10/10/2010 10:16:50 PM

Repudiating the nation's debt is not the same thing as repudiating the dollar. Nations often do one without the other.

10/11/2010 5:04:18 AM

I never said they were the same. I just posted an image relevant to the conversation that seems to be going on here about a fabled doomsday that will never come. It used to be a popular idea that the god of david would one day strike us with a judgement day for all our wickedness. It now seems like its been replaced with the same scenario only this time it's the god of adam smith.

10/11/2010 9:20:37 AM

The only thing saving the dollar from a collapse is every other country doing the same thing. World inflation, banks and debt run governments win, everyone else loses.

10/11/2010 9:24:00 AM

Wow, the only thing saving the dollar is faith? What a revelation! Or it would be if it weren't in the very definition of the dollar that the only thing that makes it worth more than it's weight in paper is faith in it.

10/11/2010 9:40:49 AM

Faith? How about supply and demand? Other countries are buying our newly created dollars as soon as we print them so that their currencies don't appreciate.

10/11/2010 9:58:32 AM

That's a homunculus argument. You have faith in the demand.

10/11/2010 10:12:46 AM

I disagree. What you meant to say (I assume) is that I have faith that the demand continues at a level that doesn't destroy the system. No one has that faith, they only respond rationally to whatever level the demand is.

The faith is that the system works. Whether I get 1 loaf of bread for my dollar or 1 slice of bread, so long as there isn't another method of exchange I can use to preserve the value of my production, I can only use the one that everyone else is using.

[Edited on October 11, 2010 at 10:24 AM. Reason : .]

10/11/2010 10:22:12 AM

Quote :

"I have faith that the demand continues at a level that doesn't destroy the system."

What is that level? I've never noticed a skull and crossbones on a supply demand chart.

Quote :

"No one has that faith, they only respond rationally to whatever level the demand is."

You have faith. If I hold out two hands one with a dollar bill and one with a piece of trash, you'll take the dollar, because you have faith that other people will take it, you have faith in the demand for that dollar.

10/11/2010 10:56:24 AM

Quote :

"What is that level? I've never noticed a skull and crossbones on a supply demand chart."

No one knows the level. But you keep glossing over my original point. So long as other countries debase just as fast or faster, we'll never find it. This isn't faith that they'll do this because of some perceived strength in the dollar, it simply is what it is...until it isn't.

Quote :

"If I hold out two hands one with a dollar bill and one with a piece of trash, you'll take the dollar, because you have faith that other people will take it, you have faith in the demand for that doll"

Interesting that you choose "trash" as your other offering. Absent other countries demanding dollars (to destroy their own), trash starts to look mighty appealing in return. Instead of trash, if you were to hold out your hand with a competing currency (dare I say, gold) that can't be debased by politicians...I'm going to be real tempted to take that.

[Edited on October 11, 2010 at 11:44 AM. Reason : .]

10/11/2010 11:41:40 AM

I don't buy that argument. While everyone else printing money would stabilize exchange rates, it alone would not stop domestic prices from rising. If foreigners were squirreling dollars away into the mattresses, that would prevent prices from rising, but I don't believe foreigners are hoarding dollars, at best they are hoarding U.S. treasuries, and I know no mechanism for this behavior to lessen inflation.

10/11/2010 11:47:43 AM

Quote :

"No one knows the level. But you keep glossing over my original point. So long as other countries debase just as fast or faster, we'll never find it. This isn't faith that they'll do this because of some perceived strength in the dollar, it simply is what it is...until it isn't."

wat? I don't even? This sounds like something peter schiff would say if he had downs.

Quote :

"Interesting that you choose "trash" as your other offering."

It's not interesting, I did it on purpose. I chose trash because people have no faith in the value of trash. They don't take trash in exchange for goods and services because they know others will not take trash in exchange for goods and services.

Quote :

"if you were to hold out your hand with a competing currency (dare I say, gold) that can't be debased by politicians...I'm going to be real tempted to take that."

Gold isn't a competing currency. It's only used as a commodity now, no one uses commodity money any more.

