maybe march will prove the cruelest month …this year at least


it started simply enough



rumors of a profitable report from citi bank …of all zombies



then gentle ben sees light at the end of his 12 month long tunnel vision



and don't my ex boss the skirt chaser from omaha buffett.standard.jpg

agree …  'yup the banks are back '



we must be cheered eh ???

notice pinko onlookers one and all

the sly implied syllogism here :

the private banking system is “reviving”
private banks are the heart of our credit system

therefore

the credit system has turned the corner …



what follows ???



the credit system is the very nexus of our real economy

—-the one our phoney ass jobs hang from—-

so therefore

we're about to get …back on track …err give or take a few quarters of growing jobless ness

while the markets work thru their inevitable ” transmission lags “



its bull shit of course and i don't need to tell u why



but there's a nice fact ground here:

nearly half of the credit flow before the great crumble
was securities based

and those markets the ones for securitized debt

whether over the counter or under

are not even visited these days by our reanimated giant zombies

so they're like a vast ball room full of fucking bloated corpses

play all the polka music you want

these bastards ain't gonna get up and dance 



so what .. can't we hop along on our  privateer bank leg alone

we did it in the old days..err more or less ???

well gentle ben for one
suggests

we need to revive these security markets too

b4 we can declare its hammer time again in america …

okay u got all that
before i wrote it out right ??

we ain't there yet

there's still swill in the system unflushed but we're headed there



but that's not all folks …

even if the credit system could be restored

to its condition say one day before 9/11

yes eventually even if this is a false spring
a real spring time for banking is coming and maybe fairly soon

but here's post point

still you won't see a revival this time round

'cause u can't lend what no one will borrow



where headed for mid 1933 2.0

the private great banks all spiffed up re openned ready to lend

but the credit system still in low flow



back then

flow didn't really start to  rush out

even after hitler absorbed the danzig corridor

only when uncle turned warrior

7 long years after the banks put on their prom gowns again

the corporate sector remained on polonian strike

yes for 7 years fdr had to employee millions on light weight gubmint projects

just to keep this blessed place from exploding

in rage 

7 long years the corporate scrooges

horded their cash

borrowed near nothing

and sat out the twilight of the new deal

in a grump



okay paine but what about us presently credit constrained waifs and waifettes

what about you and your pard and the pizza parlor down the street ????

we got a household credit system now …too eh ??

well since our lots sank
and our jobs went thread bare

we ain't got collateral asnymore do we

mr potter he no interested in
taking a chance on love bub

Posted by pinky at 01:31 PM

god are we  lefty types ever the long winded bag pipers eh … take this  slow yurling sigh
t'is by a true  veteran of the endless class gabble



“To understand the current situation we need to go beyond what goes on in the labor process and production

to the complex of relationships around the state and finance . We need to understand how the national debt and credit system have from the beginning been major vehicles for primitive accumulation, or what I now call accumulation by dispossession”



christ dry rot at least crackles and powders away

but  this limitless left gas this ever so etherial ever so similar left gas on and on it carries

” aye mate … ya know …i'm a wee piper for marx ”



worsed of it ???…. the perky plaid brained bastard could fill a veritable red zeppelin with his  etherial  gas ….

my lord he's got shelves and shelves full of it



once again:



” In my ‘Right to the City’ article I looked at how capitalism was revived in second empire Paris because the state along with the bankers put together a new nexus of state-finance capital, to rebuild Paris. That provided full employment and the boulevards, the water systems and sewage systems, new transport systems, and it was through those types of mechanisms that the Suez Canal was built. A lot of this was debt financed”



….and to think he's only one of ever so many such red zeppelin fillers out there sliding indpendently thru Clio's night skys …..

damn the burdens of these days filled with a safe and comfortable  left …that is …safe and comfortable independent left

oh for the days of party lines …party discipline …. party boiler plate …. party….. gags !!!!!

