Z.1 Flow of Funds: Total Debt Still Growing
By Barry Ritholtz - June 11th, 2009, 5:16PM
The Fed published the Z.1 Flow of Funds at noon.
The key takeaway: Total debt continues to grow, albeit more slowly.
Since Q3 ‘08 households have cut their debt (slightly), but the federal government is borrowing so rapidly, overall debt continues to expand.
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via Rolfe Winkler
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Source:
Flow of Funds Accounts of the United States
Flows and Outstandings First Quarter 2009 Board
Federal Reserve, June 11, 2009
http://www.federalreserve.gov/releases/z1/Current/z1.pdf
June 11th, 2009 at 5:39 pm
Last year debt still grew but not nearly as fast as prior years and look what happened. Debt must continue to grow AT AN INCREASING RATE or the monetary system collapses under its own weight. The back end of a parabola is not like the front end – it doesn’t plateau or slowly fall it crashes. The longer and higher it goes the farther it has to fall on the back end.
June 11th, 2009 at 6:07 pm
We have come along way in thirty years. America feel proud, take a bow. Wonder what that chart will look like thirty years from now? Flatlined, just like us.
June 11th, 2009 at 6:16 pm
But the second derivative is improving…
June 11th, 2009 at 6:28 pm
Anyone know how much faster it is growing than the population of the U.S.?
June 11th, 2009 at 6:31 pm
we suck- weak, flabby- unable to take some punishment for our profligate ways-
stay classy USA
June 11th, 2009 at 6:36 pm
The big banks and consumers lost their ability to borrow so the US and Fed are borrowing on their behalf to provide no-cost funds for the banks to lend and hopefully unemployed borrowers will be able to pay some of their mortgages & loans.
It will get ugly as foreign lenders get skittish and demand higher interest on their increasingly risky lending!
June 11th, 2009 at 6:38 pm
can some one identify the sectors in this chart? some are obvious, but others could mean almost any thing
June 11th, 2009 at 6:38 pm
There there Ahab, it’ll be ok, buck up lil soldier!
That was as much for me as it was for you by the way.
June 11th, 2009 at 6:39 pm
We borrowed an unprecedented amount during WWII. I would argue that what we bought–the survival of freedom and liberty in the world, the idea that humans have rights, the idea that there are no “master” races and “slave” races–was worth the debt load.
We borrowed an unprecedented amount from 2001 to 2009. What did we buy? Peace in the Middle East? Nope. A reliable supply of cheap oil? Nope. The foundations of a sustainable economy? Nope. Freedom from terrorist attacks in the US? Nope. No, what we bought was jet skis, McMansions, and a thin veneer of prosperity for all but the 10% of America that owns 75% of the nation’s wealth.
We’re borrowing an unprecedented amount now. What are we buying? Stability in the banking system. A free market where all compete on the basis of merit–not on the basis of the fact that one child’s parents can afford to send him to college, and another child’s parent’s cannot. We’re buying a future where people aren’t forced to choose between paying for their cancer treatment or paying their credit card bill.
There is no higher return on capital invested than going long America.
June 11th, 2009 at 6:43 pm
Franklin – That’s true, but during WWII we borrowed from ourselves (War Bonds), and loaned money out to the rest of the world. We also came out of the war with a population that had a huge savings as well as pent up demand for goods they’d been starved for during the Depression and WWII. We also had absolutely no competition from the rest of the world and had a massive trade surplus.
I’m not saying that we can’t somehow get our way out of this mess, just that the two era’s are not comparable simply because the numbers are similar.
June 11th, 2009 at 6:46 pm
@f411 Past performance does not necessarily reflect future results.
June 11th, 2009 at 6:48 pm
Debt has doubled in under a decade while wges and salaries have been pretty flat. Major devaluation via hyperinflation coming. Gasoline prices have doubled, not due to damand, simply speculators hedging with commodities expecting inflation – then hyperinflation.
In a few years BB will be testifying that hyperinflation was unimaginable just like Greensputum testified about tyhe bubble crashes being unimaginable.
How about 1/2 the federal budget being borrowed for “unimaginable”?
June 11th, 2009 at 6:53 pm
@ahab–”dude- I am so sick of what this country has become I can’t take it anymore- everyone pinning their hopes on the stupid American’s to continue on with their mindless ways- fucking embarrasing”
Comment on another thread after I left to see Land of The Lost–which sucked. I agree with you, but we are the whore of the global economy being pimped out by our government. The chart above doesn’t lie. We have turned a lot of tricks over the last 30 years and the only ones getting any richer are the pimps of course and the (corporate) syndicate.
June 11th, 2009 at 6:57 pm
Pat – I’m so sorry for this, but I can’t resist. You follow up “I am so sick of what this country has become” with “I left to see Land of The Lost”. Ironic no?
