That is laying it out bro! Thanks and well done.
Ron Paul is the only conservative that we've seen in decades
Ron Paul 2012!!! Your thoughts on who we should pick for our "Cause"?
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That is laying it out bro! Thanks and well done.
Ron Paul is the only conservative that we've seen in decades
TR busted up monopolies which didn't happen with old world conservatives. That said, TR wasn't for the type of regulations his son would eventually implement with the New Deal. But that's only because TR was dead. If TR had seen what FDR had to deal with, he would have recognized that collective corporate interests had similar debilitating effects on government as monopolies had. Instead of corporate monopolies, the New Deal mitigated effects of the rich monopoly vs the general good.
TR established national parks. Ron Paul would sell them back to private interests. Imagine you and the family taking in Old Faithful with clear cutting and or mountain top removal going in the background. It would be up to the corporations to decide how much damage they could sustain while simultaneously maintaining necessary market share. It's the wrong motivator and policies like this are what caused the Cuyahoga river to catch fire over a half dozen times.
TR established national parks. Ron Paul would sell them back to private interests. Imagine you and the family taking in Old Faithful with clear cutting and or mountain top removal going in the background. It would be up to the corporations to decide how much damage they could sustain while simultaneously maintaining necessary market share. It's the wrong motivator and policies like this are what caused the Cuyahoga river to catch fire over a half dozen times.
Pragmatic..... like the bailouts were/are pragmatic? Completely abandoning capitalism and some semblance of the free markets pragmatic? I guess my next question is pragmatic for who? What's pragmatic for the banking elite may not be so pragmatic for "the people" in the long run.
Sometimes strict adherence to principles are a good thing.
I'm down with busting up monopolies. Capitalism is about competition. It's supposed to the state's job to protect competition and the free market.
I wouldn't mind Paul giving federal land back to the states. I wouldn't support selling them to private interests.
There are two sides to the whole New Deal debate. I'll leave that one alone.
It depends on how narrow you focus attention to cause, effect and the inability to legally force banks to apply funds so that their toxic assets are relieved. When it comes to regulations, we're in a fast sprint toward exactly what you want. And QE is a result of those ideas not working. Allow the foxes to count the chickens and they'll only count the ones they're not eating.
Free markets work best for the best manipulators, allowing big dogs to squeeze out the little guy. It took one of their own to accept busting up monopolies at the turn of the last century.
Imagine standing on the Colosseum floor and Roman soldiers are about to release the lions. You and trusty sword face the opening gates. But this time there are too many lions to fend off with your sword. Just as the audience expects you to meet your demise, chains restrain the beasts from ripping out your throat. It's not as romantic but you're alive to fight the ones with no chains should that reality arise.
If it depends on whether you're doing good to start with....
I think the attention should have been focused on preventing moral hazard from taking over the system. Too late now. Pandora's box is open. Their toxic assets should have been relieved through bankruptcy. We wouldn't have to sit around and make excuses for why crony capitalism doesn't ever seem to work out the way it's sold to us.
If you'd said "crony capitalism" instead of free markets that sentence would make more sense IMO.
Jim Grant Must Watch: "Capitalism Is An Alternative For What We Have Now"
Principles > Crony Capitalism and Moral Hazard
Ever taken a look at income disparity in the 19th century? Gold standard, no fed, few to no regulations. Rich folks loved it. There just weren't that many of them.
ever take a look at the 21st?
no gold standard
plenty of fed
hundreds of thousands of pages of regulations
record income disparity
moral hazard
record personal debt
record national debt
record foreclosures
legalized graft
government sponsored golden chutes
corporations are people
progress
Those are nice results but they didn't cause themselves. Some of your statistics are 3 and a half years old. We might have a big public debt but our private debt has decreased by a third since 2008. That's one of the problems with European austerity, private debt hasn't contracted and overall demand is worse than the US. The reason unemployment isn't as bad overall, Europeans retain more of their workforce in down economies.
We've unleashed systemic risk that was illegal for 70 years. It was illegal for a reason. We had record foreclosures and unemployment before the '29 crash. Don't pretend like what's left replaces or even has anything to do with what we took away.
We've unleashed systemic risk that was illegal for 70 years. It was illegal for a reason. We had record foreclosures and unemployment before the '29 crash. Don't pretend like what's left replaces or even has anything to do with what we took away.
Firstly, it's kind of hard to look at the stats since there are little to no records. Granted it's well known that income disparity was high. You'd expect that much during the time of slavery. Post Civil War the inequality rose as well. You'd expect that much considering the south was destroyed and the fact civil wars aren't good for wage equality.
Both reports reference 15% and 16% respectively so I stand corrected on the "one third" part.
You give Americans too much credit. They aren't being responsible. They are overdosing.
