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barely writes:
Negative saving rate, unprecedented debt, wealth concetrated in few hands and Shiller thinks we can spend our way to presperity. I am growing tired of the wise men of economics and their quick fix mentality.
barely |
02.02.08 - 7:07 pm | #
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MiTurn writes:
Can we have a mild recession? :)
MiTurn |
02.02.08 - 7:17 pm | #
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ac writes:
It bugs me a little bit about how Robert Shiller says that we need to take all these measures to boost consumer wealth and consumer confidence, but also laments that consumers aren't saving enough.
Isn't it possible that the reason consumers don't save enough in this country because we always seek to boost their confidence, even when it's not warranted?
To me this is distrubingly similar to UCLA-style "Fantasy Economics".
Increasingly my sense is that when it comes down to it, Robert Shiller doesn't think that the average person should be able to make decisions that affect their economic future.
Maybe he's right.
In any case the Federal Reserve and the economic orthodoxy in this country clearly don't believe that US citizens don't deserve free will in these matters.
But then who does?
Washington bueracrats?
ac |
02.02.08 - 7:24 pm | #
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ac writes:
In any case the Federal Reserve and the economic orthodoxy in this country clearly don't believe that US citizens don't deserve free will in these matters.
BTW, take one of those don't out. It makes more sense that way.
ac |
02.02.08 - 7:25 pm | #
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Ministry of Truth writes:
Did it not sound like they where grasping at straws to keep things positive? Faith based economy, kind of like disbelieving gravity exists.
Ministry of Truth |
02.02.08 - 7:26 pm | #
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AllenM writes:
MiTurn,
No.
Probably over the top, but proof positive that housing as an ATM is definitely broken for good.
reverse mortgages excepted, after a while.
Just looked at Len's balance sheet. They lost 1/3 of the company last year, with a billion.five in the last quarter.
Grim news this weekend, indeed.
Someday this war's gonna end...
AllenM |
02.02.08 - 7:27 pm | #
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Jas Jain writes:
--
The severe recession will be continuation of the weakest and costliest recoveries...
The annual growth rate in employment in Jan’08 was 0.72%. Whenever this rate fell below 1.0%, after a sustained recovery, the economy had entered recession.
Assuming that the recession began in Nov’07, during the last business cycle, Mar’01-Oct’07 (beginning of the recession to the end of the recovery,) the annual rate of growth in Employment was 0.62%, the worst since the Great Depression, which finally ended with the end of the recession of 1949-50 in Sep’50. For comparison purposes the annual growth rate during the previous (Clinton) cycle, Mar’91-Feb’01, was 2.02%! Thus, the Clinton-cycle employment growth rate was 3.28 times the Bush-cycle!!
And the cost of the Bush recovery, in household debt via the Housing Bubble, was horrendous.
Jas
Jas Jain |
02.02.08 - 7:28 pm | #
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01/20/2009 end of an error writes:
I personally think after reading the SD article on short sales earlier today we are screwed. Even the FEDS don't have enough money to put Humpty together again.
The best thing to do is let housing correct. Then people will have lower house payments and rent then they can spend again. You can't borrow your way to prosperity.
01/20/2009 end of an error |
02.02.08 - 7:30 pm | #
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eh writes:
It's pathetic the way some of these media people practically beg to be told that we're at the bottom and that everything really will be alright -- putting their anecdotes out there.
eh |
02.02.08 - 7:31 pm | #
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FT Woods writes:
As I watched I wondered how much she paid for her condo last year and what it's worth today.
FT Woods |
02.02.08 - 7:33 pm | #
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01/20/2009 end of an error writes:
FT Woods,
I hope it was a lot.
01/20/2009 end of an error |
02.02.08 - 7:34 pm | #
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Troy writes:
All this discussion without understanding why this chart of household mortgage borrowing is merely blather.
Prices zoomed up because Americans were able to borrow FIVE TRILLION PLUS dollars 2002-2007.
This was essentially a time-warp of income from the future -- which will be debt service going forward -- into cold, hard, cash in consumers' hands in this economic cycle.
Prices will fall to the corresponding level of lending. $600B/yr is about 2002-era prices.
Troy |
02.02.08 - 7:35 pm | #
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Jas Jain writes:
--
"All this discussion without understanding why this chart of household mortgage borrowing is merely blather."
Yes indeed, troy.
It Is the Debt, Stupid!
Jas
Jas Jain |
02.02.08 - 7:39 pm | #
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Jas Jain writes:
--
AllenM,
Would you kindly identify the waring parties?
Jas
Jas Jain |
02.02.08 - 7:40 pm | #
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Elvis writes:
Not reason to whine, we can all short homebuilders soon and make a load of money. People continue to make bad assumptions, and, for the informed, this is a huge opportunity. CR readers will have every chance to profit from the mainstream blunders. I say keep up the misinformation NAR.
Elvis |
02.02.08 - 7:45 pm | #
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rjm writes:
No worries, Senator Dodd (front man for the banks) has proposed a new federal agency to deal with the mess. It will be called the Distressed Mortgage Agency. I am not making this up! This sounds very similar to the RTC set up to deal with the Savings and Loan crisis of the early 1990's, which involved risky real estate lending -sound familiar? This mess will end up just the same way, just bigger this time. The bagholders have been identified-It's us--the US taxpayer, again. Now the stock market can rocket up up and away. The banks and Wall Street keep all the fictional profits and you and me pay for all the real losses . It may be time for the second Revolutionary War if we get stuck holding the bag again.
One of the hedge fund managers who specialized in subprime, made 350 million dollars, frose his client's assets in the fund with no redemptions, and has now had to sell his Gulfsteam jet and his 45 meter yacht, named the "Carry Trade", so he is cutting back too, Come on you people,you have to chip in and help him out , he is feeling the pain. And there is a National Securitization Forum meeting in Las Vegas, with topics including -How to rebuild investor confidence in subprime, and How traders cope with low volume subprime trading conditions. You can read all about it at Bloomberg-no joke.
Excuse me, I need to take a break so I can go
vomit... these amoral crooks have made me sick from disgust.
PS, this blog is great. Misean, your posts are absolutely hilarious...better to laugh at all this stuff..it is just business as usual on Wall Street.
RJM
rjm |
02.02.08 - 7:48 pm | #
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Red Pill writes:
barely writes:
Negative saving rate, unprecedented debt, wealth concetrated in few hands and Shiller thinks we can spend our way to presperity. I am growing tired of the wise men of economics and their quick fix mentality.
barely | 02.02.08 - 7:07 pm | #
barely got to the crux in the first comment. These economists lament lack of savings, but then it is all about confidence and spending.
Does it ever occur to any of these people that "consumers" are pulling back because they are BROKE.
Red Pill |
02.02.08 - 7:49 pm | #
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Berylmarkham writes:
"Increasingly my sense is that when it comes down to it, Robert Shiller doesn't think that the average person should be able to make decisions that affect their economic future."
Shiller would have us be more like Singapore, I think.
"http://www.project-syndicate.org/commentary/
shiller55"
Berylmarkham |
02.02.08 - 7:55 pm | #
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lawyerliz writes:
I think Shiller look haunted, especially at the beginning. I don't think what he said we could spend our way to prosperity.
lawyerliz |
02.02.08 - 7:57 pm | #
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dunham writes:
as somebody who works on "wall street" (albeit in a unsensationalized arena and in a low level capacity), i'm shocked by the shock of people on this blog and in the MSM regarding wall street's intentions, moral fiber and capacity for greed.
WS will buy anything assuming WS can skim a little bit and sell it to somebody.
only the top 1% of hedge funds and banks have the mental ability and intestinal fortitude to move against the market and take the other side of the bet.
everybody else is, to borrow chuck prince's terminology, just "dancing."
dunham |
02.02.08 - 7:59 pm | #
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ac writes:
I think Shiller look haunted, especially at the beginning. I don't think what he said we could spend our way to prosperity.
Was it just me, or did somebody take him out back after that first cut and comb his hair?
ac |
02.02.08 - 8:00 pm | #
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RayOnTheFarm writes:
Spending our way to prosperity wouldn't be such a bad deal if... that money was churning around and around in the US economy rather than being sent elsewhere almost as soon as its spent (i.e tanker loads of crude and aircraft full of ipods and iphones). I have nothing against buying stuff that originates in other countries, as long as they are buying just as much from us.
RayOnTheFarm |
02.02.08 - 8:00 pm | #
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Robyn writes:
rjm - Is this the guy you're talking about?
http://www.nytimes.com/2007/04/1...nyt&
oref=slogin
If so - you got the name of the boat wrong ;). Robyn
Robyn |
02.02.08 - 8:01 pm | #
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Berylmarkham writes:
"Was it just me, or did somebody take him out back after that first cut and comb his hair?"
Yes, I noticed that! And out more make-up on him and said, "Bob, please don't slouch."
Maybe his mom was there.
