Santelli's Chicago Tea Party: The Quest for Our Nation's Soul [View article]
Stupid, lies, and more stupid. This is what happens when you make economics a morality play instead of a technical exercise.
This is the simpleton thinking..."Government prints money, so obviously it destroys the value of the dollar"
or comments like the one above
"Good article, Mr. Garot. Paper is dead, at least in the U.S. For the next cycle, commodities will the source of value. "
Except, one dollar can now buy you more of any commodity (outside of gold, which I think is in a bubble) than it did just a year ago before government started printing on massive scale. Far from dead, the dollar is at its strongest point in years. Now, this does not mean that the economy is strong just cause the dollar is strong. That is another simpleton conclusion. That is why the Treasury secretary, whomever he may be, has to keep saying we have a "strong dollar" policy. But what it does mean is that the dollar is still the world's reserve currency and that is not going to change anytime soon.
Because even those people who are holding gold right thinking that the dollar is going to zero, when they lose their jobs, they will find that McDonalds does not take their American Eagle coins and if they want to eat they will have to sell their gold coins and "buy" the dollar.
Another Gingrich win next week might be enough of a catalyst to unsettle the markets. For the past two days, Romney’s vulnerability to the former House Speaker has been the talk of trading rooms. He is by far the preferred candidate on Wall Street, and many believe if he loses the Florida primary next Tuesday, he going have a hard time stopping Gingrich’s momentum. [View news story]
I am pretty sure Obama will be reelected anyway. But if Gingrich gets the nomination, you can etch it in stone.
Democrats criticize a Republican plan to cut the U.S. deficit by overhauling the tax code as a sop to the wealthy, after the proposal had appeared to signal a new willingness to at least consider revenue increases. "They’ve got to put real revenue on the table," says Sen. John Kerry, who wants more than $1T. It's looking like the super-committee may be the real turkey this Thanksgiving. [View news story]
How about this. Put in policies that grow the economy at a rate of 5% a year for the next 5 years and you'll get your $1T in new revenues just from the natural growth of tax revenues with the economy.
Paul Farrell pens his most apocalyptic vision yet of U.S. and global decline, as denial and greedy addictions render us unable to deal with the biggest bubble ever: an exploding population that could hit 10B by 2050. "Already too many people in our world. Adding too many more every day. Not enough resources." Among his solutions: "Rapid and wholly voluntary reductions of fertility." [View news story]
Complete idiocy.
People have been saying the world is overpopulated for at least 70 years now as the world population has continued to double several times over.
Even if we are up against resource constraints, then free moving prices in a free market will force us to conserve, be efficient and deal with the resource constraints (as is happening now with higher prices for oil & commodities).
And then there are possible technological innovations that may make the whole point mute.
Oh and finally, and probably most importantly, as societies get more materially rich, people chose to have less kids anyway.
We need to start hiking interest rates, and stop trying to reflate a consumption bubble, says Peter Schiff. Low rates are just prolonging an economy that’s not built on production, but on lending “to governments and college students.” Bonds, he adds, are in a bubble, dependent upon buying from central banks and “speculators who flip them like condos.” [View news story]
How does Peter Schiff know that interest rates need to be higher? Isn't he the one that always says rates should be set by the market?
The fact of the matter is, long term rates would be low with or without a central bank. There is a liquidity preference in this economy and no one wants to spend and everyone just holds cash. Long term rates are low naturally and are actually indicative of a tight monetary policy.
The spate of recent bankruptcies in the U.S. solar power industry has left China as the dominant player in green energy. With over 60% of the world’s solar production capacity and huge economies of scale, GTM Research notes that “pricing is determined by where they price, and everyone else prices at a premium or discount to them.” [View news story]
If TVs are manufactured in China, then why wouldn't solar panels? Solar panels are far simpler of a technology then TVs.
And if China wants to waste their money and subsidize solar panels, I say let them. We don't have to do stupid things because China is doing them. Remember on a per capita basis they are a still poorer country than Mexico. Their advantage is that they have a ton of people and hence a ton of cheap labor.
"Bernanke is a murderer, he’s a murderer of the middle class and the working class," Marc Faber says in a King World News interview. "If you print money everything will go up... it goes into equities and for Mr. Bernanke unfortunately into commodities. And this is lifting the cost of living of the median household, of the typical household in the U.S." [View news story]
Well, I guess I have to be the one to introduce some textbook economics to the SA horde.
