Seems GS has projected a 5.8% Q4 2009 GDP number....
so as you can imagine the green shooters will be in hysteria over this one!
Myself, I will be all over GDP details, tracing every variable I possibly can....
cause looking at the overall EIs every day....I will be highly suspect of anything that causes the green shooters to run up and down the halls claiming all of those gloom and doomers "just don't understand econ" BS....
Anywho, I imagine we'll have a few more economics blog wars over this puppy so get your mega calculators out!
I'd claim they are right, that prices have risen since CPI (as one can see, the deflationary time period is obviously affected by oil, almost exclusively).
It appears COLA (and I'm still looking for the exact formula, nice that they hide it!) it correlated to CPI-W, but it's not broken down by elements at all.
Now CPI-W isn't quite the same as CPI, it's Urban Wage Earners and Clerical Workers.
It's also Q3 of a year compared against Q3 of the past year, to project the next year. Now that seems kind of not valid considering there is enormous evidence of a speculative bubble on energy, specifically oil in 2008, which gives an artificial deflationary value.
Ok, the CPI-W for 2009 was...(drum roll please), 3.4%.
Gets better. Guess what so far I cannot find either the raw data or the break down, or even a graph of? CPI-W (vs. the above which is CPI-U).
Here is table 6 from the above report, which is some CPI-W data here.
So, here is the CPI-W per quarter and note it's only the Q3 used (now why dump out 75% of the index is another very good question?)
Now this makes zero sense to me, intuitively. Why use just 25% of a price index instead of yearly averages? Esp. in today's derivatives, speculative trading, commodities gone wild world? (in other words, one month might have deflation due to increased volatility, but for a period of a year or two actually be inflationary).
So, here we have a 3.4% yearly increase, yet, Q3 2009 against Q3 2008 gives drop of 3.504, which amounts to a 2.1% decrease, i.e. as I understand this, implies no COLA increase for 2010. Now how can one have a yearly 3.4% increase in CPI-W, yet because one is comparing just Q3's, not get a COLA (it's against the law to reduce payments regardless of deflation, which also makes not a lot of sense really)....
yeah, well, those Seniors man, get righteous because I think you're onto something here. It sure seems like some skewed calculations that need to be revised on first glance pass to me.
This is what I've got so far, but I'll try to hunt around for more info on CPI-W. I wasn't paying much attention but this affects all sorts of adjustments from Medicaid, to Medicare to SS to military pay, so I'll start trying to ferret.
Also, I'm the geek squad of the site so your account is activated and hope you comment more for this was something I personally was oblivious to until your comment.
because there are a host of assumptions that are not so valid these days. #1 being older people have money stashed.....so many people have zippo who are in the 50's, 60's they must work.
Then, longevity has increased dramatically. People don't drop dead at age 65.
So, the problem is we have a very outdated world view of age in comparison to what's happening.
I mean one can get a Bachelor's degree in 16 years from zero education, yet here we have 45 years, 30 years where people are being deemed "useless" and it's just not so.
Tell me if you have been in any large corporation and beyond the executives, seen any perm (permanent employee) over the age of 45? That's 20 years of earnings killed right there.
My argument on pensions as well as lifetime earnings being vastly reduced bears out my argument.
I haven't studied everything they have done, but it's one of the reasons a petition to get into the EU takes so long.
Seems the Eastern block has had a lot of problems.
One thing I do know about is the reunification with Germany (East and West). That was political, they just "tore down that wall" and did it and it is still bringing havoc to Germany's overall economy, esp. the unemployment rate. The two economies were so different and as a result it did pull down W. Germany's overall economy, well, to this day.
Also, the EU isn't like the states, it's more like a co-op or something, with country rights trumping EU type of deal.
But I do know, Finland, for example, had to make all sorts of changes to harmonize their economy for membership and this is one of the reasons the U.K. passed. Finland was (I think top 10 of overall world economies? something like 6th in overall economic competitiveness and in terms of PPP, something like top 14 or top 10) but as time has worn on and more and more countries petition for membership, on this I don't know how rigorous the equalization due diligence has been. I'll bet Jerome A Paris knows this stuff upside now, we should try to get him to post on here (he has an account).
At least when it happens on a huge scale.
