Robert Brusca's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/1085733/comments http://seekingalpha.com/article/679221/comments?source=feed#comment-6719011 6719011 Sat, 23 Jun 2012 08:57:48 -0400 http://seekingalpha.com/article/640981/comments?source=feed#comment-6229001 6229001
Whether a set of recessions is double dip or not has to do with more than just the passage of time..

It is not even recovering to the previous cycle peak.

I doubt that if we went into recession with the unemployment rate at around 8% there would be any sense of this next recession being 'independent. It would be the result of not getting sufficient recovery and being pulled back by the very same forces that activated the first one. it would give credibility to those who look at the current recovery and say its not a real recovery, we are still in recession. Indeed this recovery looks like no other post WWII recovery.

At some point we may have to come to grips with he last THREE recoveries in which the 'economy' went into recovery but the labor market did not...(until much later).


There is no formal definition of double dip, so everyone can have their own standard. I can't say yours is 'wrong' in any technical sense but I want to explain where my thinking comes from. There is grounds for disagreement here lacking any formal definition. I can respect your choice, but still disagree with it.

]]> Fri, 08 Jun 2012 08:55:12 -0400
Whether a set of recessions is double dip or not has to do with more than just the passage of time..

It is not even recovering to the previous cycle peak.

I doubt that if we went into recession with the unemployment rate at around 8% there would be any sense of this next recession being 'independent. It would be the result of not getting sufficient recovery and being pulled back by the very same forces that activated the first one. it would give credibility to those who look at the current recovery and say its not a real recovery, we are still in recession. Indeed this recovery looks like no other post WWII recovery.

At some point we may have to come to grips with he last THREE recoveries in which the 'economy' went into recovery but the labor market did not...(until much later).


There is no formal definition of double dip, so everyone can have their own standard. I can't say yours is 'wrong' in any technical sense but I want to explain where my thinking comes from. There is grounds for disagreement here lacking any formal definition. I can respect your choice, but still disagree with it.

]]> http://seekingalpha.com/article/640981/comments?source=feed#comment-6228611 6228611
We have no historic reference for current GDP growth metrics in raw form since we have not seen our growth potential this low. That is why I use the metric of GDP growth relative to potential instead of the unadjusted growth rate. Try this: read the article to see why that is important.

I guess you don't want to read the article just diss it.

Ok with me.

But why not READ IT and learn something instead of picking at points I have not made or making the same mistakes I warn against making?

ANd..after all you bluster about using recent pre-lim data you are doing it yourself with other GDP components. Good Show! I guess even you were not convinced by your own argument.

By the way the NBER method is not at all convoluted. It talks of recessions as having three metrics: depth, breadth and length. When economic contraction is deep enough, long enough and widespread enough its a recession. No one has some up with any formula to reduce these three metrics a scalar or a binary signal. I continue to ponder the possibilities.]]> Fri, 08 Jun 2012 08:43:43 -0400
We have no historic reference for current GDP growth metrics in raw form since we have not seen our growth potential this low. That is why I use the metric of GDP growth relative to potential instead of the unadjusted growth rate. Try this: read the article to see why that is important.

I guess you don't want to read the article just diss it.

Ok with me.

But why not READ IT and learn something instead of picking at points I have not made or making the same mistakes I warn against making?

ANd..after all you bluster about using recent pre-lim data you are doing it yourself with other GDP components. Good Show! I guess even you were not convinced by your own argument.

By the way the NBER method is not at all convoluted. It talks of recessions as having three metrics: depth, breadth and length. When economic contraction is deep enough, long enough and widespread enough its a recession. No one has some up with any formula to reduce these three metrics a scalar or a binary signal. I continue to ponder the possibilities.]]> http://seekingalpha.com/article/640981/comments?source=feed#comment-6228341 6228341
While data may be flawed it is still our only way to 'know' what is going on. I don't the like the 'make it up as you go along' method.

I really don't want someone with partisan views telling me what really IS going on. I'll take the 'flawed government numbers any day.

I wrote this price because some have been arguing that GDP growth below 2% is a recession signal. The point was to de-bunk that.]]> Fri, 08 Jun 2012 08:32:48 -0400
While data may be flawed it is still our only way to 'know' what is going on. I don't the like the 'make it up as you go along' method.

I really don't want someone with partisan views telling me what really IS going on. I'll take the 'flawed government numbers any day.

I wrote this price because some have been arguing that GDP growth below 2% is a recession signal. The point was to de-bunk that.]]> http://seekingalpha.com/article/640981/comments?source=feed#comment-6196411 6196411 Thu, 07 Jun 2012 10:13:32 -0400 http://seekingalpha.com/article/640981/comments?source=feed#comment-6196321 6196321
I don't see what you want. THIS IS REALITY. Are you opposed to reality?]]> Thu, 07 Jun 2012 10:12:09 -0400
I don't see what you want. THIS IS REALITY. Are you opposed to reality?]]> http://seekingalpha.com/article/640981/comments?source=feed#comment-6188991 6188991
As for 'stop calling it a double dip'.. since this recovery began some have been forecasting a second recession. And while we are far enough along this 'recovery' that some might think that the next recession is 'independent,' the very awkward and incomplete nature of this recovery, the fact that we have not made anything like a complete recovery, and the height of the unemployment now ensure that these two recessions (were one to occur 'soon') would be forever linked as a double dip regardless of your assertion to the contrary.

Whether a set of recessions is double dip or not has to do with more than just the passage of time..

Beyond that the logic of the article is fine. Your dog analogy is a dog and its barking.]]> Thu, 07 Jun 2012 07:26:14 -0400
As for 'stop calling it a double dip'.. since this recovery began some have been forecasting a second recession. And while we are far enough along this 'recovery' that some might think that the next recession is 'independent,' the very awkward and incomplete nature of this recovery, the fact that we have not made anything like a complete recovery, and the height of the unemployment now ensure that these two recessions (were one to occur 'soon') would be forever linked as a double dip regardless of your assertion to the contrary.

Whether a set of recessions is double dip or not has to do with more than just the passage of time..

Beyond that the logic of the article is fine. Your dog analogy is a dog and its barking.]]> http://seekingalpha.com/article/449201/comments?source=feed#comment-3832121 3832121
They are the wrong tool for the purpose they allegedly serve too.

Good luck sorting out the banks

Soon none of them will able to take any risk and they all will be 'safe.'

B]]> Mon, 26 Mar 2012 11:33:54 -0400
They are the wrong tool for the purpose they allegedly serve too.

Good luck sorting out the banks

Soon none of them will able to take any risk and they all will be 'safe.'

B]]> http://seekingalpha.com/article/449201/comments?source=feed#comment-3751611 3751611
I did not mean to mislead you only to explain why stress test performance should be viewed with a whole shaker full of salt.

I do hope that that observation helps you.

RAB]]> Fri, 23 Mar 2012 09:25:46 -0400
I did not mean to mislead you only to explain why stress test performance should be viewed with a whole shaker full of salt.

I do hope that that observation helps you.

RAB]]> http://seekingalpha.com/article/430391/comments?source=feed#comment-3581871 3581871
The growth of per capita income in the recovery has been very slow too, but is in line with the past two recovery episodes.

And, of course, population growth it self has slowed and is at a low point since 1960.]]> Sun, 18 Mar 2012 04:16:56 -0400
The growth of per capita income in the recovery has been very slow too, but is in line with the past two recovery episodes.

And, of course, population growth it self has slowed and is at a low point since 1960.]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3581671 3581671
In Nature, naturally.]]> Sun, 18 Mar 2012 03:37:27 -0400
In Nature, naturally.]]> http://seekingalpha.com/article/430391/comments?source=feed#comment-3539521 3539521
The employment-population ratio is falling. So that will challenge GDP/Population measures.