So, Faber was right in saying one thing. If there is REALLY inflation, everything does go up. But that's the problem. Not everything is going up. Just because commodities are going up, doesn't mean EVERYTHING is going up. Specifically, wages are not going up.
The 1970s was a time of TRUE inflation. Everything really was going up. Including people's paychecks. There was a famous moment in the Reagan campaign, when one of the workers he met on the assembly line told him that he takes home more money than he could have ever dreamed of, but it's not really buying him much more now. Another anecdote from the 70s is that you could buy certain cars in the early 70s and sell them used in the late 70s for more nominal dollars.
Another reason we don't have inflation is that prices on commodities are rising around the world, not just in US. I actually wish the problem with commodity prices was just that Bernanke was printing too much and that if he just stopped we could enjoy $1 / gallon gas for perpetuity. But the unfortunate answer is that the problem with commodities is a REAL supply and demand problem. Demand is growing by leaps and bounds while supply is growing but not at as fast a pace as it needs to. Look at inventory statistics. Crop inventories around the world are at historic lows.
Finally, one more comparison to the 70s that proves Faber wrong. The 1970s was a terrible time for stocks despite runaway inflation. So, to say that "If you print money everything will go up... it goes into equities..." just shows his COMPLETE ECONOMIC ILLITERACY. The man is just a doomsday proffet who has his cult following of SA readers. He has no more insight than the people predicting the world will end on May 21st this year.
Rep. Paul Ryan releases a new deficit reduction proposal that claims to cut $5.8T in spending over the next decade and includes major changes to Medicare and Medicaid. These problems won't get fixed because (choose one): A. they're unworkable; or B. politicians and voters don't have the stomach for such deep cuts. [View news story]
"Don't any of you Obamans out there understand that we are in a debt crisis the likes of which our country has never seen before."
Treasury yields and CDS spreads are a good sign of whether or not we are in a debt crisis. Greece had a debt crisis and its yeilds and CDS spreads skyrocketed.
We have lower interest rates now (LONG TERM rates ANDshort term) than we did during your patron saint, Ronald Reagan's reign.
That indicates that we are not broke and people are literally still lining up to buy our debt. I know what you are going to say now. "It's all a conspiracy. The Fed is buying up all the debt."
I can say that's complete BS and I know it won't make a difference. But all I'll say is that the Fed is not all powerful. If the market was truly worried about our fiscal situation, then rates would rise and the bond vigilantes would appear.
Now, I agree in the long term, our debt is a problem. But the reason it is a problem is because of lack of tax revenue because of lack of growth because of the financial crisis.
But the Republicans have loved this recession. It has been an excuse to cut every public service imaginable.
Please raise my taxes, Warren Buffett says: “If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we’ve ever had it.” [View news story]
Seriously, bukdow.
How dare he have the gall to call out the system that feeds him? Doesn't he realize that raising his tax rate by 3 percentage points will cause him to shut down all his businesses and go Galt?? Sarah Palin says so... And what da hell does he know about what business decisions he would make with higher tax rates. Why doesn't he stick to what he knows rather than tell us how he would run his own businesses.
Stupid communist, fascist, Obama-loving, death panel Nazi!
I take great pride in killing conspiracy theories that continue to rise like zombies from SA readers. So, here I go...
The government does not ignore millions of unemployed. If you are looking for work, they count you. But even if you are not, you are still counted in the broader unemployment measures (U4, U5, U6). It's not the government's fault that we are all focused on U3. Oh btw, U4, U5 & U6 were instituted by Bill Clinton to show Greenspan that there was still some slack in the economy even at full employment. So, prior to the mid-90s, if you haven't looked for work in 6 months you weren't counted, but NOW you are.
And as for CPI, I'll give you that the CPI doesn't take into account housing costs (however, that means it's overstating inflation right now) but it does count everything else. Look at the website and news releases.
I know, I know...everything is a conspiracy. But still...
By what measure? By the Mort Zuckerman fiscal resposibility indicator?
Yields are tiny. CDS are spreads are narrow. Interest payments are as small a fraction of the budget now as they were 10 years ago during the surplus years.
Do any facts matter in this discussion about debt and fiscal responsibility? Or does this discussion come down to throwing out a bunch of big numbers out of context and going "Oooo...scary!"
