Re: Pepper sprayed for public safety.
 

Bachmann is far too easy to parody. She could have said just about anything.

Lets hope we are done with her on Nov 6 (give some money to the Graves campaign).

Re: The case for a Sebby-style health care system
 

God, you're impatient. Give this depression some time. Europe's going to get far worse, and China's heading for a hard landing. Build the innumerable ripple effects of that on us into the mortality charts and I'll think you'll see millions of Americans exiting this mortal coil far earlier than expected.

Stability's all illusion. We're still just a small shock from 2008 Redux. I thought Greece was it for a time. Then it was Spain. But now it looks like a Chinese slowdown might be the trigger. Or many none of those things, or a combination of all of them... One thing is certain. Sooner or later, everyone will realize the status quo we've come to expect is not sustainable. (Right now, I'd say only 50% of people understand this.) When that happens, and it will, shit's going to get really amusing.

(Go ahead, Adder... Tell me why 20% unemployment is sustainable. Tell me how a Fed policy of propping assets, which has done nothing for demand or to cure unemployment, will suddenly have a different effect than it's had for the past three years. Tell me where, in the near term, the new but-as-yet undefined jobs that technology brings will appear, and replace those it is eliminating about as quickly as loggers are cutting down the Amazon Rain Forest. Tell me how an economy of low paid service workers consumes enough to create the growth we need.)

Re: The case for a Sebby-style health care system
 

This was good for a smile. I think exactly none of your facts are right, but whatever. You've been reading zerohedge or similar crap, haven't you?

I'll only address one of them: the Fed isn't propping up assets. That's not the goal or the theoretical underpinning of fed policy. That's a bullshit spin from the "financial" press.

Re: The case for a Sebby-style health care system
 

Thank you. If you agreed with any of it, I'd have to reassess.

The Fed's policy isn't propping up assets. That's just its effect. For three years, its policies have propped up the assets of investors, while workers, who buy things, continue to struggle with wage stagnation and inflation in non-core essentials. This spurs demand how, again? I seem to have missed whatever genius it is underpinning something like QE∞.

I'm no austerity fan, but it's hard not to raise the definition of insanity here. Three years on, and unemployment, when adjusted to reflect the quality of jobs created versus lost, is as bas as it was from the start and-- Well, let's just commit to buying housing related debt until the market heals, however long it takes! That's the magic ticket. If we just keep offering some variation on the same idea, eventually, it will work!

Zerohedge is a loony bin, no doubt. But in a world of policies as absurd as QE∞... In a world where financial statements are secondary in research importance to having an algorithm that follows the nanosecond trends of other high speed computer models, and financial results pale in usefulness when compared to macro (read: political) event prediction... In a world this capricious and silly... Who better to offer commentary than lunatics?

Re: The case for a Sebby-style health care system
 

Translation: I don't understand so it must be dumb.

And yeah, never mind that "analysis" of the zerohedge variety ("omg! Hyperinflation!") has been consistently wrong.

Eta: http://economistsview.typepad.com/ti...inflation.html

Re: The case for a Sebby-style health care system
 

What don't I understand?

Right. You don't even understand. You only know to say, It will work. You've never run a business. You know nothing of how economic policy impacts the actors in the economy on the street level. Your view is the sky high eye of an academic who didn't even have enough practical analytical skill to work as an analyst. (I at least have an excuse, having dropped the Econ major in Sophomore year.)

I don't subscribe to ZH's views. I do subscribe to the view there is pernicious non-core inflation cratering demand. The reason? I see it. It's obvious. You need only look at the prices of essentials and see what is crippling small business and individual debtors to grasp the disequilibrium between where QE liquidity goes, and where it ought to go to spur some useful demand.

You read data. You read charts. These are useful, obviously. The information from which blunt, baseline assumptions are crafted. But if these are all you read (along with academic papers), and you never develop your own analysis of anything, you wind up being another of the endless exhibits proving the axiom "Economists are wrong far more than they're right."*

Stop being a frustrating pest and open your mind a little.
________
* You're also biased to assume minimal deviation from a norm, and persistence of whatever status quo exists at a given moment. It's practically the central theme of everything you write. (This is hardly surprising considering your affection for retail analysis.)

[...Oh, by the way, have you noticed the status quo since 2008 has, uh, changed a bit? It does so slowly, which of course, gives people like you the impression, not unlike a frog slowly boiling in a tea kettle, that Everything is Fine.]