Posted by pinky at 01:29 PM

hutch

are you a condense the pop guy ??
contract sprawl ville till its mile high city ??

if so
so am i

but bruce here is talking economic policy
not cultural anthropology

look the various tilts in the system toward home ownership
have been around since long before this bubble

nope they are not the cause of the bubble
only the cause of sprawl

lawn cults and various other spacious

and car hopish

philistine

proclivities

of our nation's (former?) kulack majority

Posted by pinky at 09:37 PM

“That was the Reagan-Bush-Bush program for America”

bruce my man
err ….ain't there a fourth head

on your lovely

mt rushmore of whitehouse

eels goons and heels ???

admittedly
just like with the other rushmore quartet

where tr shouldn't be there

billy bob clinton ought not be up there
on this one either…but …himmm izzzz

Posted by pinky at 09:35 PM

mark thoma goes all muddled on who do we blame

i try not to notice his banality
and cull one passage

“excess liquidity, very poorly structured incentives, and incorrect assessment of the risks all came together to produce the problems we are seeing”

i'm not sure anyone disagrees with this
and on the other hand searching for villains under one rock

doesn't imply

there aren't villains under other rocks

but its the villains that are
still..still… still being rewarded

that cause plain folks hair to stand on end

yes the system produced not only the crisis but lots of purps
“The attempt to chain the bottom rungs of the economic ladder to “home equity” failed because there was not enough existing wealth on the lower rungs to adequately collateralize the debt.”

ahh but house lot values rose

so long as wild and crazy guy type credit

flowed into the sector

yes once the credit wave hit the bottom rungs
the wave began to crash down on itself…

and lot value collateral imploded and and and

i liked one comment back a ways

i'll accept the line

“well we thought the lot values would stagnate
not sink ..we expectd a slow inflation rate of decay

ie

households going underwater at a much slower rate

and when the realization of the defaults occured

we smart money griffters

would be long past moving on …

not enough sag time before the mine shaft caved in

rf

“So as Pogo said: “We have met the enemy and he is us”.

serious ???

u blame the american public ???

ya and
'after all it was u and me' shot kennedy …right ??

u take marks bland rendition of systemic causation
and turn it into sermonic pap

and its alibi pap

as in stop the scape goating
we made the poor swine possible

recall peter lorre in Lang's M ??

just before the underground polishes him off

gist of his plea

'i couldn't help himself '

how bestial eh

or is it

how human ???

save that poser
for the holy house suppers rf

however i'll focus on the wally boys
not the local originating broker

that is until uncle doles him in too like his

counterparts coiled around branches

further up the money tree

i'm with geg

lets track down
both mr goldman

and that sneeky pete bastard mr sachs

truss em up

one to a side

on a semi's well appointed trailer

and drive cross country

maybe we paint a set of target rings around em

ya that's the ticket

hey comrade x
get frank stella

on the blower

Posted by pinky at 09:32 PM

“For reasons that are not obvious, Axelrod and Emanuel have not prevailed on the degree of toughness towards the American Banking Oligarchy.”

passage from link worth a hee haw

the chi city axe and rhambo
vs

the wall street hefty bags ??

like a all in the ring at once match
between

belt way tinsel

and

a posse of bulls AND bears

“The most amazing aspect of the meltdown and its consequences is how many WS Barons have, in fact, lost their golden parachutes and other (delectable) positions of power in American Capitalism.”

hari please
watch more pro wrestling

u got that over there ..right

the money used out in public
prolly its stage money

u think real deals are made for our eyes ???

the historical record shows
its trail of demolished titans

but to the great circus itself

that's just part of the excitement

like a nascar crash

ahh what a pile up ….

yet
deaths even injuries are rare

and besides

like satans horde

these pokes like the down side

to bite some…adds relish

wally ball is a blood sport
even if 9/10ths of the blood is tomato juice

guys

u need to get with the trill of all this

i suspect the purps here

would take their ill gottens over three times as much made
by a zillion hours of green eye shade shit

like the young buffet pulled off

i mean most green eye shade types
from the 70-80's

are still wearing a rubber finger tip

and ain't seen the inside

of

a private jet

except on cablevision

Posted by pinky at 09:30 PM

 no where

Posted by pinky at 09:32 PM

when i'm not selling

i'm into affirmational thoughts only

these days

 thoughts are like smoke rings

you hold your mouth right
u blow right

and

tumbling donut puffs 

come thru your lips

on their merry way

out into the room …..

