The Official Finance/Economics Thread

[wrppdarndyrfngr]

Because we finance quants need somewhere to be nerdy and talk about numbers

[wrppdarndyrfngr]

Buy American . I am (http://www.nytimes.com/2008/10/17/opinion/17buffett.html?partner=rssuserland&emc=rss&pagewanted=all) by Warren Buffet

The financial world is a mess, both in the United States and abroad.

So ... I’ve been buying American stocks

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful

[wrppdarndyrfngr]

Some Finance & Econ Blogs :

Freakonomics (http://freakonomics.blogs.nytimes.com/rss2.xml)
Get Rich Slowly (http://www.getrichslowly.org/blog)
Greg Mankiw (http://gregmankiw.blogspot.com)
I Will Teach You to Be Rich (http://www.iwillteachyoutoberich.com/blog)
NEws n Economics (http://www.newsneconomics.com)
Paul Krugman (http://krugman.blogs.nytimes.com)
The Icahn Report (http://www.icahnreport.com/report)
WSJ.com: Real Time Economics (http://blogs.wsj.com/economics)
AllFinancialMatters (http://allfinancialmatters.com)

[FScott]

fuck this official thread baloney

[wrppdarndyrfngr]

fuck you F Scott, the Great Gatsby is a terrible book

How do you feel about David Fincher turning your short story into a movie staring Brad Pitt aging backwards in time?

[saysmydoctor]

Ignore the racist and take back that comment about an american classic.

[wrppdarndyrfngr]

haha oh I know. its a good book. i was just trying to invoke a reaction.

[FScott]

haha oh I know. its a good book. i was just trying to invoke a reaction.

You failed.

[Jason Tate]

Just posting to subscribe. Could be a fun topic.

[Jason Tate]

Mint.com is a very cool personal finance website -- worth giving a shout out.

[wrppdarndyrfngr]

The Organization of Petroleum Exporting Countries (OPEC) meets on Friday in Vienna. What are they fighting? An oil bear market, where prices fell to their lowest levels in over a year; the oil Czars are nervous.


http://3.bp.blogspot.com/_Et4TQ-a0gGU/SP-HnuUXhsI/AAAAAAAAAxQ/Y6ugUrPYuoQ/s320/oil_chart.gif (http://3.bp.blogspot.com/_Et4TQ-a0gGU/SP-HnuUXhsI/AAAAAAAAAxQ/Y6ugUrPYuoQ/s1600-h/oil_chart.gif)From CNNMoney (http://money.cnn.com/2008/10/22/news/international/opec_production/index.htm):
"When the Organization of Petroleum Exporting Countries meets at its Vienna headquarters on Friday it will be reminded of just how slippery oil prices can be, and how little control the cartel has over the price of oil.



Faced with a the possibility of a global recession and a sharp decline in energy demand, OPEC will discuss slashing oil production in an emergency meeting.


OPEC president Chakib Khelil, Algeria's oil minister, said there could be a "significant" reduction in the organization's daily output of 29 million barrels.


The organization considers the market to be oversupplied by two million barrels a day, but it has yet to agree on the size of the cut. This lack of agreement could hinder its efforts to control prices.


"Two million barrels a day is a very big number and it's not that easy to do," said Joseph Stanislaw, an energy expert and independent senior advisor at the consultancy Deloitte & Touche. "It's possible. It's doable. But the question is how long it takes them to agree."
And later in the article:
"Most [OPEC] members have planned massive infrastructure projects on the assumption that high oil prices will continue," wrote Anas Alhajji, chief economist for NGP Energy Capital Management, in an email to CNNMoney.com. "If they cut production in the current environment, revenues will decline and they might not be able to finish these projects."


One of OPEC's biggest hurdles as it tries to stem the fall in oil prices is getting all its members to agree to a plan and to stick to it, said Alhajji."

[saysmydoctor]

Bet they wish Saudi Arabia was there to lead them.

[wrppdarndyrfngr]

According to conservatives (http://thinkprogress.org/2008/09/26/bachmann-ellison-economy/), Freddie Mac and Fannie Mae’s audacity to loan to low-income Americans is to blame for the current financial crisis. During the final presidential debate, for example, Sen. John McCain (R-AZ) called the lending giants “the catalyst for this housing crisis (http://wonkroom.thinkprogress.org/2008/10/16/fannie-freddie-correction/).”
Today in a House Oversight Committee hearing with former Fed chairman Alan Greenspan, SEC chairman Christopher Cox, and former Treasury secretary John Snow, Rep. John Mica (R-FL) revived that argument. He also tried to tie the crisis to Sen. Barack Obama (D-IL), holding up a chart called “Follow the Money Trail.” He pointed that Obama has been the largest recipient of donations from Freddie and Fannie. (Actually, he’s the second highest (http://politicalticker.blogs.cnn.com/2008/10/07/fact-check-did-obama-get-second-most-money-from-freddie-and-fannie/).)
Committee chairman Henry Waxman (D-IL) chastised Mica for trying to turn the financial crisis into a political issue. He noted that Freddie and Fannie “certainly played a role” in the current situation, but then asked the witnesses, “Do any of you believe that they were the cause of this financial crisis?” All three men said no. Watch it:
[/URL]Popout Federal housing data back up this conclusion — that “[URL="http://www.mcclatchydc.com/251/story/53802.html"]the private sector (http://www.youtube.com/v/XjYDzyQNqX8&hl=en&fs=1), not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.” As Center for American Progress Senior Fellows Michael S. Barr and Gene Sperling explain, Freddie and Fannie weren’t even securitizing subprime mortgages en-masse until 2005 (http://www.nytimes.com/2008/10/18/opinion/18barr.html):
The subprime boom was led by investment banks and mortgage brokers, not by government-sponsored enterprises. Fannie and Freddie became unhinged in the middle of this decade when they tried to play catch-up. Their shareholders and managers pushed them to recover the securitization market share they had lost to unregulated investment banks getting absurd AAA ratings for packaging subprime dross. From 2005 to 2008, Fannie Mae purchased or guaranteed $270 billion in loans to risky borrowers — triple the amount in all its earlier years combined.
As Center for Economic and Policy Research co-director Dean Baker has written, “Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector (http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=09&year=2008&base_name=market_place_misleads_the _publ). They lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded.” More here on “how did this happen (http://howdidthishappen.org/).”

[wrppdarndyrfngr]

Greenspan's Bubbles (http://krugman.blogs.nytimes.com/2008/10/11/greenspans-bubbles/)
http://www.princeton.edu/%7Epkrugman/bubbles.png
PE ratio for S&P 500, from Shiller (10-year moving average of earnings, on right scale.) Real house prices from Case-Shiller, left scale.

[saysmydoctor]

Apparently, no one in the Bush Administration studied macroeconomics.

[FScott]

its normal

[nfgrocker16]

http://media.timesfreepress.com/img/news/tease/2008/09/24/080924_rescue_plan.jpg

[FScott]

http://www.kirktoons.com/permanent_images/3_bushtax.jpg

[IcedOpethBlind]

well lets do it up...BBA in Finance however...

[nfgrocker16]

http://www.kirktoons.com/permanent_images/3_bushtax.jpg

I concur with a statement Tate made earlier on a different thread. I don't get why people who aren't rich are Republican.

Like, I do, but I don't like the reason cause its extremely retarded.

[FScott]

Since we are on the topic of fires:
lueRaOwFK0Q&feature=related

[nfgrocker16]

http://www.marcellosendos.ch/humor/Capitalism.gif

[asmolitor]

mostly to bump the thread... but if it wasn't painfully obvious already, it's now official:

http://biz.yahoo.com/ap/081030/economy.html

[wrppdarndyrfngr]

http://allfinancialmatters.com/wp-content/uploads/2008/11/sp-history-50-best-months.gif

[wrppdarndyrfngr]

http://allfinancialmatters.com/wp-content/uploads/2008/10/sp-history-part-2.gif

[wrppdarndyrfngr]

http://allfinancialmatters.com/wp-content/uploads/2008/11/sp-history-50-best-and-worst-months.gif

[wrppdarndyrfngr]

http://dshort.com/charts/bears/four-bears-large.gif

[boykosaurus]

Is it ok to keep my paltry savings in my orange account, or should I consider investing at this point if I want to have a better return?

[asmolitor]

depends on the yield you're currently receiving (i'm assuming "orange" means ING savings?) and also your risk tolerance. i guess it'd be a tradeoff between a stable growth percentage for your money now against the probability of losses you could incur in the hopes of a larger yield.

even though the market's gone relatively sideways for the last month or so, and will likely continue that pattern for the next few weeks - i'm not entirely convinced the worst is over. but regardless of that, a buying opportunity with the dow ~8500 is a good deal for the long haul. if your time horizon is decades rather than years, months, weeks, etc then it's probably something to look into.

[asmolitor]

saw this on digg today: it's the US map with each state labeled with a country it shares a similar GDP with - i.e. wisconsin's GDP equals that of ireland's, and so on.

http://i42.tinypic.com/qxou4g.jpg
and here's a number-based list of where each state would fall if US states were counted as individual countries for GDP purposes:

http://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_ countries_nominal_GDP

[asmolitor]

bump, because i refuse to let this linger beyond the first page. and also, interesting website i found when reading the freakonomics blog today:

http://truecostofcredit.com/

shows the various fees retailers pay on credit card purchases, tailored to the type of card you use.

[.invisible ink.]

i don't understand why this thread isn't jumping considering what's currently going on in the economy. I work in the finance industry, so i have plenty of opinions if anyone wants to chat economics/banking/bailout...

[SLOWPOKE LOPEZ]

i have a question. and don't ridicule me for asking...
looking over this stimulus plan, i don't really see how this is going to help create jobs. out of the 700 whatever billion, it looked to me like most of it was being used as handouts to people that have been hurt by the economy. sure people could use it, but to me it seems like they're throwing money at the effects of the economy crisis, not the causes.
could someone explain how increasing welfare/unemployment/etc benefits is going to improve the job market?
it just seems like this crisis is being used as an excuse to implement programs that the dems have wanted all along, but just needed this economic hysteria to fuel the push through congress.

[saysmydoctor]

saw this on digg today: it's the US map with each state labeled with a country it shares a similar GDP with - i.e. wisconsin's GDP equals that of ireland's, and so on.

http://i42.tinypic.com/qxou4g.jpg
and here's a number-based list of where each state would fall if US states were counted as individual countries for GDP purposes:

http://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_ countries_nominal_GDP
This is awesome. Good find.

[Esrb99]

i have a question. and don't ridicule me for asking...
looking over this stimulus plan, i don't really see how this is going to help create jobs. out of the 700 whatever billion, it looked to me like most of it was being used as handouts to people that have been hurt by the economy. sure people could use it, but to me it seems like they're throwing money at the effects of the economy crisis, not the causes.
could someone explain how increasing welfare/unemployment/etc benefits is going to improve the job market?
it just seems like this crisis is being used as an excuse to implement programs that the dems have wanted all along, but just needed this economic hysteria to fuel the push through congress.

shh. don't question them.

[Praetor]

I wish I had more faith in the stimulus. Maybe it's just because I'm a cynical asshole but...

[benn10]

I'm thinking that there's a chance that the economy will rebound by next year, entering a new business cycle. What will happen if this "stimulus" is distributed if we're no longer in a recession?

[TranslateTheNam]

shh. don't question them.


haha....Does anyone find it frightening that not a single senator that voted for this spending bill actually read it. Mostly because of its ridiculous length and loads of special interest handouts. I cant believe ACORN is getting whatever BILLION dollars, that is absurd. I swear to god the democrats have gone crazy with their majority. Once this bill is signed and implemented we'll see what kind of crap was hidden in it.

[TranslateTheNam]

I'm thinking that there's a chance that the economy will rebound by next year, entering a new business cycle. What will happen if this "stimulus" is distributed if we're no longer in a recession?

inflation like we have never experienced before and a total loss of confidence from foreign countries coupled with the risk of China demanding re-payment of debts ultimately leading to an era of isolationism due to global sanctions/embargoes against the United States for being dead beat debtors who cant stop spending money that doesn't exist until we print it, leaving our kids and grandkids to bear the burdens created by a fiscally irresponsible generation.

is that a run on sentence?

[benn10]

inflation like we have never experienced before and a total loss of confidence from foreign countries coupled with the risk of China demanding re-payment of debts ultimately leading to an era of isolationism due to global sanctions/embargoes against the United States for being dead beat debtors who cant stop spending money that doesn't exist until we print it, leaving our kids and grandkids to bear the burdens created by a fiscally irresponsible generation.

is that a run on sentence?

It's a run on, but it definitely gets the point across. I'm kind of disappointed that the Democrats are shoving this down our throats. We're going to be paying a lot more taxes.

Just never forget, there's life after death... and taxes.

[windmillninja]

Does anyone find it frightening that not a single senator that voted for this spending bill actually read it.

Well, to be fair, Pelosi did have a plane to catch.

[asmolitor]

I'm thinking that there's a chance that the economy will rebound by next year, entering a new business cycle. What will happen if this "stimulus" is distributed if we're no longer in a recession?

oh good, a chance. i'd challenge the the second sentence, but the lack of foundation in the first sentence tells me it's not necessarily worth the time.

haha....Does anyone find it frightening that not a single senator that voted for this spending bill actually read it. Mostly because of its ridiculous length and loads of special interest handouts. I cant believe ACORN is getting whatever BILLION dollars, that is absurd. I swear to god the democrats have gone crazy with their majority. Once this bill is signed and implemented we'll see what kind of crap was hidden in it.

oh hey, lou dobbs - http://www.factcheck.org/askfactcheck/does_the_stimulus_bill_include_a_52 .html

[.invisible ink.]

I wish I had more faith in the stimulus. Maybe it's just because I'm a cynical asshole but...

