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Guest Post: Where’s The Crisis?

Tyler Durden's picture





 

Submitted by Azizonomics

Where’s The Crisis?

A hilarious BusinessWeek piece from 2005 asked:

Is the U.S. in a savings crisis? We think not, though one may be brewing if attitudes toward the budget deficit don’t change in Washington. The fact is that for the past 20 years, America has grown faster than Europe and Japan, two of the world’s highest savers. Year after year, U.S. deficits are financed, bills are paid, and living standards rise. If anything, America is awash in money. So where’s the crisis?

2008 answered that question pretty well, I think. They asked for a crisis, and they got one. This is the same slack-jawed cocaine-addled bozo thinking that led some very serious analysts to declaim that subprime was “contained” in 2007 (of course, we know now that thanks to the cult of endless syphilitic re-hypothecation nothing can be contained), and the same brand of thinking that leads some very serious economists today to claim that the threat of an alien invasion would trigger an economic recovery.

Here’s the dreamland fantasy:

It could only go up and up, right? This time is different, right?

And here’s the crisis:

I know, I know. Correlation does not imply causation. But that’s a pretty brutal correlation: personal savings fall lower and lower and lo and behold we hit a once-in-a-generation crisis. (Of course, if governments keep repeating the policies that led to that “once in a generation crisis”, it will be soon be a twice-, or thrice-in-a-generation crisis).

So what brought us here? What took us from the savings and investment-driven society of the postwar years to the wild-eyed derivatives, hookers and iPads society enchained to a crushing swathe of debt?

Was it moral decline? The decline of the notion that debt is something to be avoided? Was it the softening and fattening of society, bread and circuses, Superbowls and all-you-can-eat Vegas buffets? The aura of American invincibility having won the cold war? The arrogance of modernity, and the undying myth that “this time is different”?

All factors played their part. However one shines out above and beyond any other: the intellectual fallacy that all GDP is equal, and that GDP growth — even debt-driven growth, even growth based on lies, fallacies and errors — paves the road to the future.

 Simply, the social variables emerged from a period in which the dominant intellectual, governmental and media culture condoned and actively encouraged profligacy.

Easy money policies pushed by Greenspan and the lackeys of irresponsibility discouraged savings in favour of consumption. As it became less (in the short term) expensive to borrow and consum, more people did it. It became socially acceptable. As the debt was securitised, and  pumped off into the shadow banking system for endless re-hypothecation and carry trading, the companies issuing the debt stopped giving a damn about creditworthiness. The easy-money mythology led to house price rises that seemed never-ending and built up the social acceptability of  remortgaging your house, and spending the proceeds on boats, cruises and keeping up with the Joneses.

That is where the BusinessWeek article picked up; to an objective observer versed in history, the United States fiscal and financial situation in 2005 seemed perverse and absurd. But GDP kept growing, and the hopium kept flowing, and so this time it was different until it wasn’t.

The thing about GDP, is that it doesn’t really measure wealth creation, or the size of the economy. It measures a derivative of that: money circulation. If Congress passed a law saying that everyone in America had to smoke meth (hey, if you can mandate the purchase of health insurance, why not mandate drug consumption in the name of increasing GDP?) and gamble all their disposable income on horse racing, GDP would almost certainly improve. And that’s growth, right? Except it isn’t. Real growth comes from innovation, productivity, imagination, and hard work. You can attempt to quantify it, but there is no easy catch-all number that will give you a quick and simple insight.

Here’s industrial production:

In 2005, we were where we were five years previous. That looked problematic at the very least.

Here’s the US trade balance:

In 2005 — after a century of being creditor and importer to the world — America was running the greatest trade deficit in history. America was losing its spirit of self-sufficiency, which in my view was one of the keys behind its earlier successes.

So it was easy to find a brewing crisis without even looking at the crisis of savings, and without even looking at the growing bubbles in subprime, in the DJIA, in securitisation, in student debt, and in McMansions. But only if you knew where to look. Only if you knew that the concept of GDP — the prism through which the political and intellectual hoi polloi viewed the economy — didn’t really represent the underlying reality.

The frightening truth is that those who do not learn from history are doomed to repeat it. And the focus of the intellectual and governmental elite since the crisis has been on reflationism — reflating GDP, housing, stocks, corporate earnings, consumer borrowing — with no regard to the concept that the system being reflated is the problem.

 


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Mon, 04/23/2012 - 18:49 | Link to Comment slewie the pi rat
slewie the pi rat's picture

Real growth comes from innovation, productivity, imagination, and hard work. You can attempt to quantify it, but there is no easy catch-all number that will give you a quick and simple insight.

 

agree, but if you can't measure it, you can't manage it

Mon, 04/23/2012 - 18:52 | Link to Comment LowProfile
LowProfile's picture

Impostor cunt.

Mon, 04/23/2012 - 18:57 | Link to Comment LowProfiIe
LowProfiIe's picture

But then Slewie you are correct, it's kind of like how Rosenberg views things, his assesments are correct based on the metrics he uses, and he uses good and sound metrics but he missed the fact that Ben actually did own a helicopter and had a license to use it, so poor old Dave was calling for the equity markets to stall and slip backwards back in spring of 09 and completely missed the run to 1400. To his credit his calls on gold and  the ten year were on the  money.

Mon, 04/23/2012 - 19:14 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

So what brought us here? What took us from the savings and investment-driven society of the postwar years to the wild-eyed derivatives, hookers and iPads society enchained to a crushing swathe of debt?

Crushing swath of debt=making money available to just about anyone at historically low rates of interest. Or in simple english, enabling opportunity galore.

The question should why this opportunity was squandered on plasmas, escalades et al

and not education, healthcare, small business or many other things that provide a return.

 

Mon, 04/23/2012 - 19:27 | Link to Comment john39
john39's picture

the educational debt bubble is massive, plenty of "spending" there...  healthcare is bankrupting people across the country, again, plenty of spending there...  and yet, here we are.

Mon, 04/23/2012 - 19:35 | Link to Comment spiral_eyes
spiral_eyes's picture

Education, bitchez

Mon, 04/23/2012 - 20:04 | Link to Comment sschu
sschu's picture

America spends more per capita on education than just about anyone.  The return on our education dollar is pathetic, especially on K-12.

sschu

Mon, 04/23/2012 - 20:13 | Link to Comment spiral_eyes
spiral_eyes's picture

Click the link before you downvote, or do I have to write /sarc after every sarcastic thing I say?

Mon, 04/23/2012 - 20:26 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

and yet here we are every house has three plasmas, two escalades and inhabitants with no unique or valuable skills. As far as whatever being spent on education, it must not have been spent wisely and as far as healthcare-the number of insureds v uninsureds hardly changed and hardly ever does. 

Venture capital 25yrs ago was 1%/month and half the net.

Venture capital through the easy money period was priced at lint.

They made capital available to the masses at historically low rates and yet somehow this was a scheme by the rich to take advantage of the poor.

the best of this piece of course is the obvious:

of course the leading edge is what creates growth

of course speculators are the ones largely feeding the leading edge

of course the wealthy create jobs since they are the speculators.

anything short of double digit red will be disappointing, afterall anything disturbing the woe is me the world is fucking me beyond belief credo is auto red.

Mon, 04/23/2012 - 20:39 | Link to Comment john39
john39's picture

nothing about the US healthcare system supports productivity.  it is waste, a cost.   it is not designed to promote health, or even be efficient at managing disease.  just another big corporate fail.

as for defending the banking system, perhaps you can explain why the bankers get to charge people interest for something they are given the right to create from thin air?   our economy can begin to be productive again only after the money changer/parasites are hanging from lightpoles.   which can't be far off now. 

Mon, 04/23/2012 - 20:50 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Funny since the US has the highest survival rates for the 12 most common forms of cancer.

Funny since the head of the nationalized Canadian health system came to the US for healthcare.

Funny since the US drug and biotech industries is one of the few things the country actually still does well.

Funny since the leading edge medical equipment industry in the US is one of the few things the country actually still does well.

Funny since the US is amongst world leaders annually in newly adopted medical procedures.

Try again, and this time go with siphoning money from R&D to maintain the status quo which is every nationalized healthcare system leads to a drop off of output from that lesser R&D.