In Japan population is shrinking.

Aging populations are an issue globally not just in the main most-developed countries. And we need to be careful of excess pessimism.

Indeed demographers have pointed to lower GLOBAL fertility rates and are more a worry and that the trend will imply shrinking GLOBAL POPULATION far down the line. Malthus is dead! Really dead! So dead his ideas are even dying. Now that is dead.

Danger Will Robinson! Danger, danger!

The fact is that in the US jobs growth is really taking off, averaging 375K per MONTH over seven months in the Household report ( the one where they measure the unemployment rate) . The 'headline' payroll report is creating under 200K over the same period.

Put participation rates aside; there is job growth. All job measures are improving. Do not throw the baby out with the bathwater.

It is a separate thing to say that growth is picking up from saying the economy is in good shape.

You would not measure Wilt Chamberlin's (Wilt the Stilt) son at 5yrs of age and say he is not 7 foot tall yet so he will never be as tall as his father! You need to check his height against the age of his peers. Similarly you can't be constantly critical that we are not at full employment. It will take a long time to get back there. Ask instead, is there progress? And there is progress. By some measures there is a lot.

Denying it - I think- is wrong. Attributing it to someone is the key political issue of the day. But I do not want objective economic analysis spoiled by political agendas. So don't drag me into that quagmire. I am not taking sides on the blame or kudos game. I do want to be able to objectively assess the economy- politics be damned!

I don't think per-capital GDP is useful in making a growth assessment right now. While there are some clear challengers to economic welfare when people leave the labor force and stop contributing to GDP, its really hard to say what that is. Some see the exit from the labor force as the result of failed economic policies. But people leave the LF for all sorts of reasons.

I grew up in Michigan. I worked on auto assembly lines. Hot, sweaty, grunt work but great pay -at the time. Now in Michigan many plants are closed. the high wage jobs are gone. The multiplier effects have ravaged Saginaw, Flint and Bay City. House prices fall. People have roots there but no longer jobs. The wages paid no longer can support the stock of homes at past prices so house prices fall. People are trapped in underwater mortgages. Unemployment assistance runs out.

There are NO JOBS there. People stop looking. Are they unemployed?

are they?

Its an interesting question. Because many are not looking for the job that, in fact, does not exist. Yet they really do want to work. They are not slackers; they are just TRAPPED. They need to move, to seek work in a better environment. If they stay and wait they may be 'unemployed' or should I say 'not working' for another five years. Is that Obama's fault? Bush's fault? Who is at fault?

Whose job is it to create new jobs? GM failed them. They failed themselves with unions who failed them for getting wages too high for GM to compete. I think that is true but but many will hate me for saying it. GM failed because it paid its workers much more than they were paid down South or in China. Free trade is one unrelenting factor So do we blame Richard Nixon for 'opening' China? Who do we blame? .

Move South and east from the tri-city area to Detroit. Again, union benefits are strangling the city that has lost one-quarter of its population. If it fired everyone of its remaining 11K public sector workers, pension costs alone would dry up its cash by around mid year.

Detroit, the city of collective bargaining love, let itself pay more than it can afford to retired workers, let them retire too early etc.

Now everyone is in trouble. Retirees want their benefits. They worked and were promised... I see that. But the city HAS NO MONEY. Can't pay what you do not have.

So these are the real world forces that underlie phrases like employment to population ratio, participation rate, and per capita GDP.

The times they are a changin' as the man once sang. And with it there is stress. The industrial revolution was a great period in history but I doubt any of us would have liked to have lived through that transformation.

I do not think there are easy answers here but I do not think per captia GDP is a useful measure of how the economy is progressing. But this just an opinion of mine and it is more mine than it is justified by any economic concept.

At this point per-capita-GDP is a political stick to hit the Fed or Obama or someone with. The argument bites but in the end it's not an exercise that will get you anywhere but frustrated.

best,

RAB . ]]> Fri, 16 Mar 2012 10:56:43 -0400
The employment-population ratio is falling. So that will challenge GDP/Population measures.

In Japan population is shrinking.

Aging populations are an issue globally not just in the main most-developed countries. And we need to be careful of excess pessimism.

Indeed demographers have pointed to lower GLOBAL fertility rates and are more a worry and that the trend will imply shrinking GLOBAL POPULATION far down the line. Malthus is dead! Really dead! So dead his ideas are even dying. Now that is dead.

Danger Will Robinson! Danger, danger!

The fact is that in the US jobs growth is really taking off, averaging 375K per MONTH over seven months in the Household report ( the one where they measure the unemployment rate) . The 'headline' payroll report is creating under 200K over the same period.

Put participation rates aside; there is job growth. All job measures are improving. Do not throw the baby out with the bathwater.

It is a separate thing to say that growth is picking up from saying the economy is in good shape.

You would not measure Wilt Chamberlin's (Wilt the Stilt) son at 5yrs of age and say he is not 7 foot tall yet so he will never be as tall as his father! You need to check his height against the age of his peers. Similarly you can't be constantly critical that we are not at full employment. It will take a long time to get back there. Ask instead, is there progress? And there is progress. By some measures there is a lot.

Denying it - I think- is wrong. Attributing it to someone is the key political issue of the day. But I do not want objective economic analysis spoiled by political agendas. So don't drag me into that quagmire. I am not taking sides on the blame or kudos game. I do want to be able to objectively assess the economy- politics be damned!

I don't think per-capital GDP is useful in making a growth assessment right now. While there are some clear challengers to economic welfare when people leave the labor force and stop contributing to GDP, its really hard to say what that is. Some see the exit from the labor force as the result of failed economic policies. But people leave the LF for all sorts of reasons.

I grew up in Michigan. I worked on auto assembly lines. Hot, sweaty, grunt work but great pay -at the time. Now in Michigan many plants are closed. the high wage jobs are gone. The multiplier effects have ravaged Saginaw, Flint and Bay City. House prices fall. People have roots there but no longer jobs. The wages paid no longer can support the stock of homes at past prices so house prices fall. People are trapped in underwater mortgages. Unemployment assistance runs out.

There are NO JOBS there. People stop looking. Are they unemployed?

are they?

Its an interesting question. Because many are not looking for the job that, in fact, does not exist. Yet they really do want to work. They are not slackers; they are just TRAPPED. They need to move, to seek work in a better environment. If they stay and wait they may be 'unemployed' or should I say 'not working' for another five years. Is that Obama's fault? Bush's fault? Who is at fault?

Whose job is it to create new jobs? GM failed them. They failed themselves with unions who failed them for getting wages too high for GM to compete. I think that is true but but many will hate me for saying it. GM failed because it paid its workers much more than they were paid down South or in China. Free trade is one unrelenting factor So do we blame Richard Nixon for 'opening' China? Who do we blame? .

Move South and east from the tri-city area to Detroit. Again, union benefits are strangling the city that has lost one-quarter of its population. If it fired everyone of its remaining 11K public sector workers, pension costs alone would dry up its cash by around mid year.

Detroit, the city of collective bargaining love, let itself pay more than it can afford to retired workers, let them retire too early etc.

Now everyone is in trouble. Retirees want their benefits. They worked and were promised... I see that. But the city HAS NO MONEY. Can't pay what you do not have.

So these are the real world forces that underlie phrases like employment to population ratio, participation rate, and per capita GDP.

The times they are a changin' as the man once sang. And with it there is stress. The industrial revolution was a great period in history but I doubt any of us would have liked to have lived through that transformation.

