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Balestra Capital: "If Government Programs Were Cancelled, The Economy Would Collapse Back Into Severe Recession"

Tyler Durden's picture




 

While hardly an opinion that would be questioned around these parts, it is still good to see that even some of the smart money shares our views about the Schrodinger Economy ('alive' and 'dead' at the same time, depending if the BLS or anyone else is observing it) and we are not totally insane vis-a-vis one-time, non recurring government bailouts, which just incidentally have become perpetual and endless: "The Federal government has manfully stepped up to fill the gap left by consumers who have been forced to retrench and who are trying to repair their finances by paying down debt and increasing their savings.  So the next question has to be:  Is this recovery self-sustaining or is the economy still on life support, held together by periodic massive liquidity injections and ultra low interest rates, and accompanied by a dangerous, if not reckless, expansion of government debt?  We think that if government programs were canceled, the economy would collapse back into severe recession." And here Balestra's Chris Gorgone explains quite astutely why anyone betting on a decoupling or perpetual USD reserve status may want to reconsider: "the U.S. is no longer in complete control of its own destiny.  We exist now in a world of increasing correlation in the arenas of economics, finance, trade, politics, etc.  What happens in Europe, China, the Middle East, etc. will have major impacts on American economic, political, and social outcomes.  The world is changing  rapidly.  The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II." Alas, this too is spot on.

More:

From its October 2011 low of 1075 to its high point at the end of October, the S&P 500 stock index has risen 28%, buoyed by improving economic data in employment and manufacturing along with historically low interest rates.  The obvious question:  Is the strong stock market a sign of a strengthening and enduring economic recovery?  Economic data has been improving  for several months, including employment, manufacturing, and consumption reports, abetted by historically low interest rates. 

 

The Federal government has manfully stepped up to fill the gap left by consumers who have been forced to retrench and who are trying to repair their finances by paying down debt and increasing their savings.  So the next question has to be:  Is this recovery self-sustaining or is the economy still on life support, held together by periodic massive liquidity injections and ultra low interest rates, and accompanied by a dangerous, if not reckless, expansion of government debt? We think that if government programs were canceled, the economy would collapse back into severe recession.  With the continuation of these programs the U.S. can probably maintain a reasonably steady state, which could allow consumers to repair their finances over a period of several years and allow a gradually reducing level of government support.  However, the U.S. is no longer in complete control of its own destiny. 

 

We exist now in a world of increasing correlation in the arenas of economics, finance, trade, politics, etc.  What happens in Europe, China, the Middle East, etc. will have major impacts on American economic, political, and social outcomes.  The world is changing  rapidly.  The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II.  The LTRO was successful in delaying a serious breakdown in the European banking system.  However, it has not solved the problems.  The ECB has been accepting dubious, if not worthless, collateral against its loans to banks, which is a roundabout way of printing money.  Japan has finally embarked on a serious effort to stimulate inflation, with moderate success over the past few weeks.  A cynic might say that these are just two more steps in the currency debasement race to the bottom.

As for where Balesta is invested:

We made some gains on our long-term options on the yen in February, and additional gains during first week of March.  There were also modest losses in equities derivatives.  The portfolio is modestly short overall, but long gold, as usual, mainly to protect against continuing debasement of fiat currencies.  We are also short via options (mostly puts) the yen, euro, and Australian dollar against the U.S. dollar. Equities holdings are balanced, with long positions focused on income producers such as utilities and mortgage REITs.

 

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Tue, 03/13/2012 - 06:51 | 2249778 Calmyourself
Calmyourself's picture

Exactly, in other news sky is blue, yada,yada..

Tue, 03/13/2012 - 10:50 | 2250335 Chump
Chump's picture

Because it's better to wind them down now instead of their destruction being forced by the inability to borrow and spend at such profligate levels.  Your logic would dictate that the government could simply borrow/print tens of thousands of dollars just to hand out to every American.  We'll all be rich, and our 70% consumer spending driven economy will rocket to the moon.  But possibly, possibly, even you can see the problem with that logic.

Mon, 03/12/2012 - 20:59 | 2249144 Cheesy Bastard
Cheesy Bastard's picture

The Federal government has manfully stepped up to fill the gap left by consumers...

http://www.urbandictionary.com/define.php?term=manfully

Manfully: An adverb meaning 'cock-first'

Mon, 03/12/2012 - 22:40 | 2249401 Conrad Murray
Conrad Murray's picture

Ben Shalom sings this every morning - Hoy platique con mi gallo

Mon, 03/12/2012 - 22:42 | 2249404 lincolnsteffens
lincolnsteffens's picture

Cock and bull first. There, fixed it for you

Mon, 03/12/2012 - 21:00 | 2249149 Renfield
Renfield's picture

Most diplomatic description of our disarray that I've seen yet.

More plainly: the whole western economy has shifted from capitalism to central government planning. Therefore we now depend on continued central government control.

