Rolling US Economy Into The Shitbin Thread

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personally I'm applying for a civil servant position ASAP

El Tomboto, Thursday, 18 October 2007 23:45 (ten years ago) Permalink

Just FYI, during the 1930s depression, many civil servants were paid with vouchers rather than cash, because local governments were unable to collect property taxes and their receipts fell into the shitbin.

Aimless, Friday, 19 October 2007 00:12 (ten years ago) Permalink

Economy's doing poorly enough as it stands, why do we deliberately want to roll it into the shitbin?

Abbott, Friday, 19 October 2007 00:14 (ten years ago) Permalink

Because that way Hillary can rescue us all.

Dandy Don Weiner, Friday, 19 October 2007 00:17 (ten years ago) Permalink

lol property taxes

El Tomboto, Friday, 19 October 2007 00:18 (ten years ago) Permalink

shitbin's a great word, BTW.

Dandy Don Weiner, Friday, 19 October 2007 00:20 (ten years ago) Permalink

you been loving my thread titles lately

El Tomboto, Friday, 19 October 2007 00:26 (ten years ago) Permalink

i came to this country some time ago with little more than a crippling debt burden in GB Pounds and the shirt on my back. i used to have to send back $1,200 each month to pay off my UK debt, and now I'm sending back over $1,400 to cover the same amount of debt repayment. that's two and a half thousand dollars disappearing from my tiny disposable income every year, for no explicable reason. i *heart* the decline of the US economy.

Roberto Spiralli, Friday, 19 October 2007 00:27 (ten years ago) Permalink

anyway why start this thread now because the bit where ritholtz points out that domino's pizza can't print new menus fast enough to keep up with inflation was pretty fucking amazing

I wish rasheed wallace was still around to show us the latest and greatest exploding bubble blogs

El Tomboto, Friday, 19 October 2007 00:28 (ten years ago) Permalink

wow Roberto that was some shitty timing, that sucks

El Tomboto, Friday, 19 October 2007 00:29 (ten years ago) Permalink

This was in the paper today:

Mortgage defaults

Hit an annual rate of 1.5 million in September. That compares with 900,000 last year from fewer than 800,000 in 2005. At the current rate, more than one million Americans will lose their homes to foreclosure, making this the worst housing recession since the Second World War.

Housing starts

Sank to a 14-year low of 1.19 million in September. Starts are a vital economic engine, creating jobs and growth as people stuff their homes with sofas and TVs. Starts peaked at 2.3 million in early 2006, and the decline will be a drag on the rest of the economy until the slide stops.

Mortgages

A quarter of the roughly 50 million U.S. home mortgages are subprime. That's seven times the number of high-risk mortgages there were in 2001. That means that many more marginal homeowners have mortgages, making it far more likely they'll wind up in default.

House prices

Fell 3.2 per cent in the second quarter. Prices are falling faster and more broadly than they have in decades, according to the closely watched Case-Shiller index.

http://www.theglobeandmail.com/servlet/story/LAC.20071018.IBUSECONOMY18/TPStory/Business

everything, Friday, 19 October 2007 00:29 (ten years ago) Permalink

In regard to inflation, in the USA during the past three years inflation has been soaring - but almost entirely in the housing sector. The fact that people are encouraged to see their houses as investments rather than as expenses doesn't mean that skyrocketing housing costs weren't inflationary. They were.

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008. As it has for the past 30 years, the official CPI will understate the real inflation rate. It was rigged under Reagan so that government entitlement programs indexed to the CPI would not increase at the true pace of inflation.

If Bush continues to shovel shit on the dollar right up to the end of his term in January 2009, the inflation rate could hit 15%-20% by 2010.

Aimless, Friday, 19 October 2007 00:55 (ten years ago) Permalink

There are some good economics articles put up here as well:
http://www.VoxEU.org

stet, Friday, 19 October 2007 01:02 (ten years ago) Permalink

Which shit on the dollar are you referring to?

