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  • On 22 Oct 2014 in Middle Class Wealth Gone!, Reality said:

    The chart shows two problems:

    1. Prior to "Greenspan Put," recessions and market crashes increased the percentage of wealth held by the bottom 90%. The top 10% grow their wealth faster during economic expansions, as expected, and take their lumps during recessions and crashes before the late 1980's. However, after the late 1980's, the top 10% wealth growth out- paced the society as a whole rain or shine.

    2. The statistics used to generate the graph may not be complete: present cash value of multi-decade if not life-time welfare handouts are probably not in the graph. For example, a family qualifying for life time housing subsidy of $1500 a month at current discount rate is having the equivalent of $400 thousand worth of asset; life time medical insurance and care with no cap on total payout are worth multiple millions! Those "assets" for being a poor citizen in America are obviously not included in the graph; adding back those baseline "assets," the percentage of wealth actually enjoyed and potentially available to the bottom 90% increase dramatically.

  • On 18 Oct 2014 in American Housing Survey finds 1 in 3 homes is a rental, Reality said:

    iwog says

    That isn't the point. I thought the stock market was going down so I sold my stocks. I thought real estate was going up so I bought real estate.

    What kind of ridiculous prick spends years telling people real estate would crash while simultaneously holding an asset that he could lose a large sum of money on?

    Why haven't you sold all your cars yet? Their value as used cars are certainly going down in the next few years.

    Why haven't you divorced your wife yet? Her sexual appeal will certainly be going down in the next few years.

    People hold onto their houses in a down market for numerous reasons:

    1. The capital gain tax liability is so huge on top of the regular transaction cost that it makes no sense to go through the round trip;

    2. Homestead protection against law suits. Cash can not be thus protected;

    3. The house/building generate enough rent to off-set down turn;

    4. Kids going to school in the local area, where there is either no rental or rental price is high;

    5. Rebuying a similar house would require mortgage (again), and there is no guarantee of low interest rate at the next market trough . . . in fact, probably not there.

    Just to list a few. How long have you owned real estate anyway? Why did you not sell all your holdings in 1999 and 1991?

  • On 16 Oct 2014 in As predicted here it comes..., Reality said:

    Strategist says

    Most of the stuff Walmart sells is name brand that cost more elsewhere. Colgate toothpaste as an eg. I read 30% of all shampoo sold in the US is sold by Walmart. They manage to sell things cheap and still make a profit due to efficiency and sheer volume.

    Why should anyone care how much Walmart makes, as long as you save money by shopping there. Last year I even got my iphone 5s from Walmart and saved a bundle.

    The most powerful competitive edge Walmart had used to be their computerized inventory system, which was far more advanced than any of their brick-and-motar competitors. It literally could detect local consumer demand and stock the particular local store differently on the truck's route. Nowadays, Amazon might have an even more efficient inventory system; we shall see. Retailers live and die by the efficiency of their inventory system. I saw how disorganized Woolworth and Kmart shelves became, and shorted their stocks many years ago, with big pay-off's each time.

  • On 16 Oct 2014 in As predicted here it comes..., Reality said:

    Quigley says

    Behind every great fortune is a great crime. The most successful such criminals just rewrite the laws to suit their brand of villainy.

    Really? What great crime was involved in Apple's Fortune? or Sam Walton himself, who died before out-sourcing?

  • On 16 Oct 2014 in Iwog Idiocy Strikes Again, Reality said:

    Heraclitusstudent says

    The idea that you predict cycles of history ahead of time independently of what actually happens on the ground, independently of the mix of countries, independently of what authorities do, is akin to astrology. It's patently stupid.

    I do not predict cycles per se, but I'm aware there are cycle predictors and cycle-based arguments out there. As for their validity? IMHO, the longer cycles seem to have more validity, probably due to increased sampling size (events in the temporal domain having Gaussian distribution just like events in the spatial domain).

  • On 16 Oct 2014 in Iwog Idiocy Strikes Again, Reality said:

    gsr says

    What makes you think we will have secular bull market after 2017? Is there any particular reason?