I agree. I have about 1% faith in this actually doing anything to create enough jobs to make a difference. I hope I'm wrong but the way this went down certainly doesn't give me any feelings that this is actually going to work. I'm extremely bothered by the fact that this was all done behind extremely closed doors when that was something that Obama made a point of stating would not happen in his government. He's only been in office for about 3 weeks and he's already breaking his own rules. I'm not surprised but he certainly isn't working on restoring my faith in politics yet.

I understand this needs to be done quickly as we're having a crisis, but some things take some time to get right. This should have been something hashed out at least for a few weeks more, in my opinion. The fact that we as taxpayers are going to be paying for this for a very long time (as in our grand kids will still be paying for this mess when we're long gone) is a damn good reason that this should not have been rushed into and kept so vague. We should have a right to know what we're paying for before it actually passes, but again, i'm truly not surprised.

I'm thinking that there's a chance that the economy will rebound by next year, entering a new business cycle. What will happen if this "stimulus" is distributed if we're no longer in a recession?

what basis do you have for thinking that the recession is going to end that quickly? i'm honestly curious why you think that as it is most definitely not the opinion held by most analysts, especially considering that most people will be quick to tell you that we've been in a recession since 2007 or at least 2008.

Seeing first hand every day in my job (i travel weekly around the country from bank to bank reviewing their loan portfolios), I am going to have to disagree strongly with thinking that anything will rebound by next year. Again, I hope I'm wrong, for the good of the economy, but the fact is, there are still a LOT of companies that have yet to close and many many mortgages that have yet to reset. Companies closing means more people out of work, means even more people who can't afford their homes. I don't think that a tax benefit is going to be enough to save a good many of these people/organizations. We better hope for a miracle to be contained within this stimulus package if we think it's going to miraculously put tons of people back to work in such a short time span. I just don't buy it, but I hope I'm wrong. My prediction is that this is going to last at least 5-7 more years. Some things take time to work themselves out.


(Oh and don't even get me started on the TARP funds...)

[SLOWPOKE LOPEZ]

i don't understand why anyone thinks this will help the economy.
job creation through infrastructure projects?
we tried that (http://www.msnbc.msn.com/id/8894520/). in 2005, congress passed a 290 billion dollar infrastructure/highway bill, designed to boost the economy and create jobs.
290 billion didn't work. now they expect a measly 30 billion to change things?
tax cuts?
each person stands to make less than 10 dollars a week extra after this plan. how is giving ten dollars to everybody going to change much at all? do they think we're stupid?
it just doesn't make sense how people are so dead-set on passing this bill. have they even thought about it?

[benn10]

oh good, a chance. i'd challenge the the second sentence, but the lack of foundation in the first sentence tells me it's not necessarily worth the time.



oh hey, lou dobbs - http://www.factcheck.org/askfactcheck/does_the_stimulus_bill_include_a_52 .html

You obviously haven't taken any Econ classes. Business cycles are unpredictable. You can't give concrete proof that this recession will carry on longer than next year.

[benn10]

what basis do you have for thinking that the recession is going to end that quickly? i'm honestly curious why you think that as it is most definitely not the opinion held by most analysts, especially considering that most people will be quick to tell you that we've been in a recession since 2007 or at least 2008.

Seeing first hand every day in my job (i travel weekly around the country from bank to bank reviewing their loan portfolios), I am going to have to disagree strongly with thinking that anything will rebound by next year. Again, I hope I'm wrong, for the good of the economy, but the fact is, there are still a LOT of companies that have yet to close and many many mortgages that have yet to reset. Companies closing means more people out of work, means even more people who can't afford their homes. I don't think that a tax benefit is going to be enough to save a good many of these people/organizations. We better hope for a miracle to be contained within this stimulus package if we think it's going to miraculously put tons of people back to work in such a short time span. I just don't buy it, but I hope I'm wrong. My prediction is that this is going to last at least 5-7 more years. Some things take time to work themselves out.


(Oh and don't even get me started on the TARP funds...)

Thanks for taking my words out of context. I never said that the recession will end quickly. I said that there was a possibility.

And when you say that "this is going to last 5-7 more years", I hope you're not referring to the recession. Recessions never last that long, unless go back to the great depression, in which case you're suggesting that we're entering into a depression.

[.invisible ink.]

Thanks for taking my words out of context. I never said that the recession will end quickly. I said that there was a possibility.

And when you say that "this is going to last 5-7 more years", I hope you're not referring to the recession. Recessions never last that long, unless go back to the great depression, in which case you're suggesting that we're entering into a depression.

Sorry, I don't think I was taking your words out of context. I understood that it was your opinion that there was a chance that the recession would end next year, but I'm still trying to understand why you think that it's a possibility.

And yes, I would say that this is either going to be the worst recession in history, or another depression (more likely). If you take into consideration the high amount of mortgages that have not yet even begun to reset plus those who are losing their jobs, then we're looking at another few years of this unless of course all these people are able to get out of their loans and get fabulous new gigs before the shit hits the fan for them. I'm cynical and don't see that happening with any immediacy.

[SLOWPOKE LOPEZ]

i'm no economics major or whatever, so i don't know just the ramifications this would have, but all this money thats been spent to bail out banks and stimulate the economy would be nearly enough to pay off every mortgage in america.
no mortgage debt for anybody...now that would've stimulated something i'd think.

[TranslateTheNam]

oh good, a chance. i'd challenge the the second sentence, but the lack of foundation in the first sentence tells me it's not necessarily worth the time.



oh hey, lou dobbs - http://www.factcheck.org/askfactcheck/does_the_stimulus_bill_include_a_52 .html



You'll notice how that article briefly defends taking CDBG funds and then runs right into the fact that they were eligible for NSP funds but never acted to acquire them, yet. Mostly because ACORN received over 17.2 million from 11/08-01/09 alone. ACORN is in the CDBG's pocket, deep. They are a left wing lobbyist organization with they're own agenda. It doesn't matter where the funds are funneled on paper, ACORN will use it to they're liking.

[nfgrocker16]

It's a run on, but it definitely gets the point across. I'm kind of disappointed that the Democrats are shoving this down our throats. We're going to be paying a lot more taxes.

Just never forget, there's life after death... and taxes.

And I think you need to stop complaining about taxes. Do you even make enough money a year that this will effect you? I doubt it.

[saysmydoctor]

You'll notice how that article briefly defends taking CDBG funds and then runs right into the fact that they were eligible for NSP funds but never acted to acquire them, yet. Mostly because ACORN received over 17.2 million from 11/08-01/09 alone. ACORN is in the CDBG's pocket, deep. They are a left wing lobbyist organization with they're own agenda. It doesn't matter where the funds are funneled on paper, ACORN will use it to they're liking.
This isn't serious, right?

[asmolitor]

You obviously haven't taken any Econ classes. Business cycles are unpredictable. You can't give concrete proof that this recession will carry on longer than next year.

I'm thinking that there's a chance that the economy will rebound by next year, entering a new business cycle. What will happen if this "stimulus" is distributed if we're no longer in a recession?

didn't even have to work for that one, nice.

as for the econ classes, i've taken quite a few seeing as its my major.

whereas you, on the other hand, deny the effects of the new deal (http://absolutepunk.net/showthread.php?p=35683322#post35683 322), are conservative only when it's convenient (http://absolutepunk.net/showthread.php?p=35086422#post35086 422), and post fox news links (http://absolutepunk.net/showthread.php?p=34761742#post34761 742) arguing that obama's turning our economy socialist (and subsequently start threads about it that get locked for complete idiocy (http://absolutepunk.net/showthread.php?t=834742)).

[saysmydoctor]

Conservatism is hardly convenient.

[asmolitor]

Conservatism is hardly convenient.

hence my point.

[asmolitor]

i'm no economics major or whatever, so i don't know just the ramifications this would have, but all this money thats been spent to bail out banks and stimulate the economy would be nearly enough to pay off every mortgage in america.
no mortgage debt for anybody...now that would've stimulated something i'd think.

http://www.census.gov/compendia/statab/tables/09s1152.pdf

no, unless we've spent around 12 trillion that no one was aware of. for comparison, total government spending in the fiscal year 2008 was around 5.2 trillion.

regardless, there should be plans released on wednesday dealing with public mortgages - http://online.wsj.com/article/SB123443879043977105.html?mod=googl enews_wsj

[asmolitor]

for future reference as we head into spring: "Crude Oil is getting cheaper - so why isn't gas?"

http://www.npr.org/templates/story/story.php?storyId=100733852

[Machu505]

didn't even have to work for that one, nice.

as for the econ classes, i've taken quite a few seeing as its my major.

whereas you, on the other hand, deny the effects of the new deal (http://absolutepunk.net/showthread.php?p=35683322#post35683 322), are conservative only when it's convenient (http://absolutepunk.net/showthread.php?p=35086422#post35086 422), and post fox news links (http://absolutepunk.net/showthread.php?p=34761742#post34761 742) arguing that obama's turning our economy socialist (and subsequently start threads about it that get locked for complete idiocy (http://absolutepunk.net/showthread.php?t=834742)).

Pwn'd.

[saysmydoctor]

for future reference as we head into spring: "Crude Oil is getting cheaper - so why isn't gas?"

http://www.npr.org/templates/story/story.php?storyId=100733852
Because the uninformed public is uninformed and will pay the price regardless because they don't know any better.

Am I warm, cold?

[asmolitor]

Because the uninformed public is uninformed and will pay the price regardless because they don't know any better.

Am I warm, cold?

warm to an extent, though i think it's more a refinery-minded issue than a consumer information one. plus, unless you have a personal refinery in your backyard with fitted pipelines, there's not much say you can have in terms of pricing - haha.

[asmolitor]

You'll notice how that article briefly defends taking CDBG funds and then runs right into the fact that they were eligible for NSP funds but never acted to acquire them, yet. Mostly because ACORN received over 17.2 million from 11/08-01/09 alone. ACORN is in the CDBG's pocket, deep. They are a left wing lobbyist organization with they're own agenda. It doesn't matter where the funds are funneled on paper, ACORN will use it to they're liking.


Faulty Logic


Boehner and Vitter commit two logical fallacies. Their argument has the form:


The stimulus bill provides funding for redeveloping neighborhoods.
ACORN does work in redeveloping neighborhoods.
Therefore the stimulus bill provides funding for ACORN. That's an example of what philosophers call the undistributed middle fallacy (http://factchecked.org/LessonPlanDetails.aspx?myId=7&mySectionId=1). It's a common mistake; in May 2008, we caught Sen. John McCain making a similar logical blunder (http://www.factcheck.org/elections-2008/the_budget_according_to_mccain_part _i.html). But Boehner and Vitter compound their error by treating different terms as if they had the same meaning. ACORN does indeed work in redeveloping neighborhoods, but the work that it does is not the same sort of work for which NSP provides funding. By pretending as if the two are the same, Boehner and Vitter commit the fallacy of equivocation.

We're accustomed to seeing logical fallacies in political arguments. But working two of them into a single argument is unusually bad logic.

[saysmydoctor]

Boehner? Doesn't he have like a ridiculously low approval rating? Even for a republican?

[Machu505]

lol Boehner

[asmolitor]

with arguments like "we're stimulating ACORN" it shouldn't be a surprise.

[nfgrocker16]

Boehner? Doesn't he have like a ridiculously low approval rating? Even for a republican?

The same John Boehner who just gave an angry tirade last week about how he got into politics to decrease the size of government even though he's been a part of the Republican party the last 19 years and has helped pass legislation allowing some of the largest growth in governmental powers and presence in history?

That same John Boehner?

[saysmydoctor]

with arguments like "we're stimulating ACORN" it shouldn't be a surprise.
You think that's fucking loony, I heard a crazy conspiracy theory about the mandated switch to digital about how the government is using it to basically be like fucking 1984.
The same John Boehner who just gave an angry tirade last week about how he got into politics to decrease the size of government even though he's been a part of the Republican party the last 19 years and has helped pass legislation allowing some of the largest growth in governmental powers and presence in history?

That same John Boehner?
I watched that on CSPAN and the entire I was like "You mean that redundant Homeland Security Department?"

[benn10]

And I think you need to stop complaining about taxes. Do you even make enough money a year that this will effect you? I doubt it.

No, but in four years I will.

(Affect, not effect. Sorry, I couldn't let that one go.)

[nfgrocker16]

No, but in four years I will.

(Affect, not effect. Sorry, I couldn't let that one go.)

Never said anything about how it will emotionally affect you. But it doesn't have an effect, a physical change, on your life.

[zion the lion]

It's a run on, but it definitely gets the point across. I'm kind of disappointed that the Democrats are shoving this down our throats. We're going to be paying a lot more taxes.

Just never forget, there's life after death... and taxes.


I went to a movie with my friend on Friday, and while we were waiting for my mom to pick us up I mentioned how I was offered a summer job in D.C. working for Obama and she went off telling me how much she hates him because hes raising taxes and its evil. Quite frankly I'm a little bit scared that there is more than one person who thinks tax raises are bad.

If you cut taxes what do you think will happen? Teachers and the military get pay cuts, then cops, fire fighters, and construction workers get fired. Who do you think pays for the 911 operators and the technology they use to find people? Schools dont get rebuilt and get over crowded, our roads get ruined which ruins our cars, and then we're all screwed. Not to mention raising taxes is what makes this country richer, giving us more power, and both make our dollar stronger. We owe china 12.1 TRILLION dollars, and how are we going to pay that back? I know talking about taxes is annoying but people should honestly know that we need to raise taxes sooner or later to get this country going.

As for right now, what I dont get is why they dont just erase everybody's credit scores and let them start over, give them confidence so they can go spend more. If something big doesnt happen in the next year we'll be in a depression for the next decade.