Dandy Don Weiner, Friday, 19 October 2007 01:02 (ten years ago) Permalink

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008.

lol

aaaaaaaaaaaaaaaaaaaaaaaaaa, Friday, 19 October 2007 06:11 (ten years ago) Permalink

this is why i live in canada!

J0rdan S., Friday, 19 October 2007 06:13 (ten years ago) Permalink

oh wait.

J0rdan S., Friday, 19 October 2007 06:13 (ten years ago) Permalink

Guys, this is a good time stay in academia right?

Catsupppppppppppppp dude 茄蕃, Friday, 19 October 2007 11:51 (ten years ago) Permalink

It's a good time to learn a European language.

Nubbelverbrennung, Friday, 19 October 2007 13:33 (ten years ago) Permalink

Prime shit examples:

When Bush was elected in 2000, the federal budget was in surplus and the national debt was being paid down. Had this state of affairs continued, as projected, it would have led both to lower interest rates and a strong dollar, together. Instead, Bush submitted a series of enormous tax cuts to the Republican-controlled Congress and lobbied them through. Immediately, the CBO's projected budget surpluses turned to projected deficits for the next decade.

Bush also initiated a war of choice, not necessity, in Iraq. This war has already cost well over $700 billion. Yet, Bush insisted on making his tax cuts permanent. Overall, the national debt has increased under Bush by about $2 trillion in seven years. This represents a difference of about $3 trillion of debt from what was projected at the start of his first term.

Because, due to Bush's tax cuts and other policies, the Federal government was in a far weaker position to stimulate the economy when the recession started after 9/11, almost the entire stimulus was delivered via lower interest rates. Because these rate cuts were artificial, and not based on a stronger dollar, this stimulus not only inflated the current housing bubble, but it also undercut the dollar even more than the ballooning national debt did.

Now the dollar is at an all-time low against the euro and the canadian dollar. However, the incomes of the top 10% of American households have increased at a good clip, while the lower 50% of households have seen a decrease in income after inflation. This is largely thanks to Bush's shitty policies. I expect more of the same mismanagement until he is gone.

Aimless, Saturday, 20 October 2007 18:36 (ten years ago) Permalink

I agree with everything you've just said. You're predictions still seem a tad extreme on the downside though, if I may so.

aaaaaaaaaaaaaaaaaaaaaaaaaa, Saturday, 20 October 2007 18:50 (ten years ago) Permalink

i wonder if income inequality will ever arrive as a political issue in this country. americans tend to not begrudge the rich - so it'll have to be more of a "for everyone's good" type of angle. no?

jhøshea, Saturday, 20 October 2007 18:54 (ten years ago) Permalink

I remember the 1970s and early 80s quite well. Back then people couldn't belileve it, either. Bush has done a bangup job of recreating many of the same policy errors under Johnson and Nixon that led to raging stagflation back then, except the underlying economy is now weaker than it was in the 1970s and the oil shocks we are likely to get are not political, as when OPEC was formed, but structural.

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

Aimless, Saturday, 20 October 2007 19:07 (ten years ago) Permalink

Anyone want to join my modern-day James Gang? We shall ride across the lower Midwest, robbing and pillaging.

milo z, Saturday, 20 October 2007 19:09 (ten years ago) Permalink

sounds fun

jhøshea, Saturday, 20 October 2007 19:13 (ten years ago) Permalink

Sorry, I don't want to relocate. But this scheme sounds ripe for franchising.

Aimless, Saturday, 20 October 2007 19:14 (ten years ago) Permalink

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

-- Aimless, Saturday, 20 October 2007 19:07 (14 minutes ago) Link

The coming of $100/barrel oil is not Bush's fault. It's yours and mine and everyone else's for using too damned much energy. I agree Bush could and should have done a lot more with policy to encourage energy efficiency, but there's little he could have done to stop oil's eventual rise to that price level.

