligton's picture

Thanks.

14.5MB.

Saved.

 

Wed, 08/04/2010 - 11:51 | 502316 Pamela Anderson
Pamela Anderson's picture

Besides the great analysis I like that he shows his positions and performance.

On the Yen he wrote:

 "We are getting close to the point where Yen strength will run out of steam and weakness will take over, as Japan starts moving closer to a default when the world moves back to recession"

This is very interesting USD/JPY is currently at 85.35 that is a record multi year low, lots of people want to short the yen based on similar arguments and on the fact that the Japanese society is getting older and ...bla bla bla (I lived there for 3 years and yes is an amazing place but there is not enough young blood).
Yesterday, Zero Hedge posted a link (http://www.zerohedge.com/article/frontrunning-august-2) referencing an FP article about  Japan Limiting Forex Trades of ‘Mrs Watanabes’. If you are thinking on shorting the JPY the article is a must read, and the point that they make is exactly the same point that FX Concepts (John Taylor's) made a couple of weeks ago as a big reason of why not to short the Yen... "Japan is going to repatriate a tsunami of yens when the slowdown in the world economies start, those are leveraged trades that Japanese people took in the FX markets with borrowed yens" besides the short squeeze from all the people shorting it. Just to put the trade into perspective FX Concepts is calling for USD/JPY close to 75 (yes is 75) by February or March of next year.

I understand Pal's argument and in the long run JPY is going to have huge issues... the aging population one of the most compelling ones, but for the near term (next couple of months) I think FX Concepts is right.

Wed, 08/04/2010 - 05:28 | 502412 drwells
drwells's picture

Thank you ma'am. I hate Scribd as well.

Wed, 08/04/2010 - 07:23 | 502467 Sneeve
Sneeve's picture

+100000000

Wed, 08/04/2010 - 13:41 | 502961 crosey
crosey's picture

Mille Grazie PA!

Wed, 08/04/2010 - 08:36 | 502538 aus_punter
aus_punter's picture

so according to page 54 if you had followed his trade recommendations you would probably have gone broke

Tue, 08/03/2010 - 18:49 | 501873 Charley
Charley's picture

"The attached report provides the most in depth observation on the "future recession in an ongoing depression" which is arguably the best way the describe the current economic predicament."

Not just arguably the best, TD. It is a dead on accurate statement: http://tinypic.com/r/smy2if/4

 

We are now in the third depression since 1929

 

Tue, 08/03/2010 - 19:14 | 501912 Goldenballs
Goldenballs's picture

Yep 2008,2009 &2010 ................

Tue, 08/03/2010 - 20:05 | 501918 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

'05, '06, '07....

OK for context to the junker:

Housing tops in '05, equities in '07, so this current depression, in my book, started in '05.

Tue, 08/03/2010 - 19:46 | 501968 Charley
Charley's picture

1929, 1970, 2001 FWIW

Wed, 08/04/2010 - 06:17 | 502407 chrisina
chrisina's picture

1970s in no way compares with what the world went through from 1929-1945 and what the world is going to go through in the next 20 years.

 

World economic output didn't shrink in the 70s

Total debt in the West didn't shrink in the 70s

Stock market indexes remained more or less flat in the 70s

 

In the 30s, World economic output shrank by 25%, total debt in the West shrank by more than 50%, stock market indexes crashed, and more importantly the human and geopolitical consequences were enormous.

What happened in the 70s was tiny in comparison with the great depression and the super great depression we are going to go through now. Both depressions have the same cause, an astronomical bubble in private debts.... the 70s wasn't even a blip in comparison.

Wed, 08/04/2010 - 09:03 | 502584 Noah Vail
Noah Vail's picture

I generally agree with that. The 70's was stagflation and oil crisis at a time when energy was a much larger factor in industrial production. We still still used oil to actually make stuff back then.But remember inflation topping at 19% did wonders for making assets look good and keeping the velocity of money up, so much economic data is badly distorted by inflation. And then interest rates hit what? 13% Imagine that now !

Wed, 08/04/2010 - 13:01 | 502896 DaveyJones
DaveyJones's picture

And the clothes and music were better in the thirties too

Tue, 08/03/2010 - 21:35 | 502097 Lord Welligton
Lord Welligton's picture

Some day you might have to cut off your golden balls and sell them for food.

 

Wed, 08/04/2010 - 05:29 | 502413 Goldenballs
Goldenballs's picture

Up,Guards and at ,em.

Wed, 08/04/2010 - 07:39 | 502479 Lord Welligton
Lord Welligton's picture

:)

 

Tue, 08/03/2010 - 19:26 | 501931 Implicit simplicit
Implicit simplicit's picture

From 1957 to 1997 (which were part of the good years all in all), "of the 500 largest compa.nies in 1957, only 74 were still part of that select group, the S&P 500, forty years later. Only a few had disappeared in mergers; the rest either shrank or went bust." Taleb quote from The Black Swan

if this many companies can fail, or do badly, in a relatively good long term economic  environment, imagine what the next 10 years will be like in this cycle downturn.

In light of the article and the quote the potential for of higher volataility along with many company failures in the coming years makes a longterm vix bet and S&P shorts seem appealing.

There is an argument for short and hold-longterm being the analogy to the old buy and hold- longterm.

Tue, 08/03/2010 - 22:43 | 502178 nopat
nopat's picture

I think you're misunderstanding and misapplying Taleb's quote.  It isn't so much /if/ this many companies can fail, it is precisely /that/ companies do fail and is an observation on the assumption of natural normality in spite of the preponderance of outliers (e.g. biological evolution is the demonstration of non-normal events).  While we may cling to a "static" metric like the S&P, periodic returns, averaging (weighted or otherwise), pig entrails or mystic crystals as a benchmark for economic performance, in reality it is a dynamic beast and the parts are as important as the sum.  This is normal.  This is how it /should/ be.  Old growth forests burning to the ground to allow younger trees to flourish, elderly populations leaving the workforce and eventually dying, technological improvements driving new competition into the market and uncompetitive firms out...I mean, take a look at the menu bar at the top: "On a long enough timeline".  The appearance of too many "old growths" should send the klaxxon's wailing that things aren't functioning as they should be.

I think the point is, as always, bulls and bears make money, only pigs go to slaughter.

Wed, 08/04/2010 - 14:53 | 503081 hbjork1
hbjork1's picture

nopat,

+1,000

Some economic entities, modify, buy out younger competition, morph with time into something different without giving up the original name. Some simply shrink and go out of business.  I have been around long enough to watch the process.  Polaroid has almost completed its life cycle.  Control Data (a world beater for a few years) completed its life cycle years ago but the "super" computers have modified every thing that US society does. A number of startups in "Crop Genetics" (one company name) are gone but Monsanto and duPont are making lots of money "in the field". 

