Credit Writedowns - Latest Comments

Re: Jon Stewart spoofs Glenn Beck

Lee — Sat, 07 Nov 2009 03:26:52 -0000

Lame.

Re: ‘Buy American horror stories’ in Canada

Guest — Sat, 07 Nov 2009 00:41:01 -0000

It seems every day it becomes more obvious that America is rudderless, there's no one at the helm anyway and the sails are in tatters.

Canada, China, the EU, Britain, Russia, Iran, ... can you think of anyone who aren't shaking their heads in disgust and frustration at the US? Israel, I suppose... lot of good that'll do them.

I suppose one way to severely deflate your currency is to ensure every other country in the world loathes every second they are forced to do business with you.

Re: Intent and motive

LavrentiBeria — Sat, 07 Nov 2009 00:19:37 -0000

With respect, a bit facile, I'm afraid, Ed. My comment was directed specifically at what was asserted in the statement below and that without referrence to non-participation:

"In our democracy, the ballot box is where you get to act as jury. Campaign contributions is where you get to be the judge. You can convict any incumbent politician of misusing public trust and yielding to monied special interests by withholding your money and voting the individual out of office."

Is this statement palpably true? Let's see. What's presupposed here is that (1) we are, in fact, in a democracy, (2) can by voting make a judgment about guilt and innocence as to misuse of public monies and, (3) can actually and meaningfully change the moral environment by expelling an adjudged miscreant. While it may be true that one can make a judgment about guilt or innocence by voting (#2 above), because special interest contributors own both incumbent and non-incumbent candidates, we have neither a democracy (#1 above) nor a capacity meaningfully to punish an adjudged miscreant and cleanse public service (#3 above). Its not so much whether one decides "whether or how to vote" but rather whether voting carries any import at all.

Voting in the United States today is little different than voting in Bulgaria cerca 1952. If you know going in that AIPAC, for example, has privately coerced the candidates of both parties into agreeing that a pre-emptive military strike on Iran is the good policy, that banking interests will contribute only to candidates favoring more stringent debt collection laws and that the candidates themselves eagerly accept these strictures, voting on such questions is, at best, somnambulistic. Yet these are our realities. Yesterday's vote on the UN's Goldstone report is a case in point. The vote not to support the Goldstone conclusions, 344 to 36. Ask yourself if a vote like that was arrived at without coercion. Josef Stalin in his finest moments couldn't have done much better. In such circumstances is one really free to cast a vote that hasn't already been stolen. I don't think so. Non-participation, then, is simply a kind of grudging acceptance, the very form of powerlessness.

Re: Rosenberg: “the mother of all jobless recoveries”

Dave — Fri, 06 Nov 2009 23:09:34 -0000

Lies...only lies...and nothing but lies....so help me god.
1-The Bush administration oath of office?
2- Requirement to work at the Dept of Justice?
3-Motto of the SEC?
4-Obama's "change you can shove up your *ss?
4-Everything the mass media tries to cram down our throats?
5-All of the above?

Re: Intent and motive

enh124 — Fri, 06 Nov 2009 19:47:34 -0000

You're not reading the post accurately: "how or whether to vote" covers
what you are saying.

Re: Intent and motive

LavrentiBeria — Fri, 06 Nov 2009 19:35:01 -0000

Oh come on , Ed. What good does it do to withhold money and vote an individual out of office. You know darn well he'll simply be replaced by someone else equally debased and septic. Best to boycott elections altogether out of self respect and to seek redress through mass demonstrations and strikes where possible. The system as it has now evolved is utterly unresponsive to attempts at parliamentary remediation. It is rank silliness to imagine otherwise. In a real way, to participate at all is to act insanely.

Re: Rosenberg: “the mother of all jobless recoveries”

enh124 — Fri, 06 Nov 2009 16:40:25 -0000

Of course it is. It points to systemic problems that are being papered over with short-term solutions.

Re: Rosenberg: “the mother of all jobless recoveries”

davossherman — Fri, 06 Nov 2009 16:35:52 -0000

Jobless recovery is an oxymoron.

Re: Rosenberg: “the mother of all jobless recoveries”

Name — Fri, 06 Nov 2009 15:57:34 -0000

Oops. Never mind

Re: Rosenberg: “the mother of all jobless recoveries”

Name — Fri, 06 Nov 2009 15:57:01 -0000

A typo in first bullet point, U-6 is listed as 7.5% instead of 17.5%

Re: Comprehensive unemployment rate is 17.5%

enh124 — Fri, 06 Nov 2009 14:20:48 -0000

Also, my headline should tell you I see the labor market as weak. But again, in context, this is not a negative surprise.

Re: Comprehensive unemployment rate is 17.5%

enh124 — Fri, 06 Nov 2009 14:19:49 -0000

I'm sorry it read as positive spin. I did not intend it that way.

I get what you're saying, haris. And I know this: the fact that labor market participation is decreasing is a sign of economic weakness - not strength.

My last paragraph is a reflection of how I see the data in context: this is not a game-changer. The labor market is weak, but not deteriorating. It can still be this weak and yet the economy can show a statistical recovery.

Re: Comprehensive unemployment rate is 17.5%

haris07 — Fri, 06 Nov 2009 13:04:03 -0000

Ed, in otherwise good analysis, you miss a very simple fact by spinning labor force participation dropping as a positive!! In a recovery, labor force participation INCREASES as more people who were discouraged get encouraged again. I am surprised that an analyst of your caliber is spinning this as a positive???

Also, note that the birth/death model revisions in 2009 continue to be way out of left field - yet again some stupid economist somewhere in the 90's built some stupid model that uses "numbers" to come up with this and it doesn't seem to be adjusted for changes in the economy.

