ISM the Fruit of the Loom of the US of A

Robots are working at hyper-speed?

Apparently Cadillac is not a manufacturer.

For all those worried about the 1%:

Mitt Romney, reporting from personal experience, said yesterday, "the very rich are doing just fine".

sportsfan wrote:

Didn't someone say that we were in a depression?

Only on Main Street due to "cost push" and "wage deflation".
The people that count are doing just fine. No worries.

Walt, I just got another Ben Silver catalogue in the mail. Ostrich or lizard belts are more expensive. Again.

burnside wrote:

Ostrich or lizard belts are more expensive. Again.

Makes me feel soooo bad.

curious wrote:
with monthly payments roughly equal to those they make under their current loan.

So take a non-recourse loan and make it recourse...at the same payment. Why would anyone be that dumb?

Sure. But either the purveyor is putting himself out of business or Romney is pretty much right.

Good Morning

We manufacture fertilizer!

OMG!!!!!!! LMAO!!!!!!!!!!

NRC spokeswoman for emergency at Illinois nuke plant also works as belly dancer — “Absolutely there’s no threat to the public” (PHOTOS) « ENENews.com

burnside wrote:

Romney is pretty much right.

Romney is right. The top 1% are doing just fine.

josap wrote:

Only on Main Street due to "cost push" and "wage deflation".
The people that count are doing just fine. No worries.

Pro-tip: In a two-tiered money system, much as the gains from inflation are not distributed equally, neither are the losses in a deflation.

comments about gas not making new highs . . . and what was it in '99/ '01/ '03. I remember ~.68/1.20/1.50. Hmm, let me just do some quick calculations here . . . (it's been 3 for the last year, so we'll call it prices doubling in 10 years). Rule of 72 gives an approximate 7% inflation rate in gas over the past decade.

But, but, but gas hasn't reached a new high === idiots can't see the forest for the trees.

If you want good charts here is a good collection Financial Markets, Current Prices and Economic Trends.

The only reason inflation has not taken off is because demand for money is very, very high (abnormally so). And that bears out in reality, people are trying to pay off debts and hold money because they are unsure about jobs.

When that flips (and it will), inflation will hit like an electric shock and everyone will be standing around saying but,but, but.
Make no mistake, it's coming . . . just a matter of when.

The auto bailouts were easily the best thing O ever did IMHO.

BBC News - Europe freeze: Heavy snow across the continent

yjacket wrote:

Make no mistake

In our consumer lending business there is no DEMAND because lack of jobs or lack of job security and still up to their eyeballs with past debt and credit shot to hell.

Plus pilots. Planes pretty much fly themselves these days.

josap wrote:

Never would have guessed.

Well, as good as TPTB are at hiding their outsized gains during inflationary times from public knowledge... well, you can fill in the b(l)ank here.

Bottom line comes back to spendable dollar. Wages, inflation and credit, the balance has been broken.

JP wrote:

Those maintenance guys are expensive, so I'd start there.

That is the plan, outsource the maint work. They are the only airline left that does maint in the US. They also will dump the pensions on the fed gov.

yjacket wrote:

The only reason inflation has not taken off

I've become more aware of it recently. Don't think the lid is going to stay on much longer.

Absolutely, but it's also because rates are so incredibly low that banks won't lend because the risk premium isn't there.

I 100% agree if the Fed. stayed out of the mess, we would have seen massive deflation (this is a great thing too!). They have intervened and have already caused inflation (just by the fact prices haven't fallen as much as they should have).

It's quite funny, if you actually look at the data from the Great Depression, everyone thinks deflation was the norm throughout and was horrible-incorrect. Deflation until they devauled the dollar and then it was 3-5% inflation . . . and that was the real killer. It wasn't the deflation, it was the inflation that came afterwards when no one had jobs.

We are repeating the same mistakes, a little deflation at the beginning, Fed intervenes to prevent it, we get inflation and then people get killed. Once people with no jobs exists, inflation/deflation doesn't matter to them b/c they don't have money anyways!

sdtfs wrote:

The only reason inflation has not taken off

I've become more aware of it recently. Don't think the lid is going to stay on much longer.

Maybe...maybe not...the Fed's wanton printing has no doubt boosted commodity inflation along with other mal-investment. We might see rampant inflation before a crushing deflation, or we might bypass the inflationary phase altogether...

shill wrote:

These Auto makers have been bailed out for many many years prior to Obama, so no hat here for either of them.

I heard an economics prof. say that if GM hadn't paid the bonuses to its executives during the previous 15 years and had saved the money for" a rainy day"instead, GM wouldn't have needed to be bailed out.

Its interesting when people die.

Give us dirty laundry!

JP wrote:

You mean the bubble-chested bleach blond, who comes on at 5, who will tell us about the plane crash with a gleam in her eye?

ResistanceIsFeudal wrote:

That's what the people want to see...

dirty laundry

I heard an economics prof. say that if GM hadn't paid the bonuses to it's executives during the previous 15 years and had saved the money for" a rainy day"instead, GM wouldn't have needed to b bailed out.