    1. Demographic: the generation born between 1980 and 2000 is more numerous than the 1960-1980 generation, and even the baby boomer generation born between 1940 and 1960.

    2. Technological: there are several important technologies coming into play on the horizon, the most significant of which include self-driving cars. IMHO, that is even more important than the internet. The computer and internet revolution is similar to the invention of telegram and telephone, whereas the automaton mobility is aking to the automobile itself and railroad before that. There are also potentially significant breakthrough ahead in the energy sector; something akin to the harnessing of coal, electricity and petroleum. These are potentially more significant innovations than the internet itself.

    3. Cyclical: it will be 17 years of bear market since the late 1999 / early 2000 market peak (in real terms), just like the 17 year bull market (in real terms) from 1982 to the 1999/2000 peak. Unless we have a war to make the cycle extended in length, 34 years is about right for a full cycle. That means, between now and 2017, we get a harsh bear market (in real terms) wash-out. 20-25% down will be under-statement of the severity of the down-turn. What will come out ahead after 2017 may not be the current leading businesses.

  • On 15 Oct 2014 in Financial woes for renters, Reality said:

    thunderlips11 says

    There's a line of thought that home prices exploded - not just in the US but Canada, UK, and Australia - when all the governments decided to stop building or subsidizing modest housing units in cities and inner suburbs sometime in the 70s. Developers returned to the good old days of building nofrills apartment complexes for rental income on one hand, and McMansions on the other with nothing inbetween.

    McMansions and large condo/apartment complexes are more efficient use of "land." By "land" I do not mean just any spread of open space, but the limited amount that is available for current use due to the high cost of infrastructure, commute time and limitation imposed by density codes (lot size requirement).

  • On 15 Oct 2014 in Iwog Idiocy Strikes Again, Reality said:

    Well, it is time for registering Iwog's Idiocy again as she deleted my posts in her thread:

    Item #1:

    Iwog apparently doesn't understand what Kondratieff Cycle is, and thought it was some kind of Austrian School of thought. Kondratieff was a Russian economist working on historical commodity price cycles. Iwog criticized Kondratieff Cycle by pointing out that the stock market is "near historical high" whereas Kondratieff predicted starting around year 2000 the gold price for stocks should be going down. Well, in early 2000, the DJIA to gold ratio was 40+, now it's standing at around 13. Not sure what current "historical high" Iwog was talking. She obviously doesn't understand Kondratieff Cycle either.

    Item #2 she deleted:

    While Iwog has been beating his chest about his prediction of 2017 mega doom, I do not agree with that. My view is that we are on track for some major correction between now and 2017. After 2017, however, the economy and markets will be in a secular bull market after 17 years of bear market since the year 2000.

  • On 15 Oct 2014 in Iwog Idiocy Strikes Again, Reality said:

    tatupu70 says

    Reality says

    Those closer to the money printing (the cronies) get the newly printed money

    first, and therefore achieve greater purchasing power at the expense of those

    who get the money later.

    Bullshit. Please explain in detail exactly how cronies and "those closer to the money printing get the money first. I want the exact mechanism.

    New money is created primarily via fractional reserve lending. Those who enjoy the backing from "lender of last resort" transfering risks to others at gun point can fractional reserve multiply money much more aggressively than they should be able to under a real free market place. It's just as if they had a counterfeit machine in their own possession.

  • On 15 Oct 2014 in The implications of being right about stocks, Reality said:

    iwog says

    indigenous says

    This also from ZH seems quite precient

    Right......because we all know that after the year 2000, stocks fell and are now near multi-generational lows.

    This is the kind of nonsense that you are famous for. It's why no one takes you seriously.

    You are once again showing your ignorance. Kondratieff Cycles work off asset price to commodity price ratio, not nominal asset prices. Kondratief's initial work was actually based largely off commodity price cycles. There has been some argument over whether Kondratieff cycles cause wars or war cycles produce Kondratieff cycles.

