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Obama Must Create 230,000 Jobs A Month Until The End Of His Second Term For Return To Breakeven - Charting The New "7 Year Itch" Normal
Recently there has been a surge in cherry picked employment charts highlighting that the Obama administration has done a great job in rescuing the economy. The premise goes: after dropping to as much as 700K+ jobs lost per month, the administration has managed to pull off a miraculous recovery and now we are riding on a wave of 8 consecutive "private jobs" beats in a row. This argument is so shallow we won't even bother with it. Perhaps the "economists" who espouse this theory will be so kind in their next iteration of their charts to overlay the monthly US debt issuance side by side with the jobs number. Because you see if you drown the economy in unrepayable debt, while using transfer payments to fund the digging of trenches by every man, woman and child who makes up the labor pool, then yes - you may get 0%, or even negative, unemployment overnight. Will it bankrupt the country (even faster)? Why, of course. But whoever said those who discuss politics subjectively ever care about the long-term implications of reality. So in the vein of sharing pretty charts, here is one: we show job losses since the beginning of the Recession (excluding for the impact of census hiring), juxtaposed to the natural growth rate of the Labor Pool (and not the artificial one, which according to the BLS is the same now as it was a year ago). We discover that i) 7.6 Million absolute jobs have been lost since the beginning of the Recession; ii) that a record 10.5 Million jobs (and you won't find this statistic anywhere), have been lost when factoring in for the natural growth of the Labor Pool of 90-100K a month (we use the lower estimate, which also happens to be the CBO's estimate), and that iii) assuming we expect to return to the jobs baseline level as of December 2007 (or an unemployment rate of 5%) by the end of Obama's second term (and we make the big assumption there will be a second term), Obama needs to create 230,000 jobs each and every month consecutively from September through November 2016 in order for the total jobs lost to be put back into the labor force, and that iv) an optimistic (if more realistic) projection of jobs returning to the work force means the return the baseline will occur in 2019, some 7 years after the start of the last recession. The point of these observations is not to cast political blame on either party: we are in this predicament due to the combined stupidity, corruption and greed of both parties. The question is how do we get out of here. And unfortunately for all those hoping that a return to a normal, baseline past is possible, please forget it (i.e., the New Normal is really real), at least for the next 7 years. This also means that any charting, technical analysis and other "reversion to the mean" approaches of forecasting the future will all end up sorely lacking and misrepresenting the final outcome.
Chart 1: a simple baseline chart that shows where we were, where we are, and where we are going, with the assumption of recovering all labor force growth-adjusted jobs losses from December 2007 through the end of Obama's second term. The conclusion: the economy needs 229,300 jobs per mont (incidentally, for the simplistic read on the labor force which does not account for demographic changes, which economists tend to conveniently forget all too often, a 230K jobs pick up a month, means a recoupment of baseline jobs lost in June of 2013).
Chart 2: We demonstrate that the cumulative jobs lost since December 2007, are in fact materially greater when adjusting for a realistic change in the labor force, instead of that presented by the administration, which naively expect people to believe that the labor force in August 2010 (154,110) was lower than that in August 2009 (154,426). That in the meantime the US population grew by 2.5 million seems to make no difference to the administration. Which only means that sooner or later this labor force participation will catch up to the numbers. Either way, we factor for it, and assume that the labor force was growing by 90K every month since the start of the recession, and add the cumulative differential to the jobs lost. The result: in the 33 months through August, the US has lost not 7.6 million jobs, but 10.5 million: a stunning 38% delta.
Obviously, all these projections are unrealistic. So let's take them down to some version of reality... even if it is Bank of America's. We take the most optimistic Wall Street projetions we could find - traditionally those belong to Bank of America's Ethan Harris. In a note released to clients, Harris discusses his revised jobs forecast:
Under the weaker growth trajectory we are now penciling in:
- Private payrolls manage tepid monthly gains of just 25,000 through the end of 2010. As the growth recession fades in the second half of 2011, gains in private payroll employment should accelerate. We expect average monthly gains of 125,000 in the fourth quarter of 2011.
- Therefore, for most of 2010 and 2011, employment growth is not expected to keep up with the rise in the labor force, which means the unemployment rate heads north. We expect a steady increase to 10.1% by the second quarter with a slow fall slightly below 10.0% by the end of 2011.
So let's adjusted the chart using Bank of America's projections, which assumesa gradual increase in the unemployment rate to 10% by Q3 2010 and a decline since then. We chart these projections on the chart below. According to this adjusted case, the payroll number will never return to the December 2007 baseline for the duration of Obama's term, even if one assumes 200K job pick ups beginning in January 2012 and continuing every month thereafter (as we have done). In November 2016 we forecast an unemployment rate of 5.7% using these assumptions. They are presented visually below:
And just to demonstrate what the recession will look like assuming even this quite optimstic assumption, here is the famous post WW2 recession comparison chart adjusted for an expansion of the depression (let's not split hairs here) labor force, that started in December 2007: it is shaping up to be 7 years before the jobs lost finally are put back into the system. And that's for those optimistically inclined.
So before everyone gets all political on who has done a more bang up job of destroying the economy, perhaps both sides can explain how they each got the US to a point where even wildly optimstic projections assume that the length of the most recent economic slowdown will take 85 months to resolve (and, in all reality, far, far longer).
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Don't forget ordinary doctors, nurses, public-health workers, biotech and innovative medical device mfrs. They're (mostly) not guilty IMHO and esp biotech and med devices can help US balance of payments, prestige etc. This is one area where we have the lead in the US and should extend it for our selfish benefit and the benefit of all mankind (nothing wrong w being grandiose?).
Puhleeez. Enough with the one man solution. He's impotent.
Looking to government is what started the mess and I've got a feeling that's NOT what is going to fix it.
http://www.zerohedge.com/article/guest-post-inflationary-policy-wmd-baby...
Which is why your proposed 'solution' wouldn't work either.
The only question really.... In what ways will America break up? There is no way in hell to fix the cluster fuck we now have in America , without massive changes and I dont mean Obamas' BS Change social utopia either.
Bankruptcy on a grand scale is coming and it will sort things out. Honest people will be hurt most, but we will no longer be under the thumb of the banksters. The movement for constitutional government is coming at just the right time. Central planners have proven just how insane they are. Europe will look to our lead once we get a free market and honest money established. Americans get ourselves in trouble, then we get it together and come out stronger. Thankful not to be in Europe.
Well that would be a good start. But that bankruptcy had better be done smart or Americas natural weaknesses will give power to Americas enemies.
Honest people will be hurt most
Honest people may well take a big hit initially. But as the dishonest people mostly suck at the public teat they will take a bigger hit and will languish as the honest people get busy building themselves new lives.
are you talking about the poor? the dishonest are not on the public dole but in the halls of justice.
Knee jerk much?
What makes you think I was talking about "the poor?"
The wording... my mistake.
'Salright.
He can say these things because as he's an American, he doesn't have to give a damn about his shortfalls. And as he's the president, he might not be right, BUT HE'S NEVER WRONG!
BECAUSE HE CAN!
"he doesn't have to give a damn about his shortfalls. And as he's the president, he might not be right, BUT HE'S NEVER WRONG!"
Made me think of a joke that has been recenyly making the email rounds. Sorry I couldn't get the font size down, can't make heads or tales of editing feature. Edit: fixed it.
Al Gore, Bill Clinton and Barrack Obama go to heaven:
God addresses Gore first. ''Al, what do you believe in?''
Gore replies: "Well, I believe that I won that election, but that it was your will that I did not serve..And I've come to understand that now.''