Does anyone think we're doing better now?

I think they're wise to be short EUR, JPY, and AUD vs. USD, anyway. And of course to be long gold, although this is probably the most hostile investment one can make in an economy that relies on a powerful central government. One would almost think they don't expect it to last.

Mon, 03/12/2012 - 21:01 | 2249154 Yen Cross
Yen Cross's picture

 You mean " Move Forward" into a deeper Recession!

Mon, 03/12/2012 - 22:53 | 2249431 Conrad Murray
Conrad Murray's picture

Move Forward, (msnbs)Lean Forward, Leap Forward...commies never change their tune.

Mon, 03/12/2012 - 21:04 | 2249161 non_anon
non_anon's picture

just like in Oct 2008, the end of the world, these fuckers play us like?

Mon, 03/12/2012 - 21:07 | 2249162 Atomizer
Atomizer's picture

Bloated Government workers will lose their Blackberry's funded by the private sector.  We have already heard all of these idol threats presented in 2007-2008 parasite programs to jump start the economy thru bridge to nowhere loans & stimulus incentive waste.

 

Good luck peddling your crisis mode this time around.

Mon, 03/12/2012 - 21:08 | 2249180 Seize Mars
Seize Mars's picture

I think if government spending were stopped, we would see a huge breath of prosperity. All that malinvested capital would be freed to pursue profitable plans. It works. Let's give it a try. Freedom!

 

Mon, 03/12/2012 - 21:22 | 2249211 dwdollar
dwdollar's picture

Slightly more than half of what the government spends is freshly printed money. That money wouldn't even be in the economy if it wasn't for the government.

Sometimes it's best not to invest in anything. Something the Keynesians fail to understand.

Mon, 03/12/2012 - 21:41 | 2249271 Lednbrass
Lednbrass's picture

Agreed, but the pain would be sharp and this society is too far gone to handle it.  If you want to make yoruself sick sometime, look up the GDP numbers since 1980 and factor out deficit spending and inflation- we have had real growth for only a couple of years in the last three decades.  The rest was been fueled by spending what we didnt have at the cost of the future.

Mon, 03/12/2012 - 22:53 | 2249429 r101958
r101958's picture

The pain has to be 'handled' some time. Better now than later when it will be even worse.

Mon, 03/12/2012 - 23:02 | 2249460 Lednbrass
Lednbrass's picture

Yep, but this society doesnt have the guts for such things anymore. I suspect it will go as is for a time yet- and then one day it just wont and the pitiless iron hand of Darwin will smash alot of people into pink slime.

Mon, 03/12/2012 - 21:51 | 2249300 TrulyBelieving
TrulyBelieving's picture

Yes,once a free market catches its breath after being smothered for so long it will take off. But that ain't gonna happen. Central planning is designed for another purpose, quite obvious to some, to steal. It's that plain and simple and if it were not so, then a free market would be allowed to function. But a free market doesn't net the results the central planners desire, now does it? 

Tue, 03/13/2012 - 00:59 | 2249625 GMadScientist
GMadScientist's picture

Brilliant!

Except for the part about assuming the 'capital' (i.e. debt-based growth) will still be available once the people who used to work at those government jobs no longer spend what they are no longer earning. You might have an argument with respect to misallocation of input resources, but there's certainly no shortage of available labor (in case your theory is that the government is robbing industry of the best minds or something).

And then you'd have to explain away the many obvious inefficiencies and externalities of raw capitalism. Won't that be fun?

If government spending were stopped immediately, you'd see an easy-to-invade nation with hundreds of thousands of bloating corpses on their hands, plane wreckage failling from the sky, and farmers burning product and pouring it into ditches. Your 'goober-free Nirvana' is a pipe dream, but if squalor is your goal then that's the shortest route by far.

Go ahead...tell us a bedtime story about trickle-down, Bonzo.

Tell me how the people (who can't possibly contemplate being told to put a sweater on) are gonna be so tough.

 

Mon, 03/12/2012 - 21:09 | 2249182 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

...it's the ultimate circle jerk. Consumers out of picture? Govt takes up slack. But how to pay? Ah issue debt and monetise via banana ben. But prices rise so consumer more squeezed out. Solution: Gov't steps in deeper. But how to pay? Ah issue debt....yada, yada, yada.  As I said, the ne plus ultra of circle jerks. Currency debasement bitchez!!

Mon, 03/12/2012 - 21:09 | 2249183 e-man
e-man's picture

Nothing to worry about, I'm sure everything will be fine.  I saw some kids playing with some chunks of ice on the boat deck of the economy.

Mon, 03/12/2012 - 21:14 | 2249195 icanhasbailout
icanhasbailout's picture

By the conditions on the ground, we are already well into a big-D Depression. If the indicators don't indicate that, what good are they?

Mon, 03/12/2012 - 21:16 | 2249205 Moneyswirth
Moneyswirth's picture

We learn nothing.  We learn nothing.  WE LEARN NOTHING.