The fact is that old people spend less because they've accumulated most of what they need during their lifetime. Also, old people have no need to save. They will instead sell their accumulated financial assets. Finally, old people will use more social services, such as Medicare because their health will get worse, and Social Security because they deserve it.
None of this would matter if every generation was roughly the same size.
The problem arises when one generation is much bigger than the next (America's problem), or if people simply stop having kids (Japan's and Italy's problem).
It's not age discrimination. It's just the way it is.
In light of all the controversy about the lack of Social Security COLA for 2010, which is based the CPI, I am confused about which CPI (all items, or with certain things excluded?) the SS COLA formula is based on. Can Mr. Oak shed light on this? Many seniors are outraged, claiming their costs have continued to rise. (I am a senior, but not an outraged one.) Of course, part of the outrage is based on ignorance (people think Congress and/or Obama specifically took action to deprive them of the COLA) and part of it is based on an entitlement mentality (once used to an annual COLA, people think of it as a "right" and feel they have been "screwed"). Even setting aside all the irrationality, there are certain factual issues such as the one I raised above that I hope Mr. Oak can clarify.
Think of it as Vermont suddenly decided to succeed from the U.S., create it's own currency. Then, dinky Vermont, with a state GDP of say ? $5 billion and a massive oversupply of dairy products and maple syrup for the actual population, will now be subject to trade law in trying to sell it's products to the United States. Any transport, transaction would then be going across it's borders and require a change of money, and problem some sort of registration or inspections while operating in another nation.
It's the same deal with the EU. Each country, by itself has a small GDP, often specializes in some product manufacture, say Belgium chocolate, Finnish advanced machinery that can pummel through any frozen tundra on Earth and so on....
Because all of those GDPs are basically equalized, i.e. the EU spent a lot of time making sure each country had similar PPP, wages, costs, standards of living to harmonize each country into the other one, they also had other similarities, such as no overpopulation issues, a highly advanced education and skills culture, existing social safety nets, infrastructure, similar unemployment rates and so forth...
so when one has individual nations which most of their major economic elements have been rectified to be of similar status....
joining forces, well, it basically has a similar effect of say Vermont being in the U.S. Vermont can freely exchange it's diary and maple syrup for other state manufactured goods...
You might even say this is what free trade was meant to be originally....but do note the equilibrium of all individual member state economies (for the most part) before membership is allowed or done. This is why the EU spent years and years rectifying currency differences before starting the Euro, a sudden jolt without harmonizing all of the differences would bring down each member state (EU countries), not raise it.
Then the "federal government" or in this case, the EU, also can "spread around" social safety nets, they share in civil defense costs and so on to create even more harmonization between all of the member states.
It's like water reservoirs and merging them (almost) as a concept. Too much out of balance and one is going to run right into the other one in a flood, bringing destruction and havoc...but if both has about the same water levels...same volume, etc....
no big deal to merge the two water reservoirs.
Roubini, but what is kind of strange is he mentions "aging population" over and over and I'm sorry, unless one has institutionalized age discrimination such as in the United States, that shouldn't hurt an economy necessarily.
I'd claim the U.S. has an age discrimination problem and is literally cutting off a good 30 years of career achievements as well as earning time for many workers.
Anywho, the domino of sovereign debt default is what I'm interested in. I noticed more and more we are seeing our favorite animal, credit default swaps, now on sovereign debt. I understand the problems with these in terms of ABS as well as CDOs, but not too up on the differences w.r.t. sovereign debt and currency. Anyone want to take a tutorial stab? i.e. what kind of contagion is going on these days with just sovereign debt and defaults through tumbling derivatives, specifically CDS?
Greece has control over its fiscal policy, but not its monetary one. It benefits from being part of the EU by having open borders with wealthy nations and relatively lower borrowing costs.
Leaving the EU would allow it to devalue its currency, but its borrowing costs would explode.
In the end, Greece's problem, not to mention Latvia, Iceland, and others like Haiti, is how to retire Odious debt.
and has been for years. Seriously, no rhyme or reason to it.
That's why the dot.com crash is called dot.con. During that time you saw a ricked game of IPOs where Citigroup and others rigged up stocks issued before the IPO, guaranteed to make them serious money and then the IPO...
then, when it was realized the company was vaporware, or had a business model that never was going to make any money or whatever it was and went bankrupt, a host of "executives" (i.e. deemed pals of VCs and/or "chosen ones") had golden parachutes that even in bankruptcy, they somehow managed to get things like cash outs of a few million to literally guaranteed yearly payouts in the millions.
