Obviously wise words:

The US may be on the verge of making among the biggest and least- necessary financial mistakes in world history.

-Martin Wolf, FT.com

Will they be ignored . . . ?

Category: Credit, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

22 Responses to “QOTD: US Financial Mistakes”

  1. dead hobo says:

    BR observed:
    ——————————-
    Obviously wise words:

    The US may be on the verge of making among the biggest and least- necessary financial mistakes in world history.

    -Martin Wolf, FT.com

    reply:
    ————–
    Would you prefer they make the most necessary mistakes only and ignore the least necessary ones? I’m assuming as a given that only the biggest mistakes rate analysis here. Nobody cares about small and necessary mistakes, do they? He sees mistake. I see perhaps a little stupidity … or maybe a lot of stupidity. I stopped caring since it does no good.

  2. DeDude says:

    The problem is that we have stacked legislative bodies with clowns like Bachmann who are too lazy and dumb to edumacate themselves on the critical issues. Yet they will rather just pull an opinion out of their own dumb asses than listen to people who have taken the time and intellectual effort to figure things out. Mixed in we have so called “think tanks” that as standard procedure start with the conclusion and imaginatively “think” their way back to some kind of support for it – in the process mutilating any and all inconvenient facts or dropping them into the septic tank. It is actually telling that not even the most rotten smelling of these “think tanks” have come out in support of the tea party moron’s idea that we can just go cold turkey on the debt sealing without anything bad happening. Maybe we really do need to have IOU’s send out to Social Security recipients next month to wake the electorate up to what morons they have voted to represent them in Washington. Maybe they actually are right that the only way to save the baby is to hack it into two pieces and start praying that somebody someday will be able to glue those pieces back again.

  3. bobk says:

    Repo all those medicare scooters we saw on our teevees last summer. Aahh schadenfreude.

    Note that it took McConnell less than an hour to swoop in after Obama mentioned the checks. To be sure, the Very Important People missed the coincidence completely.

  4. Transor Z says:

    The biggest one, of course, being never fight a land war in Asia.

  5. Julia Chestnut says:

    Oh Transor, you blew it! “Never get involved in a land war in Asia.”

    Unforced errors hurt. Worse, at the risk of repeating the obvious, what is being shown up is the really ugly risk of this economy at present: political risk. Too many interesting things going on for comfort.

  6. RW says:

    Calculated Risk cites a Stan Collender interview and admits that while he remains confident a deal will be reached he is beginning to worry.

    Collender reflects on a meeting he had with some Representatives and says WRT the debt ceiling, “They did not want a negotiation there. There was a religious-like fervor on that point: Voting for the debt ceiling was a sin, and you can’t just sin a little.”

    Debt ceiling quarrels have traditionally been a mix of Kabuki theater and Aesop’s Fable but it is becoming clear a significant number of Tea Party affected congress critters want to change the script to a much stronger climax with a considerably less equivocal (from their standpoint) moral message.

    Outcomes here all look poor although some are certainly much worse than others; e.g., negotiations could fail entirely leading to default, or take too long leading to debt downgrades, or partially succeed resulting in weak compromises (too much cutting and/or too little revenue), …reminds me of my old football coach’s admonition WRT the forward pass which went something like, “there are five things that can happen and four of them are bad.”

  7. AHodge says:

    BOBK
    i think following R shock and panic
    mcConnell swooped in shortly after O said no short term (3 mo or less) deal.
    “see your stupid and raise you two stupids” to quote Dylan R
    but might as well settle now– we also have the detail 1012 budget shortly for the house

    theoreticallyas to what O doesnt spend on
    ( i dont recommend budget balancing starting august )
    how bout R congress staff salaries
    or social security/ medicare for folks with over 200k of other income?
    i think he can not spend on pretty much what ever he wants
    though there some 14 amendment legal argument argument for treaury interest?
    how bout not sending fannie freddie $80 100 billion every year?

    dont pay out transfers that arent going to be spent,
    thats the best least damaging cutback for the economy economically speaking

  8. DeDude says:

    Completely absurd that someone would think that the difference between a projected national debt (10 years from now) of $18 trillion vs. $22 trillion is worth the risk that markets would lose confidence in our ability or willingness to pay that debt back. If the loss of trust in treasuries were to increase rates by just 100 bp, the cost (on 20 trillion in debt) would be $200 billion/year and wipe out whatever they had “saved” us. And the experience from Europe suggests that when markets lose confidence, it is going to cost a lot more than 100 bp. The only reason we have not yet been shunned is that European feet smell worse, but that could change in a flash.

  9. Transor Z says:

    @Julia:

    D’oh!

  10. BuffaloBob says:

    Come on people. Can’t you see the fix is in. This “crisis” is being generated to further screw the middle class; this time out of the future value of their retirement cash flows. Its just another chapter in Disaster Capitalism (great book).

    Just as the last financial crisis was used to transfer wealth (middle class home equity and retirement savings) to the financial elite, their political poop boys are generating this debt ceiling farce to go after the next largest middle class asset.

    Its not just the Repugs, Obama is a full participant in this charade.

  11. Irwin Fletcher says:

    DeDude,

    Regarding your personal insults of Congresswoman Bachmann, referring to her as a clown, lazy and dumb;
    do you have any facts or data to support this? Dumb? Lazy? What happened to respectful argument of different ideas?

