WP: Man the lifeboats: This is not a drill!
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I threw a few words down discussing this week’s wild ride in a column for the Washington Post. The online version has the modest headline Why the wild stock ride? Why the wild stock ride? but I like the print headline Man the lifeboats: This is not a drill!.
Here is an excerpt:
“Last week’s havoc should be looked at as a warning shot across investors’ bows. The disruptions signal a major change in risk appetites — the willingness of large institutional buyers of stocks to continue accumulating equities.
The changing economic data make a recession less of a long shot and more of a real possibility. The standard cyclical recession causes a market correction of about eight months and a market drop of about 20 percent.”
Feel free to leave comments here or at WaPo . . .
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Source:
Man the lifeboats: This is not a drill!
Barry Ritholtz
Washington Post August 04,6:58 PM
http://www.washingtonpost.com/why-the-wild-stock-ride/2011/08/04/gIQARdp0yI_story.html
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August 7th, 2011 at 9:44 am
Are we on the Titantic? A ship that couldn’t sink, so there weren’t enough life boats. Monday could be a historic day, a new era, as in you ain’t seen nothing yet. PIMCO (El-Erian) has an anricle on the PIMCO web site just full of zingers.
U.S. DOWNGRADE HERALDS A NEW FINANCIAL ERA
http://www.pimco.com/EN/Insights/Pages/US-downgrade-heralds-a-new-financial-era.aspx
“…financial markets will reopen on Monday to a changed reality…”
“…Key market segments will be closely watched, including the money market…”
“…credit costs for virtually all American borrowers will be higher over…”
“…dwindling club of sovereign AAAs.”
“…increasing the risk of economic fragmentation.”
May you live in interesting times.
August 7th, 2011 at 9:45 am
The funny thing about all this is that there is nothing black swan about anything that has happened. The Republican Congress wants to cut spending, cutting spending will harm growth, the Fed is in a policy bind at the zero bound, the ECB the same. Europe is a basket case of inability to make hard decisions. Austerity abounds, austerity is bad for growth. The banks are still toxic with unrealised losses. All of this falls into the “no shit Sherlock” category.
Debt-deflation has the usual three solutions – repayment, default or printing. ‘Everyone’ (the people who make the decisions) wants to do none of these and instead rely on the confidence fairy. Unfortunately, the rest of the world doesn’t believe the “if you say it long enough and loud enough, it becomes true”.
Watch out for a co-ordinated spin attempt on Monday… jawbones everywhere… asses too…
August 7th, 2011 at 9:50 am
good reading from the G&M:
Portfolio Strategy
A downturn is the time to hunt for dividend stocks
http://www.theglobeandmail.com/globe-investor/investment-ideas/portfolio-strategy/a-downturn-is-the-time-to-hunt-for-dividend-stocks/article2121409/
August 7th, 2011 at 10:09 am
@yogan “cutting spending will harm growth”-come on, the fanaticism of this mantra is goofy and out of context.
We have a spending problem-our government is misallocating capital, our tax structure is made by lobbyists, even when our government has a good idea they screw it up. Enough of the political positioning.
I think the 3 quoted possibilities are quite correct but there is a couple others. First, the markets seem to be thinner-is this liquidity, summer, traders using black boxes? I have no idea. But the whippiness also seems to be inherent rather than just lately created.
Second, whether you’re left or right, you can’t come away from looking at our leadership without gagging a bit. The lack of confidence in “leaders” has never seemed so prevalent.
August 7th, 2011 at 10:16 am
I’m sticking with my FUBAR thesis long term but I like 990 as a long entry. Anything higher to me is shortable. I’ll probably remain uninvested however.
I will say it would not surprise me to see us crash hard one day soon ie bigger than 2008 once the realization that .gov and the fed are not omnipotent but omnimpotent!
August 7th, 2011 at 10:20 am
ECRI now predicting a 2nd half rebound will not happen.Oil, interest rates and other comodities falling.
CAPE still above 20, market is not cheap regardlesss of the analysts promoting stock ownership based upon next years earnings. Seen this dog and pony show before. People waiting on rebound rally to sell.
Margin debt at near record, capitulation not even close.
Europe,china slowing. Solution to debt problems in europe not in sight.
Can’t find a reason to be in the market.
August 7th, 2011 at 10:26 am
15-to-25% equates to “man the lifeboats” when we’re already 10% down??? I would think such phrase choice would be reserved for something more along the lines of a 40-to-50%+ correction (or does that get a ‘women and children first’ tie-in?)
August 7th, 2011 at 10:27 am
You’ll know things are really bad if the market sells off when Bernanke announces QE3.
August 7th, 2011 at 10:28 am
OT: for the kenpynsian socialists on the forum:
http://www.telegraph.co.uk/comment/columnists/janetdaley/8685945/If-we-are-to-survive-the-looming-catastrophe-we-need-to-face-the-truth.html
August 7th, 2011 at 10:29 am
Super anon I think that is very possible. I also think such a sell off will be vicious and frightening.
August 7th, 2011 at 10:29 am
Could we go back in time so I could keep my gold position?
August 7th, 2011 at 10:42 am
Tel Aviv exchange goes messuganah, -7%, first trading stops since Lehman. OYYYYYY!
Who’s next?
US is 25% of their exports and 10% of imports – not to mention $4billion of mostly military aid each year.
http://news.xinhuanet.com/english2010/business/2011-08/07/c_131034568.htm
August 7th, 2011 at 10:48 am
The problem with the downgrade is not that it is a financial issue, but a political one. How exactly does Mr. Obama respond to the millions of campaign commercials whose simple message is that under this Presidency the U.S. lost its AAA rating?
http://dismalpoliticaleconomist.blogspot.com/2011/08/downgrading-s-downgrade-of-dwongraded-u.html
The answer is, he does not. It is just devastating.
August 7th, 2011 at 10:50 am
Meanwhile, in Chicago: Mayor Rahm Emanuel (former Chief of Staff for Obama) has taken to calling members of the general public about the budget-cutting ideas they’ve posted to a city website.
http://chicago.cbslocal.com/2011/08/04/mayor-calls-some-who-posted-budget-ideas-on-city-website/
Radical democracy in action, or a ‘hail Mary’-type decision?!?
August 7th, 2011 at 10:53 am
Be careful with what you allow them to say in the headlines. If we get another 6% and turn around from there, you may be technically correct in your article – but people will still be laughing at you for having said “Man the Lifeboats” when there was only another 6% drop after that. You obviously consider that scenario a possibility since your range for the correction is 15-25%.
