It just seemed to fit ...
A field of steel. A nice eyesore.
best to all
Calculated Risk
bobn (member) wrote on Sat, 04/11/2009 - 9:56pm.
Nuts. It just reminds me of "Steel-Toed Bunny Slipppers". 
Fedster Benny Found in a Field of Steal!
F-I-R-S-T
Nuts. It just reminds me of "Steel-Toed Bunny Slipppers".
US Steel Companies are complaining that China is dumping steel on the US market:
http://www.bloomberg.com/apps/news?pid=20601087&sid=am6sKhRpSxZs&refer=home
... and bankers are leaving bulge bracket firms for smaller ones, which would be allowed to fail, one hopes
I was talking to a CRE guru the other day. He was telling me that their biggest issue now is finding a way to secure all their shuttered building projects and open pits in the NYC area... Every data point seems to indicate that most CRE dev is coming to a halt, and the remaining funds are being used to secure the partially completed projects. Should be good for security companies and people who make chain link fences.
@dk
and are providing a solution beyond "SPEND MORE STIMULUS".
Uh, what solution is that?
My concern with Krugman is his assertion that we have $10T worth of "running room" left for stimulus. Does he use figures like $10T so he can later claim that "not enough" was spent? Or does he really not mind risking the end of modern civilization to test a hypothesis?
--
The Zombie Apocalypse begins when U3 hits 15%
The current AP story (picked up by NYT) in re chinese drywall is not only huge, but perfectly captures just about everything that made this decade what it was. The oughts, indeed.
"the end of modern civilization"
Methinks that even after the greenback joins the early 20's Wiemar currency in the annals of history, we'll still have microwaves and cable tv.
MrM - At one of the big failing banks (can't disclose) they recently had a presentation for Sr. Managers about the attrition rates and how their top rated employees are fleeing in droves. This is really bad for these big banks, as they are being left with only the real duds. So essentially banks like BAC and C will be filled with nothing but "lifers" who can't find a comparable job anywhere else. If the government continues their "bail and pray" policies these banks will just collapse of their own accord, and that will be messy.
Even the IT people are fleeing in droves... Good luck finding someone to run a business application that was written in 1988 and hasn't been upgraded since. Things will get worse.
Can we turn I-beams into pitchforks?
(Could make some really *large* pitchforks without having to melt 'em down, too!)
I hear there's a lot of underutilized heavy construction equipment available at low cost, too...
My site: http://ic4mg.com
Tupuli - he's an egghead (I mean that in a nice way) with no real world policy or business experience.
bgates - that story has been brewing since early March. Nice to see the MSM finally picked up on it. Thnx
My concern with Krugman is his assertion that we have $10T worth of "running room" left for stimulus.
Yeah, that's pretty funny. That's like saying if we don't go overboard on the bananas we won't be a banana republic. Methinks we're already past that point.
-----
"Hope for the best, prepare for the worst"
"Methinks that even after the greenback joins the early 20's Wiemar currency in the annals of history, we'll still have microwaves and cable tv."
Yes, until the lights go out.
Maybe I lack the imagination, but is there a graceful way that the dollar could become worthless without complete economic upheaval? What concept of property would survive the death of the dollar?
--
The Zombie Apocalypse begins when U3 hits 15%
@dk, thanks for the info on bank "human capital". Seems like everyone forgot that institutions are made up, not of piles of bank statements, but rather collections of people, all of whom are engaged in life, liberty and the pursuit of happiness. Just because a "corporation" has a "system" and an "org chart" and a bunch of names attached to titles, doesn't mean it can execute.
We saw something like this already with the mortgage companies that couldn't do proper foreclosures and/or workouts, even if they wanted to, because they lost all the people who knew where all the paper was filed and/or had the early 1990s experience on how to do it well...
Bring on the creative destruction... The Invisible Hand will work its way to the inevitable conclusion.
We can only hope that the capital flows smoothly to the stronger hands (new banks, regional banks, etc.) and we get orderly unwinds...
My site: http://ic4mg.com
how their top rated employees are fleeing in droves
I hope they know where they're going.
-----
"Hope for the best, prepare for the worst"
dk - Exodus of big ego bankers is not a bad thing - the old business model is dead. However, IT/backoffice people leaving is a problem.
That said, I also heard that some failing banks are offering guaranteed packages to attract new people.
Just a few thoughts on the current situation and attitudes. I have previously mentioned parts of this particular concept.
I keep on seeing more manifestations of one predictable but unfortunate trend. There seems to be many people in the west who believe that the world can to back to some thing like what existed from 1850 to 1950. They believe that if things just regressed they would be in the drivers seat again. There seems to be a general ignorance or avoidance of two of the most basic principles of the universe.
The basic theoretical objection is that Time, as we understand it, flows in only direction. We cannot go back in time and change the past as doing so only changes one time line. It is very likely that there are multiple, possibly infinite, time lines. This might seem to be a trivial and somewhat esoteric concept when applied to the current economic situation, but it undercuts one of the most accepted beliefs in studies of complex systems - the belief that prediction of future states of a system can be done with any worthwhile degree of accuracy. However this belief in the ability to predict the future underlies everything from weather forecasting, stock market cycles and generally any prediction. Predictions might therefore decrease in accuracy with increasing temporal distance from the prediction, not because of the unsoundness of the prediction but because that prediction holds true in only one time line which may not contain the observer.
A further issue is that it is essentially impossible to reverse the state of a complex emergent system without completely destroying it. This problem arises from an even harder to manage property of emergent systems, namely the "rules" change as the system evolves. Combined with the problems of infinite time lines, this makes true reversibility of emergent systems essentially impossible.
The question then is- why do so many people think that we can go back.. I think it arises from the human want to maintain status quo even if change is beneficial.
