Home › Forums › Financial Markets/Economics › Sombre Econ News – Aug 16
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CA renter.
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August 16, 2010 at 10:31 AM #17838August 16, 2010 at 11:29 AM #591476
davelj
ParticipantThat Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.
August 16, 2010 at 11:29 AM #592529davelj
ParticipantThat Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.
August 16, 2010 at 11:29 AM #592219davelj
ParticipantThat Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.
August 16, 2010 at 11:29 AM #592109davelj
ParticipantThat Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.
August 16, 2010 at 11:29 AM #591568davelj
ParticipantThat Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.
August 16, 2010 at 4:58 PM #591899EconProf
ParticipantPimco’s El-Erian has an especially good track record. His piece is worth reading.
August 16, 2010 at 4:58 PM #591805EconProf
ParticipantPimco’s El-Erian has an especially good track record. His piece is worth reading.
August 16, 2010 at 4:58 PM #592855EconProf
ParticipantPimco’s El-Erian has an especially good track record. His piece is worth reading.
August 16, 2010 at 4:58 PM #592435EconProf
ParticipantPimco’s El-Erian has an especially good track record. His piece is worth reading.
August 16, 2010 at 4:58 PM #592547EconProf
ParticipantPimco’s El-Erian has an especially good track record. His piece is worth reading.
August 17, 2010 at 3:49 AM #591935CA renter
ParticipantGreat stuff, SD Transplant. Thanks for sharing the links with us.
From the ZH link, I especially liked this part:
“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.
For the last 40 years in particular the rich are getting richer and the average person has seen very little increase in real income. In the US, the real annual income of the bottom 90% of US families has increased by only 10% since 1970. And in the expansion between 2002 and 2007, median US household income dropped $2,000. The perceived increase in wealth for the majority of Americans derives from an increase in their debt level not from an increase in real earnings. So the improvement in living standards that the average American and many other Western countries have enjoyed in the last 40 odd years is primarily based on debt – debt that can never be and will never be repaid with normal money.”/i>
August 17, 2010 at 3:49 AM #592029CA renter
ParticipantGreat stuff, SD Transplant. Thanks for sharing the links with us.
From the ZH link, I especially liked this part:
“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.
For the last 40 years in particular the rich are getting richer and the average person has seen very little increase in real income. In the US, the real annual income of the bottom 90% of US families has increased by only 10% since 1970. And in the expansion between 2002 and 2007, median US household income dropped $2,000. The perceived increase in wealth for the majority of Americans derives from an increase in their debt level not from an increase in real earnings. So the improvement in living standards that the average American and many other Western countries have enjoyed in the last 40 odd years is primarily based on debt – debt that can never be and will never be repaid with normal money.”/i>
August 17, 2010 at 3:49 AM #592985CA renter
ParticipantGreat stuff, SD Transplant. Thanks for sharing the links with us.
From the ZH link, I especially liked this part:
“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.
For the last 40 years in particular the rich are getting richer and the average person has seen very little increase in real income. In the US, the real annual income of the bottom 90% of US families has increased by only 10% since 1970. And in the expansion between 2002 and 2007, median US household income dropped $2,000. The perceived increase in wealth for the majority of Americans derives from an increase in their debt level not from an increase in real earnings. So the improvement in living standards that the average American and many other Western countries have enjoyed in the last 40 odd years is primarily based on debt – debt that can never be and will never be repaid with normal money.”/i>
August 17, 2010 at 3:49 AM #592677CA renter
ParticipantGreat stuff, SD Transplant. Thanks for sharing the links with us.
From the ZH link, I especially liked this part:
“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.
For the last 40 years in particular the rich are getting richer and the average person has seen very little increase in real income. In the US, the real annual income of the bottom 90% of US families has increased by only 10% since 1970. And in the expansion between 2002 and 2007, median US household income dropped $2,000. The perceived increase in wealth for the majority of Americans derives from an increase in their debt level not from an increase in real earnings. So the improvement in living standards that the average American and many other Western countries have enjoyed in the last 40 odd years is primarily based on debt – debt that can never be and will never be repaid with normal money.”/i>
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