markdown:
# Tính thuế thu nhập cá nhân 2013
## Thuế thu nhập cá nhân năm 2013 được tính như thế nào ?
- Thuế TNCN đối với thu nhập từ kinh doanh, tiền lương, tiền công:
Thuế TNCN phải nộp = Thu nhập tính thuế * Thuế suất
Thuế suất thuế thu nhập cá nhân đối với thu nhập từ kinh doanh, từ tiền lương, tiền công được áp dụng theo biểu thuế luỹ tiến từng phần theo quy định tại Điều 22 Luật Thuế thu nhập cá nhân
- Thuế TNCN đối với thu nhập từ đầu tư vốn:
Thuế TNCN phải nộp = Thu nhập tính thuế * Thuế suất 5%
- Thuế TNCN đối với thu nhập từ chuyển nhượng vốn:
Thuế TNCN phải nộp = Thu nhập tính thuế * Thuế suất 20%
- Thuế TNCN đối với thu nhập từ chuyển chứng khoán:
+ Trường hợp cá nhân chuyển nhượng chứng khoán đăng ký nộp thuế theo biểu thuế toàn phần với thuế suất là 20%.
Thuế TNCN phải nộp = Thu nhập tính thuế * Thuế suất 20%
+ Trường hợp cá nhân chuyển nhượng chứng khoán không đăng ký nộp thuế theo biểu thuế toàn phần với thuế suất là 20% thì áp dụng thuế suất 0,1% trên giá chuyển nhượng chứng khoản từng lần
Thuế TNCN phải nộp = Giá chuyển nhượng * Thuế suất 0,1%
- Thuế TNCN đối với thu nhập từ trúng thưởng: áp dụng theo biểu thuế toàn phần là 10%.
Thuế TNCN phải nộp = Thu nhập tính thuế* Thuế suất 10%
**Để nắm chi tiết hơn cách tính thuế thu nhập cá nhân 2013 bạn cần biết:** **Thuế thu nhập cá nhân 2013 sẽ được “tính” thế nào?**
Biểu thuế lũy tiến từng phần áp dụng với thu nhập từ kinh doanh, từ tiền lương, tiền công.
Bậc 1: 4 triệu đồng/tháng 0%;
Bậc 2: Trên 4 – 6 triệu đồng/tháng: 5%;
Bậc 3: Trên 6 – 9 triệu đồng: 10%;
Bậc 4: Trên 9 – 14 triệu đồng/tháng: 15%;
Bậc 5: trên 14 – 24 triệu đồng/tháng: 20%;
Bậc 6: Trên 24 – 44 triệu đồng/tháng: 25%;
Bậc 7: Trên 44 – 84 triệu đồng/tháng: 30%;
Bậc 8: Trên 84 triệu đồng: 35%.
( Ví dụ có 10 triệu bị đánh thuế thì: 6 triệu bị đánh thuế 5%; 3 triệu bị đánh thuế 10% và 1 triệu bị đánh thuế 15% )
Biểu thuế suất toàn phần.
Theo đó:
- Lãi cho vay, lợi tức cổ phần, lợi tức từ góp vốn kinh doanh, lãi tiết kiệm trên 5 triệu đồng/tháng là 5%;
- Thu nhập từ chuyển nhượng vốn: 25%;
- Thu nhập từ chuyển đổi bất động sản: 25%.
Các thu nhập khác:
- Thu nhập từ tiền bản quyền vượt 10 triệu đồng/lần: 5%;
- Trúng xổ số, khuyến mãi quá 10 triệu đồng/giải thưởng: 10%;
- Thu nhập từ thừa kế, quà tặng trên 10 triệu đồng/lần: 10%.
![](http://ketoanhn.com/hinh-anh/images/ketoanhanoi.png)
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## SỐNG LÀ PHẢI MƠ
![](https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-ash3/1094987_4593814383972_2074437556_n.jpg)
## DẠY VÀ HỌC TRÒ CHƠI VĂN THPT
(
*Bài giảng chưa được thẩm định*) **Nguồn:**Sưu tầm **Người gửi:** [Hải Nguyên Văn](/user/show/id/2864365)( [trang riêng](http://kuchet106.violet.vn)) **Ngày gửi:**14h:22' 28-05-2012 **Dung lượng:**55.0 KB **Số lượt tải:**373 **Số lượt thích:**0 người
Lồng ghép trò chơi trong dạy và học môn Ngữ Văn ở THPT.
Trò chơi vừa là một hoạt động giải trí vừa là một phương pháp giáo dục: giáo dục bằng trò chơi - một phương pháp đã được nhiều nền giáo dục tiên tiến trên thế giới vận dụng. Lồng ghép trò chơi trong dạy và học môn Ngữ văn, kết hợp với những phương pháp dạy học khác sẽ có ý nghĩa tích cực đối với yêu cầu đổi mới hiện nay.
1)Mục đích đề tài:
Giới thiệu hình thức lồng ghép trò chơi trong tổ chức lớp học ở các giờ học Ngữ Văn THPT nhằm bổ sung và đổi mới những phương pháp dạy học Ngữ văn truyền thống. Qua phân tích ý nghĩa, mối quan hệ của việc học mà chơi, để giới thiệu một cách có hệ thống về các hình thức lồng ghép trò chơi, minh hoạ một số trò chơi và những khả năng lồng ghép trò chơi đối với cả ba phân môn: Đọc văn, Tiếng Việt và Làm văn. Nhằm hướng đến mục đích cuối cùng là cải tiến phương pháp dạy học, tạo thêm hứng thú cho người học, giúp học sinh tích cực, chủ động tiếp nhận tri thức và hình thành kĩ năng, phát triển nhân cách.
2)Mô tả giải pháp:
2.1- Mô tả giải pháp:
2.1.1- Đối với đặc thù bộ môn Ngữ văn, việc phủ nhận những phương pháp dạy học truyền thống, là điều thiếu thoả đáng. Nhưng điều đó cũng không có nghĩa chúng ta có quyền “khư khư” với những gì đã có. Một khi học sinh đã quá nhàm chán với kiểu học văn thầy giảng, trò nghe, ghi chép thụ động, thỉnh thoảng rụt rè trình bày vài ý kiến theo gợi ý của thầy… nảy sinh thực trạng học đối phó, thụ động, thậm chí chán học bộ môn.
2.1.2- Trò chơi vừa là một hoạt động giải trí vừa là một phương pháp giáo dục: giáo dục bằng trò chơi - một phương pháp đã được nhiều nền giáo dục tiên tiến trên thế giới vận dụng. Lồng ghép trò chơi trong dạy và học môn Ngữ văn, kết hợp với những phương pháp dạy học khác sẽ có ý nghĩa tích cực đối với yêu cầu đổi mới hiện nay. Giải pháp này sẽ làm thay đổi không khí căng thẳng trong các giờ học, tăng thêm hứng thú cho người học, học sinh sẽ chú ý hơn, chủ động hơn trong chuẩn bị, mạnh dạn hơn trong đề xuất ý kiến của mình, phát huy tư duy sáng tạo,… Hứng thú và chủ động trong học tập là sự khởi đầu tốt cho việc nắm bắt kiến thức, hình thành kĩ năng và phát triển nhân cách ở học sinh qua bộ môn Văn.
2.1.3- Lồng ghép các đơn vị kiến thức vào các trò chơi trong những giờ học không chỉ làm cho những giờ học trở nên sinh động mà còn giúp học sinh lĩnh hội kiến thức bằng con đường ngắn nhất và tự nhiên nhất.
2.1.4- Lồng ghép trò chơi trong dạy và học môn Ngữ văn giáo viên vừa tận dụng được “vốn sẵn có” của mình, vừa đòi hỏi người thầy phải không ngừng tìm tòi sáng tạo (để những trò chơi luôn luôn mới, không “đụng hàng” và có ý nghĩa giáo dục).
2.2- Nội dung giải pháp:
2.2.1- Một số hình thức lồng ghép trò chơi trong dạy và học Ngữ văn ở THPT:
* Nguyên tắc: Giáo viên cần chú ý đến đặc thù của từng phân môn; lưu ý mối quan hệ giữa trò chơi với hệ thống câu hỏi; vận dụng linh hoạt, hợp lí, đúng mức và đúng lúc để không xáo trộn nhiều không gian lớp học, nhanh chóng ổn định lớp học khi trò chơi kết thúc; trò chơi phải phù hợp với nội dung, mục tiêu cần đạt, không vận dụng cho tất cả các tiết học, đôi khi gây phản cảm, phản tác dụng; trò chơi bao giờ cũng kết thúc bằng thưởng cho người (đội) thắng hoặc xử phạt nhẹ nhàng cho vui (dí dỏm, tế nhị).
* Một số hình thức lồng ghép trò chơi:
+ Xem trò chơi là một hình thức tổ chức cho một đơn vị kiến thức nhỏ trong giờ học để triển khai ở các bước khác nhau của bài giảng (phần tìm hiểu chung, tìm hiểu ngữ liệu, phần đọc - hiểu văn bản, phần luyện tập, củng cố bài…)
+ Tổ chức tiết học thành một trò chơi lớn đối với một số tiết ôn tập hoặc khái quát.
* Một số trò chơi có thể vận dụng lồng ghép trong dạy học Ngữ văn: giáo viên có thể tự sáng tạo ra những trò chơi phù hợp với tiết học (trò chơi phát động, trò chơi hoạt động, trò chơi luỵên trí, trò chơi chú ý và quan sát, trò chơi huy động kiến thức
Trò chơi vừa là một hoạt động giải trí vừa là một phương pháp giáo dục: giáo dục bằng trò chơi - một phương pháp đã được nhiều nền giáo dục tiên tiến trên thế giới vận dụng. Lồng ghép trò chơi trong dạy và học môn Ngữ văn, kết hợp với những phương pháp dạy học khác sẽ có ý nghĩa tích cực đối với yêu cầu đổi mới hiện nay.