It took almost 80 years from the discovery that citrus fruits prevented and treated scurvy to it's mandatory enforcement by the british navy. It took decades before the idea that germs caused sepsis to be widely accepted even after semelweiss demonstrated that concept very emphatically. It took almost 4-5 years for the medical profession to accept sulfonamides as effective antibacterials even when the effects of treating infections were so dramatic. While we have become somewhat quicker at accepting reality over the centuries, the essential problem remains.
The essential problem is that humans personalize their experiences to a level where they choose to suffer rather than accept that were wrong. For example- If we had new evidence that gravity, as a force, intrinsically does not scale like other fundamental forces, it would not make any difference to either of us or anything in this universe. But I bet that thousands of losers from various 'famous' universities would flock to attack and denigrate the person who performed that experiment (even if that discovery did not affect their job security). It has more to do with hubris than with any measurable loss.
The reason I mentioned this is that many people, even those who see the absurdity of the current situation, refuse to see that the problem is essentially one of their own worthless beliefs.
Many still want to believe in peak oil, global warming, scarcity of resources, difficulty of doing X or Y, because the alternative is quite scary to them.
The alternative is that there will be more wealth in the world. This would play havoc with their beliefs in racial superiority, purpose in life etc. What they do not seem to realize is that trying to go back will almost certainly wreck them, in multiple ways. They forget that technology had diffused throughout the world and most of the first world has too many vulnerabilities and an adverse population profile to win. However they will cling to their beliefs and will try to win an unwinnable situation.
Of course, in due course they will have to face their folly. It might be just too late for most of them.
Tupuli - he's an egghead (I mean that in a nice way) with no real world policy or business experience.
I guess I find it shocking that someone with his profile would make such reckless assertions. He apparently feels emboldened by various audacious economic policies over the last few decades.
Basically, he strikes me as the type who feels no accountability for his actions because his rivals feel no accountability for theirs.
--
The Zombie Apocalypse begins when U3 hits 15%
.....it's nice to know that in these times of CRE project shutdowns, the IMPORTANT projects will be continued and finished for the betterment of this Country.............
"Corrections Corporation of America announced Tuesday it has received the go-ahead from the Office of the Federal Detention Trustee to build its federal detention center [in Nye County, NV]........Legal challenges were filed after Nye County Commissioners signed a 20-year development agreement with CCA Dec. 16.........Federal District Judge Kent Dawson dismissed a request for a temporary restraining order and later for an injunction to stop the project......... the majority of citizens were opposed to the construction [of the center]........".
http://www.pahrumpvalleytimes.com/2009/Apr-08-Wed-2009/news/28006104.html
- - - - -
Black 
Ranch
CR... first thing that comes to mind is artwork by Richard Serra,
dated for a short while the daughter of the late Raymond Nasher... he used to buy stuff like this...
"that story has been brewing since early March."
as has the drywall, since March of '04 apparently... really, Henry James or O. Henry couldn't have asked for a better device
lucifer - add to that the challenge of making controlled experiments in economy.
And by the way, there have been many experiments looking for deviations of the force of gravity from the inverse square of distance (outside of general relativity). There is nothing wrong with testing a well established law so long as you can improve accuracy over previous such test.
Good night all
for me the I-beam is a thing of beauty, without it Louis Sullivan could not have built his first skyscaper in Chicago
"What concept of property would survive the death of the dollar? "
Despite being a card-carrying goldbug (and one of the probable less than 10% or so who actually reports bullion gains on taxes), I still don't think that a 70% devaluation is that big of a deal. It is exactly what happened in 1933. The sad thing is that reinflating commodities is really going to be a bullet to the cerebellum of what remains of the middle class after this recent real estate wipeout. But as for a broad forex wipeout - no one except the 20% of our society who regularly buys overseas products not made in China will notice.
Many still want to believe in peak oil, global warming, scarcity of resources, difficulty of doing X or Y, because the alternative is quite scary to them.
You seem to have that exactly backwards. Since when is "more wealth in the world" scary to anyone?
-----
"Hope for the best, prepare for the worst"
"What concept of property would survive the death of the dollar? "
Elk sausage and a real tomato...
Think of all the paychecks that stack of steel represents...
what dollars are you talking about?
dk... some interesting comments, esp. about the lifers... a dozen years ago I was a consultant at NYNEX/Bell Atlantic during its merger.
that former Baby Bell was trying to move on the other side of the bright line - the non regulated free market - for a number of new product offerings...
so when you mention 'lifers' it rings a big bell (no pun intended)... I think it was Pol Pot who devised 3 areas of classification for political re-hab...
one of the levels being that you were too far gone. they'd take you out and shoot or bludgeon you to death...
some 'lifers' are like that...
Oh wait, I know, it's the payout from your derivatives
You seem to forget that humans are just hairless, murderous monkeys.
The concept of more wealth is scary because it destroys the present social pyramid. Imagine the horror of black africans not acting primitive and getting handouts from a few white people. The horror of people who do not look like you having a good life and not taking your bullsh**t. The horror of not being able to watch poorer people starve, die or kill each other. The horror of not being treated with deference because of your skin color... oh the horror.
//You seem to have that exactly backwards. Since when is "more wealth in the world" scary to anyone?//
I still don't think that a 70% devaluation is that big of a deal. It is exactly what happened in 1933.
Well, China didn't have $2T worth of US treasuries in 1993... or nuclear weapons for that matter 
Deliberate inflation would be a fairly offensive action to existing US debt holders. We'd be making suckers out of a good bit of the world.
The sad thing is that reinflating commodities is really going to be a bullet to the cerebellum of what remains of the middle class after this recent real estate wipeout.
My theory is that unemployment (U3) in the teens is going to be the end of the middle class' passivity. TPTB are really only blowing smoke up their own asses as we head towards that figure. WFC and C can invent profits, Geithner can juke the stats, Obama can fill people will false hope, but U3 in the teens will be the irrefutable evidence that J6P has been had.
--
The Zombie Apocalypse begins when U3 hits 15%
oh wait , I know, it's the payout from derivatives that's being transferred into the mutual fund that your pension program went all in for...
