Oh Yeah, The Economy Is Improving 24 comments
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First, let me say it again, since people seem not to read The Ticker often: The Market Ticker is not a short-term trading log. If you're looking for that, you can find it with a gold star on Tickerforum. End of (short) rant.
Those who claim that the macro environment is improving - fit these pieces in your models and smoke 'em. We'll start with the Credit Survey:
Credit remained especially tight for commercial and industrial loans, commercial real estate loans and credit cards. Some banks were beginning to ease standards for residential mortgages.
Most banks said they would tighten standards for credit cards in reaction to recent legislation that outlawed some practices Congress said were abusive to customers.
That's not so good. But it pales compared to this:
Banks that tightened credit requirements for business loans did so for the same three reasons cited in earlier surveys: reduced tolerance for risk, an uncertain economic outlook, and problems specific to industries.
Heh wait a second! I thought the economic outlook was improving? Not according to the banks it isn't!
The details? A scant two percent of banks eased standards for prime residential mortgages, and 4% were more willing to make consumer loans. For all others lending standards remained the same or tightened.
Next, if you think the mega-sized profits and bonuses of the "too big to fail" are going to stay, well, perhaps not. Of course the big boyz will fight it, but perhaps - just perhaps - someone's been reading Tickers on The Hill....
"What you will have is another public utility sector, with banks growing roughly 4% a year, funded by deposits," Richard Bove, a financial-services analyst at Rochdale Securities, said in an interview.
That could change things.....
To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.
"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said.
That's New York! Uh, wait a second. I thought Wall Street was back to their tax-paying, bonus-giving ways? What's this?
The governor says $3.2 billion in cuts must be enacted how -- or else. The cuts range from $500 million in agency spending to over $1 billion in already committed in aid to school districts and hospitals.
Hoh hoh hoh - Merry Christmas, especially given....
But Senate Democrats, with their tenuous 32-30 hold on the upper house, are terrified to make school and hospital cuts because, they said, the cuts could mean increases in local property taxes.
That's right, your property value goes down but your taxes go up! Isn't that special?
Of course government never wants to deal with things like gold-plated (and diamond-studded!) pension plans, or double-dipping "retirees" that come back as "consultants" or even take a second job (to get a second pension!) and other similar games. Why no!
The average American is supposed to tighten HIS or HER belt, but government? Hoh hoh hoh - no, we'll pick your pocket instead!
(Let's not forget that NY State increased spending last year - into the maw of this mess - by some $12 billion. That was smart, no?)
I have a solution to this - Tax these bonuses at a 90% marginal rate:
Nov. 9 (Bloomberg) -- Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year.
The firms -- the three biggest banks to exit the Troubled Asset Relief Program -- will hand out $29.7 billion in bonuses, according to analysts’ estimates.
That ought to cover it. After all, none of these firms would exist were it not for the extraordinary help they received. Since they're taking the "I don't give a damn" position, NY State should do the same, and enact a 90% marginal rate on their bonuses - including stock awards - to be paid in cash, up front.
The Minority Report is a data-grounded call for gutsy leadership to modernize the pension system that Illinoisans can't sustain: "Just to keep the unfunded obligation from growing, the state should be funding pensions to the extent of about $8.3 billion (per year) out of operating revenues."
That approaches one-third of the current state budget. Can't be done.
But heh, I'm just a pessimist, right?
First California, now New York, all as a consequence of allowing "the mighty" (whether they be public unions or banksters) to rob the government and public wholesale.
I guess I shouldn't be surprised; after all, Washington DC set a perfect example by ripping off the taxpayer - nearly literally at gunpoint - for $700 billion last year.
What's a few more billion between "friends"?
Finally, a bit of (possible) tin - a claim that "peak oil" is much closer than claimed in the Guardian (UK):
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
If that meme gains traction into an imploding dollar I hope you like paying $6+/gallon for your gasoline. Let's not talk about heating oil or diesel fuel (the same thing really), especially going into the winter months....