God thinks for a second and says:
"Very good. Come and sit at my left.''
God then addresses Clinton . "Bill, what do you believe in?''
Clinton replies: "I believe in forgiveness. I've sinned, but I've never held a grudge against my fellow man, and I hope no grudges are held against me.''
God thinks for a second and says:
"You are forgiven, my son. Come and sit at my right.''
Then God addresses Obama.
"Barrack, what do you believe in?''
Obama replies: "I believe you're in my chair."
Golden Oldie.
:) +10
Great post here.
Another point to make is that the $100,000 per year line manager doesn't become the $100,000 per year road builder. It doesn't work like that.
Got that genius Larry and friends.
"Another point to make is that the $100,000 per year line manager doesn't become the $100,000 road builder. It doesn't work like that."
Rarely brought up, but I often wonder same thing. How do you turn a service economy into public works? And how does that translate into wages? As I have no real skills outside of finance, I don't see the same wage when they hand me a shovel, or trash bag.
Public Works sounds nice: let's build up the infrastructure for the guys that bought out the country over the decades. What a deal, huh?
Quite a sales pitch, eh? "I'll sell you a country--I'll even throw in workers that'll improve the infrastructure for you, at no extra cost!"
nicely done.
This seems as good a place as any to reference a rare event for those who may also be readers of The Automatic Earth.
Stoneleigh is interviewed by Jim Puplava: http://theautomaticearth.blogspot.com/2010/09/september-4-2010-jim-pupla...
It seems related.
Pete
I read AE blog daily... almost every ZHer should be doing so also...
Obama's Secretary of Labor is a loud proud and aggressive promoter of mass blanket amnesty and massive extensions of the welfare state to "assist" these new citizens.
http://thehill.com/blogs/blog-briefing-room/news/117227-labor-secretary-despite-daunting-job-numbers-good-news-is-recovery-is-happening
This is the move towards a complete breakdown of the Republic... every time they trot out this BS about employment situation improving.. is one step closer to the end of the country....
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/03/AR201009...
Nuff said.
Political finger-pointing is a useless distraction, meant to keep us from realizing two fundamental issues. First, Keynesian monetary policy looks and smells like the wad of paper that I just used to wipe my ass after a night of consuming Taco Bell and Schaefer. Second, politics means nothing when the entire system is subservient to the shadowy actions of the Fed, IMF, and every other fuckstick central bank on this planet. The real architects of our collapse and further subjugation are more than happy to see us twaddle on and on over gun control, god, abortion, democracy, etc., and they have the useful tool of the MSM to constantly barrage our senses with all of this yammering, such that it takes a sustained mental effort to block it out long enough to begin assembling the real picture.
If there's one bright spot in the whole sad affair, it's that the implosion of such a worthless system will mean nothing in terms of the resources that are actually still available. I just wonder if the out-of-work, out-of-money, out-of-hope masses will actually have the steel to rise up and toss these fucks aside like the trash that they are when the time comes, or whether we'll just go quietly into the good-night of whatever shit it is that they dream up to follow this (e.g., hello, official world-currency and government).
Thank you, Tyler, for once again ripping holes in the thin tissue of manipulation that this batch of assholes likes to employ in an effort to keep us tractable and mostly asleep. When I look around, I see that it's not just a sad era for this country, but for the world as a whole. I don't believe that there's a single person at the helm of any of these institutions who cares about anything other than saving his/her own worthless hide by making us drink the fucking Kool-Aid of their invention.
I never did like Kool-Aid...sweet on the surface, but it rots your fucking guts in the long run.
Good stuff there. It really gets tiresome hearing the Murdoch-Soros factions battling it out about whose gurus are the worst. The oligarchs who are pulling the levers give Murdoch and Soros the spoils from creating competing ideologies to keep the lumpen-proletariat busy while they loot the Treasury. Until J6P has the balls to look behind the curtain there will not be a revolution worth your burrito/beer dinner.
Bingo.
The left wing and the right wing are both attached to the same damn vulture.
http://thepirata.com/wp-content/uploads/2008/09/nilgunyalcin_childvultur...
Here's one of them circling now:
http://picayune.uclick.com/comics/gm/2009/gm090109.gif
The best part of the entire situation is that people are really just clinging to partisan demagogues in an effort to avoid the truth, because it's really awful to realize that you've been told a fucking fairy tale for most of your life...especially when the real truth is that EVERYONE in the "civilized" world has been told the same fairy tale, and that it's been happily consumed for several generations. Worse yet, the modern text of that fairy tale is more or less just an updated edition of the same steaming pile of shit that's been served up during former cultural periods. I'd be willing to bet that the Roman peasantry was busily expressing their feelings of something being rotten via whatever medium of communication it was that they could pass from one to another when that fine example of civilization was buckling under the insanity of its ruling class.
The fundamental difference now, however, is that there are no new continents left to which to run...we're out of space, unless the new pilgrims decide that they'd like to go live with the fucking penguins in Antarctica. That being said, it's going to get ugly.
"Most people prefer to believe their leaders are just and fair even in the face of evidence to the contrary, because most people do not want to admit they do not have the courage to do anything about it. Most propaganda is not designed to fool the critical thinker, but only to give moral cowards an excuse not to think at all"
- Michael Rivero
Spot on, my man, which is exactly why I feel that we will see nothing less than total collapse. If you imagine a system composed of people and their "wealth," as measured by the resources available to them to care for themselves, then our current predicament is one where the system is being stretched ever farther. When the recoil comes, as it does in every system that naturally seeks an equilibrium, there's going to be one hell of a party. It's going to make a soccer riot look like naptime at a preschool, lol.
Don't worry... Big O will double exports in 5 ys. \end{sarcasm}
What I said just above your comment. Enough with the thinking that all this crap is one guy's fault and that one guy can fix it. Expand your view as you are missing the real villains. You are seeing the shadow of the marionettes, not even the real dummies let alone the strings.
Agreed, I hate the guy, and he's a problem, but when it comes to big bills he's just signing them, without reading them, without any participation in writing them. He made a lot of noise campaigning but the content wasn't his. From there, not even most of the Congresscritters who voted FOR the various awful bills(stimulus, "obama"care, etc) had any input, or even read them before voting. Vetoing them would have been a great help, but I'm going to say the guy is a puppet of larger forces, of deep corruption in our central government, but also and not least, of very stupid, destructive ideas that hold currency in DC and even on Wall Street to some extent.
Go back and read what you wrote again.
...especially the very stupid part.
Now, in 250 words or less tell me how this description differs from the administration of Dubya. Betcha can't!
Bush was fuckin' hilarious. That's the difference.
Clown wasn't in the list of comparisons. I'll agree that Bush was a buffoon, but a dangerous one. I voted for the prick twice. The first time thinking, "Maybe, just maybe this time...". Wrong I was. The second time was to help make sure that the goober was in power when the shit hit the fan. I wanted him saddled with the debacle(s). Bingo!
The first time for hope, the second for revenge. I'd learned that the hope crap was a come-on so it was Ron Paul the last time I voted.
It's clear, most people prefer to be lied to. Most people don't like the truth.
Hence bubbles.
So long as we are lied to, by media, government and even ourselves, nothing much will change.
Truth. In fact, at this juncture, the only part of the lie that matters anymore is whether or not we continue lying to ourselves. Everything else is shot and broken. Time to start over.
Tiny bubbles,
In the wine,
Make me feel happy,
Make me feel fine.
