Financial Crisis

[midas]

Santelli tells it straight

Rick Santelli Goes On A Deficit Rampage: "Gov't Must Live Within Its Means! Now, Now, Now! Stop Spending Now!"

http://dailybail.com/home/rick-santelli-goes-on-a-deficit-rampage-govt-must-live-withi.html

I saw that live & once again I thought ....This Santelli is the only guy ( of the talking heads on TV )who gets it.

Classic

if there was ever an emperor is not wearing any clothes moment it was this

Santelli “ What I think we need to do is live within the revenue intake. End of story “

Jerk with the glasses with an inane smile “ but we don't have revenue “

Shhhhh……… You're not supposed to say that on CNBC

Edited July 20, 2011 by midas

[churchill]

Radical solutions needed - I thought Alaska but Hawaii is a good start ...

Breaking News: China Buys Hawaii

http://blogs.forbes.com/china/2010/05/24/breaking-news-china-buys-hawaii/

[cloudhopper]

I thought it had all been sold to the Japanese at the height of that bubble. I guess they're finally getting out.

Heh looks like history is rhyming again... http://www.zerohedge.com/article/exposing-chinas-mysterious-multi-trillion-shadow-banking-system

[midas]

Radical solutions needed - I thought Alaska but Hawaii is a good start ...

Breaking News: China Buys Hawaii

http://blogs.forbes.com/china/2010/05/24/breaking-news-china-buys-hawaii/

what a clever strategic move allowing them effective ownership of the birth certificate database

[churchill]

Portugal's new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a "colossal" €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists.

"colossal"

Peanuts to some life and death to others - How is it that the US , UK & all can spend billions in Libya to prevent a human crisis .. but let this happen >>

UN officially declares state of famine in Somalia after worst drought in 60 years

Read more: http://www.dailymail.co.uk/news/article-2016783/UN-declares-famine-Somalia-worst-drought-60-years.html#ixzz1SeHJ9aaW

[12DrinkMore]

http://www.bloomberg...n-l-carter.html

Remember the Budget Enforcement Act, adopted in 1990 to limit discretionary spending, while ensuring that Congress adopted no new tax cuts or entitlements without future revenues to pay for them? You don't? Of course not: Congress gutted the thing once it began to get in the way of distributing benefits without regard to cost.

How about the government's balance sheet? You know, the sort of thing that corporations have to issue every year, calculating assets and liabilities using generally accepted accounting principles? Haven't seen it? Small wonder. Congress, in its wisdom, believes that only the troglodytes of the private sector should be burdened by such nonsense, lest their foolish and unsophisticated clients at the banks of Wall Street be deceived.

The Congress that passed Sarbanes-Oxley concluded that the only way to ensure transparency in corporate numbers was to require corporate officers to certify that their numbers were correct. The penalties for falsely certifying are substantial -- fines of as much as $5 million, and up to 20 years in prison -- on the theory that the fear of personal liability will reduce the incentive to exaggerate future revenue or conceal future liabilities.By contrast, congressional appropriators and federal agency heads, are under no similar constraints. True, the government does have its own accounting principles. But nobody faces liability if the numbers are off. Nobody has skin in the game.

But none of the literature suggests that these differences justify the budgetary practice of treating future liabilities as if they don't exist. Unless we develop a system in which federal officials personally have skin in the game, no plan is likely to succeed.What's that you say? These requirements would be unduly burdensome, creating enormous compliance costs and chilling frank discussion of possible courses of action due to a fear of personal liability? Well, sauce for the goose....

[ronz28]

US Federal Reserve Board Banksters' corruption exposed by GAO...

http://www.zerohedge.com/article/gao-audit-exposes-feds-corruption-once-again

[ronz28]

Socialism for the Rich and you paid for it........

http://vtdigger.org/2011/07/21/sanders-on-the-fed-audit-this-is-socialism-for-the-rich/

[midas]

The penalties for falsely certifying are substantial -- fines of as much as $5 million, and up to 20 years in prison -- on the theory that the fear of personal liability will reduce the incentive to exaggerate future revenue or conceal future liabilities.[/font]By contrast, congressional appropriators and federal agency heads, are under no similar constraints. True, the government does have its own accounting principles. But nobody faces liability if the numbers are off. Nobody has skin in the game.

maybe the only solution is for us all to become like the safari bandit and steal the money back from the banksters?

