Comments on: Positive GDP Can Occur Mid-Recession

By: Bruce N Tennessee

Bruce N Tennessee — Thu, 13 Aug 2009 20:21:23 +0000

But the debt service from 2010 if 4% is anywhere near correct will still be about 600 billion…closing in on the total amount of the bailout congress passed. This is my main point, and should be cause for alarm, since no one in Washington is making any kind of noise about paying any of the generational albatross down…much less social security or medicare.

Fiscal restraint has left the building…

By: Bruce N Tennessee

Bruce N Tennessee — Thu, 13 Aug 2009 20:10:03 +0000

Let us hope we are not moving from linear to exponential…

By: Bruce N Tennessee

Bruce N Tennessee — Thu, 13 Aug 2009 20:08:24 +0000

Uh, Napster….you are correct. The debt service is only increasing about 18% per year…still nothing to worry about…let’s have a beer!

By: napster

napster — Thu, 13 Aug 2009 19:21:42 +0000

@Bruce: you did your percentage increase on the debt servicing costs INCORRECTLY.

If you start with 220 billion in 2000 and go to 600 billion in 2010, the math is 600-220 divided by 220, or 1.72.

That is an increase of 172% over a decade, or 17.2% per year. Not 27.5%. You incorrectly divided 600 by 220 and got 2.75. This is called a growth factor. If you subtract one from the growth factor you get the percentage increase, which is 175% not 275%.

If you start with 100 and go to 200, that is an increase of 100 or 100%, but if you divide 200 by 100 you get 2. You see what I mean.

The correct figure is 17.5% per year increase in debt serviceing if we assume the projection is linear, not exponential. I’ll assume you know what I mean.

By: franklin420d

franklin420d — Thu, 13 Aug 2009 18:42:27 +0000

@LB,
I have learned a lot over the past couple months, but that is a mear spoonful out of the great alphabet soup bowl of information in front of us.

As I see it the most improtant thing I learned so fa is; All any of us has are the numbers and letters in our bowl of soup, some have more (Most of you guys) some less (me). In the end all anyone can do is pull out their spoon and try and put together as many words as they can. Some are good at in some not so much.

You have been finding words and meanings in the soap, longer then I have, there for I want to watch and learn, basically I want a bigger bowl of soap.

I know you don’t know the whole story as that story is still hidding within your bowl, but I sincerly apprciate you letting me know what words you are reading.

And with my currently limited resource, I hope to add to my bowl of alphabet soap.

Thank you for sharing.

By: leftback

leftback — Thu, 13 Aug 2009 18:10:46 +0000

@f420d: You already had a sneak peek at it last autumn. An echo of last year’s crash is one of many fall scenarios.

IF you think we are going to see the sequel, then what worked last year will work again. Treasury bonds gained in value, all the way from the 2-yr to the 10-yr. Cash is fine, and judicious use of one’s favorite shorting vehicles would allow one to employ added risk/reward plays. This time around IG corporate bonds should be OK but not HY.

But don’t listen to LB. Ask someone who called the Generational Bottom in March, like Doug Kass, for example…

By: franklin420d

franklin420d — Thu, 13 Aug 2009 18:07:11 +0000

Damn price of addmition is too high, I think I will sit out act II.
I’ll stay home eating popcorn and watching Die Hard III instead.

By: ben22

ben22 — Thu, 13 Aug 2009 17:52:39 +0000

franklin,

you already bought your ticket when you helped pay for GM/AIG, etc.

By: Thursday links: financial fans Abnormal Returns

Thursday links: financial fans Abnormal Returns — Thu, 13 Aug 2009 17:31:38 +0000

[...] It is not unusual to see a positive quarter of GDP growth in a recession. (Big Picture) [...]

By: franklin420d

franklin420d — Thu, 13 Aug 2009 17:09:46 +0000

@LB where can I get tickets for “: DELEVERAGING II: THE SEQUEL.” and is it possible to have a sneak peek at it so I know better how to protect the little I have?