What happened to all of the doom and gloom economic threads?

vetteman said:

Looks like the Prsident's trip to China was an utter failure. This President casts a diminutive shadow while getting pushed around by the Chinese:

China Holds Firm on Major Issues in Obama’s Visit


BEIJING — In six hours of meetings, at two dinners and during a stilted 30-minute news conference in which President Hu Jintao did not allow questions, President Obama was confronted, on his first visit, with a fast-rising China more willing to say no to the United States.

On topics like Iran (Mr. Hu did not publicly discuss the possibility of sanctions), China’s currency (he made no nod toward changing its value) and human rights (a joint statement bluntly acknowledged that the two countries “have differences”), China held firm against most American demands.

With China’s micro-management of Mr. Obama’s appearances in the country, the trip did more to showcase China’s ability to push back against outside pressure than it did to advance the main issues on Mr. Obama’s agenda, analysts said.

“China effectively stage-managed President Obama’s public appearances, got him to make statements endorsing Chinese positions of political importance to them and effectively squelched discussions of contentious issues such as human rights and China’s currency policy,” said Eswar S. Prasad, a China specialist at Cornell University. “In a masterstroke, they shifted the public discussion from the global risks posed by Chinese currency policy to the dangers of loose monetary policy and protectionist tendencies in the U.S.”

http://www.nytimes.com/2009/11/18/world/asia/18prexy.html

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What a surprise!

They weren't wowed by his charisma?

That's strange.

Wall Street on Track for Record in Profits

The New York Times

By ZACHERY KOUWE Published: November 17, 2009

In a report released Tuesday by Thomas P. DiNapoli, the comptroller of New York State, Wall Street profits in 2009 are on track to exceed the record set three years ago, at the height of the credit bubble...

“The national economy is slowly improving, but Wall Street has recovered much faster than anyone had envisioned,” Mr. DiNapoli said in a statement...

“Wall Street remains the engine that drives New York’s economy,” Mr. DiNapoli said in a statement. “It’s encouraging that the industry is recovering faster than forecast.”

http://www.nytimes.com/2009/11/18/business/18wall.html?_r=1&hp&ex=&ei=&partner=

Mortgage delinquencies hit record high
Mortgage group's quarterly report raises worries about housing recovery



http://www.msnbc.msn.com/id/34039065/ns/business-real_estate

Obama warns of 'double-dip recession'
President says too much government debt could hamper economic recovery



http://www.msnbc.msn.com/id/34016726/ns/business-economy_in_turmoil/

Try another stimulus package, that helps contain costs.

The economic programs and policies currently in place are truly astounding. I don't think I have ever seen a more harmful economic environment for the country. While some of these programs started with Bush, the Obama Administration has advanced them to insane levels. Logic, economics, common sense and history must be defied to believe a recovery is possible in this environment. The nation's standard of living will be substantially lowered unless changes in policies are forthcoming.

To understand why this economy cannot recover under these policies, it is necessary to differentiate between the macroeconomic and microeconomic approach. Arguably, macroeconomics is not economics, but that topic cannot be fully explored today.

Macroeconomics deals with aggregates, statistics and mathematical models. Macroeconomics purports to describe and explain the behavior of the economy. But economics is not about aggregates, it is about human beings and their behavior. The building block for meaningful economics must be the individual, not some aggregate called Consumption, Investment or Government. These aggregates are nothing more than the outcomes of millions of individual decisions, summed up and categorized into classifications.

The field of economics that studies the individual is known as microeconomics. This segment of economics deals with the institutional framework and incentive structures that influence human behavior. When faced with a stable microeconomic environment, aggregate individual decisions tend to appear stable over time. Under such conditions, correlation can be found between some aggregates.

A key point to understand is aggregates do not make decisions; aggregates result from decisions. Aggregates are statistical constructs only, often useful to summarize history. However, no causal relationship exists amongst aggregates. The economy cannot be treated as if it were some giant machine. Yet, the machine analogy forms the basis for macroeconomics. If you "input" more Investment, then the "output" of the machine will increase. If you increase Government spending, it will increase GDP. If you increase the Money Supply then ... . Such is the world of macroeconomics which confuses correlation with causality.

