Der Spiegel's portrait of Greece today, as austerity measures backfire: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70% in some places. Frustrated workers are threatening to strike back." [View news story]
Again youngman, I don't know why it's so hard to understand that all those evil people in the public sector economy, buy stuff from the private sector economy. Despite your desires, everything is linked. Especially, in a depression.
Der Spiegel's portrait of Greece today, as austerity measures backfire: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70% in some places. Frustrated workers are threatening to strike back." [View news story]
Can you give a timeline for this "short-term pain"? Two? Three? 10 Years?
I promise you that if there are no radical changes in policy (such as leaving the Euro), the Greek economy will remain depressed for AT LEAST a decade.
Ireland imposed austerity on itself for the longest time out of all developed world economies. It is also the most depressed economy right now. Its bond yields and CDS spreads are higher than most counties that implemented stimulus measures.
I guess what I am trying to get at is is there a point where you admit you are wrong? How much longer will you predict that we will have hyper-inflation as we head farther and farther into deflation? How much longer will you predict that treasuries are about to tank as with every day they keep rising and rising? When will facts and results matter?
More evidence of heavy correlation as the "drive-by" market has investors looking neither ahead to future events, nor into the rear-view at yesterday's happenings, but out the side window: What should we be reacting to today? [View news story]
I disagree. I think the eyes of the "smart money" at least is on the next Fed meeting in 5 weeks.
One of the surest sign that you are an investing loser is that you let politics get into your investment decisions. Be honest, how much money have you lost in this market since Obama came to power?
KC Fed President Thomas Hoenig: Lashes out at monetary policy (a "dangerous gamble" in a moderate-growth environment). The recovery's got legs and is moving faster than the last two, and he finds "no evidence that deflation is the most serious threat to the recovery today." Using Fed policy as a "cure-all" for all problems risks repeating the cycle of severe recession and unemployment. [View news story]
You can do it whenever you want....if you want to lose all your money.
The IMF's report that the U.S. needs to grow at 14% in perpetuity to close its fiscal gap leads Laurence Kotlikoff to conclude that "our country is broke and can no longer afford no-pain, all-gain" Ponzi solutions. Hard-core Keynesians who say any short-term stimulus won’t affect our ability to handle long-term deficits are "wrong as a simple matter of arithmetic." (also) [View news story]
"So, how come Zimbabwe is not the world's most prosperous country?" ----------------------... I have been wishing someone would ask me this. The reason is simple. They have REAL economic problems. Meaning if I was to print a ton of money and to hand it out to people in Zimbabwe. They would want to buy stuff with it, but there is no productive capacity in the country to build or produce anything. So, what would happen is you would boost demand by printing all the money, but the supply would remain depressed (due to real reasons, uneducated workforce, too much government harassment, etc, etc). So this leads to demand >>> supply. And THAT'S HOW YOU GET INFLATION.
We don't have this problem in America. In fact, we have the opposite. Supply >>> Demand. AND THAT"S HOW WE GET DEFLATION.
Production for whom?? You realize you need to have demand before you can produce? Someone has to buy and consume what you are producing. Who is Ireland going to produce for?
This is such a typical "Conservative" response. Economically clueless. But sounding tough, so it has to be right.
Fed Open Market Committee: No big news of asset buys, but Fed will reinvest principal from agency debt and agency MBS in longer-term Treasurys. Near-zero rates for an "extended period." Even the policy tools statement wasn't strengthened. KC Fed's Hoenig again the lone dissenter. [View news story]
And yet, the other countries are piling in (see latest Treasury auction).
"In countries which have decided that further government economic stimulation will produce more harm than good, the story is markedly different." ----------------------...
Tell me which country that put in place austerity, has come off better for it? See Ireland as an example of austerity leading to utter disaster.
Contrarian Peter Schiff sees inflation, not deflation, as the big threat. "The real evidence of inflation is that the Fed is creating too much money," he says, and the result will be higher prices ahead for food, clothing, energy, health care and electronic items. [View news story]
Yep, that's exactly what happened to Japan. Their interest rates definitely skyrocketed all the way to....umm...wait...nev...
