patrick.net

marcus says

Strategist says

Obama has failed to ignite either

Obama didn't break the economy. And he didn't have the power to fix it either.

Obama prevented us from going into a depression. I give him credit for that, but he has clearly failed to engineer a complete recovery. Seven years and no recovery is ridiculous. He needs to focus on housing.

Strategist says

Obama prevented us from going into a depression. I give him credit for that, but he has clearly failed to engineer a complete recovery. Seven years and no recovery is ridiculous. He needs to focus on housing.

Obama produced the best recovery possible for asset holders. What do you mean by focusing on housing? Building more? Because interest rates are pretty low. If they built a lot of houses, supply would increase and prices would go down.

just any guy says

This time it's different. It's a new paradigm. No more recessions.

This is actually my thesis, yes.

They really threw out the rulebook 2009-2013.

Shows how the Fed injected $1.2T of new money into the economy through to mid-2010 by funding mortgage originations, in addition to the liquidity games they were playing with their existing wad of treasuries (I can't pretend to understand it but they "lent" like $300B of their treasuries to TBTF so they'd have assets on their books or something).

In 2011 they pumped another $800B into the economy by buying government debt directly (or indirectly but same difference, new money was being created in NYC). Then after the 2012 election was over and done they had free hands to go back to work pumping up the money supply, and they pulled the lever on both pumps, adding another $1.6T to the economy 2013-2014.

Is annual % growth of the age 15-64 population, showing that 1960-80 was a helluva demographic upswing, 1.5% to 2% of "growth" was simply more bodies joining the workforce.

Things are different now, with the boomers leaving about as fast as Gen Y arrives.

(The big spikes in 1990 and 2000 were 'hey, where did all these Mexicans come from??')

We have an economy now that doesn't really need to "grow" any more.

Shows Real (2009 dollars) GDP per working-age (15-64) person is $80,000 now, double what it was in the early 70s.

Isn't $160,000/yr per couple enough to run a household? Why or why not?

Presidents have very little velocity factor due to their structural power in the U.S.

Logan Mohtashami says

Presidents have very little velocity factor due to their structural power in the U.S.

Unless they can get Congress to open the taps . . .

Annual YOY % growth of Federal spending, 2009 dollars.

The 50's spike was Korea, LBJ saw a nice boost with Great Society and trying to keep SVN out of the ruble bloc, Raygun's 8 budgets look flat but are major mountains compared to Clinton's 8 budgets, as he was being shut down by the initial neoliberal austerity mania of the early 90s and then the Gingrich Congress after 1994.

The twin peaks in the last recession are TARP and then ARRA I suppose, then Congress started playing sequester games, trying to make Obama a one-term president-failure like Carter.

Bellingham Bill says

Unless they can get Congress to open the taps . .

A lot U.B. , mandatory payouts, Stimulus package pushed with a lot tax cuts, not a lot spending outside of mandatory items

Just look at how many countries 3 year and on are lower than our 1 year yield

Goodness

#USA

Wow, that above chart is basically ranking countries by my desire to live there . . .

Except Finland, my ancestors left that place for a reason

Bellingham Bill says

Wow, that above chart is basically ranking countries by my desire to live there .

Top 3 countries on that list hate immigrants. You will always be a second class citizen there.

tr6 says

Strategist says

Obama prevented us from going into a depression. I give him credit for that, but he has clearly failed to engineer a complete recovery. Seven years and no recovery is ridiculous. He needs to focus on housing.

Obama produced the best recovery possible for asset holders. What do you mean by focusing on housing? Building more? Because interest rates are pretty low. If they built a lot of houses, supply would increase and prices would go down.

We cannot have an economic recovery without a housing recovery. As simple as that.

I was OK being 2nd-class in Japan for most of the 90s, after all it is their country and we gaikokujin are guests more or less.

Most Japanese IME were happy to make this respect a two-way street, I bring my gaijin A-game and they cut me the necessary slack.

As for Germany, my earliest known ancestor was a Hessian who allegedly absconded from British service during the Revolutionary War so I certainly look more German than Japanese.

The Swiss have a NIIP at 120% of GDP according to Wikipedia, and I respect that greatly, even this wealth position wasn't achieved as honestly as the Swedes or Norwegians (breaking even and at 170%, respectively).

We're at negative 40%, btw.

My plan now is to spend some vacation time touring the socialists paradises this decade, and either retire there or Japan next decade.

Every time I go to a Target or Costco I just want to get the hell out of California. Then again Bellingham might work I guess, and no income tax is a good thing for retirees : )

I saw.. lets give a Big cheer.... to any America who leaves this country!

More Job openings

Lock them all out .... never let them back in ..... unless they write a letter of apologize

Logan Mohtashami says

I saw.. lets give a Big cheer.... to any America who leaves this country!

More Job openings

Lock them all out .... never let them back in ..... unless they write a letter of apologize

Ha ha ha Logan. You wish you had that power! But you are missing the point. What makes America great is the emigration. You lock the door and this country is going down. Nice note from all star economist!

Ironworker says

You lock the door and this country is going down.

Isn't my humor transparent enough ;-)

What is remarkable about America today is that ... coming off the Great Recession and the first decline in prime age labor force growth in decades

America... itself had the most stable economy in the world. People forget all the drama the world economies have had since 2011.

