The Economic Populist
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New York Post Claims Census Falsifies Unemployment Figures
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US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
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Jobs For U.S. Workers Stripped Out of Stimulus Bill Behind Closed Doors - Update It Lives!
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Krugman Defines a New Economic State - Purgatory
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New York Post Claims Census Falsifies Unemployment Figures
- 950736 reads
US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
- 185193 reads
Jobs For U.S. Workers Stripped Out of Stimulus Bill Behind Closed Doors - Update It Lives!
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Krugman Defines a New Economic State - Purgatory
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The Golden Rule
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Will the NY Attorney General Bring Doomsday Charges Against Wall Street? If So, How Long Will He Survive?
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New York Post Claims Census Falsifies Unemployment Figures
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How Many Jobs Are Needed to Keep Up with Population Growth?
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VAT or Value Added Tax is Getting a Look in D.C.
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U3 and U6 Unemployment during the Great Depression
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The war on the middle class
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House discusses 401k/IRA confiscation
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Tax Cuts for the Rich Do Not Generate Jobs
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Response deleted due to lack of knowledge of other forms of economics.
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Maximum jobs, not maximum profits.
After posting this, I read a perfect article by Mike Whitney over at counterpunch.org. It really sums it up!
"Last time I checked, the banks offloaded to the government their liabilities in what I think is the largest con in history."
While I agree with the "con" part, they didn't actually unload so much as get a new infusion of greenbacks and other instruments from the Fed through it's various funds. The amount of notional derivatives exposure by the top five has continued to increase, especially at Goldman Sachs, BofA and Morgan Stanley. (Check the latest OCC report from that Bloomberg news article blog previously mentioned at this site.)
The increase in securitized products in the insurance industry is most likely what has encouraged this backdoor bailout for the insurance industry - fraudulently referred to as "healthcare reform" (I'll believe it when I see single payer). I recently read that AIG is paying back some of loans to the government utilizing securitized notes, or "death bonds" based upon a pool of life insurance policies. Good luck on that -- junk bonds out, junk bonds in.
We are going through a super-deleveraging from the previous securitization/derivatives superleveraging, while they are still superleveraging, a mix that can only lead to further meltdown, if not a continuous one as this administration is continuing the Bush Administration's policies and has taken no radical action to nullify or address this situation.
The BIS recently mentioned an economic malaise period for the US over the next 25 years (and I think this is a very whimsical and optimistic prediction).
This superleveraging is the basis for the dramatic increase in billionaires and multi-millionaires over the preceding decade -- there just ain't enough real wealth creation to justify such a fiction -- simply fraud, tontines and Ponzi schemes to the max!
The derivatives-based extremely high volume trading going on the stock exchange (or probably I should say world's stock exchanges) is destroying any possible real exchange values, and should only lead to further destablizing of the economy (check out all that HFT going on).
As for Hugo Chavez being a thug, where did you come by such neocon nonsense? The only thuggery are those who attempted to assassinate President Chavez and put the head of the Venezuelan Chamber of Commerce in his place (that's not the normal political secession, even for a South American country, bud!). And still the US government finances the Honduran coup --- will this clown econ-run poli-culture never learn?
President Chavez, had you any familiarity with history, is simply continuing on the exact same program once put forth by President John F. Kennedy, his Alliance for Progress.
WSJ is saying the Treasury has backed off trying to request a legal challenge to SIGTARP's independent authority to monitor/audit TARP.
Smith measured these elements by money, i.e. the markets are an indirect reflection of wealth by his definition.
Thinking there is a limited amount of money in some market pool and it's just traded, never to disappear or reappear is conceptually incorrect.
If wealth isn't defined by economic terms, then why did Adam Smith call his book "The Wealth of Nations"?
Wealth is well defined in that book as the value added to natural resources by work to turn them into tangible products, or to put it in a direct quote, "the annual produce of the land and labour of the society". I am using that definition.
Adam Smith saw wealth creation as the combination of materials, labour, land, and technology in such a way as to capture a profit (excess above the cost of production). The theories of David Ricardo, John Locke, John Stuart Mill, in the 18th century and 19th century built on these views of wealth that we now call classical economics.
Do you disagree with that basic *economic* definition from the granddaddy of all economics textbooks? And what textbook are YOU using that defines wealth as "various measures including money or PPP"?
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Maximum jobs, not maximum profits.
isn't that a seasonal indicator? Although how much are tickets these days? Seems you must sell your first born child to watch some of these games in person.
That's not going to make a bunch of TV advertisers happy either.
once again Seebert, please get back into economic reality and quit posting your ill conceived beliefs on what you think markets are about. Wealth is not even defined by economic terms and can imply various measures, including money or PPP.
Because money is a measure of wealth, and wealth is production of tangibles.
You can only move money around in the market.
Only by opening a factory can you actually *create wealth*.
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Maximum jobs, not maximum profits.
