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Van Hoisington: "Has The Recession Really Ended?"
Observations on the mythical end of the recession, on deflation, and on treasuries as a safe haven asset class. Shortly, we will post an opinion from Morgan Stanley that calls for precisely the opposite, i.e., shorting Treasuries.
h/t Adam
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Your "bitchez" posts are irritating. Okay, now you can call me names.
lots of articles already using the term 'back before the Great Recession..'
could be right if we further say that we are in the Great Deleveraging, or Great Deflation or just
the Great Big Shit Hole
Everything in red... yes!, who cares about Alcoa numbers....
Asian Stocks Decline as China Reiterates Property Policieshttp://noir.bloomberg.com/apps/news?pid=20601087&sid=aTsBgzvTHXZs
Ahh, Americans are so convinced that everything American is superior to everything foreign. Well, maybe they are right, but not the way they think. Al Thomas of www.mutualfundmagic reports that California bonds now carry a higher interest rate that Greece or Portugal. He also says only two (2) American states are in the black, so get out of municipal bonds while you still can.
Coming to a city,state,county,district,country,near you ................. to be continued ......................not the end (yet).
As an American I can say that it's obvious to me that we are a fat, self indulgent society, with insanely stupid, corrupt politicians. We've just about run out of post-WWII and post-cold war glory. The major problem is Washington, though, not the states and local governments.
I agree that we Americans are fat lazy slobs, and that our politicians are insanely corrupt. Lucky for us, the rest of the world is in much worse shape!
As long as we let the bankers use mark to fantasy accounting, it indicates the orginal problem, a banking meltdown, is still with us. No point in declaring the patient cured just because he has been encouraged to stay in the frst stage of grieving (denial) for a prolonged period of time.
+1 (ending "mark to FANTASY" accounting would be a good start to understanding the truth)...
Let's leave aside any ideas of QE, its effectiveness, the need for a new one, or the rally in stocks since 3/09...
Follow the timeline of QE... When it was first announced... You'll see that upon actual implementation, one could NOT conclude that IT was actually a catalyst for a stock market rally... (Instead - "mark to fantasy" may claim that honor)...
The objective of QE was to EXPAND CREDIT (think about that logically - would the FED have ever really come out and said "We're going to EASE so that the stock market will rally")?... BS... It was all about "foreclosure prevention", CFC, "homebuyers tax credits" (all that crap)... Maybe only LARRY SUMMERS was interested in a stock market rally (because that's all a jackboot like he knows)...
The result of QE? The pool of willing (or "qualified" borrowers) shrunk anyway... Banks either "hoarded" the cash, or made bets with it in capital markets... And when THOSE casinos are rigged in your favor (and you can still HIDE your losses)... Well, it's easy to imagine the outcome...
Post 1990 Japan should tell anything anybody needs to know about the concept of QE (with regards to pulling us out of a recession)... The NIKKEI had 6 rallies of over 45% or more over the past 20 years (on the way to losing 90% overall)... Is their overall problem solved? Are they OUT of their recession?
People... Don't make the mistake of confusing MARKETS with the ECONOMY...
I wouldn't even credit the market's March 09 ramp to QE liquidity pumping. Based on historical trends, it always happens in oversold markets. Timing was peculiar but not the 61.8% fib. ret. on the DOW. If the Fed wanted to goose the market, why stop at such a technical resistance point? They could have blown through it slaughtering all remaining bears.
They are smarter than us, have more money and more control. They stop at TA inflection points on purpose. TA is just another form of control...every trader uses it and they know it. The point is not to just wipe away everyone's savings and investments in one fale swoop, but to wipe away everyone's savings and investment (and make them debt slaves) while covering their tracks.
"In hindsight, the 61.8% fib retrace...blah, blah, blah." You fill in the words. Meanwhile you, your children and your grandchildren will be paying interest only on a national debt that will never be paid back.
If you read my comments closely... I DID NOT credit the "ramp" to the QE liquidity...
Instead, I credited it (in a vague way) to "mark to fantasy"... (call it... "the baton")...
That is... March '09, IMO was a TECHNICAL OVERSOLD BOUNCING point... Hell... If one wanted to go FIBO, they could just say 1576 x .618 = 974... Then, 1576-974 = 602...
The 666 low attached itself to other fibo ratio's (but the DOUG KASS "generational bottom" call was more a product of SIMPLE MATH than it was of any heavenly insight)... At least we know "Kass-y" knows how to add...