August 7th, 2011 at 10:53 am
@MayorQuimby:
Reply to your OT:
Although I don’t consider myself a “kenpynsian socialist”, why do you think they should read this article? What do you want to show with it? Do you want to show that you have found an opinion piece about which you believe it confirms your views? And that was evidence that you were right? Well, if you believe latter you only prove that you don’t know the difference between empirical or scientific evidence and opinion.
If the author of the article was right, my main conclusion from this would be that capitalism was a failing system, and there won’t be any humane and peaceful future for humankind if world society continues to be organized based on the capitalist way of producing and consuming.
August 7th, 2011 at 10:55 am
@yoganmahew:
I agree, we can expect further jawboning out of the ECB after their latest “emergency meeting” later today. It would not surprise me in the least for all to be miraculously right with the world come Monday morning.
At some point one would have to expect diminishing returns from such “emergency measures/reassurances/for-the-love-of-God-don’t-sell-pleas”. One week Europe is saved and the markets rally, the next week Europe is in trouble and the markets sell-off, and over and over it goes. I would have thought the market would not be so gullible, but all evidence is to the contrary.
We have already seen arguably diminishing returns in monetary policy with QEII, strongly suggesting its chief impact was to drive asset prices higher rather that stimulate lending for actual productive economic activity. I doubt very much Mr. Bernanke shares that assessment, however, and his is the opinion that really matters.
I don’t know where I’ll start buying, but it certainly isn’t here. I feel like QE has generated a massive air bubble in asset prices, and the air needs to be let out before we get a sense of what things are really worth. I have no desire buy assets that are inflated by reckless monetary stimulus and unsustainable fiscal stimulus.
August 7th, 2011 at 10:56 am
As a Chicagoan, I can confirm that there is a lot of positive buzz around the opening salvos of actions taken by the new mayor…
Emanuel to send out layoff notices today
http://www.chicagotribune.com/news/politics/clout/chi-emanuel-to-send-out-layoff-notices-today-20110715,0,3705289.story
The Reinvention of Rahm Emanue
http://www.businessweek.com/printer/magazine/the-reinvention-of-rahm-emanuel-08042011.htmll
August 7th, 2011 at 11:03 am
Rootless, all systems fil to some extent. It is not an all or nothing proposition. Pure socialism doesn’t exist nor does pure capitalism. Humans always get caught up in semantics which tend to characterize things in black and white terms.
It is crucial that those who believe in perpetual live beyond our means economics wake up for it is these people both in the public and in gvmt who are preventing us from making the necessary changes to fix this mess.
Yes it means austerity in a big way. But the alternative is WORSE not better. If you cant see tht now, you might never see it until we are well past the event horizon and firmly within the exponentially growing grvity of the black hole if we are not already.
August 7th, 2011 at 11:09 am
abit of snidely funin’ …
Cal Hockley: What?
Thomas Andrews: Please, tell only who you must. I don’t want to be responsible for a panic. And get to a boat quickly, don’t wait. You remember what I told you about the boats?
Rose: Yes… I understand.
http://www.imdb.com/title/tt0120338/
August 7th, 2011 at 11:12 am
@Sidfinkel:
Ah, but the US did not lose it’s AAA rating. It still has an AAA rating from Moodys as well as Fitch. It received a single downgrade from only one of the three rating agencies and the one with the least credibility I might add. The difference by the way between Prime and High Grade seems awfully speculative and not worthy of much consideration.
On a separate note, I find it interesting that those awful socialist countries in Europe are all carrying AAA ratings. Jeeze, just how do they do it?
August 7th, 2011 at 11:16 am
Everyone needs to understand that the credit markets have the us rated at about single A or BBB.
So anyone who supposes that s&p is being cruel, well….tell that to CDS traders.
Look…we ARE in too deep, we CANNOT spend TRILLIONS of dollars we don’t have every year forever and we NEED to stop lying to ourselves.
Wake up !
August 7th, 2011 at 11:21 am
louiswi said:
“On a separate note, I find it interesting that those awful socialist countries in Europe are all carrying AAA ratings. Jeeze, just how do they do it?”
They don’t.
http://en.wikipedia.org/wiki/File:Rating_S%26P%27s_Europa_06-2011.svg
http://en.wikipedia.org/wiki/List_of_countries_by_credit_rating
AAA != A or A+ or AA
AAA = AAA
August 7th, 2011 at 11:23 am
The problem with the downgrade is not that it is a financial issue, but a political one. How exactly does Mr. Obama respond to the millions of campaign commercials whose simple message is that under this Presidency the U.S. lost its AAA rating?
Honestly most of the blame for the S&P rating change should be directed at the Teabaggers in the House.
Where O’B and the Dems should be faulted is for political incompetence to let a group of radicals in the minority party bring the US to the brink of default. Their first great error was allowing the Repubs to blackmail them using the unemployed to get the ill-advised Bush tax cuts extended. They paid the blackmailer so the blackmailer came back for more this time taking the whole country captive with the default threat. The Republicans have a simple game plan of making the country ungovernable if they aren’t in control -and then with numbnuts Bush calling the shots it was still ungovernable!
August 7th, 2011 at 11:24 am
Warren Buffett…
“I don’t get it. In Omaha, the U.S. is still triple A. In fact, if there were a quadruple-A rating, I’d give the U.S. that.”
http://www.businessinsider.com/buffett-in-omaha-the-us-is-still-triple-a-2011-8#ixzz1UM9cBmfC
Some may say the big Moody’s investor is talking his book … some may say the man with billions in US stock may be talking his book …but the fact is, S&P is right, “…The political parties must compromise on deficit reduction…” and the fact that Boehner walked away from a “grand bargain” because it tinkered with the “temporary” Bush tax (and cut loopholes!) cuts means the GOP needs to make a decision to end their “destroy-the-village-to-save-it” strategy and believe they can win some elections without being screaming lunatics.
Here’s someone who doesn’t think they can win the middle of the country without their anger-driven rhetoric, their BS large-font, colored, unsigned email machine, and half-truth daily talking points. They have created a media machine that they need to change first, before they can compromise. Marshall McLuhan indeed.
August 7th, 2011 at 11:27 am
Honestly you’re crazy if you think a group of people that want to reign spending in to the extent that we simply spend what we have and no more and then work hard to pay down debt are nutters, well all I can say is WOW.
The tea party path is the only path to salvation. The spend our way out of this mess is akin to trying to eat yourself skinny. A four year old would get it but you adults get so emotional and attached to your theses and refuse to admit you were wrong even as the brick wall is right in front of your eyes.
You all need to go watch Sunset Boulevard.
August 7th, 2011 at 11:29 am
Tel Aviv closes down 7%, biggest drop since Oct 2000.
Australia is next on deck.
