quote:

"amounts of money"

Isn't it sad when a good sentence goes bad?

quote:

dollars, and not invested in something of enduring value or sound prospects (dollars are neither), then I hope you are braced for disappointment in the relatively near term.

For a while there "Cash was King". But generally I keep the majority of my money working for me. Even buying "companies" on margin in rare circumstances that suggest low risk.

I believe stocks do maintain their value with inflation over time. There is a rather large lag time though because in an inflationary environment often pricing power is restricted until we come in to better balance.

quote:

Doug, that is a very succinct and completely accurate description of a free marketplace. Prices (the mechanism of economic activity) set by supply and demand (the aggregates of production and consumption) will trigger recovery. Permitting prices, supply, and demand to seek their equilibrium levels is the only thing that can do that.

Good job. There's hope.

My intent was not to teach or even describe the mechanism, per se, as I expect most who are interested and discuss economics here have the basic concept.

Rather, I was attempting to describe where the current data suggests we might be in that cycle. For example, as I noted earlier, the large decline in inventories in the second quarter was not as positive as some stated since demand was still falling further and faster. Instead, now, current inventories falling more slowly suggests they are coming more in line with demand.

And I wanted to point out that if inventories came fully in line with the low demand that any uptick in demand would create the need for production above demand as inventories would need rebuilding as well.

That is another very positive turning point I am watching to see occur.

That would be another indication of a recovery.

quote:

It is impossible to invest and make money without taking politics into consideration. As a matter of fact it is the very first thing you should take into consideration to map your strategy.

quote:

Once you have all that figured out you should be able to figure out where every US penny will be spent and be able to invest accordingly.
Pawn

I look at policy and the effects, not "politics" in particular, that is a little different animal.

quote:

Republican Pres and a Republican controlled congress ( the party of lower taxes and smaller government )

Alas I fear you are lost believing in the Republican myths of fiscal responsibility. All they do is shove money in the pockets of the rich to the detriment of the majority and the country.

Under Bush the government has expanded the most in history, 40%. Most of the debt has been accumulated under Republican presidents. The Bush treasury has borrowed more money from foreign governments than under all the previous presidents combined. Those are the facts.

You would be better served in investing by following the money instead of believing dogma.

quote:

Isn't it sad when a good sentence goes bad?

The sentence that went bad (see below) was yours. You're laughing at yourself, and that's truly out of character. You wrote this:

quote:

I have made "life changing" amounts of money this year.

I hope that does not disappoint you.

Just a couple of weeks ago, your life didn't appear to be changing much. Here's you again, sounding disappointed yourself.

quote:

But I will be sogging through another cold wet winter. My feet will be cold and damp instead of filtering warm sand between my toes. For how long I don't know.

"Follow the money" if you want. But following dollars down hill is likely to postpone that sand-filtering exercise indefinitely.

As Pawn points out, an artificial supply of money and even goods (see stimulus checks and "cash for clunkers") against a consumerist demand is not a sign of a healthy economy. Those inventories being reported are largely assemblies of piece parts and even finished goods that got here by container ships that go back home empty, since we're making next to nothing to go in them.

You can see them on your own local waterfront.

Pawn09,

quote:

Republican Pres and a Republican controlled congress ( the party of lower taxes and smaller government )

When is the last time a Republican president and/or a Republican Congress acted like the party of lower taxes and smaller government? I'm thinking, maybe, Calvin Coolidge?

     On January 2000 our dollar and the euro were approximately at parity. Now it takes about $1.50 to buy a single euro. I expect such shrinkage to continue until the things we have for sale can be cheaply bought by foreigners even as they become expensive here at home. We're moving in the right direction: Our economy will recover when we can maintain a trading surplus, but that may require a much cheaper dollar and a great deal of time.
     At least that's how I see it. Can anyone envision a more enticing scenario?
Seán

Bull,

Your last post doesn’t even warrant a response as it’s based on pure bull crap!
Please don’t waste my time with any more crap like that, as I deal in “FACTS” not propaganda.
Of course if you believe it to be a fact, then quote your source complete with a URL. ( no .org’s will be accepted)
Thank you
Pawn

AMProf,
Re:

quote:

When is the last time a Republican president and/or a Republican Congress acted like the party of lower taxes and smaller government? I'm thinking, maybe, Calvin Coolidge?

The short answer is, under Pres. George W Bush. He cut taxes and attempted to shrink the government by at least warning of the impending disaster of Fannie Mae and Fannie Mac.