Posted by pinky at 09:28 PM

“If any of these start to materialise, expect me and a number of other stimulus advocates to start backpedalling rapidly”

why neo liberalism
as an ideologians guide to social welfare max

is a stink pot of dismality for us weebles

yes and
even when combined

with a class neutral set of intentions

—-as it is

in the mind of our u of c econ con pugsley here—-

as for

this rubber clawed

infinite gas bag

of a bird of prey

clarida

mugwumping away here

okay multipliers are low
then up the deficit more

lending by pub sec
top the real economy isn't high enough

okay then uncle lend more to the real economy

ps

if my pal hari has less education

in the exact science

of necessary natural levels of popular misery

then clarida here

then he's that much the better

policy economist

and no one pays him for it

just read a bit on larry summmers
reasoning

when he chose grad work in economics over physics

a poor physicist earns what …
but a poor economist

hey now he can do quite well indeed

“Was that sentence supposed to make sense? “

its highly leverage bw

by boorrowings from
sources adicted

to too much

faux algebra

and not enough

expository prose

i think he has a notion
that credit markets can gear up household purchases

as well as firms purchases

and his equation system of the mind
prolly looks like these skeleton keys

assume
one aggregate household c(y,r)

as well as

one aggregate firm I(y,r)

oh

and add a credit constraint

err u know value of collateral too

meaning

c(y,r,w) I(y,r,w)

g is free to choose its gig

t is set to auto stablizer mode

x and m ..well they better come home in any case

“We remember nothing of the sort”

okay so the full sweep of your take
might be subject to revisions etc

i suspect tricking Clio

into revealing her deeper class truths

unequically seems unlikely

given the class stakes involved

and the loopy lags

we remain
trapped in the numbers we have

only those ready to leap
to a perception of pattern

will find one or impose one

correcting the p's separating and grouping the q's
are we discovering our assumptions only ??

value added per hour /wage rate per hour

where's the acid test
that parts causation

from tautology

gets mind boggling

Posted by: paine | Link to comment | March 16, 2009 at 12:03 PM

paine says…
“how about the government just drop the interest rate it pays to ZERO by no longer issuing treasury bonds?”

zero rate inflation indexed
t bonds and notes etc

are as good as money

errr …money stuck in time release capsules

but that gives em a shaping advantage over
just plain old now money eh ???

recall krugmans manage expectations bit

bonds can help that management either way

thus if you want to up expected price levels
don't print money

just create a lot of uncle bonds

okay if you end up lifting rates

then the liquidity trap has vanished anyway eh ??

Posted by pinky at 09:20 PM

The hedge had it right
Dump the junk on the foreign gubs

And the uncle insured plqyers

Proves they saw the end of the dance coming

Time to load up the sucker barrels

My operating assumption is this
The hedge new where uncle would bail and left the risk even the off balance sheet risk to “insured” players

Note the insured players are now being bailed for their unregulated
Portfolios not just their regulated officialy insured deposit sourced portfolios

Thanks to the invest-com mergers

“these Cassandras weren't believed”

no they weren't recognized as correct …publically
privately…

conjecture
the smart money saw the scam'sfull arc

and when the show went south they left the uncle insured

or insurable outfits holding the bag

honestly do you think
self promoting

sad sack clowns like robini

saw what the big wally types

missed ???