I do not think there are easy answers here but I do not think per captia GDP is a useful measure of how the economy is progressing. But this just an opinion of mine and it is more mine than it is justified by any economic concept.

At this point per-capita-GDP is a political stick to hit the Fed or Obama or someone with. The argument bites but in the end it's not an exercise that will get you anywhere but frustrated.

best,

RAB . ]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3536891 3536891
...and you need to understand what circular reasoning is really about. It not about me disagreeing with your (who makes thinks up: Larry-land!) and you disagreeing with me (who tries to benchmark the argument to economic thought) and then you rejecting me and making something up again and so on and so forth. That is a circle of sorts but not circular reasoning.

.And I spent a good deal of time actually dealing with your attempt to be an expert where you are not. I demonstrated (in the post you did not read) why my position is not based on circular reasoning. But in the end you are more wedded to your thoughts than to learning or to confronting actually opposed opinion. Again and again you simply refused to deal with the points I made. While I actually confronted and dealt with each of your arguments. So who showed whom respect here Larry-boy? In the end I used more strident language to try to get you to confront reality, but alas, you wish to live in larry-land.

So be it. have fun there.

I have been respectful if stern. I have related my criticism to economic tenets which you reject and I can see how that makes me arrogant and stupid, in your mind.

This is the last lawyer trick. If you can't win the argument you try to destroy the credibility of the opponent/witness. Brilliant, Larry. You now rest your case and leave the court room - to the stunned silence of one-hand clapping.

Since I do not see the light of Larry's wisdom as superior to centuries of economic thought I am stupid, I am arrogant. Oh God do forgive me, my hubris!.

The internet is free. And as economists say, you get what you pay for.
You are an example of that. I try to give more and to at least give a good accounting of myself and my views.

I remain proud of the posts I write because they reflect me and my thinking. I was in the end harsh with you but only after you ignored me and trashed me and denigrated my arguments with words of made-up Larry wisdom.' I Reject rules I reject systems!' Oh wow can we publish that in the American Economic Review? Brilliant just Brilliant. Sure proves MY arrogance, doesn't it?

I had to do something to wake you up. In response to one of my posts you actually cut and pasted your treatise on capital flows from anther place. Who is really the arrogant one?

Anyone who reads my post(s) will see that I took a position and defend it with reference to economic thought and knowledge. It took time for me to more aggressive with your Larryisms. I showed you a great deal of respect even though your ego will not let you see it.

In the end, you took the low road and just spewed insults.

Shame on you, Larry.

Shame on you. But that was your way all along wasn't it?

I am glad I no longer have to deal with your opinionated unfounded spew, for that is what it is as I have demonstrated in my writing. I feel sorry for you that you cannot be content with expertise you have and want to spread you wings to shadow over a domain where you do not rule and can barely walk or crawl. But you can write well so you can dress up your ill-logic in some fine rhetoric. .

You are the arrogant one, I am not. I have only and consistently marked your arguments to economic fact while you have spurned economic rules and asserted your own values. And, after all of that, you can't understand why I do not want to sign on for Larryy-nomics.

I doubt anyone does.

Good luck with that, Larry

By the way, you can be critical of someone's ideas and not attack them personally but I can see you are incapable of understanding that process.

So,
Somewhat less respectfully,

RAB]]> Fri, 16 Mar 2012 09:48:47 -0400
...and you need to understand what circular reasoning is really about. It not about me disagreeing with your (who makes thinks up: Larry-land!) and you disagreeing with me (who tries to benchmark the argument to economic thought) and then you rejecting me and making something up again and so on and so forth. That is a circle of sorts but not circular reasoning.

.And I spent a good deal of time actually dealing with your attempt to be an expert where you are not. I demonstrated (in the post you did not read) why my position is not based on circular reasoning. But in the end you are more wedded to your thoughts than to learning or to confronting actually opposed opinion. Again and again you simply refused to deal with the points I made. While I actually confronted and dealt with each of your arguments. So who showed whom respect here Larry-boy? In the end I used more strident language to try to get you to confront reality, but alas, you wish to live in larry-land.

So be it. have fun there.

I have been respectful if stern. I have related my criticism to economic tenets which you reject and I can see how that makes me arrogant and stupid, in your mind.

This is the last lawyer trick. If you can't win the argument you try to destroy the credibility of the opponent/witness. Brilliant, Larry. You now rest your case and leave the court room - to the stunned silence of one-hand clapping.

Since I do not see the light of Larry's wisdom as superior to centuries of economic thought I am stupid, I am arrogant. Oh God do forgive me, my hubris!.

The internet is free. And as economists say, you get what you pay for.
You are an example of that. I try to give more and to at least give a good accounting of myself and my views.

I remain proud of the posts I write because they reflect me and my thinking. I was in the end harsh with you but only after you ignored me and trashed me and denigrated my arguments with words of made-up Larry wisdom.' I Reject rules I reject systems!' Oh wow can we publish that in the American Economic Review? Brilliant just Brilliant. Sure proves MY arrogance, doesn't it?

I had to do something to wake you up. In response to one of my posts you actually cut and pasted your treatise on capital flows from anther place. Who is really the arrogant one?

Anyone who reads my post(s) will see that I took a position and defend it with reference to economic thought and knowledge. It took time for me to more aggressive with your Larryisms. I showed you a great deal of respect even though your ego will not let you see it.

In the end, you took the low road and just spewed insults.

Shame on you, Larry.

Shame on you. But that was your way all along wasn't it?

I am glad I no longer have to deal with your opinionated unfounded spew, for that is what it is as I have demonstrated in my writing. I feel sorry for you that you cannot be content with expertise you have and want to spread you wings to shadow over a domain where you do not rule and can barely walk or crawl. But you can write well so you can dress up your ill-logic in some fine rhetoric. .

You are the arrogant one, I am not. I have only and consistently marked your arguments to economic fact while you have spurned economic rules and asserted your own values. And, after all of that, you can't understand why I do not want to sign on for Larryy-nomics.

I doubt anyone does.

Good luck with that, Larry

By the way, you can be critical of someone's ideas and not attack them personally but I can see you are incapable of understanding that process.

So,
Somewhat less respectfully,

RAB]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3504091 3504091
I'm sorry to render that stark and scathing comment but it is true.

My reasoning is not circular. Your calling it circular is another lawyer trick that you clearly have a bag full of from your many years of 'lawyering'. The lawyer trick to engage in illogical refutation by creating a bogus argument is a great tactic if it works.

Lawyers understand that there are weak and strong positions. They have a saying, (and please correct me if i get this wrong, since you are the expert in that field) I believe it is this: if the facts are on your side argue the facts, if the facts (of the case) are not on your side, argue the law.

In this case neither of them are on your side. The facts speak plainly to the existence of a gargantuan distortions, in US trade and current account deficit (in absolute size and as percentage of US GDP and as a percentage of foreign savings etc etc).

The economic laws and theory you simply reject and you want to replace them with personal sophistry. So fine. Go build Larry Land right to Chevy Chase's Wally World.

To create a straw-man argument and destroy is simple, but it does not make your position correct. Such tactics are more face-saving than anything else. .

SO LET...ME...TRY...THIS....

If export led growth strategy is what causes reserve accumulation to occur, it implies excess reserve accumulation That IS the cause and the argument is not circular, it is direct.

POLICY: export led growth->FX_rate too low-> Excess exports-> excess trade surplus-> excess capital outflows-> excess asset accumulation-> excess FX asset build up. QED.

Also, though, -> larger FOREIGN deficits since the sum of global trade or current account balances must equal zero (they do in theory but not in practice... for too many reasons to discuss here).