1)Mục đích đề tài:
Giới thiệu hình thức lồng ghép trò chơi trong tổ chức lớp học ở các giờ học Ngữ Văn THPT nhằm bổ sung và đổi mới những phương pháp dạy học Ngữ văn truyền thống. Qua phân tích ý nghĩa, mối quan hệ của việc học mà chơi, để giới thiệu một cách có hệ thống về các hình thức lồng ghép trò chơi, minh hoạ một số trò chơi và những khả năng lồng ghép trò chơi đối với cả ba phân môn: Đọc văn, Tiếng Việt và Làm văn. Nhằm hướng đến mục đích cuối cùng là cải tiến phương pháp dạy học, tạo thêm hứng thú cho người học, giúp học sinh tích cực, chủ động tiếp nhận tri thức và hình thành kĩ năng, phát triển nhân cách.
2)Mô tả giải pháp:
2.1- Mô tả giải pháp:
2.1.1- Đối với đặc thù bộ môn Ngữ văn, việc phủ nhận những phương pháp dạy học truyền thống, là điều thiếu thoả đáng. Nhưng điều đó cũng không có nghĩa chúng ta có quyền “khư khư” với những gì đã có. Một khi học sinh đã quá nhàm chán với kiểu học văn thầy giảng, trò nghe, ghi chép thụ động, thỉnh thoảng rụt rè trình bày vài ý kiến theo gợi ý của thầy… nảy sinh thực trạng học đối phó, thụ động, thậm chí chán học bộ môn.
2.1.2- Trò chơi vừa là một hoạt động giải trí vừa là một phương pháp giáo dục: giáo dục bằng trò chơi - một phương pháp đã được nhiều nền giáo dục tiên tiến trên thế giới vận dụng. Lồng ghép trò chơi trong dạy và học môn Ngữ văn, kết hợp với những phương pháp dạy học khác sẽ có ý nghĩa tích cực đối với yêu cầu đổi mới hiện nay. Giải pháp này sẽ làm thay đổi không khí căng thẳng trong các giờ học, tăng thêm hứng thú cho người học, học sinh sẽ chú ý hơn, chủ động hơn trong chuẩn bị, mạnh dạn hơn trong đề xuất ý kiến của mình, phát huy tư duy sáng tạo,… Hứng thú và chủ động trong học tập là sự khởi đầu tốt cho việc nắm bắt kiến thức, hình thành kĩ năng và phát triển nhân cách ở học sinh qua bộ môn Văn.
2.1.3- Lồng ghép các đơn vị kiến thức vào các trò chơi trong những giờ học không chỉ làm cho những giờ học trở nên sinh động mà còn giúp học sinh lĩnh hội kiến thức bằng con đường ngắn nhất và tự nhiên nhất.
2.1.4- Lồng ghép trò chơi trong dạy và học môn Ngữ văn giáo viên vừa tận dụng được “vốn sẵn có” của mình, vừa đòi hỏi người thầy phải không ngừng tìm tòi sáng tạo (để những trò chơi luôn luôn mới, không “đụng hàng” và có ý nghĩa giáo dục).
2.2- Nội dung giải pháp:
2.2.1- Một số hình thức lồng ghép trò chơi trong dạy và học Ngữ văn ở THPT:
* Nguyên tắc: Giáo viên cần chú ý đến đặc thù của từng phân môn; lưu ý mối quan hệ giữa trò chơi với hệ thống câu hỏi; vận dụng linh hoạt, hợp lí, đúng mức và đúng lúc để không xáo trộn nhiều không gian lớp học, nhanh chóng ổn định lớp học khi trò chơi kết thúc; trò chơi phải phù hợp với nội dung, mục tiêu cần đạt, không vận dụng cho tất cả các tiết học, đôi khi gây phản cảm, phản tác dụng; trò chơi bao giờ cũng kết thúc bằng thưởng cho người (đội) thắng hoặc xử phạt nhẹ nhàng cho vui (dí dỏm, tế nhị).
* Một số hình thức lồng ghép trò chơi:
+ Xem trò chơi là một hình thức tổ chức cho một đơn vị kiến thức nhỏ trong giờ học để triển khai ở các bước khác nhau của bài giảng (phần tìm hiểu chung, tìm hiểu ngữ liệu, phần đọc - hiểu văn bản, phần luyện tập, củng cố bài…)
+ Tổ chức tiết học thành một trò chơi lớn đối với một số tiết ôn tập hoặc khái quát.
* Một số trò chơi có thể vận dụng lồng ghép trong dạy học Ngữ văn: giáo viên có thể tự sáng tạo ra những trò chơi phù hợp với tiết học (trò chơi phát động, trò chơi hoạt động, trò chơi luỵên trí, trò chơi chú ý và quan sát, trò chơi huy động kiến thức