Hurting 2, Saturday, 20 October 2007 19:26 (ten years ago) Permalink

Part of the pricing of oil represents the weakness of the dollar. This hurts the USA more than it does other countries. US citizens are paid in dollars and the US government collects revenue in dollars, so they are stuck. EU countries can use euros to buy increasingly cheap dollars, so they don't see the same rise in prices as we do. The weakness of the dollar is mainly Bush's fault.

Aimless, Saturday, 20 October 2007 19:31 (ten years ago) Permalink

The US also uses way more oil than other countries.

Hurting 2, Saturday, 20 October 2007 19:33 (ten years ago) Permalink

he could have done to stop oil's eventual rise to that price level.
Not starting a war in Iraq would definitely have helped here.

stet, Saturday, 20 October 2007 19:57 (ten years ago) Permalink

arrgh, if that won't work then
http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html

El Tomboto, Monday, 22 October 2007 17:47 (ten years ago) Permalink

tombot u r freakin me out

gff, Monday, 22 October 2007 17:50 (ten years ago) Permalink

i hope my small apartment + modest savings plan + job in "information services" is enough to weather the shitstorm, if it comes. i got myself out of credit card debt a few months ago, at least

gff, Monday, 22 October 2007 17:53 (ten years ago) Permalink

well if you can hold down a job and don't have to worry about an ARM reset you should be okay, it's the homeowner with kids and a subprime loan and two cars who ought to be shitting themselves

El Tomboto, Monday, 22 October 2007 17:58 (ten years ago) Permalink

apart from some student loans and binging on credit cards over a few years, i'm kind of debt phobic.

which has actually made me lose out over the past several years, i realize, since i pay for EVERYTHING with a debit/check card... i could have just paid that balance on a credit card with some rewards scheme and has some air miles or something

gff, Monday, 22 October 2007 18:00 (ten years ago) Permalink

rolling gff personal finances into the shitbin thread, ha

gff, Monday, 22 October 2007 18:01 (ten years ago) Permalink

This will give you a boner Tombot

http://nymag.com/guides/money/2007/39952/

Dandy Don Weiner, Wednesday, 31 October 2007 11:30 (ten years ago) Permalink

the economy increased by 3.9% this quarter! bull market forever, baby. economy's better than ever. golden age.

yet me and so many people I know are getting laid off next month. granted we're all in the writing/design field, but urhhhhh. gggg.

burt_stanton, Wednesday, 31 October 2007 14:58 (ten years ago) Permalink

http://nymag.com/guides/money/2007/catastrophist071105_560.jpg
http://nymag.com/guides/money/2007/catastrophist071105_2_560.jpg

^^^ lol

most of that guy's scenario is not really news to regular bigpicture/CR readers I don't think. But #5, the "we don't pay attention" thing, yeah, well, evidently the awareness campaign is underway, but hell if the big players are paying attention.

He also leaves out the approaching demographic catastrophe as millions of inexperienced thirtysomethings and even some late-twenties kids are forced to move into arguably tougher jobs that the boomers have been holding for two decades. Beyond the social security and healthcare costs associated with mass retirement, I don't really know if this generation has the work ethic and definitely not the rolodex to just start filling in and not fuck up royally. too busy updating their linkedin pages.

El Tomboto, Wednesday, 31 October 2007 15:11 (ten years ago) Permalink

can someone explain what "being upside down on your mortgage" means, in plain English?

Tracer Hand, Wednesday, 31 October 2007 16:14 (ten years ago) Permalink

essentially, owing more than your home is worth.

Dandy Don Weiner, Wednesday, 31 October 2007 17:10 (ten years ago) Permalink

also Tombot I'm not going to blame this generation as much as I blame their parents.

Dandy Don Weiner, Wednesday, 31 October 2007 17:11 (ten years ago) Permalink

isn't that the way people buy homes? by paying for the privilege of a loan?

Tracer Hand, Wednesday, 31 October 2007 17:12 (ten years ago) Permalink

When you enter into a contract with a bank for a mortgage, both you and the bank assume that the property value will not plummet. The bank doesn't want you to default any more than you want to default. But if for whatever reason you need to sell your home, and you can't get what you owe on it, then you will owe the difference to the bank. And the bank knows that when that happens, you probably will not have enough assets to cover the difference.

