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A treasury bubble makes about as much sense as a cash bubble.

Cash bubble is the same as hyperinflation?

As Tech Job Cuts Mount, Layoff Rumors Pervade The Valley
Posted by Eric Savitz

When the Internet and telecom bubble burst, Silicon Valley jobs evaporated: by 2005, California’s Santa Clara County - which includes San Jose, Palo Alto, Cupertino, Mountain View and other tech-focused towns - had given up more than 20% of its total job base, a loss of over 200,000 jobs. So how bad will it get this time around?

http://news.cnet.com/In-Silicon-Valley,-help-not-wanted/2008-1022_3-5571238.html

Chordiant Software, the Cupertino company that last month slashed the forecast for its fiscal fourth quarter by a third and said it would lay off 33 employees, or about 13 percent of its workforce, said Tuesday that its board approved payment of "special cash bonuses for outstanding performance during the 2008 fiscal year" as a "retentive tool."

Chordiant's chief executive, Steven Springsteel, is set to get an extra $100,000 distributed over the next four quarters. He won't be getting a raise next year but will have to make do with the same $550,000 salary he was paid in 2008.

The day before that, Maxygen, the Redwood City biopharmaceutical company that said last month it would cut 30 percent of its staff during the first quarter of 2009 "in order to preserve cash," filed details about bonuses being paid to its top officers, including $200,000 for its CEO, Russell Howard.

Eighty percent of their bonuses were to be based on company performance while the remaining 20 percent would be distributed at the board's discretion. Evidently, the performance goals weren't entirely met. Based on the performance targets set up, only "a portion of the achievement of certain corporate objectives" was paid, while the "full amount of the discretionary component" was approved.

The board also used its "discretionary authority" to give even more extra bonus money to its CEO and chief business officer, "to recognize their contributions to the achievement of corporate objectives that were not included in the previously established goals."

“retentive tool.”, indeed

Friedman, Billings, Ramsey & Co. analyst Craig Berger wrote in a note to clients that "recent industry checks" suggest that Santa Clara, Calif.-based Intel is preparing a large work force reduction that could be as high as 8,300 employees, or 10 percent of its global staff.

Intel's last major round of cutbacks came in 2006, when about 10,500 jobs were eliminated as smaller rival Advanced Micro Devices Inc. was stealing market share and cutting deeply into Intel's profits in a bruising price war.

Berger said Intel could save $1 billion a year from a new restructuring and by reducing or eliminating some raises and bonuses because of the company's performance.

An Intel spokesman declined to comment.

Liz Perkins, 24 and the mother of four young children in Colorado Springs, began looking for work in October after she learned that her husband, James, was about to lose his job at a bed-making factory.

But the jobs she found either did not pay enough to cover child care or required her to work overnight. “I can’t do overnight work with four children,” she said. She has since stopped looking for work.

The family has paid its bills by dipping into its savings and borrowing money from relatives. But Ms. Perkins said that unless her husband found a job in the next three months, she feared the family would become homeless.

Cash bubble is the same as hyperinflation?

Hah, actually deflation could be considered a cash bubble.

Hyperinflation is hyperinflation. No bubble to see there.

“The real problem with deflation is the lack of jobs, so a direct hire approach beats the print to prosperity method.”

That didn’t work in Japan. You can’t spend yourself to prosperity.

What I meant by that is if the gov wants to throw money at the problem, a "jobs program" would be better than a "stimulus" handout.

You do not believe that the Great Depression was ended by WWII and the GI Bill? That may be an example of how spending on jobs and production ended a severe economic downturn. Of course, I'd rather see a space program and infrastructure bulidup, and not a major war, powering an economic recovery.

O.T., but interesting non the less.

Check your seldom used credit cards. My wife received a letter from one of her card issuers stating that her card had been cancelled due to non use. It was still in her purse, but it was no good for a month before she got the letter. I have a card from the same company, had it for eighteen years, never a late payment. It's due to expire soon and I hadn't received my replacement card, so I called. Much to my surprise they said, "Due to lack of use, we are closing your account." I just used the thing two weeks ago to pay my Spring tuition. Granted, it was the first time I used the card in two years, but shit, give people a heads up. It gets better. My better half is talking to her Mom and mentions the incident. Mom has a card from the same issuer, and yup, you guessed it, cancelled. No notice or warning whatsoever, yet.
If any of you have those emergency cards you stash in your wallet and hardly ever use, check them.
Incidently, this company took billions of our tax dollars and still pulled shit like this.

