March 31, 2011

DOOM! in my pocket like grains of sand
— Monty

You can read this news two ways. Optimistic: Fewer people are losing their jobs! DOOM!: Labor force participation is at a 26-year low; job losses are decelerating because there's no one left to lay off. Still, since unemployment is a lagging indicator, this does give some strength to the argument that the "recession" ended about six months back.

Nicole Gelinas at NRO steps into the debate about whether public-employee pensions are sustainable or not. She agrees with Veronique de Rugy (and me) that the rate-of-return many states are basing their contribution calculations off of are basically nonsense, but somewhat agrees that pensions aren't the biggest budgetary problems facing states right now. My take? It's true that pensions aren't an immediate funding threat to most states (that problem is centered more on municipalities at present) -- but they are going to consume an ever-larger proportion of general-fund revenues in coming years, and if borrowing rates go up or returns are lower than actuaries expected (or both), five or ten years from now the situation may go from "bad" to "catastrophic" pretty damned quick. In states like California and Illinois, this situation has already arrived.

Ireland is "stress testing" its banks, and unless Ireland decides to go full retard and hide the gruesome results, either the ECB will have to pony up additional bailout funds (with the associated austerity conditions that the population is unlikely to accept), or to default in some way (preferable to the populace, but it's unclear how Ireland could do this and still retain the Euro as the currency).

So now you have Portugal, Greece, and Ireland on the brink of default, and the ECB seems to be at a loss as to what to do next. Everyone insists that bond-defaults are not being seriously considered, but everyone also knows that this is a lie. Apparently, everyone is waiting for the Deus Ex Machina to descend from the clouds and magically resolve the situation. Somehow.

The old greenback, she ain't what she used to be.

Reason magazine looks into how Ohio Gov. Kasich plans to cut government spending...by increasing spending by 11%. It's a new thing we call "government math". You peasants just don't understand. (This is also why I despair of the GOP ever really getting a handle on our budgetary mess at the state and local level. They tend to love spending taxpayer money just as much as the Democrats do, just on different stuff.)

[UPDATE]: Wal-Mart CEO: Get ready for some serious inflation. As John McClane would say: welcome to the party, pal!

[UPDATE 2]: *Snif*. I'm so proud. If you type "california boned" into the Google, guess what pops up first?

[UPDATE 3]: Aaaah. This is how I like my DOOM!: fresh and piping hot. Bill Gross of PIMCO says that without entitlement reform, default is inevitable. Plus he uses a cartoon skunk as a framing device, which garners originality points.

[UPDATE 4]: John Tamny of Real Clear Markets says that GDP (Gross Domestic Product) is a nonsensical term. (He also says the same of "macroeconomics".) I'm not sure I agree entirely -- you have to have some way of measuring the output of a politically organized region, and while GDP is not the best way to measure output it's not the worst either. But Tamny understands that trade, and hence that amorphous beast we call "the economy" is truly global now, and completely interlinked. And this isn't true of just manufactured goods, either -- it applies to service industries as well (particularly in IT).

Doom! DOOM! DOOOOOOOOOOOOOOM!

Redneck cat says you've got one minute to get the hell off of his land before he fetches the shotgun.


Posted by: Monty at 04:44 AM | Comments (60)
Post contains 627 words, total size 5 kb.

1 I think I head redneck cat say "boy" at the end of his sentence

Posted by: Ben at March 31, 2011 05:05 AM (wuv1c)

2 heard not head, shoot.

Posted by: Ben at March 31, 2011 05:05 AM (wuv1c)

3 LOL, jobless claims have less validity than Grimm's Fairy Tales. At least when they collected those stories they based them on what people had seen.

As for the dollar, I have been expecting it to tank for a long time. The only thing holding it up right now is China trying to keep theirs low and the fact that the Europeans are also in a race to see who can be the most BONED.

Posted by: Vic at March 31, 2011 05:09 AM (M9Ie6)

4 Redneck Kitty looks like my cat when I have not properly given him enough food.

Posted by: Vic at March 31, 2011 05:09 AM (M9Ie6)

5 (This is also why I despair of the GOP ever really getting a handle on our budgetary mess at the state and local level. They tend to love spending taxpayer money just as much as the Democrats do, just on different stuff.)

Indeed.  Conservatives across the fruited plain disabused themselves of any last fantasies of the GOP pulling itself together to save the nation last night.  I received phone calls from many of them detailing just how flabbergasted they are at the Republicans faltering at this critical hour.
I suppose I'm one of the not-surprised-at-all crew. o_x
On the flip side, we got some wicked awesome magic beans.  I wonder if they can be used as currency in the new Mad Max era.

