Rolling US Economy Into The Shitbin Thread

Staff stand in a meeting room at the Lehman Brothers offices in the financial district of Canary Wharf in London September 11, 2008. Lehman Brothers eventually filed for bankruptcy - the largest bankruptcy in U.S. history - and was delisted from the NYSE, and later liquidated. #

i posted that article about 1873 in October! and Mackro Mackro, i think it was, told me that such comparisons are irrelevant. sorry this is a worthless post :)

Hey I posted it in October! Joshea was unconvinced about the comparison.

http://www.ritholtz.com/blog/2008/12/chicago-repudiation/

this is the best news I've heard in years

http://online.wsj.com/article/SB123025036865134309.html

retail is the new newspaper industry?

Of all the "Chicago Schools of" things, that one seems pretty thrown together.

this is from a british perspective but elliott's analysis doesn't seem wildly inappropriate for america, either:

http://www.guardian.co.uk/business/2008/dec/22/keynes-left-economics-economy

The bottom has been falling out of retail every holiday for years now. duh + shrug.

tracer the problem with that analysis for the US is that we already had an election and the winner has been showcasing his keynes steez nearly every weekend since?

Why are people surprised by ANY of this shit, by the way? The writing has been on the wall for brick & mortar shops for years. Of course all retail is going to slump when the entire country's economy faceplants. The writing's been on the wall for newsprint for even longer than retail, and by all accounts the management of most publications has never been what you might call adaptable or even competent. Businesses that we have known were on thin ice for almost a decade are in trouble for SURE!! Oh SNAP!!

there's no concrete evidence i've seen that obama seez any keynez steez as necessary beyond a two-year recovery program, which krugman warns won't be enough. the other stuff elliott says about the total lack of a center-left apparatus that actually draws longterm lessons from this and then puts policy in place to capitalize on those lessons seems pretty on point; the feeling i get so far from democrats is "yall screwed up, now it's going to take democrats to return us to the status quo" when the status quo is what got us into trouble in the first place.

^

there are so many unfounded assumptions in that graph its hard to know where to start

There's no upside for Obama to announce in advance that the gigantic stimulus package he wants Congress to pass asap will not revive the economy. He may or may not know it is true, but even if he knew it were true, he wouldn't want to say it.

That's pretty optimistic.

wait why is retail a dying industry like newspapers? im not sure i get it

macys was paaacked today btw -- im assuming its cuz of the sale prices -- got a wool argyle sweater for $25

Tried to buy a suit at Brooklyn Macy's today but their selection kind of sucked imho. Fuck an Alfani.

i just got a CK suit there during the huge tgiving black friday sales -- good deal and they adjusted it for me pretty inexpensively

retail's more just comically overbuilt in anticipation of a never-ending housing bubble

Optimism is my trademark move.

retail's more just comically overbuilt in anticipation of a never-ending housing bubble

yah there was a piece in the times this week about a town in the bay area that had transformed most of their old industrial sites into retail space and how drastically they've overbuilt - now that ppl have no credit to spend the town seemed basically fucked. the most damning thing was that despite the writing being on the wall new developments and stores were opening right through the summer. also there was no real acknowledgment of how unsustainable that kind of development was most of the civic leaders and businessppl interviewed had the attitude of "oh the next year will be bad but things will bounce back"

the stuff in the WSJ article was interesting to me, at least a little, in that the degree of difference between on-line and b+m retail was so marked - i'm not trending this shit for a living but from what i recall the decline is much less severe on-line than expected that has to be worrying news for retail ppl. i'm curious about how that will play out too, what the means for communities like the one i mentioned above and for any recovery in unemployment #s.

I think I read that Amazon's holiday sales were up considerably from last year. Which makes the comparison between brick and mortar retail and newspapers more apt -- both are being hit by a combination of recessionary pressures and increasing competition from online outlets.

u guys hav no faith in america imo

eAmerica >>> brick and mortar america

ice cr?m, have you seen evidence that there's any sort of real movement from either obama or the congressional leadership that they're looking to radically realign how american finance works? for instance, nationalizing banks for the long term? we've heard talk about more regulation and surely we will get it, but the underlying goal seems to be as speedy a return to high-flying finance as is possible, houses used as ATMs, etc etc. the only real difference being capital requirements for ibanks. the government will spend massively over the next two years to bridge us there and then, uh, everything's supposed to be peachy. krugman says this is a pipe dream. elliott says that apart from krugman and stiglitz there is no policy establishment in the US doing the heavy lifting over the past 30 years to effectively seize this window of opportunity the way reagan and thatcher seized theirs in the late 1970s. this all seems accurate to me. if any of this seems unfounded please say what it is, i'd be interested to hear your point of view.