Now the long answer is:
Pres. George W Bush was a very effective Governor of Texas, but was also know as a “proud cut” politician outside Texas, as was his father.
W was only effective in Texas because of the psychological demographics of Texas voters and none voters.
When he entered the national race the demographics of his voters and none voters changed and his effectiveness was cut and his demise was evident, as he was a “proud cut” politician. But he still managed to cut taxes and grow the economy.

Before that the Republican Pres. That really stands out was Ronald Reagan who was not a “proud cut” politician.

Pawn

Sean,
Re:

quote:

Our economy will recover when we can maintain a trading surplus, but that may require a much cheaper dollar and a great deal of time.

The keyword in that statement is “TIME”.
All economies will recover if given enough time. But in the US “time” is a double edged sword.
On one side you have “time” to implement your policies and have them perform.
On the other side you have the next election where some, or all, players could be changed, depending on a change in the psychological demographics of voters and none-voters.

So IMO a change in the balance of trade is highly unlikely to happen to be a cure for this economic disaster. There simply isn’t that much time!

Re:

quote:

At least that's how I see it. Can anyone envision a more enticing scenario?

I could probably give you a 100 scenarios but none would work with this administration.

OH what the H. Try this one for a stimulus package.

As we have been basically at a 0 population growth for some time now and we generate around 2 million new jobs per year, why not have INS open the gates and have a drive thru window to all foreign family with a net worth of at least $500,000 that want to enter the US.
Think about it!
Pawn

quote:

So IMO a change in the balance of trade is highly unlikely to happen to be a cure for this economic disaster. There simply isn’t that much time!—Pawn

Pawn,
     There is time aplenty; if we need a century or so we have it. It may be we'll die in poverty as individuals but we, as a culture, can pay off our debts by making things and exporting them for sale at bargain prices.
     Administrations come and go, so we'll have one, someday, that is to your liking. Assuming that ideal arrives, please propose a cure for our economy more palatable than mine.
Seán



when

quote:

The short answer is, under Pres. George W Bush. He cut taxes and attempted to shrink the government by at least warning of the impending disaster of Fannie Mae and Fannie Mac.

The G W Bush record is not even close to one of lower taxes and smaller government. You overlook the very simple fact that hundreds of billions of dollars in borrowing to sustain and extend the reach of government amounts to higher taxes, poorly disguised. The impending disaster was made worse by an additional, outside-the-budget-cycle borrowing of over $700 billion all at once, obtained under a pretext that was quickly abandoned. That was followed by an outrageously inappropriate bailout of both Fannie and Freddie (they're not both "Fannie.") Banks and speculators who should have been allowed to swing slowly in the wind were the beneficiaries of still undeclared sums of cash disbursed by way of G W Bush's own Treasury Department. None of that looks, feels, smells or tastes like a commitment to smaller government.

Your apparent party loyalty is based on demonstrably false premises.

Sean,
Re:

quote:

please propose a cure for our economy more palatable than mine.

OK, here is one that ties right in with your proposed balance of trade theory.
Now I am dealing with proven “FACTS” here, not my own personal political desires or opinions.

Remember when a major earthquake hit California and some of their major freeways collapsed, what did the Democrat Governor and Democrat control State Congress do?
A. Fact: They waived all government rules and regulations and their highway system was rebuilt in record time and under budget.
So you see the concept of fewer government rules and regulations IS a concept Democrats do understand and have actually used and proven it does in “fact” work.
Now if less government interference worked for that crisis why not apply the very same proven fact to our economic crisis?

Now here is my most favorable proposal to end this economical crisis.
DRILL, Drill here and drill now!!!
Waive any and all government rules and regulation, just as Ca. did to rebuild their freeways, and let the oil companies drill on our homeland instead of abroad.
And you can add the construction of at least 10 new refineries, in the US, to that waiver.

That is my proposed stimulus package for the following reasons.
1. It would all be done with private sector, not taxpayer money.
2. It would reduce our dependency on foreign oil while at the same time would reduce our trade deficit.
3. It would not only create revenues to the Fed Government but would be found new revenues for states like Ca who are in desperate need of new revenues.
4. It would create jobs and reduce unemployment.
5. It would reduce the cost of fuels. ( gas, diesel, and home heating oil ) it would reduce the cost of raw petro-chemicals materials used to produce literally 100,000s of other consumer products, reducing the cost of living while putting spend able cash in the pockets of all consumers which would create even more jobs.

