There is no cavalry coming to the rescue.

That is the takeaway from yesterday’s FOMC meeting. No QE3 was announced, no extraordinary measures were taken, no rabbits were pulled out of any hats. On top of that, the Fed’s language was far blunter than it had previously been discussing deceleration of the economy, possibly risks of an economic slowdown, weak job market, and depressed housing market.

The long-only, fully-invested contingent were hoping for much much more out of the US central bank. They are likely to be disappointed.

I suspect the Fed’s blunt language was telegraphing a message to Congress. Rates are at zero, mortgages are at 60 year lows, and yet demand simply is not there. The Fed has done pretty much all it can do. As we noted yesterday, responding to the weak economy at this point requires fiscal policy, rather than further monetary approach. “The Twist” and purchases of mortgage-backed paper is an attempt to rates down even further. It is hard to see how that can be effective in the current environment.

Don’t expect a policy response from the Austerians. These misguided politicos are in charge in D.C., despite having gotten the past few economic cycles precisely backwards. During the last expansion (2003-07), instead of raising taxes and cutting spending — managing the deficit, creating a better private/government spending ratio — the hypocritical deficit peacocks in the USA did the exact opposite. We cut taxes during (2) wartime, created yet another entitlement program, and raised yet other government spending during private sector economic expansion.

That approach makes much more sense in the current environment of consumer de-leveraging, weak private sector job creation, modest CapEx investment, and low growth. Instead, we suffer from the opposite:

Based upon a fundamental misunderstanding of the works of John Maynard Keynes, they are once again out of phase. Now, the same crowd is looking at raising taxes and reducing government spending when an already frail economy cannot support it. Hence, the Austerians and a complicit White House are all but guaranteeing a 1937 like recession will be increasingly likely.

Excess government stimulus during expansions and austerity during (or immediately after) contractions is simply misguided economics, bad politics and awful policy.

With the Fed out of bullets, traders are now left to their own devices. That means decelerating growth, little in the way of new hiring, and peak profits retreating 15-25%. There is no cavalry coming over the hill, traders are on their own.

Next stop SPX 1100,with 950 as a realistic downside target . . .

Category: Federal Reserve, Markets

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.

119 Responses to “Look Out Below, Post FOMC Version”

  1. BusSchDean says:

    I see more teachers and professors pushing back their retirements.

  2. Mike in Nola says:

    Barry: looks like it should be “60 year low”, not “60 year loans.”

    Spot on, as usual, though I suspect continued volatility from program trading programs in conditions for which they were not programmed.

  3. Mr. Wonderful says:

    The mommy of all short squeezes is probably ongoing in the dollar since about everyone and everything trades against it. Silly commodities bubbles in a world swimming in oversupply, overcapacity, ballooning technological advances and endless supply of cheap labor will be hit very hard.

    Why anyone would want to hoard anything at all (except cash in anticipation of falling prices) in this extreme deflationary environment – is totally beyond me. By now Americans have enough freeze dried food in storage to feed the nation´s pets for 50-80 years ! So, starting to short producers of pet food is probably a pretty good ida now.

  4. Concerned Neighbour says:

    Could reality finally be setting in? I have my doubts, but we shall see. Heck, after they announced permanent low rates at their last meeting – something I took as a sign of defeat and desperation – the market lapped it up.

    The thing that struck me is there was an absence of “safety net” talk. In previous releases, the tone was reassuring (“Don’t worry, we’ve got all sorts of things we can do to fix this mess.”). In this release, the tone was more realistic (“The cupboard is bare. We can do more of the same, but we have no more rabbits to pull out of the hat).

  5. Concerned Neighbour says:

    Mr. Wonderful, I believe the bubbles we see in commodities are due in large part to the low interest rate/QE policies around the world. The money isn’t being used in the real economy, but rather to speculate in commodities and other assets (read, the amazingly out-of-touch US stock “market”). A major drawback of Mr. Bernanke’s policies, to be sure.

  6. [...] Barry: Look Out Below, the guys running this thing have no idea what they're doing.  (TBP) [...]

  7. mark says:

    You’re on fire today BR. Give ‘em hell Brother Ritholtz, give ‘em hell.

    950? That’s a short term target one must presume. The long term potential is far worse, no?

    Austerians are in charge in Euroland as well. They are even Austerier there. Even China and India are joining in the move to purposefully slow their economies (they have reason though – inflation – and I do mean that the Austerians are doing this purposefully – doesn’t the term Austerian simply refer to the intellectual whores on the payroll of the Rentier Class?)

  8. TLH says:

    Do not become too bearish. Stocks with good dividends and high yield corporates might become the only game in town.

  9. dead hobo says:

    Don’t worry, money has to flow somewhere. Once all the panic selling and margin selling concludes, commodities will be the destination du jour. Any cost increase due to higher intermediate term interest rates will just be passed on to the consumers as a additive to the speculator tax. Hot money will attract more hot money like a magnet. Consider buying the dip in commodity related assets as the selling peters out. Lots of liquidity with no productive place to go just causes trouble.

    On the other hand, equities will probably take a bigger pounding. Remember that Fed statement note about reinvesting in agencies as they mature. That cash formerly went into QE 2.5 treasuries. This will decrease the amount of any bond buying and, thus, reduce the added liquidity that found it’s way into the less frequent QE pumps.

    And, my favorite, as I noted yesterday, the shift from mid duration treasuries to long term treasuries will cause a rise in the interest rate associated with mid term loans in general. Companies borrow for investment and working capital. The Fed twist was favorable for long term borrowing but sucked royally for working capital related borrowings. While stock buybacks might be in the stars, so will higher costs due to higher interest rates associated with loans for working capital. For the accounting illiterate, this means the cost of business for most business, especially small business, just went up. Obviously, this is a negative for employment, prices, profits. Operation Twist will likely suck a few tenths of percent from GDP due to higher costs that impact small business the most. As I noted yesterday, what a bunch of dumb shits.

    To the positive, QE3 is probably only a couple of months away as a stimulant to fix the issues forced upon us by Operation Twist.

  10. PDS says:

    Your last reported cash level was 50% BR?….I don’t think that’s enough

  11. MayorQuimby says:

    Austerity does not prevent a recession but it will prevent things from going to shit.
    I find it astounding that you lament the austerians (and then foolishly lump them in with republicans as if many weren’t literally screaming at what bush did).

    Is that REALLY going to help? Of course not.

