Stimuluszilla Killed Japan and Is Heading Our Way [View article]
The stimulus is in the stock market, I fear. Just another party for Wall Street. Is that what 'infrastructure' means?
On Sep 18 12:52 PM Dave Wrixon wrote:
> Inflating activity by Stimulus is not a recovery. It is only really > a recovery when you get to the "Look Mum, No Hands" moment. All Obama > has achieved to date is to get America much deeper into dept. > > And what happened to all those Roads and Bridges that would form > the core of tomorrow's infrastructure that would support growth? > > > Frankly, the Stimulus is the equivalent of a night on the town. The > pockets are empty, the fine liqueur has been pissed up against the > wall, and the patient is too sick to hold down his breakfast, whilst > the head-ache seems to be endless. But yes, if you ask the local > publican whether the economy is helpful, he is hardly likely to complain.
Stimuluszilla Killed Japan and Is Heading Our Way [View article]
The stock market seems to be having a V recovery, for the time being. But the stock market is NOT -- I repeat NOT -- a leading economic indicator. The stock market predicted the end of the recession in 1932. The depression finally ended in 1947.
Stocks put in a bottom in 1932 -- but stocks did not recover to the 1929 level until 1954. (See below for more information on this.)
Stimuluszilla Killed Japan and Is Heading Our Way [View article]
Very well said. Wonderful post. Deflation to 2019.
On Sep 18 12:56 PM User 353732 wrote:
> Sustained, high quality growth requires that resources be continually > redeployed up the value added ladder -----from lower to higher valued > uses. This requires useful and extensive innovation(as opposed to > financial engineering for its own sake or management fads) which, > in turn, entails protecting the property rights of both intellectual > and risk capital and permitting just returns for entrepreneurial > contribution. > In contrast , efficiency frees up resources but creates no growth > until these resources are used to support innovation. A focus on > efficiency will lead, at best, to stagnation. > Debt driven consumption leads to negative value added and after a > time leads to economic contraction. Debt is a tonic when it leverages > high return innovation or bridges efficiency improvements. Debt is > a poison when it finances instant gratification or when it is invested > in infrastructure or make work projects that cannot even earn cost > of capital. > For over a decade, the economic policy of Japan has been to focus > on efficiency and debt driven , negative return public "investments". > Japan has been moving down the value added ladder which is why it > is stagnant and why its citizens are steadily become poorer in both > real and comparative( compared with other high per capita income > nations) terms. > > The US Govt has adopted the worst features of Japanese economic policy > and added to them toxins of its own design and preference. By its > actions the US Govt is forcing a very large scale redeployment of > national resources DOWN the value added ladder while increasing National > indebtedness to crushing levels. > If this trajectory continues, stagnation will not be the floor for > the US economy from 2008 levels: it will be the ceiling
Seven Reasons Doug Kass Is Wrong About the Economy [View article]
There's no question we're looking like Japan. Especially in the way we are hiding the toxic loans in our banking system, pretending that time will take care of everything. But time is not on our side. It is never on the side of those living in an ark INSIDE the deflating bubble.
On Sep 18 01:28 PM aja8888 wrote:
> Try to get a job (or an apartment, or a loan) with damaged credit. > That's *new* in the last ten years. > > 50 million old timers are "retiring" in the next 5 years; that's > different and will put a load on SS & Medicare. > > It's looking like Japan now and that's different. > > We have 20+ million (my guess) undocumented illegals in this country > sucking jobs out of the work force; that's different. > > I'm with Kass......
Seven Reasons Doug Kass Is Wrong About the Economy [View article]
Always a de-leveraging following a recession? Our debt vs GDP is 350%. It has never been this high, and only once close, during the great Depression.
There is always a massive deflation (de-leveraging) during a depression, especially when debt vs GDP is 350%. The Japanese were close to this in 1989 -- and now they are in their 20th year of deflation.
Jobless Claims: Curiously Big Drop in Unadjusted Number [View article]
Excellent post. The bank failures keep coming.