MARK TO FANTASY took off (took the baton) where the March '09 bottom started to falter... There was enough embedded momentum in that to make it appear "validated" it by June/July with wonderful things like "golden crosses" (and cheap talk from the "geniuses" within the "O" economic team)...
By then... All the "tool" fund managers (who hardly know anything else other than that, and were DESPERATE for anything "green" on the long side)... Were convinced they had to participate...
RECENTLY - We have seen that CROSS reverse, on SPX, (and it is reversing on the $COMP as we speak)...
Basically what I'm saying is that... The FED, HFT's, whatever, don't have the "mythical" powers that everyone ascribes to them... Sure, the deck is stacked in their favor on benign occasions (and there is much "hand wringing" that goes on amongst bears in those moments)... But this course will go the way it's supposed to go in due time...
As I'd stated before... The past 20 years of the NIKKEI should be the roadmap for anyone interested (equity wise), the BOJ rate policy should be the roadmap for anyone interest (credit wise), and I might even say that, "politically", the climate will most likely resemble Japan over the past 20 years as well...
good parallel re: japan. and while we are at it we should examine what the nordic countries did in somewhat similar circumstances in the late '90's: i.e. receivership for insolvent institutions, no "bailouts" and more sustained rebound. also far less moral hazard.
Tell it to Ben and Turbo Timmy - their policies are exactly that - they believe that by goosing the stock market that "animal spirits" will be aroused creating the "virtuous circle" (read bubble) of activity. Easy Al invented the policy and these hammer heads along with Keynesian Fat Larry will continue to puruse this policy because thats all they know...
Well Greenspan said the markets won't tank so he thinks things are being propped up most likely.
And you are missing the point that they don't care what the truth is as long as the perception is that there is a "recovery." So they describe the economy as such, in a recovery, hoping that people will start to spend money again regardless of not having a job.
Don't forget massive amounts of people are on welfare and foodstamps and that money to save state pensions has also vanished into the wind.
Bread and Circuses.
When the "net INFLOWS vs. OUTFLOWS" data (that Tyler provides for us every week) start to TREND (not just "shift", actually "trend") in a different direction than they have for the past 8-9 weeks... I might start to think that the "proppers" that you're referring to actually can have much of a net effect (other than to bounce support levels forward for more than a couple of days, or weeks)...
Face it... RETAIL is "out"... There's NO CASH ON THE SIDELINES...
The only INFLOWS these days are the "automatic payroll deductions" that some of the JOHNNYS out there haven't taken the initiative yet to put a stop to (Johnny being distracted and all)... More and more, JOHNNY needs that cash... It ain't coming back... This isn't the 80's, 90's, or oughts...
Received a JPM packet with info on my 'new' 401k options (stopped contributing to Fidelity about 3 years ago) - but tore it up. Would rather burn cash than give them more leverage. I can invest my own FRNs and get a better return on tools, seeds, PMs, or un-debtifying myself. Been in angry-boycott-mood for 2 years now and Ponzi Street can 'compound' my middle finger after placing it gently up their bumm.
The tail wags the dog today, no?
Put it this way...
If QE2 is structured in a way that the money goes DIRECTLY into the hands of "Johnny" (with the implicit demand to gamble it in EQUITY MARKETS)...?
Yeah Baby, DOW 36,000!
Otherwise... We're mostly going back to the year 1996 (as, perhaps, a stopping point to the year 1971, "asset class" wise)...
The SYSTEM needs to "reboot" to a level before Nixon took the dollar off the gold standard... Or something equivalent thereof...
While I'll admit that one should factor in SOME form of price appreciation (post 1971)... I'd also say that in a REBOOTING of asset values, things will end up getting "marked down" (overshooting past), certain marks in the HEAT OF BATTLE...
1971 is therefore only a FRAMEWORK mark...
In any case...
As this all pertains to THE THREAD "Has the Recession Really Ended?"...
Think about that question (with regards to predictions towards asset values) along those lines...
Or, more simply...
Has JAPAN been in a RECESSION since 1990? or not?
They know that in order for the recovery to occur they need to create confidence. Only way to do that is to lie. Works every time.