## Các ý kiến mới nhất

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markdown:
## Ghi chép của Congamaimo
## Tiền giả hay.... mình đa nghi quá :D
Đang đi dạo, có một bà ăn mày đến gần thỏ thẻ:
- Cô ơi, cho chị mấy hào, cả ngày nay chưa ăn gì cả :(
Nhìn từ đầu tới chân: Gầy gò, quê mùa, một mắt có vẻ như bị tật
- Chị quê ở đâu, sao lại chưa ăn gì?
- Khổ, lúc sáng có một anh cho 200 ngàn, mừng quá tính trưa sẽ ăn nhưng khốn nỗi tiền đó không tiêu được chị ạ
- Sao lại không tiêu được?
- Tiền giả chị ơi, ( rơm rớm mắt)
Nghe đến đây tự dưng mình không muốn hỏi thêm gì nữa, thò tay túi quần đưa 20k
- Cho chị
- Cảm ơn cô
Rồi người đàn bà có tật ở mắt ấy bước đi thật nhanh
Tự dưng mình chợt nghĩ: có bao giờ mình bị lừa không ta?
Baltimo, TaySacvà 1 người nữa 0Bình luận hay 0Bình luận hay 0Bình luận hay 0Bình luận hay 0Bình luận hay

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# Thời đại chiến tranh 2
"Thời đại chiến tranh 2" là một sự kết hợp giữa trò chơi phòng thủ và chiến lược. Mục tiêu của bạn là phải tiêu diệt căn cứ của kẻ thù để bảo vệ thành. Bạn có thể xây dựng tháp để bảo vệ thành và quân đội để tấn công kẻ địch. Bạn có thể phát triển quân đội cũng như mở khóa những chức năng, quân đội mới và các phương tiện quốc phòng khác để trở nên mạnh mẽ hơn. Trên màn hình trò chơi sẽ thể hiện hình ảnh của chiến trường, quân đội (đơn vị), tháp pháo, đặc biệt và nâng cấp
vào tháp pháo mốn bán và nhấn vào tháp bạn muốn để xây dựng
*Đây là nơi bạn có thể tạo ra các đơn vị mới. Di chuyển chuột qua biểu tượng để xem mô tả ngắn và số liệu thống kê của đơn vị ở bên dưới. Ban đầu một số đơn vị sẽ bị khóa, hãy đọc phần mô tả để tìm hiểu làm thế nào để mở khóa* **Quân đội** **Tháp pháo**
Di chuyển chuột qua biểu tượng để xem mô tả ngắn và số liệu thống kê của tháp pháp ở bên dưới. Lưu ý rằng đôi khi một tháp pháo với sức sát thương kém hơn nhưng khoảng thời gian tấn công tiếp theo sẽ nhanh hơn.Khi xây dựng một tháp pháo, bạn cần một vị trí trống trên tháp của bạn, có thể xây dựng ối đa 4 điểm tháp. Bạn có thể bán một tháp pháo để xây dựng một tháp mới tốt hơn, chỉ cần nhấp
![ ](http://www.gamevui.com/images/Image/Icon_HD/mouse_left.png)
*Phần này cho phép bạn làm 2 việc: Khởi động một cuộc tấn công đặc biệt hoặc phát triển. Nếu bạn sử dụng quá nhiều các cuộc tấn công đặc biệt này thì có thể làm bạn bị trễ quá nhiều thời gian trong cuộc đua "tiến hóa" và bạn sẽ bị áp đảo bởi quân đội đối phương.* **Đặc biệt** *Việc nâng cấp rất quan trọng. Bạn có thể nâng cấp các đơn vị để tăng sức mạnh trong chiến đấu. Hãy chi tiêu một cách hợp lý trong việc nâng cấp này.* **Nâng cấp** **Fatal error**: Call to undefined function the_views() in **/home/game/domains/luyengame.com/public_html/wp-content/themes/luyengame/single.php**on line **93**