 

Still don't get it-

Country needs: banking system, military, food and fuel to operate,

it doesn't need 15,000 agencies doling out social benefits. People like you think paying the people stems violence whatever and meanwhile the outcome everytime is violence and whatever.

 

They made money available to anyone at ludicrous interest levels.

That equates to never seen before and never seen again type of opportunity.

never getting around that. Can spin until your head falls off, that is what happened.

Some of us have been around for a  while know exactly how difficult procuring capital was at times.

and how ludicrous any other idea's as to what took place happen to be. 

 

Mon, 04/23/2012 - 21:32 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Stay focused everyone.

....and gamble all their disposable income on horse racing...

Now this is an idea that needs more consideration.

Mon, 04/23/2012 - 22:03 | Link to Comment JW n FL
JW n FL's picture

 

 

Owned and Operated!

http://www.youtube.com/watch?feature=player_embedded&v=njSV5LtVmR4

My Life and Your Life on FILM!

Mon, 04/23/2012 - 22:36 | Link to Comment Moon Pie
Moon Pie's picture

Well said, HH.  BTW, I got a line on the Derby winner....wins for fun...

Mon, 04/23/2012 - 22:37 | Link to Comment Moon Pie
Moon Pie's picture

Pari-Mutuel...Bitchez!

 

Mon, 04/23/2012 - 22:42 | Link to Comment francis_sawyer
francis_sawyer's picture

Dullahan bitchez!

Mon, 04/23/2012 - 22:13 | Link to Comment centerline
centerline's picture

Yeah, life is pretty good here at the top.  The food supply is incredible.  Steaks and good wine... tuna flown in from across the world... etc.  Too bad it was all built on unstable ground.  Two steps forward and one step back maybe is our future on a longer timeline - and the next step back is going to suck considering how big the last two steps forward were.  Are you prepared to be homeless?  Hungry?  Unable to provide for your loved ones?

Ever looked at historical population growth charts? If so, wondered if how long that could continue?  And if when the time comes for the process to top and turn that you would  be doing the right thing in the right place to not be part of the "thinning process"?  Or are you banking on the process being slow enough to spare you (maybe not your kids though)?

Party is almost over.  You can tell because the bar is practically giving the drinks away for free.  When it ends though, the hangover is going to be long and painful.

Mon, 04/23/2012 - 21:00 | Link to Comment lasvegaspersona
lasvegaspersona's picture

John39

every kid who breaks his arm but heals to become productive, every patient with rheumatoid arthritis who stays on the job and every child cured of leukemia who lives to adulthood proves your statement incorrect. Medicine is productive. There is waste and if you want to count taking care of the elderly who paid into medicare but now are not working as waste...then there is a bunch of it. Overall though saying it is just a cost is wrong.

Mon, 04/23/2012 - 21:16 | Link to Comment mrpxsytin
mrpxsytin's picture

Perhaps he meant that it was a net cost...

Sure you can spend money on healing people but everyone knows that an investment is only as good as its net return. What net return are you getting on treating people who never go back to work?

Mon, 04/23/2012 - 21:44 | Link to Comment john39
john39's picture

that, and it is a pathetic system designed to generate profits, not health or even efficiency.  there is a huge difference.   Many effective treatments are basically outlawed because they cannot be used to make money.  big pharma is very corrupt.  owned by the same fascists who own the banks and other large corporations, so, what do you expect really?

Mon, 04/23/2012 - 22:07 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Profits create jobs which creates prosperity,

nothing else on the planet does so as efficiently,

and it is debatable whether anything else does at all.

afterall I got some guy telling me daily natural resources don't create prosperity.

It is not big pharma's doing that is costs $1billion to get a drug to market and surely if they owned the fascist government it would not cost $1billion.

No system is perfect and the US system could be significantly improved. 

However you like the WHO health rankings are whacked out of your fucking minds.

So spoiled it is mind boggling.

the poorest idiot lives closer to Bill Gates than ever.
A guy who revolutionized the world, eats at the same restaurants, doctors educated at the same schools, everyone has the same gadgets, teachers all taught by the same people.
class warfare in face of the obvious, where there is no such thing as unttainable luxury anymore where dispersion, inclusion whatever have largely made US life banal.

WTF is it that you want exactly? A large pile of fiat that has been earning 0% interest all the while getting crushed by inflation? 

 

Mon, 04/23/2012 - 22:35 | Link to Comment Calmyourself
Calmyourself's picture

Yes you do trust me on this every time you wish to use sarcasm here start and end with "sarc"...  Unless of course like me you don't give one rats ass how many red arrows you get..

Tue, 04/24/2012 - 08:09 | Link to Comment smb12321
smb12321's picture

It's a cultural event - the destruction of education.  I can remember being warned in the 60's and 70's that our system would eventually fail us and it has.  It is perpetuating a class distinction with well-off folks valuing education and others discounting it. As a former tutor I was surprised that many nminority kids "acted up" to prove they were not taking education seriously - it was seen as a negative.  

The fact that businesses cannot hire educated workers in this environment says it all.  It's not really a surprise considering the minimal amount of time spent in school and on study. In the small village in France where my wife lived, the kids not only were in class 30 more days but went 1-2 extra hours.   It was NOT a place for social experimentation, debates on religion, history or politics.  The village had a communist rep but there was absolutely no disagreement over education.

Mon, 04/23/2012 - 20:01 | Link to Comment GeorgeHayduke
GeorgeHayduke's picture

"The question should why this opportunity was squandered on plasmas, escalades et al...and not education, healthcare, small business or many other things that provide a return."

Because that's the true American Way circa 2008 - 2012. Conspicuous consumption became the mantra when Ronnie Reagan hit the White House and it hasn't slowed since. This is America man, it's about the show, not the go; quantity over quality, perception over reality, etc...

Mon, 04/23/2012 - 21:10 | Link to Comment duo
duo's picture

I'm sorry, but divorce lawyer's fees are considered a part of GDP.  There is nothing productive about that.

Then again, we have banks, more banks, WMT, and McDonald's as part of the DJIA so I guess we believe bank fees and hamburger flipping are wealth creation.

Mon, 04/23/2012 - 19:17 | Link to Comment nmewn
nmewn's picture

Two imposters in a row...complimenting each other as it were...and why on this subject?

The boiler room has been activated ;-)

Mon, 04/23/2012 - 20:02 | Link to Comment Poor Grogman
Poor Grogman's picture

 

Obviously questioning the actual idea of GDP is politically incorrect.

 

The way I view GDP is as a simple measure of money supply growth, it is simply looking at inflation and calling it economic growth.

 

Laughable...

 

Tue, 04/24/2012 - 08:09 | Link to Comment Calmyourself
Calmyourself's picture

NMEWN, have you also noticed that most of our new posts are dominated by a few idiots speaking just enough sense but never with cites or anything too convincing just enough to have to read it.  They are normally beat back by a regular or two but they dominate the top of the post.  The infowars have begun and the penetration of Alinskyites is astounding.

Mon, 04/23/2012 - 20:43 | Link to Comment trying to make ...
trying to make sense of it all's picture

Get over it. He makes more sense than the "original".

Mon, 04/23/2012 - 21:08 | Link to Comment EvlTheCat
EvlTheCat's picture

You don't drink enough, that's why...

Mon, 04/23/2012 - 22:11 | Link to Comment fuu
fuu's picture

STFU Vic.

Tue, 04/24/2012 - 02:40 | Link to Comment Vic Vinegar
Vic Vinegar's picture

I hope you aren't talking to me, fuu.  Your paranoia is getting the better of you if that's the case. 