Sean,
So there you have your answer.
IMO, waive all government regs to drill and build some new refineries without a dime of taxpayers money!
Now which political party was it that has continuously proposed drilling? And which political party is it that continuously opposes drilling?

Pawn
PS: Is that more palatable for you?

quote:

DRILL, Drill here and drill now!—Pawn

Pawn,
     Yes, that oil would supply an additional product for us to trade. We'll need to sell everything we can muster in order to pay off our existing $11.9 Trillion debt. I understand the USA has about $1.5 Trillion worth of reserve oil (at its present $70 price}. We would be in competition with OPEC if we chose to sell it, so oil prices would go down, but that cannot be helped.
Seán

.Sean,

So do you support drilling and constructing new refineries or do you oppose it?

Pawn

quote:

The sentence that went bad (see below) was yours. You're laughing at yourself, and that's truly out of character.

Amp.,

Of course I know that sentence was mine and no that is not of out of character.

I laughed at myself because I know how it happens.

quote:

quote:
I have made "life changing" amounts of money this year.

I hope that does not disappoint you.


Just a couple of weeks ago, your life didn't appear to be changing much. Here's you again, sounding disappointed yourself.


quote:
But I will be sogging through another cold wet winter. My feet will be cold and damp instead of filtering warm sand between my toes. For how long I don't know.

Like most conservatives you wouldn't get so confused and draw false conclusions if you would include the qualifying statements.

Regarding the first statement:

My entire net worth "at the time" I retired was almost entirely liquid and by missing this Bear, one excellent profitable trade, and a little leverage I am approaching doubling that net worth. That is not something I had planned or anticipated while being most positive.

But the latter statement was regarding substantial inherited real estate with rentals, still in a trust, that took a major hit in value, some from a signed contract. That contract was signed two years ago and allowed to expire the end of last year. The earnest money was in 6 figures though on that piece. It is the property and rentals that have me stuck here in the damp, managing it and without that money.

Other than the inability to note qualifying statements conservatives seem to need to compare apples to oranges by failing to make distinctions.

quote:

"Follow the money" if you want. But following dollars down hill is likely to postpone that sand-filtering exercise indefinitely.

As Pawn points out, an artificial supply of money and even goods (see stimulus checks and "cash for clunkers") against a consumerist demand is not a sign of a healthy economy. Those inventories being reported are largely assemblies of piece parts and even finished goods that got here by container ships that go back home empty, since we're making next to nothing to go in them.

You can see them on your own local waterfront.

You are suggesting we should have invested in hard assets, like real estate?


It sounds like you don't realize that the United States is still the worlds biggest producer of goods.

Do you also realize the United States is still the world's greatest exporter of goods as well?

The problem is that we consume more than we produce by importing.

China's economy is still a fraction of ours.

quote:

Doug's not even right in theory.

How arrogant of you. My take on theory is well thought through and accepted, less so with yours. And your Libertarian conceptions are definitely unproven. Have they ever been implemented? Somalia maybe?

Our differences are more than theoretical, they are philsophical.

quote:

He thinks further government actions will help the economy recover, and that there is too little, not too much regulation (read interference) in markets.

Absolutely! History proves me right on that in regards to government being able to positively influence, blunt, or reverse a recession.

But I am a fiscal hawk and don't like deficit with the exception of a recession or war. Currently we have both.

Your "too much regulation" should be a real hard sell after the destruction caused by the efforts for "free market self regulation" that nearly collapsed our economy. Even Greenspan, who used that term himself has admitted it was wrong and an abysmal failure. They were still trying to push that line a year ago March when Bear Stearns was failing. Now that their entire less regulated shadow banking system has collapsed there are few that would still support the concept.

Except for a few diehards like you that support philosophy over reality while ignoring the ramifications and recent events.

quote:

So do you support drilling and constructing new refineries or do you oppose it?—Pawn

Pawn,
     My opinion is irrelevant. But on balance I oppose it because OPEC has more than 20 times the oil we do. I favor using up their supplies before depleting ours. Let's look at OPEC as comprising 325 Million potential customers. Over many years, we could sell a few trillion dollars worth of food and machinery to them, assuming that our prices were attractive. To offer bargain prices would require drastic cuts in our paychecks, but there is no avoiding that, except by slashing the value of the dollar, if we hope to compete with India and China.
Seán

quote:

Would you like a little music to do that dance to!

Give me some “ known facts “ please.

I gave you facts. You don't want to hear facts and are unwilling to check them out.

quote:

Of course if you believe it to be a fact, then quote your source complete with a URL. ( no .org’s will be accepted)
Thank you
Pawn

Why? So you can ignore or deny them? You can easily verify my statements with a search. I found RWWS like to try to make others do work to shoot down their myths.