I'm sure you are bristling to take aim at my excessive use of the word 'excess' so let me explain...

In economics the right values for variables in markets are the values that occur 'in nature' without government distortion. So when a government policy distorts the free market the distortion created by that policy is the cause of it ( that's 'THE CAUSE,' as in 'policy of export-led growth'). that distortion traces back to the policy that caused it. Moreover, in economics, distortions do not live in isolation. Here think of double entry book keeping or action and reaction.

A too big current account surplus implies a too big capital account deficit as the financial consequence and similar pairs of distortion for some other nation or for several of them.

Any knock on effects from that initial policy distortion are due to government policy that created it. And since in trade one country's surplus is another's deficit if a government policy for export-led growth in China creates a surplus that 'would not occur in nature' (by continually suppressing the rise in the yuan's FX value that would diminish China's competitiveness edge and reduce the surplus, for example...) that it will create/transmit a distortion to another country that will wind up with the other side of that trade, the deficit. You see, its action and reaction or double entry book keeping in action.

This is why I keep saying economics is about systems and how they operate. For systems to operate fairly they have rules. Because of these rules everyone on both sides of the transaction, whatever it is, get fair value.

If someone gives you something too cheap there are consequences. They may not be immediate.

In this world too cheap goods from China while seemingly a windfall, lead, through a complex process, to fewer jobs in the US excess consumption and excess debt to finance that consumption and a degradation of US welfare through the back door of debt accumulation and rising unemployment.

That is not immediately evident when you take something too cheap. And it does not appear immediately in the doctrine of free trade which ASSUMES (critically!!) that transactions occur at fair market prices. The systematic nature of Free Trade is only understood in the context of closed economic system with a finical sector where the knock on impact of too cheap goods to too few jobs and too high unemployment and too much debt eventually reveal its dark side.

By the way this is one shortcoming of economics which usually teaches 'real theory' separate from 'financial theory'.

These knock on effects are not there in a recitation of Ricardian comparative advantage theory because it is only a partial demonstration. It is usually offered as a comparative static result: look at this state vs that one, under the assumption that financial side that is left out is in equilibrium - a true market equilibrium not a phony one..

China is violating the rules of this financial system along with other countries. When trade and capital flows are out of kilter transactions take place as sub-optimal prices and the result of 'sort of free trade' is not what you would get in true free trade.

---------------
...and the trade deficit IS gargantuan prima facie! It is huge relative to GDP is is no where close to zero or want normal reserve accumulation by other countries might call for. I can't imagine having to justify that statement and will go no further to do so.

---------------
The Walmart example is yours. Walmart workers are neither underpaid nor over paid according to what some people think. Rather they are overpaid or underpaid in reality. What some people 'think' is irrelevant.

As I have said before, If some people think the law of gravity does not apply to them they are free to think that but the law of gravity will not be 'repealed for them.

Economic theory is not about what people think but the about real truth, which is hard to discern, but it is out there somewhere.

If Walmart underpays people, they can work somewhere else. If too-skilled a person chooses to work there for wages that are too low that person probably will leave when the economy picks up. etc. Or maybe he/she will relocate..if he/she can.

------

As for you proposition on strategic goods, this is a very very old argument in economics and there is a lot of theory that has nothing to do with your own made up logic about what you think. Again you are welcome to your thoughts. but being unaware of CENTURIES of economic discourse on this subject hardly leaves you in a position to plow any new fertile ground. You might start your economic education by reading about the Corn Laws in England around 1815. These laws were in effect from 1815 to 1846 and economic literature has abundant commentary on the welfare effects of these laws. 'Corn' was taken to be of strategic importance in the case of war England wanted to be able to feed itself...or so the Corn Law cover-story goes...

In economics 'welfare' has a more objective meaning than the one commonly associated with the term today so you might want to get some background on that too.

Governments of course have more than 'welfare considerations' when they make laws but if in the name of national security some trade impediment is put in place there are still economic distortions and consequences. Saying that there is a national security reason does cause economists to say Oh, OK, never mind.

----------------------...

You can write on economics all you want. It's a free country. But with each step you simply demonstrate how much of a foundation you lack in this field. You undermine your own conclusions.

I'm sure I'd look equally clumsy if I tried to write about law. But you do not have a leg to stand on in this argument. I don't care if you have written a book or who has published it. The more I read of your comments the less I care to ever read your book. Maybe you should write one about law, an area where you are an expert?

You are clearly a smart guy. I bet you would write one heck of a good book on some legal issue that you understand inside and out.. Why not put your talent to better use?

Respectfully,

RAB]]> Thu, 15 Mar 2012 11:02:46 -0400
I'm sorry to render that stark and scathing comment but it is true.

My reasoning is not circular. Your calling it circular is another lawyer trick that you clearly have a bag full of from your many years of 'lawyering'. The lawyer trick to engage in illogical refutation by creating a bogus argument is a great tactic if it works.

Lawyers understand that there are weak and strong positions. They have a saying, (and please correct me if i get this wrong, since you are the expert in that field) I believe it is this: if the facts are on your side argue the facts, if the facts (of the case) are not on your side, argue the law.

In this case neither of them are on your side. The facts speak plainly to the existence of a gargantuan distortions, in US trade and current account deficit (in absolute size and as percentage of US GDP and as a percentage of foreign savings etc etc).

The economic laws and theory you simply reject and you want to replace them with personal sophistry. So fine. Go build Larry Land right to Chevy Chase's Wally World.

To create a straw-man argument and destroy is simple, but it does not make your position correct. Such tactics are more face-saving than anything else. .

SO LET...ME...TRY...THIS....

If export led growth strategy is what causes reserve accumulation to occur, it implies excess reserve accumulation That IS the cause and the argument is not circular, it is direct.

POLICY: export led growth->FX_rate too low-> Excess exports-> excess trade surplus-> excess capital outflows-> excess asset accumulation-> excess FX asset build up. QED.

Also, though, -> larger FOREIGN deficits since the sum of global trade or current account balances must equal zero (they do in theory but not in practice... for too many reasons to discuss here).

I'm sure you are bristling to take aim at my excessive use of the word 'excess' so let me explain...

In economics the right values for variables in markets are the values that occur 'in nature' without government distortion. So when a government policy distorts the free market the distortion created by that policy is the cause of it ( that's 'THE CAUSE,' as in 'policy of export-led growth'). that distortion traces back to the policy that caused it. Moreover, in economics, distortions do not live in isolation. Here think of double entry book keeping or action and reaction.

A too big current account surplus implies a too big capital account deficit as the financial consequence and similar pairs of distortion for some other nation or for several of them.

Any knock on effects from that initial policy distortion are due to government policy that created it. And since in trade one country's surplus is another's deficit if a government policy for export-led growth in China creates a surplus that 'would not occur in nature' (by continually suppressing the rise in the yuan's FX value that would diminish China's competitiveness edge and reduce the surplus, for example...) that it will create/transmit a distortion to another country that will wind up with the other side of that trade, the deficit. You see, its action and reaction or double entry book keeping in action.

This is why I keep saying economics is about systems and how they operate. For systems to operate fairly they have rules. Because of these rules everyone on both sides of the transaction, whatever it is, get fair value.

If someone gives you something too cheap there are consequences. They may not be immediate.

In this world too cheap goods from China while seemingly a windfall, lead, through a complex process, to fewer jobs in the US excess consumption and excess debt to finance that consumption and a degradation of US welfare through the back door of debt accumulation and rising unemployment.

That is not immediately evident when you take something too cheap. And it does not appear immediately in the doctrine of free trade which ASSUMES (critically!!) that transactions occur at fair market prices. The systematic nature of Free Trade is only understood in the context of closed economic system with a finical sector where the knock on impact of too cheap goods to too few jobs and too high unemployment and too much debt eventually reveal its dark side.