June 11th, 2009 at 6:59 pm
franklin Says-
“We’re borrowing an unprecedented amount now. What are we buying? Stability in the banking system. A free market where all compete on the basis of merit–not on the basis of the fact that one child’s parents can afford to send him to college, and another child’s parent’s cannot. We’re buying a future where people aren’t forced to choose between paying for their cancer treatment or paying their credit card bill.”
franklin- as much as it pains me to respond to any of your posts- I have to reply- that- your comments are the most vapid, superficial nonsense coming from a supposed adult-
please take off your Obama pajamas, put on some big boy clothes, sneak up from parent’s basement and run out the door to the real world
June 11th, 2009 at 7:01 pm
willid3
Click on the chart and it’ll take you to optarm’s website where the legend is shown.
June 11th, 2009 at 7:04 pm
@Thor
It is. I made a reference to that before I left. As to the movie, there were quite a few sexual innuendoes so I wouldn’t take the kids. The Mrs actually wanted to see it. I am more of the Star Wars, Terminator, James Bond type movie goer. More action and special effects, the better. But you have to acquiescence–hallmark of a great relationship.
June 11th, 2009 at 7:05 pm
@f411: I would submit to you that unless radical wholesale changes are made (which they won’t be lest the Dems lose out on campaign contributions) our banking system will be even more unstable going forward than it had been previously. The big banks now have to feel even MORE emboldened to take even bigger outsized risks because they know the feds will come in and bail them out every time to the extent that they are able. That’s clear as day now to them (and most here at TBP). They’re backstopping everything the banks do. Why do you think their stocks have gone parabolic lately? It’s not because investors think they’ve done a good job of running their business. It’s because they know Uncle Stupid will bail them out every time they get in a bind through their own recklessness, greed, and stupidity. How is that “buying banking stability”. Please, I beg you, wake the fuck up.
June 11th, 2009 at 7:07 pm
This chart is quite revealing….doesn’t fit with the green shoots PR offensive though.
http://3.bp.blogspot.com/_pMscxxELHEg/SjEwNKwvjvI/AAAAAAAAFfg/1zKaUhx0I8Y/s1600-h/HouseholdPercentEquityQ12009.jpg
June 11th, 2009 at 7:10 pm
A couple of years ago I was talking about there being too much consumer and business debt and our strategist said that according to his ratios businesses had room for more debt.
He didn’t seem to understand that maybe there were too many businesses!
I’m still expecting a mix of shutdowns, failures and consolidation (after valuations have come down of course).
June 11th, 2009 at 7:13 pm
The Curmudgeon Says:
June 11th, 2009 at 6:16 pm
But the second derivative is improving…
————–
Actually in this case if you don’t want the system to implode you’ve got to have the second derivative increasing!
June 11th, 2009 at 7:14 pm
Onlooker thats not what i was hoping to be defined. ex domestic financial or household other. what do they mean? is domestic financial the US banks?
June 11th, 2009 at 7:15 pm
PatG – You and I have very similar tastes in movies. I’m as frustrated as you are with the way the many Americans have conducted themselves over the last 25 years. Maybe I just have a little more faith in the average guy to change his ways. I know that must seem terribly naive, but we’ve seen massive social change in this country before (the 20’s, the 60’s -70’s, etc) so it’s not totally out of the realm of possibility that people could change once again. I mean look at the reality, I think whether the average Joe wants it or not, he’s going to have to start living within his means.
June 11th, 2009 at 7:17 pm
mannwich Says-
“It’s because they know Uncle Stupid will bail them out every time they get in a bind”
dead hobo didn’t use the ™ sign- so I assume Uncle Stupid is up for grabs- although you have a longer history at this site than I- so maybe it is community property as far as I know-
anyway- excellent analysis- the TBTF banks now have the implicit guarantee that Fannie and Freddie had before it became an explicit guarantee
June 11th, 2009 at 7:23 pm
Simon@ 6:46 pm-
“@f411 Past performance does not necessarily reflect future results.”
i got a big chuckle out of that one
debt is ~350% of GDP headed to 450% next year – can you say Banana Republic of America (and that is not a pun on debt-based retail spending)
June 11th, 2009 at 7:23 pm
There is still room left before the debt hits the uppermost line in the chart. And if this isn’t sufficient we just add another line above it. So, what’s the problem?
rc
June 11th, 2009 at 7:28 pm
@ahab: I assumed hobo wouldn’t mind if I borrowed it.
June 11th, 2009 at 7:28 pm
dumb question time. why are pointing at the government debt levels when the chart shows that isn’t the biggest debt. that would be the private sector by a big margin. and how do we shrink that and not kill the economy at the same time?
