Rolling US Economy Into The Shitbin Thread

re what's going to happen to those juicy profits: i suspect some of it may end up getting paid out as bonuses (to the top dogs, of course).

"The "fixed" nature of industrial investment represented by machinery and structures means that large parts of the costs of any accounting period must be assigned in an arbitrary way. Hence, the magnitude of profits shown in any accounting period varies entirely according to the regulation made by the management itself for assigning its "fixed" charges."

Um, wouldn't this typically be handled via debt service? I don't think corporations typically plunk down all the cash for new plants or large new equipment expenditures at once. Not to say that there aren't other ways a quarterly or annual profit can be 'distorted' by one-time events, including deliberately manufactured ones.

in context, this is heartbreaking.

I hate to take away from the moment, but I've seen basically the same photo essay in like 10 different publications in the last two years.

"There's a million and a half engineers graduated in China every year. There's still more sports therapists graduated in the US than electrical engineers. So that's a losing equation. We're going to have to switch this. I mean, a good massage is still good, but it shouldn't stay that way."

http://www.theregister.co.uk/2011/01/11/ces_ceo_confab/

most of those chinese engineers are crap though

yeah there's def a huge element of degree inflation going on

I read about that CES panel yesterday and thought "wow, three fucking dinosaurs telling a room full of people that it's everybody else's fault" I especially liked the part where they said America's tax structure is bad for their business, but even if it was, all the engineers are in Asia, so they still wouldn't see any point to employ Americans except as a salesmen. I am always struck by the total weirdos who ascend to CEO jobs for blue chip tech companies btw. You think career bureaucrats are bad and then you read transcripts of people like Ursula Burns. WHAT ARE THEY TALKING ABOUT

Back in 2006ish, I think, I was becoming concerned that USA was going to have our lunch eaten once our buying power dropped off and we were no longer the #1 consumer of everything on earth, because that would mean a lot less demand for our core competency as a workforce, namely selling shit to our fellow Americans, but now I think it was just easy to make that kind of mistake when we had just come off of the dot com bubble and were living through a really, really obvious mortgage bubble that nobody wanted to fess up to. Basically the last couple of years are the first since my graduation from high school that the primary engine of "growth" in our economy didn't consist of a fucked up con everybody was running on one another.

So I actually feel better than I ever have about our economy:

- Google, Intel, Apple, Microsoft, Nvidia, and even fucking Ford Motors continue to make loads of money pushing "innovative" this and that to the entire globe. Seriously, Xerox?

- The boomer era work model for engineering and science applications is obsolete and has been since whenever Fred Brooks published his first book. I don't need more coders and techies asking me "what should I do next?" all day and everywhere I go has the same kind of too-many-indians problem. (Maybe hire a promising sports therapist, put them in the analyst pool and send them to a technical/engineering management graduate program. You need more of those people but your problem is you keep directly hiring careerist MBAs instead, who, by the way, usually know absolutely nothing about the rest of the world outside of the collected works of the Gartner group.)
(And what a dumb fucking metric anyway, "# of engineers graduated." Wow. How about # of engineers gainfully employed doing what they were trained to do? Oh, that's hard.)

- Labor and tax structures overseas are never going to be more business-friendly than they are now. The populations in developed countries are only overpaid and overprivileged if you forget that most of the rest of the world hasn't discovered its middle class yet. The Chinese know what a shrink is now, and they would like to see one. imagine all the sports therapists they're going to need.

Note, the ice caps are still going to melt, the gulf stream is going to run backwards and we're all going to die of starvation or acute hypothermia, but economically, I feel reasonably good about the future.

terrific radio program about housing here -

http://marketplace.publicradio.org/display/web/2011/01/13/pm-lot-354-a-tale-of-americas-housing-meltdown/

The Chinese know what a shrink is now, and they would like to see one. imagine all the sports therapists they're going to need.

― El Tomboto, Tuesday, January 11, 2011 10:15 AM Bookmark

You read that New Yorker article too? I had almost the same thought on reading it.

There was an interesting Esquire article as well about the economic future of different countries. China won't always be on the top and Canada will do good in the long run. It's gotta be on the Esquire site right now.

