Page 21 of 56 FirstFirst ... 11192021222331 ... LastLast
Results 601 to 630 of 1676

Thread: Black Monday 2: Economic Boogaloo

  1. #601
    Join Date
    Jan 2004
    Location
    Near Grover's Mill
    Posts
    2,729
    Spain's borrowing cost has increased to 6.15% according to this Article.

    Spain's 10-year bonds were up 16 basis points at 6.15 percent, five-year yields topped 5 percent, while two-year yields spiked to 3.70 percent, all highs for this year.

    Six percent was last reached in December and is psychologically important for markets. The rise typically accelerates after that level, putting yields on course for 7 percent beyond which debt costs are seen as unsustainable.
    I may have many faults, but being wrong ain't one of them. - Jimmy Hoffa

  2. #602
    Join Date
    Sep 2003
    Location
    Denmark
    Posts
    18,413
    Incidentally, just because I can't see a reference to it and the news apparently got lost during the making of the new bionic man.

    Greece officially defaulted on March 9th.
    __________________________________________________
    Reductionist and proud of it.

    Being ignorant is not so much a shame, as being unwilling to learn. Benjamin Franklin
    Chase after the truth like all hell and you'll free yourself, even though you never touch its coat tails. Clarence Darrow
    A person who won't read has no advantage over one who can't read. Mark Twain

  3. #603
    Join Date
    Apr 2012
    Posts
    13
    Quote Originally Posted by profloater View Post
    The evidence is that clever people get round every regulation and show scanty regard for general well being; rather maximising their personal wealth with no care for the consequences.
    People in poor countries (like the one I am in) do the same thing, they are very greedily pursuing their own interest, and don't care at all that their actions make it harder for westerners to earn twenty times what they do. How could people be so greedy?

  4. #604
    Join Date
    Aug 2005
    Location
    location
    Posts
    11,557
    Quote Originally Posted by Rough Edges View Post
    People in poor countries (like the one I am in) do the same thing, they are very greedily pursuing their own interest, and don't care at all that their actions make it harder for westerners to earn twenty times what they do. How could people be so greedy?
    Easy, human nature. More to the point, many people suffer under the delusion that they earned what they get. Part of the problem is globalization. It might be better for an economy to be self-sufficient before attempting to globalize. Of course, part of the solution is globalization, because it brings jobs and infrastructure to locations that some believe would not otherwise develop it. Unfortunately, that stinks of "The White Man's Burden". On the other hand, perhaps the "White Man" does have a burden, the burden of fixing what was broken during colonialism/slavery. However, environmental practices (more to the point, the lack of them) in some locations by some companies allowed by some governments hungry for jobs/investment is just an extension/reprise of colonialism in an economic sense. Perhaps if a government (or all governments -to prevent/revert a "race to the bottom") stuck to its guns and forced resource developers to be environmentally conscious then the extra work they'd need to do would be converted to jobs for the locals. The same goes for social welfare, health services etc with regards to human resources.

    Anyway, the real question is how do we make work for all these people when our processes are so efficient that those wannabe-workers are superfluous with regard to the labor market? We have enough capacity to make goods for everyone or can create it fairly easily. The limiting factors are energy and food. With enough efficiency and new (preferably cheap and non-polluting/carbon-neutral) energy we could meet that (until thermal exhaust overheated this world even without greenhouse warming -several hundred years from now). As automation grows and population grows, we find ourselves with a growing percentage of structural unemployment. Some believe that not forcing people to work for their supper produces a "moral hazard", though perhaps a more compelling hazard is how bored humans might create a population boom, thereby exacerbating the problem of running up against the energy and food limitations. How do we solve that? Do we force everyone to work doing useless tasks? Well, forced labor for consumption may not go over well, but that's sorta what we've got now, using money as a mechanism. We might develop stop-gap measures of job-sharing and more (and forced) vacation time, or forcing certain classes (read: women) out of the workforce. But what happens if/when we invent robots and AI that can do everything we do? Do humans go on permanent vacation, and if so, how do we establish a system whereby everyone gets enough if we don't force/allow people to earn it, and what would that system look like?
    Et tu BAUT? Quantum mutatus ab illo.

