Thanks for the formatting. I did a sloppy job because shrinking those Macquarie charts down made them difficult to read, but it does look better!
Agree with everything you said, of course. My main point, besides the lack of history on securitization (by those supposed experts) which is crucial to understanding what's going on, was to get across the idea of the linking of securitization to all those debt-financed billionaires now smelling up the landscape -- and to further the concept that securitization, the way it is presently handled at least, is nothing more than a humongous leveraged buyout of leveraged buyouts against the American people and workers.
and a couple of posts on what this means to the U.S.
Simon Johnson is pointing out a strong U.S. dollar will actually make the recovery be even more "uphill" along with some other things on it.
FT is watching all of the shorts on the Euro and there is even some question on the future of the Euro itself (I don't buy that one).
But it looks like all of this is going down until Thursday and there are also reports that our pal who runs the world, Goldman Sachs is causing the record high CDS spreads on Greece.
It's like everyone is just betting and waiting on a sovereign default here.
I think I need to do another one of those "turn mathematics and theoretical equations into blogspeak" posts. The ones I've done have been highly popular, and this is a case where the mathematics does not equal the rhetoric at all.
I've GOT to get this site updated, but remind me to tackle this and it's a good project for anyone to do.
James Wooley just did an excellent job calling out the "sudden surprise" that securitization and privatization is somehow "all new", when it's not, historically.
I don't know about psychology, links and 6 degrees of separation, but I do know about vested interested parties funding "research", sometimes through a 3rd party to justify whatever short term profit or goals they want to do...regardless of it's affects on the national interest or even long term health of the same company.
We are seeing more and more biased research, white papers where one is only going to find the flaw if:
1. You read the white paper
2. you have advanced mathematics
3. you have advanced economic theory
4. you review raw statistics
I mean from drug trials to policy to the obvious outrage, writing a white paper to justify getting funds from the government for your particular investments or privatization schemes you want to do.
I edited the formatting a tad, your post tells me I need to get better formatting, esp. graphics tools NOW! My apologies, it's clear a lot of the site tools are not adequate.
BTW: There is a slew of "immigration" "papers" right now that try to claim unlimited migration "helps the economy". This is really sick. What they are doing, which is truly dishonest, not only from the theory, but also the raw statistics, is putting the labor substitution coefficient to zero, in a nutshell. This is just the equations, ignoring the other elements in wages, overall costs. In English, these biased papers are trying to claim that U.S. workers are not displaced and that is just very obviously false from the data on what's happening on the ground.
So, we also have people, with their philosophies trying to make something so, which is objectively incorrect.
Anywho, for someone who takes the scientific method seriously, who believes that the entire world was built upon objective science, methods and analysis...
this trend is really disturbing to me. It's cutting down objectivity itself and so you are turning supposed objective experts into glorified lobbyists with bad math.
Most people in the United States cannot add two numbers together. They know something is wrong with this picture but who can drill down into the actual theory to see clearly....someone just biased a mathematics equation by setting a known quantity, represented by a host of variables....to zero in order to get their conclusion to work out they want they want it to.
I was expecting this to happen frankly. Initially people use credit cards, their savings and when really up against the wall, take the penalty and empty out their IRAs and 401ks.
If you notice our government's great "jobs program" consists of extending unemployment benefits, which only covers about 48% of the real work force in the first place.
This has gone on 25 months. If it hits 36 months, and frankly I think GDP of a couple of percentage and no jobs...
I don't see how they can technically call that a recession for it's not even keeping up with current population growth....
Well, a recession lasting 3 years or longer is actually defined as a depression. I think technically, because we've had and probably will have positive GDP growth, they will still have the recession ending..
but I think we need a new definition ...for jobless recovery. A jobless recovery is no recovery at all.
I also need to do a big overview point on the last decade. Lots of intel on how the S&P is flat for a decade....but very little on the U.S. job market and U.S. labor force for a decade....it basically is less jobs, repressed wages, more age discrimination yet....the population has dramatically increased.
