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November 18, 2009

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Pofarmer

As if it won't be a tax increase when the Bush taxcuts expire. But, that'll be Bush's fault.

Neo

Raising taxes going into an election year ..
Yeah .. that's the ticket.

Gregory Koster

Neo, I hope it will be the ticket for the GOP...It's a harrowing time, but think of the fun you can have with the usual Once voter. Gitmo not closed. Troops still in Afghanistan. Taxes rising and rising. The prospects for the GOP are bright, which probably means that every 75% of the GOP minority in Congress are shagging interns, while the press busily records the evidence, to be exposed about 20 October 2010.

God help us all!

Neo

God help us after the 2010 elections.

"The One" doesn't know how to operate without an overwhelming majority in Congress (and even then they can't seem to ...), so I expect an angry White House as Obama will be a "long-tailed cat in a room of rocking chairs."

Neo

So much for Hope

Fifty-two percent (52%) of voters feel that America’s best days are in the past, according to the latest Rasmussen Reports national telephone survey. This marks the highest level of voter pessimism in two years and is up 13 points from a year ago when Barack Obama was elected president.

daddy

Don't know about Reid His Lips, but I just listened to the Obama interview with FOX's Major Garrett, and from Obama His Lips I heard this new twist in prefacing a non-answer to Garrett's question;

"As I've said repeatedly, and I'll say it again..."

Not bad, not bad. Self referential twice before pseudo-replying.

But now we need to see if he can do a 3 way. You know, some updated version of the old self-referential "Me, myself and I."

Something like "Well Major, as these folks have heard me say before, and as others have heard me reiterate, let me say again ..."

That's what I'm looking for.

Then after that it's on to bigger and better things:

"As I told them In the 86th Congressional District of Arizona, and as I told them in the great State of Eau Claire, and as I told them in Cominsky Field, and as I'll tell them in all 57 States across this great union of yours... errr ours...

BR

Oh god, that was hilarious!

Jane

Daddy,

There is an FHA computer glitch - whatever that means - so nothing is flying - in case you were planning to.

I assume this is Ibama's first step to taking over the internet - ala Clinton's bombing of the aspirin factory - but what do I know?

Jane

I just reread that post and realize that I sound like a complete lunatic. I really don't expect any of you to connect the dots in my head.

Pofarmer

I think I understood it Jane.

sbw

Jane: "There is an FHA computer glitch"

I understood it perfectly--the Federal Housing Authority has taken over air traffic control from the FAA and the change is working with typical bureaucratic precision.

Jane

Po, sbw,

We will all go to the loony bin together. (I hear there is nice weather there - but NO nude beaches)

clarice

HEH--daddy--very good..

Sue

Jane,

I just reread that post and realize that I sound like a complete lunatic.

Not to me. It just sounds like you are coming along nicely expanding on my conspiracy theories. Attaboy...uh...girl.

Extraneus

We will all go to the loony bin together.

I hope it's not "by invitation only."

Jane

You're in Ex, no worries.

Old Lurker

Can I come, can I come?

Rick Ballard

OL,

We're here already. I'd just like a day pass from time to time. This place is driving me nuts.

hit and run

I've got home field advantage here.

Jane

Sheesh guys of course - it will be great fun to all be daft in the same location.

Well the sane physical location. We've got the rest nailed.

Old Lurker

Rick, it does seem the other lunatics are slowly discovering economic reality. Finally others are counting containers as you have been doing for some time and crying foul on the Chinese economy. That will ripple in interesting ways though all sorts of commodity markets. Forbes is producing a state by state grading of the "cost of living and doing business" in each state taking into account claims made on future earnings (by bonds and by pensions etc) in addition to present taxation. Unless blue state spending is nationalized, that data would suggest we should by stock in U-Haul. And even the nuts are scratching their heads at the costs of implementing the dreams of our president as unmployment approaches 11% and "adjusted" unemployment approaches 20%.
My mattress is awfully lumpy.

hit and run

http://www.etrucker.com/apps/news/article.asp?id=83042>Economic Green Shoot Alert!

FTR Associates released preliminary data showing Class 8 net orders for all major North American OEMs totaled 21,792 units in October, reflecting a definite upsurge in order activity.

October’s order volume is a 104 percent increase over September and a 117 percent year-over-year increase. For the last three months, Class 8 orders were received at an annualized rate of 172,300, significantly better than early 2009.

Yeeehaaaw! I've said before that you can watch truck orders to see where transportation companies are anticipating a pick up in economic activity and therefore freight, right?

Well. Don't listen to me about that this time.

What we've got here is a "cash for clunkers" meets "carbon footprints are for suckers".