[boykosaurus]

didn't even have to work for that one, nice.

as for the econ classes, i've taken quite a few seeing as its my major.

whereas you, on the other hand, deny the effects of the new deal (http://absolutepunk.net/showthread.php?p=35683322#post35683 322), are conservative only when it's convenient (http://absolutepunk.net/showthread.php?p=35086422#post35086 422), and post fox news links (http://absolutepunk.net/showthread.php?p=34761742#post34761 742) arguing that obama's turning our economy socialist (and subsequently start threads about it that get locked for complete idiocy (http://absolutepunk.net/showthread.php?t=834742)).

Sick burn.

:appl:

[windmillninja]

Never said anything about how it will emotionally affect you. But it doesn't have an effect, a physical change, on your life.

Not that I'm supporting the bitch move on his part of playing the grammar card, but he's actually right. That's not the difference between those two words. "Effect" is never a verb.

[saysmydoctor]

I've been gone for a while. Good to see that when incapable of making a valid point, we attack someone's grammar now. I wasn't sure if this board would ever fall on par with the intelligence of the General Forum, but by golly, where there is a will, there is a way.

[loveisdead]

I've been gone for a while. Good to see that when incapable of making a valid point, we attack someone's grammar now. I wasn't sure if this board would ever fall on par with the intelligence of the General Forum, but by golly, where there is a will, there is a way.
It's a shame, isn't it? That's why I like it here, it has many less idiots. I hate people arguing over grammar when what they meant is obvious.

[Machu505]

You think that's fucking loony, I heard a crazy conspiracy theory about the mandated switch to digital about how the government is using it to basically be like fucking 1984.

What?

[saysmydoctor]

It's a shame, isn't it? That's why I like it here, it has many less idiots. I hate people arguing over grammar when what they meant is obvious.
I can't contribute anything valid so, I'm just going to say 'this.'
What?
People are claiming the switch is so the government can make the TV like those TVs that watch you in 1984 and so that the government can send out low frequency soundwaves to control the populace. Some real AnarchyintheUS shit.

[Machu505]

People are claiming the switch is so the government can make the TV like those TVs that watch you in 1984 and so that the government can send out low frequency soundwaves to control the populace. Some real AnarchyintheUS shit.

I blame the Illuminati. :shrug:

[loveisdead]

I blame Sean's facebook status.

[saysmydoctor]

I blame the Illuminati. :shrug:
I blame Dan Brown.
I blame Sean's facebook status.
"You will need a binding UN resolution to stop me from fucking destroying you. I'm talking scorched earth motherfucker. I WILL FUCK YOU UP."

[saysmydoctor]

http://www.cnn.com/2009/POLITICS/02/16/begala.carolina/index.html

Actually, I agree with Paul Begala. Someone pinch me.

[nfgrocker16]

Not that I'm supporting the bitch move on his part of playing the grammar card, but he's actually right. That's not the difference between those two words. "Effect" is never a verb.

I know. My grammar is atrocious. I went to film school.

[TranslateTheNam]

http://www.cnn.com/2009/POLITICS/02/16/begala.carolina/index.html

Actually, I agree with Paul Begala. Someone pinch me.

to be fair, that pretty much was a partisan rant along the lines of "If you dont like our plan, your on your own". Besides the fact there's obvious bad blood between the two. That whole Denial, Delay, Do nothing breakdown was kind of ridiculous. Its supposed to be a stimulus bill and it turned into a giant spending package, which no one has even read. It should have been shelved, and the house and senate should have been locked in the capitol until they came up with an actual stimulus bill. Just my opinion.


"Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before." - Rahm Emanuel

[saysmydoctor]

to be fair, that pretty much was a partisan rant along the lines of "If you dont like our plan, your on your own". Besides the fact there's obvious bad blood between the two. That whole Denial, Delay, Do nothing breakdown was kind of ridiculous. Its supposed to be a stimulus bill and it turned into a giant spending package, which no one has even read. It should have been shelved, and the house and senate should have been locked in the capitol until they came up with an actual stimulus bill. Just my opinion.


"Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before." - Rahm Emanuel
To be fair, no shit Sherlock. That's the fucking idea behind editorial commentary.

[TranslateTheNam]

To be fair, no shit Sherlock. That's the fucking idea behind editorial commentary.

Good to see that when incapable of making a valid point, we use profanity now. Your a joke, don't post useless CNN garbage without expecting a comment on it.

[saysmydoctor]

Good to see that when incapable of making a valid point, we use profanity now. Your a joke, don't post useless CNN garbage without expecting a comment on it.
Wait, so trying to discredit an obvious commentary, the source, the news organization releasing it isn't making a valid point?

You're the joke.

[loveisdead]

Good to see that when incapable of making a valid point, we use profanity now. Your a joke, don't post useless CNN garbage without expecting a comment on it.
Whoa man. Your point was that it was "partisan commentary." His point was that's exactly what an editorial is. He made a valid point and is right.

[Machu505]

No profanity guys. This dude is too delicate.

[loveisdead]

My bad.

[benn10]

I went to a movie with my friend on Friday, and while we were waiting for my mom to pick us up I mentioned how I was offered a summer job in D.C. working for Obama and she went off telling me how much she hates him because hes raising taxes and its evil. Quite frankly I'm a little bit scared that there is more than one person who thinks tax raises are bad.

If you cut taxes what do you think will happen? Teachers and the military get pay cuts, then cops, fire fighters, and construction workers get fired. Who do you think pays for the 911 operators and the technology they use to find people? Schools dont get rebuilt and get over crowded, our roads get ruined which ruins our cars, and then we're all screwed. Not to mention raising taxes is what makes this country richer, giving us more power, and both make our dollar stronger. We owe china 12.1 TRILLION dollars, and how are we going to pay that back? I know talking about taxes is annoying but people should honestly know that we need to raise taxes sooner or later to get this country going.

As for right now, what I dont get is why they dont just erase everybody's credit scores and let them start over, give them confidence so they can go spend more. If something big doesnt happen in the next year we'll be in a depression for the next decade.

If you raise taxes, you lower disposable income. A decrease in disposable income decreases consumption. A decrease in consumption decreases the GDP and pushes the economy toward recession.

The opposite is also true. Decreased taxes -> increased disposable income -> increased GDP -> economic growth and prosperity.

And if you erase everyone's credit score, people who shouldn't take out loans are going to go crazy and take out exorbitant amounts of money that they will never pay back.

[zion the lion]

If you raise taxes, you lower disposable income. A decrease in disposable income decreases consumption. A decrease in consumption decreases the GDP and pushes the economy toward recession.

The opposite is also true. Decreased taxes -> increased disposable income -> increased GDP -> economic growth and prosperity.

And if you erase everyone's credit score, people who shouldn't take out loans are going to go crazy and take out exorbitant amounts of money that they will never pay back.


This is going to end up one giant circle of consequences. But if you raise taxes youre raising income for other people's jobs, as in teachers. The teachers who teach at my school dont give a crap about teaching us because they dont get paid enough (one of them honestly said that she's punishing the government by not really teaching us anything, which will leave us as ignorant furture leaders). When taxes get raised theres more money for grants that scientists use for funding research and non profit groups use for hiring people and helping others. When people do talk about tax increases, its not like they mean that everybody's paycheck is going to have a hundred dollars more going to taxes every week. All I'm talking about is like 5 dollars and theres close to a billion people in this country so its not that hard.

As for erasing everyone's credit scores, everyone I know who has bad credit actually says they wish they could start over and do it right. And since the government has learned its lesson and is probably going to start regulating what banks do with their loans, it seems like a smart idea.


EDIT: I forgot to say this originally but cutting taxes got us in this problem. We cut taxes people had more money to spend and got stupid and bought things they couldnt afford, then they got loans to pay off the things they couldnt afford and then couldnt pay the loans they had taken out.

[benn10]

This is going to end up one giant circle of consequences. But if you raise taxes youre raising income for other people's jobs, as in teachers. The teachers who teach at my school dont give a crap about teaching us because they dont get paid enough (one of them honestly said that she's punishing the government by not really teaching us anything, which will leave us as ignorant furture leaders). When taxes get raised theres more money for grants that scientists use for funding research and non profit groups use for hiring people and helping others. When people do talk about tax increases, its not like they mean that everybody's paycheck is going to have a hundred dollars more going to taxes every week. All I'm talking about is like 5 dollars and theres close to a billion people in this country so its not that hard.

As for erasing everyone's credit scores, everyone I know who has bad credit actually says they wish they could start over and do it right. And since the government has learned its lesson and is probably going to start regulating what banks do with their loans, it seems like a smart idea.


EDIT: I forgot to say this originally but cutting taxes got us in this problem. We cut taxes people had more money to spend and got stupid and bought things they couldnt afford, then they got loans to pay off the things they couldnt afford and then couldnt pay the loans they had taken out.

Lol, ask any of your teachers if they've ever gotten a raise because of a tax increase. Five dollars a person is pocket change to the IRS, it wouldn't make any difference. Usually when there's a tax increase, a substantial amount of money is taken out of peoples' incomes, all depending on what tax bracket they're in. The government has to run on a deficit in the current economic climate.

(and trust me when I say that erasing everyone's credit score will through the economy into chaos.)

[nfgrocker16]

If you raise taxes, you lower disposable income. A decrease in disposable income decreases consumption. A decrease in consumption decreases the GDP and pushes the economy toward recession.

The opposite is also true. Decreased taxes -> increased disposable income -> increased GDP -> economic growth and prosperity.

And if you erase everyone's credit score, people who shouldn't take out loans are going to go crazy and take out exorbitant amounts of money that they will never pay back.

http://query.nytimes.com/gst/fullpage.html?res=990CE0DB173BF937A 2575AC0A9659C8B63&sec=&spon=&pagewanted=1

Just read.

[benn10]

http://query.nytimes.com/gst/fullpage.html?res=990CE0DB173BF937A 2575AC0A9659C8B63&sec=&spon=&pagewanted=1

Just read.

Raise taxes significantly for the rich and decrease them for the poor and middle classes? I think that's called socialism.

[nfgrocker16]

Raise taxes significantly for the rich and decrease them for the poor and middle classes? I think that's called socialism.

I'm sorry you have a problem with progressive taxation. Its been around for the better part of 100 years. Blame Teddy Roosevelt.

[TK]

Raise taxes significantly for the rich and decrease them for the poor and middle classes? I think that's called socialism.

You act as if socialism is something new in America...

[benn10]

You act as if socialism is something new in America...

Shhh. I want to live in ignorance and believe the United States is a strictly capitalist country.

[saysmydoctor]

Raise taxes significantly for the rich and decrease them for the poor and middle classes? I think that's called socialism.
It's called progressive taxation. Pay-what-you can principle.

[benn10]

It's called progressive taxation. Pay-what-you can principle.

Thanks, pal.

[nfgrocker16]

Shhh. I want to live in ignorance and believe the United States is a strictly capitalist country.

Then what's your point? You haven't had one yet.

[benn10]

Then what's your point? You haven't had one yet.

I wasn't aware that it was mandatory to make a point.

[Machu505]

Raise taxes significantly for the rich and decrease them for the poor and middle classes? I think that's called socialism.

Whatever works.

[benn10]

Whatever works.

If that's the case, let's sacrifice all of our personal freedoms to the government. It would work, and not to mention, it would so fun.

[nfgrocker16]

I wasn't aware that it was mandatory to make a point.

I know, seeing as you have yet to make any.

[benn10]

I know, seeing as you have yet to make any.

Yep, that's what you said.

[Machu505]

If that's the case, let's sacrifice all of our personal freedoms to the government. It would work, and not to mention, it would so fun.

Because progressive taxes would totally mean sacrificing our liberties. Totally.

[benn10]

Because progressive taxes would totally mean sacrificing our liberties. Totally.

You said "whatever works", thus implying that you are willing to adopt any system that "works". The content of your previous sentence is apparently not reflective of what you meant to say.

[Machu505]

You said "whatever works", thus implying that you are willing to adopt any system that "works". The content of your previous sentence is apparently not reflective of what you meant to say.

Progressive taxing works. Call it what you want, but it works, so let's do it.

[zion the lion]

Lol, ask any of your teachers if they've ever gotten a raise because of a tax increase. Five dollars a person is pocket change to the IRS, it wouldn't make any difference. Usually when there's a tax increase, a substantial amount of money is taken out of peoples' incomes, all depending on what tax bracket they're in. The government has to run on a deficit in the current economic climate.

(and trust me when I say that erasing everyone's credit score will through the economy into chaos.)


Obviously you are going to believe what you want to, and I'm not going to change that, and we can disagree on what should happen with taxes. As for you and socialism, its weird that people are so against anything other than capitalism, obviously real capitialism is illegal and those who pracitice in this country will go to jail for a while (its called a pyrimad scheme). If we were to be fully capitalist there would be 100 people who were wiping their butts with 100 dollar bills, and then the rest of us would be living off of top ramen and kool-aid. But socialism seems like its failing, and communism cant work either. Maybe people should just get rid of money all together and share what they've got.

[benn10]

Obviously you are going to believe what you want to, and I'm not going to change that, and we can disagree on what should happen with taxes. As for you and socialism, its weird that people are so against anything other than capitalism, obviously real capitialism is illegal and those who pracitice in this country will go to jail for a while (its called a pyrimad scheme). If we were to be fully capitalist there would be 100 people who were wiping their butts with 100 dollar bills, and then the rest of us would be living off of top ramen and kool-aid. But socialism seems like its failing, and communism cant work either. Maybe people should just get rid of money all together and share what they've got.

It's not a matter of whether we agree on it or not, it's a matter of the Economic principles at work.

Obviously, strict capitalism doesn't exist, as there's always government intervention, and rightfully so. It's the degree to which the government is involved that defines whether it is capitalist, socialist, communist, etc. (What you're suggesting with the people getting rid of their money and sharing everything they have, is purely Communist in ideology.)

[saysmydoctor]

If that's the case, let's sacrifice all of our personal freedoms to the government. It would work, and not to mention, it would so fun.
That's what he said. Good catch.

[nfgrocker16]

It's not a matter of whether we agree on it or not, it's a matter of the Economic principles at work.

