Rolling US Economy Into The Shitbin Thread

http://bigpicture.typepad.com/comments/2007/10/more-inflation.html

personally I'm applying for a civil servant position ASAP

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.

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

Because that way Hillary can rescue us all.

lol property taxes

shitbin's a great word, BTW.

you been loving my thread titles lately

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.

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

wow Roberto that was some shitty timing, that sucks

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

where the hell is rasheed anyway?

economic blogs I read (they're all fairly liberal):

http://calculatedrisk.blogspot.com/
http://angrybear.blogspot.com/
http://delong.typepad.com/sdj/
http://www.marginalrevolution.com/marginalrevolution/
http://bigpicture.typepad.com/
http://www.janegalt.net/

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.

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

Which shit on the dollar are you referring to?

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

this is why i live in canada!

oh wait.

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

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

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.

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

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?

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.

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

sounds fun

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

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.

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.

The US also uses way more oil than other countries.

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.

http://bp3.blogger.com/_pMscxxELHEg/RxzD0s_7EYI/AAAAAAAABB4/ljDSXZhMG3o/s1600-h/IMFresets.jpg

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

tombot u r freakin me out

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

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

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

rolling gff personal finances into the shitbin thread, ha

This will give you a boner Tombot

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

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.

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.

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

essentially, owing more than your home is worth.

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

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

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.)

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

yeah Tracer it's also called "negative equity"

trump is a russian agent. krasnov

Where's the pee tape?

furious Mormon mom bloggers

Damn, when you've lost the mom bloggers...

Any suggestions to what Democrats should do with their power is dependent on them obtaining some

that's the old cia, the new cia starts podcasts and rap-themed viral farm instagram accounts

― gestures broadly at...everything (voodoo chili), Tuesday, April 8, 2025 12:35 PM (sixteen minutes ago) bookmarkflaglink

dang

We can always go back even further and have the red states send priests and the blue states send nepo-babies

Car dealers are 3rd estate and don’t belong

btw not to get too formal politics itt but seven gop senators already willing to vote against trump on tariffs is pretty crazy, if true

their corporate overlords must be giving them a real hard time

104% tariff on china goes into effect tonight. my god

https://y.yarn.co/e89c569c-6c6e-47f8-82c3-e2e02afa0561_text.gif

given the emphasis on china the tariffs on japan and south korea make no sense as that’s where you’d expect china importers to substitute towards

if i dont get the new nintendo i swear to god this is the last straw

I bet Tim Apple is glad he donated all that money to Trump's inaugural committee

The people who support him think that they are in the majority fwiw

They also believe that staring into a laptop screen turns you into a woman.

https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:mlmouohgzbjofidukcp4pxf2/bafkreided4bnx6jgxz4hwlxkm7mkmuzo3m6w5wmkjhzzs4f2monewbx4nq@jpeg

104% tariff on china goes into effect tonight. my god

literally everything at Dollar Tree is made in China, except for the crackers and things made in Canada
This is gonna be hardest on the poorest red states

um, Jesse Watters sits behind a screen all day... I wonder where they are in their transition

Xp more like Fiver Tree amirite

lol Arthur Laffer's WSJ op-ed is that Trump could win bigly by offering zero tariffs and zero subsidies. Elon might suicide bomb the Oval Office

literally everything at Dollar Tree is made in China

Guess it will be Two Dollars and Four Cents Tree now.

Elon might suicide bomb the Oval Office

Duh, why do that when he can just make one of his cars explode?

Aaaaaaand there's the long Bond movie villain plot.

A really long game - get Trump elected, manipulate him into buying. a Tesla and exhibiting it at the White House, make it go boom

104% china tariffs watch stocks go bye bye

given the emphasis on china the tariffs on japan and south korea make no sense

They make good political sense if you ignore their practical effects and concentrate on how they fit his larger narrative about the off-shoring of manufacturing and the abandonment of the working class by the elites in both parties. The general US public has only the vaguest ideas (usually wrong ones) about how tariffs work. They do understand the words "made in China".

feeling that morbid curiosity about how quickly various things will happen if these aren't immediately walked back

Will any deal cut now with SK survive the election currently taking place?

This has to be a lie:

"Nearly 70 countries have reached out to the White House looking to begin negotiations on reducing the impact of Donald Trump’s tariff policy, White House press secretary Karoline Leavitt said."

Why wouldn't they try to start up some kind of talks? It's what any responsible government would do.

they are lining up to make deals with the deal maker in chief baby

White House press secretary Karoline Leavitt said.

You can be sure this is a lie then.

Beginning negotiations with “WTF!!!”

Germany reaches out: arschlöch

you can't win with China
They've shown an incredible tolerance for suffering over & over again

government efficiency is negotiating 70 bilateral trade agreements at once baby

China says: You want it to be one way … but it’s the other way.

lol

um, Jesse Watters sits behind a screen all day... I wonder where they are in their transition

― Andy the Grasshopper

look, i was willing to make a lot of sacrifices in order to transition. there's basically no sacrifice i wouldn't make in order to be who i am now.

talking to HR, though? i'd do anything to transition, but i won't do that.

you can't win with China
They've shown an incredible tolerance for suffering over & over again

― Andy the Grasshopper, Tuesday, April 8, 2025 11:08 AM (nine minutes ago)

works out well, then, america's shown an incredible tolerance for inflicting suffering over & over again

China might hold out but I expect the EU and the UK will capitulate sooner rather than later.

Not sure what capitulation means here. What can these countries really give the US? The demand here is on the likes of corporations to move their site of production and keep their costs down so that enough ppl can consume them.

probably just means making some vague promises that team Trump can claim are massive wins and proof of his great dominance

The main problem the rest of the world would have in cutting the USA out of the globalized trade system is that without our endless appetite for consumption there would suddenly be a lot of excess production capacity without a gluttonous US market to sop it up. The period of adjustment would be quicker than the USA re-industrializing, but it would still be highly painful for everyone involved.

the world needs a new glutton to step up

also: reducing the trade deficit with the U.S. is gonna be difficult when the entire population has sworn to never buy anything American again

AnnetteRosieP
Hats off to anyone boycotting supermarket chains!
It's interesting to hear what's happening in Canada, for anyone not at the 'total boycott' point.
Canadian shoppers are laying down/turning upside down any US products on the shelves & of course, not buying them

There is plenty the US is demanding of the EU, U.K., Canada, etc - end VAT, privatise all state-owned businesses, get rid of GDPR and hate speech laws, remove product safety standards, remove environmental protections over and above those the US has agreed to, etc, it’s just all so stupid and implausible, it can’t be agreed to. Unless they can do a deal on bleached chicken, or whatever, to help him save face, there isn’t much they can do. It’s also not clear that Trump is particularly interested. Israel preemptively removed all tariffs and still got hit.

Noodles - yes it's an incoherent set of demands that is actually fulfilling an election promise, which will need an 'out' sooner or later xp

israel has generously promised to buy more genocidal weaponry

we need a new thread so I made one

The shittest of bins - rolling the Global Economy back to the Stone Age

this one has lasted us seventeen years seems pretty solid

Very on theme, then, to just toss it out and try something else for no reason.

thanks Ed
Everyone go to The shittest of bins - rolling the Global Economy back to the Stone Age now