“All indications are that the October increase is due to the filling up of remaining 2009 production slots for trucks with the older 2007 engine technology and to avoid the new 2010 engines, which due to tighter emissions standards will be more expensive and will employ new technology," says Eric Starks, FTR president. ...

"However, we believe this is a temporary situation that may actually take orders away from early 2010, so our forecast for next year remains very conservative until we see economic activity to support solid orders going forward.”

As you were.

Old Lurker

Speaking of Green Shoots... the LUN will sober you right up.

Pofarmer

which due to tighter emissions standards will be more expensive and will employ new technology,

Nobody, and I mean Nobody, wants the new Tier IV diesels. Nobody. The Tier III's have been a disasters that isn't fully worked out yet. CAT bowed out rather than have their name sullied by what's about to come.

Like I've said before, daft environmental policy is going to work REAL HARD to tamp down any recovery that might want to happen.

Rick Ballard

OL,

Evans-Pritchard has mislaid his calculator (once again).

"If so, gold would go "up, and up, and up" as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s. "

The average DSR for the '80's was 11.4 with a decadal high of 12.4 in Q4 '86. The current decadal high is 13.9, reached in Q1 '08. It has since dropped to 13.1 and would reach the '80's high in five quarters and the '80's average in 11 quarters (assuming the drop continues at the same rate). Two years and nine months is somewhat different than 9 years.

It's still Zombietimes and the Ghost Fleet still rusts at anchor. SocGen might be right but I'd love to see their options position in gold before nodding in agreement.

I wonder if the President is searching through his mail today, looking for the strong letters promised by China and Japan after they gave him rather brief answers? Perhaps someone could explain (with pictures) that 'setting a course between Scylla and Charybdis' does not refer to the establishment of a ferry service.

glasater

After reading Melinda's link from the past thread--Old Lurker was trying to diagram the thing as I remember--perhaps Zero is not satisfied destroying the US financial system--he wants to bring down the whole world.

Old Lurker

Good point, Glasater. And you are so good to have connected the two. I say we task Melinda and Rick with the assignment of merging the two predictions and explaining them to us, here in the nut house.

Then again if all collapsed, we might land on the top of the trash heap, relatively speaking. Since he seems to want us to stive for a position somehwere deeper in the pile, I suspect he wants some of his pals to survive better than others. Hugo, perhaps?

Rick makes an excellent point about going too long on gold. Ask the guy advising that how much, exactly, he owns and in which form.

Jane

Rick makes an excellent point about going too long on gold.

Could one of you please interpret that to a peon like me, since I cannot figure out what Rick is saying.

Two years is okay, but not 9 when it comes to gold? Is that the short answer?

Janet

LUN a clever video explaining the public option. It could also explain Dem. vs. Rep. with the ref being the media!

glasater

OL--I appreciate your plan:)

What concerns me is the herd mentality in assuming inflation is right around the corner.

John Paulson's going into a gold play has "the street" excited for sure but he did "make" 20 bil on the financial almost collapse a year or so ago so he can play:)

daddy

Jane,

Your post made good sense to me.
But of course I've had years of experience deciphering Chinese, Khazak, and French Air Traffic Controller's:)

As for the FAA, my big fear about those doofus NorthWest guys who fell asleep last month or got naked or whatever it is they did, is that it may cause a big bureaucracy like the FAA to mandate excessive in-cockpit guidelines or regulations, simply to cosmetically assure the public that steps are being taken to guaranty the safety of the traveling public and blah, blah, blah.

And what with this Administration so chock full of imbecilic, common sense lacking, Do-Gooder's in positions of power, I find I am always concerned about story's reporting anything about the FAA, so please keep posting such stuff when you come across it.

Jane

Daddy,

I think that is the goal - government full of personal buddies of those in power designed to take more and more money from people who work for a living - and the FAA will not be spared.

Are you saying I can now get a job as an air traffic controller? Cool, but I'm doing it on St Jane's.

Rick Ballard

Jane,

Being "long" in a stock or commodity means that you have purchased it in the belief (vide 'faith', 'hope') that it will increase in value. The author of the piece linked by OL has a rather apocalyptic bent and seized upon a worst case scenario presented by the French bank, SocGen, which suggested "going long gold" as a means of protection against the apocalypse. The author used the Debt Service Ratio as a boogeyman and posited nine years as the length of time required for the general population to return to a "safe" ratio (he plucked the '80's from God only knows where).

I just grabbed the actual dataset and calculated the length of time required to flee to "safety" based upon what is actually happening. It has nothing whatsoever to do with "going long gold". When Safeway announces that it is accepting gold in payment for food I'll consider it.

