po folks

Should We Thank the Plunge Protection Team for the Equities Rally?

Does anyone think there might also be a bias upwards in the market from all the high frequency trades going on?

I'm not sure, but it seems reasonable that 1 share traded 1,000,000 times in a day might have a similar influence on pricing to a single1,000,000 share buy.

The Fed's Balance Sheet: 11 Months Later

Your chart reminds me of two trash bins. Is that a coincidence?

2009 Prediction Review

I congratulate you on your 2009 prediction insight.

However, in your observation that "There certainly weren't a lack of buyers for Treasuries last year...", please look at who "the buyers" were.

A 3500% growth of customers occurred in a misnamed category called, "household sector". This may have had some private individuals buying T bills in the number, but likely not to the tune of the over $700 Billion reported for last year.

Others have postulated that the mystery "household" with the deep pockets, was actually the Fed.

If this is true, your prediction would be basically correct. I think that one rich uncle constitutes a lack of buyers for Treasuries last year.

And, as a consequence, jameshook51 could be waiting longer for free health care.

Our Current Economic Illusions

You stated, ..."Productivity is essentially the amount of GDP produced per worker. Since employment is falling in the U.S. and GDP is supposedly rising (the two moving in opposite directions is illogical) productivity has to go up. According to the government, it is going up a huge amount. Is there any major new technological advance or innovation accounting for this? None, that anyone knows about."...

For some time there has been controversy over foreign content within US-assembled manufactured goods. As the imported content rises, the value of the constituent components are still being included in US GDP, as though the components were still being made here.

If that trend is further accelerated by the downturn, you have a greater numerator (GDP from the value of the whole assembly, including foreign content) divided by a smaller numerator (many fewer workers designing, procuring, fabricating, assembling, transporting, US made components).
Voila!... much better, US "productivity".

If this is truly happening, the divergence between employment and "productivity" becomes logical and easily explained, because it is not being measured properly.

Is It Time for Capital Preservation Mode?

A question: Why didn't Dubai just quietly refinance by partaking in, "the mother of all carry trades", now supposedly quietly going on? You'd think 80 $billion or so could quite easily be had from these presumedly too big, freewheeling, gambling, gangster bankers. Is the industry finally minding the store and evaluating risk?

Foreclosure Rates Continue Their Steady Decline

Please help me understand something about alt-A's: Are they originated at a below market interest rate, that has to be increased when reset, or, are they reset according to prevailing interest rates (US prime, LIBOR, etc...)?

Obama Administration Won't Release Mortgage Modification Figures

Both you and Robbo are so right. Let the Bubbles reflate by whatever means at whatever the cost. We'll all feel richer (for a short while).

Were Fannie and Freddie the Real Enablers of the Housing Bubble?

Fannie, Freddie, Ginnie, and FHA ARE "interventions" in the "market".

Whenever you have the government in the market, whether by providing direct subsidy or guarantee, it changes the underlying values in home financing and ownership from what they would be if 100% privately financed. Throughout the existence of these agencies there has been a "bubble".

I would also hasten to add, that this intervention has provided stimulus to mining, manufacturing, utilities, home service providers, local governments, and a general improvement in quality of life for the US population. The bubble was kept a manageable size when regulations were effective.

But I am afraid that this goose may finally be cooked. Too much greed, too many grabbing for an outsize share of her golden eggs. So sad...

Alcoa Kicks Off Earnings: Some Numbers That Don't Add Up

Shipments usually don't rise a lot in most recessions I've seen, so that is no surprise.

Basic material companies usually take it on the chin during downturns and have to cut employment, and also have to squeeze working capital to the absolute minimum to sustain operations. Although this is a reactive solution, it is called good operations management, and that is what we partially see in this earnings report.

Prices usually don't rise in a recession either, which is the puzzle, to me at least. This industry is prone to big oversupply from sovereign nations that run smelters at full capacity to generate foreign exchange, whatever the market conditions. The world price has improved and LME stocks have shown some reductions, but there is still a large overhang.

Could it be that these nations now see this as folly? Is it the weak dollar? Could aluminum be a new "stable store of value" like precious metals?

The Great Shift: China Rising, U.S. Falling

Scuse me, I am not an economist, but isn't the RMB's value actually pegged to that of the US dollar? What happens to it if the dollar collapses?

Hybrids Lead the Way for Auto Transport Industry

For high volume production of vehicle bodies, there are many material choices that have been tried.

"Inexpensive", "Light", and, "Composite" are three goals that are often used in combination. Unfortunately, the final product often has only two of these three traits. And don't forget, "re-usable" after the car is scrapped.

Krugman Puzzled by Housing Asymmetry

Many "resources" came from monetization of an asset. i.e.: homes were ATM cash machines in exchange for debt, which would fade away as housing values inexorably and irreversibly rose. This created consumer demand that became a significant part of the general economy.

Simple. You take away the money, you lose the demand.

(Surely a brilliant, high Nobel-prize pedigree academic asking the question for rhetorical purposes, no?)

Garmin: Overrated or Underappreciated?

GRMN has a powerful aviation and marine division that make panel mounted navigators with COM radios. Relative revenues (vs. PND's) make this seem small. However, it is the real profit center.

Mid-Year 2009 Recap: What's Ahead

I remain hopeful that the gloom and doom prophecy will not materialize, but I agree that current US economic policies only will succeed in digging us into a deeper hole. Trying the same measures and yet somehow expecting a different result. Even though short of capital, we seem to have cornered the market on a wealth of gullible and naive people who go along with this madness.

Prosecuting Those Who 'Caused' the Recession Could Have Unintended Consequences

All good comments to this article (which also raises a lot of serious questions).

Somehow we must clean up a dysfunctional economic system that perpetrated fraud along every tier of a long value chain, while being aided by numerous self-serving cheats in high public office.

The justice system now has a chance to do this thoroughly and fairly. If it blows the opportunity then it stands with the crooks.

I agree with the author that the free market is at risk at every step of such a reckoning. However, "Free Market" does not mean, "Free-For-All". You have to hold accountable those who were responsible to prevent this from happening.