[shortonsense]

Denninger in his normal excellent form. I agree completely with his analysis:

http://market-ticker.org/archives/2039- ... ttack.html

As best I can tell from his resume, this guy is some proto-typical computer geek, who has run a small business.

Is his credibility any better than someone else operating primarily outside their area of expertise, like, say Ruppert?

Or does this guy just assemble random facts, attach a Doom ending, and have an instant story which all Doomers then like because, well, it has a Doom ending?

[truecougarblue]

Is his credibility any better than someone else operating primarily outside their area of expertise, like, say Ruppert?

I totally get your point on this SOS, I mean, who knows how bad things would be without experts like Bernanke, Geithner, Lewis, Summers, etc. Think of all those poor GS associates who wouldn't have had money for the new Beemer and the holiday in Bermuda!

[NoWorries]

Dow is up another 122 points at close today:

http://www.cnbc.com/

Does Denninger believe this financial collapse will occur sometime within next 5 years? Because it seems to me that he's been predicting it for at least 5 years already (probably a lot longer).

That's my problem with Denninger.

[shortonsense]

Is his credibility any better than someone else operating primarily outside their area of expertise, like, say Ruppert?

I totally get your point on this SOS, I mean, who knows how bad things would be without experts like Bernanke, Geithner, Lewis, Summers, etc. Think of all those poor GS associates who wouldn't have had money for the new Beemer and the holiday in Bermuda!

You didn't answer my question. But you appear to be implying that the academic training, experience and just outright knowledge on every facet of the issue ala Bernanke and Co., is somehow not worth considering when stacked up against....a computer geek who maybe ran a small business once.

Was this the point you were trying to make?

[Cloud9]

My faith in academia took a slight slip when Mr. Bernanke assured us that all was well in 2007. http://www.federalreserve.gov/newsevent ... 70328a.htm

That is when I started listening to other voices. Karl is a Cassandra not doubt about it. His writing tends to be a bit hyperbolic.

Still, some how or other, this idea of borrowing our way out of debt flies into the face of reason.

Cassandra was derided and ignored. Nevertheless, she was right.

[dinopello]

Cassandra was derided and ignored. Nevertheless, she was right.

I had never really known the origin of the "Cassandra" moniker

Strange though, that if she could see the future, she apparently didn't see the fact that she would be abducted and raped after the fall of Troy by Ajax the Lesser.

That seems to be the case with prophets, in that they can't seem to profit from their ability to see the future, unless they sell books to people or ad space on their website.

[JJ]

Or does this guy just assemble random facts, attach a Doom ending, and have an instant story which all Doomers then like because, well, it has a Doom ending?

well, he won the Reed Irvine Accuracy in Media Award in 2009.

of course I suppose Bernanke and crew also won a bunch of awards.

[AirlinePilot]

Denninger got a whole slew of his outlook right starting back in 08. I didnt start reading him until late that year. He has blatantly admitted many times that he has no real idea how long the charade can be perpetrated. i agree with that. He makes predictions which i rarely pay attention to. I do pay attention to the news he unearths in his blog regularly and he has beenpretty accurate with that and his economic analysis.

IMHO he ranks right up there with Mish Shedlock, Roubini, Faber and others when it comes to where we are going and how the Government actions are not working nd will lead to further and larger problems.

I dont take his points as gospel ,but he makes a lot more sense than a lot of other folks do.

The only thing Bernanke, Gheitner, and all the other Govt/bank morons have done is kick the can down the road. They have Increased our debt dramatically and put the US into the position that we may suddenly and swiftly lose our credit rating around the world. They have effectively canceled the capital reset from occurring and created a Too Big To Fail nightmare here in the US.

Failing to acknowledge the historic nature of where we are is a fault i see many making. Denninger is screaming it loudly and strongly and i believe he has it right. I made a lot of money over the last two years listening to this guy.

You can keep your head buried in the sand as long as you want, but I chose a different path. You ignore folks like these at your own peril.

[shortonsense]

You can keep your head buried in the sand as long as you want, but I chose a different path. You ignore folks like these at your own peril.

I like Nouriel myself, but I like him in part because he's serious, has credentials to back up what he says and doesn't have the "attach Doom endings to all scenario's" disease. Which, while amusing, wears thin after awhile.

When I want someone to do brain surgery on me, the tech who fixes the laser might be good enough for some people, but I'll take the guy who passed anatomy classes in med school as well.

[Cloud9]

Short, I’m beginning to think that much in economics is mysticism. The lens through which you view the evidence depends on which economic school you believe in. Who has it right the Keynesians or the Austrians?

Either Ben and the boys got it really wrong or they were lying to us. This is one of those strange times in which I wish they had been lying to us. If they truly got it wrong this badly, they are as clueless as the rest of us.

Do not be blinded by experts when their fields are politics, religion, psychology or economics.

[shortonsense]

Short, I’m beginning to think that much in economics is mysticism.

They don't call it "the dirty science" for nuttin. But they do include the word "science" in there, so until someone completely rewrites the book, the concept has to be given its due.

The lens through which you view the evidence depends on which economic school you believe in. Who has it right the Keynesians or the Austrians?

Maybe neither?

Either Ben and the boys got it really wrong or they were lying to us. This is one of those strange times in which I wish they had been lying to us. If they truly got it wrong this badly, they are as clueless as the rest of us.

Do not be blinded by experts when their fields are politics, religion, psychology or economics.

I have no objection to the idea that a person, without any academic training, can have an idea as valuable as the world smartest person. Look at the Renaissance. However, people trained in their profession have something which amateurs, experts in other fields, or some "well read" individual do not....they have experience.

I imagine I could read everything Patton, Montgomery and Rommel ever wrote, yet that won't make me a newby tank commander, let alone a competent one.

It isn't fair, right? Americans believe everyone is unique and special and deserves to have their thoughts heard, their ideas considered. But there is another concept which says, why listen to someone, on any topic, where the sum of total of their knowledge is their claim to being "well read"? Just because modern American society tries to convince everyone they are "special" doesn't mean they actually know bubkiss, but in America, thats what we pretend. I simply don't subscribe to such a thing.

[Cloud9]

It is true. If life were fair, I’d have hair, but it isn’t so I don’t. Well read is a credential. Many attorneys in the 19th century read for the law. John Marshall never graduated law school. Then there are true prodigies. Einstein is a case in point. I am not arguing that degrees are worthless. I have several myself. What I am saying that academia has been and is often blindsided by its tendency to hold to a prevailing school of thought and defend it with the tenacity of a cornered wolverine.

I am reminded of the interview with Peter Shiff when he was derided for his correct view of the coming depression. http://www.youtube.com/watch?v=2I0QN-FYkpw

In my youth I worked in law enforcement, I was mentored by an old captain. His comment was specific to law enforcement when he said “As goes California so goes the rest of the nation.” When I moved over into the field of education I found that maxim to be even more true. The longer I live the more I have come to realize this maxim holds true in many other areas as well.

California is large enough to be a country. It has been a Mecca for the best and brightest since 1848. It has been a leader in agriculture, and technology since its inception. For the last fifty years it has been one of the most progressive and forward thinking societies on the planet. It has championed social services, and because of its vast resources it has been able to foster a dual society based on capitalism and the socialism. It has been a noble experiment in the idea that we can live large and that we can have it all. Now it is broke.

California has fed them and they have multiplied. The dream factory so adept at creating infinite fantasies has run smack dab into the wall of finite resources. The irony is not lost on me that they are the second country in the world to be run by an Austrian corporal.

California is about to get ugly. http://www.newsweek.com/id/232575

Historically, California was about a decade ahead of the rest of us. I suspect that lead time has been considerably shortened by the speed of light transfer of ideas through the internet.

[shortonsense]

What I am saying that academia has been and is often blindsided by its tendency to hold to a prevailing school of thought and defend it with the tenacity of a cornered wolverine.

I would certainly agree. But look at the argument, Einstein, well read lawyers from the 19th century, etc etc. People claim to be well read, some at this very site, and what does that mean MOST of the time? It means they read the things of interest to them, ignored the parts which didn't, and because of it are handicapped in any conversation involving their science because lets face it, no one likes, say, statistics, yet it is a required course for very specific reasons. How does one become versed in the sciences without understanding the language? You just can't substitute in "well read" and think it overcomes some other deficiency.

Historically, California was about a decade ahead of the rest of us. I suspect that lead time has been considerably shortened by the speed of light transfer of ideas through the internet.

Fortunately, I do not believe in the "the entire country wants to be like California" angle. In fact, some places would just as soon not have anything to do with the place, and make fun of its citizens when they show up elsewhere and try to make the joint over in their own image. While it certainly underpins the left coast and is quite substantial in terms of its economic size, people constructing real estate that isn't needed, selling it to each other with loans that can't be repaid, and doing this as often as possible to create "economic activity" certainly failed as a state business model ( much to the chargrin of Florida and Arizona who tried to "be like California" ).

[Cloud9]

It is true that there are those who believe that simply because they can read, they are well read. There are times that even I have difficulty recognizing the fool in the mirror.

My point was that many of the innovations in California have been taken to heart in other parts of the country. For years, the organizational model used in the Los Angeles Police Department was seen as a model for other departments around the country. Everybody wanted a SWAT team. LEAP and the War on Drugs made it possible. The innovations in education, the respect for the environment were seen as examples to be followed by the rest of the country.

The explosions in demographics, the corresponding pervasiveness of the welfare state has created a top heavy system in California. It is cracking under its own weight. Current public professional union members are going to be less willing to continue to force the state to pay the pensions of their retired members when those payments come at the expense of their own jobs. We are going to witness the public spectacle of the bureaucracy cannibalizing itself.

We are already seeing it with the layoffs and salary cuts. Even here in my own state, there is a push to end tenure. Younger teachers are being pitted against older teachers. The youngsters are wondering why they are facing layoffs while the layoff of one of us would preserve two of their jobs. The administrations are seeing this as a control mechanism and a cost cutting device. They are getting behind it in full force. The irony is that their bloated salaries and redundant positions will be next in the food chain.

I think we are very much in the age of consequences and the economy built on consumption will be replaced by one based on repair and replace.

[shortonsense]

My point was that many of the innovations in California have been taken to heart in other parts of the country. For years, the organizational model used in the Los Angeles Police Department was seen as a model for other departments around the country. Everybody wanted a SWAT team. LEAP and the War on Drugs made it possible. The innovations in education the respect for the environment were seen as examples to be followed by the rest of the country.

Sure....you can argue that some of the ideas which originated in California were good ideas. Some, like the jumbo house loan, a self delusional attitude allowing the "real estate will always go up" thoughts to dominate even managed to leak out...and do damage.

But those ideas have costs, and some are quite bad. Education? California used to be a model for providing a good one, until everyone realized they weren't actually paying for it as they went. So the idea, a Cadillac education on a VW budget, turns out to be as much a fairy tale as anything else. Its easy to solve a problem by throwing truckloads of cash at it, stand back, proclaim victory, find the next target for cash. Its something else altogether to have it working 20 years later in the equivalent of a failed state which can't pay its bills, is chasing business from the state to better environments, suffering from a voter induced gridlock which wants its cake but certainly isn't interested in being called to account for it.

California also "solved" its energy problems by outsourcing them, and costing electricity in such a way as to contribute to a the same sort of "urban flight which decimated city centers over the past decades. As far as inventing some interesting ways for cops to shoot the occasional wackjob, that strikes me as more of curing a symptom, if the wackjob didn't exist in the first place having a SWAT team waiting around for him to murder a couple dozen people wouldn't be necessary.

The explosions in demographics, the corresponding pervasiveness of the welfare state has created a top heavy system in California. It is cracking under its own weight. Current public professional union members are going to be less willing to continue to force the state to pay the pensions of their retired members when those payments come at the expense of their own jobs. We are going to witness the public spectacle of the bureaucracy cannibalizing itself.

Cool beans. Becoming a poster child for how not to do it sounds like at least the place can provide an example for the rest of the country to avoid, assuming its not too late for them. Certainly when someone is dumb enough to announce that they wish to change their states financing mechanism to be more like "the California model" they are likely to be greeted with giggles and catcalls, which is a good thing in my book. But who knows, maybe The Terminator will get the voters to change the structuring of the way the state collects taxes, it certainly wouldn't hurt to try.

We are already seeing it with the layoffs and salary cuts. Even here in my own state, there is a push to end tenure. Younger teachers are being pitted against older teachers. The youngsters are wondering why they are facing layoffs while the layoff on one of us would preserve two of their jobs. The administrations are seeing this as a control mechanism and a cost cutting device. They are getting behind it in full force. The irony is that their bloated salaries and redundant positions will be next in the food chain.

I think we are very much in the age of consequences and the economy built on consumption will be replaced be replaced by one based on repair and replace.

Myself, I don't mind either, and don't even know if I would change my lifestyle based on recognizing the distinction. I am an economic animal however, and will react according to any given situation. If putting a new battery pack in my new hybrid is in my financial interest in a few years rather than buying a new car, count me in. If money is still nearly free, and the price of a new car is relatively cheap, and the old car has some value as a trade in, off it goes. Those decisions will be made on a combination of the economics at the time and what I want or need. I'm betting others are the same way.

[patience]

RE: "Qualifications"

One of the problems with listening to the current crop of "qualified" economists is that the policy advisors that have the King's ear, all came from academia, and the results of their thinking (+ politics as usual) is what got us into the mess we're in now.

Keynesian Economics dovetails nicely with politics. Both are aimed at unsustainable "growth economics". The politicos love it, because they get told to give away the national wealth to whomever for "stimulus". Their ignorant constituency love it, because they get checks in the mail. The Economists stay employed by telling the politicos what they want to hear; likewise the politicos keep their jobs because they tell the public what they want to hear.

A new form of Gonnorrhea surfaces just before elections---"gonnareelectum".

[shortonsense]

RE: "Qualifications"

One of the problems with listening to the current crop of "qualified" economists is that the policy advisors that have the King's ear, all came from academia, and the results of their thinking (+ politics as usual) is what got us into the mess we're in now.

Its all in the eye of the beholder, isn't it? You can also say, "all came from academia, and the results of their thinking (+politics as usual ) in combination with quick and decisive action is what saved us from the GDII".

Keynesian Economics dovetails nicely with politics. Both are aimed at unsustainable "growth economics". The politicos love it, because they get told to give away the national wealth to whomever for "stimulus". Their ignorant constituency love it, because they get checks in the mail. The Economists stay employed by telling the politicos what they want to hear; likewise the politicos keep their jobs because they tell the public what they want to hear.

Politico's keep their jobs sometimes...and in a representative form of government, you get what you deserve. If Americans settle for crap leadership, they can expect to get it. Certainly its hard to blame them when regular citizens refuse to hold them accountable.

[patience]

Quote:
"Politico's keep their jobs sometimes...and in a representative form of government, you get what you deserve. If Americans settle for crap leadership, they can expect to get it. Certainly its hard to blame them when regular citizens refuse to hold them accountable."

True. I have a theory that one should never vote for an incumbent. My thinking is that the longer we leave them in there, the more chance they have to get their corrupt schemes going. With only a 2 party (= almost no choice) system, we get to choose between dumb and dumber. So, if both choices are bad, then go with the adage that politicians and diapers need to be changed often---and for the same reason.

[shortonsense]

I have a theory that one should never vote for an incumbent.

I like it...and have a corollary. Anyone who wants to run for a political leadership position should be automatically disqualified. Lottery system, sane adults, anyone who claims to want the job goes on a "do not elect" list.

Random citizens would be an improvement. Its a theory.

My thinking is that the longer we leave them in there, the more chance they have to get their corrupt schemes going. With only a 2 party (= almost no choice) system, we get to choose between dumb and dumber. So, if both choices are bad, then go with the adage that politicians and diapers need to be changed often---and for the same reason.

I like it.

[Hawkcreek]

I have a theory that one should never vote for an incumbent.

I like it...and have a corollary. Anyone who wants to run for a political leadership position should be automatically disqualified. Lottery system, sane adults, anyone who claims to want the job goes on a "do not elect" list.

Random citizens would be an improvement. Its a theory.

My thinking is that the longer we leave them in there, the more chance they have to get their corrupt schemes going. With only a 2 party (= almost no choice) system, we get to choose between dumb and dumber. So, if both choices are bad, then go with the adage that politicians and diapers need to be changed often---and for the same reason.

I like it.

I agree. I have always said that we should have an election draft pool. Every 4 years we should randomly select 435 people, who would go to Washington, live in a barracks, go to school for the first 6 months on the constitution and the law, and then make law and decide policy. At the end of their term they would go home to live under the laws they just made.
Their salary, benefits, and living conditions would be equal to those of a senior enlisted rank in the armed forces. Their only contact with lobbyists would be in a controlled environment with voice and video records made, and available to the public.