Lance on Dec 02 2008 | Filed under: Domestic Politics, Economics, Humor, Lance's Page
By Fred Thompson. With only the most minor quibbles I not only laughed, but cried. Pretty much dead on:
The sad thing is that it isn’t only “liberal” economists, it is the meat of the profession and plenty of so called “conservative” politicians.
Hat Tip: McQ
Sphere: Related ContentLance on Nov 17 2008 | Filed under: Economics, Investing, Lance's Page
The insufferable Peter Schiff has a video going around, which frankly, is just brilliant. He may be unpleasant at times, but he nailed this thing, and took mounds of abuse while doing so. More importantly, I KNOW HOW HE FEELS!
The resentment, irritation, condescension and, at times, outright hostility to my Cassandra act makes me wish I had a video of my own. Sigh…
Oh well, it pays to remember that Cassandra was right. I was never as sure of myself as Peter, but risk management isn’t about knowing you are right, but knowing what could go wrong and whether it is likely enough to act upon.
As an aside, Peter is no big government type, and he goes to prove that despite the media focusing on Roubini and others (who do deserve a lot of credit) that people across the ideological perspective warned of this. Thus having seen this coming is not the same as being correct about what to do about it, since those who saw the oncoming train differ markedly on that score.
Sphere: Related ContentLance on Nov 16 2008 | Filed under: Economics, Lance's Page
Given the topic of tonight’s podcast I thought a little visual data might help. First, the explosion in US debt:
From the early 1920s through 1985, the average level of debt-to-GDP in this country was 155%. The highest peak in history (until the recent debt boom) was in the early 1930s, when debt-to-GDP soared to 260% of GDP. In the 1930s, the ratio then cratered to 130%, and it remained close to that level for another half century. (See chart below).
In 1985, we started to borrow, and last year, when we got finished borrowing, we had borrowed 350% of GDP. To get back to that 155%, we need to get rid of more than $25 trillion of debt.
Do we have to get back to 155% debt-to-GDP? No, we don’t have to. But given what happened after the 1920s, and given what people will probably think about debt when they get through getting hammered this time around, we wouldn’t be surprised if we got back there. It seems to be sort of a natural level.
The banks have written off $650 billion so far. So we suppose that’s a start.
That would mean reducing (de-leveraging) our economy’s debt load by 25 trillion. I have no idea how you cut even 10 trillion in debt without massive economic dislocation.
Sphere: Related ContentLance on Oct 01 2008 | Filed under: Domestic Politics, Economics, Lance's Page
I do believe we should be doing something as a nation, through our government, to avoid the not insignificant chance of a total financial meltdown. I have seen several things proposed that I find interesting, and I will get into them and other longer term issues in coming days. I had hoped to address this all comprehensively, but time just isn’t allowing that, so let us do so piecemeal.
Today I would like to endorse one proposal that aligns exactly with my thoughts on this, which is we need to recapitalize banks in a more effective, less arbitrary manner while protecting taxpayers and homeowners as well.
(more…)
Risk and Return Multinational Force-Iraq QandO Marginal Revolution Robby's Last FM Journal