By the way this is one shortcoming of economics which usually teaches 'real theory' separate from 'financial theory'.

These knock on effects are not there in a recitation of Ricardian comparative advantage theory because it is only a partial demonstration. It is usually offered as a comparative static result: look at this state vs that one, under the assumption that financial side that is left out is in equilibrium - a true market equilibrium not a phony one..

China is violating the rules of this financial system along with other countries. When trade and capital flows are out of kilter transactions take place as sub-optimal prices and the result of 'sort of free trade' is not what you would get in true free trade.

---------------
...and the trade deficit IS gargantuan prima facie! It is huge relative to GDP is is no where close to zero or want normal reserve accumulation by other countries might call for. I can't imagine having to justify that statement and will go no further to do so.

---------------
The Walmart example is yours. Walmart workers are neither underpaid nor over paid according to what some people think. Rather they are overpaid or underpaid in reality. What some people 'think' is irrelevant.

As I have said before, If some people think the law of gravity does not apply to them they are free to think that but the law of gravity will not be 'repealed for them.

Economic theory is not about what people think but the about real truth, which is hard to discern, but it is out there somewhere.

If Walmart underpays people, they can work somewhere else. If too-skilled a person chooses to work there for wages that are too low that person probably will leave when the economy picks up. etc. Or maybe he/she will relocate..if he/she can.

------

As for you proposition on strategic goods, this is a very very old argument in economics and there is a lot of theory that has nothing to do with your own made up logic about what you think. Again you are welcome to your thoughts. but being unaware of CENTURIES of economic discourse on this subject hardly leaves you in a position to plow any new fertile ground. You might start your economic education by reading about the Corn Laws in England around 1815. These laws were in effect from 1815 to 1846 and economic literature has abundant commentary on the welfare effects of these laws. 'Corn' was taken to be of strategic importance in the case of war England wanted to be able to feed itself...or so the Corn Law cover-story goes...

In economics 'welfare' has a more objective meaning than the one commonly associated with the term today so you might want to get some background on that too.

Governments of course have more than 'welfare considerations' when they make laws but if in the name of national security some trade impediment is put in place there are still economic distortions and consequences. Saying that there is a national security reason does cause economists to say Oh, OK, never mind.

----------------------...

You can write on economics all you want. It's a free country. But with each step you simply demonstrate how much of a foundation you lack in this field. You undermine your own conclusions.

I'm sure I'd look equally clumsy if I tried to write about law. But you do not have a leg to stand on in this argument. I don't care if you have written a book or who has published it. The more I read of your comments the less I care to ever read your book. Maybe you should write one about law, an area where you are an expert?

You are clearly a smart guy. I bet you would write one heck of a good book on some legal issue that you understand inside and out.. Why not put your talent to better use?

Respectfully,

RAB]]> http://seekingalpha.com/article/430391/comments?source=feed#comment-3499801 3499801
there has been real growth ( real meaning growth in volume not just value driven by price) . It has been inadequate. I will have to look at some data to see if GDP per-capita has done much as I do not keep the regular pulse on that series. I'll get back on that later.

RAB]]> Thu, 15 Mar 2012 09:21:28 -0400
there has been real growth ( real meaning growth in volume not just value driven by price) . It has been inadequate. I will have to look at some data to see if GDP per-capita has done much as I do not keep the regular pulse on that series. I'll get back on that later.

RAB]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3467611 3467611
It is BECAUSE deficits are the engine of reserve creation that we need to be sure that the reserves that nations hold are 'optimal' in an of themselves not piles of Scrooge McDuck reserves accumulated as a by-product of a policy of EXPORT-LED -GROWTH!!!

So the point on the source of reserves is well taken - but it is still not swallowed whole. The counter point - which you prefer to ignore in its entirety - is that the US deficits are gargantuan beyond anyone's needs for FX reserves and they serve the needs of foreign masters who are effectively using economic warfare to drive the US deeply into a (blissful/overconsumpt... debt stupor.

There are rules of this game even if you reject them. Fortunately you are not the arbiter here; neither am I. But the consequences of ignoring rules are now coming to light and that should change things.

The rules are the basis for this system. Who would operate in a system without rules? Would play golf against me without first specifying rules? if we were to play match or for lowest score? Only a fool would do so. And we have been foolish to let folk remake the rules after their own design. EMU did this by degrading Mass-trick in mid stream. How did that turn out?

The gold system has its rules. A fixed rate system has its rules, this game has been slow to enforce its rules and the ossified imbalances of payments structure globally- which is not sustainable - is the result.

Without these rules there is no game, there is no basis for the argument of 'free trade' and there will eventually be chaos and trade wars.

"Manipulation" is not a circular term, except for those building straw-men arguments to set afire.... it means we get this result as the consequence of the intrusive policies of another government not from market forces. That is MANIPULATION. Maybe you prefer the terms Gov-nipulation?

Fine. Works for me.


Without rules that enforce currency values to their true parity none of the theorems from free trade apply and the benefits from free trade do not flow. Thus the system of free trade is undermined. This is why RULES MUST be enforced. Without them the whole system would crash.

Beware.

p.s.Larry...
It does not matter if you believe in these rules or not. You can choose to disbelieve in the law of gravity as well but that will not stop it from having an effect on you. It is not what you believe that matters, but what is true.

...And there are mountains and mountains of economic research that are devoted to the importance of getting the price levels, real exchange rates, PPP, whatever you want to call it, right.

Development literature is rife with information on the distortions you get when you trade at the wrong prices. Most people who seem to write on this subject are not aware of that because they only know free trade and do not know its requirements.

You want to build a house without a foundation and you mis-read Triffin to say it's OK. But it's not.

Free trade is widely revered and so strongly worshiped that too many have cut to the chase of its conclusions which economists hammer into people. They have forgotten or were never properly taught what the required conditions are that support true free trade.

I can add, that it is much like Europe that ignored the rules/requirements of an optimal currency area when it formed EMU for political reasons. That was much more the rational than the existence of a solid economics foundation.
]]> Wed, 14 Mar 2012 10:41:11 -0400
It is BECAUSE deficits are the engine of reserve creation that we need to be sure that the reserves that nations hold are 'optimal' in an of themselves not piles of Scrooge McDuck reserves accumulated as a by-product of a policy of EXPORT-LED -GROWTH!!!

So the point on the source of reserves is well taken - but it is still not swallowed whole. The counter point - which you prefer to ignore in its entirety - is that the US deficits are gargantuan beyond anyone's needs for FX reserves and they serve the needs of foreign masters who are effectively using economic warfare to drive the US deeply into a (blissful/overconsumpt... debt stupor.

There are rules of this game even if you reject them. Fortunately you are not the arbiter here; neither am I. But the consequences of ignoring rules are now coming to light and that should change things.

The rules are the basis for this system. Who would operate in a system without rules? Would play golf against me without first specifying rules? if we were to play match or for lowest score? Only a fool would do so. And we have been foolish to let folk remake the rules after their own design. EMU did this by degrading Mass-trick in mid stream. How did that turn out?

The gold system has its rules. A fixed rate system has its rules, this game has been slow to enforce its rules and the ossified imbalances of payments structure globally- which is not sustainable - is the result.

Without these rules there is no game, there is no basis for the argument of 'free trade' and there will eventually be chaos and trade wars.

"Manipulation" is not a circular term, except for those building straw-men arguments to set afire.... it means we get this result as the consequence of the intrusive policies of another government not from market forces. That is MANIPULATION. Maybe you prefer the terms Gov-nipulation?