What does Warren know?
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This article has 24 comments:
MORE of the same.
The CBPP also studied what kinds of budget decisions the states have already made because of the crisis. Key findings include the following:
27 states have reduced health benefits for low-income children and families;
25 states are cutting aid to K-12 schools and other educational programs;
34 states have cut assistance to state colleges and universities;
26 states have instituted hiring freezes;
13 states have announced layoffs; and
22 states have reduced state workers' wages.
Since the worst of the states' budget shortfalls lies ahead, we can expect all of these numbers to deteriorate further.
These state actions not only undercut the federal government's short-term stimulus goals; they also impose long-term costs on the economy in the diminished health and education of the U.S. workforce. Just when the mass of Americans need more help and support from their state governments, our economic system provides them with less. This raises the human and fiscal costs of the crisis. It worsens in the cities and municipalities.
A rising stock market is not a sign of economic recovery. It is a sign of mis-directed funds enabling a broken system to criple along at the expense of the taxpayer.
The one thing I am counting on, is a huge wave of Retail Layoffs in January or February after the bad news comes in, and the Returns are processed.
The amount of apathy, ignorance and down right 'hang dog' attitude in the country is frightening. No wonder the TBTFs and government can get away with what they are doing - because they know they can! No one gives a s- -t. They have given up before they even try. The sheer amount of hubris, corruption, deceit, false information and misleading numbers have brow beaten the electorate into such a submissive state that those in power have a free rein.
Before any fair recovery can take place, the spirit and principles of the Constitution must be enforced. Prosecution and punishment of those wrong doers must be accomplished - at the very least start the process. The present poisoned atmosphere of Washington DC and Wall Street requires fumigation and expunging before the nauseating, incipient rot that resides there poisons what little there is left that is good in the country.
Donald Ingram, brilliant response. Couldn't have expressed your sentiment better myself.
On Nov 10 12:41 PM conceptwizard wrote:
> The Center on Budget and Policy Priorities (CBPP) in Washington,
> DC monitors and calculates the gap between the fifty states' tax
> revenues and expenditures.
> The CBPP also studied what kinds of budget decisions the states have
> already made because of the crisis. Key findings include the following:
>
>
> 27 states have reduced health benefits for low-income children and
> families;
> 25 states are cutting aid to K-12 schools and other educational programs;
>
> 34 states have cut assistance to state colleges and universities;
>
> 26 states have instituted hiring freezes;
> 13 states have announced layoffs; and
> 22 states have reduced state workers' wages.
> Since the worst of the states' budget shortfalls lies ahead, we can
> expect all of these numbers to deteriorate further.
>
> These state actions not only undercut the federal government's short-term
> stimulus goals; they also impose long-term costs on the economy in
> the diminished health and education of the U.S. workforce. Just when
> the mass of Americans need more help and support from their state
> governments, our economic system provides them with less. This raises
> the human and fiscal costs of the crisis. It worsens in the cities
> and municipalities.
>
> A rising stock market is not a sign of economic recovery. It is a
> sign of mis-directed funds enabling a broken system to criple along
> at the expense of the taxpayer.
Warren does not know anything more than what many of us already know. Peak Oil is a fact, not an internet meme. We peaked already in 2005. Each and every one of the world's top 20 largest oil fields are in decline, some very step.
Mexico's Cantarell, world's 2nd largest oil field, was still producing as much as 2M barrels per day as recent as 2005. Now it is less than 0.7M barrel a day and still dropping at an annual rate of 30% decline. Some Texas oil fields have a water cut of 99%: 99% of what comes out is water injected to get the oil out, only 1% is the oil. I recomment every one read Matthey Simmon's "Twilight in the Desert".
In a hyper inflation, you will not pay $6 per gallon for gasoline, you will pay much higher. Some people will simply not be able to afford gasoline any more. That's the whole point, demand destruction must occur. Some must be priced out of the market.
