I was going to make that post but didn't feel like getting into it. The discount rate is not the Fed Funds rate, however, rally isn't 100% correct with his assessment.

The Fed, through language, will attempt to signal the market WELL in advance that it will begin tightening. This is but a micro step in that process. If the market pukes tomorrow, then this means the actors are indeed afraid of the Fed taking it's ZIRP candy away.

2/18/2010 6:56:02 PM

raising the discount rate to 0.75 when the fed funds rate is at 0.13 isn't going to mean dick.

Does that clarify it for you?

Let me know when they stop purchasing half the treasury auctions, guaranteeing mortgages, etc

No one is going to be borrowing from the feds anyway right now so the discount rate means very little, its strictly for looks.

2/18/2010 7:25:47 PM

*crickets*

OUCH, these numbers are just plain dismal.

2/25/2010 12:26:59 AM

Obviously from a bit of a doomsday website, but I found this interesting in context:

12 Signs The United States Is Headed For Financial Collapse

Quote :

"Is the United States headed for total financial collapse? Most Americans seem to think that we are now recovering from the recent economic crisis and that we will be back to "normal" very soon. But what do the numbers say? Do the economic signs point toward a recovery or a major financial disaster? The truth is that if you take a close look at the numbers, they are very troubling. Just consider the following signs.... #1) The FDIC plans to open a huge satellite office near Chicago that will house up to 500 temporary staffers and contractors to manage receiverships and liquidate assets from what they are expecting will be a gigantic wave of failed Midwest banks. #2) So is there are reason for the FDIC to expect so many banks to fail? Well, the FDIC recently announced that the number of banks on its "problem" list climbed to 702 at the end of 2009. This is compared to only 552 banks that were on the problem list at the end of September and only 252 banks that were on the problem list at the end of 2008. #3) The U.S. Treasury Department has announced that foreign holdings of U.S. Treasury securities fell by 53 billion dollars in December, which was the biggest one month decline in history. China alone reduced its holdings of U.S. Treasuries by 34.2 billion dollars. If other nations quit buying up U.S. government debt, what happens then? #4) A massive "second wave" of adjustable rate mortgages is scheduled to reset beginning in 2010. The first wave of adjustable rate mortgage resets absolutely devastated the U.S. housing market in 2007 and 2008. So what is this second wave of mortgage resets going to do to the U.S. economy? #5) In fact, one shocking new study predicts that 5 million houses and condos will go through foreclosure over the next couple of years. If that actually happens, the impact on the U.S. economy would be enormous. #6) A number of financial analysts are forecasting that the next "shoe to fall" in the ongoing financial crisis will be commercial real estate. U.S. commercial property values are down about 40 percent since 2007 and currently 18 percent of all office space in the United States is now sitting vacant. #7) The number of Americans who are declaring personal bankruptcy continues to shoot into the stratosphere. 1.41 million Americans filed for bankruptcy in 2009, which represented a 32 percent increase over 2008. #8) But how can average Americans possibly pay their bills without jobs? In some areas of the United States, unemployment is now at depression-era levels. For example, the mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 45 to 50 percent. #9) Meanwhile, soaring unemployment insurance taxes are actually discouraging small and mid-size companies from hiring more workers. According to the National Association of State Workforce Agencies, companies in at least 35 states will have to fork over even more in unemployment insurance taxes in 2010. #10) In addition, the U.S. is facing a pension crisis of unprecedented magnitude. The reality is that the vast majority of all pension funds in the United States, both public and private, are massively underfunded. With millions of Baby Boomers now at or nearing retirement age, there is simply no way that all of these unfunded pension obligations are going to be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the collective unfunded pension liability for all 50 U.S. states for Forbes magazine. So what was the total that they came up with? 3.2 trillion dollars. #11) Not only that, but Social Security and Medicare also threaten to decimate U.S. government finances. In fact, some economic analysts are now predicting that the coming wave of retiring Baby Boomers is going to bankrupt the entire Social Security system. #12) All of these financial problems come at a time when the U.S. national debt is experiencing exponential growth. The U.S. national debt is now over 12 trillion dollars and it is rising at a rate of about 3.8 billion dollars per day. So just how much is one trillion dollars? Well, if you spent one dollar every single second of every single day, it would take you over 31,000 years just to spend one trillion dollars."

http://thefinalhour.blogspot.com/2010/02/12-signs-united-states-is-headed-for.html

2/28/2010 10:40:06 AM

Quote :

"Charlotte-area unemployment hits 12.8%, a new high"

change we can believe in

3/19/2010 11:57:27 AM

yeah, it's his fault we had a depression.

