EUOBSERVER / BRUSSELS - A new report by the European Commission on the sustainability of public finances concludes that the health of member state coffers varies considerably across the bloc. Britain, Spain, Greece, Ireland and Latvia all fell into the high-risk category as soaring public debt may constrict their ability to meet future obligations such as pension payments. The recession has put a large hole in government finances Published on Wednesday (14 October), the Commission's communication and accompanying "Sustainability Report 2009" takes into account the impact of the crisis, and is a follow-on from a similar report in 2006. "The long-term sustainability of public finances is a concern for all EU countries, although to a considerably varying degree across member states," said the EU executive in a statement.
EUOBSERVER / BRUSSELS - A new report by the European Commission on the sustainability of public finances concludes that the health of member state coffers varies considerably across the bloc.
Britain, Spain, Greece, Ireland and Latvia all fell into the high-risk category as soaring public debt may constrict their ability to meet future obligations such as pension payments.
The recession has put a large hole in government finances
Published on Wednesday (14 October), the Commission's communication and accompanying "Sustainability Report 2009" takes into account the impact of the crisis, and is a follow-on from a similar report in 2006.
"The long-term sustainability of public finances is a concern for all EU countries, although to a considerably varying degree across member states," said the EU executive in a statement.
Aides to the US treasury secretary who each earned large pay packets working for some of the country's largest investment companies have been advising the administration on its regulatory policy, despite never having faced senate confirmation. None of the aides to Timothy Geithner have faced the public scrutiny given to senate-confirmed appointees, despite earning massive sums from Wall Street firms, nor are they required to testify in US congress to defend or explain the treasury's actions. Geithner's "kitchen cabinet", which wields considerable influence behind the scenes at the treasury department, helped oversee the nation's $700bn banking rescue, as well as helping to draw up executive pay rules and revamp financial regulations.According to financial disclosure forms obtained by the Bloomberg news agency, advisers including Lee Sachs from Mariner Investment Group, and Gene Sperling, from Goldman Sachs, earned hundreds of thousands of dollars last year.
Aides to the US treasury secretary who each earned large pay packets working for some of the country's largest investment companies have been advising the administration on its regulatory policy, despite never having faced senate confirmation.
None of the aides to Timothy Geithner have faced the public scrutiny given to senate-confirmed appointees, despite earning massive sums from Wall Street firms, nor are they required to testify in US congress to defend or explain the treasury's actions.
Geithner's "kitchen cabinet", which wields considerable influence behind the scenes at the treasury department, helped oversee the nation's $700bn banking rescue, as well as helping to draw up executive pay rules and revamp financial regulations.According to financial disclosure forms obtained by the Bloomberg news agency, advisers including Lee Sachs from Mariner Investment Group, and Gene Sperling, from Goldman Sachs, earned hundreds of thousands of dollars last year.
Some of Treasury Secretary Timothy Geithner's closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.... The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies.... Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.... The title of counselor had been generally reserved for those awaiting confirmation. Some of Geithner's aides now work in that capacity, including Lael Brainard, who has been nominated to be undersecretary for international affairs, and Jeffrey Goldstein, the nominee to be undersecretary for domestic finance.... For example, Geithner's deputy, Neal Wolin, was president and chief operating officer for property and casualty operations at insurer Hartford Financial Services Group Inc. in Hartford, Connecticut. Michael Barr, the assistant secretary for financial institutions, was a professor at the University of Michigan Law School.... Geithner's inner circle also includes counselor Lewis Alexander, the former chief economist at Citigroup; Chief of Staff Mark Patterson, who was a lobbyist at Goldman Sachs, and Matthew Kabaker, a deputy assistant secretary who worked at private equity firm Blackstone Group LP. Patterson's and Kabaker's jobs did not require confirmation. One counselor who doesn't have a finance background is Jake Siewert, a press secretary for President Bill Clinton who came to the Treasury after working as a vice president at New York- based Alcoa Inc., the largest U.S. aluminum producer....
The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies....
Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund....
The title of counselor had been generally reserved for those awaiting confirmation. Some of Geithner's aides now work in that capacity, including Lael Brainard, who has been nominated to be undersecretary for international affairs, and Jeffrey Goldstein, the nominee to be undersecretary for domestic finance....