IMO, the next big thing will be human genetic modification. (A solution for our societal obesity and stupidity problems?).   

Its going to be a unique time.

About 35 years ago, Science Magazine published a note on psychological experimentation at the University of Chicago(I think).  Two groups of kittens (split siblings) were tested for response to the effects of exposure to a high frequency sound that they found intolerable.  One group, when small, was subjected to the sound at low levels of the sound when they were trying to eat.  The other group was raised normally.  

Both groups, when fully grown, were subjected to high levels of the sound.  The group that had been raised normally could not eat to the point of starvation.  The group that had been exposed to the sound when small did not like the exposure but when hungry laid back their ears and ate.

In our time, unlike the 30's, the means for economical food distribution exists.  And some of these unoccupied houses are quite roomy.  Two needy families per repossed house?

Could we deal with the new normal by going back to an "old" normal.

 

 

 

Wed, 08/04/2010 - 15:05 | 503097 anonnn
anonnn's picture

Have you noticed? The founders of our corporations are mostly dead and long gone. Their legacy is corporations run by just hired-CEO actors practicing feral corporatism.

Consider this view...

[from C. Wagenvoord aka Belacqua Jones]

Madmen and idiots are the lifeblood of corporate imperialism. They give life its color and pizzazz with their belief in infinite growth in a finite world, a doctrine they share with a cancer cell.

Corporatists differ from primitives only in that corporatists mistake a blind momentum driven by ego, greed and stupidity for destiny.

Human sacrifice is more popular today than at any time in history. Only now, the priests wear suits instead of robes.

The battlefields of the world are littered with the corpses of those who thought they were fighting ignorant savages.

Let’s talk about the mainstay of American ascendancy, Feral Corporatism. I know folks like to talk about a feral capitalism, but they are missing the point. This is why so many of your critics are shooting blanks. Corporatism stomped capitalism into the ground decades ago. Though the public tends to conflate the two, there is a crucial difference between them: In capitalism, the owners call the shots; in Corporatism, overpaid employees call the shots.

The dogma of "free markets" is sanitized by calling the disasters "structural adjustments." This is like calling Hiroshima a home renovation project.

Feral Corporatism is the harbinger of freedom. The path to freedom leads through the swamp of impoverishment. The best way to teach a man about free enterprise is to starve him. The starving man is motivated to steal bread and sell the surplus to his neighbors for a tidy profit. In this way, he improves his station by screwing his fellows.

All commerce is grounded in crime. A man achieves success when he is powerful enough to legalize the crimes that brought him to power.

One basic rule of world domination: The only way to defeat a rogue state is to become one; the only way to crush the Axis of Evil is to embrace evil.

Tue, 08/03/2010 - 18:50 | 501879 Goldenballs
Goldenballs's picture

Truth is the most valuable commodity to have .........................

Tue, 08/03/2010 - 19:12 | 501908 Implicit simplicit
Implicit simplicit's picture

The truth hurts but it sets you free. Short the rallies.

Tue, 08/03/2010 - 21:38 | 502100 Lord Welligton
Lord Welligton's picture

You wouldn't know it if it bit you golden balls.

Wed, 08/04/2010 - 04:40 | 502401 Goldenballs
Goldenballs's picture

Some real pearls of wisdom off yourself today.Stay out of stocks ...........

Tue, 08/03/2010 - 19:00 | 501895 Leo Kolivakis
Leo Kolivakis's picture

Just keep buying them dips, Raoul.:)

Tue, 08/03/2010 - 19:36 | 501957 traderjoe
traderjoe's picture

Read your piece the other day when you discussed that this was a regular cyclical recovery. That seems to ignore all of the evidence of how we got into this recession and how it will be playing out. I get the reflation at all cost argument. Seems to be working. Don't get at all calling this a regular recession (business cycle) as opposed to a balance sheet recession. That's why I think all of their actions will eventually fail. 

Wed, 08/04/2010 - 02:17 | 502351 Young
Young's picture

I think Leo is actually Tyler's alter-ego designed to annoy (we) the bears...

Wed, 08/04/2010 - 15:19 | 503124 ATTILA THE WIMP
ATTILA THE WIMP's picture

Price of gold on Sep. 10th, 2001, the day before Osama bin Subcontractor attacked us because he hates our Freedom Fries: $271.50. Current price of gold: $1,197 - up 341%.

S&P 500 on Sep. 10th, 2001: 1,093. Current S&P 500: 1,126 - up 3%

This does not take into the dividends that one would have gotten from owning the stocks but I doubt that it would make much difference.

Gold up 336% stocks up 3%

Price of hot air - same as always

Tue, 08/03/2010 - 19:11 | 501909 VK
VK's picture

Great summary! Consumer metrics has declined sharply in the last month or so, we're closing in on 4pc contraction right now in the eCONomy and yet it's going to be a prolonged period of deflation, deleveraging and depression.

Tue, 08/03/2010 - 20:50 | 502050 midtowng
midtowng's picture

Negative 2.5% of GDP sounds about right to me. Although I wouldn't put it out so far as Q4. Some time this quarter is closer to it.

  Then followed by another extremely weak recovery. It's a step-down Depression. Not all at once or the frog (aka workers) might jump out of the pot.

Tue, 08/03/2010 - 19:30 | 501919 B9K9
B9K9's picture

Look, it doesn't take being a genius or even being a member of a club/group/clan to organize nefarious events to see what is occurring @ a macro level:

1. Demographics - Older, educated, highly skilled earners (boomers) are being replaced with younger, uneducated, low skills & wages illegal aliens.

2. Off-shoring - Regardless of demographics, off-shoring destroyed private sector employment.

3. Resource depletion - When the first Euros arrived, the entire continent was practically empty with easy to access resources literally lying on top of the ground. Today? Not so much - oil anyone? Again, this would have been a problem regardless of off-shoring and/or demographics.

4. Debt - 70 years worth of debt accumulation has reached the point where the marginal utility of debt has fallen below a 1:1 ratio. This would have been a problem regardless of demographics, off-shoring and/or resource depletion.

Any one of these primary drivers could sink civilizations, and have for thousands of years. The original model of the USA might, **might** have had the flexibility to adapt to these circumstances, but today, not so much.

So, when you step back and evaluate the macro perspective, it just seems really difficult to see how the USA is gonna come out of this in one piece when one considers that all four killer trends are occurring at the same time. That's why all the machinations being taken by the Fed, USG, MSM, et al really smack of the types of desperate actions taken by someone who's drowning.

What do desperate people do? Emotions begin to color their judgment until panic causes them to break & run. In the case of drowning victims, outright terror results in grabbing for anyone/anything to hang onto, regardless of other people's personal safety. (That's why lifeguards use those plastic buoys - they don't want a drowning person anywhere near them.)