    Recessions WILL ALWAYS HAPPEN when money creation occurs at the top and not at the bottom. And without BALANACED BUDGETS we can never allow price ps to CORRECT. You can call it deflation but when prices go up 300 percent And then fall 50, is the economy REALLY deflating?


    We get what we earn so if you all want more prosperity and success, GO EARN IT.

    This idea that we cn whip out the taxpayer credit card and JUST MAGICALLY PREVENT ANOTHER RECESSION FOREVER IS UTTER BULLSHIT.

    No mas.


    BR: Your lack of reading comprehension skills is on par with my outdoor lawn furniture, leading me to ask you if you are weatherproof and whether or not you will fade in the sunlight as you age.


  12. Casual_Observer says:

    Ditto ditto ditto (alas)

  13. dead hobo says:

    PDS Says:
    September 22nd, 2011 at 7:32 am

    Your last reported cash level was 50% BR?….I don’t think that’s enough

    Don’t worry about old BR. As equity prices fall, the 50% will grow to a higher percentage without the need to sell anything. If equity prices fall enough, the percentage of cash could approach 100%. Anyway, his bonds are probably doing OK, unless they are mid term duration … in which case they will also contribute to the cash percentage.

  14. Mr. Wonderful says:

    Concerned Neighbour, there isn´t much of an incentive to invest in real economies that suffer a glut in about everything, indebtedness included. The rising economic input cost from foodstuffs, energy and raw materials has then made this situation even worse by crimping small business profits and consumer purchasing power.

    Both prices and wages will have to come heavily down in this environment, it´s totally inevitable. The rising dollar will help this process.

  15. be the ball says:

    Oh Woe is Me!!!! Us poor traders are on our own….wah wah

    First, we individual traders are always on our own. I’ve never had any device but my own. The barriers we face are always damned near insurmountable.

    Second, who gives a flying turd about us? We are a pimple on the ass of the US Workforce. Even worse, we have the most unproductive, useless jobs out there.

    Sorry. It felt like that rant of yours was more based on you being caught too long into the fed meeting rather than expressing any genuine concern for the fate of the American populace (you know, the 99.95% that don’t stare at flickering ticks all day long and call it work).


    BR: New around here?

    You exhibit a fundamental misunderstanding of my positions (50% cash/bonds since Aug 1) as well as misreading of my criticism of the Street

    No soup for you, come back in 1 year.

  16. stonedwino says:

    “I think I’m turning Japanese, I think I’m turning Japanese, I really think so…”

  17. BusSchDean says:

    Last Friday someone who has made a nice career with a finance firm you would instantly recognize, a firm still held in relatively high regard for its prudence and leadership before the crisis and since. He simply said it isn’t fun and hasn’t been fun for a couple of years — doesn’t look like it will get better for him soon.

    Eventually margins, not just prices, have to rise or the effort to drive down costs will impact wages and employment.

  18. Expat says:

    It would be necessary for politicians and Wall Street bankers to be responsible and honest if we wanted to prevent these kinds of crises. Politicians think of the Punch Bowl as a magical Horn, ever self-filling and free of cost. Wall Street is sucking away at it with every larger straws, occasionally topping up with backwash and used lube oils. The Fed is supposed to take away the Punch Bowl just as the party gets going but we now know the Fed is simply a bizarre hybrid of politics and greed; they are so beholden and enmeshed that they cannot act rationally.

    We should have taxed and regulated during the “boom”, using at least part of the fictional wealth to finance our war machines. Had we tempered greed we would have avoided the bubbles and perhaps channeled effort and money into productive activities.

    Now the tide has gone out and most of us are naked. The rest are wearing Prada and complaining that the Poor are trying to hurt them. The traditional solution of having government replace private industry looks untenable because we have let the problem grow so large.

    But, don’t worry, the market will rally five percent at least once during the week and we will hear that the bottom is in, pessimism is over, Job Creators will save us, and Rick Perry is the new Reagan/Bush.

    ha ha ha.

  19. Jim67545 says:

    I don’t see/hear much about having a part of the strategy be to eliminate anything and everything we can which causes us to export wealth to other parts of the world. The biggies lie in the defense area with two wars, expeditions in Somalia, etc., stationing troops to support NATO (WTF?) and south Korea. We have bases in Guam and elsewhere that are hated. We support (read ship everything from aircraft to tootsie rolls to) Guantanimo. A base in Diego Garcia? On and on. Why are WE the trainer for the world’s military and police? Why, when there is an airplane crash overseas our NTA investigates? We have coast guard ships off Somalia. What other countries are doing that?

    We tolerate all sorts of illegal sucking from drugs to cyber crime to frauds. We support the world’s pharmaceutical industry by paying premium prices, so drug companies can charge less overseas (even Canada.) We support vassel states like Israel and Pakistan. We tolerate unfair trade and currency practices by other countries – sort of an unofficial foreign aid program.

    For every dollar we ship overseas that is a dollar that is not available either to trim the deficit (without negatively impacting domestic employment) or to redeploy into things geared to improve the country in the long run.

  20. call me ahab says:

    “With the Fed out of bullets, traders are now left to their own devices.”

    I guess it’s the Fed’s job to keep that bid under your portfolio


    BR: That is unfortunately how its been since the Greenspan Put was created circa 1998

    See this from later today:

  21. ashpelham2 says:

    It’s tough dealing with individual investors anymore. But that alone isn’t enough to make me want to bail out of a career. Bail of out stocks PERMANENTLY? Did that some time ago. What am I advising my clients? Fixed income is for everyone. Whatever the general understanding has always been for the right mix of equities and fixed, shift 25% more toward fixed. All of this volatility is just too much for yesterday’s investor to take.

    As for me? Eventually, my big break in Hollywood will come, and all the money I’ll be printing will make these concerns seem trivial!

  22. TrndTrader says:

    As I mentioned last week on talk of adding long leverage, if one simply looks at price and nothing else, essentially all long-term trend systems were still short, and where the market was at in its mini-rally was about the point where same said systems on intraday data were getting close to their long exits.

    Now we get “one of those” periods where everything is correlated, more or less.

    The “I have to buy dividend paying stocks yield seeking crowd” has had a awfully loud voice the past 4-5 weeks, so it’s likely that sector will see some ugly results as the downmove progresses. It will have high relative strength up until the point where forced selling occurs after funds, et al, have sold what they have to since then they will be selling what they can.