Don Ho:
http://www.youtube.com/watch?v=hRfjv6uf95Y
WHAT ME WORRY
http://williambanzai7.blogspot.com/2010/09/what-me-worry.html
WHAT ME GEITHNER
http://williambanzai7.blogspot.com/2010/09/what-me-geithner-mask.html
Second Term???? LOL! There will be one additional person added to the unemployed ranks.
+ a whole fleet of czars. - Ned
Nah, there will be a Jobby job for him at one of the TBTFs. Maybe Chi town? Nah. Paraguay, and he will live next to the Bush ranch and have an organic garden.
Two coward junks? For that? C'mon you losers. You think she's wrong? Oh I get it...you're afraid she's right.
Bohemian Grove
http://ia341324.us.archive.org/3/items/OldPicturesOfBohemianGrove/BohemianGrove290.jpg
- more here;
http://www.archive.org/details/OldPicturesOfBohemianGrove
Now that we know the numbers, there's only one problem: government can't create jobs, unless they're government jobs.
I'll be going postal, then. Fresh air, good exercise, pet a few dogs along the way...
"Because the mail never stops. It just keeps coming and coming and
coming, there's never a let-up. It's relentless. Every day it
piles up more and more and more! And you gotta get it out but the
more you get it out the more it keeps coming in. And then the bar
code reader breaks and it's Publisher's Clearing House day!"
Ok you have a point. Some sort of park ranger job then - one where they let you carry a gun.
http://www.youtube.com/watch?v=ubsfbWsuQpI&feature=related
Someone gave me a copy of Thomas Sowell's Basic Economics book. I was thumbing through the back and was AMAZED to see he states that the term "trickle down economics" does NOT exist in the economics literature. In fact, Sowell, who is a Conservative, states in his book that the only theory that works is trickle up. The lower middle class and middle class has to have money to spend, then and only then will businesses make a profit.
Shows Ronald Reagan and Roger Ailes, Faux News CEO, in a new light, as a couple of charlatans.
The economy is not akin to a watershed. Basic physics causes a watershed to function but an economy depends on the talents and the desires of individual human beings. There really is no "up" or "down" to it. It can not be managed from top or bottom.
The only way to make an economy work is to let it work by removing impediments to free transactions and voluntary associations.
Someone gave me a copy of Thomas Sowell's Basic Economics book.
Consider reading it.
Shows Ronald Reagan and Roger Ailes, Faux News CEO, in a new light, as a couple of charlatans.
WRONG!!
<><><><><><><><><><><><><><><><><><><><
The "Trickle Down" Economics Straw ManAmong the suggestions being made for getting the American economy moving up again is a reduction in the capital gains tax. But any such suggestion makes people on the left go ballistic. It is "trickle down" economics, they cry.
Liberals claim that those who favor tax cuts and a free market want to help the rich first, hoping that the benefits they receive will eventually trickle down to the masses of ordinary people. But there has never been any school of economists who believed in a trickle down theory. No such theory can be found in even the most voluminous and learned books on the history of economics. It is a straw man.
This straw man is not confined to the United States. A critic of India's change from a government-dominated economy to more free market activity in the 1990s accused those behind this change of having "blind faith in the 'trickle-down' theory of distributing the benefits of economic growth among different socio-economic groups in the country." But free-market economics is not about "distributing" anything to anybody. It is about letting people earn whatever they can from voluntary transactions with other people.
Those who imagine that profits first benefit business owners -- and that benefits only belatedly trickle down to workers -- have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.
Money goes out first to pay expenses first and then comes back as profits later -- if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.
Even with successful businesses, years can elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid -- geologists, engineers, refinery workers, truck drivers.
Nor is the oil industry unique. No one who begins publishing a newspaper expects to break even -- much less make a profit -- during the first year or two. But reporters and other members of the newspaper staff expect to be paid every payday, even while the paper shows only red ink on the bottom line.
In short, the sequence of payments is directly the opposite of what is assumed by those who talk about a "trickle-down" theory. As for capital gains, some countries don't tax capital gains at all. They tax a business' earnings, but not capital gains, which are harder to define and sometimes illusory.
The real effect of a reduction in the capital gains tax rate is that it opens the prospect -- only the prospect -- of greater future net profits. But that is enough to provide incentives for making current investments. Reductions in the capital gains tax rate tend to draw money out of tax shelters like municipal bonds and into creating jobs and productive capacity. That's the point!
As with all taxes, a distinction must be made between tax rates and tax revenues.Tax revenues went up while tax rates went down in the 1980s. Similarly in the 1960s and the 1920s. That is because incomes rose more than tax rates fell. But still it will be claimed that we cannot "afford" to cut tax rates because it would create deficits. Spending creates deficits -- and it is big spenders who fight hardest against cutting tax rates.
It is not faith but empirical evidence that is overwhelming on the actual track record of tax cuts and free markets. By the 1980s, this mounting evidence convinced even left-wing governments in various parts of the world to cut back government operations and sell government-owned enterprises to private industry. Faith had nothing to do with it.
In India, in the decade since the 1991 economic reforms which were condemned as "blind faith," the country's economic growth rate has soared. It has been estimated that the real blind faith -- in government planning -- had cost the average Indian hundreds of dollars a year in income during the decades when socialist dogma ruled. In a poor country like India, this was income they could not afford to miss. Even in a prosperous country like the United States, there is no need to forego economic benefits for the sake of a political phrase.
http://www.capitalismmagazine.com/economics/1115-The-Trickle-Down-Econom...
Yep, that's why John Kerry's new boat was scheduled to be home-ported in Newport, RI. Those crafty Rhode Islanders, with their economy and finances in worse shape than most, why--they decided to give favorable tax treatment to maritime building and maintenance work. Place is booming in that industry. Good yards, skilled workforce, got it all.
Mass? not so much. But Kerry's boat is now at home in the islands, where it is the second largest boat. Dang.
- Ned
Hell, if it were up to me I'd scrap the entire tax code and go back to what the Constitution says the federal government is allowed to tax... period.
My idea is to use the inventory management technique of LIFO. Repeal every law that has been passed starting with the most recent, and work our way back to the beginning. Large government would be choked off yet have time to adjust on the way down. Timing of said plan to coincide with the enactment of each law.
http://en.wikipedia.org/wiki/FIFO_and_LIFO_accounting
The Constitution, in Article I, Section 8, gives Congress the power "to lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States."
In Article I, Section 9, the original document made clear that "no Capitation, or other direct Tax shall be laid, unless in Proportion to the Census of Enumeration herein before directed to be taken." It is moreover established that "No Tax or Duty shall be laid on Articles exported from any State."
Common defense and general welfare. "General" precludes a check to Mr. Jones for not working, or for having 17 children. That would be "specific" welfare. Yeah, I know, all this has been argued -- wrongly.
http://www.constitutionparty.com/party_platform.php#Taxes
spekulatn
I checked out Basic Economics from the library and bought a new one for the cause. As a restaurant guy, I can attest to the risk and capital outlay before any chance of profit reality. Watching these people do the exact opposite gonna make another good book/chapter one day.
I junked you.
You are conflating all sorts of arguments and situations and using the Straw Man fallacy against your Straw Man opponents.
It is the balance that is important for a succesful economy and society. It is no coincidence that the concentration of wealth in the US is now higher than the previous peak in the late 1920s which you cite.
At some stage of disequilibrium in economies, say pre-Thatcher England and recent India, "Economic Reform" is a good thing, but it can be taken too far. Oligarchy, anyone?
