I concur.

While the parable of the Ant and the Grasshopper is true in that the Ant by working hard and saving can provide himself with more security than the Grasshopper. The theory of Capitalism and or Socialism has never been sustainable models. At some point they each fail. The great American engine of prosperity was attained because a continent needed development and failed during the Great Depression. After WW2 a world needed rebuilding and prosperity followed. Socialism came to a screeching halt in the former USSR in 1990 and the US is headed for the same type of implosion in the future. Thus it is not adherence to an economic theory that drives economies but the vagaries of time and space. Most economic theory is just fanciful constructs

I see where you are going with this, but I think the revenue loss from the mortgage deductibility wouldn't be as bad as the revenue loss from the crashing housing market. Most people would probably stay in their current houses with their 4% mortgage rate rather than move into a bigger or smaller house at 7%.

You do not get to buy a house, a new car, a big screen TV on a Ronald McDonald job's salary. Those are the kind of jobs that are being created in the highly touted Barrack Obama economic recovery. To be fair it is not all his fault as the trend was in that direction anyway. He does deserve to be slammed for spinning it though.

The only justifiable reason why the economy should be spinned is because you don't yell fire in a theater as it might cause a panic.

As far as the FED QEing programs, better the devil you know than the devil you don't by rolling the dice. Is it optimal, NO!

Now here is the kicker..In 2008 and onwards it was a reasonable expectation that a Stimulus Bill and or a QE program would resurrect a moribund economy. Some like myself said what we are dealing with this time is a different animal the likes of which we have not seen before and that this is essentially a "new normal." As time has moved on and programs have not taken hold of as expected the sentiment is changing that none of the old tried and true since the Depression remedies is going to work. They are beginning to be at a loss as to what to do remedy the situation and time is beginning to work against them as the system that is in place is ultimately not sustainable.

Figure it this way. The FED printed roughly some 3.5T USD which they spent 2.5T in buying US Treasury Bonds. The US government spent the money in running the government???? but the velocity of that money unexpectedly fell off a cliff once it hit the private sector. Result is a moribund economy that is growing at roughly the rate of population increase. There is no real growth in the economy just an inflation of the number of people


Here is a lovely scenario for your enjoyment. Sooner or later that in spite of the FEDs monetary hi jinxs the economy will fall into a continued recession where the economy contracts to a point of equilibrium commensurate with the true buying power of the American consumer. One would call this with a whimper and not a bang scenario. Think of it this way the economy just slowly contracts year over year for a decade or three.

Please provide examples of pure (or near pure) capitalist systems that have failed.
Thanks in advance.

And herein is my reason for being a An-Cap and agorist. (to the degree possible )

https://en.wikipedia.org/wiki/Agorism

A bit of levity.
 

I posted this some time ago over in PARF.

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Yannis is a smart cookie. He would certainly like to have the lines of credit afforded by being in the EU if possible. I'm not sure Germany will swallow that, so it will be quite interesting to see what he does if there is a Grexit.

I think tabs is back on the meds today. Great posts and pretty much spot-on. The "whimper not a bang" situation is the most likely I totally agree. There will be ups and downs along the way but we will certainly see an overall trend downward and a reversion to the mean as the cost of all our giveaway programs and "government-mandated charity" comes home to roost. We've let millions upon millions of unskilled, non-contributing people sponge off our educational and support / health & human services programs for decades and it's finally coming due. Also consider the net effect of globalization (which I've posted on at length before). It creates a race to the bottom. We will not "uplift" people living in crushing or near-crushing poverty who outnumber us 10,000-to-one. They will - if given the chance - drag us down to their level. Globalization and the rapid embrace of government-sanctioned corporatism in recent years gives them that chance. There is no more manufacturing in the west. There probably won't ever be again. So that factors into the equation as well. All of it means what you say - the middle class way of life is going to change and get more difficult and more expensive. It'll be more of a struggle. The Baby Boomers were the last generation in America to live better than their parents (at least for a few generations to come, that might turn around in the future but it won't be for a while).

I'd like to think that a sufficient bit of "pain therapy" might encourage future generations to be less brain-dead when it comes to deifying so-called "progressivism" but maybe I'm too much of a realist. It'll end up being cyclical - one of those "those who forget history are condemned to repeat it" situations more than likely...

I just hope that we (meaning the USA and the west) remain viable and strong enough as we take our lumps in the coming years to fight off the REAL threats - communism and Islam. Both are very real evils that seek weakened, poor societies to exploit for their own ends and the rise of either in a post-high-water-mark United States or Europe would be a very scary prospect. I worry more for Europe in that regard, but it's certainly a potential threat to us as well here in the good ol' USA.

https://www.youtube.com/watch?v=OY3Qxm6BoUI

This guyz thinking is flawed.