    The exit point for “dividend paying stocks” was this summer or baring that a simply volatility multiple exit off their highs. It was a nice place to be for 1.5 years or so, but when the cavalry shows up in huge quantity wanting to buy, buy, buy, most of the time it’s best to simply let them have it. ;)

  23. [...] allowed me to short the indices in my retirement plan but they not.  Barry Ritholtz over at the Big Picture explains why Congressmen like John Flemming are complete morons: I suspect the Fed’s blunt language was [...]

  24. JimRino says:

    Anyone who can really see what’s going on in the economy is a DEMOCRAT.
    Barry, Time for YOU to Run.

  25. SCTTD says:

    BR – the problme with 2003 – 2007 fiscal policy was a misplaced reliance on supply side theory. I know many are throwing it out as a failed theory. In fact it is a solid theory WHEN overlaid with supply/demand curves. Supply sider theory relies on upper strata investing the extra money they are allowed to keep ultimately creating jobs. This only works if you have adequate and rising demand and/or a shortage of supply. When you have over supply in every sector of the economy worldwide, it is either misallocated or held as cash (as corporations are now).

    Dead Hobo – you might want to read up on deflation. When leverage is squeezed as it must be with the zero bound being pushed out the maturity curve, the currency debt is denominated in become in demand and even hoarded. If this is the begining of the end game, commodities will not rise, they will fall until we can establish a new supply-demand balance supported by real incomes. Watch gold as a tell on this.

  26. Greg0658 says:

    “Stocks with good dividends and high yield corporates might become …” .. yep – I heard corporations are buying gold in the shadows to pay dividends (and your cash out money) with .. no need to worry at all

  27. Greg0658 says:

    here is some real advice – when a stock gets .25%Xearnings (not 7. or 11.) buy a seat on the BoD (with your gold)

  28. machinehead says:

    Next stop SPX 1100,with 950 as a realistic downside target . . .

    I doubt it. The VIX is taking another run at 40. If you missed the August lows … here’s your second chance.

    Don’t blow it!

  29. [...] Look Out Below, Post FOMC Version | The Big Picture (tags: federal-reserve monetary-policy) [...]

  30. Ted Kavadas says:

    RE: “Next stop SPX 1100,with 950 as a realistic downside target . . .”

    Yes, I think that the stock market will go below 1100, as I wrote in the following post, because of the “deflationary pressures” I mention as well as various other problems:


  31. Petey Wheatstraw says:

    The average person does not have enough dollars because the average person is not an insider.

    Sure, there was “easy money,” for some, because the dollar is purely fiat. The rest of us were offered easy credit.

    Again, I ask: What is the value of a dollar?

    The answer is that there is no value — it is indeterminate in fact, and “scarce,” solely due to allocation by choice. Once the value of a dollar became indeterminate, the entire global economy (thanks to globalization and the dollar’s “reserve” status), was placed in the hands of a select few who could determine both its quantity and its allocation. Once those conditions were put in place, our common wealth was stolen, and our Republic was finished, and the Fed became the law.

    In 1973, the dollar ceased being a unit of value and became a purely political tool. In 1973, credit became the ONLY means of access to dollars for the average citizen. When debt is all you have access to, debt is what you use to stay alive and “prosper” (for a while). In 1973, the ability to control the wealth of our country was handed over to a select few, who we foolishly trusted to do the right thing, without check or balance.

    Yesterday, Elizabeth Warren said, “There is nobody in this country who got rich on his own. Nobody.”


    Ms. Warren is correct.

    Yesterday, it was reported that the Koch brothers’ “fortune” had reached a stunning $50 billion.


    Does anyone actually think that this “wealth” was “earned” (in the real meaning of the word)?


    Of course not. It’s the manifest destiny of crony capitalism.

    Now, we speak of “austerity,” as if that is the only path we might take to return to prosperity.


    Some complain of high taxes, but never question exactly why, despite their hard work, or their willingness to work hard, they don’t have enough fiat to pay those taxes and live a comfortable life. Some are easily bamboozled (apparently a vast majority of The People).

    It’s high time we understood the scam by which we have been fleeced.

  32. wally says:

    ” These misguided politicos are in charge in D.C.”

    It reminds me a lot of the environment in the late 1960s… there was a blockhead group in power that had its own theories (the domino effect, losing face to the commies, “national honor”) and they simply would not listen to others. Instead, they ruined the lives of people to keep their strange world intact. We’re the same now… there is no dialogue based on reason; it’s dogmatic and hardened and lives are being injured by that goofy belief that “right” is what they think it is, not what reality says it is.

  33. dead hobo says:

    SCTTD Says:
    September 22nd, 2011 at 8:39 am

    Dead Hobo – you might want to read up on deflation. When leverage is squeezed as it must be with the zero bound being pushed out the maturity curve, the currency debt is denominated in become in demand and even hoarded. If this is the begining of the end game, commodities will not rise, they will fall until we can establish a new supply-demand balance supported by real incomes. Watch gold as a tell on this.

    I agree deflation … in this case prices falling to incomes … is the ultimate conclusion. The Fed has been trying to force incomes to prices and has used monetary policy to inflate prices. They are failing but speculators and robots will use the excess liquidity for fun and profits for a long time coming. The Fed will attempt to pump inflation at least one more time as they eventually realize how badly they just screwed up, hence my belief in QE3 and probably before the end of the year.

    Over the relevant range of economic activity, this Fed initiative was actually a tightening since it will cause intermediate term rates to rise. I also believe this is an unintended consequence on the part of the Fed. The Fed just created a deflationary event.

    I agree gold will ultimately fall to possiblu a few hundred dollars eventually. Just not today or soon. The deflationary end game is too far off for this to be a short term possibility.

  34. Petey Wheatstraw says:


    We have already “gone to shit.”

    Stop trying to make sense of the scam by justifying and perpetuating it.

    You cannot solve this problem by asking for another whack across our collective asses.

  35. wally says:

    If your theory is that negativism is a good sign, the general mood of today’s posters sends a buy signal. As the Fed targets the long rate, a lot of divvy stocks look to be great buys.
    I suppose you might argue that people will stop using cellphones, stop using medical supplies, stop buying toothpaste or tissue but, really, that’s not going to happen.

  36. rootless says:


    You, together with the other lunatics from the tea party, have been advocating deliberately crashing the economy and society all along. How is this preventing things going to shit?

  37. Gene-OK says:

    @BusSchDean Says:

    >>He simply said it isn’t fun and hasn’t been fun for a couple of years — doesn’t look like it will get better for him soon.