So let's relate this to the markets. At this point in the game, the PTB simply do not give a shit about how transparent their bullshit is. Their hair is in their face, they can't see the shore, they're thrashing, and going down for the count. ZIRP, suspension of MTM, Fed printing for MBS/UST/GSE, legalized fraud, manipulated stats, MSM propaganda, SNAP, UI, mortgage forgiveness->retail ramp, and gunning the markets didn't work to improve **confidence** and re-ignite credit expansion. So what are they going to come up with next?

Going forward, each successive action will be increasingly more irrational, more ridiculus, and more dangerous. Losing gamblers who keep doubling down usually end up in the streets, dead or otherwise.

This whole panorama can easily be seen if one chooses to step back and take a look. Once you get the big picture, it's pretty damn easy to divine what the numbskulls are going to try & pull off next.

Tue, 08/03/2010 - 19:33 | 501943 Shameful
Shameful's picture

I agree with your macro view but I disagree about the "irrational" actors on the top anyway.  This is the century of change, and many have written about a post industrial world.  We don't get from A to Z without turmoil.  To make it to a post industrial world it necessitates turmoil, so the serfs will accept the new way of living, or barring that simply die off.  After all population reduction and a greatly reduced standard of living has to be sold to the serfs, and you don't sell it in good times.

Now I don't think it's possible to pull out of the tailspin even if they wanted to for the reasons you mention.  I think this is the reason you see the seed vaults, armored redoubts, and remote property of many of the big boys.  When you see a storm coming (or helped make) you take precautions.

For the lower tier guys, sure I can see the desperation.  They are picking up nickels in front of the steam roller.  But I have to think the big boys would have seen this coming, and had the resources to prepare for it.  The collapse is all but certain after all, for the reasons you mention.

Tue, 08/03/2010 - 21:05 | 502021 B9K9
B9K9's picture

Good points. I might add that any characterization of rational vs irrational does not necessarily correlate with income/power. There are plenty of people, like Bernanke, who appear to be true believers, while OTOH, there are plenty of poor/modest people who sure as shit can figure out what is occurring and are rapidly preparing.

Sure, there are plenty @ the very top who saw this coming. I think they saw what was occurring and just bet on the trends rather than actively worked towards hatching a plan to make it all happen. That's why I opened with prefatory remarks about there didn't need to be a secret club to cause all of these events to play out. If history is any guide, and so far it's batting 1.000 percent, these trends & transitional change-overs have been occurring since yeast eventually morphed into humans.

So, back to the rational vs irrational comparison. We've got irrational folks - like Leo - or those who are just really good @ trolling for hits. Then we've got the rational minority who look at these larger macro trends, shake their heads, and figure there's just no way this thing is gonna fly.

So that means the astute person will conclude the trick is to forgo considering fundamentals and just position themselves to take advantage of increasingly desperate actions taken by the true believers - those both in/out of power.

We know for an indisputable fact that the actions taken to date have failed. Not that they really had a chance, but still there was an outside possibility. Now, however, we're entering the land of diminishing marginal returns. In football, this is when a team abandons their original game plan (typically oriented around ball/clock control) and begins to execute increasingly high risk, low probability plays. Unless there is a miraculous, come from behind victory, we all know the outcome.

Same true for the USA. It's getting late & the clock is running out. What do coaches & tyrants have in common when it's all slipping away through their fingers?

Tue, 08/03/2010 - 21:37 | 502098 Rebel
Rebel's picture

I used to live in the start-up world in Silicon Valley. Many of the uber-rich venture capitalist I know are doing exactly what you are describing . . . building compounds in remote areas. I see them taking fairly extreme measures to prepare for what they must perceive is happening.

I now live in an area where the average income is probably around $15K per year. Yesterday, I needed to have a heavy item moved from a storage shed about twenty miles from my house, to my house. I was driving around, and saw a Mexican loading a lawnmower onto a trailer after mowing someone's yard. The trailer looked like it could carry the item I needed moved. I stopped and asked him if he would move this item for me. He said he would do it for $50 (using his pickup and trailer, 40 miles round trip.) I gave him a $50, and keys to the storage shed and told him where I lived. I went home, and about an hour later he showed up with the item, and two other men to help unload it. After he unloaded it, he commented on my little flock of 10 chickens. He said he had 250 chickens. He did not feed them, but they did fine scavenging for food. He said he did not have time to fool with them but gave eggs to all his friends, and sold eggs for $1 a dozen to anyone who wanted to buy them. He also had a large garden, and he has a set of scales at the entrance and a money box. He lets anyone come and pick anything they want for $1 a pound, and on the honor system they leave the payment in the box. He said that he did not think anyone was cheating, and felt like most people were leaving extra money in the box. He also sells produce from the garden to local supermarkets. The garden is fertilized with the chicken droppings, and watered by a windmill and simple irrigation system. He also had some pigs, and he fed them the excess from the garden, and if pickings were slim for the scavenging chickens, he would give them excess from the garden. He said he worked 12 hours a day mowing grass for people, but on most days he comes home to more money in the box from his garden than what he makes mowing. He also said he has a fruit orchard, and is starting a pecan orchard. He is doing all this on 10 acres that he owns free and clear. He said he had not bought food from the grocery store in the last 5 years. He also sad on the weekend he makes up food boxes with his eggs and produce and delivers it to needy old people in the area.

I found this man fascinating. He had no formal education, had never heard of the Fed, and was completely clueless on the economy. He was not preparing for a collapse or disaster, he was just doing what he has always done, and that is to provide for his family, and others in the community . . . and yet, he is probably the most prepared person I have met.

Should things collapse, I think many of the uber-rich will be OK, as they clearly see the mess that is coming, and are making arrangements. At the same time, many of the people viewed as being low in the socio-economic scale will be OK because they have relevant skills, and know how to take care of themselves. It is the vast number of people in the middle that I think are in for a reckoning. People who don't know how to do anything but shuffle paper or sit in front of a keyboard. 

Tue, 08/03/2010 - 21:58 | 502119 ToNYC
ToNYC's picture

I think Darwin had it right by way of Schumpeter.

Wed, 08/04/2010 - 12:37 | 502865 Kayman
Kayman's picture

I admire anyone who can read Schumpeter (or Marx for that matter).

You must be endowed with great divining tools.

If you add survival of the luckiest to survival of the fittest, then I can agree.

But reverse the order- Schumpeter had it right by way of Darwin.

Tue, 08/03/2010 - 22:31 | 502163 feeb
feeb's picture

Fascinating story, Rebel. Thanks for sharing.

I am about as prepared as I can be, situation being considered - but I still live just a few miles outside of Washington DC so I'm clearly not THAT prepared. When moving recently, my fiance gave me a lot of looks and tongue-in-cheek comments about the weight of my safe, the sheer volume of food in my apartment, and because she's from Massachusetts...my guns. She's not a big fan of those.