10/11/2010 4:19:33 PM

Like most things, people don't use gold as a competing currency because it is illegal to do so, as the Liberty Dollar people found out way too late to save themselves.

10/11/2010 5:04:24 PM

Quote :

"I chose trash because people have no faith in the value of trash."

Incorrect. They have faith in the value, it's just that the value happens to be extremely low.

Quote :

"This sounds like something peter schiff would say if he had downs."

Don't be ridiculous.

Quote :

"and I know no mechanism for this behavior to lessen inflation."

And yet that very thing has happened. Look at bank balance sheets for their holding of treasuries and look at how subdued inflation actually is at the moment...to the point this nutso Fed is talking about QE 2.0.

10/11/2010 5:40:49 PM

Quote :

"Incorrect. They have faith in the value, it's just that the value happens to be extremely low."

It's actually negative, considering I have to pay people to take it.

Quote :

"Don't be ridiculous."

I'm not, it was literally gibberish. I mean parts of it sounded like quotes from "race to the bottom" that keeps getting posted, but it was mainly nonsense.

10/11/2010 6:45:49 PM

Just when you think the market couldn't make any less sense, this happens:

U.S. sells debt with a negative yield for 1st time

Quote :

"Oct 25 (Reuters) - The U.S. Treasury Department on Monday sold securities that fetched a negative yield for the first time, implying investors are willing to pay the government to own its debt. This is a milestone in the current rock-bottom interest rate environment, as the Federal Reserve is widely expected next week to announce it will buy more Treasuries to jump-start a sluggish economy. Typically, investors buy a new Treasury bond at "par" or $100. At Monday's $10 billion auction of five-year Treasury Inflation-Protected Securities (TIPS), they paid more than $105 and accepted a bond that yields nothing even after factoring in a 0.50 percent semi-annual interest payment. For more see [ID:nTAR000400]. "This shows negative yields are not a turn-off to investors," said Michael Pond, co-head of U.S. rates strategy with Barclays Capital in New York. But some analysts cautioned negative yields, if they persist, could hurt TIPS demand."

Continued at http://www.reuters.com/article/idUSN2527792620101025

What a joke of an economy we have.

10/25/2010 3:50:09 PM

It makes sense, in the same way you have irrational fear of the stability of the US economy, it seems many more people with much more money have a seemingly irrational hope.

10/25/2010 7:01:48 PM

The fact that we could be in a condition where people think a negative yield on TIPS is a good buy says enough, but I think there could be many motives. The most obvious one is that people expect greater than normal inflation. That's warranted. Indirectly, I think this points to the mounting expectations that the Fed will undergo more quantitative easing, undoubtedly justified by "too low inflation." It's like we're living in some kind of fucking bizarro world where the Fed does the opposite of what it's supposed to do (prevent inflation), the "winner" of the currency war is whoever can debase their currency the fastest, with Geithner cruising around the world telling everyone else how to run an economy.

10/26/2010 12:16:33 AM

^^ Dude you are in over your head here.

If people are willing to accept TIPS at zero yields that means they have the expectation of monster inflation.

If they had hope they would be investing in something that would actually benefit from the economy performing well.

LOL, you just tried to say that investing at 0% shows you have belief in the economy. Think about that for a minute.



For what it's worth TIPS are a huge suckers bet. The gov't controls inflation reports and they have been misreporting inflation for years. That's how they keep social security benefits from exploding. They do a lot of crazy bullshit to spit out that fake CPI number which includes changing the percentages that comprise the basket, adjusting the "value" of a product, etc

A good example would be a new TV. It may cost $500 the same it cost 5 years ago but they will say it is 2x better quality so the true cost is only $250.

This is also how we get fake adjusted GDP numbers. The gov't misreports inflation which gives us larger adjusted GDP growth. That makes the politicians look good.

You guys need to read more.

How can anyone explain the price of everything exploding over the past decade yet there has been low inflation haha.

10/26/2010 12:40:09 AM

Well, it's better than investing in nominal treasuries. I mean, holy shit...there's like a 1% yield on a 5 year. You would have to be a complete idiot to buy that. At least with TIPS, you get the benefit from whatever bullshit CPI number they conjure up.