    Gee! I guess I should feel sorry for him? I suppose all of us get up every damn day looking forward to a fun day at work?

  38. Petey Wheatstraw says:

    wally Says:

    “I suppose you might argue that people will stop using cellphones, stop using medical supplies, stop buying toothpaste or tissue but, really, that’s not going to happen.”

    People won’t choose to do those things, but they might be forced to. How does an unemployed or underemployed and indebted person continue to use any of those things? Get a job? Credit? Become an entrepreneur? Crime? Welfare?

  39. rktbrkr says:

    The Austerians know they can’t obtain a majority but they will try to make the country ungovernable by sending it into default/depression as we have already seen by their “my way or the highway” approach to democracy -and it’s the entire country, not just the Democrats that they’re willing to put on the highway.

    If the Democrats took the same approach and refused to support Bush when he was frantically throwing bailouts and stimulus at the banks, ins cos and automakers we would have had the depression he was frantically trying to avoid on his watch. Instead we are going to get a bifurcated depression starting with the first dip at the end of Team Bush and the second dip coming as Teabaggers try to balance the budget in the worst recession in a century – beyond wrong-headed.

    The thing that baffles me about the Teabaggers is that they are falling on the sword for the millionaires they are not. The Teabaggers want to savage the very same entitlement programs so many of them are dependent upon in order to maintain lower tax rates for the wealthy and keep feeding the maw of the military-industrial complex. I think the Teabag movement must be political cover for masochist groups.

  40. dead hobo says:

    rootless Says:
    September 22nd, 2011 at 9:26 am

    You, together with the other lunatics from the tea party, have been advocating deliberately crashing the economy and society all along. How is this preventing things going to shit?

    While I’m not a tea party nut or would consider myself a nut of any kind, I think things have already gone to shit. At this point, we are discussing the depth of the current and coming shit pile. With all due respect.

    In fact, and I never thought I would ever say this given history of the past couple of decades, I might vote Republican next year. The tea party are the lunatic fringe and Obama and the Dems are out of touch and utterly incapable of leadership. As long as the Republicans don’t try to make being poor and unwilling to support the upper classes a crime or start a new patriotic war somewhere, then they are starting to look a little better.

  41. rootless says:


    What makes you think the mood in this forum was representative for the general sentiment in the market? I think your assumption, on which your argument is based, is fallacious. If the mood here was any contrarian indicator when would there have ever been a time to sell stocks in the first hand?

    I don’t even see that the buy-ammo-and-canned-food types have appeared here now. Unlike in early 2009.

  42. rktbrkr says:

    Recovery via headline. those financial writers know how to find the pearl in the swill!

    (Bloomberg Headline): Initial Jobless Claims in U.S. Fell Last Week

    (First sentence)More Americans than forecast filed first-time claims for unemployment insurance payments last week as the labor market struggled to improve.

    A couple thousand drop out of 420K and a few thousand worse than expected.

  43. wally says:

    Yep… really overblown negativism.

  44. Petey Wheatstraw says:

    dead hobo:

    The Republicans don’t need the likes of you and me to support the upper class (there are no upper classes, or there will soon not be), so there will be no laws requiring us to do so.

    Do you honestly believe that they woke up and decided to do what’s best for this country? The Tea Party are the Republican leadership.

  45. rootless says:

    @dead hobo:

    How do you define “gone to shit”? I call such wording hyperbole and polemic at this point. How would you name it then, if GDP was down by 25% and U3-unemployment rates were at 20 or 25% or higher, if there were food riots etc.? This likely would happen, if it went according to the wishes of MayorQuimby and Co.

  46. Mr. Wonderful says:

    Since the FED is already leveraged 60 to 1 against its own capital, the probability of QE3 is zero.

    A relatively small fall of its portfolio due to rising interest rates would quickly render it technically insolvent, forcing it to sell part of the portfolio, that is contract the money supply. So you see, Operation Twist is in fact to a great part in the interests of the FED´s own self-preservation.

  47. rktbrkr says:

    Watching WNET news last night and their piece on retirees medical care said that SocSec and Medicare was worth hundreds of thousand and I thought “sweet baby Jesus, don’t say that the Teabaggers will be burning the White House” (even though many of them are dependent on these same entitlements)

    Compare the value of prefunded SocSec and medicare to average savings (before the past two days stock meltdown)

    Baby boomers between the ages of 41 and 54 have typically a retirement savings of $30,000.

    Baby boomers have median total household personal retirement savings of $35,000.

  48. dead hobo says:

    Petey Wheatstraw Says:
    September 22nd, 2011 at 9:49 am

    dead hobo:

    Do you honestly believe that they woke up and decided to do what’s best for this country? The Tea Party are the Republican leadership.

    No, but part of me thinks it will be easier to fix what they might break than expect any Dem to do something useful while things continue swimming in shit. Admittedly, this is a close call.

  49. arthur.i says:

    If anyone needs a brake from this roller coaster, here is an amazing documentary on water:


    It’s in nine parts on youtube. Really fascinating stuff…

  50. Petey Wheatstraw says:

    Yes. Poverty and privation can be overcome by positive thinking. Don’t worry, be happy!

    A little note on the Tea Party: They cheered Perry executing prisoners. Supporting it is bad enough, cheering it is ghoulish. Economic policy isn’t their sole agenda. Don’t ask for whom the bell tolls.

  51. Petey Wheatstraw says:


    it’s only a close call because they are one and the same: Corporatists (except for the select few, who are ignored).

  52. dead hobo says:

    Petey Wheatstraw Says:
    September 22nd, 2011 at 10:03 am


    it’s only a close call because they are one and the same: Corporatists (except for the select few, who are ignored).

    Yes, it’s really a beauty contest. Which turd is the prettiest and smells the sweetest? The question boils down to which one won’t stop up the crapper?

  53. rktbrkr says:

    A little note on the Tea Party: They cheered Perry executing prisoners. Supporting it is bad enough, cheering it is ghoulish. Economic policy isn’t their sole agenda. Don’t ask for whom the bell tolls.

