These have been some very interesting comments. And I have to say, the manfrommiddletown made a very good point on nationalism. If I recall correctly, something almost similar occurred in Japan in the late 30s. FDR placed an oil embargo on the Japanese, which caused their economy to go into a tailspin. Now they were already in a nationalistic furver, it was only just prior to it's annexation of parts of China (including the establishment of Manchukuo). We all know how that turned out.
Well in college in taking classes that focused on Asian history, there was a theme that came up when it came to politics and China. That was a certain number of disasters tend to preview the fate of a given political order. Now it's been a while since I was in class, but I believe it's known as either the Seven Disasters or something along those lines. That basically, throughout Chinese history, that seven or more/less great calamities hit the country that eventually leads to the current regime being toppled. Most of these calamities have been of the nature variety (earthquakes, drought) while in some rare occasions it has been political (failure of the boxer rebellion).
Either way, it seems to be a cycle that happens over and over again. Now the current regime is facing it's series of calamities. If we date back to the beginning of the Peoples Republic of China we have:
1) The famine from the Great Leap Forward
2) The Cultural Revolution
3) Tiennamen Square
4) the increasing desertification of China's agricultural areas
5) the recent earthquake and the deaths of 19,000 children
Keep in mind, that in the middle phase, nobody ever figures its' in the cycle. There is nothing in the rules that says an economic calamity won't be #6. Also for every "valley" they do experience peaks, yet I think the 7 disasters rules still applies. It's been going on since the formation of the Chin Dynasty.
Summer 2009: The US government defaults on its debt
Our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders.
I am in the midst of writing a paper that I hope to get published right now.
The gist of the paper is this. In East Asia, the legitimacy of governments is based either in their ability to provided material benefits: the economy. Or nationalism: the status of the nation internationally.
The Chinese have dropped $586 billion (about 1/5th of the country's $3.2 trillion nominal GDP) in order to create domestic stimulus. As it has stood, about half of Chinese GDP has resulted from international demand.
Without GDP growth in excess of 5% annually, the Chinese economy isn't going to be able to soak up the peasants who are being pushed off the land because of the poor opportunities in the countryside. That's going to release hellacious social forces, like labor riots in the cities that require the use of security forces to restore order.
Once a critical mass is reached, you have a revolutionary situation. The irony is that there is a change of regime in China it will not result from the growth of the urban middle class. A working class revolt? That's a real possibility.
Oh, the irony.
The CCP has a strategy in reserve though. Nationalism.
Chinese nationalism is intense, basically being of the same type that existed in Japan and Germany in the 1930s.
And they have an idea of "Greater China" that includes parts of Siberia, Mongolia, Taiwan, the Spratly and Paracel Islands in the South China sea, and at times parts of southeast Asia.
I'm going to be blunt.
If this stimulus package fails, the likely result is an intense Cold War with China.
In that case, the industrial base that we've funded the construction of with our trade is going to be used against us and others.
Free Market Liberalism always falls. The questions is whether social democracy can catch it before it falls into either communism or fascism.
We've been through this once before, but the arrogant fucking pricks on Wall Street have insisted that history teaches us nothing. We all are going to get to see just how wrong they are.
For example, in Taiwan and other Asian countries, they walk and take subways or buses which is good way to lessen the air pollution if everyone took them. However I know, living in Southern California, that is utterly impossible since everything is so spread out.
Ever notice how reluctant Americans are to take to the streets and demand their rights? It really takes a lot of effort and seemingly with the TV age and now the Internet age it is even worse. If only we could get all of those bits flying through cyberspace to form images of real people with protest signs.
If you want to, this is a community site. You can create an account and even blog on here and cross post (see user guide) if you want. Although your blog I think has more readers and we even RSS your writings.
When you have an account you don't have to deal with typing letters into little boxes, moderation queues and such.
That's interesting, what is the total deflation w/o home prices and then gas prices?