I think I read that somewhere as well Trader. And your correct its not Obama's fault, its ours for putting up with this crap.

Day after day, nothing is shocking anymore, not a dam thing.

Tony Montana was correct: Capitalism means getting fu*ked.

Lobbyist Ben Dover wrote:

Wages, inflation and credit, the balance has been broken

The balance has been broken with no expert in sight only guessers needing a larger audience to feed their fifteen minutes of fame.

black dog wrote:

How do you know? I read their report - no mention of dealer inventory. A lot of their "sales" could be inventory piling up on dealer lots.

I understand the Germans have a couple of complaints about Italian accounting as well.

QE2 ended approximately July-August 2011, and there's a decent chance that there will be a QE3 this year so the Fed hasn't even stopped easing yet. We could be years away from meaningful Fed tightening.

Seb, your just discovering this?

JP wrote:

Those maintenance guys are expensive, so I'd start there.

Contracted out to Mexico and Brazil...

shill wrote:

Seb, your just discovering this?

Of course not. I posted it as a public service to the bears and other doomers who think we're going to see a bear market/recession anytime soon.

S.

gabyjan wrote:

why is market so happy?

Is somebody rubbing it?

redacted, you read it.

traderwalt wrote:

I heard an economics prof. say that if GM hadn't paid the bonuses to its executives during the previous 15 years and had saved the money for" a rainy day"instead, GM wouldn't have needed to be bailed out.

What did he say about the unions? Same could be said for both as I see it.

I posted it as a public service to the bears and other doomers who think we're going to see a bear market/recession anytime soon.

Holding April puts in a few areas. Irrational exuberance IE: "The market will never go down " has taken many a bull to the grave, this time will be no different.

As another reminder: GNP growth was fairly off the charts 33-37 (and yet it was still a depression).

A discussion of a technical recession at this point is really meaningless IMHO.

World-Wide Factory Activity, by Country - Real Time Economics - WSJ

black dog wrote:

and yet you're "short"?

Speaking of...anybody seen HG lately?

sum luk wrote:

It's my personal hope that they hyperinflationistas actually bet the way they talk. That alone would quiet the argument.

INVESTORS: DE-MYSTIFYING THE CENTRAL BANK BALANCE SHEETS

A Dash of Insight

I thought this was a pretty good refutation of the hyperinflation argument. Money that gets loaned out to banks that then turn around and loan it out into the economy is inflationary. Money that gets loaned out to the banks *but simply stays on their books" does not.

Even when the Fed does get around to tightening, it'll just be taking back those excess reserves, not removing money from the economy.

Sebastian

It is my impression that we are consuming the unseen savings(my understanding of capital) of our society to maintain a standard of living that we are not producing enough for. In my delusional opinion at some point things should start breaking down and it will be impossible to fix. One outcome would be shortages and that will make money lose it's value to real goods. But I as being an idiot with a laptop have no real idea if it will ever come about

eh, I think we get very high inflation, something like the 70s. Lot of middle ground between >5% inflation and hyperinflation (which is really easy to stop--just stop printing/creating zeros).

I wasn't around in the 70s, but I'm curious when inflation was 9-10% if people thought we would hyperinflate?

But hey, I do put my money where my mouth is avg. buyin on sliber is $13, on glod is 1k.

How will they take it back?

tg wrote:

It is my impression that we are consuming the unseen savings(my understanding of capital) of our society to maintain a standard of living that we are not producing enough for.

The Capital Spectator: Major Asset Classes | Jan 31, 2012 | Performance Update

and yet you're "short"?

Yeah. A serious lapse in judgment, paying too much attention to the bearish arguments of the Commentariat. I'll remember this lesson for a good long while.

Sebastian

If you haven't taken you losses, there is no loss. Bankster 101

Sebastian wrote:

paying too much attention to the bearish arguments of the Commentariat. I'll remember this lesson for a good long while.

What would Buddha do? Age-old advice for investors - MarketWatch

Yancey Ward wrote:

Bill Gross:
http://www.pimco.com/EN/Insights/Pages/Life-and-Death-Proposition.aspx 

Why's Pimpco getting all philosophical?

I don’t remember much of this life, and like Virginia Woolf, nothing of the herebefore. How then, could I expect to know of the hereafter?

Blaming the messenger: Greece's chief statistician under fire - World Wires - MiamiHerald.com

ATHENS, Greece -- Greece has won strong endorsements in the past year for shoring up its economic statistics after years of fudging data to conceal its deficits and financial mismanagement, but the man who's responsible for restoring the country's reputation is now the target of possible prosecution.
He's been accused of exaggerating Greece's deficits in a conspiracy to strengthen the hand of the European Union and the International Monetary Fund.
Even as the country navigates its way back from the brink of economic catastrophe, the same crazy political infighting that brought matters to a head here - and provoked a broader crisis for the euro - continues to dent Greece's international image.
"To me, it is suicidal," said Andreas Georgiou, the target of the conspiracy case and president of the newly established independent Hellenic Statistical Authority, known as ELSTAT. "We are in a process of perpetual hara-kiri. And it is not necessary."
The case is flimsy at best, but in theory the country's chief statistician could land in prison for life for issuing data that his detractors say led to higher bond prices and a drop in housing values.

yjacket wrote:

So my question is please tell me "exactly" how the Fed will "take the money back" without causing some kind of disruption in the system.