  • On 15 Oct 2014 in The Final Cable death knell, Reality said:

    Now if they can make Wifi routers that don't crash when streaming two HD video streams and an Xbox at the same time.

  • On 14 Oct 2014 in Vote: is it Iwog or is it Indigenous or 'Call it Crazy', Reality said:

    Heraclitusstudent says

    In a fiat money system, the government doesn't manage its debt like a family or a company.

    In a fiat money system, the government can create money, inject it where it wants in the economy, when it wants to. And this money is not lost as it is there in the economy. The government can then take back this money as taxation at will.

    You people need to understand this:

    More government debt means there is more cash in private hands.

    --------------------------------------------------------------------------

    What you think of as your hard won cash, was in fact won a lot more easily BECAUSE of the government deficit. Don't bitch about paying taxes. The money is just going back from whence it came.

    Let's not forget: with interest added.

    In the long run, government spending and borrowing is deflationary! Just like relying on Payday loans actually reduces one's living standards, simply because a new class of consumers, the bankster lenders, have to be sustained on that same original productivity. Sure, the moment you borrowed from the payday loan shark, you have more money in your pocket, but over a month-long full debt cycle, you have less money to spend on yourself, not more.

    It's not a special burden on future generations, provided the people who have the money are the one paying the taxes.

    Of course it is not. The ones have the money and the ones who will be paying the taxes to repay the loans are not even in the same generation.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    You think that somehow digging for money is better than bankruptcy writing off bad debts?

    Straw Man. Did not say that - compared your idea that mal-investment is still economic activity to Keynes' idea of spending for the sake of spending in a recession.

    Mal-investment is waste, as is spending for the sake of spending.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    Hoover started the Great Depression by preventing the market from clearing

    You're kidding, right? Treasury Secretary Mellon said to Hoover, "Liquidate** Everything... liquidate businesses, liquidate workers, liquidate Aunt Jemima, etc. etc."

    And Hoover refused to take Mellon's advice.

    Hoover instead had sit downs with large companies and tried to get them not to fire anybody or cut wages.

    That's literally it. That was the extent of Hoover's interference with "Clearing the Markets".

    Your ignorance on the subject is putting you in a position bordering on lying. Read FDR's platform in the 1932 election. Hoover had an "albphabetical soup of government committees" trying to hold up prices, and thereby preventing bad debts from being liquidated and the market from clearing.

    If he did anything beyond that, it sure didn't work. Wages fell and unemployment exploded.

    Of course it would not work. Just like such policies are not working this time around either. When mal-investments are discovered and market readjustments have to be made, you can let the market correction take place quickly, or you can intervene and slow it down to a pace like pulling the bandage off one hair at a time and really exacerbate the pain.

    ** Also a popular euphemism for "Murder"

    The choice is between killing the bad business vs. killing the actually flesh and blood people in terms of their time and savings to be burned to be sacrificed to sustain the bad businesses. Which one do you kill? By all logic and moral standards it should the businesses that caused the problems, but the crony lobby spins killing people to save bad businesses into some kind of heroic endeavor.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    Hoover started the Great Depression by preventing the market from clearing

    You're kidding, right? Treasury Secretary Mellon said to Hoover, "Liquidate** Everything... liquidate businesses, liquidate workers, liquidate Aunt Jemima, etc. etc."

    And Hoover refused to take Mellon's advice.

    Hoover instead had sit downs with large companies and tried to get them not to fire anybody or cut wages.

    That's literally it. That was the extent of Hoover's interference with "Clearing the Markets".

    Your ignorance on the subject is putting you in a position bordering on lying. Read FDR's platform in the 1932 election. Hoover had an "albphabetical soup of government committees" trying to hold up prices, and thereby preventing bad debts from being liquidated and the market from clearing.

    If he did anything beyond that, it sure didn't work. Wages fell and unemployment exploded.