I think this is a real cool dude

http://www.ksby.com/news/fbi-seeking-safari-bandit-in-santa-barbara-bank-robbery/

[craigt3365]

This is interesting:

In a sign of how perilous the ongoing partisan gridlock could be for both parties in Washington, a new poll finds that just 30 percent of Americans are willing to re-elect their current member of Congress.

According to a new ABC News/Washington Post poll, 63 percent of those surveyed say they are inclined to "look around" for someone new to elect. That's the highest anti-incumbency number ever recorded in the poll, which dates back to 1989.

By comparison, roughly half of Americans said they were looking to new candidates ahead of the 2010 midterms, when Republicans claimed 63 new seats in Congress and regained majority control of the House.

The latest poll would seem most perilous to Republicans, since they hold more seats in the House. More broadly, however, the survey underlines just how little esteem the country holds for sitting lawmakers from either major party in Congress.

Still pollster Gary Langer writes in an analysis of the poll that anti-incumbency is particularly high among Democrats, "a possible sign they are stirring as they did not in 2010."

This tends to show how political the debt ceiling vote is. Each party trying to jockey for position in the upcoming elections. Another quote from the NY Times:

Many Republicans oppose abandoning the party’s no-compromise stand against any new taxes, while many Democrats fear a “grand bargain” will undercut their party’s ability in the 2012 campaigns to use Republicans’ support of deep cuts in Medicare, Medicaid and Social Security against them.

Putting elections above the interests of the country at large. Pretty sad...

[cloudhopper]

Putting elections above the interests of the country at large. Pretty sad...<br />

That's the way it has always been I'm afraid.

http://www.youtube.com/watch?v=rg1AJV2DPFg

[Wrong Turn]

This is interesting:

In a sign of how perilous the ongoing partisan gridlock could be for both parties in Washington, a new poll finds that just 30 percent of Americans are willing to re-elect their current member of Congress.

According to a new ABC News/Washington Post poll, 63 percent of those surveyed say they are inclined to "look around" for someone new to elect. That's the highest anti-incumbency number ever recorded in the poll, which dates back to 1989.

By comparison, roughly half of Americans said they were looking to new candidates ahead of the 2010 midterms, when Republicans claimed 63 new seats in Congress and regained majority control of the House.

The latest poll would seem most perilous to Republicans, since they hold more seats in the House. More broadly, however, the survey underlines just how little esteem the country holds for sitting lawmakers from either major party in Congress.

Still pollster Gary Langer writes in an analysis of the poll that anti-incumbency is particularly high among Democrats, "a possible sign they are stirring as they did not in 2010."

This tends to show how political the debt ceiling vote is. Each party trying to jockey for position in the upcoming elections. Another quote from the NY Times:

Many Republicans oppose abandoning the party’s no-compromise stand against any new taxes, while many Democrats fear a “grand bargain” will undercut their party’s ability in the 2012 campaigns to use Republicans’ support of deep cuts in Medicare, Medicaid and Social Security against them.

Putting elections above the interests of the country at large. Pretty sad...

That was a good snippet to post here, craigt3365.

The entire fiasco of going into this debt was to benefit during the next elections: "we'll spend to 'create' jobs. We are *doing* something." When in fact, it didn't really help at all.

And now, the Debt Ceiling wrangling is another sad game for both parties to position themselves for the upcoming elections.

These are the negatives of 'democracy.'

Do something in the short-term that 'seems' good and beneficial to get re-elected every 2, 4 and 6 years, which will bring the country down in the long term.

Glad I'm in Asia, and not there.

[midas]

so the households of America are mirroring the behaviour and values of their elected representatives

Consumers in U.S. Relying on Credit as Inflation Erodes Incomes

Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.

http://www.bloomberg.com/news/2011-07-21/consumers-in-u-s-relying-on-credit-as-inflation-erodes-incomes.html

Edited July 22, 2011 by midas

[cloudhopper]

<br />

<br />When in fact he is calling on the Germans to subsidize banks and bondholders who foolishly lent money to the corrupt Greek regime. "How much longer will the average Hans put up with that crap?" is the German perspective I'd like to see.<br />

<br />the average German Hans will mutter and curse. but in the end he will grind his teeth and obey what has been ordered from "above". especially the last 2½ decades are evidence that the average Hans has no guts. he accepted and keeps paying through his nose for any bullcrap the various governments introduced and if need be he will pay for the dolce vita of the "club med"  <img src='http://static.thaivisa.com/forum/public/style_emoticons/default/bah.gif' class='bbc_emoticon' alt='' /><br />

<br /><br /><br />

Wow here we are again. Still think the voters will allow it? SSDD 'til it isn't I guess...

