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OMB's Stockman: "We're At The Fiscal Endgame"
To those on the hill and elsewhere who suggest this growing 'fiscal cliff' and 'debt ceiling' crisis will all get solved, former Office of Management and Budget (OMB) Director David Stockman tells Bloomberg TV that "they will punt, punt, punt and kick the can with partial solutions driven by eleventh hour crisis-based extensions that will go on for the whole of the next term!" When asked whether this economy will be mired in the doldrums, he rather ominously states "it will be worse, because we will be in recession" and notes that when the lame ducks re-look at the budget numbers with a realistic recession (instead of the current assumption of no recession within 12 years) it will be far worse and in a political environment where 'we cannot possibly raise taxes - and we cannot possibly cut spending'. With a 78% disapproval rating for the 'do nothing' Congress, Stockman is surprised that 16% somehow approve - approve of what? His warning is that unlike in past periods, today "we are completely paralyzed, there is an ideological divide on taxes and entitlement like we've never had before" and while he realizes that "the debt problem doesn't become a debt problem until the market suddenly have a wake up call and realize that if the Fed doesn't keep printing, it's game over."
"The fact that rates are so low is not a reflection of the US as a safe-haven but a bet on the Fed not allowing rates to rise."
"The perverse low-rate environment simply tells Congress that they can borrow a trillion dollars for 10 billion a year."
If rates rose then it would break this huge partisan stalemate we have today"
"There is a huge costs to stalemate!"
In a little under six minutes, David factually describes the certainly-not-priced-in dismal reality of the political situation we face in the next few months... must watch...
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We are not in a Recession. We are in an Economic Depression. This entire article describes the Economic Depression we are currently experiencing. No one wants to admit this fact including the person that wrote this article. If he had simply admitted that we are in an Economic Depression the article could have been written using 25% of the words used.
I'm feeling giddy for that fiscal cliff to finally happen.
Stockman has obviously not seen a chart of government bond ETF's lately.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72197115
Hands down the biggest run in history.
In a vibrant, growing economy interest rates are strong because businesses need money to expand. And new businesses and even industries are starting up.
The fact that so many people can find nothing better to do with their money than loan it to the government at negative real interest rates shows just how sick our "economy" truly is.
Were already in a recession.It's Bain Capital and Mitt Romneys fault. I agree the lady doing the interview is clueless.
Here's a good article related to this topic:
http://finance.yahoo.com/news/close-great-depression-142400188.html
I'm pretty much in agreeance with these opinions.
Sometimes I wonder if 9-11 wasn't a "sacrifice the few for the good of the many" scenario. The US gov't knows the collapse is coming and needs the wars, not to mention win them, to continue on. A few thousand dead is much better than the whole country lost. We don't need to have a discussion as to why or why not this isn't plausible it just runs thru my mind on occasion. Of course winning a war agains Russia and China is impossible unless you can breath radiation.
This shit is serious and everyday seems like a new piece of the puzzle materializes and what an ugly picture it is.
WTC7 - Controlled demolition or not? The entire building free falls into its own footprint as a result of a few "office furniture*" fires even though the building wasn't directly hit by any aircraft?? Right....
Architects and Engineers for 9/11 Truth:
http://www.ae911truth.org/en/home.html
*NIST Final Report
16% of people approve of Congress.
I guess we know who the percentage of the super rich people are, now.
She clearly did not believe a word he said.
He should have used some nice pictures for her.
We're heading towards recession (maybe somthing worse) no matter what the govt clowns do about anything. The fixes will take 10-20 yrs to work its way through properly.
Don't you just hate all these Obama adds on your blog? I know how it feels. Yesterday I heard Obama has outspent Romney 4 to 1 on Adds thus far. When will Mitt get his act together? If Obama gets reelected it really will be over for us.
It will be the same game reset as with Turkey and Israel in the 80s ago. Issue a new dollar/shekel/lira at a fixed rate of exchange to the old one.
When inflation destroys the new currency, issue a new-new currency. Repeat as needed.
In this particular game-over scenario, the new fiat does not get metal backing. The fiat clock is merely turned back and the Krugmans continue on as our wise elders.
As a special bonus, if the state sets different new/old currency exchage rates for different favored or despised constituencies (as Israel's Lbor government did), a lot of radical redistribution gets done at one stroke.
Every one of these new currency issues has a cut off date for the exchange and in every country there is a news story about the saver who came to the bank a day late with the old currency and got the HA_HA treatment.
Fiat people are not going to adopt metal as a result of a bond market meltdown or massive inflation. A conversion to metal will only come in the form of a desperate race after one major currency adopts partial or full backing (China's?).
Bond market meltdowns may or may not trigger foreign adoption. They will not trigger US adoption of a metal standard.
IMHO, as they say.
Stockman is right. That is why that IMF report on US being third is BS. We ARE paralyzed. And things will get worse.
http://confoundedinterest.wordpress.com/2012/07/16/imf-declares-spain-an...
I can't stand this chick...she barely listens to what he is really saying
Stockman is full of shit. Corp bonds are low as well - IBM just sold 3yr bonds at 0.75%, and 7yr bonds at a record low. Is Stockman saying the Fed is buying corporates, also?
He needs to choose his theory based on the facts; not choose his facts based on his theory.