Fees for passports go up 47% starting tomorrow. Barry wants to squeeze more and more from the middle class, and Ben wants us to stay state side and spend here. His idea of stimulating consumer spending. Bunch of clowns. Sent my renewal today. Paid $75 vs $110 tomorrow.
http://www.usps.com/passport/
http://travel.state.gov/passport/fees/fees_837.html
I know I saw that the other day, completely insane. Just another way to discourage people to actually move about and enjoy themselves.
These are monopolies. No inflation
taxes and fees on international flights are really jumpin... i am seeing $800 flights get $400+ in fees and taxes added on
Paragraph 2 page 3 was one of the salient points - much of the debt created was used for items that likely do not have economic value in today's economy, i.e. consumer goods, homes, CRE, and industrial capacity no longer needed. No economic value means no ability to service the debt - which eventually means defaults (bitchez). Deflationary debt default spiral here we come! With a nice hyper-flationary collapse as the cherry on top...
Hear one of the NBER guys on Bloomberg. He was speaking the truth (a bit)...
The double dip talk is just more manufactured bullshit. Even the American Idol crowd knows we never really exited the first dip.
I agree on deflation, collapsing inflationary expectations and the prospects for the long term T . It'll be a bitching time to bag some dips in gold for the stash, too.
Can't wait to see how MS sets up going the other way.
I can't wait to see what all the financial station anchors and reporters look like when the stations can no longer afford the make-up staff.
Check out Tom Tommorrow's cartoons for an answer to your question. They will have electrical feed tubes directly to their brains.
http://www.credoaction.com/comics/2010/01/underpants-of-mass-destruction/
Can't find the newscasters--guess that's too GWB-ish.
Double Dip definition:
When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.
So we are beyond double dip once GDP FY2010 Q3 (end June 2010) is adjusted positive. However, GDP is a poor indicator of economic growth in the face of stimulus.
What is more telling is net tax revenue. This is a real-time indicator of how ARRA is performing, or should I say nonperforming.
It is really incredible what is happening in the US. Debt de-leverage and the propping up of bad debt, has frozen credit and investment.
Everyone hears a faint cry of economic death in the distance, coming ever closer. This monster has killed availability of credit and scared away corporate expansion. Only massive FED action, stimulus, or huge state subsidy seems to quench its thurst.
It seems only the media, as a matter of corporate policy, cannot speak the obvious.
There is no recovery, only a shoring up for the storm ahead.
Mark Beck
Anyone who shops (for just about anything [-gas,-homes]) knows there is inflation.
This research was conducted by living day-day for the last 3 years.
steel and copper prices are down as are a ton of tools and equipment. the dollar menu still exists and milk prices are down.
I had a similar argument with a guy named pitz not long ago.
#462135
You hit it with the dollar menu. It's $1 because they have to and can afford it, not b/c they want to. Others that cannot compete will fail and usually find out when it's too late and that's why food and retain are a lagging indicator.
What planet have you just arrived from? NG is pretty cheap. Homes are more affordable than at any time in the last 50 years or so, food is remarkably inexpensive. The only things costing more are those which the govt. operates or controls - Taxes and medical care.
You are from Planet Crack, I see...
Homes are MORE affordable than the last 50 years? Dude..on that basis ALONE, you shot your credibility to hell and back.
How in the fuck are homes more affordable now? 50 years ago they were at fractions of the current price-to-income multiples.
Your other statements are also bunk. Food is "remarkably inexpensive." That's a meaningless statement with no quantitative measure.
The $1 menu is what in the business is called a LOSS LEADER, folks! The price of the Big Rat value meal is UP. Subway's $5 sandwiches are now marked $6. A bag of fking Doritos costs nearly $4.
I'm not sure where you live, but most of the stuff you listed is not occuring in Texas. We still have $5 subway footlongs and a family bag of dorritos or lays is regularly $2.50 a bag now. Walmart has been going after the local competition pretty heavily. They have toothpaste back to $1.50 a tube now for colgate. Now if I could buy basic deodorant again for $2 a stick, why the fuck is everything crappy $4.30 a stick gel.
I started using a safety razor from 1940 and bought a 100 pack of feather blades, a couple straight razors (one from 1927 new in box!), pucks of soap, and brush. I maybe have spent $200 gathering all the sharpening stuff/strops and shaving stuff, but way cheaper already a year into it than buying $15 5 packs of gillette bs. My feather blades are around 45 cents a piece and last me around 2 weeks, the mach 3 would last me maybe 3-4 shaves and $3 a blade. Puck of soap lasts 3 months and is $3.
hook'em horns, baby! - Ned
I use Wilkenson Sword plastic razors. You can keep one going for a month, whereas Gillete's only last a day or two. Obviously, for that reason Gillette is the better investment. In fact, I've never been able to find Wilkenson razors in the US.
