Jeff Gundlach "Society Looked Into The Debt Abyss And Decided Enough Is Enough With The Debt-Based Consumer Economy"

Tyler Durden's picture

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FEDstidius's picture

Society Looked Into The Debt Abyss And Decided Enough Is Enough With The Debt-Based Consumer Economy" - Like the FED gives a shit

knukles's picture

Y'all git fired, like Laurence Summers when ya don't care.  Let that be a fuckin' lesson to ya'.

Ah, the joys and immunity of public service.

zhandax's picture

For that matter, when did Gundlach start hittin the pipe?  A serious amount of this is complete delusion.

knukles's picture

teeeh heeh....

But Wait!
There's More!

If ya' signs up in the next 10 minutes, we can't do this all day, we'll throw in a personally autographed double-dong

redpill's picture

We are all Nietzscheans now

Kayman's picture

redpill

you are so Kafkaesque !

NoVolumeMeltup's picture

The Nietzsche Family Circus

http://www.losanjealous.com/nfc/

Hit refresh for a new one each time.

heyligen's picture

Governed by platonist contrivers, as usual.

centerline's picture

"net debt"?  This assumes the government holdings are liquid and marked-to-market.  And what about unfunded liabilities?  As if an internal default of that magnitude wouldn't have the same consequences anyhow?

 

Seems to me an underestimation of the risks here.

Dismal Scientist's picture

I thought the US consumer was still maxing out credit and walking away when lenders pull the plug, as per ZH article earlier in the week. On that basis, society has looked into the debt abyss, and said 'SFW ?'. If you were a borrower with negative equity on your housing asset and no chance to refi, then its actually rational to blow up your credit rating on a short term view. What a twisted world.

centerline's picture

I think the initial shock of the crisis caused a severe retraction on part of the average consumer.  And, the SFW attitude is emerging this year for sure.  Is a twisted thing for sure.

Something Wicked This Way Comes's picture

I looked into the debt abyss and what did I see?

Helicopter Ben printin gobs of curren-cy

markar's picture

No evidence of inflation? Vanguard TIPS fund (VIPSX) says otherwise

Quinvarius's picture

Suddenly all these guys stuck in bonds are demanding deflation from all corners.

BobPaulson's picture

Exactly. My read on the T-Bill mess is that rates will stay low until they don't, then they'll go up. It's all gonna go down sometime between now and when hell freezes over, so keep your eyes open...

Holy Blind Man's Bluff Batman!

bull-market_3.0's picture

Wow. Advocating going into treasuries longer...very interesting...is the risk/reward worth it now? how much lower can they go? 

Battleaxe's picture

 how much lower can they go? 

There are as many decimal places between zero and 1 as there are millions, trillions, quadrillions, .... above 1.

How about .00000000001% interest? .0000000000000000000000000789%? There is also negative interest, which may become attractive if you don't think you can protect your cash.

Takingbets's picture

Well at lunch yesterday I heard 4 people discussing how they were going to go to Best Buy and max out the credit they could get from them, then not pay the bill.

Those are the people who are willing to use the credit the FED so desperately needs.

Snidley Whipsnae's picture

I know people that are doing the same thing. Not only are they maxing out credit and not paying, they are not feeling any guilt about it... Not saying that they should after what has happened to them over the past 30 years.

Our government and mass media encouraged the consumer, buy it on credit, take a cash out refi lifestyles. Now it's coming home to roost.

There is definitely a party hardy attitude among many people that are upside down on everything they 'own'. 

 

trav7777's picture

had to counsel a girl friend whose having trouble spending less than earned to do the same thing...just walk from the CC and any private student loans.  The bank that lent went into the transaction with eyes wide open.  Once the first lates start going onto the credit report, it's pretty much fucked and you have nothing to lose by defaulting.

grunion's picture

That is theft...Pure and simple.

ghostfaceinvestah's picture

"Stocks are down over the past 10 years. Real estate is down hard over the last five years. Commodities are down sharply over the last two years."

And the price of gold is anticipating what Gideon Gono's greatest pupil is going to do next.

Carl Marks's picture

The American consumer is worthless trash which is the heap they will all land on.

grunion's picture

I really would like to meet you...

Atomizer's picture

Your next epic failure. Another crisis will be spun on telly.