On Sep 18 08:51 AM conceptwizard wrote:
> A good part of money and credit injections have been into world stock > markets to give a semblance of normality and to make people think > all is well. At the same time we hear of eliminating this orgy of > money and credit, but it gets pushed off further and further into > the future, as it forms another speculative inflationary bubble. > There is no doubt that a groundswell is forming as inflation begins > to appear again, an event that really started in May, five-months > ago. As you can see jobs are not being created and that this financial > largess is again flowing mostly into financial markets. The inflationary > bubble is on the way again worldwide. > > G-20 members that are flooding the markets with money and credit > think they are doing a great thing saving us. These are scam and > propaganda artists. All they are guaranteeing is higher gold and > silver prices. Governments issue bonds and central banks in part > buy them monetizing the debt. All this in the name of bailing out > bankers, insurance companies, Wall Street and the federal government. > Reckless spending is ruining almost all world economies. Borrowed > money is subsidizing deficit spending in a big way and soon it will > turn inflation higher. > > We have just seen Treasuries, Agencies and GSE MBS expand $2 trillion > over the past year and expect a further $2 trillion expansion for > the next fiscal year. The private sector and foreign central banks > are simply not capable of financing such deficits. That means credit > expansion and monetization has to take place and that will be inflationary. > > > This past week we again were treated to the “Fed Friday Night Financial > Follies.” Chicago’s Corus Bank, under crippled by construction loans > for condos, was seized by regulators and its $7 billion in deposits > were acquired by MB Financial. This makes 91 failures this year and > 416 FDIC insured banks are on the problem list.
Wells Fargo (WFC -0.9%) CEO John Stumpf told the WSJ this week losses on Wachovia loans are "still in the same ZIP code" as Wells' original predictions. But bank journalist Teri Buhl says outside experts who have pored over Wells' books "are shocked with what they're seeing," namely a huge swath of derivative trades, and a default rate 8x greater than other banks. (via) [View news story]
'Still in the same zip code'? Maybe the problem is that our bankers are using too many metaphors, and not enough numbers.
Financial Meltdown: China Blames West, West Blames China [View article]
I really wish our leaders (all of them) would say: 'America screwed up. We let the banks and insurance companies run wild. We made bad judgments about housing and about lending and we need to try to fix the problem right now by confronting the bad debts in our banks and in our government and in our consumer society...'
Blaming the Chinese is another instance of not taking responsibility. We're always spinning. We've become such cowards at looking at reality head on.
As long as we continue looking for someone else to blame we are going to get no where. The suspension of the mark-to-market rule was the second step down the road to hell. The first step was allowing that freak Hank Paulson anywhere near Washington.
Interesting Times: From 40% Below the 200 Day Moving Average to 20% Above [View article]
That's a very interesting chart.
One thing we keep forgetting. The Market and the Economy are not really linked. Oh, we hear and say they are. "Investors sold today over concerns that unemployment was gaining momentum..." This is a rational explanation of an irrational being, an emotional reaction to a myriad of related and unrelated events. The stock market is not rational. The stock market is a herd of emotions acting out their fears in great waves: (1) greed is the fear of missing out on profits -- panic buying; (2) fear of losing profits in a sell-off -- panic-selling. The rational part is how we 'talk' about our behavior, rationalize it. But the behavior is ALL emotion.
We can see this is this most recent stock rally. Reason suggests caution, given the picture many are seeing of limited possibilities of business expansion over the next decade. Spain, one of the worst-looking economies in the world, is rallying right next to all the other global markets. Why is Spain rallying right in lock-step with France, Germany, China, Taiwan? The herd doesn't want to miss out. The rational facade talks about price-earnings ratios, and debt-to-cash ratios, but the real rational investor often panics if HIS stock loses 10% in a pullback. He may not sell -- but that doesn't mean he's not panicking on the inside. And is his stock gains 15%, he is probably not thinking about the prospect his stock might be overvalued, but he is probably thinking about how rich he feels, what an intelligent man he is, to have made such a good play in the market.
