The lightning before the thunder - and downpour is coming it would appear

what about the huge Construction spending figure?

Quote:

Friday's employment report is (at my present analysis) going to come in under 100k

And since volume will probably be low on Friday because of the holiday week and if it is a bad report I expect a good shorting opportunity in the market.

Disclosure: Not in the market at all except for a pension.

Karl, care to revise your December +/- 3 months?

Keep in mind... These numbers are probably slanted toward the *GOOD* side.

Bernanke said he will be back with more stimulus (QE3) to make Wall Street happy if the situation weakens. Faber and Schiff think Bernanke will keep QEing. So far it's exactly what Bernanke has been doing.

Bernanke has commodities down far enough where he can juice it again with more QEing.

Quote:

"Friday's employment report is (at my present analysis) going to come in under 100k"

Bah! A nice +400K birth/death adjustment will create a great number and have the monkeys on CNBS cheering! While killing the mic of anyone who mentions the adjustment.

Quote:

Bernanke has commodities down far enough where he can juice it again with more QEing.

I agree with Trades. Consumers have shown that they're a helluva lot more elastic with respect to gas prices than I would have imagined. Our economy sure seems much more resilient to $4 a gallon gas than it did in 2008/2009. And now with crude prices below $100 and the DXY in the low 80s Bernanke can really goose the dollar ahead of the election.

I see the bad moon rising.
I see trouble on the way.
I see earthquakes and lightnin'.
I see bad times today.

Don't go around tonight,
Well, it's bound to take your life,
There's a bad moon on the rise.

I hear hurricanes ablowing.
I know the end is coming soon.
I fear rivers over flowing.
I hear the voice of rage and ruin.

All right!

Hope you got your things together.
Hope you are quite prepared to die.
Looks like we're in for nasty weather.
One eye is taken for an eye.

How do they know GDP is growing when the measuring stick is so manipulated? Evidently, if your spouse pays you 25 cents for the 3 minutes it takes to put the trash in the can, you have a job. Could GDP be overstated by 10% because of price manipulation?

Mann, I think GDP is overstated by about 50% once you take out the fraud, manipulations and stimulations.

$7.5T? if thats the case we are UBER ****ed. You may be right though...

Quote:

Mann, I think GDP is overstated by about 50% once you take out the fraud, manipulations and stimulations.

Which isn't a bad thing! Much of that 50% is simply higher prices. Prices will come down, but that won't wreck the economy. People will get ****ed as they have to adjust to actually providing real value to consumers instead of mooching off the government or fraud teat, so there will be temporary pain, but as has been seen repeatedly in history the economy will bounce back within a year or so.

Also remember all the financial advisors, analysts, mutual fund and insurance companies make very little money on USTs so they never plug them. Despite that Treasuries continue to make new highs on prices. Yields in Japan are still at a bottom at 200% of GDP and still deflating.

Without the LIBOR rigging, it might be even more deflationary in the coming months. ALthough 1/2 of me thinks the banks will pay the fine and Rig it again as they run out of options to make money in the future.

Quote:

$7.5T? if thats the case we are UBER ****ed. You may be right though...

75% of credit in this country is bad debt. I think 50% may be conservative. Heck, Dagong thinks real US GDP should be around $5 trillion. If there has been no real growth since 1980.........well GDP then was about $2-3 trillion......... Oh, and if government cannot extract more than 20% in revenue, then it will have, AT BEST, $1.5 trillion in revenues to spend. With about $500 billion going to interest, you are looking at outright anarchy both here and abroad (who is going to police the world's trading routes if the military gets cut off?).


I also don't buy that lower prices are going to save the day. Such a decline in GDP is guaranteed to cause unemployment to go parabolic. Just look at the 30s, 20% decline and 25% unemployment. The government tax base is also based on nominal GDP. A 50% decline in revenues (or greater) is going to destroy government spending, and that too will have a very negative impact on the economy (and jobs).

As for the argument that the economy will bounce back strong after a year. Please provide evidence to support this claim. Iceland does not count, since Iceland is small and the rest of the world was stimulating.

If America goes down, there is nobody to provide support. Our net national investment position sucks (so no capital to kick start strong growth), our manufacturing base (and subsequent supply chain) has been gutted. Government (at all levels) is around 50% of GDP. The US economy is geared towards financialization, health care and defense contracting. It is going to be a multi-year process of righting the economy and re-orienting it towards a more sustainable and productive platform(maybe decades) IMO. Where is the capital, on such a large scale, that will be needed, come from? We won't be able to source it all domestically, especially if borrowing suddenly becomes prohibitively expensive. Those gearing up for a quick and fast explosion just may get caught with their pants down.

Quote:

As for the argument that the economy will bounce back strong after a year. Please provide evidence to support this claim. Iceland does not count, since Iceland is small and the rest of the world was stimulating.

1920/21.

Are the conditions the same now, as they were then Gen? If you are going to draw parallels you have to make sure it is ceteris paribus. I have my concerns, raised above, and I am not so confident that it is something we just bounce back from. ESPECIALLY, if we lose reserve currency status (as I suspect will happen in the short-intermediate term).

There are NEVER two instances in which the "same conditions" apply in total.

Quote:

Oh, and if government cannot extract more than 20% in revenue, then it will have, AT BEST, $1.5 trillion in revenues to spend. With about $500 billion going to interest, you are looking at outright anarchy both here and abroad (who is going to police the world's trading routes if the military gets cut off?).

So what is your answer? Continue fraud because adjustment now is bad? It simply gets worse the longer you keep doing it.

Quote:

So what is your answer? Continue fraud because adjustment now is bad? It simply gets worse the longer you keep doing it.

Well my handle is 'Fraudster' isn't it?

But seriously, I think we need to take the adjustment now, because soon the damage will go from taking us from $7.5 trillion, to $5 trillion, to $3 trillion, etc. So to answer your question, no, I think we should not continue the fraud and we should take the adjustment NOW. The only thing I would be willing to debate is whether the adjustment should be a sudden stop, as you are calling for, or a phased three, or so, year drawdown. Only question in my mind is whether the bond market will co-operate if it becomes clear that we are serious about rectifying our fiscal situation, but just need some time.

This isn't going to help either:

http://www.zerohedge.com/news/global-dem....

Quote:

1920/21.

That example is a comprehensively good answer. The US bounced back sharply despite the RoW sinking into the first wave of GD 1.0. Britain in fact was in depression for nearly 20 years.

The normal post-war depression was offset in the US by the explosion in new technologies. Internal combustion, radio, mass production and movies all fed the rebound and boom that followed. The fact that the boom morphed into a bubble does not invalidate the technological advances. Same thing with the tech bubble. The advances in wireless, fiber optic and routing/switching were very real and valuable - just not as much as the Wall Street touts claimed.

We have a chance for a similar renaissance today based primarily on energy breakthroughs. Fracking is providing a flood of proven energy resources. Oil sand/shale extraction is doing the same from previously untapped sources. There is an additional opportunity to update our power grid with nuclear tech that is 3 generation advanced from existing commercial installations. But the financial issues will have to get ironed out first and that means SETTLED, not merely delayed.

they weren't $16 trillion in debt though were they, I don't see how you can compare today with then