Berylmarkham |
02.02.08 - 8:02 pm | #
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ac writes:
WS will buy anything assuming WS can skim a little bit and sell it to somebody.
only the top 1% of hedge funds and banks have the mental ability and intestinal fortitude to move against the market and take the other side of the bet.
everybody else is, to borrow chuck prince's terminology, just "dancing."
The problem is a lot of these hedge funds that aren't betting against the markets are still knowingly involved in ponzi schemes (e.g. housing). How many hedge fund managers who bought bad debt actually lost money? Or was it just their clients who lost money?
I think unless you've experience the thrill of screwing people over for money first hand (presumably because you're "smarter than everybody else") I think it's difficult to appreciate the tendency for this kind of behavior to spread and become deeply entrenched in a culture.
Some of us who used to dream only about an opportunity to make the world a better place now only dream that tomorrow will bring a new sucker.
ac |
02.02.08 - 8:06 pm | #
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NC Jim writes:
Send me an e-mail when the median home price is twice median household income.
That event will be near a bottom.
Also, how can there be serial stimulus packages when every penny must be borrowed from countries that are fighting inflation caused by a world excess of dollars? The US government has been BK'ed by military action - possibly intentionally ("starve the beast"). I personally suspect the US will also have high inflation (10%-ish) due to globalization even as we have a credit collapse. Rare but not impossible IMO.
The last great bubble (in this super cycle) may already exit in bond prices.
Jim
NC Jim |
02.02.08 - 8:07 pm | #
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Berylmarkham writes:
Can I just say how much I HATE the hand-holding interview style that passes for news these days. It's like weatherman-itis has infected all reporters. Why does everything have to have an upside? And be cheerful and positive? It's so callow and insincere. WTF is wrong with Americans?!
Berylmarkham |
02.02.08 - 8:09 pm | #
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dr strangemoney writes:
Some of us who used to dream only about an opportunity to make the world a better place now only dream that tomorrow will bring a new sucker.
Mmmmm... ripped off face.
dr strangemoney |
Homepage |
02.02.08 - 8:14 pm | #
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Berylmarkham writes:
Lou Reed said it best:
"Americans will shit in a river, dump battery acid in a stream, then complain they can't swim."
Berylmarkham |
02.02.08 - 8:15 pm | #
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Minh writes:
Shiller repeats more than twice what he does not believe in ... is that a condition for the interview (on request) or he himself in denial ?
Minh |
02.02.08 - 8:15 pm | #
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dunham writes:
lets be honest.
the real issues is that as currently constructed, our economy must grow to avoid collapsing back on itself.
in our frantic urgency to maintain "economic growth" we have borrowed and spent ourselves into oblivion.
equity appreciation is dependent on earnings growth; new debt must be issued to pay debt service; asset appreciation is dependent on an increasing population (each successive generation of which overutilizes natural resources) and what else?
its an unsustainable system. we'll get out of this mess without a depression, but it won't be long before things get really bad.
when oil is scarcer and costlier. when food becomes more expensive and more toxic to the environment. when we can't afford to spend our way out of a recession.
we'll be fine for a while - the US is still innovative enough that our economy can prosper for the next 5-15 years just building up China and India (infrastructure, tech, ag) and global alternative energy supply. but unless serious changes are made in american consumption patterns and major scientific advances are made in alternative energy, i can't see how it will be enough.
the 2020's should be interesting.
sorry for the rant - i just can't understand a society that counters a terrorist attack with pleas to "go shopping."
dunham |
02.02.08 - 8:15 pm | #
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uncle_silvio writes:
NC Jim writes:
The last great bubble (in this super cycle) may already exit in bond prices.
It won't be buy choice either.
Not only is there a distinct possibility that the Fed will take rates to 0 (a la Japan '89/90), I also think that Bernanke-panky will - as an "open market operation" compress the yield curve by buying Treasuries all across the curve to take it to 0 as well. Look at the TAF, the 50/50 cut on an options expiration. This guy is all about "being creative" and having government entities stepping further and further into the market realm.
All because they "are from the government and are here to help."
uncle_silvio |
02.02.08 - 8:17 pm | #
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dunham writes:
Some of us who used to dream only about an opportunity to make the world a better place now only dream that tomorrow will bring a new sucker.
ac - couldn't have said it better myself.
we've come to the point where as long as you aren't holding the bag when the sh** hits the fan, you're doing your job well.
dunham |
02.02.08 - 8:18 pm | #
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dr strangemoney writes:
Regarding suckers and financial education, the solution is simple. Graduating from high school would require correctly answering this question:
Somebody gives you information when they have a vested interest in getting money from you. You should assume that this person is:
a) Trustworthy
b) Full of shit and trying to rip you off
dr strangemoney |
Homepage |
02.02.08 - 8:20 pm | #
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ron writes:
Shiller like BB places great emphasis on "confidence" its as if the new fiancial engineering is based on perception rather then reality. Now I cannot spend my Confidence at the store nor does my confidence reduce debts. Somebody please inform the economic upper crust that income is more important key measure of wealth rather then confidence.
ron |
Homepage |
02.02.08 - 8:24 pm | #
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Berylmarkham writes:
"Some of us who used to dream only about an opportunity to make the world a better place..."
If there are actually more than a handful of sincere, non self-congratulatory people out there who actually feel this way, then I am his holiness the pope.
Sorry for the rant, I'm just fed up (ah, pun intended).
Berylmarkham |
02.02.08 - 8:27 pm | #
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dunham writes:
ron,
you sound like you are struggling with income - i'll hire you for some work on the side, but i'll only pay you with praise. after a couple of weeks you'll have so much confidence you'll be able to buy an ipod.
serious now: great point on BB. the current economic hardship is just an "illusion" and if we can prove that "illusion" false, everything will be OK.
dunham |
02.02.08 - 8:28 pm | #
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Anonymous writes:
Counter this w/ letters of your own, before it's too late.
http://
takeaction.realtoractionc...en_econstimulus
Anonymous |
02.02.08 - 8:28 pm | #
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dunham writes:
haha, get the F out of here Anon.
dunham |
02.02.08 - 8:29 pm | #
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Anonymous writes:
counter-
adj : indicating opposition or resistance
Anonymous |
02.02.08 - 8:33 pm | #
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dunham writes:
Anon:
My apologizes, your sentence was unclear as to what "this" referred to. dangling modifier? i don't grammar well enough, but i was confused either way.
dunham |
02.02.08 - 8:38 pm | #
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ac writes:
Shiller like BB places great emphasis on "confidence" its as if the new fiancial engineering is based on perception rather then reality. Now I cannot spend my Confidence at the store nor does my confidence reduce debts. Somebody please inform the economic upper crust that income is more important key measure of wealth rather then confidence.
"Oh, don't worry about walking off that ledge. There'll be an airbag at the bottom by the time you get there."
ac |
02.02.08 - 8:38 pm | #
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ac writes:
"Was it just me, or did somebody take him out back after that first cut and comb his hair?"
Yes, I noticed that! And out more make-up on him and said, "Bob, please don't slouch."
Maybe his mom was there.
Well, it looks like Robert's hair might be the first real casualty of this economic downturn.
ac |
02.02.08 - 8:39 pm | #
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mp writes:
Conjure Bag and mp are here to say, "Hello from New York, it's Saturday night!"
On Monday, the fun begins.
mp |
02.02.08 - 8:40 pm | #
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energyecon writes:
Anon,
Done and done, I wrote both my senators the day the House came out with the conforming loan limit increase...used a quote from Lockhart (head of OFHEO) to buttress argument.
We'll see if that turkey makes it back in the conference version of the bill...
energyecon |
02.02.08 - 8:49 pm | #
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energyecon writes:
mp!
Instead of the clock, can we get a new measure on how many Macanudo's Conjure has gone through in the last 24 hours? ;-)
energyecon |
02.02.08 - 8:50 pm | #
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Circling the Drain writes:
Economist to news reporter:
"The recession is going to be horrible. People are going to stop borrowing, cut way back on spending, stash their money into savings, and generally tighten their belts, killing the economy."
News reporter to economist:
"Then what do you recommend people do to get ready for the coming recession??
Economist to news reporter:
"They should stop borrowing, cut back their spending, start saving, and really tighten their belts..."
cd
Circling the Drain |
02.02.08 - 8:52 pm | #
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RayOnTheFarm writes:
Conjure Bag and mp are here to say, "Hello from New York, it's Saturday night!"
lolz.. there you are !
RayOnTheFarm |
02.02.08 - 8:52 pm | #
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Zac writes:
I wonder why these interviewers so often stumble over their words because they babble so rapidly. Why can't they maintain some verbal poise when asking their meaty questions?
Zac |
02.02.08 - 8:53 pm | #
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mp writes:
Energyecon- "...how many Macanudo's Conjure has gone through in the last 24 hours?"
Seven, I think.
mp |
02.02.08 - 8:53 pm | #
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quackprogrammer writes:
I sense that Shiller believes it is going to be *much* worse than he says it will be. He is just being cautious about what he says.
As he points out in Irrational Exuberance, 2nd ed, these manias are driven by psychology.