I also take issue where you claim that initial money is spent on labour hire. In respect of large corporations I observe that the initial money is spent on legislative capture through lobbying. Does this sound familiar? Your examples of businesses are mainly large and capital intensive when in fact, in the US, it is the small businesses that generate new employment.
I do not regard the history of privatisation of the 1980s around the world as an umitigated success. Many costs have been socialised with profits being privatised. I think this has contributed to the present situation.
Another effect of reducing capital gains taxes is to have highly paid individuals convert income to capital gains with all the distortions of incentive that this has entailed. Share option schemes, anyone?
I think there are other problems to address before taxes are reduced. I can understand a desire to reduce taxation in order to starve the beast, in fact I share it. However, I do not see all good coming from what you propose. In proposing this remedy I think you are taking your eye off the ball, which is what I assume the members of the present US oligarchy, such as Roger Ailes, intend.
In the rush for the exits lower taxes are attractive. Be careful what you wish for.
OT: Watch Greece vs. Spain live at FIBA World Championships:
http://www.atdhe.net/23423/watch-spain-vs-greece
4th quarter now, they are tied. Incredible game..AWESOME!
Anybody pissed? Anyone trust that NO us funds will be used?
https://www.nytimes.com/2010/09/05/world/asia/05kabul.html?_r=1
Bailout in the Works for Afghan Bank Hit by PanicKABUL, Afghanistan — In a bid to fend off the threat of a nationwide financial crisis, the Afghan and United States governments hammered together a deal to bail out Afghanistan’s largest bank on Saturday after lines of frantic depositors mobbed the bank for a third day.
Details of the deal were still being worked out on Saturday by the Central Bank of Afghanistan with assistance from the United States Treasury Department, Afghan and American officials said. But American officials said no United States funds were involved in the bailout.
...
The panic began last week when the Central Bank ousted the chairman and the chief executive officer of Kabul Bank, after discovering that the bank had acted recklessly, lending tens of millions of dollars to allies of President Hamid Karzai and pouring money into risky real estate investments in Dubai.
The crisis threatened to undermine confidence in Afghanistan’s fledgling financial system, which was built under American guidance after the collapse of the Taliban government in 2001. Among the clients of the bank is the government, which pays about 250,000 public employees through the bank, including those of security officials and the military. Top officials at Kabul Bank and a senior leader at the Central Bank declined to comment publicly on the proposed bailout, which was still being negotiated Saturday. However, a manager at the Central Bank and a senior American official confirmed that there would be what the American official called an “intervention.”
The Afghan government has withdrawn roughly $300 million of its sovereign funds held by the Federal Reserve Bank of New York, as well as Afghan sovereign funds held by central banks outside the United States, a senior Obama administration official said.
But the United States is not contributing any American money to the rescue.
“No American taxpayer funds will be used to support Kabul Bank,” said Jenni LeCompte, a Treasury Department spokeswoman.
The Treasury Department is advising the Afghan government on how to manage the crisis, and has sent a team of experts to Kabul. While the Afghan Central Bank has intervened, the official said, it has not yet taken over Kabul Bank, an option it still has should the panic continue.
More on Kabul bank.
http://www.juancole.com/2010/09/collapse-of-kabul-bank-points-to-termina...
Collapse of Kabul Bank Points to Fatal Corruption of Karzai Government...
The story begins with Sherkhan Farnood, a financier who founded Da Kabul Bank after the fall of the Taliban. Over the years he appears to have used the institution for patronage for politicians and their families. Farnood gave millions to the presidential campaign of Hamid Karzai last summer, a campaign that Karzai was accused of only winning through substantial ballot fraud. (Hint: a vote wouldn’t cost much to buy in Afghanistan, and ‘millions’ would buy a lot). The other top executive at the bank, Khalilu’llah Frozi, was a campaign adviser to Karzai. Hamid Karzai’s brother Mahmoud has a 9% share in the bank.
Instead of wiring money overseas, as banks typically do, Farnood used a traditional money-transfer or hawala service, the New Ansari, which is also alleged to have been resorted to by drug smugglers, some of whose proceeds go to the Taliban and other insurgents that kill US troops. Money transferred by hawala cannot be traced electronically. The New Ansari itself is under investigation by US authorities. Persistent news reports suggest that billions of dollars in cash are being flown out of Afghanistan to Dubai, and that, let us say, irregularities are involved.
Farnood often gave out loans without proper collateral or other formalities. He loaned $100 million to Haseen Fahim, the brother of Marshal Mohammad Fahim (an old-time Northern Alliance warlord whom Karzai brought back into government as his vice-presidential running mate in summer of 2009). Haseen Fahim has substantial investments in Afghanistan’s small natural gas sector.
Farnood also apparently loaned himself $140 million to invest in real estate in Dubai, including in villas on the world islands off Jumeirah. These artificial islands made of landfill were to resemble the map of the globe once constructed, and were intended to give the wealthy the opportunity to own an entire faux country. Farnood has been flying out connected people like Mahmoud Karzai and Haseen Fahim and putting them up in the fancy chalets. Afghanistan is the fifth-poorest country in the world, with 36% of the population under the poverty line.
With the world economic downturn and real estate crash of 2008-2009, the Dubai world project largely fell apart, with investors going bankrupt in droves. Indeed, Dubai itself had to be bailed out by its rich sibling Abu Dhabi (which has petroleum; Dubai just has a financial sector). The artificial islands appear from NASA photos to have been abandoned since late 2009 when the own, Nakheel Properties, asked for a delay in repaying $29 billion in debt. Some seem to be sinking back into the lagoon or their boundaries are blurring. Close-up pictures of some of them show an eyesore.
So Farnood’s $140 million investment was suddenly not worth anything at all, and his bank began spiraling down. The details of his other bad investments have not yet emerged. The bank went from having over $1 billion in capital to now having only $120 million and owing $300 million.
...
And this
http://online.wsj.com/article/SB1000142405274870343160457546809409070086...
Probe Circles Globe to Find Dirty MoneyNine banks have been caught up in the probe, and some are in discussions to settle, according to a person familiar with the case. Three have already. Last month, Barclays PLC in London agreed to pay $298 million and admitted to allowing payments on behalf of clients in Cuba, Sudan and other countries. Lloyds Banking Group in London and Credit Suisse Group in Zurich—banks that operated extensive transfer systems for Iranian clients—have agreed to settlements totaling $350 million and $536 million, respectively.
These weren't rogue operations. The investigators discovered that the banks ran dedicated units to systematically aid the undetected transfer of money through the U.S. banking system. They did that by removing identifying coding on fund transfers so they could evade automated U.S. bank computer systems designed to spot money flowing from a sanctioned state.
Gully, I am convinced that if you and I can think of it, they have done it. Ever see Star Trek? They have a multi level version of chess they play on the show. You and I are only allowed to see one board, meanwhile there are multiple boards in play. The reality of just how ugly the game is may well be beyond our ability, not to comprehend, but to be present with the knowledge and not go postal on the spot. I live in a world now where I take it for granted it is that bad. I don't even mean special conspiracies, I mean business as usual.
MsCreant
Sucking up to Gully Foyle,
as usual.
(Yawn)
.
Interesting you decided to post that. You clearly do not know my history with Gully. Gully is a hatemongering SOB and I have left meltdown level pissed off posts saying as much. Gully also is a great example for me on how I can find aspects of someone's perspective distasteful AND respect that they have other things to say that are worth taking into consideration. Are you that flexible, or do you only paint with one brush? Or are you another hatemonger, like Gully can be? Your post to me would seem to support that idea.
