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Friday, August 19, 2011
The Increasing Quantity of Money is the Problem, Not the Solution
Because the last thing we need is more debt when we haven't settled the bad debt we've already got.
Jeffrey Snider here rips the monetarists at two bastions of liberal opinion, The New York Times and National Review Magazine:
There is a definite quality of absurdity to all this intervention. Besides the fact that every method of intervention or monetary "solution" guarantees ongoing crisis and instability, what else has to be said about a condition where increasing cash for the banking system actually creates a liquidity crisis. Whatever rabbit hole exists for central banks and economic experts, they have widened and deepened it, inviting the rest of the world to follow them down it.
For once someone actually explains in macroeconomic terms why there isn't a dime's worth of difference between the Democrats and the Republicans.
Recent Explosion in M2 in US a Sign of European Bank Run?
Larry Kudlow explores the issue here:
According to the St. Louis Fed, M2 is up 24.2 percent at an annual rate over the past two months. Almost out of the blue, that comes to a near $500 billion increase. In rough terms, the M2 explosion breaks down to $165 billion in demand deposits and $335 billion in savings deposits.
What's going on here? There's a flight to government-guaranteed accounts. Some people believe Europeans are withdrawing from their own banking system and parking their money in the U.S. banking system, guaranteed by Uncle Sam.
The smart money has already left Europe. Last one out please switch off the lights.
Throngs Used To Greet Bill Clinton, Obama Settles For Dozens on Martha's Vineyard
Amid security concerns, says the story here.
Hm. I thought the summer playground for the rich was friendly territory.
"With a democracy tyranny quarrels with the nobles, and destroys them both publicly and privately, or drives them into banishment, as rivals and an impediment to the government; hence naturally arise conspiracies both amongst those who desire to govern and those who desire not to be slaves."
-- Aristotle, The Politics
"With a democracy tyranny quarrels with the nobles, and destroys them both publicly and privately, or drives them into banishment, as rivals and an impediment to the government; hence naturally arise conspiracies both amongst those who desire to govern and those who desire not to be slaves."
-- Aristotle, The Politics
Imported Oil's Cost to Economy in 2009 Was About $190 Billion
Assuming an average price of $54 per barrel of crude in 2009, and net imports in excess of 9 million barrels per day.
'Serious Recession Coming, Possibly Even a Depression'
So says Roger Nightingale, quoted here:
"We have done everything to monetary policy that we could do and this slowdown is going to be uncontrollable," Roger Nightingale, RDN Associates, told CNBC.
"We have a serious recession coming, possibly even a depression."
Excuse me, but negative GDP back to back in 2008 and 2009 shows that we were indeed in a depression. One might even be tempted to argue that the regime's gymnastics merely bought us a subsequent recession in 2010. But it was very expensive.
With GDP now running at less than half the rate in 2011 than in 2010, it is clear that monetary easing combined with extravagant government spending has failed to address the real problem dragging down the economy, which is bad debt.
Until we accept the cure for this prescribed by capitalism, we're going to drag this out indefinitely.
Orderly bankruptcy is the pressing need of the day.
Excuse me, but negative GDP back to back in 2008 and 2009 shows that we were indeed in a depression. One might even be tempted to argue that the regime's gymnastics merely bought us a subsequent recession in 2010. But it was very expensive.
With GDP now running at less than half the rate in 2011 than in 2010, it is clear that monetary easing combined with extravagant government spending has failed to address the real problem dragging down the economy, which is bad debt.
Until we accept the cure for this prescribed by capitalism, we're going to drag this out indefinitely.
Orderly bankruptcy is the pressing need of the day.
Thursday, August 18, 2011
Tax Reform Had Better Be Revenue Neutral, Otherwise No Thanks
Louis Woodhill isn't fooled by Gang of Six types, Gang of Twelve types, or any other types looking for increased revenues from tax reform flying under the banner of eliminating tax loss expenditures while making the Bush brackets permanent:
Republicans want to reform the tax code and broaden the tax base in return for lower tax rates. However, they must insist that such reform be (at most) “revenue neutral”, because an effort to get more revenue via reform would mean higher tax rates, and therefore lower economic growth. An increment of economic growth provides somewhere between 27 times and infinitely more benefit to federal finances than raising taxes. So, no thanks.
And he says No Thanks to about seven other things, too, here.
Wednesday, August 17, 2011
The Number One Reason No One Would Even Think Of Assassinating Obama
No one would want a mental case like this running the country:
Rep. Mike Doyle (D-Pa.) said “we have negotiated with terrorists,” and the story quotes Biden agreeing, saying: “They have acted like terrorists.”