I recognize that I and many others of my ilk have foregone productive education and employment in favor of easy money...I barely work 40 hours a week in a good week, I do ok at $100K+, and I have been in this position since I was 24 years old. This equation is utterly imbalanced...but I recognize it. Most of the people I speak with - either strangers I run into or friends I have known for years, they think the Fed is just another silly DC institution, they think the status quo will return, and they have been thoroughly brainwashed.

I think the most difficult thing about our present situation is finding a balance between preparedness and allowing yourself to live for today. I used to take the preparedness thing too far - I was loaded with index and bank stock puts on 3/15/08 (then of course I sold them in April and May...WAAAAAY too early)...I thought that was it and then it wasn't. I think that over-emphasis on dramatic change made me very negative and downcast in my every day life. But now I save everything I can (this while paying for a wedding, sigh) but I also go out and live life to the fullest. I travel at least once a month just for fun to new, random destinations. I talk to people more, especially people from different walks of life...people like your chicken farming mexican friend. Society has long-derided people with typical blue-collar skills but the real parallel is the man who can only lift himself up by putting others down...this behavior is very transparent and very pathetic. 

I hope to convince my fiance to join me in a more independent lifestyle somewhat akin to your own, but I don't see that being feasible in the next 5 years and I fear there simply isn't that much time left. Be well and be proud of where you are in life - it sounds pretty fantastic ;)

Wed, 08/04/2010 - 05:51 | 502423 Goldenballs
Goldenballs's picture

Regardless of what modern society believes to be a good education and true "success" I have always found travel to be the most educating thing in life.I believe if you can talk and find interest  in people from all walks of life you are never "lost" and this is often true education.People need hard cash or a medium to trade to survive but just because you have a lot dosen,t mean you are "happy" or have a quality of life.Mass wealth buys you freedom from the system and allows you to have choice.Being a hamster in a wheel is not much fun.Work for me at the moment is slow,however I have some which is better than nothing.When I have a spare day I nip out metal detecting or digging on a local Victorian tip.Yesterday a case in point,nipped out for approx 4 hours,air was fresh,Sun popped out for a couple of hours,turned up $16.00 in spendable,a 50% Silver Sixpence 1924,a few items of scrap and then went home for tea.Very civilized,relaxing and no-one on your back and didn,t waste the day.

Wed, 08/04/2010 - 07:31 | 502474 ToNYC
ToNYC's picture

Find some fee simple vacant land (quarter acre) 180 degrees away from population core...old industrial land, rail right-of-way abandoned... with water well possibility and guaranteed not toxic waste dump or like and learn to build the soil. Keep doing that and planting vegetables and you won't need gold or guns.

Wed, 08/04/2010 - 07:47 | 502484 primefool
primefool's picture

Whatchoo all usin fer terlet paiper ? Ay loikes dry leaves - avoid eucalyptus.

Wed, 08/04/2010 - 12:55 | 502885 IBelieveInMagic
IBelieveInMagic's picture

Now that is what I would call preparation.....PreparationH!

Tue, 08/03/2010 - 22:41 | 502174 DoChenRollingBearing
DoChenRollingBearing's picture

Shameful, B9K9, Rebel,

Most excellent comments above.  I think many have seen this coming, and it is up to each of us to decide our fate in this dangerous time.

...

Any of you going to join our little protest against the system Thursday August 12 by pulling $500 from your local ATM.  If enough of us do it, it will get some attention that there ARE some of us who will ACT.  Hope to see you all in line, get there early!

This applies to you non-USA ZH-ers as well.  If you are mad at the system, well take 500 Euros, 50000 Yen, 20000 Rupies, etc.  In fact, since Asia and European banks open before ours do, YOU GUYS would be starting the worldwide protest!

Tue, 08/03/2010 - 22:48 | 502184 DarkAgeAhead
DarkAgeAhead's picture

best post or comment i have read here.  completely true.

Tue, 08/03/2010 - 23:18 | 502222 russki standart
russki standart's picture

What a Gem! Please pass this on to your grandchildren.

Wed, 08/04/2010 - 00:19 | 502271 tip e. canoe
tip e. canoe's picture

one day soon we may all have to choose a side:

HAVE and TAKE

or

GIVE and GET

hopefully, this story will make it easier for some to pick the side their heart tells them to pick.

good soap rebel.

 

Wed, 08/04/2010 - 00:48 | 502299 SheHunter
SheHunter's picture

Great post Rebel.  Your friend's attitude of trust that people will pay by the honor system and trust that he will be able to provide for his family and friends carries a lesson many of us might strive to learn.  These people you refer to as being lower on the socio-economic scale do indeed possess survival skills and attitudes that the nop-notch echalon have lost and, alas, have no desire to regain.

I live in the Rocky Mountains 40 miles from the closest town.  When the snow gets deep the county stops plowing the one paved road and we use snowmobiles to get around.  January through March when the snow is deepest we take turns making a run once a week into the nearest town for mail and supplies for ourself and our neighbors.  We help one another and check on the older single folk to make certain they are well.   We cuss and discuss politics and the market over homemade brew.  There are pockets of us low-socio-folk throughout America.  Except we are NOT low on the social totem pole.  We are far advaced to those who are completely reliant on technology, repair shops and malls.

Give me friends who can shoe a horse, tune-up a tractor, make serviceberry jam and gut an elk any day over those who are cursed with having to rely upon urban society. 

Wed, 08/04/2010 - 07:56 | 502490 -Michelle-
-Michelle-'s picture

I agree, with one qualifier.  Those who are low on the socio-economic scale but have not become dependent on government largesse for survival possess the skills and attitude necessary to survive and thrive in what's coming.

Those who are generationally attached to the public teat...

Wed, 08/04/2010 - 07:58 | 502492 Rebel
Rebel's picture

"These people you refer to as being lower on the socio-economic scale do indeed possess survival skills and attitudes that the nop-notch echalon have lost and, alas, have no desire to regain."

A very good observation. As I mentioned, I came from the silicon valley start up world, so knew lots of uber-rich VC and entrepreneurs. I find it interesting to compare and contrast these people with people like the mexican man I described above. The uber-rich many times to not have true friends and meaningful relationships. They tend to distrust everyone, as everyone around them tends to be trying to get something from them. Among equally rich, there is still not a lot of meaningful friendships . . . more like a contest of who can have a bigger yacht or latest private jet. Lots of stuff, but quite honestly, not a real great life if you ask me. The mexican man on the other hand, he has lots of friends . . . people he can call at 3 in the morning for help is their car breaks down. I just met the man once, but I feel like if I was stranded somewhere at 3 in the morning, I could call him and he would come and help out. 