    I told you the Teabag movement is just a political umbrella for sado-masochists, they’ll be cheering as their Medicare is eliminated and then they can fall in line with the Mexican mommas with their anchor babies at the charity clinics, take the bus there when they can’t afford to keep their car on the road when their SocSec is diverted to open Perry’s new military front to liberate Persia

  54. ironman says:

    It appears that this analysis was almost spot on – all the way up to anticipating that the Fed would take stronger action by the end of this month:

    Surveying the currently developing economic situation, Jim Hamilton anticipates the Fed’s next move with respect to the apparent resurgence of deflationary expectations:

    And in response, the Fed should do what, exactly? A new phase of large-scale asset purchases (which doubtless would be referred to in the press as QE3) could sop up a few more percent of publicly-held Treasury debt. Conceivably that could put pressure on the nominal or TIPS yields to decline even further, and I suppose that one might hope that a 10-year real Treasury yield of -0.2% would be slightly more stimulative than the current real yield around zero.

    I would suggest that the more important and achievable goal for the Fed should be to keep the long-run inflation rate from falling below 2%. The reason I say this is an important goal is that I believe the lesson from the U.S. in the 1930s and Japan in the 1990s is that exceptionally low or negative inflation rates can make economic problems like the ones we’re currently experiencing significantly worse. By announcing QE3, the Fed would be sending a clear signal that it’s not going to tolerate deflation, and I expect that would be the primary mechanism by which it could have an effect. Perhaps we’d see the effort framed as part of a broader strategy of price level targeting.

    Once that happens, if the Fed continues to use stock prices as its gauge for setting the amount of quantitative easing it will do, we can expect stock prices to begin increasing in response. We anticipate that the market will bottom either this month or in September as the Fed initiates such a program.

    And now, here we are on 22 September 2011, and the Fed is indicating that it will not initiate such a program. The expectation that it would was what was holding stock prices up near the low 1200 level, and now stock prices are falling in response to the Fed’s unexpected nonaction. Barry’s target range looks on target in the short term – we’ll have more next week.

  55. gman says:

    You go Barry! We truly live in a bizzarro world.
    ” Friedman is a socialist” Cheer on Keynes in the inverse…”.tax cuts and wars in the boom times..austerity, tax hikes and calls for tight money/gold standard in the BUST TIMES”.

  56. wunsacon says:

    I’m really tired of hearing “Keynesian”, “Keynesian”, “Keynesian” from people who write like they’re paid a $GOP buck every time they misuse it.

  57. rootless says:

    Well, they just have had these two guys on CNBC who were saying how these were the final weeks of the market drop, the capitulation stage, how this becomes a great buying opportunity and the stock market will go up after this. How many more out there thinking like this? So much for the “negativism”.

  58. wunsacon says:

    >> the Teabaggers … are falling on the sword for the millionaires they are not.

    As Matt Taibbi said (with Joe the Plumber in mind): they think they’re one clogged toilet away from being millionaires.

  59. rktbrkr says:

    The Fed loading up with longer term maturities at all time lows really increases their risk exposure.Hear a talking head say a quick 1/2% interest rate increase effectively wipes out the Fed.

    The risk/benefit of this move doesn’t look very attractive. I don’t think there is really a viable exit strategy for the Fed – certainly not after they finish twisting. I think we’ll get a new Federal reserve system after the depression and defacto fed BK

  60. rktbrkr says:

    As Matt Taibbi said (with Joe the Plumber in mind): they think they’re one clogged toilet away from being millionaires.

    The clogs are all in their heads.

  61. BusSchDean says:

    Gene: Not suggesting we should feel sorry for anyone. He no doubt very much enjoyed some fun during a more go, go environment. My point was simply the ongoing duldroms and declining morale.

    BTW, yes, I do! (i.e., “get up every damn day looking forward to a fun day at work”). And I “manage” a group of highly educated tenured professors that I can neither reward for quality work no penalize for less quality work.

  62. rootless says:


    Please could you and anyone else stop calling the tea-party people “tea baggers”? It’s a derogative term that negatively stigmatizes real tea baggers by using it in this context. There is nothing wrong with tea bagging.

  63. Gene-OK says:

    @BusSchDean You forgot to mention you can’t fire them or penalize them for non-quality work either, since they are ‘tenured’. And what’s not to like about having a job where you have ‘tenure’ and can’t be fired? I bet the school continues to increase contributions to their TIAA-CREF accounts even during ‘hard times’.

  64. BusSchDean says:

    dh…agree with most of your comment except, “As long as the Republicans don’t try to make being poor and unwilling to support the upper classes a crime or start a new patriotic war somewhere, then they are starting to look a little better.” If history is any judge you may not want to put too much on this possibility. That said, I share your frustration with the black hole of leadership on the other side. And just to be complete, compared to times past, business leadership now is less than pitiful.

  65. rootless says:


    I suppose you might argue that people will stop using cellphones, stop using medical supplies, stop buying toothpaste or tissue but, really, that’s not going to happen.

    This is a fallacious reasoning. You don’t need to assume armageddon, or that people stop buying every day stuff to see the possibility that stocks will be going down even more, perhaps even drop below the levels of March 2009 eventually. You only need to assume that valuations in the stock market will go back to their historical normal eventually, and that the excessive profit margins of the last years won’t last forever. CAPE is still around 19. And secular bear markets ended in the past when CAPE had reached single digits. The open question rather is how long will it take to get there. It still could be years from here, with some cyclical bull markets on the way. Also, the longer it takes the more an increase in the denominator could contribute to bringing CAPE down.

  66. AtlasRocked says:

    Keynesian Beauty Contest
    $25 gift certificate for the winning example:
    Keynesian stimulus was used in the
    country _____ in the years ______,
    during a __ recession/__ depression,
    then the economy turned around within 2
    years and then produced ___ years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within ______ years.

  67. wally says:

    “You only need to assume that valuations in the stock market will go back to their historical normal eventually, and that the excessive profit margins of the last years won’t last forever.”

    I disagree… but we each plan our strategies according to how we see things.

  68. herewegoagain says:

    Thanks Barry. Perfectly summarized a perfect mess.

  69. rootless says:


    Care to elaborate with what specifically you disagree and why?

  70. Petey Wheatstraw says:

    rootless Says:
    September 22nd, 2011 at 10:27 am

    Please could you and anyone else stop calling the tea-party people “tea baggers”? It’s a derogative term that negatively stigmatizes real tea baggers by using it in this context. There is nothing wrong with tea bagging.

    Funniest comment of the day!

  71. Petey Wheatstraw says:


    Your premise is all fucked up. We missed the boat on Keynesian policy when we didn’t build reserves during the boom.

    Atlas blew Greenspan, BTW.