Yea thats me ! 
U3 in the teens.. Optimist!!
If this thing really hits the skids, like some of worser scenarios predict, it will be much worser. Hopefully we will be executing banksters before then.. hopefully.
I hope that people wake up before U3 crosses 15%. I am not sure they will..
//My theory is that unemployment (U3) in the teens is going to be the end of the middle class' passivity. TPTB are really only blowing smoke up their own asses as we head towards that figure. WFC and C can invent profits, Geithner can juke the stats, Obama can fill people will false hope, but U3 in the teens will be the irrefutable evidence that J6P has been had.//
The horror of not being treated with deference because of your skin color... oh the horror.
I wouldn't get so caught up on race within developed nations. We do have a fairly diverse cast of characters in top finance positions right now.
But I agree that relations with the third world are as you say. White people have a lot of guilt and have an special inventiveness in creating new indulgences to purchase.
--
The Zombie Apocalypse begins when U3 hits 15%
"Well, China didn't have $2T worth of US treasuries in 1993..."
True,. but France (and others) did have quite a bit of mark-denominated war debt in the early 20s. I think the PRC and USA recognize that we've become a unified commercial bloc for better or worse. I don't think either party really understands how we got there, but the reality of it is what it is.
"...the end of the middle class' passivity. "
Sadly, no. The ideology behind the "Ownership Society" is far too deeply entrenched in the psyche of the middle class. Jas is obnoxious on many levels, but his core message on this subject is 100% on the money. The real interesting dynamic is in the lumpenproletariat - there really are few political acts more effective than good old-fashioned squatting.
Robotic test post
There isn't any solution. New and desperate borrowing has delayed the meltdown, but not forestalled it.
But the fact that there isn't any "solution" doesn't mean we should cower in denial and fear.
Herculean efforts should be made toward restoring justice.
By that I mean not only criminal justice - as in prosecuting the fraud that brought us to this pass. I mean also restoring social justice.
The uber-rich should be bled damned near dry by punitive new taxes on wealth, and a steep tilting of the income tax toward the 95% bracket.
A society that allows sociopaths to earn 19,000X the average worker can't cohere.
And our society can't be returned to reasonable health until the billionaires are stripped of their plunder. Which is, at present, a legal impossibility, because there is no direct tax on wealth itself.
If we bend our efforts to justice, our society has hope of surviving - in tattered but intact condition.
If justice is ignored much longer, our society will not survive at all. Our political structure will be dragged into the abyss by the banks and the economy.
Yes.. that is what I have been saying for some time.
//If justice is ignored much longer, our society will not survive at all. Our political structure will be dragged into the abyss by the banks and the economy.//
Krugman talks about zombie banks... I like his comment that they're on the march... reminds me of a story about Jack Nicholson, some years ago he was in a disco with another actor and some hot babe comes up to him and says, 'Mr Nicholson, would you like to dance?' and he replied, "Wrong verb!'
marching? shuffling, yeah... or shambling? or slouching?
Guest Post: The Imminent Disinformation Schism (http://www.nakedcapitalism.com/2009/04/guest-post-imminent-disinformatio...)
Submitted by Tyler Durden, publisher of Zero Hedge
With articles like this coming out of Time magazine, it is inevitable that in the immediate future, the United States will be split into two partisan camps. However, this will not be the traditional schism of republicans vs. democrats, contrary to Mr. Barney Frank's attempt to start ideological partisan warfare. The real split will be of naive, easily-manipulated, small-time mom and pop investors, who only care about looking at their daily yahoo finance screens and 401(k) statements, seeing more black than red, and only focusing on what happened in the immediate past, and the forward looking taxpayers, who see the upcoming budget deficit fiasco, the social security ponzi scheme, the Medicare/Medicaid debacle, the ridiculous underfunding in public and corporate pension funds, the rising city and state taxes, the shuttering factories, the rising unemployment, the plummeting American production base, the "seasonally" upward-adjusted economic data coupled with consistently downward revised prior economic releases, the increasing savings rate and the multi trillion discrepancy in consumer purchasing power. The taxpayers are becoming angrier and angrier at the net present value destruction of future opportunities of being a U.S. citizen, while investors cheer every piece of information (whether or not supported by facts) that provides a push to their current net worth, ignorant of what this may mean for the future. There will come a point where this schism reaches a boiling point, in the meantime, the paradox is that so many of the taxpayers are also investors, who are caught in a tug of war with themselves on what the proper response to the crisis should be: happy as a result of bear market rallies, or sad when they put the facts into perspective.
using a tax to get money is like using a fist to get justice
try being happy about paying people to work?
they'll spend the money, I swear....
Am I naive?
I can't believe it has taken this long since I first blogged about the CalPERS disaster in Sacramento Feb '07.
Excerpt: Now that John Saca has defaulted on the $22m loan he used to start up the $500m venture the back room deals are coming to light. Turns out the California Public Employees' Retirement System (CalPERS) has been tightening the screws in its usual fashion as it seeks ever more lucrative deals to fund its ever more lucrative benefits.
So I'm wondering if anyone's seen this, or has a comment to it? (I know it may have shown up in the comments in the past day, but I've been doing Easter eggs & buying chickens & stuff like that, with no time for perusing the comments...)
More Quickly Than It Began, The Banking Crisis Is Over...This person claims that Wells Fargo and BAC are all hunky dory, and that this indicates that all the banking problems are Things Of The Past, all will be well, yadda yadda yadda.
Change is the only constant.
Everyone is afraid of tomorrow but it comes anyway.
All that steel represents a credit on someones balance sheet and debit on the taxpayers.
Imagine the cycle from mining to production to building to decay. There is the only guarantee anyone is allowed.
If all of us had a timer counting down from our births that we always see, what would we do differently?
Humans aren't sheep, we are rabbits. Know the difference?