Almost the entire article was a primer on money followed by: "The Fed is not printing money, okay?"
"The Fed is not printing money, okay?"
How is the Federal government continuing to fund itself?
Japan has increased U.S. Treasury purchases which is the start of the flim-flam, since the U.S. buys United Kingdom Gilts, and the U.K. buys Japanese Bonds, who then buy U.S. Treasuries!
Round and round she goes, where she stops...
We are out of the recession, actually I think we been out of it for about 1 year now. I believe if the numbers are right we been in a depression since Early 2009. I can't stand theses talking heads, that sit there and lie right to everyones face.
http://www.shadowstats.com/
http://www.dailyjobcuts.com
Gotta love these people: Lets create 200,000 jobs a month and toot our horn while allowing 400,000 new people a month to enter this country.
To what recession end are they referring?
It's not a recession. The economy is just advancing to the rear. Our rulers say everythings sorted.
They "invest" $4bn for large funds, institutions and entities...
So take them with a grain of salt.
And, whatever they say, gold IS money, it's NOT illiquid, and what's the point of earning interest in a currency of constantly declining purchasing power anyway?
Excellent direction, for in a marriage of Purchasing Power Parity amongst currencies and an Efficient Capital Market Hypothesis (Yes, I know, neither holds practical water, for markets are neither efficient nor does purchasing power parity bear fruit over reasonable periods of time, but they do together reflect the concept of arbitrage.) a currency's risk free short term rate should generally be reflective of the anticipated decline relative to other currencies or erosion in value caused by inflation over reasonable time frames.
Ergo, spot on.... Why tenaciously hold unnecessary short term balances when the currency's purchasing powershall evaporate, in any case. The problem of the political realities of managed fiat currencies. Particularly in turbulent socio-politico-economic times.
And a little too late, but it's a start............
Americans are pissed at everyone..............a Dogcatcher(if he/she's employed), could likely get a seat in the House, or Senate.
Worst part, Obama's BIGGEST nightmares start in Jan 2011, to which, when the SHTF even worse, he will AUTOMATICALLY BLAME on the GOP.( Even tho they have voted on nearly NOTHING he's proposed, and passed by coercion.
Even Michelle is lying thru her teeth to the NAACP, about RACISM in the TEA PARTIES!!!!.
God Almighty, these people are shameless.
http://politics.usnews.com/opinion/mzuckerman/articles/2010/07/02/mort-zuckerman-obama-is-barely-treading-water.html
Close, but no banana. The Republicans will get blamed for what did NOT pass.
See? Simple. Heads I win, tails you lose.
If you review the history of the NAACP, you will notice a curious interlocking directorate with the types of people who head banks and the Fed.
NAACP and SPLC are attack dogs for the power elite.
at some point, you have to embrace the "racist" label and say so fucking what if I am? Collectively, we who are not part of the group that controls the funding and the message must repudiate the strength of this label that's applied to us EVERY SINGLE TIME we attempt to assert power contrary to the interests of the elite.
WE are the only ones who care a shit about being accused of racism.
your comment about home prices as a percent of income was a good one.
The economy is not retreating,just making a tactical withdrawal (: (: (: Lol
It ends up green shoots were just from the jolly green giant flogging the bishop.
F-ing Hillarious !!!
tactical withdrawal to a strategically reinforced position.........
Sure, Van Hoisington killed Dracula and all that, but what has he done lately?
Shorting everyone who has a stake in the recovery...
Rimshot
http://www.mikenco.com/plom.php
Cool link. Try this one:
http://www.entertonement.com/clips/bdvgdtkqrb--Hi-YoooooooooooooooEd-McM...
listed the count's transylvania estate, sharpened his stake and stashed a huge cache of silver bullets???
Makes me believe in Santa, the Tooth Ferry, the Easter Bunny
What about the devil?
where do you catch the tooth ferry? at the root canal.
At what time? - tooth hurty - badda bing
There is no recovery, just a cover-up (Gerald Celente). I believe this guy had it right all along. The stimulus only postponed the inevitable. Pity so many have fallen for the BS of green shoots etc. It is becoming abundantly clear the recovery was only an illusion, kind of like a wet dream but you wake up prematurely.
the financial recover-up?