Israel’s benchmark stock index plunged the most in almost 11 years after Standard & Poor’s lowered the U.S. credit rating and amid concern the widening sovereign debt crisis in Europe will stall global growth.
… All 25 shares in the TA-25 Index tumbled, pushing the gauge down 7 percent, the biggest decline since October 2000
August 7th, 2011 at 11:32 am
@MayorQuimby Says:
“OT: for the kenpynsian socialists on the forum:”
These are some tidbits from the article:
“the wealth-creating sector has to be taxed to a degree that makes it almost impossible for it to create the wealth that is needed to pay for the entitlements that populations have been led to expect, etc, etc. ”
My tax burden is around %30. The tax burden of the 400 richest people in the US is %18
Pontificate about “share sacrifice” and all that tea-fascist propaganda when their tax burden and mine are more equal.
August 7th, 2011 at 11:36 am
‘Man the lifeboats: this ain’t no drill!’
Might be a reciprocating saw, though. From yesterday’s NYT article about Jean-Claude Trichet’s impending retirement:
http://www.nytimes.com/2011/08/06/business/global/jean-claude-trichet-builder-of-the-euro-ends-his-career-on-a-bitter-note.html?_r=1&src=recg
Translation: LooterFest for plutocrats! It’s raining euros! BACK UP THE TRUCKS!
August 7th, 2011 at 11:43 am
Robespierre I agree. I think she means (or should mean) your average worker who is also taxed via inflation and dollar debasement.
August 7th, 2011 at 11:46 am
@nicholsong:
I should have been more clear. I’m speaking of the “classic” socialist countries speciffically Sweden, Norway, Denmark, and Finland. rated AAA and stable. These are countries that agree to determine what they want from their governments and then make it happen.
August 7th, 2011 at 11:53 am
@MayorQuimby:
You just ramble the same preconceived views from your belief system again and again, w/o any empirical evidence to support them, or w/o any reply to the arguments with which you are confronted (except that you just repeat the same assertions again or set up some straw man arguments).
August 7th, 2011 at 11:57 am
Evidence?!!!!.
Just look around!
We’ve BEEN overspending and lowering interest rates and all we have done is:
paper over and avoid dealing with structural issues such as outsourced jobs
Put 46 MILLION people on food stamps
Over 16 pct real unemployment
FIFTEEN TRILLION in debt which is over 100 pct of GDP
With record unfunded liabilities and private debt still going UP
Hw can you characterize a guy who simply wants a no bullshit spend what we earn and that’s it as having a “belief system” as if common sense is some sort of strange alchemy!!!
I can assure you, the future you is laughing at the current you.
August 7th, 2011 at 11:57 am
S&P was a central player in helping to create the credit mess….so what? Maybe they got religion maybe not. They have only stated the obvious. Our government loved them when they were helping to fuel the bubble and now shame on them. A little hypocritical don’t you think? And I see some of our more “progressive” posters are blaming the Tea party…heck, all they want to do is stop pouring slop ino the pig’s trough. The problem with Keynesion believers is that they can’t admit they were fooled. there is just not enough money in the world to fix this folks….get over it.
August 7th, 2011 at 12:00 pm
@MayorQuimby
What is mind boggling that people like you call for smaller government and less regulation and are in favor of corporate power. So let me enlighten you with all its faults at least I get to vote and I get to try to change “my representatives”. When was the last time that middle class got to vote on a BoD or CEOs? The only thing that less government will bring is higher concentration and wealth to the people who already have it. And that is the final kiss of death of democracy . This is already happening today we have two parties Republicans and tea-fascists. Democrats are just a different shade of republican so they have made themselves obsolete.
August 7th, 2011 at 12:02 pm
The neo keynsians act as if we haven’t given gvmt stimulus a chance yet!
Bhahahahahaaaaa!!!!!!!!
Sigh. A sad day it is when grown adults think the obese man in ICU with a stent and who needs a second bypass surgery hasn’t eaten enough ice cream because to do so would increase his metabolism above and beyond the rate of fat accrual.
It is the same thing…that we can generated on a sustained basis three dollars of growth with two dollars of money.
Look! Like magic!
August 7th, 2011 at 12:03 pm
MayorQuimby wrote:
Well, here we have it. Listing to MayorQuimby is like listening to religious fanatics who are immune against any logic arguments or empirical facts, with which they are confronted. I and other have tried enough to debate with him on a rational basis, using logic and math.
And then he is projecting his own irrationality and ignorance on his opponents.
August 7th, 2011 at 12:04 pm
Robes, please do not make shit up. These bs “people like you” comments are uttery useless. You can look up very word I’ve written and will find not ONE supporting anything of the kind. Retract the bs please.
August 7th, 2011 at 12:05 pm
Fanatics!!!!!!!!
Spend what we make and no more is a fanatic!
Orwell:
“during times of universal receipt, telling the truth becomes a revolutionary act.”
August 7th, 2011 at 12:05 pm
Deceipt, not receipt. darned iPad!
August 7th, 2011 at 12:15 pm
Is the following only showing up on my internets?
August 7th, 2011 at 12:19 pm
@MayorQuimby:
Who thinks this is an argument:
Argues like a religious fanatic.
Religious fanatics don’t engage in a discussion, in which they reply to the point of the arguments of the other side. They just ignore any counter-argument or empirical evidence that would contradict their beliefs. Instead they try to indoctrinate by endless repeat of the same again and again. And they promise punishment or damnation, if you don’t follow their beliefs:
You don’t recognize yourself?
August 7th, 2011 at 12:24 pm
Ive engaged ad nauseum with figures and facts. You know I have on other threads.
You are the zealot because fanaticism isncharacterizedmby a perverse and self defeating inability to accept truth when it is staring you in the face for to do so would mean you would have to accept having been wrong for the past 15 years. THAT is a fanatic my good man, not a guy who states the obvious- that we’ve tried it your way and things are deteriorating not improving..
We can’t outsmart entropy and we can’t eat ourselves skinny.
August 7th, 2011 at 12:29 pm
2 minute star trek clip:
http://www.youtube.com/watch?v=lRmmHPE8EvA&feature=youtube_gdata_player
August 7th, 2011 at 12:32 pm
Perhaps if those now out of the market beat the drums of panic loudly enough they will be rewarded with a nice entry point… which they will then inform the general pubic about (after their entry, of course) so that the public can then carry the values upward for them.
August 7th, 2011 at 12:33 pm
I see people blaming the Tea Party but how was it all those Democrats were replaced by Republicans in the last election? Surely you can’t blame the Republicans for that can you? Did the GOP somehow force voters to vote out the Democrats? I guess if it is still OK to blame Bush for the mess the US is in it is also safe to blame the Democrats for the Tea Party faction being in power
August 7th, 2011 at 12:34 pm
As an aside, what ruins the value of various internet sites is spotlight-hogging by one-message posters who can’t get over themselves and who really believe they have some special insight.
