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the economy is primed for a run but the wheels seem to be stuck in the mud because of unemployment...we need a economic stimulus for taxpayers, about $2500 per....to get the car rolling...
I think this is just a way to measure the instability in the US economy. The real problem is the GDP, mainly our production of goods. We don't make anything anymore, yet we buy much much more. It Doesn't hold well for stability.
Buy USA when you can
the economy is primed for a run but the wheels seem to be stuck in the mud because of unemployment...we need a economic stimulus for taxpayers, about $2500 per....to get the car rolling...
payoff and writeoffs...
Marke chWASHINGTON (Marke ch)- U.S. consumers reduced their credit burden by a record amount in July, the Federal Reserve reported Tuesday. Total seasonally adjusted consumer debt fell $21.55 billion, or at a 10.4% annual rate, in July to $2.47 trillion. This is the sixth straight monthly drop in consumer credit. Consumers have retrenched since the financial crisis hit the economy in full force last September. Credit has fallen in every month since then except January. Economists surveyed by Marke ch expected consumer credit to decline by $4.3 billion. This is the longest consecutive string of declines in credit since the second half of 1991. In the subcategories, credit-card debt fell $6.11 billion, or 8.5%, to $905.58 billion. This is the record 11th straight monthly drop in credit card debt. Non-revolving credit, such as auto loans, personal loans and student loans fell a record $15.44 billion or 11.7% to $1.57 trillion.
People are reducing debt and saving at a record pace, not two good ingredients for substantial long-term gains...or the economy for now...
To me it means people are starting to put their financial houses in order and live within their means -- an unquestionably good thing IMO. Thrift is the traditional cradle of capital.
You lost me there, but I'll continue reading.the Federal Reserve has never looked more heroic than it does right now.
Simple solution. Investors lose their money if there is a meltdown. No bailouts. Do not reward bad behavior, but loan money to the banks that have stayed in good standing when people come to them for loans.
Would it were so simple. The downstream wreckage from unrestrained deflation/debt default might include not only our financial masters, but the political power they support.
That is why it will never be allowed to happen.
In a just world, I agree with you that is what should happen, WC.
But any true conservative should also be concerned to prevent any grave instability that may tend to destroy our form of government, and with it the rights and liberties it guarantees, and we enjoy.
I know. They are in bet with the enemy. They shouldn't be. The only time it's proper to be in bed with the enemy is when you are married. I think the original quote goes like this:
Marriage is the only war where you can sleep with the enemy.
I don't see how it could destroy the government. We need to stop politicians from being self centered to begin with. I would love it if we could make them responsible somehow, but our freedoms allow the media to lie about their friends.
I'm willing to risk instability if I'm wrong. We would only come out stronger anyway.
The arms of love, eh? How antique.Marriage is the only war where you can sleep with the enemy.
I think it's worth the risk too, but am less sanguine than you that everything would turn out for the best. Anytime the legitimacy of our government and our economic system are broadly questioned, is a dangerous time. The Great Depression sure was.
That line was just on a DVD I watched today. I kind of like it.
this time, perhaps, by tapering QE:The bubbles this time will likely appear abroad. Parts of Asia and Latin America, a tiny fraction of the size of the U.S. economy, are experiencing large capital inflows, low interest rates, and the beginnings of a major boom. Countries with intact banking systems and access to global capital markets will lead the next speculative wave. The United States will be pulled in--probably soon enough that we will all be surprised by a supposedly robust recovery, fed by continued low interest rates and loose credit. We all know these episodes end in tears, but they can be spectacular while they last.
Just like in the late 1920s, most central banks--the Fed among them--will undoubtedly wait a long time to raise interest rates. Inflation remains low, and bankers will surely argue that financial-sector fragility means we should be cautious. It would take a tremendous political battle to stop the next bubble; who wants to take away the punch bowl in the midst of a perceived boom? By the time the Fed and other central banks get around to tightening monetary policy, it will already be too late.
http://www.ft.com/intl/cms/s/0/e83f8...#axzz2rXiWbqaB
http://www.alhambrapartners.com/2014...r-of-leverage/After the 2011 market event which saw margin levels decline, margin debt and free cash balances largely followed each other very closely. That suggested investors were optimistic, but not overly so. Like a switch, cash balances declined $31 billion in January 2013 while margin debt balances grew by $33 billion – a $64 billion swing in net worth to the negative. For the year, total margin debt usage jumped by an almost incomprehensible $123 billion, while cash balances declined by $19 billion.
That $142 billion leveraged bet on stocks far surpasses any twelve month period in history. The only times that were even close to as leveraged were the year leading up to June 2007 (-$89 billion) and the twelve months preceding February and March 2000 (-$77 billion). Both of those marked significant tops in the market.
just curious, fascist how?
So you are OK with the possibility the exchange of money ceases?
so, you are ok with chronic instability (a series of asset bubbles) essentially caused by countercyclical monetary policy?
My statement and your scenario are not mutually inclusive.
There basically was a series of events that worked concert and fed upon each other. I happen to think it was unique in a number of ways. You gave some good possible solutions, read them. When you have investment banks behaving like insurance companies, but are not required to maintain a level of liquid assets, that's a problem.
When you have mortgage companies playing everyone gets a loan, AND investment banks hiding the quality of the securities, that's a problem.
Put the above together and this is unlawful fraud.
Individual investors should have access to the tools to decipher deception. Plenty of people in the banks saw what was going on. Plenty of people in the Mortgage business saw what was going on. But there was no real agency to look into the fraud. The bookkeeping is made to make deception easy. Financial instruments to aid the economy do not need to be complex as to be deceptive.
To a certain extent investors/consumers who are extraordinarily ignorant in their greed need to be held responsible of course. But this has always been, and will always be a problem... How much of a role should government play in protecting people from themselves.
Last edited by pgardn; 02-03-2014 at 09:50 PM.
deep financial depressions like the 1930s and 2010s are not the only instability. The business cycle is another "mysterious" instability of US economy.
Maybe the link Winehole posted mentioned this but securitized consumer debt and the rental bond Blackstone released a few months ago are both bubbles in the making.
There's nothing mysterious about the business cycle. It's caused by an economy that was built incorrectly. It was built incorrectly because of banks counterfeiting money.
I'm ready for the revolution. Bring this on.
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