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Picking Biden actually was a sign of intelligence in the young president, though it kind of makes you lonesome for the days of the nattering nabobs of negativism.
Picking Biden actually was a sign of intelligence in the young president, though it kind of makes you lonesome for the days of the nattering nabobs of negativism.
The Veep only seems like a loose cannon on the ship of Obama, but his penchant for screw loose partisanship and outrageously inaccurate comments both get to fly under the dim pall of his brain aneurysm in 1988. He possesses a kind of sacrosanctity because of his illness, which consequence Obama skilfully exploits in order to push the radical envelope.
Obama may very well not know what to do in the positive sense, and even if he did he would choose against it, but he does know what he needs in the negative sense: unapologetic, partisan rhetoricians on whom no one can lay a finger.
Which also helps explain the choice of Jewish female Debbie Blabbermouth Schultz, who possesses double sacrosanctity.
Caligula picked a horse.
Obama may very well not know what to do in the positive sense, and even if he did he would choose against it, but he does know what he needs in the negative sense: unapologetic, partisan rhetoricians on whom no one can lay a finger.
Which also helps explain the choice of Jewish female Debbie Blabbermouth Schultz, who possesses double sacrosanctity.
Caligula picked a horse.
Where Are All The Liberals Protesting Obama's Illegal War In Libya?
And how is it that a non-kinetic operation to protect innocent civilians has become a state-sponsored assassination plot?
Obama has thumbed his nose at the War Powers Act, for which he should be impeached and convicted, but he won't be because our Congress is composed of his slaves.
Obama has thumbed his nose at the War Powers Act, for which he should be impeached and convicted, but he won't be because our Congress is composed of his slaves.
Tuesday, August 16, 2011
Are We Following in Japan's Footsteps?
Seen at The Big Picture here.
The idea is that the Japanese stock market experience in red superimposed over the US SPX in green (lagged by a decade) predicts a new low in the US below the 683/666 level of March 2009 by 2015.
The market trend line in the US went haywire in 1995. The February/March 2003 and March 2009 lows represent corrections toward that old line.
The Maestro noted the irrationality of the break out from the trend already in December 1996.
Capitalism Hasn't Failed in America. It Just Hasn't Been Tried For A While.
So says Chris Whalen here, in reply to Roubini:
[D]espite America’s pretensions to being a free market, democratic society, the Marxian world view won the battle for ideas in the 20th Century. The New Deal and Great Society efforts to increase the scope of government in America all stem from the socialist ideas of FDR and his political heirs in both parties.
Which explains, among other things, Paul Krugman.
A Functioning Economy Most Certainly Did NOT Depend on Passing TARP
So says John Carney, here, for CNBC.com, responding to the batshitcrazytalk coming out of the economic ignoramuses of the regime in The New York Times.
Obama and his people are as stupid as George W. Bush ever was, except without the experience. Heh, heh.
Forget GDP: 'Real GPP in 1944 was a quarter below its 1932 nadir.'
So says Martin Hutchinson, here, for The Asia Times.
He thinks the present is a Bond Bubble akin to the Tulip Bubble, and is about to go Pow!
Let's see. A $35 trillion bond market taking a 30 percent haircut wipes out $10.5 trillion vs. a $16 trillion equity market taking a 50 percent haircut wipes out $8 trillion.
Isn't this why cash is so attractive? Especially cash of the Swiss Franc variety backed by relatively enormous gold reserves compared to every other currency?
The Next Stop For The S and P 500?
575.
And that may very well be this secular bear market's final low, though it is more than likely that that level will be retested at least once after we hit it. Say in 2015.
We are in denial about bad debt, which is typical behavior for a drunk. It's the evil flip-side of human adaptability. We can put off the final reckoning seemingly indefinitely, but we'll be drawn and gaunt when we do hit bottom.
If we're lucky no one will mug us before we come to in the alley.
Monday, August 15, 2011
The Forehead Wishes He Had Gov. Rick Perry's Hair
But that's about it. Oh, except for the ambition.
Story here.
He doesn't mention that as nitwits go, this one made the bright choice to become an organizer for the divinity school dropout, Al Gore, before he became a Republican.
Sunday, August 14, 2011
That Didn't Take Long: Pawlenty Quits After Poor Showing Against Bachmann in Iowa
"'I'm announcing on your show that I'm ending my campaign for president,' the former governor said on This Week."
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