Interesting. For what it's worth, a home price decline of 9 percent instead of 18 percent as indicated in my chart would produce year-over-year inflation of +1 percent instead of -1.5 percent.
A bubble can only exist with increasing supply to meet increasing demand. Commodities (oil, PM's, etc.) never had the huge stockpiles to create the bubble.
The bubble only existed in Tech stocks, and housing recently.
I do believe you are correct about the dollar bubble
Absolutely. due to availability of parts and then cost of parts, information about repairs, warranties, resale value and all of it, I cannot imagine most people buying cars when they believe the entire line and company would be stopped.
That does sound huge. But pushing the $40k and over SUV thing was pretty damn stupid in my opinion.
I happen to love trucks, want that clearance, torque and then want good 4WD but I didn't want a friggin' tank that gets 6 mi to the gal. and even in smaller trucks that can pull a small boat, it's the type of consumer truck farmers use every day and in the NW, people use them extensively because of the weather and outdoors and you plain can't find that many options. Same with SUVs, which are pretty practical but when it came to smaller ones with reasonable gas mileage that make much more sense to more consumers...once again, just can't find them. They might be shit in quality or you couldn't get the features you want in a smaller class of these.
i.e. if you wanted versatility, quality, features you had to buy a gas guzzling tank.
Just got off the phone with my brother-in-law in Phoenix. I've been talking to him a lot lately about all this. He was a salesman, and a damn good one at that, for a dealership. It's funny in a way, as his career there parallels the fortunes of the automakers. In the early 90s he made book selling small and compact cars. He ended the decade, actually 2002, selling Hummers and SUVs. You know they say that the Detroit 3 don't make cares people buy, but tell that didn't see true in the late 90s-early 2000s. He made enough selling Hummers alone to buy a new house in Gilbert. Well, he's out of work from the dealership due to illness but keeps tabs with his pals there. He told me that sales have been dead on every line but some sedans. That one of the sales managers there were talking about stopping purchases of 2009s. That to me sounded big.
Bloomberg is saying the deal is stalled until next month, lame duck.
God this is pathetic. While the financial sector just raked it in, their stock is still completely, well, it looks like it's collapsing.
The only thrill I have is that when Citigroup announced 50k people fired, instead of the usual Wall Street reward for that, their stock tanked.
That's another question about stock prices going to these lows, sometimes more low that assets, cash on hand, what kind of private equity takeover adventures does that lead to?
I don't think we've seen such lows in quite some time so probably need to go back to historical data.
To me, this all looks like implosion and those Congress critters are playing some serious games instead of objectively analyzing, separate from influence, where the US taxpayer money would be most effective.
That's kind of stupid, what should happen is some experts should tell GM what they are going to do to get the money versus let them tell Congress what they are going to do.
This is turning into a topic upon which I have a good post to write up on.
That's what I'm hearing so far as the due date for the automakers to come up with a plan to prove they "deserve" the money. Otherwise they may have to wait until Congress re-convenes in late January. I'll tell you, if they don't make the sale then I suspect one of the three will declare Chapter 11.
They can give away $125 Billion to AIG and they can't give $25 billion to three major manufacturers?
This is pure bullshit! WTF is wrong with these people, is this just battle of the corporate lobbyists on who controls DC and thus gets to rob the taxpayer?
I'd much rather have GM rob the taxpayer than Bear Sterns, AIG and Goldman Sachs for GM will have a major effect on the middle class, workers.
I think I may have found a solution so you don't need to worry. If I do, I'll post in the admin so nobody has to worry about this crap and can update their titles if and when they damn please.
These have been some very interesting comments. And I have to say, the manfrommiddletown made a very good point on nationalism. If I recall correctly, something almost similar occurred in Japan in the late 30s. FDR placed an oil embargo on the Japanese, which caused their economy to go into a tailspin. Now they were already in a nationalistic furver, it was only just prior to it's annexation of parts of China (including the establishment of Manchukuo). We all know how that turned out.