You may want to take financial advice from Stockman with a grain of salt:
Having left government, Stockman joined the Wall St. investment bank Salomon Brothers and later became a partner of the now very successful New York–based private equity company, the Blackstone Group.[10] His record was mixed at Blackstone, with some very good investments, such as American Axle, but also several large failures, including Haynes International and Republic Technologies.[11] During 1999, after Blackstone CEO Stephen A. Schwarzman curtailed Stockman's role in managing the investments he had developed,[12] Stockman resigned Blackstone to start his own private equity fund company, Heartland Industrial Partners, L.P., based in Greenwich, Connecticut.[13]
On the strength of his investment record at Blackstone, Stockman and his partners raised $1.3 billion of equity from institutional and other investors. With Stockman's guidance, Heartland used a contrarian investment strategy, buying controlling interests in companies operating in sectors of the U.S. economy that were attracting the least amount of new equity: auto parts and textiles. With the help of about $9 billion in Wall Street debt financing, Heartland completed more than 20 transactions in less than 2 years to create four portfolio companies: Springs Industries, Metaldyne, Collins & Aikman, and TriMas. Several major investments performed very poorly, however. Collins & Aikman filed for bankruptcy during 2005 and when Heartland sold Metaldyne to Asahi Tec Corp. during 2006, Heartland lost most of the $340 million-plus of equity it had invested in the business.[14]
Collins & Aikman Corp.During August 2003, Stockman installed himself as CEO of Collins & Aikman Corporation, a Detroit-based manufacturer of automotive interior components. He was ousted from that job days before a Chapter 11 filing on May 17, 2005.
Criminal and civil chargesOn March 26, 2007, federal prosecutors in Manhattan indicted Stockman in "a scheme ... to defraud [Collins & Aikman]'s investors, banks and creditors by manipulating C&A's reported revenues and earnings." At the same time, the Securities and Exchange Commission brought civil charges against Stockman related to actions he performed while CEO of Collins & Aikman.[15] Stockman suffered a personal financial loss, estimated at $13 million, along with losses suffered by as many as 15,000 Collins & Aikman employees worldwide. Stockman said in a statement posted on his law company's website that the company's end was the consequence of an industry decline, not fraud.[16] On January 9, 2009, the U.S. Attorney's Office announced that it did not intend to prosecute Stockman for this case.
After Mitt is installed and things go from bad to worse to hellish, the citizens of the US will have attained the prerequisite level of frustration required for a viable 3rd Party to run and 'win' in 2016, 2020 at the latest.
You are presently witness to the conception of that party. They'll want to call it Socialist but that particular word is something of a PR problem for them. Perhaps by then we will need to look only to the Miracle of Europe as an example to follow...
I can't stand Stockman. At least he's telling the truth now - it's too bad he and his kind weren't doing so 30 years ago - too late now dickhead!
He has basically been saying the same thing since the Reagan administration. Namely that government deficits will lead us to ruin. He will eventually be proven right --- any decade now.
Good times are coming...
just as soon as I finish rolling this doobie.
and my vicodin to kick in...
"With a 78% disapproval rating for the 'do nothing' Congress, Stockman is surprised that 16% somehow approve - approve of what?"
uh, has anyone pointed out that 100% - 78% = 22%, not 16%? Can this guy subtract?
6% other.
I give, other what?
You'd need to ask either Gallup polling or Bloomberg, 2:44 in the video.
6% of the population "don't know" (what congress is probably)
Future scene at NY Federal Reserve Bldg.:
http://www.youtube.com/watch?v=dsx2vdn7gpY
Does not matter what party you are affiliated with, you do not want this comedy team in the White House when this economy collapses. This man is so un-american it scares the living shit out of me that people would even consider another 4 years of lies and deciet!
I agree, his supporters are also quite frightening, particularly the evangelical ones.
Do you seriously think that you've only been lied to and deceived for the past 4 years?
They "saved" SS in 1982, 83??
16% approval rate for Congress ?
Hei, even the food stamps holders, as a percentage, exceed 16% of total population......
OK. not all food stamps receiver approve CON-gress..... Guess what, if all food stamp receivers vote disapporval and drive the approval rate for Congres down to 0%, then the monthly stamps would certainly jump.......
DISAPPROVAL For Food...........................
I see roving bands of well-armed, hungry people.
I see banks shuttered.
I see smoke, fire, thuggery.
I see it all fall asunder.
I see dead people.
and I may have found John Denver's head !!!
Are you Nancy Grace?
Hey Hulk, I watched Back to Eden. I cried. Thanks. I am getting ready to do my garden in exactly that manner.
If the Fed keeps printing it s game over , if it stops printing it s game over!
GAME OVER!
I'm old. I've been preparing for this for 20 years. Demographics made the end game obvious. I was about 18 months off in my prediction of the start of the housing bust. Luckily my real estate holding that I wanted to sell off were in areas not hard hit, so I got out with no problem.
The real estate I wanted to keep (my fallback Galt-farm) is fine.
The weird thing is that so many of you think your gold and silver is going to save you.
That's wrong.
I'm sorry.
And my Galt-farm may not save me. But it's been a great run and if it ends tomorrow I can only be grateful for living in a great country in its' golden age and early decline. It's the young people that are screwed.
Are we still waiting for inflation goes to SUPERNOVA ?
Jubilee?