Seriously people, try to read and really understand what a liquidity trap is.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
I could not agree more with your comment here. The Fed should commit itself to 4% inflation. As for the problem of overshooting, well first of all I think it's a problem we'd like to have, because producing 4% inflation in this economy is going to be VERY, VERY, VERY HARD! Simply printing money won't do it.
And if inflation does overshoot, then just raise rates until it comes back down to 4%. Inflation is much easier to clamp down than deflation.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
Here is a quick summary: falling prices produces the wrong incentives.
People put off purchases in anticipation of further falling prices. People's real debt load gets larger. All in all people's spending falls. Companies see profits fall. They begin to fire people. This leads to more cuts in spending and more firing. It's a slow and grinding death spiral. Japan has been in it for 20+ years. This is our future. We are staring at it and instead of running away from it, we are going all in on the Japan scenario with our austerity measures.
By the way, this is not an endorsement of hyper-inflation. But right now we have the Fed committed to 2% inflation, but perfectly fine and sitting on its hands as inflation gets closer and closer to 0% and will soon turn negative.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
Seriously Poor Texan read this article and try to do it without any preconceived notions:
"Media fools" are trying to spin Goldman's (GS) settlement as a victory, Barry Ritholtz writes, but it is really a "painful loss" with expensive repercussions likely to last far into the future. For starters, it opens the firm to future liability from all clients who bought money-losing derivatives, which could leave Goldman - and its rivals - constantly under attack. But the biggest question now: Who will the SEC come after next?[View news story]
I just want to respond to the FDIC argument because it's the argument I hear ALL THE TIME. I always find myself being the only one who supports the bailouts (for obvious reasons). But here is how all the arguments go.
Regular person: The government should have just let all the banks go bankrupt!
Me: You do realize how banks are structured don't you? You do realize that you, as a depositor at a bank, are in effect its creditor. (That's why banks count deposits as liabilities on their balance sheet). So, if a bank goes bankrupt, just like any other company that goes bankrupt, the creditors are wiped out or at the very least take a big haircut. Meaning basically you lose your checking account and everything you had in it.
Regular person: You don't know what you are talking about. What about the FDIC??
Me: OK, first of all the FDIC is a bailout. The 'F' stands for Federal and its not like you, yourself, pay any premiums for this insurance. It's just a blanket guarantee on deposits below $250k.
Second of all, the FDIC doesn't have the money to handle the synchronized collapse of (for example) Citigroup, Bank of America and Wells Fargo. Washington Mutual was the biggest bank failure in American history and it was a fraction of the size of Citigroup and Bank of America. So, in effect, if you had to guarantee the deposits under $250k of all the checking accounts at Citi and BoA, I would guess it would be >$700billion which was TARP.
On top of that, just the mayhem that would be caused by the collapse of Citi and BoA would lead to irrational behavior that would plunge us further into depression. Nobody would believe the claims of even responsible banks and there would be runs on them too.
So, in the end, yes bankruptcy doesn't work for big banks.
"Media fools" are trying to spin Goldman's (GS) settlement as a victory, Barry Ritholtz writes, but it is really a "painful loss" with expensive repercussions likely to last far into the future. For starters, it opens the firm to future liability from all clients who bought money-losing derivatives, which could leave Goldman - and its rivals - constantly under attack. But the biggest question now: Who will the SEC come after next?[View news story]
OK, let me respond
1.) It's the biggest fine the SEC have ever levied in its history. And to your corollary of "If the SEC thought it could get a guilty verdit wouldn't it have pursued the case farther?", I can say if Goldman thought it was innocent wouldn't it do the same thing.
3.) Bankruptcy doesn't work for banks because banks are like no other industry. If Burger King goes bankrupt, there is no run on McDonald's bonds. But if Citibank goes bankrupt and all of their depositors are wiped out (and by depositors, I mean the Joe Schmo with the simple checking account), then yes there will be a run on other banks. It has happened throughout history.
4.) If you are going to bring the "Tea Party" mentality to any government agency then of course you are going to be against it. But just for a second stop and think about the government agencies that have done their jobs well. They never make the news but, as just one example of many, the Clean Air Act and Clean Water Act produced clean air and clean water without destroying the economy (like Republicans at the time said that it would). With your attitude, you should be against all of our institutions. Police departments have a long and storied history of corruption. Lets get rid of them too. Why not?