The first order of business for new Fed members Yellen, Diamond and Raskin likely will be to "print enough dollars to make something happen in the U.S. economy," Jim Grant says while skewering the Fed's "lack of intellectual rigor" on deflation as a threat. "If the world produces more at lower prices, is that so bad? Would [the Fed] please stop and help us understand why this is bad?" [View news story]
Yep. Hyper-inflation with no demand and almost 0% yields on government debt. We will rewrite economic history.
As Congress wrestles with whether to extend benefits for the unemployed, the issue has prompted a fierce debate: Do more-generous benefits cause jobless workers to be fussier in their searches? Or is the program a prudent response to the worst recession in generations? [View news story]
How can anyone think that subsisting on $1300/month and sitting at home in constant depressing boredom eliminates all incentive to look for jobs? How can anyone think that in today's economy, with job seekers far outnumbering job openings, the problem is unemployed people don't want to work? How can anyone not realize that eliminating the only income source of a million or so people will have a depressing effect on the economy?
How can anyone not realize this?? Oh..wait..I live in Tea Party Nation now... Sigh...continue as you were.
More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in Dec. 2007, according to a Pew Research report. The survey also cites a "new frugality" in spending and borrowing habits, and diminished expectations about the future. [View news story]
The problem is that everyone thinks that this is what has to happen. That we deserve this and that "frugality" is the new virtue that everyone strives for.
But if you really think about it, are there any actual, real problems with the US economy? Are we facing conquest by an enemy? Is disease is spreading at an epidemic scale? Are we stupid and can't grow enough food or make enough stuff and always have shortages? No. On the contrary, our problem is not the supply-side. Our industrial capacity far, far outweighs any level of demand that we are facing now. (Supply >> Demand, and yet somehow some people still are calling for inflation.)
Our only problems is lack of confidence and a new political belief that we and seemingly the rest of the world is quickly adopting that we need to accept the pain.
Just a quick thought, that I know most of you will at best make up an excuse for, and most likely quickly ignore.
Take two countries: Ireland and Spain.
Both were severely hit by the recession and their governments saw massive deficits because of collapsing tax revenues. Ireland quickly moved to aggressively cut spending and balance their budget. Spain on the other hand moved slowly and in fact spent on stimulus projects. Of the two, which one do you think faces higher yields on its debt now and higher CDS spreads??
If you guessed Spain...you are WRONG! Ireland faces the higher yields and the market judges Ireland to be the bigger default risk. It's almost as if the market is trying to tell you that we are more worried about future growth than the immediate balance sheet calculations and yet the austerians put their head down and charge ahead with spending cuts anyway.
Kids go back to school tomorrow, as parents breathe a collective sigh of relief. Here's what President Obama plans to tell them. [View news story]
"I don't want socialized Medicine! I don't want my country to be like Russia! And don't you dare TOUCH MY MEDICARE!!!!"
Santelli's Chicago Tea Party: The Quest for Our Nation's Soul [View article]
This is the simpleton thinking..."Government prints money, so obviously it destroys the value of the dollar"
or comments like the one above
"Good article, Mr. Garot. Paper is dead, at least in the U.S. For the next cycle, commodities will the source of value. "
Except, one dollar can now buy you more of any commodity (outside of gold, which I think is in a bubble) than it did just a year ago before government started printing on massive scale. Far from dead, the dollar is at its strongest point in years. Now, this does not mean that the economy is strong just cause the dollar is strong. That is another simpleton conclusion. That is why the Treasury secretary, whomever he may be, has to keep saying we have a "strong dollar" policy. But what it does mean is that the dollar is still the world's reserve currency and that is not going to change anytime soon.
Because even those people who are holding gold right thinking that the dollar is going to zero, when they lose their jobs, they will find that McDonalds does not take their American Eagle coins and if they want to eat they will have to sell their gold coins and "buy" the dollar.