It is your contention that the Republicans are the party of smaller government that is in dispute because the facts say different.

The onus of proving that is up to you and I think you will not be able.

Republicans are the party of tax cut and spend. The vast majority of the national debt was incurred under Republican presidents.

You believe the myths and ignore the facts. I see so much of that on the Republican side. Show, with links and URLs where the Republicans have reduced government or are the fiscally conservative party. They talk the talk and do the opposite.

quote:

The short answer is, under Pres. George W Bush. He cut taxes and attempted to shrink the government by at least warning of the impending disaster of Fannie Mae and Fannie Mac.

Fannie and Freddie are NOT part of the government in that manner. They were self supporting and their payrolls, profits and losses were separate. Blaming them is just attempting to pass the blame for the mistakes of the Republican policy that crushed us.

Sean,

Re:

quote:

My opinion is irrelevant.

Not true! Your opinion is just as valuable as mine or anyone else’s.

quote:

But on balance I oppose it because OPEC has more than 20 times the oil we do.

That I find hard to believe. Do you have a source for that info?

quote:

I favor using up their supplies before depleting ours.

You are forgetting that oil is renewable, therefore we can not deplete the supply.
The last I heard there was over a 200 year supply of US oil outside of the control of OPEC.
So you see it is highly unlikely we could ever deplete our own supply.
Not to mention that to produce that “few trillion dollars worth of food and machinery” you will need oil and most of it’s many by-products, such as energy, fertilizer, synthetic fibers, plastics etc etc etc.

quote:

Over many years, we could sell a few trillion dollars worth of food and machinery to them, assuming that our prices were attractive. To offer bargain prices would require drastic cuts in our paychecks, but there is no avoiding that, except by slashing the value of the dollar,

Sean, what you are proposing is returning to 1950s and 60s economics and lifestyle and it simply isn’t going to happen because first you would have to abolish the minimum wage and the masses would have to return to rural living to provide their own food while working for peanuts.
No thank you, I would much rather bring other countries up to our standards than to tear down the US to theirs.

Pawn

Pawn,
     See World oil reserves. Scroll down until you reach the tabulation.

     I am saying that we are heading for the 1930's economy and lifestyle. The prospect does not make me joyous.

quote:

I would much rather bring other countries up to our standards than to tear down the US to theirs.—Pawn

     So would I. I only wish we had a way to do it.
Sean

Bull Bull BULL!
You absolutely crack me up with your fancy footwork.!
If you’re ever in need of a job I’m sure I can get you on at the LIS {Lost in Space ) news service.

Re.

quote:

Republicans are the party of tax cut and spend.

OK, now we are getting some where.
Again!

quote:

Republicans are the party of tax cut (s )

AGREED! No problem there!
Now lets look at the rest of your statement.

quote:

and spend

Now let me reduce this issue down to baby magic for ya.

Q. Who sets the “spend “ing? Is it the President, or is it Congress?
A. Congress!
Q. Which political party controlled congress when most of the “spend” ing was done?
A. DEMOCRATS!
Q. What was most of the spending used for?
A. Bigger government!

So you see Bull, FACT, Republicans ARE the party of “lower taxes” and “smaller government” while the Democrats ARE the party of “higher taxes” and “bigger government”.

OK, the music is playing, so dance around that one for me!
Pawn

quote:

November 3, 2009

Boasting of Glory


Last week, to the delight of its media cheerleaders, the government announced that economic growth had returned and the recession had ended. But before we start celebrating one quarter of modest growth, we should realize the only force driving this apparent recovery is an enormous increase in government spending. To finance its largesse, the government is now borrowing at a rate that has ordinary citizens and the international community extremely concerned.

Leading into the first election season under Obama's reign, this unprecedented government borrowing and spending is creating a false sense of security. The activity has allowed GDP to increase despite stagnation in corporate and consumer spending.

Small businesses – the most important creators of new jobs – are nervous. Due to uncertain economic conditions and a high degree of regulatory uncertainty, they are hoarding cash rather than investing. Indeed, their largest expenditures are often solely to replenish inventories.