3/19/2010 9:11:56 PM

its just interesting...aside from the record all time high in unemployment in Charlotte, Obama and Biden think it would be even worse if it wasn't for them http://www.charlotteobserver.com/2010/03/18/1321076/biden-touts-ncs-cree-as-green.html

yet they promised to create tens of thousands of new jobs in North Carolina

hmmmm

theres blame to go around everywhere...i just see it going down first hand, and think its interesting that the media has been talking about economic rebound over the past 6 months

3/20/2010 12:26:47 AM

I didnt know where to put this



http://www.gapminder.org/

3/23/2010 9:53:31 PM

^ I watched that video in a statistics class, of all places. Worth the 20 minutes.

3/23/2010 10:14:42 PM

Quote :

"Economic rebounds sure aren't what they used to be. If the current rebound had been like those during 1954 - 1982, the U.S. would have already experienced a substantial rebound in employment, as shown by the shaded gray area in the chart from Goldman Sachs below. The U.S. seems to be stuck in a 'New Normal', one which for employment has existed since 1991. In the last two decades, employment gains have remained weak well after the end of recessions. Worse yet 2009 takes the cake as the worst of the worst as shown by the blue line below. We clearly have a long time to wait for the significant employment gains like we used to see in 1954 - 1982."

http://www.businessinsider.com/chart-of-the-day-total-nonfarm-employment-2010-5?utm_source=Triggermail&utm_medium=email&utm_campaign=CS_COTD_052610#ixzz0p4iQOouQ

[Edited on May 26, 2010 at 5:55 PM. Reason : yay stimulus!]

5/26/2010 5:55:11 PM

a bigger ship takes wider turns.

5/26/2010 6:05:01 PM

There doesn't seem to be as many people riding Greyhound lately.

5/26/2010 6:13:35 PM

Quote :

"In the week ending June 12, the advance figure for seasonally adjusted initial claims was 472,000, an increase of 12,000 from the previous week's revised figure of 460,000. The 4-week moving average was 463,500, a decrease of 500 from the previous week's revised average of 464,000. The advance number for seasonally adjusted insured unemployment during the week ending June 5 was 4,571,000, an increase of 88,000 from the preceding week's revised level of 4,483,000. The four-week average of weekly unemployment claims decreased this week by 500 to 463,500 (the "decrease" was because last week was revised up). The dashed line on the graph is the current 4-week average. Initial weekly claims first fell to this level in December 2009, and have been at the same level for about 6 months. The current level of 472,000 (and 4-week average of 463,500) is still high, and suggests ongoing weakness in the labor market."

Might we be hovering around a new mean?

6/20/2010 9:46:48 AM

Nation's attention is largely elsewhere, this thread is quiet, with the exception of 5/7 I haven't been paying attention to financial news in months.....feels dangerous

6/28/2010 9:18:26 PM

Can I get a flip-flop witness on Krugman? Judges?

Krugman: Recession Is Over
July 26, 2009

http://abcnews.go.com/video/playerIndex?id=8176904

Krugman: A depression is coming
June 28, 2010

http://tinyurl.com/2d47mws

6/29/2010 4:26:40 PM

I think he just looks at GPD in a vacuum and declares the recession to be over whenever it goes up.

6/29/2010 4:35:28 PM

My respect for the Nobel goes down more every year.

6/29/2010 4:41:42 PM

^ ZOMG my buddy is back

[Edited on June 29, 2010 at 4:42 PM. Reason : ]

6/29/2010 4:42:02 PM

^ Stay away from my taint, schmoe!

6/29/2010 4:49:18 PM

I definitely think we are sliding into a 2nd recession. Housing and auto numbers are disastrous, bank lending down huge, purchase managers terrible, weekly indicators terrible, and govt spending is about to be curtailed (thankfully)


It could be an ugly recession, this is what happens when you keep postponing the inevitable

6/29/2010 5:11:18 PM

Quote :

"Can I get a flip-flop witness on Krugman? Judges?"

Did you even read the two articles faggot?

6/29/2010 8:01:53 PM

^ Yes, did you? You obviously didn't because one link is to a video. And I thought we weren't doing the ad hom thing anymore.

Krugman: Recession Is Over
July 26, 2009

Quote :

"[The Business Cycle Dating Committee] will probably retrospectively say that the recession ended in July [2009]."

http://abcnews.go.com/video/playerIndex?id=8176904

Double-sourced:

Krugman: Recession Might End This Summer
06-8-09

http://www.huffingtonpost.com/2009/06/08/krugman-recession-might-e_n_212788.html

Krugman: A depression is coming
June 28, 2010

Quote :

"Indeed, [Krugman] believes the world is now at the threshold of an all-out depression with spending cutbacks coming at the worst possible time for the economy."

http://tinyurl.com/2d47mws

And are the headlines wrong, too?