:)
I have nothing to say, but someone keeps junking the titties.
So there!
That's just 'cause there isn't a "fondle" option.
The names are giving me flashbacks to the good ole HBB days, the bouncing titties, not so much. :-)
Okay, I'll admit it. I stared at them for far too long.
Me too. Waiting for one to fall out. No luck.
Did Muir say something?
Muir
For your fine artistic endeavors I give you the BOUNCEOMETER.
Not for those with weak hearts, at work, or next to the little woman and kiddies.
http://www.shockabsorber.co.uk/bounceometer/shock.html
technology is fuckin miraculous
"Has the recession ended?"
Ben Bernanke saw his shadow so I think that means six more weeks of recession.
ben doesn't have a shadow....that's why van hosington is trashing him....he knows the undead when he sees them............
Totally agree and learn't a bit whilst at it.
Forget "The Great Recession"...or 'Depression'
Continued and expanded corporatist police state tactics, as demonstrated by the BP GoM debacle,
to deal with domestic crises can only ensure that Barry's legacy will be potentially remembered as
The Great O-pression
The recession ended for the 6 big banks who made $51 billion or whatever it was in an earlier article.
For the other 980 banks and the rest of us, not so much.
Of course, one way to avoid the double dip is to simply point out that the first dip never ended.
There's no avoiding it. All indicators point to zero. 2012 election will deliver the truth and blame the mess on the predecessor. We will then be told "we are all in it together" and "hang in there" or "don't give up" and all that other desperate teamwork'esk bullshit.
Yup. "L" shaped collapse. Down and out.
I, President Obama, will crush your cracker businesses, I will seize your cracker income, and I will give your cracker money to my historically oppressed union and minority allies. I will redistribute your income to those less fortunate who sit home and get fat and watch television.
Instant Karma
If he went on TV and just said, " Everything is fucked. So fucked we need to conquer other countries for their rescources so we citizens of the United States of America shall maintain our present standard of living". The majority would cheer and his approval ratings would immediately surpass W after 911.
Didn't we already try that. Iraq has the 4th largest oil reserves in the world, much of which are undeveloped. The US conquered Iraq, paid in blood, and, instead of seizing the oil for the US, auctioned it off to the highest bidder. We're too stupid to survive.
Whose junk-in the "titties"? Stop the madness and just enjoy.
As far as Michele Obama calling the Tea Party Racists, well there you have the result of people who have been using the "everybody is a racist but me" line there whole life. If she looked in the mirror she would discover the ugly truth...she is the new racists.
Gimp
I think Lionel pointed that out to Mike on an episode of All in the Family.
But hey you are probably young.
He is completely high if he has convinced himself that what we are doing is not increasing the money supply. He thinks he sees deflation because the new money is being hoarded. He only wants to take a narrow view of money supply based on his choice of "M" types and some delusion as to what the optimal level of money is. Well, you can't know if we are at the optimal level if the Fed is interfering and paying special interest rates to banks to keep their money locked away and choke the money out of the hands of the public. It is very convienient to use M2 if you want to ignore every bailout dollar we have created because it is at the Fed.
The money will hit the system one way or the other. Once it is created, it never gets uncreated. Inflation is the creation of money and only the creation of money. The public can be destitute and we can still have massive inflation.
The real money won't let it happen.
The usual debate about what's in the cards, deflation or (hyper) inflation, assumes the market or the Federal Reserve/Treasury will be the definitive factor. The more fruitful analysis starts with asking what benefits the Financial Power Elites who influence the process of governance.
http://www.oftwominds.com/blog.html
Interesting point of view. But our monetary system will collapse with no inflation. I think the money has been created and the need to dishorde it, or balance out stimulus given to the banks with stimulus given to the public will be overwhelming.
Tne money will hit the "system" when the chips fall into to place. To know whether or not M3 is expanding or contracting, one needs the #'s, which are no longer reported after 2006. How much is deposited at the Fed (hoarded), how much is purchasing Treasuries, how much is vaporized to balance the TBTF derivative balance sheets, is anyone's guess at this point. You, me, and evryone else here at ZH is just along for the ride, so make some popcorn and enjoy.
