Standing before a two-story-tall pile of chicken manure, Lee Richardson pondered how times had changed. Gigantic fans suction ammonia from the birds' waste, filling the air for miles around.
I don't think it matters who they put as Treasury secretary ... you know, the economy is in terrible shape, and everything the government is doing now, and everything the government is likely to do, when Obama takes over, is going to make the situation worse.
... We need a serious recession in this country, and the government needs to get out of the way, and let it happen.
I know I'm pretty well alone here, but all the glossy avatars and video and social networks conceal a trivialization of interaction, dragging it down to the level of single-sentence grunts, flirtation and ROTFL [rolling on the floor laughing], at a time when we need discussion and argument to be more effective than ever.
Take note:
Underwear should be the normal type that people wear, not anything that shows you're a fundamentalist.
The action bias, or the desire to do something rather than nothing when you have just been through a terrible experience, plays a powerful role in our lives. It influences individuals and companies, investors and leaders. You can see the action bias on display in current thinking on the housing and economic crises, in the bitter debates over the war in Iraq -- even in discussions about how to fix a football team that's a perennial loser.
When people suffer losses and confront the possibility of even greater reverses -- it doesn't matter if you are talking about a terrorist attack or a meltdown in retirement savings -- it is psychologically difficult to do nothing, to hold course. This is true even when the action you contemplate produces an outcome that leaves you demonstrably worse than you were in the first place.
See also, Michael Bloomberg:
“Nobody knows exactly what they should do, but anything is better than nothing.”
Why fairly valued stock markets are an opportunity
Topic: Economics
2:31 pm EST, Nov 26, 2008
Lawrence Summers:
Martin Wolf is the world's preeminent financial journalist.
Martin Wolf:
The average valuation of the US stock market corresponds to a real return of 6½-7 per cent, which implies an “equity risk premium” – a margin of return over risk-free government bonds – of about 4 percentage points. This has long seemed high. During the great bull market of the 1990s, some even argued that no such premium was justified. But if one has to ask why equity holders should be risk-averse, one need only look at history. For mortals (rather than immortal institutions), the risk of being caught in a bear market (that is, a period of below average valuations) for 15 years, as happened from 1973 to 1988, is scary. Anybody retiring today knows this.
From the recent archive, Niall Ferguson:
The motto “In God we trust” was added to the dollar bill in 1957. Since then its purchasing power, relative to the consumer price index, has declined by a staggering 87 percent. Average annual inflation during that period has been more than 4 percent. A man who decided to put his savings into gold in 1970 could have bought just over 27.8 ounces of the precious metal for $1,000. At the time of writing, with gold trading at $900 an ounce, he could have sold it for around $25,000.
Those few goldbugs who always doubted the soundness of fiat money—paper currency without a metal anchor—have in large measure been vindicated. But why were the rest of us so blinded by money illusion?
Our current downturn will end as well someday, and, as in the ’30s, the recovery will probably come for reasons that have little to do with most policy initiatives.
The deeper question is, should we try? (That’s what unhappy people do.)
We are not living in a time that allows for incrementalism.
You Might Want To Think About Stopping Your Mortgage Payments and Reducing Your Income
Topic: Economics
7:32 am EST, Nov 19, 2008
Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.
"This is a once-in-a-lifetime opportunity," Schiff says. "People are going to feel like complete morons if they don't participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn't afford."
The S&P 500 is headed for its biggest annual decline since the Great Depression, when it fell 47 percent in 1931.
``The final low will be much lower than this,'' and may not occur before the fourth quarter of next year, de Graaf said.
At a minimum, stocks are likely to revisit their lowest levels of 2002 and 2003, when a 51 percent slide from the March 2000 peak sent the S&P 500 as low as 768.63, said Mary Ann Bartels, chief market analyst at Merrill Lynch & Co. in New York.
The S&P 500 is likely to fall to around 680, 20 percent lower than yesterday's close, probably by the end of the year, said John Roque, senior technical analyst for New York-based brokerage Natixis Bleichroeder Inc.