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tag:blogger.com,1999:blog-84515172014-04-13T16:42:58.509-07:00MaxedOutMamaMaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.comBlogger4145125tag:blogger.com,1999:blog-8451517.post-44443416252614564332014-01-30T07:17:00.004-08:002014-01-30T07:18:38.651-08:00No Surprises There, But An Interesting StoryI refer, of course, to Q4 GDP. This is the first release and there will be revisions.

There are several interesting things about this, but the takeaway is real disposable personal income, which explains the subdued inflation. If you refer to Table 7, you'll see that 2013 racked up an astounding 0.7% increase in real disposable personal income. In total. Of course that's due to tax changes, and also to the drawing-forward of dividends and investment proceeds in Q4 of 2012 in order to evade the 2013 tax increase.

But still. ... FICA increases of course hit the average wage earner the hardest. Final sales of domestic product increased 1.7%, and final sales to domestic purchasers increased 1.5% for 2013. This is probably a better measure of economic activity than fficial 2013 GDP increase (1.9%) is

There are some other interesting aspects of this release, such as residential fixed investment (see Table 3) which fell 12.7 billion in the fourth quarter. In fact, even with the addition of the "intellectual property products" to GPDI, we still only picked up 22.2 billion in Q4. Fixed investment, which excludes inventory builds but now includes software, R&D and the creation of sculptures from dung by highly enterprising community-funded artists, only increased by 5.6 billion. Of that, intellectual property products accounted for 5 billion. You may perhaps be relieved to know that the mission-essential investment in Duck Dynasty episodes and dung sculptures only accounted for 0.1 billion of that, with software and R&D having a much more significant contribution. But still, I would cautiously comment that since this category was a 2013 invention, in effect we had no increase in fixed investment in Q4.

Personal income is not quite as bad as it seems, because the investment payout pop in Q4 2012 had such strong influence. If you will refer to Table 10, you'll see that real disposable personal income was 11,743 billion in Q4 2012, and then fell to 11,502 billion in Q1 2013. After that it rose for two quarters quite strongly to return to 11,704 in Q3, but in Q4 it only increased a bit to 11,726, thus ending 2013 year at a lower point than the end of 2012. But such increases in income have a delayed effect on spending, so Q4 2012's money contributed to the economy in 2013, and the later rebound will show up somewhat in 2014.

So, for 2013 the official increase of real GDP was 1.9%, the actual real increase was closer to 1.7% and what is the forward trajectory for 2014?

Here's my guess as to that question. First, it is highly unlikely that we could ever exceed 2.4%, because I think both housing and autos are near sustainable tops. But I also think that the floor is close to 2%, because although both are near the top money wants to come into the US, and neither are totally overblown. There is a downshift in the US economy now, but it's not a bad one.

The thing that stuns me mostly is that there is so little change in forecast. Last year in the fall I calculated that the end June/early July 2014, the 10 year Treasury should be yielding around 2.83 or 2.84, and I don't come up with anything very different. Perhaps 2.78%?

