And I've said so before- Keynes aside, there's a gigantic possibility that this method of spending will overshoot and crash the dollar.
At best, we'll hit it exactly on the mark (or within a billion or two), avoid major deflation, and reset the regulations to have this problem all over again in about 70 years.
As Robert Oak says above, the lack of tying the stimulus to *local* *domestic* production, and local self-sufficiency is the problem. The age of Manifest Destiny is over. We live on a finite world. We can't handle an eternally growing global economy. Time to figure out something else.
-------------------------------------
Moral hazards would not exist in a system designed to eliminate fraud.
This is class warfare plain and simple. This is the largest transfer of wealth from one group of people to another.
Middle class people don't need financial conglomerates. What they need is a bank that accepts deposits and makes loans. That is it. They can get that from a local bank or a local credit union. We don't need them.
Statements like this absolutely set me off and are a clear indication why this is class warfare:
Attorney V. Gerard Comizio, senior partner in the banking practice at Paul, Hastings, Janofsky & Walker LLP in Washington, said his firm recently held a conference call with representatives from about 300 companies who were “wildly concerned” about the restrictions on hiring foreign workers.
Fu*k them. We need to break this financial oligarchy now and not after Geithner's plan fails.
Are you in or out? Stop carping about how worried you are congress stepping in and changing the rules. Just assume they will and price accordingly. If think it too risky then step aside and let us break up the financial oligarchy and see how you like that.
If this is what the PPIP is for, then I'm in favor of it.
If - again IF - it's going to be used for honest price discover (32 cents on the dollar) rather than stealth subsidy (86 cents on the dollar) then that's a wonderful thing that we should all support...and in fact, a thing that's not at all incompatible with sterner measures, like nationalization.
congress for more money. But it will be unavoidable. I hope Geithner will use the stress tests as an excuse or rationale to temporary nationalize but I am not sure he is willing to upset the oligarchs. Geithner's plan, as written, is not fiscally feasible based on a report I read that estimated that there are $4-7 trillion of "toxic assets" out there.
The second half of your story is unbelievable. I wrote about this yesterday:FDIC Inviting Public Comment on Legacy Loan Program. FDIC is saying it is an incentive for "healthier banks" but come on they are not going to stop zombie banks like Citi and BofA from double dipping.
Ronald Reagan told the air traffic controllers to get back to work. Perhaps Obama will have to do the same in order to save the auto industry here in the states. There will be no shortage of people willing to take a job here for $14.00-$18.00 an hour plus benefits. I'd be on the look out for a new government created U.A.W contract.
I think #1 they need to be regulating in mass and plain stopping a host of derivatives. also, nationalize "some" banks, namely BoA, Citigroup as the top targets, fire the executives.
Then, on the rest of these on this "winding down" of derivatives they should either offer a partial payment to no payment, depending on the solvency and TARP recipient.
I agree fundamentally mark-to-market just exposed the illness and is not the cause but when one gets into these complex corporate accounting method, I'm learning myself, digging around. That's what I've determined so far for myself.
That's what i was pointing out in the original 'what is mark to market' blog post I wrote and the resulting comments..
he basically same up with a game simply in order to avoid putting taxpayers on the hook and did similar things when resolving the S&L crisis.
I honestly think his analysis is completely different from the corporate lobbyists agenda, which is to keep the entire derivative, fictional black box gambling model going, ala "Enron" style, whereas Isaac seems to be more interested in figuring out a way to clean up the mess while being a serious budget deficit hawk type.
This may be a short-term solution but it doesn't resolve the long-term problem.
Cash-flow is king. No accounting standard will change that. If mortgage defaults are still occurring and there is no cashflow for MBS the market will still think they are worthless. "Mark-to-Model" won't change that reality.
It seems we are just kicking the problem down the road.
Back to my divergence theme or the theoretical economy decoupling from the real economy mantra...
I think many folks who aren't hip to Economic indicators and what they all mean are simply aware that they are personally screwed.....and the percentage of personally screwed in the United States keeps rising...
so maybe we need along with all of this some sort of main street recovery indicators super imposed on the traditional EIs.
i.e. wage cycles, under employed cycles....then the damn median wealth indicators are so hosed because they were funneled with private dwellings...which is turn was overinflated debt. Maybe another one is career longevity and stability.
I'm just mulling here but something that more clearly ties main street to national economic growth and recovery or lack thereof.
To everyone else, yes The Economic Populist is a layperson's blog, a community blog, a place, as long as it's well reasoned, referenced, cited, based in economic reality, one can blast out on the national screw job called Economic, Trade policy....
but frankly we really do expect you to crack the economics books, we expect you to read, learn, understand or ask questions about economics 101. I believe anyone with a college education absolutely needs to crack those books never mind those with a high school education. This is the most critical policy area besides outright war that affects real people and their real lives. Even war is so often tied into economic related policies.
So, once again, what's happening here is NDD happened to have a strong economic education and he's simply using it...
and yes all of these metrics are extremely valid..
just because one doesn't like economic policy....one should not confuse that with economic theory and metrics...not the same things.