For example, Geithner's deputy, Neal Wolin, was president and chief operating officer for property and casualty operations at insurer Hartford Financial Services Group Inc. in Hartford, Connecticut. Michael Barr, the assistant secretary for financial institutions, was a professor at the University of Michigan Law School....
Geithner's inner circle also includes counselor Lewis Alexander, the former chief economist at Citigroup; Chief of Staff Mark Patterson, who was a lobbyist at Goldman Sachs, and Matthew Kabaker, a deputy assistant secretary who worked at private equity firm Blackstone Group LP. Patterson's and Kabaker's jobs did not require confirmation.
One counselor who doesn't have a finance background is Jake Siewert, a press secretary for President Bill Clinton who came to the Treasury after working as a vice president at New York- based Alcoa Inc., the largest U.S. aluminum producer....
Al Jazeer was a little short on um copy. Diversity is the key to economic and political evolution.
The credit crunch is getting worse on Main Street, despite a Wall Street bailout now in the trillions of dollars. The Federal Reserve's charts show that "base money" is rapidly expanding--meaning coins, paper money, and commercial banks' reserves with the central bank. But the money isn't getting where it needs to go to stimulate economic growth: into the bank accounts of American businesses and consumers. The Fed has been pumping out money to the banks, and their reserves have been growing at unprecedented rates, but the money supply in the real economy has been declining. According to Ambrose Evans-Pritchard, writing last month in the UK Telegraph, U.S. bank credit and M3 (the broadest measure of the money supply) contracted over the summer at rates comparable to the onset of the Great Depression. In the summer quarter, U.S. bank loans fell at an annual pace of almost 14 percent. "There has been nothing like this in the USA since the 1930s," said Professor Tim Congdon of International Monetary Research. "The rapid destruction of money balances is madness." Chartered banks are allowed to create credit on their books equal to many times their deposit base, but lately they haven't been doing it. In more normal times, one dollar in base money has been fanned by the banks into $8.50 in loans. Today, one dollar in base money produces only one dollar in loans. Although the Fed has been frantically pushing cash into the banks, it can't make them lend to consumers.
The credit crunch is getting worse on Main Street, despite a Wall Street bailout now in the trillions of dollars. The Federal Reserve's charts show that "base money" is rapidly expanding--meaning coins, paper money, and commercial banks' reserves with the central bank. But the money isn't getting where it needs to go to stimulate economic growth: into the bank accounts of American businesses and consumers. The Fed has been pumping out money to the banks, and their reserves have been growing at unprecedented rates, but the money supply in the real economy has been declining.
According to Ambrose Evans-Pritchard, writing last month in the UK Telegraph, U.S. bank credit and M3 (the broadest measure of the money supply) contracted over the summer at rates comparable to the onset of the Great Depression. In the summer quarter, U.S. bank loans fell at an annual pace of almost 14 percent. "There has been nothing like this in the USA since the 1930s," said Professor Tim Congdon of International Monetary Research. "The rapid destruction of money balances is madness."
Chartered banks are allowed to create credit on their books equal to many times their deposit base, but lately they haven't been doing it. In more normal times, one dollar in base money has been fanned by the banks into $8.50 in loans. Today, one dollar in base money produces only one dollar in loans. Although the Fed has been frantically pushing cash into the banks, it can't make them lend to consumers.
Calvin Trillin's Theory
According to Calvin Trillin (or, more accurately, the probably-at-least-semi-fictional interlocutor he meets at a bar in Midtown), the financial crisis was caused by smart people going to work on Wall Street. In the old days, the story goes, it was the lower third of the class that went to Wall Street, and "by the standards that came later, they weren't really greedy. They just wanted a nice house in Greenwich and maybe a sailboat. A lot of them were from families that had always been on Wall Street, so they were accustomed to nice houses in Greenwich. They didn't feel the need to leverage the entire business so they could make the sort of money that easily supports the second oceangoing yacht."
Then, however, as college debts and Wall Street pay grew in tandem, the smart kids started going to Wall Street to make the money, leading to derivatives and securitization, until finally: "When the smart guys started this business of securitizing things that didn't even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn't have the foggiest notion of what a credit default swap was."