Predatory-type loans (which seems like a nebulous description to me) typically compound the problem because they have higher transaction rates (points, etc.)

Dandy Don Weiner, Wednesday, 31 October 2007 17:17 (ten years ago) Permalink

oh certainly! well played baby boom letting healthcare slide for the 20 years you've owned the electorate

El Tomboto, Wednesday, 31 October 2007 17:18 (ten years ago) Permalink

yeah Tracer it's also called "negative equity"

El Tomboto, Wednesday, 31 October 2007 17:19 (ten years ago) Permalink

trashness of the dow is true but only relevant if other non-crap indexes show different trend; s&p also down 4% today

flopson, Monday, 5 February 2018 22:11 (two weeks ago) Permalink

yeah, that's a pointlessly pedantic point to make on a day when all the indexes crash

Fedora Dostoyevsky (man alive), Monday, 5 February 2018 22:14 (two weeks ago) Permalink

trump casinos
trump steaks
trump university
trump america

reggie (qualmsley), Tuesday, 6 February 2018 01:17 (one week ago) Permalink

nikkei down nearly 7%

𝔠𝔞𝔢𝔨 (caek), Tuesday, 6 February 2018 05:25 (one week ago) Permalink

darling nikkei

But doctor, I am Camille Paglia (Bananaman Begins), Tuesday, 6 February 2018 11:04 (one week ago) Permalink

Need a rolling global recession 2018-eotwawki thread imho

El Tomboto, Tuesday, 6 February 2018 11:08 (one week ago) Permalink

https://pbs.twimg.com/media/DVTiYqyW4AMkHSO.jpg:large

calzino, Tuesday, 6 February 2018 11:27 (one week ago) Permalink

tomboto otm

how's life, Tuesday, 6 February 2018 11:28 (one week ago) Permalink

Trump otm?

American Fear of Pranksterism (Ed), Tuesday, 6 February 2018 11:32 (one week ago) Permalink

I had a longer post about the expansion. In the money supply vs activity and how that lead to evaluation but I’d rather focus on firing the current POTUS out of a cannon.

American Fear of Pranksterism (Ed), Tuesday, 6 February 2018 11:34 (one week ago) Permalink

I need to preface this (as i should most posts) by saying that i don't know what i'm talking about but is this not a good thing, in some respects? Central banks seem to want to get to a position of sustainable wage growth, sustainable inflation and sustainable interest rates of about 2% - all of which are starting to line up. The stock market dip seems to be based on the idea that interest rates are likely to rise modestly so safe investments (like long-term savings bonds) are relatively more attractive than risky ones to some people.

It seems like you can have an ever-growing DOW and interest rates of close to 0% or you can have a wage increases / a return on normal savings accounts but you can't really have both. It sounds like the ECB is still printing money with the aim of getting to this scenario, rather than trying to avoid it.

Wag1 Shree Rajneesh (ShariVari), Tuesday, 6 February 2018 11:54 (one week ago) Permalink

iirc i think that trump tweet is a fake

Men's Scarehouse - "You're gonna like the way you're shook." (m bison), Tuesday, 6 February 2018 11:59 (one week ago) Permalink

tbf it's about the Dow Joans which is a totally different exchange

drugs don't kill people, poppers do (Noodle Vague), Tuesday, 6 February 2018 12:01 (one week ago) Permalink

Dow Joans is a character in steinbeck's "the grapes of WRTH"

also i agree with the take that the dow/stock market in general got overeager and this is a simple market correction, but we def seem due for a recession within the next year or two bc business cycle

Men's Scarehouse - "You're gonna like the way you're shook." (m bison), Tuesday, 6 February 2018 12:02 (one week ago) Permalink

that tweet is fake

https://www.snopes.com/did-trump-tweet-president-dow-joans/

joker's remorse

Sweet mother of god. Not for one second did I think people would believe that to be genuine.

