smilingpilgrim

ECRI: Recession Likely to End This Summer

ECRI is well established, there's no question.

BUT the stock market is such an important constituent of the WLI. That is what worries me because the market has "gone cassino". So while the market used to have a valid place in the WLI when it followed investments, should is be the same today as it's become a gambling vehicle? I do question whether the wli has become just another self-fulfilling prophecy, just like the pundits talking the markets up, and it all will end very badly.

It would certainly be interesting to know what the WLI would be right now without the stock market included.

And what about the velocity of money? Has that really improved? I do not hear that banks would be bending over backwards to lend money out there.

Defending the UAW, Felix Salmon Abandons Logic

Thanks, Vincent.

Yes, you are right, debate or no debate, Mother Nature is in the process right now to remove the burden of the UAW/CAW from those who labour for their own fruit through years of university, post-grad courses, certifications, weekends spent upgrading our skills, through falling on our knees and picking ourselves up. We may be bruised by the occassional firing, but hey - that very struggle makes us strong, and makes our kids strong as they learn from us about how to be independent and successful in the real world.

Now, Vincent, can you write about how we can get rid of the public unions strangeling our public purse? The CUPE (Canadian Union of Public Employees) being the next worst thing after the Soviet Union?

Sorry, 303820... you are looking for mercy in the wrong place. You may grab some of my tax dollars as you go down, but that's it my friend. Seeking Alpha pages are not for the weak.


On May 10 05:15 PM Vincent Fernando wrote:

> This will be my last reply. I appreciate your comments, but there
> is a point where I'll just let it be until the next article. 303820,
> you need to really understand how wages are created for people to
> earn. I'm talking basic economics, basic laws of economics. Not the
> more complex stuff that is debatable theory.
>
> I'm not sure how I can explain it further but I'll try.
>
> Let's think about standard of living. Our standard of living costs
> something, its value has to be created from somewhere. Mother nature
> is a tough place. All the comforts we enjoy are due to somebody making
> it happen, creating value. Thus at its core, the standard of living
> for a country is simple. Its the total productivity, ie. value created,
> divided by the number of people. Because once all is said and done,
> collectively we all can't take more value than we collectively create.
> So to be simple, imagine if 10 people were dropped in a jungle and
> collectively harvested 10 pineapples, some collected 2 while some
> collected zero, but altogether they got 10. It would be impossible
> to have 2 pineapples each. The only way to get 2 pineapples each
> would be for the society to find a way to create 20 pineapples with
> the same 10 people.
>
> It sounds simple, but really thats economics at its core. Its just
> that in this modern age we're many layers removed from the original
> economic problems of our ancestors so perhaps the laws of econ are
> harder to see as evident. Now what we consider bare necessities include
> mobile phones that can communicate across a continent, 200 channels
> of entertainment 24/7, advanced chemical compounds that extend our
> lives by reducing heart attack, and notebook PC's running on chips
> 10,000x faster than our brains. Standards of living haven't gone
> up? My arse. All of the above, unattainable just 20 years ago, you
> can have for under $1,000. But I digress.
>
> So anyways, how do standards of living go up for a country? Create
> more value per person. This is inescapable fact. Just as laws of
> physics are inescapable.
>
> And so how did the US create an economic miracle and a very high
> standard of living? On average, each worker created more and more
> value over time. Massively more value if we compare today with the
> birth of the nation. And as there is a limit to how long one can
> work in a day, most of this added value was due to discovering better
> ways to use people's labor to make things happen, with technological
> innovation. Labor alone doesn't create higher standard of living,
> labor has existed since the stone age. More advanced technology applied
> to labor is what makes the difference.
>
> Now on an individual basis, we in the end either have to follow these
> same rules, or we need to mooch off of someone else who follows them.
> There is no way for 10 people to have 20 pineapples if 5 of them
> create 2 each and the other 5 create zero. Now of course there is
> a way to make everyone have 1 pineapple. Force the guys who have
> 2 to give 1 away. But soon many people realize that the smartest
> thing to do is to create zero and just take 1 from someone else.
> Thats called communism and history has shown us how that worked out,
> with China's initial economic problems, and then reform, as a prime
> example. Or just count the major human innovations which have come
> out of communist countries...
>
> Thus on an individual basis, each of our standards of living must
> come from the value we create, unless we then go and infringe on
> other people's rights and force them to give us more value than we
> add. This is inescapable.
>
> This is how it is at the core. This is basic economics. Blame mother
> nature, but don't blame other people in your society. Its life.
>
>
> Now, the UAW is guilty of forcing wages and benefits beyond the value
> they provide, and doing it for a very long time. Eventually it killed
> the US auto industry, and it makes sense since they essentially were
> taking more than they provided their employers for years. Here's
> another analogy. Just imagine a box filled with money, invested by
> shareholders and creditors. And now imagine that each year a large
> group of people take more money out of the box, than they create
> in the box. Eventually, the box is empty, its not sustainable. I'm
> amazed at how many people fail to grasp this.
>
> And thats the US auto industry. With the shareholders basically annihilated
> by this, the UAW is now killing the creditors who supplied the rest
> of the money in the box. If it just stopped there, then now it would
> be over. The money box would be empty, and the UAW's game would be
> over. It should have ended before the creditors got killed since
> by law, by contract, creditors have senior claims.
>
> But what have they done? Well they've twisted the government to essentially
> ignore the law and to make things worse they've now started to tap
> into another box, a much larger box, called the US taxpayer, as a
> further step to avoid economic reality. And thats when I think a
> lot of American's have a very good reason to be angry.
>
> Thats my problem with the UAW. If people want to enjoy a certain
> standard of living, why can't they just learn to earn it like the
> rest of us? Add at least as much value as you take from your company.
> If you need to earn more, then find ways to add more value. Its simple.
> Thats the real world most people face, and its the reality eventually
> someone has to face, even if they have to support moochers who leech
> off of them.
>
> So why does the UAW get to strong arm the US taxpayer once they have
> killed the companies that provided their livelihood? You realize
> that most of the US economy, and most US people, has to live in the
> real world, facing the reality of economics, right? And actually
> most US companies are very successful, and most Americans are very
> successful, competing in open competition with the entire world.
> Most US companies do fine without the US having national health care.
>
>
> See, none of the arguments for the UAW hold if one simply compares
> the auto industry with the majority of the US economy, thinks about
> basic econ, and reads history. Or simply considers individual property
> rights. Unfortunately, to the benefit of the UAW, most people do
> none of above. This is my last post on this thread. In either case,
> I wish you the best.