    Of course it would not work. Just like such policies are not working this time around either. When mal-investments are discovered and market readjustments have to be made, you can let the market correction take place quickly, or you can intervene and slow it down to a pace like pulling the bandage off one hair at a time and really exacerbate the pain.

    ** Also a popular euphemism for "Murder"

    The choice is between killing the bad business vs. killing the actual flesh and blood people in terms of their time and savings to be burned to be sacrificed to sustain the bad businesses. Which one do you kill?

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    No matter how much the Right tries to spin, they can never get away from the fact that the US at it's most Social Democrat had the greatest expansion in the standard of living, ever.

    Nonsense. The fastest improvement in living standards took place in the late 19th century and early 20th century, the Guilded Age. The US was far from Social Democratic during that time; in fact, any social democrats arriving from Europe were treated as communists and "anarchists" like we treat Jihadis today.

    The only time period since 1980 where there was actual upward wage pressure was the late 90s - and businesses quickly lobbied government to whip out those H1-Bs ASAP!

    Why should it be a surprise that businesses would lobby a nexus of political power? Do you let your tenant pass their apartment to their relative when you know you can get substantially more in the market place? Do you let your tenant live in your property for free? If you do not run your business as a charity, why should anyone else be expected to?

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says


    , instead of trying to rip each other off.

    S&L Crisis, Pets.com, the LTCM bailout?

    Pets.com did go bankrupt, and that's how capitalistic price discovery works: resources get re-allocated from incompetents to those who can do better. As for the bailouts, those were crony projects advocated by Keynesian FED apologists like yourself.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says


    After Keynesianism gave way to Friedmanites in the late 1970's, we had two decades of prosperity, through the year 2000, and the economy went through virtuous cycles as people endeavor to be more productive, instead of trying to rip each other off.

    Two decades of a credit expansion... culminating in two massive bubbles where the government had to rescue the Die Hard Free Marketeers with trillions of dollars.

    Things looked great in the 20s, too. Lots of credit expansion, also.

    It was the "weakest" recovery in Post War History.

    The government did not have to "rescue" anyone. It was the interventionists like yourself who advocated government stepping in to rescue the cronies, at the expense of the rest of the society.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    Mal-investment is also a form of consumption, whether by private sector or by public sector coercive choice.

    This sounds very Keynesian. Like dropping money from a helicopter, or burying money just to create economic activity by having people dig for it.

    LOL. You think that somehow digging for money is better than bankruptcy writing off bad debts? You are so buried in consumption-mindedness that you failed to recognize: consumption is no different from investment gone bad! Your advocacy for consumption is essentially advocating for bad investments!

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    It was when the nice people banks and factories ran some calculations and said "Schucks, we can pay workers more." and did so out of the goodness of their hearts.

    No Great Depression and massive labor unrest had anything to do with it. Hoover had the situation in hand! Especially once he had MacArthur and Patton run down all the WW1 Veterans.

    Hoover started the Great Depression by preventing the market from clearing. FDR ran on a platform of abolishing Hoover's myriads of government committees that were designed to keep prices up . . . then he continued and exacerbated Hoover's programs after being elected. Just like the W and Obama 1-2 punch. The Great Depression and the Great Recession are not co-incidences.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    . As for Democracy, depending on what you mean by it. Majority/Mob rule is just a process for a prosperous people to destroy themselves.

    Well, the Soviet Union and China and Saudi Arabia have no free voting, no universal suffrage.

    Sweden, Norway, and Iceland, on the other hand...

    A regime can persist only by majority consent. Saudi Arabian regime certainly has majority consent for most of its policies. The Soviet Union and China always had rubber-stamping elections, resulting in near-100% approval rating. LOL. Even Stalin always had to live by a majority in the Politburo; he just killed off those in the minority at each turn.

    The key to a functional and prosperous society is preserving the rights of the political minority, not majority rule.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    We have prosperity because striking workers, who lived horrible lives of back breaking toil, struck and struck and struck,

    This is complete utter hogwash. Massive numbers of economic immigrants came to the US from Europe during the Guilded Age. Those were people who left behind the proto welfare-state inaugerated by Bismarck so they could start a new life in America, the land of the free: free to toil and make something of yourself for a change! It's silly to think striking could bring prosperity; the Communists among European immigrants were the late 19th century equivalent of today's Jihadis!

    and Capitalism faced a huge crisis of underconsumption - much like today.