the obama admin has shown me nothing thatd imply theyre looking to reinflate the housing bubble - and there are some really obv things they could do to make that happen - i dunno what yr talking abt as far a nationalizing the banks thats never ever gonna happen and isnt imo particularly germane to the conversation - restructuring new regulation and actual application of existing regulations is a completely reasonable and doable reaction to the current banking stupidity

also not really sure why u think the obama admin is planning on returning to bush admin policies after two years - just cause hes offing a two year plan right now doesnt mean theres nothing after that - maybe lay of the krugman a lil - hes obv a brilliant economic mind but his political analysis is so often just a bizarre overly general pessimistic extrapolation of current events

or for that matter past events - his current obsession is w/38 when fdr let his foot off the keynesian gas causing another recession - theres def a v good lesson there but every situation is unique and this is not 1933

restructuring new regulation and actual application of existing regulations is a completely reasonable and doable reaction to the current banking stupidity

absolutely, but it's not a political response remotely on par with what reagan and thatcher mounted around 1980, and this current debacle is almost certainly worse than what either country went through then. the fact that partial long-term nationalization of american banks would "never ever happen" is testament to the total lack of intellectual and ideological groundwork to this point, despite such a prospect being a pretty sound policy and comparable in scale to what reagan and thatcher pulled off.

obama i think theres reason to believe does have ambitions on par w/reagan - they just likely dont have to do w/nationalizing the banks

thatd be imo sort of a left field thing to spend yr political capital on - in fact can u explain to me how thatd work and why its a good idea

http://letmegooglethatforyou.com/?q=state-owned+bank

no u mad lazy homes

it's just one example of a far-reaching change that won't happen. that it is so "left-field", that obama would be a fool to risk his political capital on it, proves my/elliott's point rather nicely.

dude u cant do everything just explain why u think this is at all important or even a good idea

look i'm not an expert on this. but it seems that a well-run state-owned bank would be more transparent, publicly accountable, would have a mandate to loan, would have stringent capital requirements, would have far less motivation and room to weasel billions away in off-shore tax havens.

you could argue that all that is accomplishable with regulation of the banks we have now, and you could be right. i don't know. but if it is accomplished, the amount of moaning we heard about sarbanes-oxley will appear as though a tiddly squall. and armies of lawyers will be found to try and circumvent it all.

yah i guess im little weary of putting an industry thats an indispensable cog in the economy and when run right a legitimate profit center on the government side - and then theres the political battle it would require - just police the situation better - which btw doesnt necessarily mean more sarbox style red tape but rather a restructuring of the industry as a whole

ok i've showed you mine, now show me your "restructuring the industry as a whole"!!

im little weary of putting an industry thats an indispensable cog in the economy and when run right a legitimate profit center on the government side

"legitimate profit center" - this could be argued, both the "legitimate" part and the "profit" part; the temporary fictional excess money generated certainly wasn't being INVESTED in actual things

at any rate, it wasn't run right and is now "on the government side" yet is still in stuck in a tarpit mainly because the government is telling them to do two contradictory things: 1) get loans back up to something approaching former levels and 2) stop lending to people who can't pay their loans back, which right now is like, everybody

ha well as an example u can remove a lot of the motivation for corporate malfeasance just by changing the rules governing executive compensation xp

def recently the banking sector hanst been a legitimate profit center but historically it has

agreed tho that at least some in government and punditry are discounting the whole its a bad time to loan to people since no one has any jobs or money angle a little too steeply

the problem is that no loans = less debt = less actual money, since debt = money

i'm stunned that the CEOs of these places are still there, in japan they would have resigned months ago

its outrageous and completely unsurprising

elliott says that apart from krugman and stiglitz there is no policy establishment in the US doing the heavy lifting over the past 30 years to effectively seize this window of opportunity the way reagan and thatcher seized theirs in the late 1970s.

umm everyone from CAP to the brookings dudes have written up policy proposals about how to use the current economic crisis to transform the economy - you or elliot can def argue that some or even all of these proposals dont go far enough - but pretending like there is no centre-left policy establishment is retarded.

also lol that your big moment of truth is nationalization of the banks as if the treasury didnt spend a couple billion some months ago using TARP funds to take equity stakes in large FIs. maybe it's a good idea to have to defend things i take for granted but i dont really want to argue over why it is a TERRIBLE idea to fully nationalize the banking industry let's just admits that's an unrealistic thing to pin your transformation on.

i also think it's pretty disingenuous to claim "there's no concrete evidence i've seen that obama seez any keynez steez as necessary beyond a two-year recovery program" and then show that a) you don't even understand kenyes and b) argue that because someone doesn't take as drastic steps as you'd like they must logically not want to take any steps at all. like "well, obama has been careful and measured in his plans he must just want to get back to 'fuckin with makiw 2010' asap"

inbetween you being an asshole i can sort of make out a few points, but it is kind of rough going

yah i apologize to you and professor gregory mankiw my tone there was unnecessary and patronizing - i think you've got a skewed take on keynes and the banking industry but that's no justification for acting like a dick

if u cant run with the big dogs u should stay on the porhc

thanks for the apols Lamp. if you want to give someone a logistical beatdown, do it to the economics editor of the guardian not me - i don't really know shit!

aw, the giving spirit of keynesian economics has infected this very thread

lol wamu. that used to be my bank! i didn't know they were so crazy. definitely nobody ever tried to give me meth.

While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.

“In our world, it was tolerated,” said Sherri Zaback, who worked for Mr. Parsons and recalls seeing drug paraphernalia on his desk. “Everybody said, ‘He gets the job done.’ ”

At WaMu, getting the job done meant lending money to nearly anyone who asked for it — the force behind the bank’s meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.

... WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.

“It was the Wild West,” said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. “If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”