Financial topics

[OLD1953]

The "good news" is generally made up from whole cloth. I about choked when I read this one:

http://www.abc15.com/dpp/news/national/ ... asing-rate

Food prices have been a main culprit in rampant inflation recently, but are finally starting to ease, rising at 6.4% annual rate in May. That compares to the 7% rate of increase in food prices in April.

Carl Weinberg of High Frequency Economics, said falling food prices could be even more widespread if there is a bumper crop later this year, and that should be a tremendous boost for Chinese economic growth.
******

Explain to me exactly what part of dropping inflation from 7% to 6.4% implies anything but rising food prices! That's just crazy talk. The guys who prop up the market are simply making stuff up. And a bumper crop implies food excess, and China hasn't had that in years. OFC, if everyone cuts back on what they eat, they might manage, but that doesn't exactly imply surplus, it implies rationing.

This is less than a shock, 40% of family wealth disappeared during the great recession. Wonder how much will go in GR redux?

http://www.kansascity.com/2012/06/11/36 ... early.html

And the WSJ is warning that boomers will wind up supporting their parents, and they should forget about inheriting anything. BTDT. And of course, that will certainly affect the public debate over the "death tax" as more and more will come to see it as "cutting the bastards down to size". I'd rather debate tax policy without all the emotion that gets involved, but that's wishing for the moon.

http://online.wsj.com/article/SB1000142 ... lenews_wsj

[aedens]

The guys who prop up the market are simply making stuff up. No and J.A.S.O.N. "july august sept .... " will be a fun for corporate bond markets I suspect. The guvvy sure as hell wants no waves. Back some time ago we noted that the terminals are staffed by both.

“Hypothetical, illustrative example of the orderly liquidation of JPMorgan Chase”

http://ftalphaville.ft.com/blog/2012/06 ... gan-chase/

In March, Gregory Baer, deputy general counsel, presented a plan to policymakers and bankers to show the results of a hypothetical $50bn loss. It showed the bank would fail, shareholders would be wiped out . In the doomsday scenario set out by Mr Baer, a $50bn loss would trigger “a run on the bank” – with $375bn of funding, including bank deposits, draining away. The government would then step in and mark down the bank’s assets, leading to an additional $150bn loss. Shareholders would be wiped out but senior creditors would be transferred to a new bridge company that allows “critical activities [to] continue to operate smoothly”. Their debt would be restructured into equity. The bank might require $200bn of temporary government funding, though the bridge company would return to the private sector and New JPMorgan would raise $200bn in the private markets to repay the government loan, the plan says.

All is well unless you pay taxes or resemble ongoing Collateral.
http://www.law.harvard.edu/programs/abo ... e/baer.pdf

[aedens]

http://www.youtube.com/watch?v=TN_1mF-3 ... r_embedded

http://www.farhudbook.com/ never let facts deny avarice.

http://www.youtube.com/watch?v=nRzhh9l5 ... e=youtu.be Way over due and may they push forward.

[Higgenbotham]

“Hypothetical, illustrative example of the orderly liquidation of JPMorgan Chase”

http://ftalphaville.ft.com/blog/2012/06 ... gan-chase/

In March, Gregory Baer, deputy general counsel, presented a plan to policymakers and bankers to show the results of a hypothetical $50bn loss. It showed the bank would fail, shareholders would be wiped out . In the doomsday scenario set out by Mr Baer, a $50bn loss would trigger “a run on the bank” – with $375bn of funding, including bank deposits, draining away. The government would then step in and mark down the bank’s assets, leading to an additional $150bn loss. Shareholders would be wiped out but senior creditors would be transferred to a new bridge company that allows “critical activities [to] continue to operate smoothly”. Their debt would be restructured into equity. The bank might require $200bn of temporary government funding, though the bridge company would return to the private sector and New JPMorgan would raise $200bn in the private markets to repay the government loan, the plan says.

All is well unless you pay taxes or resemble ongoing Collateral.
http://www.law.harvard.edu/programs/abo ... e/baer.pdf

Everyone in America should write a plan describing how the government will provide "temporary" funding to cover 4 times their loss. This is even more bizarre than the stuff the most bizarre government bureaucrats dream up. No way would the private sector give a dime to these bozos and they know it.

[Trevor]

Yet another financial scam, one of countless others. However, I'm noticing people are becoming more and more skeptical about these doomsday claims. With the economy as weak as it is, "Climate Change" is not on the forefront of many people's minds.

[aedens]

H, the taxpayer are a non starter in discussion's. They are unit resources to be allocated.