  72. AtlasRocked says:

    Bush was not a conservative nor an Austerian. He raised social spending 3.5X over defense spending. Go look it up. Don’t go to Dailykos.com, go to the government’s own spreadsheets, look at the years 2001 and 2009, sum all the social spending in one pile, all the defense spending in another, then do a divide to show the growth of each. 3.5X is the ratio. Bush and Obama have been doing the exact same policy: Appeasing the middle class, who demand more social spending and less taxes every time they go to vote. Ideologues are not our problem, democracy is our problem. Plato told us all about the problems with democracy 2400 years ago, and all the Western democracies are experience the same symptoms: http://faculty.frostburg.edu/phil/forum/PlatoRep.htm

    Democratic self-government does not work, according to Plato, because ….In their ignorance they tend to vote for politicians who beguile them with appearances and nebulous talk……

    Imagine then a ship or a fleet in which there is a captain who is taller and stronger than any of the crew, but who is a little deaf and has a similar infirmity in sight, and whose knowledge of navigation is not much better. The sailors are quarreling with one another about the steering—every one is of the opinion that he has a right to steer, though he has never learned the art of navigation …

    [The sailors] throng about the captain, begging and praying him to commit the helm to them; and if at any time they do not prevail, but others are preferred to them, they kill the others or throw them overboard, and having first chained up the noble captain’s senses with drink or some narcotic drug, they mutiny and take possession of the ship and make free with the stores, thus eating and drinking. They proceed on their voyage in such a manner as can be expected of them. Him who is their partisan and cleverly aids them in their plot for getting the ship out of the captain’s hands into their own whether by force or persuasion, they compliment with the name of sailor, pilot, able seaman, and abuse the other sort of man, whom they call a good-for-nothing; but that the good pilot must pay attention to the year and seasons and sky and stars and winds, and whatever else belongs to his art, if he intends to be really qualified for the command of a ship, and that he must and will be the steerer, whether other people like it or not—the possibility of this union of authority with the steerer’s art has never seriously entered into their thoughts or been made part of their calling.

  73. BusSchDean says:


    Yes, dealing with tenured people can be a challenge but I do not consider the ability to fire someone to good management, more often than not it results from the failure of management.

    Yes, I am tenured BUT I took this job non-tenured and have, in fact, twice given up tenure to make a move. Not everyone in academia is afraid to be judged on the quality of his/her work and not everyone cares that much about tenure.

    Nope, contributions have not increased. In fact, I took a small pay cut for 18 months and as you probably know there have been furlows. Your kneejerk reaction may say more about what you don’t know about higher education than what you do know.

  74. Petey Wheatstraw says:

    Mr. Wonderful Says:
    September 22nd, 2011 at 9:55 am
    Since the FED is already leveraged 60 to 1 against its own capital, the probability of QE3 is zero.

    What capital? It’s fiat.

    Jeesus on a fuckin’ piece of burnt toast. Tell me where they got the “capital” for QEs I & II.

  75. DrungoHazewood says:

    Any of you geniuses ever thought that decades of lies, opacity, corruption, thievery and central planning has caused the tbaggers? How about political patronage thinly disguised as stimulus? How about a healthcare bill that funnels billions to already massive corporations, making them unassailable financial colossi? Both parties are still doing everything to destroy trust. They just boldly lie right to your faces, and still you vote for these turds. Why don’t you pinheads look in the mirror and think about the gangsters you have been voting for? Hope and change really means I hope nothing changes. Executive orders over the weekend, more money poured down a rat hole, sneakily announced on a Friday night during the holidays. How many times do you have to be lied to, slapped in the face, bent over and financially gang done by the corporatists? Rip off that diaper, grow a pair, and admit who the real enemy is and face him! You have el presidente jetting around with an incompetent gangster like Jeff Immelt. And talking about creating jobs? And you don’t see anything a tiny bit ironic about that? We aren’t going to be able to ponzi our way to prosperity. Gimcrack financial schemes will continue to predictably come a cropper. People that actually try to be productive are legislated against and looted. Get used tiny or no pensions, expensive take two aspirins and don’t call me in the morning health care, and junky smoke belching cars with at least one donut tire. Or better yet, let’s all get a bicycle. And if the unions think they are going to get away with their ‘our shit don’t stink’ attitude, they have another thing coming! As Greece shows, the ponzi eventually comes after them too.

  76. Petey Wheatstraw says:


    As with that of AtlasRocked, your premise is all fucked up. The Tea Party is nothing but right wing republicanism (no realtion to actual republicanism, BTW), writ LARGE. Tell me how these freekin’ imbeciles (“morans” to use their parlance), ever got one minute of media coverage, while demonstrations on Wall St., are met by absolute silence. The Tea Party, in addition to being tools of the penile kind, are tools of the entrenched right wing, corporatist status quo.

  77. rootless says:


    Nice rant, although with some straw man arguments put in there.

    Now explain how any of the the proposals the tea party had advocated that would have crashed the economy, like crashing macroeconomic demand by a radical stop in government spending, cutting social security and medicare would have helped with eliminating any of the things about which you have been ranting. It seems to me that the tea party people believe that a collapse of society is needed and that would have a cleansing effect and would lead to salvation and some free-market fantasy land.

  78. HarleyHoward says:

    Anyone who says that deficit spending will solve the debt problem is an idiot and has never read Keynes! Even he knew and wrote that the government can’t borrow it’s way out of debt! (Duh!) And, since many of you haven’t, maybe you should read “This Time is Different” where you will learn that it is not! Oh, and look, our debt is at 100% of GDP!!!! What a surprise! (Duh! again!)
    Common Sense from the Heartland – http://howardwemple.com

  79. AtlasRocked says:

    Guys, if there is one thing that is clearly lacking in American discourse, it is decorum and honesty. The repeated strawman arguments to cast the other side as wanting to crash the economy is just a total waste of time and exposure of gigantic ignorance. Calling names? Really? You folks are grown ups? Really?

    If you guys were at work trying to figure out how to fix a car, or a device, or set up a flow for customer or a store layout, would you be citing the other employees as really wanting to make the store go out of business? Really? Of course not? I even have to cite you as violating this decorum rule, BR.

    Most of these arguments would be over in short order if we simply put the good and bad arguments in front of us all, weighed out the cases for legality (standing of policy vs written law), morality (if someone is getting a benefit, who is getting hurt and is that a good moral trade off), and fiscal policy ( is someone who had no interest in the outcome being left a debt? if we’re talking a loan, are the borrower and loaner equally at risk?, is the policy sustainable? are the prior results showing promise? or are they failing all over the world? ) .

