Uh Oh! II
- Thread starter El and Bill
- Start date
- Status
Hello,
Here's your vocabulary lesson for today
Liquidity: When you look at your investments and wet your pants.
Check out Ecuador instead of Idaho or Montana. Good climate, good fishing uses U.S. dollar decent medical care available. Look at the possibilities www.InternationalLiving.com
D.D.
Here's your vocabulary lesson for today
Liquidity: When you look at your investments and wet your pants.
Check out Ecuador instead of Idaho or Montana. Good climate, good fishing uses U.S. dollar decent medical care available. Look at the possibilities www.InternationalLiving.com
D.D.
rogerbum":2dma15e2 said:
It's a dual use flag/fishing pole and can - in an emergency - be waved with a yellow life jacket attached to it...
The optional flybridge steering station was not required by this client but can be added later at reasonable cost...
Never a C-Dory has been so spacious, what with 2 queen sized berths, complete galley and enclosed head compartment...
Also note the latest fashion in 2-tone paint job allied to the warmth of natural pretreated wood and the steering station behind a see-through rear bulkhead, the ultimate in European design...
Yellowstone
New member
Dave - that is a very, very humorous one liner. It reminds me of another jewel uttered by outgoing Senator Alan Simpson of Wyoming when Florida was recounting and recounting the presidential votes, hanging chads, etc.,"it is a well known fact that if you torture a ballot long enough, eventually it will confess."
In many ways Toland's "Future Shock" is today. Or is this just another
pithy reminder that Adam Smith's "invisible hand" is guiding the stock market through another major "correction?" Or perhaps the wages of greed is not death but chaos?
When things get out of focus, humor helps us try to maintain our sanity.
For those of us on fixed or should I say shrinking incomes with little hope of getting back into the world of work, (we also could be called the greedy geezer generation), I say unless we were uncommonly unlucky or just plain slothful, we have had it pretty good.
B.C., how is junior doing? See you at the SBS.
In many ways Toland's "Future Shock" is today. Or is this just another
pithy reminder that Adam Smith's "invisible hand" is guiding the stock market through another major "correction?" Or perhaps the wages of greed is not death but chaos?
When things get out of focus, humor helps us try to maintain our sanity.
For those of us on fixed or should I say shrinking incomes with little hope of getting back into the world of work, (we also could be called the greedy geezer generation), I say unless we were uncommonly unlucky or just plain slothful, we have had it pretty good.
B.C., how is junior doing? See you at the SBS.
is that new C-Dory a Hybrid or an inbred?
glad to hear you'll be at the show John, look forward to chatting. Jr is doing well in his studies. One thing I do know about the economy is that when he gets done with school, our economy will be doing better....especially when we hit him with the 39% offspring tax. I watched MSU in the playoffs, wondering...trying to remember, if you had a player in the game
This thread is an interesting read...there could be some interesting times ahead
glad to hear you'll be at the show John, look forward to chatting. Jr is doing well in his studies. One thing I do know about the economy is that when he gets done with school, our economy will be doing better....especially when we hit him with the 39% offspring tax. I watched MSU in the playoffs, wondering...trying to remember, if you had a player in the game
This thread is an interesting read...there could be some interesting times ahead
Yellowstone
New member
Ken - Junior is worth it. Grandson's team went bust this year and so did his knee -ACL. He graduates with degree in enviornmental engineering this spring.
TyBoo Mike - Do you still have a little round magnet? Just in case some of our C-Brats keys have fallen overboard. See if my luck hold out.
John
TyBoo Mike - Do you still have a little round magnet? Just in case some of our C-Brats keys have fallen overboard. See if my luck hold out.
John
Yellowstone -
Way Off Topic:
About a month ago my keys fell overboard at my slip after our town's Christmas boat parade. I knew their approximate location in about five feet of water (at low tide) Magnets were not going to work but I called a commercial shell fisherman who knows how to use a clam rake.
He retrieved them on the second pass :thup
Way Off Topic:
About a month ago my keys fell overboard at my slip after our town's Christmas boat parade. I knew their approximate location in about five feet of water (at low tide) Magnets were not going to work but I called a commercial shell fisherman who knows how to use a clam rake.