It's a cute story. But there may be an element of truth to it. In their well-known paper, "Wages and Human Capital in the U.S. Financial Industry: 1909-2006," Thomas Philippon and Ariell Reshef measured the relative wage and relative educational levels of workers in the financial sector over the last century. The picture looks like this:
.....
I read somewhere that of the CEOs of the largest banks, only Vikram Pandit at Citi was a true "quant," and he only came in when Citi bought his hedge fund in 2007, after the bulk of the damage was done. (I'm not endorsing Pandit's job as CEO, only saying that the mess was there before he arrived.) So there probably was this situation where the executive ranks were filled with old-style relationship-builders and dealmakers, and the increasingly quantitative traders were doing things they didn't understand. A similar story has been told about Salomon under John Gutfreund in the 1980s (and LTCM under John Meriweather in the 1990s).
Technology firms also face a similar problem. In technology, as in most businesses, the way to make it to the top is through sales, so you end up with a situation where the CEO is a sales guy who has no understanding of technology and, for example, thinks that you can cut the development time of a project in half by adding twice as many people. I have seen this have catastrophic results. Even when you don't have the generational issue that Trillin talks about, the problem is that the sociology of corporations leads to a certain kind of CEO, and as corporations become increasingly dependent on complex technology or complex business processes (for example, the kind of data-driven marketing that consumer packaged companies do), you end up with CEOs who don't understand the key aspects of the companies they are managing. And the underlying problem is that, for all the blather that CEOs and boards spit out about succession planning and the importance of people, the fact remains that the market for CEOs is deeply flawed, as shown for example by Rakesh Khurana. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
This is starting to get interesting, although it is far from conclusive. Massachusetts Land Court judge Keith Long reaffirmed a 2009 ruling (Ibanez) that invalidated foreclosures on two properties because the lenders did not hold clear title to them at the time of the foreclosure sale. Now this decision is still subject to appeal, and Richard Vetstein of the Massachusetts Law Blog (hat tip reader Barbara W) thinks the Massachusetts Supreme Judicial Court might hear the case directly, given the potential significance of the ruling. I am still gobsmacked that this issue is even in dispute. Who has ownership is the foundation of commercial law, and it permeates our life in ways most people do not recognize. The reason you get a receipt at the grocery store is that it is evidence that the title of the goods transferred from the store to you. The idea that banks were too lazy to do a decent job of keeping on top of title instruments, when that was the SOLE basis for their ownership interest in the collateral underlying their loans, is equally stunning. I have seen all sorts of deals in other areas founder (water rights is a biggie) because investors were unable to "perfect" certain rights they sought. This is a well established area of law, but the banks couldn't be bothered to spend the money and time to do things correctly. And now they think they can go to banks and assert, "Yeah, we really do own this stuff" and get away with it it is brazen. If you lost a $1000 bill or a bearer bond, no one would take "yeah I really do own this stuff" claims seriously either. From Ralph Vetstein: When mortgages are packaged to Wall Street investors, the ownership of a mortgage loan may be divided and freely transferred numerous times on the lenders' books. But the documentation (i.e., the assignments) actually on file at the Registry of Deeds often lags far behind.... Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers: The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise. Judge Long also had some choice words for lenders: [T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
Massachusetts Land Court judge Keith Long reaffirmed a 2009 ruling (Ibanez) that invalidated foreclosures on two properties because the lenders did not hold clear title to them at the time of the foreclosure sale. Now this decision is still subject to appeal, and Richard Vetstein of the Massachusetts Law Blog (hat tip reader Barbara W) thinks the Massachusetts Supreme Judicial Court might hear the case directly, given the potential significance of the ruling.
I am still gobsmacked that this issue is even in dispute. Who has ownership is the foundation of commercial law, and it permeates our life in ways most people do not recognize. The reason you get a receipt at the grocery store is that it is evidence that the title of the goods transferred from the store to you. The idea that banks were too lazy to do a decent job of keeping on top of title instruments, when that was the SOLE basis for their ownership interest in the collateral underlying their loans, is equally stunning. I have seen all sorts of deals in other areas founder (water rights is a biggie) because investors were unable to "perfect" certain rights they sought. This is a well established area of law, but the banks couldn't be bothered to spend the money and time to do things correctly. And now they think they can go to banks and assert, "Yeah, we really do own this stuff" and get away with it it is brazen. If you lost a $1000 bill or a bearer bond, no one would take "yeah I really do own this stuff" claims seriously either.