6/29/2010 8:23:23 PM

Quote :

"Did you even read the two articles faggot?"

unnecessary. just saying.

6/29/2010 8:25:30 PM

faggot is funny.

Quote :

"And are the headlines wrong, too?"

It's that he bases the first assessment on the numbers whereas he bases the second assessment on the outcome of the G-20, which I think you'd have to agree he would not be able to guess. Thus seeing as he had reasonable justification for both predictions, you trying to juxtaposition him with the two articles is laughable, thus the "faggot" remark.

6/29/2010 8:32:55 PM

I finally got around to watching IOUSA. It was a good primer for me on some of this stuff.

I am concerned about the present and the future.

6/29/2010 8:36:52 PM

^^ Krugman is an ideologue--and his "predictions" can't be trusted. I was simply trying to illustrate with the comparison that he was very wrong about the recession ending, so why should we trust him now that he says the sky will be raining giant chunks of depression down on us?

And if I understand Krugman correctly, he wanted the stimulus to be even bigger--and he wants yet another one! Krugman's consistent need to promote suckling from the government teat is troubling, and his mealy-mouthed hocus-pocus with economic numbers--always skewing left--is nothing more than highfalutin rubbish with the Nobel seal stamped on it.

6/29/2010 8:45:29 PM

Quote :

"Krugman is an ideologue--and his "predictions" can't be trusted."

I thought you just said no ad hom?

Quote :

"I was simply trying to illustrate with the comparison that he was very wrong about the recession ending, so why should we trust him now that he says the sky will be raining giant chunks of depression down on us?"

You should look into the two links you posted, they explain both of those points.

Quote :

"And if I understand Krugman correctly, he wanted the stimulus to be even bigger--and he wants yet another one! Krugman's consistent need to promote suckling from the government teat is troubling, and his mealy-mouthed hocus-pocus with economic numbers--always skewing left--is nothing more than highfalutin rubbish with the Nobel seal stamped on it."

I see, so he's wrong because you don't like what he has to say?

6/29/2010 9:37:33 PM

^ No, Krugman's wrong because he's been proven wrong.

6/30/2010 6:11:12 AM

sup, hooksaw

6/30/2010 6:48:14 AM

^ Am I still French?

6/30/2010 7:03:28 AM

Quote :

"Krugman's wrong because he's been proven wrong."

[citation needed]

6/30/2010 12:24:58 PM

6/30/2010 1:47:53 PM

It's like someone managed to fit all of your ignorance regarding libertarianism into one comic strip. Impressive, to say the least.

6/30/2010 4:32:44 PM

I see we've found the "Arrogant" Libertarian!

6/30/2010 4:40:30 PM

^^ somebody's mad.

6/30/2010 5:23:51 PM

Here's one for liberals:



Maybe we could just not do the stereotypes, yes?

6/30/2010 5:41:20 PM

Not to be a Krugman defender, but if you really thought (as he does) that government spending could jumpstart private demand, just that we aren't quite there yet, then it could in fact be possible to be out of the recession but on the cusp of going back into it (or worse as he is claiming, a Depression) if the government support is pulled.

The root of the problem is there is there is no great way to measure economic indicators sans government stimulus.

6/30/2010 6:07:37 PM

^ Wait, what?

6/30/2010 6:11:47 PM

This isn't difficult

Quote :

"The NBER defines an economic recession as: "a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales.""

By most measures, all those variables stopped their retreat and all but employment have actually improved. We know this is largely due to government stimulus, but the measures are real nonetheless. The Keynes clowns think that at some point private demand returns and the government stimulus can be scaled back and all will be fine however, it is entirely possible that you can have positive readings, the end of a recession, yet when the government aid is pulled back those same readings go negative again and we slip back into recession/depression. This is where Krugman (and actually many other Keynes-ish economists) are coming from.

Again, it's a flaw in the way the economic indicators are taken. They are agnostic on where the money came from and they don't include forward looking drags on the economy from the heavy debt loads that caused them. If you think about it, our economic indicators should somehow include this as a feedback mechanism on policy - you know, how capitalism is supposed to work, with feedback to the system when things don't work.

6/30/2010 6:31:52 PM

^ I don't think we're actually disagreeing all that much here, except about Krugman. And I'm well aware of the NBER and its approach--check this thread for proof.

As many here were so fond of pointing out during the Bush years, but appear to have strangely abandoned as of late, the NBER reviews the economic numbers after the fact. It takes a number of months for them to actually declare what the economic situation was, according to NBER, during a given period.