June 11th, 2009 at 7:30 pm
rootless@7:23 –
just a matter of scale, huh?
kinda like you can’t afford a house if the mortgage is more than a certain % of your income
lever up baby, just make the cash flow, until it doesn’t – turn on the printin’ press and run it overtime
June 11th, 2009 at 7:34 pm
pat g-
i’m w/ you brother- everyone is waiting for Americans to get back to what American’s do best- buy stuff from other countries- preferably at Walmart- where it’s cheap- makes one proud to be an American-
consuming like locusts the world’s goods- because that very next purchase- may just be- what makes you complete-
only then can we sit in the lotus position
June 11th, 2009 at 7:36 pm
@Wes:
Correction…Total debt from the above chart, divided by GDP is now 375%, not 350%. GDP shrank this qtr, so the fact that debt grew anyway is truly amazing. Now we need more and more debt just to have GDP shrink. Great job!
June 11th, 2009 at 7:38 pm
I’d be interested to see this chart re-done to show per capita debt levels instead of absolute debt levels.
June 11th, 2009 at 7:40 pm
Ahab – yeah, but unfortunately we’ve exported that consumer culture to the rest of the world. Have you traveled abroad much? If you think we’re conspicuous with our wealth, man oh man!
I think it could be noted that Americans spend the way we do because we can. Doesn’t mean that we’re any different than anyone else, I think if you gave an almost unlimited source of cheap money to any culture they’d be just as bad as we’ve become.
June 11th, 2009 at 7:42 pm
jswap:
I like to divide by GDP.
Another thing about this chart…it looks like it is leveling off, but note that the 2009 column is only through 1Q…all other years are full years. By the end of 2009, it will look like debt is zooming right along…unless the inevitable deleveraging starts.
June 11th, 2009 at 7:50 pm
thor Says-
“Have you traveled abroad much?”
don’t know where to start exactly- but i’ll just start throwing out some countries-
singapore, korea, phillipines, china,mongolia,hong kong, macua, ireland, netherlands, germany, czech republic, poland, hungary, slovenia, italy, mexico, costa rica- but-
I am certain I forgot many-
why do you ask?
June 11th, 2009 at 7:56 pm
Ahab – I’m jealous, I’ve been to a lot of the same countries but you have a few in there still on my list. I ask because one of the thing that strikes me when I travel is how people with money show it in other countries. We’re fairly flashy with it here in the US but in some places I’ve been (Turkey, Morocco, Russia) it goes almost beyond flashy.
Point I was trying to make, or rather didn’t do a very good job of making, is that although I’m horrified at the way the average American spends money these days, I think that has much more to do with the availability of easy money (credit cards, car loans, home equity) than it does with any failings in our society. I would make the argument that if you went to say, Thailand, or Argentina, and made debt just as easy to get as it is here, you would see the same level of conspicuous consumption. . . . just a thought.
June 11th, 2009 at 8:03 pm
*sigh* What is wrong with the New media in this country today? Do we really just want fluff?
BBCNews has on their front page ”
World Bank sees even worse slump
CNN?
Chastity Bono changing gender, spokesman says
June 11th, 2009 at 8:03 pm
Quick read for this evening: http://www.financialsense.com/fsu/editorials/willie/2009/0611.html
re: “Bond Volatility & Interest Rate Swaps”
June 11th, 2009 at 8:05 pm
thor-
good points-
how was Turkey? I have always wanted to go- Istanbul? I would think that would be an incredible city to see- much history from divergent cultures-
and of course Russia- almost considered taking the trans-siberian out of Ulaanbaatar- tried to get a visa-but did not trust that i would get my passport back (they had to send my passport to Russia- and then I would have to wait- in- Ulaanbaater for the return). Still should have done it though.
June 11th, 2009 at 8:08 pm
SB@7:36 –
i standed corrected
i guess i got the time scale wrong when i computed the “second” derivitive
he, he, he….
June 11th, 2009 at 8:11 pm
Franklin, I hardly know where to begin, but I’ll try. You have no earthly idea from where national wealth springs. I’ll tell you: it’s foreign territory, but it’s this abstract thing called The Private Sector. And most of BOB’s policies, as impressively ambitous as they’ve been, are geared to frustrate and impede The Private Sector with increased taxes, regulation, and assorted frictional costs. It is The Private Sector that is the engine of national income, and GDP growth. And we won’t have as much of either due to statist policies. No amount of your casuistry or politicized rhetoric will change those facts. You’re a clever enough guy, with high enough SATs and GREs, not to be silenced, and I don’t want to try. I just hope (for you) that Baringo doesn’t start charging admission here.
June 11th, 2009 at 8:13 pm
ahab and thor-
no scandanavian countries, thor?
no israel, ahab?
are you guys just makin’ up names here?
June 11th, 2009 at 8:17 pm
…it is so funny that F411 gets under so many peoples skin here…really funny, sorry cv – FUNNY
someone said he is BR’s alter ego
but, i don’t believe that for one minute…can anybody really be anybody?