Macro advocates implicitly assume causality, an assumption that easily leads to the conclusion that an economy can be centrally managed. Macroeconomic policy "works" only in the sense that a crowing rooster "causes" the sun to rise. Macro policies provide "scientific" cover for politicians to add more power and control to their portfolio. This rationale and the fact that professing belief in macroeconomics raises the incomes of pseudo economists are probably the two primary reasons the macro myth lives on.

The Obama economic program has much to dislike even when viewed through a macroeconomic prism. Commentary amongst economists are nowhere near consensus: our deficits are too large, we are spending too much, we are not spending enough, more should go to Main Street, banks should be allowed to fail, etc. etc. Even the political allocation of funds has been criticized. Chris Dunn at the Huffington Post states:

According to the most recent data, 98 percent of all U.S. firms have less than 100 employees. These firms are responsible for 98 percent of all new jobs in America and employ 50.2 percent of the private sector workforce. American small businesses are responsible for over 97 percent of all exported goods and generate the majority of innovations that come from the United States.

Not one dollar of the $2.3 trillion in economic stimulus funds will go to the 27 million small businesses where most Americans work. One hundred percent of the stimulus bill funds not destined for states will go to the top 1 percent of U.S. firms. The firms in that top 1 percent have not created one net new job in America since 1977.

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Criticism at the microeconomic level has been limited. That results more from the complexity of the field rather than satisfaction. Microeconomics is not simplistic like macroeconomics. No recognized model can be developed because microeconomics is too complex. The famous supply-demand cross diagram might be pointed to as a model, but it is merely useful as a simplistic pedagogical tool and nothing more.

In our "cookbook" world, people and journalists want simple answers even when the situation does not allow for them. Macroeconomics produces simple (often wrong) answers. Microeconomics cannot do so. Microeconomics cannot be captured in a sound bite. Complex analysis of incentives, interactions, prices, expectations, uncertainties, etc. is required. These must be analyzed at the level of the economic decision-maker. This type of analysis is not easy. Once completed, the results are virtually impossible to communicate in sound-bite terms.

...

The reason that Obamanomics will not and cannot work is because an economy cannot be managed from the top. Economics is a bottom-up process that depends upon individual incentives. Critical incentives have been diminished or destroyed by recent economic policies. Fear, uncertainty, threats, tax increases, penalties and violations of the rule of law are merely some of the conditions anathema to entrepreneurs, small business and large business. Businesses will not hire, invest or expand in a climate of disincentives. No commands from on high can force economic activity. That was a lesson that should have been learned from Eastern Europe and the former USSR.

If these disincentives are left in place, our economy will continue to shrink and our standard of living will continue to be diminished. Capital has no nationality and will start to flee our shores. Talent will follow. We will not recover from this economic downturn until businesses and individuals have a more favorable incentive structure.

Monty Pelerin
economicnoise.com
American Thinker

I rarely let my eyes linger on a long-assed cut and paste, but economics is my thing and thought that article was interesting. Overly simplistic, but interesting.

It has to be simplistic for it's goal is to inform and arm the common man, not browbeat him into submission due to his lack of comprehension or to use his specialization in some other field against him causing him to act deferentially to other "experts" lest his expertise in turn be questioned.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

http://www.cnbc.com/id/34104722

I have less money this year than I did last year. That's all I really care about when it comes to economics. I refuse to pretend to know how the global economy works like many people here that I won't mention by name and I refuse to pretend that I have the answer to our woes like those same unmentionable people do.
I have less money, I am not happy, I want more money next year to make up for it. That is all that matters. I don't care if Obama, Pelosi, Palin or Ronald Fucking McDonald fix the problem as long as it gets fixed.
Stock. Mine. Up. Get the fuck on it.

At this point, the only thing we have to ponder is, will a loss of Congress shake Obama from his Marxist principles and force him to the center ala Bill Clinton, or will he step aside in the '12 election as he recently hinted at and just go out and make money and rail against the Republicans?