Hah! I see that Lucifer saw it over at Nekkid Capitalism. I'd like to know what everyone here thinks of it.
The uber-rich should be bled damned near dry by punitive new taxes on wealth,
I've thought about this, but the question is: How, exactly?
They don't, for the most part, keep it in checking or savings accounts. It's in stocks or bonds or real-estate or other non-money stuff. If you tax them all at once on it, how do they convert it into money - as in if they are all selling, who's left to buy and meanwhile what has happened to the FMV for those assets?
I'm not against the idea of bleeding the rich,frankly, but just how does that work?
If justice is ignored much longer, our society will not survive at all. Our political structure will be dragged into the abyss by the banks and the economy.
This part I UTTERLY agree with. Sooner or later it must happen - it's only a question of whether the system does it, or a bunch of vigilantes do it.
YAL,
The UE rate (particularly watching U-6 unadj. YoY) is currently a leading indicator for consumer credit default rates which are ticking new records and will continue to do so...and once the rate of increase stops accelerating (which it has not done yet), it will plateau there for some time and the absolute rate of UE will continue to increase for at least a year after the "end" of the recession in GDP terms.
U-6 acceleration
http://energyecon.blogspot.com/2009/04/u-6-year-over-year-changes-contin...
Also, the YoY rate of change for EMRATIO is in uncharted territory, while the number is now at mid-80's levels the speed with which we have arrived there is unprecedented.
EMRATIO Rate of Change
http://energyecon.blogspot.com/2009/04/emratio-rate-of-change-and-civpar...
In an economy that is over 2/3 driven by consumer spending, in which business investment is moribund and CRE just beginning its cratering...in which the second order effects of the pace and scale of the economic contraction are just beginning to manifest (viz local and state government budgets)...when the people who have been flat out wrong about just about everything say the light in the tunnel is not a train...'scuse me but I am going to get off the tracks.
I'll second (third, fourth, fifth...) the call for justice. That's ultimately the glue that holds society together, and they're seriously testing it.
-----
"Hope for the best, prepare for the worst"
I'd like to know what everyone here thinks of it.
Oh, I agree completely: the Banking Crisis is over! Stick a fork in it, it's done! The shit is still there, but we're ready for a new name for this on going drama, some new angle that will finally raise it's head.
Wow, this is the proverbial Hydra, lop off one head and two more problems appear. It won't be until we start cauterizing the suckers that we'll have any success.
lucifer,
Although there's certainly people that think that way, the majority could give a shit. If they're happy they don't begrudge others' happiness, regardless of geography, nationality or ethnicity.
You can go into any neighborhood in America and find someone enviously bitching about their neighbor's nicer car/boat/barbecue -- keeping in mind the neighboring family is probably a carbon copy of their own -- whereas you won't hear virtually anyone talking about the Benzes recently clogging the highways & byways of Kuwait or Dubai. If you talk to people about India or China they'll more likely talk about the great things happening there; unless, of course, it's cost them a job (or thankless hours talking to a scripted call center).
Don't project prejudices of a select few you may know onto the rest of us.
-----
"Hope for the best, prepare for the worst"
The taxpayers are becoming angrier and angrier at the net present value destruction of future opportunities of being a U.S. citizen,
As a 27 year-old taxpayer I've starting telling people that I'd happily opt-out of the US if there was a viable alternative.
Consider how pissed recent college grads are going to be when they realize that their non-dischargable student loans have indebted to the generation that keeps them out of the workforce and wrote entitlements into the law before they could vote.
--
The Zombie Apocalypse begins when U3 hits 15%
Halo-ized comments at http://users.thelink.net/bobn/CR
No left 'gutter'
No Javascript.
Should load in any coneivable browsing device. Any complaints to bobn.
I've been biting my lip holding off on calling a peak. After all not only did I not pay attention to this rally on the equity side, I initially expected March to come across as a terrible month. So at the risk of becoming a stupid hypocrite, let me say I'm really bugging out now. The next 3 months will show undeniably abysmal economic data; bad enough that no one will even notice what happens in July/August. That's my opinion. I will refrain from harping on my list of reasons and let things be.
...it's only a question of whether the system does it, or a bunch of vigilantes do it.
--bobn
Or a fascist in the mode of Hitler...
I think I fear the rise of the vengeful fascism of victimhood even more than I do the Mad Max scenarios.
EHP,
It's tough... the market's definitely weak but pressing higher, and we could see more anomalous (and probably fictitious) upside earnings surprises that people will irrationally seize upon. It's not like we haven't seen this happening time and again since August of '07.
-----
"Hope for the best, prepare for the worst"
EHP,
I share your frustration. Nothing but gross manipulation and or truly intense stupidity can account for the sucker's rally we are having now.
"So now it becomes clearer to us what is happening in the psyches of millions of individuals who are losing their roles in the imperial system-and in the psyches of those who are not. The entire culture is under unprecedented stress, except perhaps for those old enough to have lived through the Great Depression. On some level, many of them "grew up" and stopped being infants during their ordeal. The 1930s in America was an enormous initiation which they moved through and became wiser and more authentically adult for having done so. This is not to say that every person now alive who lived through the Great Depression is a paragon of wizened maturity, but rather to notice that their survival of it has informed their behavior and attitudes since and actually equipped many of them to face the current crisis more skillfully than younger generations.'
http://thomaspainescorner.wordpress.com/2009/04/06/collapse-psychosis-na...
Growing up and being a voracious reader led me to understand the importance of rites of passage. How absurd that in America rites of passage became monetary based. First CC, first home, first car, first extravagant vacation. Now everyone is getting a chance to be challenged as rites of passage should actually be, having your survival challenged and making it. Losing your high FICO can be so devastating.
It's not manipulation, it's incorrect rational logic based on optimism. I wasn't surprise by material events, but was by the reaction . The timing of some initial reports and the revisions, engineered. Not frustrated, the rate of adjustment will be dangerous soon.