June 11th, 2009 at 8:22 pm
Wes-
ahab is a fine biblical name- however does not mean I’m Jewish- and – just because my daughter’s name is Anna- does not mean that she is an heir to the Russian thrown-
I’m Bohemian actually- and when I was in Prague everyone kept saying- your Czech (because of my last name)- and I said- well- i guess so- but- i’m from the United States
June 11th, 2009 at 8:43 pm
ahab@8:22 –
thanks for your thoughtful comment
i was just kidin’ around, you know me (ish, sal, tibbs…)
but, thor on the other hand, come on, tell us some more
June 11th, 2009 at 8:48 pm
oh, and ahab –
congrats on you daughter, that is really nice, seriously
hmmm, what a minute, my oldest son dated a girl named anna – she was of russian descent – are you from H-town?
that was in high school, and she was pretty hot – i only have boys, so i am pretty insensitive to dads w/girls – he, he, he – just funnin’
June 11th, 2009 at 8:53 pm
[...] a chart of the economy’s flow of funds, from Option ARMageddon: (This chart was also stolen here and [...]
June 11th, 2009 at 9:11 pm
well Wes- she is only 11- but have some boys myself- 15 & 18- so can relate
June 11th, 2009 at 9:20 pm
ahab,
now you are someone
name is an irrelevant handle
luv ya’ man
June 11th, 2009 at 9:21 pm
scm0330:
I’m calling bullshit on your entire statement. You conveniently overlook the fact that we have national debt not national wealth. Some people in our nation have wealth, but the wealth itself ain’t national.
National wealth comes from the military defeat of weaker peoples, the assimilation of the survivors, and the theft of what were once “their” resources. It’s been that way since the dawn of time, and it’s the way it is now. Name an historical world power (Greece, Rome, Persia, Japan, the Ottomans, any of the Mongol Hordes — any rich country), and you will find weaker peoples put to the sword and their cultures absorbed. In the case of the US, British expansion trumped French and Spanish expansion, and, in the end, the British won out (until an empowered America disenfranchised them, adopted the concept of “Manifest Destiny” in order to justify their misdeeds, and went about subjugating the natives and their lands. Why do you think we’re in Iraq? High principles? You actually buy that shit?
You’d be informed by reading this:
http://www.lexrex.com/enlightened/articles/warisaracket.htm
The “private sector” wouldn’t develop jack shit without the government strong man at it’s side.
On the other side of that relationship are taxes and regulations. For the past 30 years, “the private sector” (and by that, I assume you mean “business interests”) has not pulled its own weight. Those who hold the “national wealth” are taxed less than at any point in our history, and society suffers for it. If not for regulations, we’d be knee deep in pollution, and ignorant, uneducated, unhealthy people. You, personally, would more than likely not have what you do. Your children would be put to had labor before they reached their teens. Do you really believe that the income gap between the wealthiest 1% and the bottom 99% is exists because the generators of our “national wealth” are overtaxed and over regulated?
The “private sector” (once again, business interests) is the primary beneficiary of “statist policies”, and they would be overrun and relieved of their wealth in a heartbeat without them.
June 11th, 2009 at 9:25 pm
Ahab – Turkey was amazing, Istanbul is my favorite city in the world- YOU HAVE TO GO!! – more history there than just about any place on earth and the Ottomans/Turks were very good about keeping the old stuff around. The Turks are also among the friendliest people I’ve met abroad. Russia? Not so much, probably one of my least favorite places. Went to St Petersburg which is beautiful, especially for White Nights. For me two things make a country, the people, and the landscapes. The Russian people are not very warm or friendly and they most definitely do not like Americans. Area around St. Petersburg was pretty featureless as well.
Wes – no, no Scandinavian countries yet, although I was somewhat close in St. Petes, also went to Latvia and Lithuania if that counts – Riga and Vilnius are beautiful cities, I went in 2006 so pretty much at the height of their boom, I often wonder what it’s like there now, especially Latvia, when I was there it seemed as though the entire country was one giant construction site.
June 11th, 2009 at 9:28 pm
Also – If you’re at all into ancient Greek history all the best Greek ruins are in Turkey – Ephesus is out of this world!
June 11th, 2009 at 9:28 pm
MA,
wow, you always have seemed so calm and rational, not like your typical F411 replier
i could not even find a comment by scm0330:
time stamp please, headline stamp, reference/footnote
June 11th, 2009 at 9:30 pm
@Wes at 8:17 pm can anybody really be anybody?
A lot of decent stuff written on social tools. See, e.g., Here Comes Everybody by Clay Shirky.
The title is an allusion to James Joyce’s Finnegan’s Wake, which plays with pan-psychic notions of everyone being connected and being everyone else all at once.
June 11th, 2009 at 9:31 pm
Ah, to answer your other question Wes – Thor is the name of one of my dogs. My name is John, one of my ancestors was from Norway though, does that count?