The Oil Drum is a good site to read discussions on Peak Oil:
www.theoildrum.com/
I believe there is only one salvation from the Peak Oil crisis: Development of Cold Fusion, and a precious metal called palladium, element No. 46. Read this web site:
lenr-canr.org/News.htm
Collapse of the dollar looks like imminent now. This web site allows real time tracking of the US dollar index:
quote.goldseek.com/dol...
Which is why I fully expect to see another stimulus aimed at the same inane targets next year. Gotta keep those state employees' paychecks and pensions flowing. State employees vote after all.
In Michigan it seems our entire plan is to tax 99% of business to closure, while bailing out/ supporting 1% and keep the status quo in state employees' paychecks and benefits. We used $1.8 BILLION of Fed money to plug the gaps last year and this.
The only solution there is for Michigan is more Fed money. There is nothing else.
So, I fully expect this will continue on until we find out what bankrupt Federal coffers truly means.
Nicely done, as usual.
On Nov 11 08:15 AM TeresaE wrote:
> The stimulus saved state employees' jobs - this year.
>
> Which is why I fully expect to see another stimulus aimed at the
> same inane targets next year. Gotta keep those state employees'
> paychecks and pensions flowing. State employees vote after all.
>
>
> In Michigan it seems our entire plan is to tax 99% of business to
> closure, while bailing out/ supporting 1% and keep the status quo
> in state employees' paychecks and benefits. We used $1.8 BILLION
> of Fed money to plug the gaps last year and this.
>
> The only solution there is for Michigan is more Fed money. There
> is nothing else.
>
> So, I fully expect this will continue on until we find out what
> bankrupt Federal coffers truly means.
>
> Nicely done, as usual.
There are many who have peddled violations of the laws of thermodynamics (or quantum mechanics) over the years, but they have all - every one - been scams.
That's because those are laws, not suggestions.
Anyone putting forward such a "solution" has instantly defined themself as a kook.
On Nov 10 01:22 PM Donald Ingram wrote:
> Shedding light into the dark corners of ongoing malfeasance and ineptitude
> does not make them go away, it reveals them to the people - IF they
> are looking.
>
> The amount of apathy, ignorance and down right 'hang dog' attitude
> in the country is frightening. No wonder the TBTFs and government
> can get away with what they are doing - because they know they can!
> No one gives a s- -t. They have given up before they even try. The
> sheer amount of hubris, corruption, deceit, false information and
> misleading numbers have brow beaten the electorate into such a submissive
> state that those in power have a free rein.
>
> Before any fair recovery can take place, the spirit and principles
> of the Constitution must be enforced. Prosecution and punishment
> of those wrong doers must be accomplished - at the very least start
> the process. The present poisoned atmosphere of Washington DC and
> Wall Street requires fumigation and expunging before the nauseating,
> incipient rot that resides there poisons what little there is left
> that is good in the country.
On Nov 10 12:41 PM conceptwizard wrote:
> A rising stock market is not a sign of economic recovery. It is a sign of mis-directed funds enabling a broken system to criple along at the expense of the taxpayer. <
Thanks for the detail on state spending cuts. On the comment above, the correlation of the stock market/dollar leads me to believe that devaluation of the dollar has already begun. Thus, there is no "real dollar" rise in equity prices reflected in the current bull correction. They are simply higher in anticipated "future nominal dollar" terms.
Taxpayers believe moderate inflation is beneficial since it allows them to pay long term debt with cheaper dollars. However, State and Federal governments find it even more beneficial since it allows them to similarly fund long term capital projects payed by increased revenue via bracket creep while hiding increased spending as "rising costs." For example, teacher salaries, which have risen dramatically over the last couple of decades in real terms, were funded in many states by inflated home values.