IMO - the President is getting slapped silly by reality. His pathetic socialist plans have hit the choke point of the primary dealers telling Turbo Timmy that there isn't another $1 trillion on hand this year at 1% rates. China and Japan just told him the same thing and even the (D)irty socialist wing of the Democrat party understands that the total annual federal tax theft take only amounts to around $2.3 trillion.

Raising taxes by 40% in a deep recession isn't generally considered to be an optimal policy.

Pofarmer

Raising taxes by 40% in a deep recession isn't generally considered to be an optimal policy.

Doesn't that rather depend on what you're trying to accomplish?

Pagar

O/T but it highlights that the fears expressed by daddy: " that it may cause a big bureaucracy to ------------------------------

This story gives the Post Office a chance to attack another Christian holiday tradition, and strike another blow against Alaska. The Obama administration must be so pleased.

"No more letters from North Pole? Ho ho oh no!"

LUN

I wonder what they would do if it had been a sex offender involved with Kwanzaa.

"1, Kwanzaa actually was created in the U.S. in 1966 by Dr. Maulana "Ron" Karenga, the head of a violent black-power group, United Slaves Organization, which was a rival to the Black Panthers.

In the 1970s, Karenga served four years in prison for conspiracy and assault in the torture of two female followers."

Link

Neo

The whole point of “Roe v Wade” was privacy trumped the wishes of the government.
The privacy was based on being apart from the government.
Under a “public option” and under government mandates, the government is making the choices of what kind of medical treatment you are allowed, which runs completely counter to the “Roe v Wade” argument. In effect you have given up your privacy. Under this revised regime, a new administration & Congress could change the benefits allowed and completely and legally wipe out abortion (or kidney transplants, hair plugs, etc.) by a vote of Congress and the President’s signature.

My question is .. based on "Roe v Wade" is a federal or federal-only healthcare Constitutional based on the destruction of privacy ?

daddy

Are you saying I can now get a job as an air traffic controller? Cool, but I'm doing it on St Jane's

Absolutely, Jane,

But the weather at ST Jane's needs to be so consistently beautiful that it's always simply visual approaches, no difficult Instrument approach stuff required. Simply have Shrimp on the Bar B on the deck of the Control Tower, and limit the nude beach to the other side of the island so as not to distract incoming aviators.

And no temps at all like the single digits we've had here lately. Think it's 9 F as I type this today. Brrrrrrrr.

Frau Nebenan

OL - I hope some of the lumps in your mattress are victuals; gold can buy food but won't help if there's not enough food around. Remember clarice recommending food storage a few months ago?

Old Lurker

You guys all chimed in well while I was out. Jane, Rick explained it well about the gold - and Frau that's why those lumps in my bed aren't!

I know the crowd's moved on, but here's some more decoding for Jane:

Jane, what I would add to Rick's is Glasater's wise observation about the herd mentality expecting run away inflation might be very wrong in the shorter term. So if everyone buys gold (goes long) because they expect inflation...imagine what happens if the opposite (deflation) occurs. That's where catching China lying about the real state of their economy comes in. IF they boom, they will gobble up lots of raw materials (commodities) and that bids their prices up and that fuels global inflation. If the herd thinks that, then they fall for the inflation expectation and that by itself can cause it. But if China is fibbing, then they don't gobble up the raw materials and the surplus of them causes deflation. And it's deflation that crashes economies big time...1930 comes to mind. And in that case, Gold goes back to $300 long before it sees $2,000.

And that's why Rick said he wanted to know how much the guy predicting inflation was backing his advice by owning gold himself, because if he owns none, he is spooking the herd with perhaps another agenda in mind.

Clear as mud?

BTW when that guy on TV says "and gold has never been worth zero", while true doesn't make much difference if you bought it at $1150 and it drops 90% in value!

BTW#2. You probably know this, but the reason deflation is so deadly is that in a highly leveraged society (lot's of people own things they bought with debt) well when inflation happens they make out big time, and the banks get paid back easily. But if defaltion happens, the values of the assets backing those loans fall below the loan amounts and then the loans fail and then the banks fail and then the economy implodes. That is obvious I know, but the truth is most of the folks who lived through real deflation in the thirties are gone now, and boomers on down have known nothing but inflation their whole lives. So when the masses don't see it coming, we need wise leaders. So this President, this congress, and these other idiots scare the carp out of us. And if they are evil and not just stupid...so much the worse.

clarice

Reid's calling for a vote on the Obamacare bill Saturday night..He's bought off Landrieu.

Old Lurker

Saw that. $100M.