I’ve seen it happen frequently; I don’t have any suggestions to fix the problem.
August 7th, 2011 at 12:35 pm
I’m a big time buyer at a retest of the 2009 lows. Your sense of what things are worth is perverted. Everything is distorted and overpriced.
You think I’m e bad guy when you have it in reverse. My motivations are to save the system not enrich myself at the expense of everyone else. When bac was three bucks I refused to buy in even though I knew I could do it. I hate the idea of renting buildings to people because I want to ADD value to society not take from another.
You have no idea what my motivations are so chill out with the judgement crap.
August 7th, 2011 at 12:37 pm
If you only see one message it is because you aren’t paying attention. At any rate, I’m hear until I get kicked out to offset the insanity and bs coming from the free lunchers out there.
August 7th, 2011 at 12:43 pm
How the common man see it…Really? The voters? Two things are infinite: the universe and human stupidity; and I’m not sure about the universe. – Albert Einstein….genius?
As for MayorQuimby….Dude, WTF are you smoking? It has to be some really good stuff…
August 7th, 2011 at 12:47 pm
@ The Mayor:
This describes you the best, I could think of a few choice words but I’ll just keep then to my self:
Ideologue – Definition and More from the Free Merriam-Webster …
Synonyms: crusader, fanatic, zealot (also idealogue), militant, partisan (also partizan), red hot, true believer. Antonyms: nonmilitant. Related Words: activist; dreamer, idealist, …
August 7th, 2011 at 12:50 pm
“but how was it all those Democrats were replaced by Republicans in the last election? ”
Simple. People wanted job creation and lower unemployment.
What they got instead was a bait-and-switch, being fed some kind of religious mania about spending being evil. They literally got an anti-job, anti-growth Congress right in the midst of a recession.
Incredible… but true.
August 7th, 2011 at 12:55 pm
“My motivations are to save the system”
ONLY you can do it, right? If only those people would repent and stop spending money, stop creating projects, stop paying people to do work… only then will we have a booming economy that will increase tax collections and pay down debt. Right? If only you are able to crash it and burn it, only then will you be proven correct. Only when people have no health care, government provides no safety net, schools close down, public works come to an end, business grinds to a halt.. only THEN will the country be saved.
August 7th, 2011 at 12:59 pm
Maybe the “truth we must face” is that the wealthy and the corporations have had an inordinate amount of political and economic power to control the development and flow of the worlds resources to enrich themselves – I suspect that these same individuals and institutions have arranged their portfolios in such a way that any default will be to their economic advantage.
Cui bono?
August 7th, 2011 at 1:06 pm
My question, and the biggest one of them all, is when to get back in? Assuming we have a 20% step down here, dropping SPX to below 900, when do I get back in and wait for the next pump? We ARE in a get rich scheme of global proportions now, right? Then, if true, I need to find the next entry point, ride it until the next mega crisis, then take my winnings and go home.
It’s about easy money. Or at least that’s what Michael McDonald said.
August 7th, 2011 at 1:10 pm
Things are booming here in South Florida. The laid off home construction workers are both drawing unemployment insurance and working off the books in the remodeling trades. Our shopping centers and restaurants have many customers. The streets and highways are busy and our gas stations aways have a” filler-up” crowd. There is no recession here on the Gold Coast. I’ll bet its the same in the Hampton’s this month.
The traders will be back from vacation in September and then the markets will begin their holiday climb. “All Aboard … the good times are a coming!” $$$$$$$$$$
August 7th, 2011 at 1:23 pm
It used to be a guns v. butter argument, now it is guns v. butter v. the robber barons of the 21st century, a whole legion of Lex Luthors who schemed to extract every last penny from the financial system before it collapsed.
Indeed, this is not a drill, it might take a year or two to find the bottom but despite that the debt problems here and in Europe will remain and probably get worse.
Now won’t that be fun? A stock market collapse and even more debt? A lower standard of living and extreme hardships for many is in our future.
August 7th, 2011 at 1:29 pm
The yield on the U.S. 10-year was 2.58 on Friday. It appears there are at least 2 or 3 people left who are not terrified over U.S. debt.
August 7th, 2011 at 2:44 pm
Quimby,
“Yes it means austerity in a big way.”
Britain tried your (and the American RightWing’s) prescription last year. That has been followed by three quarters of PLUNGING GDP and RISING deficits.
“Honestly you’re crazy if you think a group of people that want to reign spending in to the extent that we simply spend what we have and no more and then work hard to pay down debt are nutters”
Indeed they are.
We don’t have a “spending” problem, we have a revenue problem.
“The tea party path is the only path to salvation.”
Reminiscent of Jim Jones.
“We’ve BEEN overspending and lowering interest rates”
No, we’ve been undertaxing the Rich & Corporate and had to lower interest rates to combat the result.
August 7th, 2011 at 2:46 pm
Winston,
“The yield on the U.S. 10-year was 2.58 on Friday. It appears there are at least 2 or 3 people left who are not terrified over U.S. debt.”
Facts ? We don’t need no stinkin’ facts !
August 7th, 2011 at 3:14 pm
@All Re: Mayor Quimby
As of the time I started this message but got importuned to go get some hamburger buns, there were 47 posts and 1/3 of them were his. Most of the rest were responses. It made this thread mostly unreadable.
Remember the old rule about not feeding the trolls. You never get anywhere giving them facts or logic.. I have a brother in law like that. In fact it may be my brother in law :)
@yoganmaher: Agree with you. Your writing bears the hallmarks of a literate man.
August 7th, 2011 at 3:16 pm
The deficit:-spending more than we are bringing in.
There are two pieces to the puzzle. Cutting spending has its obvious drawbacks. We could however, be “bringing in” a lot more than we do. Neither party agreed to raise taxes on the middle class so there should be no arguement there but taxing the rich would aid in the “bringing in” piece. There are assets held by the U.S. Government that could be sold. Tons of land, timber, mineral wealth,water etc etc. The Grand Canyon and Yellowstone if you need it. All adding to the “bringing it in” piece. The most significant thing that could be done is just charge the countries we provide defense for. We defend Japan, Israel, South Korea and a host of other countries. Much of NATO and all of the oil exporting countries. All we have to do is charge them for it. It would provide justification for our 11 aircraft carriers, billion dollar bombers and 200 million dollar fighter aircraft. All this helps the “bringing it in” piece. The deficit could be diminished without significant cuts in spending if we wanted to.