There was an interesting Esquire article as well about the economic future of different countries. China won't always be on the top and Canada will do good in the long run. It's gotta be on the Esquire site right now.

sounds interesting, do you have a link for this? couldnt find it on the esquire homepage

So I actually feel better than I ever have about our economy

yeah, i feel better about it than i have in a while. i still like to find a key industry or niche that will drive the economy (e.g., leading the world in smart-car innovation; central contributions to green economy; revitalized steel-ish industry). but things look much better than they have in years, and it will look much better when job growth begins (always lags behind a recovery).

yeah, I think I was wrong about that Esquire article being from the most recent magazine

I wish I could feel more optimistic about things, but I'm still reading a lot of bad news in my industry. Still haven't had a week go by where I'm not reading or hearing about more architectural layoffs.

architecture is exactly the wrong industry from which to measure such things from, though. money's assigned in advance and projects can take forever. there's a kind of buffer, or delayed reaction. or so some architects i know say...

Oh, thats 100% on the money, its just hard to be optimistic when we're still buried in doom and gloom. I think six months from now it will be a brighter picture, but right now still a lot of unhappy people.

CL did you read that article in a physical issue of esquire? if so can you recall what month it was, or who was on the cover?

Well I checked the last 3 issues and it wasn't there. But then I remembered that it was a waiting room magazine. I don't remember what magazine. I think it even had China's flag on the cover and maybe the article had something like "why you don't have to worry" in title. And one part of the article talked about the economic future of a few different countries. And Canada was gonna do good in the long run because of all the natural resources. I think the article talked about farm land gonna do good for one country. I don't think I had time to read the whole article but I believe it was a newer magazine from the past few months.

I hope "all the natural resources" wasn't predicated on tar sands oil extraction-type development. That sort of mass-mining resource development is some serious, nasty enviro-disaster shit.

not to be debbie downer for the millionth time, but remember the crazy gas prices of 2006 to summer 2008, peaking at around $147/barrel and $4 gallon? The only reason they dropped was because of the global recession, which dropped demand. Even with a weak global "recovery", they're already back to $90/barrel and $3 gallon. The reason for the resurgent prices is that demand is picking back up, but supply (or conventional oil) has peaked. At best, prepare for a bunch of republicans droning on about an "all of the above" energy "policy" that basically amounts to devastating the environment for no particular reason, since the U.S. has less than 2% of the oil reserves in the world but use 25% of the oil, and exploiting the oil reserves that are in ANWR are projected by EIA to lower the price of gasoline by only a few cents by 2030 (http://www.eia.doe.gov/oiaf/servicerpt/anwr/results.html). At worst, another spike in oil prices will push us toward another recession.

yeaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah

http://i52.tinypic.com/2a95m6a.jpg

luckily, the U.S. spent the last couple of years trying to make the best out of the financial downturn by putting millions of unemployed people to work building a new low-carbon infrastructure - weatherproofing homes, laying down Bus Rapid Transit and high-speed rail lines, implementing a price on carbon, renewable energy standards, promoting telework, etc - as an incredibly belated attempt to improve the resilience of a country that is utterly dependent on oil.

oops, i mean...uh, that didn't happen

http://i52.tinypic.com/2a95m6a.jpg

i will stop now, sry

putting millions of unemployed people to work building a new low-carbon infrastructure - weatherproofing homes, laying down Bus Rapid Transit and high-speed rail lines, implementing a price on carbon, renewable energy standards,

i believed obama when he talked this shit

:/

That shit sounds way too much like by-gawd commie socialism for any red-blooded American to ever believe in.

i believed obama when he talked this shit

i did too. And shit, I think Obama believed it too. He had Van Jones as his Green Jobs czar, Chu, Holdren, and so on. And occasionally he hints that he still "gets it". But energy/environmental policy, out of all policy realms, is the least conducive to compromise, because nature/physics does not give a damn that "politics is the art of what's possible". aaaaaaaaaarrrrgh

don't hate the player hate the game?

anyway, i was going to apologize for going off on a tangent on an economy thread but the inaction on climate/energy over the past 3 decades is going to have massive economic repercussions. people always talk about the costs of implementing a price on carbon without ever talking about the costs of NOT doing so, which are mindboggling. If a flood is clearly approaching your home and you could pay $50 to stop it or mitigate it, you do it. you don't quibble about whether the cost is $50 or $75 or $20, you just DO IT ASAP because if you don't your fucking house is ruined.