  5. #605
    Join Date
    Apr 2012
    Posts
    13
    Quote Originally Posted by Ara Pacis View Post
    Easy, human nature.
    Not quite sure you got the point there!

    Quote Originally Posted by Ara Pacis View Post
    Anyway, the real question is how do we make work for all these people when our processes are so efficient that those wannabe-workers are superfluous with regard to the labor market? We have enough capacity to make goods for everyone or can create it fairly easily. The limiting factors are energy and food.
    How innovative! And there is this widespread belief that employers in your country are employing more than 90% of the labor pool and paying them about 2/3 of the value of national output (about 10 times the amount spend on energy) because that labor is needed for production, not because they are superfluous, and that in this country, I am facing labor costs that are rising at a double-digit perecentage rate for the same reason. Who knew we were all paying this huge labor bill unnecessarily!

    I might have you confused with someone else, but do you happen to be a member of a conspiracy theory board that claims one of the mods here as a member? If so, I am wondering if the Croation guy with all the innovative economic theories has helped craft this one. In any event, the whole "useless eater" thing seems to be pretty standard fare at the NWO conspiracy-theory type web sites. I am not sure if they have any arguments to address all the contradictions with the evidence.
    Last edited by Rough Edges; 2012-Apr-18 at 12:59 AM.

  6. #606
    Join Date
    Aug 2005
    Location
    location
    Posts
    11,557
    Quote Originally Posted by Rough Edges View Post
    Not quite sure you got the point there!
    Then make your point.


    How innovative! And there is this widespread belief that employers in your country are employing more than 90% of the labor pool and paying them about 2/3 of the value of national output (about 10 times the amount spend on energy) because that labor is needed for production, not because they are superfluous, and that in this country, I am facing labor costs that are rising at a double-digit perecentage rate for the same reason. Who knew we were all paying this huge labor bill unnecessarily!
    That depends on what you mean by "needed". Despite a higher than normal rate of unemployment (and arguments that it may be structural and not transitional), a lot of the work performed by people may be considered unnecessary in a total system point of view. Some of this is due to a duplication of efforts, and that duplication of capacity often leads to unused capacity due to the non-contiguous/non-continuous nature of individual unitary actors, that is corporations that are in competition. This is a major source of waste. As part of the race to the bottom, it also results in over-work of certain portions of production capacity while other portions under-worked.

    I'm not claiming that paying this huge labor bill is unnecessary - it is necessary in our current paradigm. However, a case can be made that constraints on supplies (food and energy) will necessitate a change in the paradigm to either reduce waste at the point where it is wasted (production) or reduce consumption, which will probably occur in locations distant from the over-production in socio-economic time and space.

    I might have you confused with someone else, but do you happen to be a member of a conspiracy theory board that claims one of the mods here as a member? If so, I am wondering if the Croation guy with all the innovative economic theories has helped craft this one. In any event, the whole "useless eater" thing seems to be pretty standard fare at the NWO conspiracy-theory type web sites. I am not sure if they have any arguments to address all the contradictions with the evidence.
    Are you new here?
    Et tu BAUT? Quantum mutatus ab illo.

  7. #607
    Join Date
    Feb 2005
    Location
    Edinburgh
    Posts
    717
    Quote Originally Posted by Ara Pacis View Post
    Are you new here?
    S/he joined this month and has 13 posts, so yes, s/he's new here. I'm not sure what difference that makes though.

  8. #608
    Join Date
    Aug 2005
    Location
    location
    Posts
    11,557
    Quote Originally Posted by Heid the Ba' View Post
    S/he joined this month and has 13 posts, so yes, s/he's new here. I'm not sure what difference that makes though.
    That's not conclusive.
    Et tu BAUT? Quantum mutatus ab illo.

  9. #609
    Join Date
    Sep 2005
    Posts
    9,031
    Been slacking off here of late, haven't I? Well, I've got good excuses.