"Obama banking on large scale public works projects"

http://news.yahoo.com/s/ap/20081207/ap_on_bi_ge/obama_economy

I like this! Spend a trillion dollars or so making every federal building energy-efficient. Helps the economy now and saves money in the future.

The president-elect's address never once used the word "spend," relying instead on "invest" or "investments," and pledging wise stewardship of taxpayer money in upgrading roads and schools, and making public buildings more energy-efficient.

"We won't just throw money at the problem," Obama said. "We'll measure progress by the reforms we make and the results we achieve — by the jobs we create, by the energy we save, by whether America is more competitive in the world."

Obama said his plan would employ millions of people by "making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s." He said state officials would lose the federal dollars if they did not quickly

Gold is experiencing downward pressures like most commodities. Supply is appearing again. Take a look at Kitco.com. Three weeks ago the cupboard was bare - I mean bare. Now they've got just about everything available. My local coin shop has gold and siver eagles again. People will unload more bullion as spot and futures fall. Yes, the premium you pay for physical is still high, but that will ease too. Gold was at $1002 in March 08. Gold was over $850 most of the year until the wild gyrations at the end of summer. Spot is $754 today. 25 percent down from the top. Is that a how a great investment performs? I'll be surprized if it stays above $500 for long.

My humble opinion, but not investment advice.

"I like this! Spend a trillion dollars or so making every federal building energy-efficient."

I like it too. Better than just throwing money away with bailouts. But it is still not a solution. Japan's government spent billions on public works trying to defeat deflation. It didn't work for them, it won't work for us. You can't spend your way to prosperity.

Unalloyed, agree that gold may see more downside in the short term and little upside thereafter until monetary inflation returns. Unfortunately for some of the gold bugs on this blog, this probably won't happen for several years.

What I meant by that is if the gov wants to throw money at the problem, a “jobs program” would be better than a “stimulus” handout.

Absolutely, from the point of view that we (the taxpayers) will at least get new roads and bridges for our money.

I like it too. Better than just throwing money away with bailouts. But it is still not a solution. Japan’s government spent billions on public works trying to defeat deflation. It didn’t work for them, it won’t work for us. You can’t spend your way to prosperity.

Depends how you define *work* I guess.

Stability and sustainability are a higher priority than prosperity, in my opinion.

Edit: I higher priority given the potentially catastrophic alternatives.

When I just came to the U.S., I didn't know the word "mortgage" and "credit", seriously. Four years later, I argued with my professor that we shouldn't use credit cards, she laughed at me.

"Depends how you define *work* I guess."

In this context, inflation or a reversal of deflation.

What was stabilizing or sustainable about Japan's public works program?

What was stabilizing or sustainable about Japan’s public works program?

Well, there weren't riots in the streets for one.

I think the lesson here is that no country can grow forever. Sooner or later you get over-leveraged and the whole thing comes crashing down.

Well, there weren’t riots in the streets for one.

I think deflation had more to do with that than the public works program.

SP @ December 5th, 2008 at 11:10 pm:
Tulving? Is there a local dealer who can handle such a transaction?

If you're buying in quantities like that, you might want to look into LBMA Good Delivery bars. If I had millions in USD to convert to physical gold, I would go to a refiner and buy LBMA bars off them direct. Don't take delivery on a futures contract, the overhead charges are usually not worth the speculative bother (unless you know the gold languishing period we are in right now is about to vaporize).

On the other hand, if you only want up to 2-300 troy ounces, in a format that is retail-friendly, then yeah, Tulving is as good a place as any to get gold coins, small bars, and kilo bars. Be certain what your purpose for the gold is, whether it is for conversion inside or outside the epicenter of a financial crisis. As one Argentinean blogger found out, gold rings were a better format than gold coins after the Argentinean peso devalued, if one was trying to convert the gold inside Argentina for currency. It turned out that jewelry stores were almost the only ones accepting gold in the aftermath of the devaluation, certainly the only widespread establishments. However, counterfeiting was such a problem that they simply treated all gold items with the same junk plating status, offering very low exchange rates per ounce. People who had crap gold jewelry were treated the same as people coming in with solid gold coins.

Of course, Argentineans who were able to leave the nation, then exchange physical gold outside of Argentina for harder currency, or simply tap harder currency accounts outside of Argentina to bring back into the country, fared much, much better than the average citizen. There were very, very few who were perspicacious enough to set that up ahead of time, though.