I have a seemingly simple minded question to ask. I ask it because I think we take for granted we know the answer. But I wonder... here it is:
I ask this because I wonder if I am missing something in my assumptions. Thanks ahead of time anyone who is willing to answer. I actually think this will be a revealing exercise.
You mean expose the insolvent banking system? Get real, Missy.
Letting the economic tide go out will expose that the bankers are not only swimming naked, they are screwing each other as well. Think sodomy conga line.
So that is one reason we hear, the Fed won't let it deflate because too many failures will have to go on the books, exposing the banking system as insolvent (it already is, but this would expose it).
Another you imply is that it would reveal more of the "real" system of how things get done that they don't want visible by the masses. Masses think they are in a democracy that is just a little bit unfair biased towards the folks with money. They would shit if they knew the details of just how bad.
Here are some others we hear:
Why else not let it deflate? I think there is more here to consider. All of these could be dealt with.
Ms, I'll add a couple, along your line of thinking:
1. Fixed public service union retirement plans with no allowance for negative cost of living adjustments.
2. State, municipal, local governments addicted to "growth"--no doubt in my mind that they are complicit in the mortgage fiasco as unindicted conspirators/beneficiaries.
3. Deflation is self-reinforcing, so tends to get out of hand, leading to your tptb concerns. Can't have a system that is out of everyone's control (statists are control freaks, after all).
- Ned
Critics say it's time for cities and states to get tough with public-sector unions. They may be right - for all the wrong reasons.
Before the National Economists Club, Washington, D.C.
November 21, 2002 - Governor Ben S. Bernanke
Deflation: Making Sure "It" Doesn't Happen Here
"... I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States ..... the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
They are quite insane.
Again, this is theft of labor.
Here's a new documentary that says what most of us here already know, but does it in a pretty compelling way, I think.
The last few minutes (starting at 42:00) seem pretty germaine, but don't actually answer your question. I do get the sense that TPTB are, at this point, just as scared of too much inflation as they are of too much deflation. The problem with that approach is: now the tightrope is getting thinner and thinner.
http://www.youtube.com/watch?v=4ECi6WJpbzE
Deflation is vastly disadvantageous to debtors. True value of debt increases and has to be paid out of dollars growing always more valuable and more scarce. Who is the biggest debtor in the history of the world, possibly in the history of the universe? They will fight deflation to the death (probably our death). Inflation, however, is disadvantageous to creditors. Debt grows less valuable with time and is paid back in dollars that become less valuable the further out in time you get.
"In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the annual inflation rate falls below zero percent (a negative inflation rate), resulting in an increase in the real value of money – allowing one to buy more goods with the same amount of money. This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels).[2] As inflation reduces the real value of money over time, conversely, deflation increases the real value of money – the functional currency (and monetary unit of account) in a national or regional economy."
Effects of deflation
http://en.wikipedia.org/wiki/Deflation
There was a deflationary trend during the 19th century. The dollar was worth more in 1900 than it had been in 1801. This corresponded with the great improvements in growth, profit and standard of living known as The Industrial Revolution.
http://mises.org/images/SeanMaloneRiseFallDollarLarge.jpg
CrockettAlmanac.com wrote: " There was a deflationary trend during the 19th century....great improvements in growth, profit and standard of living known as The Industrial Revolution.
"...the net effect of the Industrial Revolution was strongly positive but was largely offset by the negative effects of rapid population growth."
http://www.econlib.org/library/Enc/IndustrialRevolutionandtheStandardofL...
Not sure how that quote illuminates my comment regarding the deflationary trend of the 19th century. But the source you cite does make some generally interesting points about the Industrial Revolution:
"The research of economic historians, then, has altered the old standard-of-living debate. They now seek to answer not the question of what happened to the standard of living, but the question of the effect of the industrial revolution net of other historical events. For example, the positive effect of the industrial revolution may well have been offset by the negative effect of frequent wars (the American Revolution, the Napoleonic Wars, the War of 1812) and the high taxes that accompanied them. Some economic historians include bad harvests, misguided government policies, rapid population growth, and the costs of transforming preindustrial workers into a modern labor force as
additional causes of slow growth. In a counterfactual simulation, Mokyr has shown that without the technological changes of the industrial revolution, population growth could have substantially reduced real income per person between 1760 and 1830. In other words, the net effect of the industrial revolution was strongly positive but was largely offset by the negative effects of rapid population growth."
http://www.econlib.org/library/Enc/IndustrialRevolutionandtheStandardofL...
Seems like causality is being imposed there. One could just as easily say that without the population growth, there would not have been as much impetus for the technological changes of the industrial revolution. But I'm not a scholar so I'm just playing logic games.
Full disclosure: I think deflation is good.
Seems like causality is being imposed there.
I thought so, too.
But I'm not a scholar so I'm just playing logic games.
That's the enjoyable part. No harm in that. It's not like we're creating public policy here, just bouncing ideas off each other, individual to individual.
Full disclosure: I think deflation is good.
Strictly speaking I'd say that whether deflation is good or bad depends on what else is going on at the time (considered not necessarily in a causative but rather a reciprocative light). Generally speaking I believe that a low to moderate rate of deflation is vastly preferable to low to moderate inflation.
Back lying again, eh?
Apparently, there was no inflation from 1760-1880 or whatever.
None at all.
Even the premise sounds wrong.
History is all a lie and what Johnny Bravo imagines to be true is true.
There's gonna be a second term?? Damn. Thanks for the heads up.
The odds are higher of a military intervention to remove the muslim and his teleprompter from the White House than a second term.
Obama is no more a Muslim than Bush was a Christian.
There. Fixed it for you.
Islamabad, Sep 2 (PTI) A Pakistani minister wants US President Barack Obama to offer Eid prayers at Ground Zero in New York and become the "Amir-ul-Momineen" or Caliph of Muslims.
Minister of State for Industries Ayatullah Durrani, who belongs to the ruling Pakistan People''s Party, said the upcoming Eid-ul-Fitr festival, expected to be observed on September 11, would be a "golden opportunity" for Obama to offer Eid prayers and declare himself the leader of all Muslims.
"In this way, all the problems of the Muslim world would be solved," Durrani told The Nation newspaper.
Durrani, a former member of the Pakistan Ideological Council, contended that the Muslim world is in "dire need" of a Caliph and occupying this distinguished slot would provide Obama "exemplary titles" like "Mullah Barack Hussain Obama" or "Allama Obama".
He said: "The time is approaching fast. Barack Hussain Obama must act now. This is a golden opportunity, Muslims badly need it."
Obama''s elevation to the Islamic Caliphate would be the "key to success, he claimed but did not offer any explanation for his remarks.
''Ground Zero'' is the former site of the fallen twin towers of the World Trade Center.
And when do you expect this to come about?
Is that some kind of "proof" of something? Who gives a shit...
Whatever happened to that Rev. Wright brain-washing?
Get a story and stick with it.
I'm hoping obama will not get a second term either, but man, you are WAY out there in right field. Nobody is hitting the ball anywhere near you, so you've got a long time to dream up conspiracies about why. I'm guessing you see jesus in your mashed potatoes too.
He was there I tell you. I ate him. With gravy. God is good. So was Jesus, with gravy.
Judging from the comments from The Joints Chief Of Staff, Gen. James Conway, Maj, Gen. Jerry R. Curry, Maj. Gen. Paul Vallely, Lt. Gen. Thomas G. McInerney, and Stanley McChrystal, it appears right field is becoming more and more crowded.