August 7th, 2011 at 3:44 pm
Pseudo Keynes is a “spent” force.It has been used for too long, and incorrectly by Keynes standards.
The Fed’s fear of taking away the punch bowl has been the proximate cause of our current mess.
A lifetime of gov’t reliance on Keynes has erdoded the social fabric and made another approach unthinkable.
The space of possibilities in which Keynes was effective has mutated and we are faced with a paradigm shift. Unless you believe in perpetual motion machines, you have to understand that any system that is used too long becomes sclerotic, rustbound, hypersaturated with input, disoriented, unresponsive, etc..
A dose of self protection is needed while we evolve. What is good for G.E. is not good for the country.
,
August 7th, 2011 at 3:46 pm
“Britain tried your (and the American RightWing’s) prescription last year. That has been followed by three quarters of PLUNGING GDP and RISING deficits.”
Greece and Japan tried your QE and bailout and deficit spend forever and Japan’s structural flaws are growing, its debt to gdp is over 200 and their equity markets lost 60% and stayed down!
““Honestly you’re crazy if you think a group of people that want to reign spending in to the extent that we simply spend what we have and no more and then work hard to pay down debt are nutters”
Indeed they are.”
No response needed.
“We don’t have a “spending” problem, we have a revenue problem.”
http://1.bp.blogspot.com/_3bGnkNeoPxk/SbEbx4MWJrI/AAAAAAAACfA/AIxIVAJ5tTc/s400/Government-Spending-Graph.PNG
Nahhhhhh. No problems with spending there!
Oh, and one more thing – find me a revenue stream that can bring our deficit down. That’s $1.7 TRILLION dollars bucko. Find me ONE POINT SEVEN. Our debts will still rise as will our overall indebtedness but we could have a balanced budget for ONE YEAR if you can just find me ONE POINT SEVEN TRILLION DOLLARS.
““The tea party path is the only path to salvation.”
Reminiscent of Jim Jones.”
There’s a saying I learned….keep doing what you’ve been doing and you’ll keep getting what you’ve been getting.
So by all means, let’s have more QE, more deficits and let’s wreck the entire edifice if only to silence you free lunch crazies.
““We’ve BEEN overspending and lowering interest rates”
No, we’ve been undertaxing the Rich & Corporate and had to lower interest rates to combat the result.”
Agreed. But that’s just part of the problem. We let them partake in commodities markets so they destroy purchasing power with leverage (!) and then hand J6P MORE DEBT to make up for his weakening purchasing power.
IOW- We add fuel to the fire, build up structural issues and the potential for defaults and then light the whole thing ablaze and we are doing it AGAIN and AGAIN and AGAIN.
August 7th, 2011 at 3:48 pm
“This describes you the best, I could think of a few choice words but I’ll just keep then to my self:
Ideologue – Definition and More from the Free Merriam-Webster …
Synonyms: crusader, fanatic, zealot (also idealogue), militant, partisan (also partizan), red hot, true believer. Antonyms: nonmilitant. Related Words: activist; dreamer, idealist, …”
I will respond with Einstein’s purported definition of insanity which is:
“Doing the same thing over and over again and expecting a different result.”
August 7th, 2011 at 3:57 pm
@MayorQuimby Says:
“Robes, please do not make shit up. These bs “people like you” comments are uttery useless. You can look up very word I’ve written and will find not ONE supporting anything of the kind. Retract the bs please.”
@MayorQuimby Says:
“The tea party path is the only path to salvation. ”
This is what I said: “What is mind boggling that people like you call for smaller government and less regulation and are in favor of corporate power.”
Show me a place where the tea party elected officials don’t vote the way I said above.
BTW you know tea party is a pseudo religious fanatic movement when their “platform” is called:
“Ten Core Beliefs of the Modern-Day Tea Party Movement ”
Gee why not call it the ten commandments?
August 7th, 2011 at 4:27 pm
Mike in NOLA,
Could not agree more.
Quimby,
We heard you the first 100 times. No need to keep repeating right wing memes ad nauseum. We do indeed have a revenue problem because the wealthy don’t want to pay their fair share.
What part of that equation do you not understand?
From that left wing rag, The Wall Street Journal:
The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.
Boost in Food Stamp Funding Percolates Through The Economy</
If we don't have enough to pay our bills it is because our revenue has dropped off a cliff.
This is a simple equation that even the most simple minded Tea Party, Libertarians and Right Wing should be able to understand, it is the lack of revenue. But they don't want to understand because then they would have nothing to add to the conversation.
August 7th, 2011 at 4:33 pm
“Facts ? We don’t need no stinkin’ facts.”
@Joe Friday,
Facts have a liberal bias, no doubt.
Instead of facts, why not conjecture based on fact? Is that still liberal? It would seem that with the stream of cash fleeing to U.S. bonds (10-year yield 2.58) and the stock market dropping 10% that the big investors have decided that U.S. corporate profits may not be sustainable now that the Tea Party has decided that a Hoover deja vu is the best way to reproduce the roaring economy of the 1930s.
With 16% unemployed or underemployed and with 50 million people on food stamps, and now stimulus taken off the table, I can’t understand why they are such pessimists. Can you?
August 7th, 2011 at 4:36 pm
Robes, the Tea Party movement really began in earnest when Santelli made his rant about everyone bailing out “e loser’s mortgages”. Denninger at ticker forum and others preceded that when a forum member suggested mailing teabags to congress to protest TARP
Gt your facts straight.
It ws cooped by the usual rightists who then turned it into some strange disjointed offshoot of the republican party.
August 7th, 2011 at 4:38 pm
Hey Winston, please explain to me how ramping a FIFTEEN TRILLION DEBT to TWENTY ONE TRILLION which will push us from 100 percent of GDP to at least 140 percent of GDP WITH solid growth is pulling a Hoover?!!!
August 7th, 2011 at 4:52 pm
“…Santelli made his rant about everyone bailing out “the loser’s mortgages”
Gee, I don’t recall Santelli screaming about JPM, BAC, Morgan Stanley, Goldman, et al, getting bailed out to the tune of a $ trillion, or so.
I guess I missed something.
.
August 7th, 2011 at 5:01 pm
Quimby,
“Greece and Japan tried your…”
No, they didn’t.
Neither Greece or Japan have done what I’ve proffered or any version of what Economics 101 has elucidated.
“Nahhhhhh. No problems with spending there!”
Once, again:
A) You obviously missed the discussion of numerators and denominators in regards to percentage of GDP.
B) The independent non-partisan Congressional Budget Office illustrates that the overwhelming majority of our current federal deficits & debt, as well as the overwhelming majority of our projected medium-term federal deficits & debt, are as a result of plunging federal income tax revenue from the numerous rounds of tax cuts for the Rich & Corporate enacted by the previous Republican White House and Republican Congressional Majority.
