It’s going to get much worse…there is no escape (ECRI)

[paramount]

I should have left the room like George Costanza.

I’m a political atheist and more or less agree with earlyretirement. For some strange reason I chuckled when I got to the punchline though.

[Anonymous]

[quote=earlyretirement]
I do think Obama could have done some things differently but he couldn’t really have changed the destiny of all the horrible things going on in the economy and the fallout from years of “sins” from Wall Street.

That’s just the plain truth.[/quote]

Funny thing is I think most people understand this, but they still put the blame on whomever is in charge at the moment.

Back to the topic:

For the economic historians out there: has there ever been a period of inflation without wage growth?

Exactly how could that happen (outside of a scenario where there is a disruption in supply of goods, such as a war)?

Who is going to pay these higher prices if they don’t have any money? What would drive prices up even higher?

[The-Shoveler]

Yep the where do you get wage inflation puzzle is an interesting question,

1) maybe just have the Gov send everyone checks like they did under Bush ?

2) just raise the minimum wage to say 15 or 20 dollars an hour or something like that,

Other than that I am stumped as it is unlikely we will create enough job pressure for most professions while we are in this Japan trap.

[briansd1]

In response to paramount’s post: [img_assist|nid=15416|title=Republicans|desc=|link=node|align=left|width=452|height=141]

[Rich Toscano]

Let’s get this thread back on track, please…

[Rich Toscano]

In the interest of getting back to the topic at hand, I don’t have much time this morning, but to the folks discussing wage inflation and general inflation, remember to consider real vs. nominal. You could have nominal wage inflation in a weak economy, simply due to more currency in circulation (ie the currency being worth less). But due to the weak economy, real wages could be dropping, even as they rise in nominal terms.

[evolusd]

[quote=earlyretirement]I’m no Obama fan but the truth of the matter is that it wouldn’t have mattered if a Republican, Democrat or Independent was the President the past couple of years. Everything playing out now and the past few years were things set in motion already. VERY little of it could have been changed off it’s course.

I do think Obama could have done some things differently but he couldn’t really have changed the destiny of all the horrible things going on in the economy and the fallout from years of “sins” from Wall Street.

That’s just the plain truth.[/quote]

I agree completely – there wasn’t much anyone could do to turn the ship to avoid the financial glacier we were approaching. What irks me the most is how the people and firms that caused the most harm from their greed and short-sightedness were the ones that got the most bailout funds/government assistance. The moral hazard caused by this will haunt us for years to come.

They should have allocated the bailout funds to the people and institutions that DID NOT act irresponsibly – reward the GOOD behavior of the fiscally conservative. Let us reap the benefits of acting responsible through a period when everyone was going nuts!

[Coronita]

Maybe this is sort of off topic, but maybe someone else has been noticing….

I’ve been seeing more and more things being made in the USA again…. Inexpensive things that you would think have low margins and outsourced….I mean, things like plastic boxes, screen meshes, screws, nuts bolts, that traditionally was be made overseas is now here…

Have we reached a point that that our currency and economy is so trashed that it’s starting to look more competitive to manufacture in some of the rustbelts/midwest now versus overseas?

Also, maybe there is some hope afterall???

Americans have no choice but to get more frugal

http://finance.yahoo.com/blogs/daily-ticker/americans-no-choice-more-frugal-135559129.html?sec=topStories&pos=9&asset=&ccode=

[NotCranky]

[quote=flu]Maybe this is sort of off topic, but maybe someone else has been noticing….

I’ve been seeing more and more things being made in the USA again…. Inexpensive things that you would think have low margins and outsourced….I mean, things like plastic boxes, screen meshes, screws, nuts bolts, that traditionally was be made overseas is now here…

Have we reached a point that that our currency and economy is so trashed that it’s starting to look more competitive to manufacture in some of the rustbelts/midwest now versus overseas?[/quote]

I recently spoke with long time retail business owner who is changing his inventory to at least 60% “Made in USA”, even if it means he has to take stock off his shelves and not replace it. That was an eye opener.

His decision doesn’t have as much to do with cost of manufacturing, but just looking at what customers want to see and buy. Perhaps it, could have something to do with tax incentives too?

[Coronita]

You guys catch the article about Zero Hedge and Morgan Stanley????

http://finance.yahoo.com/news/Morgan-Tries-to-Quell-Rumors-nytimes-3096392663.html?x=0&sec=topStories&pos=main&asset=&ccode=

Morgan Tries to Quell Rumors About Its Holdings

SUSANNE CRAIG, On Tuesday October 4, 2011, 9:26 pm EDT

Morgan Stanley executives are battling a daily barrage of speculation and nay-saying to try to stem a sharp slide in the company’s stock.