In the meantime think on this:

1. The real slewie is one of the great commenters here. The real slewie is on the short list of people I'd like to see be benevolent dictator of the universe...I'd entrust him and about five other people with that power.  And while slewie will never become that, my fantasy is no different than a lot of comments on this thread...rooted in principle but never going to materialize in the real world.  LOL

2. This is going to be a boring summer.  Obama v Romney is Clinton v Dole all over again: the guy you despise v the guy you can't vote for.  Ain't no chance in hell Romney wins - who the heck is going to vote for the stiff white guy with no charisma, here in "modern America"?  The answer is the same today as it was in 1996's "modern America".  All we need is the angry, principled white guy (calling Ron Paul - can you put those Ross Perot ears on and have some bad shit happen to your daughter to give us the full effect?) to come in third party-style and ensure this happens. LOL again

3. Although, unlike 1997, 2013 will bring us a Department of Homeland Security with 450 million rounds of ammo.  Also, unlike 2013, 1997 brought us hits from Third Eye Blind.  If I get shot up by DHS with said ammo, I so hope it's to the sweet sounds of Stephan Jenkins.  Maybe Third Eye Blind makes a comeback next year?  One can hope.

http://www.youtube.com/watch?v=zWX_p2GgHzY

4. When are you, fuu, going to put up something that matches trav's theme?  That was pure art.  But let's be honest - RobotTrader's theme kinda sucked.  Give us something new to jam to, buddy!

Seriously, dude.  This was perfection

http://www.youtube.com/watch?v=nnpEI3njoeo

Tue, 04/24/2012 - 03:21 | Link to Comment Vic Vinegar
Vic Vinegar's picture

Junker,

All apologies.  It's much more principled to get riddled with bullets by your own government while a Smashmouth hit from 1997 is playing rather than a Third Eye Blind tune. 

Your red arrow speaks to me.

http://www.youtube.com/watch?v=LQj--Kjn0z8&ob=av2e

Tue, 04/24/2012 - 08:12 | Link to Comment Calmyourself
Calmyourself's picture

Vic, youth and enthusiasm can be added to the ticket.  A better question is who the hell votes for the bamster?  Unions and the hardcore committed apparently, the bigger story is the compelete and total subversion of the voting process.  Widespread cheating on a grand scale is the only way dog eater wins..

Tue, 04/24/2012 - 09:18 | Link to Comment fuu
fuu's picture

1) I agree slewie is a gem.

2) Summer has been boring since 1985.

3) I am not touching this one.

4) There just haven't been any good trolls lately that have lasted a year, plus I like Robo's theme.

5) Her writing style is reminiscent of yours, my bad.

Mon, 04/23/2012 - 18:55 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Not everything needs "managed." The "invisible hand" of millions of individuals working, creating, and trading "manages" an economy just fine in the absence of a bunch of central planners, central bankers, and other assorted crack whores.

Mon, 04/23/2012 - 19:12 | Link to Comment rwe2late
rwe2late's picture

The "hand" is only made "invisible" by ignoring all the privileged and privatized protections for "property", lands, waters, and resources. And also by turning a blind eye to patent rights, licenses, liability laws and other protections given property owners.

Monetary profit is a man-made concept. It is a limited concept. Profit does not and cannot measure the worth of every and all things and be the ultimate guide to human conduct. The concept nonetheless underpins the whole notion that the pursuit of micro self interests will result in the best of all possible worlds. And it is that mistaken notion which is often used to justify the worst of all outcomes, and pronounce that the ultimate solution to our miseries is to increase business profits.

Never mind the profits made by ruining forests, rivers, and oceans. Never mind the profits from destroying the fisheries and polluting the air. Never mind financial parasitism. Never mind sweatshops, child labor, and poisoned foods. Micro profit, it seems, does not measure the environmental losses to society, nor the debilitation and destruction of human beings. But yet, it is to be the ultimate arbiter of human conduct. Or so we are told.

Mon, 04/23/2012 - 19:27 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Never mind that the human race is thriving largely thanks to these egregious capitalists.

Never mind that a Gates has done more to the benefit of every man, woman and child on the planet than any not for profit could dream about.  Go cry a river about eugenics elsewhere. Somehow that is and crap like the global proliferation of the computer chip is micro profit.

Never mind getting 12 times the yield on an acre of land vs two generations ago that's micro profit afterall evil Monsanto is responsible for Orange Crush and a littany of other toxins along the way.

World starving absent agritech is micro.

Deluded utopian realm where one gets human advancement without any negative by product.

Religion is a sham, revolving door justice systems, epidemic single parent households, crappy education systems, pretty much the only reliable arbiter of right and wrong left is profit.

 

 

 

 

 

 

 

 

 

Mon, 04/23/2012 - 19:29 | Link to Comment john39
john39's picture

12x the agricultural production doesn't mean shit if it slowly kills you.  screw monsanto and the rest of the corporate "persons" out to enslave humanity.

Mon, 04/23/2012 - 20:40 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

The human race is thriving, they not slowly killing anyone, if that was the case over population wouldn't be an issue.

Really?

Go back to the yields before and the world is starving.

Peak food probably before your time, just insert food into the peak oil posts to get an idea.

and per usual it is nice to see so many would rather  see the world starve.

afterall why put world hunger in front of another chance to post the usual stupid shit about those evil corporations.

 

 

 

 

Mon, 04/23/2012 - 20:42 | Link to Comment john39
john39's picture

thriving?  really.... been to a middle america walmart recently? how about checked out the  incidence of auto-immune diseases? cancer? heart disease? obeisity?, compared to fifty years ago?  no doubt you are going to say all that results from eating too much good nutritious GMO frankenshit, so i just go ahead now and point out how idiotic that would be.

Mon, 04/23/2012 - 20:56 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

YEa thriving. Population increasing everyday.

The first world is largely obese.

Lifespans in the third world are at an all time high and would be in the first world absent obesity caused from thriving.

No plagues, pandemics or whatever.

If I fed my fish poisonous food and warmed their water or generally replicated the conditions you idiots believe exist they would be dead. Their population would not only decline it would goto zero.

 

Mon, 04/23/2012 - 21:28 | Link to Comment centerline
centerline's picture

You have cause and effect mixed up like so many other idiots around here.  The human race is not thriving.  Unless your measurement in time is fixed and viewpoint very narrow.

How long do think this continues (population growth)?

 

 

Mon, 04/23/2012 - 22:29 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Funny. 

How does one conclude it is not thriving?

Number of whining posts on the internet doesn't count.

Via myopic POV competely devoid of any actual substance.

How long has the population been growing despite you people of the world warning otherwise?

You told me in 1970 in no uncertain terms world out of food by 2000-instead we have epidemic obesity-good call.

You told me  in 1976 the world will be out of oil by 1995,

currently threee times the reserves exist as in 1976-good call.

You told me I would fry thanks to a hole in the ozone layer, my electronic life would be wiped out on Y2K, Three Mile Island was supposed to nuke me..........

I could go on for 10days here, the doomsdayers will inevitably be right at some point of course they will never have the gratification of saying I told you so,

but until then you are wrong and at this point in time you are wholly and completely wrong about  the human race.  In the midst of a technological revolution, the advancement in the last 40yrs rivals that of the previous thousands.  People are living better as a whole than their grandparents could have dreamed about.

 Unless of course we employ that myopic POV.

 

Tue, 04/24/2012 - 09:13 | Link to Comment petridish
petridish's picture

FOOD doesn't make humans obese, eating chemically produced toxic waste like high fructose corn syrup does.

Mon, 04/23/2012 - 21:06 | Link to Comment erg
erg's picture

Yields are better therefore it's all good. Got it. We're thriving. Autism, cancer...we're thriving alright.

Quick everybody, let's throw a pool together. First person to pick the year this guy clues in gets the jackpot.

I thought I heard the other day that the very research firm that blamed Monsanto in part for the great bee kill-off was just bought by....Monsanto. Nice little thing they got going on there.

Mon, 04/23/2012 - 21:19 | Link to Comment john39
john39's picture

Same reason that the war on cancer, like the war on terrorism, will never be won. That is not how this game is played.

Mon, 04/23/2012 - 21:28 | Link to Comment erg
erg's picture

You're not a patient, you're a customer.

Here, this pill will cure your immediate problem but it causes this but worry not there's a pill for that.

Continue until you are either dead or broke. Preferably both.

Mon, 04/23/2012 - 21:43 | Link to Comment TBT or not TBT
TBT or not TBT's picture

Cheap carbohydrates did stave off the Population Bomb result globally, aaaand they permit the lower income folks here in the US(or the gummint SNAP program) to pay for food more easily, BUT they are poisonous, it turns out, resulting in a raft of degenerative diseases, not just obesity, but expensive productivity crushing ones.

