Karl, wow... an OUTSTANDING Ticker, and one that I've already sent emails to many friends with a link to the Ticker. You have a great talent of expressing your thoughts thru writing (and speaking) and I am most appreciative of your hard work and efforts!

David

Great ticker! But isn't this all just common sense? Why are people so ****ing stupid? What did they think was going to happen when they (AND our government, for that matter) leveraged themselves into unsustainability?

I honestly think my 8 yr old could understand this. Well written!

I thought only gold donors got autographed books...

Great ticker.

Your article is getting some traction amongst my FaceBook contacts and beyond...it may be going viral...

... we will fail at our goal and the spiral you're seeing right now in Greece will come here.

It's improbable that Turbo Timmy and Helicopter Ben are unaware of the ramifications of the actions so far taken as to the setup begun 30+ years ago.
It's also improbable that Obama is unaware also. Same for GS, CITI, etc.

2+2=4, and they all know it. That is what the average American has yet to realize.

We're all Greece now.

Forgive me for pointing this out, but I see one flaw here.

While the banksters, the doctors, the college professors, and the realtors will all wind up taking haircuts, and well-deserved ones, there's still going to be one group that continues to make out like bandits.

Which is? The lawyers.

See, you might be able to put off buying a house, or going to the doctor, or going to college, until you can pay for it out of economic surplus. But if you're accused of a crime (and people get falsely accused of crimes all the time), or if somebody's suing you (which someone could do at any time, for any reason), you're going to need a lawyer, and you really are going to need one right damn now, because it's your money, or worse, your freedom on the line! So what's stopping lawyers from continuing to charge exorbitant amounts? Nothing, because they have you over a barrel, and they know it!

And, in an environment where people are going bankrupt and taking haircuts left and right, due to the need to clear past excesses, is the demand for lawyers going to be more, or less?

If, instead of having to give all our economic surplus to the banksters, doctors, realtors, and colleges, we wind up having to give it all to the lawyers...what have we gained?

This is one of my top 3 Tickers ever.

Thank you.

The obvious question-

A big tranche of American people who are “over borrowed” go bankrupt and take lenders with them (and related industry).

Then everyone works and spends what they earn- living within their means.
What is it these people are going to do?

What skills have they got? Into what industry can they transfer? What does a bank HR exec do in industry? These were high paid non jobs.

…Like Monica in Friends who thought Chandler was a “transponster”.

So, “clue me” what this army of bankrupt transponsters are going to do to make ends meet?

How much do actually think they can contribute to tthe economy- let alone the army of leaches who haven't ever worked?

FANTASTIC column! The root problem is so very simple, really. Nothing complex about it at all.

I wish everyone on this planet would read this one column of yours.

@Erbo - the lawyers already have us by the short hairs. It'll only get worse.

Unless we're all so destitute that no one can pay their prices.

Simply the best ticker ever! This should be taught in every high school economics class.

Excellent post, Gen!

A couple of typos:
"economic surplus form working" -- "economic surplus *from* working"
"predicted by basis economics" -- "predicted by *basic* economics"

Sorry to nitpick, but this Ticker will (I hope!) be seen far and wide.

KD,

Say someone has a $100,000 house with a mortgage, but no other debt to consider. The value of the mortgage is 80% of the value of the house, today. He has no savings due to long unemployment and though he is working, is only earning at 60% the rate of the job he lost, so there's not much, if any, cash on hand.

Tomorrow, someone pulls the plug on the housing market. Overnight, the guy with the house and note finds himself unable to sell the house for more than $10,000. He loses half of the money he put down and he's still on the hook for the other 80 grand he agreed to pay. A smart guy, one who was smart enough to get himself into a leverage situation previously considered safe by nearly any measure, suddenly finds himself bankrupted. There's no reason to keep paying the note if the asset doesn't justify the expense, so he loses 100% of his money in a foreclosure - and he doesn't have a place to hang his hat.

I get that the purchasing power paradigm shift theoretically benefits everyone, but the benefit to the guy who, with the exception of his home, has no debt at all and still loses his modest home is pretty hard to see.

Theox wrote:

Quote:

"Next up on The View- best-selling author Karl Denninger!"

That would be epic- I'd pay good money to see that live.

A DVR worthy moment, for sure.
Joy Behar and Whoopie trying to understand the concept that not everybody can have everything all the time just because they want it would be enough to make their heads explode.
I’d buy a ticket to see that.

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Quote:

Well, we're told that if we cut out the student loan programs, for example, that nobody would be able to afford to go to college.

Is this really true?