Well in college in taking classes that focused on Asian history, there was a theme that came up when it came to politics and China. That was a certain number of disasters tend to preview the fate of a given political order. Now it's been a while since I was in class, but I believe it's known as either the Seven Disasters or something along those lines. That basically, throughout Chinese history, that seven or more/less great calamities hit the country that eventually leads to the current regime being toppled. Most of these calamities have been of the nature variety (earthquakes, drought) while in some rare occasions it has been political (failure of the boxer rebellion).
Either way, it seems to be a cycle that happens over and over again. Now the current regime is facing it's series of calamities. If we date back to the beginning of the Peoples Republic of China we have:
1) The famine from the Great Leap Forward
2) The Cultural Revolution
3) Tiennamen Square
4) the increasing desertification of China's agricultural areas
5) the recent earthquake and the deaths of 19,000 children
Keep in mind, that in the middle phase, nobody ever figures its' in the cycle. There is nothing in the rules that says an economic calamity won't be #6. Also for every "valley" they do experience peaks, yet I think the 7 disasters rules still applies. It's been going on since the formation of the Chin Dynasty.
employment climbs to 1982 levels to boot.
Boy Michigan just has a bulls eye on it's back, South Carolina too.
In South Carolina it's manufacturing losses that is the biggest.
This research group predicted the current crisis years ago, to the month. Their latest analysis is extremely worrying.
http://www.leap2020.eu/GEAB-N-28-is-available!-Global-systemic-crisis-Al...
Summer 2009: The US government defaults on its debt
Our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders.
I am in the midst of writing a paper that I hope to get published right now.
The gist of the paper is this. In East Asia, the legitimacy of governments is based either in their ability to provided material benefits: the economy. Or nationalism: the status of the nation internationally.
The Chinese have dropped $586 billion (about 1/5th of the country's $3.2 trillion nominal GDP) in order to create domestic stimulus. As it has stood, about half of Chinese GDP has resulted from international demand.
Without GDP growth in excess of 5% annually, the Chinese economy isn't going to be able to soak up the peasants who are being pushed off the land because of the poor opportunities in the countryside. That's going to release hellacious social forces, like labor riots in the cities that require the use of security forces to restore order.
Once a critical mass is reached, you have a revolutionary situation. The irony is that there is a change of regime in China it will not result from the growth of the urban middle class. A working class revolt? That's a real possibility.
Oh, the irony.
The CCP has a strategy in reserve though. Nationalism.
Chinese nationalism is intense, basically being of the same type that existed in Japan and Germany in the 1930s.
And they have an idea of "Greater China" that includes parts of Siberia, Mongolia, Taiwan, the Spratly and Paracel Islands in the South China sea, and at times parts of southeast Asia.
I'm going to be blunt.
If this stimulus package fails, the likely result is an intense Cold War with China.
In that case, the industrial base that we've funded the construction of with our trade is going to be used against us and others.
Free Market Liberalism always falls. The questions is whether social democracy can catch it before it falls into either communism or fascism.
We've been through this once before, but the arrogant fucking pricks on Wall Street have insisted that history teaches us nothing. We all are going to get to see just how wrong they are.
For example, in Taiwan and other Asian countries, they walk and take subways or buses which is good way to lessen the air pollution if everyone took them. However I know, living in Southern California, that is utterly impossible since everything is so spread out.
Ever notice how reluctant Americans are to take to the streets and demand their rights? It really takes a lot of effort and seemingly with the TV age and now the Internet age it is even worse. If only we could get all of those bits flying through cyberspace to form images of real people with protest signs.
If you want to, this is a community site. You can create an account and even blog on here and cross post (see user guide) if you want. Although your blog I think has more readers and we even RSS your writings.
When you have an account you don't have to deal with typing letters into little boxes, moderation queues and such.
That's interesting, what is the total deflation w/o home prices and then gas prices?
