search elliott

  • Google

Enter your email address:

Delivered by FeedBurner


  • Where From?
    free counters
Related Posts with Thumbnails

« Yves the Bond Bull | Main | Dollar Gets Gobbled Up Today »

Tuesday, November 24, 2009


Feed You can follow this conversation by subscribing to the comment feed for this post.


Yelnick, good post. But your bias in the ending swipe re economic illiteracy weakens your point. Obama is no more illiterate than Bush, but finally the issue is between Keynesian stimulus or letting the water more quickly seek its own level. If you were president would you have opposed the authority of Bernanke, Paulson, Geitner?

Is the Keynesian model wrong? Perhaps. But I wonder whether the risk of a total collapse of the financial system, which one could argue has been thus far avoided, digs a deeper whole to climb out of than the re-inflating of the credit bubble through stimulus spending.

In the end, there may be no way to avoid paying the piper, in which case, at least we have had a little more time to contemplate our demise.

Why do we see so little intelligent analysis in the Media about where the job losses are, and what caused them?

Of course, many job losses were due to a slowdown in consumer spending. But I dont see that as a bad thing, consumers were spending too much, and not saving enough. So a slowdown tin their spending is really a good and necessary thing. A large reduction in expensive consumer debt is part of the genuine cure to this recessionary depression.

The area that has not been adequately discussed is the loss of jobs due to meltdown of the fictitious economy that grew up around speculative bubble related activities, like: property speculation, building of surplus homes in the outer rinf suburbs, mortgage banking, and activities that helped to finance the housing bubble, like CDO securitisation. I don't think that a loss of these jobs that never-should-have-been, can be regarded as a bad thing. Important parts of 2002-7 growth should never have happened, and so I call it fictitious. If that is the major part of job losses, it is healthy. Good riddance to all the jobs that were directly related to malinvestment.

Another area that is badly in need of shrinking is in the public sector, and in sunset industries like auto manufacturing. The state sector was swollen, by the mistaken assumption that the fictious wealth generation of 2004-7 was real. Taxes collected from blowing up the debt bubble led state, local, and national governments to expand, thinking they could rely upon a bubble peak level of taxes. The disapearance of the bubble jobs in the government sector is another good and necessary thing.

What ever happened to infrastructure spending, and all those "shover-ready" projects? It seems that Obama cheer-led the approval of a stimulus program, and real pork fest, that was designed by Pelosi and her cronies. But that reckless and huge spending has created few decent permanent jobs.

More intelligent thought needs to be put into stimulus program #2, if these is going to be one. Maybe genuine recovery will come sooner, if there is no second stimulus program, and the zombie parts of the economy are allowed to die a natural death.

"Deficits could cause a double dip recession. (Krugman's response: 'What? Huh?')"

No surprise there. A typical Krugman response to the intrusion of reality in his fantasy world.

When Prof. Krugman was awarded a Nobel prize, it did not raise his prestige, rather it cheapened the Nobel prize.

On my GEI website, Krugman is regarded as a villain, alongside: Greenspan, Gordon Brown, and the pink dinosaur, Barney Frank. I have loads of time for anyone who rubbishes this 'orrible gang.


GEI website?


The majority of the Stimulus Package is back-end loaded and won't be executed until 2010. Why is it that no one seems to understand this?

A second stimulus package is fantasy.


Looks to me like the bond markets are on the same page as you Yelnik. You see the bid to cover on the auction today? Pretty amazing - three straight auctions here all over subscribed.


PS - you were right about dollars - they actually did hit 74.50 (a little lower) - I doubt it stays there over Thanksgiving holiday though. We are looking at the same charts - that break should become support now.


The majority of the Stimulus Package is back-end loaded and won't be executed until 2010. Why is it that no one seems to understand this?

Great, another post where the poster seems to think only he is intelligent enough to understand the current situation.

Chart A will put you some knowledge.


Yelnik - you are engaging in revisionist history with respect to FDR and Hoover. The main problem the revisionists run into trouble with is simply - how is it that FDR got elected to 4 straight terms if the "new deal" was not working for the "economy" of the people at the time? And who was in position to judge the result best - the people that lived it or the latter day revisionists?

FDR simply continued Hoover's policies - come on.