Now, when the slave-master is debt, and thus one's own desire to live beyond their means, it is far more difficult to look in the mirror and to revolt against what one sees. Which is why, one day at a time, the Greek civilization will continue to suffer the terminal consequences of infinite debt serfdom, until finally, after two thousand years, it no longer exists. Every one here know Thucylidides warning clearly so I will avoid unfolding that reality as the father of the school of political realism

They do not get it yet. To have culture change the other will cease to exist....
It is coming here also and no one will stand up. I am not saying team work or natural work teams of the past inferences.
http://www.zerohedge.com/news/matter-li ... -condition

As we conveyed. As always people assume deflation was a threat. The threat was years of misery was enabled by the excess credit by design. The balance of payment was a issue between counterparty's of gold on a governmental basis not consumer. They inflate "debased" for the fabian sociopaths running rampant also today. The distinction between market and natural interest rates, and the key role played by credit, was already commonplace when John Stuart Mill (1871) was writing, and was the main preoccupation of thinkers such as Wicksell (1898) and those that followed him. "I dissected Alfred Marshall since he doctrinated Keynes" The importance of understanding global financial intermediation and its tenuous link to current accounts was a key theme in Kindleberger (1965). It has motivated the collection and analysis of statistics on international banking by the policy community, a task entrusted to the BIS in the 1970s. More recently, several observers have again highlighted the need to focus on the whole balance sheet of national economies, albeit from a purely residence (balance-of-payments) perspective.

The Fabian strategy battles are avoided in favor of wearing down an opponent through a war of attrition. While avoiding decisive battles, the side employing this strategy to cause attrition and loss of morale. Employment of this strategy implies that the weaker side believes time is on its side and is adopted and devised implementation. They do not want a A Pyrrhic victory with devastating cost that carries the implication that another such victory will ultimately lead to defeat. Just change the x y axis since $2.50 in debt to create $1.00 GDP is the norm in first quarter 2012. Observed over time the relationship between the current rate of energy consumption or power of civilization, and its total economic wealth, is a fixed constant of ~9.7 ± 0.3 milliwatts per inflation-adjusted 1990 dollar. In real terms it has been found to be ~1.82% yoy to maintain base standard.
What I can convey is out put costs are moving up. Your wealth is not as GPD measurements. Point is more are falling behind and the fallacy today is
wages will later catch up to GDP. It will not, or will they even allow it.
From the handbook "The first step in community organization is community disorganization."

[Marc]

Aedens, that chart regarding the value of slaves in the United States in the 19th century is an eye-opener, and really seems to parallel the last few decades' growth of credit in the US (especially in the last 25–30 years). The real growth spurt in that slave-value chart occurred right between the Transcendental Era and the American Civil War: in other words, the Third Turning for its time. Be it tulips, slaves, or houses, it appears that those who are able to will financialize just about anything to the hilt that they are able to when those Unravelings kick in.... Thanks for sharing; that information provided an interesting historical perspective. —Best regards, Marc

[Higgenbotham]

in our neighborhood we see some houses with 7 cars
one put in a parking lot style driveway
another one widened theirs so the cars pull in diagonal on the one new side

The situation as we outlined it. Real wages have fallen more since the "recession" ended than they did during the recession. This statistic is courtesy of former Census Bureau employees. The above quote is anecdotal conveyed that as a result of this cost pressure familes are abandoning housing units and moving in with relatives. The harder the push to prevent deflation, the more housing units will be vacated? Meanwhile, I hear HUD is financing vacant foreclosures for $300 down.

[Trevor]

It's only been a recovery in the technical sense of the word. I certainly wouldn't call it one, especially since most of the reason for the drop in the unemployment rate is simply because people have given up looking for work. Yeah, we had a halfway decent boost at the beginning of the year, but now things are slowing down again. We're sliding back into recession and however many jobs economists are predicting for this month, I would cut it in half to estimate the actual number, assuming of course it doesn't go negative.

[Higgenbotham]

Not sure exactly what this means. The gross vacancy rate at the top remains high, yet the apartment vacancy rate is down.

http://www.census.gov/hhes/www/housing/ ... /fig02.pdf

Link to complete quarterly report.

http://www.census.gov/hhes/www/housing/ ... 2press.pdf

Page 4. "Held off market - other" Bet that's the growing shadow inventory and the reason why the gross vacancy rate remains high. And the reason why rents are going up - because Comrade Obama won't force the banks to release the properties into the free market and instead subsidizes their losses.