10/26/2010 12:49:33 AM

Quote :

"How can anyone explain the price of everything exploding over the past decade yet there has been low inflation haha."

I actually agree with you that the CPI number is manipulated, but what they spit out isn't likely that far away from reality. And, what exactly is everything? I can't think of anything that has exploded in price. Some things are cheaper, some slightly more expensive, other things relatively the same.

10/26/2010 8:44:03 AM

Quote :

"most obvious one is that people expect greater than normal inflation."

Why not invest foriegn?

Quote :

"the "winner" of the currency war is whoever can debase their currency the fastest, with Geithner cruising around the world telling everyone else how to run an economy"

It's funny that no legitimate economist takes that guy seriously, yet people hear treat him like the messiah.

Quote :

"If people are willing to accept TIPS at zero yields that means they have the expectation of monster inflation."

There are far better inflation hedges than TIPS.

Quote :

"If they had hope they would be investing in something that would actually benefit from the economy performing well."

They are, have you not watched the news lately?

Quote :

"How can anyone explain the price of everything exploding over the past decade yet there has been low inflation haha."

Changes in consumer prices. I don't think you know what inflation is.

10/26/2010 9:28:09 AM

Quote :

"Momentum for housing has stalled. Home prices decline sequentially in 15 out of 20 markets according to the just-released Case-Shiller numbers. (http://www.businessinsider.com/august-case-shiller-2010-10) The double dip in housing has arrived. And this is just August, prior to the foreclosure-gate mess."

10/26/2010 4:53:16 PM

If someone could post the link to the latest jeremy grantham quarterly letter here he really crushes it again this time.
It feels like everytime its his best one yet.

I'm on my phone so its annoying to try to do, but ill add when I get home if no one has done it yet

10/27/2010 12:02:54 PM

http://www.gmo.com/websitecontent/JGLetter_NightofLivingFed_3Q10.pdf

10/27/2010 1:38:33 PM

As always you have to excuse his whacky northeastern liberal politics but he raises valid points about the govt and fed robbing the nation blind over the course of this whole thing and stunting its growth.

He never blames obama specifically enough for his crazy anti-growth agendas though which is an immediate red flag.

10/27/2010 2:03:40 PM

Obama is arrogant and ignorant. His administration is incompetent. He's just another cog in a machine that is much bigger than him, though. When have you heard Obama talk about money or the Fed? it just doesn't come up. I can't imagine it's an accident; it doesn't fit into his narrative. Obama was the perfect candidate for a docile public that gets the vast majority of their information from TV pundit talking points. Fraud has been rampant throughout the housing crisis and banking industry, but any attempt to actually prosecute that fraud will lead to collapse of the system.



The mainstream politicians are phony. They will kick the can along, no matter the cost. We have to do better or this country is going to be a wasteland.

10/27/2010 4:02:27 PM

^ I don't necessarily disagree with what you're saying about politicians, but I think that bank roll is a little misleading. Obviously we can only speculate, but if Ron Paul had won the nomination I imagine he would have received similar contributions. Those big donors tend to hedge their bets and give money to whomever they think will win and to both sides.

10/27/2010 4:54:24 PM

Well, you're speaking about a guy who wants to abolish the Fed, which has served as a proverbial piñata for the TBTF banks. Somehow, I think the breakdown would have looked a lot different regardless.

10/27/2010 5:03:45 PM

Quote :

"but any attempt to actually prosecute that fraud will lead to collapse of the system"

How in the fuck is that true?

10/27/2010 5:44:58 PM

When good and bad mortgages were packaged together and sold, they formed what we now call mortgage backed securities. Unfortunately, no one knows that what exactly is in those securities. People are now learning that the banks often don't actually hold the original note for the home loans they own. They can't even prove that the mortgage originated from them, or that they're authorized to collect payment. It's fraud, plain and simple. The banks are already insolvent. Yeah, we can continue down this road where the Fed buys MBS and the banks buy treasuries. It's a tidy smoke and mirrors game, but if the administration were to investigate the issue, or if more and more people wake up to the fact that they've been had by the banksters, the collapse that was allegedly prevented by the bailout in 2008 will begin again. It'll just be much, much worse.