Defending the UAW, Felix Salmon Abandons Logic

303820

stop screaming here - you and your comrades have bargained yourselves out of business. stop pointing fingers at others in the financial industry since thousands of truly hardworking folks are losing jobs there as well. My husband and I lost our jobs in the tech crash. The strong and persistant ones recovered and we never asked you for your tax dollars to help us back on our feet.

So grow up already and like the rest of us ... get a r e a l job !

ECRI: Recession Probably Over by End of Summer

Steve:

Aren't the stock market and money supply two major components and the only two to be seriously up? If this is a fool's bear market rally PLUS the a fool's money supply created by Fed and Treasury, shouldn't that make the fool of the WLI as well ?

Thanks,
Pilgrim

CEOs Must Bring Investors Along for the Ride (WSJ)

TraderMark - NOW you've nailed it - "you-sit-on-my-board-I... is THE problem. They mutually increase each other's pay in an inflationary super-spiral.

As a student of history I would say that we are in a neo-feudal phase. If you care about dry history see Medieval England, if not read Ken Follet's "Pillars of the Earth" and "World without End". Great bestsellers, and you will see that toady's CEOs are the Barons ofthe Middle Ages. This is most pronounced in the USA with the rest of the developed world being more balanced - although getting infected as well. If the American people do not revolt, their neo-feudal clique will soon be paid in the 1000's of multiples - not just 100's.

Apropos, am I the only person thinking that a CEO who is paid in the millions should be spending 24/7 at their job? Where do they find the time to worry about another company's problems? Unless they are Zeus on the Olympus, the time calculation just does not add up! As a non-US investor, I would not touch 99.99..% of US publicly traded companies with a ten-foot pole. My only US holding is JNJ.

Pilgrim


On May 03 08:36 PM TraderMark wrote:

> You nailed it. Only the holier than thou few at the top think there
> is no one to replace them, and the defenders of corporate pay, generally
> are in the "back scratch" program (you sit on my board, I sit on
> your board) and we'll all walk about how we are irreplaceable to
> justify how we can get away with this. Have WSJ and CNBC trumpet
> the dogma and we all win here.

