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I was speaking generally in response to your general characterization of my motivation for posting. That said, you have misunderstood several things since, principal among those being the nature of your own posts.
Lets review all of the misunderstandings I have had in this posting listed by you..
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...
...
Nope.. none there, but yet more claims of mis-understandings.. It shouldnt be that difficult for you to list them...
Quote:
Originally Posted by saganista
The points first made against your post were with respect to twin references to a Chinese call option with respect to US debt that doesn't exist, and with an apparent confusion as to which is the buyer and which is the seller of debt in the relationship.
I think you are the one confused because I made no such reference to Chinese call options in regards to the debt.. The ONLY thing I questioned was the relationship between the link by the OP in regards to sanctions and the relevance to the title of the thread involving the paydown of debt. As a debt seller myself, I'm probably more aware of the lack of call options involving most debt.
Quote:
Originally Posted by saganista
Your later sanctions point was irrelevant and in any case claimed that Iraqi debt went up. A paydown -- which is what you now refer to -- is the opposite of that. Sort of like when you claimed that China had decreased its buying of US debt when it has actually increased. Up. Down. Two different things...
Actually the link from the OP talks about sanctions, not I, did you even look?
Quote:
Originally Posted by SunnyKayak
Beijing, China (CNN) -- China has threatened to slap sanctions on American companies that sell arms to its rival Taiwan as part of a range of punitive actions Beijing is taking to protest the deal.
In fact on this thread we pretty much agree about the lack of China being able to call our debt, but yet you continue to argue with me anyways.
Well I confess to not watch daily the amount of american debt being bought by the Chinese, I do indeed have data to backup my claims that China is buying less debt.
Saggy, you are about the only person I can think of who can celebrate a deflationary economy. Yippee!
Celebrate? I mentioned the recent months of deflation as counterpoint to the ridiculous hyperinflation whining that so many of you manage to pick up from the wailing of your assorted whackjob internet financial guru wannabes.
Quote:
Originally Posted by hawkeye2009
Of course inflation is in check right now, as there is minimal demand for consumer products and prodcution capacity is low. However, given your esteemed knowledge of economics and your ficticious economic faculty position, you know damn well that when consumption increases and there is no market for our bonds, interest rates will begin to rise and we are in deep do-do.
As consumption and production begin to rise, tax receipts will be on the increase and transfer payments will be on the decrease, thereby slashing our need to be borrowing in the first place. How a pickup of steam in our economic recovery would be perceived could be debated, but investors are thought typically to be more inclined toward a position that is on the upswing than one that is either flat or on a downswing.
Quote:
Originally Posted by hawkeye2009
Bond prices and interest rates tend to move in opposite directions and I do not see any way out of our situation (thanks Obama!) except severe austerity measures or allowing hyperinflation to occur. No one wins in either situation, but a bum can't live off credit forever.
I don't think we have any evidence from which to conclude that the limits of your vision comprise any actual economic limits at all.
Title misleading.. Sanctions is not a call of debt..
If China was going to call our debt, they would simply stop issuing new debt..
i would think you would agree that imposing sanctions would indicate a sign of deteriorating relations between two countries, and china has already disagreed with our threatened sanctions on iran, and there seems to be some growing differences between the countries on that issue also, as well as the new taiwan arms sale issue: http://news.antiwar.com/2010/01/29/c...ran-sanctions/
i would think you would agree that imposing sanctions would indicate a sign of deteriorating relations between two countries, and china has already disagreed with our threatened sanctions on iran, and there seems to be some growing differences between the countries on that issue also, as well as the new taiwan arms sale issue: Clinton Threatens China With Isolation Over Iran Sanctions -- News from Antiwar.com
Yes but disagreeing with one politically, doesnt mean that they will stop investing for their own interest. As I stated previously, even though the world issued sanctions against Iraq in August of 1990, Iraq was still able to issue enough debt over numerous years to double the amount of debt in their country held by others.
As an analogy, I can disagree in how management of a company is managing their company, but that doesnt mean I wont look at my own special interest and determine to buy their debt anyways. I might also disagree with the government/Obama take over of GM.. but I can guarantee you that I might look at buying their stocks when it gets issued..
i understand what you are saying, but i think that could be part of the problem in this country - which is that people will invest against their own long-term interests if they think it will make them money personally. i think we need more backbone and have to stop rewarding bad behavior, and all of the bailouts were bad behavior!
Celebrate? I mentioned the recent months of deflation as counterpoint to the ridiculous hyperinflation whining that so many of you manage to pick up from the wailing of your assorted whackjob internet financial guru wannabes.
As consumption and production begin to rise, tax receipts will be on the increase and transfer payments will be on the decrease, thereby slashing our need to be borrowing in the first place. How a pickup of steam in our economic recovery would be perceived could be debated, but investors are thought typically to be more inclined toward a position that is on the upswing than one that is either flat or on a downswing.
I don't think we have any evidence from which to conclude that the limits of your vision comprise any actual economic limits at all.
i think the delusional people are people who think that this level of government spending is sustainable, with decreasing revenue coming in.
I think you are the one confused because I made no such reference to Chinese call options in regards to the debt..
There were two references to call options in the following brief post, and the use of the word "China" made me think you were indeed referring to Chinese call options, of which there is no such thing.