Mon, 03/12/2012 - 21:19 | 2249212 bugs_
bugs_'s picture

you can't say that enough

Mon, 03/12/2012 - 21:21 | 2249222 Yen Cross
Yen Cross's picture

 It's not how you ask. It's what you ask? Silence is GOLDEN!

Mon, 03/12/2012 - 21:52 | 2249307 A Nanny Moose
A Nanny Moose's picture

Duct tape is silver.

Mon, 03/12/2012 - 21:22 | 2249225 Moneyswirth
Moneyswirth's picture

We learn noth.....ah, screw it.  We're so fucked.

Mon, 03/12/2012 - 21:24 | 2249229 max2205
max2205's picture

It hard to guess

Mon, 03/12/2012 - 21:26 | 2249234 kito
kito's picture

Over 50 percent of american households now get govt assistance...and this author thinks cutting programs puts the u.s. In a deep recession?? Thats optimistic.........

Mon, 03/12/2012 - 21:29 | 2249242 Moneyswirth
Moneyswirth's picture

Thought the same thing.  We could be in a deep recession right now.  But CNBC keeps assuring me otherwise....

Mon, 03/12/2012 - 21:31 | 2249247 Dr. Engali
Dr. Engali's picture

That's completely sustainable too.

Mon, 03/12/2012 - 21:32 | 2249250 dwdollar
dwdollar's picture

And half the deficit is with printed money...

Mon, 03/12/2012 - 21:32 | 2249249 Yen Cross
Yen Cross's picture

 On a lighter note. " Balestra capital" Non recurring bailouts, financial debt pay-downs, ( Schrodinger economy)  Increasing global correlations.

 WWll  and complete control.  : Foot Notes; ?

Mon, 03/12/2012 - 21:36 | 2249260 destroyer of mo...
destroyer of moonbats's picture

we are sooo screwed.

Mon, 03/12/2012 - 21:39 | 2249268 Moneyswirth
Moneyswirth's picture

Someone should reach out to LeBron James to solve our fiscal woes.  He just might be in the 1%:

Is This LeBron James’ Six Figure Bar Tab?

$9 Bud Lights?  Nothing but squirrel piss

Mon, 03/12/2012 - 21:44 | 2249281 nmewn
nmewn's picture

"The Federal government has manfully stepped up to fill the gap left by consumers who have been forced to retrench and who are trying to repair their finances by paying down debt and increasing their savings."

This is either going to turn into another Citizens United "corporations" ain't people hoohah or it's just too painful to contemplate ;-)

Mon, 03/12/2012 - 21:51 | 2249303 bobert
bobert's picture

NM:

Coincidence to see you posting on the same topic?

Mon, 03/12/2012 - 21:49 | 2249295 bobert
bobert's picture

All US departments (including the Pentegon) accept Medicare and Social Security should be told to reduce their expenditures by 5% per year until further notice. The two departmenrts above should be told to hold their expenditures at current levels with no increase until further notice. No exceptions to the rule!

Leave taxes as they are.

Keep this policy in place until government shrinks enough to resolve the problem we are faced with currently.

Leadership is what is needed!

Mon, 03/12/2012 - 23:44 | 2249539 Lednbrass
Lednbrass's picture

Are you saying 5% from current levels or 5% every year reduced  from the previous year totals?

In any case it isnt enough, SS and Medicare are roughly 1.7 or 1.8 Trillion a year off the top of my head which leaves about the same amount to be reduced. Lets say we do as you advocate and reduce by 5% this year- we have just reduced expenditure by 85 or 90 billion. With a 1.5 Trillion plus annual deficit (and I bet FY 2012 will be higher) thats about 20 years to a balanced budget.  Maybe 15 years if its a 5% reduction from previous spending every year.  Personally I think we will melt down long before that, but Im a pessimist on this subject.

SS and Medicare need to be cut like everything else, and by much larger margins or we need to resign ourselves to the fact that the generation coming up now has had its entire future stolen to pay for the comforts and illusions (or even delusions) of those ahead of them.

Tue, 03/13/2012 - 02:43 | 2249697 mkkby
mkkby's picture

That doesn't work because each 5% cut reduces GDP and tax revenues by the same amount.  As you cut, you need to cut even more to make up for the tax losses.  That's how Greece was destroyed.  And why Spain, Italy... and on and on until it's our turn.

Mon, 03/12/2012 - 21:53 | 2249296 adr
adr's picture

Out of the $14-$15 trillion GDP how much is actual true produced goods? $6 trillion? Maybe less. The majority is generated through bloated overpriced services. I don't understand how healthcare services can add to GDP when the money needed to pay for it must be removed from the economy first.

We have reached trillions per year fed into the economy through debt that winds up being leveraged 100:1 to prop up the world economy. How much of the world economy is truly real???