Mon, 04/23/2012 - 21:59 | Link to Comment centerline
centerline's picture

Millions of years of eating certain diets, and only in the last 100 years we change radically what we eat.  The last 50 or so mainly on manufactured food.  Yeah, evolution just loves turning on a dime like this!

 Nuerological, degenerative, and other diseases are increasing at alarming rates - even relative to population growth.

Mon, 04/23/2012 - 22:35 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

No eating before refrigeration was invented  was much healthier.

Drinking before pasteurization, homogenation whatever was certainly healthier.

the testing for all diseases are significantly better than ever but who cares, the cavemen ate better than modern man.

That good old mypoic POV-is that drug induced?

 

Mon, 04/23/2012 - 22:53 | Link to Comment erg
erg's picture

Personally, I'm having a little trouble following your train of thought. It seems fractured at best. Replete with vagaries.

No eating before refridgeration.

As it turns out the crux of humanity is coolant.

I'd like to cite this.

If I fed my fish poisonous food and warmed their water or generally replicated the conditions you idiots believe exist they would be dead. Their population would not only decline it would goto zero.

This seems at least mildly addled to me.

Mon, 04/23/2012 - 23:01 | Link to Comment jomama
jomama's picture

er, eating before refrigeration was certainly more sustainable.  as a matter of fact, the population of the planet itself was much more sustainable, unlike today.

drinking raw milk has dramatically improved my gastro-intestinal health.  your body expects to consume food and drink rife with ideally healthy organisms, not sterile food.

diseases and disorders on today's scale comes from imbalance, and the un-sustainable process to create drugs is throwing bad after bad (believe me, i work in an industry that manufactures and develops drugs, and i have never seen any process that was so wasteful.

so if you consider wasteful, unsustainble, exponential growth to = thriving, then we, as human beings are.  

 

 

Mon, 04/23/2012 - 23:23 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Please.

There is no comparison,

it is great fun to pretend otherwise.

The idea that mankind was thriving more pre refrigeration and pre pastuerization, homogenation whatever is laughable.

It's the usual, don't use lifespans, don't consider that the first world is obese, don't use population growth,

instead focus on this teeny thing over here then mankind is not thriving.

and fwiw someone who works in the drug industry should know two things full well: the signifantly superior testing leads to a higher percent of the population being declared diseased, the country is test happy thanks to the litigious nature of society.

Mon, 04/23/2012 - 23:39 | Link to Comment erg
erg's picture

Well done good sir.

You've earned the meh of the day.

Bask in it's reflected glow.

Tue, 04/24/2012 - 07:29 | Link to Comment pappacass
Tue, 04/24/2012 - 08:19 | Link to Comment Calmyourself
Calmyourself's picture

Troll my ass, none of his points are refuted you "sustainable" idiots throw out a few poll tested bullshit lines about sustainable crap and the self satisfied back slapping commences.  Cavemen lived a more sustainable life, what morons, not one of you lives a sustainable life by your own metric.  Riding your mass produced bike or deigning to ride in a pious doesn't cut it..

Tue, 04/24/2012 - 08:50 | Link to Comment centerline
centerline's picture

Here is the deal... it is called normalcy bias.  We have been living in the single greatest time period ever known to man.  Yes, in this timeframe man has thrived in many ways.  And has also lost so much along the way.  We are now poisioning ourselves in more ways than not though - modern medicine helping to keep it all held together.  The "rat race" is accelerating (for reasons known around here) towards oblivion (frog in boiling water analogy fits).

Of course, since times have been great up until recently, that means the party is just going to keep going?  Because we have never experienced a real downturn that it can never happen?

Population growth (if you care to even look at the charts) cannot continue forever in a parabolic fashion.  That is not conjecture or opinion.  It is simple fact.  Social complexity among other constraints are already pushing back.  Moden infrastructure in terms of what really matters (food, water and energy) has gone from robust to fragile as a result.

The best we can hope for is a stationary period.  However, human nature and most of our systems (i.e. economic) are built on perpetual growth.  Therefore, a transition out of the paradigm of explosive human growth is not going to be easy.  This doesn't mean we stop advancing.  It just means that we are going to be forced to change.

Mon, 04/23/2012 - 19:24 | Link to Comment NewWorldOrange
NewWorldOrange's picture

"The "hand" is only made "invisible" by ignoring all the privileged and privatized protections for "property", lands, waters, and resources."

All very true of course. But... you took "invisible hand" wholly out of context - that happens a lot when folks try to piggyback off a comment near the top out of need for "daily affirmation" rather than just post a new comment.  And central planning by governments only makes the undesireable externalities of economic activity worse. Is it your goal to argue for more central planning and "management" by bureacrats?

Mon, 04/23/2012 - 19:57 | Link to Comment rwe2late
rwe2late's picture

 Your "insight" as to the implied motive for my comment lacks any factual basis. As does your hypothetical "straw man" suggestion as to my "goal".

FYI, I do not favor either totalitarianism nor anarchism.

Humans organize. There are advantages to organization. There are also disadvantages. That is the human condition. That is the human conundrum as I see it. 

Mon, 04/23/2012 - 20:13 | Link to Comment NewWorldOrange
NewWorldOrange's picture

You don't "favor totalitarianism or anarchism." Okay. Not sure what that has to do with the price of wheat in Russia, but okay.

"Humans organize. There are advantages to organization. There are also disadvantages. That is the human condition."

You are very gifted at stating the obvious ;)

Mon, 04/23/2012 - 20:28 | Link to Comment rwe2late
rwe2late's picture

 Do you object to all "central planning"? Some at ZH object to ALL form of government.

At what point do you object to "central planning"?

Is it at the local level, state, or federal?

What about "central planning " done in secret by heads of large corporations?

Can or should "central planning" be done democratically? Some at ZH have stated it should not.

The answers to the "obvious" questions may not be so "obvious".

Mon, 04/23/2012 - 20:40 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Ahhh...I see now. You like to play games with words. Just take them out of context and equivocate.

Never seen your species before. (/sarc)

And no, "central planning" should NOT be done democratically. Or otherwise.

It's getting late. Have you said your prayers to The Government yet?

Tue, 04/24/2012 - 08:24 | Link to Comment Calmyourself
Calmyourself's picture

Marxist's always start by rearranging words and especially their meanings, as nothing they say makes sense on an intrinsic gut level until they confuse the debate.  Once the word games start I check my wallet and hug my rifle.

Mon, 04/23/2012 - 21:08 | Link to Comment lasvegaspersona
lasvegaspersona's picture

2late

central planning refers to the decree of government rather than the market in determining production...but I don't think clarity is what you are looking for...I'm thinking it is more an argument .

Mon, 04/23/2012 - 19:39 | Link to Comment kridkrid
kridkrid's picture

Noam Chomsky has interesting thoughts on how we tend to understand Adam Smith. http://www.youtube.com/watch?v=mFEfmYH-PPE&feature=youtube_gdata_player. - he agrees with you :-)

Mon, 04/23/2012 - 20:06 | Link to Comment BigJim
BigJim's picture

 The concept nonetheless underpins the whole notion that the pursuit of micro self interests will result in the best of all possible worlds. 

Er, no, not "the best of all possible worlds"; just better than the alternative - allowing a cabal of central planners to determine who gets what.... which is increasingly what we have now.

Do you think corporations et al would pollute and endanger the environment if they knew government didn't have their backs - through limited liability laws, for instance? If the environment they were damaging wasn't government owned and managed 'commons'?

Mon, 04/23/2012 - 20:36 | Link to Comment rwe2late
rwe2late's picture

Er, no, one does believe that to be "the best of all possible worlds" if one also believes the only alternative is having a "cabal" determine who gets what. (or more generally, that it beats ALL the alternatives)

Mon, 04/23/2012 - 22:33 | Link to Comment vast-dom
vast-dom's picture

But without Central Planning and Government and the illegal IRS you can't extract the lifeforce from every productive individual. The Invisible Hand must be cuffed and restrained or else people will be allowed true freedom and approach true happines -- every despot wants to vampirically suck everyone around him dry. 