Originally Posted by pghquest
Title misleading.. Sanctions is not a call of debt..
If China was going to call our debt, they would simply stop issuing new debt..
Quote:
Originally Posted by pghquest
In fact on this thread we pretty much agree about the lack of China being able to call our debt, but yet you continue to argue with me anyways.
I'm glad that you now see the light.
Quote:
Originally Posted by pghquest
Well I confess to not watch daily the amount of american debt being bought by the Chinese...
That was evident prior to the confession.
Quote:
Originally Posted by pghquest
...I do indeed have data to backup my claims that China is buying less debt. These stories directly contradict your claim of China increasing their holdings of american debt.
Not really. One of them is more than a year old, and the other is unsourced rant/commentary straight from the incestuous world of whackjob blog-economics. Can't you do any better than that? You should try to, you know...
i think the delusional people are people who think that this level of government spending is sustainable, with decreasing revenue coming in.
Who are these people? Are they saying that we need to sustain unemployment levels at 10% or above by laying off additional workers in light of this latest report of GDP growth? Are they calling for federal restrictions on bank lending to protect against the possibility that emerging trends toward economic growth might gain some traction?
Let me suggest that THERE ARE NO PEOPLE who believe that current levels of government spending are sustainable over any extended period fo time. There are only those sensible enough to realize that such policies have been our only choice of late and are at the moment unless we wish to simply sit back and enjoy the ride into utter economic oblivion. And of couirse, many right-wingers have called for exactly that. Let this fail, let that fail, never mind the consequences. We will rebuild from the ruins. Expect just that sort of outcome if we ever have a Tea Party Chairman of the Fed.
Back in the real world, we need to see the stimulus-induced recovery edging over into a self-sustaining recovery. That will not happen quickly, but there are early signs of it already. The stimulus was estimated to provide about 3.0 points worth of GDP growth in the 3rd quarter. But final growth was just 2.2%, meaning that the economy on its own would have still been in the red. The stimulus in the 4th quarter would have provided closer to 2.0 points worth of GDP growth, so even though we have only an Advance estimate to go by, the early rate of 5.7% is certainly on the promising side. I think most (actual) economists would tell you that the chances that we have reached a point of self-sustainability -- i.e., a point where cutbacks in stimulus would not result in major backsliding -- have gone past the 50-50 mark. I don't know anyone who is comfortable with those kinds of odds. 90-10 or 95-5 would be a lot nicer looking given what we've gone through. Some think we can get there on the strength of the stimulus package we have now, others think there's enough doubt of that to justify extending and supplementing programs to remove such doubt. I tend to fall in the second camp, in part because the sooner we can have some assurance that a self-sustaining recovery is underway, the sooner we can begin pulling back and planning for a return to economic normalcy, meaning something much closer to historical deficit levels and debt-to-GDP ratios that fall back below 65% or so.
evidently, we are not looking at the same picture. our revenues are down, and our trade deficit is up.
Int'l Trade in Goods and Services
• Deficit increased to $36.4 billion in November 2009(p) from $33.2 billion in October 2009(r).
[Release: 1/12/10]
U.S. Int'l Transactions
• Current-account deficit increased $10.1 billion to $108.0 billion in Q3 2009(p).
[Release: 12/16/09]
we aren't better off than we were and, as a matter of fact, obama is now proposing a 3.8 trillion dollar budget. this is not a step in the right direction. even obama said that our deficit "could jeopardize our recovery".
furthermore, we haven't fixed the problems that brought about the last collapse. from denninger today and barofsky's report):
There are many who believe that Bernanke "saved us from another Depression." I will note that there were many in 1930 who thought we had been "saved" as well. They were wrong.
They were wrong for the same reason they're wrong this time. From SIGTARP's latest report:
It is hard to see how any of the fundamental problems in the system have been addressed to date.
To the extent that huge, interconnected, “too big to fail” institutions contributed to the crisis, those institutions are now even larger, in part because of the substantial subsidies provided by TARP and other bailout programs.
To the extent that institutions were previously incentivized to take reckless risks through a “heads, I win; tails, the Government will bail me out” mentality, the market is more convinced than ever that the Government will step in as necessary to save systemically significant institutions. This perception was reinforced when TARP was extended until October 3, 2010, thus permitting Treasury to maintain a war chest of potential rescue funding at the same time that banks that have shown questionable ability to return to profitability (and in some cases are posting multi-billion-dollar losses) are exiting TARP programs.
To the extent that large institutions’ risky behavior resulted from the desire to justify ever-greater bonuses — and indeed, the race appears to be on for TARP recipients to exit the program in order to avoid its pay restrictions — the current bonus season demonstrates that although there have been some improvements in the form that bonus compensation takes for some executives, there has been little fundamental change in the excessive compensation culture on Wall Street.
To the extent that the crisis was fueled by a “bubble” in the housing market, the Federal Government’s concerted efforts to support home prices — as discussed more fully in Section 3 of this report — risk re-inflating that bubble in light of the Government’s effective takeover of the housing market through purchases and guarantees, either direct or implicit, of nearly all of the residential mortgage market.
Stated another way, even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.
Yep.
not to mention the social cost and moral hazard of misallocating trillions of dollars......
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