    Why don’t we try debating like grownups for a while?

  80. MayorQuimby says:


    Bull fucking shit. The only lunatics are the ones that think more debt can solve an excess credit problem.

    If insanity is defined by doing the same thing over and over again and expecting a different result, then LUNACY can be defined as DEMANDING (petulantly) more of the very poison that is consuming us.

    YOU are why we are crashing. And so is anyone that believes we can borrow our way out of this mess.

    Tea Party conservatives are 100 % correct when it comes to balanced budgets and living within our means.

    After TWENTY YEARS of failed easy money IT IS TIME FOR YOU GUYS TO STFU already.

  81. rootless says:


    Who exactly has claimed here that the government could “borrow it’s way out of debt”? Who exactly are you addressing with your rant? Beside your name calling against some unspecified people you apparently just make things up. What for? To have a pretext for unloading your link to some right wing propaganda against social security and the alleged global warming conspiracy in response to the criticism on the tea party?

  82. MayorQuimby says:


    How does living within ones means cause a problem? If it is because we have promised the unaffordable to tens of millions with regards to pensions and medicaid and social security THEN WHAT IN HOLY HELL IS THE ANSWER?

    Clearly credit won’t solve it although it can delay the inevitable for a time.

    So what do you propose? Destroy more purchasing power and force inflation into the system? WONDERFUL. I’ll see you at the next riot – the one with 20 million people storming DC.






  83. AtlasRocked says:

    Folks we have 6 gigantic, egregious violation of law, fiscal restraint, morality, and economics in front of us. Let’s take account of where the Federal government is at right now:

    There are 6 current, major areas of egregious government behavior:

    Social security, banking, constitutional violations,
    fiscal servitude of our youth, the conjoining of big medicine and government, and the Keynesian stimulus scam.

    1. Social security: Social Security keeps 2 sets of books. Obama called it a contract, yet its debts are not tallied in the nation’s debt total. Clinton borrowed money from SS; can you imagine how quickly a bank president would be jailed for loaning money beyond required reserves? Why did the liberal advocates abrogate FDRs demand that SS be a separate cost center spreadsheet from Federal gov’t spending? SS also has all the characteristics of a pyramid scheme, requiring constant growth in payees to make it viable. This has all the earmarks of a massive scam.

    2. The bank fraud: The nation’s handout programs are critically dependent on steady tax revenue, unlike the days when Warren Harding chopped federal spending 50% in one year, and ended a DEPRESSION in 2 years. Now the banks are unhealthy due to a mass of bad real estate loans, falsely rated loans, loans to unqualified applicants promoted by gov’t policy, and overselling due to excessively low FED interest rates. Since the gov’t can’t take the economic/tax revenue drop-off of writing down the losses and reconciling the debt, they won’t prosecute the fraud perpetrators, which include gov’t officials, nor will they prosecute the bank officials behind the scam.

    3. The legal sodomization of the Constitution: The debts being left for the kids are in direct conflict with the Constitution, and now they are in conflict with the legal basis of liberal benevolence programs.

    First look at the legal basis for the benevolence programs: Liberal program advocates directly abused the vague language of “promote the general welfare” in the preamble to the Constitution in order to legalize Social Security. Next, they abrogated FDR’s demand that Social Security books be kept seperately, this was done through the courts nullifying FDRs law by fiat. Now, they have abrogated the sentence immediately after “promote the general welfare”: “secure the blessings of liberty…. to …. our posterity.” Leaving a $14 trillion national debt is in direct conflict with the sentence just after the one they trampled in the 1930s. Did you really think they were going to stop abusing the Constitution after only one breach? Did you think they would adhere to their own laws? The words of the Constitution must stand, like all laws, as intended by the legislators, until such time a new law is passed or the law is amended. Finding judges who agree to work around written law is lethally bad practice.

    4. The fiscal sodomization of the next generation: At any given time, a people cannot demand to consume the resources of the future generations for their well being in any manner, nor for any reason. I guarantee you the folks being left “holding the bag” of $14 trillion dollars are noting all the sins surrounding the current policies of the grasshoppers now eating the stores for the next few winters. They will have ample moral right to cancel all the bills at their whim.

    5. The conjoining of big medicine and government: Big medicine has infested Washington DC, selling them and the American people on the notion we have to buy all their technology for all our people, telling them no expense can be spared. Obamacare was sold on a $2500 saving/per family basis, and sold as a policy DIRECTLY AIMED at closing the deficit to tax levels, not as a reason to raise taxes nor to increase the deficit. The new Obamacare bill also demands the abrogation of the commerce clause, for the first time in our history the Constitution must be re-interpreted to force citizens to buy something. The diversion of so much labor and capital into a single market that accelerates our wealth drain is not tenable, the next generation cannot be asked to pay for it, and it has destroyed our faith in our money system. Preserving life will be even more imperiled when the money system fails. In the end, everyone still dies, and the aged generation has consumed the resources needed for the young to survive. That cannot stand.

    6. Keynesian stimulus: There are no historical examples of Keynesian stimulus success. $2 trillion has been wasted on a completely substatiated scam, a 100% failure-perfect economic idea.

  84. Petey Wheatstraw says:


    You are aware that, in theory, we have a Constitutional (redefined as “quaint” by Bush), Republic, with democratically elected, representative government, and not a Democracy, right?

    you wrote:

    “Bush was not a conservative nor an Austerian. He raised social spending 3.5X over defense spending. Go look it up.”

    How about you providing a link and defining “social” spending?

    He also cut taxes and promised prosperity in return.

    Bush was a Corporatist, so is Obama.

    BTW: Bush might have been a Austrian (he wasn’t much of an American), but I really don’t know what an “Austerian” is.

    It’s also interesting that every time a “conservative” politician fucks the nation over, the other “conservatives” disown them.

    Please tell me what plan the “conservatives,” minus Bush, have to return us to our golden age.

    Keep in mind that you will not be able to disown them after they go all butt pirate on your ass.

  85. Petey Wheatstraw says:


    You, sir, are the Mayor of Goofytown.

    You call a wholesale redistribution of wealth to the very wealthiest people in our country “living within ones means?”

    The “fat” you want to cut is what’s financing your imbecilic Tea Party.

    And now, you want the middle class to suck it up?

    Fuck that.

    Raise marginal rates to what they were under Eisenhower, tax offshored money (I don’t give a damn if the repatriate the cash, or not, but they will have to if they don’t want to go to prison, forever), bring the jobs and industrial capacity we’ve sent overseas back home, and then we can discuss the remaining deficit.

