Dave Stockman..............well worth 45 mins of your life.

[Mega]

http://media.chrismartenson.com/audi...2011-09-30.mp3

Well done, clean & cool headed Summing up.
Mike

[jpatter666]

Re: Dave Stockman..............well worth 45 mins of your life.

Even better, read the transcript....

http://www.chrismartenson.com/page/t...kman-blame-fed

[Kcim67]

Re: Dave Stockman..............well worth 45 mins of your life.

Absolute crock of S*** the whole idea that Capitalism is not perfect but is better than the alternatives is also a crock of S*** We can do better but the 1% don't want to they're doing pretty well as it is and they're doing everything in their power (aided by crooked politicians) to ensure that the band keeps playing and we keep paying!

[Raz]

Re: Dave Stockman..............well worth 45 mins of your life.

Absolute crock of S*** the whole idea that Capitalism is not perfect but is better than the alternatives is also a crock of S*** We can do better but the 1% don't want to they're doing pretty well as it is and they're doing everything in their power (aided by crooked politicians) to ensure that the band keeps playing and we keep paying!

Perhaps, comrade, you will share your ideas concerning a better economic system?

(And I don't mean the Neofascist welfare bankster state currently bleeding the small businesses and working classes of the U.S and the U.K. Crony Capitalism is certainly not an answer.)

[Chris Coles]

Re: Dave Stockman..............well worth 45 mins of your life.

First of all a very big thankyou to Mega for spotting this and another to jpatter66, (whomever you are), for the transcript and spot on Raz.....

Here in the UK it is the hottest day ever 1st October and I am off to the sunshine, but will return to add some comments.

[jpatter666]

Re: Dave Stockman..............well worth 45 mins of your life.

First of all a very big thankyou to Mega for spotting this and another to jpatter66, (whomever you are), for the transcript and spot on Raz.....

Here in the UK it is the hottest day ever 1st October and I am off to the sunshine, but will return to add some comments.

You are most welcome. Martenson's site often has some nice stuff on it. It's more doomer IMO, he and Mish do weekly-ish commentary, but he hasn't gone to the deflationist side, is trying to keep his options open.

On the other hand, the site is exceptionally well-managed and in many ways is what I'd kill for iTulip to be one day.

And yeah, go Raz!

[aaron]

Re: Dave Stockman..............well worth 45 mins of your life.

On the other hand, the site is exceptionally well-managed and in many ways is what I'd kill for iTulip to be one day.

Absolutely agree!
And, because it is better, HIS message gets out. Though, I am not convinced that is EJ wants to get his message out there (via a web site).

[FRED]

Re: Dave Stockman..............well worth 45 mins of your life.

Absolute crock of S*** the whole idea that Capitalism is not perfect but is better than the alternatives is also a crock of S*** We can do better but the 1% don't want to they're doing pretty well as it is and they're doing everything in their power (aided by crooked politicians) to ensure that the band keeps playing and we keep paying!

Your point is well taken but this is not how we communicate here on iTulip. The curse words are unnecessary and detract from your message.

[FRED]

Re: Dave Stockman..............well worth 45 mins of your life.

You are most welcome. Martenson's site often has some nice stuff on it. It's more doomer IMO, he and Mish do weekly-ish commentary, but he hasn't gone to the deflationist side, is trying to keep his options open.

On the other hand, the site is exceptionally well-managed and in many ways is what I'd kill for iTulip to be one day.

And yeah, go Raz!

We are working on the site update. It was scheduled for completion in September but that deadline has been extended.

We are a forecasting site and have been since 1998. We do not explain what is happening but what is going to happen and have done so with considerable success for 13 years. Naturally, accurately forecasting the future is more difficult that discussing the past or inaccurately or ambiguously forecasting the future.

Much of the messiness of the iTulip site is a result of over a decade of legacy material. On the other hand, much of the reason why the forecasts are as accurate as they are comes from 13 years of continuous refinement of the methods used to make forecasts.