If I leave by posting a single thought, just think about all the defaulted mortgages that will be foreclosed/sold in the very near future. You can hold off selling for a short while, pretend the loan is current, hope for a bailout at par. This is sales season, they can't wait another 12 months holding existing inventory, let alone whatever stock the future may bring. It's just one of about 20 things that have amassed to make me twitch. It will get worse... because it already has if you follow trade/shipping very closely
bobn,
congrats on the new thread-simplifier script.
I share your frustration. Nothing but gross manipulation and or truly intense stupidity can account for the sucker's rally we are having now.
I think you're overstating it. Normal manipulation and average stupidity would explain this sucker's rally.
The Summit project is a product of the Jay Paul Company, a developer from Northern California who has their hands tied up on a project in Sunnyvale, California called Moffett Towers. That project is some 1.8M square feet in total (all phases), much of which has already been constructed, without a single tenant signed up yet. They began marketing Moffett Towers about 4 years ago before they broker ground on construction.
I'm not against the idea of bleeding the rich,frankly, but just how does that work?
--bobn
Historical record on it is not promising. Much of the wealth, during the process of "redistibution," has its value destroyed.
Here's one idea: do like tribal cultures do. The rich in the tribe have proportionally greater obligations. E.g., the rich man is expected to bestow gifts at weddings and such, and to sponsor extravagant feasts, etc.
The beauty of that tribal method is that it prevents anyone from getting too rich - as fast as they acquire wealth, the more they are obligated to spend it. (That is one reason why, BTW, a pristine tribal society can cohere for millenia; gross inequity doesn't develop.)
So, inform a billionaire like Buffett that he is responsible for the health and welfare of a medium-sized Nebraska city. If he is judged to fail at the task, his wealth is entirely confiscated and assigned to an executor to administer.
These people love to play philanthropist, anyway.
I daresay people would still want to get rich. But they might like it less if they do.
It's not manipulation
My May SPY puts beg to differ
And don't even get me started about SHLD
--
The Zombie Apocalypse begins when U3 hits 15%
Lucifer (member) wrote on Sat, 04/11/2009 - 10:59pm.
Yes.. that is what I have been saying for some time.
//If justice is ignored much longer, our society will not survive at all. Our political structure will be dragged into the abyss by the banks and the economy.//
Sorry, but it is already a done deal. The answers to the questions are there for those who are receptive.
Many years ago, someone in authority told me that "if you are looking for justice, don't look here." This was a state police department.
I don't have answers or advice. Sadness and anger, yes, but acceptance, more so.
"can the dollar become worthless without upheaval?"
-------
After the past two months. I've concluded that's the plan, at least outside the USA.
Some weighted scheme that phases out the dollar in increments over time
As I sit by this dance floor, it suddenly occurs to me that beauty, like intelligence, is often a cross to bear.
Lucifer-- if you like both system theory and physics, you might try:
http://www.amazon.com/unireality-Stanley-Heidrich/dp/061514814X/ref=sr_1...
Judging by your metacomments.
Broward Horne,
You have quite the ex-wife.. I read one of your previous posts
NbyNW,
The present system has to collapse for a newer system to arise.. I wish there could be a smoother transition, but human ego is a bigger problem than most people realize.
As I sit by this dance floor, it suddenly occurs to me that beauty, like intelligence, is often a cross to bear.
You, too? At last someone understands my pain!
It is certainly more likely
"I think I fear the rise of the vengeful fascism of victimhood even more than I do the Mad Max scenarios."
It is the few vocal douchebags that are the problem.. always
"lucifer,
Although there's certainly people that think that way, the majority could give a shit. If they're happy they don't begrudge others' happiness, regardless of geography, nationality or ethnicity"
OK now I drag my sorry self to bed, but here is the latest update on the US Treasury marketable debt maturity plot (a graph showing the term structure of the publicly held marketable debt of the US Treasury):
http://energyecon.blogspot.com/2009/04/treasury-marketable-debt-maturity...
nite all
That is certainly one way.. heck most stable cultures are like that.
//Here's one idea: do like tribal cultures do. The rich in the tribe have proportionally greater obligations. E.g., the rich man is expected to bestow gifts at weddings and such, and to sponsor extravagant feasts, etc.//
I agree with EHP, I don't see the equity rally as some devious manipulation but
rather a psychological bounce back to months of bad news...
I am going back here to the whole crowd theory thing ... best visually portrayed in Gerricault's Raft of the Medusa...
that distance ship of the horizon? salvation or false hope...
unirealist,
Anyone who believes that they
1. Understand the patterns behind the universe.
2. See the limits of possibilities.
3. Issue dire warnings to humanity.
have more in common with prophets than scientists. I do not claim to understand the universe, I just see some patterns that suggest it has more possibilities than I can imagine. It is also likely that the universe, as we know it, might not exist.. rather we might be just experiencing one particular slice of an infinite matrix.
"http://www.amazon.com/unireality-Stanley-Heidrich/dp/061514814X/ref=sr_1..."
dCD,
The real problem is that people want to believe.. in their own bulls**t.
WW1 was never supposed to last over a few months.
'Operation barbarossa' was supposed to destroy russia.
America was supposed to win the Vietnam war.
We were supposed to have found the solution to end economic downturns.
"It is also likely that the universe, as we know it, might not exist.. rather we might be just experiencing one particular slice of an infinite matrix."
is there a practical application for this theory?
if you become aware that you cannot know everything about the universe i don't see how that affects your ability to predict within the rules of this slice of the matrix.
\\\\\\\\\\\\\\\\\\\\\\\\\\\\||||||||||||||||||||||||||//////////////////////////
Broward Horne wrote,
"As I sit by this dance floor, it suddenly occurs to me that beauty, like intelligence, is often a cross to bear."
What do you call ugly and stupid, blessings?
swamp otis,
Yes, there is one peculiar outcome of such a belief. If the universe, as we know it, is our particular time-thread.. then we can explore other possibilities and change the direction/ size of that time thread.