Likewise, consumers are rationally hording their resources. Year over year, consumer spending – which constitutes 70 percent of GDP – is essentially flat. With such a large segment of the economy quiescent, the percentage increase in public sector spending has to be very large in order to push the GDP upward.

quote:

November 11, 2009

A Toxic Cocktail


Last week, the Fed extended its emergency economic powers, which include lending to the money center banks at zero interest. A few days later, the Fed's plan was reinforced by similar announcements from the rest of the G-20. The road map the authorities are providing for the near-term global economy can't be much clearer. There will be no cessation of the seemingly endless supply of cheap dollars being pumped into the financial system. With the world apparently in complete accord on the need for ever more liquidity, stock markets are staging an easy-money rally. The main line media is almost euphoric. But what should investors make of this seemingly good news?

This time last year, the world faced a meltdown of its financial systems and a potential depression. Fed Chairman Ben Bernanke, a renowned expert on the Great Depression, coordinated an international rescue of the toxic financial system. Although the bill for these operations has yet to come due, almost all agree it will prove costly to present and future generations. For now at least, the most significant impact of these policies has been the creation of a liquidity bubble in stocks and a surge in commodities.

However, any efforts to reduce these stimuli will result in an immediate correction toward our previous depressionary trajectory. Acceptance of this uncomfortable truth is a political third rail. Therefore, it is highly unlikely that any major government will change course. Rather, the change will be thrust upon them.

http://www.europac.net/#

Sean,
Nice pic of the 1930s bush for barrels stimulus package. Kind of reminds me of our present day clunkers thingee.
Pawn

AM,
Don’t know much about that publication or the author but IMO they hit the nail right on the head!
Pawn

Amp.,

Your righty spinners are sure slick. Any cons need a large dose of critical thinking to keep from being duped.

I read the articles and I read along thinking true, true, that's right, that is what is going on, that is accurate, they are doing that, and then I hit the conclusion and
!!!!

quote:

However, any efforts to reduce these stimuli will result in an immediate correction toward our previous depressionary trajectory. Acceptance of this uncomfortable truth is a political third rail. Therefore, it is highly unlikely that any major government will change course. Rather, the change will be thrust upon them.

There is NOTHING that was presented that supports that conclusion that any reduction in stimuli will result in "an immediate correction toward our previous depressionary trajectory". Nothing. Not only is not supported what is there contradicts it. After backing out the effect of the stimulus, spending was "essentially flat". Essentially flat meaning slightly up by 0.2%. That is good! Spending has been falling for most of the year after falling off a cliff in the 4th quarter.

"Year over year, consumer spending –"

A spinner's comparison slight of hand used to dupe and deceive you. The lie of omission. The lack of context. A disgusting trick in my opinion that should destroy a writer's credibility.

In the third quarter of last year there was only a slight drop in retail spending. We were not that far off historic highs with spending still being fueled by home equity (but less so) and by borrowing. Third quarter last year was still a good quarter. We were still growing. To be comparable to Q3 of last year is very good!

Which in no way suggests a sudden return to a "depressionary trajectory". He gave nothing to support that.

And can you guess how these same chicken little spinners are going to spin it next quarter? Retail spending fell off a cliff so if we see a very positive "year over year" they will likely be saying "But... but.... last year Q4 was real bad!".

Wanna bet?

If they do use the context of last year to make the negative case next quarter after failing to put it in context this quarter then you will know the writers are lying to you by trying to manipulate the statistics they use to support a conclusion they want instead of truthfully using the data to draw a conclusion.

quote:

Q. Who sets the “spend “ing? Is it the President, or is it Congress?
A. Congress!

The same holds for tax cutting too. Just like a Republican to try to falsely take credit on one side while trying to deny any responsibility for what they did on the other. How can you claim the President doesn't matter while trying to credit (only) yours at the same time?

quote:

So you see Bull, FACT, Republicans ARE the party of “lower taxes” and “smaller government” while the Democrats ARE the party of “higher taxes” and “bigger government”.

Mostly bunk. You have shown NOTHING that suggest Republicans have done anything to make government smaller. The "FACTS" are just the opposite. How do you justify the largest increase in government ever while the Republicans had FULL control of the government? You can't.

You can prove it to yourself if weren't so blinded by your own rhetoric and believing the righty myths.

Tax and spend is better than the tax cut, spend, and borrow of the Republicans. They are responsible for most of the debt. Just the facts. I don't know why so many Republicans believe the opposite of the truth. They sure have them duped.

There is a huge difference on what the two parties spend. Other than the Republican pork fest that went on when they first controlled the whole government the Republicans like to spend massively on the military and the Democrats like to spend on social programs the Republicans would like to kill.

That difference I have no trouble admitting. But at least the Democrats are willing to pay for their spending unlike the Republicans.