The stock market is fueled by psychology and emotion. Reason is used to attempt to explain the emotional behavior (panic on the affirmative side or panic on the negative side).
Is the current market over-rally caused by ration, sober men viewing long-term probabilities of company earnings power over the next decade -- or is it: I'd better get mine before it's too late? There may be a little bit of the former; but I'd bet there is a lot more of the later. 'Frothy' -- isn't that the word for too much emotion sloshing around inside too little reason? A PE of 140 on the S&P 500 says some investors are getting a bit ahead of their qualitative reasoning.
American Consumers Tell Economists to Speak for Themselves [View article]
Does anyone really think the American consumer is going to take Ben Bernanke at his word and start spending their life savings on new cars they don't really need just because Ben is giving his word that the recession is over?
American Consumers Tell Economists to Speak for Themselves [View article]
We've seen how the Fed blackballs economists who are pets of the Fed and the Fed's pet, Goldman Sachs. It's one big fraternity of floppy neighbors, living high and loving it, watching Big Ben inflate the stock markets with his unending supply of personal gas. What could be finer, than to be in Carolina, as part of the Master's of the Universe glee club?
SEC's Attempts to Institute Financial Reform Could Also Have a Downside [View article]
We won't have ANY reform if we worry about what the banks say. Of course the banks want a system like the one they've had for the last decade and a half, with fewer and fewer rules, with more and more profits, with more and more risk leading to disaster.
It's like worrying in prisoners are going to mind if we turn our the lights at 10:00 PM to save on electricity. Of course they are going to mind.
Why is selfishness such a virtue to some people? The same people probably have no problem with spending billions of dollars to fight in Iraq or Afghanistan...but providing the best health-care system in the world is not an option because of the cost -- and because it's not in the constitution.
Seems like a case of moral blindness to me. If they can't swim then they should sink. Well, a lot of people wanting to work, wanting health-care, who can't find jobs, are going to be sinking -- so keep on defending the rich doctors, lawyers and insurance companies.
On Sep 18 04:38 AM Mr. Ed, Jr. wrote:
> This is from the report... > > "Methods. We conducted a survival analysis with data from the Third > National Health and Nutrition Examination Survey. We analyzed participants > aged 17 to 64 years to determine whether uninsurance at the time > of interview predicted death. > Results. Among all participants, 3.1% (95% confidence interval [CI]=2.5%, > 3.7%) died. The hazard ratio for mortality among the uninsured compared > with the insured, with adjustment for age and gender only, was 1.80 > (95% CI=1.44, 2.26). After additional adjustment for race/ethnicity, > income, education, self- and physician-rated health status, body > mass index, leisure exercise, smoking, and regular alcohol use, the > uninsured were more likely to die (hazard ratio=1.40; 95% CI=1.06, > 1.84) than those with insurance. > Conclusions. Uninsurance is associated with mortality." > > > Now, let's review...... > > First, the report did not include those covered by Medicaid, Medicare > and VA. Only uninsured vs. private insurance. Should we wonder why > government-insured are not surveyed ? I think we know-- those with > government insurance likely also did not compare well with the privately > insured. > > Yes, private insurance probably does have a higher correlation with > better health than government insurance. And does anyone doubt that > not having insurance is worse than having private insurance ? > > > "We analyzed participants aged 17 to 64 years to determine whether > uninsurance at the time of interview predicted death." > > Uninsurance at the time of the interview ? A 17 year old ? And they > "predicted" the 17 year old's death ? > > > > But the real cause for concern is this..."with adjustment for age > and gender" and ..."After additional adjustment for race/ethnicity, > income, education, self- and physician-rated health status, body > mass index, leisure exercise, smoking, and regular alcohol use, the > uninsured were more likely to die' > > Adjustments. For race...income...educat... > > And the coup de grace....self-rated health status. > > Adjustments. To make the stats work. just like what our government > does with unemployment reports. Or those infamous "seasonal adjustments". > (As in "Just add seasoning") > > A more significant correlation would be income/longevity. Persons > with more significant income will be able to afford better health > insurance coverage and better health care. They will , on average, > live longer. No doubt. > > Those who support government-run healthcare want the wealthy to have > the same healthcare experience as the poor. The government-run healthcare > advocates have it backwards. Their real concern should be exactly > the opposite-- helping the poor get healthcare more like what the > wealthy receive. > >
Stimuluszilla Killed Japan and Is Heading Our Way [View article]
On Sep 18 12:52 PM Dave Wrixon wrote:
> Inflating activity by Stimulus is not a recovery. It is only really
> a recovery when you get to the "Look Mum, No Hands" moment. All Obama
> has achieved to date is to get America much deeper into dept.