It is a war that is being fought in large part in the shadows: against anonymous blogs and market whispers, but also against undefined fears about exposure to troubled European banks. While those worries are common to all the big Wall Street banks, Morgan Stanley, as the smallest, is perhaps the most vulnerable among them.

In response, Morgan Stanley executives have been rallying employees and talking to the company’s biggest shareholders. The campaign culminated late on Monday, with the Mitsubishi UFJ Financial Group, which owns approximately 22 percent of Morgan Stanley, publicly reaffirming its support for the company.

The push may have helped on Tuesday. Shares of Morgan Stanley rose 12.4 percent, after falling nearly 29 percent since the beginning of September. Morgan and other banks were primarily buoyed on Tuesday by a suggestion that European officials would look at bank recapitalizations.

Nonetheless, there has been a bloodbath in bank stocks. Morgan Stanley is down 48.5 percent for the year; Goldman Sachs has fallen 44 percent; and Bank of America is off about 57 percent. And the cost of insuring Morgan Stanley’s debt for five years through credit-default swaps, though it eased on Tuesday, remains at levels that were seen during the financial crisis.

Morgan Stanley’s war-roomlike approach to market volatility highlights the difficulties of stamping out speculation in a world of instant, and often anonymous, information.

Its latest round of troubles began on Friday morning before the markets opened at 9:30 a.m. Zero Hedge, a well-read and controversial financial blog, linked to a Bloomberg News article that noted Morgan’s credit-default swap spreads had been widening. The Zero Hedge post also directed readers to a previous Zero Hedge article that pegged Morgan Stanley’s net exposure to French banks at $39 billion, about $12 billion more than the bank’s current market capitalization, reigniting fears about its exposure.

It was a potent cocktail of information. The company’s stock opened down more than 3 percent, prompting a flood of calls to Morgan’s investor relations and press offices.

Calling Zero Hedge for damage control was not an option. The post was written by an anonymous blogger who goes by the name of “Tyler Durden,” a character in the movie “The Fight Club,” and the Web site does not give readers a way to readily reach its writers.

Adding to Morgan Stanley’s woes, Friday was the last day of Morgan Stanley’s third quarter. The company is set to release its earnings in a few weeks, and securities laws limit what it can say about its financial condition. Unable to reach Zero Hedge, Morgan Stanley’s investor relations department went into overdrive, quickly pulling together talking points for callers that were circulated to both media and investor relations staff members.

According to the talking points, reviewed by The New York Times, the numbers cited by Zero Hedge “represent gross asset positions and thus do not reflect the benefit of collateral or other hedges and protection, and the more relevant exposure to consider is the net exposure.”

So what is its net exposure? The company was limited in what it could say because of the pending earnings announcement. To address this point, staff members were told to direct callers to pre-existing stock research. “Analysts estimate that the actual net exposure is meaningfully lower,” the talking points read.

In particular, they cited a recent report by Brad Hintz, an analyst with Sanford C. Bernstein & Company, who estimated that Morgan’s “total risk to France and its banks is less than $2 billion net of collateral and hedges.”

Zero Hedge could not be reached for comment.

Despite Morgan Stanley’s efforts, the stock ended on Friday down about 10 percent, at $13.51, its lowest close since the fall of 2008 and the depth of the financial crisis. The stock price was particularly frustrating to James P. Gorman, the company’s chief executive since early 2010. He has been leading the effort to rebuild the company; he even bought 100,000 shares of Morgan Stanley in early August at approximately $20 a share.

On Friday, Mr. Gorman shared his concerns with senior executives at Mitsubishi, conversations that culminated with discussions over the weekend between Mr. Gorman and Nobuyuki Hirano, his counterpart at the Japanese bank. The two men discussed the market rumors, concurring that they ran contrary to what they felt was going on in the market, said two people briefed on the conversation.

The company is expected to report third-quarter results in two weeks. Those results, these people said, are solid in light of the recent stock market rout. Analysts polled by Thomson Reuters estimated that the bank would report a profit of 36 cents a share.

Mr. Gorman and Mr. Hirano agreed that it would be helpful if Mitsubishi issued a news release expressing its support. That did not come, however, until Monday after the close.

Early on Monday Mr. Gorman decided to speak out himself. “In fragile markets, where fear triumphs over common sense, these things are bound to happen. It is easy to respond to the rumor of the day, but that is not usually productive,” he wrote in a note to employees. “Instead we should let balanced third parties do their own analysis and let the facts speak.”