Another Gingrich win next week might be enough of a catalyst to unsettle the markets. For the past two days, Romney’s vulnerability to the former House Speaker has been the talk of trading rooms. He is by far the preferred candidate on Wall Street, and many believe if he loses the Florida primary next Tuesday, he going have a hard time stopping Gingrich’s momentum. [View news story]
Democrats criticize a Republican plan to cut the U.S. deficit by overhauling the tax code as a sop to the wealthy, after the proposal had appeared to signal a new willingness to at least consider revenue increases. "They’ve got to put real revenue on the table," says Sen. John Kerry, who wants more than $1T. It's looking like the super-committee may be the real turkey this Thanksgiving. [View news story]
Paul Farrell pens his most apocalyptic vision yet of U.S. and global decline, as denial and greedy addictions render us unable to deal with the biggest bubble ever: an exploding population that could hit 10B by 2050. "Already too many people in our world. Adding too many more every day. Not enough resources." Among his solutions: "Rapid and wholly voluntary reductions of fertility." [View news story]
People have been saying the world is overpopulated for at least 70 years now as the world population has continued to double several times over.
Even if we are up against resource constraints, then free moving prices in a free market will force us to conserve, be efficient and deal with the resource constraints (as is happening now with higher prices for oil & commodities).
And then there are possible technological innovations that may make the whole point mute.
Oh and finally, and probably most importantly, as societies get more materially rich, people chose to have less kids anyway.
We need to start hiking interest rates, and stop trying to reflate a consumption bubble, says Peter Schiff. Low rates are just prolonging an economy that’s not built on production, but on lending “to governments and college students.” Bonds, he adds, are in a bubble, dependent upon buying from central banks and “speculators who flip them like condos.” [View news story]
The fact of the matter is, long term rates would be low with or without a central bank. There is a liquidity preference in this economy and no one wants to spend and everyone just holds cash. Long term rates are low naturally and are actually indicative of a tight monetary policy.
Schiff, read your Friedman.
The spate of recent bankruptcies in the U.S. solar power industry has left China as the dominant player in green energy. With over 60% of the world’s solar production capacity and huge economies of scale, GTM Research notes that “pricing is determined by where they price, and everyone else prices at a premium or discount to them.” [View news story]
And if China wants to waste their money and subsidize solar panels, I say let them. We don't have to do stupid things because China is doing them. Remember on a per capita basis they are a still poorer country than Mexico. Their advantage is that they have a ton of people and hence a ton of cheap labor.
"Bernanke is a murderer, he’s a murderer of the middle class and the working class," Marc Faber says in a King World News interview. "If you print money everything will go up... it goes into equities and for Mr. Bernanke unfortunately into commodities. And this is lifting the cost of living of the median household, of the typical household in the U.S." [View news story]
So, Faber was right in saying one thing. If there is REALLY inflation, everything does go up. But that's the problem. Not everything is going up. Just because commodities are going up, doesn't mean EVERYTHING is going up. Specifically, wages are not going up.
The 1970s was a time of TRUE inflation. Everything really was going up. Including people's paychecks. There was a famous moment in the Reagan campaign, when one of the workers he met on the assembly line told him that he takes home more money than he could have ever dreamed of, but it's not really buying him much more now. Another anecdote from the 70s is that you could buy certain cars in the early 70s and sell them used in the late 70s for more nominal dollars.
Another reason we don't have inflation is that prices on commodities are rising around the world, not just in US. I actually wish the problem with commodity prices was just that Bernanke was printing too much and that if he just stopped we could enjoy $1 / gallon gas for perpetuity. But the unfortunate answer is that the problem with commodities is a REAL supply and demand problem. Demand is growing by leaps and bounds while supply is growing but not at as fast a pace as it needs to. Look at inventory statistics. Crop inventories around the world are at historic lows.
Finally, one more comparison to the 70s that proves Faber wrong. The 1970s was a terrible time for stocks despite runaway inflation. So, to say that "If you print money everything will go up... it goes into equities..." just shows his COMPLETE ECONOMIC ILLITERACY. The man is just a doomsday proffet who has his cult following of SA readers. He has no more insight than the people predicting the world will end on May 21st this year.
www.dailymail.co.uk/ne...
Rep. Paul Ryan releases a new deficit reduction proposal that claims to cut $5.8T in spending over the next decade and includes major changes to Medicare and Medicaid. These problems won't get fixed because (choose one): A. they're unworkable; or B. politicians and voters don't have the stomach for such deep cuts. [View news story]
Treasury yields and CDS spreads are a good sign of whether or not we are in a debt crisis. Greece had a debt crisis and its yeilds and CDS spreads skyrocketed.
We have lower interest rates now (LONG TERM rates ANDshort term) than we did during your patron saint, Ronald Reagan's reign.
finance.yahoo.com/echa...=^TNX+Interactive#char...