Obviously, strict capitalism doesn't exist, as there's always government intervention, and rightfully so. It's the degree to which the government is involved that defines whether it is capitalist, socialist, communist, etc. (What you're suggesting with the people getting rid of their money and sharing everything they have, is purely Communist in ideology.)

And you're acting as if our taxes haven't gone up in the past. As pf the rich can't afford to be taxed more. As we have said before, our tax system for the better part of 100 years has been a progressive tax system. It has worked. Taxes for the top brackets have been raised in the past, far higher than they are being threatened right now.

And you claim you know all this. So again, what is your point? Are you anti-progressive taxation, a proven means of taxing the public? Are you just someone who is completely anti-everything liberal and buys into whatever Ron Paul or whatever "non Republican" yet still conservative to the bone you listen to? Or do you just enjoy hearing yourself talk even though you have yet to post any concrete point with facts?

I'm guessing its a combination of all of the above.

So again, get to the point or stop posting because you're just making yourself look like an idiot.

I'll ask the question you've conveniently left open for us to ask. What economic principles do you believe in and why? Its an easy question.

[benn10]

And you're acting as if our taxes haven't gone up in the past. As pf the rich can't afford to be taxed more. As we have said before, our tax system for the better part of 100 years has been a progressive tax system. It has worked. Taxes for the top brackets have been raised in the past, far higher than they are being threatened right now.

And you claim you know all this. So again, what is your point? Are you anti-progressive taxation, a proven means of taxing the public? Are you just someone who is completely anti-everything liberal and buys into whatever Ron Paul or whatever "non Republican" yet still conservative to the bone you listen to? Or do you just enjoy hearing yourself talk even though you have yet to post any concrete point with facts?

I'm guessing its a combination of all of the above.

So again, get to the point or stop posting because you're just making yourself look like an idiot.

I'll ask the question you've conveniently left open for us to ask. What economic principles do you believe in and why? Its an easy question.

You know, I started typing what economic principles I see fit for the United States, and then I stopped. Why should I answer your question? You're pretty much a condescending a-hole to any non-liberals.... so yeah. Put that in your pipe and smoke it.

[TK]

Wow, you have got to be one of the worst posters on this site.

[benn10]

Wow, you have got to be one of the worst posters on this site.

What?! I'm assuming you're talking about him lol.

[asmolitor]

If you raise taxes, you lower disposable income. A decrease in disposable income decreases consumption. A decrease in consumption decreases the GDP and pushes the economy toward recession.

The opposite is also true. Decreased taxes -> increased disposable income -> increased GDP -> economic growth and prosperity.

And if you erase everyone's credit score, people who shouldn't take out loans are going to go crazy and take out exorbitant amounts of money that they will never pay back.

first of all, your tax/gdp logic(?) chains ignore more variables than i could probably ever list in verbatim.

second of all, i can't believe i have to use the heritage foundation of all sources, but your inane babbling even lets me use sources i despise to prove your incompetence:

http://www.heritage.org/Research/Taxes/images/chart4_lg_1.gif


tax rates have essentially nothing to do with GDP, when extrapolated to the erroneous degree you have. tax revenues as a % of gdp have largely stayed the same over time post-WW2, regardless of the highest marginal rate.

and since consumption is part of the GDP identity, a lowering of the top tax rate over time should then raise consumption and influence an increase in GDP, using your standard - by which there should be marked disparity between GDP and tax rates that would cause the yellow line above to rise rapidly. oh hey, looks like america doesn't go by your standard.

[asmolitor]

also, not sure if every/anyone saw this, but:

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR2009021601180.html?nav=hcmodule

The sharp course change was one of the key reasons why Geithner's plan -- his first major policy initiative as Treasury secretary -- landed with such a thud last Tuesday. Lawmakers, investors and analysts expressed dismay over the lack of specifics. Markets tanked, and fresh doubts arose about the hand now steering the country's financial policy.

[asmolitor]

for what it's worth, in terms of bullish intent:

http://www.marketwatch.com/news/story/Increase-money-supply-means-recovery/story.aspx?guid={E98C87D2-FFC6-4B48-AEFD-0F54FA406F2D} (http://www.marketwatch.com/news/story/Increase-money-supply-means-recovery/story.aspx?guid=%7BE98C87D2-FFC6-4B48-AEFD-0F54FA406F2D%7D)

Some economic forecasters and strategists are pointing to a steep five-month rise in the amount of money held as indicating that a recovery in the U.S. economy is slowly but surely getting under way.
The rise in the M2 measurement of money supply is saying "monetary policy is pretty easy and the economy may pick up before the consensus expects it," said Paul Kasriel, chief economist for the Northern Trust.

[Machu505]

You know, I started typing what economic principles I see fit for the United States, and then I stopped. Why should I answer your question? You're pretty much a condescending a-hole to any non-liberals.... so yeah. Put that in your pipe and smoke it.

No, by all means, tell us your economic principles.

[.invisible ink.]

so, what's everyone's feelings on a nationalized banking system?

[windmillninja]

so, what's everyone's feelings on a nationalized banking system?

:puke:

[Machu505]

so, what's everyone's feelings on a nationalized banking system?

It's certainly undesirable, but it depends on the circumstances we encounter.

[.invisible ink.]

:puke:

i'm right there with you on this. this country is scaring me more and more with each passing day.

[windmillninja]

i'm right there with you on this. this country is scaring me more and more with each passing day.

I wouldn't say I'm necessarily scared. Concerned, sure, but not legitimately frightened of the US turning into the USSR as most on the far right would have us believe.

[.invisible ink.]

I wouldn't say I'm necessarily scared. Concerned, sure, but not legitimately frightened of the US turning into the USSR as most on the far right would have us believe.

Perhaps "scared" is the wrong word. Disappointed is a far better word, in my opinion. I wish we could actually *follow* the Constitution, it's not even like it's been around that long, we shouldn't have veered this far off course so fast in our country's young history. I am very disappointed.

[zion the lion]

so, what's everyone's feelings on a nationalized banking system?

My mom's husband works at citigroup which is the one they want to nationalize. I heard they were only going to nationalize it for a little while so I dont really care. If it means that in the long run I wont have to look in the empty cupboards and find only freakin top ramen and little packets of kool-aid (which is all we really have right now) then I'm fine.

Its sad that we're slowly becoming as vunerable as all of those other countries were when they moved into "communism" and dictatorships but whatever, I'm not worried about that. On the bright side, Alaska is so isolated that a lot of the problems going on in the lower 48 with unemployment arent happening as bad up here.

[walking_by91]

Oh man, I just got into uni and chose this as my major... fun.

[.invisible ink.]

Oh man, I just got into uni and chose this as my major... fun.

Finance/Economics is fascinating. I wish I had studied it in school instead of Humanities, I think it would have given me more insight into the way it works in the big picture. I've been in the banking/mortgage industry since I started working and I still have soooo much to learn. Currently I go around reviewing bank's commercial and residential loan portfolios to see just how fucked they are financially. It's really sad. Bad loans are everywhere.

[walking_by91]

Finance/Economics is fascinating. I wish I had studied it in school instead of Humanities, I think it would have given me more insight into the way it works in the big picture. I've been in the banking/mortgage industry since I started working and I still have soooo much to learn. Currently I go around reviewing bank's commercial and residential loan portfolios to see just how fucked they are financially. It's really sad. Bad loans are everywhere.
Thanks, yeah I guess I'll find it more interesting when I start studying.

[asmolitor]

http://www.marketwatch.com/news/story/Evidence-mounts-recessions-worst-past/story.aspx?guid={71467556-3683-4018-906C-7FFC8A3F9E8C}&dist=SecMostRead (http://www.marketwatch.com/news/story/Evidence-mounts-recessions-worst-past/story.aspx?guid=%7B71467556-3683-4018-906C-7FFC8A3F9E8C%7D&dist=SecMostRead)

Prosperity may not be just around the corner, but statistical evidence is mounting to suggest that the worst of this recession may soon be past.

But you want more than assertions; you want proof. And here it is:

The Conference Board's index of leading economic indicators has risen for two months in a row.
Producer prices have increased for two straight months.
Consumer prices rose in January -- the first monthly gain in six months.
The Baltic Dry Index, which measures the cost of shipping key raw materials like copper, steel and iron, has more than doubled from its recent lows.
Existing-home sales rose in December, and participants in our weekly survey think that another rise took place in January.
Pending home sales went up in December.
Builders' confidence inched up this month.
Thanks to lower interest rates, applications for both new mortgages and refinancings of existing mortgages are rising.
Real hourly earnings rose 4.5% in December following a 3.3% increase in November.
An index of consumer expectations rose in January.
Retail sales shot up by 1% in January -- the first monthly rise since June.
The decline in consumer credit moderated in the latest month.
New orders for consumer and nonmilitary capital goods went up in January.
The ISM index of manufacturing went up last month.
The ISM index of services rose last month for the second month in a row.
The money supply is soaring, a sign that there's plenty of liquidity in the economy.
The 3-month London interbank offered rate, a measure of banks' willingness to lend to each other, has dropped to 1.2% from close to 5% a number of weeks ago.
Other measures of the state of the financial markets, like the TED spread and the 2-year swap spread are down, as well.
Prices of credit default swaps for banks have fallen from their peaks.
The corporate-bond markets are thawing out, too; some $127 billion in dollar-denominated debt was issued in January, the most for any month since last May.
Some securities on banks' books are starting to recover in value.

[saysmydoctor]

first of all, your tax/gdp logic(?) chains ignore more variables than i could probably ever list in verbatim.

second of all, i can't believe i have to use the heritage foundation of all sources, but your inane babbling even lets me use sources i despise to prove your incompetence:

http://www.heritage.org/Research/Taxes/images/chart4_lg_1.gif


tax rates have essentially nothing to do with GDP, when extrapolated to the erroneous degree you have. tax revenues as a % of gdp have largely stayed the same over time post-WW2, regardless of the highest marginal rate.

and since consumption is part of the GDP identity, a lowering of the top tax rate over time should then raise consumption and influence an increase in GDP, using your standard - by which there should be marked disparity between GDP and tax rates that would cause the yellow line above to rise rapidly. oh hey, looks like america doesn't go by your standard.
I think I understand what you're saying but can you break this down a bit more Barney style for me?
Thanks, yeah I guess I'll find it more interesting when I start studying.
It's my minor...well, will be.

[asmolitor]

I think I understand what you're saying but can you break this down a bit more Barney style for me?

well, basically, using the trend line of income tax revenue as a share of GDP, you'll see it hasn't changed much over time. the unfounded correlation of GDP growth with tax income, and subsequently tax rates, doesn't really hold with historical evidence. over time, the highest marginal tax rate has fallen dramatically, leaving most tax revenue at a ~25-40% marginal tax rate, and there just isn't historical evidence that it's been for better or worse. for instance, you could point to "lower" taxes under bush and see that GDP growth was really only sufficient from 2003-2007, and that "higher" taxes under clinton coinceded with a relatively great economic expansion. you could also point to ridiculous high marginal tax rates for the rich in the early 20th century, and that didn't have much influence either. of course, in saying that, that's ignoring a multitude of variables, buttttttt that's sort of the point i'm making in that tax rates have little, if any, correlation with economic (GDP) growth.

also, it (was just) mardi gras, so i don't necessarily expect that to make the most sense by the time you read it, but i tried.

[asmolitor]

http://www.newsday.com/news/nationworld/wire/sns-ap-stock-shock,0,1590595.story

sort of a disheartening reality of the ramifications of the recession, in a way.

[walking_by91]

I think I understand what you're saying but can you break this down a bit more Barney style for me?

It's my minor...well, will be.
Oh, cool. I'll be studing finance and economics, but I'll probably change my major to marketing. Who knows though.

[saysmydoctor]

well, basically, using the trend line of income tax revenue as a share of GDP, you'll see it hasn't changed much over time. the unfounded correlation of GDP growth with tax income, and subsequently tax rates, doesn't really hold with historical evidence. over time, the highest marginal tax rate has fallen dramatically, leaving most tax revenue at a ~25-40% marginal tax rate, and there just isn't historical evidence that it's been for better or worse. for instance, you could point to "lower" taxes under bush and see that GDP growth was really only sufficient from 2003-2007, and that "higher" taxes under clinton coinceded with a relatively great economic expansion. you could also point to ridiculous high marginal tax rates for the rich in the early 20th century, and that didn't have much influence either. of course, in saying that, that's ignoring a multitude of variables, buttttttt that's sort of the point i'm making in that tax rates have little, if any, correlation with economic (GDP) growth.

also, it (was just) mardi gras, so i don't necessarily expect that to make the most sense by the time you read it, but i tried.
Mmkay, that makes a bit more sense.
http://www.newsday.com/news/nationworld/wire/sns-ap-stock-shock,0,1590595.story

sort of a disheartening reality of the ramifications of the recession, in a way.
They've been struggling for months and they aren't the only ones. Washington Post, the Tribune, etc, etc, all papers are either cutting editorial staff or just using hiring freezes. It's bad. Print can't compete with the internet.

[wrppdarndyrfngr]

THIS A ABSOLUTE MUST READ :

Recipe for Disaster: The Formula That Killed Wall Street (http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all)


A year ago, it was hardly unthinkable that a math wizard like David X. Li (http://en.wikipedia.org/wiki/David_X._Li)might someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li's work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nut—determining correlation, or how seemingly disparate events are related—and cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous in finance worldwide.
For five years, Li's formula, known as a Gaussian copula function (http://en.wikipedia.org/wiki/Copula_(statistics)), looked like an unambiguously positive breakthrough, a piece of financial technology that allowed hugely complex risks to be modeled with more ease and accuracy than ever before. With his brilliant spark of mathematical legerdemain, Li made it possible for traders to sell vast quantities of new securities, expanding financial markets to unimaginable levels.
His method was adopted by everybody from bond investors and Wall Street banks to ratings agencies and regulators. And it became so deeply entrenched—and was making people so much money—that warnings about its limitations were largely ignored.
Then the model fell apart. Cracks started appearing early on, when financial markets began behaving in ways that users of Li's formula hadn't expected. The cracks became full-fledged canyons in 2008—when ruptures in the financial system's foundation swallowed up trillions of dollars and put the survival of the global banking system in serious peril.
David X. Li, it's safe to say, won't be getting that Nobel anytime soon. One result of the collapse has been the end of financial economics as something to be celebrated rather than feared. And Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees.