That is a revenue problem, not a spending problem.
“find me a revenue stream that can bring our deficit down.”
Sure.
Just as an exercise, repealing the Bush tax cuts would reduce SEVENTY-FIVE PERCENT of our future projected federal deficits & debt, combine that with increasing GDP by 1%, and that would have us in federal budget surpluses.
“Our debts will still rise as will our overall indebtedness but we could have a balanced budget for ONE YEAR if you can just find me ONE POINT SEVEN TRILLION DOLLARS.”
Trying to balance the federal budget in one year is silly. Can you pay off a 30-year home mortgage in one year ? Not to mention it took over a decade of failed RightWing economic policies to go from federal budget surpluses to trillion dollar deficits.
“There’s a saying I learned….keep doing what you’ve been doing and you’ll keep getting what you’ve been getting.”
We agree.
If we continue with the failed tax cuts for the Rich & Corporate and Corporate Welfare we will keep getting what we’ve been getting as a result. The only “Social Welfare State” we have in America is for the Rich & Corporate.
“the Tea Party movement really began in earnest when Santelli made his rant about everyone bailing out ‘e loser’s mortgages’.”
Proof positive that Santelli is an uniformed RightWing hack who didn’t have a clue what he was ranting about, and still doesn’t.
August 7th, 2011 at 5:18 pm
“No, they didn’t.”
Yes, they did.
“That is a revenue problem, not a spending problem.”
Can’t debate with someone like you. While technically correct – you can ALWAYS say such absurdities. The guy with the McMansion, two Hummers and 3 mortgages can ALSO claim to have a revenue problem. But truth is, he has a spending addiction as does our gvmt.
As for denominators, you’re full of the brown, wet stuff.
Here are our spending breakdowns:
http://www.usgovernmentspending.com/
http://www.usgovernmentrevenue.com/
Increasing taxes on the wealthy (which I fully support btw) does absolutely d*ck to help things long term. We’re talking a few percentage points. Once again – I double dog dare you to find me ONE POINT SEVEN TRILLION DOLLARS.
“Just as an exercise, repealing the Bush tax cuts would reduce SEVENTY-FIVE PERCENT of our future projected federal deficits & debt, combine that with increasing GDP by 1%, and that would have us in federal budget surpluses.”
Now you’re making shit up. You can take the ENTIRE PROFIT STREAM from EVERY FORTUNE 500 COMPANY and still not have enough to pay INTEREST ON DEBT.
http://money.cnn.com/2010/04/13/news/companies/fortune_500_profits.fortune/index.htm
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
QED
Moving on…
“Trying to balance the federal budget in one year is silly. Can you pay off a 30-year home mortgage in one year ? Not to mention it took over a decade of failed RightWing economic policies to go from federal budget surpluses to trillion dollar deficits.”
1. Agreed. But you do realize that balancing the budget for one year leaves us with FIFTEEN TRILLION in debt so the “mortgage as you put it” is still there. I’m BALANCING THE BUDGET, NOT PAYING OFF LOAN.
2. Secondly, I’m not defending right wing anything. I’m completely apolitical and pretty much a pure centrist.
“If we continue with the failed tax cuts for the Rich & Corporate and Corporate Welfare we will keep getting what we’ve been getting as a result. The only “Social Welfare State” we have in America is for the Rich & Corporate.”
Agreed once again. but your figures are off. I’m with you in the spirit of what has happened but factually you are WAAAAAAAAAAAAY off with your figures – to such an extent that you falsely believe that taxing the rich (which we SHOULD DO) will magically pay down our debts to serviceable levels. You are flat out wrong. Go reread your CBO estimates because you are way off.
“Proof positive that Santelli is an uniformed RightWing hack who didn’t have a clue what he was ranting about, and still doesn’t.”
Proof positive that Santelli was spot on. No one should get bailed out. There is a difference between a modest social safety net and robbing the workers to pay the rich, the unions and other connected workers. The whole damned thing is one giant economic clusterfuck of bailouts, printing, derivatives, nepotism, greed, un-prosecuted corruption and lord only knows what else. Let’s just say that I don’t support bailing out anyone – not BAC and not Joe and Jane McMansion buyer.
August 7th, 2011 at 5:19 pm
Winston,
“With 16% unemployed or underemployed and with 50 million people on food stamps, and now stimulus taken off the table, I can’t understand why they are such pessimists. Can you?”
Because they know, contrary to the claim by the RightWing, that our problem is not taxation (personal federal income taxation is the lowest in 60 years and corporations don’t pay any taxes now), and it’s not overregulation (we essentially had no regulation during the previous administration), it is lack of demand, and the bottom 95% of income-earners are responsible for 71% of Consumer Spending, yet all the American RightWing wants to do is throw money at that top 5% and return to the economic policies that produced two recessions and an economic depression.
August 7th, 2011 at 5:19 pm
“Gee, I don’t recall Santelli screaming about JPM, BAC, Morgan Stanley, Goldman, et al, getting bailed out to the tune of a $ trillion, or so.”
Then you CLEARLY were not watching CNBC at the time. Rick is as straight a shooter as anyone out there. He didn’t want ANYONE bailed out. Nor do I. THAT is the spirit in which the “Tea Party” started before it was a political mvmt and really was just a bunch of pissed off folks that understood how badly they were getting r*ped by their gvmt.
August 7th, 2011 at 5:30 pm
“yet all the American RightWing wants to do is throw money at that top 5% and return to the economic policies that produced two recessions and an economic depression.”
Joe-
BOTH parties have been touting the trickle down bs. What do you think QE is?!!! Sure – J6P’s 401K SEEMS to go back up but Buffet’s holdings went up $200 million at the same time and HE is smart enough to cash out at the top!
Restoration of purchasing power is what is needed. Strong dollar policy with balanced budgets. “Grandpa’s” old school economy. And if that means we renege or default on sovereigns, break up banks – then SO BE IT. And while we are at it – we MUST put away the crooks on WS and in DC or it is all for naught.
August 7th, 2011 at 5:32 pm
Since we’re all cool with torture now, I say we embrace pillage and plunder too. Well, maybe not pillage, but certainly plunder. Iraq owes us big time, and the opium trade out of Afghanistan should generate about 10 billion/year. Should be enough to float Medicare for a bit. Iraq’y oil should be confiscated and resold on the open market by Our oil companies. This would result in much higer quarterly profits, and will surely rescue the stock market.
The Tea Party has a problem with taxes. Not sure why I should be offended when the ultra-wealthy have to pay more percentage wise to Uncle Sam than I, but I’ve been trained to trust those who shout the loudest, so I’m in.