Debunking The Great Myth Of US Consumer Deleveraging, Or Why The US Economy Will End Not With A Whimper But A Bang
By now everyone 'knows' that the US consumer is hunkering down, paying down debt and performing other mythological tasks. Alas, as the WSJ points out today, this is not exactly true... In fact not true one bit. The reality is that over the past two years, US consumers have not been deleveraging as a voluntary act of eliminating debt, but have been actually aggressively leveraging more and more until the bank providing them credit puts them into involuntary bankruptcy, cutting off the money spigot. This is a startling realization, confirming that the average American is actually hyperleveraging to the point where all available credit is forcefully eliminated by a lender institution!
Here are the facts: as the Flow of Funds report demonstrates, total household credit, consisting of Home Mortgages and Consumer Credit, has indeed declined by $610 billion from $13.2 trillion to $12.6 trillion since the credit bubble peak in June 2008. Yet, as Mark Whitehose points out, there are two ways in which this "deleveraging" can occur. Voluntarily, in the form of actual financial discipline, whereby the end consumer makes a conscious effort to pay down their debt, and Involuntarily, which is really not deleveraging, but aggressive leveraging to the hilt, up until the point where banks eliminate all credit access to the end consumer.
Luckily there is a way to quantify which road has been more travelled by. As the WSJ points out, in the period in which consumer credit has declined by $610 billion, banks and other institutions have charged off $588 billion in mortgage and consumer loans. (Our attempts at recreating these numbers using Fed H.8 and charge off data were slightly off, in fact demonstrating that based on charge off data as calculated, forced deleveraging will only accelerate as it catches up to bank charge off runrates). Nonetheless, a good way to visualize this phenomenon can be seen in the chart below:
Putting numbers to the data confirms that of the over $600 billion in deleveraging, only $20 billion or so of it was voluntary, with the balance occurring due to continuously irresponsible borrowing practices, in which US consumers spend, spend, spend themselves into oblivion only to be cut off cold turkey, instead of entering a slow deleveraging rehabilitation which would allow them to shift into the transition to a new creditless normal far easier.
The last observation is key as it has rather startling implications to David Rosenberg's theme of the New Frugal Normal. It would appear consumers do not, in fact, moderate their spending while still in possession of credit (regardless of its cost) - quite the contrary: they accelerate spending until the charge off threshold at the lender is breached, and all credit is cut off, also resulting in a collapse in a creditor's FICO score, cutting him or her off completely from future (at least near term) credit access. Thus what is occurring at the end of a typical consumer credit lifespan, is not a whimper but a massive bang. What happens after may require Stephen Hawking's explanation rather than David Rosenberg. The conclusion is that consumers do not pass a moderate "go" on their way to insolvency, they go from hyperleverage straight into bankruptcy.
What this means for consumption as observed on the supply-side, i.e., sales at stores like Nordtstroms and Barneys, is that instead of trendlines being indicative of what is truly happening behind the scenes, we have now entered a phase where sales will spike only to drop off in a quantized, step-wise fashion, rather than a linear drop off. This would make all the sense in the world, when one considers that side by side with the observed "deleveraging" of consumers, sales at aspirational store concepts are in fact surging, as the broke middle class performs one last "swan song" rampage of purchasing every Gucci and Chanel bag available, before saying goodbye to credit for a long, long time.
And with unemployment still at record highs, and soon to take another leg higher, paychecks continuing to decline, excess capacity at record highs, 99 week EUC and Extended Claims reaching their ceiling 2 year anniversary from the Lehman collapse, and the general economy double dipping, the implications of this will be dire, as there will be no gradual decline. Instead, to borrow another cosmological term, instead of the US economy decelerating at a rate proportional to the removal of credit from the system, it will grow and grow until it hits supergiant status, only to collapse into a neutron star (or worse) singularity, in which only the Fed will be left beyond the event horizon, only to suffer a similar fate in its last ditch failed attempt to stimulate hyperinflation and rescue the US consumer and banking classes from the infinite gravitational pull of a failed Keynesian experiment.
Which university or public records would you be most inclined to consider?
Slaves aren't part of the working-class demographic.
We also did nothing about income disparity. You either had money or you didn't and if you didn't you couldn't do anything but wither on the vine. Your withering made others' sugar sweeter.
Not only are they not deleveraging, but they continue to liquidate their equity holdings. Now they are either doing so because the "dumb money" has finally figured out that the stock market is a complete farce or they are so broke they are liquidating their saving in a last ditch effort to keep afloat. I reckon it's a little of both.