    Here's a good 'un about the games schools play with "financial aid" (meaning loans the students and/or parents must take out) statements to confuse the college bound young 'uns on just how much they're going to have to pay and go in hock for:

    http://www.bloomberg.com/news/2012-0...at-s-debt.html

    We've discussed this before here, but this little bubble is going to pop soon. Our little model is going to have change, and there's some high flying universities that need to have their tuition deflate big time. As it is now, they jack up the tuition and just get the sucker students more loans to make up for it. This is a classic "throw money at something recklessly" inflationary spiral.

    18 yr olds just aren't the best for doing a little cost/benefit analysis of taking on that ridiculous debt. Their parents and other responsible adults ought to, but they apparently can't either, and get suckered into it. We've got this ridiculous "everyone must go to college" mentality at work that causes these irrational choices to be made.

    The laws of physics/reality/economics are soon going to come down hard on this ridiculous system we've created, one I'd call just about criminal. Just like everything else, we're hitting the debt wall. We're out of money and the reality is hitting home.

  10. #610
    Join Date
    Sep 2005
    Posts
    9,031
    It's now official with 2 quarters of negative GDP change: UK is in recession, a double dip if you will.

  11. #611
    Join Date
    Sep 2005
    Posts
    9,031
    The rest of the EU is going in the crapper as well. As expected. Spainish unemployment came in at nearly 25%, and Italian yields are starting to blow out again. Assuming they play the same rose-colored statistical games as we do, we can be the true unemployment rate is somewhat higher than that official number.

  12. #612
    Join Date
    Nov 2005
    Posts
    3,460
    I don't know a good long term solution, but short term we could ask people (collecting the dole) to report what they did yesterday and today to better themselves or help someone else or society. We should only be critical of the worst answers, but it would send a message that we are expected to seek our own solutions. One of the problems is an increasing percentage are abusing substances, have severe attitude problems and many others are not continuing their education in useful ways. Neil

  13. #613
    Join Date
    Jul 2003
    Posts
    13,886
    Quote Originally Posted by neilzero View Post
    I don't know a good long term solution, but short term we could ask people (collecting the dole) to report what they did yesterday and today to better themselves or help someone else or society. We should only be critical of the worst answers, but it would send a message that we are expected to seek our own solutions. One of the problems is an increasing percentage are abusing substances, have severe attitude problems and many others are not continuing their education in useful ways. Neil
    Strikes me that if you were to remove "(collecting the dole)" from the first sentence it might make some sense. Otherwise it has a certain Dickensian ring, calling to mind debtor's prisons, orphanages and bootblack factories.

  14. #614
    Join Date
    Jul 2003
    Posts
    4,217
    Perhaps some labour Union might start a website
    which collects anonomous resumes from everybody
    employed or otherwise. If you are in the market
    you request your entry is flagged such. For a
    fee potential employers search this resource.

    If no responce happens put your feet up with a
    clear conscience.

    The British encouragement about "helping people
    back to work" is so completely dishonest
    implying as its does jobs waiting everywhere!

  15. #615
    Join Date
    Jan 2004
    Location
    Near Grover's Mill
    Posts
    2,729
    To touch on the college cost bubble Publius mentioned a few posts back, Businessweek magazine has a special report titled College Investment: Does it Pay?"

    There are a number of articles in the report, including ones about student loan debt, return on investment, and the "College is not for everyone" article.

    There is also a giant table showing Return On Investment for several hundred US colleges...yes sometimes it is negative. (Hint: You can sort the table by clicking on the column headers)
    I may have many faults, but being wrong ain't one of them. - Jimmy Hoffa

  16. #616
    Join Date
    Apr 2011
    Location
    Norfolk UK and some of me is in Northern France
    Posts
    4,250
    Students: And we in the UK look to the USA to justify the new high cost of university while graduates cannot find jobs. And my friends in Brussels just cannot see that the Euro is doomed (IMO) while the southern countries are in the downward spiral. If they had their own currencies, market led devaluation would bring back the tourists and the manufacturers would thrive. Instead there is just frustration with austerity. I note that Sweden, basically a socialist model state, cut taxes in the last few years and found that state revenues increased, they are doing well, of course they have their own Kroner, not Euros. And now the French and Greek elections are upon us and what will happen next? The biggest irony I find is that Germany still is in anxious mood , not buying.