It's all about CONTROL. The axiom of Live and Let Live is like garlic, a cross and a wooden stake to these Central Bankers/Planners/Cops/Politicians/Psychotic BPD bitches/Sociopaths/etc./etc./etc.

Mon, 04/23/2012 - 23:31 | Link to Comment goldfish1
goldfish1's picture

General Motors Co. announced Monday at the Beijing auto show that it will begin building its all-new 2013 Cadillac XTS sedan in China this year and later will bring the ELR luxury electric coupe in the country.

Real growth comes from building American cars in China? http://www.detroitnews.com/article/20120423/AUTO0103/204230371#ixzz1svKVFMNT
Tue, 04/24/2012 - 08:11 | Link to Comment midtowng
midtowng's picture

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

The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can't be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can't be measured easily really isn't important. This is blindness. The fourth step is to say that what can't be easily measured really doesn't exist. This is suicide. —Daniel Yankelovich "Corporate Priorities: A continuing study of the new demands on business." (1972)
Mon, 04/23/2012 - 18:50 | Link to Comment tawdzilla
tawdzilla's picture

GDP includes borrowed money...equivalent of taking a cash advance on a credit card and reporting it as income.

Mon, 04/23/2012 - 19:27 | Link to Comment t_kAyk
t_kAyk's picture

Hmmm...  I wonder how many student loan checks were converted to 'straight cash, homie'. 

 

http://www.youtube.com/watch?v=07G23zMGa4g

Mon, 04/23/2012 - 19:28 | Link to Comment NewWorldOrange
NewWorldOrange's picture

GDP is not a measure of the money supply. It is a measure of the goods and services produced in a nation (or whatever region) in a year (typically a year is used.) It does not matter for GDP purposes whether the goods and services were produced with borrowed money or saved money (or even no money at all.)

Mon, 04/23/2012 - 19:44 | Link to Comment Max Fischer
Max Fischer's picture

 

 

The right-wing bobble heads in America have done an excellent job creating debt and deficit hysteria ever since Obama was elected. This is nothing more than a modern version of McCarthyism, where the right wing has convinced their ever-gullible and ignorant constituents that Obama/OHitler is converting America into a communist/socialist state, and that our bankruptcy is imminent.  Pure propaganda and garbage.  Just look at gun sales.... why all the hysteria? Whether it's about debt, deficits or guns, it's all just manufactured hysteria by wingnuts on the right.   

The truth of the matter is that the United States government ranks second from the bottom (among developed nations) in terms of government expenditures as a percentage of GDP.  In other words, spending by the federal government is SMALL compared to our European and Asian counterparts. In 2010, government spending was 22% of GDP. Before the 07/08 crisis and for most of this decade, we were in the high teens, maybe 18% or 19%.  The record was 23%..... during the Reagan administration.  Yes, that's right, federal government spending in relation to GDP peaked during the Reagan years, which is hilarious given the right wing worships him as the ultimate fiscal conservative.*   There is so much hypocrisy when it comes to Reagan and how the Republicans worship him, it's simply pathetic.

Yes, we need to reduce our debt and deficits.  But the situation is not nearly as dire as all the right-wing propaganda would lead you to believe.  We just passed through the worst recession since the Great Depression, so it's only natural that debts and deficits would have temporarily ballooned.

Max Fischer, Civis Mundi 

* All data from Simon Johnson and James Kwak's newest book, White House Burning 

Mon, 04/23/2012 - 19:47 | Link to Comment t_kAyk
t_kAyk's picture

Holy shit.  It's a good thing I'm drinking... 

Mon, 04/23/2012 - 22:02 | Link to Comment centerline
centerline's picture

I think Max is spanking the monkey to a picture of Krugman.

Mon, 04/23/2012 - 22:47 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

If the nationalized health care is ever made law.

The government will be responsible for 50% of the commerce conducted in America.

The truth being absent nationalized healthcare the percent of GDP is obscene.

Spin away Maxie.

 

Mon, 04/23/2012 - 19:50 | Link to Comment Kayman
Kayman's picture

Comparing US deficits/debt to Europe/Japan is like saying they have lung cancer and we "only" have pancreatic cancer.

The situation is, indeed, dire. And changing presidents will do squat.

Mon, 04/23/2012 - 19:57 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Rather than just saying "it is, indeed, dire" like Faux News has brainwashed you into believing, can you make a coherent, convincing argument?  The bond market doesn't think our debt is "dire," and all the metrics suggest otherwise.  Just because our debt is higher than its ever been, doesn't make it "dire."

MF 

Mon, 04/23/2012 - 20:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

The Fed is the only one buying our debt.  Take away the Fed and show me the recovery.-FAIL

Mon, 04/23/2012 - 20:11 | Link to Comment Max Fischer
Max Fischer's picture

 

 

The Fed is the only one buying our debt.....

False.  Pure garbage. You don't understand our bond market, nor do you understand Operation Twist.

MF

 

Mon, 04/23/2012 - 20:19 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Jesus H Christ on a popsicle stick! Max, your posts, and your statements, are so FULL OF FAIL I don't even know where to begin. But this last one was EPIC! OPERATION TWIST WAS DONE BY THE FED IN BUYING U.S. DEBT!!!!!!

Literally rolled on the floor over that one.

Mon, 04/23/2012 - 20:29 | Link to Comment Max Fischer
Max Fischer's picture

 

 

WTF are you talking about? 

MF

Mon, 04/23/2012 - 20:33 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Here Max (I'm assuming you can read)

http://www.marketswiki.com/mwiki/Operation_Twist

Mon, 04/23/2012 - 20:39 | Link to Comment Max Fischer
Max Fischer's picture

 

 

I don't need a stupid Wikipedia copy/paste to understand Operation Twist.

If you understood anything about it, you would recognize that the Fed sold $400B in short dated bonds and used the proceeds to buy equal amounts of long dated bonds.  The Fed was NOT a net buyer.

So, now that the elementary shit has been explained, please tell me how the Fed is the only buyer of US debt, which was the point of contention.

MF

Mon, 04/23/2012 - 20:49 | Link to Comment BigJim
BigJim's picture

No, sophist, the point of contention was whether there actually was a 'bond market'. The Fed's intervention was to specifically stop the 'market' working as it should, ie, have long-dated bonds reflect inflation fears. Why do you think they intervened in the first place?

And though twist was sterilized, QEI and II certainly weren't. 

Give it up, loser.

Mon, 04/23/2012 - 21:08 | Link to Comment Max Fischer
Max Fischer's picture

 

 

You're changing the point of contention because you know you can't defend your own claims. 

You don't even know what QE1 was!  In QE1, the Fed wasn't buying Treasury debt, IDIOT.  It was buying agency debt and mortage securities.  How does QE1 support your claim that the "bond market isn't working as it should?"

*LOL*

Can't wait to hear this one.....

MF

Mon, 04/23/2012 - 21:22 | Link to Comment BigJim
BigJim's picture

*sigh* From wikipedia.... ( http://en.wikipedia.org/wiki/History_of_Federal_Open_Market_Committee_actions#Quantitative_Easing_1_.28QE1.29 )

Quantitative Easing 1 (QE1)

"On November 25, 2008, the Federal Reserve announced that it would purchase up to $600 billion in agency mortgage-backed securities (MBS) and agency debt. On December 1, Chairman Bernanke provided further details in a speech.6 On December 16, the program was formally launched by the FOMC.7 On March 18, 2009, the FOMC announced that the program would be expanded by an additional $850 billion in purchases of agency MBS and agency debt and $300 billion in purchases of Treasury securities." [3] 

over to you, Civis Mundane... 

 

Mon, 04/23/2012 - 22:34 | Link to Comment Max Fischer
Max Fischer's picture

 

 

That is commonly referred to QE1.5, since it wasn't part of the initial QE1 plans, and it only represented about 25% of the entire $1.25T program.  

If all you're capable of doing is a copy/paste of Wikipedia, then I really don't have any desire to continue this with you. 

MF

 

 

Mon, 04/23/2012 - 23:08 | Link to Comment dwdollar
dwdollar's picture

What fucking difference does it make if it's QE1, 1.5, 2, or 3.1415? It's all one big central planning circle jerk with jokers like you defending it. We can't get true price discovery in Treasuries just like we can't get true price discovery in housing or agriculture for that matter. It's all one big pile of steamy BS that should have been flushed in 2008.