This cannot be replicated.

[Mega]

Re: Dave Stockman..............well worth 45 mins of your life.

I think we should have a "Mega section".........where i can discuss my special & general theory on life, perhaps a "MISH" Areas were poor lost souls can go to "lean how to bang the rocks together"

[jpatter666]

Re: Dave Stockman..............well worth 45 mins of your life.

We are working on the site update. It was scheduled for completion in September but that deadline has been extended.

We are a forecasting site and have been since 1998. We do not explain what is happening but what is going to happen and have done so with considerable success for 13 years. Naturally, accurately forecasting the future is more difficult that discussing the past or inaccurately or ambiguously forecasting the future.

Much of the messiness of the iTulip site is a result of over a decade of legacy material. On the other hand, much of the reason why the forecasts are as accurate as they are comes from 13 years of continuous refinement of the methods used to make forecasts.

This cannot be replicated.

Shrug. Never said it could be -- that's why I'm a long-term subscriber!

But none of this has anything to do with how the site looks and is managed. Martenson hired someone to manage the site and coordinate interviews, etc. He encourages a core group to get the message out. This IMO has been highly effective.

iTulip has and continues to be my core information forecasting portal, but that is completely disconnected from the effectiveness of the information medium itself. FRED has stated before that you really need to dig into iTulip to get the needed info. In the end, that is an EJ-level decision.

[Chris Coles]

Re: Dave Stockman..............well worth 45 mins of your life.

First of all a very big thankyou to Mega for spotting this and another to jpatter66, (whomever you are), for the transcript and spot on Raz.....

Here in the UK it is the hottest day ever 1st October and I am off to the sunshine, but will return to add some comments.

It seems that I, unintentionally, stirred up a rare hornets nest. So may I return to the debate opened by Mega; Stockman.

Stockman is a honed well known player in the FIRE economy; yet, here he is coming out to tell us all about what has gone wrong over the last few years. As I see it, this is a classic example of what we here in the UK describe as "Nothing to do with me Gov!, must have fallen of the back of a lorry".

Stockman is distancing himself from the Shit about to hit the fan. But in so trying, he also exposes the deep fault in the overall thinking that has constructed a building called "Capitalism" that has no strong foundation built from equity capital. ALL his "Capital" is borrowed money. ALL of it.

He never once talks about equity; it does not exist in his imagination; he has no idea in point of fact as to what ACTUALLY happened. Blind! Blind as a bat.

On the other hand, what this does tell us; is also trying to cover up the true situation. He describes debt as a proportion of GDP, Gross Domestic Product; not as a level of leverage on the original capital input..... and as you can see, that brings me right back to where I started. He has no concept of the need for underlying equity capital. In his mind, he can and does; move "figures on a screen" from one place to another, without any relationship to the reality.

How much underlying equity capital today underpins the GDP figures? Does anyone know of an accurate figure?

David Stockman is trying to place the blame on anyone but himself. He is not the first, nor will he be the last. What everyone on the outside must do is challenge these people; make them recognise that they cannot just step out and suggest it was "Nothing to do with me Gov!"

Note for EJ; Perhaps this set of questions and answers will make a very useful starting point to get at the true; underlying facts about where all this debt, called capital, has come from. Where it originated, where it now resides, (it is quite impossible for it to have been bought at par when it is the result of leverage of, to quote Mervyn King in his Banking: From Bagehot to Basil and back again, speech, http://www.bankofengland.co.uk/publi.../speech455.pdf

For almost a century after Bagehot wrote Lombard Street, the size of the banking sector in the UK, relative to GDP, was broadly stable at around 50%. But, over the past fifty years, bank balance sheets have grown so fast that today they are over five times annual GDP. The size of the US banking industry has grown from around 20% in Bagehot’s time to around 100% of GDP today. And, until recently, the true scale of balance sheets was understated by these figures because banks were allowed to put exposures to entities such as special purpose vehicles off balance sheet.

