The Great Recession (New Charts)

[Pedronicus]

There is definitely a pattern emerging here.

and it's always hexagonal like a snowflake ....

[Phatscotty]

I credit the Mid 80's for building a foundation for the 90's.

True dat!

Indeed, you could perhaps extend your analysis even further and posit that the Mid 70's, in their respective turn, built a foundation for the 80's.

Wait a second. This is incredible. I think we're on to something here.

Do you think maybe the 60's built a foundation for the 70's??!?!

You mean like, your actions today has an impact on tomorrow? P.S. The impact can be good or bad. The 80's being "done correctly" was one of at least 4 reasons that contributed to the 90's. That being said....it' pretty obvious.

Cmon U guys, I'm dealing with degenerates here...

[InkL0sed]

I credit the Mid 80's for building a foundation for the 90's.

True dat!

Indeed, you could perhaps extend your analysis even further and posit that the Mid 70's, in their respective turn, built a foundation for the 80's.

Wait a second. This is incredible. I think we're on to something here.

Do you think maybe the 60's built a foundation for the 70's??!?!

Mein Gott!

Which, of course, leads us back to the well-known fact that the 60's merely stood upon the shoulders of giants... or, as we know them, "the 50's".

Hmm, you know, given that that is likely the case, perhaps these so-called "giants" were actually supported by the true giants, the 40's. This is pure speculation of course.

[Phatscotty]

All we know for sure is, the problems of 2010 are all because of the 2000's...

[Pedronicus]

http://blogs.telegraph.co.uk/finance/am ... t-60529620

[Pedronicus]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

[thegreekdog]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

Agree completely. I wouldn't limit it to America though.

[Pedronicus]

The Baltic dry index was down AGAIN, this time by another 4% down. That makes the 31st day in a row of decline taking it down to where it was in '09, which at the time was described as a 'generational' low. 1 year is a pretty short generation! It's like 'freak' weather events. Generational events are the new norm.

Anyway, the Baltic Dry is one of the purest measures of future economic activity. It measures the actual tonnage and price for moving that tonnage, of raw material being shipped from producer to manufacturer. The index clearly says less and less is being ordered. Lower orders - less economic activity.

Japanese machine orders were down 9.1%. That's quite a drop. These machines are not gadgets but the machines that make the gadgets and cars. They are the machine tools that industry buys in order to make stuff we buy, from the raw materials. 9.1% down fits well with the Baltic Dry index.

And in the US, at the other end of the economic chain, US consumer credit figures paint a painful picture in all respects. Consumer credit has contracted in 18 of the last 20 months. Both credit card and longer term debt contracted. Together by $9 Billion in May alone. Spending 9 billion less in May, than the month before, means there just isn't any consumer growth.

On the other hand you might search for a glimmer of positive news in this, and at least note that the consumer is finally paying off a little of their huge debt overhang. Sadly its a very little bit off a very large over hang. The US consumer still has $2.4 Trillion in debt to pay off. That is a massive weight bearing down on demand.

So borrowing and spending are contracting, sending strong signals back down the real economy not to make anything, or ship anything, or invest in future productive capacity and therefore not to think about hiring anyone. There is no growth in consumption and there are no financial conditions appearing to encourage it in the near future. Quite the opposite in fact as austerity measures will crush demand lower still.

All that, plus any amount of other data on houses and repossessions and Commercial real estate paint a consistent picture. And that picture is why people who want more stimulus, in the US mainly, are getting hysterical.

In the face of these numbers, however, the question we have to ask is, how can there possibly be a rally in stock let alone a recovery? And yet for the past four days, on almost no positive news from the real economy stock markets have been rallying.

The fact that there was a market rally led each day by financial stocks, tells you that the people buying the stocks don't think producing or consuming is germane to their profits or well being. They no longer think they need you to buy anything, for them to get rich.

And they are right. Think about the first quarter of this year when almost all th BIG US banks made profits every single day. A perfect scoring average. It will be intersting to see how close to perfect they still managed to be this last quarter.

How were those profits made? Well we know very little came from lending to consumers or industry. Most came from the trading desks. And the money they used to make those profits? The money the banks were using was basically bail-out money. We can say this because if we took all that government money away, the banks would have none and in fact be insolvent.

Now lets look at the markets in which the banks made their money. They made it in a stock market that is presently made of trades in a very small number of companies' stocks and where the gains are being dominated by HFT trading against a background of low volume. We are seeing ramps and dumps. Profits are from two sources. A simple ramp where HFT traders trade stocks back and forth gradually pushing the notional worth up and up, and from sucking smaller traders in to a price increase before trading out, letting the price drop on the small trader, and then doing the same again in the morning. Smaller traders are increasingly angry at what they see as a rigged market. Both in stocks and bonds.

None of these trades needs input from the real economy. What the financial world does need to know, is that their grip on the politics of rates and Central Bank bail-outs is unconstested. As long as they feel secure that they are still in control of that, then the rest of the economy is of far less consequence to them. Unemployment figures might dampen the markets a little, but an article opining how there is still time to water down the 'Volker rule' in the now stalled and helpless financial regulation bill, is far more important. And when the ECB says it will continue to supply 'whatever support its banks need for as long as needed' you can watch the markets rise in response.