  17. #617
    Join Date
    Sep 2005
    Posts
    9,031
    We've had some interesting developments in Euroland, electoral-wise. France threw out the incumbent. Watch to see how the market reacts (French bonds go by the symbol "OAT").

    And then we had an election in Greece, which is a bit complicated for me to understand. If I've got it right, anti-bailout, anti-status quo parties got 60% of the popular vote between them. But, the two major parties may have a bare majority of seats between them, by just a vote or two. The rest go to all the radical parties on both extremes of the spectrum. If the two major parties can form a coalition, they will control parliament against the rest of them.

    For a rough analogy for us here in the US, imagine we had a bunch of third parties running for seats in Congress from both extremes and there was a strong anti-D and R movement, to throw the status quo out. Now, after the election, between them, the Ds and Rs have just a vote or two over 50% of the seats, with the rest going to radicals on both sides. Thus the Ds and Rs would have to join together in a coalition to hold control of Congress against the barbarians at the gate. That would be "fun" wouldn't it? Well, that's roughly where Greece is.

    So watch that closely. If they can't put together such a coalition, things will get interesting indeed.

  18. #618
    Join Date
    Jan 2004
    Location
    Near Grover's Mill
    Posts
    2,729
    I realize that we can't get into a specific discussion of politics, but will comment that I am interested in seeing how economics interacts with democracy over the next few years.

    On a less philosophical note, I see that the unemployment rate went down about 0.1% in the US last week because about twice as many people stopped looking for work as jobs were created. To quote an Internet meme, "You're doing it wrong."
    I may have many faults, but being wrong ain't one of them. - Jimmy Hoffa

  19. #619
    Join Date
    Sep 2005
    Posts
    9,031
    Quote Originally Posted by Extravoice View Post
    I realize that we can't get into a specific discussion of politics, but will comment that I am interested in seeing how economics interacts with democracy over the next few years.
    Yes, and I'm certainly interested as well. If history repeats itself, the center won't hold, as Yeats said, and it will be a battle of the extremes, communists vs. fascists essentially. That seems to be the way Greece is going, but history doesn't repeat exactly, but just sort of rhymes, so it will be something different, but similiar. Could be not as bad, but could be worse.

    Of course, that's Europe. We're a bit different, I say hopefully, and a polarizing field so to speak may have different effects here. Although, I recall the Eugenics movement did start here back before WWII and there was a fascist movement here back during the Depression. Frightening, but it never really caught on much. It was only after the horrors of the Nazis that we recalled in horror at the direction we were going and those things have been forgotten.

    At any rate, the Western democratic model is going to be tested, and we'll see how well it holds up to severe stress. I shouldn't smile though. There's the potential for great good, but for great evil as well.

  20. #620
    Join Date
    Sep 2005
    Posts
    9,031
    Latest is it looks like the two major parties may now be just shy of a majority between them, and the others will have a majority between them. We'll just have to wait and see. At any rate, if the two don't have a majority, then it's over, as there is an anti-bailout, anti-Eureaucracy majority in parliament.

    What happens in France is even bigger, of course. It was the "Merkozy" coalition holding the line, and now that's gone. According to the futures, the market doesn't like it, but we'll see next week. If the market panics and blows out OAT yields, well, everything is toast and the end of the Euro has begun. I'm sure they're working desperately right now to try to hold it together by hook or crook.

  21. #621
    Join Date
    Apr 2011
    Location
    Norfolk UK and some of me is in Northern France
    Posts
    4,250
    Without getting specifically political about any of those recent elections, it seems to me the centre (left and right) have lost too much to the extreme left and right respectively, which have grown with austerity, and which is I suppose what "the centre will not hold" means. The natural oscillations of "let the other team have a go with the ball" become unstable like one of those double pendulums used to examine chaos. We will be living in interesting times.