You might check out the user guide on the upper left column for how to format, cite references.
As far as the "buttom pushers", I can guarantee that NDD is no "Wall Street pusher", just looking at the data to get an accurate picture and he has written other posts on EP, one of my favorites of recent on what he would like to see in a real financial crisis recovery plan, which has the bold desire to fire Summers and Geithner immediately...
That said, being fact based and getting to the bottom of the actual facts is one of the points of EP, so adding references, quotes, graphs and other metrics in a blog post brings you good juju so we can see your points more clearly.
You seem to agree that the housing story is correct, and important, even though prices are likely to fall much more (which is a good or bad thing depending on if you are a first time buyer, or a seller who bought within the last few years).
As to who is "pushing" the story, I'll let Rob Oak and others here vouch for my bona fides. I'll also note that Calculated Risk is looking for a bottom, and CR's ideology is what I would call center-left.
Describing what is happening with the economy is an entirely different enterprize than analyzing the morality of how the economy is functioning.
My issue with "Stimulus" and deficit spending is it not following real Keynesian theory. The problem is they will not tie the jobs to U.S. citizens, perm residents.
Hence we have billions upon billions of contracts going to companies like IBM, who will assuredly offshore outsource the actual work. We also have GE, who also will offshore the work, same with Caterpillar.
So, by the equation, temporary deficit spending must increase domestic income in order to actually work.
So that's just the project spending, we haven't even gotten to the "tax cuts".
The Fed printing press is also a major concern and it's quite clear not only are other nation's wanting to decouple from the U.S. dollar, they literally want to get rid of the U.S. dollar as an international currency.
You might format your links. EP is different from DK in that there are a host of tools to help you format your posts. Check out the user guide on the upper left and there is also an admin forum. There is also an email system, so if someone is really stuck with formatting, they can email me for help (or post in the admin forum for help).
And I've said so before- Keynes aside, there's a gigantic possibility that this method of spending will overshoot and crash the dollar.
At best, we'll hit it exactly on the mark (or within a billion or two), avoid major deflation, and reset the regulations to have this problem all over again in about 70 years.
As Robert Oak says above, the lack of tying the stimulus to *local* *domestic* production, and local self-sufficiency is the problem. The age of Manifest Destiny is over. We live on a finite world. We can't handle an eternally growing global economy. Time to figure out something else.
-------------------------------------
Moral hazards would not exist in a system designed to eliminate fraud.
This spending I don't think is going to help us out one bit. And the costs for us citizens keeps going up.
Check out this:
http://blogs.wsj.com/economics/2009/04/03/cbo-tarp-may-be-more-costly-th...
This is class warfare plain and simple. This is the largest transfer of wealth from one group of people to another.
Middle class people don't need financial conglomerates. What they need is a bank that accepts deposits and makes loans. That is it. They can get that from a local bank or a local credit union. We don't need them.
Statements like this absolutely set me off and are a clear indication why this is class warfare:
Fu*k them. We need to break this financial oligarchy now and not after Geithner's plan fails.
Are you in or out? Stop carping about how worried you are congress stepping in and changing the rules. Just assume they will and price accordingly. If think it too risky then step aside and let us break up the financial oligarchy and see how you like that.
If this is what the PPIP is for, then I'm in favor of it.
If - again IF - it's going to be used for honest price discover (32 cents on the dollar) rather than stealth subsidy (86 cents on the dollar) then that's a wonderful thing that we should all support...and in fact, a thing that's not at all incompatible with sterner measures, like nationalization.
BofA's overseas workforce has grown sharply.
BofA says it is an international bank. Ha. Ha. But it begs for U.S. taxpayer money. Maybe next time they can ask the Indian gov't for a bailout.
congress for more money. But it will be unavoidable. I hope Geithner will use the stress tests as an excuse or rationale to temporary nationalize but I am not sure he is willing to upset the oligarchs. Geithner's plan, as written, is not fiscally feasible based on a report I read that estimated that there are $4-7 trillion of "toxic assets" out there.
The second half of your story is unbelievable. I wrote about this yesterday:FDIC Inviting Public Comment on Legacy Loan Program. FDIC is saying it is an incentive for "healthier banks" but come on they are not going to stop zombie banks like Citi and BofA from double dipping.
Ronald Reagan told the air traffic controllers to get back to work. Perhaps Obama will have to do the same in order to save the auto industry here in the states. There will be no shortage of people willing to take a job here for $14.00-$18.00 an hour plus benefits. I'd be on the look out for a new government created U.A.W contract.
I think #1 they need to be regulating in mass and plain stopping a host of derivatives. also, nationalize "some" banks, namely BoA, Citigroup as the top targets, fire the executives.
Then, on the rest of these on this "winding down" of derivatives they should either offer a partial payment to no payment, depending on the solvency and TARP recipient.