10/28/2010 10:47:18 AM

You're falling into the overthrower's trap. The more your argument relies on people you can't specify doing things you can't explain, the less likely people are to take it seriously.

10/28/2010 1:16:46 PM

I can see how that paragraph would strike someone that doesn't read current events as "tin foil hat"-esque. Turns out that the government-backed banking industry is more riddled with corruption than the most loony conspiracy theorists would have previously guessed. Start here and come back when you get educated.

http://consumerist.com/2010/10/graph-how-the-current-foreclosure-fraud-crisis-works.html

10/28/2010 3:50:02 PM

I've already heard about the robo-signers, but you're a fool if you think that small level of impact could cause such a crisis.

10/28/2010 4:23:28 PM

How small is the level?

10/29/2010 5:59:41 PM

Robo-signers really only sped up foreclosures, they didn't really cause them, so they aren't nearly the root of the problem, just companies cheating to cut corners to deal with the large number of foreclosures and shrinking of staff.

[Edited on October 29, 2010 at 6:56 PM. Reason : ]

10/29/2010 6:48:31 PM

Clearly, you've not read much about Fraudclosuregate.

It's the potential double counting of mortgages, the allegations that shitty MBSs were created specifically to profit off their blowup via CDS, and a potential forced mark to market event because of all of this.

Estimates to the hit on bank balance sheets are currently ranging from about 100-400 billion. This will cause a Lehman like event and TARP 2.0 to be vogue if it isn't managed. It might even if it is managed.

10/29/2010 7:51:03 PM

Here's my link:
http://www.businessinsider.com/calculated-risk-why-the-banks-used-robo-signers-2010-10

Give me your link

10/29/2010 7:58:13 PM

http://tinyurl.com/25nbkkk

Quote :

"The critics contend that in the worst case scenario, the big four banks could suffer losses on home equity loans of up to $200 billion. To put that in perspective, JPMorgan's total shareholder equity as of June 30 was about $171 billion. For the last few quarters, the biggest banks have been reducing the reserves set aside for delinquent loans, and they are fairly uniform in rejecting the doomsday scenarios about the mountain of home equity loans sitting on balance sheet. Bank of America, with $141.7 billion in second-lien exposure -- the most of any U.S. bank -- said its hefty book of home equity loans is in good shape because 90 percent "are stands-alone originations" not tied to troubled mortgages."

Flashback to the Lehman crisis and how well off they assured us they were:
http://tinyurl.com/3p73sv

http://www.americanindependent.com/too-big-to-fail-rears-its-head-again/

And so on. Basically, it ultimately depends on how much the government steps in with taxpayer monies again to keep the bonuses rolling in for TBTFs.

10/29/2010 8:39:05 PM

Quote :

"It's the potential double counting of mortgages, the allegations that shitty MBSs were created specifically to profit off their blowup via CDS, and a potential forced mark to market event because of all of this. Estimates to the hit on bank balance sheets are currently ranging from about 100-400 billion. This will cause a Lehman like event and TARP 2.0 to be vogue if it isn't managed. It might even if it is managed."

That doesn't have to do with robosigners or any kind of real fraud.

Quote :

"Basically, it ultimately depends on how much the government steps in with taxpayer monies again to keep the bonuses rolling in for TBTFs."

You're falling into the overthrower's trap. The more your argument relies on people you can't specify doing things you can't explain, the less likely people are to take it seriously.

10/31/2010 5:12:23 PM

You really are just trolling this section aren't you?

10/31/2010 7:18:52 PM

TROLOLOLOLOL

Have my responses ever been less than sincere? What would make you think they are? Are you that closed off to the world that you have trouble believing that people have different opinions than you?

10/31/2010 8:46:22 PM

Quote :

"Are you that closed off to the world that you have trouble believing that people have different opinions than you?"

This isn't an opinion

Quote :

"That doesn't have to do with robosigners or any kind of real fraud."

We can factually state that robosigners have both to do with what I posted and fraud. Like I said the post before, you're going to need to do some more reading though.