Global Shipping Industry Sees Long Duration Economic Recession

I am scratching my head over the same contradiction in your article, Steve - can you follow up?


On Apr 21 08:11 AM CautiousInvestor wrote:

> This is an interesting article and suggests that the Baltic Dry Index
> could lose some of its value as a guage of international trade activity
> if there is a surplus of ships. If true, this would keep rents rates
> for dry vessels depressed even if there is an uptick in the movement
> of grains, ores and other materials.
>
> I have pasted below something I am having a hard time getting my
> arms around. If China is deiberately producing too many ships to
> depress freight/rental rates, why are do others need finanacing to
> build additional capacity?
> ______________________...
>
> $350 billion of financing for new ship construction is necessary
> within the next two years. Even in normal times, the tradition sources
> of financing would only have been able to provide $250 billion.<br/>
>

IMF Notwithstanding, Just Don't See a Depression

60 Minutes two weeks ago reported that gun sales in the US are booming ...


On Apr 22 05:56 PM The Geoffster wrote:

> The massive debt bubble has burst causing the near? collapse of the
> banking system. This has been followed by the floating of even more
> bad? debt. When this bubble bursts, ammunition may trade like gold.

ECRI: Signs of Economic Improvement

thank you Steven for the commentary - greatly appreciated. Would appreciate more of it with future postings.

Pilgrim


On Apr 05 07:38 PM the hand wrote:

> unfortunately, i am not making the big bucks working for ECRI, and
> am not affiliated with ECRI in any way except an admirer of their
> track record. they has specifically given permission to me to publish
> of some of their work for the readers of Seeking Alpha.
>
> i too am concerned about the economy. and i personally believe the
> stock market is way too ahead of itself this time - the future earnings
> will not support the current prices. the market did not fall low
> enough. we will have a slow and labored period after the economy
> bottoms within the next six months.
>
> according to Lakshman Achuthan, in november long term indicators
> bottomed, weekly indicators bottomed in december, and in march stocks
> bottomed. this 1-2-3 punch has reoccurred recession after recession
> since 1920.
> www.cnbc.com/id/158402...;play=1 (via
> @addthis)
>
> Lakshman goes on to say in this interview that when comparing recessions,
> the recovery growth trends are becoming weaker and weaker while the
> cycle itself is becoming bigger with recessions becoming more and
> more frequent.
>
> Lakshman comments about this interview were "The risk in stock market
> over next couple of quarters is lower than most think. At least that's
> what I was trying to say in the context of the interview."
>
> Now you ask me if i am investing my money right now - hell no. I
> am not convinced the government and the Fed will have large and unintended
> consequences for what they are doing.
>
> steven hansen
>

One World, One Currency?

Michael: I too was wondering what gold would have to be, and I thought it would have to go much higher than $26K. The number would depends on the amount of international trade, wouldn't it?

Would that come down to New Gold Standard? But didn't countries who did not relax it during Depression suffer more than those who did?

And if it was composed of the four currencies and one would "misbehave", would that wreak more havock on international relations?

This is not as simple as it seams the more I think about it.


On Apr 05 11:21 AM Michael Fitzsimmons wrote:

> fireball: yes, awhile back a commenter and i worked through what
> the price of gold would have to be to back the US dollar. it was
> early last year, and if memory serves it was either $16,000 or $26,000
> an ounce (sorry, too lazy to go back and find out). regardless, it's
> obviously more than the current ~$900 and certainly a much larger
> figure now since the "bailout" and juiced printing presses started
> churning out US dollars by the boatload. farmland? you bet, get some
> chickens, some cows, plant a big garden, and put a big catfish farm
> on it. even better if you have some deer and turkey running around
> and can seed for ducks and geese :)
>
> yellowhoard: yup, it's naomi klein's "shock doctrine" theory all
> over again. american soverignty is at stake, and foreign oil is at
> the root of the problem (imho).

One World, One Currency?

You cannot compare to the Euro which REPLACES national currencie. The new reserve currency would not replace national currencies as it would be used for international settlements only. Of course the ideal would gold which has no liabilities, but there's not enough of it. So the next best bet is a basket of currencies.

