Intermarkets' Privacy Policy
Support


Donate to Ace of Spades HQ!





Recent Entries
« House Republicans' Christmas Present to Obama | Main | Afternoon Open Thread
"Enough Is Enough!:" Obama Stands Around With Some Americans Who Tells Sob Stories About Horrible Republicans »
December 22, 2011

DOOM: Funky dollar bill

DOOOOM

PSA: The Daily DOOM will be going on hiatus until after New Year's, my groovy babies. Do your best to ignore the foolishness and outrage, and focus instead on friends and family. I hope you all have a very Merry Christmas.

Jobless claims drop yet again, yet still GDP growth drops to 1.8%. We all know what this means: there is some job growth, but most of the "drop" is due to a number of other factors, like discouraged workers and retirees leaving the workforce altogether. Much of the actual job growth is probably due to seasonal work that will tail off after the holidays, but we'll see. I suspect that financial writers are going to be breaking out the "unexpectedly" adjective once again in the first quarter of next year to explain why jobless claims shoot back up.

Hollywood liberals can spout off about the rights of the poor and oppressed and then hide in their hillside mansions and gated communities when the sun goes down. Other people have to live in the world these liberals brought about. This is less a "California is boned" story and more an eyewitness report from a citizen who lives on the frontiers of the Empire and has to deal on a daily basis with the barbarian hordes. Let VDH speak:

The city of Fresno is now under siege. Hundreds of street lights are out, their copper wire stripped away. In desperation, workers are now cementing the bases of all the poles — as if the original steel access doors were not necessary to service the wiring. How sad the synergy! Since darkness begets crime, the thieves achieve a twofer: The more copper they steal, the easier under cover of spreading night it is to steal more. Yet do thieves themselves at home with their wives and children not sometimes appreciate light in the darkness? Do they vandalize the street lights in front of their own homes?
In this case, the encroaching darkness is both metaphorical and literal. This is what becomes of a bankrupt and morally dead government: an inability to protect its citizens or maintain its infrastructure, but retaining the bureaucratic power to annoy and impose upon the law-abiding.

Ultimate statism equals ultimate poverty. This applies not only to Communist regimes, but to any overbearing Statist regime. Centralized control over something as complex as a national economy is doomed to failure, and this has always and forever been the case. This is simply a example of Hayek’s “knowledge problem”...only with real-world suffering, misery, and death.

I agree with Hertzel and Kling that a liquidity crisis is a completely mythical creature, at least when you are talking about sovereigns who have a monopoly over the issuance of fiat legal tender. I also argue that inflation, in real terms, has been badly understated in the current downturn. Inflation is not low; it is just hidden.


Er...about that “voluntary” write-down of Greek debt....

Mark Faber: the derivatives market will go to zero. (Faber also predicted that the US dollar would go to zero, and we're not there yet, so take this with a large grain of salt.) I’ve always been uncomfortable with how derivatives have evolved in world markets in the past several decades. Rather than playing their intended role as risk-management instruments, they are being used instead as speculative instruments to increase leverage. Not all derivatives are bad -- in fact many, like futures, are highly valuable -- but many either serve no useful purpose or actually increase the risk they are supposed to be laying off. You can argue that this is a failure of use rather than design, I guess, but shouldn't risk-abatement instruments be designed in such a way as to make such misuse more difficult? (I think Faber is talking about the problems in valuing derivatives, not in the role of derivatives themselves, but it amounts to the same problem: if derivatives can’t be accurately valued, they can’t be traded, hence their value is essentially zero.)

Average total compensation for a public-sector California employee: $102,000. Average total compensation for the taxpayers who sustain them: $57,000. I'm sure the private-sector pack-mules won't mind slaving a bit longer to sustain their masters...right?

If it comes down to paying pensioners or bondholders, bondholders are going to be first in line. No state is going to kill their ability to borrow from the capital markets, which is what a default would do. But pensioners? Ultimately, they'll take whatever the state offers, because...what choice do they really have?

As horrible as we thought the housing bust was in the years after 2008...it was actually about 14% worse.