[Naam]

<br />

<br />When in fact he is calling on the Germans to subsidize banks and bondholders who foolishly lent money to the corrupt Greek regime. "How much longer will the average Hans put up with that crap?" is the German perspective I'd like to see.<br />

<br />the average German Hans will mutter and curse. but in the end he will grind his teeth and obey what has been ordered from "above". especially the last 2½ decades are evidence that the average Hans has no guts. he accepted and keeps paying through his nose for any bullcrap the various governments introduced and if need be he will pay for the dolce vita of the "club med"  <img src='http://static.thaivisa.com/forum/public/style_emoticons/default/bah.gif' class='bbc_emoticon' alt='' /><br />

<br /><br /><br />

Wow here we are again. Still think the voters will allow it? SSDD 'til it isn't I guess...

the voter has no say Cloudhopper. moreover, the tchermann voter -or rather the taxpayer who will pay sooner or later for it- is now convinced that saving one country of "Club Med" is cheaper than a break-up of the monetary union. the latter is -i hate to admit it - true. i also hate to admit that i participated and benefitted from yesterday's shady agreement with a few trades that raked in between 8 and14% within a couple of hours. now out again, profit realised and looking forward to a relaxed weekend.

don't ask me whether Merkel and Sarkozy will be successful as i have no &lt;deleted&gt; idea

[Abrak]

<br />

<br />When in fact he is calling on the Germans to subsidize banks and bondholders who foolishly lent money to the corrupt Greek regime. "How much longer will the average Hans put up with that crap?" is the German perspective I'd like to see.<br />

<br />the average German Hans will mutter and curse. but in the end he will grind his teeth and obey what has been ordered from "above". especially the last 2½ decades are evidence that the average Hans has no guts. he accepted and keeps paying through his nose for any bullcrap the various governments introduced and if need be he will pay for the dolce vita of the "club med"  <img src='http://static.thaivisa.com/forum/public/style_emoticons/default/bah.gif' class='bbc_emoticon' alt='' /><br />

<br /><br /><br />

Wow here we are again. Still think the voters will allow it? SSDD 'til it isn't I guess...

the voter has no say Cloudhopper. moreover, the tchermann voter -or rather the taxpayer who will pay sooner or later for it- is now convinced that saving one country of "Club Med" is cheaper than a break-up of the monetary union. the latter is -i hate to admit it - true. i also hate to admit that i participated and benefitted from yesterday's shady agreement with a few trades that raked in between 8 and14% within a couple of hours. now out again, profit realised and looking forward to a relaxed weekend.

don't ask me whether Merkel and Sarkozy will be successful as i have no &lt;deleted&gt; idea

The day that I am convinced that Italy is free from Euro contagion I will stop betting against it. Until then it is basically a one way bet.

[Naam]

The day that I am convinced that Italy is free from Euro contagion I will stop betting against it. Until then it is basically a one way bet.

against what are you betting Abrak? Italy or €UR?

[craigt3365]

Seems the US bailout of the auto industry eventually worked out?

http://money.cnn.com/2011/07/21/autos/chrysler_bailout_costs_gains/index.htm?iid=HP_LN

[cloudhopper]

<br />Seems the US bailout of the auto industry eventually worked out?

At least "according to the Michigan-based Center for Automotive Research" who no doubt is a bribing, er lobbying group for the automotive industry. The article fails to mention that the US still owns a buttload of GM stock, another word for fascism.

[craigt3365]

<br />Seems the US bailout of the auto industry eventually worked out?

At least "according to the Michigan-based Center for Automotive Research" who no doubt is a bribing, er lobbying group for the automotive industry. The article fails to mention that the US still owns a buttload of GM stock, another word for fascism.

Initially, I was totally against this. They screwed up by not manufacturing quality products. My cousin works for Ford and says there's only one or two good products there.

But I liked this comment in the article:

Instead of failing and dragging a big chunk of America's economy down with it, GM says it has has hired 15,720 people since the bail-out and has invested $5.4 billion in the U.S.

Chrysler, meanwhile, reports it has hired 6,000 and invested $3.2 billion.

In the end, the $14 billion loss may well have been a small price to pay for a strong American auto industry that can finally succeed on its own merit.