    No it does not. Mal-investment is also a form of consumption, whether by private sector or by public sector coercive choice.

    With police getting beaten and the economy tanking, the rich panicked and listened to Keynes.

    Nonsense. Keynesian policies were implemented before Keynes wrote the book. Keynes only provided an intellectual cover for what was already being done in Soviet Union, Italy, Japan, and Nazi Germany: fascism! All those countries went down the road of massive government spending to induce make-belief employment in the 1920's and early 1930's. Keynes did not have his book ("General Theory") until 1936!

    It's no surprise that as Keynes has been supplanted by Friedman, life is starting to suck again.

    After Keynesianism gave way to Friedmanites in the late 1970's, we had two decades of prosperity, through the year 2000, and the economy went through virtuous cycles as people endeavor to be more productive, instead of trying to rip each other off.

    The rich need a solid beating now and again, when they get uppity, so everyone can prosper.

    LOL. When the ethos is about ripping each other off, it just means the vicious cycles have to continue a little longer, and life has to continue suck for a while until morons give up on trying to make others' lives worse in hopes of making their own better.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Reality says

    That's why communism/socialism/central-planning (central banking is one of the 10 planks proposed in the Communist Manifesto by Karl Marx) is just slavery dressed up in fancy words: owner privileges at the expense of the vast slaves.

    Oh? Look to the left of North Korea. It sure doesn't look dim there.

    Which goes to show that Capitalism != Democracy.

    Chinese economy used to be worse than that of the North Korea only 35 years ago. It was the capitalistic free market liberalization process that brought that country into a modicum of prosperity. As for Democracy, depending on what you mean by it. Majority/Mob rule is just a process for a prosperous people to destroy themselves.

    Karl Marx may have been correct in observing that recorded human societal history consisted of 3 phases: slavery, feudalism and capitalism. His apocryphal "primitive communism" before slavery and post-capitalism social-communism may well be non-existential (i.e. before birth and after death for each individual, all are equal). Human society may well just cycle through the 3 phases: slavery, feudalism and capitalism. "Socialist" and "Communist" may just be tricky ways of introducing slavery to a formerly free people.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    See above. I explained how increasingly, landlords are faceless investment trusts, rather than local well-to-do.

    That's the result of central planning of money. How is this significantly different from mortgage payment to far away big banks?

    Money goes out, does not necessarily come back, except in the form of more bids on more housing stock.

    That is not correct. What the central banking cabal and their cronies want is not money per se (which they can print) but the fruits of labor from the economic periphery.

    Furthermore, instead of Joe Sixpack having an asset where his actual job is, he's got to schlep miles away.

    Renting actually provides better mobility than owning.

    Since 3% yields suck anyway, it's better to have a resident owner that cares instead of increasingly absentee landlords that are number crunchers that don't give a shit.

    Are you talking about local landlords vs. big banks? In that case I agree with you. Many home debtors however have proved themselves incapable of taking care of the houses. It seems to me that only about 60% of the population are capable of taking good care of their houses. The other 40% need to be housed somehow.

    Bad for the economy, the environment, and certainly the trade deficit.

    When you fill up your car, you fill up ISIS' coffers.

    ISIS is just another leg of the Petro-Dollar Complex. The US is rapidly becoming the largest oil producer in the world.

  • On 14 Oct 2014 in Wealth Inequality destroys Societies, Reality said:

    thunderlips11 says

    Wouldn't it be funny if ordinary Schmcuks got the Bankster treatment from Politicians?

    That's why communism/socialism/central-planning (central banking is one of the 10 planks proposed in the Communist Manifesto by Karl Marx) is just slavery dressed up in fancy words: owner privileges at the expense of the vast slaves.

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