Karl, this is a great Ticker. However lets keep in mind that Prof. Cornell West and many other professors that have shown up in support are NOT looking to get LESS money into Academia, which we all know is overwhelmingly Liberal.

Here in NYC Columbia University is buying up huge chunks of land on the West Side, north of 125 st. This is a poor area and a lot of businesses and people aren't happy about it. Do you think 'sensitivity to poor people' and a sense of "fairness' or 'Social Justice' is stopping Columbia? HELL NO! They're marching forward, the peasants be damned. And there is a nary a Social Justice Professor to be found speaking out against it. And it's all made possible by the financialization of college that you speak of!

These phonies are all against Greed...except when gobs of money are pouring into THEIR pockets. THAT'S OK as far as they're concerned. And the people organizing OWS are sympatico with the Academic Industrial Complex which is raping many of the kids that they've organized.

I'm still waiting for them to Occupy a Greedy College Campus. I'm not holding my breath though.

DEFINANCIALIZE - the process of correcting the excesses of the past 40 years by downsizing, reducing debt, and correcting balance sheets.

Those with the most to lose will fight the hardest against it.

Quote:

These phonies are all against Greed...except when gobs of money are pouring into THEIR pockets.

As with banksters, politicians, entertainers and and the majority of the rest of the progressive universe, when the gobs of money are pouring into THEIR pockets, it is not greed. It is the elite getting their just rewards from the peons who should be happy to give it to them.

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Fastrunner, your guy in your scenario wouldn't be broke by any means. Just because the value of the home dropped, he realizes no loss unless he sells. he could afford his mortgage before and after so what is your point?

Plus if he is on the hook for the other 80 grand depends on what state he lives in, recourse or not.

You seem to be arguing a point from a very uneducated place.

Quote:

direct acts of government acting at the behest of fat cat banksters

There are no government officials, only corrupt bankster puppets.

Wow just wow, I am glad I joined. Your ability to see things clearly and explain them to someone with little education is a gift. I thank you.
However, I fear the establishment might see you as a threat. Watch your back good luck.
ED.

I like the posting. You glossed over the pain that will inevitably come from this correction - the loss in jobs at universities, the loss in jobs in hospitals, the loss in jobs at the banks, the loss in jobs at the student loans office and in the government..

I'm still digesting some of the implications of your ideas - but it was a very good post. 'Social Justice' might be an objection here - but I don't see why. I can't imagine new inequalities that would sprout up as a result of these ideas - at least no more so than exists today, and in fact, it might correct some that currently exist.

lots to think about - worth a few re-reads imo...

Great ticker , but NOW WHAT?

If you had read Kevin Phillips you would see exactly how deep and wide are the "interests" and brainwashing that has gone on.

Those on all sides who created and benefit or think they benefit from the systems will use any tools at hand to demonize anyone that tries to over turn either sides fiat-cash cow.

Read it an then take a weekend to reflect on the SCALE of change that would need to take place. Won't happen here imo.

Read American_Theocracy and then check out his Bad Money which layed out the whole financialization many years ago and the players and ideas that forced it upon you.

No. Nothing less than a cultural change now is required and that doesn't come at the voting box. One thing TPTB are great at is perception management and they have plenty of "them" to strike fear in the normal 9 to 5 peep.

Of course one would have to be a godless commie or an american hater to read either of those.
:)

Quote:

While the banksters, the doctors, the college professors, and the realtors will all wind up taking haircuts, and well-deserved ones, there's still going to be one group that continues to make out like bandits.

Which is? The lawyers.

Two Word Solution:

Loser Pays.


These tickers keep getting better and better; Facebooked!

I'd like to see the issue of property taxes addressed as well; if you want to buy a property and live off it, you cannot as you must get in the system to earn paper tokens to pay your feudal, er, property taxes.

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Don't buy from Verizon.

OK, Karl, I'll bite: in your opinion which company offers the best plan for a phone that you buy? I would love to own my own phone without any obligation to the company providing the service (much as I own - yes, really, without any debt - my TV, and I pay the cable company for the programs it sends me).

Of course, I have to convince SWMBO why it is smarter to pay for the phone out-of-pocket and pay less to the cell company...math isn't one of her strong points, and she's enthralled with the idea of a "free" phone (she never learned that TANSTAAFL).

Oh, BTW, I concur that this is one of the best Tickers ever. It concisely explains why our system is screwed - basically, because we bought the idea from (bankster-paid) Madison Avenue that we could have everything we wanted RIGHT NOW, so we pulled demand forward for 30 years. Result: inflation in the price of goods and services and unsustainable debt loads. Ultimate result: I hope I'm wrong, but I think that the French Revolution might look mild in comparison...there are too many entrenched interests to effect the necessary change.