— Shaun Usher (@ShaunUsher) February 5, 2018

maura, Tuesday, 6 February 2018 14:34 (one week ago) Permalink

I mean 'Dow Joans' was an obvious tell but you seriously cannot win by trying to fake a Trump statement. Nothing is outside the realm of believability at this point.

I'm very active in the pegasus community (Old Lunch), Tuesday, 6 February 2018 14:54 (one week ago) Permalink

sahun usher go on gorilla channel

But doctor, I am Camille Paglia (Bananaman Begins), Tuesday, 6 February 2018 14:57 (one week ago) Permalink

Buy buy buy!

Josh in Chicago, Tuesday, 6 February 2018 15:00 (one week ago) Permalink

Wait, I mean, sell, sell, sell!

Josh in Chicago, Tuesday, 6 February 2018 15:00 (one week ago) Permalink

No, hold up. Buy buy buy!

Josh in Chicago, Tuesday, 6 February 2018 15:00 (one week ago) Permalink

if the market closes below 24,000 today, we'll have to arrest hillary and the kenyan

reggie (qualmsley), Tuesday, 6 February 2018 15:25 (one week ago) Permalink

I wonder if it was the bitcoin plunge that made people wary of a similar over-valuation in stocks, and they decided to take their profits before too many other people felt the same way.

nickn, Tuesday, 6 February 2018 18:12 (one week ago) Permalink

The Dow Joans is a bullshit index though, I look at the Nazdack and the S in P

Fedora Dostoyevsky (man alive), Tuesday, 6 February 2018 18:55 (one week ago) Permalink

darling nikkei

― But doctor, I am Camille Paglia (Bananaman Begins), Tuesday, February 6, 2018 11:04 AM (seven hours ago) Bookmark Flag Post Permalink

^^ underrated post

Le Bateau Ivre, Tuesday, 6 February 2018 18:59 (one week ago) Permalink

The Dow Joans is a bullshit index though, I look at the Nazdack and the S in P

Read that as "Nazidack" - i need to go home.

Elvis Telecom, Wednesday, 7 February 2018 03:36 (one week ago) Permalink

i guess this is what "the markets" are worried about

This Economist cover might become a classic. What happens when the govt delivers huge fiscal stimulus, nine years into the business cycle. We are about to find out. pic.twitter.com/NsCn0J9EkP

— Joseph Lake (@EconomistLake) February 8, 2018

𝔠𝔞𝔢𝔨 (caek), Thursday, 8 February 2018 16:20 (one week ago) Permalink

https://ftalphaville.ft.com/2018/02/07/2198503/someone-is-wrong-on-the-internet-wages-and-the-stock-market-edition/

login required, but tldr this argues:

- wages aren't actually rising that fast
- low income wages certainly aren't rising that fast (these are the people who spend a greater fraction of their income, and thus have more influence on consumer spending)
- bankers think wages are rising because bankers' wages are rising

𝔠𝔞𝔢𝔨 (caek), Thursday, 8 February 2018 16:29 (one week ago) Permalink

my smart former philosopher hedge fund friend says it's just a minor correction since the market has been growing so much and he's not particularly worried

Mordy, Thursday, 8 February 2018 16:48 (one week ago) Permalink

My question for Joseph Lake would be why did it take 9 years for us to find out and what is it about now that's bringing the chickens home to roost? And I don't mean that rhetorically either, I'm not sure that isn't what's happening.

Fedora Dostoyevsky (man alive), Thursday, 8 February 2018 16:49 (one week ago) Permalink

Market still ... correcting. Apparently it did not listen to Trump's admonition that down is the wrong direction.

Josh in Chicago, Thursday, 8 February 2018 18:13 (one week ago) Permalink

Hovering just over 24000.

Josh in Chicago, Thursday, 8 February 2018 20:42 (one week ago) Permalink

This stock market needs a proper spanking.

I'm very active in the pegasus community (Old Lunch), Thursday, 8 February 2018 20:43 (one week ago) Permalink

The Fed could raise the margin requirements, but they won't.