>
> And what happened to all those Roads and Bridges that would form
> the core of tomorrow's infrastructure that would support growth?
>
>
> Frankly, the Stimulus is the equivalent of a night on the town. The
> pockets are empty, the fine liqueur has been pissed up against the
> wall, and the patient is too sick to hold down his breakfast, whilst
> the head-ache seems to be endless. But yes, if you ask the local
> publican whether the economy is helpful, he is hardly likely to complain.
Stimuluszilla Killed Japan and Is Heading Our Way [View article]
Stocks put in a bottom in 1932 -- but stocks did not recover to the 1929 level until 1954. (See below for more information on this.)
seekingalpha.com/insta...
On Sep 18 11:54 AM Socialism cannot compete! wrote:
> People keep arguing whether we're looking at a V or a W. We're gonna
> have an L.
Stimuluszilla Killed Japan and Is Heading Our Way [View article]
On Sep 18 12:56 PM User 353732 wrote:
> Sustained, high quality growth requires that resources be continually
> redeployed up the value added ladder -----from lower to higher valued
> uses. This requires useful and extensive innovation(as opposed to
> financial engineering for its own sake or management fads) which,
> in turn, entails protecting the property rights of both intellectual
> and risk capital and permitting just returns for entrepreneurial
> contribution.
> In contrast , efficiency frees up resources but creates no growth
> until these resources are used to support innovation. A focus on
> efficiency will lead, at best, to stagnation.
> Debt driven consumption leads to negative value added and after a
> time leads to economic contraction. Debt is a tonic when it leverages
> high return innovation or bridges efficiency improvements. Debt is
> a poison when it finances instant gratification or when it is invested
> in infrastructure or make work projects that cannot even earn cost
> of capital.
> For over a decade, the economic policy of Japan has been to focus
> on efficiency and debt driven , negative return public "investments".
> Japan has been moving down the value added ladder which is why it
> is stagnant and why its citizens are steadily become poorer in both
> real and comparative( compared with other high per capita income
> nations) terms.
>
> The US Govt has adopted the worst features of Japanese economic policy
> and added to them toxins of its own design and preference. By its
> actions the US Govt is forcing a very large scale redeployment of
> national resources DOWN the value added ladder while increasing National
> indebtedness to crushing levels.
> If this trajectory continues, stagnation will not be the floor for
> the US economy from 2008 levels: it will be the ceiling
Seven Reasons Doug Kass Is Wrong About the Economy [View article]
seekingalpha.com/insta...
Seven Reasons Doug Kass Is Wrong About the Economy [View article]
On Sep 18 01:28 PM aja8888 wrote:
> Try to get a job (or an apartment, or a loan) with damaged credit.
> That's *new* in the last ten years.
>
> 50 million old timers are "retiring" in the next 5 years; that's
> different and will put a load on SS & Medicare.
>
> It's looking like Japan now and that's different.
>
> We have 20+ million (my guess) undocumented illegals in this country
> sucking jobs out of the work force; that's different.
>
> I'm with Kass......