His comments about the need for additional stimuli merely provide a polite way for him to tell you how screwed housing really is. He cannot possibly believe that a little stimulus will change sentiment towards housing.
If he told the truth, he would not be invited to be on TV. Simple.
quackprogrammer |
02.02.08 - 9:00 pm | #
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jg writes:
Jas, stick to economic prophecy and stay away from political economy. The rapid increase in household debt started in the '90s. Probably a 'boomer' thing -- instant gratification -- more than anything:
http://research.stlouisfed.org/f...art_type=line&
s[1][id]=CMDEBT&s[1][transformation]=pc1
Hope you're right, mp, about Monday. Although if you could push things off a week, I'd appreciate it, as I'm levering up via margin and other borrowing to amplify my SDS bet.
Shiller, for being such a sharp guy in many matters -- seeing the dotcom bubble and housing bubble -- sure is oblivious to other things, e.g., that household debt to income at 150-200% of '29 levels poses a mortal threat to consumption and that you can have inflation -- if we are flooded with dollars and credit -- even when real activity is receding or depressed.
jg |
02.02.08 - 9:06 pm | #
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Keep It Simple, I'm Stupid writes:
dr strangemoney writes:
Regarding suckers and financial education, the solution is simple. Graduating from high school would require correctly answering this question:
Somebody gives you information when they have a vested interest in getting money from you. You should assume that this person is:
a) Trustworthy
b) Full of shit and trying to rip you off
Yeah, well going through life assuming that everyone around you is trying to rip you off makes for a horrible society. I'd go on a long rant about this, but I just did on my blog.
Keep It Simple, I'm Stupid |
Homepage |
02.02.08 - 9:06 pm | #
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jg writes:
I botched the link; I hope that this works:
http://research.stlouisfed.org/f...art_type=line&
s[1][id]=CMDEBT&s[1][transformation]=pc1
jg |
02.02.08 - 9:08 pm | #
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jg writes:
Third time is the charm:
http://tinyurl.com/2s2lpt
jg |
02.02.08 - 9:09 pm | #
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Anonymous writes:
" Now he (Shiller) says lawyers won't let him publicly forecast home prices because he's involved in preparing the market-sensitive Standard & Poor's/Case-Shiller home price indexes. All he'll say is: 'This is a historic turning point.' "
BusinessWeek Magazine
.
Anonymous |
02.02.08 - 9:11 pm | #
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jg writes:
Here's another one, Jas, Gary, and other Bush-haters:
http://research.stlouisfed.org/f...ies/TDSP?
cid=97
Nah, the silliness clearly started long before GWB set foot in the White House.
jg |
02.02.08 - 9:16 pm | #
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ac writes:
I sense that Shiller believes it is going to be *much* worse than he says it will be. He is just being cautious about what he says.
Well this is the guy who's been saying that retirees in the next few decades may have to live their lives "simply".
So he hasn't really changed his tune.
ac |
02.02.08 - 9:18 pm | #
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Berylmarkham writes:
"Well, it looks like Robert's hair might be the first real casualty of this economic downturn."
But your lawyers won't let you say that on the air.
Berylmarkham |
02.02.08 - 9:19 pm | #
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Mike in Long Island writes:
mp,
If Conjure Bag is looking for a change might I suggest Fuente Double Chateau Sungrowns if he has time for a long relaxing smoke. Otherwise the Hemingway Short Stories work well if he's pressed for time.
Mike in Long Island |
02.02.08 - 9:23 pm | #
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Peterbob writes:
I can't believe that Shiller dodged the question of raising the conforming limit amounts. I am at a loss to explain how this will improve efficiency of mortgage markets. We got into this mess because of exotic mortgages. Now that prices are falling across the country, why would we RAISE the conforming limits?
I suppose the real reason that the limits are going up is NOT to improve the system and make sure that this mess doesn't happen again, but rather to try to reinflate the bubble and have the GSEs eventually bail everyone out.
(BTW, the bubble WON'T reinflate, since borrowers will still need to qualify by proving income, etc.)
Peterbob |
02.02.08 - 9:25 pm | #
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John Stark writes:
Keep It Simple, I'm Stupid writes:
dr strangemoney writes:
Regarding suckers and financial education, the solution is simple. Graduating from high school would require correctly answering this question:
Somebody gives you information when they have a vested interest in getting money from you. You should assume that this person is:
a) Trustworthy
b) Full of shit and trying to rip you off
Yeah, well going through life assuming that everyone around you is trying to rip you off makes for a horrible society. I'd go on a long rant about this, but I just did on my blog.
Keep It Simple, I'm Stupid | Homepage | 02.02.08 - 9:06 pm |
Why does the choice have to be between two extremes (honesty or ripoff) listed above? Usually the behavior of the sales people we encounter is somewhere between. We just need to realize that the guy who labels himself your "financial advisor" is actually a "financial products salesman." That would make the whole business a lot more transparent. After all, used-car salesmen don't call themselves "transportation advisors."
John Stark |
02.02.08 - 9:25 pm | #
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km4 writes:
Gee on a couple of threads ago I seem to recall saying Stephen Roach was ahead of the curve stating "A sharp decline in asset prices ( first and foremost with hosues ) is necessary to rebalance the US economy".
km4 |
02.02.08 - 9:33 pm | #
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Keep It Simple, I'm Stupid writes:
Why does the choice have to be between two extremes (honesty or ripoff) listed above? Usually the behavior of the sales people we encounter is somewhere between. We just need to realize that the guy who labels himself your "financial advisor" is actually a "financial products salesman." That would make the whole business a lot more transparent. After all, used-car salesmen don't call themselves "transportation advisors."
Because most people do not have professional level knowledge of financial products and investing. Unless you plan to argue that everyone should develop such knowledge, there is a need for financial advisers that you can trust.
If you do think that everyone should have such professional level knowledge, does that apply to everything in life? Is it your fault if you don't have a professional knowledge of everything, and someone takes advantage of you?
Keep It Simple, I'm Stupid |
Homepage |
02.02.08 - 9:40 pm | #
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montanaheadcold writes:
"Because most people do not have professional level knowledge of financial products and investing. Unless you plan to argue that everyone should develop such knowledge, there is a need for financial advisers that you can trust."
"Trust" is the operative word. Inevitably, these folks have a product to sell, and that's not always wise advice.
montanaheadcold |
02.02.08 - 9:46 pm | #
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idoc writes:
mp
what do u think about total borrowing of depository institutions dropping back to zero?
idoc |
02.02.08 - 9:47 pm | #
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tj & the bear writes:
its an unsustainable system. we'll get out of this mess without a depression, but it won't be long before things get really bad.
Okay, dunham, how exactly do we avoid a depression?
The interviewer is absolutely clueless -- she obviously considers real estate a circus side show, and not the predominant driver of the economy this century. RE got us out of the last recession, and nothing's stepped in to take it's place; take it away and we're sunk. There's little left except huge sums of (realistically unsecured) debt, even larger future obligations, and absolutely no savings (not to mention your seriously disjointed economic structure).
I've said it before and I'll say it again -- we're in *worse* shape than 1929, not better. RE peaked in 2005, jobs just now tanked, and CRE's angling southward. This show is only now starting.
p.s.: Welcome back mp & cb!
tj & the bear |
02.02.08 - 9:48 pm | #
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picosec writes:
KISIS: If you do think that everyone should have such professional level knowledge, does that apply to everything in life? Is it your fault if you don't have a professional knowledge of everything, and someone takes advantage of you?
Someday I’m gonna write a book… the title will be something like “Asymetrical Relationships” (OK, I’ll have to work on that.)
The thesis will be that in today’s world virtually every transaction an individual makes is with a very large organization. The organization always holds the cards; it understands the laws (may have even written them) and if you want to play with them, they make (and change) the rules.
The irony is that many of us are employed as cogs in one of these big wheels; we’re the experts in some aspect of these rules. We hold the advantage in that area, and if the topic moves to another area we call in/transfer the issue to an expert in that subject. The layman doesn’t stand a chance.
Then we go home from work and become the layman ourselves, dealing with CC, utility, retail, government, and my personal favorite, the cable company. And we have to deal with their experts and rules. And still, the layman doesn’t have a chance.
And they say I'm an optimist.
picosec |
02.02.08 - 9:55 pm | #
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mp writes:
idoc- "what do u think about total borrowing of depository institutions dropping back to zero?"
idoc, we haven't had the chance to do any deep analysis for several days. Having said that, we expected a test of 12,000 and certainly got it. Conjure and I didn't expect this big of a bounce. Oh well, just that much more fun later.
mp |
02.02.08 - 9:56 pm | #
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idoc writes:
mp
http://research.stlouisfed.org/f.../series/
TOTBORR
idoc |
02.02.08 - 10:00 pm | #
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wawawa writes:
What was people's savings before the great depression comparing to now?
wawawa |
Homepage |
02.02.08 - 10:03 pm | #
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tj & the bear writes:
idoc,
Looks like it's gotten worse to me...
http://www.federalreserve.gov/releases/h3/Current/
tj & the bear |
02.02.08 - 10:12 pm | #
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jg writes:
w-, go to the BEA website and pull down the data:
http://www.bea.gov/national/nipa...p?