Interesting. For what it's worth, a home price decline of 9 percent instead of 18 percent as indicated in my chart would produce year-over-year inflation of +1 percent instead of -1.5 percent.
Try buying physical gold and silver bullion lately? Without several weeks delay?
Don't be too sure about that. ;)
were never in a bubble.
A bubble can only exist with increasing supply to meet increasing demand. Commodities (oil, PM's, etc.) never had the huge stockpiles to create the bubble.
The bubble only existed in Tech stocks, and housing recently.
I do believe you are correct about the dollar bubble
Absolutely. due to availability of parts and then cost of parts, information about repairs, warranties, resale value and all of it, I cannot imagine most people buying cars when they believe the entire line and company would be stopped.
That does sound huge. But pushing the $40k and over SUV thing was pretty damn stupid in my opinion.
I happen to love trucks, want that clearance, torque and then want good 4WD but I didn't want a friggin' tank that gets 6 mi to the gal. and even in smaller trucks that can pull a small boat, it's the type of consumer truck farmers use every day and in the NW, people use them extensively because of the weather and outdoors and you plain can't find that many options. Same with SUVs, which are pretty practical but when it came to smaller ones with reasonable gas mileage that make much more sense to more consumers...once again, just can't find them. They might be shit in quality or you couldn't get the features you want in a smaller class of these.
i.e. if you wanted versatility, quality, features you had to buy a gas guzzling tank.
Just got off the phone with my brother-in-law in Phoenix. I've been talking to him a lot lately about all this. He was a salesman, and a damn good one at that, for a dealership. It's funny in a way, as his career there parallels the fortunes of the automakers. In the early 90s he made book selling small and compact cars. He ended the decade, actually 2002, selling Hummers and SUVs. You know they say that the Detroit 3 don't make cares people buy, but tell that didn't see true in the late 90s-early 2000s. He made enough selling Hummers alone to buy a new house in Gilbert. Well, he's out of work from the dealership due to illness but keeps tabs with his pals there. He told me that sales have been dead on every line but some sedans. That one of the sales managers there were talking about stopping purchases of 2009s. That to me sounded big.
Bloomberg is saying the deal is stalled until next month, lame duck.
God this is pathetic. While the financial sector just raked it in, their stock is still completely, well, it looks like it's collapsing.
The only thrill I have is that when Citigroup announced 50k people fired, instead of the usual Wall Street reward for that, their stock tanked.
That's another question about stock prices going to these lows, sometimes more low that assets, cash on hand, what kind of private equity takeover adventures does that lead to?
I don't think we've seen such lows in quite some time so probably need to go back to historical data.
To me, this all looks like implosion and those Congress critters are playing some serious games instead of objectively analyzing, separate from influence, where the US taxpayer money would be most effective.
That's kind of stupid, what should happen is some experts should tell GM what they are going to do to get the money versus let them tell Congress what they are going to do.
This is turning into a topic upon which I have a good post to write up on.
That is the last half hour of trading the stock market tanks over 400 points?
This is becoming almost a pattern, in the last half hour.
That's what I'm hearing so far as the due date for the automakers to come up with a plan to prove they "deserve" the money. Otherwise they may have to wait until Congress re-convenes in late January. I'll tell you, if they don't make the sale then I suspect one of the three will declare Chapter 11.
They can give away $125 Billion to AIG and they can't give $25 billion to three major manufacturers?
This is pure bullshit! WTF is wrong with these people, is this just battle of the corporate lobbyists on who controls DC and thus gets to rob the taxpayer?
I'd much rather have GM rob the taxpayer than Bear Sterns, AIG and Goldman Sachs for GM will have a major effect on the middle class, workers.
God @&*)$@&!!!
Maybe it's time to write our representatives.
I think I may have found a solution so you don't need to worry. If I do, I'll post in the admin so nobody has to worry about this crap and can update their titles if and when they damn please.
I changed the title after you just told me about the link thing. Sorry RO, while updating, it skipped my mind.
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