If you know anything about Glaussian probablity/statisical theory you need to read that.

[.invisible ink.]

If anyone wants an easy to understand/interesting explanation of what's going on with the banks and nationalization of the banking system, you might be interested in listening to this week's episode of This American Life. Their other episodes about the mortgage crisis have been incredibly well-done, and not boring in the slightest either. Here's the link to the episode - in a week, you'll be able to download the entire podcast, but for right now, it's just a 30 second clip. http://www.thisamericanlife.org/Radio_Episode.aspx?episode=375

[asmolitor]

http://finance.yahoo.com/news/Pandit-Citi-operating-at-apf-14594108.html

NEW YORK (AP) -- Citigroup Inc. has been operating at a profit through the first two months of the year, according to a letter that the embattled bank's chief executive sent to employees.

In the letter sent Monday, CEO Vikram Pandit said the first-quarter performance so far has been the bank's best since the last time it recorded net income for a full quarter -- that was in the July-September period in 2007. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.

lolwut?

[.invisible ink.]

My cynicism and anger with the financial system is growing by leaps and bounds daily (as I work as a banking consultant who goes around reviewing a different bank each week). In the past few months especially, I've been looking at the worst garbage loans (mostly commercial, i.e., development of massive residential subdivisions, recreational parks, etc.) I've ever seen in my life. The banks and the communities they serve in this country are so fucked it's not even funny. I'm sure monkeys could have made better lending decisions than half the banks I've been working in lately. I can't wait to see how this mess unfolds as it's only just beginning. Anyone who feels the need to blame the low men on the totem pole for the crisis we're in right now is missing the boat completely. Apparently when times are good, everyone is just in it for themselves and has no concern or foresight to predict what will happen when times turn, and these are "bankers" who have been doing this stuff for 30+ years generally. People disgust me to no end. We need to get rid of these banks and start over in such a bad way.

Oh, and as a final point - we DO NOT need the banks to start lending again, that is not what is going to help solve this crisis, it's just going to create more of the same garbage we've been dealing with. Consumers need to start saving and reducing their debt, that's the only way we could ever really change anything longterm.

FYI, the podcast is up if you want to hear a really well done explanation of what's going on economically right now, here's the link again: http://www.thisamericanlife.org/Radio_Episode.aspx?episode=375 click on "full episode" to hear it, or download it from the This American Life podcast on itunes for free.

[loveisdead]

This thread needs more discussion.

[wrppdarndyrfngr]

Great Finance/economics podcst here (http://econtalk.org/) :

Nassim Taleb (http://www.fooledbyrandomness.com/) talks about the financial crisis, how we misunderstand rare events, the fragility of the banking system, the moral hazard of government bailouts, the unprecedented nature of really, really bad events, the contribution of human psychology to misinterpreting probability and the dangers of hubris. The conversation closes with a discussion of religion and probability.

oh if you have not read these two books you should :

http://web.iese.edu/jestrada/Images/FooledRandomness.jpg (http://www.amazon.com/Fooled-Randomness-Hidden-Chance-Markets/dp/1400067936/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1237841266&sr=8-1)


http://chemoton.files.wordpress.com/2008/10/blackswan.jpg (http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp/1400063515/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1237841266&sr=8-2)

[loveisdead]

I really believe that the media could be a huge force in turning around the markets. Stewart was dead on when he said that.

[wrppdarndyrfngr]

Fed has comitted/spent as much as USA's GDP to try and stop the financial crisis:

Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion (http://www.bloomberg.com/apps/news?pid=20601087&sid=armOzfkwtCA4&refer=home)

March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program (http://www.treas.gov/press/releases/reports/ppip_fact_sheet.pdf), designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.

[wrppdarndyrfngr]

I'll post this here too

Coutnries that own US Debt:

http://image.politicalbase.com/uploads/user/floating/1156/mail.png

http://www.treas.gov/tic/mfh.txt

[wrppdarndyrfngr]

some more fun and scary graphs/ charts:

http://dshort.com/charts/bears/four-bears.gif

http://www.ritholtz.com/blog/wp-content/uploads/2009/04/4-10-09-daily-dx1.gif

http://graphics8.nytimes.com/images/2009/04/03/business/economy/joblossesrecessions.jpg

[IAmNietzche]

Thanks for bumping this, didn't know it was here.

[loveisdead]

Yeah, those graphs suck.

[saysmydoctor]

Can this get a sticky?

[asmolitor]

about time:

http://www.reuters.com/article/governmentFilingsNews/idUSN2830912620090428

NEW YORK, April 28 (Reuters) - Washington Mutual Inc (WAMUQ.PK (http://www.reuters.com/finance/stocks/overview?symbol=WAMUQ.PK)) has filed a lawsuit against JPMorgan Chase & Co (JPM.N (http://www.reuters.com/finance/stocks/overview?symbol=JPM.N)) seeking the return of more than $4 billion in cash deposits which it lost access to when its bank was sold last year.


Washington Mutual Bank was closed by the U.S. government in September, in the largest bank failure in U.S. history. Its banking assets were sold the same day to JPMorgan for $1.9 billion, and the parent holding company filed for bankruptcy protection a day later.


disclosure: i still own WaMu stock, and still vehemently disagree with the course of events that happened last september.

[asmolitor]

"reduce what you can, offset what you can't"

http://www.carbonfund.org/Calculators

this is the pinnacle of my scoffing at the "green" movement. there's also another calculator (http://www.carbonfund.org/weddings) that allows your wedding guests to pay their share of the carbon footprint created by their travel.

[mattybobviously]

My small little public school team managed to finish 2nd in the Boston Fed Challenge Championship, behind Choate Rosemary Hall

[loveisdead]

It's gonna be a big day for the market.

[asmolitor]

following up on the JPMorgan / WaMu affair: Senate resolution 896, the "Helping Families Save Their Homes Act of 2009" is likely to be passed today, and one section (http://thomas.loc.gov/cgi-bin/query/z?c111:S.896:) about the FDIC (204) has some big implications for WaMu, in that the FDIC handing over $4.1 billion in WaMu deposits to JPMorgan might come under some scrutiny. apparently JPMorgan classified the deposits transfer as them paying the FDIC insurance on it, rather than it being an interbank loan. my understanding of it all is still a little foggy, but there's definitely some optimism for WaMu.

[asmolitor]

before the thread becomes obselete without a sticky, the absolute, hands down, top-notch explanation of the financial crisis. blows the previous new york times(?) guest post that was passed around a while ago out of the water.

http://freakonomics.blogs.nytimes.com/2009/05/12/the-financial-meltdown-now-and-then/

[asmolitor]

oh, and just in case you forgot about that other elephant in the room/economy:

http://money.cnn.com/2009/05/12/news/economy/SocSec_Medicare_trustees_report/index.htm

NEW YORK (CNNMoney.com) -- The recession has taken its toll on Social Security. The officials who oversee the program forecast Tuesday that the Social Security trust fund will be exhausted by 2037 -- four years earlier than estimated last year.

[lightcollapse]

I need to understand economics. This thread fucking rules.

[loveisdead]

I need to understand economics. This thread fucking rules.
I wish I knew it better too. There are a few people on these boards who know so fucking much.

[saysmydoctor]

I need to understand economics. This thread fucking rules.
http://krugman.blogs.nytimes.com/

Listen to him. Buy his books. Love him.

[IAmNietzche]

http://krugman.blogs.nytimes.com/

Listen to him. Buy his books. Love him.
But also other people.

http://www.fooledbyrandomness.com/
http://www.ft.com/comment/columnists/gilliantett

and read this book...

http://ebookstore.sony.com/ebook/george-cooper/the-origin-of-the-financial-crises/_/R-400000000000000100593#productEditor ialReviews

[GuitarR0cker1]

http://krugman.blogs.nytimes.com/

Listen to him. Buy his books. Love him.
Krugman is the shit. I need him to write another book.

[foodpyramidguru]

finance crisis.

Around the world.

[wrppdarndyrfngr]

http://www.nytimes.com/images/blogs/freakonomics/posts/Vix.jpg

The Volitility Index is finally under 30

[loveisdead]

Yet the market is still getting slammed.

[wrppdarndyrfngr]

haha pretty funny (TBP (http://www.ritholtz.com/blog/2009/05/bloomberg-ma-screen/))

http://www.ritholtz.com/blog/wp-content/uploads/2009/05/sg20090522344621.gif

[wrppdarndyrfngr]

How the Government Dealt With Past Recessions (http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html)


great interactive chart with commentary from economists about what the government did in the past, waht worked and what didn't work

[saysmydoctor]

How the Government Dealt With Past Recessions (http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html)


great interactive chart with commentary from economists about what the government did in the past, waht worked and what didn't work
So basically Reagan used Keynesian theory in a sense by shrinking government/cutting spending in all areas except the Defense Department where he raised defense spending HUGELY. That is a shocking way of looking at it.

[wrppdarndyrfngr]

Was doing some research (for fun - hey i get bored at work) and thought I would post links here

Criticisms of the Austrian School of Economics: (http://thereisnoaustrianschoolofeconomics. blogspot.com/2004/08/critics-of-austrian-economics.html)

Best ones :
Bryan Caplan - Why I Am Not An Austrian Economist (http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm)

Gordon Tullock - Why the Austrians Are Wrong About Depressions (http://www.mises.org/journals/rae/pdf/rae2_1_4.pdf) (pdf)Review of Austrian Economics 2, 1987: 73-78



Huge List here: (http://thereisnoaustrianschoolofeconomics. blogspot.com/2004/08/critics-of-austrian-economics.html)

Methodology General


Karl Popper - The Logic of Scientific Discovery (http://www.amazon.com/exec/obidos/ASIN/0415278449/againstpoliti-20)Hutchinson, 1959

Milton Friedman - Essays in Positive Economics (http://www.amazon.com/exec/obidos/ASIN/0226264033/againstpoliti-20) (online: chapter 1 (http://www.lib.pku.edu.cn/webcourse/new_econ/readings/Methodology.pdf))University of Chicago Press, 1966

Jonathan Baron - Thinking and Deciding (http://www.amazon.com/exec/obidos/ASIN/0521659728/againstpoliti-20)Cambridge University Press, 1988

David M. Kreps - Game Theory and Economic Modelling (http://www.amazon.com/exec/obidos/ASIN/0198283814/againstpoliti-20)Oxford University Press, 1991

Gary King, Robert O. Keohane and Sidney Verba - Designing Social Inquiry (http://www.amazon.com/exec/obidos/ASIN/0691034710/againstpoliti-20)Princeton University Press, 1994


Austrian Methodology


Frank H. Knight - Professor Mises and the Theory of CapitalEconomica, 1941

Robert Nozick - On Austrian MethodologySynthese 36, 1977: 353-392

Gerard Radnitzky - Reply to Hoppe: On Apriorism in Austrian Economics (http://www.radnitzky.de/pub/1995d.pdf) (pdf)Radnitzky, Gerard and Bouillon, Hardy (eds.), Values and the Social Order (2 Volumes), Aldershot (England): Avebury 1995: 189-194.

Bryan Caplan - Why I Am Not An Austrian Economist (http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm)

Harold Demsetz - Block's Erroneous Interpretations (http://www.mises.org/journals/rae/pdf/rae10_2_6.pdf) (pdf) Review of Austrian Economics, Vol. 10, No. 2, 1997

Paul B. Trescott - Murray Rothbard Confronts Adam Smith (http://www.mises.org/journals/qjae/pdf/qjae1_1_4.pdf) (pdf)Quarterly Journal of Austrian Economics, Vol. 1, No. 1, 1998

Spencer J. Pack - Murray Rothbard's Adam Smith (http://www.mises.org/journals/qjae/pdf/qjae1_1_5.pdf) (pdf)Quarterly Journal of Austrian Economics, Vol. 1, No. 1, 1998

Thomas Mayer - Boettke's Austrian Critique of Mainstream Economics: An Empiricist's ResponseCritical Review, Vol.12, Nos.1-2, Winter-Spring 1998

Warren J. Samuels - Murray Rothbard's Austrian Perspective on Warren J. Samuels the History of Economic ThoughtCritical Review, Vol.12, Nos.1-2, Winter-Spring 1998

Bryan Caplan - The Austrian Search for Realistic Foundations (http://www.gmu.edu/departments/economics/bcaplan/ausfin2.doc) (doc) Southern Economic Journal 65(4), April 1999: 823-838

Nicolai Foss - Austrian Economics and Game Theory: a Stocktaking and an Evaluation (http://www.gmu.edu/rae/archives/VOL13_1_2000/foss.pdf) (pdf)Review of Austrian Economics, 13: 41-58, 2000

Peter Hans Matthews and Andreas Ortmann - An Austrian (Mis)Reads Adam Smith: A Critique of Rothbard as Intellectual Historian (http://home.cerge.cuni.cz/Ortmann/Papers/08Rothbardpaper.pdf) (pdf)October 1999, revised January 2000.

Bryan Caplan - Probability, Common Sense, and Realism: A Reply to Hülsmann and Block (http://www.gmu.edu/departments/economics/bcaplan/sejreply.doc) (doc)Quarterly Journal of Austrian Economics 4(2), Summer 2001: 69-86.

