Financial topics

[aedens]

H - http://www.reuters.com/article/2012/09/ ... AM20120902
O - It feels like living through a high speed rerun of the 1920's scandals
http://www.theaustralian.com.au/nationa ... 6457049108
http://generationaldynamics.com/forum/v ... 360#p15334

Soon http://generationaldynamics.com/forum/v ... 370#p15355 thread context

Are we to expect a positive note? "clearing "

H you are correct since they know not what cost truly is. Even socialists tend to tolerate a profitable company. But they will never tolerate for long a thriving economy. This is because growth entails a steady stream of bankruptcies. Socialists take this as a sign of capitalism's failure, and a signal to nationalize; but even theoretical advocates of capitalism often recoil from the prospect of failure opened up by entrepreneurial struggle.

My early thought was we should see some direction by the 22nd ... As I looked at it... bad then worse. This got me going from nominal values we are
aware of and beta numbers errant as lets say "seeking a rudder"

[Higgenbotham]

H - http://www.reuters.com/article/2012/09/ ... AM20120902

Sounds familiar, thanks for pointing it out. "3. The money not be distributed in a disproportionate manner such that the productive, tax generating capacity of the economy is diminished relative to the speculative or investment capacity of the economy." Written in the inflation thread in the past few days.

[aedens]

I think they can smartly clean it up with out being pudding heads.

[OLD1953]

Most of Europe and certainly China is heavily "socialist" by US standards, and they've done pretty well in the growth department.

https://www.cia.gov/library/publication ... 1rank.html

No system can grow without adjustments during growth, and when those adjustments aren't made, you get our housing crash or the tulip bubble or the "Great Leap Forward" that nearly starved China.

A single simple adjustment to our tax system would eliminate corporate pirates such as Bain, a simple regulation that tulip bulbs could not be used for security in amounts in excess of 10 guilders per bulb, a simple statement that government secured mortgages had to be held by the buyer for a minimum of five years before resale, a simple fact check on the PIIGS as they entered the EURO or a test set up for every five years to ensure the rules were being followed or ejection from the EURO, and the world would have been different. It really isn't rocket science, it's not even difficult, except that money talks, very very loudly.

China to miss growth targets. Late loan payments up hugely. Not looking good. Haven't heard the "Asia will rescue the world economy" meme for a while now.

http://www.bloomberg.com/news/2012-09-0 ... arget.html

[Marc]

Most of Europe and certainly China is heavily "socialist" by US standards, and they've done pretty well in the growth department.

https://www.cia.gov/library/publication ... 1rank.html

No system can grow without adjustments during growth, and when those adjustments aren't made, you get our housing crash or the tulip bubble or the "Great Leap Forward" that nearly starved China.

A single simple adjustment to our tax system would eliminate corporate pirates such as Bain, a simple regulation that tulip bulbs could not be used for security in amounts in excess of 10 guilders per bulb, a simple statement that government secured mortgages had to be held by the buyer for a minimum of five years before resale, a simple fact check on the PIIGS as they entered the EURO or a test set up for every five years to ensure the rules were being followed or ejection from the EURO, and the world would have been different. It really isn't rocket science, it's not even difficult, except that money talks, very very loudly.

China to miss growth targets. Late loan payments up hugely. Not looking good. Haven't heard the "Asia will rescue the world economy" meme for a while now.

http://www.bloomberg.com/news/2012-09-0 ... arget.html

Great analysis, OLD, in that, yes, establishing concrete limitations on financial liberties can help rein in excesses. I must respectfully mention that, given the "Third Turning spirit" that existed most notably from the mid-1980s to the mid-2000s, and the present Post-Unraveling spirit and actions of trying to keep a creaky financial machine running the way it recently did (as well as much of the Third Turning spirit still being with us), that what I unfortunately see are, shall I say, the inclination to have, on the part of administrative and judicial apparatus, "robustly liberal" interpretations of, say, the value relationship of tulips to guilders, or what it technically means to hold a mortgage on the books, etc.

In other words, it will likely take, I feel, that Fourth Turning climax occurring, and a new First Turning spirit of austerity — the latter which would include austere administrative/judicial interpretations of financial rules and regulations — to really rein things in. (It will last until we get, in the new Late Second Turning in the mid-to-late 21st century, a new wave of nihilistic neo-punk music and a new wave of tax revolts...and then things will really start to unravel again financial-wise, of course )

Thanks for sharing your valuable analysis. —Best regards, Marc

[Higgenbotham]

Interesting data which supports the perspective that the Third Turning hasn't ended. The graph is at the link.

Below, the first huge spike in margin debt versus GDP appears in 1999, the year we believe the mania for stocks commenced. The higher horizontal line represents the average for margin debt versus GDP from 1999 to present. The lower horizontal line represents the average level of margin from 1958 through 1998.

http://www.traders-talk.com/mb2/index.p ... pic=140931

[Marc]

Thanks also for sharing, Higgs — and when I decided to buzz by Neil Howe's Fourth Turning Forums recently, a contributor brought up the concept of "half turnings," while Howe himself did make mention not too long ago that a "Third Turning feel" was still largely with us. And, America today does still feel heavily to me like a Third Turning, despite the struggles of many families, the job losses, the many American households on food stamps (about 1 out of 6 today, I believe), etc. The crappy mainstream music that's popular today seems, more than anything, to "scream Third Turning," with its emphasis on bling, booty, badass-ism, image-obsession, materialism, etc. But, then again, all that vacuous, narcissistic music may partially be a sign of a Post-Unraveling as well, as it seems to be pushed hard by corporations in part to get our minds off the bad times and not to protest the powers-that-be.

But, just go visit an American enclosed shopping mall today (that is, one which is not a dying mall)...I'd have to say that it seems pretty darned Third Turning in that environment...almost too much so, and we haven't even quite hit the holiday shopping season yet.... —Best regards, Marc

[aedens]

"half turnings" Been a rational for some time but worth a review to the polarization of intent. We used to convey if the cup is half empty or half full the answer is yes. Point being nothing is changed. OLDS subtle point remains to cap and this reminds us of 1973 price supports or price caps so who has a choice for a clearing mechanism. On the extreme edges nothing can change since we note the effect as a dumbbell economy since moral hazzard is a calculation.
Not going to be be condusive to growth. I was reminded they could even care less anyway.
http://www.berylconsulting.com/sites/be ... 202010.pdf

[Higgenbotham]

US companies conduct fire drills in case Greece exits euro

Preparations include planning to fill trucks with cash to send into the country, reconfiguring computers to immediately handle new currency

By Nelson D. Schwartz
updated 9/2/2012 9:56:39 PM ET

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

“It’s safe to say most companies are preparing,” said Paul Dennis, a program manager with Corporate Executive Board, a private advisory firm.

In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow.

http://www.msnbc.msn.com/id/48881981/from/RSS/

Germany reiterated its support for Bundesbank President Jens Weidmann, following reports last week that he’d considered resigning over his opposition to ECB bond purchases. Chancellor Angela Merkel’s spokesman, Steffen Seibert, referred to a report in Der Spiegel that he’s staying on the job.

“He’s staying in office,” Seibert told reporters today in Berlin. “That’s our position.”

http://www.bloomberg.com/news/2012-09-0 ... plans.html

[aedens]

Scale of effect: ‘It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.’ …He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs. If cutting taxes for the rich encouraged risk-taking, then it had to be done.
http://danieljmitchell.wordpress.com/20 ... al-policy/