He retrieved them on the second pass :thup
El and Bill
New member
Phil -
Do you think your commercial fisherman friend could use his rake and retrieve some of our overboard investments? ... maybe not ... seems some banks have already raked them in. :evil:
Do you think your commercial fisherman friend could use his rake and retrieve some of our overboard investments? ... maybe not ... seems some banks have already raked them in. :evil:
Yellowstone
New member
Phil - Had you been at the Cathlamet, Wa. rendezvous six years ago with your rake, you would have been celebrated and toasted when a set of keys went overboard. Any idea what those rigs cost?
Bill - I can't resist. Didn't any of your friends tell you to stay away from Madoff?
John
Bill - I can't resist. Didn't any of your friends tell you to stay away from Madoff?
John
El and Bill
New member
John - you mean Uncle Bernie? That sweet, gentle guy who long ago was head of NASDAQ, gave candy to the grandkids and knew all about the markets? Why, he seemed to know as much about the markets as Uncle Sam, aka S.E.C. :roll:
Yellowstone
New member
edwardf - Thanks for the correction. The 20% non-citizens in our prision system quote came from a single state source, not the entire nation. I failed to get that straight. National statistics as we both know are just a snapshot at any given time. However, if we extrapolate from today, (latest estimate in federal and state prisons has exceeded 2 million inmates) 6 % equals at least 120,000 non-citizens. If we assume the average yearly cost is now $35,000, we are talking about $4.2 billion aren't we, or is my math flawed? I woiuld like to see that amount shifted to our children's overall health care. I know you would, too.
Bill - that is good old uncle Bernie, the fellow under house arrest. Tough duty. Reminds me of Marine Corps boot camp. My daughter's brokerage business is tanking. Afraid she is going to move back home. Only problem is that she is 48.
Bill - that is good old uncle Bernie, the fellow under house arrest. Tough duty. Reminds me of Marine Corps boot camp. My daughter's brokerage business is tanking. Afraid she is going to move back home. Only problem is that she is 48.
El and Bill
New member
For those interested, here's another quick up-date on some economic ideas. These concepts have helped me understand the current melt-down, so thought it would be good to share them with those of you in the pub who are also trying to understand the current economic crisis.
1. The Paradox of Thrift: Times get tough, people cut back on spending and save their dollars. Last spring, the govt gave most of us a 'stimulus check' and most of us put it in savings and didn't spend it. Our thrift makes times more tough since without buying, things aren't sold; things not sold mean things aren't made; this cuts jobs and makes times more rough. When the supply of things exceeds demand, prices fall and folks then really don't spend since they want to wait for a lower price. (deflation)
2. Liquidity Trap: This time, banks and lenders don't want to 'lend' for fear of the future. The gov't lowers interest rates (almost to zero, now) but still no lending due to fear. Govt gives banks money and they 'save' it, just like most of us did with our gov't 'stimulus.' The amount of money (liquidity) in the system is huge but it ain't being used.
3. Velocity of Money - how often a dollar is spent in a unit of time. For instance, Roger and I have $50 between us. I buy $40 worth of peas from Roger. He pays me fifty bucks for my book. I spend another $10 to buy some corn from Roger. So, last year $100 changed hands between us, even though we only had $50 between us. Each buck was spent twice.
Now if we (and the lenders) save our 'stimulus packages' or other money and we're not buying and spending from each other, velocity falls to zero and no amount of gov't spending will help. No one spends so there are no jobs making things. Right now liquidity is rising fast and velocity is dropping equally fast.
How does the economy recover? Only when confidence in the system returns, and we spend and lenders lend. Whew! :roll:
1. The Paradox of Thrift: Times get tough, people cut back on spending and save their dollars. Last spring, the govt gave most of us a 'stimulus check' and most of us put it in savings and didn't spend it. Our thrift makes times more tough since without buying, things aren't sold; things not sold mean things aren't made; this cuts jobs and makes times more rough. When the supply of things exceeds demand, prices fall and folks then really don't spend since they want to wait for a lower price. (deflation)
2. Liquidity Trap: This time, banks and lenders don't want to 'lend' for fear of the future. The gov't lowers interest rates (almost to zero, now) but still no lending due to fear. Govt gives banks money and they 'save' it, just like most of us did with our gov't 'stimulus.' The amount of money (liquidity) in the system is huge but it ain't being used.
