B&Co should get the heck out of the way and let the 300 million people in this country decide how to fix the economy. Of course Bernanke and Co. are not about fixing the economy, they are about preserving the banking system and making money from that monopolistic position they were granted by the Federal Reserve Act of 1913.
Richard Koo says the WH understood the U.S. balance sheet recession, but preferred Paul Krugman's easy money cure instead of more spending. Nearly one year on, all QEII has done is shift money out of Treasurys and into stocks, with higher commodities hampering economic activity. Thanks for the inside baseball account, but when has Krugman ever shied from more government spending? [View news story]
Perhaps you mis understood my comment. I did not comment about what drives the price of oil - I don't think. I commented on what drives consumption of oil....because you suggested that oil consumption would decline dramatically if the economy were about to fall off a cliff.
In fact what I said was that there is no relation to the price of oil and consumption. That evidence is supported by your chart. Namely, that OPEC can charge whatever they want and speculators can hop on board and it will hardly change consumption....which of course is not reflected at all on your chart.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Terry330. You can actually check that kind of stuff out on the internet you know. And you may know that a site called Snopes debunks such myths with actual facts. In reality it was under Reagan that the most Americans were killed in military related action...by more than 2-1 over Bush. Of course that wouldn't include the era of Johnson, or FDR where losses were just a tad bit higher.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Love the paternity analogy ! And you are right. However, you know as I do that tax revenues are upwardly bounded at the 19 - 20% of GDP range. So another important question is what other things would have changed during a period where the Bush tax cuts were rescinded? Perhaps we wouldn't have had a housing bubble or other suggestions of economic health that would have then reduced revenues.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Well let's check that out.
During Clinton years revenue averaged 19.0% of GDP. During Bush years it averaged 17.6% of GDP. The difference is 1.4 points.
The total deficits during Bush years were $2.0 trillion, or an average of $250 billion per year. We have had $2.7 trillion in deficits in two years - 2009/10 during which time the Bush tax cuts were in effect and the revenue has been 14.9% of GDP. Had we had Clinton's revenue receipts of 19% deficits would have been $1.1 trillion lower than the $2.7 trillion we actually experienced. The difference between Bush's 17.6% and Obama's 14.9% is clearly recession driven. But the delta of $1.6 trillion for two years is clearly higher than the $250 billion average under Bush. It's not just war, and taxes. It's also expanding government.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Alex...do you really think that is the case? During the decade in question the tax receipts grew more than 3% per year. More than enough to cover the cost of government including inflation. During that same 10 years spending grew more twice the rate - over 6%.
So from where I stand, I look at it this way. The only reason we're in this mess with deficits and debt is that we grew government too fast. We won't even speak to the concept of who actually pays those taxes.
With federal tax revenues coming in at 14.9% of GDP in both 2009 and 2010, current levels are unusually low and have been for some time, Bruce Bartlett writes. The average federal income tax rate on the 400 richest people in the U.S. is 18.1%, down from 26.3% when the data was first calculated in 1992. Cutting already low taxes won't spur growth, Bartlett believes. [View news story]
Well OM, no problem. You see, I've got 3 kids, two of whom have yet to figure out how the world goes around. I have two sisters who's husbands have checked out and are now letting them support the family. Many of them have made serious mistakes financially, but I know that in every case, I cannot fix their situation. I can help when the time is right, but it will never be right until they get their heads screwed on.
I know there are many people out there who don't have a clue what's going on, and I see them every day when I go out to lunch. I count the major failure to be the fault of our education system...one which was more than happy to allow my oldest to go work a Taco Bell during her senior year of HS for 1/2 days as an "internship" kind of program, despite our protests.
People need opportunities, but the bell shaped curve says there are going to be a portion that are happy to make a modest wage, buy a 4 wheeler and drink a 6 pack while watching the game on Sunday. I don't disparage them, like I don't my own family members, but there is only so much one can do.