That indicates that we are not broke and people are literally still lining up to buy our debt. I know what you are going to say now. "It's all a conspiracy. The Fed is buying up all the debt."
I can say that's complete BS and I know it won't make a difference. But all I'll say is that the Fed is not all powerful. If the market was truly worried about our fiscal situation, then rates would rise and the bond vigilantes would appear.
Now, I agree in the long term, our debt is a problem. But the reason it is a problem is because of lack of tax revenue because of lack of growth because of the financial crisis.
But the Republicans have loved this recession. It has been an excuse to cut every public service imaginable.
Please raise my taxes, Warren Buffett says: “If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we’ve ever had it.” [View news story]
How dare he have the gall to call out the system that feeds him? Doesn't he realize that raising his tax rate by 3 percentage points will cause him to shut down all his businesses and go Galt?? Sarah Palin says so... And what da hell does he know about what business decisions he would make with higher tax rates. Why doesn't he stick to what he knows rather than tell us how he would run his own businesses.
Stupid communist, fascist, Obama-loving, death panel Nazi!
What does QE2 mean to you? Since all the hype was overblown, probably not much - except destroy the dollar, jack up inflation, or start the U.S. swirling down a never-ending cycle of government intervention. [View news story]
The government does not ignore millions of unemployed. If you are looking for work, they count you. But even if you are not, you are still counted in the broader unemployment measures (U4, U5, U6). It's not the government's fault that we are all focused on U3. Oh btw, U4, U5 & U6 were instituted by Bill Clinton to show Greenspan that there was still some slack in the economy even at full employment. So, prior to the mid-90s, if you haven't looked for work in 6 months you weren't counted, but NOW you are.
And as for CPI, I'll give you that the CPI doesn't take into account housing costs (however, that means it's overstating inflation right now) but it does count everything else. Look at the website and news releases.
I know, I know...everything is a conspiracy. But still...
Rising debt + a crisis of confidence that the president and Congress can fix it = "the most fiscally irresponsible government in U.S. history," Mort Zuckerman writes. [View news story]
Yields are tiny. CDS are spreads are narrow. Interest payments are as small a fraction of the budget now as they were 10 years ago during the surplus years.
Do any facts matter in this discussion about debt and fiscal responsibility? Or does this discussion come down to throwing out a bunch of big numbers out of context and going "Oooo...scary!"
The first order of business for new Fed members Yellen, Diamond and Raskin likely will be to "print enough dollars to make something happen in the U.S. economy," Jim Grant says while skewering the Fed's "lack of intellectual rigor" on deflation as a threat. "If the world produces more at lower prices, is that so bad? Would [the Fed] please stop and help us understand why this is bad?" [View news story]
As Congress wrestles with whether to extend benefits for the unemployed, the issue has prompted a fierce debate: Do more-generous benefits cause jobless workers to be fussier in their searches? Or is the program a prudent response to the worst recession in generations? [View news story]
How can anyone not realize this?? Oh..wait..I live in Tea Party Nation now... Sigh...continue as you were.
More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in Dec. 2007, according to a Pew Research report. The survey also cites a "new frugality" in spending and borrowing habits, and diminished expectations about the future. [View news story]
But if you really think about it, are there any actual, real problems with the US economy? Are we facing conquest by an enemy? Is disease is spreading at an epidemic scale? Are we stupid and can't grow enough food or make enough stuff and always have shortages? No. On the contrary, our problem is not the supply-side. Our industrial capacity far, far outweighs any level of demand that we are facing now. (Supply >> Demand, and yet somehow some people still are calling for inflation.)
Our only problems is lack of confidence and a new political belief that we and seemingly the rest of the world is quickly adopting that we need to accept the pain.
Just a quick thought, that I know most of you will at best make up an excuse for, and most likely quickly ignore.
Take two countries: Ireland and Spain.
Both were severely hit by the recession and their governments saw massive deficits because of collapsing tax revenues. Ireland quickly moved to aggressively cut spending and balance their budget. Spain on the other hand moved slowly and in fact spent on stimulus projects. Of the two, which one do you think faces higher yields on its debt now and higher CDS spreads??
If you guessed Spain...you are WRONG! Ireland faces the higher yields and the market judges Ireland to be the bigger default risk. It's almost as if the market is trying to tell you that we are more worried about future growth than the immediate balance sheet calculations and yet the austerians put their head down and charge ahead with spending cuts anyway.