Wed, 08/04/2010 - 12:56 | 502884 Ura Bonehead
Ura Bonehead's picture

"These people you refer to as being lower on the socio-economic scale do indeed possess survival skills and attitudes that the nop-notch echalon have lost and, alas, have no desire to regain."

 

Look.  Both ends of the economic spectrum have the same survival skills.  The difference is that one takes from the land and what God provides (taking their "daily bread," no more, no less) while the other takes from and targets their fellow man.  It is really that simple.  Under the scenario presented in the comments, however, when there's nothing left to take from each other, when their fellow-man has been stripped bare, the "top-notch echelon" will parish having turned their back on what’s left (read: the land and Godly ways).  That's the way I read it.

Wed, 08/04/2010 - 13:02 | 502891 Rebel
Rebel's picture

delete

Wed, 08/04/2010 - 03:01 | 502367 Temporalist
Temporalist's picture

Did you ask how he acquired 10 acres free and clear?  Just curious that is obviously the most important part of the equation.

Wed, 08/04/2010 - 07:40 | 502481 Rebel
Rebel's picture

"Did you ask how he acquired 10 acres free and clear? "

When he finished high school he went to work as a roughneck, so he made good money. Unlike most who worked in the oil patch, he put a little away as he went, and bought the property, and the equipment for his lawn mowing. Roughnecking is hard on the body, and is a young man's game. At about 40, he left the oil field and started doing the things he is doing now.

Wed, 08/04/2010 - 09:02 | 502581 Temporalist
Temporalist's picture

TY.

Wed, 08/04/2010 - 10:16 | 502673 RockyRacoon
RockyRacoon's picture

Rebel, thanks for the info.  I know a couple of guys who had (emphasize past tense) "grounds maintenance" or "landscaping" companies.  Big trailers, trucks, equipment and such.  No longer.  In downturns people mow their own grass and they certainly don't need any exotic plants installed or cared for.  Your Mexican friend will see the same dwindling of income I suppose, can't say without knowing his customer base.  At least he will be able to fall back on his resources.  I can't say the same for the unlucky former mower jockeys I know.  They are on the dole now and blame the "system".  It certainly was not their fault for failing to plan and set aside resources.  The Harleys, four-wheelers, boats, and jet skis will go on the market at reduced prices.

Wed, 08/04/2010 - 13:04 | 502905 Rebel
Rebel's picture

Landscaping/mowing is definitely a "can do without". The thing about this guy is that he is very resourceful, and he does not charge much. Part of the reason he does not charge much is that he does not need much. I am willing to bet if the landscaping peters out, he will do fine with his food production, fixing things (lawnmowers/small engines/electrical work) and various odd jobs. This is just the way this guy chooses to live. This "choice" will likely be the norm in the future, and some will adapt better than others. 

This guy is a guy a definitely intend on becoming friends with. After unloading his truck, he spent an hour visiting with me, mainly giving me suggestions on my property. . .  telling me what he would do if it were his. Lots of insightful suggestions on the greenhouse, gardening, and easy ways to have some larger animals like sheep and goats. 

Wed, 08/04/2010 - 12:57 | 502889 Ura Bonehead
Ura Bonehead's picture

Take part was easy!!!!  He was an illegal so he didn't have to pay taxes for 30 years.  :)

Wed, 08/04/2010 - 13:00 | 502895 Rebel
Rebel's picture

Actually he is a US citizen, born here. In this part of the country "Mexican" refers to skin color, not nationality. When a person says they are "Mexican" they mean nothing other than they are brown.

Wed, 08/04/2010 - 13:01 | 502898 Gully Foyle
Gully Foyle's picture

Temporalist

Ten acres is not that expensive.

Wed, 08/04/2010 - 08:22 | 502511 grunion
grunion's picture

That man is a national treasure. Too bad he represents a portion of the population too small to even register. There is a fellow near me who behaves in a similar fashion. He is a hermit and dislikes people but he will take their money. He is sort of a local nutbag but everyone tolerates him.

My point is that he is a bit of an outcast as are most people who choose to live that way which is kind of funny considering he is a classic Jeffersonian, yoeman agrarian. The vision of our forefather's United States is now considered kooky.

Wed, 08/04/2010 - 18:30 | 503513 fightthepower
fightthepower's picture

Its always the middle class that gets hurt most when things collapse.  The rich will always be rich and the poor will always be poor. 

Tue, 08/03/2010 - 21:54 | 502117 trav7777
trav7777's picture

It had no chance of working.  Economists set policy, engineers and geologists do not.  Economists do not understand the limits to exponential growth.  Engineers do.  Geologists studying oil production curves do.  At the point aggregate energy inputs peak, there is nothing the monetary regimes can do.  Because, to be perfectly blunt, you can't PRINT OIL.

When EROI goes to unity, it is literally all over.  I mean all.  No amount of free cash can make water yield more energy going downhill than it took to pump it uphill.

This is where economics collide with thermodynamics and you will bear witness to what is real science and what bows down before it.

Tue, 08/03/2010 - 22:04 | 502129 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

We will write this on Bernanke's tombstone.

Tue, 08/03/2010 - 22:13 | 502140 Rebel
Rebel's picture

When engineers look at ANY system, the first thing they think about is entropy. Economists act as if it does not exist, or at least, does not apply to them. 

Wed, 08/04/2010 - 02:28 | 502341 poopdeville
poopdeville's picture

The whole point behind desiring Pareto efficiency is to eliminate entropy from economic considerations.  Improving conditions for some without lowering conditions for others, consistently, is too expensive to be possible.  (Think about Maxwell's Demon)  

The purpose of the State is to fight entropy.  This is why conservatism is such a powerful political force.  

Tue, 08/03/2010 - 22:51 | 502188 DarkAgeAhead
DarkAgeAhead's picture

it always pisses me off to read about economists making decisions on anything under the Sun, as if they're expert in that area. 

but many engineers i've worked with, some respect and design in accord with laws of thermodynamics.  most ignore, however, the laws of ecology.  and a good portion are stuck to the ASHRAE tables, as if ASHRAE wasn't a key part of the functional disintegration that is emerging in all living social-ecological systems.

you may have caught this already, but if not, check out Biophysical Economics, began by C. Hall at ESF.

but absolutely, as you write, there is no negotiation with natural law.  it will be ultimately what proves any form of economics not derived from physics, ecology, and the sciences of life as complete and utter fiction, a mythology or religion that failed.

Tue, 08/03/2010 - 23:36 | 502248 B9K9
B9K9's picture

Economists do not understand the limits to exponential growth.

Travis, compadre, I usually agree with everything you post, but this comment above gives me reason for pause. I simply cannot believe that anyone with an IQ above one standard deviation doesn't understand what is occurring in terms of dealing with natural limits to growth. If such a person says anything to the contrary or professes ignorance, it is simply because they have something to gain from taking such a position.