Richard Koo says the WH understood the U.S. balance sheet recession, but preferred Paul Krugman's easy money cure instead of more spending. Nearly one year on, all QEII has done is shift money out of Treasurys and into stocks, with higher commodities hampering economic activity. Thanks for the inside baseball account, but when has Krugman ever shied from more government spending? [View news story]
Sorry guys (Tack and Joe) maybe I don't understand like you, but my view is the consumption of oil reacts very little to price ( price inelastic). I think that people, businesses, economies, etc are probably (picking a number) 95% fixed in their consumption of oil. Global growth in large population countries is exerting upward pressure on demand and despite efforts to increase fuel economy, etc, demand changes very little. My suspicion is that if the US were to go into negative growth mode, there would be very little change in consumption. Thus (to get to the point) I don't view oil prices as an indicator of future economic performance.
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
If, as Bernanke says, the economy is to complicated to figure out, then it's clearly time for the government wonks who stick their noses everywhere to go home and let the people of this country figure it out with the combined impact on market forces.
I, for example, have pulled my savings out of big banks and started using local credit unions. If enough people abandon JPM, GS, etc, then guess what, they don't survive being large without deposits.
As a former public company CFO, I would NEVER use JPM or Goldman for any corporate finance work.
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
The Fed is risking a second Depression by putting pressure on banks to raise more capital, analyst Dick Bove writes in a scathing note that accuses the central bank of losing "all sense of reality." Banks must be allowed room to lend money and conduct business but are being handcuffed by onerous capital restrictions, Bove believes. [View news story]
First, banks should be required to raise more capital. They have kept excess reserves at the Fed both to sanitize QE and to make risk free profits.
Here's my question. If the banking business is such a great business and you can leverage 40 : 1 and do all kinds of cool things in derivatives, etc...why the heck wouldn't investors want to invest in these banks for the chance to make tons of money. I'm not a banker, but I suspect you can lend invested capital just as easily and with the same multipliers as deposits?
Higher rates of invested capital would lower FDIC premiums, improve the soundness of the banking system, decrease the risk of systemic failure, and give the banks interest free capital to lend.
"On the fiscal side, we currently assume fiscal restraint of about 1% of GDP in 2012. "
So by my math that means $140 billion in cuts reducing the $1.5-$1.6 trillion deficit to $1.4 trillion-ish. Take those kinds of numbers and neglect any meaningful change for 5 years and we'll be paying nearly $1 trillion in interest in the national debt. I sure that will stimulate the economy right down the drain.
QE3 or Double Dip? Question Remains Unanswered [View article]
Now there's an interesting question. War seems to be tool of those who are in positions of power to try to fix things. We know that there are a group of people who think the sustainable population of the world is 1 billion. I would hate to think that such a goal would get traction, but one never knows.
Middle East is a natural for such an outbreak. Here's a twist to your non-boots war. Oil is the reason that we can conduct video game wars. Severly reduce the flow of oil and the whole world stops and reverts to past tense, but I suspect like you that the oil gambit will be a post nuclear by product. So nukes initially, then the devastation will create the need for boots. EMP will also send us back decades.
Oh well - probably should move on or the SA guys will tell us to get back on investing topics.
What Are the Fed's Policy Options? [View article]
Richard Koo says the WH understood the U.S. balance sheet recession, but preferred Paul Krugman's easy money cure instead of more spending. Nearly one year on, all QEII has done is shift money out of Treasurys and into stocks, with higher commodities hampering economic activity. Thanks for the inside baseball account, but when has Krugman ever shied from more government spending? [View news story]
In fact what I said was that there is no relation to the price of oil and consumption. That evidence is supported by your chart. Namely, that OPEC can charge whatever they want and speculators can hop on board and it will hardly change consumption....which of course is not reflected at all on your chart.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
During Clinton years revenue averaged 19.0% of GDP. During Bush years it averaged 17.6% of GDP. The difference is 1.4 points.
The total deficits during Bush years were $2.0 trillion, or an average of $250 billion per year. We have had $2.7 trillion in deficits in two years - 2009/10 during which time the Bush tax cuts were in effect and the revenue has been 14.9% of GDP. Had we had Clinton's revenue receipts of 19% deficits would have been $1.1 trillion lower than the $2.7 trillion we actually experienced. The difference between Bush's 17.6% and Obama's 14.9% is clearly recession driven. But the delta of $1.6 trillion for two years is clearly higher than the $250 billion average under Bush. It's not just war, and taxes. It's also expanding government.