3. Velocity of Money - how often a dollar is spent in a unit of time. For instance, Roger and I have $50 between us. I buy $40 worth of peas from Roger. He pays me fifty bucks for my book. I spend another $10 to buy some corn from Roger. So, last year $100 changed hands between us, even though we only had $50 between us. Each buck was spent twice.
Now if we (and the lenders) save our 'stimulus packages' or other money and we're not buying and spending from each other, velocity falls to zero and no amount of gov't spending will help. No one spends so there are no jobs making things. Right now liquidity is rising fast and velocity is dropping equally fast.
How does the economy recover? Only when confidence in the system returns, and we spend and lenders lend. Whew! :roll:
Well, it seems to me that one simple thing we could all do is to buy American. I know, I know all the contrary discussions about relative quality and different parts from different countries, and globlization and the flat world.but this is a difficult time. Frankly I think the least I can do, when I spend what relatively little I have, is to spend it for something made in America. I've got nothing against any other country, but this is my country. If I can't find a TV or a bike or a car or a wrench or a bottle of beer made in the USA, then I won't buy it. And another thing......
A
Anonymous
Guest
So, if our biggest problem is SLOW MONEY, then how would reducing taxes speed up our spending?
Sounds like what's needed is a scheme which increases the availability of cash for the masses but only on the condition that it be spent directly.
Bill?
Paul Priest
Sequim
Sounds like what's needed is a scheme which increases the availability of cash for the masses but only on the condition that it be spent directly.
Bill?
Paul Priest
Sequim
This from a recent newsletter entitled
Last Nail in the Coffin
by Martin D. Weiss, Ph.D.
Dear Subscriber,
The government has just released one of the most shocking federal budget reports of all time.
Even if you overlook the gaping holes in their economic assumptions, it's obvious the federal deficit is going to deliver a punch below the belt of the economy.
And once you unveil the shaky assumptions, it's equally obvious the deficit could be the last nail in its coffin.
First, Look at the Government's
Own Shocking Numbers!
The Congressional Budget Office (CBO) estimates that ...
The 2009 federal deficit will be $1.186 trillion! Even after adjusting for inflation, that's more than the combined cost of the Vietnam War ($698 billion) and the Korean War ($454 billion) ... 4.6 times more than the entire S&L bailout of the 1980s ... and 5.5 times larger than the Louisiana Purchase:
In sheer dollars, the 2009 federal deficit will shatter every record deficit of every nation in history.
Even in proportion to the larger U.S. economy, the 2009 deficit will represent 8.6% of GDP — more than four times the average under Bush, nearly seven times the average under Clinton, and 1.4 times the post-World War II record of 6% under Reagan.
After you factor in the additional deficit spending and tax cuts proposed in the Obama stimulus package, the deficit will surge to 10% of GDP.
Federal spending will reach 25% of GDP — the highest level in American history outside of World War II. But during World War II, most of the money was spent on war-related production, creating entire new industries and keeping millions of Americans in uniform or on the job. In contrast, most of the 2009 deficit spending will be for corporate bailouts, unemployment benefits, Social Security and Medicare.
Already, in the first quarter of fiscal 2009, the federal deficit has ballooned to $485 billion, an unprecedented increase of 353% compared to the previous year. If it continues to grow at that pace, it will make all the above estimates look small by comparison.
This is not a fictional scenario conjured up by a gloomy economists with a murky crystal ball. Nor does it represent a third-party diatribe against Democrats and Republicans. It accurately represents the actual numbers just released by the nonpartisan CBO on January 8.
Second, Take a Closer Look
At Their Assumptions!
Beyond the traditional budgetary smoke and mirrors, here are just some of the holes in their estimates:
1. The CBO implicitly assumes that the debt crisis is largely behind us — no more big bank failures, no more GMs or Chryslers, no more international debt defaults and no Wall Street meltdown. But the very size of its own deficit projection — reaching 10% of GDP — makes that assumption highly questionable.
2. The CBO assumes that federal revenues will remain relatively stable at 17.6% of GDP, only slightly below the 18.3% historical average. That means there can be no depression, no unemployment disaster, no tsunami of corporate red ink and no plunge in federal tax revenues.
"Just make believe those events can never happen!" goes the rationale.
What about the government data showing that the unemployment disaster is already here? "Largely ignore that, too," seems to be the underlying theme.