Seven Reasons Doug Kass Is Wrong About the Economy [View article]
There is always a massive deflation (de-leveraging) during a depression, especially when debt vs GDP is 350%. The Japanese were close to this in 1989 -- and now they are in their 20th year of deflation.
Jobless Claims: Curiously Big Drop in Unadjusted Number [View article]
On Sep 18 08:51 AM conceptwizard wrote:
> A good part of money and credit injections have been into world stock
> markets to give a semblance of normality and to make people think
> all is well. At the same time we hear of eliminating this orgy of
> money and credit, but it gets pushed off further and further into
> the future, as it forms another speculative inflationary bubble.
> There is no doubt that a groundswell is forming as inflation begins
> to appear again, an event that really started in May, five-months
> ago. As you can see jobs are not being created and that this financial
> largess is again flowing mostly into financial markets. The inflationary
> bubble is on the way again worldwide.
>
> G-20 members that are flooding the markets with money and credit
> think they are doing a great thing saving us. These are scam and
> propaganda artists. All they are guaranteeing is higher gold and
> silver prices. Governments issue bonds and central banks in part
> buy them monetizing the debt. All this in the name of bailing out
> bankers, insurance companies, Wall Street and the federal government.
> Reckless spending is ruining almost all world economies. Borrowed
> money is subsidizing deficit spending in a big way and soon it will
> turn inflation higher.
>
> We have just seen Treasuries, Agencies and GSE MBS expand $2 trillion
> over the past year and expect a further $2 trillion expansion for
> the next fiscal year. The private sector and foreign central banks
> are simply not capable of financing such deficits. That means credit
> expansion and monetization has to take place and that will be inflationary.
>
>
> This past week we again were treated to the “Fed Friday Night Financial
> Follies.” Chicago’s Corus Bank, under crippled by construction loans
> for condos, was seized by regulators and its $7 billion in deposits
> were acquired by MB Financial. This makes 91 failures this year and
> 416 FDIC insured banks are on the problem list.
Wells Fargo (WFC -0.9%) CEO John Stumpf told the WSJ this week losses on Wachovia loans are "still in the same ZIP code" as Wells' original predictions. But bank journalist Teri Buhl says outside experts who have pored over Wells' books "are shocked with what they're seeing," namely a huge swath of derivative trades, and a default rate 8x greater than other banks. (via) [View news story]
Financial Meltdown: China Blames West, West Blames China [View article]
Blaming the Chinese is another instance of not taking responsibility. We're always spinning. We've become such cowards at looking at reality head on.
As long as we continue looking for someone else to blame we are going to get no where. The suspension of the mark-to-market rule was the second step down the road to hell. The first step was allowing that freak Hank Paulson anywhere near Washington.
Interesting Times: From 40% Below the 200 Day Moving Average to 20% Above [View article]
One thing we keep forgetting. The Market and the Economy are not really linked. Oh, we hear and say they are. "Investors sold today over concerns that unemployment was gaining momentum..." This is a rational explanation of an irrational being, an emotional reaction to a myriad of related and unrelated events. The stock market is not rational. The stock market is a herd of emotions acting out their fears in great waves: (1) greed is the fear of missing out on profits -- panic buying; (2) fear of losing profits in a sell-off -- panic-selling. The rational part is how we 'talk' about our behavior, rationalize it. But the behavior is ALL emotion.
We can see this is this most recent stock rally. Reason suggests caution, given the picture many are seeing of limited possibilities of business expansion over the next decade. Spain, one of the worst-looking economies in the world, is rallying right next to all the other global markets. Why is Spain rallying right in lock-step with France, Germany, China, Taiwan? The herd doesn't want to miss out. The rational facade talks about price-earnings ratios, and debt-to-cash ratios, but the real rational investor often panics if HIS stock loses 10% in a pullback. He may not sell -- but that doesn't mean he's not panicking on the inside. And is his stock gains 15%, he is probably not thinking about the prospect his stock might be overvalued, but he is probably thinking about how rich he feels, what an intelligent man he is, to have made such a good play in the market.