Bryan Caplan - Economic Calculation, Quantitative Laws, and the"Impossibility" of Socialism (http://www.gmu.edu/departments/economics/bcaplan/econcalc1.doc) (doc) June, 2002

Joe Dunsmore - Why We Can't Associate Too Closely with the Austrians (http://anti-state.com/article.php?article_id=381)Anti-State.com, January 31, 2003

Arnold Kling - The Sect of Austrian Economics (http://www.techcentralstation.com/111103C.html)Tech Central Station, November 11, 2003The


Austrian Theory of the Trade Cycle


Gordon Tullock - Why the Austrians Are Wrong About Depressions (http://www.mises.org/journals/rae/pdf/rae2_1_4.pdf) (pdf)Review of Austrian Economics 2, 1987: 73-78

Gordon Tullock - "Reply to Comment by Joseph T. Salerno (http://www.mises.org/journals/rae/pdf/R3_12.pdf) (pdf)Review of Austrian Economics 3, 1989: 147-49.

Fractional Reserve Banking

Gene Callahan - The Libertarian Case Against Fractional-Reserve Banking (http://www.anti-state.com/article.php?article_id=416&PHPSESSID=4c2014f84f6e79664d12b1662 eefdce4)Anti-State.com, July 22, 2003


Moral and Political Philosophy


L.A. Rollins - The Myth of Natural Rights. Reviewed by Jorge Amador (http://www.againstpolitics.com/austrian_economics/amador_myth.htm)The Pragmatist: A Utilitarian Approach, Vol. 2, No. 1, September 1984

David Friedman - Some Brief Comments on Hoppe's Justification of the Private Property Ethic (http://www.daviddfriedman.com/Libertarian/On_Hoppe.html)Liberty Magazine, 1987

Hardy Bouillon - Libertärer Anarchismus - eine kritische Würdigung (http://www.gkpn.de/liberal3.htm)Aufklarung und Kritik, 1998

Bob Murphy and Gene Callahan - Hans-Hermann Hoppe’s Argumentation Ethic: A Critique (http://www.anti-state.com/murphy/murphy19.html) Anti-State.com, September 19, 2002

Frank van Dun - Against Libertarian Legalism: A Comment on Kinsella and Block (http://allserv.rug.ac.be/~frvandun/Texts/Articles/LibertarianLegalism.djvu) (DjVu)Journal of Libertarian Studies, Volume 17, Number 3, Summer 2003

Frank van Dun - Organised Chaos (http://allserv.rug.ac.be/~frvandun/Texts/Articles/Organised%20Chaos.htm)Lecture notes Libertarian Spring Convention, Leiden, April 3, 2004


Austrian Economists


Tom G. Palmer - Lew Rockwell's Vienna Waltz (http://www.libertysoft.com/liberty/features/61palmer.html) (comment) Liberty, September 1997

Ralph Raico - Mises and Monarchy (http://www.libertysoft.com/liberty/features/62raico.html) (retort)Liberty, November 1997

Tom G. Palmer - For Mises' Sake (http://www.libertysoft.com/liberty/features/63palmer.html) (riposte)Liberty, January 1998

Justin Raimondo - An Enemy of the State: The Life of Murray N. Rothbard (http://www.againstpolitics.com/austrian_economics/steele_rothbard.htm)Reviewed by David Ramsay Steele. Liberty, November, 2000

Jim Peron - Von Mises Washed in the Blood of Jesus (http://www.againstpolitics.com/austrian_economics/peron_mises.htm)Laissez Faire City Times, Vol. 6, No. 2, January 14, 2001


From Wikipedia:


Criticism

The main criticism of modern Austrian economics is that it lacks scientific precision. Austrian theories are not formulated in formal mathematical form, but using verbal logic. Mainstream economists believe that this makes Austrian theories too imprecisely defined to be clearly used to explain or predict real world events. Economist Bryan Caplan (http://en.wikipedia.org/wiki/Bryan_Caplan) noted that, "what prevents Austrian economists from getting more publications in mainstream journals is that their papers rarely use mathematics or econometrics." This criticism of the Austrian school is related to its rejection of the use of the falsificationism (http://en.wikipedia.org/wiki/Falsifiability) and empirical (http://en.wikipedia.org/wiki/Empirical) testing in social sciences in favor of self-evident axioms (http://en.wikipedia.org/wiki/Axiom) and logical reasoning.[3] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Caplan-2)
Another general criticism of the School is that although it claims to highlight shortcomings in traditional methodology, it fails to provide viable alternatives for making positive contributions to economic theory.[53] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-52) In his critique of Austrian economics, Caplan stated that Austrian economists have often misunderstood modern economics, causing them to overstate their differences with it. He argued that several of the most important Austrian claims are false or overstated. For example, Austrian economists object to the use of cardinal utility (http://en.wikipedia.org/wiki/Cardinal_utility) in microeconomic (http://en.wikipedia.org/wiki/Microeconomic) theory; however, microeconomic theorists go to great pains to show that their results hold for all monotonic (http://en.wikipedia.org/wiki/Monotonic) transformations of utility, and so are true for purely ordinal preferences (http://en.wikipedia.org/wiki/Ordinal_utility).[3] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Caplan-2) He has also criticized the school for rejecting on principle the use of mathematics (http://en.wikipedia.org/wiki/Mathematics) or econometrics (http://en.wikipedia.org/wiki/Econometrics). In response, Austrians argue that neoclassical economists fail to recognize hidden (and not necessarily true) assumptions they make to arrive to tractable mathematical models.[54] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-53) Austrians also claim that econometrics is fundamentally based on mathematically and logically invalid summation and averaging of demonstrably non-additive personal utility functions, and therefore is subjective.[55] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-54)
There are also criticisms of specific Austrian theories. For example, Nobel laureate and neo-Keynesian (http://en.wikipedia.org/wiki/Neo-Keynesian_Economics) economist Paul Krugman (http://en.wikipedia.org/wiki/Paul_Krugman) argued that Austrian business cycle theory implies that consumption would increase during downturns, and cannot explain the empirical observation that spending in all sectors of the economy fall during a recession.[56] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Krugman-55) Austrian theorists argue a recession can result from a monetary contraction or a "credit crunch (http://en.wikipedia.org/wiki/Credit_crunch)" that causes the investment boom not to shift but simply to disappear.[57] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Gordon-56) Nobel laureate Milton Friedman (http://en.wikipedia.org/wiki/Milton_Friedman), after examining the history of business cycles in the US, concluded that "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false."[58] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Friedman1969-57)[59] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-Friedman93-58)
Economist Jeffrey Sachs (http://en.wikipedia.org/wiki/Jeffrey_Sachs) states that when comparing developed free-market economies, those that have high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He asserts that poverty rates are lower, median income is higher, the budget has larger surpluses, and the trade balance is stronger (although unemployment tends to be higher). He concludes that von Hayek was wrong when he said that high taxation would be a threat to freedom; but rather, a generous social-welfare state leads to fairness, economic equality, international competitiveness, and strong vibrant democracies.[60] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-59) In response to Sachs' article, William Easterly (http://en.wikipedia.org/wiki/William_Easterly) states that Hayek, writing in 1944, correctly recognized the dangers of large-scale state economic planning. He also questions the validity of comparing poverty levels in the Nordic countries and the United States, when the former have been moving away from social planning toward a more market-based economy, and the latter has historically taken in impoverished immigrants. Easterly also argues that laissez-faire countries were the leaders of "the ongoing global industrial revolution" which is responsible for abolishing much of the world's poverty.[61] (http://en.wikipedia.org/wiki/Austrian_School#cite_note-60)

[wrppdarndyrfngr]

Good list. I plan on reading "Bailout Nation", "Animal Spirits" and "Lecturing Birds on Flying"



The 10 books to help you understand the crisis
(http://www.ritholtz.com/blog/2009/06/the-10-books-to-help-you-understand-the-crisis/)Cardiff Garcia
05 Jun 2009
Not surprisingly, the number of books about the causes and consequences of the financial crisis has proliferated in recent months. To help our readers keep up, Financial News has compiled the following list of 10 finance books released this year along with brief synopses and links to reviews and excerpts.

In alphabetical order by title:

“Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism”, by George Akerlof and Robert Shiller. Drawing on insights from psychology and history, two economists advocate for macroeconomic policies that account for human emotion and irrationality. Reviewed by The Economist (http://www.economist.com/finance/displaystory.cfm?story_id=13362834) :

“Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook
the World Economy” by Barry Ritholtz. Ritholtz, a quantitative researcher who runs one of the best-read finance blogs, The Big Picture, goes after the regulators, politicians and financiers he deems responsible for the crisis. Reviewed by Bloomberg Europe (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amoZezYyYwFA):

“Chasing Alpha: How Reckless Growth and Unchecked Ambition Ruined the City’s Golden Decade”, by Philip Augar. The author’s third installment about London’s City laments the Americanization of finance and the cozy relationship between investment bankers and New Labour politics during the City’s boom years. A Q&A with the author in Financial News (http://www.efinancialnews.com/homepage/content/1054016326):

”Fool’s Gold: How the Bold Dream of a Small Tribe at JP Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe”, by Gillian Tett. The Financial Times journalist traces the roots of the crisis back to the invention of credit derivatives by a small team at JP Morgan. Reviewed by The Independent (http://www.independent.co.uk/arts-entertainment/books/reviews/fools-gold-by-gillian-tett-1676686.html):

“Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis”, by John Taylor. This short book by the Stanford economics assigns the blame for the crisis to flawed monetary policy by the US Federal Reserve. A review in the Financial Times (http://www.ft.com/cms/s/2/b6b56bd6-278b-11de-9b77-00144feabdc0.html):

“House of Cards: A Tale of Hubris and Wretched Excess on Wall Street”, by William Cohan. Former investment banker Cohan, who also authored a book about the history of Lazard, chronicles the ten days leading to the collapse of Bear Stearns. Reviewed here by The Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032000979.html).

“Lecturing Birds on Flying: Can Mathematical Theories Destroy the Financial Markets?” by Pablo Triana, with foreword by Nassim Nicholas Taleb. The author, a former derivatives consultant, takes aim at the quantitative models and financial theory that he deems responsible for some of history’s market failures, including the current one. The book is scheduled to be released June 9, but here is a link to its Amazon page (http://www.amazon.com/Lecturing-Birds-Flying-Mathematical-Financial/dp/0470406755)

“Lords of Finance: The Bankers Who Broke the World”, by Liaquat Ahamed. A history book with obvious contemporary parallels, it chronicles how the decisions of the world’s four most powerful central bankers in the aftermath of the first World War laid the foundations for the Great Depression. Reviewed by the New York Times (http://www.nytimes.com/2009/02/15/books/review/Nocera-t.html):

“The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street”, by Justin Fox. Populating this story with some the most influential economists and financiers of the twentieth century, the business and economics columnist for Time Magazine describes the rise and fall of the efficient markets hypothesis. Reviewed by Barron’s here (http://online.barrons.com/article/SB124363560053267777.html)

“Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street”,
by Kate Kelly. The reporter for the Wall Street Journal places the demise of Bear in the context of its deserved reputation for toughness and arrogance. An excerpt from the book (http://online.wsj.com/article/SB124182740622102431.html):

[wrppdarndyrfngr]

http://dmarron.files.wordpress.com/2009/06/tracking-the-tarp.jpg?w=500&h=340Tracking the TARP (http://dmarron.com/2009/06/10/tracking-the-tarp/) by Donald Marron (http://dmarron.com/)


The TARP continues to grab headlines, so I thought it would be useful to summarize how the TARP money has been used to date.
As you may recall, the Troubled Asset Relief Program (TARP) created a pool of $700 billion that the Treasury Secretary could use to stabilize the financial sector. The following chart summarizes the TARP transactions that have already occurred (dark blue) and any additional funds that Treasury has announced for each program (grayish):


http://dmarron.files.wordpress.com/2009/06/tracking-the-tarp.jpg?w=500&h=340

As the chart illustrates, Treasury has announced plans for about $645 billion of the TARP money, of which $435 billion has been committed to specific transactions. But the most interesting facts involve the specific programs:

Three firms — AIG, Bank of America, and Citigroup — account for the majority of TARP investments in the financial sector. Those three firms have received $165 billion thus far, more than the $149 billion received by all other financial firms.
The comparison is even starker if we consider repayment. Banks are planning to repay about $70 billion in TARP investments (a bit less than $2 billion has already happened, with another $68 billion under consideration by banks that “passed” the stress test). If that happens, then the outstanding TARP investment to the rest of the financial sector will fall to $79 billion, only slightly more than what AIG has received by itself.
The auto industry has been the other major TARP recipient, with transactions now totaling about $85 billion. These amounts have primarily gone to Chrysler and GM (both the pre- and post-bankruptcy versions), but the auto suppliers and GMAC have also been recipients.
As yet, the other TARP programs have received relatively little money from TARP. Efforts to support consumer and business lending through the Term Asset-Backed Securities Lending Facility (TALF) have received $20 billion of TARP money thus far, and $15 billion has been allocated for efforts to encourage modifications to home mortgages.
The other two programs have yet to get off the ground. One program — purchasing loans backed by the Small Business Administration (SBA) appears to be in progress, while the Public-Private Investment Partnership to purchase troubled assets has experienced some well-known difficulties.Disclosure: I have no investments in any TARP recipients.