If there is only something like $9 trillion worth of gold out there ever mined at $1900 an ounce, how do you prop up a $15 trillion economy on that, let alone the world economy?

The only answer is that trillions of dollars in supposed wealth would have to disappear overnight. 99% of that being held by the richest people in the world. Either that or gold has to go to $25k an ounce or more. Good luck with inflation then.

What it really looks like is hyper-deflation would set in and the world would return to a system of true value. No more hypothecation and 1000:1 leverage artificially boosting the value or worthless holdings. Consumption becoming based on earned wages once again, ghast. The complete destruction of the financialization system. HOW WOULD WE EVER GET BY?

All I know is everything I vote against keeps getting passed. My local school levy passed again raising my taxes $25 a month. The backers of the levy kept saying, what's $25 a month for your kids. I actually went to a meeting and said, "It isn't just $25 a month, it is $25 a month for each of the 5 levies passed over the past 7 years. That is $125 a month and in a few years it will be $200 a month at the rate we are going. Why do we need to keep passing these levies and why is it that each time we pass one we still can't hire more teachers? I'll tell you why and you on the board know why. In the numbers you put out 34% of the levy will go directly to pay for retirement benefits. In the next ten years another 30% of the school's teachers will be retiring as the average teacher age is 48. Soon more than half of the districts budget will be going to pay for retirement benefits. Paying more than half the budget to people who are no longer working. Same with the police department and fire department. The pensions are bankrupting our town and the residents can not afford to subsidize the lifestyles of the retirees. Our children are paying a heavy price as they are going to schools that are no longer adequate because a retiring teacher believes they are entitled to $60k a year plus full medical insurance every year until the day they die without doing any work. I'm sorry but I don't have that to look forward to and that extra money could do a lot of good for my family if that 34% of the total levy would go back to me. Every teacher that retires is paid on average twice what any new young teacher is paid. Pretty sad that the only real chance for a young teacher to be hired is if a pensioner dies. That is a problem we need to fix."

Mon, 03/12/2012 - 21:55 | 2249315 surf0766
surf0766's picture

Fire the teachers. Hire non-union like the rest of the 93% who work.

Mon, 03/12/2012 - 22:49 | 2249424 monopoly
monopoly's picture

adr, that was right on. That is the crux of what is going on all around the planet. There is not a country in the Western world that can afford what was promised to those that "retire". It is not just Greece, but all of Europe and we are the main course. NY Times just this weekend had an article on the front page telling us that many cities and counties in NY cannot meet their budgets and obligations. Cut backs, furloughs, reductions. They all advise that their pension requirements are getting bigger and harder to meet.

Yet NOT ONE of these council men and women move to the front and advise that we cannot afford these pensions, benefits and perks going forward. They have to pay one till death after they retire and then have to almost double that to hire one to take that place if the job is still there. We have the same problem with our moronic Congress. We cannot afford them. Until all of us get together and advise "sorry, we screwed up and cannot give you what we promised" and move to reality, this will go on and on. IT IS OVER> And they still do not get it.

Tue, 03/13/2012 - 01:01 | 2249633 FreeNewEnergy
FreeNewEnergy's picture

I live in upstate NY and the property taxes are murder. Here's the NY Times article you mentioned:

http://www.nytimes.com/2012/03/11/nyregion/deficits-push-municipalities-...

While the pension obligations are onerous, that's not the only problem, obviously. This situation will not be easily solved, nation-wide. Voting for Ron Paul might be a good idea, but by the time he actually takes office (Jan. 2013), the US may already be dead (it may be deal already).

The only workable solution I see now is a complete and total work stoppage by the PRIVATE sector, alongside an abject refusal to collect or pay any and all taxes.

While I know that won't fly well with TPTB, I am fully cognizant that this country, and, pretty much the rest of the world, cannot maintain this facade any longer.

It's time to hit the reset button with both hands and hold it down until the pillars of power crumble into dust.

Mon, 03/12/2012 - 23:48 | 2249310 zebrasquid
zebrasquid's picture


Mon, 03/12/2012 - 23:50 | 2249311 zebrasquid
zebrasquid's picture

Schrodinger's cat analogy was not apt.  The observers in that experiment are non-biased.  The subject experiment is rigged with biased, corrupt 'observers'.

Mon, 03/12/2012 - 21:55 | 2249314 Dre4dwolf
Dre4dwolf's picture

Lol only the rich people and stock holders would feel the hit, 80% of America wouldn't even give a shit.

Mon, 03/12/2012 - 21:57 | 2249319 surf0766
surf0766's picture

You may be on to something. I can see people actually feeling a weight lifted. A clean fresh start as someone posted previously.

Mon, 03/12/2012 - 21:56 | 2249316 jomama
jomama's picture

which in essence overstates the obvious?

on the plus side for TPTB, obummer's already got a mandate... more than half of americans are on some government handout.  add in everyone with a bloated bureaucracy gov't job, and there's no wonder RP never had a snowball's chance in a supernova.

