patrick.net

I also saw the movie, thought it was excellent. For members of Patnet who came here/are here for the housing crisis (that was sort of the original reason this blog came into being) I would rate the movie a must see. Good acting, good script and something that gives you reason to pause at the end of the movie.

indigenous says

gives you reason to pause at the end of the movie

What was that?

indigenous says

indigenous says

gives you reason to pause at the end of the movie

What was that?

Basically it said the fund manager ONLY deals with stocks (or some financial thing) having to do with water. AND it said that derivatives are back but now they are being called tranches. When you look up tranches, they are a little different than derivatives but be warned.

Yeah I remember that Burry was invested mostly in water companies.

It was a nice movie. I'm willing to bet they are now betting on the housing market going up.

I bet not, as Logan had stated the current mortgages are solid.

The next crisis will be in currency.

No, it is simple my fine feathered friend, the debt service is now what 400 billion a year at what zero interest, when that interest goes up to ?, the debt service eclipses the budget.

Now you say they will just keep the interest rate at zero.

But when inflation rears it's ugly head they has to raise the interest rate or risk skyrocketing inflation.

That will be the crises.

Yea I know but it is fun to piss off the Wogster and Bobby.

That was a good point they made in the movie about the AAA tranches.

I still contend that the easy loan culture was extended to other than the subprime.

Inflation has two necessary parts. An increase in the money supply and an increase in demand.

We are lacking in the the latter because of demographics.

indigenous says

We are lacking in the the latter because of demographics.

It's not demographics. It's inequality.

Ah no. The wealth inequality that we do have is because of inflation through QE and ZIRP.

The inflation from demographics is down the road a bit.

indigenous says

Ah no. The wealth inequality that we do have is because of inflation through QE and ZIRP

Really? Here's a chart of inequality. Please show me the QE and ZIRP that were occurring in the 70s and 80s.

And here's a chart of monetary velocity which explains why there is no inflation

It's pretty clear that there is a strong inverse relationship between inequality and velocity. That is--velocity decreases and inequality increases. Which shows why there's no inflation.

tatupu70 says

Really? Here's a chart of inequality. Please show me the QE and ZIRP that were occurring in the 70s and 80s.

Sactly my point.

tatupu70 says

It's pretty clear that there is a strong inverse relationship between inequality and velocity. That is--velocity decreases and inequality increases. Which shows why there's no inflation.

The velocity is because of low demand. The inequality is because of inflation in RE and the stock market.

indigenous says

tatupu70 says

Really? Here's a chart of inequality. Please show me the QE and ZIRP that were occurring in the 70s and 80s.

Sactly my point

So, your point was that inequality was rising just as fast in the late 70s and 80s as it is now despite no QE or ZIRP? Interesting. So, you agree that QE and ZIRP aren't the cause then?

indigenous says

The velocity is because of low demand. The inequality is because of inflation in RE and the stock market.

The velocity is because of low demand. But, the low demand is because all the wealth is in the hands of 1% of the people. 99% of the people have little money and therefore, little demand.

tatupu70 says

Really? Here's a chart of inequality. Please show me the QE and ZIRP that were occurring in the 70s and 80s.

Tatupu, If millionaires make 10% more, the poor make 5% more, and inflation is at 2%, the inequality increases but the poor are still better off.

tatupu70 says

So, your point was that inequality was rising just as fast in the late 70s and 80s as it is now despite no QE or ZIRP? Interesting. So, you agree that QE and ZIRP aren't the cause then?

That is not what your chart indicates.

Notice how it looks similar to the late 20s ?

indigenous says

That is not what your chart indicates.

Notice how it looks similar to the late 20s ?

Of course it does. Around 1980 there was a sharp change in inequality. The trend has been fairly constant since then. Whatever happened to cause inequality to rise, happened in 1980ish.

Inequality is similar to what was experienced in the late 1920s right before the crash and depression. I fear we are headed for a repeat.

tatupu70 says

Strategist says

Tatupu, If millionaires make 10% more, the poor make 5% more, and inflation is at 2%, the inequality increases but the poor are still better off.

Perhaps, but unfortunately, that's not what is happening. Here are the real stats:

WTF. Tatupu, you proved my claim. The bottom fifth is still better off even though the top 1% saw the largest increase.

Strategist says

Tatupu, If millionaires make 10% more, the poor make 5% more, and inflation is at 2%, the inequality increases but the poor are still better off.

Unfortunately, that's not how real life has been in the US.

Strategist says

WTF. Tatupu, you proved my claim. The bottom fifth is still better off even though the top 1% saw the largest increase.

Yep--I found a better chart for you.

tatupu70 says

Unfortunately, that's not how real life has been in the US.

WTF round 2.
Another graph showing the same thing. Finish your coffee.

Strategist says

WTF round 2.

Another graph showing the same thing. Finish your coffee.

Except it's not 10% to 5%. It's more like 20% to 1%. If you think that's OK, then you don't know how an economy works.

tatupu70 says

Strategist says

WTF round 2.


Another graph showing the same thing. Finish your coffee.

Except it's not 10% to 5%. It's more like 20% to 1%. If you think that's OK, then you don't know how an economy works.

I am more concerned with how much Strategist, an average man makes. Not how much the rich make. So should Tatupu.

Strategist says

I am more concerned with how much Strategist, an average man makes. Not how much the rich make. So should Tatupu.

That's because you're thinking selfishly. I'm worried about the US economy and all US citizens. It's no coincidence that the last time the country reached wealth disparity like we have now, it went into the worst depression in history.

tatupu70 says

Strategist says

I am more concerned with how much Strategist, an average man makes. Not how much the rich make. So should Tatupu.

That's because you're thinking selfishly. I'm worried about the US economy and all US citizens. It's no coincidence that the last time the country reached wealth disparity like we have now, it went into the worst depression in history.

I would only worry about wealth disparity when the poor have less and less, while the rich have more and more. Today, we have the poor who have more, and the rich who have more and more.
In other words.....it's time to worry when "they have no bread", not when they are over weight.

Strategist says

I would only worry about wealth disparity when the poor have less and less, while the rich have more and more. Today, we have the poor who have more, and the rich who have more and more.

People exist from the bottom quintile almost as fast as they exit the top quintile.

Strategist says

Notice the inflection starting at 1971

indigenous says

Notice the inflection starting at 1971

No. Looks like around late 70s/early 80s to me.

The mythical liquidity trap?

tatupu70 says

No. Looks like around late 70s/early 80s to me.

Where does the top 5% no longer parallel the bottom 4 quintiles?

The real Short is that my dollar is $0.96 less than 1913?

HEY YOU says

The real Short is that my dollar is $0.96 less than 1913?

Who cares? Real incomes are up dramatically since 1913.

tatupu70 says

Who cares? Real incomes are up dramatically since 1913.

It is about the margins. There is a lag time involved with the Cantillon effect that greatly benefits the top .01%

HEY YOU says

The real Short is that my dollar is $0.96 less than 1913?

Seems hard to short the reserve currency of the world, but if the BRICS ever gets established it would be a very good bet.

" Real incomes are up dramatically since 1913."
I'm glad everyone is receiving more fiat currency.

New paper is worth more than that heavy gold & silver
bought,cheap,many years ago.

HEY YOU says

I'm glad everyone is receiving more fiat currency.

Do you know what "real" income means?

indigenous says

It is about the margins. There is a lag time involved with the Cantillon effect that greatly benefits the top .01%

No there isn't.

tatupu70 says

No there isn't.

yes there is

I have the book on my Kindle. A great read.