Yes, yes...the tax breaks to the middle class are no good b/c the peasants, I mean middle class, used the money to pay down debt and started saving again. It is much better to give free money to the TBTF banks and watch them use that money to repair their balance sheets.
For the dim: repairing balance sheets = pay down debts and increase savings (reserves). According to PhD's, what's good for the Goose is not necessarily good for the Gander. Here endeth the lesson.
Not that relevant but interesting: http://www.telegraph.co.uk/finance/china-business/7886077/Chinese-rating-agency-strips-Western-nations-of-AAA-status.html
Not that relevant!?!?!
To those of us whose lineage began in the fixed income segment of the capital structure, we'd suggest that just about every single last major financial market problem's foundations were found in the credit markets. Usually they've begun with an inability to roll or secure financing, liquidity, insolvency. And in many cases, brought upon by none other than a mere perception of an unacceptable increase in liquidity risk. To which ratings, however rightfully maligned, play a significant role.
This event has been overlooked by the MSM today, but shall ultimately be referred to as a straw, a timely and significant straw added to what is becoming an unbearable load upon the camel's back. And funny, odd how it coincides with increasing discussions of new world wide clearing currencies (SDR or other) 4 bear raids on the gold market in about as many weeks, the BIS swap, and so forth.
Further, the ratings agency so promulgating such is held to be of an independent nature, whilst domiciled in ...China. Verily, the landlord of American sovereign finance, the decision published not only in but publicly announced at the official organ of the Chinese government.
Wake up the fuck up folks! This is Not Small Potatoes.
The Congress and Administration just could not contain their public populist derision toward Chinese central bank currency policy. Well, its a comin' home to roost. Throughout the last year, the Chinese had carefully and politely stated that the Yuan would be revalued, attended to at the proper time as befitting of their own policies whilst Clearly Warning the US of Untenable Increases in US Sovereign Debt Levels, of the Importance of Stability of Purchasing Power.
Apparently, nobody listened. Apparently, payback is gonna be a bitch. The largest holder of the US debt has downgraded the same. And no, the US is at greater risk in this showdown, possibly withering financial fire, than China. The argument of they'd not do that as it'd hurt their own position is bogus, empty, crossed fingers, whistling past the grave yard. They hold all the cards. We rent America from them.
This is economic warfare; they got the big guns and we got Timmy with an empty bazooka.
The Dagong rating agency is not to be trusted. Unlike our US rating agencies, it is not paid by the entities it rates. No conflict of interest, no reliability. Truth is lies.
Sounds like saber-rattling more than anything meaningful. Why not just repudiate that rating agency?
We are out of the Great Recession...
and fully into the 'fake recovery.'
I refer to it as the "recoveryless recovery" :)
You can put lipstick on a pig, until you run out of lipstick, or pig...
GF thanks for the complement. My eldest just graduated from University with a second an almost graduate so not that young anymore my friend.
BTW - Had to look up the Atlas Shrugged reference in another comment you made went to wiki: http://en.wikipedia.org/wiki/Atlas_Shrugged
Remember the book in college, thumbed it, now I will take the time to read it.
Perhaps ZH should do a piece on the collapse of US Military discretionary spending. This would be a forward looking piece on the parallels to the USSR military complex collapse faced with limited or no funding. What would be the impact to US large defense subcontractors and would we see a complete complexity breakdown due to the huge price for parts and maintenance.
Will we uncover that over complexity in weapons is unsustainable?
It is clear we will be forced to choose guns or butter.
What makes the dynamics so interesting is the possibility of massive cuts. The industry would be unable to cope with the massive reversals.
Will we downsize intelligently, or pick apart porgrams here and there which lead to part shortages which essentially remove the equipment from service. The USSR version of an uncontrolled collapse.
Mark Beck
While there can be no doubt we are milked dry by defense contractors, the desire to be the technological premiere country for military is what is driving it.
Unless we can change that attitude, then it will be as you said, guns or butter.
A point will be reached where congress will just ask "how much".
I doubt if your average Congressman understands technology, or computers, or High Frequency Trading. We had one last year think that Pacific Islands actually floated in the ocean, so if you loaded up one end, it would tip over.
A lot of congressman do not even read the bills they are passing.
If techonolgy was so important, why did congress let our consumer electronic market be dominated in Japan, when the key patents were held by American companies.
Also, if you consider software to be technology, why are Microsofts copyrights openly violated in China.