... why don't you try reading the link he posted

Yeah. A serious lapse in judgment, paying too much attention to the bearish arguments of the Commentariat. I'll remember this lesson for a good long while.

i'm sticking with my H2 recession call ... even if it comes to fruition it is waayyy too early to go short.

btw, i was an "optimist" last year in my 2% to 2.5% 2011 GDP growth call.

josap wrote:

People also bought on credit as the interest rates set by usary laws was lower than inflation.

American Express. Karl Malden. It didn't make me want to use American Express.

yjacket wrote:

Thanks. . . from what I've gathered the seeds of the 70s inflation was sown in the 60s.

Most of it was oil. Triple the price of a basic staple of an industrial economy and watch what happens.

yjacket wrote:

The Fed. can't just "take the money back". While the Fed prints money, it then actually buy/sells it to banks. They can't take it back without buying it back from banks.
So my question is please tell me "exactly" how the Fed will "take the money back" without causing some kind of disruption in the system.

Because the money didn't go out into the economy. Under more normal circumstances, the Fed would take the money back from the banks, who in turn would have to get it back from whoever they loaned it to out there in the economy. That would, obviously, have the effect of slowing down the economy.

This time, however, the banks aren't loaning it out. It's the difference between borrowing $20,000 on your credit card and spending the money and borrowing the same amount and just keeping it in cash without spending it. By simply keeping the money, you can pay it back anytime without repercussion.

Sebastian

"Yeah. A serious lapse in judgment, paying too much attention to the bearish arguments of the Commentariat. I'll remember this lesson for a good long while."

The perma doomers can be as hard on your account as the koolaid drinkers.

josap wrote:

How long before we get 5% unemployment and raising wages? It may be a very long time.

In the '80s, it took about 7 years ... for the unemployment thing. The wages ... not so much.

flaminia wrote:

Yeah. A 20% increase is "nearly unchanged."

This is wrong on so many levels, I don't even know where to begin.

The perma doomers can be as hard on your account as the koolaid drinkers.

Not really. If you bought the precious when they said to, you are pretty happy. The real doomers think putting money in the market is idiotic. (no offense meant, Sebastian).

lol . . you didn't answer my question. I did read the link and it was more blathering about how it doesn't matter. But again it did not say "how" the Fed "takes money back from the banks"? More obfuscation about how "it doesn't matter".

It just says they will . . . please tell me the mechanism as to how.

I'll tell you how, they have sell off the assets they bought from the banks. If when they sell off those assets they are still worth less than when the Fed bought them then the Fed cannot take all the money back, it can only take some of it back.

Very simple. Fed buys Y from banks @ price Z. Say Y is really worth .1 x Z. Fed has now introduced .9 x Z onto banks balance sheets. Bank holds .9*Z on Feds balance sheet (it hasn't gone out into the economy). If the Fed now buys back Y, say Y is now worth only .6 x Z. They buy it back at .6 x Z. That leaves an extra .3 x Z (.9 x Z-.6 x Z) on the banks balance sheets.

Oh you say, well the bank will just sell it back at price Z, and please tell me exactly how the Fed is going to force the bank to voluntarily give up .3 x Z of free money??

It does not matter that the money is not "in the economy" the Fed cannot take it all back.

Elvis wrote:

People also bought on credit as the interest rates set by usary laws was lower than inflation.
American Express. Karl Malden. It didn't make me want to use American Express.

Credit card rates were capped at the state usary rate, which was 10% ibn Az, Loans for cars, houses etc were 14 to 22%.

local gas prices $3.37 --$3.59
diesel $3.78-3.91

from: ISM A Snoozer, Just The Way The Bulls Like It - MarketBeat - WSJ

Alan Ruskin, global head of forex strategy at Deutsche Bank:

Firemane wrote:

In the '80s, it took about 7 years ... for the unemployment thing. The wages ... not so much.

Real wages have not increased since the 1970s--
But we did have a almost 200 year run on increasing wages, which brought many to our shores, and validated our current economic paradigm.
That is over.

yjacket wrote:

eh, I think we get very high inflation, something like the 70s. Lot of middle ground between >5% inflation and hyperinflation (which is really easy to stop--just stop printing/creating zeros).

The John Koo article posted last night was an excellent read. Many thanks to whoever posted the link. (I don't remember who it was.) Among other things he states that in a balance sheet recession--which is what we are in--it is virtually impossible to get inflation going via monetary policy.

Construction Spending increased 1.5% in December

black dog wrote:

the FR will shrink its balance sheet ... by selling assets or letting them run off (removing money from the economy)

They cannot. Will not. Cannot because it hurts the banks. Will not because it hurts the banks.

Sebastian wrote:

By simply keeping the money, you can pay it back

It's cute that you think that money exists, and hasn't been leveraged over and over. Who is going to be lending to the US if the primary dealers are paying the Fed?