If that's the case, it was a good thing??? The problem with the economy is not enough jobs...not the debt ceiling. Though the latter needs to be dealt with for sure!

[cloudhopper]

  The problem with the economy is not enough jobs...

True enough and the global wage arbitrage facilitated by the Nixon "shock" will ensure that it doesn't improve anytime soon.

[Wrong Turn]

The problem with the economy is not enough jobs...not the debt ceiling. Though the latter needs to be dealt with for sure!

Every year more and more adults enter the work force, but there are not jobs created. How to deal with it? Hard to say, as it's a private sector matter.

[midas]

The problem with the economy is not enough jobs...not the debt ceiling. Though the latter needs to be dealt with for sure!

Every year more and more adults enter the work force, but there are not jobs created. How to deal with it? Hard to say, as it's a private sector matter.

that is the elephant in the room that no one wants to talk about very much

New Demand, Old Workforce, Not Enough Jobs Ever Again

"There is an ugly truth about the job market that economists and politicians will not speak. The United States and the world will never need as many workers as it has in the past to supply more than we could ever buy or consume and with almost everyone in the modern workforce, this is a huge problem. The solution is a global lower standard of living."

http://pollardpost.blogspot.com/2011/07/new-demand-old-workforce-not-enough.html

[lannarebirth]

The problem with the economy is not enough jobs...not the debt ceiling. Though the latter needs to be dealt with for sure!

Every year more and more adults enter the work force, but there are not jobs created. How to deal with it? Hard to say, as it's a private sector matter.

that is the elephant in the room that no one wants to talk about very much

New Demand, Old Workforce, Not Enough Jobs Ever Again

"There is an ugly truth about the job market that economists and politicians will not speak. The United States and the world will never need as many workers as it has in the past to supply more than we could ever buy or consume and with almost everyone in the modern workforce, this is a huge problem. The solution is a global lower standard of living."

http://pollardpost.b...not-enough.html

"Futurists" claim that 30 years from now less than half of working age people will be working in fulltime jobs. They may or may not be proven right / wrong, though I tend to agree with them given prevailing trends. What they don't say is what the other half will be doing and how societies will have to change / adapt to this new paradigm.

[Abrak]

The day that I am convinced that Italy is free from Euro contagion I will stop betting against it. Until then it is basically a one way bet.

against what are you betting Abrak? Italy or €UR?

I have absolutely no view whatsoever on the Euro. I dont need to be invested in it but more importantly I really have no clue whether it will go up or down.

I have been betting for a while (through a hedge fund - something I rarely use - but is able to do trades that I cannot make) that there will be Euro divergence rather than convergence. At one point this was a fairly easy one way bet when Ireland's cost of capital was lower than Germany's.

As I see it the Euro crisis hasnt made a huge amount of progress. It was obvious 2 years ago that Greece was not suffering from a liquidity problem but one of insolvency. How the Euro crisis will end I have no idea and really doesnt make a whole lot of difference in the greater scheme of things. Locking together interest rates and exchange rates in Europe simply led to too many apartments in Spain, too many factories in Germany and too many civil servants in Brussels. Now we are left with the winners from the Euro and the losers.

Italy is a bundle of debt wrapped up in an 'nontransparent' financial system, so my guess is that it will be tested at some point.

[Abrak]

"There is an ugly truth about the job market that economists and politicians will not speak. The United States and the world will never need as many workers as it has in the past to supply more than we could ever buy or consume and with almost everyone in the modern workforce, this is a huge problem. The solution is a global lower standard of living."

Errrr.... that doesnt make a lot of sense.

On the one hand it basically says that 'the world has too many workers to supply the needs and wants of those people who exist on the earth' and on the other hand it says 'we will have a lower global standard of living'.

The theory that we will only work 20 hours a week is based on the theory that with 20 hours a week of work we will generate such a high standard of living that we will 'prefer' not to work and enjoy our 'pleasure time' rather than to work and gain a 'higher standard of living' in our 'non-work' time by earning huge amounts of dosh to get us incrementally marginal utility of existing goods.

[midas]

"There is an ugly truth about the job market that economists and politicians will not speak. The United States and the world will never need as many workers as it has in the past to supply more than we could ever buy or consume and with almost everyone in the modern workforce, this is a huge problem. The solution is a global lower standard of living."

Errrr.... that doesnt make a lot of sense.

On the one hand it basically says that 'the world has too many workers to supply the needs and wants of those people who exist on the earth' and on the other hand it says 'we will have a lower global standard of living'.