Every time the minimum wage is raised, businesses find new ways to automate their production and creating more unemployment. I helped to deploy robotic automated solutions that threw hundreds if not thousands out of jobs and that was when the economy was healthy.
Smaug, my brother runs a small packaging machinery business. Custom stuff. He's been selling into China (PRC) believe it or not. Owners of small businesses there talking about quality of employees, education, work ethic. He's made repeated sales, even though he expects the machines to be knocked off over time.
Guess it isn't personal to us.
And I'm absolutely with you on the ill-effects of the "minimum wage." Look at dark green unemployment figures.
- Ned
I know how to create a lot of jobs. We even did it in this country prior to 1980. Mandate that coporations and traders and banks and passive investors put a large portion of their retained earnings (calculated against a wage cap for tax purposes for any induividual) into new businesses or loans to existing businesses. We used to call it the retained earnings tax. Go look it up. We even used to enforce it when the currency was worth 100% more in real dollars than it is now and real incomes were rising and we didn't have an unemployment problem.
I instinctively fight against anything tied to the word mandate.
Prolly just me though...LOL.
Here's an idea...how about a one year tax holiday, as in zero federal taxation. They're just making a ledger entry anyway's, let them "print" for their own consumption.
Wonder how many jobs that would create?
Has Obama made a success of anything during his presidency.
Yes.
Speaking.
But the man has a Ph.D in teleprompter, so clearly a core competency.
And one day I believe he will make a fine community organizer.
Enough with the thinking that all this crap is one guy's fault and that one guy can fix it. Expand your view as you are missing the real villains. You are seeing the shadow of the marionettes, not even the real dummies let alone the strings.
"As I was walking among the fires of Hell,
delighted with the enjoyments of Genius;
which to Angels look like torment and insanity.
I collected some of their Proverbs."
William Blake (1757 - 1827), "The Marriage of Heaven and Hell", 1790
My response was to a question about what "Obama has accomplished". To infer from that, some grand generalization, about "fault" would be an error on your part.
One man, one party did not "cause this" and one person, nor any party will ever fix it. Assuming one can even define what "fix" means.
I am agnostic when it comes to political parties, as they all have puppet masters.
I apologize for my cynicism. It's just that the cutesy comment just fell flat.
Same old unfunny community organizer stuff. It's old.
Employment in America,,why the following will drive downward the hope...In Obama
With Obama’s letter to the G-20 countries released a while back, the US strategy for the Ottawa summit was clear: Obama will attempt to sabotage the meeting with a two-pronged attack designed to knock China and Germany off balance, and to prevent any urgent measures from being discussed which might roll back the exorbitant proliferation of derivatives, impose a Tobin tax on speculators, or regulate and restrain the hedge fund hyenas whose activities are ravaging the globe.
Obama, as usual, operates under a veil of dissembling and deception. His letter talks first of all in edifying terms about the priority which must be given to economic recovery and growth. He says he wants to encourage the growth of internal consumption, especially in countries with large trade surpluses, meaning China and Germany, or possibly Japan. He sheds crocodile tears about the drastic austerity policies of the type being introduced by the Merkel government in Berlin. He tells countries which have built their strategy around exports that it is unwise to rely on exports.
Much of this represents an attempt to prevent the Germans from bringing up the issues that are important to them and to the world, such as the need to restrain over-the-counter derivatives, especially the extremely toxic naked credit default swaps which Berlin has now banned in regard to government bonds denominated in euros. Obama does not want to hear about the German government’s plans for a Tobin tax on speculative turnover. He also wants to divert attention away from the European Union efforts to regulate and restrain hedge funds, which have played a prominent role in exacerbating the current world economic depression.
The other prong of Obama’s attack is his blather about the superiority of “market-based rates” for currency exchange. Obama, in effect, demands the perpetuation of the current chaos of the floating exchange rate system, which has done so much to hinder world economic development in the nearly 40 years since Nixon and Kissinger, acting under British pressure, destroyed the Bretton Woods system on August 15, 1971. In particular, Obama wants the Chinese yuan or renminbi to be driven sharply upwards. There is now a significant strike wave breaking out in China, especially at factories owned by Japanese, Taiwanese, and other foreign companies. The US knows that for every penny which the renminbi gains on the US dollar, a measurable number of Chinese export firms operating on narrow profit margins will be forced out of business and into bankruptcy, increasing unemployment and magnifying the social tensions which are already abroad in China. There is also the chance that US pressure on this point will inflame the contrasts between the elitist and populist factions inside the Chinese Communist Party. The Chinese first instinct, which was to refuse to discuss matters of sovereign economic policy at a multilateral gathering, was undoubtedly the correct one. The subsequent report that China is willing to be more flexible on its exchange rates is fine if it is meant as a smokescreen, but opens the door to great trouble if the Chinese begin to make significant concessions on this point.
During the early months of this year, the United States systematically provoked China on issues related to Google and the administration of the Internet. After that phase, there has been a relatively quiet interlude. One suspects that the US was attempting to apply a kind of aversive conditioning to Beijing, most probably with the goal of inducing the Chinese to dump large quantities of euros during the month of May. The Chinese are estimated to have 2 ½ trillion dollars worth of foreign exchange reserves, of which about one quarter is held in euros. A recent story planted in the London Financial Times by Anglo-American intelligence circles claimed that China was indeed about to dump the euro. The Chinese government agency which administers foreign exchange quickly denied this report, stressing that China regards Europe is an important area of future investment and economic cooperation.
The best guess possible at this time is that the US and the British had intended to launch a very rapid Blitzkrieg against the euro in May, with the intent of provoking a panic flight of hot money out of the joint European currency within a matter of weeks, before the end of last month. In this estimate, the German ban on naked credit default swaps and on the naked shorting of German bank stocks was partly a defensive measure against this looming Blitzkrieg, and partly a signal that Berlin intended to fight the Anglo-American predators with additional serious countermeasures. As a result, the collapse of the euro has now been halted for the moment, and this currency has exhibited greater stability over the past two weeks.
The forces of economic depression in the world economy are colossal, and they cannot be neutralized without the deleting or shredding (as Germany has begun to do) of large portions of the cancerous mass of $1.5 quadrillion of derivatives that is crushing the world economy, and without a wave of debt moratoria and debt write-offs among those nations who have destroyed their public finances by socializing the private speculative and derivatives losses of zombie banks and hedge fund hyenas. Since this is not being done by most countries, the forces of depression emanating from the black hole of world derivatives will necessarily do their destructive work in one direction or another. During the second half of 2009, the victim was the dollar. For the last several months, it has been the euro. If the euro somehow gets off the hook, the British pound sterling might be the next victim. Or, it could be the Japanese yen. This will become clear shortly.