August 7th, 2011 at 5:40 pm
Quimby,
“Yes, they did.”
Let’s see it.
“Can’t debate with someone like you.”
Sorry Bud, your argument is with the independent non-partisan CBO and the U.S. Treasury Dept.
“As for denominators…”
Well, you know how to spell it, but you still don’t comprehend it.
“Increasing taxes on the wealthy (which I fully support btw) does absolutely d*ck to help things long term.”
Long-term the problem is PRIVATE-SECTOR healthcare, AND that is decades and decades away. So what the hell does it have to do with the price of eggs in Singapore ?
“Once again – I double dog dare you to find me ONE POINT SEVEN TRILLION DOLLARS.”
Ball is back in your court – pay off a 30-year home mortgage in one year.
“Now you’re making shit up.”
The independent non-partisan CBO disagrees with you.
“You can take the ENTIRE PROFIT STREAM from EVERY FORTUNE 500 COMPANY and still not have enough to pay INTEREST ON DEBT.”
All this crap about there aren’t enough wealthy people and corporations to make a dent gibberish relies on ONE YEAR. It took us over a DECADE of failed RightWing policies to get where we are, why are the opponents of failed economic policies asked to clean it all up in just ONE YEAR ?
“Secondly, I’m not defending right wing anything.”
You are regurgitating failed RightWing policies.
“Proof positive that Santelli was spot on.”
Nope.
Santelli had his facts DEAD WRONG.
“BOTH parties have been touting the trickle down bs.”
You must be watching a different reality then I am.
“What do you think QE is?!!!”
Gee, I think it’s Quantitative Easing. What else would you suggest, that doesn’t add a penny to our federal debt, when interest rates are already at zero ?
August 7th, 2011 at 5:49 pm
“Let’s see it.”
How many bailouts and ECB funded backstops have been tried to date?
How many QE have Japan tried?
What has been the result?
“Sorry Bud, your argument is with the independent non-partisan CBO and the U.S. Treasury Dept.”
No, you are misstating and misunderstanding facts. Post the data buddy.
“Well, you know how to spell it, but you still don’t comprehend it.”
Please see the preceding chart which shows us nearing record levels into record nominal debt, record private sector debt and record debt to gdp ratios. Give it up man!
“Long-term the problem is PRIVATE-SECTOR healthcare, AND that is decades and decades away. So what the hell does it have to do with the price of eggs in Singapore ?”
Healthcare is utterly irrelevant to the entire discussion.
“All this crap about there aren’t enough wealthy people and corporations to make a dent gibberish relies on ONE YEAR. It took us over a DECADE of failed RightWing policies to get where we are, why are the opponents of failed economic policies asked to clean it all up in just ONE YEAR ?”
I agree – if you want to blame anyone for the largest debt increase, it is Bush by a couple of lengths.
NEVERTHELESS…unless we retroactively tax the rich for past profits, taxing the rich MIGHT get us $100 Billion into a ONE POINT SEVEN TRILLION DEFICIT with FIFTEEN TRILLION IN DEBT and over FOUR HUNDRED BILLION IN DEBT INTEREST ALONE FOR THIS ONE YEAR!!!!
“You are regurgitating failed RightWing policies.”
I think not. Once again you out and out bullshit everyone.
Cheney said, “Deficits don’t matter”
I said, “They ALWAYS come at a net loss and unless we have a good idea that future gdp will pick up to the extent that it not only resumes growing nominally but can ALSO account for the losses incurred by the deficit and any debt interest, we should NEVER EVER deficit spend.”
“Santelli had his facts DEAD WRONG.”
What facts? He railed against ALL bailouts. There are no facts at play – just sentiments – and I agree with him entirely.
“You must be watching a different reality then I am.”
Really? Geithner – appointed by Bush and reappointed by Obama. Summers? Similar deal. Bernanke? Same deal. Policies under Bush? Bailout banks, lower rates, ignore corruption, paper over the mess. Policies under Obama? SAME SHIT DIFFERENT TOILET.
“Gee, I think it’s Quantitative Easing. What else would you suggest, that doesn’t add a penny to our federal debt, when interest rates are already at zero ?”
1. Oh but it DOES add to our debt because it frees us up to borrow more money we can’t afford to pay back!
2. But most importantly, it is the very last recourse of those trying to maintain a broken system.
August 7th, 2011 at 5:59 pm
NZ exchange opens in a few mins after Israel tanked 7%.
I don’t know if the S&P downgrade merits a “sell everything” response but it’s hard to imagine who would be buying “everything” at the open either.
Italy & Spain problems and the ability of a semi fractious Europe to respond is probably the more serious problem.
Do you think it’s possible that S&P rushed thru the US downgrade to stem the flight to safety from various European investors? Still have gold,swiisy franc and yen but the dollar is biggest and most liquid.
August 7th, 2011 at 6:11 pm
The Quim may go on a bit too much here, but, overall and without a doubt, The Big Picture has the most intelligent, interesting and literate contributors of any financial site I visit.
August 7th, 2011 at 6:19 pm
Calculated Risk reports a “massive” ECB intervention in Spanish and Italian debt markets is now highly likely.
On top of oversold conditions in a number of markets the probability of a bounce tomorrow is in the cards. Longer term, well …
Keep your powder dry folks.
NB: Don’t waste time debating with trolls, there’s business to be done.
August 7th, 2011 at 6:42 pm
Quimby,
“How many bailouts and ECB funded backstops have been tried to date? How many QE have Japan tried?”
Once again, you’re givin’ me gibberish. Neither Greece or Japan has done anything that I or economics 101 has proffered.
“No, you are misstating and misunderstanding facts.”
Both the independent non-partisan CBO and the U.S. Treasury Dept disagree with you.
“Post the data buddy.”
Been there, done that.
“Please see the preceding chart which shows us nearing record levels into record nominal debt, record private sector debt and record debt to gdp ratios.”
Please comprehend that the chart doesn’t illustrate what you think it does.
“Healthcare is utterly irrelevant to the entire discussion.”
My point exactly, and since the long-term deficits and debt are about PRIVATE-SECTOR healthcare, there is no debt crisis to worry about now.
“NEVERTHELESS…unless we retroactively tax the rich for past profits, taxing the rich MIGHT get us $100 Billion”
That’s silly.
“What facts?”
Let’s start with the fact that Santelli did not and still does not comprehend that UNREGULATED PRIVATE FIRMS (his buddies) made nearly 83 percent of the subprime loans to low-income and moderate-income borrowers, while he was ranting against and blaming federal government policy.
The man is a blithering idiot.
“Oh but it DOES add to our debt because it frees us up to borrow more money”
Nope.