Mon, 03/12/2012 - 22:08 | 2249342 Bunga Bunga
Bunga Bunga's picture

In capitalism socialism is not a choice, but a necessity.

Mon, 03/12/2012 - 22:31 | 2249379 Yen Cross
Yen Cross's picture

 I enjoy your posts Bunga.  Capitalism/Socialism ?   I guess we could ask Putin? The Kremlin is walled in though.

  Perhaps CNBS could offer some insight?

Mon, 03/12/2012 - 22:30 | 2249343 Cabreado
Cabreado's picture

"The world is changing  rapidly.  The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II."

Yes, "managers-of-money" are justifiably terrified, but...

I would find that to be somewhat insulting to even my marginal intelligence. 

It's not selling vacuum cleaners to little old ladies anymore -- stop the madness, and conjure up some tough love.

Mon, 03/12/2012 - 22:34 | 2249383 Osmium
Osmium's picture

WTF caused the ES ramp this time?

Mon, 03/12/2012 - 22:47 | 2249414 tmftdoyle
tmftdoyle's picture

Duh! There is no solution until the PTB allow the required step-function down in economic activeity to play out: It's the one constant of the last three years. Although I was dumbfounded by the participation rate in the first two years of this charade, what is truly frightening now is that the only parties that haven't gotten the joke and stopped playing are the machines. There really is no natural bid in the market, just pools of capital that go home flat. Lately, they have skewed to the bid side. Occasionally, however, certain variables supportive of selling achieve heavy weights in the majority of these models. No natural bid coupled with another market construct where selling begets selling (yes, i remember portfolio insurance) is a dangerous setup in a deflationary time. Although I believe that the Fed ultimately fails, when the efficacy of Fed policy will determine our economic fate, and those policies are judged by the pricing of public equities, one should hope that the market's structural setup is sound. Ours definately is not. The weaknesses that have been created by alllowing advantaged access to data feeds may well be the catalyst to up-end the Fed's goals. 

Mon, 03/12/2012 - 22:51 | 2249428 Westcoastliberal
Westcoastliberal's picture

Bernie Sanders has it right for the majority of Americans.  Were we to evolve to such a "Socialist Democracy" the living standard would be much better for most Americans.  Not so lucrative for the 1% though.  That's why we are at this spot in history.  What happens from here is up to all of us who are awake and understand what's being done to us.  We are all Icelanders!

Mon, 03/12/2012 - 22:56 | 2249441 gimli
gimli's picture

I think most Americans are now working part time at your nearby Apple store.

Just think what would happen if ....... if ....... if ........ there was some kind of Apple Terror Incident (ATI)

http://cdn.iphoneincanada.ca/wp-content/uploads/2011/05/apple-store-plan...

Mon, 03/12/2012 - 22:58 | 2249451 ISEEIT
ISEEIT's picture

'Life' is nearing a point of failing. Humanity has gotten ahead of herself. Pandora's box comes to mind.

Part's are missing. This venture lacks the appropriate 'skeletal structure',

That or I'm just to old to get it.

To be consistent and genuine, I do need to allow myself exposure to that possibility.

What if I'm wrong?

Is that really such an outrageous question?

Seems like a painfully worthwhile 'thing' to consider.

Mon, 03/12/2012 - 23:12 | 2249482 Cabreado
Cabreado's picture

ISEEIT,

Finally, again, a critical mass of pathological self-absorption in places of power, control, influence.

You are not wrong...  do not doubt yourself.

Tue, 03/13/2012 - 01:39 | 2249657 dwdollar
dwdollar's picture

I agree. I think it's bigger than economics. You think something is missing? A cohesive moral code, which encompasses all of the scientific possibilities we have today, comes to mind. That's just one.

Mon, 03/12/2012 - 23:22 | 2249504 Yen Cross
Yen Cross's picture

I'm not trading the Austrailian Dollar any more. I'm FLAT! I took profit and moved on . That trade looks like a shark on shore!

Mon, 03/12/2012 - 23:25 | 2249512 Sun and Moon
Sun and Moon's picture

When the government builds a $300bn bridge-to-nowhere, that gets counted as $300bn in GDP, even though the actual value of the bridge may be nearly zero. So an economy that is being sustained by useless government spending is still a sick economy. The people who are working on these worthless government infrastructure projects might just as well be on unemployment for all the good that their work does anyone.

Mon, 03/12/2012 - 23:27 | 2249515 goldencrumbs
goldencrumbs's picture

Don't give me shit because it's on Bloomberg, but.... Couldn't help laughing at the headlines next to each other on the "Most Popular" list: 


 

Mon, 03/12/2012 - 23:32 | 2249523 AndrewCostello
AndrewCostello's picture

Most of the American Economy is running on printed money (government programs).  The company I work for provides medical equipment, and more than 99.9% of all our customers are from Medicare and Medicaid.  The entire industry is based around it.

