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Sorry I haven't been posting much lately.
Let's just say that I've been taking a break from my computer. As a night person, I somehow managed to get on a morning schedule. On the one hand, it allows me to see the sun. That's a good thing I guess. On the other hand, it allows me to see the sun! ;)
I'm fairly sure it is just temporary. I shall return with more charts in the not too distant future. I can't define exactly when that will be but if I'm still on a morning schedule several weeks from now I may need serious medical attention, lol.
And on that note, I shall leave you with something to remember me by.
I played a bit of Rocksmith today, but not at anywhere near this level. Not even the same ballpark!
Wednesday: GDP, Unemployment Claims, Durable Goods, Personal Income &
Outlays, Pending Home Sales
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[image: Mortgage Rates] Note: Mortgage rates are from MortgageNewsDaily.com
and are for top tier scenarios.
Wednesday:
• At 7:00 AM ET, The Mortgage Banker...
2 hours ago
23 comments:
You've earned a break. I vote for a winter climb to Poo Poo Point. Honey will need a bath after.
Mr Slippery,
I'm actually off to do some winter snowshoeing with a friend today. No joke! :)
Nice seeing an actual educational game, not a complete waste of time like they all are now.
The UI design and execution on that is of course rather stunning.
We're going to have a high of 71 this week apparently. If global warming means March weather in January, I'm OK with that, as long as we still get enough rain!
http://research.stlouisfed.org/fred2/graph/?g=eIj
is an interesting chart I made for Delong's just now.
Red is age 16-54 population. Green is real GDP (2000 dollars). Blue is PAYEMS.
I did not know that working-age pop has been topped out since 2008.
There's no way we're going to have a $20T economy (2012 dollars) by 2020.
Another $4T in 7 years will require a repeat of the 1992-1999 miracle.
Need to get that doomstead on Pt Roberts and not worry about anything any more.
oh yeah:
http://research.stlouisfed.org/fred2/graph/?g=eIp
is real GDP (2012 dollars) 1990-now.
One wildcard I don't understand too well is the stimulative nature of health and pension spending. This will be a growing flow being piped directly into the paycheck economy, or a lot of it at least.
This will help with velocity in the middle class economy I think, and be the foundation of another boom.
Provided we just keep borrowing & spending of course. Japan has showed the way.
http://www.mof.go.jp/english/budget/budget/fy2012/e20111224b.pdf
is an interesting budget summary I found last week.
I'm actually off to do some winter snowshoeing with a friend today. No joke! :)
Post the Pix! I would like a trip report, please.
Troy,
Provided we just keep borrowing & spending of course.
Of course! ;)
Mr Slippery,
The trip was awesome. I have no pictures though. Perhaps some will show up in my email inbox at some point.
As a side note, still taking a break it seems.
I can pretty much guarantee I'll be posting a new chart in a few days if only to keep the weight loss charts current.
As a side note, our cat died. Nearly made it to just shy of 18 years old. Somber week here.
So sad. It's so hard. Many condolences.
dd,
Many thanks. It's definitely been a rough week.
Let's talk about ending the Fed.
Go
Fritz_O,
If we were to end the Fed then we'd be looking at an endless stream of financial crises as speculators poured into and out of risky assets at random.
This is in sharp contrast to how it is done now of course. Not so randomly! ;)
One Fed to rule them all
One Fed to find them
One Fed to bring them all
And in the darkness bind them
Who could have been more in the dark than Ben "There is no housing bubble to go bust" Bernanke?
"If we were to end the Fed then we'd be looking at an endless stream of financial crises as speculators poured into and out of risky assets at random.
This is in sharp contrast to how it is done now of course. Not so randomly!"
When one walks down Wall Street, one must be careful not to step in the random pile of...
WWI brought about global intervention, the Fed, permanent income tax, high federal budgets, the draft, and a cluster-**** between eCONomic booms, war, and defense contracts.
CONservatives admire our vast military-industrial complex yet there is no greater distortion of present-day free market, which they rhetorically support.
The answer: DISARMAMENT.
Of the Fed.
Mark,
Sorry to hear about your cat. Tough to lose a member of the family.
Fritz_O,
I'd say there has been a bull market in cluster-****.
I'd have a hard time pinning down the exact starting point. It's like trying to figure out exactly which straw is most responsible for breaking the camel's back. The last one? The first one? I think two intelligent people could certainly debate it.
Mr Slippery,
Thanks. It's been a rough couple of weeks.
Deep down I kind of knew it would come to that soon. Perhaps that's one reason why I took a break from blogging.
I was also not adding to the kitty litter hoard in my last few trips to Costco either. All in all, it was timed fairly well. Sigh.
"It's like trying to figure out exactly which straw is most responsible for breaking the camel's back."
Help me to arrive at a conclusion. First, a few premises:
1.) The Fed targets a certain amount of inflation (that is, they intend to increase inflation forever and ever.)
2.) The Fed desires number one so that the dollar decreases in value.
3.) The Fed desires number two so that it will not have to pay back as much in interest tomorrow as it does today.