For those who haven't seen my take-off on Goodwin, here it is in its entire glory:

"As an online discussion grows longer, the probability of a suggestion involving lack of understanding by economists approaches 1."

 

Wed, 08/04/2010 - 13:26 | 502940 DarkAgeAhead
DarkAgeAhead's picture

B9K9, I'm embedded pretty deeply in the "sustainability" community, working with university PhD's, architects, engineers, builders, etc...and I'd say a full 80% to 90% don't appreciate the scale of encroaching natural disasters.  Certainly not when you measure their initiatives against what different disciplines of science reveal.  Sure, there's the climate-change-is-end-of-world community, but even a good portion of this community fails to consider other emerging Planetary Boundaries, any of which could be as bad as climate.

Wed, 08/04/2010 - 06:33 | 502442 chrisina
chrisina's picture

Well said.

Only one thing I disagree, the actions of the PTB going forward aren't irrational. They're just trying to keep the cow alive and milk the max of it for as long as possible.

If you were the owner of the cow and you knew it was going to die soon, wouldn't you be doing the same?

Wed, 08/04/2010 - 09:49 | 502637 topshelfstuff
topshelfstuff's picture

""" it's pretty damn easy to divine what the numbskulls are going to try & pull off next."""

1 of these 2---both involve a change in the value of the USD

1) Move the Decimal Point on the USD [but keep certain debt, Mortage Debt for sure, tied to the "old" dollar, the one we have now ~or~

2) Equalize to China's Currency

[ One = 10 cents, Two = about 15 cents ]

Wed, 08/04/2010 - 15:29 | 503134 anonnn
anonnn's picture

"When the first Euros arrived..."

They did so with overwhelming force, namely the blunderbuss and similar crude guns..that enabled acquisitiveness and slavery in the New World and elsehere.

Overwhelming force was/is the dream-come-true of all acquisitive madness

Tue, 08/03/2010 - 19:21 | 501922 Jones79
Jones79's picture

where can it be confirmed that the uk is 475% of gdp in debt, as stated on p.22.  i thought japan was the worst large economy at around 180% or so, if memory serves.

Tue, 08/03/2010 - 19:30 | 501936 THE DORK OF CORK
THE DORK OF CORK's picture

The 475% may refer to total UK debt both private and public while the Japanese figure is the total public debt which socialised private debt over the last few decades.

Although I think it went past 200% recently.

Tue, 08/03/2010 - 21:59 | 502122 ToNYC
ToNYC's picture

Lord Johnny Rotten had it right: "God Save the Queen; She ain't no Human Being."

Wed, 08/04/2010 - 07:01 | 502459 chrisina
chrisina's picture

Japan and UK are just about at the same level of leverage and hold the world record of most indebted nations in the world. It's just the distribution of the debt that is different :

UK

Total 475% of GDP

Public 75%

Households 100%

Businesses 100%

Financial sector 200%

 

Japan

Total 480% of GDP

Public 200%

Households 70%

Businesses 100%

Financial sector 110%

Wed, 08/04/2010 - 09:18 | 502579 THE DORK OF CORK
THE DORK OF CORK's picture

Whats harder to quantify is the potential future revenue of the debt - the channel tunnel for instance may have broke the backs of the first investors but it will provide a revenue stream for possibly centuries while a extension to a already comfortable home is not so good.

In fact the UK is a perfect example for a resource capital depletion economy - burning all that North Sea oil while investing in just one modern reactor.

The British will pay dearly for the destruction of their boffin scientific culture in the 60s.

Wed, 08/04/2010 - 16:28 | 503284 hbjork1
hbjork1's picture

Reactor technology, particularly in smaller reactors,  continues to progress.  The delay, to date, may not be so bad.  The AIChE, is asking now for comment from members so as to develop a policy on nuclear vs non nuclear power.  

Every large ship and all submarines in the US Navy is driven by nuclear power.

The problem with nuclear is that it must be taken seriously.  My first job out of school was at Savanna River Plant then making plutonium and tritium (hydrogen bombs).  They took safety and reliability VERY seriously.  The only non military power plant nuclear release accident  this country has ever actually had, at Three Mile Island, was due to lax procedures.  

Certainly, shutdowns have occurred but that kind of thing will be part of normal operation. Of course, even with the small plants of today's technology and intense training of the right people, the risk that bozos (irresponsible people) will be in control (Gulf oil example). will go up.  And that says increased risk. But we have had nuclear in multiple locations for three decades and Three mile Island remains the only actual release.

Nuclear will be less costly if the US starts to implement it.

IMO, delay until the US starts is not a bad idea..

Thu, 08/05/2010 - 04:32 | 504112 THE DORK OF CORK
THE DORK OF CORK's picture

Yea I get ya.

As the Brits made a error going down a different design path in the 60s with their Advanced gas cooled reactor design and encountering major problems with this.

But they did create one PWR reactor in the 80s - going online in the 90s and then decided to stop - the overall cost and waste must have been huge with workers who could have continued to expand their production base going elsewhere or retiring.

There is nothing wrong with PWR reactors design they just need upfront capital and they will work for half a century with proper maintenance.

The fault lies with the capital markets which are geared to short term thinking and capital extraction thinking and not capital creation.

Wed, 08/04/2010 - 13:49 | 502807 Jones79
Jones79's picture

I found this.  it's pretty good, breaking down external debt as % of gdp which i think the author must be talking about.  

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

 

 

 

Tue, 08/03/2010 - 19:23 | 501924 RobotTrader
RobotTrader's picture

I was in Las Vegas this past weekend.

And I can assure you, nobody in Vegas got the "Great Recession" memo.

I made it a point to check out the Encore, and the new Aria at City Center.  Since these were the newest properties, I expected ghost towns.

Instead, these casinos were totally jammed.

The Encore, which has a couple of high end clubs (XS and Surrender) were so popular, there were 150 ft. roped off lines in the lobby to get in.  Cover charge is about $30, drinks about $10 apiece.

And all the people were dressed to kill, especially the women.  Wearing the tightest, shortest dresses possible.  With a high percentage of them will boob jobs installed.

Anyway, tooks some photos of The Strip and the Encore casino at 2:00am:

 

Tue, 08/03/2010 - 19:29 | 501935 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Did you take Leo?

Wed, 08/04/2010 - 12:34 | 502862 akak
akak's picture

Are you actually implying that Robot Trader and Leo are two different people?

Tue, 08/03/2010 - 19:35 | 501952 lawton
lawton's picture

The newer places will get the business but Vegas is still hurting big time since this depression started and many laid off casino workers are still out of work...

Tue, 08/03/2010 - 20:46 | 502045 Bendromeda Strain
Bendromeda Strain's picture

Yup - Vegas housing tells the real story. Everything else is just the Grand Illusion.