The theory that we will only work 20 hours a week is based on the theory that with 20 hours a week of work we will generate such a high standard of living that we will 'prefer' not to work and enjoy our 'pleasure time' rather than to work and gain a 'higher standard of living' in our 'non-work' time by earning huge amounts of dosh to get us incrementally marginal utility of existing goods.

This question/topic has been haunting me since the financial crisis started. I am reminded of it every time the politicians talk about “ creating jobs “-such loose words but no one ever goes beyond that by defining exactly what these jobs would be and how much they would pay?

Yes I remember the 20 hour week predictions and I wonder whatever happened to that?

Coincidentally here is an article in today's business insider where Billionaire Howard Marks also talks about this subject:-

"In addition to balancing the budget and growing the economy, I think we have to accept that the coming decades are likely to see U.S. standards of living decline relative to the rest of the world. Unless our goods offer a better cost/benefit bargain, there’s no reason why American workers should continue to enjoy the same lifestyle advantage over workers in other countries. I just don’t expect to hear many politicians own up to this reality on the stump."

Read more: http://www.businessinsider.com/billionaire-howard-marks-us-standards-of-living-are-likely-to-decline-relative-to-the-rest-of-the-world-2011-7#ixzz1SvwM4NeN

Edited July 23, 2011 by midas

[12DrinkMore]

The theory that we will only work 20 hours a week is based on the theory that with 20 hours a week of work we will generate such a high standard of living that we will 'prefer' not to work and enjoy our 'pleasure time' rather than to work and gain a 'higher standard of living' in our 'non-work' time by earning huge amounts of dosh to get us incrementally marginal utility of existing goods.

I am sure that you do not buy into that one little bit.

Employers will never pay on average a wage that will provide a decent standard of living for just 20 hours work/week. Globalised capitalism has killed that dream good and proper. The system revolves around extracting as much work as is legally possible for as little as they can get away with.

Roger Bootle devoted a couple of chapters in his "Money for Nothing" book to this subject. He put forward the idea that the west could maintain its standard of living by multiplying income selling stuff such as software, with high development costs but low distribution and selling costs. I think he is very wrong on this. All the gains and profits will go to the entrepreneurs and business owners, there will indeed be no free lunches or holidays in this world.

The vast majority of the world's population will have to work full weeks just to keep their heads above water, just the way it has always been and always will be.

[midas]

The theory that we will only work 20 hours a week is based on the theory that with 20 hours a week of work we will generate such a high standard of living that we will 'prefer' not to work and enjoy our 'pleasure time' rather than to work and gain a 'higher standard of living' in our 'non-work' time by earning huge amounts of dosh to get us incrementally marginal utility of existing goods.

I am sure that you do not buy into that one little bit.

Employers will never pay on average a wage that will provide a decent standard of living for just 20 hours work/week. Globalised capitalism has killed that dream good and proper. The system revolves around extracting as much work as is legally possible for as little as they can get away with.

Roger Bootle devoted a couple of chapters in his "Money for Nothing" book to this subject. He put forward the idea that the west could maintain its standard of living by multiplying income selling stuff such as software, with high development costs but low distribution and selling costs. I think he is very wrong on this. All the gains and profits will go to the entrepreneurs and business owners, there will indeed be no free lunches or holidays in this world.

The vast majority of the world's population will have to work full weeks just to keep their heads above water, just the way it has always been and always will be.

a friend in Australia was telling me one of the biggest and most prestigious law firms in Sydney ( that used to also be one of the most expensive ) has dropped its hourly rate and has built a mini dormitory with beds and showers and everything for its young hard-working lawyers so they don't have to go home if they don't want. Some of the more enthusiastic ones are working weekends and everything 72 hours a week

[12DrinkMore]

a friend in Australia was telling me one of the biggest and most prestigious law firms in Sydney ( that used to also be one of the most expensive ) has dropped its hourly rate and has built a mini dormitory with beds and showers and everything for its young hard-working lawyers so they don't have to go home if they don't want. Some of the more enthusiastic ones are working weekends and everything 72 hours a week

It's about time the penny dropped with regard to the legal and financial services "professions".

Self-serving parasites.

The legal lot are on the whole an exclusive club of tiered administrators making mountains out of molehills, and the financial services lot consists of 95% bullshitters; both lots reducing the wealth of the rest of the wealth producing world.

Politicians and "civil servants" live in the same camp.