From Ralph Vetstein:
When mortgages are packaged to Wall Street investors, the ownership of a mortgage loan may be divided and freely transferred numerous times on the lenders' books. But the documentation (i.e., the assignments) actually on file at the Registry of Deeds often lags far behind.... Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers: The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise. Judge Long also had some choice words for lenders: [T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
Despite the lender's attempt to convince him otherwise, Judge Long came out (again) in favor of consumers:
The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's. Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature. To accept the plaintiffs' arguments is to allow them to take someone's home without any demonstrable right to do so, based upon the assumption that they ultimately will be able to show that they have that right and the further assumption that potential bidders will be undeterred by the lack of a demonstrable legal foundation for the sale and will nonetheless bid full value in the expectation that that foundation will ultimately be produced, even if it takes a year or more. The law recognizes the troubling nature of these assumptions, the harm caused if those assumptions prove erroneous, and commands otherwise.
Judge Long also had some choice words for lenders:
[T]he problem the [lenders] face (the present title defect) is entirely of their own making as a result of their failure to comply with the statute and the directives in their own securitization documents... What the plaintiffs truly seek is a change in the foreclosure sale statute (G.L. c. 244, § 14), which can only come from the legislature.
The other interesting factor in this is that the further one gets from Wall Street and Washington, the less sympathy there is for the banksters and their problems. The best bet for the banksters might be in the venue of the Supreme Court of the United States. However, were I the attorneys for the defendants, I would go to any lengths possible to keep the cases in state courts up to the level of State Supreme Courts. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
OTH: The effects of such a game would be fun to watch. Land of the Free would turn into the Wild West, with the rich of China/Germany/Netherlands/England owning all of the USians and our/their Commons. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
the rich of China/Germany/Netherlands/England owning all of the USians and our/their Commons
For the SC it would be like the old Jack Benny routine where he is being held up at gunpoint:
Robber: "Your money or your life!"
Benny: "I'm thinking! I'm thinking!" As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
History says that JPMorgan and GS have enough inside info to merely sell off at advantageous times and survive even stronger - being able to watch their moves would be the key. Anyone in ET want to be the mole? Never underestimate their intelligence, always underestimate their knowledge.
Can anyone confirm that such is the case. If what you say is correct, the only thing that will prevent most people in the U.S. from stopping payments on their mortgages is their own individual moral sense. Given what the banks have been up to lately, I'm not sure I'd want to bet on that...
If what you say is correct, the only thing that will prevent most people in the U.S. from stopping payments on their mortgages is their own individual moral sense.
I learned the reality a few years ago in London, talking to a commercial bank strategist there. "We've had an intellectual breakthrough," he said. "It's changed our credit philosophy."... "The poor are honest," he said, accompanying his words with his jaw dropping open as if to say, "Who could have guessed?" The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today's neoliberal Chicago School language, the poor behave "uneconomically." That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.
...
"The poor are honest," he said, accompanying his words with his jaw dropping open as if to say, "Who could have guessed?"
The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today's neoliberal Chicago School language, the poor behave "uneconomically." That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.
See "Jingle mail:" The Awful Sound Of "Voluntary" Foreclosure - Couric & Co. - CBS News
When I posted a poll asking whether walking away from a bad mortgage is "irresponsible" or "the smart thing to do," 63 percent agreed with "condoblue" - that walking away is the smart choice. And that's a scary trend for banks and lenders.
But nowhere near as scary as people ceasing to make payments on a perfectly good mortgage if there's nothing anybody can do to them.
* [new] Re: Economy and Finance (4.00 / 5) Ellen Brown: Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
Eventually someone acting on behalf of some lender is going to start researching the Wall Street Mortgage Chop Shops. It should have been done years ago
The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.
In the '70-71 downturn in L.A. a kid I was employing at minimum wage to help wire a console and studio in Hollywood managed to con his parents out of $4,000 for a down on a $40,000 house at the top of a canyon overlooking the SFV, with a view! The seller, probably an agent for an estate, self financed the loan. The house had a state park above, between it and the Mullholland Hwy. and had a glass enclosed atrium with a statue of The Buddha recumbent and displaying a mudra that was reputed to have stopped a charging elephant. The neighbor across the street was Gene Cerwinski, founder of Cerwin Vega. Very nice place!