5. Yes, let's blame everything on Barney Frank. Here is a video of George W. Bush on housing:
No one was pushing home ownership more than Republicans and their "ownership society" idea. Because, as one of them put it, "mortgage holders don't go on strike".
Der Spiegel's portrait of Greece today, as austerity measures backfire: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70% in some places. Frustrated workers are threatening to strike back." [View news story]
Der Spiegel's portrait of Greece today, as austerity measures backfire: "Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70% in some places. Frustrated workers are threatening to strike back." [View news story]
I promise you that if there are no radical changes in policy (such as leaving the Euro), the Greek economy will remain depressed for AT LEAST a decade.
Ireland imposed austerity on itself for the longest time out of all developed world economies. It is also the most depressed economy right now. Its bond yields and CDS spreads are higher than most counties that implemented stimulus measures.
I guess what I am trying to get at is is there a point where you admit you are wrong? How much longer will you predict that we will have hyper-inflation as we head farther and farther into deflation? How much longer will you predict that treasuries are about to tank as with every day they keep rising and rising? When will facts and results matter?
More evidence of heavy correlation as the "drive-by" market has investors looking neither ahead to future events, nor into the rear-view at yesterday's happenings, but out the side window: What should we be reacting to today? [View news story]
Way too many people are way too complacent this summer, Brett Arends writes, citing 10 reasons to be very, very worried. [View news story]
One of the surest sign that you are an investing loser is that you let politics get into your investment decisions. Be honest, how much money have you lost in this market since Obama came to power?
KC Fed President Thomas Hoenig: Lashes out at monetary policy (a "dangerous gamble" in a moderate-growth environment). The recovery's got legs and is moving faster than the last two, and he finds "no evidence that deflation is the most serious threat to the recovery today." Using Fed policy as a "cure-all" for all problems risks repeating the cycle of severe recession and unemployment. [View news story]
The IMF's report that the U.S. needs to grow at 14% in perpetuity to close its fiscal gap leads Laurence Kotlikoff to conclude that "our country is broke and can no longer afford no-pain, all-gain" Ponzi solutions. Hard-core Keynesians who say any short-term stimulus won’t affect our ability to handle long-term deficits are "wrong as a simple matter of arithmetic." (also) [View news story]
----------------------...
I have been wishing someone would ask me this. The reason is simple. They have REAL economic problems. Meaning if I was to print a ton of money and to hand it out to people in Zimbabwe. They would want to buy stuff with it, but there is no productive capacity in the country to build or produce anything. So, what would happen is you would boost demand by printing all the money, but the supply would remain depressed (due to real reasons, uneducated workforce, too much government harassment, etc, etc). So this leads to demand >>> supply. And THAT'S HOW YOU GET INFLATION.
We don't have this problem in America. In fact, we have the opposite. Supply >>> Demand. AND THAT"S HOW WE GET DEFLATION.
Monetary Cards on the Table [View article]
Production for whom?? You realize you need to have demand before you can produce? Someone has to buy and consume what you are producing. Who is Ireland going to produce for?
This is such a typical "Conservative" response. Economically clueless. But sounding tough, so it has to be right.
Fed Open Market Committee: No big news of asset buys, but Fed will reinvest principal from agency debt and agency MBS in longer-term Treasurys. Near-zero rates for an "extended period." Even the policy tools statement wasn't strengthened. KC Fed's Hoenig again the lone dissenter. [View news story]
Monetary Cards on the Table [View article]
----------------------...
Tell me which country that put in place austerity, has come off better for it? See Ireland as an example of austerity leading to utter disaster.
Contrarian Peter Schiff sees inflation, not deflation, as the big threat. "The real evidence of inflation is that the Fed is creating too much money," he says, and the result will be higher prices ahead for food, clothing, energy, health care and electronic items. [View news story]
Seriously people, try to read and really understand what a liquidity trap is.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
And if inflation does overshoot, then just raise rates until it comes back down to 4%. Inflation is much easier to clamp down than deflation.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
People put off purchases in anticipation of further falling prices. People's real debt load gets larger. All in all people's spending falls.