Selected=N#S2
Go to Table 2.1, and pull down annual data from '29 to present. You'll see that personal savings as a percentage of disposable personal income (line 34) was positive though declining over '29-'31, negative in '32-'33, and was 7-10% through '92, when it began its near monotonic decline to near zero.
That addresses annual savings. But it does not address stock of savings. I don't know where to find that online.
jg |
02.02.08 - 10:14 pm | #
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mp writes:
wawawa, see this regarding the savings rate:
http://books.google.com/books?
id...viOXhMbrTdmFGVI
However, I don't know--in fact, I doubt--if the rates for 1929 and, let's say, 2006 are comparable. I say that mainly due to differences in culture and the system's structure.
mp |
02.02.08 - 10:16 pm | #
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Troy writes:
When comparing the 90s to the 20s it's important to note that "savings" doesn't include investments or home equity. When houses were selling for $10,000 in Westwood these were not that significant, but these days, people have more access to wealth outside of traditional savings.
Troy |
02.02.08 - 10:21 pm | #
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tj & the bear writes:
jg, mp,
Thanks guys for that data.
The important thing here IMO is that there was a positive savings rate up until the GD, whereas we haven't had a positive savings rate this century. Goes to my point that we're in worse shape now, not better.
tj & the bear |
02.02.08 - 10:22 pm | #
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wawawa writes:
Thanks jg & mp.
wawawa |
Homepage |
02.02.08 - 10:24 pm | #
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barely writes:
How many stimulus pkgs do you think we'll get in 2008? 3? 4? I better sell my EEM PUTs. The only place getting an economic stimulus will be China. Good. More money for China to buy MORE US Treasuries and pump into the IBs. Perpetual economic motion machine.
barely |
02.02.08 - 10:27 pm | #
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jg writes:
The Z.1s have household savings, investments, and debt levels on table L.100.
Unfortunately, the Z.1s only go back to '45.
jg |
02.02.08 - 10:27 pm | #
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jg writes:
Oops; forgot the link to the historical Z.1s:
http://www.federalreserve.gov/re...urrent/
data.htm
jg |
02.02.08 - 10:28 pm | #
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John Stark writes:
Because most people do not have professional level knowledge of financial products and investing. Unless you plan to argue that everyone should develop such knowledge, there is a need for financial advisers that you can trust.
Obviously there's a need for that, but where does the small-timer find a financial adviser who doesn't have divided loyalties -- if he isn't completely in it for him/herself?
There are decent retail stockbrokers out there, just like there are decent car salesmen and realtors too. But it's always, "let the buyer beware."
If you choose not to do your homework and "trust" the people you do business with, you will eventually pay for that.
John Stark |
02.02.08 - 10:31 pm | #
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calmo writes:
I'm no Shiller fan particularly and I find his relaxed manner in that setting much more convincing and less distracting than the host who should have maybe had a handful of cards to play with...maybe shoot them 1 at a time with her questions...such were those distracting limbs.
$2T loss (according to Shiller) so far in the housing morass means in this $13T economy that...there was no GDP growth...even if we assume that $2T is from the peak of housing in 05...no growth since mid 05. The large beast takes awhile turn, but we take longer to recognize the turn and even longer still to act on it.
calmo |
02.02.08 - 10:32 pm | #
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John Stark writes:
barely writes:
How many stimulus pkgs do you think we'll get in 2008? 3? 4? I better sell my EEM PUTs. The only place getting an economic stimulus will be China. Good. More money for China to buy MORE US Treasuries and pump into the IBs. Perpetual economic motion machine.
Maybe the only economic stimulus that matters is the one we get from China. Let's hope they want to keep stimulating us.
John Stark |
02.02.08 - 10:34 pm | #
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tj & the bear writes:
When comparing the 90s to the 20s it's important to note that "savings" doesn't include investments or home equity.
That's because investments and home equity are not savings, and can evaporate quite quickly. Did I say can? Oh, so sorry... they *are* evaporating quite quickly.
tj & the bear |
02.02.08 - 10:35 pm | #
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jg writes:
tj, no doubt whatsoever that we are in worse shape going into this depression than we were in '29.
There's a chart from Ned Davis Research that I have on PDF that plots domestic debt-to-GDP over '20-'06. It is scary: in '29, it was at 170%; today, it is at 330%.
That chart is the one that foreordains where we are going -- depression -- IMO. Either income has got to grow faster than debt -- fat chance -- or debt (and assets) have to be liquidated, which is happening as we speak.
As those assets and debt get liquidated/written off, 'animal spirits' for investment and entrepreneurial activity evaporate and consumption plummets.
Store those nuts, folks, 'cause it is going to be a long, long winter, unfortunately.
jg |
02.02.08 - 10:36 pm | #
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rcyran writes:
TJ-
We have deposit insurance (see CR post last week about bank failures in 20s and 30s)
We don't have half of Europe starving and nearly the whole continent in political chaos. This certainly caused some rather poor policy choices (e.g. Smoot Hawley)
We don't have a gold system pushing us into deflation (I imagine you think this is good, but my opinion is that it made the depression far worse in the UK for example)
People are far wealthier in the US, so it's far harder to starve now then it was then. This is actually important.
Govt. social programs now act as economic stabilizers (unemployment insurance, social security, food stamps etc.)
Shift in economy towards services means its more stable. So does shift in manufacturing away from carrying large inventories.
etc. etc.
This economy is a different animal. Odds of a repeat are rather low.
rcyran |
02.02.08 - 10:37 pm | #
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mp writes:
jg- "There's a chart from Ned Davis Research that I have on PDF that plots domestic debt-to-GDP over '20-'06. It is scary: in '29, it was at 170%; today, it is at 330%."
This type of measure, it seems to me, is more germane to what y'all are talking about than the personal saving rate.
Be advised, however, that Conjure and I do not subscribe to an actualization of 1929 scenario in this instance.
mp |
02.02.08 - 10:40 pm | #
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1926 writes:
Maybe this is what Prof. Shiller was referring to:
http://finance.yahoo.com/real-
es...gUJ.SNw7dlO7sMF
"On Jan. 30 the government said annual economic growth slowed to just 0.6% in the fourth quarter as home construction plunged at a 24% annual rate. The Standard & Poor's/Case-Shiller 20-city home price index fell 7.7% in November from the year before, the biggest decline since the index was created in 2000.
"And that could be just the start. Brace yourself: Home prices could sink an additional 25% over the next two or three years, returning values to their 2000 levels in inflation-adjusted terms. That's even with the Federal Reserve's half-percentage-point rate cut on Jan. 30."...
1926 |
02.02.08 - 10:42 pm | #
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Pat writes:
Given the lag from notice of default to foreclosure to sale, the sales numbers we are seeing now comprise the first wave of foreclosures stemming from the August credit restrictions. Furthermore, we should expect the month-on-month rate of REO and short sales to increase until at least 6 months after the peak in ARM resets, making 4Q08 the likely peak rate of home price decline, with the decline rate easing in 2Q09 and beyond.
A second observation is that every foreclosure, and perhaps every short sale as well, produces a person or household that will not be a future home buyer for at least several years. Taking together the recent record rate of homeownership, the excess supply of housing, the continued monetization of land, labor, and material by the homebuilders, and the disenfranchisement of foreclosed and short-sold homeowners, and we have the conditions for long term price pressure on residential housing. This may take several years to clear.
By the time it does, the baby boomers will be beginning their excess property liquidation to support their retirement.
The conditions for a generation of real home price declines are in place.
Pat |
02.02.08 - 10:44 pm | #
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NC Jim writes:
John Stark writes:
Maybe the only economic stimulus that matters is the one we get from China. Let's hope they want to keep stimulating us.
You can take one thing to the bank. China will act in it's own (very long term) self interest. China may have found finance capitalism's weakness - an addiction to short term leveraged debt.
Jim
NC Jim |
02.02.08 - 10:46 pm | #
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tj & the bear writes:
rcryan,
You're kidding, right? There are so many of your points I can eviscerate with little if any effort, but the worst is this:
Shift in economy towards services means its more stable.
Stable??? The majority of those services are *discretionary*; IOW, the demand for them will disappear overnight. Services can never be the basis for a sound economy. Hell, that's one of the biggest reasons we're in worse shape this time around, not better.
tj & the bear |
02.02.08 - 10:46 pm | #
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Anonymous writes:
...the Great Depression, which finally ended with the end of the recession of 1949-50 in Sep’50.
Jas Jain
If this is true, Jas, the last Long Wave would have indeed bottomed out in 2002-2003 as per the ~54 years cycles demonstrated by N. Kondratiev first in 1926 (German edition, 1935 translated into English). You paint the most bullish scenario possible, yet forecast the extreme opposite. One cannot be more contradictory than this. Read the book!