June 11th, 2009 at 9:32 pm
Thor –
norway is “god’s” country…… sweden is sweet as well…….
absolutely beautiful
the people have a very dry sense of humor
June 11th, 2009 at 9:34 pm
Thor@9:32 –
absolutely
mine is gabby
and she barks alot
June 11th, 2009 at 9:41 pm
Wes – yes, Scandinavia is definitely on my list. My favorite place in the world is New Zealand for it’s landscapes and I’ve been told Scandinavia is very similar. I have a couple of acquaintances in Helsinki and Stockholm so I’m long overdue for the trip. This year is Guatemala and Beliz for the Mayan ruins.
On a side note – and actually on topic for a change. All is not total shit in California, at least in LA County. I came home from work tonight and got a letter from the county saying that they have assessed the value of my home down a 100K for tax purposes. Yeah yeah, I know I should be depressed that even the county thinks my house has lost that much value (which means it’s probably lost twice that!) but hey, my property taxes just went down by about 20%!
June 11th, 2009 at 9:43 pm
TZ @9:30 –
it seems like a lot of the comments here are from people from a liberal arts background
i have heard that lawyers and traders often times have that background
i am an engineer, so i am trying to catch up
June 11th, 2009 at 9:44 pm
Marcus-
you crushed- well said
Thor-
Istanbul is definitely on my list- sounds like I imagined- thanks- Buenos Aires is another city i would like to check out-
the world’s a big place and the hardest decision is deciding where to go
June 11th, 2009 at 9:49 pm
folks –
i am off to rio de janeiro on saturday evening
i promised to report out on my perception of the economic condition there
judging by the price of my hotel room….hmm…..higher than last year, not less.
June 11th, 2009 at 9:54 pm
@Thor, et al,
Don’t let him fool you…”Call me Ahab” is a clever twist on the opening line to Moby Dick. Ahab is a trader, just like Captain Ahab would have been in a later age. His (our Ahab’s) White Whale is the truths that can be found through careful observation of behavior in markets and elsewhere.
“Call me Ishmael” would have left everyone wondering why? Who the hell wants to be Ishmael?
June 11th, 2009 at 9:56 pm
Wes – That would be very cool. I was in Morocco in November, pretty grim place but not sue if that’s the way the country always is or if it’s because of the times. Every time we said we were American people would chant OBAMA! Say what you will about what kind of President he’s been in the last three months, this man is absolutely adored abroad, pretty much universally at this point. We’ll see whether that lasts. Also stopped in London for a couple of days on our way back, this was in mid December so Christmas season, everywhere we went was busy, people in all the stores, tourists everywhere (the pound is CHEAP). From the surface – in London you’d never know we were in a recession.
June 11th, 2009 at 9:58 pm
curmudgeon-
keep the myth alive
June 11th, 2009 at 10:01 pm
Ahab – hah, I’m you’re pre travel consultant
I went to Buenos Aires two years ago. Beautiful city but I wouldn’t spend more than a couple of days there. Portenos all say that BA is a very “European” city, which in a way it is, but if you’ve been to Europe, and latin America, it looks like a cross between the two. Mexico City is a much more beautiful and grand city. Plus portenos are pretty stuck up. It was interesting at the time though – November 07, another city that was all construction, you could tell there was a lot of money coming into the city. Think that’s all gone now. Still talk to the friends I made there, they say it’s bad there, but it sounds like it’s about like here, some people are feeling it, others aren’t.
See the rest of Argentina though, way up on the top of my list. Spent my time in Patagonia, absolutely breathtaking – from towns that look like they were taken right out of the swiss alps (complete with blond, blue eyed people) to one of the biggest glaciers in the world. Food like you cannot believe (I hope you like steak!) and cheap! Yes, definitely go to Argentina!
June 11th, 2009 at 10:03 pm
@Wes: Nah, stick with the engineering. Liberal arts is mostly bullshit anyway.
June 11th, 2009 at 10:06 pm
And by the way, I’m just the future F411. Two kids (12 &15) older one’s a boy, younger is a girl.
I quit believing in fairy tales about the time I was laying on a sand berm on the Iraq border w/ Saudi Arabia and watched in the distance as B-52’s rained hell on a bunch of people that never did anything to me or mine, all because some jackasses in the Pentagon wanted to play with a bunch of toys they never got to use against the Soviets, and they had a compliant President that felt he didn’t exist unless he was engaged in some international conflict or another. Clinton is the only President we’ve had since the Berlin Wall fell that wasn’t a war monger. He got his kicks in other ways.
I’m pretty much with MA all the way on his assessment of the military. And watch out guys. When the economy crashes again, they’ll find a war to divert our attention. Just wait. The people that run this country, Dems, Republicans, businessmen, everyone, could not give a good god damn about anything but themselves. If staying in power means a few dead troops and thousands of dead foreigners, don’t think for a minute that they’d balk at the price.