Quote :

"the more your argument relies on people you can't specify doing things you can't explain, "

You got me, because people I can't specify doing things I can't explain hasn't already happened or anything. Had it happened though, we might could make some sort of guess as to how it could happen again. What was I thinking?

10/31/2010 9:06:29 PM

If you don't bother reading my posts completely, I'm not going to keep writing them. This is the third or forth time you've obviously just skimmed over my post and not bothered actually reading it, it's insulting.

10/31/2010 9:35:17 PM

Rofl. You didn't even post anything you lame troll. Go run along and play failed society games.

10/31/2010 9:41:52 PM

I did post things, you quoted them but failed to actually read them.

10/31/2010 9:50:56 PM

You realize you're in a different thread now right? The one where you read one link about robo signers and apparently don't know enough about the fraudclosure crisis to link them.

10/31/2010 10:06:13 PM

I know what thread we're in, and I know that you don't bother to read what I say and just take the first and last words I say and fill in the middle with whatever you like.

10/31/2010 10:56:01 PM

Economy Logs Brisk 3.9 Percent Growth

Quote :

"WASHINGTON - The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1 1/2 years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil. The latest snapshot of the country's economic health, released by the Commerce Department on Wednesday, suggested the economy is proving resilient and holding up well despite strains in the housing and credit markets. Those problems intensified during the third quarter and rocked Wall Street. A second report from the department showed construction spending rose 0.3 percent in September, the best showing in four months. All-time high spending in both commercial construction by private builders and government projects more than offset weakness in home building. For the entire July through September period, individuals increased spending. U.S. businesses sold more goods abroad and boosted some investment at home. Those were main factors helping to push up overall economic activity during that period. The third quarter growth rate was up slightly from a 3.8 percent pace for the three previous months. It marked the strongest showing since the first quarter of last year. The increase in gross domestic product exceeded analysts' forecasts for a 3.1 percent growth rate for third quarter. Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness. The White House was pleased that problems in housing did not spread widely through other parts of the economy during the summer as some feared. 'This is an extremely resilient economy,' said Ed Lazear, chairman of President Bush's Council of Economic Advisers. 'It is really quite remarkable.'"

Quote :

"Consumers, whose spending is an important ingredient for the economy's good health, actually rediscovered their appetite to spend in the third quarter. Their spending rose at a 3 percent pace, a considerable improvement from the second quarter's rather weak 1.4 percent growth rate. One of the reasons why people are continuing to spend is because the nation's employment climate has managed to stay fairly sturdy through all the problems. Wage and job gains have served as shock absorbers for some of the negative forces of the housing slump, weaker home prices and more restrictive credit. Another report from the Labor Department showed employers' costs to hire and retain workers rose 0.8 percent in the July-to-September quarter. That was down a bit from a 0.9 percent increase posted in the second quarter, but still suggested workers are seeing solid compensation gains. Businesses, meanwhile, increased their spending on equipment and software at a 5.9 percent pace in the third quarter, the strongest in 1 1/2 years. They also boosted their investment in inventories, another factor that added to GDP. Strong sales of U.S. exports to foreign buyers was another big factor in the good third-quarter showing. Exports grew by 16.2 percent, on an annualized basis, during the quarter. That was the biggest increase since the final quarter of 2003. Business investment in commercial structures, such as office buildings and factories, grew at a 12.3 percent pace in the third quarter. It was a robust showing but down from a sizzling 26.2 percent growth rate in the second quarter. Government spending also contributed to third quarter GDP growth. Such spending rose at a rate of 3.7 percent, following a 4.1 percent pace in the second quarter."

http://www.forbes.com/feeds/ap/2007/10/31/ap4286372.html

I know that, like Iraq, some here are invested in the defeat of the U.S. economy, but the economy apparently has other ideas. The good news just keeps rolling in.

10/31/2010 11:25:38 PM

Quote :

"and fill in the middle with whatever you like"

What did I fill in? You're the one that said people dealing with foreclosures don't have anything to do with mortgages.

11/1/2010 8:56:24 PM