PS - some group bought 28,000 vix calls this AM for either December or January - I was half asleep when I heard this on CNBC - does anyone know more about this?


Yelnik – maybe you can do a post about that market action today? I’d be really curious as to what people think about this situation. Dollar sure smelled like a blow off, the equity market sure didn’t follow and I have doubts that the auction today alone led that drop in T-Notes here. And I would love to know who in the heck bought all those vix calls – December or January - you know, short term calls. Also, isn’t the S&P due for a cycle low shortly (I think)? Frankly, Prechters call makes an awful lot of sense to me here.

Here is a question about dollar – if you were short dollars and you got that windfall especially today, wouldn’t you protect that on Friday-Monday? Wouldn’t there likely be a fairly strong rally in dollars coming here?



"Chart A will put you some knowledge."
- - - DG

Perhaps you can post a chart of the S&P and let us know how your shorts are doing.


"Obama is no more illiterate than Bush"

Great, I'm going to sleep better now. Right up there with deficit neutral and sustainable debt growth. Bush couldn't make change for a dollar.

For wavers, the short term issue revolves around quantifying how willing our government is to rape and destroy the future generations of this country. Good luck timing that. Today's citizen has an embedded divine right not to pay its way and this view is fully endorsed by the majority. I think "stimulus verses economic hardship" conveniently misrepresents the issue. Better to call it "pass the buck verses economic hardship" because policy makers in their life times have no intention (or ability) of ever accounting. And I don't think Keynes ever proposed such a one way street to oblivion, so invoking his economic policies is disingenuous at best. With the rise of Obama, the term balanced budget has disappeared completely from our vocabulary. Now it is all about sustainable debt growth or what we can get away with on a continuous, long term basis.

The longer term issue is just how bad government is in this country. And forget the elephant/donkey cannon fodder. That was invented to keep folks standing around with their hands in their pockets and their mouths open.

And isn't the real issue the fact that there is another cock on the block. Ok, I get it, let's get so far in debt to China that they will have to look after us. Interesting how this dogma starts to surface once the great generation is all but gone.


Bird, I am happy to stipulate that Bush was an economic illiterate as well. How could he not be when he cheer-led the greatest asset bubble in American history (with his calls for an "ownership Society" and support for no money down loans)? But it is now Obama who put half the Stimulus into tax rebates which have been shown not to work the three previous times when tried, including a year ago under the hapless Bush!

"Embracing the W" does not mean THAT W.


Perhaps you can post a chart of the S&P and let us know how your shorts are doing.

Trade's still on, unlike your knowledge of the timing and impact of the stimulus spending.


Joe, FDR caught the bottom! We bottomed in Sep32, then had a 2d bottom in Mar33 when FDR took over. Economy grew over 10% each year for the next three years. FDR got re-elected quite properly in 1936 after such a rebound from the Hoover years. Yet almost all of the initial programs of FDR had been started by Hoover, including the bank bailout plan and the public works plan. Hoover Dam is not FDR Dam.

I give great credit to FDR for restoring confidence, but a lot of that was due to the rebound. FDR also took us off gold and revalued, while Hoover tried to say on gold; and he pushed the NRA, a micro-management beyond Nixon's price controls, which was declared unconstitutional during those years in a famous case where the Feds tried to regulate local prices. When the full scope of FDR's changes began to take effect, including a very Hoover-like attempt to withdraw stimulus, we had a fall back down in the second wave of the Depression. FDr almost lost in 1940 but the buildup to the war helped him.


Does anyone remember when Obama said it would be OK to buy stocks? It is very scary when politcal leader say everything is OK. Coolidge said that everything was OK in early 1929, right before he left office. We all know what happened. I dicussed a little bit about politcal leaders, the Great Depression, and Obama all in the same place:

I think the real question is not "what" letter of recovery we are in, but "if" we are in a letter at all.

Finally, I hope we don't get out of this recession with a war. Simply put, I don't like wars, and the world sure doesn't need another one. If governments would just let things "go" and see where the chips fall, I think we would be better off.


Grasp, nice comment and nice post on your site  


Joe, a quick comment on today will be posted shortly


TC, I will do a high level Stimulus post. There is a lot of noise about the stimulus, but the basic structure and timing are pretty well known.

The comments to this entry are closed.