bllluuurgh

xpost

I sympathize with Obama and the tough position he's in, but if this is a game he's the closest thing to a DM we've got

last post before i pass out in a pile of puke in the gutter (again), but i'll go ahead and make an ass out of myself by making the prediction that anything approximating a global economic recovery will come paired with another sustained rise in the price of oil to the $150-160 range, followed by another recession that will be blamed primarily on other more obvious factors.

also, depressing sidebar: rising oil prices + climate change related extreme weather have already pushed food prices to similar levels that provoked food riots in a dozen countries in 2008 and 2009; the idiotic ethanol policy in the U.S. plus the almost certain future rise in oil prices are going to exacerbate the situation. Lester Brown has been on fire regarding this subject recently, and for the last decade.

http://i52.tinypic.com/5nmyw8.gif

positive signs, finally

It took less than three weeks for the new Republican Congressional leadership to claim credit for an apparent economic upturn.

An aide to House Majority Leader Eric Cantor, Brian Patrick, emailed reporters this morning:

THERE ARE THE JOBS: Republicans Prevent Massive Tax Increase, Economy Begins to Improve....

Ha

Republicans Prevent Massive Tax Increase

Pretty easy to prevent something when the only opposing party immediately caves to your position.

"massive" would have equaled returning rate a few percentage points to Clinton era

considering that the GOP credited the late 90s boom to Ronald Reagan, it's not at all surprising that they'd credit any improved economic news to their (1-month) majority. logic isn't the point here, it's all about message.

also, and w/t reading any of those Esquire articles, i actually think that Latin America may be the best bet for economic growth this decade -- China and India are going to hit some big walls soon (though I think India may end up faring better than China).

Gross Eliminates Government Debt From Pimco's Flagship Total Return Fund

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., eliminated government-related debt from his flagship fund last month as the U.S. projected record budget deficits.

Pimco’s $237 billion Total Return Fund last held zero government-related debt in January 2009. Gross had cut the holdings to 12 percent of assets in January, according to the Newport Beach, California-based company’s website. The fund’s net cash-and-equivalent position surged from 5 percent to 23 percent in February, the highest since May 2008.

Yields on Treasuries may be too low to sustain demand for U.S. government debt as the Federal Reserve approaches the end of its second round of quantitative easing, Gross wrote in a monthly investment outlook posted on Pimco’s website on March 2. Gross mentioned that Pimco may be a buyer of Treasuries if yields rise to attractive levels.

Treasury yields are about 150 basis points too low when viewed on a historical context and when compared with expected nominal gross domestic product growth of 5 percent, he wrote in the commentary. The Fed is scheduled to complete purchases of $600 billion of Treasuries in June.

Gross in his February commentary urged investors to reduce holdings of Treasuries and U.K. gilts and buy higher-returning securities such as debt from emerging-market nations. “Old- fashioned gilts and Treasury bonds may need to be ‘exorcised’ from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint,” Gross wrote.

the austerity mistake:

http://krugman.blogs.nytimes.com/2011/03/30/austerity-games-here-and-there/

"The only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap — and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt. So we have the spectacle of a government that inveighs against the evils of debt pinning all its hopes on an assumption that over-indebted households will dig their hole even deeper."

let's cut taxes on the rich too

The only way the economy can avoid taking a hit from government cuts is if it get's it's spending fix from somewhere else.

No shit, Paul Krugman.

He's not writing a public diary revealing his newest economic revelations, he's trying to influence policymakers who don't (or refuse to) get it.

But sadly noone in the White House will advocate for his position

much love to william greider

http://www.thenation.com/article/159433/how-wall-street-crooks-get-out-jail-free?page=full

Except for occasional civil complaints by the Securities and Exchange Commission, the nation is left to face a disturbing spectacle: crime without punishment. Massive injuries were done to millions of people by reckless bankers, and vast wealth was destroyed by elaborate financial deceptions. Yet there are no culprits to be held responsible.

mistakes were made

didn't matt taibibi write the same article a few months ago?

matt taibbi vs. megan mccardle - fight!

http://www.rollingstone.com/politics/blogs/taibblog/video-taibbi-vs-mcardle-on-goldmans-responsibility-to-its-clients-20110516

whoah

http://www.nytimes.com/2011/05/17/business/17bank.html?_r=1

The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.

Officials in Eric T. Schneiderman’s office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.

Thank you New York state for doing what the feds have clearly declined to do, and it's about fucking time some one did it.