If your point is that many economic indicators, even leading indicators, aren't great ones, then, yeah, I think everyone is aware of this. It's not a revelation.

6/30/2010 7:25:21 PM

No, that wasn't my point at all. The point was, Krugman didn't flip flop using the NBER definition of recessions. By their definition we are out of recession. However, the economy is in such a frail state that we could slip back into recession if the government takes the stimulus candy away. It isn't that the NBER looks backwards, it's that it doesn't distinguish organic growth from government and there is no discounting method for debt.

6/30/2010 9:35:35 PM

^ Um. . .the NBER does, in fact, look back at economic activity. If you read your own post of the NBER definition of an economic recession, you will see that the organization looks at a number of indicators over several months--this approach necessitates that past economic numbers be analyzed in the present.

Krugman did, in fact, flip-flop. If one says, as Krugman said, that the recession is going to be over by the end of summer 2009, and then one says, as Krugman said, in June 2010 that "We are now, I fear, in the early stages of a third depression," that is a flip-flop.

BTW, please don't give me any semantics argument--a depressed economy is still one that is receding. Furthermore, the NBER doesn't even identify depressions.

And I don't have a problem with liberal economists taking a position on this or that. But Krugman is a Kool-Aid drinker--he almost always skews hard left--and as a consequence, his "predictions" simply can't be trusted. Even so, predictions about the economy are always crystal ball-type deals. I mean, most are familiar with the old joke "Economists have correctly predicted nine of the last five recessions."

In any event, I don't know your background, but you seem confused about this issue. Krugman did make conflicting predictions and the NBER does analyze economic data retrospectively. So, I'm not really sure what in the devil you're talking about.

[Edited on July 1, 2010 at 9:02 AM. Reason : .]

7/1/2010 8:58:41 AM

An entire blog devoted to the intellectual hi-jinks of one P. Krugman, Nobel Laureate and PhD in economics. Here you go!
http://krugman-in-wonderland.blogspot.com/

7/1/2010 10:03:11 AM

^ Thanks, Snark! Good read.

7/1/2010 11:55:20 AM

Quote :

"Krugman did make conflicting predictions "

You're really not listening to anyone. He did not make conflicting predictions, he changed his predictions based on new data. When the G-20 happened he was forced to quickly reverse his prediction as he was not able to predict what the G-20 would cause. This is much like how a team may be favored to win a game, but quickly lose that favor when thier star player is injured.

Quote :

"An entire blog gallon of haterade devoted to the intellectual hi-jinks of one P. Krugman, Nobel Laureate and PhD in economics. Here you go!"

7/1/2010 2:04:47 PM

Meteorologist: It will be bright and sunny tomorrow!

Viewer: But it rained heavily on my picnic!

Meteorologist: Well, I simply 'changed my predictions based on new data.'

Viewer:



And



Isn't that convenient?



[Edited on July 1, 2010 at 2:19 PM. Reason : And does the G-20 control economies? If so, why don't they make them all good?]

7/1/2010 2:17:24 PM

Quote :

"And if I understand Krugman correctly, he wanted the stimulus to be even bigger--and he wants yet another one!"

I believe the argument for another stimulus is that the first one merely filled the gaps in all the state budgets and didn't really act as a stimulus toward anything.

7/1/2010 4:33:31 PM

^ So, Biden and others in the administration and Congress are lying?

Biden: Stimulus is working, road work ahead
June 17, 2010

http://tinyurl.com/3yvd6j3

And you think we can borrow our way out of debt? Just asking.

7/1/2010 4:43:03 PM

I think it probably depends on what one expects from the stimulus. If the stimulus is expected to save three million jobs from being lost, then it can be argued a success; however, if the purpose of the stimulus is to jump-start the economy, then it will probably be viewed as less than a success if it fails to do so.

I definitely think that it's possible for a person, a business or a government to borrow their way out of debt. It's happened, continues to happen and will continue to happen. However, you asked whether I think that we, the US, can borrow our way out of debt; it would probably depend on how wisely those borrowed funds are invested, just as with any other individual or organization.

7/1/2010 4:53:45 PM

Quote :

"Rep. Dave Camp, R-Mich., on Thursday called the newest extension plan "fiscal insanity" because it is not paid for and will only create future problems. "I support, and Republicans have supported, extending unemployment benefits, but we must not do so at a cost to the deficit, to the economy and to future generations. Our inability to get our fiscal house in order isn't just damaging future generations; it is wreaking havoc on jobs today," he said in a statement."

Can someone please explain the statement in bold? This is one of the main arguments the Republicans have for holding up unemployment extensions and I don't understand it.

[Edited on July 1, 2010 at 4:56 PM. Reason : ]

7/1/2010 4:56:14 PM