Tue, 04/24/2012 - 08:29 | Link to Comment BigJim
BigJim's picture

Oh, so QE 1.5 wasn't part of QE1? Despite them describing it an 'expansion' of the program?

But wait! QE1.5 was actually launched in August 2010  http://www.theatlantic.com/business/archive/2010/11/dont-forget-about-the-feds-other-asset-buying-effort/67084/ , so in fact, the purchase of $300 billion worth of Treasury securities back in 2009 wasn't QE1.5, was it? Or are you going to claim now it was QE1.333 recurring, or somesuch, and, thus, also not part of QE1 either?

And as it was 'only' $300 billion it had no effect on bond prices? 'Cause, if I recall correctly, that's what this argument was about - whether bond prices reflected 'the markets' view of the viability of US debt, or do bond prices reflect the Fed's interventions?

You say you really don't have any desire to continue this? LOL, yes, now that I can believe.

Scuttle off, loser. 

 

Tue, 04/24/2012 - 01:05 | Link to Comment mophead
mophead's picture

Max, you're a dumbass. Most people don't distinguish betwen QE1 and QE1.5. Get over it, you lost!

And btw, you're a liberal left, faggy ass obama/krugman cock sucking queer. You think all ZH'ers are conservatives? Think again.

Tue, 04/24/2012 - 08:44 | Link to Comment Calmyourself
Calmyourself's picture

Yeah, not all ZH'ers are Conservative only the ones who have grown up, had a real job and actually learned life's lessons..  Some of these guys worship central planning and  actually believe you Max.

Mon, 04/23/2012 - 21:34 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Max, money is fungible. You really have difficulty making simple connections don't you? Hell even Bernanke defended QE1 partly by arguing that it would support the bond market. Someone called you a sophist - SPOT ON. Sophistry tends to kind of simulate intelligence Max, not stimulate it. You'd need mental QE to do the latter (ease the quantity of whatever you're smoking.)

Tue, 04/24/2012 - 01:58 | Link to Comment awakening
awakening's picture

That there is the best and most concise definition of Quantative Easing I have ever read and literally lmao at.

+1 Internet (gold, bitchez or preferred equivalent) to you, sir :)

Tue, 04/24/2012 - 22:16 | Link to Comment erg
erg's picture

Welcome to the scrum.

Edit: For NWOrange

A friend of mine calls it the new world odor.

Mon, 04/23/2012 - 20:48 | Link to Comment LowProfile
LowProfile's picture

 

 

 

 

 

                   The Fed will buy every last scrap of debt to "save" the system at the expense of the currency.

 

Now PISS OFF.

Mon, 04/23/2012 - 21:07 | Link to Comment NewWorldOrange
NewWorldOrange's picture

"I don't need a stupid Wikipedia copy/paste to understand Operation Twist."

Obviously you did. And clearly you READ IT. Now you're saying the Fed wasn't a NET buyer. Correct. But why did they even do Op Twist? Because they were taking so much criticism (rightly) for trying to push down interest rates by PRINTING MONEY AND BUYING TREASURIES WITH IT (and BTW,  the unintended consequences of Op Twist include expansion of the money supply and greater purchases of U.S. gov debt - if you can grasp the concept of "discounted present value" you can probably get that. Good luck.)

The Fed bought 79% of all U.S. Treasuries sold in 2009. The number has taperd off slightly since then since it hasn't "needed" to bailout a bunch of domestic and foreign banks. It still buys over two thirds of the U.S. Treasuries sold. It admits it. Federalreserve.gov  It's no big secret Max, except to you. Blinded by ideology? Your comments would probably be popular on Huff Po. But kudos for not just seeking to be popular. You COULD also try to LEARN something before you spew (your "DUHs" after stating obvious falsehoods, like the one the other day where you said higher tax rates are what balanced the budget in the 90's, are CLASSIC ;)

Mon, 04/23/2012 - 23:37 | Link to Comment HurricaneSeason
HurricaneSeason's picture

Do you have a webpage that says the Federal Reserve is buying 66% of the Treasuries annually? Japan only bought $200 billion in Treasuries last year and I thought they were the only significant buyer. I wondered if they were going to claim a heroin dealer from Afghanistan was buying $1 trillion a year in Treasuries through a Cayman bank called "household".

Tue, 04/24/2012 - 04:29 | Link to Comment t_kAyk
t_kAyk's picture

I was trying to give you a down arrow and then I realised... 

 

... I had already given you one.  

Mon, 04/23/2012 - 20:22 | Link to Comment LawsofPhysics
LawsofPhysics's picture

LOL!!!  I shouldn't have expected anything less.  Who is brainwashed?  Thanks for the laugh max and pointing out why no one should ever bother replying to you.

Mon, 04/23/2012 - 20:35 | Link to Comment Stax Edwards
Stax Edwards's picture

Your argument is PK's argument that because we can borrow right now, we should.  That does not consider whatsoever what happens when the $ has to be repaid which is my problem du jour with the keynesian crap.  OK, so with the FED and global calamity we can borrow from lets say up to 100 years in the future.  That does not make it the right course of action and is totally selfish with regard to the next generation who has higher energy costs, higher food costs, etc.  That is my problem with the Keynes people and yourself.  I do not disagree that we can in fact steal from the next several generations, I say things are not so dire that we should.  As we watch Europe burn, it only reinforces my belief that if we don't stop this foolishness soon, we will be ipso facto Europe in no time.  Enough with this stupidity.  You are a clown max.  If your position is that it will never be repaid so why worry just say so.

Mon, 04/23/2012 - 21:11 | Link to Comment jus_lite_reading
jus_lite_reading's picture

MAX FISCHER, I have but only one question for you: do you wear a beanie on your head? That's all I want and need to know. The rest is elementary, as they say. 

PS- If the FED was not the "only one" buying our debt, you better contact Anton Silluanov and tell him you know better than he...

LMAO! 

Mon, 04/23/2012 - 20:15 | Link to Comment BigJim
BigJim's picture

 The bond market doesn't think our debt is "dire," and all the metrics suggest otherwise.

LOL, Civis Mundane strikes again! Heard of QE? Heard of twist? There's no 'bond market', Mr Mundane, the yield curve has, in the words of Jim Grant, 'been nationalised'.

But please, keep making a fool of yourself. Tell us again how 'the free market' has messed everything up, that's always good for a chuckle.

Mon, 04/23/2012 - 20:27 | Link to Comment Max Fischer
Max Fischer's picture

 

 

The Fed is NOT bigger than the bond market.  When QE2 commenced in November 2010, rates went up.  

MF

Mon, 04/23/2012 - 21:05 | Link to Comment BigJim
BigJim's picture

I guess after all those years as a successful trader, you've forgotten the expression "buy the rumor, sell the news"? So yields briefly rose? Big deal. As it happened, QE2 bought $600 BILLION worth of US debt over eight months, with freshly created money. But no, that couldn't possibly put a floor under their price, and cap yields, could it?

Are you genuinely this stupid in real life? 

Mon, 04/23/2012 - 21:11 | Link to Comment NewWorldOrange
NewWorldOrange's picture

It seems Max doesn't understand the difference between bond rates and bond yields.

Mon, 04/23/2012 - 21:07 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Ah, I think you should read the WSJ of the 14th of March 2011 by Drukenmiller .

 

http://online.wsj.com/article/SB1000142405274870386420457631761232379096...

 

It seems, Max Fischer that you are part of the problem with your ignorance. As for Bill Gross.

 

http://online.wsj.com/article/SB1000142405274870386420457631761232379096...

 

You sure know how to stir up reactions from our fellow bloggers. Either you are a political football addict or you ignore the fate of many nations who like the US spent more than they received for a long period of time until they could not anymore.

 

 

Mon, 04/23/2012 - 21:30 | Link to Comment fonzannoon
fonzannoon's picture

Rates went up because all the hedge funds bought the treasuries in advance and dumped them on the Fed's head. You are correct about QE1 (Agencies) and QE2 (treasuries) and Twist (selling short dated to buy long dated). You are also correct that the Fed is not bigger than the bond market. At what point in time that will be proven is the only question, because it will be proven and whoever else is buying treasuries alongside is going to seriously regeret it.