June 11th, 2009 at 10:14 pm
Curmudgeon – spot on man! Thanks for the personal bits too, it fleshes your posts out quite a bit. You’re right about being the future F411, funny how just aging and experiencing life makes you change the way you think about things – the reason I travel as much as I do. Agree with all your posts. Whatever your political persuasion, I think we can all admit that the whole Clinton blow job scandal was pretty f***ing tame compared to what we’ve gone through and are living through now.
I totally agree with you about a war, who knows whether or not they’ll inflate our way out of this mess or not, but if they don’t, you can absolutely count on there being a war. Right again about politicians, they couldn’t care less about us, not one bit. It’s about power and nothing else, the lot of them. One of my favorite quotes – It’s not that power corrupts, it’s the power attracts the corruptible.
June 11th, 2009 at 10:16 pm
curmudgeon-
clinton- i miss those years
thor-
San Carlos de Bariloche? I have been wanting to make it- any ideas- you said you were in Patagonia-been wanting to go ever since i read Chatwin 20 years ago
June 11th, 2009 at 10:19 pm
Curmudgeon @10:06 –
you are younger than i would have thought
maybe i am just older than i would have thought
thanks, luv ya’ man – i am afraid they will – but, maybe not, it is still possible
June 11th, 2009 at 10:20 pm
Ahab – yes, went to Bariloche, that’s the alpine town, St. Bernards and all. Also went to El Califate – Fox Glacier – a must see, the FACE of the glacier is 5 miles wide and you can take a hike right out onto it. Also went to Tierra Del Fuego – you can skip Teirra, I’d go to Mendoza, didn’t make it on that trip but it’s their wine country and I hear it’s beautiful. There’s also the northern part of the country – Iguazu Falls, I heard that looks a lot like Brazil so I skipped it and figured I go to Brazil one day.
June 11th, 2009 at 10:23 pm
it is not about money
it is about power
bien sur – cv, wherever you are
June 11th, 2009 at 10:23 pm
Hah, got me thinking about the Clinton thing. Wish I could have whispered into our ears “um, hey, enough with this shit, we don’t have time for this, we’ve got two wars and an economic collapse to get ready for. Come on, CHOP CHOP!
June 11th, 2009 at 10:27 pm
TZ@10:03 -
a bit late to make a change
just tryin’ to braoden the perspective
luv ya’ man, too
June 11th, 2009 at 10:29 pm
thor-
thanks- sounds like Bariloche was worthy of being on my list-
life’s a one way ticket- have to check shit out while you can-
peace bother
June 11th, 2009 at 10:31 pm
Same here Wes. No finance or economics background here, I’m a Network Admin. Just here because I think these are very important times and it’s very important to get as much information, from as many different sources, on as many sides of the issues as I can. The country may or may not be on it’s way to some dark times, but I want to be as prepared for what could happen as I can be.
June 11th, 2009 at 10:41 pm
Thor @10:31 –
i keep thinking i am taling to a norwegian
ok, name does not equal person
it is good to be prepared – multiple outcomes are possible – nobody knows the answer – not even here
June 11th, 2009 at 10:51 pm
Wes – Yeah, that’s just it, so many people THINK they know the answer. And people are so passionate about it as well. So many people want to be right and are disdainful (to put it mildly) of people of opposing views. Take Deflation vs Hyper Inflation. People are so adamant about which is going to happen, such a debate. Meanwhile, I’m sitting here, thinking to myself “has anyone noticed that NO ONE is talking about prices staying the same or stable?” We’re equally screwed whichever it is.
Anyhow, sorry I’m all of a sudden taking up so much room on all these threads. I’ve been lurking around the blogs for months and this is the first one I’ve found where I see some really serious discussions going on and not too much mindless personal insults. You guys are great.
June 11th, 2009 at 10:54 pm
The bashing of Franklin411 is getting a little old. Can people disagree without insulting him?
The guy’s not saying we don’t have a rough road ahead. He’s saying it’s better than heading off a cliff.
June 11th, 2009 at 10:55 pm
Concerning the behavior of politicians, CEO’s and other criminal elements, Thomas Gleason nails it:
“Who’s Running America?
Criminologists will tell you that 6% of the population is afflicted with a severe psychological problem called anti-social personality disorder. The worst cases are true sociopaths and near 100% of these people end up
in prison. You can’t reform them because it’s genetic – mom and dad are not to blame. Milder cases may go into politics or do very well in large business organizations where their egomania and pursuit of self interest without
regard to others is rewarded. A sociopath can lie and never feel regret – they’re incapable of caring about the emotional pain in those they injure. When I was doing fraud investigations, I’d see this ego driven certainty and deeply rooted dishonesty in some senior executives. When you mix egomania with intelligence you get guys like our recent past presidents.