Mark Beck
Treasuries are rocketing back up as we speak.
Troubles in China and India causing oil and copper to implode.
Has The Recession Really Ended?Why...everything is just fucking terrific...Fuck your rhetorical...
Has the "recession" ended? Are 40MM people on food stamps?
Let's get down to brass tacks (how much for the monkey?): we are horse-fucked. I've done everything right, ducked all the market bubbles, had no babies, et cetera, et cetera, and I can't tell you how I'm gonna eat a year from now.
http://en.wikipedia.org/wiki/Modest_proposal
Will you deflationistas please just give it up already. There may be 'deflation' for you, 'cuz you lost your job thanks to your plutocracy sending all the work overseas, but every single mofo'ing-thing else is saying 'inflation', in ALL CAPS. Stop buying the magician's hype, please. 'Looming Deflation' scenarios (aka. OH NOES we don't wanna be Turning Japanese!) are a shakedown designed to get you all deeply back into the utterly worthless USD while the banks divest of their USD holdings like they're going out of style (they are). This is called "Maintaining the Illusion of Value" while they unload the paper that they get for free (or less) and send any actual costs of printing it right on down to you. Telling is how Au seems to move with the USD a lot more often these days; disregarding egregious naked paper takedowns, of course. Meanwhile the heat on that pot all you frogs are sitting in is being quietly turned up because hard assets actually have intrinsic value, and fewer and fewer outside of your country (where they are indeed getting scarcer: see above, rinse and repeat) are willing to part with them for paper that is worth less and less at an ever increasing rate.
On the off chance you weren't aware M3 isn't being reported anymore so anyone telling you it's shrinking like your weenie in the North Sea is doing nothing but reading signs in the entrails. Best check their sponsors with a touch more diligence.
Sure, the 'dollah menu' is still around, yes, but the burgers are of a size useful only to the youngsters in "Honey, I shrunk the kids"! But check the prices on decent food. In reality the cost of everything is going up up and away. Except, of course, for all the crap that you don't really need, and guess which stuff is used exclusively to calculate 'core' CPI.
TMS (True Money Supply) is going parabolic. And the banks are holding on to that just long enough for you to cry "Uncle, Sam" and give away anything of value you might have left for the imaginary value they've hocus pocus'd on the USD, while they steal limitless fiat via the Gov't Bond carry trade they got goin'. Of course credit is contracting, they've gotta perpetuate the delusion that bits of paper have intrinsic value, 'cuz if you take off the blinders and see through the facade too soon then THEY're the ones left holding tonnes of, well, bits of paper (or just 'bits' if you're all techie and shit).
I know it may be a bit tough to get your noodle up it, but you really need to comprehend how there is inflation and deflation occurring simultaneously. Deflation for you, but not for those who control those who control those who control the printing presses and press the ones and zeroes buttons. A lot of this paper is going overseas on hard assets in case the plutocracy needs to make a quick getaway from your absolutely justifiable ire. After all: they still really want somewhere nice to stay with a big yard for the dogs where they can build a big stone wall with some nice garlands of barbed wire lining the top of it; oh and some cheap labour to guard the ring road surrounding their 'factory'. Once the fiat gets out of your country, and this is a downside to having the world's reserve currency (don't worry you won't for much longer), it immediately encounters a vicious game of USD 'Hot Potato', with a rapidly increasing supply of potatoes. But not at home, oh no. Just ask the unemployed.
For some charts and shit, go here:
http://jessescrossroadscafe.blogspot.com/2010/07/austrian-economics-true-money-supply.html
And please be careful when reading, be prepared to be shocked; don't bogart the joint.
Regards
Deflation is the trend. Attempts at inflation are Ben's counterpunch, and they are not working. Please read "Deflation: making sure 'it' doesn't happen here".
Inflation and deflation at the same time? I am oh so tired of hearing this line.
<washes hands>
I wish someone would tell that to the real estate market. Here on the east coast United States, I still see pie-in-the-sky, some-rich-person-will-come-along-and-buy-it prices.
I see no inflation in my world - food, gas, etc. prices steady or dropping. Just saying. I think it's deflation.
What color is the sky in your world?
Electricity is up on a kwh basis. Food is up almost 20%. Gasoline is steadily climbing back to $3. Clothing's up too and it's not even taxed here. Toys are getting smaller even after 20% price hikes in 2008-2009. Literally nothing except maybe DVDs has gotten any cheaper since the initial firesales at the tail end of 2008 (when Circuit City, KayBee, etc were going under).