The stock market is fueled by psychology and emotion. Reason is used to attempt to explain the emotional behavior (panic on the affirmative side or panic on the negative side).
Is the current market over-rally caused by ration, sober men viewing long-term probabilities of company earnings power over the next decade -- or is it: I'd better get mine before it's too late? There may be a little bit of the former; but I'd bet there is a lot more of the later. 'Frothy' -- isn't that the word for too much emotion sloshing around inside too little reason? A PE of 140 on the S&P 500 says some investors are getting a bit ahead of their qualitative reasoning.
American Consumers Tell Economists to Speak for Themselves [View article]
Who is Ben Bernanke? Ben is Wally Cox on viagara.
American Consumers Tell Economists to Speak for Themselves [View article]
SEC's Attempts to Institute Financial Reform Could Also Have a Downside [View article]
It's like worrying in prisoners are going to mind if we turn our the lights at 10:00 PM to save on electricity. Of course they are going to mind.
What's the Worst Case Scenario for Real Estate? [View article]
I'd watch gold very closely 2018-19 for an exit point.
According to a study published yesterday, one American dies every 12 minutes due to the lack of health insurance. [View news story]
Seems like a case of moral blindness to me. If they can't swim then they should sink. Well, a lot of people wanting to work, wanting health-care, who can't find jobs, are going to be sinking -- so keep on defending the rich doctors, lawyers and insurance companies.
On Sep 18 04:38 AM Mr. Ed, Jr. wrote:
> This is from the report...
>
> "Methods. We conducted a survival analysis with data from the Third
> National Health and Nutrition Examination Survey. We analyzed participants
> aged 17 to 64 years to determine whether uninsurance at the time
> of interview predicted death.
> Results. Among all participants, 3.1% (95% confidence interval [CI]=2.5%,
> 3.7%) died. The hazard ratio for mortality among the uninsured compared
> with the insured, with adjustment for age and gender only, was 1.80
> (95% CI=1.44, 2.26). After additional adjustment for race/ethnicity,
> income, education, self- and physician-rated health status, body
> mass index, leisure exercise, smoking, and regular alcohol use, the
> uninsured were more likely to die (hazard ratio=1.40; 95% CI=1.06,
> 1.84) than those with insurance.
> Conclusions. Uninsurance is associated with mortality."
>
>
> Now, let's review......
>
> First, the report did not include those covered by Medicaid, Medicare
> and VA. Only uninsured vs. private insurance. Should we wonder why
> government-insured are not surveyed ? I think we know-- those with
> government insurance likely also did not compare well with the privately
> insured.
>
> Yes, private insurance probably does have a higher correlation with
> better health than government insurance. And does anyone doubt that
> not having insurance is worse than having private insurance ?
>
>
> "We analyzed participants aged 17 to 64 years to determine whether
> uninsurance at the time of interview predicted death."
>
> Uninsurance at the time of the interview ? A 17 year old ? And they
> "predicted" the 17 year old's death ?
>
>
>
> But the real cause for concern is this..."with adjustment for age
> and gender" and ..."After additional adjustment for race/ethnicity,
> income, education, self- and physician-rated health status, body
> mass index, leisure exercise, smoking, and regular alcohol use, the
> uninsured were more likely to die'
>
> Adjustments. For race...income...educat...
>
> And the coup de grace....self-rated health status.
>
> Adjustments. To make the stats work. just like what our government
> does with unemployment reports. Or those infamous "seasonal adjustments".
> (As in "Just add seasoning")
>
> A more significant correlation would be income/longevity. Persons
> with more significant income will be able to afford better health
> insurance coverage and better health care. They will , on average,
> live longer. No doubt.
>
> Those who support government-run healthcare want the wealthy to have
> the same healthcare experience as the poor. The government-run healthcare
> advocates have it backwards. Their real concern should be exactly
> the opposite-- helping the poor get healthcare more like what the
> wealthy receive.
>
>