Re: The case for a Sebby-style health care system
 

Adder is the kind of guy, the first few files he was handed at his firm, he asked "I don't get it, why would a company enter into a contract where they lose money?" By now he's learned to keep his trap shut, but he still thinks it's all straightforward math. Sad:(

Re: The case for a Sebby-style health care system
 

Smart but doesn't 'get it.' = This describes what? 80% of the corporate world?

ETA: I have to admit, however, aiming for simple proficiency and to be an expert in a narrow area is probably the wisest path these days. Or at least the least ulcer-inducing. Curiosity and a severe allergy to boredom are punished quite substantially.

Re: The case for a Sebby-style health care system
 

nm

Re: The case for a Sebby-style health care system
 

I was just chatting with someone from China who said the dip below 8% growth is causing systemic problems there - they have built an economy where everyone's models and plans depend on growth (it's much easier to borrow off a plan showing endless growth...), and 8% has been the magic minimum for the memorable past. Apparently, the leadership transition combined with the slowdown could lead to big problems. Get the popcorn.

Re: The case for a Sebby-style health care system
 

Apparently much about monetary policy.

You sound like this guy, who doesn't even seem to see the serious inconsistencies in his argument. He thinks the Fed is risking inflation and that household debt is the real problem without appreciating that moderately more inflation would help reduce the burden of household debt. Like you, he thinks what the fed is doing is propping up asset prices (whatever that means), without realizing that doing so would mean propping up the value of people's houses and 401(k)s, therefore reducing the burden of household debt.

You both sound like you're sure something bad is happening, but you just can't put your finger on exactly what it is.

But you're smarter than him. You know you can't predict systematic inflation (or, you know, "inflation"), because you know you'll get called on it. So you invoke look at whatever sub-sector of prices have been rising and declare those to have been "inflation", thus proving your point. Never mind that headline CPI inflation, which includes your special items, has averaged something like 1.1% over the last four years.

But sometimes you can't help yourself and you slip over the line to blaming fed policy for the "inflation" in a handful of commodities. Um. No. Maybe precious metals, because they are relatively small markets and the handful of idiots who believe hyperinflation is coming flock to them, but that's about it. The Fed is not driving any other commodity markets.

As for whether QE "props up asset markets," that's a misleading statement. As to the bonds the Fed is purchasing, sure it does. That's the point. To lower rates on those bonds, which implies increasing their value. To the extent that there is also an effect on stock and other asset prices, its because participants in those markets have growing confidence in our economic performance. And that's a good thing.

This summer the Fed has slowly, gruelingly, started coming around to the idea that expectations matter (lots of credit goes to Woodford's Jackson Hole paper, apparently). The notion is that there is a difference between the Fed saying "our policy is to get to X" instead of "our policy is to get to X unless we see the inflation rate tick up, in which case we are putting the breaks on."

That's what QE3 is about. It's about removing the Fed as a limiting factor on macro growth. The Fed's going to keep on the gas and not back off as soon as there is a little inflation.

ETA: Also what Matt Yglesias says.

No, I don't know it will work. But I do know that it's better than doing nothing. I also know that the only arguments of potential harm from it are that it might cause a little inflation. Which, ironically, would actually be helpful. I also know that if it causes more inflation than the Fed is comfortable with, the Fed knows exactly how to stop it.

The other thing we know is that the prior two rounds of half-hearted easing seemed to help a little. Given that the Fed at the time was still policing it's 2% inflation ceiling, it's not surprising that it didn't help a lot.

You you still don't understand, despite the repeated demonstrated idiocy of people who hoist themselves up on this soapbox, that monetary policy is a strange thing that is not really susceptible to reasoning from micro concerns of individual business people.

So you subscribe to one of ZH's views, even though there is no evidence at all for the point.

It's called confirmation bias.

Mostly I read other people's analysis of data, but yeah, I'm so sorry to try to use actual data instead of your hunches. My bad.

First of all fuck you.

Yup. Macroeconomics is really hard. And worse, given the severe difficulty of finding hard data and the impossibility of running experiments, it's really easy for economists to let themselves be consciously or unconsciously led by their political beliefs. Those things make them wrong a lot.

Says he who shuns data and prefers his own reality.

Those are not biases. They are very useful assumptions that are often highly accurate.

I have no idea what you are talking about. What do you mean by "retail analysis?"

No, things have been remarkably the same since around 2008. ;)

Re: The case for a Sebby-style health care system
 

That's what cheetos are for, I'll cooncede. But alcohol still dominates the herd-thinning game.