A Note on Data and Sources: The official web site for TARP (http://dmarron.com/2009/06/10/tracking-the-tarp/www.financialstability.gov) has a wealth of information, including TARP transaction reports, testimonies, contract terms, etc. The New York Times also has a page tracking the program: “Tracking the $700 Billion Bailout” (http://projects.nytimes.com/creditcrisis/recipients/table) as does ProPublica (http://bailout.propublica.org/initiatives/2-emergency-economic-stabilization-act). You will find small differences in numbers between these sources, depending on when they were last updated and how they categorize certain TARP programs (e.g., $25 billion of the intended PPIP would be routed through the TALF). There are also subtleties about the difference between money that Treasury has actually spent vs. guarantees that it has provided. For example, Citigroup has received $45 billion in cash and has received a guarantee worth up to $5 billion. So I report Citigroup as receiving $50 billion

[asmolitor]

oh hey, look what i found on the THIRD page of politics forum threads. sigh. i guess i'll have to revive it.

http://www.marketwatch.com/story/us-may-lose-23-billion-cit-investment-wsj?siteid=rss

The U.S. Treasury estimates the government could lose its entire $2.3 billion investment in troubled lender CIT Group Inc
---
The loss would mark the first for the TARP program, according to the report. CIT is now scrambling to raise $2 billion in rescue financing from its debt holders, and may file for bankruptcy if that financing does not come through, according to the report.

http://finance.yahoo.com/news/Chinas-growth-accelerates-to-apf-988988150.html?x=0&.v=2

China's economic growth accelerated to 7.9 percent from a year earlier in the second quarter amid a stimulus-fueled surge in consumer spending, factory output and investment, the government reported Thursday.


The growth rate for the world's third-largest economy was up from the previous quarter's 6.1 percent, the National Bureau of Statistics reported. The government's growth target for this year is 8 percent.


The statistics agency's spokesman warned, however, that a full-fledged recovery still is not firmly established.


http://finance.yahoo.com/news/Fed-Raises-Outlook-For-US-ibd-633742565.html?x=0&.v=1

The Fed expects GDP to shrink 1%-1.5% this year vs. its April forecast for a 1.3%-2% contraction.
---
A tepid recovery should start soon, leading to solid growth of 2.1%-3.3% in 2010, slightly better than its prior range. Growth would then accelerate further in 2011.

[saysmydoctor]

Fact check what I posted in Obama: Is he doing a good job? thread.

[asmolitor]

Fact check what I posted in Obama: Is he doing a good job? thread.

will do, most of my reply in that thread was a sarcastic reply to a reagan-fixed-everything type. which would be partially true, if his legacy stopped in 1988.

Firstly, he isn't giving money to people. Huge misconception of the stimulus. The stimulus is not designed to be handouts, never was, never will be. If you are going to discuss what the government is doing and say you disagree with it in principle, fine. If you are going to misrepresent what the government is doing, you will be corrected. The stimulus money goes to numerous projects, numerous programs, with the intention of creating jobs. People work jobs, people make the money, people spend the money. That's how the economy really works.

the stimulus does hand money to people, in the form of tax cuts - but if someone disagrees with the "handout" that stems from the tax cuts, probably not a good idea to be an obama critic. since you know, the tax cuts are only present to pacify the GOP base in the house, and even then, not a single one voted for it. even though numerous GOP representatives campaigned for the tax cut addition for the weeks leading up to the vote.

for things non tax-cut related, you're spot on. i was opposed to any sort of tax cut in the stimulus, because given the size of the bill, adding an extra $1 to a million people's paychecks would have less of a substantive effect than a $1 million infrastructure project. even though the empirical evidence seems to suggest that the government spending multiplier is lower the tax cut multiplier - it's a matter of what issue you want to tackle: consumer spending or unemployment. i figured that keeping a supply of jobs available to counteract the unemployment rate would inevitably lead to increased consumer spending from new hires and people who were able to keep their jobs.

but i guess all things considered, a stimulus with a spending/tax-cut hybrid isn't exactly the worst thing to combat the current climate, even though i disagree.

Secondly, I love the fiscal conservative doublespeak here. The business caused the crisis, why would I trust them to 'trickle down' the money? They never have. The industry is also a pretty ambiguous term considering it is pretty much all inclusive, the laborers and the executives. Hell, look at the banks (read: businesses) we have given money. They are hoarding the capital and refuse to lend it, which is their function in the economy.

haha, i love the "business can do no wrong" talking point from the right. bankruptcies, corporate scandals, outsourcing, etc. obviously can't exist.

from bad banking models to bad manufacturing models, of course giving business the reigns makes sense. 1929-1931? perfect comparision to show the robust gains from business control.

Thirdly, Reagan did what? Fixed an economic crisis that had never been encountered before? Stagflation is a term that came about after what happened because of how rare the situation was. Recessions rarely come with high inflation. Recessions are natural occurrences in the business cycle. The supply shock (oil crisis)--not so common. Anyway, supply side economics is silly.

i never get how people could ever praise reagan if they knew the simplest concept of macroeconomics. sure, reagan decreased inflation during his terms from ~12% to ~4%, if you completely ignore the ramifications that would stem from massive deficit spending in the future. and if anything, to tie it to obama, the stimulus (and the inflation pressures it will inevitably create) may counteract the deflationary pressures the economy has been facing for the last year.

http://upload.wikimedia.org/wikipedia/en/7/79/Supply-demand-right-shift-supply.svgWhat Reagan did was made everything affordable (and I'm simplifying it and here's where I might make a mistake, someone correct me). Consumer confidence was low, so they won't buy anything. So you increase the buying power. Coupled with huge deregulation, tax cuts, yes, people had money on hand, but the common misconception is Reagan cut government spending when instead it was Reagan that made government spending/deficit spending the thing to do. It was Reagan who raided the Social Security vaults that caused us to owe I think something to the effect of $3 trillion to ourselves (could be wrong about that number). It was Reagan who also expanded defense spending so much that it bankrupted us and his debt sits as the foundation to modern debt we have now. What makes it ironic that Reagan's defense spending is basically exactly what Barney Frank has described recently--weaponized Keynesanism. I like how it's never 'government spending' when it concerns the defense budget. He may have cut spending everywhere else but the Defense Budget since Reagan was president has not shrunk to pre-Reagan proportions. Stop glorifying Reagan. He did it. (http://www.nytimes.com/2009/06/01/opinion/01krugman.html)

spot on, i can't really add anything to this part. kudos.

[saysmydoctor]

Is a tax cut a handout? Then wouldn't republicans be for handouts? Also, I guess I don't consider a tax cut as much as a 'handout' as like a rebate check (Bush).

I feel like I've come full circle, haha, I'm so stoked for my economics course.

[asmolitor]

Is a tax cut a handout? Then wouldn't republicans be for handouts? Also, I guess I don't consider a tax cut as much as a 'handout' as like a rebate check (Bush).

I feel like I've come full circle, haha, I'm so stoked for my economics course.

well, it's a matter of semantics, really. it's the government letting you keep some of the money you would've paid in. in a way, it's giving you access to money you wouldn't have had otherwise, so i'd call it a "handout" of sorts even though it's a gray area.

and yeah, the republican addition to the stimulus debate was "more tax cuts" - that's the concession obama made to garner more GOP house support. if someone's using the stimulus as a "handout" angle, they might as well blame the republicans for that one. or at least, share the blame between obama and the GOP.

and i wouldn't get too stoked, depending on the class. if it's intro micro - there's usually not a lot of real world application, just the study of an individual consumer/firm's choices. intro macro is usually the interesting one with direct relevance - i.e. inflation, interest rates, the federal reserve, monetary/fiscal policy, keynes/friedman. i liked some of micro for the personal consumer utility stuff i've grown to love, but macro's definitely the better of the two.

[asmolitor]

http://finance.yahoo.com/news/Paulson-says-he-pressured-apf-4172060968.html?x=0&sec=topStories&pos=main&asset=&ccode=

WASHINGTON (AP) -- Former Treasury Secretary Henry Paulson says he pressured Bank of America last year to go through with its plans to buy Merrill Lynch but didn't tell the bank's chief to hide losses from shareholders.

i find half of paulson's statement plausible.

[saysmydoctor]

The whole thing sounds believable.

[wrppdarndyrfngr]

Top 25 Economics Blogs According To The Wall Street Journal (http://online.wsj.com/article/SB124768581740247061.html)

[saysmydoctor]

lolololol @ mankiw

[wrppdarndyrfngr]

ya i have him on my RSS but all he does is link to fellow republicans does not even do commentary anymore.

I love how the WSJ put their own blog in there too

[saysmydoctor]

I found a few that I might follow. Calculated Risk, Economix, and OMB.

[asmolitor]

The whole thing sounds believable.

i don't buy the second half, personally.

[saysmydoctor]

I didn't read that as "didn't tell," but as "did tell."

I definitely understand the skepticism now.

[asmolitor]

i watched some special on PBS about the whole merrill/BofA/Fed thing a few weeks ago; think it might have been an episode of frontline.

basically, when ken lewis (BofA CEO) was asked about paulson's involvement, the interview got quite awkward enough to warrant some raised eyebrows.

EDIT: found the whole episode here (http://www.pbs.org/wgbh/pages/frontline/breakingthebank/). worth the watch.

[loveisdead]

Interesting news from the market concerning citi (http://www.cnbc.com/id/31947429), General Electric (http://www.cnbc.com/id/31947430) and Bank of America (http://www.cnbc.com/id/31947428). I'm really curious to see how the market will finish out a much needed strong week.

[asmolitor]

financial companies "bailing out"... financial companies?

http://finance.yahoo.com/news/CIT-in-talks-with-Goldman-rb-4025552110.html?x=0&sec=topStories&pos=main&asset=&ccode=

NEW YORK (Reuters) - CIT Group Inc (NYSE:CIT - News) is in talks with JPMorgan Chase & Co (NYSE:JPM - News) and Goldman Sachs Group Inc (NYSE:GS - News) for short-term financing of $2 billion to $3 billion as it looks for ways to avoid a potential bankruptcy, a source close to the company said on Friday.

[wrppdarndyrfngr]

i have never heard of CIT till last week. I am sooo confused with this story.

[loveisdead]

i have never heard of CIT till last week. I am sooo confused with this story.
Same here. Very confused.
CNN says the stimulus is working (http://cnnwire.blogs.cnn.com/)

[loveisdead]

financial companies "bailing out"... financial companies?

http://finance.yahoo.com/news/CIT-in-talks-with-Goldman-rb-4025552110.html?x=0&sec=topStories&pos=main&asset=&ccode=
Hm. This is strange. I don't have a problem with it, just seems a little weird.

[asmolitor]

i have never heard of CIT till last week. I am sooo confused with this story.

honestly, me either. and it didn't help that certain web editors (marketwatch, cough) would insert the citigroup ticker in stories about CIT.

Hm. This is strange. I don't have a problem with it, just seems a little weird.

i figure it's a backdoor venture to doing all the i-banking for CIT in the future, or somehow superceding lending agreements CIT had with clients and making them either JPM or GS clients.

all things considering, for about ~$2 billion, possible access to over a million small-to-midsize businesses could be a steal. not as much of a steal as WaMu's deposits for the same price, but still.

Same here. Very confused.
CNN says the stimulus is working (http://cnnwire.blogs.cnn.com/)

the thing i never got, what how anyone could look at economic indicators and other stats, see a bottoming / "less bad" process, and not attribute it to one of the only things created to combat it. it's simplistic, but it still blows my mind that stopping a freefall can be effectively viewed as "everything's not completely better in 6 months! impeach!"

[loveisdead]

The impeachment calls blow my mind. It basically comes down to people being ignorant of the facts.

[loveisdead]

Dow is doing fine today. Oddly enoug the S&P is struggling.

[saysmydoctor]

financial companies "bailing out"... financial companies?

http://finance.yahoo.com/news/CIT-in-talks-with-Goldman-rb-4025552110.html?x=0&sec=topStories&pos=main&asset=&ccode=

hahahahahaahahaha amazing.

[asmolitor]

Dow is doing fine today. Oddly enoug the S&P is struggling.

30 versus 500. sometimes it happens due to the unique sector makeup of both.

[loveisdead]

All 30 stocks on the Dow were positive for the week.

[saysmydoctor]

http://www.newsweek.com/id/207390?from=rss
Why Washington Ignores an Economic Prophet

Stiglitz is really the Keynes of our time. The guy is a genius. Every time I read about him or anything he has written, I'm like "Holy shit, this seems to have a third eye."

[asmolitor]

some recent articles written by stiglitz, for funsies:

http://www.vanityfair.com/politics/features/2009/07/third-world-debt200907?currentPage=1
http://www.guardian.co.uk/commentisfree/2009/jun/12/america-corporate-banking-welfare

and a gem from december 2007, deriding the economic consequences of the bush administration:
http://www.vanityfair.com/politics/features/2007/12/bush200712

[Love As Arson]

The New Face Of Capitalism: Slow Growth, Excess Capital, and a Mountain of Debt (http://monthlyreview.org/0402editr.htm)

[asmolitor]

http://finance.yahoo.com/echarts?s=^DJI#chart2:symbol=^dji;r ange=3m;compare=^ixic+^gspc;indicat or=volume;charttype=line;crosshair= on;ohlcvalues=0;logscale=on;source= undefined (http://finance.yahoo.com/echarts?s=%5EDJI#chart2:symbol=%5Ed ji;range=3m;compare=%5Eixic+%5Egspc ;indicator=volume;charttype=line;cr osshair=on;ohlcvalues=0;logscale=on ;source=undefined)

you know, if no one's noticed, we're at a 3 month high.

EDIT: actually, after looking at the historical price closes on yahoo finance, this looks like the highest dow close since january 6th.

[saysmydoctor]

Stiglitz makes Bush seem somehow even worse than I already previously believed.

[loveisdead]

How the budget and deficit spending is gonna kill us.

http://www.cnbc.com/id/32008607

[saysmydoctor]

Not concerned with the deficit spending at all. I don't understand how these people are the same people who say you have to spend money to make money. Same basic concept at a macroeconomic level.

[wrppdarndyrfngr]

The Fed’s Exit Strategy (http://online.wsj.com/article/SB100014240529702039469045743000506 57897992.html) By BEN BERNANKE (http://online.wsj.com/search/search_center.html?KEYWORDS=BEN+BER NANKE&ARTICLESEARCHQUERY_PARSER=bylineAND )

seems resonable but I dont know how much I trust them to tighten monetary policy at the correct time considering how much Greenspan lossened monetary policy at the incorrect time.