U.S. Racing Toward Debt ‘Shock’
Monday, November 23, 2009 1:51 PM

A page one, top-of-the-fold New York Times report Monday warns that U.S. debt is rising so fast that the federal government is careening toward a "payment shock" in the not-too-distant future.

The Times lead headline read: “Federal Government Faces Balloon in Debt Payments: At $700 Billion a Year, Cost Will Top Budgets for 2 Wars, Education, Energy.”

The Times headline appears eerie just as the Senate moves to push forward on a radical healthcare reform — with CBO estimates for a final bill costing nearly $1 trillion dollars over the next year.

The national debt now stands at over $12 trillion and the White House estimates that the cost of servicing the debt will rise to more than $700 billion a year in 2019, up from $202 billion this year. The Times suggests that $700 billion annual payment cost may be conservative.

The additional $500 billion a year in interest payments would surpass the combined budgets this year for education, energy, homeland security, plus the wars in Iraq and Afghanistan, the Times observes.

Treasury officials face not only huge new debts incurred in response to the economic meltdown but a balloon of short-term borrowings coming due in the months ahead, and interest rates that are certain to return to normal levels when the Federal Reserve concludes that the fiscal emergency has passed.

"Even as Treasury officials are racing to lock in today's low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages," The Times reported on Monday.

Interestingly, the alarming Times analysis comes as the nation is in the midst of a debate over healthcare reform proposals that could add many billions of dollars to the overall debt.

Record deficits have arrived just as payments for Medicare and Social Security benefits are set to explode, with the oldest Baby Boomers approaching age 65. This will result in what experts have long warned will be a "fiscal nightmare" for the government, the Times article notes.

"What a good country or a good squirrel should be doing is stashing away nuts for the winter," William H. Gross, managing director of the Pimco, a bond management firm, told The Times.

"The United States is not only not saving nuts, it's eating the ones left over from the last winter."

As for the balloon of short-term borrowings coming due, that debt now accounts for 36 percent of overall debt, compared to the historic average of less than 25 percent, and more than $1.6 trillion is due by March 31.

Another problem: The Federal Reserve's purchases of Treasury bonds and mortgage-backed securities to prop up the economy pushed down long-term interest rates by about half of a percentage point, but the Fed is set to reverse those policies — that alone could add $40 billion to the government's annual debt service expense.

The Treasury Borrowing Advisory Committee, a group of market experts that advises the Treasury on debt management, declared this month: "Inflation, higher interest rate and rollover risk should be the primary concerns. Clever debt management strategy can't completely substitute for prudent fiscal policy."

And The Times warns: "There is little doubt that the United States' long-term budget crisis is becoming too big to postpone."

When it's the Times, and not just lying rwingnut FAUX News, then the game is actually afoot...

trysail said:

U.S. Racing Toward Debt ‘Shock’
Monday, November 23, 2009 1:51 PM

A page one, top-of-the-fold New York Times report Monday warns that U.S. debt is rising so fast that the federal government is careening toward a "payment shock" in the not-too-distant future.

The Times lead headline read: “Federal Government Faces Balloon in Debt Payments: At $700 Billion a Year, Cost Will Top Budgets for 2 Wars, Education, Energy.”

The Times headline appears eerie just as the Senate moves to push forward on a radical healthcare reform — with CBO estimates for a final bill costing nearly $1 trillion dollars over the next year.

The national debt now stands at over $12 trillion and the White House estimates that the cost of servicing the debt will rise to more than $700 billion a year in 2019, up from $202 billion this year. The Times suggests that $700 billion annual payment cost may be conservative.

The additional $500 billion a year in interest payments would surpass the combined budgets this year for education, energy, homeland security, plus the wars in Iraq and Afghanistan, the Times observes.

Treasury officials face not only huge new debts incurred in response to the economic meltdown but a balloon of short-term borrowings coming due in the months ahead, and interest rates that are certain to return to normal levels when the Federal Reserve concludes that the fiscal emergency has passed.

"Even as Treasury officials are racing to lock in today's low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages," The Times reported on Monday.

Interestingly, the alarming Times analysis comes as the nation is in the midst of a debate over healthcare reform proposals that could add many billions of dollars to the overall debt.

Record deficits have arrived just as payments for Medicare and Social Security benefits are set to explode, with the oldest Baby Boomers approaching age 65. This will result in what experts have long warned will be a "fiscal nightmare" for the government, the Times article notes.

"What a good country or a good squirrel should be doing is stashing away nuts for the winter," William H. Gross, managing director of the Pimco, a bond management firm, told The Times.

"The United States is not only not saving nuts, it's eating the ones left over from the last winter."

As for the balloon of short-term borrowings coming due, that debt now accounts for 36 percent of overall debt, compared to the historic average of less than 25 percent, and more than $1.6 trillion is due by March 31.

Another problem: The Federal Reserve's purchases of Treasury bonds and mortgage-backed securities to prop up the economy pushed down long-term interest rates by about half of a percentage point, but the Fed is set to reverse those policies — that alone could add $40 billion to the government's annual debt service expense.

The Treasury Borrowing Advisory Committee, a group of market experts that advises the Treasury on debt management, declared this month: "Inflation, higher interest rate and rollover risk should be the primary concerns. Clever debt management strategy can't completely substitute for prudent fiscal policy."

And The Times warns: "There is little doubt that the United States' long-term budget crisis is becoming too big to postpone."

Click to expand...

Uh oh, sounds like it's time to raid that piggy bank, and go buy some candy. Cause, the doo doo, is about to hit the fan.

KRCummings said:

I have less money this year than I did last year. That's all I really care about when it comes to economics. I refuse to pretend to know how the global economy works like many people here that I won't mention by name and I refuse to pretend that I have the answer to our woes like those same unmentionable people do.
I have less money, I am not happy, I want more money next year to make up for it. That is all that matters. I don't care if Obama, Pelosi, Palin or Ronald Fucking McDonald fix the problem as long as it gets fixed.
Stock. Mine. Up. Get the fuck on it.

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Arent you retired? Of course you have less money.

The problem with all of the doom and gloom debt projections are that they include one-time charges as if they were going to repeated every year.

We are not going to have a TARP and ARRA every year...

Non-partisan number crunchers say that the current form of the UHI bill will save us (as a nation) money through 2029 and beyond.

Acanthus said:

The problem with all of the doom and gloom debt projections are that they include one-time charges as if they were going to repeated every year.

We are not going to have a TARP and ARRA every year...

Non-partisan number crunchers say that the current form of the UHI bill will save us (as a nation) money through 2029 and beyond.

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The Nation is broke now, how does adding millions to the Government Dole save money?

koalabear said:

The Nation is broke now, how does adding millions to the Government Dole save money?

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Taxes, benefits shifting, more productive workforce, cost reductions. Remember that i said (as a nation), not (as an individual).

Acanthus said:

Taxes, benefits shifting, more productive workforce, cost reductions. Remember that i said (as a nation), not (as an individual).

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More productive workforce, that's hard to do without jobs.

koalabear said:

More productive workforce, that's hard to do without jobs.

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A basic understanding of economics is what you need.

The jobs are coming back.

Acanthus said:

A basic understanding of economics is what you need.

The jobs are coming back.

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I suggest you don't hold your breath waiting for that.

vetteman said:

No shit! Apply your vast knowledge of economics and tell us when.

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Q2 2010 give or take 1Q.

Acanthus said:

Q2 2010 give or take 1Q.

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So UHC passes and small businesses and the rich are surcharged, taxed and fined to death. I doubt that jobs will be the result.

koalabear said:

So UHC passes and small businesses and the rich are surcharged, taxed and fined to death. I doubt that jobs will be the result.

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Err? If it passed now it wouldn't start until 2011.

Acanthus said:

Err? If it passed now it wouldn't start until 2011.

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You do need to read up on it more. Taxes, surcharges and such will start immediately.