Boeing, Grumman Northrop and the rest of the Aerospace industry SURVIVE on government grants and subsidized contracts to foreign airlines.   The education industry runs on printed money.   Then there is the communications/technology industry - APPLE and MICROSOFT would go broke OVERNIGHT if it wasn't for all the products they sell on finance, which is paid for by the tax payer.

Seen all those CARS ON BAD CREDIT adverts?  All those bad loans get paid for by the taxpayer - which means money printing, because the American taxpayer is broke.

 

The entire world economy is a fraud.  Do a bit of reading and it quickly becomes evident.

 

If you'd like to be different, and not be a leech, then read this.  Become a better person.

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Mon, 03/12/2012 - 23:55 | 2249551 Monedas
Monedas's picture

Forget all the borrowed money.....we're living on borrowed time !   There will be little emphasis on fixing our debt problem when chaos generalizes  !     The world is going down big time !  Grab your rocks and curl up like a sow bug !   Even a hundred Ron Pauls can't fix this mess !   The only sure thing is that Socialism will not be blamed....bank on it !    Hahahahahahahahaha !  Syria is just the begining  !   Monedas  2012    Stock up on medical supplies for your bunker ! 

Tue, 03/13/2012 - 02:21 | 2249685 PeaceLover
PeaceLover's picture

Is one Ron Paul better than the sold out other choices?

 

It not like our votes count.. the whole deal has been rigged for as long as I have been around..

Why Vote..?

  1. Change the world for the better?
  2. Change who is in power?
  3. To have your team win?
  4. To let you feel that paying large amounts of taxes get's you something?
  5. Make you feel good.. if your team wins.

 

If you want to watch something that most Americans don't get watch these easy to understand. videos

Primary explained

How the Electoral College Works

and

The Trouble with the Electoral College

 

My favorite
Daylight Saving Time Explained

My message isn't to get folks not to vote. it's more along the line of ZH readers are smarter than most
and we need to come up with something that works for the people not the 193 family's that own the USA.

 

PL

 

Tue, 03/13/2012 - 04:26 | 2249734 Renfield
Renfield's picture

I'm not an American and so I have very little to say about who US voters "should/not" vote for.

But...FWIW...even if Ron Paul DOESN'T win, if enough people voted for him it would challenge the illusion of the 2 main parties that they have a mandate.

Just chiming in with an outsider's two cents.

Tue, 03/13/2012 - 09:00 | 2249930 francis_sawyer
francis_sawyer's picture

Yeah ~ It would probably motivate them to draft & pass legislation that only two "recognized" parties were allowed in the interest of national security...

Tue, 03/13/2012 - 11:35 | 2250515 TheFourthStooge-ing
TheFourthStooge-ing's picture

They pretty much have that already with various state ballot eligibility laws.

 

Mon, 03/12/2012 - 23:51 | 2249553 Dead Canary
Tue, 03/13/2012 - 00:16 | 2249580 cnhedge
cnhedge's picture

currency debasement will go on forever.

 

http://www.jinrongbaike.com/

http://www.cnhedge.com/

Tue, 03/13/2012 - 11:38 | 2250530 TheFourthStooge-ing
TheFourthStooge-ing's picture

Guo Tao's spamming of his crappy sites will go on forever.

 

Tue, 03/13/2012 - 00:19 | 2249584 navy62802
navy62802's picture

The Schrodinger Economy ... haha, I like it!!

Tue, 03/13/2012 - 01:03 | 2249628 G-R-U-N-T
G-R-U-N-T's picture

Cancel the damn programs fer cryn' out loud!!! Let them fend for themselves and perhaps they would come to understand what it means to be FREE rather than being dependent sucking off the tits of the industrious and productive.

Tue, 03/13/2012 - 01:02 | 2249634 Thomas Jefferson
Thomas Jefferson's picture

This is like 2008 all over again.  Sky high gas prices and the polital reality show we call elections.  We all know how that ended in September 2008. 

Tue, 03/13/2012 - 07:31 | 2249796 crawl
crawl's picture

Sadly, it's different with an incumbent president wanting a second term in office and a federal reserve board so eager to help him make that happen.

To get the votes, expect the stock market to continue the escalator ride up to the elections, QE3 in some form or another, greater handout to welfare and food stamp recipients to combat rising prices at the check out, and throw on some bs about a viable energy policy to get the US self reliant.

More central planning ahead. Rally on stocks & commodities.

Tue, 03/13/2012 - 01:22 | 2249645 q99x2
q99x2's picture

Great article. Sad but true and necessary.

Tue, 03/13/2012 - 02:20 | 2249651 cranky-old-geezer
cranky-old-geezer's picture

 

 

I haven't seen such a bullshit article on ZH since ...well... the last GW article I read ...which has been a while.