Though Bernanke is not Greenspan so we shall see.

[asmolitor]

http://finance.yahoo.com/news/Goldman-buys-back-TARP-apf-1707764150.html;_ylt=Amsk1IHH49E_4J K8g2UqA1m7YWsA?x=0&sec=topStories&pos=5&asset=&ccode=

Goldman already paid $318 million in preferred dividends on the $10 billion in TARP funds it received, which it repaid in full last month.
Combined with the warrant repurchases, Goldman has paid the government $1.42 billion, for an annualized return of 23 percent.

[wrppdarndyrfngr]

fuck 23% is wayyyy more than I expected

[My Broken Fever]

I find it really disturbing that regardless of what happened over the course of the last year, banks are yet again starting to hand out ridiculously high bonuses. I'm afraid nothing will change and we'll be in the same (or possibly worse) position in a few years.

[saysmydoctor]

The bailouts would have been perfect if it came along with a shitton of trustbusting.

[asmolitor]

fuck 23% is wayyyy more than I expected

well, goldman sachs is goldman sachs. i doubt the rest of the banks will be able to produce anything similar.

I find it really disturbing that regardless of what happened over the course of the last year, banks are yet again starting to hand out ridiculously high bonuses. I'm afraid nothing will change and we'll be in the same (or possibly worse) position in a few years.

banks will be banks.

The bailouts would have been perfect if it came along with a shitton of trustbusting.

if there was ever a perfect plan for a bailout, everyone would love the concept.

[saysmydoctor]

I just think it was bad economics on the Obama and Bush Administration. The only real obligation on the banks was to pay the money back. I don't understand why GM and Chrysler were told they need to restructure in order to receive any money from us. The bailouts didn't solve anything. I acknowledge the necessity of the bailouts, I think they were needed. It's like putting a piece of gum into a small leak on a boat.

If we do come out of this recession, I kind of think we will fall into another a few years later simply because we haven't really fixed it.

[wrppdarndyrfngr]

http://img.skitch.com/20090723-tqe1p3mrerbchcgqwwhks59yff.jpg

holy fuck

[loveisdead]

I really don't understand that graph at all. I'm very confused.

[wrppdarndyrfngr]

I really don't understand that graph at all. I'm very confused.

here is the link to the article : http://blogs.wsj.com/economics/2009/07/16/a-look-inside-feds-balance-sheet-71609-update/

[loveisdead]

Thanks.

[saysmydoctor]

That article didn't make it any easier.

[asmolitor]

seems like we've had a lot of ~9000 area dow testing in the last few days, and we've fought off every single downside movement.

http://finance.yahoo.com/q/bc?s=^DJI&t=5d (http://finance.yahoo.com/q/bc?s=%5EDJI&t=5d)

[wrppdarndyrfngr]

http://fridayinvegas.blogspot.com/2009/07/we-fear-what-we-dont-understand.html

Great blog post about High Frequency Trading, front running, and flash trading,

[saysmydoctor]

Heard the new home sales went by a huge margin. Semi-good news, even that's like 1/7 of the housing market.

[saysmydoctor]

http://paul.kedrosky.com/archives/2009/07/qotd_good_thing.html

Oh lordy.

[timb89]

And I think you need to stop complaining about taxes. Do you even make enough money a year that this will effect you? I doubt it.

whats the tax threshold in the states?

[saysmydoctor]

Think even in the highest bracket, the max is 34%. One of the lowest tax rates in the world.

[asmolitor]

http://finance.yahoo.com/news/New-jobless-claims-rise-more-apf-2834048300.html;_ylt=AvpMuWXNpWZxXX iMWpELWKK7YWsA?x=0&sec=topStories&pos=7&asset=&ccode=


The Labor Department said Thursday that the initial claims for unemployment aid rose by 25,000 to a seasonally adjusted 584,000, above analysts' estimates. But the figure is below the 617,000 new claims filed in late June, before the numbers began to be distorted by a shift in the timing of temporary auto shutdowns.


The four-week average of claims, which smooths out fluctuations, fell to 559,000, its lowest level since late January. And the number of people remaining on the jobless benefit rolls unexpectedly fell to 6.2 million from 6.25 million, the lowest level since mid-April.

color me confused as to the conflicting unemployment reports having this effect on the market today. a better explanation of my confusion in the general thread (http://www.absolutepunk.net/showthread.php?p=49930982#post49930 982).

[asmolitor]

i'm assuming more than a few people are pleased to hear this (http://finance.yahoo.com/news/Exxon-profit-tumbles-66-rb-321506918.html?x=0&sec=topStories&pos=1&asset=&ccode=):


Exxon profit tumbles 66 percent, misses Street view
---
Exxon, which raked in record profits last year, has seen earnings wither as crude oil prices have fallen by more than half from a year ago. Refiners have also seen margins under pressure as weakness in industrial demand for fuels like diesel has caused a buildup in stockpiles.
"It looks disappointing," said Phil Weiss, an analyst at Argus Research. "They missed on margins and production."

[loveisdead]

Good. Fuck them. Their stock didn't really take that bad of a blow today though.

[kwsqd]

It's Exxon, they'll be fine.

[saysmydoctor]

Irrelevant blimp

[kwsqd]

Pretty much.

Impressive rally today, it'd be nice if the market would go up again tomorrow to close the month on a high note.

[asmolitor]

http://www.pionline.com/apps/pbcs.dll/article?AID=/20090727/DAILYREG/907279989&AssignSessionID=173361859983671

The SEC today made permanent an emergency rule to ban abusive “naked” short-selling, according to an SEC statement.


The temporary rule, adopted in October during a steep drop in the equity market, was set to expire Friday.


The new Rule 204 requires broker-dealers to purchase or borrow securities promptly to deliver on a short sale, the statement said.


Naked short sales, when an investor sells shares without first having borrowed them, “is permitted because there is no legal requirement that a short seller actually borrow the shares before effecting a short sale,” according to the SEC statement. But the rule “requires that the broker-dealer, as opposed to the seller, ‘locate’ an entity that the broker reasonably believes can deliver the shares” in time for settlement.


good. naked short selling can be attributed to the accelerated stock price drops from last september, particularly in financial stocks.

Good. Fuck them. Their stock didn't really take that bad of a blow today though.

eh, it's been priced in for a while. oil / natural gas prices along with demand have been pretty low in the last year.

it's ok though. they still turned a profit of $4 billion this quarter. could've bought two sets of WaMu deposits with that.

[asmolitor]

http://krugman.blogs.nytimes.com/2009/07/31/its-a-postmodern-recovery/

Given today’s GDP release, which showed the economy contracting slowly in the second quarter, it’s a good bet that the recession has either already ended or will end soon — by which I mean that when the NBER business cycle dating committee retroactively makes its pronouncement of when the recession ended, it will put the date in the 3rd quarter, probably in July or August.


Unfortunately, as I’ve been warning for a long time (http://krugman.blogs.nytimes.com/2008/02/10/postmodern-recessions/), the recovery won’t feel like one. Postmodern recoveries tend to include a long period during which GDP is growing but the job market continues to worsen:

http://www.princeton.edu/%7Epkrugman/two-recessions.png

[loveisdead]

http://krugman.blogs.nytimes.com/2009/07/31/its-a-postmodern-recovery/



http://www.princeton.edu/%7Epkrugman/two-recessions.png
Still, :appl:

[loveisdead]

Market might actually be better than I thought this week. That would be so nice. Most experts are prediciting a pretty big August. If we're able to break 10k by the end of it that would be huge going into the fall.

[asmolitor]

http://www.thestreet.com/tsc/common/images/storyimages/0724_bankfailure_mapc.html

bank failure map. what uppppppp wisconsin. even though m&i bank tried its hardest.

sorry, georgia.

[loveisdead]

Bought time you came back. I'm bored to hell at work and you're the only person to come post anything of interesting in this forum today. Fucking weekends blow around here.

[loveisdead]

http://www.cnbc.com/id/32241678
Interesting article on how long the bull market will last.

[Stormtrooper]

My economic advice: Don't have kids.

[asmolitor]

Market might actually be better than I thought this week. That would be so nice. Most experts are prediciting a pretty big August. If we're able to break 10k by the end of it that would be huge going into the fall.
http://www.cnbc.com/id/32241678
Interesting article on how long the bull market will last.

looks like we'll start august with a bang - futures overnight data might give the dow a triple digit gap up at the open. why? no idea, really.

although ford possibly posting a monthly sales increase for the first time in two years, plus favorable construction data might do it.

[asmolitor]

http://www.marketwatch.com/story//job-losses-could-be-fewest-in-nearly-a-year-2009-08-02

WASHINGTON (MarketWatch) -- Nearly 6 million U.S. nonfarm payroll jobs have been lost in the past year, but the tsunami of job destruction seems to be finally petering out.



The government will report on the July labor market on Friday, the highlight of a very busy week on the economic calendar. Economists surveyed by MarketWatch expect that "only" 275,000 jobs were lost in July on a seasonally adjusted basis, the fewest since last August and significantly lower than the 467,000 lost in June.


if that number has any validity to it come friday, that would be pretty incredible. and considering there's rumblings about the recession ending in the next few weeks (though we won't technically know for a few months) - the recent "rally" could have another leg behind it.

[loveisdead]

looks like we'll start august with a bang - futures overnight data might give the dow a triple digit gap up at the open. why? no idea, really.

although ford possibly posting a monthly sales increase for the first time in two years, plus favorable construction data might do it.
Foreclosures went down and Europe's stocks hit a one year high. We're going to open high as hell today.

[saysmydoctor]

That Krugman explanation is kind of what I figured, considering the unemployment projections. If the recession ends say next quarter, the unemployment will probably continue to 'rise,' so to speak, until maybe next March/April, I'd imagine? The stimulus would have reached its year mark and considering it's a two year plan, I'd imagine that's the point when we'd see unemployment begin to drop, at the half point of the stimulus plan.



/amateur opinion

[loveisdead]

Sounds pretty accurate to me. Market is doing well but I expected it t be doing even better.

[loveisdead]

http://www.cnbc.com/id/32266340

[loveisdead]

Holy shit the stock market will not quit.

[asmolitor]

heh, i sold out of a few things yesterday because i figured s&p 1000 resistance would be pretty strong until some really, really substantive positive numbers come in.

[asmolitor]

Morgan Stanley repurchases TARP warrants (http://finance.yahoo.com/news/Morgan-Stanley-repurchases-apf-807078386.html?x=0&sec=topStories&pos=5&asset=&ccode=)

NEW YORK (AP) -- Morgan Stanley said Thursday it paid $950 million to buy back warrants from the government that could have eventually been converted to common shares in the bank.



New York-based Morgan Stanley issued the warrants to the Treasury Department as part of the loan package it received under the Troubled Asset Relief Program.


As part of the program, Morgan Stanley received $10 billion in funding from the government to help bolster its balance sheet as credit markets essentially shut down. In exchange, the government received preferred shares in Morgan Stanley and the warrants to purchase common shares.


The government launched the program at the height of the credit crisis, shortly after Morgan Stanley's competitor Lehman Brothers Holdings Inc. collapsed. Hundreds of banks participated in the $700 billion program.


In June, Morgan Stanley repaid the $10 billion loan, eliminating the outstanding preferred shares.


Between the repurchase of the warrants and dividends paid on the preferred shares, Morgan Stanley paid the government $1.27 billion.


... did the government just claim a 12.7% return on Morgan Stanley? that would be like 14-16% annualized since TARP. government's a smart investor after all?

[saysmydoctor]

Isn't that the business of banks and loaning, which is basically what the government was doing? You charge interest, essentially, correct?

[asmolitor]

Isn't that the business of banks and loaning, which is basically what the government was doing? You charge interest, essentially, correct?

correct. it validates the fact that TARP/bailouts weren't just "lost" money and had profit potential as originally forecasted.

[saysmydoctor]

Exactly, I just wanted to reiterate the point that this is a big ol' DUH.

[asmolitor]

oh i know, it's just a complete reversal of the general opinion that the bailouts were handouts and money that was never coming back. in MS' case, the money not only came back, it came back with a profit for taxpayers - like the program said could happen initially.

[asmolitor]

hold on there, dip in the unemployment rate:

Why Job Creation Will Be 'Iffy' In The Coming Recovery (http://finance.yahoo.com/news/Why-Job-Creation-Will-Be-Iffy-cnbc-3174494677.html;_ylt=Am3ngP4ZFiN91A 574WN.42a7YWsA;_ylu=X3oDMTE1b3BjNzk 2BHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsaw N3aHlqb2JjcmVhdGk-?x=0&sec=topStories&pos=1&asset=&ccode=)

[saysmydoctor]

Bet the counterargument from the GOP is the amount of money spent doesn't really quantify a .1% dip six months.

[saysmydoctor]

I just got my economics textbook in the mail.

If it wasn't thick enough, it comes with a Microeconomics AND a Marcoeconomics study guide. Along with an Aplia disc. Fuck my life, what have I gotten myself into.

[asmolitor]

haha, i would venture that graphs take up a lot of space.

[wrppdarndyrfngr]

god i love/hate the WSJ:


Jobless Rate Challenges Fed Outlook

(http://feedproxy.google.com/~r/wsj/economics/feed/~3/hLlp_8eFExE/)The unexpectedly favorable turn in the July jobs report Friday is making some wonder if the Federal Reserve overestimated how bad unemployment will get in the U.S., which could have implications for its policy outlook.

OMG THEY GOT ONE MONTH WRONG BECAUSE IT WAS FUKCING BETTER THAN EXPECTED THEREFORE ALL OF THEIR FORECASTS AND PLANS ARE WRONG BECAUSE OF ONE MONTH

XX

[wrppdarndyrfngr]

http://dmarron.files.wordpress.com/2009/08/ue-july.jpg

[saysmydoctor]

What is the expanded unemployment rate? That's a new term.