  22. #622
    Join Date
    Sep 2005
    Posts
    9,031
    It now looks like Greece can't form a government, and the Troika is now making noises about witholding a bailout payment due Monday. If they can't form a government, I believe the rules call for another election immediately.

  23. #623
    Join Date
    Oct 2006
    Posts
    3,303
    The political outcomes have been the result of a dispute over economic theory. One side says the response to this crisis, since the crisis was caused by too much spending, is to cut spending a lot, and the other says cutting spending during the crisis only harms economies. I don't understand the mechanism for the latter. In what way is an economy dependent on government spending, especially short-term? I've seen some claim it has to do with infrastructure, but that's a long-term issue in a country that already has sound roads & power supplies & such; cut it for a year or two and things don't immediately just fall apart or quit running. I've seen some claim it has to do with welfare or a socioeconomic "safety net" so people who've lost a job or had their hours cut can still have the money they need, but people in that category have a rather minimal contribution to the economy.

    So what is the economic reason to object to "austerity"?

  24. #624
    Join Date
    Sep 2005
    Posts
    9,031
    Quote Originally Posted by Delvo View Post
    In what way is an economy dependent on government spending, especially short-term?
    ...
    So what is the economic reason to object to "austerity"?

    It's a matter of GDP. Consider the (in)famous GDP equation:

    GDP = C + I + G + (X - I)

    C and I are private consumption and investment spending, and the (X - I) term is exports less imports, otherwise called net exports (which is negative for countries, like us, that run trade deficits, meaning we import more than export). G is government consumption and investment spending. There's nothing special about G, we could write that as total, public + private, consumption and investment, but it's broken out that way traditionally because G is under more control than private.

    A recession is when GDP starts decreasing, rather than increasing. So, if you cut G, then you take out a big chunk of GDP when G/GDP is an appreciable fraction.

    We can call GDP "aggregate demand" (and you can read all the macroeconomic theory and dispute over the nuances of that term). THus a recession is when aggregate demand for goods and services starts dropping, the whole of an economy reduces spending.

    So the simple Keynesian idea is if GDP, aggregate demand starts dropping, the increase G to make up for it. A big increase in G is thus a "stimulus", which keeps production going when private demand drops.

    The reality is much, much, *MUCH* more complex than that of course (where does G get the money to spend, and what effect does that have on the rest of the system, for instance).

    In a nutshell my position is, while such stimulus may work under "normal" conditions, we've reached a point of debt saturations, and borrowing more money to "stimulate" doesn't work like it otherwise would. And further, to get out of it and reset the system, we're going to have take our medicine of a big contraction in GDP, with attempts to avoid that via more borrowing by G just making the final collapse even worse.

    Note that either way, really, a contraction in GDP is going to occur. If governments were to balance their budgets, GDP would collapse 10% right off, and compounding effects would perhaps double that. Keep on borrowing, though, and you get the system collapses as well, and most likely even more.

  25. #625
    Join Date
    Jan 2004
    Location
    Near Grover's Mill
    Posts
    2,729
    Publius, your arch nemesis Paul Krugman wrote an article the other day discussing the "revolts" in France and Greece. He claims austerity isn't working, and offers Ireland as an example. As a counterpoint, he mentions Iceland, which took the hit, devalued its currency, and defaulted on its debt. This is to make a case for ditching the Euro. I have to admit that I agree with him to some extent in this case.

    He then goes on to pretty-much blame the Germans for making money at the expense of the peripheral European countries over the last decade through a big trade surplus. His solution is to cause the reverse through inflation in Germany. This would allow countries like Greece and Spain to grow out of their problems.

