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

[unregistered]

 

[unregistered]

 

[Sean Renaud]

As best as I can tell, Obama does not have a 2nd term agenda.

Did he have a first term agenda? Aside from pretending to be a liberal but actually being a Centrist? Cus best as I can see he doesn't have a 2nd term agenda either, he's not even really pretending he'll push to the Left this time other than his one fuck up on assault weapons. Which he'd still have to get through Congress so while I disagree with the move I'm simply not worried he could accomplish it.

 

[garbage can]

Did he have a first term agenda? Aside from pretending to be a liberal but actually being a Centrist? Cus best as I can see he doesn't have a 2nd term agenda either, he's not even really pretending he'll push to the Left this time other than his one fuck up on assault weapons. Which he'd still have to get through Congress so while I disagree with the move I'm simply not worried he could accomplish it.

In my view, we've lost our manufacturing base, and it won't be back anytime soon.

I'm looking at our natural resources as creating jobs and saving this country.
I see Romney as our best bet.

 

[Beco]

Did he have a first term agenda? Aside from pretending to be a liberal but actually being a Centrist? Cus best as I can see he doesn't have a 2nd term agenda either, he's not even really pretending he'll push to the Left this time other than his one fuck up on assault weapons. Which he'd still have to get through Congress so while I disagree with the move I'm simply not worried he could accomplish it.

I hope he opens up Cuba, as he said he would.

 

[Sean Renaud]

In my view, we've lost our manufacturing base, and it won't be back anytime soon.

I'm looking at our natural resources as creating jobs and saving this country.
I see Romney as our best bet.

Your right, we've lost of manufacturing base. We don't want it either. It won't be back in any of our life times because it's not something we actually want.

Our natural resources aren't going to save us and if you see Romney as our best bet so be it. You're dead wrong but feel free to fuck us.

 

[garbage can]

Your right, we've lost of manufacturing base. We don't want it either. It won't be back in any of our life times because it's not something we actually want.

Our natural resources aren't going to save us and if you see Romney as our best bet so be it. You're dead wrong but feel free to fuck us.

Okay, look forward to Obama shutting down our coal powered energy plants.

Spending billions on green energy.

And governing by executive order.

 

[RobDownSouth]

Okay, look forward to Obama shutting down our coal powered energy plants.

Spending billions on green energy.

And governing by executive order.

The cheap price of natural gas is doing far more to close down antiquated coal plants than any regulations ever did.

Coal plants pollute the environment with mercury. They have until 2015 to clean up their plants or must shut down. The new standard is expected to save as many as 17,000 lives per year and prevent thousands of heart attacks.

 

[garbage can]

The cheap price of natural gas is doing far more to close down antiquated coal plants than any regulations ever did.

I would'a swore it was the EPA shutting down those plants, not the cheap price of natural gas.

 

[koalabear]

Vegas picks Romney, more bad news for the libs.

 

[IrezumiKiss]

Clint Eastwood's daughter not voting for Romney, more bad news for the cons.

 

[RobDownSouth]

I would'a swore it was the EPA shutting down those plants, not the cheap price of natural gas.

Here you go.

Another take on natural gas vs coal that still manages to blame libruls

Another one: coal beats EPA, loses to natural gas

A ray of hope? Global warming helps coal plants recover from their 2012 beatdown at the hands of natural gas

 

[Busybody]

How I Caused the 1987 Crash
Submitted by Bruce Krasting on 10/20/2012 12:37 -0400

BondBrazilCRAPHigh YieldHong KongMarket ConditionsMexicoProp TradingReuters




I got a chuckle from the biz blogs and TV yesterday with the rehash of the 1987 stock crash. Twenty-five years is a very long time. I’d forgotten most of the events of that day.



I was at Drexel, and at that time, Drexel was a powerhouse. The firm had plenty of capital and huge capacity to borrow money to fund positions. Money was rolling in; risk taking was encouraged. I was working with a small group of people on one of the screwier sub-sets of the high yield bond market. It was referred to as LDC debt (Less Developed Country debt). These were the busted bank loans of all of the countries in South America.



You might wonder why anyone would spend time mucking around with the debts of Brazil, Mexico, Argentina and Chile. Actually, it was a great business. We were coining money. The key to our (and others) success was the ability to make a price on illiquid assets. If some regional bank needed to sell $25Mn of Brazilian debt, we would make a bid on the phone. If a company were in need of some Mexican debt that would be used in a debt for equity transaction, we would offer the paper to the buyer, even though we did not own it.



My old days of currency trading came in handy as some of the paper we traded was denominated in currencies other than the dollar . The fact that I had a “license” to trade currencies gave me the opportunity to speculate pretty freely, and I/we did. The shop that I worked in was no different than any other on Wall Street. We had a “book” of positions. Some were outright specs, others were hedges against commitments we had made. To hold this book together, we required equity (cash).



The Crash of 1987 happened on a Monday. But the crash really started the week before. The S&P tanked 9% on the week, Friday was a particularly bad day. The big move in stocks set things in motion over a very nervous weekend. I got the call from the controller’s office on Saturday. It went like this:



Controller:

Hi, Sorry to bother you, but we have some issues with our bank lenders (It was Bankers Trust that first pulled the plug on street liquidity). They are nervous, and want to cut back our funding lines. You are using a fair bit of capital in your trading book. Can you tell me what all this money is being used for?



BK:

Sure. We have a matched book of longs and shorts on the prop trading side. We also have some open currency positions. We have an inventory of hedges against open client positions. We also have some naked longs.



Controller:

Ah, can you be more specific?



BK:

Sure. We are long Brazil, Mexico and Chile; we are short Ecuador, Peru and Venezuela. We are naked short the USDHK$ and have $60Mn of Cuban bonds in inventory.



Controller:

You’re shitting me! What is that junk? Is any of this liquid? Can you sell this book of crap?



BK:

I might be able to run things down a bit. How much time do I have?



Controller:

Cut it in half by Monday night.



And that is how the crash of 87 happened.



Sunday night October 19, at the opening in Tokyo the HK$ position was closed off (at a loss of course). I got up at 2am and started the calls to London where there was a market for LDC paper. I was hitting bids on anything I could. The prices for the long assets were getting clobbered. There was no liquidity in the markets I was short. It was about minimizing losses and cutting a book. There was no finesse about it.



Of course I was not alone in those early morning hours. Hundreds of players from NYC were on the phone hitting bids on all sorts of squirrely assets. The folks who make markets in London were never dopes. When their phones lit up with Americans looking to lighten up, they voted with their feet. Bids for everything dropped like a stone. By eight o’clock in NY everyone knew that wholesale liquidations were going on, and that stocks were going to get beat to a pulp when the market opened up.



I think I stood all of that day. The phones rang and rang. Both buy and sell side clients were panicked. Most were sellers; the buyers went on strike. Prices were dropping without any trading taking place. The brokers were all, “offered without the bid”. It was next to impossible to get trades off.



Some where’s around 2pm NY time, the Cuban paper got sold (more losses). There was not much more that could be done. So I sat down and watched the Reuters screen and the Dow tape for the rest of the day. I’d had next to no sleep, drank a ton of coffee and smoked too many cigarettes. I'd sweated all day, and stank. I left before the 4pm close.



To me, there are today many similarities to the market conditions that triggered the 87 crash. These two ring a bell:



In 87 I bet on Cuban paper. The rumor at the time was that Castro was sick. The thinking was that when he died, the bonds would increase in value. I’d bought the bonds at around 5 cents on the dollar. Exactly the same bet, for the same reason, is being made today:







The Hong Kong dollar was pegged to the USD in 1983. Four years later guys like me were betting that the central bank could not hold the peg. Money was flowing into Hong Kong; the central bank was forced to intervene in the market to keep the lid on the HK$. This same trade is popular today:







The most important comparison has not yet shown up yet in 2012. In 1987, over the course of a weekend (and many panicky phone calls), market liquidity and the ability to finance off-the-run assets dried up. It started at the bottom of the rung of asset quality, by the end of the day it had spread to the most liquid stocks.



On Thursday, October 15, 1987, the farthest thing from my mind was a squeeze on the equity capital I was using to support a book of business. If anything, I was (everyone was) being encouraged to put more money to work. That vaporized in hours. It was one giant “risk off” event.



There were no external factors of significance that led to the 87 crash. The market did itself in on that day. All it took was a few calls that said, “I want you to cut back at open”.



The repo markets that fund the zillions of assets (good and bad) in 2012 are exponentially larger and more complex than in 1987. If anything, that market is more vulnerable today to the call that says, “Cut it back”.

 

[jeninflorida]

if you would stop obsessing about "rich people's money" and focus on building a business or hell, getting a job...then you too could become rich!

Clint Eastwood's daughter not voting for Romney, more bad news for the cons.

 

[4est_4est_Gump]

Your right, we've lost of manufacturing base. We don't want it either. It won't be back in any of our life times because it's not something we actually want.

Our natural resources aren't going to save us and if you see Romney as our best bet so be it. You're dead wrong but feel free to fuck us.

You're

With it went out educational base...

Romney is not our best bet.

 

[RobDownSouth]

You're

With it went out educational base...

Romney is not our best bet.

"our"

 

[islandman]

I am no stranger to Iggy, or threats of Iggy, son. I think your responses are more of a knee jerk reaction than any form of gratuitous humoring. I don't think you can help yourself when it comes to playing this game, that's really all it is to me. I might even advance a position I don't personally hold just because I know it will propel a Democrat straight up the wall and bring them down snarling and snapping like a rabid coyote starring into a mud puddle. Like you do sometimes.

Dear puppetmaster,

We already know there's nothing but hot air in you.


Sincerely,

We who see through you each and every day

 

[islandman]

Can I assume you're speaking for everyone? Or do you just like to think you're speaking for everyone?

Do you know for a fact that all the WE's you represent have BB and 4est on iggy?

I do, and yes. We talked about it at the last party we had, right after we played a rousing game of 'pin the idiot on the garbage can'.

The mini-cupcakes were to die for.

 

[4est_4est_Gump]

Ahm on iggy???



Then so is Rothbard!

 

[4est_4est_Gump]

Fore more Years!!!

The majority of small business owners are putting greater emphasis on the bottom line and do not plan on hiring in the next year, according to a recent survey from The Hartford Financial Services Group (NYSE: HIG).

Only 33% of the 2,000 business owners surveyed by Hartford are optimistic that the national economy will strengthen this year. They also cited slow economic growth (67%), taxes (59%) and uncertainty with federal regulations (56%) as major risks to small businesses.

Small business owners’ economic concerns are shaping their business strategies, as 80% said they are finding ways to cut costs during a slower economy. Hiring expectations are tepid, with 67% reporting no plans to hire, while 59% said they have not hired in the last 12 months. Roughly half of those surveyed told Hartford that they are trying to maintain their current size in terms of revenue or employees, and the percentage of small businesses focused on growth declined to 41% from 51% in 2011.

Read more: http://smallbusiness.foxbusiness.co...owners-expecting-tax-increases/#ixzz29tSMowc1

 

[garbage can]

I do, and yes. We talked about it at the last party we had, right after we played a rousing game of 'pin the idiot on the garbage can'.

The mini-cupcakes were to die for.

Tsk, tsk, tsk, I feel bad for you.

Were you the idiot they were trying to pin on the garbage can?

 

[islandman]

Tsk, tsk, tsk, I feel bad for you.

Were you the idiot they were trying to pin on the garbage can?

No.

Per vette, I am the smartest man on Lit.

 

[garbage can]

No.

Per vette, I am the smartest man on Lit.

*laughing*.....All liberals know that Vette is full of shit, so don't worry about it....

 

[islandman]

*laughing*.....All liberals know that Vette is full of shit, so don't worry about it....

Making conservatives the idiots who believe him?

If you say so.

 

[4est_4est_Gump]

Recovery and the Fed's 'Exit Strategy'
Jon N. Hall, The American Thinker
October 21, 2012

Since the 2008 financial crisis, the Federal Reserve's policy has been to keep interest rates at about zero percent, and to run a program called "quantitative easing" (or QE), which is designed to pump money into the system by buying U.S. Treasury bonds, mortgage-backed securities, and other assets. These policies will someday need to be reversed (or unwound) in order to prevent "price inflation." This reversal of policy consists of raising interest rates and selling the Fed's recently acquired assets. It is called the Fed's "exit strategy."

As early as 2009, critics warned about the difficulties of the Fed's exit strategy and its potential for failure in preventing price inflation. After a speech by Fed Chairman Ben Bernanke at the London School of Economics, the British newspaper The Telegraph on January 13, 2009 reported:

Mr Bernanke is acutely aware of critics who fear that the Fed is storing up trouble by "printing money" and stoking a Zimbabwe-style surge in the US monetary base. "At some point, the Federal Reserve will have to unwind its various lending programmes," he said. This will happen in an orderly fashion. The excess liquidity poses no inflation threat because the "great bulk" is lying idle on deposit at the Fed. It will be mopped up "automatically" as markets revive.

In July of 2009, as the economy started to improve, economist Lawrence Kudlow in "Is Bernanke Wise Enough to Exit?" at Real Clear Markets wrote:

A third-straight rise in the Index of Leading Economic Indicators points emphatically to recovery and an end to the recession. Strong profits at companies like Apple, Caterpillar, Merck, and Starbucks suggest that "someone, somewhere, somehow is spending money," in the words of Wall Street blogger Douglas McIntyre. Or maybe the Fed's liquidity mustard seeds are finally germinating.

By "the Fed's liquidity mustard seeds," Mr. Kudlow was surely referring to QE1, the Fed's program of buying $1.25T in mortgage bonds launched in March 2009. With the economy showing signs of "green shoots," Dr. Larry wrote that Bernanke "should be getting ready to implement his exit strategy." Kudlow then expressed reservations:

Mr. Bernanke has a poor track record here. As Alan Greenspan's copilot in the early 2000s, Bernanke deliberately dissed the dollar and commodities in Fed meetings as potential inflation influences. So from 2002 to 2005, an over-easy Fed bubbled up housing, energy, and commodities, allowed the dollar to sink, and wound up moving the consumer price inflation rate from 1 percent to 6 percent, all of which helped sink the economy into the Great Recession. [...] I have no doubt that Mr. Bernanke and the Fed have the right tools to protect the consumer dollar. The question is: Do they have the wisdom?

Also in July of 2009, Randall Forsyth in "Bernanke's Non-Exit Strategy" at Barron's wrote:

Bernanke, the entire Fed, the Obama Administration, every member of Congress and all Americans should jump for joy for the day when the monetary authorities have to tap the brakes. That's because housing, employment and output would be in an upward swing, an outcome devoutly wished by all.

But Bernanke knows the risk of braking too soon. That's what happened in 1937, which fiscal and monetary policies both tightened, in part of misplaced fear of inflation. That set the stage of the second leg of the Great Depression that followed growth from 1933 to 1936 that averaged over 9%, but still left unemployment well in double digits.

In exit strategies, the consensus seems to be that timing, if not everything, is crucial. In "Will Bernanke's Exit Strategy Work?" at Reason Foundation, Marius Gustavson in February 2010 wrote:

Unwinding its current monetary policy is a difficult maneuver: tighten too fast, and the Fed could risk setting off a much dreaded double-dip recession; tighten too slow, and high inflation could result.

At The New York Times, Sewell Chan ends a 2010 article headlined "Bernanke Hints at Timing of Exit Strategy" by quoting Laurence H. Meyer, a former Fed governor:

"The Fed is operating in uncharted waters," he warned. "It has never had such a challenging exit. Don't expect the Fed to be perfect. Nobody is perfect."

In March 2011 at the Ludwig von Mises Institute, Robert P. Murphy concluded his article "Three Flawed Fed Exit Options" thus: "Bernanke has effectively gone "all in" with his successive rounds of quantitative easing, and I get the queasy feeling that he's bluffing." In August 2012, Martin Hutchinson at Prudent Bear wrote:

Various policy reversal strategies would be counterproductive. To take the most extreme example, it would be foolish to attempt to reverse "QE" without doing anything about the deficit. That would double up on the strains to the financial market from financing the deficit, making the annual net cash flow drain on the market perhaps $2 trillion rather than $1 trillion. Almost certainly, this would cause a liquidity crunch, producing an economic lurch downward that would both worsen the deficit and bring even more misery to the American working class. [...] It thus follows that reversing QE must come late in the Bernanke reversal process; that lowering the deficit must take a top priority and that spending cuts should precede or at least coincide with tax cuts.

Also in August 2012, Nouriel Roubini (aka Dr. Doom) opined: "the crucial policy issue ahead is how to time and sequence the exit strategy." Roubini continued:

"If not reversed, this combination of very loose fiscal and monetary policy will lead to a fiscal crisis and runaway inflation, together with another dangerous asset and credit bubble. So the key issue for policy-makers is to decide when to mop up the excess liquidity and normalize policy rates. [...] The biggest policy risk is that the exit strategy from monetary and fiscal easing is somehow botched, because policy-makers are damned if they do and damned if they don't. [Italics added.]

So more than three years after the first calls for an exit strategy, and we still haven't taken that off-ramp. In fact, we've just embarked on QE3, which is open-ended -- it could go on forever. Congress has spent about a $1T in stimulus while the Fed has created a few trillions in QE, and yet, "No Exit" by Jean Paul Bernanke is still the only play in town and the only title on marquees.

More than four years since the financial crisis began, America's central bank is still in "crisis mode," printing money. Is this what recovery looks like?