Fine. Works for me.


Without rules that enforce currency values to their true parity none of the theorems from free trade apply and the benefits from free trade do not flow. Thus the system of free trade is undermined. This is why RULES MUST be enforced. Without them the whole system would crash.

Beware.

p.s.Larry...
It does not matter if you believe in these rules or not. You can choose to disbelieve in the law of gravity as well but that will not stop it from having an effect on you. It is not what you believe that matters, but what is true.

...And there are mountains and mountains of economic research that are devoted to the importance of getting the price levels, real exchange rates, PPP, whatever you want to call it, right.

Development literature is rife with information on the distortions you get when you trade at the wrong prices. Most people who seem to write on this subject are not aware of that because they only know free trade and do not know its requirements.

You want to build a house without a foundation and you mis-read Triffin to say it's OK. But it's not.

Free trade is widely revered and so strongly worshiped that too many have cut to the chase of its conclusions which economists hammer into people. They have forgotten or were never properly taught what the required conditions are that support true free trade.

I can add, that it is much like Europe that ignored the rules/requirements of an optimal currency area when it formed EMU for political reasons. That was much more the rational than the existence of a solid economics foundation.
]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3431151 3431151
But It has little to with my point.

I do NOT want to take the capital flows as given. They are not market determined. They are contrived by foreigners. The flows are a RESIDUAL of policy geared to target the exchange rate and boost their exports.

As a result of that policy they wind up with excessive capital which then circulates back to the US according the paradigm you suggest.

What I am arguing is that since the US is the center country, the reserve unit, other countries pick the forex rate to us and not vice versa. They pick rates that perpetuate their current account surpluses and our deficits. In doing this they circumvent the systemic process that is suppose to be at work to keep countries from running persistent deficits and/or surpluses.

Our trade gap and our capital 'needs' are not the result of our domestic spend-save decisions made in isolation. They instead are a result forced on us that distorts our spend save decisions.
]]> Tue, 13 Mar 2012 10:57:20 -0400
But It has little to with my point.

I do NOT want to take the capital flows as given. They are not market determined. They are contrived by foreigners. The flows are a RESIDUAL of policy geared to target the exchange rate and boost their exports.

As a result of that policy they wind up with excessive capital which then circulates back to the US according the paradigm you suggest.

What I am arguing is that since the US is the center country, the reserve unit, other countries pick the forex rate to us and not vice versa. They pick rates that perpetuate their current account surpluses and our deficits. In doing this they circumvent the systemic process that is suppose to be at work to keep countries from running persistent deficits and/or surpluses.

Our trade gap and our capital 'needs' are not the result of our domestic spend-save decisions made in isolation. They instead are a result forced on us that distorts our spend save decisions.
]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3408621 3408621
Here is the factual background for the assertion that the financial crisis was in part caused by excessive capital inflows to the US.

US banks have god-zillions of excess reserves
US corporations have about one trillion of cash on their balance sheets.

Yet corps are not investing and banks are not lending.

So why do we need all this capital?

answer WE DO NOT

These inflows represent funds flowing to the US to keep other countries currencies weak (the dollar strong). there is nothing in the US they need. US firms are not clamoring for capital. Foreigners put this money into the US and have no objective for it. It is not invested wisely and ends up financing poorly thought out investments like too many derivative securities etc.

This is the risk of too many foreign capital inflows.

Developing economies have the bulk of FX reserves because they use this technique to keep their currencies weak and their exports strong.

END]]> Mon, 12 Mar 2012 15:39:09 -0400
Here is the factual background for the assertion that the financial crisis was in part caused by excessive capital inflows to the US.

US banks have god-zillions of excess reserves
US corporations have about one trillion of cash on their balance sheets.

Yet corps are not investing and banks are not lending.

So why do we need all this capital?

answer WE DO NOT

These inflows represent funds flowing to the US to keep other countries currencies weak (the dollar strong). there is nothing in the US they need. US firms are not clamoring for capital. Foreigners put this money into the US and have no objective for it. It is not invested wisely and ends up financing poorly thought out investments like too many derivative securities etc.

This is the risk of too many foreign capital inflows.

Developing economies have the bulk of FX reserves because they use this technique to keep their currencies weak and their exports strong.

END]]> http://seekingalpha.com/article/425191/comments?source=feed#comment-3408241 3408241 Mon, 12 Mar 2012 15:25:07 -0400 http://seekingalpha.com/article/423681/comments?source=feed#comment-3359511 3359511
But this sort of ex-post methodology was applied to the full balance sheet of what? Was it what end of quarter or end of month data showed? That can hardly capture the fear and the whiteness of the knuckles of those who were in markets and seeing asset prices falling ever faster and with the lethal force of a meltdown in the core of a nuclear reactor.

If you take a Justin Verlander fast ball and slow it down using time-phase photography, I'm sure it does not look that different from anyone else's... and given the distance from the mound to home it is probably is hardly any quicker in traversing the distance than anyone else's. So why is it so hard to hit? Somethings are not adequately described by slowing them down. Financial panic is one of them.

For his part, Timmy Geithner (who was at the NY Fed for the crisis) described the market stability that eventually came into force as the result of Fed-mandated bank stress tests. But to me it was clearly the result of the switch to the option of mark to market accounting (m2m) from the requirement of it.

M2M is pro-cyclical and I don't trust an any model to really tells us if it created enough of an effect to overly boost the upside or trash the downside with moderate or lethal impact. One of the reasons we HAD a crisis was that financial modeling FAILED! Most models to not track all the way to market peaks or all the way down to toughs, and I doubt that the these models could capture the inherent destabilizing endogeneity of the process which makes markets do even worse when things go bad (pro-cyclicality).

The point is that it IS pro-cyclical and it is destabilizing.

Was M2M, "Fair value' THE FORCE that untracked the markets? That is a much harder judgment but it did contribute... and many things went wrong.

Several well-known asset sales established new lower public prices for securities (to which others then had to mark their assets), prominent in the crisis was one sale by Merrill Lynch,

Abstractly if you had a best Buy store RIGHT NEXT TO a Circuit City that was going out of business and selling everything for half-price would that fail to affect your business? Your long run model might be better, but you might not survive the short run. With M2M that hypothetical store does not have to be 'next door' to to inflict looses on you every single day.

As I watched this chaos unfold in real time I became convinced absolutely that mark to market was a devilishly unstable contributor to market dynamics.

Moreover, the Treasury and Fed wanted to tout bank stress tests as a stabilizing force, another example of WTF (What The Fantasy) accounting usage. How do you convince people that you can value asset value assets on the books of banks 'in the future scenario' that they cannot value in markets now by assuming that they are going to be sold in some future period under assumed stress levels? If you can't evaluate their value now how can you do it some hypothetical future except to make it up! And if you make it up ( use a model) how is that reassuring?

Remember in the crisis many banks said they just could not value their esoteric assets. So mark THAT to market!

This is the problem- with all the simulations- they all still succumb to the Heisenberg Principle (a variant of it found in economics is Goodhart's Law).

When you reduce an essentially dynamic process to a series of comparative static snap shots the essence of the thing studied is lost.

I think we should be very suspicious of these findings instead of embracing them. The clear message of the financial crisis was that our regulatory oversight and approach broke down. Is it really sensible to look back at all the chaos and carnage and say, oh no everything worked just fine?

Huh? Yeah that is the conclusion of these papers.

Isn't it more just a little itsy bitsy teeny weeny yellow polka dot bikini of an oxymoron?

This/these papers and conclusions might pass muster at some journals but it/they fail the basic scratch and sniff test of markets and fail Occam's Razor test as well. They contradict reality.