Surprisingly, such an extraordinary rate of expansion has been accompanied by

increasing concentration: the largest institutions have expanded the most. Table 1 shows that the asset holdings of the top ten banks in the UK amount to over 450% of GDP, with RBS, Barclays and HSBC each individually having assets in excess of UK GDP. Table 2 shows that in the US, the top ten banks amount to over 60% of GDP, six times larger than the top ten fifty years ago. Bank of America today accounts for the same proportion of the US banking system as all of the top 10 banks put together in 1960.

While banks’ balance sheets have exploded, so have the risks associated with those balance sheets. Bagehot would have been used to banks with leverage ratios (total assets, or liabilities, to capital) of around six to one. But capital ratios have declined and leverage has risen. Immediately prior to the crisis, leverage in the banking system of the industrialised world had increased to astronomical levels. Simple leverage ratios of close to 50 or more could be found in the US, UK, and the continent of Europe, driven in part by the expansion of trading books (Brennan, Haldane and Madouros, 2010).

And banks resorted to using more short-term, wholesale funding. The average maturity of wholesale funding issued by banks has declined by two thirds in the UK and by around three quarters in the US over the past thirty years – at the same time as reliance on wholesale funding has increased. As a result, they have run a higher degree of maturity mismatch between their long-dated assets and short-term funding. To cap it all, they held a lower proportion of liquid assets on their balance sheets, so they were more exposed if some of the short-term funding dried up. In less than fifty years, the share of highly liquid assets that UK banks hold has declined from around a third of their assets to less than 2% last year (Bank of England, 2009). Banks tested the limits of where the risk-return trade-off was located, in all parts of their operations. As John Kay wrote about his experience on the board of HBoS, the problems began “on the day it was decided that treasury should be a profit centre in its own right rather than an ancillary activity” (Kay, 2008).

Moreover, the size of the balance sheet is no longer limited by the scale of opportunities to lend to companies or individuals in the real economy. So-called ‘financial engineering’ allows banks to manufacture additional assets without limit. And in the run-up to the crisis, they were aided and abetted in this endeavour by a host of vehicles and funds in the so-called shadow banking system, which in the US grew in gross terms to be larger than the traditional banking sector. This shadow banking system, as well as holding securitised debt and a host of manufactured – or ‘synthetic’ – exposures was also a significant source of funding for the conventional banking system. Money market funds and other similar entities had call liabilities totalling over $7 trillion. And they on lent very significant amounts to banks, both directly and indirectly via chains of transactions.

This has had two consequences. First, the financial system has become enormously more interconnected. This means that promoting stability of the system as a whole using a regime of regulation of individual institutions is much less likely to be successful than hitherto. Maturity mismatch can grow through chains of transactions – without any significant amount being located in any one institution – a risk described many years ago by Martin Hellwig (Hellwig, 1995).

Second, although many of these positions net out when the financial system is seen as a whole, gross balance sheets are not restricted by the scale of the real economy and so banks were able to expand at a remarkable pace. So when the crisis began in 2007, uncertainty about where losses would ultimately fall led confidence in banks to seep away. This was obvious through the crisis. Almost no institution was immune from suspicion, the result of the knock-on consequences so eloquently described by Bagehot when he wrote:

“At first, incipient panic amounts to a kind of vague conversation: Is A. B. as good as he used to be? Has not C. D. lost money? and a thousand such questions. A hundred people are talked about, and a thousand think, 'Am I talked about, or am I not?' 'Is my credit as good as it used to be, or is it less?' And every day, as a panic grows, this floating suspicion becomes both more intense and more diffused; it attacks more persons; and attacks them all more virulently than at first. All men of experience, therefore, try to 'strengthen themselves,' as it is called, in the early stage of a panic; they borrow money while they can; they come to their banker and offer bills for discount, which commonly they would not have offered for days or weeks to come. And if the merchant be a regular customer, a banker does not like to refuse, because if he does he will be said, or may be said, to be in want of money, and so may attract the panic to himself.”