I think few track on the fact the unemployment rate is a ratio of a subset of the U.S. population to W2 jobs.
And they still, still will not look at offshore outsourcing at all on this. Not breath the word, all the while India's BPO industry is like the New Orleans Saints in terms of their joy at hitting pay dirt on capturing even more U.S. jobs.
I think we also need to look at the underclass, the homeless, the poverty stricken and frankly even the death rate. I think that is where one will find the "dropped of the rolls" statistics of the U.S. middle class.
The political economic philosophy of Keynesianism emerged after World War II following the catastrophic experience of the Great Depression. The new paradigm advocated an economy with full employment and shared prosperity, and gave government the critical role of regulating markets and adjusting monetary and fiscal policy to ensure levels of demand sufficient to generate full employment.
True Keynesian policies focus on FULL EMPLOYMENT. What we have seen so far in Europe or U.S. is far from FULL EMPLOYMENT.
It seems like in every glorified steal from the poor and give the rich financial scandal all that happens is a few scapegoats get nailed and nothing systematic changes.
In other words, Ken Lay, Ebbers, yet during the dot con era it was an insider's game and companies like Citigroup really got a slap on the wrist.
In SIGTARP's latest report (this goes to an overview with report attached), it makes a point to say they having ongoing investigations and hints about AIG abound for criminal actions.
But what we need and clearly are not going to get is financial reform, esp. derivatives regulation.
Glad to see you here Michael, this is an excellent post.
That's a nice concise wrap-up. In and of itself a Greek bankruptcy or bond default should -in theory- not affect the Euro as such very much, Greece being maybe 3% of the total. However, just as a Californian bankruptcy (probably inevitable, large US cities at least are already contemplating insolvency, ten idividual states may well follow) would reflect badly on the "state of the Union" as a whole so would the default of on EU country, coupled with the rising interest rates and thus further destabilisation of the remaining over-leveraged member states, make investors wonder when sovereign default across the board is likely. Thus they wouldn't commit themseves to bonds of longer maturity and that's the beginning of the end.
Plain and simple, Obama has not yet let it sink in his thick head that very few Americans believe a single word he says, nor most of our corrupt Congress for that matter. Obama has been in the White House over a year now, it is time he started doing his job as President and stopped working the campaign trail.
I believe that the citizens will begin taking back our country this year (and I believe Obama knows that also), but it will be a very painful journey to 2012, when the clearing of Washington will finally be done.
Our next leader needs to be experienced, tough and honest; al the things Obama is not. Ron Paul or Elizabeth Warren being prime candidates in my opinion. To this end, while I respect what the Tea Party Movement stands for, Sarah Palin is not the person for this role, not in 2012. She has the same lack of experience Obama does and we cannot afford the next president in 2012 to give us more of the same; this country won't survive it.
According to the Main Stream Media, the unemployment picture improved from 10% to 9.7% and Obama ballyhooed that this was the proof of a recovery, but as this ADP survey shows, it's actually worse.
Manufacturing and Goods production, the heart of productivity, is being exchanged for low wage, less secure, service jobs.
The professional middle class that bought all those McMansions during the Bush years are being thrown back to worse economic status than their parents, and to service jobs they hate.
It's worse in Europe, who richly deserve it also.
This is NOT a recovery, this is stagnation, and MORE destruction of the middle class than under bush.
SO, how's that change thingy working out for YOU?
.
The Census ran a super bowl ad. I think it's 3 million for 30 seconds. $3 million could have hired how many temporary workers?
Seriously, the only way to inform the public is to run some attempt to be funny ad that if someone is stupid enough not to know the Census is going on this year they would understand (not!) to the tune of $3 million dollars minimum?
someone can take this on or I can, and just write up a post about the abuse of a host of terms, such as Keynesian, true Stimulus, even true "free" trade vs. what is currently going on and socialism, capitalism. Socialism esp. is abused. I think Glenn Beck really muddles up things, FAUX but I see the same thing happen.
The point is that this has nothing to do with a spendthrift government; what’s happening to Spain reflects the inherent problems with the euro, which now more than ever looks like a monetary union too far.
The point is clear though. With no capacity to set monetary policy, fiscal policy bound by the Maastricht straitjacket, and its exchange rate fixed, the only way Spain, Greece or any of the PIIGS nations can change their competitive position within the EMU is to harshly bash workers’ living conditions. That is not a sensible way to proceed.
Iceland and Eastern block countries were neoliberal bastions. And Greece's problems were a result of global recession but they can't do anything about since there are fiscal constraints via European Union treaty. BTW, Spain was running a budget surplus before this happened. The problem is sovereign countries not having control over monetary and fiscal policy.
The stuff that is being sold by the media and politicians as Keynesian economics. The current practice that is being told to us that it is Keynesian.
If you want to be technical (and correct), we haven't done Keynesian economics in a very long time. But I was trying to say it in a way that most people could understand.
I don't think what has been happening is Keynes frankly, it's deficits yes, spending yes, true Keynes, no.
Back in Keynes day we did not have this economic sieve, called globalization going on where capital was so interconnected to this extent and his spending is really "I", it requires that income be put into the pockets of the citizens from where that domestic gov. spending is originating.
I think Keynes is getting a bad rap here and maybe I need to go through all of those equations later.
I mean there is a difference between spending for corporate welfare vs. spending for citizen welfare.
On MEET THE PRESS today:
MR. GREGORY: A disturbing report on Wednesday in The New York Times talked about people underwater in their mortgages. "The number of Americans," the paper reported, "who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter '09 an estimated 4.5 million homeowners had reached the critical threshold, with their home's value dropping below 75 percent of the mortgage balance. ...according to Sam Khater, senior economist with First American CoreLogic, "People's emotional attachment to their property is melting into the air.'"
Q. Secretary Paulson, what happens if housing prices go down again?
MR. PAULSON: It clearly wouldn't be good. It's very difficult for governments to design a program that is effective and fair to taxpayers...historically, everyone would do whatever it took to make the mortgage payment and avoid default...And when the home is worth less than the mortgage, behaviors tend to change."
MR. GREENSPAN: "Well, I am very much concerned if home prices decline. The reason I am is that during 2005 and 2006, there were eight million home purchases with so-called conventional conforming mortgages with the 20 percent down payment. That down payment is gone, and we have this very large block of homeowners who are right on the edge of tilting down into that underwater category. Fortunately, the evidence suggests that the vast majority of these homeowners--that is, those with standard, conventional mortgages--continue to pay on their mortgages...even if the value in the homes is below the market price. Or rather, what worries me particularly is that there is a very large block that will be thrown on the market, I mean people starting to foreclose, if prices go down significantly from here."
There are all sorts of in depth analysis showing that the current crisis was just kicked down the road and a host of analysis expecting sovereign defaults to kick in and start "phase 2".
It's become like a living entity. A villainous character in the play "The Destruction of America."
It is the enemy. It is part of a cabal of villains pushing the people ever closer to revolt. This cabal has one purpose: As the situation on the ground for real people continues to get worse and worse, the cabal of villains is in charge of an endless propaganda pump, feeding the masses a steady diet of fodder saying "Nothing to see here folks, move along, our great leader has it all figured out."
The Bureau of Lying Statistics is an arm of a propaganda machine. A machine that continually tells us not to believe that which we see and experience for ourselves, but to believe the complete opposite which that they feed us. It is an propaganda arm dedicated to a continuous pouring of salt into America's open wounds. And as the situation on the ground gets worse and worse, the Propaganda Pump will all the more try and tell us things are getting better and better. And at the very front of the Propaganda Pump will be the Bureau of Lying Statistics.
This will go on until the American people literally take apart this Pump with their bare hands.
Thanks for the formatting. I did a sloppy job because shrinking those Macquarie charts down made them difficult to read, but it does look better!
Agree with everything you said, of course. My main point, besides the lack of history on securitization (by those supposed experts) which is crucial to understanding what's going on, was to get across the idea of the linking of securitization to all those debt-financed billionaires now smelling up the landscape -- and to further the concept that securitization, the way it is presently handled at least, is nothing more than a humongous leveraged buyout of leveraged buyouts against the American people and workers.
Thanks again.
and a couple of posts on what this means to the U.S.
Simon Johnson is pointing out a strong U.S. dollar will actually make the recovery be even more "uphill" along with some other things on it.
FT is watching all of the shorts on the Euro and there is even some question on the future of the Euro itself (I don't buy that one).
But it looks like all of this is going down until Thursday and there are also reports that our pal who runs the world, Goldman Sachs is causing the record high CDS spreads on Greece.
It's like everyone is just betting and waiting on a sovereign default here.
I think I need to do another one of those "turn mathematics and theoretical equations into blogspeak" posts. The ones I've done have been highly popular, and this is a case where the mathematics does not equal the rhetoric at all.
I've GOT to get this site updated, but remind me to tackle this and it's a good project for anyone to do.
James Wooley just did an excellent job calling out the "sudden surprise" that securitization and privatization is somehow "all new", when it's not, historically.
I don't know about psychology, links and 6 degrees of separation, but I do know about vested interested parties funding "research", sometimes through a 3rd party to justify whatever short term profit or goals they want to do...regardless of it's affects on the national interest or even long term health of the same company.
We are seeing more and more biased research, white papers where one is only going to find the flaw if:
1. You read the white paper
2. you have advanced mathematics
3. you have advanced economic theory
4. you review raw statistics
I mean from drug trials to policy to the obvious outrage, writing a white paper to justify getting funds from the government for your particular investments or privatization schemes you want to do.
I edited the formatting a tad, your post tells me I need to get better formatting, esp. graphics tools NOW! My apologies, it's clear a lot of the site tools are not adequate.
BTW: There is a slew of "immigration" "papers" right now that try to claim unlimited migration "helps the economy". This is really sick. What they are doing, which is truly dishonest, not only from the theory, but also the raw statistics, is putting the labor substitution coefficient to zero, in a nutshell. This is just the equations, ignoring the other elements in wages, overall costs. In English, these biased papers are trying to claim that U.S. workers are not displaced and that is just very obviously false from the data on what's happening on the ground.
So, we also have people, with their philosophies trying to make something so, which is objectively incorrect.
Anywho, for someone who takes the scientific method seriously, who believes that the entire world was built upon objective science, methods and analysis...
this trend is really disturbing to me. It's cutting down objectivity itself and so you are turning supposed objective experts into glorified lobbyists with bad math.
Most people in the United States cannot add two numbers together. They know something is wrong with this picture but who can drill down into the actual theory to see clearly....someone just biased a mathematics equation by setting a known quantity, represented by a host of variables....to zero in order to get their conclusion to work out they want they want it to.
I was expecting this to happen frankly. Initially people use credit cards, their savings and when really up against the wall, take the penalty and empty out their IRAs and 401ks.
If you notice our government's great "jobs program" consists of extending unemployment benefits, which only covers about 48% of the real work force in the first place.
This has gone on 25 months. If it hits 36 months, and frankly I think GDP of a couple of percentage and no jobs...
I don't see how they can technically call that a recession for it's not even keeping up with current population growth....
Well, a recession lasting 3 years or longer is actually defined as a depression. I think technically, because we've had and probably will have positive GDP growth, they will still have the recession ending..
but I think we need a new definition ...for jobless recovery. A jobless recovery is no recovery at all.
I also need to do a big overview point on the last decade. Lots of intel on how the S&P is flat for a decade....but very little on the U.S. job market and U.S. labor force for a decade....it basically is less jobs, repressed wages, more age discrimination yet....the population has dramatically increased.
I think few track on the fact the unemployment rate is a ratio of a subset of the U.S. population to W2 jobs.
And they still, still will not look at offshore outsourcing at all on this. Not breath the word, all the while India's BPO industry is like the New Orleans Saints in terms of their joy at hitting pay dirt on capturing even more U.S. jobs.
I think we also need to look at the underclass, the homeless, the poverty stricken and frankly even the death rate. I think that is where one will find the "dropped of the rolls" statistics of the U.S. middle class.
The Capture of Keynesianism:
True Keynesian policies focus on FULL EMPLOYMENT. What we have seen so far in Europe or U.S. is far from FULL EMPLOYMENT.
RebelCapitalist.com - Financial Information for the Rest of Us.
It seems like in every glorified steal from the poor and give the rich financial scandal all that happens is a few scapegoats get nailed and nothing systematic changes.
In other words, Ken Lay, Ebbers, yet during the dot con era it was an insider's game and companies like Citigroup really got a slap on the wrist.
In SIGTARP's latest report (this goes to an overview with report attached), it makes a point to say they having ongoing investigations and hints about AIG abound for criminal actions.
But what we need and clearly are not going to get is financial reform, esp. derivatives regulation.
Glad to see you here Michael, this is an excellent post.
That's a nice concise wrap-up. In and of itself a Greek bankruptcy or bond default should -in theory- not affect the Euro as such very much, Greece being maybe 3% of the total. However, just as a Californian bankruptcy (probably inevitable, large US cities at least are already contemplating insolvency, ten idividual states may well follow) would reflect badly on the "state of the Union" as a whole so would the default of on EU country, coupled with the rising interest rates and thus further destabilisation of the remaining over-leveraged member states, make investors wonder when sovereign default across the board is likely. Thus they wouldn't commit themseves to bonds of longer maturity and that's the beginning of the end.
was the several hundreds of billions of dollars to rebuild Iraq. Don't forget.
RebelCapitalist.com - Financial Information for the Rest of Us.
Plain and simple, Obama has not yet let it sink in his thick head that very few Americans believe a single word he says, nor most of our corrupt Congress for that matter. Obama has been in the White House over a year now, it is time he started doing his job as President and stopped working the campaign trail.
I believe that the citizens will begin taking back our country this year (and I believe Obama knows that also), but it will be a very painful journey to 2012, when the clearing of Washington will finally be done.
Our next leader needs to be experienced, tough and honest; al the things Obama is not. Ron Paul or Elizabeth Warren being prime candidates in my opinion. To this end, while I respect what the Tea Party Movement stands for, Sarah Palin is not the person for this role, not in 2012. She has the same lack of experience Obama does and we cannot afford the next president in 2012 to give us more of the same; this country won't survive it.
According to the Main Stream Media, the unemployment picture improved from 10% to 9.7% and Obama ballyhooed that this was the proof of a recovery, but as this ADP survey shows, it's actually worse.
Manufacturing and Goods production, the heart of productivity, is being exchanged for low wage, less secure, service jobs.
The professional middle class that bought all those McMansions during the Bush years are being thrown back to worse economic status than their parents, and to service jobs they hate.
It's worse in Europe, who richly deserve it also.
This is NOT a recovery, this is stagnation, and MORE destruction of the middle class than under bush.
SO, how's that change thingy working out for YOU?
.
The Census ran a super bowl ad. I think it's 3 million for 30 seconds. $3 million could have hired how many temporary workers?
Seriously, the only way to inform the public is to run some attempt to be funny ad that if someone is stupid enough not to know the Census is going on this year they would understand (not!) to the tune of $3 million dollars minimum?
someone can take this on or I can, and just write up a post about the abuse of a host of terms, such as Keynesian, true Stimulus, even true "free" trade vs. what is currently going on and socialism, capitalism. Socialism esp. is abused. I think Glenn Beck really muddles up things, FAUX but I see the same thing happen.
My Sunday media nightmare
RebelCapitalist.com - Financial Information for the Rest of Us.
Iceland and Eastern block countries were neoliberal bastions. And Greece's problems were a result of global recession but they can't do anything about since there are fiscal constraints via European Union treaty. BTW, Spain was running a budget surplus before this happened. The problem is sovereign countries not having control over monetary and fiscal policy.
Nothing Keynesian in European debt crisis.
RebelCapitalist.com - Financial Information for the Rest of Us.
The stuff that is being sold by the media and politicians as Keynesian economics. The current practice that is being told to us that it is Keynesian.
If you want to be technical (and correct), we haven't done Keynesian economics in a very long time. But I was trying to say it in a way that most people could understand.
I don't think what has been happening is Keynes frankly, it's deficits yes, spending yes, true Keynes, no.
Back in Keynes day we did not have this economic sieve, called globalization going on where capital was so interconnected to this extent and his spending is really "I", it requires that income be put into the pockets of the citizens from where that domestic gov. spending is originating.
I think Keynes is getting a bad rap here and maybe I need to go through all of those equations later.
I mean there is a difference between spending for corporate welfare vs. spending for citizen welfare.
On MEET THE PRESS today:
MR. GREGORY: A disturbing report on Wednesday in The New York Times talked about people underwater in their mortgages. "The number of Americans," the paper reported, "who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter '09 an estimated 4.5 million homeowners had reached the critical threshold, with their home's value dropping below 75 percent of the mortgage balance. ...according to Sam Khater, senior economist with First American CoreLogic, "People's emotional attachment to their property is melting into the air.'"
Q. Secretary Paulson, what happens if housing prices go down again?
MR. PAULSON: It clearly wouldn't be good. It's very difficult for governments to design a program that is effective and fair to taxpayers...historically, everyone would do whatever it took to make the mortgage payment and avoid default...And when the home is worth less than the mortgage, behaviors tend to change."
MR. GREENSPAN: "Well, I am very much concerned if home prices decline. The reason I am is that during 2005 and 2006, there were eight million home purchases with so-called conventional conforming mortgages with the 20 percent down payment. That down payment is gone, and we have this very large block of homeowners who are right on the edge of tilting down into that underwater category. Fortunately, the evidence suggests that the vast majority of these homeowners--that is, those with standard, conventional mortgages--continue to pay on their mortgages...even if the value in the homes is below the market price. Or rather, what worries me particularly is that there is a very large block that will be thrown on the market, I mean people starting to foreclose, if prices go down significantly from here."
Frank T.
There are all sorts of in depth analysis showing that the current crisis was just kicked down the road and a host of analysis expecting sovereign defaults to kick in and start "phase 2".
It's become like a living entity. A villainous character in the play "The Destruction of America."
It is the enemy. It is part of a cabal of villains pushing the people ever closer to revolt. This cabal has one purpose: As the situation on the ground for real people continues to get worse and worse, the cabal of villains is in charge of an endless propaganda pump, feeding the masses a steady diet of fodder saying "Nothing to see here folks, move along, our great leader has it all figured out."
The Bureau of Lying Statistics is an arm of a propaganda machine. A machine that continually tells us not to believe that which we see and experience for ourselves, but to believe the complete opposite which that they feed us. It is an propaganda arm dedicated to a continuous pouring of salt into America's open wounds. And as the situation on the ground gets worse and worse, the Propaganda Pump will all the more try and tell us things are getting better and better. And at the very front of the Propaganda Pump will be the Bureau of Lying Statistics.
This will go on until the American people literally take apart this Pump with their bare hands.
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