The notorious hedge fund predator George Soros is frenetically churning out his own variations on the Anglo-American line in advance of the G-20 with a series of attacks on Germany. He does not make the ban on naked credit default swaps the issue, but bashes Berlin using other pretexts. Soros pretends to be concerned about the German austerity policies, which are admittedly ill-advised in the extreme. Soros wants brutal austerity for Greece and the southern tier, but demands deficit spending and consumerism in Germany. This is the old Carter-Mondale locomotive theory of 1977, when Germany and Japan were expected to launch vast stimulus programs to weaken their currencies and reduce their exports so as to relieve the pressure on the US dollar. In an interview with Die Zeit of Hamburg, Soros absurdly blamed the entire hedge-fund induced European crisis on the Germans, pontificating: “The German policy is a danger for Europe, it could destroy the European project.” Soros thinks that the collapse of the euro may be at hand; in fact, his hedge funds have been a key part of the speculative attack, for which he has also served as ideologue. Soros thinks that the end of the euro may be followed by a new era of European wars: “That would be tragic, because then Europe would be threatened by the sort of conflicts between states that have shaped European history.”[1]
According to a recent speech by Soros in Berlin, current German austerity policy “is in direct conflict with the lessons learnt from the Great Depression of the 1930s and is liable to push Europe into a period of prolonged stagnation or worse…. The wide range of possibilities will weigh heavily on the financial markets. They will have to discount the prospects of deflation and inflation, default and disintegration…. In a worst case scenario that could undermine democracy and paralyze or even destroy the European Union. If that were to happen, Germany would have to bear a major share of the responsibility because as the strongest and most creditworthy country it calls the shots. By insisting on pro-cyclical policies, Germany is endangering the European Union.”[2] Austerity is a bad thing, but it is absurd to blame Germany for the current depression, the direct cause of which was the 2008 panic in the $1.5 quadrillion derivatives bubble centered in Wall Street and the City of London.
The G-20 should ban all credit default swaps, starting with the naked ones already targeted by Germany. A bright line prohibition of collateralized debt obligations is also long overdue, as even Lloyd Blankfein of Goldman Sachs has conceded. Individual countries should generate revenue and suppress speculation by instituting a 1% Tobin tax on financial transactions, to be collected and used at the national level. Hedge funds need to be thoroughly regulated, meaning that they will cease to be hedge funds in the current sense. So far, only Germany has taken concrete steps on these issues.
Depressions like the current one do not end thanks to some mysterious business cycle or other deus ex machina. They end when destructive policies are abandoned, and effective recovery programs are set into motion. If the G-20 fails to restrict speculation, the world economic depression will continue to worsen.
Your source:
http://tarpley.net/2010/06/25/obama-strategy-for-g-20-in-ottawa-push-eur...
Obama Strategy for G-20 in Ottawa: Push Euro Down, Drive Renminbi Up, Attack Germany, and Keep Toxic Derivatives in Charge of the World EconomyWebster G. Tarpley
TARPLEY.net
June 25, 2010
You are on the warpath tonight. No BS for your sensitive Raccoon nose.
I think he has the right to post that. Does not hawk site, likes privacy, but does poststuff here from time to time.
Trying to be opaque and not.
I think that any unsourced comment is, let's say, disingenuous. I don't care about motives or anything else. Nor did I judge the post for its content. If I quote a source I go out of my way to create a link, or state that it's not my own thought. It's only fair. A source is very important in determining motive, and, thereby, veracity. My warpath, as you so aptly describe it, is about the lack of focus, the political distraction, and the general apathy. Apathy is not an issue here at ZH but I refer to the populace in general.
I don't give a damn about apathy.
I couldn't care less about your opinion of apathy.
God bless you for saying, "couldn't care less."
I actually looked it up a few days ago (can't remember why), so it's fresh in my mind.
When is a quote not a quote, is what I believe MsC may be referring to... There can exist a singular exception to the (otherwise generally prudent) rule/policy of attribution. At least the effortless ease of using a search engine being available to anyone should be obvious to GeoP as well.
CD, you're goddam right.
CD caught my drift. This is an issue of identity. I witnessed an exchange where someone outed someone and the one outed was upset because of privacy. Meanwhile I agree about the search engine being obvious. But I try my best to respect wishes, even when they are sometimes irrational. So I talk in very indirect ways, which drives me nuts. I must have been raised in a dysfunctional family for this to come to me so easily. Oh wait, I am a US citizen [forehead smack].
The slow always need more proof. Most people who die in fires are like that. The fire alarm rings some people bolt out of the building, 25 or 30 percent of the people go on an investigation trying to find out if there really is a fire and where it is and how big it is. When they find it they die.
Just the latest in a long line of so-called 'direct causes'. I wonder what caused these causes? Could it be...a fiat monetary policy that punishes saving, rewards borrowing, and destroys the currency, to the detriment of the middle class and the benefit of the oligarchical political class? Or could it be fiscal and political policies that depends on said monetary policy to fund exponential governmental expansion?
Naw, it's just the speculators.
You know what would restrict speculation? Not some law that says "No Speculatin'". That's a band-aid on a gaping chest wound. What would work is ending the TBTF policy, ending gov't backstops and bailouts, and restoring real freedom to the markets, with all the financial risk that entails. Get rid of the Fed - and no, don't NATIONALIZE it, that would only make things worse, if that's even possible. Get rid of it and allow the market to determine a real monetary standard. This would likely end up as gold or silver, or both. Define fractional reserve lending as fraud, or at least as a walled-off enterprise with a big 'caveat emptor' sign at the entrance.
This current depression will not be ended by making (more) laws against speculation. More central control, tighter regulations, more spending programs...yeah that'll work. The current depression will be ended by REAL policy changes, not more big-government tweaks.
But yeah, other than your conclusions, good stuff.
http://www.economicroadmap.com/2010/09/china-looks-to-win-hearts-and-min...
China Looks to Win Hearts and MindsSeveral recent reports -- including this one -- have focused on China's aggressive efforts to develop its military capabilities -- its "hard power." But there's more to the global leadership game than brute force alone. Nations that want to rise to the top of the heap must also win the hearts and minds of those they wish to dominate. A Defense Tech post, "Chinese Hospital Ship 'Peace Ark' Sets Sail For Africa," suggests our rival to the east is well aware of this dynamic:
China’s 10,000 ton hospital ship “Peace Ark” left Zhoushan Port today en route to the Gulf of Aden on its first overseas medical mission, according to a Chinese government announcement. It says the ship carries 428 “soldiers, officers and medical workers.” During its 87-day mission the ship’s medical staff will provide treatment to people in Djibouti, Kenya, Tanzania, the Seychelles and Bangladesh.
The Chinese are adept (and becoming more so) at the use of soft power in all its forms, not just economic, as this deployment makes clear. Taking a page from the U.S. Navy playbook, the hospital ship will become a major tool in China’s soft power exploits.
The Peace Ark’s deployment should be seen in the same light as China’s PLA Navy participating in anti-piracy patrols: maximizing the strategic and messaging value of the limited number of ships it’s able to maintain on long patrols. Undoubtedly, a major public relations campaign will follow the hospital ship’s various port calls.
Very few world navies have purpose built hospital ships and it’s rather significant that the Chinese built such a large one. That they did goes to the drivers behind China’s naval expansion. The Peace Ark is another signal that the PLA Navy is moving beyond the defending territorial claims imperative into more far ranging economic interests.
China must secure raw materials to supply its voracious economic growth, Africa is a source of many of those resources, hence the peace Ark goes to Africa. China must also worry about the safety and health of its overseas workers, thousands of which are working across the African continent
http://www.economicroadmap.com/2010/09/geopolitics-the-willie-sutton-rul...
Geopolitics: the Willie Sutton RuleIn "The New Arms Race In Central Asia," War News Updates highlights another example of the Willie Sutton rule, geopolitical style. As usual, this basic truth -- "that's where the money is" -- goes some way towards explaining why some areas of the world seem especially prone to cross-border intrigue and armed conflict.
http://the-diplomat.com/2010/08/31/arms-race-on-the-caspian/
The Caspian Sea, an oil-rich body of water on the border of Iran and the former Soviet Union, has seen an unprecedented amount of naval activity this year: Iran has launched its largest ship yet into the Caspian, Kazakhstan has declared plans to start construction of six new ships by the end of the year and Turkmenistan announced the creation of its first navy. This military build-up, though so far still modest in scope, has observers wondering if the stage is being set for an arms race on this heretofore quiet sea.
