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Credit-Suisse's debt strategists go after the Debt-To-GDP chart (right) that we and others have used to conclude that the US economy needs to shed about $25 trillion of debt to get back to sustainable levels. Specifically, they suggest that the chart is "technically wrong and analytically meaningless"
Ken
That artcile doesn't say squat about corpertate debt to gdp ratio.
Credit-Suisse's debt strategists go after the Debt-To-GDP chart (right) that we and others have used to conclude that the US economy needs to shed about $25 trillion of debt to get back to sustainable levels. Specifically, they suggest that the chart is "technically wrong and analytically meaningless"
Because it's just that guy's prediction.
Such folks make predictions all the time. The vast majority turn out to be false. It's just the authors supposition about what may happen - that doesn't mean it WILL happen.
Look at the following statement for example:
"Now, even assuming the bigger companies can handle it (even though, at the very least it will dampen GDP), the smaller countries reliant on exports may get crushed, transforming the economic contagion back into financial contagion to be injected into the Eurozone."
Even in this statement he says "the smaller countries MAY get crushed"
They MAY - or then again they MAY not.
The fact is, the guy doesn't know what's going to happen. He writing what the THINKS may happen. I just don't buy it. Economic views are all over the place - and always are. I just don't buy this guy's. You can choose to agree with him if you want. I don't.
Plenty of other smart folks out there disagree with him.
Because it's just that guy's prediction.
Such folks make predictions all the time. The vast majority turn out to be false. It's just the authors supposition about what may happen - that doesn't mean it WILL happen.
Look at the following statement for example:
"Now, even assuming the bigger companies can handle it (even though, at the very least it will dampen GDP), the smaller countries reliant on exports may get crushed, transforming the economic contagion back into financial contagion to be injected into the Eurozone."
Even in this statement he says "the smaller countries MAY get crushed"
They MAY - or then again they MAY not.
The fact is, the guy doesn't know what's going to happen. He writing what the THINKS may happen. I just don't buy it. Economic views are all over the place - and always are. I just don't buy this guy's. You can choose to agree with him if you want. I don't.
Plenty of other smart folks out there disagree with him.
Ken
Ya guess what he shorted PPG when it was at over 60 and road it down into signal digits. http://boombustblog.com/Reggie-Middleton/144-GGP-part-7-Share-value-under-the-foreclosure-analysis.html He does first class research. When he was working on PPG he knew more about the company than they did. He does speak carefully. His not knowing what is going to happen is a lot more like knowing that most peoples well researched opinions.
What he is saying is that the situation is really really unstable. One default one place may trigger a domino collapse of the hole system. The Great Depression all over again.
Ya guess what he shorted PPG when it was at over 60 and road it down into signal digits. http://boombustblog.com/Reggie-Middleton/144-GGP-part-7-Share-value-under-the-foreclosure-analysis.html He does first class research. When he was working on PPG he knew more about the company than they did. He does speak carefully. His not knowing what is going to happen is a lot more like knowing that most peoples well researched opinions.
What he is saying is that the situation is really really unstable. One default one place may trigger a domino collapse of the hole system. The Great Depression all over again.
I've never denied that the economic conditions hold risk. I just happen to be of the opinion that the folks watching over it right now are VERY AWARE of the risks (having seen what happened a year and half ago when such risks were ignored) and are monitoring the situation very carefully (more so that at ANY time in my lifetime) and will take whatever steps are necessary to prevent an economic relapse.
Supply-side theory states; if the investment class is doing well, it will create jobs. So, where are the jobs?
They are still waiting for the proposed new regulations, entitlements, spending and taxes to reach their conclusion before risking their money. Stop taking about bank taxes, Obamacare, cap and trade and other new taxes, because only after we set the rules will the players will come back to the table. If the house's rules don't allow the players to win from time to time, they will simply play elsewhere (see Asia).
I've never denied that the economic conditions hold risk. I just happen to be of the opinion that the folks watching over it right now are VERY AWARE of the risks (having seen what happened a year and half ago when such risks were ignored) and are monitoring the situation very carefully (more so that at ANY time in my lifetime) and will take whatever steps are necessary to prevent an economic relapse.
Ken
Here is the problem. look at JP Morgan as an example It has derivative exposure to the total US economy 6 times over. An Unexpected move would wipe out JP Morgan.
“Cute graphic above, eh? There is plenty of this in the public preview. When considering the staggering level of derivatives employed by JPM, it is frightening to even consider the fact that the quality of JPM's derivative exposure is even worse than Bear Stearns and Lehman‘s derivative portfolio just prior to their fall. Total net derivative exposure rated below BBB and below for JP Morgan currently stands at 35.4% while the same stood at 17.0% for Bear Stearns (February 2008) and 9.2% for Lehman (May 2008). We all know what happened to Bear Stearns and Lehman Brothers, don't we???” From the above link.
So what is being done about this? By those very careful people in charge.
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