Follow the advise of your elected officials: Shop!
I'll never forget that advise as it was spoken by Rudy Giuliani, former Mayor of NYC right after the Twin Towers crashed. I knew then that we were entering never-never land. Shop!
Does canned goods, ammo and water purification count? I already had enough handbags and sunglasses to last a couple recessions anyway.
Yes, and you get "double points" for the ammo.
"And I encourage you all to go shopping more." - George W. Bush
http://www.youtube.com/watch?v=lfs6wpjlu28
Whoops double tap...
It's actually quite simple :
FACT: if one looks at historical data over the past 100 years, one can see very clearly that there has NEVER been a sustained recovery without an increase in private debt / GDP.
That's the way this "system" (financial capitalism) works : for GDP to grow (and unemployement to decrease or remain sufficiently low), private demand for credit needs to grow. It isn't that complicated.
In a normal cyclical recession such as all those we've known since the end of WWII, private demand for credit contracts for a while but because the level of private debt / GDP is still well below a certain maximum leverage threshold (which varies depending on the degree of development of the economy between 200% and 300% of GDP), private demand for credit starts pickng up again and there is a sustained recovery.
In a depression such as the 1930s or the 2010s, the level of private debt / GDP is above that maximum threshold and when there is a cyclical downturn the debt burden is so huge that it causes the financial system to become instable. Minsky understood this. In that case, the system is litterally "broken", in desequilibrium, and there is NO WAY private demand for credit can start picking up again, ending the depression, before all the excess private debts have been purged from the system.
Today, on a worldwide level, the excess debts are at least $60 trillion. And this excess is in ALL countries of the OECD. So on a worldwide level, a much larger problem than what caused the great depression. You can forget about the BRICs helping to solve the problem, their level of private demand is about twenty times smaller than the level of excess debt. So the level of worldwide aggregate demand, hampered by a huge and absolutely necessary deleveraging of the private sector, is going to fall off a cliff, no matter what governments do, or chinese households spend. Last time, it took 15 years and a World War that destroyed huge parts of the world to purge the system from the excess debt so that private demand for credit could start growing again, generating a sustained recovery.
It doesn't look like it's going to take less time and pain with this depression knowing that the problem that causes this depression is not only bigger, but that we are also confronted with the problem of availability of cheap oil that we didn't have 80 years ago.
This talk of double dip recession is beyond ridiculous. We are in a depression, and we are going to stay like this for a very long time, no matter what our elites say, think or try to do.
Oh, and neoclassical economics is completely bankrupt, once the system becomes instable it ends up spouting pure nonsense. The only predictive model that works when the system becomes instable is that of Minsky. And the number of economists advising central banks and governments that know and understand that model is not much greater than zero. So our elites are completely blind, which only helps to make the situation worse.
"In that case, the system is literally "broken", in desequilibrium, and there is NO WAY private demand for credit can start picking up again, ending the depression, before all the excess private debts have been purged from the system."
And it would seem the owners of that debt, the lenders, have decided that debt will be restructured, or destroyed, only over their cold, lifeless bodies. Worse, the consequences of necessary debt destruction extend beyond the parties to the credit arrangement thanks to the unregulated insurance known as credit default swaps. I say it is time to hasten that outcome, and assist them in their goal.
Interesting article. I would argue he needs to clarify the issue of "printing money," since the means by which the Fed acquired all of those trash assets was most certainly the creation of new FRNS which then were traded to the the counterparties unloading the junk. I guess the theory is the money was then "trapped" and therefore did not meet the definition of money he discusses. But I am missing the "why?" on that.
The lenders are all the people who've got money deposited in a bank, all the "savers". Go and tell them that they've got to make a $60 trillion present to the debtors and substract that from their savings. Oh and FDIC? That covers less than a tenth of a cent on a dollar deposited. So they'd have nothing left, all of them.
Debt restructuring of ths magnitude requires a Government with muscle. I mean lots of police and soldiers and a government that controls and dictates everything. Not only we don't have that, but also, and for good reasons, we don't want to have that. So we keep the illusion going.
You can't be serious.
With fractional reserve banking, deposits of savers only account for, well, a fraction of the money lent to debtors.
I agree that we don't want a police state, but don't act like this imaginary money can't be waved away without one.
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