Tue, 08/03/2010 - 19:35 | 501953 bonddude
bonddude's picture

Wow and just about 3 months ago EMPTY.

Harry must've called Uncle O and said to stop bashing Vegas or he's out.

S&P futures aren't the only thing to be pumped.

Tue, 08/03/2010 - 19:39 | 501961 ZeroPower
ZeroPower's picture

Points for the one on the right (_o_)(_o_)

Tue, 08/03/2010 - 19:44 | 501964 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Fake points?

Tue, 08/03/2010 - 20:34 | 502032 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Ain't nobody has got nothin' on that Italian princess.  Nothin'!  I could watch her cook all day long!

Tue, 08/03/2010 - 20:41 | 502041 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Her face a'lil bit, but she ain't nearly as perty.  And Giada has real ones!

Tue, 08/03/2010 - 21:26 | 502090 ZeroPower
ZeroPower's picture

She's a 7 and has droopy tits

Tue, 08/03/2010 - 21:37 | 502099 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Edit:  Real.

...and a seven?  Man you've been enjoying Montreal babes too long.  They ain't all got that style!

Tue, 08/03/2010 - 21:55 | 502116 ZeroPower
ZeroPower's picture

:)

Ya, simply not my style. Real > Fake > Droopy, imo.

Wed, 08/04/2010 - 08:30 | 502523 grunion
grunion's picture

It is fun being under 30 years old? Isn't it?

Wed, 08/04/2010 - 10:09 | 502663 old_turk
old_turk's picture

:-)))

Wed, 08/04/2010 - 12:05 | 502825 ZeroPower
ZeroPower's picture

"You betcha!"

Tue, 08/03/2010 - 23:10 | 502216 mochoajr
mochoajr's picture

Me too!

Tue, 08/03/2010 - 19:47 | 501969 Chartist
Chartist's picture

Jammed with visitors, not gamblers....Here in Cincinnati, the Hollywood casino is noticeably slower, imo....Vegas is always gonna be jammed with L.A. gawkers, but lets see the house drop in Vegas...

Tue, 08/03/2010 - 19:53 | 501979 vote_libertaria...
vote_libertarian_party's picture

Actually, the casino pictured is the Wynn (Ferrari and Stratta on the sign).

I wouldn't call that packed.

Tue, 08/03/2010 - 19:59 | 501987 tip e. canoe
tip e. canoe's picture

"Sympathy? Not for me. No mercy for a criminal freak in Las Vegas. This place is like the army: the shark ethic prevails-eat the wounded. In a closed society where everybody's guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity."

~HST, Fear & Loathing

Tue, 08/03/2010 - 20:12 | 502005 Frank Owen
Frank Owen's picture

Mother/Daughter team?

Tue, 08/03/2010 - 20:19 | 502013 Implicit simplicit
Implicit simplicit's picture

No, just two sets of twins.

Tue, 08/03/2010 - 22:01 | 502126 ToNYC
ToNYC's picture

Don't you know that hookers have money magnets installed in their navels?

Tue, 08/03/2010 - 23:05 | 502204 arnoldsimage
arnoldsimage's picture

throw this vegas crowd into a scene from The Road and see how they fair. i'm  sure there will be much guffawing.

Wed, 08/04/2010 - 14:10 | 502989 crosey
crosey's picture

Love your avatar.  What is her name?

Tue, 08/03/2010 - 23:37 | 502246 Incubus
Incubus's picture

Those two broads are going to look really sexy in about a decade when they're forced to milk cows on some farm in 2nd/3rd world USA.

Wed, 08/04/2010 - 00:41 | 502295 bankonzhongguo
bankonzhongguo's picture

Mom!

Wed, 08/04/2010 - 03:29 | 502376 thomas_anderson
thomas_anderson's picture

I wish I had four hands...so I could give those titties four thumbs down!  I'm Rick James Bitch!

Wed, 08/04/2010 - 09:59 | 502653 Blano
Blano's picture

CHARLIE MURPHY!!!!

I love that skit.

Wed, 08/04/2010 - 03:42 | 502385 Escapeclaws
Escapeclaws's picture

Yeah, you've got a point. Vegas is tacky!

Wed, 08/04/2010 - 15:31 | 503144 RockyRacoon
RockyRacoon's picture

Vegas boom... or bust?  Well, obviously there are busts, but that's not the question.

A good review was done by Eric Fry over at The Daily Reckoning:

Where is all this money coming from? How on earth could the sluggish US economy play host to such seeming prosperity?

Your editor has no decisive answer to these questions, but he does have indecisive guesses:

First up, he observed a very large percentage of “ESL” tourists. The crowded sidewalks featured almost every language on the planet. Apparently, Vegas appeals to foreigners.

Secondly, your editor suspects that Vegas has become a leading “staycation” beneficiary. Vacation destinations like Paris, Venice and Cairo are as expensive as they are distant. So why not go to Vegas, which enables tourists to visit the Eiffel Tower, the canals of Venice and the pyramids of Cairo…just by strolling from one end of the Strip to the other. Better still, these sites offer valet parking and free booze.

Whatever the exact causes, the Las Vegas economy appears to be recovering. Sin is still selling.

One busy weekend does not necessarily make a trend. But the official numbers seem to support your editor’s first-hand impression. Tourist visits are on track to jump 3% this year to about 37.5 million, which would be the largest number of visits since 39.1 million tourists visited Sin City in 2007.

Vegas may not have returned to its peak prosperity, but neither has it descended into anything resembling a bust. Perhaps, therefore, the Vegas housing bust is drawing to a close…no matter what else is happening in the rest of the country.

http://dailyreckoning.com/booming-vegas-or-real-estate-bust/

There is more specifically about the housing situation which is worth a read.

Wed, 08/04/2010 - 22:17 | 503820 rapunzel
rapunzel's picture

R O B O  babey

G E T a L I F E

this looks square as H E L L‡

Tue, 08/03/2010 - 19:24 | 501926 InconvenientCou...
InconvenientCounterParty's picture

power...

Tue, 08/03/2010 - 19:27 | 501934 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Those precious metals are so hot right now.

Tue, 08/03/2010 - 19:29 | 501938 DavidRicardo
DavidRicardo's picture

If Pal is so good, perhaps he can tell us when BLS figure for college-educated unemployment will reach 20%.  Nothing changes until that figure is reached.  So what is day/month/year?

Tue, 08/03/2010 - 19:37 | 501958 lawton
lawton's picture

The college educated unemployment number is kind of misleading in a sense now imo because so many are underemployed in jobs that dont require a degree - and not by choice...

Wed, 08/04/2010 - 00:07 | 502266 Oracle of Kypseli
Oracle of Kypseli's picture

I know at least 3 LA taxi drivers with PHD's

Wed, 08/04/2010 - 08:35 | 502532 grunion
grunion's picture

Then it is time to leave LA. Is one required to divest themselves of all living skills in order to receive a PHD?