Unreal, the company is bogus, on top of it, no longer exists, yet this guaranteed money, in the millions, was set up, usually by contract when the company was "started".
Same thing with meritocracy, a complete joke. You see the same idiots, who run companies into the ground over and over, somehow manage to land yet another executive position at yet another company. Then, there are huge incentives with mergers, acquisitions at some, so because these same cats are going to make out like bandits, you see a host of mergers/acquisitions that hurt the bottom line, make zero sense and of course guarantee at least 10k workers lose their jobs.
I mean it's seriously criminal and not a damn thing happens.
I also cannot name, the list would go off of the page, by companies hiring these idiots who then are so power hungry screw ups they miss major innovations and market trends, to literally "dethrowning" that same company from their original market leadership.
Bonuses would be warranted if the company is profitable and specifically in the case of Citi no longer dependent on taxpayer money.
There was a time when companies would not give any bonuses if the company was in the red or didn't hit targets and many non-Wall Street companies still practice this. But I guess Wall Street doesn't practice this.
That said, there are many more ways to skin a cat, namely in options, you can award millions in stock options, then there are all sorts of other perks.
So, it would be nice to know their total bonus/compensation plans.
Still, someone has just a tad bit more common sense than the rest of these.
Q4 GDP blip alert.
Seems GS has projected a 5.8% Q4 2009 GDP number....
so as you can imagine the green shooters will be in hysteria over this one!
Myself, I will be all over GDP details, tracing every variable I possibly can....
cause looking at the overall EIs every day....I will be highly suspect of anything that causes the green shooters to run up and down the halls claiming all of those gloom and doomers "just don't understand econ" BS....
Anywho, I imagine we'll have a few more economics blog wars over this puppy so get your mega calculators out!
I'd claim they are right, that prices have risen since CPI (as one can see, the deflationary time period is obviously affected by oil, almost exclusively).
It appears COLA (and I'm still looking for the exact formula, nice that they hide it!) it correlated to CPI-W, but it's not broken down by elements at all.
Now CPI-W isn't quite the same as CPI, it's Urban Wage Earners and Clerical Workers.
It's also Q3 of a year compared against Q3 of the past year, to project the next year. Now that seems kind of not valid considering there is enormous evidence of a speculative bubble on energy, specifically oil in 2008, which gives an artificial deflationary value.
Ok, the CPI-W for 2009 was...(drum roll please), 3.4%.
Gets better. Guess what so far I cannot find either the raw data or the break down, or even a graph of? CPI-W (vs. the above which is CPI-U).
Here is table 6 from the above report, which is some CPI-W data here.
So, here is the CPI-W per quarter and note it's only the Q3 used (now why dump out 75% of the index is another very good question?)
Now this makes zero sense to me, intuitively. Why use just 25% of a price index instead of yearly averages? Esp. in today's derivatives, speculative trading, commodities gone wild world? (in other words, one month might have deflation due to increased volatility, but for a period of a year or two actually be inflationary).
So, here we have a 3.4% yearly increase, yet, Q3 2009 against Q3 2008 gives drop of 3.504, which amounts to a 2.1% decrease, i.e. as I understand this, implies no COLA increase for 2010. Now how can one have a yearly 3.4% increase in CPI-W, yet because one is comparing just Q3's, not get a COLA (it's against the law to reduce payments regardless of deflation, which also makes not a lot of sense really)....
yeah, well, those Seniors man, get righteous because I think you're onto something here. It sure seems like some skewed calculations that need to be revised on first glance pass to me.
This is what I've got so far, but I'll try to hunt around for more info on CPI-W. I wasn't paying much attention but this affects all sorts of adjustments from Medicaid, to Medicare to SS to military pay, so I'll start trying to ferret.
Also, I'm the geek squad of the site so your account is activated and hope you comment more for this was something I personally was oblivious to until your comment.
because there are a host of assumptions that are not so valid these days. #1 being older people have money stashed.....so many people have zippo who are in the 50's, 60's they must work.
Then, longevity has increased dramatically. People don't drop dead at age 65.