The kid and his girlfriend lived in the house for a year or more without making another payment! It took owners that had all their paperwork in order that long to get him out. So, best of luck to all of the new "homeowners" out there.
I consider that mortgage holders who do this are, in many ways, being patriotic! After all, the bought and paid for US Government and Congress will not do anything about the current situation other than try to prop up the vampires. If we are ever to see an end to years of walking dead banks and other financial institutions and the dominance they hold over US society, this might be the best hope. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
goes to....
ARGeezer~! Wow; that's a surprise. Sven, next year...what a great competition this has been. Never underestimate their intelligence, always underestimate their knowledge.
With everyone cheering the US economy finally completing its first lost decade, and likely the first of many, it is worthwhile to compare the top ten Dow Jones stocks by market cap today and ten years ago. What is notable is the rotation out of pharma companies, with both Merck and Pfizer dropping out of the ranking, and their replacement with taxpayer capital proxies, in the face of JP Morgan (#4) and Bank of America (#9). As both of these companies have achieved phenomenal profitability (and a resulting stock price appreciation) almost exclusively courtesy of the inverted yield curve and numerous other boons from the Fed, their market cap contribution should be carefully considered for whether it is sustainable or is one-time item (assuming the QE 1.0-xxxx.0 liquidity pump ever runs out). Also notable is CNBC parent GE's fall from grace, and its over $200 billion loss in market capitalization. Lastly, over half a trillion in market cap (21%) has been lost by the top 10 companies, even with the Dow at the same level.
Lastly, over half a trillion in market cap (21%) has been lost by the top 10 companies, even with the Dow at the same level.
That's not wealth, it's collateral.
In terms of who's dropped form the top 10 and who's taken their place...
Losers: Intel, Cisco, Merck, Pfizer.
Winners: JP Morgan, Johnson & Johnson, Procter & Gamble, Bank of America.
Interesting how after a banking crisis there are two banks among the top 10 companies whereas there weren't any at the peak of a technology bubble. But not unexplainable. At the peak of the bubble the banks have lent bucketloads of money to people to buy speculative stock, whereas after the banking crisis 1) investors have taken their money out of stocks; 2) the banks that have survived are the ones that were in better shape (or, in this case, the ones that were bailed out).
Also, Merck and Pfizer are pharmaceutical tech stocks whereas J&J and P&G sell consumer staples. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
2009 may be the trough of the subprime crash
Or it may be the peak of QE/bailout bubble.
Does anyone see a return to normal finance after this?
The banks are running on public cash without public ownership. When the cash runs out, they crash.
The only way they can avoid a crash is by lending some of that public cash back to the public, with the full understanding that a higher-than-usual proportion of those loans will go sour, because most of the public aren't particularly creditworthy.
If they demand more cash, public finances will crash.
How do we get from here to a happy ending?
No, but it's extraordinary the extent to which this presumption holds, even amongst otherwise well-informed commentators. It's as if they dare not admit, even to themselves, the depth of the problem. keep to the Fen Causeway
Which is, what? exactly. Perhaps it is some twist upon where the US was heading in that flukey time of single working parent families (though without the implied sexism), union jobs that paid well enough for a real middle class rise (but without using the backs of the lower classes), the hope of the Freedom Marches, the trend toward personal computers (I'm thinking of the high enabling quotient of both the last two), and inexpensive education for all from a variety of different techniques to reach into a variety of different groups. Such a group in such a condition would naturally trend science based, not invisible-god based, would trend world-view, not nationalism-restricted, and even the eye-candy TV would have elevated themes.
People would be educated enough to call bullshit on the Limbaughs and other bent air-raid horns which the corporatists and nationalists use to persuade the drones which they would prefer. People's native respect for the Commons wouldn't allow the conditions that the leaches thrive upon. All would respect the need to care for each others needs.
Good beer, of course. May as well bring in the ponies. And I want a cigar with great sunsets over a sparkling rose sea. (The latter of which I actually often have.)