Posted by: KinleyArdal at March 31, 2011 05:10 AM (VMkqN)

6 Yet when you discuss politics with a lefty, you can't even get into the debate of what to cut. You now spend all your time arguing whether or not we are actually broke. They insist not, despite the fact you can take all the rich people's money in the US and still not really cover the debt.

Posted by: Reality Man at March 31, 2011 05:10 AM (9AQdP)

7 Miss the Seventies, yet?

Posted by: Jimmuh Carter at March 31, 2011 05:11 AM (LdYLm)

8

Ben, I stil got your intent. Heh.

Monty, the thing about lagging indicators and jobs and recovery -- it may lag a recovery, but the fact that the rate of layoffs has slowed is no evidence that recovery has begun. QED: A year ago, everything was about Portugal, Greece, Ireland, and Spain and how their economies were falling off a cliff. They all got bailouts and were SAVED! Now, they're about to go bankrupt again. The only thing they did was delay it a year and burn up a bunch of German taxpayers' money.

Posted by: Ella at March 31, 2011 05:11 AM (r2c9Y)

9 Yet when you discuss politics with a lefty, you can't even get into the debate of what to cut. You now spend all your time arguing whether or not we are actually broke. They insist not, despite the fact you can take all the rich people's money in the US and still not really cover the debt. Funny. That's exactly what that Stephen Lerner guy said that Glenn Beck caught on tape, planning to "take down" the banks and Wall Street, said that the Left ought to be saying as part of their attack.

Posted by: blaster at March 31, 2011 05:13 AM (l5dj7)

10 Most voters don't trust government at any level not to be corrupt.   This covers both left and right.    So it's easy for the dems to argue that it would hurt someone to cut spending.   The voters figure at least I get something now, if its cut then it only goes to someone else.    Deficits are vague things to many.

The GOP needs to put concrete things back in peoples hands (and cut the deficit at the same time).   Small things to start help on some of the tough ones.

For example, on Social Security   Bush's proposal for private accounts was good but too easy to demagogue that the markets would destroy peoples accounts.   How about giving younger workers their SS contribution in T bills (actual T bills not IOUs) with maturities scaled for a portion due at age 50.  All could be cashed out at maturity tax free and passed to your estate.

The public can't be convinced you are sincere until you show some evidence.

Posted by: DirtyJobsGuy at March 31, 2011 05:14 AM (N7ULP)

11 no evidence that recovery has begun

Oh, I totally agree. We've drowned and sunk; now we're just bumping along the bottom. It's less a "plateau" than a "trough". Or the Marianas Trench.

Posted by: Monty at March 31, 2011 05:14 AM (FC+dS)

12 Monty I love the cat pics. The doom, not so much, but you are always right on the money with your assessments. Thanks for depressing me further this morning. Thank goodness I am not in Ca , but in Texas. Unfortunately, all you retards from CA are coming over here and screwing us up with your damn hippie liberal communist pinko ideas. Austin was weird enough without CA freaks moving into town. sigh... Okay I am going to sit on the back porch now and polish my shotgun.

Posted by: Catlady at March 31, 2011 05:17 AM (g9De2)

13 Monty@11. Thank God. I thought you were beginning to believe, like, the AP finance writers. Recovery Summer, baby!

Posted by: Ella at March 31, 2011 05:18 AM (r2c9Y)

14 So wow is CNBC lucky that it can burn up the airwaves with this Sokol/Berkshire Hathaway story.  Makes it so much easier not to talk about the zero tax bill their parent company enjoyed.  And warren will be so busy with this mess bet he won't have time to deal with those golden slacks warrants so that will surely be put off until a later date.

Posted by: curious at March 31, 2011 05:18 AM (k1rwm)

15 If you look what happen in Japan, they were never able to monetize their debt due to political pressures. Happy Jack Bernacke's plan to inflate will have as much success as a Hugh Hefner penile implant.

Posted by: Mike H at March 31, 2011 05:18 AM (LdYLm)

16 its day one of Baseball........... go Cubs.......... i think they will win it all this year. 

Posted by: Racefan at March 31, 2011 05:19 AM (UEZD/)

17 Well at least I enjoyed life as we knew it while it lasted. I guess I should invest in lead and brass. I fully intend to be an insurgent if that JEF hands us into a caliphate. May only go Galt if we become a full fledged commie nation.

Posted by: Palerider at March 31, 2011 05:20 AM (ql12X)

18 Posted by: DirtyJobsGuy at March 31, 2011 10:14 AM (N7ULP)

If you told me about your plan with t bills, I would refuse to fund my retirement and keep my money, thanks.

Posted by: curious at March 31, 2011 05:20 AM (k1rwm)

19

Ohio Gov. Kasich plans to cut government spending...by increasing spending by 11%.

It's a dream come true! It's a dream come true!

Posted by: Rep. Kasich after giver Clinton a Lewinsky at March 31, 2011 05:23 AM (7EV/g)

20 Aaarrgggh! Giving. Giving a Lewinsky.

Posted by: Rep. Kasich after givinginton a Lewinsky at March 31, 2011 05:24 AM (7EV/g)

21 DOOM is a little crunchy today, need to add so beauty:

http://tinyurl.com/6787zjr

Posted by: Mike H at March 31, 2011 05:25 AM (LdYLm)

22

Is Kasich's spending increases actual spending increases or tax cuts that are called spending increases?

I can't watch the video here at work

Posted by: Ben at March 31, 2011 05:29 AM (wuv1c)

Posted by: curious at March 31, 2011 05:32 AM (k1rwm)

24 That looks more like 'White Lightning' cat or 'Thunder Road' pussy.

Sure looks like that might be a backwoods still set up there.

Posted by: jakee308 at March 31, 2011 05:33 AM (6kXgv)

25 Me and Redneck Kitty have an attitude in common. My land is my land and I would die to keep it. Like me Pop said, most of my land is only good for holding the world together (mountain ground and mostly rock) but it's still MY LAND, and they ain't makin' any more.

Posted by: maddogg at March 31, 2011 05:35 AM (OlN4e)

26

The problem Kasich faces is the problem that the Federal Government faces, writ in the size of the state.

Entitlements.

Most of the State of Ohio budget is Education and Medicare/Medicaid (state share of Federal mandate).

They won't cut their education outlays enough, and they are restricted as to how much Medicare/Medicaid gets cut (the state mandated part). They've cut around the edges, and that alone has made the nitwit nellies in the new media all askew with silliness.

Ohio legislators are all term-limited, so most of them are not "career" politicians. What are they worried about?

The 11%,  $5.5 billion dollar increase in the state budget is not so much a surprise as a disappointment.   A BF disappointment. These guys frankly will just not cut, because they are afraid of those meanies in the media calling them mean names.

There is frankly no political courage anywhere to do what has to be done.  Half the states probably really want to do the right thing, and half are going to tap -dance off the cliff and expect the Federal Gov. to save them with QE-27 (stay tuned!). So no one makes hard decisions and sticks by them.

A real third party arising is not unthinkable to me anymore.

In short, we're boned. And doomed.

Posted by: Reader C.J. Burch writes... at March 31, 2011 05:43 AM (usS2T)

27

Aaarrgggh! Giving. Giving a Lewinsky.

Posted by: Rep. Kasich after givinginton a Lewinsky at

Dude, step away from the browser before you hurt yourself.

Posted by: Warthog at March 31, 2011 05:44 AM (WDySP)

28 This is all so unexpected!

Posted by: The MFM and the AP But Mostly the MFM... and the AP at March 31, 2011 05:49 AM (swuwV)

29

Given his demonstrated leftist and socialist as well as his anti-American tendencies, this cannot be a coincidence.  This is a concerted and thought out effort on Obama's and his allies' parts to undermine the economy. 

 

How is that hope and change bullshit working out for you mental midgets and blacks who voted for a clearly unqualified idiot for president?  he is fucking you over right along with the real Americans.

 

 

Posted by: USMC Steve at March 31, 2011 05:50 AM (zZae2)

30 Weeeee, more doom.  I'd just assume blow my fucking head off and be just done with it but I'd suspect that would make my parents rather cross.

Posted by: Herr Blcher at March 31, 2011 05:51 AM (E6FGZ)

31

I'm reading that the House leadership is leaning on Paul Ryan and asking him to tread lightly on entitlements, though another article contradicts that. Anyway, here's what has been said so far:

*Block grants for Medicaid

*Medicare vouchers for everyone 65 and above. Future retirees will be able to choose from a list of private plans.

Posted by: Miss'80sBaby at March 31, 2011 05:51 AM (UO6+e)

32 I'd just assume blow my fucking head off and be just done with it but I'd suspect that would make my parents rather cross.

The true warrior continues living out of bitterness and spite. It is the Shaolin way.

Posted by: Monty at March 31, 2011 05:53 AM (FC+dS)

33 leaning on Paul Ryan and asking him to tread lightly on entitlements

I feel for Ryan, I really do. He clearly understands the scope of the problem, but he is also a politican and cannot speak the blunt truth aloud lest he be ridden out of town on a rail. He considers politics, in Bismarck's phrase, to be "the art of the possible", so he continues to find ways to advance the ball even if it doesn't seem to hold much hope of leading to a score.

But the problem he (and the rest of us) face is this: we will never succeed by cutting inches when we need to be cutting yards. At some point the American taxpayers are going to have to hear the hard truth, and be told that they have no real choice but to deal with it. The politician who does this may not survive the attempt, which is why I think it probably will not happen (at least not in the timeframe it needs to happen).

Posted by: Monty at March 31, 2011 05:57 AM (FC+dS)

34 The document dump by the Fed today ought to be good for some shits and giggles .

Posted by: Bill D. Cat at March 31, 2011 06:01 AM (npr0X)

35 Jim Cramer and CNBC will see me through these tough times. I put my trust in them in the name of the Father, the Son and the Dividend.

Posted by: Ben at March 31, 2011 06:02 AM (wuv1c)

36 Does redneck kitteh play banjo?

Posted by: Vic at March 31, 2011 06:03 AM (M9Ie6)

37 32 The true warrior continues living out of bitterness and spite. It is the Shaolin way.
______

I always thought the Shaolin way involved cottage cheese.

Or maybe that's the Shaolin whey?

Posted by: Anachronda is unclear on the concept at March 31, 2011 06:06 AM (6fER6)

38

The vice chairman of the Budget Committee put it this way:

“Politics plays into this,” said Representative Scott Garrett, a New Jersey Republican and vice chairman of Ryan’s Budget Committee. “Is he going to come out with a plan where he wants to go, or is he coming out with a plan of where he is being allowed to go” by the party leadership. “We need to start taking some of these tough calls now.”   So there is a talk that the leadership has heard from the oh-so-concerned appropriators and their allies, that they are worried about tackling Social Security and are limited the options. Sadly, that's within Boehner's rights to say no, since this is a consensus budget; he also took 4mos. to sign-off on entitlement reform.   I say the Budget Committee should gather their allies and push-back. While it's true that Medicare and Medicaid are two of the primary drivers of the debt and SS is peanuts in comparison, it's going to become a larger problem later and Ryan knows it. He shouldn't be made to avoid the issue simply because the leadership (excepting Hensarling) is getting cold feet.

Posted by: Miss'80sBaby at March 31, 2011 06:08 AM (UO6+e)

39

Let's try that again:

“Politics plays into this,” said Representative Scott Garrett, a New Jersey Republican and vice chairman of Ryan’s Budget Committee. “Is he going to come out with a plan where he wants to go, or is he coming out with a plan of where he is being allowed to go” by the party leadership. “We need to start taking some of these tough calls now.”  

 So there is a talk that the leadership has heard from the oh-so-concerned appropriators and their allies, that they are worried about tackling Social Security and are limited the options. Sadly, that's within Boehner's rights to say no, since this is a consensus budget; he also took 4mos. to sign-off on entitlement reform.  

I say the Budget Committee should gather their allies and push-back. While it's true that Medicare and Medicaid are two of the primary drivers of the debt and SS is peanuts in comparison, it's going to become a larger problem later and Ryan knows it. He shouldn't be made to avoid the issue simply because the leadership (excepting Hensarling) is getting cold feet.

Posted by: Miss'80sBaby at March 31, 2011 06:09 AM (UO6+e)

40 32 The true warrior continues living out of bitterness and spite. It is the Shaolin way.

Posted by: Monty at March 31, 2011 10:53 AM (FC+dS)

Ah, so, it's like a variation of the "hate keeps me warm" philosophy proposed by the late, great Patrick Swayze.

Posted by: Herr Blcher at March 31, 2011 06:09 AM (E6FGZ)

41 #6  Reality,  you need to get a copy of Bill Whittle's video explanation of Iowahawk's excellent column.

Here is the url for the video. 

http://tinyurl.com/499xan5

It illustrates that if we take ALL of the money from all billionaires and millionaires and all of the Fortune 500 corporations,  stop foreign aid, take all of the money spent in Afghanistan and Iraq, all salaries of all sports stars,  sell of the homes in Beverly Hills,  we can get through one year of Obama's spending.  Then you have to start over,  and there is nothing left to take.