France declared a economic state of emergency
China has had 2 major domestic economic issues since 2011
Brazil .. no comment
Germany dealing with it's old demographic profile and all the Euro members with the 2012 Euro Bond market Crisis ( People simply forgot this drama)
Japan .... a race to debase the Yen to push stocks and in and out negative GDP for many years now
UK... was doing fine up until the Bretexit ... which is a shame I had a a lot U.S. U.K charts to counter Japan and Germany but U.K is slipping and they have a good young demographic profile too

Then all the smaller economies Russia, Argentina, Puerto Rico, Ukraine ... etc etc

Even with a legit oil and commodity crash.. the trend of unemployment claims still stayed steady in the U.S and not even the fall of Industrial production could break us.

Very Impressive!

Logan Mohtashami says

I saw.. lets give a Big cheer.... to any America who leaves this country!

More Job openings

Lock them all out .... never let them back in ..... unless they write a letter of apologize

For every American that leaves there are a thousand willing to take his place.
Adios baby
Sayonara
Auf Wiedersehn
and good riddance

The way it really works the best is: Make it in America and get the fu.k out of there.

A little exaggerated example would be every NHL player who finishes his career playing in US moves back to his country - either Sweden, Finland, Czech Republic, slovakia, even Russia. And that's almost without exception.

So why are they moving back? This country is fantastic for achieving your financial goals. But there are better ones to retire in late 30ties

Ironworker says

The way it really works the best is: Make it in America and get the fu.k out of there.

A little exaggerated example would be every NHL player who finishes his career playing in US moves back to his country - either Sweden, Finland, Czech Republic, slovakia, even Russia. And that's almost without exception.

So why are they moving back? This country is fantastic for achieving your financial goals. But there are better ones to retire in late 30ties

They come here to make it rich. They go back because they can live like kings. The average person is more likely to stay.

Exactly! They did their share. Paid taxes. Made other people rich too. Supported the US economy and left. There is no reason to be nationalistic.

The average person/family can save $1million if he's disciplined enough and works hard and invests in US in 15 years. Than moving somewhere else wold make them increase the quality of life substantially. So, why not?

Ironworker says

The average person/family can save $1million if he's disciplined enough and works hard and invests in US in 15 years. Than moving somewhere else wold make them increase the quality of life substantially. So, why not?

It's entirely possible if you are frugal.

One thing good about the collapse in yields

The crazy talk that rising federal debt will lead to higher interest rates...

I dare ya.. I double dare ya to make that claim anymore

Thanks, but i don't need the congratulations. Some of us stuck to our guns through all the mayhem, knowing that this was where we were headed. What i would like, is a no cost re-fi into a 15 year @ 2.0%

;o

errc says

re-fi into a 15 year @ 2.0%

Now it's 2% on 15 year.. you're getting greedy

;-)

People are asking about Italian banks now and I tell them this stat

17% of Italy's bank loans are going bad. For US banks in 2008-09 financial crisis, it was 5%

That was a weak bounce, alteady back below 1.5%, and looks poised to roll over and die.

How do you play this?

tr6 says

You will always be a second class citizen there.

But you'll be big in Japan.

Logan Mohtashami says

I dare ya.. I double dare ya to make that claim anymore

You show a 30 yrs trend as if history always moved in the same direction.
It doesn't.
Boomers retire and die.
China gets richer.
Politics change.
Printed money accumulates.

Heraclitusstudent says

You show a 30 yrs trend as if history always moved in the same direction

Logan Mohtashami says

So are you claiming that we will stagnate for the next 30 yrs? Or that the future is bright?

Heraclitusstudent says

Or that the future is bright?

So freaking bullish on America compared to the economic non sense that people are talking about.

As a demographic guy I know the limits of what a mature country can do with it's prime age labor force growth model.

However, the bears since social media was invented went hay wire crazy and a lot things that have been said about America are simply just wrong

To OP, I read that duration on bonds is good, which indicates continuing lower rates. But that does not portend good returns on investments.

Well it was easy to predict that the Fed will stay with ZIRP, so I am mildly bullish as well. Still waiting for a re-entry for an ultra-short REIT ETF like SRS, but they get more and more decimated by the low rates by the day. Patience is key.

Ironman says

Friday's gross domestic product reading fell below even the dimming hopes on Wall Street. The 1.2 percent growth rate in the second quarter combined with a downward revision to 0.8 percent the first three months of the year to produce an average growth rate of just 1 percent.

In total, it was far below the Wall Street forecast of 2.6 percent second-quarter growth.

The train is clearly slowing down already, but the market(s) will usually overshoot. Gold has $1400 in sight.

mell says

In total, it was far below the Wall Street forecast of 2.6 percent second-quarter growth.

The train is clearly slowing down already, but the market(s) will usually overshoot. Gold has $1400 in sight.

The best way to get the economy moving is to ignite housing by making mortgages easier to get.

Logan Mohtashami says

So freaking bullish on America compared to the economic non sense that people are talking about.

If things are great, why aren't yield higher?
Growth = yield, right?

Heraclitusstudent says

Logan Mohtashami says

So freaking bullish on America compared to the economic non sense that people are talking about.

If things are great, why aren't yield higher?

Growth = yield, right?

Logan is bullish for the future. The future is bright.

Strategist says

The best way to get the economy moving is to ignite housing by making mortgages easier to get.

The problem is that when those people lose their jobs they cannot pay their mortgage. This ignition is mainly benefiting people who purchase real estate and rent it out or flip it. I think housing is inevitably due for a stagnation, many people here in the bay area can hardly afford their dwellings, no matter what job they have. If there is a recession and layoffs I expect a sharp drop, otherwise just stagnation. Current prices are not sustainable.