For example- we started experimenting with hypergolic fuels because we wanted rocket aircraft (me-163). While that direction proved to be less than practical, the information gained was applied towards developing rocket launchers for satellites. The majority of satellites in orbit today were launched by rockets that used hypergolic fuels. Indeed the lunar landings would not have been possible without hypergolic rocket engines.
So you see.. exploring possibilities by accident changed 'our' universe in ways that we could never have anticipated.
"is there a practical application for this theory?"
Credit Default Swaps – Through The Looking Glass (http://www.wilmott.com/blogs/satyajitdas/index.cfm/2009/4/12/Credit-Defa...)
Posted At : April 12, 2009 12:42 AM | Posted By : Satyajit Das
Related Categories: Derivatives
"CDS contracts and credit derivatives are complex and powerful financial instruments that frequently have unforeseen consequences for market participants and the financial system. As former New York Federal Reserve President Gerald Corrigan told policy-makers and financiers on 16 May, 2007: "Anyone who thinks they understand this stuff is living in lala land."
"The unpalatable reality that very few, self interested industry participants are prepared to admit is that much of what passed for financial innovation was specifically designed to conceal risk, obfuscate investors and reduce transparency. The process was entirely deliberate. Efficiency and transparency are not consistent with the high profit margins that are much sought after on Wall Street. Financial products need to be opaque and priced inefficiently to produce excessive profits or economic rents."
"6 March 2009 Bloomberg reported that Myron Scholes, the Nobel prize winning co-creator of the eponymous Black-Scholes-Merton option pricing model, observed that the derivative markets have stopped functioning and are creating problems in resolving the global financial crisis. Scholes was quoted as saying that: " [The] solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and … start over…" ISDA, the beleaguered derivatives industry group, predictably countered limply that: "… the notion that you would, as he said, blow up, the business in that way is just misguided."
http://jessescrossroadscafe.blogspot.com/2009/04/g7-industrial-productio...
11 APRIL 2009
G7 Industrial Production Crashing
The production of real goods in the developed nations is plummeting. Even the mighty export driven economy of Japan appears to be heading lower as though it had fallen off a cliff.
Countries must begin to encourage consumption in their own economies. To do this, they ought not to be stimulating the old credit/speculation machine called the neo-liberal financial system
Green shoots and tea leaves (http://krugman.blogs.nytimes.com/2009/04/11/green-shoots-and-tea-leaves/)
The crisis is over! Or so some are saying.
OK, a couple of things.
One is that even in the Great Depression, things didn't head down all the time. The chart above, from Eichengreen and O'Rourke, shows world industrial production in months from the previous peak, in the Depression and in the current crisis. Notice that there were several upturns along the way; each of those could have been - and was! - heralded as the beginning of recovery.
Meanwhile, about those great numbers from Wells Fargo: remember, reported profits aren't a hard number; they involve a lot of assumptions. And at least some analysts are saying that the Wells assumptions about loan losses look, um, odd. Maybe, maybe not; but you do have to say that it would be awfully convenient for banks to sound the all clear right now, just when the question of how tough the Obama administration will really get is hanging in the balance.
All that said, I would not be surprised if GDP growth is positive in the second half of this year, if only because of the inventory bounce. But I will be surprised if the unemployment rate actually turns down.
Hey CR,
I love your show!!! But I really have to ask.... Do you really, truly, honestly still believe that this is not going to be a depression.... Come on man, the truth shall set you free....
"You have quite the ex-wife"
---------
She was tenacious and resourceful. I got my first divorce in summer of 2007, she contested it several months later, the judge set aside and we started over again. So now I'm going on dates with women who ask if I'm divorced. What is the right answer?
Yes? Probably not but I have official divorce papers.
No? Well, except I was and I will be.
I'm not sure? That's the right answer but now Miss Paranoia freaks out because she reads great deep meaning into it so I must surely be cheating on my wife.
And the thing is alternating between Arizona and Idaho jusrisdictions it is literally almost a Federal case.
How many people in the world have TWO sets of divorce papers & judgements for the same divorce?
It's unreal.
lucifer...
yes, WW1 was supposed to last a few months, had they been fighting the Napoleonic War that would have been the case but what they could not see was the introduction of technologies that vastly outstripped strategies - machine gun, gas, airplane, tank and mechanized units - (you have to go back to Agincourt before you see again such a mismatch)...
as for Vietnam, suppose Johnson would have initiated a full scale invasion of the North what would have been the outcome? military success but the problem of long term occupation, besides the war being about national policy it was also a tribal war between the north and south, spend anytime in Vietnam today and that is still very apparent...
Barbarossa was based on the von Schlieffen plan - a plan in the words of Werner Schilling 'used in a war too early and a war too late'...
"If the risk-taking spreads out to these smaller institutions, it is no longer a systemic threat," From NYT article
Yes it is. 100T of shit is 100T of shit no matter where the smell is coming from. If the guys go to other insitutions and don't create piles of shit, then it won't smell. Piles of shit being "financial products".
***
"So essentially banks like BAC and C will be filled with nothing but "lifers" who can't find a comparable job anywhere else." dk wrote on Sat, 04/11/2009 - 10:07pm.
So essentially they are becoming the government?
***
"I also heard that some failing banks are offering guaranteed packages to attract new people. " - MrM
I also heard that some failing banks are offering tax payer guaranteed packages to attract new people.
***
"So, inform a billionaire like Buffett that he is responsible for the health and welfare of a medium-sized Nebraska city. If he is judged to fail at the task, his wealth is entirely confiscated and assigned to an executor to administer." unirealist
Bill and Melinda Gates foundation + Buffet's fortune = rich people aren't to blame. Sociopaths on wall street and the mental midgets in D.C. they conned to make something from nothing are to blame.