Tax policy either enrages me or puts me to sleep, but the fact is that prosperity demands a stable tax policy. Sometimes even a bad policy is better than a chaotic one; at least a company can plan around a bad policy that is consistently enforced.

As a rule, "face-ripping" is not the adjective you want to see next to the word inflation.

PIMCO's Mohammed El-Arian: The new international economic disorder. I highlight the following paragraph to draw attention to how El-Arian and many of his cohort misunderstand the world economy:

This change in sentiment was catalyzed by the financial crises in Asia, Eastern Europe, and Latin America in the late 1990’s and early 2000’s, and by what many in these regions regarded as the West’s inadequate and poorly designed responses. With their trust in bilateral assistance and multilateral institutions such as the International Monetary Fund shaken, emerging-market economies – led by those in Asia – embarked on a sustained drive toward greater financial self-reliance.
Perhaps the West's responses were "inadequate and poorly designed", but this doesn't obscure the fact that the crises of these periods sprouted from deeply dysfunctional regions of the world -- regions that remain dysfunctional to this very day. To the extent that the East has risen economically, it's done so by turning itself into a giant factory exporting cheap gizmos to a Western world drunk on easy credit. Now that the West's appetite for cheap consumer goods is drying up, the East is finding that it still has no clue as to how to move forward: there is no domestic market to pick up the slack in most places, no real rule of law, no real political freedom, and demographic pressures that will shortly cause major social upheavals. Japan and South Korea's engines are starting to lag, and China's growth has been almost exclusively in the form of drafting along behind the US and Europe. Now that it's being called upon to pull ahead, China is finding that their engine is too weak to even keep themselves going, much less anyone else.

Standard & Poor's to Hungary: BAM! At least Hungary is not part of the Eurozone, so they can default and devalue the Forint if they have to.

Bank of America agrees to a $335M settlement to African-American and Hispanic borrowers for discriminatory practices on the part of Countrywide Financial. Boy, that acquisition just keeps paying dividends, doesn't it, guys? A stroke of sheer genius.

Dan Klein on the "invisible hand" in economics.

Dan argues that we should evaluate public policy the way we evaluate art or movies. Hang on, I know this sounds ridiculous, but what he means is that we don’t use a formula or equation to evaluate art or to assess the best movie to watch tonight or our favorite novel. We don’t pretend that those kinds of aesthetic evaluations are remotely scientific or amenable to an equation or statistical estimation. So why should we evaluate the minimum wage or trade policy that way?

UPDATE 1: AllenG sends word that all the happy talk about Christmas retail numbers may be...well, let's say misguided. Customers may have felt a bit of giddiness at the approach of the holidays, but the giddiness is wearing off.

UPDATE 2: Government Motors' Cruze heading into Flopsville. Part of the role of the Volt was to act as a bait-and-switch mechanism to get buyers into new Cruzes, but apparently that strategy has failed. The bad reliability reports coming in about the Cruze might have something to do with it too.


digg this
posted by Monty at 08:47 AM

| Access Comments




Recent Comments
Ricardo Kill: "Has anyone resolved the fucked-up Universe we see ..."

Ricardo Kill: "Oh, and, I did a huge rookie sock fail above. Scr ..."

Rock Cutter: "Go eat a carrot you tea-bagger! Have a Blessed ..."

Peaches: ""Not sure we have a quorum, but here goes: receive ..."

Niedermeyer's Dead Horse: "Congrats Alton! A good man is never down and ou ..."

cthulhu: "469 Not sure we have a quorum, but here goes: rec ..."

MIchaelangelo's Landlady: "Congrats, Alton. Jobs are a bitch. I have one bu ..."

mindful webworker being dragged back to my cell: "Gotta go. Good night, Gracies. Have fun. Or whatev ..."

Truck Monkey, Gruntled New Business Owner: "Congrats Alton! ..."

torquewrench: ""Not sure we have a quorum, but here goes: receive ..."

Slapweasel: "Congrats, Alton! ...and best wishes with that con ..."

MIchaelangelo's Landlady: "M16......M14.........M1 For some strange and ..."

Recent Entries
Search


MuNuvians
Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
News/Chat
Archives
Powered by
Movable Type 2.64