We have a disjunct in what finance needs and what the rest of us need. In many ways the two needs are diverging. So far the banks have uncontested control over the political process and its decisions. This is the new poltics of finance.

There are two economies, our and theirs. Theirs is in the process of trying to insulate itself from ours. A key part of making that separation work is for finance to gain and maintain control over political decisions. By owning our political class, by black-mailing national leaders with threats of systemic collapse and by maintaining too big to fail.

So far they are winning. They are not in the clear by a very long way. The double dip is still a threat. But we need to wake up, see the world for what it has become, understand the new lineaments of power and organize.

[saxitoxin]

This is a perfect description of America's economic system.
"Socialism for the rich and dog eat dog capitalism for every one else"

That's why ol' Sax prefers the egalitarian economic model forged in the halls of the London Stock Exchange, the London Commodities Exchange, APX-Endex, BM&F Bovespa, SIX and Euronext.

[PLAYER57832]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

Agree completely. I wouldn't limit it to America though.

You agree?

[thegreekdog]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

Agree completely. I wouldn't limit it to America though.

You agree?

Absolutely. However - my definition of rich is less inclusive than yours is probably.

[PLAYER57832]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

Agree completely. I wouldn't limit it to America though.

You agree?

Absolutely. However - my definition of rich is less inclusive than yours is probably.

That, I would doubt. (it might well differ from many who like to consider themselves "rich", though ... lol )

[thegreekdog]

This is a perfect description of America's economic system.

"Socialism for the rich and dog eat dog capitalism for every one else"

Agree completely. I wouldn't limit it to America though.

You agree?

Absolutely. However - my definition of rich is less inclusive than yours is probably.

That, I would doubt. (it might well differ from many who like to consider themselves "rich", though ... lol )

Do you think someone who makes $500,000 a year rich? Such that they fit into the quote above?

[PLAYER57832]

Do you think someone who makes $500,000 a year rich? Such that they fit into the quote above?

No, but some who make that much like to consider themselves "wealthy"... though more those who make a million or so. (and still a ways away from my definition, which by-the-way, has far less to do with income and more to do with overall assets).

[thegreekdog]

Do you think someone who makes $500,000 a year rich? Such that they fit into the quote above?

No, but some who make that much like to consider themselves "wealthy"... though more those who make a million or so. (and still a ways away from my definition, which by-the-way, has far less to do with income and more to do with overall assets).

The rich people who benefit from government programs, tax loopholes and the like are the people who benefit from government rich-people socialism. Let's call them Super Rich Those people make millions of dollars, they own large companies, they are members of boards of directors, etc.

The problem is that the government wants to tax the "rich" as they define the term, which includes everyone that makes over about $250,000 (which, yes, is a lot of money). The rich people who aren't the Super Rich don't have attorneys or accountants to find the tax loopholes; they don't have lobbyists to help get the laws changed; they don't have a ton of money to throw around at politicians. So, those people, in my opinion, are unfairly punished by being grouped together with the Super Rich. It calls to mind the situation in the Democrat primary where Hillary Clinton called out investment bankers (which is the profession of her daughter and her daughters' friends, I believe). She was pointing at the wrong people. She needed to be pointing at the owners of the investment banking company that employed the investment bankers.

[Pedronicus]

no - she should of pointing them both out. the investment bankers earn enough to make it worthwhile to employ a savvy accountant to avoid paying the whack of tax. The investment bank itself obviously is avoiding tax.

it's the average guy that earns a lot less and pays his full whack of tax that gets fucked in the arse.
If every rich cunt paid the same amount of tax as the average guy, then everyone will pay less tax. A lot less tax.

[thegreekdog]

no - she should of pointing them both out. the investment bankers earn enough to make it worthwhile to employ a savvy accountant to avoid paying the whack of tax. The investment bank itself obviously is avoiding tax.

it's the average guy that earns a lot less and pays his full whack of tax that gets fucked in the arse.
If every rich cunt paid the same amount of tax as the average guy, then everyone will pay less tax. A lot less tax.

What? That doesn't even make sense. Investment bankers (the hard working ones, the non-owners, the employees) pay a shitload more taxes than the average guy... at a higher rate... with less deductions. The worst punished people are those that make enough money to have to pay AMT, lose their deductions, and pay at a higher rate, but don't make enough to find loopholes or lobby Congress.

You have the guy who works 10 hours a week, makes $50 million, and pays $2 million of taxes. You have someone who works 100 hours a week and gets paid $300,000 a year only takes home about $150,000 after taxes. And you have someone who works 40 hours a week, has summers off, and gets paid $50,000 a year and takes home $45,000. There's a problem there. The problem is that the second guy is getting his ass kicked.

[Pedronicus]

that second guy is getting paid in shares and other sorts of non taxable stuff. if you think he is paying more tax than the lower guy, you are mad.