O-Joe
Anonymous |
02.02.08 - 10:49 pm | #
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wawawa writes:
Louise Yamada is among very few people who has integrity and knowledge to speak truth.
http://www.bloomberg.com/avp/
avp...lRCrGZV393k.asf
wawawa |
Homepage |
02.02.08 - 10:49 pm | #
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Bystander writes:
The US suffered a seven year depression that started in 1837. Someone estimated private sector debt to be 150% of GDP at the outset of that event.
http://www.safehaven.com/article...rticle-
7526.htm
I am not comforted by the fact that the US economy is now dominated by the service sector.
It is difficult to imagine that the nascent correction will be similar to any previous event. Shiller himself said that every cycle is different in the video.
Bystander |
02.02.08 - 10:52 pm | #
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jg writes:
Makes sense, Pat.
FWIW, in the last San Diego downturn, only when NODs were coming down, employment was moving up, and sales were increasing did home prices begin moving up:
http://piggington.com/node/1693
Scroll down to see the charts of the predictor variables vs. prices; nice correlations and inverse correlations.
We are a long, long way from those three things -- NODs, employment, and home sales -- moving in the right direction, IMO.
jg |
02.02.08 - 10:54 pm | #
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NC Jim writes:
rcyran writes:
People are far wealthier in the US, so it's far harder to starve now then it was then. This is actually important.
At the risk of piling on, I will disagree. IMO, the US is not a rich country but a mid-income country containing many rich individuals and businesses. Take out the top 5% and I would bet (sorry I cannot quantify) the remaining 95% are insolvent or close to it particularily when you apportion the national debt (which we are beginning to do in the form of an inflation tax).
I know you meant "harder to starve" metaphorically but in 1929 most Americans lived on a farm or had family that did and could grow their own food with very little cash required. Most Americans today probably think steaks come from a steak bush. Agflation will be a serious problem by the election. Home gardens may come back in style (my best friend's Father raised chickens in the backyard within the Raleigh city limits as late as the 50's).
Jim
NC Jim |
02.02.08 - 11:02 pm | #
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v writes:
> the remaining 95% are insolvent or close to it particularily when you apportion the national debt
Americans are rich if we look at number of things (often useless) they own.
When *it hits the fan this "wealth" evaporates. Everybody back to work.
v |
02.02.08 - 11:10 pm | #
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jg writes:
w-, thanks for the L-Y- interview. Never heard her before; she's good.
B-, thanks for the link to P-L- column. Seems crystal clear to me, the parallels between today and the 1830s and 1920s.
jg |
02.02.08 - 11:12 pm | #
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Keep It Simple, I'm Stupid writes:
If you choose not to do your homework and "trust" the people you do business with, you will eventually pay for that.
As a practical matter, this may be true. However, modern society is so complex that it means that getting taken advantage of is going to be a commonplace event for most people. Not only do I find that to be an unappealing society, I'm not sure that it's one that will function at a basic level.
Keep It Simple, I'm Stupid |
Homepage |
02.02.08 - 11:13 pm | #
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Doug Watts writes:
The reporter on the video was unbelievable. Every question was basically, "This is not anywhere as bad as it's been blown up to be, right? right? The bottom is just around the corner, correct?"
She was COACHING the witness !!!!
Doug Watts |
Homepage |
02.02.08 - 11:15 pm | #
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Doug Watts writes:
What's scary to me is:
a) U.S. Americans have very little savings.
b) Almost all real property except a house is worthless once it leaves the store/dealership.
c) People are now losing -- nay, walking out of -- the only real asset they have: houses.
d) The U.S. job market has been in a flight from quality for almost a quarter century and shows no signs of abating.
so how, or more precisely, with what, are we supposed to spend our way back to prosperity ?
Doug Watts |
Homepage |
02.02.08 - 11:19 pm | #
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v writes:
> Not only do I find that to be an unappealing society, I'm not sure that it's one that will function at a basic level.
Let the person who has not collected wages from the speculative industry at the time of its boom cast the first stone. Amen.
My sin is that I have not collected enough because people who made the rules were always 2 moves ahead.
v |
02.02.08 - 11:20 pm | #
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barely writes:
Pat "The conditions for a generation of real home price declines are in place."
Agreed, at least in nominal terms. If we get border enforcement and further curtail immigration things look even bleaker. I wonder what if any blue-skying the authorities are doing to prepare. My sense is nothing. They are fighting TODAY'S tape - HARD - And hoping (or praying - faith based planning)
barely |
02.02.08 - 11:22 pm | #
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John Stark writes:
If you choose not to do your homework and "trust" the people you do business with, you will eventually pay for that.
As a practical matter, this may be true. However, modern society is so complex that it means that getting taken advantage of is going to be a commonplace event for most people. Not only do I find that to be an unappealing society, I'm not sure that it's one that will function at a basic level.
Other people chime in and correct me if I'm being too cynical here, but I think millions of us small investors who had accounts with the major brokerage houses during the dotcom bust already have been taken advantage of. I'm not talking about "is going to be." Getting taken advantage of is already a commonplace event.
Now we find out that even larger investors--municipalities like Springfield, Mass. for example--have been taken advantage of. Meanwhile, millions of unsophisticated borrowers trusted real estate and mortgage professionals who told them not to worry about adjustable rates because they could refi after the price of the house went up. Those professionals wanted to close those deals because 1) they generally get paid by the deal and 2) in any event, their managers expected them to produce deals or hit the road.
I agree with you that this kind of society is unappealing. But it does function--or at least, it has been functioning. Let's see where we are in a year or two.
John Stark |
02.02.08 - 11:23 pm | #
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Robyn writes:
I respectfully disagree with everyone who says you have to trust a financial advisor - a broker - because you're too stupid to learn anything. I am 60 - and when I first started investing - there was no such thing as a discount broker - money market funds were brand new - and when you wanted to invest or redeem money from most mutual funds - you did it by mail. There was no such thing as an ETF. There was no internet - which provides instant access to tons of current information for free.
(I will also note that when I first started to practice law - we had wet copy machines - no word processors - just typewriters with white-out - no computers - and we dictated onto things that were like old Victrola records with grooves.)
We had about 4 TV stations (and when I was in college - the nearest TV was in the student union about a mile from my dorm). We did have newspapers.
People my father's age (he's 90) had an excuse for total reliance on brokers. Because about the only financial information he could get - even a current stock quote - was from a broker. And it is hard for people his age to make the transition from the way things were to the way they are now.
I am in the transitional generation. Some of us have made a smooth transition - it's harder for others.
But for you younger people - there is simply no excuse for ignorance except sheer laziness. A lot of investing work is - to put it simply - tedious and boring - plowing through lots of information and data. Evaluating one's risk tolerances. Going over family budgets in terms of saving and spending. Deciding whether you can afford that house - and eat out at a decent restaurant more than once a year. Learning about your 401k options at work. Your cafeteria plans. Making a will so your kids will wind up being taken care of by the right people if you die. Discussing sensitive issues (money is usually a sensitive issue) with spouses or partners. Etc. Not as much fun as the latest do-dad like an iPhone - or Super Bowl parties - or videogames - or writing 100 comments off the top of your head on a blog. But much more important.
Planning one's financial future takes a fair amount of work - and there are certainly no "one size fits all" answers. But - it is possible for most people who have IQs higher than 90 (I've met mentally challenged people who work at Publix - excellent local grocery chain - and many seem to have a better handle on their finances than a lot of people who started with greater intellectual advantages).
I have been doing personal and family financial planning at least 10-20 hours a week for almost 40 years now - and I will continue to do so until I am incapacitated or dead. Because it's necessary to try to make the best of my financial well-being. I'm just glad that I have a lot more resources available to me now than I did when I started out. It's all there at your fingertips people - you just have to be willing to sit down and use what's in front of your noses. Off soap box, Robyn
Robyn |
02.02.08 - 11:24 pm | #
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FFDIC writes:
Dollar Approaches Record Low Against Euro After Fed Rate Cuts
http://www.bloomberg.com/apps/ne...J5Dc&
refer=home
FFDIC |
02.02.08 - 11:26 pm | #
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idoc writes:
ok, i need some clarifying analysis from u balance sheet readers, mp/lama. r these 2 inconsistent with each other? how can total borrowing in the graph go to zero while the table suggests otherwise?:
http://www.federalreserve.gov/re...ses/h3/Current/
http://research.stlouisfed.org/f...TOTBORR?
cid=122
look at the acceleration in TAF borrowings! where does the Fed get the funds to fund TAF? shouldn't these numbers show up somewhere else in their balance sheet?
since these are automatically turned over, i assume, these become long term cash injections into the economy which can only be inflationary.
idoc |
02.02.08 - 11:26 pm | #
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v writes:
> It's all there at your fingertips people - you just have to be willing to sit down and use what's in front of your noses.
It is about marketing machine. You can be smart as hell and still screw up. Clever and well designed messages will reach you, your siblings, your parents, your friends, your coworkers, and unless all above listed parties are (a) smart, (b) have unbiased financial advisors, (c) surrounded by honest people, you are doomed to make dumb decision.