1. He without question believes that stimulus packages result in an economic jump start.

2. His EIB Investment bonds that would be funneled into the private sector. This presumes that there would be a velocity of money once the money hits the private sector. The consumer is basically tapped out with high debt levels and there is no velocity of money. Thus the private sector is loath to invest money without assurance that there is a viable consumer there to buy their product.

1) Those who fail to learn from history are doomed to repeat it. We need to point out the error of socialism so that people will realize what caused this problem and hopefully the next generation will not drink the tax and spend kool aide.
2) Attempting to predict "what is going to happen (and the ramifications there of", is the epitome of self diddling. If I had some control over the situation I suppose I could attempt to do something to mitigate the repercussions. If you have answers then I suggest you get off your pompous posterior and go talk to the people who are in control. I'm sure they'll listen to you. :rolleyes:

There is a built in lag, effect will take a few years to roll in....but people eventually need to renew their mortgage.

Interesting calculation is that, with a fiscal platform that makes more sense, the other side (those of us with cash assets) will be getting a greater return (say 4 or 5% versus current 1%), which makes us "richer".

However the logical effect of money markets is devaluation of the currency with the problem which does not immediately affect my local purchases, but makes imports dearer, exports more competitive...a different dynamic shall we say.

So which currencies will be devalued against which? It is a "beggar thy neighbour" game, my bet is that the Yuan will be a winner, impacted by reduced exports to G7 nations and their "wolf at the heels", namely their requirement to keep raising standard of living for their people otherwise they face revolution.

If the EU performs the requisite surgery to excise everyone except:
Belgium
France
Italy
Luxembourg
the Netherlands
Germany
Denmark
Austria
Poland
Estonia
Latvia
Lithuania
UK
Finland
Ireland

....with maybe a question mark about the Italians

so, turf the Greeks, Hungarians, Slovaks, Portugal, Spain, Croatia, Romania, Cyprus and Malta

They may have a chance to right their fiscal ship, given they shoot half the Brussels bureaucrats and embalm the rest and centre only on those matters affecting trade, free flow of goods and services. The Euro may die out of this, but I think the list of countries I would see being retained are close enough in approach (!!) that a euro **may** work. Deutschland, Deutschland uber alles...

If the Americans get a talented leader next time who will bite the bitter pill of austerity and simplification, it definitely has a fighting chance. It means strangling some of the tea party guys, hoping for early heart attacks for the supreme court justices, stop this nonsense about anthropologic climate change and just FOCUS, FOCUS, FOCUS

Please embalm Hillary....or at least continue the process...she is not the right critter.

But the effect on the market could be high, valuations are a little out of line, deflating US currency will erode the corporate cash piles while they watch....effects corporately will be spending which is a positive, effects privately means that those people who's assets are in the market will be hurting.

Where do we end up?

Lot of moving parts....very dynamic, ripe for explosive events and cusps.

Dennis

I invested in precious metals today. (I'm only partially kidding, $50 a box.....sheesh!)

http://media.midwayusa.com/productim...753/753103.jpg

Had Greeks merely paid their income tax, like most developed nations do, they wouldn't be in this predicament. 1/3 of their debt is unpaid income tax. $86 BILLION!!

****
 

Pay attention to the culture....defined as that what people do when no one is looking ....

Laws that fit the majorities view of fairness get passed, those that don't get bypassed.

'We often fail to understand that the informal, tacit greek culture is stronger the explicit EU culture in that setting.

But I am very drunk, have a beautiful, naked, willing girl beside me and I actually do not give a crap about any you relativistic morons at the moment. .

**** off and die Ziggy,Dipso, Webb et al,,,

Dennis, the guy who is one slug away from ending this vale of tears....I hope I do not wake up tomorrow morning.

Dennis

What is the effective tax rate?

With regards to your above exposition much of the FED action is with regard to PENSION plans which need an 8 percent return to meet obligations. The only way to meet this return requirement is?

So why the fuk are u talking to us and not playing hide and seek

I see your point but it's entirely possible that if they HAD paid their income taxes they'd still be in this situation or a worse one. Firstly many western model countries (including the USA) routinely overspend tax receipts anyway so it might've emboldened Greece to overspend more wildly than they did if they knew they had a few extra billion coming in each year. Secondly the taxes coming out of the economy may have put enough of a drag on it where it created other problems - sluggish growth or recessions, flight of businesses to other locations, etc. Think Laffer Curve. I don't know where Greece's inflection point is or has been but it's possible that the taxes would've harmed the country to the point it stifled them - perhaps why people didn't pay it!