Boomer alert! ;)

www.pbs.org/boomercentury

PBS has a new documentary about how great the boomers are. It airs tonight on most PBS stations. I'm sure that surfer-exlax will want to tune in. :)

Boomers are neither good nor bad. They are just what they are. We are all part of the invisible hand.

We are all part of the invisible hand

Well, I wish that "invisible hand" would give Barney Frank a good smack. He is the main pud responsible for the housing runnup and subsequent correction, yet now he is heralded as the hero taking charge to save us all. Yep, do it all with bailouts (strings attached), stern words, and calls for regulations of the type he vigorously opposed for Fannie/Freddie.

Headset,

I do not agree. FNM and FRE originated precious few subprime mortgages. Those were the invention of Wall St and the private enterprise system.

There is a HUGE concerted effort going on by the right wing to try and pin the blame of the housing bubble on the democrats. It is having some success in doing so, but it is totally wrong.

The blame belongs with deregulating false-prophet "free-market" Republicans, Alan Greenspan, Wall St, Banksters, REIC and greedy Americans that thought they could make a killing by squeezing their fellow citizens and pricing them out of the housing market forever. End of story.

@apostasy, thanks for the info.

justme Says:
There is a HUGE concerted effort going on by the right wing to try and pin the blame of the housing bubble on the democrats.

Who the NSFW cares! These distinctions - rightwing, leftwing, batwing - are meaningless. There are crooks and thieves on all sides: Paulson, Rubin, Gramm, Frank, the list goes on and on - they are all sphincters who have sold you out.

This was my summary from the finances portion of Boomer Century.

SP,

Well, I care, and you ought to care, too, for the best of our country.

Saying that "they are all the same" is doing our country a great disservice, and is partly the cause of the numbing down of the general public which allows patently horrible presidents such as George W. Bush to get elected under the guise of "he's the one you'd rather have a beer with, besides he'll cut your taxes".

I for one will not stand for that type of political manipulation, and I hope that one second thought, you will not either. Teaching the general public to be cynical to an unwarranted degree is very bad for democracy.

Here is an example of how political discourse and action SHOULD be, as announced today:

Over the last eight years, there has consistently been no penalty for those who have gotten things - even the most important things - wrong, and no reward for those who have gotten things right. Call it Bush Darwinism: survival of the unfittest. Over the weekend, Barack Obama made an encouraging move to reverse that unintelligent design by appointing Eric Shinseki to head the VA. By making a deliberate effort to reward Those Who Got It Right, Obama not only sends a message that the days of Bush Darwinism are over, he makes it far more likely that the next Eric Shinseki will be willing to step forward and speak up.

From:

http://www.huffingtonpost.com/arianna-huffington/rewarding-those-who-got-i_b_149388.html

***

I notice a real difference here -- how about you?

I have to admit that trying to blame poor people for rich people putting them in loans they could never afford to pay back is pretty evil.

Especially since richer people bought swaps on their securitized mortgages and made record hedge fund profits last year.

By the way, to save you reading the link:

Eric Shinseki is the general that spoke up, in 2003, about needing several hundred thousand troops to prevent post-battle violence in Iraq. He was rewarded by being forced into early retirement by Bush via Rumsfeld.

Poetic justice is back in fashion, and it is about time.

Evil Republicans huh?

http://www.reuters.com/article/topNews/idUSWAT01061220081209

I have to admit that trying to blame poor people for rich people putting them in loans they could never afford to pay back is pretty evil.

I do not blame poorer people. But perhaps they should blame themselves for getting into loans that they could never repay.

Come on. It was a no-brainer. When something looks too good to be true for so many people, it IS.

Yeah, but who should the better? The borrower or the lender?

Especially since many/most of the subprime 'victims' were first timers.

The banks should have known better. Its their job too.

Yeah, but who should the better? The borrower or the lender?

There is no better or worse. A borrower or the lender is just who they are.

The lenders should be ashamed though. Let them eat cake.

Yes, Peter, systematically evil Republicans compared with ONE corrupt democrat jerk.

Why don't you post some links about Ted Stevens instead.

Kewp,

Agreed, some of the very last people to get on the housing bubble before it burst was the poorest of the poor, including semi-migrant farmworkers in California trying to get a piece of the american dream before it was too late (as in "...or be priced out forever").

They made a mistake, but they sure as heck did not createt the bubble..

A study of all past bubbles should reveal that they have all been creations of mass psychology.

http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/051788433X