3. The CBO assumes that the economy will recover after 2009, and the government will get most of its bailout money back. For the TARP program, for example, the assumption is that the cost will be only 25% of the total amount loaned or invested. The remaining 75%, it figures, will be paid or earned back.
In theory, perhaps. In practice, current trends show that the only realistic hope the government might have of recouping its original investment is by providing even more bailout money to sustain the companies it already has on life support.
At Fannie Mae and Freddie Mac, for example, portfolio losses are far larger than anticipated when they were first bailed out last year.
Reason: Prime mortgages, which make up the bulk of their portfolios, are now defaulting at much higher-than-expected rates.
At Citigroup, the government has committed to an additional $20 billion on top of the initial $25 billion the bank received initially. Plus, Citigroup also has received a government backstop for up to $306 billion in loans and securities backed by mortgages. But here, too, the government's liabilities and losses are bound to be larger than anticipated.
Reason: The bank's portfolio is stuffed with home mortgages, credit cards and other consumer loans that are highly exposed to surging unemployment.
We see the same pattern at AIG, General Motors, Chrysler and nearly every major corporation the federal government has bailed out so far: More good money after bad!
Ultimately, the government will either have to write off most of its bailout investments or wind up nationalizing the companies, draining more taxpayer money for a longer period of time.
Third, Consider the
Inevitable Consequences!
Based strictly on the official estimates of the 2009 deficit, any economist not on drugs must conclude that, in the coming months and years ...
The federal government will have to borrow more money than at any time in history ...
To raise that money, it will have to shove aside individuals, businesses, local governments and virtually all other borrowers, scooping up most of the funds available in the already-tight credit markets ...
By crowding out other borrowers, it will sabotage its own efforts now underway to restore private credit markets ...
It will put great upward pressure on interest rates — and ironically ...
It could bring on a new, more virulent debt crisis that deepens and prolongs the economic decline.
Fourth, Don't Forget the Big
Impact This Can Have on You!
The official budget estimates are sending you the same message I've been giving you: You must brace yourself for America's Second Great Depression.
Any saver or investor who does NOT take protective action could be making a fatal mistake.
My recommendations are unchanged:
Recommendation #1. Keep as much as your money as safe and as short term as possible.
Recommendation #2. Despite the low yield, I recommend short-term U.S. Treasury securities for up to 90% of your money.
Recommendation #3. Despite apparent "bargains" now available in stocks and real estate, use any rally or recovery to get out of BOTH as fast as you can.
Recommendation #4. Don't dump your assets at any price. Sell in a deliberate, disciplined pattern. But do not delay! The time to move to safety is right now.
Recommendation #5. Learn how to build up an alternative source of profits and income, a core subject of our emergency briefing this coming Thursday at noon Eastern Time. Click here to sign up.
Good luck and God bless!
Martin
Last Nail in the Coffin
by Martin D. Weiss, Ph.D.
Dear Subscriber,
The government has just released one of the most shocking federal budget reports of all time.
Even if you overlook the gaping holes in their economic assumptions, it's obvious the federal deficit is going to deliver a punch below the belt of the economy.
And once you unveil the shaky assumptions, it's equally obvious the deficit could be the last nail in its coffin.
First, Look at the Government's
Own Shocking Numbers!
The Congressional Budget Office (CBO) estimates that ...
The 2009 federal deficit will be $1.186 trillion! Even after adjusting for inflation, that's more than the combined cost of the Vietnam War ($698 billion) and the Korean War ($454 billion) ... 4.6 times more than the entire S&L bailout of the 1980s ... and 5.5 times larger than the Louisiana Purchase:
In sheer dollars, the 2009 federal deficit will shatter every record deficit of every nation in history.
Even in proportion to the larger U.S. economy, the 2009 deficit will represent 8.6% of GDP — more than four times the average under Bush, nearly seven times the average under Clinton, and 1.4 times the post-World War II record of 6% under Reagan.
After you factor in the additional deficit spending and tax cuts proposed in the Obama stimulus package, the deficit will surge to 10% of GDP.
Federal spending will reach 25% of GDP — the highest level in American history outside of World War II. But during World War II, most of the money was spent on war-related production, creating entire new industries and keeping millions of Americans in uniform or on the job. In contrast, most of the 2009 deficit spending will be for corporate bailouts, unemployment benefits, Social Security and Medicare.