I'm speculating here of course and I don't think you're wrong - just tossing out some possible alternatives.

Of course the best thing here - the real lesson - is that government has to be small, limited, focused and efficient. NOT the trend in the west at all, sadly.

Which begs the question - WTF are you doing posting here?

A twist.

​Varoufakis threatens EU with court as Greek default looms — RT Business


Of course laws only mean what those in power really want them to mean, so the EU will manufacture a legal means to deal with this.

You and I are on the same page on this, logically if you take the fact that most of the pensioner's costs are in local US currency, a dropping exchange rate as a means devaluing debt, with attendant increase in interest rates will in fact allow the kinds of returns you mention.

Now....nominal versus real, Joe and Mary Q. Citizen get fewer real dollars as you dick with the inflation numbers to cause slower inflation of payouts than what the real inflation rate is, ostensibly allowing you to honour your commitment to citizens even though you practically are screwing them over with a pitchfork.

Oh yes, I really, really, really need to not type late at night after my nightly drink.....hide and seek, hide the pickle and all sorts of games take on a whole new level when you are trying to type.

:eek::D:o

Dennis

Your our Champion...

https://www.youtube.com/watch?v=8nKiYC7pyxs

Who out of the blue.....

https://www.youtube.com/watch?v=WmHrB-2gHjU

It is all about listening to the exposition.

So what your saying is that with low interest rates the Pensioner gets it up the azz because they get nothing on the ROI and has to swallow the fact that his buying power is being diminished as his currency is devalued.

The only way to beat the rape is to take mo risk which in this case means the Equity markets. The Fed in effect has told the Pension plans who need 8% to meet projected payouts that they have their backs and are covered.

So the Equity markets as well as the RE market (which has now plateaued) has done nothing but gone up without a major correction since September 2012 and the event of QE3.

So who didn't see that one coming beforehand?

Madame Lafarge has been keeping a list.

The wise have seen, the prudent have positioned, the random event has not happened. Contango or backwardation?

Oh yeah, the market will take a hit as investors withdraw when they fail to see the growths they need to maintain their desired lifestyle. Perish the thought it turns into deflation where, in light of the perversity of negative interest rates, cash once again becomes king. Notice how much effort is going into cashless society and crimping the use of cash these days. Wonder why?

Sit tight, with this just in:

Greece debt crisis: Eurozone rejects bailout appeal - BBC News

The vote will be telling, but the issue is someone needs to take action.

If the Greeks vote to stay in the Union but refuse to pay, don't take the "advice" of the IMF et al, WTF happens.

Who forecloses on the loans? Love to see the "events of default" section. I mean, what can they do? Lock the doors on the Acropolis?

If a payment to the IMF is missed and managing director Christine Lagarde informs her board, the eurozone would have the right under the loan agreements to demand immediate repayment of more than €180bn they have already lent Greece, together with interest.

Failure to repay the IMF comes under a list of "events of default" set out in the legal documents. IMF officials say Ms Lagarde intends to inform the board promptly if Greece doesn't pay on time.

Dennis

what actually happened is AIG invented a new currency and exchange rate in order to hide greek debts and allow them into the euro in the first place.

essentially, they lied.

U already have deflation, checked oil lately the price of consumer goods. We are awash on a sea of liquidity where demand is waning. Last year autos did great numbers as the avg age of the US auto fleet was about 12 years old case of replacement

GREECE DECIDES: Polls say 'No' voters have the lead | Business Insider

This should get interesting.

I'm very curious about how this will play out. A Greek exit combined with massive uncertainty in the Shanghai Composite (off 30% in 3 weeks!)....typically markets don't like uncertainty. If the US markets shrug this off, I'm going to start taking Tabs 'The fix is in' speeches too heart!

50 ways to leave germany or something
 

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I'm positioned defensively at present. However, the Shanghai market is pretty remote from most investors outside of China. The Greek default has been expected for a very long time, and the ECB is ready to meet any Eurozone bank liquidity needs outside of Greece. So if the Greek situation reaches some conclusion (almost no matter what it is), and the Fed delays rate increases to next year, you could see a nice 2H rally.

Back a few years I wrote about Germany rresurrecting the Sturmabeteillung to enforce its will through austerity measures imposed upon the debtor states. I believe that quiet a few people listen to what TABS says for two reasons. First is that TABS does not mince words and gives an accurate appraisal of the situation. Second is that TABS's level of economic and political abstraction is unique.

Speaking as both a Dutch and Canadian citizen, I am delighted to see the Greeks take their destiny into their own hands.

This is clear repudiation of the Brussels notion that Europe is one when it is not. It is an unholy confluence of cultures, ideologies all woven into a fabric with no strength, no unity, no direction.