Re: Comprehensive unemployment rate is 17.5%

LavrentiBeria — Fri, 06 Nov 2009 12:25:08 -0000

Got to hand it to you, Ed. You can find a silver lining in any cloud. :-)

I don't think I'll ever get used to the fact that the stock market goes up when unemployment levels increase. It really highlights just how hostily arrayed are the people at large on the one hand and the investing classes on the other.

Re: GM board decides to keep European Opel unit

akorozco — Fri, 06 Nov 2009 10:25:04 -0000

The Germans are livid, the Russians are livid, the Opel workers are walking out... GM seems to be the only one who's happy with this deal. http://www.newsy.com/videos/gm_opts_to_keep_opel

Re: 10.2% unemployment, 190,000 jobs lost

davossherman — Fri, 06 Nov 2009 10:14:27 -0000

U3 and U6 is over 20%, http://www.shadowstats.com/section/content-feed... has it right. “• September Unemployment Rates: U.3 = 9.8%, U.6 = 17.0%, SGS = 21.4%”

So now it is at least 17.0% + 10,2% so at or over 21.8%....these are depressionary indicators.

10.2% is CNBC Kool Aid BS.

Re: Why mortgages aren’t modified and what a ruling stopping foreclosures means

elkathy — Thu, 05 Nov 2009 20:28:27 -0000

Do not confuse a mortgage "security" with a "mortgage-backed security" - they are not the same thing. A mortgage-backed security is simply an investment "interest" in a "Pool" of current receivable cash payments. Ownership rights are not the same. An investor in a mortgage-backed security is only has has "pro-rata" share interest in pooled receivables backed by the numerous actual mortgage securities. It is not a direct investment in individual mortgage liens/mortgage notes. This is a serious misconception promoted by uninformed media.

Make sure that readers understand that any loan modification in the name of the "servicer" is not valid without identification of the actual INDIVIDUAL mortgage/loan owner/creditor/mortgagee. Any loan modification without identification of the actual owner of the mortgage/note is highly questionable.

Re: The new Japan, domestic consumption, and the neo-liberal thought machine

baconbacon — Thu, 05 Nov 2009 17:30:03 -0000

"Japanese households do not fund the deficit."

Then who does? And where are the masses of Yen that the Japanese are supposed to have saved all these years?

Re: The coming collapse of the municipal bond market

barryschaeffer — Thu, 05 Nov 2009 14:15:35 -0000

Ed,

I've seen this public pension collision coming for some time. Is there anything that the rest of us (who aren't planning on a fat public pension) can do to protect ourselves from being devoured buy it?

For example, any way to find out if any states have laws that enable state and local governments to change pension payouts to reflect realistic investment returns? The Legislature here in Washington State just chose to ignore the recent report from their analyst that they can't expect to get 8% on their capital, so I don't see good things on that front.

Got any ideas about

Re: The coming collapse of the municipal bond market

enh124 — Thu, 05 Nov 2009 11:19:05 -0000

My general take here is not so much one of shorting an index (as I don't give specific investment advice) but of being aware of what you have in your portfolio.

For example, are the munis in your portfolio general revenue bonds or ones secured with income streams from specific projects? And what does that mean about likely cash flow in a period of distress?

As I see it, not all bonds are equal and that should lead to a relative value play if and when muni distress occurs.

Re: Japan does not demonstrate the failure of stimulus

CPavese — Thu, 05 Nov 2009 11:09:52 -0000

Spending is not constrained by revenues? But isn't that the problem?

Right or wrong, it is apparent that our current administration would agree with you - we can spend/credit/print our way back to prosperity! Just like Argentina.

Re: The coming collapse of the municipal bond market

mjganucheau — Thu, 05 Nov 2009 10:58:57 -0000

Edward, do you have any ideas on how to capitalize on this theme by shorting a muni bond index, and what indexes would you focus on in this space? I read the report and thought it was pretty good. Thanks.

Re: News from around the web: 2009-11-05

enh124 — Thu, 05 Nov 2009 09:56:50 -0000

That is the hope, isn't it?

Re: News from around the web: 2009-11-05

Stevie b. — Thu, 05 Nov 2009 08:29:14 -0000

Ed - as ever, thanks for the Roach link:

"... America’s consumption is close to $9 trillion while China is about $1.2 trillion and India about $650 billion. There is no one who has stepped up to the plate on the demand side to fill the void of the American consumer. This situation will continue for at least three to five years."

This is an interesting time-speculation from someone who's opinions should be respected. I am slightly bothered by the "at least", but -at least- we can perhaps assume that somehow any withdrawal/reversal of QE will be further complicated by this time-scale of say 5 years. Is 5 years too long to stop the global economy from implosion in the meantime? Let's hope against hope that we can somehow muddle though until the Indians and Chinese can in the nick of time come riding to our rescue.

Re: The new Japan, domestic consumption, and the neo-liberal thought machine

fuguez — Thu, 05 Nov 2009 03:12:04 -0000

Hi Marshall

I think I may be getting a better understanding. I re-read your article on NC that says the same thing about sovereign debt. You replied to many comments mentioning taxes.

Would I be correct in saying that if Tax Income is insufficient (relative to Expenditure) that Hyperinflation may result?

It seems that one argument is saying that Hyperinflation occurs when a Tax Revolt - or equivalent - takes place; I believe it can take place if Tax Revenue is 'insufficient'. Whether insufficiency occurs by population migration, active evasion, or simply by people remaining unproductive and sitting at home is not relevant.

A sovereign can ALWAYS make good on its debt in its currency; however, Hyperinflation may be the result. The choice is between DEFAULT and HYPERINFLATION. DEFAULT is voluntary but HYPERINFLATION is not.

There is only so much 'blood' that can be squeezed out.

Thanks