You quite obviously do not comprehend how QE functions. The Fed creates money electronically with a keystroke, literally out of thin air, and utilizes it to purchase treasury securities. When they unwind those positions and sells those treasury securities, the monies they receive at sale will then be destroyed. It has nothing whatsoever to do with the federal government debt.
August 7th, 2011 at 6:52 pm
Lifeboats away!
NZ down 3% in the first half hour, US futures down about 2.5% in Japan
August 7th, 2011 at 7:00 pm
Joe you haven’t posted one figure and as far as I’m concerned, full of shit until you do. The only one talking gibberish is you and well, you know it.
August 7th, 2011 at 7:16 pm
Quimby,
I’m not operating an online remedial course in Economics 101, and you’re the one making wild unsubstantiated assertions, so you’re the one that needs to substantiate your unsupported and ridiculous claims that conflict with both history and reality.
August 7th, 2011 at 7:53 pm
Mayor Quimby – My god, will you shut the F***K up already? The same shit, over and over and over and over. It never ends. Get your own blog for god’s sake.
August 7th, 2011 at 8:13 pm
Mr Friday I must take issue with the last paragraph @6:42pm
1st I believe the FED gets an interest rate on “out of thin air” bytes
2nd “out of thin air” QE robs savings accounts of the need/desire of that plain-jane product – thus making investors go into corporate stocks for return -thus corporations make the repayment rules to benefit the corporation (and this financial industry) .. the investor is 2nd in line (for their ire will cause withdrawl & a mess)
3rd this is all a fabulously designed hook into laborers need to save thus the laborer needs the hire of 1 more profession to surf thru this life .. fabulous hooked system
August 7th, 2011 at 8:52 pm
Joe- I just want you to show me how we can get $1.7 Trillion and balance the budget for one year.
Thor-
Kiss my ass. I’m not trying to argue to hear myself bs. We’re in deep crap – all of us.
August 7th, 2011 at 8:53 pm
Quimby, do you have a job? You spend way too much time here spouting off, or maybe this is your job. You are taking over this and other threads. Get a life.
August 7th, 2011 at 9:00 pm
Is it permissable to make a comment on BR’s article?
I think the real reason for the market dive last week was the realization that the government of the USA has been hijacked by a bunch of Tea Party thugs and hard line conservatives. They will never compromise and were willing to see the USA default. They have been called terrorists and I agree with that term for them.
This is not to say that Obama has no blame. He has to learn to stand up to these bullies or join Jimmy Carter in fixing up old houses. Clinton gave him the perfect tool with the 14th Amendment,but he wouldn’t use it
This government worked for 200 years with compomise. No compromise,no government.
August 7th, 2011 at 9:04 pm
“I’m not trying to argue to hear myself bs.”
Yes, you are. You stated your case. Intelligent people did not accept it. Instead of asking yourself why that was so, you just scream it over and over and over and have totally lost all respect in the process.
You’ve been heard. You are not convincing.
August 7th, 2011 at 9:36 pm
Greg0658,
“1st I believe the FED gets an interest rate on “out of thin air” bytes”
You “believe” wrong.
“2nd “out of thin air” QE robs savings accounts of the need/desire of that plain-jane product”
That would be news to all the Americans that are constantly purchasing treasury securities.
“3rd this is all a fabulously designed hook into laborers need to save thus the laborer needs the hire of 1 more profession to surf thru this life .. fabulous hooked system
I’m afraid I don’t have the foggiest idea what you are referencing.
August 7th, 2011 at 9:37 pm
Quimby,
“I just want you to show me how we can get $1.7 Trillion and balance the budget for one year.”
You don’t seem to get it. I don’t want to balance the federal budget in one year, just as you cannot be expected to pay off a 30-year home mortgage in one year. Why would I want to undo in just one year what it took failed RightWing policies over a decade to do ?
August 7th, 2011 at 9:46 pm
I’m amazed that this one company has so much power over the economy. These guys who couldn’t even see Lehman and the subprime crisis coming, are now in charge of the market? Everyone is scared to death of the effects of the downgrade and what S&P might do next. It seems irrational to me, but you have to respect the market even when it’s gone completely nuts. So I’m thinking about selling more stock here, since people seem to care more about our debt rating than taking any more steps to improve the economy. 9% unemployment, who cares, we have to impress S&P or they might drop our credit rating another notch!
August 7th, 2011 at 10:50 pm
Too far too fast, because I believe in the power of the sea. People are merely smart enough to push in their chips, and not smart enough to know why. Money has been lining up for months to push one way or the other.
Here’s your push; you’ve almost got your 20% in one shove.
August 8th, 2011 at 12:39 am
Gold just broke through the $1700 level at 12:35 AM 8/8/2011. It’s going parabolic. Usually a sign to sell, but “this time it is different”. Here we go.
Yea, I’m ready to go (well at least as ready as I can be). Bought gold years ago, foreign bonds, a few shorts, put stops on the longs, holding lots of cash. Been stopped out of a considerable amount of stocks already. Have to think this thing is just beginning.
With a 20-25%% drop in the S and P, I’ll think about getting back in with some gold platted dividend stocks, like Abbott, BHI, Exxon, and maybe WIN and PG. Dividends will be king.
1937 here we come. Studied up on the Great Depression, and what investments stood up to the turmoil. A good starting point anyway for the new era.
As an aside, talk about bubbles, medical facility building in my part of the world has gone nuts. Not a good sign.
Unlike the Tea Baggers, I don’t think this will be a good thing, even though it will make it tough on O. But I’m as ready as can be.
May you live in interesting times.
August 8th, 2011 at 6:39 am
I read this thread out last nite and slept on it all .. (in MQtone now) (point 3 was redundant) (ps-I get MQs anqst) I relay an old quote I learned in here some time back “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
http://en.wikiquote.org/wiki/Upton_Sinclair
words have effects (not much of)
Mike C & RW chattin … I also Appreciate the response ‘s in and the similar flow thru to in here
http://www.ritholtz.com/blog/2011/08/sp-downgrade/
I’m gonna do what I do .. why ? I dont know anymore .. survive the day I guess
oh ..
the only answer to storing value “the next generation believes it was raised well and so it should so the next” (but alas capitalism is a consumer system so its not in its dna)
psst – I heard (maybe read it) drowning reminds your senses of those final days before date of birth-1 (reverse1)
August 8th, 2011 at 11:49 am
My favorite quote ever Grego! (Oh Al…)
So – help me out here: Governments can’t intervene re gold, but they CAN influence
China? India?
I guess I’ll start here:
http://oilprice.com/Metals/Gold/Gold-Report-Manipulation-vs.-Intervention.html