  12. BigD173 says:

    The US may be on the verge of making among the biggest and least- necessary financial mistakes in world history.

    Does this refer to the possibility of a failure to raise the debt ceiling? Or to the possibility of QE3? I’m not sure which would be worse.

  13. DMR says:

    @BigD173,

    Why don’t we find out?

    You stop paying your bills and blow your credit rating and lose your house.
    I’ll lose a % of all of my assets every year due to a grinding loss of buying power due to monetary inflation.

    We’ll see who comes out worse. Are you game?

  14. markd says:

    QOTD:

    In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy.
    -Fran Lebowitz

  15. markd says:

    @RW It was Chuck Noll “There are three things that can happen when you throw the ball and two of them are bad”

  16. DeDude says:

    Irwin;

    So far the woman has demonstrated a complete lack of knowledge about even the most basic aspects of history and economy. Even basic aspects of law (which she supposedly was trained in) seems to be slipping every now and then. If she has ambitions of becoming president of the US, she should have taken the time to understand the basic elements of this country, and the big issues she would be required to decide. Anything less is both dumb and irresponsible (as President your mistakes hurt a lot of other people than yourself). Otherwise she can not expect to be taken serious or considered anything but a clown (a dangerous clown – but nevertheless a clown).

  17. rootless says:

    @Irwin Fletcher:

    Regarding your personal insults of Congresswoman Bachmann, referring to her as a clown, lazy and dumb;
    do you have any facts or data to support this? Dumb? Lazy?

    Facts? For instance, Bachmann claims global warming was a hoax. She has an uninformed opinion. Then there is science. She wants to be president of the United States? United States would become the laughing stock of the world with her as president. She is not the only nitwit in US-Congress, though. The US-Congress is full with nitwits. Particularly, among Republicans. The flatearthers have the majority, apparently.

  18. RW says:

    @markd, thanks, I’ll bet Chuck Noll wasn’t the only one who said it though. The way I recall it was, if you pass: you can get an incomplete for no gain, be sacked for a loss, the QB is a target* and can be injured, you can be intercepted for loss of possession vs. you complete the pass.

    We ran a lot.

    *Think that one got added because we lost two QB’s fairly early that season and coach was nervous. As a linebacker I wasn’t concerned but the offensive line was drilled nearly to death and in a generally sour mood throughout.

  19. BigD173 says:

    @ DMR, who said:

    “You stop paying your bills and blow your credit rating and lose your house.
    I’ll lose a % of all of my assets every year due to a grinding loss of buying power due to monetary inflation. We’ll see who comes out worse. Are you game?”

    That’s a false dichotomy. Even if the debt ceiling is not raised, We could avoid a default on U.S. government debt if we prioritized payment of interest on bonds. Now granted we would have to cut back severely on other spending; but — newsflash — we are long overdue in doing that anyway. We’re well fairly well on our way to being a Greece, Ireland, or Italy; it’s just a matter of time really if we don’t make a fundamental change.

    I have no illusions about this; there isn’t one chance in a million that the debt ceiling won’t be raised before the deadline; our politcians haven’t the will to do what needs to be done; neither do the people. So don’t lose any sleep over it. If the market tanks as we approach the deadline, put everything into risk assets; something will be passed at the eleventh hour, the market will rally again (as will gold) and we’ll continue on with massive deficits as per usual. We’ve seen this movie before.

    But to your specific question: What would the consequences be if I as an individual stopped paying my bills? Would I indeed lose my house if I stopped paying the mortgage?

    Not anytime soon under the current regime. Instead — assuming I had the good sense to also find a way to be fired from my job — the Government would cut me $50,000 worth of slack under the Emergency Homeowner Loan Program to pay the house notes, and I wouldn’t have to repay the money. In a perverse way, this kind of makes sense, because they give me a huge tax break every year for paying the mortgage interest, so why not just have the Government pay the whole note directly for me and simultaneously help out the bank as well?

    And don’t forget, they’ve alteady given me an $8,000 tax break to buy the house, several hundred dollars to buy new appliances for it, and incentivized me to junk my older vehicle — that
    was working just fine — to buy a new one to put in the garage.

    And therein lies the root of our debt problem: Tax breaks for most everyone and spending galore. No wonder the deficit is near record levels and we’re $14.5 trillion in debt and counting.

  20. Hey You says:

    Hey man lets all chill out and keep the big party going. we can sign an IOU for the food and booze and the kids and grandkids will pick up the tab.

  21. BigD173 says:

    @ RW and markdm:

    The quote in question (“When you throw the ball, three things can happen — and two of them are bad”) goes back at least to General Robert Neyland, who was head football coach at the University of Tennessee. Woody Hayes (Ohio State) and Darrel Royal (University of Texas) repeated it — of the two, Hayes more often gets credit for the quote. But General Neyland predated both of them.

  22. DeDude says:

    The GOPsters have pledged legion to Grover Norquist and also to their country. When those two pledges come into direct conflict, the GOPsters say screw the country and bow down to their false demigod Grover. That is the problem with electing someone who think they should make pledges to anything except their country. Traitors like Grover Norquist who would rather see their country in ruins than se his own personal contribution to it go up become really dangerous when they start acting like they are King and extract pledges.