If the system was working and was so good why was there such ongoing distress and disaster?

Riddle me that Bat-accountants.

RAB



l.]]> Sat, 10 Mar 2012 13:10:32 -0500
But this sort of ex-post methodology was applied to the full balance sheet of what? Was it what end of quarter or end of month data showed? That can hardly capture the fear and the whiteness of the knuckles of those who were in markets and seeing asset prices falling ever faster and with the lethal force of a meltdown in the core of a nuclear reactor.

If you take a Justin Verlander fast ball and slow it down using time-phase photography, I'm sure it does not look that different from anyone else's... and given the distance from the mound to home it is probably is hardly any quicker in traversing the distance than anyone else's. So why is it so hard to hit? Somethings are not adequately described by slowing them down. Financial panic is one of them.

For his part, Timmy Geithner (who was at the NY Fed for the crisis) described the market stability that eventually came into force as the result of Fed-mandated bank stress tests. But to me it was clearly the result of the switch to the option of mark to market accounting (m2m) from the requirement of it.

M2M is pro-cyclical and I don't trust an any model to really tells us if it created enough of an effect to overly boost the upside or trash the downside with moderate or lethal impact. One of the reasons we HAD a crisis was that financial modeling FAILED! Most models to not track all the way to market peaks or all the way down to toughs, and I doubt that the these models could capture the inherent destabilizing endogeneity of the process which makes markets do even worse when things go bad (pro-cyclicality).

The point is that it IS pro-cyclical and it is destabilizing.

Was M2M, "Fair value' THE FORCE that untracked the markets? That is a much harder judgment but it did contribute... and many things went wrong.

Several well-known asset sales established new lower public prices for securities (to which others then had to mark their assets), prominent in the crisis was one sale by Merrill Lynch,

Abstractly if you had a best Buy store RIGHT NEXT TO a Circuit City that was going out of business and selling everything for half-price would that fail to affect your business? Your long run model might be better, but you might not survive the short run. With M2M that hypothetical store does not have to be 'next door' to to inflict looses on you every single day.

As I watched this chaos unfold in real time I became convinced absolutely that mark to market was a devilishly unstable contributor to market dynamics.

Moreover, the Treasury and Fed wanted to tout bank stress tests as a stabilizing force, another example of WTF (What The Fantasy) accounting usage. How do you convince people that you can value asset value assets on the books of banks 'in the future scenario' that they cannot value in markets now by assuming that they are going to be sold in some future period under assumed stress levels? If you can't evaluate their value now how can you do it some hypothetical future except to make it up! And if you make it up ( use a model) how is that reassuring?

Remember in the crisis many banks said they just could not value their esoteric assets. So mark THAT to market!

This is the problem- with all the simulations- they all still succumb to the Heisenberg Principle (a variant of it found in economics is Goodhart's Law).

When you reduce an essentially dynamic process to a series of comparative static snap shots the essence of the thing studied is lost.

I think we should be very suspicious of these findings instead of embracing them. The clear message of the financial crisis was that our regulatory oversight and approach broke down. Is it really sensible to look back at all the chaos and carnage and say, oh no everything worked just fine?

Huh? Yeah that is the conclusion of these papers.

Isn't it more just a little itsy bitsy teeny weeny yellow polka dot bikini of an oxymoron?

This/these papers and conclusions might pass muster at some journals but it/they fail the basic scratch and sniff test of markets and fail Occam's Razor test as well. They contradict reality.

If the system was working and was so good why was there such ongoing distress and disaster?

Riddle me that Bat-accountants.

RAB



l.]]> http://seekingalpha.com/article/413371/comments?source=feed#comment-3290241 3290241
B]]> Thu, 08 Mar 2012 11:02:54 -0500
B]]> http://seekingalpha.com/article/413371/comments?source=feed#comment-3246361 3246361
The old expression is that it's a recession until you lose your job, then its a depression. A lot of people have personal stakes that have been damaged. Some will go back to jobs that pay less. For them it will not feel like recovery. I still think the politicians are most responsible for what happened (both BOTH sides of the aisle) they manipulated Fannie and Freddie and they watered down the mortgage lending requirements that had been in place since my childhood - rules that protected home value. They did this to try and get people in houses who did not belong there. These same people are now blaming the Fed for their own errors.

These policy errors - errors in fiscal policy- have helped create a structurally different economy but so has 'free trade,' something that no one NO ONE in the US wants to come to grips with.

Developing economies have persisting trade surpluses we have a persisting deficit and no one wants to see the link. As the old song goes, 'you can't have one without the other'.

Policymakers have been loathe to make any hard decision on the economy and instead spend all their time in ideological internecine warfare. We need leader who rise above it and deal with 'our' issues instead of 'his' ideology. I don't know who that is.

Right now subsidies are not creating jobs and government is shrinking- shedding jobs month by month. The private sector is bearing the whole freight of job gains by itself and with firms worried about a truck load of costs in the future.

That is our reality ]]> Wed, 07 Mar 2012 09:02:32 -0500
The old expression is that it's a recession until you lose your job, then its a depression. A lot of people have personal stakes that have been damaged. Some will go back to jobs that pay less. For them it will not feel like recovery. I still think the politicians are most responsible for what happened (both BOTH sides of the aisle) they manipulated Fannie and Freddie and they watered down the mortgage lending requirements that had been in place since my childhood - rules that protected home value. They did this to try and get people in houses who did not belong there. These same people are now blaming the Fed for their own errors.

These policy errors - errors in fiscal policy- have helped create a structurally different economy but so has 'free trade,' something that no one NO ONE in the US wants to come to grips with.

Developing economies have persisting trade surpluses we have a persisting deficit and no one wants to see the link. As the old song goes, 'you can't have one without the other'.

Policymakers have been loathe to make any hard decision on the economy and instead spend all their time in ideological internecine warfare. We need leader who rise above it and deal with 'our' issues instead of 'his' ideology. I don't know who that is.

Right now subsidies are not creating jobs and government is shrinking- shedding jobs month by month. The private sector is bearing the whole freight of job gains by itself and with firms worried about a truck load of costs in the future.

That is our reality ]]> http://seekingalpha.com/article/413371/comments?source=feed#comment-3226721 3226721
The Fed chairman is cautious on policy because his worst fear is backsliding to low, or no, or negative job growth.

So I don't get this critique. We surely have job growth as both the payroll and household job reports show us. it's not just the decline in the rate of unemployment (...that has become such a political hot-potato).

We have job growth. It has accelerated. Sustainability is the right question. So is the question of further acceleration.

There is no trickery here and no hidden agenda (from me anyway).

There is no dispute about the existence of job growth so when you say we're not there yet (referencing job creation) I have no idea what you mean.


Baffled in NYC]]> Tue, 06 Mar 2012 16:11:18 -0500
The Fed chairman is cautious on policy because his worst fear is backsliding to low, or no, or negative job growth.

So I don't get this critique. We surely have job growth as both the payroll and household job reports show us. it's not just the decline in the rate of unemployment (...that has become such a political hot-potato).

We have job growth. It has accelerated. Sustainability is the right question. So is the question of further acceleration.

There is no trickery here and no hidden agenda (from me anyway).

There is no dispute about the existence of job growth so when you say we're not there yet (referencing job creation) I have no idea what you mean.


Baffled in NYC]]> http://seekingalpha.com/article/413371/comments?source=feed#comment-3226291 3226291
I reject the notion that I can't say that that things are better until everybody is as well off as they were at some best point in the past. But some people act as though that is the standard.