[Renewing his criticism of the dividend tax cut laid out by the Senate last week, Berkshire Hathaway's Warren Buffett called the proposal "voodoo economics" that uses "Enron-style accounting".
Through his 31 percent ownership of the company, Buffett said he would receive an additional $310 million in income that would reduce his tax rate from about 30 percent to 3 percent, while his office secretary would still have a tax rate of about 30 percent.
"Putting $1,000 in the pockets of 310,000 families with urgent needs is going to provide far more stimulus to the economy than putting the same $310 million in my pockets," Buffett added.
He closed the piece by saying that the "government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the Senate handed the bill to the wrong party." ]
***
Goodnight.
Beauty as a cross - I was watching a self-conscious but attractive young woman on the dancing floor, she kept fiddling with her clothes because they kept shifting off, but it was important to be on the dance floor putting on an image and I thought..... what a lot of embarrassment and trouble. I wonder how often she has to act like this?
Then i noticed that many customers were... well, overweight or unattractive, too thin, bad hair, etc but they were having fun, not particularly concerned with their appearance. The overweight women (common in Idaho) seemed less self-conscious than the attractive women.
Then a one-eyed gay guy (the thoughts that pass through my mind!) got on the floor directly in front of me and misinterpreted my "lost in thought" as interest and motioned at me in suggestive ways until I laughed and shook my head, "no no no".
Envy is a rare emotion for me.
I suppose I'm lucky.
'no one except the 20% of our society who regularly buys overseas products not made in China will notice.'
Lucky that oil is made in China then.
After eighteen months, the judge finally lost his patience with the obvious harassment and BANG, ruled in our favor without even a hearing.
I'm tired and going to bed.
'...the PRC and USA recognize that we've become a unified commercial bloc for better or worse'
You mean that the only two societies still representing the divisions of the Cold War between capitalism and communism are locked into a meaningless relationship which props both of them up, while the rest of the world goes on in its own various directions unnoticed to them?
The rest of the world has noticed, and neither the American nor the Chinese model are considered worth following. Corruption at the top, exploiting the labor of the masses for private gain, is never attractive, nor does it generally last over the long term.
Which is about the extent of the propping up now going on, including seeing the other as the logical enemy to unify an increasingly dissatisfied population against.
'A society that allows sociopaths to earn 19,000X the average worker can't cohere.'
The Chinese seem to be able to handle that trick better than most, though. Maybe because even their sociopaths value good manners, and are aware of the importance of connections in a complex web of social interaction.
'Imagine the horror of black africans not acting primitive and getting handouts from a few white people.'
Why do I have this sneaking suspicion you don't really know any Africans? None of the Africans I have known, from people getting by as more or less illegal day laborers to university students to medical assistants to PhDs have ever struck me as 'primitive.'
Either you need to examine some of your assumptions (either of Africans or of those you think see them as 'primitive'), or maybe you need to gain a bit more personal experience before making such sweeping, and actually quite offensive (part of that examining, since it seems unlikely you realize that fact) statements.
Then I actually read through the entire comment, including this - 'The horror of not being able to watch poorer people starve, die or kill each other.'
I'm just wasting my time typing a response, apparently.
Sorry for the OT.
This is a test post from a internet cafe in Zhongshan, Guangdong. Cannot raise the CR page (don't know why, maybe a local firewall), but have no problem with hoocoodanode.
It is Sunday, April 12 at 18:12 GMT +8.
Gonna check if this works.....
Again, apologies for messing around, but I've gotta check this.
Anonymous1 wrote on Sun, 04/12/2009 - 1:39am.
'A society that allows sociopaths to earn 19,000X the average worker can't cohere.'
The Chinese seem to be able to handle that trick better than most, though. Maybe because even their sociopaths value good manners, and are aware of the importance of connections in a complex web of social interaction.
\
Have not followed the entire thread, but I can assure you that people everywhere can accept vast income differentials so long as the tide is rising for most, IMO. Folks compare how they did this year compared to last, not so much the Zhang's beating the Li's (although there is a lot of concern about that going on too!).
How a society copes with a down year, or a series of them, is what counts. The Chinese have not had to do that since, well, Deng's reforms at least....
How a society treats its poorest members is its truest measure, and that only really gets tested in bad times. When the going is easy, you don't notice the cracks.
'The Chinese have not had to do that since, well, Deng's reforms at least....'
An excellent point, and one I should have taken into account, actually. On the other hand, the Chinese tend to simply accept the fact that massive inequality is part of being born in the Middle Kingdom. Upheavals tend to change the rulers, but not the system, at least traditionally - but China's current generation's experience has been unusual, no doubt.
The Summit Rancho Bernardo. An opportunity of extraordinary proportions.
Ha ha.
bobn,
congrats on the new thread-simplifier script.
EHP - glad you like it.
More and more, those who have the means to discard the "mortal coils" of America are doing so. Unfortunately, they are the ones we can least afford to lose.
I was looking for a simplified description of how banks might game the FDIC Legacy Program. Here's my choice (from a link provided by Interfluidity):
http://rortybomb.wordpress.com/2009/04/05/banks-as-bidders-and-sellers-f...
traderwalt
traderwalt,
Gaming government-backed transactions has to cross the line into criminal activity at some point. Too bad government seems to do such a poor job of figuring out, at least in real time, where that line is.
http://www.wilmott.com/blogs/satyajitdas/index.cfm/2009/4/12/Credit-Defa...
Any bi-lateral agreement that becomes publicly traded is no longer priced based on the referenced asset.
EHP-
This is an issue for your dazzling mind to tackle.
Lucifer, wonderful posts. Disagree as to parts, but that's ok.
Who was the Frenchman who said (approximately): It is not sufficient that I succeed. Others must fail?
No bunny sightings in back yard (they are there, but hidden), but the pair of
cardinals is back.
Eoster was the Saxon? Ce\ltic? goddess of spring, hence the bunnies, eggs, chicks,
etc.
Happy Eoster, return of fertility to the earth day!