You have been detached from physics for too long and probably forget some of the stuffs. You need to pick up your graduate school books on physics again. Many people exressed skeptism against Cold Fusion, but violation of thermal dynamics or quantum mechanics is not one of them. Most cited reason is how does the nucleid penetrate the huge Coloumb Barrier. Quantum mechanics is precisely the reason that you have a non-zero possibility of penetrating a potential barrier which you wouldn't be able to do under classical mechanics.
Cold Fusion is REAL. Hundreds of scientists persisted in Cold Fusion experimental research for 20 years with zero government funding support, many former skeptics have been converted into supporter after they saw the experiments themselves.
newenergytimes.com/v2/...
Do you suppose all these scientists have been mentally ill for 20 years? Or they come together to HOAX the world for 20 years with no money to gain and their own career to lose? Watch this CBS 60 Minutes Program aired on April 19, 2009:
www.cbsnews.com/video/...
There have been misterious attempted supression of the CBS 60 Minutes program, by invisible hands:
newenergytimes.com/v2/...
newenergytimes.com/v2/...
Note the one skeptics in the program, Dr. Garwin himself, visited the same Cold Fusion lab some years ago, on a mission assignment by the Department of Energy. He scrutinized the experimental details and submitted a report admitting that the excessive heat is real and that the amount of excessive heat far exceed any quantity that can be explained away by chemical processes, meaning they must be nuclear in nature.
newenergytimes.com/v2/...
Dr. Richard Garwin's deny of something he saw with his one eyes a few years ago was rather dishonest and disingenuous. He destroyed his own credibility, which is rather unfortunate for such a reputable scientist.
stockology.blogspot.co...
On Nov 11 09:07 AM Karl Denninger wrote:
> "Cold Fusion" is a farce.
>
> There are many who have peddled violations of the laws of thermodynamics
> (or quantum mechanics) over the years, but they have all - every
> one - been scams.
>
> That's because those are laws, not suggestions.
>
> Anyone putting forward such a "solution" has instantly defined themself
> as a kook.
Fusion is expected to cost the same.
My point is that there's really very little impetus until the gas is used up, and the supply curve changes the price.
good article.
Seen the Chase credit card commercials that basically say "Debt spend, debt spend, debt spend!".
How about the crafty "Ally bank" commercials? Well, they "used" to be GMAC. What better way to escape a tarnished reputation than to change your name and have some plastic surgery.
Seen any GM commercials lately? Bank of America? Oh yeah, government (taxpayer) funded advertising encouraging people to buy what they can't afford; this will help things!
Our society is living on it's own credit, debt spending and debt living, both financially, ethically, and spiritually.
On Nov 10 12:49 PM chris coonan wrote:
> I am waiting for Holiday commercials from the government, asking
> citizen's to spend the rest of what they have to bolster Christmas
> profits for retailers.....
>
> The one thing I am counting on, is a huge wave of Retail Layoffs
> in January or February after the bad news comes in, and the Returns
> are processed.
Why? Because they can.
On Nov 10 01:22 PM Donald Ingram wrote:
> Shedding light into the dark corners of ongoing malfeasance and ineptitude
> does not make them go away, it reveals them to the people - IF they
> are looking.
>
> The amount of apathy, ignorance and down right 'hang dog' attitude
> in the country is frightening. No wonder the TBTFs and government
> can get away with what they are doing - because they know they can!
> No one gives a s- -t. They have given up before they even try. The
> sheer amount of hubris, corruption, deceit, false information and
> misleading numbers have brow beaten the electorate into such a submissive
> state that those in power have a free rein.
>
> Before any fair recovery can take place, the spirit and principles
> of the Constitution must be enforced. Prosecution and punishment
> of those wrong doers must be accomplished - at the very least start
> the process. The present poisoned atmosphere of Washington DC and
> Wall Street requires fumigation and expunging before the nauseating,
> incipient rot that resides there poisons what little there is left
> that is good in the country.
Regretfully, we are the wrong "type" business to get into that game.
On Nov 11 09:04 AM Graham and Dodd Investor wrote:
> Then re-gear your business to serve state employees, right?