August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

[jtabeb]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

[url="http://finance.yahoo.com/tech-ticker/article/298981/Inflation-Not-a-Problem,-%22Deflationary-Depression%22-in-Our-Future,-Prechter-Says"]

elliot wave is a scam & prechter is a scam artist. give the man his due.... he's good at what he does... separating people from their money.

ONLY ZH quotes Prechter for Macro-Econ positioning.

[jtabeb]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

from zerohedge. prices paid- up a lot. prices received- not so much.

Empire Manufaturing Index Rises As Margin Pressure Increases

Submitted by Tyler Durden on 08/17/2009 07:59 -0500




The Empire Manufacturing Index screamed higher to 12.1, much higher than the estimate of 3, yet the simple reason for this was margin pressure increased. As the chart below demonstrates The Prices Paid - Prices Received delta increased yet again, this time hitting 26.60, indicating manufacturers are losing on margin, which will impact the bottom line. And the future does not look much better: Prices Paid is expected to increase to +31.91 and Received to pick up to +5.32, meaning the margin pressure is here to stay.

Yeah but ZH has a HUGE ideological bias towards deflation. I'm over there a lot and while I appreciate the intel on how the market works and the games that are being played, their macro econ analysis sucks(putting it mildly). The are simplistic (see Energy is oversupplied, demand is down prices will go down - kind of deflation all the time BS.

KA-Poom is the most useful macro construct that I've come across anywhere,

Zerohedge is just KA-KA in comparsion on the macro econ front. (pun intended).

If you don't beleive me, just look for any mention of inflation or impending inflation, YOU WON'T FIND A SINGLE article there that says so.

[talaicito]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

reflation is only semi-working in regards to the first symptoms of deflation in domestic markets.

but reflation is impossible in reviving the $600 Trillion global hedge fund market

eventually domestic markets will fail to respond, and global deflation will begin on a massive scale. it will be un-historic

I tend to agree, that's why Bank of England is continuing its QE.
I am just wondering where did you get the 600 trillion figure?

[ASH]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Data correction:

Civilian Noninstitutional Population: Thousands-----Civilians Unemployed for 27 weeks or over: Thousands----Percent

May-50-----105,014-----400-----0.4%
Jun-83-----174,125-----2,800-----1.6%
Jul-09-----235,870-----5,000-----2.1%

Hi FRED. Sorry if I'm being obtuse, but is it the case that the numbers in the graph were corrected, but not the corresponding text in the article? I think the text still reads:

The number of members of the civilian labor force counted as officially unemployed for more than 27 weeks is over 18% of the total civilian population, exceeding the previous peak of 12.3% in 1983.

[metalman]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

is it possible, you are an idiot??
Another 1 for me?

no... not an idiot... tho i never discount that chance that i'm behaving like an idiot at times.

i do require evidence. got any?

can you refute my evidence that you are a troll?

on your first post you serve up 6 criticisms that any idiot without an agenda can see are bogus.

[stumann]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

reflation is only semi-working in regards to the first symptoms of deflation in domestic markets.

but reflation is impossible in reviving the $600 Trillion global hedge fund market

eventually domestic markets will fail to respond, and global deflation will begin on a massive scale. it will be un-historic

[talaicito]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Funny think that so many people think that money gets destroyed when a credit is not payed. As I understand it, it's just the opposite:

Normal case (no default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar earns back money plus interest from the economy.
5) Liar pays bank. Money gets destroyed. The bank should lend again, or the money supply will shrink.

New normal (default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar fails to earn back money and defaults.
5) Bank loses money, that remains still in the economy. No deflation here.
6) Fed creates money to bailout bank. No inflation until the bank lends the money. It will try not to, but if it has enough defaults, it will have to...

Don't you think in the new normal, after 4 the 5 would be that the bank fails (EJ says there will be 1000 of them) or tightens credit?

[talaicito]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

mega trollish 1st post. i'll score it for ya... from 0 to 5...



0... it is 100% consistent with previous analysis.