As Schiff points out when they stress tested the banks they did not stress test them for a rise in rates because they can't concieve it because in reality the banks will choke on the debt.

Tue, 04/24/2012 - 08:25 | Link to Comment BigJim
BigJim's picture

Thing is... the Fed IS bigger than the bond market, at least the USD denominated bond market, because the Fed system is the source of their denominator - USD.

There is a limit to how much treasury debt will be created, but there is absolutely no limit to how many dollars the Fed can create to buy them with. 

Whether other nations will continue to value USD at anything like their current price is another matter, of course... 

Mon, 04/23/2012 - 20:30 | Link to Comment NewWorldOrange
NewWorldOrange's picture

"Rather than just saying "it is, indeed, dire" like Faux News has brainwashed you into believing, can you make a coherent, convincing argument?"

Argument? WITH YOU? That'd be like playing chess with a pidgeon. Most anyone here could kick yer ass, but you'd just strut around squawking and knocking pieces over and thinking you won. Faux News? So you think MSNBC, CNN, etc are less "faux" than Fox? That explains a lot...

"The bond market doesn't think our debt is "dire," and all the metrics suggest otherwise.  Just because our debt is higher than its ever been, doesn't make it "dire.""

The "bond market" doesn't think it's dire? Are you talking about the FAUX bond market that is propped up by Fed intervention (the Fed buys most U.S. treasuries, BTW) and otherwise propped up with TRILLIONS IN PONZI SCHEME "MONEY"? Hahahahahahahahaha

The U.S. paid about a half trillion dollars last year on the debt. If Americans had been allowed to keep to spend that money themselves, millions would be a lot better off, and probably many thousands would not have died for lack of something they DIRELY needed. If the gov wasn't so fucking worried that its UNSUSTAINABLE SPENDING/DEBT would not eventually crash the whole system and send us into an orgy of murder and mayhem probably never seen in history, they wouldn't be curbing all of our liberties by the day and implementing a police state.

Is THAT dire enough for you Huff Po assbitch?

Tue, 04/24/2012 - 02:13 | Link to Comment LowProfile
LowProfile's picture

 

If the gov wasn't so fucking worried that its UNSUSTAINABLE SPENDING/DEBT would not eventually crash the whole system and send us into an orgy of murder and mayhem probably never seen in history, they wouldn't be curbing all of our liberties by the day and implementing a police state.

Ah, best laid plans etc...

Tue, 04/24/2012 - 03:21 | Link to Comment TWSceptic
TWSceptic's picture

Why are lefties so obsessed with Fox News? Do you realy think that the whole right loves Fox and believes everything Fox says? Fox = neocons. I believe most people here are libertarians / true conservatives and don't give a rat's ass about the MSM.

Tue, 04/24/2012 - 03:43 | Link to Comment Dirtt
Dirtt's picture

Holy Shit.

Media Matters now has a rat sniffing up zerohedge's asshole now?

The bond market doesn't think our debt is "dire,"????  I wonder who was the last Jew to give Hilter a pass was before they were boarded on a train.

Signed MF?  Or signed MF Global? Maybe this is Jon Corzine under the guise of Miss Progressive Amerika.

Before New England there was England.  How did New England become New England? How does New America become New America? 

MF has a point.  When states succeed from DC who will pay for these dire predictions is the GREAT unknown. Faux? Not faux kiddie.  It's called ODIOUS and the case for shunning odious debt is as old as the Bible. We are in a generation where men think they are immortal. Buckle up,

Tue, 04/24/2012 - 04:23 | Link to Comment Vic Vinegar
Vic Vinegar's picture

We are in a generation.  I agree.

http://www.youtube.com/watch?v=uuwfgXD8qV8&ob=av2e

Tue, 04/24/2012 - 04:32 | Link to Comment Vic Vinegar
Vic Vinegar's picture

Put this on my tombstone, bitches!  "Dirtt" said it:

MF has a point.  When states succeed from DC who will pay for these dire predictions is the GREAT unknown. Faux? Not faux kiddie.  It's called ODIOUS and the case for shunning odious debt is as old as the Bible. We are in a generation where men think they are immortal. Buckle up,

Holy cow.  Someone is probably going to fuk you tommorow.  Sure, she doesn't know Henry Kissinger from a hole in the wall, but expected her to?  She actually fuked you, right?

I'll still take Henry Kissinger's aborted baby over your best lay ever, Dirtt.  I think anyone with an appreciation of game theory would.

Mon, 04/23/2012 - 20:03 | Link to Comment nmewn
nmewn's picture

"The truth of the matter is that the United States government ranks second from the bottom (among developed nations) in terms of government expenditures as a percentage of GDP.  In other words, spending by the federal government is SMALL compared to our European and Asian counterparts."

Yeah and they're goin like gang busters over there huh?...lol.

Tell me, when does the debt ever get repaid...I mean in what century?

And why do we even count government expenditures?...it comes from taxation or printing which are both liabilities (negatives) on the private sector side is it not?

Do you really propose we continue the double count AND count a negative as a positive to boot?

Tue, 04/24/2012 - 06:00 | Link to Comment NewWorldOrange
NewWorldOrange's picture

"The truth of the matter is that the United States government ranks second from the bottom (among developed nations) in terms of government expenditures as a percentage of GDP."

Only if you cherrypick the number of countries you count in that "ranking" at an even 20 "developed nations." The U.S. doesn't have as much debt as a % of GDP as most European nations, or Hong Kong, but here's the rub: The AMOUNT (not %) of debt carried by the U.S. is enormous and far exceeds that of the other 20. There is simply no one big enough to "bail us out", like the IMF et al have with certain EU nations (and the IMF has many lesser nations for many years, with PLENTY of strings attached.) Sure, the U.S. may be able to keep interest rates down for a while for as long as entities all over the world are willing to buy our debt. But they are losing their appetite for our debt. The Fed is having to monetize it now, and it can only do THAT because of the dollar's status as the world's reserve currency. THAT is rapidly waning too. The big collapse could be years away. It could be next month. No one knows. But everyone (except socialist morons) knows the reckoning is coming. In the meantime, the Fed, in trying to deal with it, prints money at warp speed and the moral hazards and market distortions and unintended consequences of it all are incalculable. Bottom line is, U.S. debt is not quite as bad in nominal terms as EU debt, but that's saying nothing. The EU would have collapsed years ago if not for the multi-trillion dollar bailouts it got from the U.S.  (source: page 132 of http://www.gao.gov/new.items/d11696.pdf ) There's no one to do that for the U.S. (and the EU is in collapse regardless.)

Mon, 04/23/2012 - 20:11 | Link to Comment BigJim
BigJim's picture

Haha, Max Fisher, Civis Mundane, sees the world through a left/right lens! And thinks ZHers criticising Obammey or the debt must be 'right wingers'!

Too funny. Keep it up Max, you're a riot.

Mon, 04/23/2012 - 20:13 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Would you care to dispute any of the facts I wrote, or are you just a carnival barker?

MF

Mon, 04/23/2012 - 21:25 | Link to Comment BigJim
BigJim's picture

   Would you care to dispute any of the facts I wrote, or are you just a carnival barker? 

What I dispute is their relevance. So what if Reagan spent more as a proportion of GDP? We're not Reaganites. Where did anyone say Obammey bad/Reagan good?

As an aside...  as the overall debt then was a lot lower, the borrowing was (relatively) affordable. Furthermore, as more the US economy's GDP was actually derived from the production of goods and services, and less a figment of financial legerdemain, there was some chance it could be paid back. Now? Around 100% GDP? Not so much (see Reinhart & Rogoff for more details).

As for 'coming out of recession' - it appears you are as much a slave to the GDP fantasy as you are to the right/left theatre of the absurd. Good luck trying to make sense of the world with that mindset.

Mon, 04/23/2012 - 21:14 | Link to Comment WhiteNight123129
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Are you politically charged dull non-funny version of MDB?

Mon, 04/23/2012 - 21:32 | Link to Comment fonzannoon
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Max it seems to me many of your points are actually correct but if you understood them better you would probably start coming to different conclusions.