no they had their end games in mind
at least from mid '03

to presume otherwise
is to be like those who believe

the 15 year plus 65 billion Madoff operation

went down without anyone else knowing diddle

my bet 50-100 or so folks
were recruited over the years

to various levels

of insider status

from purely tacit

to flat out full blown

partners

Posted by: paine | Link to comment | March 17, 2009 at 12:19 PM

paine says…
and as to the co conspirators to the trillions in junk

scam now headed toward uncle's toxic dump site

they might number as few as ten thousand

again on various levels

greed without guile leaves u at street level

the bigger fool ???

the guys who scoff
“just a pack of ruthless razor backs “

on a gadarene charge

Posted by: paine | Link to comment | March 17, 2009 at 12:24 PM

paine says…
“The problem with credit markets is that we still don’t understand correlation,”

the we there is actually us rubes
not the egg headed carny speaking

he like anyone who bothers to think about it
can see what's bound to happen now and again

this is not quantum cromo dynamics here
these touts were peddling

it was … perpetual motion machines

and they damn well knew it

…. build a perpetual motion machine complex enough

and if it runs long enough to sell stock in it

the public will buy it and keep buying it

..till the phoney set up stops moving

“Was this all Gramm-Leach-Bliley..”

yup

the slickers'
8 lane bridge to rube ville

slide the shit under uncle's insurance umbrella
i mean what did these ivy econ cons expect

a bunch of up and coming young slicks
read about moral hazard uncle sucker style

maybe

long before the comparatively moronic

S and L capers went bust

imagine them lookin up from some
revelatory journal article

and saying to themselves

” whoooo mamma …

man oh man

do i gotta get me a piece a that action “

'course they needed to innovate some
since the old games were decidedly over exposed

god bless their venturesome hearts

they turned to the egg heads

why i remember 87 and port folio insurance
don't u ???

Posted by: paine | Link to comment | March 17, 2009 at 12:52 PM

paine says…
M.G. in Progress

u need to shift your progress out of first gear buddy boy
elmer fudd time baby

Posted by: paine | Link to comment | March 17, 2009 at 12:54 PM

paine says…
“The U.S. has to let much of the bad debts go into default”

right on don !!!!!

Posted by: paine | Link to comment | March 17, 2009 at 12:56 PM

paine says…
“Too many biggies lost too much”

really ???

who
disgraced ???

yes

deposed like pappa doc ???

sure

living large still ???

i'd bet on it

a few must die of course
but only those new to the club

and wanting a faster track nearer the edge

and there's always the drunks and those
old bulls too far gone to count beyond three anymore

but hey
conspiracy ???

why bother

is pro wrestling a conspiracy ???

the pro casino odds are built into the games
right ???

so these guys goose em up some

now we're back to
“just play it straight

from here son

the games already crooked enough “

“Yes, there were stupid firms: AIG, Citigroup, UBS who took the wrong side of these bets”

no take your analysis one step further

these were dummy firms
set ups

the uncle bail was not considered a contingency

but a sure thing

after all AIG-ites
operating from inside the biggest dummy of all

seem unlikely to suffer

because they played

the dummy role in the great swindle

okay
so we'll see if the last round

of bonuses was one round too many

“is that all we have to do to protect the system? “

nothing protects the system from outside the system
risk that uncle in the last analysis will cover to avoid a crash

say uncle charges
a state of the market based risk premium

on all debt securities

and then insures em so long as all trades

get fed thru a clearing house and traded on the open market

the game then becomes capture uncle's regulators
don

“taking a couple years of multimillion dollar bonuses for actions they knew would sink their companies”

now your talkin buddy

hell that's why they call em limited liability outfits

insiders can
strut gut and scram

looters love to play the dumbo act

“who knew ” they howl

as the press calls em jug heads not thieves

Posted by pinky at 09:14 PM

this is good krug not bad krug writing here

the interlacing of the unified euro zone
with the various

way too open national economies

makes fiscal budget thrust feeble

if not co ordinated

just like the repubs wanted a coolidge sized federal gub
the christian-con con euros