So, the problem is we have a very outdated world view of age in comparison to what's happening.
I mean one can get a Bachelor's degree in 16 years from zero education, yet here we have 45 years, 30 years where people are being deemed "useless" and it's just not so.
Tell me if you have been in any large corporation and beyond the executives, seen any perm (permanent employee) over the age of 45? That's 20 years of earnings killed right there.
My argument on pensions as well as lifetime earnings being vastly reduced bears out my argument.
I haven't studied everything they have done, but it's one of the reasons a petition to get into the EU takes so long.
Seems the Eastern block has had a lot of problems.
One thing I do know about is the reunification with Germany (East and West). That was political, they just "tore down that wall" and did it and it is still bringing havoc to Germany's overall economy, esp. the unemployment rate. The two economies were so different and as a result it did pull down W. Germany's overall economy, well, to this day.
Also, the EU isn't like the states, it's more like a co-op or something, with country rights trumping EU type of deal.
But I do know, Finland, for example, had to make all sorts of changes to harmonize their economy for membership and this is one of the reasons the U.K. passed. Finland was (I think top 10 of overall world economies? something like 6th in overall economic competitiveness and in terms of PPP, something like top 14 or top 10) but as time has worn on and more and more countries petition for membership, on this I don't know how rigorous the equalization due diligence has been. I'll bet Jerome A Paris knows this stuff upside now, we should try to get him to post on here (he has an account).
At least when it happens on a huge scale.
The fact is that old people spend less because they've accumulated most of what they need during their lifetime. Also, old people have no need to save. They will instead sell their accumulated financial assets. Finally, old people will use more social services, such as Medicare because their health will get worse, and Social Security because they deserve it.
None of this would matter if every generation was roughly the same size.
The problem arises when one generation is much bigger than the next (America's problem), or if people simply stop having kids (Japan's and Italy's problem).
It's not age discrimination. It's just the way it is.
In light of all the controversy about the lack of Social Security COLA for 2010, which is based the CPI, I am confused about which CPI (all items, or with certain things excluded?) the SS COLA formula is based on. Can Mr. Oak shed light on this? Many seniors are outraged, claiming their costs have continued to rise. (I am a senior, but not an outraged one.) Of course, part of the outrage is based on ignorance (people think Congress and/or Obama specifically took action to deprive them of the COLA) and part of it is based on an entitlement mentality (once used to an annual COLA, people think of it as a "right" and feel they have been "screwed"). Even setting aside all the irrationality, there are certain factual issues such as the one I raised above that I hope Mr. Oak can clarify.
My point is EU membership severely limits fiscal policy of a country when they may need it the most.
Are sure about "spread around" social safety net?
RebelCapitalist.com - Financial Information for the Rest of Us.
Think of it as Vermont suddenly decided to succeed from the U.S., create it's own currency. Then, dinky Vermont, with a state GDP of say ? $5 billion and a massive oversupply of dairy products and maple syrup for the actual population, will now be subject to trade law in trying to sell it's products to the United States. Any transport, transaction would then be going across it's borders and require a change of money, and problem some sort of registration or inspections while operating in another nation.
It's the same deal with the EU. Each country, by itself has a small GDP, often specializes in some product manufacture, say Belgium chocolate, Finnish advanced machinery that can pummel through any frozen tundra on Earth and so on....
Because all of those GDPs are basically equalized, i.e. the EU spent a lot of time making sure each country had similar PPP, wages, costs, standards of living to harmonize each country into the other one, they also had other similarities, such as no overpopulation issues, a highly advanced education and skills culture, existing social safety nets, infrastructure, similar unemployment rates and so forth...
so when one has individual nations which most of their major economic elements have been rectified to be of similar status....
joining forces, well, it basically has a similar effect of say Vermont being in the U.S. Vermont can freely exchange it's diary and maple syrup for other state manufactured goods...
You might even say this is what free trade was meant to be originally....but do note the equilibrium of all individual member state economies (for the most part) before membership is allowed or done. This is why the EU spent years and years rectifying currency differences before starting the Euro, a sudden jolt without harmonizing all of the differences would bring down each member state (EU countries), not raise it.
Then the "federal government" or in this case, the EU, also can "spread around" social safety nets, they share in civil defense costs and so on to create even more harmonization between all of the member states.