0... where does he say 'runaway inflation'??? he says stagflation...

iTulip Forecast: The U.S. will experience stagflation as the economy drifts in and out of periods of moderate to high inflation while unemployment remains high. The sources of inflation are: 1) high import costs, with energy costs exerting the greatest upward force on the prices of goods, 2) reduced quantity of goods and services, 3) industrial concentration. The challenge for investors and consumers alike will be managing through inflation volatility, high unemployment, and political uncertainly, a new problem for the U.S. that will weigh on the dollar even more than the Fed's and Federal Government's balance sheet. As the U.S. fiscal and external debt position grows increasingly precarious, the U.S. remains vulnerable to a sudden stop event.

0... never says runaway inflation... stagflation.

0... ah, the meat of the deflationista troll... 'they can't hit the zero key enough...'

-5... bullshit. he backs it up with facts...



Japan since 1999: Wages up


wages up during a depression... b...b..b.but how?

0... the dollar can't depreciate? really???? like the 40% it lost 2001 - 2008?

1... you get one point... posed as a question not an unsubstantiated assertion.

i think you're a troll.

is it possible, you are an idiot??
Another 1 for me?

[FRED]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Thanks FRED!

The number doesn't look as scary... until you realize it's way worse than it's ever been before.

To be precise, the statistic is 24% worse than the worst previous recession, of the 1980s.

[snacky]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Thanks FRED!

The number doesn't look as scary... until you realize it's way worse than it's ever been before.

[FRED]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Sorry, I disagree. It is a great piece, but with enough of us not understanding this one item, it should be either corrected or explained. :confused:

jim

Data correction:

Civilian Noninstitutional Population: Thousands-----Civilians Unemployed for 27 weeks or over: Thousands----Percent

May-50-----105,014-----400-----0.4%
Jun-83-----174,125-----2,800-----1.6%
Jul-09-----235,870-----5,000-----2.1%

Don't forget to hit the "Refresh" button on your browser to see the new chart.

[jiimbergin]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

i'm glossing over the number... 1 out of 3239 facts in the piece. does it negate the argument? can get worked up about it.

Sorry, I disagree. It is a great piece, but with enough of us not understanding this one item, it should be either corrected or explained. :confused:

jim

[flintlock]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Funny think that so many people think that money gets destroyed when a credit is not payed. As I understand it, it's just the opposite:

Normal case (no default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar earns back money plus interest from the economy.
5) Liar pays bank. Money gets destroyed. The bank should lend again, or the money supply will shrink.

New normal (default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar fails to earn back money and defaults.
5) Bank loses money, that remains still in the economy. No deflation here.
6) Fed creates money to bailout bank. No inflation until the bank lends the money. It will try not to, but if it has enough defaults, it will have to...

Now that's the kind of explanation I need. Simple.

[metalman]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Thanks metalman. I think it is a great piece. But it would be better if someone would please help me understand about the 18%

jim

i'm glossing over the number... 1 out of 3239 facts in the piece. does it negate the argument? can get worked up about it.

[metalman]

Re: August 2009 FIRE Economy Depression update – Part I: Snowball in Summer - Eric Janszen

Funny think that so many people think that money gets destroyed when a credit is not payed. As I understand it, it's just the opposite:

Normal case (no default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar earns back money plus interest from the economy.
5) Liar pays bank. Money gets destroyed. The bank should lend again, or the money supply will shrink.

New normal (default):
1) Bank gives credit to liar, creating new money.
2) Liar spends money buying an 80 inch plasma TV.
3) Money circulates: from mall to distributor, from distributor to manufacturer (in China), exchanged for yuan with chineses gov., from chinese gov. buying short term treasuries to american gov., from american gov. to GM, etc.
4) Liar fails to earn back money and defaults.
5) Bank loses money, that remains still in the economy. No deflation here.
6) Fed creates money to bailout bank. No inflation until the bank lends the money. It will try not to, but if it has enough defaults, it will have to...

very concise. once in circulation, the money goes round and round!