Already, in the first quarter of fiscal 2009, the federal deficit has ballooned to $485 billion, an unprecedented increase of 353% compared to the previous year. If it continues to grow at that pace, it will make all the above estimates look small by comparison.
This is not a fictional scenario conjured up by a gloomy economists with a murky crystal ball. Nor does it represent a third-party diatribe against Democrats and Republicans. It accurately represents the actual numbers just released by the nonpartisan CBO on January 8.
Second, Take a Closer Look
At Their Assumptions!
Beyond the traditional budgetary smoke and mirrors, here are just some of the holes in their estimates:
1. The CBO implicitly assumes that the debt crisis is largely behind us — no more big bank failures, no more GMs or Chryslers, no more international debt defaults and no Wall Street meltdown. But the very size of its own deficit projection — reaching 10% of GDP — makes that assumption highly questionable.
2. The CBO assumes that federal revenues will remain relatively stable at 17.6% of GDP, only slightly below the 18.3% historical average. That means there can be no depression, no unemployment disaster, no tsunami of corporate red ink and no plunge in federal tax revenues.
"Just make believe those events can never happen!" goes the rationale.
What about the government data showing that the unemployment disaster is already here? "Largely ignore that, too," seems to be the underlying theme.
3. The CBO assumes that the economy will recover after 2009, and the government will get most of its bailout money back. For the TARP program, for example, the assumption is that the cost will be only 25% of the total amount loaned or invested. The remaining 75%, it figures, will be paid or earned back.
In theory, perhaps. In practice, current trends show that the only realistic hope the government might have of recouping its original investment is by providing even more bailout money to sustain the companies it already has on life support.
At Fannie Mae and Freddie Mac, for example, portfolio losses are far larger than anticipated when they were first bailed out last year.
Reason: Prime mortgages, which make up the bulk of their portfolios, are now defaulting at much higher-than-expected rates.
At Citigroup, the government has committed to an additional $20 billion on top of the initial $25 billion the bank received initially. Plus, Citigroup also has received a government backstop for up to $306 billion in loans and securities backed by mortgages. But here, too, the government's liabilities and losses are bound to be larger than anticipated.
Reason: The bank's portfolio is stuffed with home mortgages, credit cards and other consumer loans that are highly exposed to surging unemployment.
We see the same pattern at AIG, General Motors, Chrysler and nearly every major corporation the federal government has bailed out so far: More good money after bad!
Ultimately, the government will either have to write off most of its bailout investments or wind up nationalizing the companies, draining more taxpayer money for a longer period of time.
Third, Consider the
Inevitable Consequences!
Based strictly on the official estimates of the 2009 deficit, any economist not on drugs must conclude that, in the coming months and years ...
The federal government will have to borrow more money than at any time in history ...
To raise that money, it will have to shove aside individuals, businesses, local governments and virtually all other borrowers, scooping up most of the funds available in the already-tight credit markets ...
By crowding out other borrowers, it will sabotage its own efforts now underway to restore private credit markets ...
It will put great upward pressure on interest rates — and ironically ...
It could bring on a new, more virulent debt crisis that deepens and prolongs the economic decline.
Fourth, Don't Forget the Big
Impact This Can Have on You!
The official budget estimates are sending you the same message I've been giving you: You must brace yourself for America's Second Great Depression.
Any saver or investor who does NOT take protective action could be making a fatal mistake.
My recommendations are unchanged:
Recommendation #1. Keep as much as your money as safe and as short term as possible.
Recommendation #2. Despite the low yield, I recommend short-term U.S. Treasury securities for up to 90% of your money.
Recommendation #3. Despite apparent "bargains" now available in stocks and real estate, use any rally or recovery to get out of BOTH as fast as you can.
Recommendation #4. Don't dump your assets at any price. Sell in a deliberate, disciplined pattern. But do not delay! The time to move to safety is right now.
Recommendation #5. Learn how to build up an alternative source of profits and income, a core subject of our emergency briefing this coming Thursday at noon Eastern Time. Click here to sign up.
Good luck and God bless!
Martin
El and Bill":2x0h244g said:
All major US Banks are now BANKRUPT...