From its October 2011 low of 1075 to its high point at the end of October, the S&P 500 stock index has risen 28% ...

What?  You're gauging the economy by the S&P?  It rises, so the economy is better?

What BULLSHIT.  Where the fuck have you people been? Under a rock?  Certainly not reading ZH, where day after day we tell people stocks are being inflated by money printing while the economy continues collapsing.

... buoyed by improving economic data in employment and manufacturing along with historically low interest rates. 

WHAT improving economic data?  The bullshit government numbers?

The obvious question:  Is the strong stock market a sign of a strengthening and enduring economic recovery? 

WHY do you even ask this dumbass quesion, you dumbasses? 

Anyone with half a brain knows Bernanke is inflating stocks with printed money while the economy continues sinking.

Economic data has been improving  for several months, including employment, manufacturing, and consumption reports, abetted by historically low interest rates. 

Again I ask, what improving economic data?

The Federal government has manfully stepped up to fill the gap left by consumers ...

MANFULLY stepped up?  

What complete unequivocal BULLSHIT !!!

... who have been forced to retrench and who are trying to repair their finances by paying down debt and increasing their savings. 

Paying down debt?  Increasing savings?

WHO?  Consumers?  

What NONSENSE !!!!

So the next question has to be:  Is this recovery self-sustaining or is the economy still on life support, held together by periodic massive liquidity injections and ultra low interest rates, and accompanied by a dangerous, if not reckless, expansion of government debt?

The answer is OBVIOUS you MORONS.  NO, the economy ISN'T self-sustaining, and YES increasing debt is the only thing keeping it alive, and YES it's building up an enormous debt bubble that's gonna burst some day.

We think that if government programs were canceled, the economy would collapse back into severe recession.

What?  Hey MORONS, the economy NEVER CAME OUT of severe recession.

With the continuation of these programs the U.S. can probably maintain a reasonably steady state, which could allow consumers to repair their finances over a period of several years and allow a gradually reducing level of government support. 

Consumers repair their finances?   How?   When? 

However, the U.S. is no longer in complete control of its own destiny. 

DUH.

Yep, $16 trillion debt sorta makes you a banker slave.

We exist now in a world of increasing correlation in the arenas of economics, finance, trade, politics, etc.  What happens in Europe, China, the Middle East, etc. will have major impacts on American economic, political, and social outcomes.  The world is changing  rapidly.  The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II. 

Translation:  America is fucked.

The LTRO was successful in delaying a serious breakdown in the European banking system.  However, it has not solved the problems.  The ECB has been accepting dubious, if not worthless, collateral against its loans to banks, which is a roundabout way of printing money.  Japan has finally embarked on a serious effort to stimulate inflation, with moderate success over the past few weeks. 

A cynic might say that these are just two more steps in the currency debasement race to the bottom.

Yep, the cynic is right.

... and you Balestra Capital folks are full of shit.

Tue, 03/13/2012 - 04:58 | 2249742 blueridgeviews
blueridgeviews's picture

Right on COG! Tell them kie it is.

Tue, 03/13/2012 - 10:39 | 2250305 Herkimer Jerkimer
Herkimer Jerkimer's picture

Hey COG! Don't hold back! Let it out! Say what you mean!

 

Seriously, I couldn't agree with you, or rant with you, more. 

 

This needs to be said to every politician out there. We are tired of the bullshit. And lines like this:

 

The world is changing  rapidly.  The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II.

 

Well, if the old rules don't apply anymore, what are they being replaced with? Otherwise, I'm sitting on the sidelines, buying gold, guns and food.

 

•J•

V-V


Tue, 03/13/2012 - 01:46 | 2249659 Troy Ounce
Troy Ounce's picture

 

 

The Headline of this post suggests that Keynesianism works.

Tue, 03/13/2012 - 01:55 | 2249661 JLee2027
JLee2027's picture

Shutdown the spending. Get the government out of our lives, then the economy can truly recover.

Tue, 03/13/2012 - 01:56 | 2249662 q99x2
q99x2's picture

CNBC is anouncing Fed may spray more QE on the fire around the time FB goes IPO.

Tue, 03/13/2012 - 03:13 | 2249709 Sandmann
Sandmann's picture

The Western Economy as such was in slowdown in 1999 - almost a Kondratieff Long Wave - but Greenspan boosted it with the Y2K Scam and flooded the Banking System with liquidity. When the Dot.Com Scam collapsed with banks looking stupid the Housing Boom was engineered in Anglo-American Economies to rebuild bank profitability.  9/11 was yet another Turbo Boost whereby US Defence Spending became a huge Injection into the economy simultaneous with Tax Cuts - Guns and Butter.

The fact that Western Economies have overdosed on Steroids for over a decade is the only reason Collapse did not come last century. The Central Banks are now engaged in the Final Fling

Tue, 03/13/2012 - 04:55 | 2249740 blueridgeviews
blueridgeviews's picture

The more money the Fed prints to pay for Gov't Largesse the less that I can buy with the saved dollars in the bank.

Stop the printing, reduce the spending, let's get on with the depression while I still have resources to weather the storm.

 

Tue, 03/13/2012 - 05:22 | 2249747 TooBearish
TooBearish's picture

Gawd tyler like duh...comon this type of 7th grade analysis would not have past muster at zero hedge a year or two ago-give us something besides the perma bear story dood - make this site interesting and thought provoking again

Tue, 03/13/2012 - 09:09 | 2249811 i-dog
i-dog's picture

Given your standard of English, I take it that you are in 7th grade? The site thanks you for your "thought provoking" comment from a millenial. :-/

Tue, 03/13/2012 - 06:16 | 2249765 disabledvet
disabledvet's picture

the biggest federal program out there is the one keeping interest rates "unusually low for unusually long." don't tell me ZH has no problem with the ULTIMATE Government Program! HAHAHAHAHAHA! "You can't fix any problem with any government program unless and until you fix that one." INTEREST RATES MUST RISE!

Tue, 03/13/2012 - 06:52 | 2249779 tradewithdave
tradewithdave's picture

I have been starting and running businesses for thirty years in the U.S. and have hired hundreds of people.  Today I am involved in a business where we deal with the public and I have access to information on a wide cross-section of consumers.  Albeit this particular business is in the general area of the biggest political/military metro, but regardless of the location, the facts are shocking.

In my opinion, I know the type of people who are productive, capable and contribute to growth in the economy.  This particular company sees the average business owner or non-government employee experiencing declining incomes and challenged credit levels.  I would say the average Joe is struggling to make $50k.  If you're a doctor in private practice or a business owner you're either closing your practice due to insurance fees or shrinking your business due to lack of sales.  The doctors make $100,000 and the nurses make $85,000  A huge percentage of former entrepreneurs have bankruptcies on their records and nobody is starting businesses.

On the other hand, we have a line out the door of bureaucrats that either work for the government or for government contractors.  Generally the qualifications of these folks wouldn't cause me to hire them as say a store manager for a convenience mart.  Yet, their salary is $150,000 and more and more are coming in every day with salaries of $225,000+.  It's shocking and its real and you're paying for it.  If it wasn't for the business from these  folks (it's not their fault they got those jobs, it's our fault for tolerating it) the company would shut down in a month.  It's these overpaid folks who "protect" your access to overpaid gas pumps, overpaid mobile technology and protect your so-called property rights by increasing your taxes. 

There are three solutions and two of them won't work in this paradigm.  1)  a political solution (for example Ron Paul), 2)  a social unrest solution (for example Occupy Wall Street) and 3)  gradually withdraw from using the system (i.e. don't vote, cut up your credit card, don't answer surveys, close your bank account, cancel your cable subscription, buy precious metals, plant a garden, talk to your neighbor, drive a hybrid car, support your local currency).  Which one of the three is it?

www.tradewithdave.com

 

Tue, 03/13/2012 - 07:37 | 2249801 Winston Churchill
Winston Churchill's picture

Ceridian index just printed.

-2.2% yoy.

What recovery ?

Tue, 03/13/2012 - 08:42 | 2249821 NuYawkFrankie
NuYawkFrankie's picture

re "If Government Programs Were Cancelled, The Economy Would Collapse Back Into Severe Recession"

Mission Control, Houston to Balestra Capital: Since we're already in a DEPRESSION, can you describe the rock you've been living under. Over.

 

 

Tue, 03/13/2012 - 08:57 | 2249923 Olympia
Olympia's picture

Imperialism and loansharking are perfectly identified ...identified, exactly as imperialism used to be identified with war conflicts. This is why we believe that the consequences of some “mistakes” easily reveal the “motives” of those who planned them.

In reality, there is a permanent “recycling” of the same tactics that lead to the mistake and then to disaster. The method used in the case of Greece is a version of the practice that started from the imperialistic centers to expand all over the world. Simply, in Greece, that is a “terminal”, banking illegal superprofits were produced so that loan sharks “spoil” the Greek public assets, while at the “center” of the planning banking superprofits were created so that loan sharks “spoil” the "Greeces”. Exactly the same illegal things were planned to bring profit to their loan sharking inspirators ...illegal profits.

More info about Global Debt Crisis here:

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

.

Tue, 03/13/2012 - 10:23 | 2250249 earnulf
earnulf's picture

I say let's elect the "small government" republicans and see just how much chuzpah they have to cut government programs before the folks affected by those cuts rebel and storm Capitol Hill.    Republicans say we spend too much (which we do) and tax too much (Which we don't) and we need to cut spending (which we do) and cut taxes (which we don't).        One vote cycle and the Republican, Small Government group is sewage for the waste treatment plant.

Tue, 03/13/2012 - 10:24 | 2250250 earnulf
earnulf's picture

double post

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