    Considering the German's experience with inflation in the early 20th century, I suspect they aren't too interested.
    I may have many faults, but being wrong ain't one of them. - Jimmy Hoffa

  26. #626
    Join Date
    Apr 2011
    Location
    Norfolk UK and some of me is in Northern France
    Posts
    4,250
    My idea for a new start is to encourage the rich (who have got richer) to invest in houses and businesses with tax incentives and then add the stick of increased vigilance on all the various tax dodges for those who do not join in. That is what the Victorians did, they built streets of houses with their name on the street and collected the rents etc. Fiscal incentives can do the trick but you have to target those with the money and simple taxes just do not work. They only work for salaried employees. Of course you have to float your currency to match your productivity too. (Just coffee table economics I'm afraid)

  27. #627
    Join Date
    Feb 2005
    Location
    Edinburgh
    Posts
    717
    Quote Originally Posted by profloater View Post
    My idea for a new start is to encourage the rich (who have got richer) to invest in houses
    Who will make this a worthwhile investment? Will rents be controlled? If all the rich have to build houses then supply and demand (I know that concept is usually ignored here) dictates that rents will fall and the investment becomes uneconomic. How does this work in Spain where there is already a glut of housing? What about the rich who haven't got richer?

    and businesses with tax incentives and then add the stick of increased vigilance on all the various tax dodges for those who do not join in.
    So you want to avoid "tax dodges" by using "tax incentives"?

    That is what the Victorians did,
    No they didn't, they built and rented out houses because they were good investments, it was nothing to do with tax. Many of the resulting houses were slums with very high rents.

  28. #628
    Join Date
    Sep 2005
    Posts
    9,031
    JP Morgan finds themselves in a spot of bother, bless their little hearts, and they're getting killed in trading:

    http://online.wsj.com/article/SB1000...420792008.html

    That's a few $billion of losses, and in one of their *hedging* accounts, meant to offset risk from other accounts. It's the handiwork of a trader named Bruno, and involved CDSes. JPM is saying things like "poorly executed", "poorly monitored", "sloppiness", "bad judgement". You know, mistakes were made.

    So Bruno has blown has blown a hole in the good ship JP Morgan. Bruno. I wonder if Borat would've done better, and maybe whats-his-name's latest character, "The Dictator", Admiral General Whatever.

    And finally, I'll note that maligned little "boutique" ratings agency, Egan Jones, downgraded JPM a while back over concerns of these very trades of Bruno's. Nobody pays attention to Egan Jones because they don't know what they're talking about of course and ought to be put out of business for slander against all these poor companies (and sovereigns) whom they tell the truth about.

  29. #629
    Join Date
    Sep 2005
    Posts
    9,031
    And another to point out. A hedge trade is supposed to offset possible losses against some other trade/position. So if B is a hedge against A. Then if A loses, B gains. And likewise if B loses, then A should gain and they should offset each other. Now, this is important. If it doesn't work out that way, then it wasn't a proper hedge, and was just pure speculation being called a hedge.

  30. #630
    Join Date
    Sep 2005
    Posts
    9,031
    Quote Originally Posted by Extravoice View Post
    Publius, your arch nemesis Paul Krugman wrote an article the other day discussing the "revolts" in France and Greece. He claims austerity isn't working, and offers Ireland as an example. As a counterpoint, he mentions Iceland, which took the hit, devalued its currency, and defaulted on its debt. This is to make a case for ditching the Euro. I have to admit that I agree with him to some extent in this case.
    Yes, I saw that and I have to be careful reading Der Krugmeister for fear I might harm my monitor. And I think I agree with what you agree with, as well.

    In the first place, austerity isn't going to "work", if by work you mean immediate booming economic growth. No, austerity is the withdrawal from the addiction to debt heroin. And second, what Greece is (being forced to) doing is not austerity, it's debt slavery, and for the benefit of all the banks who would have take their default medicine under real austerity.

Similar Threads

  1. The Banned Thread 2: Electric Boogaloo
    By Moose in forum Fun-n-Games
    Replies: 1731
    Last Post: 2014-Jan-03, 11:05 PM
  2. Replies: 8
    Last Post: 2011-Nov-29, 05:16 PM
  3. Is today black Monday?
    By banquo's_bumble_puppy in forum Off-Topic Babbling
    Replies: 4999
    Last Post: 2011-Nov-10, 10:38 PM
  4. Last Starfighter 2: Intergalactic Boogaloo
    By Tuckerfan in forum Small Media at Large
    Replies: 75
    Last Post: 2009-Feb-14, 01:06 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
here
The forum is sponsored in-part by: