patrick.net

Fisk says

I was born in Russia, and the ~22,000 mile (not 2,000 mile) borders of the Soviet bloc (aka the “iron curtain”), including those over high deserts, seas and lakes, wild arctic, and 20,000-ft. mountains were sealed essentially perfectly at a rather modest cost even with the technology of 1950-s and 60-s: anti-personnel mines, triggered shooting devices, high-voltage fences, anti-vehicle ditches, man traps, and patrolling helicopter gunships with shoot-on-sight orders. With all the satellite photography, electronic sensors, cameras, networks, and night vision systems, sure US can do at least as well.

The thing is--no one wanted to get into the Soviet Union. It would have been perfectly sealed with no defenses...

Most countries have tight border security to keep people IN, not out. Nobody is sneaking into Cuba or North Korea.

> The thing is–no one wanted to get into the Soviet Union. It would have been perfectly
> sealed with no defenses.

Of course.
But a lot of people strived to get out even more than Mexicans do to get in here.
Trust me on that.

Fisk says

> The thing is–no one wanted to get into the Soviet Union. It would have been perfectly
> sealed with no defenses.
Of course.
But a lot of people strived to get out even more than Mexicans do to get in here.
Trust me on that.

You are right. I'm sure the immigration problem would be reduced if we started shooting Mexicans as they tried to cross the border. But, isn't it easier just to start enforcing the laws against the companies that hire the illegals?

Not every thread turns into a shouting match - but when they start with a challenge against a particular poster what do you expect?

> But, isn’t it easier just to start enforcing the laws against the companies that hire the
> illegals?

The scale of the problem is now such that the only workable solution is "all of the above":

1. Forceful border protection using military-like means
2. Frequent, ubiquitous raids and random document checks in the workplace, schools, public transportation, roads, public and commercial venues
3. Firm enforcement against employers who hire illegals, on both corporate and personal/ executive level
4. Severe penalties on individuals who aid and abet illegals, including romantic partners, landlords, and family members.
5. Severest penalties on illegals themselves, including lengthy prison terms at hard labor and property confiscation. BTW, confiscation of "property derived from the proceeds of crime" is legal and quite common in the US, and essentially all property of illegals in the US falls under that.

For an example of "all of the above" (plus caning of illegals), see Singapore.

Just (3) could have worked some 50 yrs ago, but wouldn't today, in part because so many illegals and recent legal immigrants from same countries already in the US make for large ethnic communities where massive continuous demand exists for illegals as domestics, live-ins, brides, etc., and where many find relatives willing to provide support.

HousingWatcher says

Most countries have tight border security to keep people IN, not out. Nobody is sneaking into Cuba or North Korea.

you never heard of terrorists crossing borders into Isreal or Irish IRA crossing into British land. Frankly it is a similar problem in the Europe.

seaside says

You guys (in the clip I mean) can spend whole day blaming the government or whomever, or stop bitching and start doing whatever you can do.

haha. that's funny. you think people take any responsibility these days? haha.

mike4518 says

seaside says

You guys (in the clip I mean) can spend whole day blaming the government or whomever, or stop bitching and start doing whatever you can do.

haha. that’s funny. you think people take any responsibility these days? haha.

Damn, you're fast.
Yup, lack of responsibility, that's what brought them down, and that why I don't feel a shit for them.

E-man says

Try to look at the graph in a log scale. Click on the link below. I’m not smart to know whether it was bad policies or tax cuts, but the CMDEBT has doubled itself approximately every 10 years since 1950.

I'm no economist, but I think a lot of 20th century growth is tied to trade growth, productivity growth, and population growth -- all these factors allowing increasing earning power to leverage up CMDEBT in a virtuous cycle.

But the 1998-2007 period, I think, featured the game getting ahead of itself, and we started to use increasing debt leverage to boost the economy, instead of having the productive economy boost debt growth leverage.

Back out the $1T/yr mortgage growth of the housing boom of 2003-2006 and we wouldn't have exited the tech recession -- the home ATM was one helluva stimulus plan.

Looking at the above graph, it's my general impression that CMDEBT should have plateaud in 1999-2001 to give the economy a consolidation phase as the true impacts of integrating our economy much more closely with low-wage economies worked itself out. An honest debt level would be around $8T today.

Instead, the PTB pushed all throttles to the firewall in 2002 for some reason, and a $14T debt was the response we got.

It is true that CMDEBT doubled 1985-1995 and doubled again 1995-2005, but it was that third doubling from $10T to $20T by 2015 that turned out to be the tricky bit, I think because the leverage was coming from suicide lending and the greatest fool had finally been found in early 2007.

There were secular reasons for the debt double of 1985-1995 (baby boom hitting peak income years, falling interest rates) and 1995-2005 (ephemeral "productivity" gains of shifting production to China, dotcom stuff, near-ZIRP post 9/11). But both of those boosters of the previous two decades turned into drags I think in 2005 as the economy became overly concentrated on consumption and speculation and not actual production.

The 30yo boomer worker of 1985 turned a semi-retired 50 in 2005, and the accumulated two trillion of trade deficits with China succeeded in driving our manufacturing sector to near zero.

-- mfg share of private payrolls -- when you've liquidated your producers, you've essentially exported your inflation.

Yay! Finally a world series win for dear old SF!

So sad. I was too young to appreciate the A's third World Series win when I was living in the East Bay. I did have a Catfish Hunter card in my spokes though, so I was cool.

And now even though I officially live in SF Giants MLB-Designated Territory, I am too old to give a shit anymore.

The duck rocks. No one else on the planet can come up with more meaningless factoids presented with the most serious of gravity. It's great seeing a left winger dishing out right wingnut methods and tactics as opposed to the usual liberal whining about the big bad conservatives are picking on me. Post on duck.

Duck has all the qualities to be a successful politician.

Hitler was a pretty successful politician.

gameisrigged says

Hitler was a pretty successful politician.

..not so in the end.

That's one view, perhaps largely correct assuming the continuity of "business as usual" in America at the basic system level. That assumption and its consequent logics are actually unique to the history of US and several related Anglo nations (Canada, UK, Australia, NZ). The rest of the world, including Russia where I'm from, most of the continental Europe, South America, and essentially all Asia has a VERY different historical experience. (Really, the only non-Anglosax exception that comes to mind is Switzerland and may be Sweden.) Every generation, there were revolutions, wars, foreign occupations, wholesale defaults, hyperinflation episodes, and state collapses. Time and again, the ONLY people who have preserved (at least some of) their wealth and often expanded it were those who owned RE and managed to hang on to it through the time of troubles. Currency has become worthless, pensions were cancelled or inflated to zero real value, bonds and other debt was defaulted on, stocks were cancelled, businesses were nationalized or went bankrupt, exchanges were closed, gold was confiscated, lost, or became non-marketable. But RE did not, and increased value over time once stability returned. That has happened time and again, and makes core historical and psychological experience of people there, in a way most Americans have hard time grasping.

One consequence is that, as more immigrants from those countries come to the US, they import this bias to asset allocation and life strategies overall. Second, as the instability of US economic and political system appears to increase, and, in many ways, the US society and economic and social environment draw closer to the rest of the world, would the unique and heretofore unprecedented system stability of Anglosax nations endure?

bubblesitter says

gameisrigged says

Hitler was a pretty successful politician.

..not so in the end.

Hitler's signal political achievement was convincing the Centrist party to throw the SDP under the bus with the Enabling Act. Before and after that he wasn't really operating on the political plane.

bubblesitter says

gameisrigged says

Hitler was a pretty successful politician.

..not so in the end.

We haven't seen the end of this yet.

shrekgrinch says

No, I said that this is an ‘open’ forum (as opposed to censored,er…’moderated’) like most conservative forums are. Reading Comprehension 101 — try a refresher course some time.

Try Writing 101. What you wrote was:

Most conservative forums on the other hand are open, like these on Patrick.net are.

A REASONABLE person would interpret that to mean that Patrick.net is a conservative forum.

But, if you want to play the "we are only using the exact meaning of the words in the sentence" game, then you have read MY sentence incorrectly. I wrote, "This is a conservative forum?" Nowhere in that sentence do I claim that YOU said it was a conservative forum. I merely ask if it is. So either way we play it, you are incorrect.

I win!

gameisrigged says

bubblesitter says

gameisrigged says

Hitler was a pretty successful politician.

..not so in the end.

We haven’t seen the end of this yet.

Good one.

shrekgrinch says

gameisrigged says

REASONABLE person would interpret that to mean that Patrick.net is a conservative forum.

Uh, no. At least an EDUCATED & REASONABLE person would not, if they read the paragraphs preceding that sentence. It is called context.
And,I used the verb ‘are’ to link the adjective ‘open’ to define the subject, ‘most conservative forums’. The ‘like these on Patrick.net are’ was referencing the forums on Patrick as being ‘open, the adverb that part appeared after.
So, I know Writing 101.

Uh, sure, whatever you say there, Skippy.

I like pat explanations that every single up or down daily move of "the markets" can be explained by a single thing. It means nothing, but it keeps the peasants illusions alive.

People purchase & are qualified based on the monthly payment that they can afford, not the price of the house. This all works out fine for long-term (15+years) home ownership.

This isn't the market for speculators who plan to sell in the next 5-7 years, since undoubtedly, home prices will drop when interest rates increase (because, like I said above, people buy based on the monthly payment). All else being equal, if rates increase from 4.25% to 6.5%, prices of homes will drop 20% in order for the monthly payment to equalize. So, the government has inflated/stabilized home prices by 20% since the 2008 financial panic.

It's of course foolish to predict with certainty that interest rates will rise in the next 20 years...look at Japan and the 2% mortgage rates they've had for the past ~20 years.

This helps those who want to live in their homes long-term & those who wish to refinance to continue to live in their homes long-term.

Mark_LA says

People purchase & are qualified based on the monthly payment that they can afford, not the price of the house.

Not everyone.

shrekgrinch says

Mark_LA says

It’s of course foolish to predict with certainty that interest rates will rise in the next 20 years…look at Japan and the 2% mortgage rates they’ve had for the past ~20 years.

1) Actually, it is pretty damn valid to assume they’ll go up as hyperinflation is more and more likely with the Fed printing more Zimbabwean dollars to monetize government debt.
2) Even if hyperinflation doesn’t happen, these low interest rates are not sustainable if growth picks up again. House prices will tank when they do go up.
4) If the Fed was just monetizing mortgage debt like it did before, then at least we’d see direct drops in mortgage rates but that would be unsustainable over the long run.
5) We aren’t Japan.
This isn’t about ’saving’ the housing market. It’s about monetizing government debt Wiemar-style.

You really don't get it at all.

shrekgrinch says

It’s about monetizing government debt Wiemar-style.

You do realize the actual Weimar printing was in response to French occupation of the Ruhr and the ensuing general strikes that shut down 20-30% (SWAG) of the German productive economy right?

And that their hyperinflationary period was a brief interval in the 1920s, that was eventually addressed with new fiscal policies in late 1923?

Our problems are MUCH more similar to Japan's than Weimar Germany's.

WWI Postwar German problems came because they had too much money and not enough stuff.

We, on the other hand, have too much stuff and not enough money.

http://research.stlouisfed.org/fred2/series/TCU

1) Actually, it is pretty damn valid to assume they’ll go up as hyperinflation is more and more likely with the Fed printing more Zimbabwean dollars to monetize government debt.

Hyperinflation happens when people loose faith in a currency and no longer want to hold it. That is extremely far from what is happening now. People are hoarding dollars.

The Fed is not printing money in order to meet government spending needs. The treasury can borrow quite easily at low rates already. If the Fed were printing money because there was no other way to meet spending needs, then I'd agree with you. But again, this is extremely far from what is happening now.

I'm not expecting much from another $600B of long term treasury purchases. Rates are already quite low.

Until the Fed announces an inflation target of 2%, 3%, 4%, and pledges to do WHATEVER IT TAKES to achieve that, then I can only conclude that they are just going to accept credit deflation and high unemployment for the foreseeable future.

Our currency is really a credit based currency. The "Fiat" aspect of it, that the Fed is responsible for is really quite minor in comparison. There is over $50T in credit money, compared to a few trillion in fiat money.

Fiat money - a federal reserve note - is just a piece of paper backed debt. So is a treasury bill, or commercial paper issued by a company, or any other note.

There is nothing really special about a FRN from the Fed, except that it's the most safe and liquid. In fact the the trillions of dollars worth treasury bills and short term GSE debt is scarely distinguishable from a FRN. They are both stores of value, backed by the government, paying little or no interest.

I can hold a $100, or treasury bill that will pay me $100.03 in 3 months. Which would I rather have? I don't care, and nobody else does. They are almost exactly the same thing. This is what the zero bound means. The Fed could purchase all $1.7 Trillion of short term treasury bills, and it would do absolutely nothing because they are just exchanging one piece of paper for another that is it's functional equivalent.

Now watch as the Republicans only allow us to run a deficit of 1 trillion a year as the Democrats scream that reducing government spending doesn't work.

The S&P was awaiting the Fed's announcement much more than the election results.

If rates were going up, you would all be talking about the option ARMS etc that are about to reset.
I haven't seen anyone post a link for that graph for a while now ;)

Yes, nice Fed blip. AAPL seems finally lifting out of it's recent plateau.

bert says

If rates were going up, you would all be talking about the option ARMS etc that are about to reset.
I haven’t seen anyone post a link for that graph for a while now

Those will reset as scheduled.
While the graph was not posted for a while indeed, the present beginning of double dip and associated QE2 by Fed
match the raise of 2nd peak after through on that graph nicely. The reason is,
tt would be great for owners were those just ARMs, but they are OPTION ARMs.
The major problem with re-set is not the reference interest %, but the need to start
paying principal + full interest instead of just (minimum) partial interest in a neg-am. situation.
Lower interest helps of course, but not enough for many and perhaps most.

shrekgrinch says

Last, monetizing the debt is still buying debt that is issued. Say that the treasury simply bypasses the auctions and just writes up a giant IOU and gives to the Fed for the cash. They are still ‘borrow[ing] quite easily and at low rates’, aren’t they?

The treasury has not been borrowing from the Fed (indirectly as you point out), and they don't need to. The amount of treasuries on the Feds balance sheet is still around $800B. The deficits have not been financed by monetizing debt. And look where treasury interest rates are even without Fed treasury purchases: 0%.

Again, this $600B monetization of debt has absolutely nothing to do with the treasuries inability to finance it's debt and deficits. And hence has nothing to do with a hyperinflationary scenario.

bert says

If rates were going up, you would all be talking about the option ARMS etc that are about to reset.

Nobody cares about resetting. It's recasting that is the problem. Option ARMS, interest only loans, etc. recast such that instead of paying off only the interest (or not even paying the interest in the case of option ARMS), you have to pay off the loan over time. Even if rates are lower this can mean a significant increase in payments.

No, what the republicans know, what the economists know, what the democrats know is that they have to get the economy moving at whatever cost. If it stops, we all lose completely.

What the republicans SAID because people are easily fooled is "they're spending money we don't have!" so they would get voted in. Make it look like they're in frugal and won't spend.

They all agree this is what needs to be done. They will all continue doing this, because it's what needs to happen.

MarkInSF says

The Fed is not printing money in order to meet government spending needs. The treasury can borrow quite easily at low rates already.

QE2, even more than QE1 is about monetizing the debt - i.e. helping the treasury issue more debt. At the risk of oversimplification, here is what happens:
1. Treasury issues debt at an auction.
2. Primary Dealers (aka big banks) bid on it. This is effectively a reverse-auction where the PD who takes the bonds at the lowest interest rate "wins". Treasury gets the money, PD gets the bond.
3. PD tries to resell the bonds.
4. With QE2, any bonds that the PD cannot sell to investors, they get to sell to the Fed. The Fed prints new money to buy this.

If the Fed backstop were not in the picture, the PD's would demand a higher interest rate because they would have to sell the bonds on the open market. Since the Fed intends to target a certain interest rate, they effectively provide a gurantee to the PD, who in turn guarantees that the Treasury's debt auction will continue to have a bid.

Like I said before, I oversimplified it a little to show the chain of circle-jerking here - in reality it is much more obfuscated so you and I cannot see that Bernanke is giving Geithner a reach-around. Damn, I need to drink to get that visual out of my head now.

pkennedy says

They all agree this is what needs to be done. They will all continue doing this, because it’s what needs to happen.

What _needs_ to happen is for the pretense to stop, the insolvent entities (banks or others) to be shut down, and the resulting write-downs to be booked. THAT is when the economy will begin to recover.

However, this will be painful to some powerful people - so what _will_ happen will be anything but the above.

How apple manages to convince people to buy their garbage is beyond me.