My reference to Japan in the 90's was to illustrate how a leading economics Professor who was so convincing with his data and got it so terribly wrong, not with any comparison with China in mind.
Uncle - not sure about timing nor severity as will depend on how effective US is in addressing their fundamental problems of debt, spending and income.
It is exceedingly difficult to convey exactly how much we are spending on bailouts. Start talking trillions (versus mere billions) and you get puzzled looks from people. Humans have a hard time conceptualizing any number that large. I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were. This Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or otherwise committed. It is nothing short of astonishing. In one short year the bailouts managed to spend far in excess of nearly every major one-time expenditure of the USA, including WW2, the moon shot, the New Deal, Iraq, Viet Nam and Korean wars -- COMBINED. 206 years versus 12 months. Barry Ritholtz
[/I]50% of states now require federal assistance, in the form of multi billion dollar loans, to pay welfare & unemployment benefits. Several states are already insolvent without federal aid. It's happening now ie we won't have to wait too long?
... [snip chart]....
UF - surely there is a "fundamental" flaw with that picture? Ie it used $$ in nominal amounts instead of in real/inflation adjusted terms? Ie the Vietnam war cost was MASSIVE in real $$$ terms (not to mention the human cost) compared to the Iraq war, yet the cost appears equal in that picture as you are comparing 1960s dollars with naughties $$$?
PS (Edit): Also don't some of the larger blocks there represent money that has since been paid back? Ie it was temporary liquidity? And some it it represents money that may not end up being spent, but having it available has rebuilt confidence and avoided further need for some it?
It is clear in the text that it is adjusted for inflation:
"It is exceedingly difficult to convey exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large. I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.
So I once again went to Jess Bachman at Wallstats. I gave him my list of expenditures (inflation adjusted of course!) and he went to work."
Also, you said:
I agree that the image can be misleading, but he does say:
"This early Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or otherwise committed." (my highlights)
It is not supposed to represent money that needs to be paid back or is lost, but rather representative of all commitments.
Source: http://www.ritholtz.com/blog/2009/06/bailout-costs-vs-big-historical-events/
All fair enough - the bit about being adjusted for inflation, was that from the linked website? As I couldn't see that in the originally quoted text posted.
absence of 'real money' driving last years rally
http://www.smartmoney.com/Investing/Stocks/Why-This-Man-Sees-a-Secret-Market-Cabal/
It's all about confidence ie a confidence trick funded by massive debt on behalf of taxpayers?So, umm - the guy has a hunch? That about covers it, right?
China is getting a bit nervous about the runaway stimulis train it has created. Standby for commodities glut and price drops?
It's all about confidence ie a confidence trick funded by massive debt on behalf of taxpayers?
His theory is based on the numbers not adding up, as has been posted here for several months ie Goldman has been the governments financial stand over man, doing the covert work through futures etc
Have a look at the volume and insider sales - still giving signals loud & clear - it's a Lemming Bull market - you have to be in it just because everybody else is, not because it presents any compelling fundamental value, especially now after such a manipulated advance?
Put it this way, if Bernanke & Co have indeed succeeded in steering the US economy on a new sustainable bull market, then Harvard and all those other business schools are pretty much redundant because all we/they have to do is know how to issue more money ie be a banker? How hard is that then?
China is getting a bit nervous about the runaway stimulis train it has created. Standby for commodities glut and price drops?
“If somebody’s been buying,” he says, “at some point they’ll have to sell.”
Some market watchers say the question of who’s been doing the buying in the rally is a good one ””
but there are other explanations beyond the U.S. government making secret purchases. “From one perspective, we know it’s not retail or institutional investors,” says Jamie Selway, managing director of White Cap Trading.
But “it could be not necessarily buying, but an absence of forced selling,” he says. “We had incredibly violent selling pressure in the end of 2008. It was liquidity oriented -- you remove the forced selling and the imbalance, and things are going to bounce a bit.”
Yes interesting point we are at Unc. If they have started a runaway then its inflation we would be worried about not gluts?
Japan's core machinery orders, seen as a key leading indicator for capital spending there, took a sharp drop in November despite expectations for a rise, according to data released Thursday. Core machinery orders fell 11.3% during the month, the Cabinet Office reported.
The result was well below estimates: A Kyodo News survey had expected a 1.1% rise from October, while a survey by Dow Jones Newswires and the Nikkei had indicated a rise of 1.2%.
Compared to November 2008, the orders dropped 20.5%, the Cabinet Office said.
This has been worrying me for a while UF. You can see the same in most commodities. It's very pronounced in Ni where LME stocks are three times greater than they have been for the last 5 years and climbing.
http://www.kitcometals.com/charts/nickel_historical.html
Recently I have been pondering over whether now is the best time to get OUT of stocks completely or start selling down my holdings.
Everyone seems to be predicting problems in the second half of 2010 but I’ve learnt from experience that when the falls kick in, they kick in fast!
Seems that a few of the older wiser heads on here have moved to cash recently.
In 2008 I got absolutely smashed. But I held on. And I made up for a lot of those losses in 2009. I view that as a ‘get out of jail free’ card!
But now I am getting a little edgy again. There is a little too much confidence and a lot of complacency in these markets.
Just today, ‘The Daily Reckoning’ posed the question - Has there been a better time in the past two years to liquidate your entire share portfolio?
I’d be interested to hear what people have to say.
The last two declines, i got out way too early and missed the irrational exuberance rally. The markets seem overbought, but so far the technical s are still in ok shape. Besides, my stops will take me out this time.
CanOz
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