A is for (Aimless), Thursday, 8 February 2018 20:54 (one week ago) Permalink

Doug Henwood, with graphs:

Since Trump has been bragging for months about the stock market’s strength, the selloff is a marketing challenge for him. His administration weighed in with the customary reassurances, with both White House flack Raj Shah and Treasury Secretary Steven Mnuchin pronouncing the “fundamentals” of the economy “strong.” (You might think that officialdom might be reluctant to repeat the sort of language used by Herbert Hoover in 1929 and John McCain in 2008, but no.)

When people say the economy is strong they mean that unemployment is low and we’re adding 180,000 jobs a month. But millions have dropped out of the labor force. If the same share of the population were working now as at the 2006 pre-recession peak, 8.4 million more would be employed. As the graph below shows, this is the second-worst expansion for job growth out of eleven....

https://lbo-news.com/2018/02/08/about-that-stock-panic/

ice cream social justice (Dr Morbius), Thursday, 8 February 2018 20:59 (one week ago) Permalink

fake news. chinese hoax. hillary's fault

reggie (qualmsley), Thursday, 8 February 2018 22:11 (one week ago) Permalink

How the fuck does only 52% of the population have a retirement account?

Mr. Snrub, Friday, 9 February 2018 00:18 (one week ago) Permalink

I'm surprised it's that high.

louise ck (milo z), Friday, 9 February 2018 00:23 (one week ago) Permalink

How the fuck does only 52% of the population have a retirement account?

Results of a 2017 survey:

$0 saved: 39 percent
Less than $1,000 saved: 18 percent
$1,000 to $4,999 saved: 12 percent
$5,000 to $9,999 saved: 6 percent
$10,000 or more saved: 25 percent

I'm in the 39 percent.

grawlix (unperson), Friday, 9 February 2018 00:24 (one week ago) Permalink

yeah, no one is saving. the younger millenials I speak to have a bone-deep understanding of just how fucked they are.

Simon H., Friday, 9 February 2018 00:28 (one week ago) Permalink

does that same set of stats feature a breakdown by age group?

Simon H., Friday, 9 February 2018 00:32 (one week ago) Permalink

enjoying the official designations that down 10% is a 'correction' and down 20% is a 'bear market'

mookieproof, Friday, 9 February 2018 00:32 (one week ago) Permalink

yeah i don't really buy any of the currently circulating theories about why this is happening, prob more mass psychological than fundamental. stock markets been going gangbusters for a while, shiller PE ratios are huge so there's a lot lower it could fall (but that doesnt mean it will...)

flopson, Friday, 9 February 2018 00:48 (one week ago) Permalink

I'm in the 39 percent.

lol i'm in the 12 percent just from half-working a few years at a place where the contract precludes you from opting out of making contributions to the account (at this point i would really have rather had the cash)

america is really pathetic

j., Friday, 9 February 2018 01:11 (one week ago) Permalink

Make America less pathetic again!

A is for (Aimless), Friday, 9 February 2018 01:47 (one week ago) Permalink

i love that the upper echelon of those savings categories wd buy you PERHAPS 9 weeks of life in NYC

ice cream social justice (Dr Morbius), Friday, 9 February 2018 02:59 (one week ago) Permalink

another very red day tomorrow is a no brainer technically, which means it'll be green I suppose

trife's rich padgett (rip van wanko), Friday, 9 February 2018 04:22 (one week ago) Permalink

lol

https://i.imgur.com/zMPlatn.jpg

BIG HOOS aka the steendriver, Friday, 9 February 2018 15:35 (one week ago) Permalink

lol bloomberg businessweek cover art dept back at it again

Fedora Dostoyevsky (man alive), Friday, 9 February 2018 15:37 (one week ago) Permalink

pouring one out for janet yellen

https://www.nytimes.com/2018/02/09/us/politics/federal-reserve-nominee-goodfriend.html

reggie (qualmsley), Saturday, 10 February 2018 19:42 (one week ago) Permalink


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