Companies see profits fall. They begin to fire people. This leads to more cuts in spending and more firing. It's a slow and grinding death spiral. Japan has been in it for 20+ years. This is our future. We are staring at it and instead of running away from it, we are going all in on the Japan scenario with our austerity measures.
By the way, this is not an endorsement of hyper-inflation. But right now we have the Fed committed to 2% inflation, but perfectly fine and sitting on its hands as inflation gets closer and closer to 0% and will soon turn negative.
The slowing economy isn't anything that a fresh bout of inflation couldn't cure, David Blanchflower says - in fact, it's the only game left in town. He says the Fed should engineer, or at least tolerate, a big jump in price pressures relative to recent years. Then the Fed could tighten policy, damping inflation while also allowing it to get rates back toward a more traditional stance. [View news story]
seekingalpha.com/artic...
If you want further discussion, pick up Friedman & Schwartz's Monetary History of US here
www.amazon.com/Monetar...
"Media fools" are trying to spin Goldman's (GS) settlement as a victory, Barry Ritholtz writes, but it is really a "painful loss" with expensive repercussions likely to last far into the future. For starters, it opens the firm to future liability from all clients who bought money-losing derivatives, which could leave Goldman - and its rivals - constantly under attack. But the biggest question now: Who will the SEC come after next? [View news story]
Regular person: The government should have just let all the banks go bankrupt!
Me: You do realize how banks are structured don't you? You do realize that you, as a depositor at a bank, are in effect its creditor. (That's why banks count deposits as liabilities on their balance sheet). So, if a bank goes bankrupt, just like any other company that goes bankrupt, the creditors are wiped out or at the very least take a big haircut. Meaning basically you lose your checking account and everything you had in it.
Regular person: You don't know what you are talking about. What about the FDIC??
Me: OK, first of all the FDIC is a bailout. The 'F' stands for Federal and its not like you, yourself, pay any premiums for this insurance. It's just a blanket guarantee on deposits below $250k.
Second of all, the FDIC doesn't have the money to handle the synchronized collapse of (for example) Citigroup, Bank of America and Wells Fargo. Washington Mutual was the biggest bank failure in American history and it was a fraction of the size of Citigroup and Bank of America. So, in effect, if you had to guarantee the deposits under $250k of all the checking accounts at Citi and BoA, I would guess it would be >$700billion which was TARP.
On top of that, just the mayhem that would be caused by the collapse of Citi and BoA would lead to irrational behavior that would plunge us further into depression. Nobody would believe the claims of even responsible banks and there would be runs on them too.
So, in the end, yes bankruptcy doesn't work for big banks.
"Media fools" are trying to spin Goldman's (GS) settlement as a victory, Barry Ritholtz writes, but it is really a "painful loss" with expensive repercussions likely to last far into the future. For starters, it opens the firm to future liability from all clients who bought money-losing derivatives, which could leave Goldman - and its rivals - constantly under attack. But the biggest question now: Who will the SEC come after next? [View news story]
1.) It's the biggest fine the SEC have ever levied in its history. And to your corollary of "If the SEC thought it could get a guilty verdit wouldn't it have pursued the case farther?", I can say if Goldman thought it was innocent wouldn't it do the same thing.
3.) Bankruptcy doesn't work for banks because banks are like no other industry. If Burger King goes bankrupt, there is no run on McDonald's bonds. But if Citibank goes bankrupt and all of their depositors are wiped out (and by depositors, I mean the Joe Schmo with the simple checking account), then yes there will be a run on other banks. It has happened throughout history.
4.) If you are going to bring the "Tea Party" mentality to any government agency then of course you are going to be against it. But just for a second stop and think about the government agencies that have done their jobs well. They never make the news but, as just one example of many, the Clean Air Act and Clean Water Act produced clean air and clean water without destroying the economy (like Republicans at the time said that it would). With your attitude, you should be against all of our institutions. Police departments have a long and storied history of corruption. Lets get rid of them too. Why not?
5. Yes, let's blame everything on Barney Frank. Here is a video of George W. Bush on housing:
georgewbush-whitehouse...
Here is the article from his own archives:
georgewbush-whitehouse...
No one was pushing home ownership more than Republicans and their "ownership society" idea. Because, as one of them put it, "mortgage holders don't go on strike".