Wed, 08/04/2010 - 00:46 | 502296 bankonzhongguo
bankonzhongguo's picture

They "graduated" and moved back home with mom and dad eating ceral at 2PM on a Weednesday.  Nobody is counting them.

Tue, 08/03/2010 - 19:34 | 501946 chinaguy
chinaguy's picture

My wife and I stayed at the Wynns a couple of months ago (nice) but although Vegas was packed We noticed more folks eating and walking around that gambling & shopping

Tue, 08/03/2010 - 19:33 | 501947 traderjoe
traderjoe's picture

I still believe the muni crisis will be a catalyst for the US depression. I harp on it, but IL has $5 billion in unpaid bills. They've simply not paid them. I wish I was owed a bit, and would try to file them into involuntary Chapter 9. 

I thought it was a comprehensive presentation, but then I saw his positions. I like it a bit better when people aren't talking their book. 

Tue, 08/03/2010 - 19:39 | 501960 Shameful
Shameful's picture

States can't go into bankruptcy.  Well there is no rules for them to do so in the code.  What should happen in a court case is the judge ordering the state to raise taxes or issue more bonds to pay the old.  But then with our legal system and respect for contracts who knows.

Tue, 08/03/2010 - 19:56 | 501985 traderjoe
traderjoe's picture

Filing involuntary Chapter 9 would be my act of civil disobedience. Unfortunately I have no standing (not owed by IL). 

Tue, 08/03/2010 - 20:50 | 502049 Mad Mad Woman
Mad Mad Woman's picture

When you're in as bad a shape as Illinois you can't issue more bonds because they're junk. Who's going to buy them? 

Tue, 08/03/2010 - 22:05 | 502130 trav7777
trav7777's picture

Seriously?!?  The same fuckin people that's been buyin all the other bonds!

Wed, 08/04/2010 - 09:09 | 502592 SheepDog-One
SheepDog-One's picture

You mean the FED?

Tue, 08/03/2010 - 19:52 | 501976 Implicit simplicit
Implicit simplicit's picture

I agree with you TJ about the munis, but before they fail the municipalities will lay off more workers to try and stay in budget. This will keep the unemployment rate high which will feed the recessionary spiral. Oh, and don't most talk their book?

Tue, 08/03/2010 - 19:55 | 501981 traderjoe
traderjoe's picture

Yes, they talk their book, but I was reading up until the end thinking he was a bit more objective. Silly me. 

Wed, 08/04/2010 - 00:49 | 502300 bankonzhongguo
bankonzhongguo's picture

Watch all the little salted "news" articles about cities/states firing cops and firemen.  Getting folks ready for the new normal - austerity.  Funny how its OK to degrade public saftey, but you have to keep the welfare roles open for all the illegals.

Tue, 08/03/2010 - 19:34 | 501948 THE DORK OF CORK
THE DORK OF CORK's picture

RobotTrader may be right - its best to blow all remaining wealth now while we still have time to have a good time.

Tue, 08/03/2010 - 22:03 | 502127 ToNYC
ToNYC's picture

Some things never change!

Tue, 08/03/2010 - 19:34 | 501949 chinaguy
chinaguy's picture

Brilliant analysis - thanks

Tue, 08/03/2010 - 19:34 | 501951 RobotTrader
RobotTrader's picture

Instead of "soup lines" or "bank run lines"....

We have lines waiting to get into the most fashionable clubs in Vegas...

LOL...

Tue, 08/03/2010 - 19:36 | 501954 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Douche lines.

Tue, 08/03/2010 - 19:51 | 501978 traderjoe
traderjoe's picture

Yea, notice it's just guys? Funny. 

I believe, to a certain degree, that the sheeple are getting a bit restless. They sense that something is wrong, but are distracting themselves with 100 days of gladiators. And of course, many still like to remain ignorant to what's really going on. 

To get a sense of the pain being felt in Vegas you need to go downtown. I predicted to a friend last year on a visit there that downtown will be closed in a couple of years. They have no way to compete with the glitz on the Strip, especially when the strip has cheapened up so much. I've heard they've closed a bunch of Aria down to keep occupancy numbers up.

Kudlow's optimism check list for tonight (part of):

European Crisis Over - Check

BP Oil Spill Over - Check 

Sad, so sad

Tue, 08/03/2010 - 20:23 | 502011 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

First douche in line:  "Brah, what's up brah?  I'm on the list brah.  Brah?  Come on brah?  Brah?  This is an Italian shirt, brah.  Come on, brah!"

Second:  'Good thing I went into debt for this iphone.  This bad boy makes me look busy!'

Third:  'I totally look like Joe Rogan before he smoked weed and got fat.  That ab roller really paid off.'

Fourth:  'Durh.'

Asian guys in the back:  "Maybe if we tell girls we are from Asia we will be seen as better off than our American counterparts."  "Works for me."  "Can you do an accent?"  "We need to talk to girls to get them to come back with us?  Can't we just buy them things?"

Tue, 08/03/2010 - 21:23 | 502085 ZeroPower
ZeroPower's picture

Haha. Got it down to a tee with teh iphonesss and fake gucci shirts brahs buy on ebay.

Wed, 08/04/2010 - 00:51 | 502303 bankonzhongguo
bankonzhongguo's picture

That is very funny.

+1 my friend

Wed, 08/04/2010 - 03:37 | 502380 thomas_anderson
thomas_anderson's picture

+1000

Wed, 08/04/2010 - 08:39 | 502544 grunion
grunion's picture

Yes you can, works like a charm!!!

Wed, 08/04/2010 - 03:39 | 502382 thomas_anderson
thomas_anderson's picture

We're in bat country.

Wed, 08/04/2010 - 22:26 | 503842 rapunzel
rapunzel's picture

rusty, your never goin believe this:

my first boyfriend in aspen was R A O U L

damn fine man, dead now though, nepal, himalayas.

breathing issues.

i think HST used his name with a D U K E.

Wed, 08/04/2010 - 00:09 | 502268 Oracle of Kypseli
Oracle of Kypseli's picture

Either that or spend it all before she blows

Wed, 08/04/2010 - 00:50 | 502292 bobm2626
bobm2626's picture

FWIW

I have a buddy in Scottsdale Az bar-tending every Sat nite at an upscale Scottsdale bar (just for fun and fake boobies). Just the other day were were talking and he had mentioned the 500% increase in credit card declines he's been getting. Some poor slob running a tab all nite trying to close out and the CC gets declined. He said he's got guys pulling 2-3 even 4 cards out before 1 gets accepted. Also mentions sometimes the amt is as low as $25.

In case ur interested and know Scottsdale the name of the bar starts with "Martini"

:-)

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