Good luck on your quest!
v |
02.02.08 - 11:31 pm | #
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Troy writes:
where does the Fed get the funds to fund TAF?
That one's easy . . . TMK they're printing money.
But taking full collateral for that money, so it's not new money per se.
Troy |
02.02.08 - 11:34 pm | #
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Troy writes:
since these are automatically turned over, i assume
actually, no. The term-of-art you want to investigate here is slosh, the amount of rollover in monthly repo issues.
According to denninger, the slosh actually went down this week.
Troy |
02.02.08 - 11:36 pm | #
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01/20/2009 end of an error writes:
TJ and the Bear,
I agree we are much worse off than before the 1930's.
We have sold out our manufacturing base.
We have a fiat currency.
Unsustainable debt load.
Overcapacity in retail and the service sector.
A younger generation that is totally unprepared to compete in a global economy.
Not to mention at least peak cheap oil if not peak oil.
01/20/2009 end of an error |
02.02.08 - 11:37 pm | #
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idoc writes:
Troy,
it is new money. they are paying full price for deflated assets, thus a net ADD.
i too follow Denninger/Adler/Winter comments as well as the Slosh myself. the decrease in no way matches the TAF infusions.
idoc |
02.02.08 - 11:39 pm | #
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Sic semper writes:
Speaking of Hedy Lamarr (2 threads back), she invented CDMA in US patent 2292387, then under the name of Hedy Markey, look it up), she is central to several of the jokes in Blazing Saddles:
Hedley Lamarr: Repeat after me: I...
Men: I...
Hedley Lamarr: ...your name...
Men: ...your name...
Hedley Lamarr: [to himself] Shmucks.
[continues aloud]
Hedley Lamarr: ... do pledge allegiance...
Men: ...do pledge allegiance...
Hedley Lamarr: ...to Hedley Lamarr...
Men: ...to Hedy Lamarr...
Hedley Lamarr: That's *Hedley*!
Men: That's Hedley.
As usual, it all comes back to Blazing Saddles.
Sic semper |
02.02.08 - 11:39 pm | #
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Keep It Simple, I'm Stupid writes:
I respectfully disagree with everyone who says you have to trust a financial advisor - a broker - because you're too stupid to learn anything.
I have never said that the problem is that people are too stupid to learn anything. I have said that modern society is too complex for most people to learn everything they need to know. Sure, they can learn how to make detailed financial plans, but that means that there is something else that they aren't going to have time to learn.
On any given subject, a large chunk of the populace is going to have to trust some sort of expert. Finance isn't any different than anything else that way.
Keep It Simple, I'm Stupid |
Homepage |
02.02.08 - 11:41 pm | #
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idoc writes:
all of u should watch the Louise Yamada video posted above.
note she only threw up longterm charts. the last weeks bull rally would be but a small blip in the longterm trend chart.
idoc |
02.02.08 - 11:41 pm | #
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FFDIC writes:
Mish blogs on this:
Columbia Journalism Review
Job Well Done / WSJ shines light on Wall Street 'hairball'...
http://www.cjr.org/the_audit/
job...b_well_done.php
FFDIC |
02.02.08 - 11:43 pm | #
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tj & the bear writes:
sic semper,
Possibly the best comedy ever!
tj & the bear |
02.02.08 - 11:43 pm | #
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ouch writes:
http://www.uccplus.com/files/
Ris...rticleDec07.doc
ouch |
02.02.08 - 11:45 pm | #
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FFDIC writes:
"Bullets Over Broadway" with Jennifer Tilley is my favorite comic movie at the moment (I know her brother Steve.)
Blazing Saddles - Rape, murder, arson, and rape...
http://youtube.com/watch?v=7Zby1-1ylD0
FFDIC |
02.02.08 - 11:46 pm | #
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albrt writes:
Dmitry Orlov has written on the differences between the US and Russia with regard to preparedness for economic collapse. Interesting stuff, and very similar to the comparisons between now and 1929.
Here is a link to a speech transcript, and he is easy to Google
http://www.fourwinds10.com/siter...hp?
q=1201473090
albrt |
02.02.08 - 11:48 pm | #
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tj & the bear writes:
2009eoae,
Yeah, pretty sad. Throw in the demographics trouble and it's an ironclad bitch.
That said, we'll survive just fine and come out the other side stronger. May be a while, though.
tj & the bear |
02.02.08 - 11:48 pm | #
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NC Jim writes:
Then we go home from work and become the layman ourselves, dealing with CC, utility, retail, government, and my personal favorite, the cable company. And we have to deal with their experts and rules. And still, the layman doesn’t have a chance.
The obvious solution is for people (collectively) to regulate business through our elected government so that the power of the state can somewhat level the playing field (going to jail is a disincentive to take advantage). Of course, business doesn't want to lose their advantage and works hard to convience people that regulation is bad by definition. This has worked since the 80's (Reagan had such a sweet smile) but people are wising up. Expect regulation to make a comeback in the next decade (there is a reason for the FDA - lots of babies died).
Jim
NC Jim |
02.02.08 - 11:53 pm | #
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FFDIC writes:
Bullets Over Broadway w/Jennifer Tilly
http://youtube.com/watch?v=x-a3cBbnljA
FFDIC |
02.02.08 - 11:54 pm | #
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01/20/2009 end of an error writes:
TJ
Demographics are a bit of a problem taking 1.4 million consumers out of the market a year for 15 years. While we pay for the retirement and healthcare of the baby boomers.
01/20/2009 end of an error |
02.02.08 - 11:56 pm | #
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Anonymous writes:
That video looks likes Austin Powers. To wit: Za vashe zdorovye!
Anonymous |
02.02.08 - 11:59 pm | #
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FFDIC writes:
I know some of you crazier bloggers have been missing Greenspan lately. Well, he is in Sweden telling more tales.
"He said that he didn't exacerbate the subprime crisis, instead he had called for caution in a speech in 2004."
"He said a surge in U.S. home purchases had driven up outstanding mortgage debt by 10 percent in the decade before 2004, but that the finances of those buying homes were not 'materially impaired' by the trend."
"He said low interest rates had held down debt service costs for households."
http://www.reuters.com/article/
r...lBrandChannel=0
FFDIC |
02.03.08 - 12:05 am | #
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Billy Hill writes:
as somebody who works on "wall street" (albeit in a unsensationalized arena and in a low level capacity)
No offense, but that description made me think of somebody employed in a foreign equivalent of Wall Street who is now enjoying(?) world-wide prominence.
Billy Hill |
02.03.08 - 12:07 am | #
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jg writes:
NCJ: "...there is a reason for the FDA - lots of babies died..."
Geez, NCJ, I thought that's why you libs WANTED the FDA, to give an imprimatur to terrible stuff like the morning after pill, the highly effective killer of babies (and of young women: use of the MAP can result in massive hemorrhage and death; lovely thing for the FDA to approve).
IMO, the FDA does not make things safer, at least not on the medical device side (where you often jump through meaningless hoops that have no real bearing on patient efficacy or safety).
jg |
02.03.08 - 12:11 am | #
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FFDIC writes:
Telegraph UK
George W Bush: God's gift to comedy
Dominic Cavendish wonders how comedy will cope when George W Bush becomes an ex-president (I get to post this because I'm from Texas.)
http://www.telegraph.co.uk/arts/
...tbushism102.xml
FFDIC |
02.03.08 - 12:11 am | #
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rich writes:
As bad as the housing boom-bust has been, I don't think it's the worst thing that's happened to the U.S. economy over the last decade, or the thing that will make this recession long, deep and hard.
In my work and life, I look around and see so many Americans who don't actually make or do anything useful. Think about all the wrong and damage that have been done by bankers, brokers, hedge fund operators, realtors, insurers and their CPAs, lawyers and regulators. All these "service professionals."
When we were a country of farmers manufacturers, miners and merchants, it wasn't possible for so many greedy people to go so wrong. I know we had robber barons. But not millions of them.
It will be so much harder to get the economy back on track, after the bottom, now that so many Americans have become so unproductive and useless.
rich |
02.03.08 - 12:11 am | #
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jg writes:
Good point, rich.
But, after the massive bloodletting of the upcoming depression, I'm positive that we'll have our priorities -- family, honest work, thrift -- back in order.
jg |
02.03.08 - 12:14 am | #
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Fester Bestertester writes:
I don't care what she says--she's HOT!