Well I'm not dumb, but I don't understand.
 

Hank may be right re health care reform and small businesses and their employees: Small employers, and their workers, could be squeezed by health care law changes


And Adder's position (as versus Sebby "The Sky Has Been Falling For Almost Four Years" Dangerfield) seems to be consistent with mainstream economic thought, as exemplified by Fed Chair Ben Bernake (and at least one regional fed president) as described by Joe Weisenthal:
Ben Bernanke Gave A Dazzling Speech About Monetary Policy—Everybody Needs To Grasp The Key Points

So, Hank gets a win -- at least as to his debate with me re health care reform and costs. (I still think Obamacare is a good thing, by the way -- this just shows that we need a public option. I think we'll either get one, or that there won't be Obamacare, post November 6.) And in my view (and Bernake's and Milton Friedman's), although Sebby is more fun to read than Adder, Adder gets the win.

I am [quantitatively] easy, easy like Sunday morning.

Carry on.

Re: The case for a Sebby-style health care system
 

The Fed is propping up asset prices. This is irrefutable. It has even said it is targeting housing, which by definition props up the values of... (wait for it)... Housing! And it's fucking obvious, unless you've utter shit for brains, that Fed action is propping the market.

Is this its primary intent? Who cares? That's the effect, which is all I said.

Have you seen the figures on the quality of jobs replacing the decent paying ones lost? Have you read about wage contraction/stagnation recently? I know exactly what's wrong. A third of our fucking economy lives paycheck to shrinking paycheck. This does not create demand. Demand is a bottom up proposition, and and you're effectively arguing, "Give banks and 'job creators' more money and hiring - with wages providing discretionary income - will occur!" You're wrong. You've been wrong, and you'll stay wrong.

CPI also includes housing. And look at energy costs (not oil, but gas), and food costs. Look at what it costs Joe Sixpack for cable and cell phones every month. And how about automobiles? You surely know the only reason auto costs aren't spiraling is lenders are moving to six and seven year loans, which keep expenses considered in aggregate low. It must be in your data.

It's a flight to safety. Developing markets are too volatile and, in the case of China, too corrupt. We look safe. Is there some growing confidence? Sure. But once things stabilize for us, money will chase yield. And in that instance, it'll go right back into the developing nations. We'll be temporarily competitive on the manufacturing front, but inevitably, our labor's costs will shift jobs back overseas. Like everything else we're doing right now, the best result we can hope for, and attain, is the kicking the can down the road.

You watch how that works. The minute we get a hiccup, Wall Street will cry to have the MBS purchases doubled.

No jobs. No discretionary spending. Inflating us out of the debt isn't going to change that. And if that doesn't change... Well, how long can a game of kick the can with monetary policy go on? We'll find out.

I didn't advocate doing nothing. I noted that something isn't working much more than nothing. We're pushing off a reckoning we'd otherwise have had, but to come back to Tyler Cowen, unless a new Internet comes along and creates real growth, sooner or later, we're headed into an economic Blood Meridian.

I do understand. It'd take a borderline mongoloid brain capacity not to understand something as blunt as our current monetary policy. You read an article on that jackson Hole paper and probably figured it riveting. In a nutshell, the argument was, "Stop putting an end date on QE." Or, "Stop referencing an inflationary concern." No shit that'll remove the predictable whining from Wall Street as the program begins to wind down. Is that science? Some brilliant epiphany we should congratulate as though it were of Newton's or Einstein's works?

Did I say don't use data? No. I said, you sound like an Econ 101 student because it's all you use. You can't speak to anything beyond helicopter-high data because you just don't know. I'm sure you did fine on your exams.

It took you this long to be insulted? Perhaps I'm too dry.

The mantra of all retail advisors: "It's a cycle. The past repeats. Things are doing exactly what they did in the past. It'll all revert to average normalcy soon enough. It always does. ...Just let me make a series of moves for you to ensure you're positioned to kick ass when it does."

You're frog tea if you really think this doesn't go from bad to ruin.

Re: Well I'm not dumb, but I don't understand.
 

You may offer this opinion based on your own assessments. You cannot offer it with a cite to Joe Weisenthal. He's the Joe Francis of financial punditry.

I could cite his partner, Henry Blodget, for the opposite view of where our economy is headed: http://www.businessinsider.com/heres...economy-2012-9

And if I did that, I hope you'd tell me I had my head up my ass.