The stakes in the Caspian Sea are high: According to the US Department of Energy, the Caspian region contains about ten percent of the world's potential oil reserves, as well as still precisely unknown—but vast—natural gas deposits. The newly-independent countries that surround the sea have staked their futures on petroleum riches, and they're trying to use the first revenues to protect that future. A Russian defence magazine recently described the emerging situation as ‘a keg of gunpowder in a sea of black gold.’
"..Obama needs to create 230,000 jobs each and every month consecutively from September through November 2016.."
There is no credible plan to make it happen. Nobody believes it's going to happen. The logical conclusion is that it simply isn't going to happen.
So.... seeing as we don't buy the employment recovery fantasy, let's move on to more realistic scenarios. What are the implications of continued high unemployment? What are the sequence of events, and timeframes for each? Trying to map out the future a bit here. It's harder to do than pointing out how pathetic the assumtions for growth are, and more worthwhile in the long run...
"What are the implications of continued high unemployment?"Japan: A Story of Love and Hate
Sunday February 8, 2009 at 10 pm ET/PT on CBC News Network
"A warning from the Japanese economic front offers an unprecedented look at Japan's 'working poor'.Naoki, 56, had it all in Japan's bubble economy days: he ran a business with 70 staff, drove a brand new BMW, and lived in a 6 bedroom house. But when Japan's economy crashed in the early 1990's he lost everything, ending up divorced (for the third time) and penniless.
He was saved from being homeless by his new girlfriend, Yoshie, 29, who took him in, despite living in a tiny, windowless, one-room apartment.
At his age, the only job Naoki can find is part-time at the post office. Here, part-time means working 7 hours a day and earning just $7,200 CD a year. He is now one of thousands of Japanese who have fallen through the cracks to become a class of 'working poor'. Yoshie now has to find extra jobs to support him: working 15 hours a day in 3 jobs.
Each evening Yoshie leaves Naoki at home to do the housework and heads to a sleazy chat bar, where she is paid to drink, flatter and flirt with married men. Sometimes she comes home drunk and teases Naoki about his poor income. After taking her nightly dose of sleeping pills, she cannot remember anything.
Video:
http://www.veoh.com/browse/videos/category/educational_and_howto/watch/v...
the USD devaluation will be extreme. happy for it. ask us how and when to take advantage ---- pamria, llc shawn mesaros
OT: Avatar who junked VI on the Dylan Grice post, i have a friendly message for you. Read it.
OT: Avatar who junked VI on the Dylan Grice post, i have a friendly message for you. Read it.
message updated.
How in the hell did we ever get this "create jobs" nonsense?
The government giveth, and the government taketh away. Get with the program, comrade.
Stimulus applied properly will start the economy engine again. The govt and corporate special interests have gotten thier way with borrowing low interest tax payer money and selling high interest corporate bonds, or issuing stocks, pig bankers have left the building with elvis and are now the new hedge fund henchmen gone wild. The hedge fund henchmen will continue the ponzi scheme rip-offs outside the so called reach of regulatory reform.
Instead of rewarding the banks, and corporations and deadbeats with tarp and stimulus money and pouring it into a bottomless pit at Freddie and Fannie, they should offer loan modifications at no cost to middle class people who have been current on their mortgages, and other debts. They key to recovery is to get the debt to disposal income ratio down for responsible middle class, not the rich (over 250,000.00 income I call rich) and not the welfare cheats, illegals gaming the system, or deadbeats. How do you sort all of the above out fairly using our political and bureaucratic red tape, I wish I know! To me the above actions are the key to bringing us back. The free market if truly fair and not just free can work!.
Another thought, tarp and stimulus money has rewarded the corporations whose incomes come from overseas, so the us taxpayer has exported our wealth and inflation and growth to foreign countries via propping up the international corporations based here, but the lion share of profits are made overseas. The american taxpayer should as they use to say back during viet nam,
BOHICA- bend over here it comes again.
Has everyone read about the Pakistani minister who wants US President Barack Obama to offer Eid prayers at Ground Zero in New York and become the "Amir-ul-Momineen" or Caliph of Muslims.
Minister of State for Industries Ayatullah Durrani, who belongs to the ruling Pakistan People''s Party, said the upcoming Eid-ul-Fitr festival, expected to be observed on September 11, would be a "golden opportunity" for Obama to offer Eid prayers and declare himself the leader of all Muslims.
The military has the obligation to honor their oaths, defend The Constitution and the country, and to remove the muslim from The White House.
He is the greatest security threat this nation has ever known.
Judging from the comments from The Joints Chief Of Staff, Gen. James Conway, Maj, Gen. Jerry R. Curry, Maj. Gen. Paul Vallely, Lt. Gen. Thomas G. McInerney, and Stanley McChrystal, it appears that this is becoming consensus in the upper ranks as well.
I would enthusiastically support a military intervention to exterminate the nest of America hating communists in DC and the media.
I believe that if they don't they will be choosing sides in a civil war.
"Fear is the main source of superstition, and one of the main sources of cruelty. To conquer fear is the beginning of wisdom."
Bertrand Russell (1872 - 1970)
bertrand russell, the fabian socialist? I'm not sure any group of people have done more damage to the world than that collection of assholes. They're why we are where we are now.
liberal sodomite write:
" bertrand russell, the fabian socialist? I'm not sure any group of people have done more damage to the world than that collection of assholes."
You are too modest.
You don't like Russell. Fine. How about arguing the merits of the quote and not resorting to an ad hominen argument (which is illogical).
What? You again? JFC
LMAO.
Government to Deploy Broader Mortgage Aid
SEPTEMBER 4, 2010 - NY Times - excerpt
“The Obama administration on Tuesday will launch its most ambitious effort at reducing mortgage balances for homeowners who owe more than their homes are worth.
Officials say between 500,000 and 1.5 million so-called underwater loans could be modified through the program, the first initiative to target homeowners who are current on their mortgage payments but are at risk of default because they have no equity in their homes. Some experts are warning, however, that the same knots that tied up prior initiatives could do so again.
Under the new "short refinance" program, banks and other creditors that write down mortgages to less than the value of the property can essentially hand off the reduced loan to the government. The process involves refinancing borrowers into loans backed by the Federal Housing Administration.”
http://tinyurl.com/2cazwue
on a related note....
More stories on the long term unemployed9/05/2010 09:02:00 AM - CalculatedRisk
From Alana Semuels at the LA Times: For many unemployed workers, jobs aren't coming back. A few excerpts:
Shortly after the government starts paying off the deadbeat mortgages, we'll witness the sudden (and fatal) epidemic of deadbeat tax cheats. It's called moral hazard. That'll be the end of the USG and the USD.
what second term?
Obamatard = earliest lame duck prez in history
its' 14+ mln, please dont you think everybody is stupid actualy ..
#that a record 10.5 Million jobs (and you won't find this statistic anywhere),have been #lost when factoring in for the natural growth of the Labor Pool of 90-100K a month ..
actualy its' 14+ mln.. very easy fugure to come up,,
work population total PRIVATE JOBS (unadj)
2007jun 231713 116603
2010aug 238099 108903
so,,, overall loss private jobs + increase of population is around 14+ mln..
I dont include non-private jobs in calculation, ,whats the point ? w/ deficit around 10% GDP number of gov/state/local jobs must be reduced.. no way around
forget to add: 2007jun - latest peak in private jobs
alx
ps
source : bls.gov
ps
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