[InkL0sed]

no - she should of pointing them both out. the investment bankers earn enough to make it worthwhile to employ a savvy accountant to avoid paying the whack of tax. The investment bank itself obviously is avoiding tax.

it's the average guy that earns a lot less and pays his full whack of tax that gets fucked in the arse.
If every rich cunt paid the same amount of tax as the average guy, then everyone will pay less tax. A lot less tax.

What? That doesn't even make sense. Investment bankers (the hard working ones, the non-owners, the employees) pay a shitload more taxes than the average guy... at a higher rate... with less deductions. The worst punished people are those that make enough money to have to pay AMT, lose their deductions, and pay at a higher rate, but don't make enough to find loopholes or lobby Congress.

You have the guy who works 10 hours a week, makes $50 million, and pays $2 million of taxes. You have someone who works 100 hours a week and gets paid $300,000 a year only takes home about $150,000 after taxes. And you have someone who works 40 hours a week, has summers off, and gets paid $50,000 a year and takes home $45,000. There's a problem there. The problem is that the second guy is getting his ass kicked.

100 hours a week? That is an exaggeration, right?

[pimpdave]

100 hours a week? That is an exaggeration, right?

Only slightly. Realistically it's more like 85-90. Or at least, those were the kinds of hours I was putting in. Maybe I would have gone further if I had put in that extra ten hours a week.

[InkL0sed]

100 hours a week? That is an exaggeration, right?

Only slightly. Realistically it's more like 85-90. Or at least, those were the kinds of hours I was putting in. Maybe I would have gone further if I had put in that extra ten hours a week.

OK, I've thought about this. Let's assume you work 10 hours a day, 6 days a week. That's only 60 hours. How is it even possible that people work 100 hours a week? There are only 168 hours in a week.

[pimpdave]

There's a reason sleep deprivation is the number one health problem in the USA. You always eat take out, either delivered or something you can pick up on the way home. You don't do your own laundry, and make sure it's either delivered or a dry cleaner with late hours. You do everything you possibly can to ensure a short commute.

There's a reason I don't subject myself to those kinds of hours anymore.

[PLAYER57832]

Do you think someone who makes $500,000 a year rich? Such that they fit into the quote above?

No, but some who make that much like to consider themselves "wealthy"... though more those who make a million or so. (and still a ways away from my definition, which by-the-way, has far less to do with income and more to do with overall assets).

The rich people who benefit from government programs, tax loopholes and the like are the people who benefit from government rich-people socialism. Let's call them Super Rich Those people make millions of dollars, they own large companies, they are members of boards of directors, etc.

The problem is that the government wants to tax the "rich" as they define the term, which includes everyone that makes over about $250,000 (which, yes, is a lot of money).

Our tax system is just plain screwed up. Alternative minimum tax was supposed to be a partial solution, but wound up not doing that at all.

The rich people who aren't the Super Rich don't have attorneys or accountants to find the tax loopholes; they don't have lobbyists to help get the laws changed; they don't have a ton of money to throw around at politicians. So, those people, in my opinion, are unfairly punished by being grouped together with the Super Rich.

I don't believe an ability to hire accountants and attorneys is an issue. Lobbyists, etc are. They are how we ALL get screwed.

And it is everyone who gets penalized because the super rich and corporations won't pay their fair share. But, I don't really blame them. After all, its their "job" (definitely in the case of corporations) to make money/keep money. The fault lies with politicians and people who keep believing that all these corporate tax cuts, etc will result in a "trickle down" effect. (yes, I know they don't call it that any more).

It calls to mind the situation in the Democrat primary where Hillary Clinton called out investment bankers (which is the profession of her daughter and her daughters' friends, I believe). She was pointing at the wrong people. She needed to be pointing at the owners of the investment banking company that employed the investment bankers.

Actually, they are all to blame. And, more to the point, those who point at them, but refuse to really and truly reform anything, because they themselves are so vested in the system.

[PLAYER57832]

100 hours a week? That is an exaggeration, right?

Only slightly. Realistically it's more like 85-90. Or at least, those were the kinds of hours I was putting in. Maybe I would have gone further if I had put in that extra ten hours a week.

OK, I've thought about this. Let's assume you work 10 hours a day, 6 days a week. That's only 60 hours. How is it even possible that people work 100 hours a week? There are only 168 hours in a week.

Actually, my dad used to work with more than one person who worked 2 jobs, each just under 32 hours (so the companies did not have to offer benefits) AND then had a 2 hour commute. In one case, the person worked 2 jobs for the same company... theoretically, illegal, but she wanted both jobs. Oh, and had kids.

When you start talking to the folks working at the local fast food place or stocking shelves, etc, you start to find that this scenario is a lot more common than you think. AND, no, these people do NOT usually have someone to do their laundry.. though they do often rely on microwaved-food and such. (this is a problem with food banks.. our food bank used to give out dried beans, along with other things, but a lot of people either don't know how or just did not have the time/ability to cook dried beans. Now they just give out canned stuff).

[Pedronicus]

The 'trickle down effect' is happening. It's just that no one was aware the pyramid was upside down.