Can this be implemented and yet not have the U$ collapse? Hardly. Just opening official talks would send the buck reeling. I think.

So let's just get the financial and economic crises under control and then let's see it the Americans can get their act truly together.

And let's not forget, as mad as this last expansion has been it has put millions of people in the developing world on their path out of dire poverty. There are and will not be quick fixes, but on balance the world is going to be better off as a result.


On Apr 05 09:23 AM longoil wrote:

> The concept of a global currency is not a new concept. In fact, Western
> European nations and Japan had their currencies pegged to the US
> dollar (which was a gold standard currency for central banks) from
> 1944-1971 as per the Bretton Woods accord. Things started to unravel
> when was a run on gold in the late 1960's.
>
> The problem with a global currency is who will set banking policy.
> The "Euro" only became possible because a strong economic union had
> existed between member nations, who have similar cultures and banking
> systems, for 35 years prior to the common currency being established.
>
>
> I don't see the US accepting a highly reduced role in setting banking
> policy in this new global currency. I dont think the USA will accept
> the influence of other substantial stake holders with diverse cultural
> and banking standards like China, Saudi Arabia, Japan, Russia, etc.
>
>
> Look what happened with the Euro, England could not agree to the
> EU central banking policy and wound up keeping its only currency
> in the end. If a global currency is established, I think the USA
> will follow the footsteps of the British and keep their own currency.
>
>
>

Obama Helps China in Preparation for a Dollar Collapse

Canadian and Aussie $$ - according to Don Coxe.


On Apr 05 11:43 PM twotraps wrote:

> As usual, many good points, and many fragments of good points...but
> where is the trade?? Looking through the politics, what is the alternative
> to the dollar? Where do you go to preserve buying power? Where is
> the next best, stable, mostly law abiding that includes property
> ownership, flexible, entreprenurial system where things are created,
> financed, sold/consumed?
>
> I agree that the expansion of the govt bal sheet is sick and dangerous,
> but that does not mean the Euro is the winner. Can the Euro keep
> going without eventual political union of the member states? Is decision
> by committee the way to go...14 countries sharing the burden of it?
>
>
> Remember when Iran was going to set up its own crude exchange and
> price it in Euros? Not as easy as it looks...China might be in the
> same boat. I doubt they know what they would do with the opportunity
> to take the currency lead! At the end of the day, as far as business
> goes...it might not be that sophisticated after all. Remember the
> opening ceremonies of the olypics...when the stadium floor was filled
> with drums? Perfect harmony. For me, it tells the world that they
> can make stuff happen. It is a unique advantage they have, leading
> by decree...like telling certain people not to drive to work to keep
> smog down, or beat a drum, or whatever. Like it or not, they will
> be a force to reckon with....by decree!!
>
> Until then however, I would rather just get on the next big currency
> trend and shut up about it. So, where is that trade?

Obama Helps China in Preparation for a Dollar Collapse

Good anti-Obama rant, Howard. I love America too, and I understand your fear as it is my fear too. But tought luck.

What about we just go back to the Torah and read it for real? You guys in New York have gone mad ( still call it creative? ). Another experiment gone sour. Greenspan should have tested this on guinea pigs first, as should have Marx. Both would have saved me lots of grief as I've had the honour to "benefit" from both.

IMHO, it's time to get back to real values in New York!

Friday Outlook: Commodities, Global Markets

jobs are a lagging indicator, so that might be right. but no-one knows how deep they will go.


On Apr 03 11:13 AM schlumpf wrote:

> good work David thanks,
>
> in cnbc the bulls wrote, its a good sign that the job losses are
> higher. The recession is over because the job losses are higher.
>
> I know everybody is long now. but this is crazy

Friday Outlook: Commodities, Global Markets

My chicago cousin told me yesterday, "if only the newspapers started to write positive things about the crisis all would be good" GOSH !

you see, it works with American menality - prudent non-Americans just do not get it with our logic, skepticism, and calculator in hand. Americans are different - "resilient, optimistic ... " and all the other "positive" emotions. And you see, my cousin's not stupid either, she's all-round American.

So do we want to be right of make money?

Friday Outlook: Commodities, Global Markets

David, do you see gold forming a H&S with the neckline around 888? what would be your take on this?

thanks