On Monday, despite Mr. Gorman’s efforts, the company’s stock tumbled 7.7 percent.

Six minutes after the close, Mitsubishi issued its statement. “In response to recent market volatility M.U.F.G. wishes to reiterate that we are firmly committed to our long-term strategic alliance with Morgan Stanley. The special relationship we have formed remains core to our global business strategy.”

Initially, the statement seemed to have little effect on the stock. The cost to insure Morgan Stanley’s bank debt with credit-default swaps on its debt continued to rise Tuesday morning, but then fell back, according to Markit, a financial information company. Its shares closed at $14.01, up $1.54, or more than 12 percent.

“Mitsubishi’s announcement was the equivalent of a Japanese firm saying you are part of the family,” Mr. Hintz said.

[briansd1]

[quote=evolusd]
I agree completely – there wasn’t much anyone could do to turn the ship to avoid the financial glacier we were approaching. What irks me the most is how the people and firms that caused the most harm from their greed and short-sightedness were the ones that got the most bailout funds/government assistance. The moral hazard caused by this will haunt us for years to come.

They should have allocated the bailout funds to the people and institutions that DID NOT act irresponsibly – reward the GOOD behavior of the fiscally conservative. Let us reap the benefits of acting responsible through a period when everyone was going nuts![/quote]

evolusd, you have to consider that Wall Street is such a central, systemic component of our economic system that not bailing out Wall Street was not an option.

Of course, the government could have acted differently with regard to individual executives.

Even a bailout of European governments will mean a bailout of Wall Street because of Wall Street’s exposure.
http://robertreich.org/post/11033625495

So I think that that bailing out the financial system was necessary. And overtime, it will be necessary to tax that system for the past bailouts and future bailouts.

The irony, evolusd is that good behavior does not need bailouts. What we need to do now is directly provide jobs to the people who don’t have jobs because the financial bailouts are not trickling down to jobs for the umemployed.

[UCGal]

[quote=flu]Maybe this is sort of off topic, but maybe someone else has been noticing….

I’ve been seeing more and more things being made in the USA again…. Inexpensive things that you would think have low margins and outsourced….I mean, things like plastic boxes, screen meshes, screws, nuts bolts, that traditionally was be made overseas is now here…

Have we reached a point that that our currency and economy is so trashed that it’s starting to look more competitive to manufacture in some of the rustbelts/midwest now versus overseas?

Also, maybe there is some hope afterall???

Americans have no choice but to get more frugal

http://finance.yahoo.com/blogs/daily-ticker/americans-no-choice-more-frugal-135559129.html?sec=topStories&pos=9&asset=&ccode=
[/quote]
My husband tried in vain to buy lightbulbs manufactured in the US.
There aren’t any.

He also was looking for an outdoor light fixture – same thing – none available at the big box stores (Home depot, lowes, lamps plus.)

[sdrealtor]

How about lanterns? Are Coleman’s made in the USA?

[briansd1]

[quote=flu]

Americans have no choice but to get more frugal

http://finance.yahoo.com/blogs/daily-ticker/americans-no-choice-more-frugal-135559129.html?sec=topStories&pos=9&asset=&ccode=
[/quote]

Here’s an interesting comment from yahoo link:

Americans may be more frugal on the small things but I am not seeing it in the big expenditures yet.

Lines at airline counters are long. Disney World parks are still full and a vacation there is not cheap. New car sales were up substantially recently. Cable and satellite companies are still doing well selling expensive channel packages. Apple is selling millions of iPhones and iPads and the wireless companies are signing up more customers to expensive data plans. Most all my neighbors are paying $100/month or more to have someone cut their lawn instead of doing it themselves and I don’t live in a wealthy neighborhood. These things are where the big discretionary money is spent or saved, not on buying a store brand can of peas to save 17 cents. You will know when American really feel the need to tighten their belt because people will decide the above goods and services are not essential and start cutting them out, they will learn to live without cable or expensive wireless plans or that airplane trip to see friends and make do with the old car. And do more things for themselves. Hasn’t happened yet but it may before too long the direction we are headed.

I believe that barring further deterioration, there has been a permanent shift in consumer behavior. Americans now eat out more, they buy more packaged food. They take once considered discretionary services as necessities. They travel more. That’s probably good for the economy.

[Coronita]

[quote=sdrealtor]How about lanterns? Are Coleman’s made in the USA?[/quote]

no… china.

Also., American Greetings and Hallmark started making cards in china to, even though the full price of a greeting card (plain, no sound,bells, whistles) is now closer to $4….Go figure…

[Author]

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