'We Need to Be Big-hearted and Hard-headed' As the world convenes at the United Nations to assess the progress on the Millennium Development Goals, President Barack Obama's speech outlines the administration's new Global Development Policy, which will change "the way [America] does business" when it comes to helping developing nations build a "path out of poverty." 

http://www.foreignpolicy.com/articles/2010/09/22/we_need_to_be_big_hearted_and_hard_headed?page=0,2

Sheep have forgotten about Patent No. 6904336

http://www.wikipatents.com/US-Patent-6904336/system-and-method-for-residential-emissions-trading

trav7777's picture

How many billionaire tinhorn dictators are we going to mint through this stupid effort?  I mean, goddamn, IQ and Wealth of Nations; how do we expect nations with IQs averaging sub-90 to become prosperous no matter HOW much we send there?

Justaman's picture

As has been stated on this website, biflation over the past few years will eventually give way to hyperinflation.  IMHO, this transition will happen fast, of course, without any lasting recognition by the mediament. 

A failed lumbering effort toward protectionism is going to prompt a currency battle (and other wars) the US can't win due to its poor fiscal and monetary decisions over the last 50 years or so.  Thankfully there is a higher power at work than mankind as this might get real ugly.  

 

Hang The Fed's picture

Fuck carrying anymore debt...let the Keynesian assholes shrivel and die, for all that I care.  At the pace at which things appear to be unravelling, the last thing I need is another bill about which to worry, all for the privilege of buying some more useless shit.  I seriously doubt that that's even within spitting distance of being the first step to fixing what's broken today, but it DOES make for passably-reheated leftovers, rehashed since 1913.

sporb's picture

This sounds like a religious revival meeting.

Ya; perma-bears need perma-bad.  

But: what if you are all wrong? Will you let those lesser mortals make all that money just because "you thought you were right"?

Seer's picture

But... you have to ask yourself one important question: Is that "money" really backed by anything?  And, whatever you answer you've got to perform a similar testing/iteration; I doubt that you need to go to a third level, but at that point it should be pretty clear that it's Monopoly money and there really aren't any more people left playing the game.

Got food?

sporb's picture

I'm Canuckistani. I "got food". I also "got order, got regulation, got the due process of law..."   

sporb's picture

as they say: "just sayin'..."

Hitman's picture

The comment that "commodities are down sharply over the last two years" is not correct, at least as measured by the continuous commodity index, which is up more than 25% during the past one year and more than 60% since bottoming out in late 2008 or early 2009.  There is some good commentary on this by Dan Norcini on JSmineset.com (http://jsmineset.com/wp-content/uploads/2010/09/September0410CCI.pdf) who points out that  the rise in commodities has occurred in spite of only limited participation by energy commodities.

He (Gundlach) is not only incorrect on this point, but wildly incorrect.  

Hephasteus's picture

After I changed to the M0 M1 M2 LOL accounting system the financial system makes so much more sense.

 

Grand Supercycle's picture

Short signals detected yesterday have now increased.

http://stockmarket618.wordpress.com

wisefool's picture

Debt/Deficit spending over the last 50 years:

-Created a middle class that was tolerant to the poor and minorities largely through  public subsidy of education. (Americans spend more per student than nearly any country in the world)

-Updated many housing "paradigms"

-Supported the R&D for logistical and workforce mobility greatness. (largely through air travel, computing and mechanical automation)

The downside is that pushing these things much further becomes diminishing returns on free time and social cohesion as follows:

The Middle class is already turning on itself. Keeping up with the Jones has got to the point of "Yeah, the house, cars and vacations made us look like the best couple in town  for several years. Now lets get a divorce, use it as an excuse to get a bailout and do it again. The kids won't mind as long as they have electronic toys and go to private university that will explain to them how much better their life still is compared to those oppressed,inflexible  minorities,women and tinfoil hatters that live in their modest homes for life growing food in their own backyard gardens."

In my observation, the boomers went into debt for their "social justice" moon shot. And it was largely a good thing. However, there is a point where they stopped moon missions.

We are at that point now, the poor and the middle class knows it. Thats why we are deleveraging. We are telling TPTB (credit pushers) thanks for the sentiment, but we really do want to eat bread. Cake is nice once in a while but makes you sick in the long term.

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