wanted a drownable euro stat

which indeed

spells

massive cluster f

and in big letters

from the channel

to the baltic

to' our ' sea

and the black sea

the evil spirits
of the teutonical ECB

will take

that smug eye borow raised look

off the euroface

btw
the impact

of these huger automatic stablizers

of theirs

can be calced

by a look at national deficits

and absurd funding crises

my guess the pinch a pfennig crowd
might try cutting

all non entitlement spending

good time /bad time

end their nato efforts

but instead
they'll prolly “try”

a cut in real wage trends

thru their various

formal and informal social recontracting

mechanisms

there'll likely
even be baffoons galore

to dance up product deflation

now comes the test
of the erasmus figment

turning on dusky immigrants
is one thing

turning on each other is another

should the franco -german core burst …

” uncanny diatribe of things you simply don't understand”
hari

is there a mirror present ???

no that won't help
you are self blind folded i fear

god bless u
u add very much to the comment cages here

but i knew

the day would come

when your innocent

but fearless

euro-chauvinism

would launch u out over the abyss

“The truth will finally surface on how EU-16 euro and other (non-euro) banks got mirred with WS derivatives.”

ahh
ravished old europe

and by wall street buffalos

and and

'lond city' type

chesire cats …

ratify the lisbon treaty ??

surely u gest

hari its too late now
to complete the united states of europe

now

just take your lumps
and your slice of humble pie

babels tower
wasn't built in a day

err oh ya
but it was …. in a day

Posted by: paine | Link to comment | March 16, 2009 at 06:06 AM

paine says…
its not that i'm just playfully

yanking your chain here

hari et uber alles

the euro project
was and remains a trans nat corporate project

just because
the yankee dooble dom is eviler then thou

has less collision mats for the lesser citizenry

and more wet blood on its hands …

ahh well

uncle hedge may gloat
but prole cats and near prole cats

on both sides of the atlantic

now might at long last

notice they've been on a boat ride

to the same shit factory for 30 years plus

maybe we'll all enter
thru different gates

but into the same shit factory we go

for a ” good feeding”
and a new paint job

Posted by: paine | Link to comment | March 16, 2009 at 06:17 AM

paine says…
“Without the Euro, what would've happened to Europe in the face of this crisis? We wouldn't be speaking of Iceland still - we'd be talking about Ireland and Spain and the crash of their currencies. We'd be talking about the soaring Deutsche Mark and wondering how German industry could continue to export to their neighbours. We'd be wondering about how the Italian Lira and the Belgian Frank can maintain their value in the face of huge national debt.”

u miss a part of the macro here

adjustments to exchange ratios
can enhance national recovery

by reducing trade imblances

even if the adjustments
reduce international flows

they help recovery efforst at the national level

if combined with sufficient

national fiscal deficit increases

“Italy and Greece are in no position to take huge amounts of debt, they are already spending their way into bankruptcy”

non sense

they're too big to fail

in fact they could just exit the euro system
and if they acted boldly enough

and stepped on enought trans nat toes …

they might both

be better off …in the middle time frames

krug:

“the E.C.B. isn’t like the Fed,
which can afford to be adventurous

because it’s backed

by a unitary national government “

this fails to grasp the “global ” unity
behind

all official bank /hi fi sector dialogues

conflicting objectives here are matters
of means not ends

ends remain

what's best under the circumstances

for

border straddling private corporations

hey paul

don't we wish actual national conflicts of interest registered at the ECB

or the fed

all we weebles
receive is ever more deeply forked tongue wags

notice gentle ben's recent
perfidious spate of boosterism

all politics being local etc
the high priests at the central temple

while they go about their “peculiar” business

behind closed doors

must

as “accountable ” public servents

at least

snow the motley rabble

in a blizzrd of mystery speak

hence
the ECB jabber in

the pigeon system

tacked together out of

hunks of undigested numbers

and simple commercial algebra

that being the globe-market cult's
church latin

kharris
sober and on target …as usual

”.. US reliant on ad hoc stabilizers, which by reputation arrive too late and in the wrong places”