Pofarmer

He's bought off Landrieu.

This is how a Nation dies? Politicians bought off with their constituents money?

Damn them all to hell.

Melinda Romanoff

OL-

Gold goes to $50, if China gets caught out.

And what if the European Banks were leveraged at twice what Bear Stearns was (37 to 1), and the ECB has been papering over it all, with no de-leveraging done at all.

I just hope we get through our pain before theirs hits. There's something to be said about US transparancy, after all.

And the deflationary aspects are what I've been talking about all along.

Does anyone remember what Jarden Corp. sells? They can't keep inventory on the shelves. And it ain't for 'shine.

Buy the good pressure cookers now is my only suggestion. Jarden-LUN.

glasater

I'm finally getting into the meat of the book "The Forgotten Man". An amazing story of those times and deflation was seriously terrible for the folks living through it.
Thank you Old Lurker for your observations and explanation and to Melinda also.

Jane

Thanks guys, I've done well in commodity based stocks and was thinking yesterday that maybe I should buy more - which is why I was interested in how long is long.

OL - do you see any chance of deflation down the road? Any signs that stick out for you?

Daddy, more than likely you will be one of the few planes landing on the island so if nothing else the babes of JOM will simply cheer you down.

Old Lurker

Jane as Rick and Melinda have been saying all along, the elephant in the room is when China will get caught lying about the real state of its economy because that can lead directly to the deflation we worry about. Even if China rumbles along, it can only do so if others buy their stuff. Since the US is the biggest consumer, if we head back down, that increases the chance that China will implode. On that I note that home mortages have their highest rate of delinquency ever today...not a year ago...and more observers see that problems in the commercial loan markets are set to pop too. Add to that a new health bill and the expiration of the Bush tax cuts next year, not to mention all the new taxes buried in the health bills, and the fact that US corporate taxes are already the highest in the world...I cannot understand why a business should risk adding a single new employee. Like somebody said here last week "your raise/bonus is the fact that we are not firing you".

All that said, I attended a board meeting last night where some very very smart people think the glass is half full.

Tough call, Jane. Stay alert and ready to jump out; when/if it flips it will be very fast.

glasater

To a certain extent we are in a deflation situation right now in that banks are hoarding cash and not making loans to small business.
Haven't checked with PoFarmer lately but farmers are small business and likely to need operating loans. They may be getting squeezed in that situation.

glasater

Regarding gold investment.....

It's my understanding if you have the physical "stuff" and try to sell a quantity to take advantage of the run-up in price--you are taxed at 28% on profit because it is considered a "collectable".

Jane

Glasater,

That is my broker's position.

Pofarmer

Haven't checked with PoFarmer lately but farmers are small business and likely to need operating loans. They may be getting squeezed in that situation.

As long as you are financially sound, then it doesn't appear to be a problem. I think banks are hoarding cash in the anticipation of needing it to cover housing and other loans going bust. Read the other day where there was a house in California, selling for $250,000, that sold for $426,000 on 2001, or thereabouts, and had, get this, $800,000 notes outstanding against it. First, Second, and home equity line. There are some folks taking HUGE haircuts out there. It's a wonder that there aren't more banks failing, and, there would be if the Fed wasn't letting them wiggle around the rules.

glasater

Wow Pofarmer!! What a story on that CA home!!

Jane Wells just said on CNBC that the unemployment crisis in some parts of CA would be worse except people are leaving the state.

Most of the farmers in our area are in fair shape but the vineyard guys have sunk a ton of money per acre into their property and its not paying well if at all. Have heard of figures of fifteen plus grand per acre investment and most likely closer to twentyfive. Wine grapes a couple of years ago were selling close to two grand a ton. Now its two hundred....
Many small vineyards are on the market right now....

glasater

For Jane--if you get back here from all the climate fraud business:

It’s Still the Worst Deflation in US History

Rick Ballard

Glasater,

That has to be read in conjunction with this. It's very easy to come up with a scenario involving further deflation (a worse than anticipated collapse in commercial real estate would do it) which causes commodities to collapse just as Uncle Ben fires up QE II - Monetization - The Real Thing.

I really lean towards cash for the moment because I believe that deflation has the whip hand for at least another 12 months. I don't trade though and a lot of 'the trend is my friend' folks are doing just fine. At the moment.

glasater

Thank you Mr. Ballard--as the late great PeterUK would address you--for your response well taken.

As Rick Santelli pointed out today--I believe next Monday will be the two year auction and could point to a direction for consideration.

I've been concerned about our cash position because of inflation but your comment has allayed some concerns.

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Wilson/Plame