My reason for bringing in this Mervyn King speech is that there is clearly a mismatch between what each tells us about the overall level of debt floating around the system. Yes, it might be said that I should do the job myself; but my argument is these figures need to come from a totally credible source. So here I challenge not just EJ, but the entire iTulip community; to put together a recognised listing of just how much "leveraged debt" is in circulation. Where it originated, where it is now.

Without that information, no one can make any real start towards removing it from the system.

[Starving Steve]

Re: Dave Stockman..............well worth 45 mins of your life.

So long as interest rates on debt are next to zero, and approaching zero (and in negative numbers in real terms), mountains of debt can be financed. Even better, the banks have all but completely shut-off lending to the private sector, so debt is being retired, albeit slowly.

Isn't Bernanke a genius! This is the Bank of Japan policy being adopted by central banks in the West, including the Fed in Washington and the Bank of England in London.

[c1ue]

Re: Dave Stockman..............well worth 45 mins of your life.

Stockman is a honed well known player in the FIRE economy; yet, here he is coming out to tell us all about what has gone wrong over the last few years. As I see it, this is a classic example of what we here in the UK describe as "Nothing to do with me Gov!, must have fallen of the back of a lorry".

Stockman is distancing himself from the Shit about to hit the fan. But in so trying, he also exposes the deep fault in the overall thinking that has constructed a building called "Capitalism" that has no strong foundation built from equity capital. ALL his "Capital" is borrowed money. ALL of it.

It is worse than that.

Stockman was part of the Reagan administration as much for ideology as for any other skills.

The agenda he's pushing today is Voodoo Economics all over again. Why was he not railing against Reagan's profligate spending when he was part of the administration?

Oh, right, because he wasn't under commission then, as he is now, to chop entitlements.

[Starving Steve]

Re: Dave Stockman..............well worth 45 mins of your life.

It is worse than that.

Stockman was part of the Reagan administration as much for ideology as for any other skills.

The agenda he's pushing today is Voodoo Economics all over again. Why was he not railing against Reagan's profligate spending when he was part of the administration?

Oh, right, because he wasn't under commission then, as he is now, to chop entitlements.

I believe it was Sen. Walter Mondale of Minnesota who called Reaganomics exactly what it was: "Voodoo Economics". Reagan (and his Stockman in the background) chose the "grow our way out of debt" strategy which came from Arthur Laffer's, supply-side economics.

Oh how I can remember Ronald Reagan speaking at the Republican Party conventions: "Tax and spend liberals have pushed America into bankruptcy because their policies are bankrupt...... We need to get the gorilla of big government off of our backs and let the economy grow once again. Let the productive capacity of America be unleashed once again. Then we will have surpluses and not deficits. We will grow our way out of debt because ultimately, 'deficits don't count'."

And this mantra came right after the tax revolt by the wealthy of Proposition 13 in California. Oh, how I remember those times well, like a bad movie starring: Arthur Laffer, Howard Jarvis, Ronald Reagan, and David Stockman !

Another part of their mantra was a detailed discussion of why the rust-belt was in decay and why the sun-belt was in boom times. Their discussion went something like this: "The rust-belt was run by 'tax and spend liberals' with old and worn-out ideas for abandoned factories, smoke-stacks, unions, the welfare state, government spending and taxation. But the sun-belt was run by young conservatives with new ideas, with vision and with pro-growth policies. People were and still are moving to the sun-belt in a mass exodus from the rust-belt in order to flee the 'welfare state'. Silicon Valley, perhaps more than any other place in the sun-belt, exhibits what can be done when business is freed from the tyranny of big government."

Enjoy the Great Recession, the direct and final result, literally the last chapter of the so-called, "Reagan-revolution".