Ramping down on the rant, the happy financial ending comes after many years of pain, which come many years after the excesses of all the recent past's bubbles are squeezed out. Some research says that the average time for this is 13 years, and we are in year 3. So, just in time for my retirement, Social Security will be ready for me, the dollar will be worth something, and I will be seen whistling down the Promenade...in my skates...with my pony. Never underestimate their intelligence, always underestimate their knowledge.
the 1% whose interest is to remain in denial will be on a shrinking floe, and the fact that they own the tradmedia will gradually count less, as more and more formerly comatose corn-sumers connect the dots and fel their gorges rising at the necessarily more absurdist arguments to buttress the Big Illusion, think berlusconi levels all over.
i'm betting on a few major strikes and/or uprisings similar to paris '68 or the thatcher era, as services are cut, and the best case scenario is that very few will be enough to make governments quake, and even rule of law quail.
at this point cool heads intervene to avoid massive bloodshed, and that is the moment when folks like those here at ET will be there to redesign capitalism from the ground up.
the worst case, well better not to go there...
as long as there's a chance of the former emerging from incipient chaos, i'll bet on that, long odds it would seem, lol.
the majority of people are reasonable and would like nothing more than to get on with their lives of needing, seeding, feeding each other in peace.
they don't need no stinking ideologies that can't fit on one page, understandable by the average 8 year old.
the turning point would be when the media loons like limbaugh are run out on a rail for being frenzy whippers, and right wing corporate attitudes about war, land, capital and privilege are dismantled beyond recognition, cognition kindled in the kind of numbers that presently show up for the lottery, or a michael jackson retro network special.
distractions like that will not suffice pretty soon. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
That should be saved to the Pearls folder.
It should also be polynomially graphed. The majority which is made up by those who can do, those who fear they can't (and would vote against their class), those who don't care either way but try someother things...
they don't need no stinking ideologies that can't fit on one page, understandable by the average 8 year old. the turning point would be when the media loons like limbaugh are run out on a rail for being frenzy whippers, and right wing corporate attitudes about war, land, capital and privilege are dismantled beyond recognition, cognition kindled in the kind of numbers that presently show up for the lottery, or a michael jackson retro network special. distractions like that will not suffice pretty soon.
distractions like that will not suffice pretty soon.
I suppose you are saying that having a nother few wars aren't distracting enough any more either?
Imagine the profit he makes in order to have a contract for 400 million dollars. Never underestimate their intelligence, always underestimate their knowledge.
Good point, but I think that the smart people use the same criteria for measuring the JapanLostDecadesTM [now coming to theaters near you], which as you point out is a false measure.
The true measure is to look at trends from decades before. In the case of the US it would have to be decades and decades and decades and decades and decades before - for the reason that one has to go back to the 50s/60s to see where the post-war trend was going, but before RunningSelfishDogsTM of the Republic of Reagan began. During that period it was scandal after scandal, liberal use of the country's credit card and the re-amp of hegemony. I would bet that examination would show it as also the beginning of the FalseDrug of The GreatFinanceEconomy TheoryTM probably started.
As usual, I bring up the Heroin Causality Principle; one can always apply "What similarities would we see if we substituted the selling of heroin - would it change or not change this picture?" Exactly as in the case of the last few decades, the US GDP was elevated upon an amazingly lucrative bubble based upon an industry which created a benefit for individuals at a multiple far outstripping the benefit (if any) for the group or groups that they ravaged, polluted and distanced themselves from.
"Also, Merck and Pfizer are pharmaceutical tech stocks whereas J&J and P&G sell consumer staples."
I don't understand Merck and Pfizer (though they rise and fall on the market's view of how their patents portfolio gained or expired), though they could be lurking, only pushed down by Bush'sLastSurge: Financing the financials.
In fact, JNJ reported their earnings a couple days ago. Just like so many companies, they have increase profits (1%) on lower sales (5.3%). If I'm not mistaken, the J&J types did well even during the Great Depression era.
I ran into this while looking that up: It's Already Worse Than the Depression
According to Ibbotson Associates, of the 74 rolling 10-year periods since 1926 (i.e., 1926-1935, 1927-1936, and so on), U.S. large-cap stocks posted negative returns in just three of them. The first two were 1929-1938 (-0.89% compound annual return) and 1930-1939 (-0.05% compound annual return), and involved the Depression. The third loser decade was the most recent -- and the worst. From 1999-2008, U.S. large-cap stocks "returned" a compound annual average of negative 1.38%.
This is a tendentious comparison:
