Unintended Consequences 20th Century and Beyond
This Article by James Quinn, (Jan 5, 2009) approaches the De/in-flation debate by helpfully poiting out what will be the real Deciders for each and every one of us in the coming decade:
Twenty years of consumer debt accumulation must be unwound. This required deleveraging needs to eliminate $2 trillion of household debt. The result will be thousands of retail store closings, mall closings, restaurant closings, and auto dealership closings. The distinction between needs and wants will reveal itself like a sledgehammer….
IMHO savers are “needs” based, spendthrifts are “wants” based. Which side do you come down on?
Too old to rock and roll, too young to die?
…from a TF thread (home of the ursine) by commenter “Bear” regarding Bill Gross and Warren Buffet’s investing acumen and whether it is present and accounted for:
they are stupid mostly and old…This is a fast game and they aren’t motivated by the same things they were when they were good investors, let alone mentally agile enough anymore….and yes they do have more info but its based on flawed data IMO….they’re surrounded by yes men and look for and deal in political favor for returns…they’ve gone from “investors” to “power brokers” …that is the typical permutation of success….”
I like to point out this very fact out whenever a discussion treads into pertinent territory. Since most people I know are middle-aged and up, this matter tends to get some of them very uncomfortable!
To this pair of fading Icahns we can surely add Ross, Thain, Cayne, Elmer “Dickie” Fuld, Pickens, Rubin, Pandit, Redstone, Hank-panky, Benron Bukkake, Krekorian, Joseph Lewis, Madoff(?), Barmy Frank, Tangelo Orangezillo, Chris Doddery, Bush, Cheney, Obama, Summers, Meriwether, Krudblow, Cramer, Scholes, fill-in-the-blank. Should Jimmy Rogers be in that company? George Soros? Krugman?
The inclusion of Madoff is because my *theorem of pinnacle-envy-itis* states that
When power brokers are confronted by a once-in-a-lifetime crisis and clearly don’t know what to do, they’ll desperately cling to their cloak of invincibility and do absolutely anything and everything possible to keep-up appearances.
Now how boojy (bourgeois) is dat?
Extra credit section
Deflation has become inevitable
For a while now I have been on the fence on the inflation/deflation issue – whether the massive monetisation of bad debts by central banks and governments will lead to rapidly escalating inflation as currencies are debased or, alternatively, lead to deflation as bad debts and illiquidity undermine all commercial and financial activity in the economy. I’m now coming down on the side of deflation for a very simple reason: there is no longer any incentive to save or invest, and so debt and investment cannot increase much beyond current bloated levels. [London Banker]
Wave ‘B’… What a Wonderful World!
The ‘C’ I am referring to in the Voyage to the Bottom of the ‘C’, represents in Elliott Wave terms the third and final leg of an A-B-C correction which is correcting an up cycle which began before America was even born. That puts this correction on a higher order than the Great Depression, a “Grand Supercycle Degree” corrective wave. [Economic edge]
All of a nation’s laws are enforced selectively.