The picture is horrifying. Is it due to the recent recession? The maps speak about the current situation of unemployment in Michigan. But we need to think that what percentage of this unemployment is seasonal unemployment. As because it affects economy for a very short period of time and is very natural to occur, we need not be that much worried about that. The rest, I hope time will heal the recession thing pretty soon.
I hope that Obama will able to handle the economic crisis very well…so that it is proven that republican’s conservative policies was never right. Thanks for sharing the post.
I don't think capitalism is "ending", it will survive this mess. If it can survive the Great Depression, it can this. Though, saying all this, I think it will change. Everyone assumes that it is the market that will disappear, but what about the state? Last time I checked, the banks offloaded to the government their liabilities in what I think is the largest con in history. Government's books aren't exactly financially healthy. Everyone thinks that some big disaster is going to hit and the market goes "poof" everyone suffers and then someone says "well, time to have a socialist government!"
Not going to play out that way, folks. History isn't that clean. If I were to make a wager, I would say that the US government as we know it disappears before Goldman Sachs does. These people have "gamed" this from the beginning, government is baught and paid for (Democrat, Republican, it doesn't matter), where people are used for supposed political motives to hide financial ones. If old man JP Morgan could help engineer a crash in the early part of the last century, there is no reason to believe that history isn't repeating itself with new actors.
Unless they all explode at once or in a short term, then the concern is valid but not exactly DEFCON 1. Derivatives of similar values are traded every day on regulated exchanges. Look, I know it sounds like I'm short changing this credit derivatives mess, but from what I've read (especially here on EP!) it isn't exactly a universal condition. A lot of this can be salvaged. To say they can't link a buyer with the seller of these derivatives is hogwash; trust me if they want their money they'll make themselves known. This reminds me of a piece in the FT that came out today or yesterday, where the op-Ed writer says just have contracts linked to the original underlying instrument. If there is a package of MBS with 10 derivatives tied to it, then first come first serve, baby. The remainders get screwed, bottom line. That would prove interesting, given who sold what to whom, testing "relationships." Let the piggies fight in the tough test their legitamacy. Wasn't it someone on here who said it was a prisoner's dillema or something? In the end, like I said, it's all a friggin game you and I are being forced to play. People more powerful than us, many part of the "lucky sperm club" who are in positions that many are not qualified for, running around doing what aristocrats from the Ancien Regime to the aparachiks in the former USSR did.
You think Soros ventures in democracy promotion is legit? His "concerns" about American democracy are as altruistic as his bottom line on his currency positions against the US Dollar. We're all players and pawns, free trade's wage arb'ing pitting the blue collar in Ohio against one in Shenzen. This is a very old game, factions fighting factions. Lehman represented one or was part of one that lost, and it paid the ultimate price.
As for Japan, Yukio Hayotama (the perspective Prime Minister, whose nickname is "the Alien") and Ichiro Ozawa are no where near that thug Hugo Chavez. When the Japanese government nationalizes Sony and Toyoda and take all the company's funds for reinvestment and plows it into public funds to bribe partisans, then I'll believe it.
The fact is Ozawa lost a pissing match within the LDP years ago and had been planning his revenge for a long time. He was a big wig in the Liberal Democrats and almost became leader to be PM until he lost an internal struggle. Ozawa will be the real power behind Japan, as President of the Democratic Party of Japan, and Hayotama will be his puppet. Yes the DPJ are made up of socialists and social Democrats, but these are "paper leftists". Just imagine if over here, after losing the primaries, Hillary became a Republican and they picked her to run because she was like the master at Parliamentary elections (if we had a Parliamentary system). The real leftists are still the Communist Party, which has a decent following there.
Japan's economy has been sucking wind for sometime. The average voter picked the DJP not because they liked them but because they were tired of the LDP. Deflation is returning and recent real estate gains are evaporating. They have a debt that I believe is twice their GDP and growing. JGB rates have been rising along with the Yen. The country has lost its dominance in semiconductors and soon other electronics as China's own firms (not to mention Korea) expand. They are still an export-oriented economy with a graying population, both major liabilities in this economic climate.
You, sir, put a smile on my face. You give me an opportunity to teach. Here, let me explain something, that seller knows about the potential 10% move. That seller is either one of two folks, A) a Market Maker or B) another Speculator/Hedger.
In the case of a Market Maker, he is obligated to match your trade if you offer it, otherwise if there are any shenanigans the nice folks at the Commodities Futures Trading Commission (CFTC) will pay a visit. Yes, he sold you that Put, but he also offsets it by either buying another one OR selling a contract as well. These guys buy and sell, their "book" is full of orders, they will be out of that trade in a jiffy.