I would agree Kaboom, but the very poor tend to become invisible, so we don't know how we are treating them, usually.
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"Primitive" is an illusion of peoples regarding other sets of peoples.
The Greeks thought everyone else a barbarian.
The primitives in question may have just as complex a society or even more so. They just know different stuff in order to survive. We couldn't survive in more natural circulmstances that they can deal with. Mostly they can survive in ours. What does that say?
The Geithner Death Star
- - - - -
Black Ranch
energyecon,
I tried to leave this comment on your site, but it requires a Blogger or Open ID, so it is easier for me to leave the comment here.
--------------------------
energyecon,
Thanks much for maintaining this analysis - it is useful for many people.
I would suggest that you split the Treasury Debt Maturity chart into two: one for short-term and another one for long-term maturities. As presented now, it seems that the volume of debt is dropping, which is not the case, obviously, and one does not see longer-term maturities in the mix.
The short term debt needs to be rolled over, therefore its maturity ladder is not very meaningful. The only important things about short-term debt are these two:
- Total volume
- Average maturity
You could simply plot these two variables as the quarterly time series.
Once you remove short term debt, you will be able to see details of the long-term maturity ladder better as your chart will not be skewed by the short term debt.
-------------------------------
The Greeks thought everyone else a barbarian.
... including the Romans, even after they had conquered the Greeks.
The same was true about the Chinese under the British.
Military victories create a sense of nation's superiority, which then lives for centuries. Subsequent military defeats do not necessarily affect that sense of superiority. It just shifts into the moral or cultural domain.
The American Accidental Empire will disband as unexpectedly as it formed.
'Lucky that oil is made in China then.'
No, lucky that most of our oil comes from the Americas
Your Easter gift from Bloomberg:
Obama Stakes His Fortunes on Failed Banksters
Just two small bits - but read the whole thing
Why doesn't the Obama administration force insolvent banks and insurance companies to come clean about their losses first? It's the "why" that's so vexing. The who, what, when, and how are mere details, by comparison.
He could have ordered all U.S. financial institutions to immediately confess whatever losses they hadn't yet recognized. And he could have backed that up by vowing to prosecute every officer, director and auditor the Justice Department could find who had approved numbers they knew to be wrong.
Obama didn't do that.
NEW THREAD at Calcluated Risk.
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Feed back via bobn
Rob Dawg (member) wrote on Sun, 04/12/2009 - 10:11am.
The American Accidental Empire will disband as unexpectedly as it formed.
It wasn't an accident, it was pushed. We should have sided with the recidivists and the self-determinationists in the post-War years rather than accepting inheritance of the Colonial system. Look back at the hands that helped us into Indochina and South America and the Middle East as inheritor to the Franco-British mandates, and that will be who put us where we are today.
Why on earth would she contest it?
She suspects you have hidden assets?
MrM,
It is the short term debt that has my interest at this time, not the total - though given the rate of growth in short term debt set forth in the plot I am puzzled by your assertion it seems the debt is declining. However, I will put in the change in total marketable debt from quarter to quarter, that is a good add - thanks.
Also, the maturity calculation is something that I have been mulling over, just need to set that up using the more granular data not just the quarterly summation...
energyecon - I was simply referring to declining columns on your chart and hence an appearance of debt getting lower (I realize that it is not true). My main point was when you are plotting long term debt trends, you need to separate short-term maturities, which get rolled over all the time, from long-term maturities. I think that looking at the average maturity of the short-term debt might create some interesting insights, in addition to the overall volume trend.
That was only steel for 1 building!
Broward Horne wrote on Sun, 04/12/2009 - 1:06am.
"You have quite the ex-wife"
---------
She was tenacious and resourceful. I got my first divorce in summer of 2007
Wow, sorry to hear, Broward. In my experience, even the most tame and amicable divorce is still horrific and devastating. A complicated, drawn out affair is cruel and unusual punishment.
MrM (member) wrote on Sun, 04/12/2009 - 7:06am.
The Greeks thought everyone else a barbarian.
... including the Romans, even after they had conquered the Greeks.
The same was true about the Chinese under the British.
Military victories create a sense of nation's superiority, which then lives for centuries. Subsequent military defeats do not necessarily affect that sense of superiority. It just shifts into the moral or cultural domain.
=======
Dead thread....but, there's a lot of wisdom in mrm's post., but I dont' know about miliary... Post-Qing, the Chinese knew their system was finished;, flat on its back. Miliitary and "total cultural" defeat. That's a signal state of affairs.
Square one, and much turmoil resutling, is what brought us what we have today.
So from now, what sort of adventures/victories will begin to establish a Chinese sense of onwership (I cannot spell suzainry)? Do they have to be military in the traditional sense? Frankly, it is inconeivebable to me now, sitting on the sidelines... and among the rank and file in China, I dare say, those who say they know are blowing smoke (and I hear them often). Those whom I respect are confused. Perhaps confusion is the seed of conflict. Has been, often.
(I cannot spell suzainry)? - Anak
suzerainty?- btw, very much appreciate your postings. Always a pleasure to hear thoughtful outside viewpoints.
Lucifer: "You seem to forget that humans are just hairless, murderous monkeys."
and you seem to forget your own theory that there is "a unique time line that might not include the observer"
unirealist: "So, inform a billionaire like Buffett that he is responsible for the health and welfare of a medium-sized Nebraska city. If he is judged to fail at the task, his wealth is entirely confiscated and assigned to an executor to administer."
if you haven't notices, it's called TAX
I dunno but that bunny looks photoshopped.
I saw that hideous story and thought the timing....aligned with WF rosey fake results was quite suspicious. I know our current admin. must at least give the appearance of knowing what they're doing and the press is there to help; especially the outlet that ran Obama covers 14 times in a year. How dumb they must think us. They have been deceiving us for so many years. I woke up in August 2007 and I'll never go back to sleep again.
HAPPY EASTER