Fester Bestertester |
02.03.08 - 12:18 am | #
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tj & the bear writes:
rich,
Yes, too many people doing unnecessary things. Compound that with the fact that over half the population gets checks directly or indirectly through the (beyond bankrupt) government and you've got a sure-fire recipe for disaster.
tj & the bear |
02.03.08 - 12:23 am | #
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rich writes:
>But, after the massive bloodletting of the upcoming depression, I'm positive that we'll have our priorities -- family, honest work, thrift -- back in order.
jg, I really believe this, too. In fact, I'll bet there will come a time when we turn on the evening news and see that somewhere in America, somebody is starting a new factory that actually makes something.
rich |
02.03.08 - 12:27 am | #
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Walker writes:
Here is a link to a speech transcript, and he is easy to Google
http://www.fourwinds10.com/siter...hp? q=1201473090
Whoa, dude! Have you read that website you just linked? From the "About Four Winds":
Our objectives are:
1. To reveal the Darkside's secret Plan 2000 for total world control by our present evil world leaders.
2. To reveal to the world's people that Creator God Aton of Light also has a Plan 2000. God Aton and His Forces of Light will not do it for us but will work with us, as we responsibly confront evil in our day and change the 'ending of the play.'
3. To reveal the evil world leaders' cover-up of off-world humans (our ancestors) who are here in starships in Earth's atmosphere at this time, and who have come with good intent to help us prevent the evil Plan 2000 from being accomplished, and to help us establish the New Age of Enlightenment.
I know we get a bit apocalyptic around here, but come on.
Walker |
02.03.08 - 12:37 am | #
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FFDIC writes:
Will Ferrell Crashes CNBC with hosts Bill Griffeth & Sue Herrera...
http://www.huffingtonpost.com/
20...rr_n_84339.html
FFDIC |
02.03.08 - 12:46 am | #
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FFDIC writes:
Gretchen Morgenson: Lenders Who Sold and Left
http://www.nytimes.com/2008/02/0...ml?
ref=business
FFDIC |
02.03.08 - 12:57 am | #
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Anonymous writes:
>But, after the massive bloodletting of the upcoming depression, I'm positive that we'll have our priorities -- family, honest work, thrift -- back in order.
Rich, jg, I agree with you. But I won't feel like we're in the correct upward trajectory in the US until we start spending on rail, barge transportation, and most people can walk to a brand new brewery.
Not kidding about that last one. Even Matt Simmons, oil investment banker, thinks that we must relocalize our food supply ASAP.
Peak oil, and global warming, doncha know.
Anonymous |
02.03.08 - 1:01 am | #
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FFDIC writes:
Washington Post
Barbara Ehrenreich: Dept.of Raw Deals
The Boom Was a Bust For Ordinary People
http://www.washingtonpost.com/
wp...id=opinionsbox1
FFDIC |
02.03.08 - 1:02 am | #
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anon writes:
the so called "complexity" of our system is actually just the sales people in the way.
Anyone who can read does not need a car salesman.
I love the idea that realtors have some sort of professional expertise.
Personal financial advisors are not successful due to knowing where to invest your money, their success is based solely on you thinking that.
anon |
02.03.08 - 1:03 am | #
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sdtfs writes:
NCJ: "...there is a reason for the FDA - lots of babies died..."
Geez, NCJ, I thought that's why you libs WANTED the FDA, to give an imprimatur to terrible stuff like the morning after pill, the highly effective killer of babies (and of young women: use of the MAP can result in massive hemorrhage and death; lovely thing for the FDA to approve).
IMO, the FDA does not make things safer, at least not on the medical device side (where you often jump through meaningless hoops that have no real bearing on patient efficacy or safety).
Come on, it doesn't have to be all or nothing. Yes, you can't trust every professional, but then it doesn't mean you can't trust anyone.
If the FDA is burdensome, think of what the place would be like unfettered of any regulation. You'd have the crappiest stuff sold out of fly-by-night manufacturing.
The problem isn't that there aren't trustworthy people out there, the problem is identifying them and not falling into the clutches of the other kind. And I do get the feeling that people have given up trying and just throw their affairs and money at some 'professional' and expect a miracle to happen.
I'm not talking an excessive amount of care, just due diligence.
Just like trusting anyone on this blog. I believe the vast majority honestly believe in what they are saying; they may be wrong, but they believe in it!
sdtfs |
02.03.08 - 1:04 am | #
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Marcus Aurelius writes:
I don't know who the interviewer was, but she reminds me of Edith Prickly from SCTV.
Shiller knows the jig is up.
The interviewer kept trying to spin positive (she keeps hearing stories of people getting ready to jump in? WTF?). Shiller kept dragging her back to reality - and even hough he introduced the 'D'
word twice, he stuck to the official line of nothing worse than a 'really bad R'. To me, he looked like he thinks the worst is coming.
Marcus Aurelius |
02.03.08 - 1:15 am | #
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Doug Watts writes:
If the FDA is burdensome, think of before the Pure Food and Drug Act of 1906.
Remember. Prior to the PFDA of 1906 we had "Mrs. Winslows Soothing Syrup," a concoction of whisky, opium and cocaine that was sold by the tens of millions of bottles to mothers as a teething syrup for babies.
Doug Watts |
Homepage |
02.03.08 - 1:19 am | #
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Doug Watts writes:
Shiller kept dragging her back to reality - and even hough he introduced the 'D' word twice, he stuck to the official line of nothing worse than a 'really bad R'. To me, he looked like he thinks the worst is coming. Marcus Aurelius | 02.03.08 - 1:15 am | #
--
Well said.
Doug Watts |
Homepage |
02.03.08 - 1:21 am | #
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FFDIC writes:
Doug Watts,
Tanta drinks that stuff like cough syrup! It's an old family secret recipe handed down from old lady Winslow who was Tanta's great-grandmother. That's my this blog is so popular man.
FFDIC |
02.03.08 - 1:23 am | #
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patient renter writes:
Damnit Shiller! Why didn't he say that raising the GSE loan limits is bad?
I'm disappointed.
patient renter |
02.03.08 - 1:26 am | #
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patient renter writes:
Might I add that this interview made me lose some respect for the man. Grow some balls dude... raising the conforming limits is ridiculous.
patient renter |
02.03.08 - 1:28 am | #
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brewster writes:
Keep It Simple, I'm Stupid
...On any given subject, a large chunk of the populace is going to have to trust some sort of expert. Finance isn't any different than anything else that way.
Heck, just take medicine. You are trusting your doctor - even if you read the insert in the packet printed in the minute type. How many can actually read and understand the R&D and clinical trial results and make a decision that the medicine works, or that it won't harm you? Even if you can understand it, how can you be sure that the R&D was done, or the trials were not manipulated? You have only the pharma company's word for it.
brewster |
02.03.08 - 1:37 am | #
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Martin Cohen writes:
It will be painful, riding into the sunset on blazing saddles.
Martin Cohen |
02.03.08 - 1:40 am | #
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Marcus Aurelius writes:
"Mrs. Winslows Soothing Syrup,"
Doug Watts | 1:19 am
_________
In my lifetime, I've known dudes on the same formula (Keith Richards would serve as a good example, too).
These young drug addicts went on to become "the Greatest Generation."
Thank you, Ms. Winslow.
Marcus Aurelius |
02.03.08 - 1:40 am | #
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Bob Dobbs writes:
"
Rich, jg, I agree with you. But I won't feel like we're in the correct upward trajectory in the US until we start spending on rail, barge transportation, and most people can walk to a brand new brewery."
I can walk to two microbreweries, one organic. Honestly, the place I live in is almost at the place you're describing; we've even got the rail in place to do long- and short-haul freight and passenger service. But a lot of the guys who bought overpriced homes along the currently-underused tracks over the past 10 years are fighting increased rail service tooth and nail because they think it'll effect their property values.
In the long run, it'd be _good_ for their property values, if things play out the way I think they will. But they can't see it that way.
Bob Dobbs |
Homepage |
02.03.08 - 1:41 am | #
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Trainwreck writes:
Microbrewers-hahaha
Buy Bud, Beast, and Pabst.
Trainwreck |
02.03.08 - 1:52 am | #
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Zanni-baby writes:
How refreshing to see Robert Shiller talk about the current state of affairs in a way that sheds some evidence on the severity of the current crisis along with some perceptive ideas of how to avert it.
What I find most appealing about Shiller, and Bernanke is that they are NOT politicians, they do not have to be, they are required to breathe, eat, sleep economics, and hence--do not have to be polished sales men. That is not their job.
Let Wall Street and MSNBC hold the torch to these guys-- they truly can show us the way out.
Zanni-baby |
02.03.08 - 1:53 am | #
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Trainwreck writes:
patient renter writes:
Might I add that this interview made me lose some respect for the man. Grow some balls dude... raising the conforming limits is ridiculous.
patient renter | 02.03.08 - 1:28 am | #
The man is hedging. He might have a job in a future administration.
Trainwreck |
02.03.08 - 1:56 am | #
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Trainwreck writes:
"I am a big believer that confidence matters."
I guess that's why he is not being honest about what he believes.
Trainwreck |
02.03.08 - 2:00 am | #
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RE writes:
"I am a big believer that confidence matters."
I guess that's why he is not being honest about what he believes.
Exactly!