It's like water reservoirs and merging them (almost) as a concept. Too much out of balance and one is going to run right into the other one in a flood, bringing destruction and havoc...but if both has about the same water levels...same volume, etc....
no big deal to merge the two water reservoirs.
Roubini, but what is kind of strange is he mentions "aging population" over and over and I'm sorry, unless one has institutionalized age discrimination such as in the United States, that shouldn't hurt an economy necessarily.
I'd claim the U.S. has an age discrimination problem and is literally cutting off a good 30 years of career achievements as well as earning time for many workers.
Anywho, the domino of sovereign debt default is what I'm interested in. I noticed more and more we are seeing our favorite animal, credit default swaps, now on sovereign debt. I understand the problems with these in terms of ABS as well as CDOs, but not too up on the differences w.r.t. sovereign debt and currency. Anyone want to take a tutorial stab? i.e. what kind of contagion is going on these days with just sovereign debt and defaults through tumbling derivatives, specifically CDS?
Ireland, Spain & Greece cannot use fiscal policy to get themselves out this mess because EU tells them they cannot - no benefit there.
RebelCapitalist.com - Financial Information for the Rest of Us.
Greece has control over its fiscal policy, but not its monetary one. It benefits from being part of the EU by having open borders with wealthy nations and relatively lower borrowing costs.
Leaving the EU would allow it to devalue its currency, but its borrowing costs would explode.
In the end, Greece's problem, not to mention Latvia, Iceland, and others like Haiti, is how to retire Odious debt.
Choices: be a slave to IMF/EU vs. potential for isolation.
Here is an interest take Greece, Spain, Ireland:
Exiting the Euro?
RebelCapitalist.com - Financial Information for the Rest of Us.
and will suffer by not being in the large economy nearby. They will get trade tariffs and all sorts of problems. It's not that simple I think.
leave the EU. Not having control over fiscal AND monetary policy is crazy. Same goes for Spain.
RebelCapitalist.com - Financial Information for the Rest of Us.
Because the people didn't want their tax dollars going to bail out foreign investors?
As far as the IMF goes I know examples are Thailand from 1998, where they forced Draconian measures upon them.
and has been for years. Seriously, no rhyme or reason to it.
That's why the dot.com crash is called dot.con. During that time you saw a ricked game of IPOs where Citigroup and others rigged up stocks issued before the IPO, guaranteed to make them serious money and then the IPO...
then, when it was realized the company was vaporware, or had a business model that never was going to make any money or whatever it was and went bankrupt, a host of "executives" (i.e. deemed pals of VCs and/or "chosen ones") had golden parachutes that even in bankruptcy, they somehow managed to get things like cash outs of a few million to literally guaranteed yearly payouts in the millions.
Unreal, the company is bogus, on top of it, no longer exists, yet this guaranteed money, in the millions, was set up, usually by contract when the company was "started".
Same thing with meritocracy, a complete joke. You see the same idiots, who run companies into the ground over and over, somehow manage to land yet another executive position at yet another company. Then, there are huge incentives with mergers, acquisitions at some, so because these same cats are going to make out like bandits, you see a host of mergers/acquisitions that hurt the bottom line, make zero sense and of course guarantee at least 10k workers lose their jobs.
I mean it's seriously criminal and not a damn thing happens.
I also cannot name, the list would go off of the page, by companies hiring these idiots who then are so power hungry screw ups they miss major innovations and market trends, to literally "dethrowning" that same company from their original market leadership.
Bonuses would be warranted if the company is profitable and specifically in the case of Citi no longer dependent on taxpayer money.
There was a time when companies would not give any bonuses if the company was in the red or didn't hit targets and many non-Wall Street companies still practice this. But I guess Wall Street doesn't practice this.
RebelCapitalist.com - Financial Information for the Rest of Us.
Financial Times.
That said, there are many more ways to skin a cat, namely in options, you can award millions in stock options, then there are all sorts of other perks.
So, it would be nice to know their total bonus/compensation plans.
Still, someone has just a tad bit more common sense than the rest of these.
I would disagree. Things have changed in the sense that these people are even more brazen and greedy.
He is the best, but Rachel Maddow is closing. I will miss him when he leaves next fall.
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