not if your goal
is really quite simple

real wage rate control

ie
domestic surplus share up

wage share down

Posted by: paine | Link to comment | March 16, 2009 at 07:49 AM

paine says…
mg in progress

prove don't just assert

Posted by: paine | Link to comment | March 16, 2009 at 07:54 AM

paine says…
“The German finance minister did point to the risks of a huge economic stimulus and I find Krugman's comparison of him (a social democrat nonetheless) with Republican party hacks outrageous and shameful.”

it was sensible soc-dems buying the bull
of their own idiotic budget priggery

that ultimately

gave us the nazi chancellor

message to the german fi min:

“learn some mid 20th century macro
you social boorocrat gull “

calmo sees”… Krugman worrying about
the stability of Europe,

but I wonder if he is overlooking China

whose export-led economy

may have more serious stresses?”

i agree

and their fiscal thrust is
seriously sub standard too

despite press coverage to the contrary

recall this blunt reality

the going rate of investment
in people's china

is huge

the export sector share is huge too

watch out below
unless the fiscal deficit to counter

these two huges is comensurately …double huge

recalling Dani's distinction
between

advanced grad teachings

and under grad text books

i'd say Dani got it backwards

climbing out on most limbs
just puts you further from the trunk

not closer to the ground

Posted by: paine | Link to comment | March 16, 2009 at 09:03 AM

paine says…
ss

nice narrative flow
details aside

europe's 'more perfect union'

road blocks

dwarf

our simple pre philly convention

“regional and state size contradictions”

and that hustle required much high and low jinx
to pull past

3/4 of the states

bums rush tactics wouldn't be too harse a name for it

Posted by: paine | Link to comment | March 16, 2009 at 09:09 AM

paine says…
of course on the other side

devolving has its road blocks too

the 1860-61

dixie land succession movement

was equally jinxified

by most scholarly accounts

winslow

u touch a central nexus here

the grouping instinct of global hi fi

the course of amerika's big bail
has these serious maybe even crucial

shaping effects

of cross border interconnections

krug rightly points to the crux here

the key deciders
in the last and the present admin

both proved willing to skunk the recovery effort

to preserve the big bail

today its the utterly non related
trillions of the great bail

that brakes up popular support

for the present undersized fiscal thrust

imagine this greensters
because ob's didn't

declare a payroll tax holiday

and a one time SSI recipients raise

first

and then and only then
after that class based action

had produced a recovery

bring on the green spinach bit

because ob instead added
to the great bail instead of pulling out of it …

and tried to run

your green agenda thru now

he may have wrecked the opportunity

to build your beloved

lean green american production machine

what if he's
the roosevelt of '37

not

the roosevelt of '33 ???

snatching the giant ccc
— the conservative corporate conspiracy—-

from the jaws of defeat

too much green goo goo

not enough

wage class mojo

“It took some flailing around”

spoken by
a past master

of the seepingly slow

aleatory flail

Anne notes spain v sweden
The adjustment by deval option is not availible to

madrid. Acting alone

A faster rising euro price level
Might help

If spain's prices and wages need to re adjust to other euro zone wages

But nominal

prices and wages won't fall fast enough

Btw what's
the total

Euro value of spains inter ez foreign debt

Even if spain could set euro forex rates to suit
self set macro targets

If its out of price and wage wack with its ez

Partners…..

Posted by: paine | Link to comment | March 17, 2009 at 09:33 AM

paine says…
Forget the piigs

Look east
In fact its the source of a banking crisis

Old europe got itself into

Including the swedes

Posted by pinky at 09:08 PM