4.) So far, foreign investors in Treasury debt have been playing along.
What I'm trying to get to the bottom of is this: Why don't, or when will, foreign investors demand that the debt they buy from the U.S. be inflation adjusted? Or else?
Why aren't they doing that now? Is it all one big cluster-**** where all central bank peddlers of debt are complicit?
It's time to short cluster-****'s!
Fritz_O,
I think that's a great train of thought. I can offer my answers for what they are worth.
Or else?
Or else what?
Let's say you are a foreign investor who no longer wants US debt. What do you do? If you sell your bonds to another foreign investor then he has the same problem you just had. Further, as Americans we would barely notice.
So the question becomes instead, when will *most* foreign investors not want to buy our debt?
And in answer to that question I would say that it will be when most foreign investors think their debt looks a lot better than our debt.
That could be a while if Greece is any indicator. Or how about China for that matter? As an American, I have no desire of buying Chinese debt. It's still all relative I guess. I don't trust their government as much as I trust ours. (And believe me, I don't trust ours all that much either.)
Now you might suggest that I am biased because I am pretty much fully invested in US debt. That could be true to some degree. Once again it isn't because I love doing so though. It is all relative. The thought of buying stocks doesn't appeal to me (especially after they've doubled). Commodities don't necessarily look all that great to me either at these price levels. I dabbled from 2004 to 2006 (if you call one-third of my nest egg in gold and silver dabbling), but I'm not convinced that commodities will be a great investment over the long-term from here. I just can't say.
Bonus thought.
The one place I really know I don't want to be over the long-term is dollars buried in my backyard.
Those who have invested in short-term treasuries awaiting higher interest rates have to be wondering how much longer short-term interest rates can remain so low. That's not a risk I was willing to take.
In hindsight, they've basically invested in cash buried in their backyards. Good luck on that one! ;)
"So the question becomes instead, when will *most* foreign investors not want to buy our debt?
And in answer to that question I would say that it will be when most foreign investors think their debt looks a lot better than our debt.
"
Indeed.
I should have have added a premise between my numbers 3 and 4, like this:
3.5.) The Fed desires number three so that they can satisfy CONgress's need for runaway spending. And perpetuate the illusion of prosperity.
Ending the Fed takes the punch out of CONgress's pocketbook. But, does it decrease the desire abroad for U.S. debt?
Ending the Fed would cause the banking system to vomit up the unsound banks. Sound banks would survive and thrive. The banks that depend on .gov wealthfare would have to clean up their act or just GTFO. And, all of a sudden, people who deposit their money in banks would have to do like everyone else who makes an important business or financial decision; determine which banks are sound and which are not and deposit accordingly. Isn't that how it should be?
Likewise, shouldn't the world of investors have to determine which countries debt is sound and invest accordingly rather than default to America, the least worst?
I'd welcome the change, and I'm no gambler.
Fritz_O,
And, all of a sudden, people who deposit their money in banks would have to do like everyone else who makes an important business or financial decision; determine which banks are sound and which are not and deposit accordingly. Isn't that how it should be?
Heading into the financial crisis I was earning about 4% on my checking account at Washington Mutual. I did it just for the juicy yield. I kept my total just under the FDIC limit. I wish you could have seen my trigger finger though.
As soon as the first bit of you know what started to hit the fan I moved my money back to my own bank. Go figure.
Our system truly is cluster@#$%ed. As you suggest, this is not an optimal way for the system to be worked. Gamed, yes. Worked, no.
Like you (from your tone), I think zombie banks are the worst possible outcome for where we are and what the future holds. We should have let them be vomited up, so to speak.
It would have been extremely painful but I truly believe the alternative is worse over the long-term. We just keep kicking the can down the road and all it does is continue to pick up more and more @#$% as it bounces along.
At some point, perhaps not even in my lifetime, we're going to attempt to kick that can and it is not going to budge. Or worse. It will budge in our direction and come rolling back over us. Sigh.
You and I don't trust banks any further than we could throw them.
You know what's really funny, thanks to the Fed's secretive, far-reaching power acting as a mega-money-supplier, banks don't trust each other either. They don't have to, the Fed will take care of everything, including all the banks books. Transperency and trust and no longer needed. Sigh.
What is even more stupid is the way the Fed kept on approving of all the mergers during the onset of the Second Great Depression. JPMorgan Chase/Bear Stearns - B of A/Merrill Lynch - JPMorgan Chase/WaMu - Wells Fargo/Wachovia. Nice job Fed, concentrate the wrongdoers even more by creating even bigger players. That's surely the way to really stabilize our future.
The way to avert a credit crisis is to regulate its source, so what does the Fed do? It continues to let any financial institution become too big and complicated for the government to understand. How can regulators save the banking system from its own self-destruction at that rate.
The plastic cosmetic approach by government guarantees no real solutions.
Fritz_O,
The plastic cosmetic approach by government guarantees no real solutions.
It's a government of the people, by the people, for the people! We get the government we deserve!
Give us liposuction and/or give us death, lol. Sigh.
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