Now if another speculator or commercial (another name for a hedger) sold you that option, they would have their own reasons. The speculator will have sold you that Put hoping Corn goes up, thus the option will lose value. Actually let me backtrack for just a moment, and talk about premium. Premium is the price of the option, in this case that $.125 or $625. One of three things can happen, either Corn goes up (and the option loses value), Corn does nothing (and the option loses value because of time decay) or Corn goes down (where he loses money). Options are time-sensitive instruments besides being price sensative, the longer until expiration the more you will pay. You would pay more for an option that expires one year from today than you would for one that does in 30 days, because you have more time to be right.
To do all this , the seller also must post a margin with her/his broker. But lets say that Corn collapses and this option seller is sweating bullets. Well there is a thing called Margin Maintenance. You see in futures, unlike stocks, when something rises or falls, cash is being deposited or withdrawn from your account, all of which is against that margin you put up.
So if Corn rose at the close, say a penny, $50 would be deposited into your account at mark-to-market. Vice versa for the opposite, now remember in our simplified example, you had to put down $1000. Often Maintenance will be less than this, say $700. So as Corn drops and your losses exceed Maintenance, you will get a call from your broker to pony up the difference. If you can't, they liquidate your trade. The speculator is hoping for that option to either expire worthless and pocket that premium OR to buy it back at a much cheaper price.
The Hedger is in a different boat. Commercials most of the time are folks who actually deal in the product underlying the futures contract. Margin for them is different. They cant really speculate. Thus a sale is to offset risk.
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www.venomopolis.com
That's going to come to a surprise to the rest of US who didn't want those damned free trade agreements or their corresponding organizations. The last time I checked, what anyone really wanted wasn't determined by some bureaucrat in Washington, but by the voters. I'm pretty sure most on this board didn't want a war in Iraq, yet the US Government, our elected government, did start just a conflict. Not sure who you really are, wish you didn't do this anonymously, but you're seriously wrong if you think this government or really any in the past 20 years really has represented those who sheepishly elected these politicians.
There is this modern fallacy that our government works for us. That this thing called "democracy" in our republic still works. Oh it works, for the few months when the gang in the 'Beltway' come back down from their ivory palaces and try and get folks that they're one of us. Its all a dog and pony show now.
What we have now isn't a government, or I should say that government now really is a giant corporation with mandatory membership dues that says we're all shareholders...only thing is we the average person aren't even getting A shares. Yes, taxes pay for things, and often it goes from your pockets to that of those who will fill these politicians' retirement funds. You also claim that it pays for what society wants. I've got news for you, society wants a lot of things, and many times they're petty perochial things or simply wanting to be bribed. There's a famous quote often connected to Alexis de Tocqueville (but really isn't) that says it best:
-------------------------------------------- www.venomopolis.com
last month. So, the chart isn't all home mortgages are all new home sales. But there are a lot of distressed property sales with speculators, "investors" buying them.
The main message,that people need stable income that matches to take on a 30 yr morgage plus afford the payments....
that is the big "on ignore" to me.
Waaaaah. Remember folks, taxes are a way of society paying for what it wants (what it wants is determined by US Government, our elected government).
If trading is taxed, will Wall Street collapse? No. Like everything else in nature, when pushed on by a force adaptations are found. This is not the end of the world. Wall Street does not trade on data anyway, but impressions.
If you take away Fannie, Freddie, Ginny and the FHA, there is no housing market. Not only has the FED traded Treasuries for toxic securities (backed by older mortgages), but we are now watching the issuance of a whole new round of mortages that Wall Street can issue new MBS and other derivatives against. This game is getting really disgusting and everyone, other than the US taxpayer, is on to the game.
Ya know, I'm one of those old fashioned people who borrowed based on credit worthiness and ample collateral up front. But because of the greed in the financial industry and the corruption in our government, my "investment" in a home is now ruined. Trust me, I am one pissed off MF'er and I will extract my own personal revenge from this sadistic system we call capitalism in America.
There is little left in America that is not a hoax and a sham. Buyer beware!
Our economy depends on bubbles. It gives an incredible illusion that people have something despite being overwhelmed by debt.
It is a shame they are doing this to the FHA program. My first house that I bought (over 15 yrs ago) was with a FHA insured mortgage with 5% downpayment.
RebelCapitalist.com - Financial Information for the Rest of Us.
I've been wondering about this because housing prices are still way out of line with income to plain afford payments.
Have you seen all of the reports on how the loan modification program is a pure 100% blow off? i.e. they are literally not returning phone calls or claiming paper work errors, etc. to not refinance mortgages?
Given this is a unique point in history, one should agree nothing is predictable, although Prof. Hudson is a brilliant macro economist with a consistent record in predictions.
The last time I checked at the DTCC sight, they claimed that 1.33 quadrillion in derivatives had been cleared through them. (Perhaps that was $1 trillion cleared many times over???)
We should discuss this subject around 30 years from now, but I seriously believe we are witnessing the end of capitalism, one way or the other (Japan, with their new prime minister, appears to now be ahead of the curve, along with Venezuela.)
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