This little factoid is important and no laughing matter as we look at what the politicians will do as the financial crisis expands.”
The full read is at http://www.gleasonreport.com/emails/2009-02-tgr.pdf
June 11th, 2009 at 10:55 pm
@ahab, @thor I went snowboarding in Bariloche 2 summers ago (winter there). Loved the slopes and powder. They call Bariloche and Las Lenas the Colorado of S.America.
If you go to Rio, don’t stay in Copa. I much prefer “less-touristy” Ipanema or Le Blon. It’s beautiful this time of the year.
June 11th, 2009 at 10:56 pm
i just happened to check another tbp thread
i found that there was a bunch of goldbugs there, it turns out that they are the usual people on this thread, i think, the usual names…the usual suspects, ok you
what’s up with that? goldbugs on the tbp? no way – ok, i get it – anybody is anybody and nobody is nobody and any name is any name – i’m freakin’ out here, please hep me, please!
June 11th, 2009 at 10:57 pm
Marcus Aurelius . see it your way too .. except I think this currency float and slow information streaming required those ways for peoples thru centuries … weapons of mass destruction should be the scare deterrent (exempting the population boom / resources angle)
international travel was Army supplied for me .. Hawaii Japan Korea and midwest USA origin providing my socialist years … I’ve work as a volunteer providing my commune ‘ist times … I run a small business and raised in a small business home providing my capitalism years … and worked in a union too / that is about as close as I came to the fasc ‘ism world
June 11th, 2009 at 11:02 pm
thor @10:51-
express thyself
very un-Norwegian, btw….
but good to do
June 11th, 2009 at 11:04 pm
Wes, the gold bugs come out of the woodwork during times like these, but hey, they have done a lot better than SPX bugs over the last 9 years.
June 11th, 2009 at 11:04 pm
wunsacon -
if a interpreting your handle corectly?
once a con?
ok – i agree, give the kid a break…
June 11th, 2009 at 11:08 pm
oh shit, manhattanguy,
i missed your post,
yeah i learned 20 years ago about the copa
i dig ipanema and leblon – Caesar Park is my place – sweet
June 11th, 2009 at 11:13 pm
Stillaway@11:04 –
Au has done quite well over the last few years
the lower commodities should folllow suit
ags, etc..
June 11th, 2009 at 11:14 pm
Steve Barry,
I take your view very seriously. But, as the market defies gravity, I wonder whether the markets *can* “grow to the sky” so long as the government keeps providing money to the private sector. Every bailout takes crap out of the private sector and injects new cash in. As I said a couple of weeks ago, maybe the turn comes when the bailouts cease (or slow down). (Or, for example, for some banks to repay the Fed, do they have to sell off some holdings?)
It feels like 2007 again. Don’t it? What will force the next round of deleveraging?
Eh…we keep covering the same subjects…crying “bull”…waiting for a leg down that’s *supposed* to come…and hopefully arrives before the puts lose too much time value…
June 11th, 2009 at 11:19 pm
….short squeeeeeeze, no?
June 11th, 2009 at 11:21 pm
stillaway-
great link- thanks- well laid out- appears to buy into the inflation play due to fiat money-
does appear this country has not much room to maneuver
June 11th, 2009 at 11:26 pm
Hi Wes,
Yes, I was “once a conservative”. Now, I’m some kind of mutt…probably somewhat of a lefty by the standards of most people reading this blog.
Like CNBC Sucks, I’m still a registered Republican.
June 11th, 2009 at 11:28 pm
Gold bugs? Who, how ironic that you say that because I just bought my first two gold coins. I figure what the hay, it’s not like they’re be worthless anytime soon. Plus they’re purdy.
June 11th, 2009 at 11:35 pm
Still Away, Totally agree. I think I mentioned I’m in IT, when I was earlier on in my career I was a help desk guy at a large ad agency. I had to interact with everyone, all the way up to our office president through the corporate parent executives when they would come to SF for a conference. These people were sharks, you really do have to claw your way up that ladder, I don’t know if it’s the process of getting into these senior positions, or just the type of people who go out for them in the first place, but for the most part they were pretty much all power hungry, shitty, back stabbing people.
Now I work for a privately owned, decent sized infomercial company. We’re doing very well right now, infomercials are counter cyclical, the more people sit at home and watch TV the more people buy our crap. We specialize in exercise videos so you throw in the overweight, unemployed crowd in and business is booming. Anyhow, I see the two guys who own the company daily – they talk the talk of “bettering people’s lives” and “doing out part for the health of America” but all you see when you look into their eyes are dollar signs.
What you say is very sad, but also very true I think.