I agree fundamentally mark-to-market just exposed the illness and is not the cause but when one gets into these complex corporate accounting method, I'm learning myself, digging around. That's what I've determined so far for myself.
1) Financial conglomerates become emboldened and decide to hold onto "toxic assets"; or
2) Financial conglomerates will ask for a too high a price and Geithner's plan fails.
Time will not heal this problem. If anything it will make it worse. We can end up truly in a worse situation then Japan's.
Time will only make this problem more costly for taxpayers.
This change will not stop capital injections. It just may mean they are not as big.
That's what i was pointing out in the original 'what is mark to market' blog post I wrote and the resulting comments..
he basically same up with a game simply in order to avoid putting taxpayers on the hook and did similar things when resolving the S&L crisis.
I honestly think his analysis is completely different from the corporate lobbyists agenda, which is to keep the entire derivative, fictional black box gambling model going, ala "Enron" style, whereas Isaac seems to be more interested in figuring out a way to clean up the mess while being a serious budget deficit hawk type.
Fannie, Freddie Need Less Aid With Accounting Change
This may be a short-term solution but it doesn't resolve the long-term problem.
Cash-flow is king. No accounting standard will change that. If mortgage defaults are still occurring and there is no cashflow for MBS the market will still think they are worthless. "Mark-to-Model" won't change that reality.
It seems we are just kicking the problem down the road.
Back to my divergence theme or the theoretical economy decoupling from the real economy mantra...
I think many folks who aren't hip to Economic indicators and what they all mean are simply aware that they are personally screwed.....and the percentage of personally screwed in the United States keeps rising...
so maybe we need along with all of this some sort of main street recovery indicators super imposed on the traditional EIs.
i.e. wage cycles, under employed cycles....then the damn median wealth indicators are so hosed because they were funneled with private dwellings...which is turn was overinflated debt. Maybe another one is career longevity and stability.
I'm just mulling here but something that more clearly ties main street to national economic growth and recovery or lack thereof.
To everyone else, yes The Economic Populist is a layperson's blog, a community blog, a place, as long as it's well reasoned, referenced, cited, based in economic reality, one can blast out on the national screw job called Economic, Trade policy....
but frankly we really do expect you to crack the economics books, we expect you to read, learn, understand or ask questions about economics 101. I believe anyone with a college education absolutely needs to crack those books never mind those with a high school education. This is the most critical policy area besides outright war that affects real people and their real lives. Even war is so often tied into economic related policies.
So, once again, what's happening here is NDD happened to have a strong economic education and he's simply using it...
and yes all of these metrics are extremely valid..
just because one doesn't like economic policy....one should not confuse that with economic theory and metrics...not the same things.
oh yes that is right, slipped my brain and the crash and burn of this one is quite the tsunami.
You might check out the user guide on the upper left column for how to format, cite references.
As far as the "buttom pushers", I can guarantee that NDD is no "Wall Street pusher", just looking at the data to get an accurate picture and he has written other posts on EP, one of my favorites of recent on what he would like to see in a real financial crisis recovery plan, which has the bold desire to fire Summers and Geithner immediately...
That said, being fact based and getting to the bottom of the actual facts is one of the points of EP, so adding references, quotes, graphs and other metrics in a blog post brings you good juju so we can see your points more clearly.
That ought to be your analysis.
You seem to agree that the housing story is correct, and important, even though prices are likely to fall much more (which is a good or bad thing depending on if you are a first time buyer, or a seller who bought within the last few years).
As to who is "pushing" the story, I'll let Rob Oak and others here vouch for my bona fides. I'll also note that Calculated Risk is looking for a bottom, and CR's ideology is what I would call center-left.
Describing what is happening with the economy is an entirely different enterprize than analyzing the morality of how the economy is functioning.
had 62% of its Bond Fund portfolio in mortgage backed securities. That is $82 billion.
China i am still digging. I saw an NPR story that said the investment in Fannie and Freddie was 10% of its GDP. That is awfully high.
My issue with "Stimulus" and deficit spending is it not following real Keynesian theory. The problem is they will not tie the jobs to U.S. citizens, perm residents.
Hence we have billions upon billions of contracts going to companies like IBM, who will assuredly offshore outsource the actual work. We also have GE, who also will offshore the work, same with Caterpillar.
So, by the equation, temporary deficit spending must increase domestic income in order to actually work.
So that's just the project spending, we haven't even gotten to the "tax cuts".
The Fed printing press is also a major concern and it's quite clear not only are other nation's wanting to decouple from the U.S. dollar, they literally want to get rid of the U.S. dollar as an international currency.
You might format your links. EP is different from DK in that there are a host of tools to help you format your posts. Check out the user guide on the upper left and there is also an admin forum. There is also an email system, so if someone is really stuck with formatting, they can email me for help (or post in the admin forum for help).
I'll post a brief critique* later.
Just when you thought they would run out of bubbles, they go for the direct one -- a bubble in creating currency out of thin air.
I suspect any recovery will also be "jobless" as you say.
Pages