Mark Thoma, on U.S. government policy of the past decade and how it makes a budget fix so difficult today: "What we did, in essence, was trade tax cuts for the wealthy and spending on wars for increased working class misery - higher unemployment, insufficient social service support, and a slower recovery from the recession." [View news story]
So from where I stand, I look at it this way. The only reason we're in this mess with deficits and debt is that we grew government too fast. We won't even speak to the concept of who actually pays those taxes.
With federal tax revenues coming in at 14.9% of GDP in both 2009 and 2010, current levels are unusually low and have been for some time, Bruce Bartlett writes. The average federal income tax rate on the 400 richest people in the U.S. is 18.1%, down from 26.3% when the data was first calculated in 1992. Cutting already low taxes won't spur growth, Bartlett believes. [View news story]
I know there are many people out there who don't have a clue what's going on, and I see them every day when I go out to lunch. I count the major failure to be the fault of our education system...one which was more than happy to allow my oldest to go work a Taco Bell during her senior year of HS for 1/2 days as an "internship" kind of program, despite our protests.
People need opportunities, but the bell shaped curve says there are going to be a portion that are happy to make a modest wage, buy a 4 wheeler and drink a 6 pack while watching the game on Sunday. I don't disparage them, like I don't my own family members, but there is only so much one can do.
Richard Koo says the WH understood the U.S. balance sheet recession, but preferred Paul Krugman's easy money cure instead of more spending. Nearly one year on, all QEII has done is shift money out of Treasurys and into stocks, with higher commodities hampering economic activity. Thanks for the inside baseball account, but when has Krugman ever shied from more government spending? [View news story]
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
I, for example, have pulled my savings out of big banks and started using local credit unions. If enough people abandon JPM, GS, etc, then guess what, they don't survive being large without deposits.
As a former public company CFO, I would NEVER use JPM or Goldman for any corporate finance work.
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
Jamie Dimon (JPM) challenges Bernanke after today's speech: "Has anyone bothered to study the cumulative effect of all these [regulations]" - that it could be the reason it's taking so long for credit and jobs to come back? Bernanke essentially says no: "it's just too complicated. We don't have quantitative tools to do that... There is going to be some trade-off here." [View news story]
The Fed is risking a second Depression by putting pressure on banks to raise more capital, analyst Dick Bove writes in a scathing note that accuses the central bank of losing "all sense of reality." Banks must be allowed room to lend money and conduct business but are being handcuffed by onerous capital restrictions, Bove believes. [View news story]
Here's my question. If the banking business is such a great business and you can leverage 40 : 1 and do all kinds of cool things in derivatives, etc...why the heck wouldn't investors want to invest in these banks for the chance to make tons of money. I'm not a banker, but I suspect you can lend invested capital just as easily and with the same multipliers as deposits?
Higher rates of invested capital would lower FDIC premiums, improve the soundness of the banking system, decrease the risk of systemic failure, and give the banks interest free capital to lend.
So what's wrong?
What Are the Fed's Policy Options? [View article]
So by my math that means $140 billion in cuts reducing the $1.5-$1.6 trillion deficit to $1.4 trillion-ish. Take those kinds of numbers and neglect any meaningful change for 5 years and we'll be paying nearly $1 trillion in interest in the national debt. I sure that will stimulate the economy right down the drain.
QE3 or Double Dip? Question Remains Unanswered [View article]
Middle East is a natural for such an outbreak. Here's a twist to your non-boots war. Oil is the reason that we can conduct video game wars. Severly reduce the flow of oil and the whole world stops and reverts to past tense, but I suspect like you that the oil gambit will be a post nuclear by product. So nukes initially, then the devastation will create the need for boots. EMP will also send us back decades.
Oh well - probably should move on or the SA guys will tell us to get back on investing topics.
U.S. Fiscal Situation: The Unsustainable Meets the Irresistible [View article]