DOOM!

Posted by: Miss Marple at March 31, 2011 06:17 AM (Fo83G)

42

More on the budget proposals:

"His plan reportedly would turn Medicaid, which provides fee health coverage for the poor and is facing a massive spending increase under President Obama’s national health care law, into a block grant program for states instead of a program administered in Washington.

On Medicare, the insurance program for senior citizens, Ryan would repace a system in which people pay in all their lives and then get government insurance to a system in which seniors would get vouchers to buy insurance on the open market."

Posted by: Miss'80sBaby at March 31, 2011 06:19 AM (UO6+e)

43 I'd just assume blow my fucking head off


The true warrior continues living out of bitterness and spite. It is the Shaolin way.

"What me worry"  Alfred E. Neumann

Early departure may save you from the cannibal hordes but it leaves your mess for others to clean up and isn't that how we got here?

Posted by: Dave at March 31, 2011 06:24 AM (FQACB)

44 At some point the American taxpayers are going to have to hear the hard truth, and be told that they have no real choice but to deal with it. The politician who does this may not survive the attempt, which is why I think it probably will not happen (at least not in the timeframe it needs to happen).

No nasally voiced rich midgets please

Posted by: Wouldn't listen to H. Ross Perot at March 31, 2011 06:26 AM (FQACB)

45 Watch Irish doom live .

Posted by: Bill D. Cat at March 31, 2011 06:29 AM (npr0X)

46 41 ... sell of the homes in Beverly Hills, we can get through one year of Obama's spending. Then you have to start over, and there is nothing left to take.
_________

Well, you could sell all of the homes in Beverly Hills again...

Posted by: Anachronda is in a glass half full mood at March 31, 2011 06:55 AM (NmR1a)

47

In 2010 USD declined on FX markets by 3%.  So far in boom 2011 year,  declining 1% per month.

Glad Japan and EU are doing so well, but a tad sorry for us.

Posted by: gary gulrud at March 31, 2011 07:03 AM (/g2vP)

48

" pensions aren't the biggest budgetary problems facing states right now. "

Pension payouts aren't on budget, duh.  NRO, why not just close the doors already?

Posted by: gary gulrud at March 31, 2011 07:07 AM (/g2vP)

49 Well we've hit the iceberg, and we don't have enough lifeboats.

"Well then...the morons shall retire to the bar..."

Posted by: Old Dude on the Titanic at March 31, 2011 07:45 AM (hxLER)

50 Well, Just Damn.

I'd always planned on working until the day I die... now, I'll just plan on fighting 'til the day I die...

Posted by: backhoe at March 31, 2011 07:58 AM (0bk6W)

51

@43: "Early departure may save you from the cannibal hordes but it leaves your mess for others to clean up and isn't that how we got here?"

One cannot leave a mess for others if one has no others.

Posted by: Kobayashi at March 31, 2011 09:11 AM (xy9wk)

52 As others, such as Pete Peterson of the Blackstone Group and Mary Meeker, have shown much better and for far longer than I, the true but unrecorded debt of the U.S. Treasury is not $9.1 trillion or even $11-12 trillion when Agency and Student Loan liabilities are thrown in, but $65 trillion more! This country appears to have an off-balance-sheet, unrecorded debt burden of close to 500% of GDP! We are out-Greeking the Greeks, dear reader.

Redneck-Shotgun Kitteh better have lots of ammo.

Posted by: ExExZonie at March 31, 2011 09:19 AM (29ek1)

53

Darn, I have a lot to do today, won't be back here but was surprised that there's only 52 comments in the DOOM thread.

I love this thread. Every weekday, this motivates me.

Everyone have a great day.

Posted by: Canadian Infidel at March 31, 2011 09:26 AM (GKQDR)

54  If Texas and other states (admittedly which have their own pension problems) decide to opt out of the US altogether and use their oil reserves as backing for their own new "Confederate" currency, where does the Social Security/Medicare obligation go? If they are null and void in the newly formed country, would those who are "promised" these benefits have to return to the "Union" US to claim their benefits? Cause at some point, people are going to refuse or be unable to pay any more in taxes. The best feature of this plan is the off-loading of Medicaid and other unfunded mandates. Who's with me?

Posted by: ExExZonie at March 31, 2011 09:27 AM (29ek1)

55 I must be finally beginning to live the Ace of Spades lifestyle.  When I first saw the title of the post, I thought it said:
DOOM! in my pecker like grains of sandDo you morons have any idea how painful that is?

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