Too much CHEAP CREDIT caused the Problem and more cheap credit sure isn't going to solve it: there are still at least $2 TRILLION of bad debts and off Balance Sheets SIV's in the US banks skeleton closets, yet to be disclosed....
If you don't believe me, read this:
http://www.moneyandmarkets.com/warning- ... id-2-29412
Or this:
http://www.telegraph.co.uk/finance/comm ... 3-yet.html
The next budget deficit will be around $3 TRILLION with no way to finance it - as the usual Treasuries buyers, like China and Japan need all their spare cash to save their own economy - other than by printing more currency, which is certain to destroy the US Dollar...
This is just the beginning of the Greater Depression with no end in sight, sorry...
Popular Catamaran builder, TWIN VEE, is now officially out of business...
http://www.palmbeachpost.com/business/c ... _0126.html
Makes one wonder how much longer C-Dory will survive in this economic climate, where purchases of non-essentials, such as RV's and boats, have been slaughtered...
Mr. Toland sure picked a bad time to resurrect his boat factory...
http://www.palmbeachpost.com/business/c ... _0126.html
Makes one wonder how much longer C-Dory will survive in this economic climate, where purchases of non-essentials, such as RV's and boats, have been slaughtered...
Mr. Toland sure picked a bad time to resurrect his boat factory...
El and Bill
New member
Paul -
If I had a technique to - first - give people money (reducing taxes would help give people money, eh?) but - secondly, and perhaps more importantly - give people incentive to spend that money (and banks to lend it) to deserving folks then I'd probably be in Washington, D.C.
As you know, Paul, since we have had discussions about this previously over a cuppa, I learned in childhood that frugality and simplicity in spending makes sense to me. I have been openly concerned about the increasing materialism ("and bigger is better, and more is best, and person with most toys, wins") of our culture, especially when this spending is dependent upon borrowing and acquiring excess debt (personal, corporate, or government). Now, apparently this excess must be accounted for ... how to achieve this with the least personal pain for everyone, but still learning the lesson that "there is no free lunch," is difficult.
We live in interesting times ...
Fortunately we have sound boats that are (relatively) economic to operate. And we're off to Lake Mojave next month for a little cruising and visiting with good friends. I suppose if things got REALLY bad you could look for Halcyon anchored in an isolated cove far back in a canyon on Lake Powell. We'd be fishing, strolling up side canyons, reading a good book, or watching the sunset from the cockpit with a sundowner in hand.
If I had a technique to - first - give people money (reducing taxes would help give people money, eh?) but - secondly, and perhaps more importantly - give people incentive to spend that money (and banks to lend it) to deserving folks then I'd probably be in Washington, D.C.
As you know, Paul, since we have had discussions about this previously over a cuppa, I learned in childhood that frugality and simplicity in spending makes sense to me. I have been openly concerned about the increasing materialism ("and bigger is better, and more is best, and person with most toys, wins") of our culture, especially when this spending is dependent upon borrowing and acquiring excess debt (personal, corporate, or government). Now, apparently this excess must be accounted for ... how to achieve this with the least personal pain for everyone, but still learning the lesson that "there is no free lunch," is difficult.
We live in interesting times ...
Fortunately we have sound boats that are (relatively) economic to operate. And we're off to Lake Mojave next month for a little cruising and visiting with good friends. I suppose if things got REALLY bad you could look for Halcyon anchored in an isolated cove far back in a canyon on Lake Powell. We'd be fishing, strolling up side canyons, reading a good book, or watching the sunset from the cockpit with a sundowner in hand.
El and Bill
New member
Thanks for the input, folks. Interesting (and important, we believe) to ponder these economic questions - many of our present decisions and our future security depends on how we personally (and all of us collectively) resolve the current crisis.
Our discussion, begun a year ago in the first days of recession, captures an historic financial trend for us and the boating industry. It is a capsulation of our attitudes about our futures and our use of boats in these harder times. It is an interesting re-read, and our continuing discussion records the history of our times and our views of the impact of the economic trends on us, our nation, and the world.
We are at a 'turning point' ...
Our discussion, begun a year ago in the first days of recession, captures an historic financial trend for us and the boating industry. It is a capsulation of our attitudes about our futures and our use of boats in these harder times. It is an interesting re-read, and our continuing discussion records the history of our times and our views of the impact of the economic trends on us, our nation, and the world.
We are at a 'turning point' ...
- Status