  86. [...] Ritholtz, “With the Fed out of bullets, traders are now left to their own devices.”  (Big Picture, [...]

  87. [...] Ritholtz, “With the Fed out of bullets, traders are now left to their own devices.”  (Big Picture, [...]

  88. MayorQuimby says:

    I fully support higher taxation of the rich.

  89. wally says:

    “Care to elaborate with what specifically you disagree and why?”

    Several things. First, I finally see -after 4 years in the wilderness – signs of something happening in architecture/construction. Vacancy rates in some areas are astoundingly low, as low as 1 percent and less. At the same time, money is very cheap. That means building. It won’t be single family homes, to start, but will be rental properties. However, that starts a virtuous cycle. What happens week-by-week in the stack market or even in Europe does not affect this stuff. Long-term population growth and pent-up pressure does. I see construction numbers next year being stronger than expected. I also contend that, had construction joined the party as we rose from the recession, we’d be talking a very different story today… it would not have been a weak recovery.
    I also think the basic divvy stocks will not see their sales and incomes decrease to the point where they cut dividends. I think the wireless industry (now basically AT&T and Verizon) is a good case in point: There will be far more use of this with each passing year; the trend is to move from telephone services to social media to full internet via handheld devices and since that market is down to two principal companies, they must at least share the growth between them. With long rates and even home mortgages now set at less than you can lock in for dividends, I think this is a no-brainer.
    The underlying point is: life goes on… variations of a few percent may seem earth-ending to investors but they are a non-event for millions upon millions of people.

  90. wally says:

    “I fully support higher taxation of the rich.”

    So do I.

  91. rootless says:


    You yourself have made clear a few weeks ago that you are advocating the economic collapse by posing the rhetorical question to me whether I preferred the quick death or the long, drawn-out one, making clear that you opt for the first one. What more do I need to know what the ways of your thinking are?

    Your populist slogans about “living within ones means” don’t make go away how macroeconomics work. Cutting government spending hundreds of billions of US-dollars a month now, in an environment were the global economy is at the brink of a new recession already, will crash total demand, the income of the private sector by about the same amount of the spending cuts and it will collapse the GDP as a consequence and, in turn, tax revenue of the government even more. How about a U3-unemployment rates of 15, 20, or 25% or higher? Now, please explain what good would come out from that. A cleansing effect of society? Will some free-market paradise rise from the ashes after that?

    And no, I don’t have a solution to offer. In contrast to you I don’t believe in SALVATION, and that there is really any solution for the debt problem. Debt is the motor oil of capitalism (and human labor as wealth creating resource is the fuel). So debt will grow. Worldwide. And the more it grows the more it will become a problem impeding economic growth. This is going to continue to go in cycles, with booms, and following financial crises, and temporary relief until the next one. But the alternative is none. There is no such thing as a debt free free-market paradise where all this doesn’t occur. This is just a fantasy land.

  92. Petey Wheatstraw says:


    I’ve been involved in the building and development industry for a long time (residential, commercial, mixed use, and a little infrastructure). It really doesn’t matter to the overall economy if what is being built is unaffordable, and to an unemployed person (especially one with student loan debt), anything is unaffordable. People will double up before they (again), sign on the dotted line for something they know they can’t afford. Broke is broke.

  93. wally says:

    True… but the low vacancy rate says otherwise; it says there is demand that is not being met.

  94. AtlasRocked says:

    The GDP equation is pretty simple guys: GDP = C + I + G + exports – imports

    Cutting gov’t spending on benefits payments to the levels of taxation (reduces C) , or raising taxes to the level of spending (reduces C), will have the same effect on the economy: around 10% fall in economic activity, probably more. At the end of the tax increase solution, we have vastly reduced the chance of business growth. At the end of spending cuts, we have a massive increase in business growth.

    Neither side wants the country to crash. Only one solution has a chance of reviving business growth.

  95. rootless says:


    Thanks for your long reply. I understand you see light and you expect that the economy is going to pick up. So I guess you don’t see another recession looming in the near future.

    However, I don’t see that your argument really targets the core of what I said and that it actually contradicts or refutes what I said. Assuming you are right, how does this support the notion that stock market valuations, based on metrics like CAPE which have been proven to have statistic validity as a predictor of future stock market return (unlike e.g. P/E ratios based on analyst estimated forward operating earnings), won’t return to at least their historical normal and that the excessive profit margins of the the last years won’t last forever instead of going back to their historical normal as well? None of this needs the assumption of an impending recession or an economic collapse. It still would be valid, even if the economy continues to grow in the coming months and years. A recession just would speed up the adjustment process, probably. Otherwise it may be dragged out longer.

  96. rootless says:


    Please could you explain the causal relationship through which cutting demand in the economy by 10% supposedly leads to a “massive increase in business growth”?

  97. DeDude says:

    “I think the Teabag movement must be political cover for masochist groups”

    It’s actually just that they are addicted to those primordial “eternal truths” that “feels” right; like “we must suffer before we can enjoy” and “those who enjoyed without suffering must now suffer” that are littering all kinds of religions. If you are too stupid to think things through and develop an understanding, you fall back on “eternal truths” for guidance. A lot of people believe in Armageddon and think that it will deliver them personally their just rewards (and those “other” people’s some just punishment).

  98. wunsacon says:

    Some folks use banker / government bailouts and corruption — after years of deregulation and underenforcement created a bubble and then naturally led to a bust — to condemn Keynes. It just as easy to use Wall Street / corporate corruption to condemn *freeeeeee*-duumb-loving market funduhmentalism every day. And we could pick some dead economist from the right and tar his name. But, who wants to sound like a broken record?

  99. wunsacon says:

    Everyone berating MayorQuimby, please make sure you read his comment @ 1:17 pm. He’s not exactly the caricature of a TeaBagger.

    Like Quimby, I’d like to see to us cut the budget deficit, through tax increases on the wealthy and through spending cuts.

    - Cut defense.
    - Make student loans dischargable in bankruptcy again, eliminate government backing of student loans, and not only will we free last year’s class of debt slaves but watch future education prices come back down.
    - Increase the age to collect SocSec by a couple of years.
    - Give vouchers for K-12. I’m happy to subsidize education but not fond of local monopolies delivering that service.

    That’ll help reduce the deficit. At least, take some simple steps and see where that gets us.

    And let’s please not build more roads until we come up with less expensive fuels.