You know what it is? Its a Republican-Democrat stuff. Republicans want to remind people that under Obama things may be improving but they are still worse than they were under Bush. Of course at the end of the Bush presidency there was this horrible recession that did that. So we are in an election cycle and it id the silly season for logic.]]> Tue, 06 Mar 2012 16:00:49 -0500
I reject the notion that I can't say that that things are better until everybody is as well off as they were at some best point in the past. But some people act as though that is the standard.

You know what it is? Its a Republican-Democrat stuff. Republicans want to remind people that under Obama things may be improving but they are still worse than they were under Bush. Of course at the end of the Bush presidency there was this horrible recession that did that. So we are in an election cycle and it id the silly season for logic.]]> http://seekingalpha.com/article/395051/comments?source=feed#comment-2991201 2991201
Greece is a country and it does not speak. It has a caretaker government. Many of the Bozos that represent the fine people of Greece are the same lot who hid the extent of Greek debt and ramped up spending to get elected and re-elected. The Greek people meanwhile thought things were fine because Greek bond markets were fine with the then-reported debt to GDP ratio; the debt was not then ass-tro-maniacal. Then OOPS a lie. a cover-up by Goldman Sachs. and guess what? Greek debt is way larger than anyone knew - the politicians hid it all. And in one sudden fell swoop Greece is thrown into disarray. This government hardly represents the Greek people nor did it speak for them in any but the most legalistic terms.

But this is the New Europe. When the new Greek PM wanted to put the bail-out scheme to a vote of the people he stopped. No head in Europe wants anything they can avoid put to a vote of the people. Nothing to do with the EU Treaty is ever put to a popular vote. Europe is largely a region with a government by elitists who 'know' what is best for their people (... read instead of 'people' 'their own political future'). They may be elected in a system of 'free' elections but their people are not being given anything but a choice between Tweedle Dee and T-dum or is that dumb?

When the Greek 'people' ' speak' they riot against their government and the crisis into which they are thrown and the one that is about to get worse.

Do you really think all that all "Greece" had to do was 'say no?'

Lesson?

be careful who you vote for.

In France: The Socialist favorite in France's presidential election, Francois Hollande, calls for top earners to pay 75% of their income in tax.

Elect 'em at your own risk]]> Tue, 28 Feb 2012 08:52:54 -0500
Greece is a country and it does not speak. It has a caretaker government. Many of the Bozos that represent the fine people of Greece are the same lot who hid the extent of Greek debt and ramped up spending to get elected and re-elected. The Greek people meanwhile thought things were fine because Greek bond markets were fine with the then-reported debt to GDP ratio; the debt was not then ass-tro-maniacal. Then OOPS a lie. a cover-up by Goldman Sachs. and guess what? Greek debt is way larger than anyone knew - the politicians hid it all. And in one sudden fell swoop Greece is thrown into disarray. This government hardly represents the Greek people nor did it speak for them in any but the most legalistic terms.

But this is the New Europe. When the new Greek PM wanted to put the bail-out scheme to a vote of the people he stopped. No head in Europe wants anything they can avoid put to a vote of the people. Nothing to do with the EU Treaty is ever put to a popular vote. Europe is largely a region with a government by elitists who 'know' what is best for their people (... read instead of 'people' 'their own political future'). They may be elected in a system of 'free' elections but their people are not being given anything but a choice between Tweedle Dee and T-dum or is that dumb?

When the Greek 'people' ' speak' they riot against their government and the crisis into which they are thrown and the one that is about to get worse.

Do you really think all that all "Greece" had to do was 'say no?'

Lesson?

be careful who you vote for.

In France: The Socialist favorite in France's presidential election, Francois Hollande, calls for top earners to pay 75% of their income in tax.

Elect 'em at your own risk]]> http://seekingalpha.com/article/372531/comments?source=feed#comment-2718221 2718221
But growth can put the economy and housing on an improving track. We do not need to be reminded second-by-second of how bad things HAVE BEEN as if that can swamp any good news. We are interested in whether things are improving, not the legacy of a past gone wrong.

As for the comment on low interest rates and discounting future cash flows, It is correct. But...that applies to the interest rate YOU CAN GET. Yes, some institutional investors do still get best rates but home owners are generally dealing with a less glowing discount factor that should prove less sensitive when rates finally do rise...
]]> Fri, 17 Feb 2012 08:36:23 -0500
But growth can put the economy and housing on an improving track. We do not need to be reminded second-by-second of how bad things HAVE BEEN as if that can swamp any good news. We are interested in whether things are improving, not the legacy of a past gone wrong.

As for the comment on low interest rates and discounting future cash flows, It is correct. But...that applies to the interest rate YOU CAN GET. Yes, some institutional investors do still get best rates but home owners are generally dealing with a less glowing discount factor that should prove less sensitive when rates finally do rise...
]]> http://seekingalpha.com/article/356941/comments?source=feed#comment-2600741 2600741
Hard to say what's next. Brief celebration- keep it very brief...
]]> Mon, 13 Feb 2012 10:17:31 -0500
Hard to say what's next. Brief celebration- keep it very brief...
]]> http://seekingalpha.com/article/356941/comments?source=feed#comment-2585351 2585351
Tough love is tough and often does not look like love, at least to the recipient.

What I see in Greece are egregious errors on all sides compounded daily.

Apart from the direct participants what the Greek deal must do is eradicate moral hazard and if there is a bail out I'm NOT sure how you do that.
trying to focus on any particular issue in this Greek-troika-German drama is harder than trying to keep a fix on just one of those little panels on a rotating mirror ball.

Sorry left a key word out 'NOT'. Software would not let me edit it. ]]> Sun, 12 Feb 2012 14:56:06 -0500
Tough love is tough and often does not look like love, at least to the recipient.

What I see in Greece are egregious errors on all sides compounded daily.

Apart from the direct participants what the Greek deal must do is eradicate moral hazard and if there is a bail out I'm NOT sure how you do that.
trying to focus on any particular issue in this Greek-troika-German drama is harder than trying to keep a fix on just one of those little panels on a rotating mirror ball.

Sorry left a key word out 'NOT'. Software would not let me edit it. ]]> http://seekingalpha.com/article/356941/comments?source=feed#comment-2582691 2582691
What I see in Greece are egregious errors on all sides compounded daily.

Apart from the direct participants what the Greek deal must do is eradicate moral hazard and if there is a bail out I'm sure how you do that.
trying to focus on any particular issue in this Greek-troika-German drama is harder than trying to keep a fix on just one of those little panels on a rotating mirror ball.]]> Sun, 12 Feb 2012 13:06:49 -0500
What I see in Greece are egregious errors on all sides compounded daily.

Apart from the direct participants what the Greek deal must do is eradicate moral hazard and if there is a bail out I'm sure how you do that.
trying to focus on any particular issue in this Greek-troika-German drama is harder than trying to keep a fix on just one of those little panels on a rotating mirror ball.]]> http://seekingalpha.com/article/358951/comments?source=feed#comment-2577591 2577591
We survived.

We Don;t need to do it gain. Now that zone is healthy. It learned its lesson (well, most of it did).

The question is will Greeks learnt their lesson the hard way or an even harder way? They are in denial. but their disease is not spreading. But pain from it IS spreading and it can spread ion several different ways controlled pain or free-form pain.

get ready cause here it comes...]]> Sun, 12 Feb 2012 08:10:17 -0500
We survived.

We Don;t need to do it gain. Now that zone is healthy. It learned its lesson (well, most of it did).

The question is will Greeks learnt their lesson the hard way or an even harder way? They are in denial. but their disease is not spreading. But pain from it IS spreading and it can spread ion several different ways controlled pain or free-form pain.

get ready cause here it comes...]]>