Tue, 04/24/2012 - 03:08 | Link to Comment TWSceptic
TWSceptic's picture

It seems noone wants to waste time on you. They either believe you are a troll, or very brainwashed and hopeless. Or both.

Mon, 04/23/2012 - 20:15 | Link to Comment Chump
Chump's picture

He's the angry, earnest MDB.  Very entertaining.

Tue, 04/24/2012 - 00:56 | Link to Comment fuu
fuu's picture

He's Team Leader of Truth Team Six.

Mon, 04/23/2012 - 20:13 | Link to Comment rwe2late
rwe2late's picture

Max

1)  - you need to include local and state spending in your comparisons.

2)  - much of what you misidentify as right-wing "hysteria" is due to:

(a) revocation of Constitutional protections such as habeas corpus

(b) the creation of a police state apparatus = NSA and many other "Homeland" agencies fed, state,local

(c) the handouts to financial swindlers and the upward concentration of wealth and power

(d) the expansion of a global military and endless self-made wars

Apparently you are unaware of what is going on. Please mention hysterical left-wing bobbleheads along with hysterical right-wing bobbleheads in your next diatribe.

Mon, 04/23/2012 - 20:17 | Link to Comment BigJim
BigJim's picture

You don't understand! Those things are only bad if they're done by right-wingers!

     -Max Fisher, Civis Mundane 

Mon, 04/23/2012 - 21:15 | Link to Comment EvlTheCat
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ROTFL

Mon, 04/23/2012 - 20:44 | Link to Comment theTribster
theTribster's picture

Excellent analysis Max. So, this is all created by the right-wing wing-nuts huh? Well shit, thank God you came along and set it all straight. I thought it was all BS but now I know for sure, because Max told me. Again, thanks so much Max - for the clarification and incredible insight. Is Thom Hartman your hero?

I can't wait to tell the people in Europe and all the foreclosed folks here that Max said its a bunch of shit created by wing-nuts, go back to your homes and forget about all this financial meltdown stuff! 

You keep thinking that way, as if there is a difference between the republicans and the democrats on substantative issues. The financial situation is real Max, if your reading posts here at ZH then you know it is so I suspect your just here to create a little fireworks...

Good luck with that...

Mon, 04/23/2012 - 21:39 | Link to Comment sgorem
sgorem's picture

jeeeesh Max, do you really love to be called a "fucking clueless shithead?" just askin.

Mon, 04/23/2012 - 21:43 | Link to Comment centerline
centerline's picture

....

edit: Comment removed.  In retrospect, decided that responding the Max is not worth the energy.

Mon, 04/23/2012 - 22:14 | Link to Comment TWSceptic
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"But the situation is not nearly as dire as all the right-wing propaganda would lead you to believe."

 

It's worse.

Mon, 04/23/2012 - 23:54 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Maxie why is it no source comes close to agreeing with the numbers in your post?

Anyone with a brain knew 1943-1945 were of course the highest,

But why does this have significantly different numbers?

http://www.whitehouse.gov/omb/budget/Historicals

happens to include state numbers which are of course at all time highs.

Why don't  the federal numbers line up with what you posted?

 

 

table 15-3

 

Mon, 04/23/2012 - 22:35 | Link to Comment vast-dom
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Precisely. And let's add not including shadow books bursting with illegal Fed derivatives and other banking toxic assets!

Mon, 04/23/2012 - 18:50 | Link to Comment jus_lite_reading
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I'll give everyone reading this a reminder of what your "GDP" growth really is --> Take the chart at top and overlay that with the "official" inflation rate and the unofficial but true to reality shadow stats inflation index over the same period. It explains why most of the "GDP" growth was really an illusion and that very soon, everything implodes. TPTB know it... they're preparing for domestic unrest very soon... you should be too

Mon, 04/23/2012 - 19:22 | Link to Comment Kayman
Kayman's picture

And... since GDP also includes Government "production" then it is a pretty lousy indicator of economic production.

For every $1 delta in Government you can count on a $2 negative in private sector wealth creation. And I am not even considering the leeches in the FIRE economy.

Mon, 04/23/2012 - 18:51 | Link to Comment ArkansasAngie
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I've been trying to buys some retail property.  And ... I'm not finding anything to invest in.  The rent rates won't support the asking price.  So ... thanks to Bennie and Obama et al and no price discovery I shant make an investment now.  Thanks guys for messing things up so badly that entrepreneurs are forced to sit on thir hands.

Neither a Republican nor Democrat be.

Mon, 04/23/2012 - 18:53 | Link to Comment LowProfile
LowProfile's picture

Buy gold.

Mon, 04/23/2012 - 18:59 | Link to Comment Paul Atreides
Paul Atreides's picture

Never put all your eggs in one basket so....buy some Silver too!

Mon, 04/23/2012 - 20:45 | Link to Comment LowProfile
LowProfile's picture

But mostly gold (because unless China or Mexico remonetizes silver, it will just be an expensive industrial metal).

And everything else you think you might need.

Mon, 04/23/2012 - 19:17 | Link to Comment stocktivity
stocktivity's picture

wait to buy....it still has another 20 - 30 % to drop.

Mon, 04/23/2012 - 20:57 | Link to Comment rqb1
rqb1's picture

All the good re is going to the hedge funds

Mon, 04/23/2012 - 18:52 | Link to Comment no life
no life's picture

If you lay people off, underemploy and underpay the others, in order to create corporate profits, who is it that is supposedly out there buying up the products the corporation is creating? Alien life-forms? Forget about growth, what's to keep the economny moving forward at all, other than fake accounting? So simple, yet economist manage to twist this up with their nonsense pontifications.

Mon, 04/23/2012 - 18:54 | Link to Comment LowProfile
LowProfile's picture

 

who is it that is supposedly out there buying up the products the corporation is creating?

GOVERNMENT AND ITS EMPLOYEES.

Mon, 04/23/2012 - 18:52 | Link to Comment LowProfile
LowProfile's picture

Good stuff.  However:

America was losing its spirit of self-sufficiency, which in my view was one of the keys behind its earlier successes.

Hmm...

Did we lose it, or have it (metaphorically) beaten out of us?

Who would stand to benefit from that?

Hmm...

Mon, 04/23/2012 - 19:38 | Link to Comment NewWorldOrange
NewWorldOrange's picture

"Beaten" out of us? Hardly. post-Americans have given away their liberty and prosperity willingly, at the polls and incrementally in a million other little ways. Those who ignore (or chose to not even study) the lessons of history are condemned to repeat them. Few post-Americans are even willing to read anything much longer than a text message. You deserve the government you get. Is it any wonder the elitist scum running things in post-America feel so much comtempt for ordinary sheeple that they have no qualms about screwing everyone? I can barely stand to look at the phucks that inhabit this God-forsaken country.

Mon, 04/23/2012 - 19:41 | Link to Comment t_kAyk
t_kAyk's picture

LowProfile said: "Did we lose it, or have it (metaphorically) beaten out of us?"

 

I do believe he was referring to the mental aspect of this game.  We have been conditioned to not think, to not question, to follow and beg for the guidance of TPTB.  I agree that we deserve what we have; ignoring the facts does not change them, but we have been lied to for so long and the liars have infiltrated so much of our existence that it has become reality. 

"Make a big lie, make it simple, keep saying it, and eventually they will believe it."  ~ Hitler

Mon, 04/23/2012 - 20:08 | Link to Comment NewWorldOrange
NewWorldOrange's picture

LOL. I did realize he didn't mean that each and every one of us was literally taken out and repeatedly beaten all of our lives by government agents. But thanks for the tip.

And, you basically just said what I said, though I'd change the emphasis a bit to include some PERSONAL FUCKING RESPONSIBILITY without all the victim-speak, to go something like this:

"We have CONDITIONED OURSELVES not to think, to not question, to follow and beg for the guidance of TPTB.  We deserve what we have, BECAUSE ignoring the facts does not change them, AND we have CHOSEN TO BELIEVE THE LIES, or not seek the truth, for so long and the LIARS WE'VE ELECTED have infiltrated so much of our existence that it has become consensus reality."

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