Central Bank Attempt To Sucker In Retail Investors Back Into Stocks Has Failed
Central Bank Attempt To Sucker In Retail Investors Back Into Stocks Has Failed
In what should come as no surprise to anyone who has a frontal lobe, yet will come as a total shock to the central planners of the world and their media marionettes, the latest attempt to sucker in retail investors courtesy of a completely artificial 20% stock market ramp over the past 4 months driven entirely by the global liquidity tsunami discussed extensively here in past weeks and months, has suffered a massive failure. Exhibit 1 and only: as ICI shows today, following what is now a 20% ramp in the stock market, not only have retail investors continued to pull out cash from domestic equity mutual funds (about $66 billion since the recent lows in October, the bulk of which has gone into bonds and hard commodities), but the week of February 29, when the market peaked so far in 2012, saw the biggest weekly outflow of 2012 to date, at -$3 billion. Alas, this means that the traditional happy ending for the authoritarian regime, whereby stocks get offloaded from Primary Dealers, and GETCO's subsidiaries, to the retail investor, is not coming, and soon the scramble for the exits among the so-called "smart money" will be a sight to behold.
That statement was according the Richmond Federal Reserve's Study.
On the Evolution of Income Inequality in the United States - Economic Quarterly Spring 2008 - Federal Reserve Bank of Richmond
FDR wasn't Teddy's son. They were distant cousins. Eleanor was Teddy's niece.
What you describe is going on right now and we're a million miles from a free market. Go figure. Rigging markets, exploiting loopholes, and skirting tax codes are the MO of big business across industries.
The small businesses are the ones that take the beating because there is no real competition, no real capitalism. The best manipulators, as you describe them, are reaping the benefits of the current configuration. Disproportionately so.
It's a tricky thing to discuss in terms that aren't so abstract because none of us have been around long enough to say we've taken part in or even witnessed a free market.
People assume we have one because they're told it's so, which for a while was supported by the illusion that we were experiencing real growth. The late 90s illustrate this perfectly. It was all a big lie. The era of "free money". We're starting to see that one way or another we're going to have to pay for it.
looks like Buffet is getting some backup
Even greedy capitalists realize we've tilted the scales too much in favor of greedy capitalists.
American consumer deleveraging is a myth and propaganda spread by the MSM. They are either going bankrupt or they are hyperleveraging thanks to the FED's super low interest rates. I'm sure that's going to end well.
I'll post the Wall Street Journal article. I know you don't like ZeroHedge.
Defaults Account for Most of Pared Down Debt
U.S. consumers might not be quite as virtuous as they seem.
The sharp decline in U.S. household debt over the past couple years has conjured up images of people across the country tightening their belts in order to pay down their mortgages and credit-card balances. A closer look, though, suggests a different picture: Some are defaulting, while the rest aren’t making much of a dent in their debts at all.
The sharp decline in U.S. household debt over the past couple years has conjured up images of people across the country tightening their belts in order to pay down their mortgages and credit-card balances. A closer look, though, suggests a different picture: Some are defaulting, while the rest aren’t making much of a dent in their debts at all.
First, consider household debt. Over the two years ending June 2010, the total value of home-mortgage debt and consumer credit outstanding has fallen by about $610 billion, to $12.6 trillion, according to the Federal Reserve. That’s an annualized decline of about 2.3%, which is pretty impressive given the fact that such debts grew at an annualized rate in excess of 10% over the previous decade.
There are two ways, though, that the debts can decline: People can pay off existing loans, or they can renege on the loans, forcing the lender to charge them off. As it happens, the latter accounted for almost all the decline. Our own analysis of data from the Fed and the Federal Deposit Insurance Corp. suggests that over the two years ending June 2010, banks and other lenders charged off a total of about $588 billion in mortgage and consumer loans.
That means consumers managed to shave off only $22 billion in debt through the kind of belt-tightening we typically envision. In other words, in the absence of defaults, they would have achieved an annualized decline of only 0.08%.
To be sure, this analysis holds consumers to a harsh standard. Defaults happen even in normal times, and are typically offset by even stronger growth in new mortgage and consumer loans. By holding their debts steady, consumers are actually being a lot less profligate than usual.
That said, the way U.S. consumers are shedding their debts isn’t encouraging. Aside from defaults, many are finding relief by refinancing mortgages at extremely low interest rates — the same low interest rates that are making it difficult for an increasing number of older folks to generate enough fixed income for a comfortable retirement. The relief might help debt-ridden consumers get into a position to start spending again sooner than they otherwise would, but the borrower’s gain is the saver’s loss.
thanks for the correction
Fair enough. That said, what we have experienced is not unlike getting too close to the Sun. Our wax melts, our feathers fall out, our wings stop working and we start falling back to earth. Grated, none of us has ever stood at the surface of the sun but we can logically deduce the conditions would be much hotter
We'd pretty much have to accept a baseline of fact to make any meaningful exchange. A few peeps have flipped all sorts of tricks to suggest the gains in the 90s were actually deficits. Every one of em have gold fever and bread's gonna cost $400 a loaf. Sorry, I don't go with Mark Coleman on climate change and I don't go with what some consider mavericks of financial pontification.
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