June 11th, 2009 at 11:40 pm
wuns –
it doesn’t really matter
black and white
or gray
June 11th, 2009 at 11:42 pm
Ahab-
If I recall I may have picked on Gleason via a post here. I’ve been reading his archives and he’s been right on, plus he’s style sometimes reminds of Mark Twain. The line from the paragraph I posted, “Milder cases may go into politics or do very well in large business organizations” first appears sarcastic but then you realize its true.
I’d like to see him interviewed by the MSM. Hah, that’ll never happen. Maybe on PBS at 2am.
June 11th, 2009 at 11:56 pm
Thor,
It’s a behavior pattern that explains how a group of executives can close factories in the US and move them to Mexico, China or Slavistan. It’s sour grapes for me. I live in a rust belt city that has lost tens of thousands of jobs via plant closings since 1990. Perot was right about the giant sucking sound that would be heard with the passage of NAFTA.
June 12th, 2009 at 12:01 am
Still – Yes it is frightening. It’s as if all of these players, business and politics are just playing out some global pissing contest and we’re stuck in the middle.
June 12th, 2009 at 12:50 am
“There is no higher return on capital invested than going long America” (franklin411 @ 6:39).
This guy Franklin must be working for Kudlow.
(Personally, I’d rather invest in China or South Korea over the next 20 years).
June 12th, 2009 at 1:36 am
I’m worried that investing in China at this point is like investing in 1870’s America. Someone will be making lots of money, but it probably won’t be you. The game seems to be rigged.
June 12th, 2009 at 2:02 am
@DL: I agree. And am putting my money where my mouth is on my long term plays on emerging markets over the U.S.
June 12th, 2009 at 2:06 am
@Curmudgeon (10:06 p.m.): So true. So true indeed. Best post I’ve read in a long time.
June 12th, 2009 at 6:06 am
before I attempt a catch up . a request for the webmaster .. I posted a flagged post last night that is now here in the open
I am wondering if I need to read the entire thread to get the big picture of comments
I would request that flagged comments get posted at the actual time the flagged becomes unflagged .. not with the original thread time stamp .. further there is so much that the robots can’t get . so why bother . (within reason) . (always) . imo
June 12th, 2009 at 6:26 am
Marcus @9:21
Are we an empire? Yes. Have business interests colluded with governmental power over time to foster this empire? Yes. Is wealth unequally distributed in this country? Yes. Is there a great crime behind every great fortune? Yes, usually. Do we need regulators in and of the economy? Yes. Satisfied?
I was putting across the point that jobs come from the private sector. From nowhere else are jobs sustainable long-term. BOB’s policies may be designed for other goals (increased public welfare, wealth redistribution) but they will stifle job and income growth. We will settle for a smaller pie, economically. Some folks may be content that their slice is larger, and larger relative to others. But the pie will be smaller. Perhaps much smaller.
Is this all BOBs fault? Of course not. It is mostly, in fact, the fault of the One Party, Two-Branch legislature that has made payment promises we can hardly keep, with benefits today and a cost in the future.
June 12th, 2009 at 6:52 am
hit thread bottom .. maybe a system lockup last night around 10:3/4 .. lots of 11pm posts
all my gold is in electronics (I hear) .. and stuff like the Norman Rockwell’s plate series “Four Seasons” r1972 looking at the back of “Spring – Beguiling Buttercup” is pretty to look at too … got it at auction a few years back .. haven’t researched the RoI for me or the for the estate .. don’t really care
… money is crappy toilet paper .. its what you turn it into the makes the world pretty (or not)
June 12th, 2009 at 7:20 am
http://www.bloomberg.com/apps/news?pid=20601087&sid=aolTh5ZZYoSY
Europe Industrial Production Declines by Record 21.6%
“Production in the euro region plunged 21.6 percent from a year earlier, the most since the data series started in 1986, the European Union’s statistics office in Luxembourg said today. Economists expected a 19.8 percent decline, according to the median of 14 estimates in a Bloomberg News survey. From March, output declined 1.9 percent.
The global economy will contract for the first time since World War II this year as the fallout from the financial crisis leads companies to scale back production and run down stocks, the World Bank predicts. The European Central Bank this month kept its benchmark interest rate at a record-low 1 percent and will soon buy bonds in a bid to improve the flow of credit.”
1/2 day on Fridays!……Weekend!
June 12th, 2009 at 8:53 am
and another thought on this broad based thread ..
there are alot of people that have been educated the world over … a change is possible / reasonable
June 12th, 2009 at 8:58 am
DIY stress test
http://rortybomb.wordpress.com/2009/06/12/diy-stress-test-3-a-new-fed-stress-test-and-size-versus-losses/
June 12th, 2009 at 10:47 am
@F411 6:39pm
“We’re buying a future where people aren’t forced to choose between paying for their cancer treatment or paying their credit card bill.”
I guess I’m left wondering how far out such a future might emerge — 50 years? 100 years?
Or do you mean they aren’t forced to choose because they can’t pay either one?