RE |
02.03.08 - 2:12 am | #
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Trainwreck writes:
Citigroup to withdraw cards from some U.K. customers: report
By Michelle Coffey
Last update: 5:02 p.m. EST Feb. 2, 2008
PrintPrint Email Subscribe to RSSRSS DisableDisable Live Quotes
Citigroup has told more than 160,000 customers in the U.K. that they will not be able to use their card cards after the first week of March, according to media reports Saturday. The bank is canceling credit cards for customers it considers risky following a review of accounts at Egg Banking PLC, an Internet bank Citigroup purchased in May 2007, according to a report in The Wall Street Journal. The figure represents about 7% of the Egg unit's credit card customers
And the credit contraction beat goes on...
Trainwreck |
02.03.08 - 2:12 am | #
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Trainwreck writes:
NEW YORK (MarketWatch) -- Bank of America's planned acquisition of distressed mortgage company Countrywide Financial Corp. may have hit a major snag this week when hedge SRM Global Fund unveiled its 5.2% stake in the target, issued a blistering attack on Bank of America and asked the SEC to investigate trading ahead of the announcement.
Oh my kinda fugly, I hope I can get on this potential lawsuit. Nothing I enjoy more then smoking out snakes in the grass.
Trainwreck |
02.03.08 - 2:16 am | #
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sbarrkum writes:
Some of us who used to dream only about an opportunity to make the world a better place now only dream that tomorrow will bring a new sucker.
ac | 02.02.08 - 8:06 pm | #
Or we have ended up working for those who look for the next sucker.
sbarrkum |
Homepage |
02.03.08 - 2:21 am | #
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tj & the bear writes:
I guess that's why he is not being honest about what he believes.
Now now... mustn't spook the sheeple! ;-)
Shiller's use of the "D" word is a textbook case of Freudian slippage.
tj & the bear |
02.03.08 - 2:22 am | #
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Bill Melater writes:
Watched the vid twice. Second time after reading the latest posts.
The man clearly looks worried. So, he starts dropping the "D" word and they haul him off, primp him up and maybe give him a little talking to about scaring the viewers, and pick up the show again.
She tries to coax happy-talk out of him (unsuccessfully). He again brings up the word which shall not be mentioned...
and the end-of-segment music comes up.
Perhaps I'm just too cynical.
Bill Melater |
02.03.08 - 2:28 am | #
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Alec writes:
If the FDA is burdensome, think of before the Pure Food and Drug Act of 1906.
Remember. Prior to the PFDA of 1906 we had "Mrs. Winslows Soothing Syrup," a concoction of whisky, opium and cocaine that was sold by the tens of millions of bottles to mothers as a teething syrup for babies.
Doug Watt
This is not your father's FDA. It's job is to stifle competition on behalf of the big boys, plain and simple.
I don't think it needs to be scuttled, but some deadwood needs to go.
Speaking from personal experience, their flouting of their own regs simply to limit entry for certain medical devices(for products already approved in the EU and Australia) only benefits certain interest groups, certainly not US patients.
Alec |
02.03.08 - 2:31 am | #
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Doug Watts writes:
This is not your father's FDA. It's job is to stifle competition on behalf of the big boys, plain and simple. -- Alec
---
By saying this Alec, you necessarily represent that you are 100 percent certain that pharmaceutical companies will never ever ever again produce or introduce another drug that causes unintended, devastating side effects and try to hide from criminal and civil responsibility for the damage they have done.
Okay.
Doug Watts |
Homepage |
02.03.08 - 3:00 am | #
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mock taurtle writes:
many throughout this thread have supposed that Schiller was being subtle and telling us just how bad it is and is going to be... in code.
that's why, or how he justifies raising the conforming loan limit!
he's saying hey this thing is so off the hook we have to use every tool in the box available to us.
also more than once he talked about confidence.
mock taurtle |
02.03.08 - 3:39 am | #
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mock turtle writes:
mock taurtle cant type.
also
last?
mock turtle |
02.03.08 - 3:41 am | #
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Alec writes:
By saying this Alec, you necessarily represent that you are 100 percent certain that pharmaceutical companies will never ever ever again produce or introduce another drug that causes unintended, devastating side effects and try to hide from criminal and civil responsibility for the damage they have done.
Okay.
Doug Watts
I wrote no such thing.
When they threw in an extra 6 months protection for the 1st generic to market, who benefited? Big Pharma who make copies of their own drugs.
Who pays for the clinical trials? Certainly not the FDA, it's the manufacturers with the deep pockets and startups who have to sell out
early to VC to even do phase 1 testing? Guess which datasets get barely perused then approved while which ones get the stink eye?
It's the FDA who looks sideways when me too drugs have horrific side effects, not the doctors, not the consumers.
Do you even know what the hell you're writing about?
Alec |
02.03.08 - 3:54 am | #
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tj & the bear writes:
Not last.
Economic cycles do have a basis in mass psychology, which is why a depression is pretty much a given. People can't just maintain a balanced outlook, they go overboard on optimism *and* pessimism. The pendulum never stops in the middle.
"Irrational exuberance", meet "senseless despair".
tj & the bear |
02.03.08 - 3:59 am | #
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tj & the bear writes:
Shiller interview... FDA... am I missing something??? You guys are WAY off the reservation.
tj & the bear |
02.03.08 - 4:03 am | #
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Lively Money writes:
THIS IS A GOOD LINK TRY THIS http://livelymoney.blogspot.com/...re-are-
two.html
Lively Money |
Homepage |
02.03.08 - 5:32 am | #
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rob writes:
The media spin looks desperate. A Bloomberg story on the loss of jobs said that out of 80 economists surveyed, not ONE had predicted a loss of jobs, and the consensus estimate was a gain of 100,000 jobs, while the actual number was a loss of 17,000 jobs.
Wow, those economists Bloomberg surveys sure are accurate.
On NPR radio show, they were interviewing some market 'expert' and asked him what he thought of the -17,000 jobs number. His response: "I think the number is wrong. I think when it is revised, it will show jobs growth."
So now we are getting some real solutions- if the statistics or numbers are unpleasant, they must be wrong and should be changed...problem solved.
I guess this explains why Moodys and S&P will keep a AAA rating on AMBAC and MBIA even after they default and go bankrupt, until hell freezes over.......which may actually happen sometime in 2008......
rob |
02.03.08 - 6:12 am | #
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Bill Melater writes:
rob wrote:
So now we are getting some real solutions- if the statistics or numbers are unpleasant, they must be wrong and should be changed...problem solved.
Quelle surprise! The same solutions from the same environment where the exit polls are always wrong now compared to the electronic election results.
SEC in the hands of cronies.
EPA in the hands of cronies.
FDA in the hands of cronies.
The entire alphabet soup is in the hands of...
Sow the wind, reap the whirlwind.
The impending debacle has been forty or fifty years in the making. The denouement won't be pretty, or more importantly, predictable. Almost every external factor is different from the last "big one"; not the least of which is that the peasants have learned to imitate the elites by exercising ruthless self-interest. see:jinglemail.
Bill Melater |
02.03.08 - 6:54 am | #
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DCBeacon writes:
First, I love the term "faith based economy." That's a keeper.
v, you suggested there was no one here who hasn't made money off the nonsense of the last decade. Well, I got out of stock entirely in the summer of 1999, left corporate America in 2002, and sold my home in 2003, so I'm relativey clean.
Looking through these lenses, I see a downward correction back to fundamentals for the housing market, not a depression. This devaluation will be good for typical folks who simply need affordable places to live and call home. I agree that 2-3 times income is about right.
I see a return to integrity and a simpler life for most people, and they will actually prefer it to the stale taste that passes for reality these days. And the "faith based economy" period (Reagan to now) will be viewed as a passing phase of greed and weakness for our society.
finally, those of you who use this site for your own speculative investing purposes, betting against legitimate value creation and such, I suggest you take a long look in the mirror. And I'll never teach my kids that being successful equates to being one step ahead of those trying to rip you off.
Enjoy your Sunday!
DCBeacon |
02.03.08 - 7:21 am | #
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yyy writes:
One factor that is commonly omitted iwhen comparing now and "Then" is the rural/urban ration. Here's the result of a very quick search; In 1930's Georgia 69 percent of the population was rural.
At the very least, that figure is reversed now. What appearance American urban centers will take on is truly horrifying.
yyy |
02.03.08 - 7:42 am | #
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Billy Hill writes:
Fester Bestertester writes:
Rest in peace, Don Martin!
Billy Hill |
02.03.08 - 8:14 am | #
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Called_Bluff writes:
01/20/2009 end of an error writes:
TJ and the Bear,
I agree we are much worse off than before the 1930's.
We have sold out our manufacturing base.
We have a fiat currency.
Unsustainable debt load.
Overcapacity in retail and the service sector.
A younger generation that is totally unprepared to compete in a global economy.
Not to mention at least peak cheap oil if not peak oil.
01/20/2009 end of an error | 02.02.08 - 11:37 pm | #
assume all of the above is true...
and use PO as a foundation for plans that you would implement in a national level...
I'm state the case the plan is brilliant, shrewd and devilish...and Working.
PO means reduced manufacutring...may as well sell it at the top...Done that..1990's-2005
Fiat currency-read the Prize to follow oil market developments with gold backing... no mistake that us peaked in'71 and |