May the Greeks have the strength to deal with the inevitable suffering that will mark their future and may their love for their country be reflected and amplified for each of our distinct cultures in each country throughout the EU.

Perhaps this is the stake through the heart of unfettered globalization and the beginning of the end of the madness...

Tomorrow will be interesting as markets open....

Dennis

Interesting how every time that the EU gets pressed into a referendum by the owners of the countries....namely the average citizen....they get rebuffed.

Makes you really, really wonder if there is alignment between those in power and their citizens.

I am no populist, but clearly what the politicians want is not how the average voter sees it and I think it is bloody well time that elected officials spend more time listening and understanding and the average voters ceasing to believe that their contribution to democracy is placing an X every few years...we collectively have to understand better, pay attention and make our beliefs known to those ostensibly elected to represent us.

Dennis

Such emotion which contravenes the very epitome of the Technocratic ideal of rationality and intellect over emotion as evidenced by the supreme technocrat of them all one Barrack Obama. :) How is that for a sentence and a perceptional concept?

For the most part you all are lost in the forest of a perceptional construct that no matter how hard you try does not match reality. Maynard Keynes talked about the "animal spirits" of emotion which we all know exists. Men more often than not are ruled by emotion rather than by rationality. So the question becomes how do you quantify an emotion? The answer is an unqualified you just can't do it.

Now some are trying to figure out brain center locus and chemistry as the panacea scientific answer to the age old dilemma. This is an effort to diminish men into being nothing more than just an electrical circuit and a bunch of molecules floating around in ones head. However these Boyz haven't even conceived of Wifi yet...or a connector that links everything in the universe together.

Good sentence previously and yes, good ol' Barack would be one to favour the European Union with its ivory tower bureaucrats who do not have the good sense that God gave a goose. But then again, he might just be a gosling in that crowd...

Personally, I think there is a whole substrata of thinking going on in the mind, one's spirit if you will, which is both absorbing knowledge and ideas and putting out conclusions in the form of hunches, conviction and belief.

The output of a rational mind, if you will, frequently is made apparent by an emotion...gut feel, whatever.

Dennis

Obama was the sirens voice of seduction for the Technocrat whether it be in Politics, Academia, Media or Finance. The europeans gave him the Noble Prize for Christs sake, all on the come for the great achievements he was supposed to accomplish. They fell over themselves in orgasmic delight. This is where the great and almighty Krauthammer notions goes south, it wasn't Ronald Reagan they were comparing him to but the deified on Mt Rushmore Abraham Lincoln as in they used the Lincoln Bible to swear him in as President. He was no "gosling" he was their Niesche esque superman hero. But what has it all turned to but ashes and dust.

Ummm so your saying that the subconscious acts as a CPU and memory file from which calculations are made and conclusions are formed which then come to the surface of consciousness in the form of imagery and the feelings they invoke? I think I will take note of that. :D

We all walk through and live in an unseen world. When I was 20 years old I made a conscious decision that that unseen world is as real as the hard and fast physical world of the here and now. We all know that you can not see, hear or touch an emotion or image from our imagination, but only the manifestation as we express them. It is from this perspective that I approach politics and economics and why I do so well with my analysis. That is what makes me unique.

This was sort of doomed from the start - Europe as a whole is far too fragmented. The citizens of each EU member nation are far too nationalistic and proud of their identity as "Spaniards", "Italians", "Englishmen", "Germans", "Greeks" or whatever rather than "Europeans". In order for this whole EU thing to work, it has to dissolve the "us versus them" mentality that is quite clearly alive and well. The Greeks see themselves as victims of the "oppressive" Germans. Most other EU member state citizens see the "Greeks" as irresponsible and reckless rather than seeing their own European brothers as facing great difficulty, which might endear them to the Greek cause a bit. The whole thing is a sham. I suspect the EU will eventually become like the UN - a "name only" sort of agreement between member nations that really don't / can't get along and will backstab each other the first chance they get.

I agree with Dennis however - I'm sick and tired of globalization and am not wholly disappointed to see this little bit of the "New World Order" fall on its face. A little competitiveness in the world isn't a bad thing.

Allen Greenspan told Charlie Rose that he was working on trying to quantify the economic "animal spirits" in a new book that he was writing. As it turned out his book was about something a bit different and that was the last we ever heard him say anything about quantifying the "animal spirits."

The "animal spirits" are dissatisfied and frustrated about the way things are turning out, as in none of their programs of rectifying the economy are working out. This is sowing the seeds of doubt in their minds as in they are at a loss as to what to do? Meanwhile things continue along on the route south.