I do expect income gains in the US to be quite subdued this year, partly due to last year's overhang, partly due to ACA effects, and partly due to whacky government policies which include actual impediments to growth, especially in regulation and taxation, which is now grossly unfavorable to actual investment.MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com4tag:blogger.com,1999:blog-8451517.post-19827011683852696682014-01-24T06:05:00.000-08:002014-01-24T06:05:09.222-08:00Yes, yes, yesI got rather sick. I survived.

I have been watching the ACA meltdown with some fascination. It's hard to top stuff like this, but it is not funny for those who have paid their insurance bill, or had their accounts double-debited, and are still having to pay out of pocket for medicines and treatment. How long will it be before someone goes postal?

From the provider side it's not much better - if you signed up to deal with this it is administrative chaos that has the potential to destroy a practice.

It is not going to get better as the year wears on. The backend mechanisms aren't there, and several of the state sites are so bad they will probably be canned. The fixed expense/medical payout ratio in the law means that companies can't hire enough staff to straighten this out. Moody's is quite right.

I don't think that the government premium subsidies are being paid to the insurance companies, which is a big problem. From the insurance companies' perspectives, they are not getting paid the premiums, yet they have the problem of trying to straighten out the mess, and they have to pay claims without having received the premiums. It leaves little incentive.

And then consider that a very small minority of their total insured counts have the capacity to overwhelm their entire customer service system - they must be scrambling to set up different numbers and try to segregate ACA customers from their paying customers. That's reality, folks, and it's why CA ACA "customers" can't get through to a human being.The government pretends to pay for your insurance, and then your insurance company pretends to provide insurance, and then your provider has to figure out what to do with patients who may or may not be insured.

From the provider perspective, all these people in healthcare limbo pose a distinct threat to your finances. If you provide care without getting payment, you are going to be in a hole, and if you don't provide care, you may get sued. In any case, straightening out the fuss for these patients is likely to chew up your customer service staff's time and cause problems for your entire patient base.

Again, this is not going to get better as the year wears on. It's going to get worse, and access to care for ACA insured people is going to degenerate as providers start to tumble to the fact that insurers are mandated to carry the policy for 90 days if the premium was paid once, but not mandated to pay claims after the first thirty days. It's going to convert to a cash-up-front deal, reimbursement later in a lot of circumstances.

Your pie-in-the-sky liberal thought of the day: It takes a village to dig a small child out of the global warming drift, although it goes somewhat faster if you use solar panels as improvised global warming shovels!! MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com18tag:blogger.com,1999:blog-8451517.post-48620113665455066362013-12-25T14:45:00.000-08:002013-12-25T14:45:45.615-08:00Peace On Earth, Good Will To Men! What else is there to say, really?

I hope each of you are having wonderful holiday time with family and friends!MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com7tag:blogger.com,1999:blog-8451517.post-331240844649977112013-12-18T12:36:00.002-08:002013-12-18T12:36:35.422-08:00Both Santa AND GrinchWell, the Fed Grinch did the awful, cruel, horrible thing by cutting bond purchases by 10 billion, meaning they are only inserting a paltry 75 billion into the market each month. The HORROR. Little Citi Lou's eyes were just streaming!

BUT they also gave Mr. Market a candy cane by effectively changing their employment goal. It was 6.5%, but in this statement, mutatis mutandis:

The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee now anticipates, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal.
Mama Yellen is going to be even kinder than Uncle Ben. The reason for this change is that the unemployment rate will fall to the 6.5% mark about the 2nd quarter next year, what with the fact of all the old farts staggering out of the work force.

This is a de facto huge expectation loosening, and it will be interesting to see how inflation develops next year. Because in fact inflation in GDP terms came in right about 2%! So there isn't much margin there, and somewhere around the June meeting, Mama Yellen might have to come up with a little more mutatis mutandis syrup to heap on the stock market waffles.

We know she will, though, because she loves all her children so well, especially Citi Lou and Goldie Saxaphone, the littlest Hoos. And you can be sure that she will just gather all her children into her warm loving arms next spring and wipe the tears of anxiety from their plaintive eyes and whisper words of comfort into their ears JUST FOR THEM. There is no need to fear while Mama is there. No need at all.

2015 will therefore be pretty interesting. This isn't going to stabilize easily now. The most likely market move after today is for an epic run on commodities, purely because everything else has run out. It may be very durable, and there is a possibility of a recession in 2015 because of it. There's a lot of money out there and a lot of it is going to want to run into the US.

I am now going to start the rotation out of stocks. Mama Yellen looks to me to be utterly unequipped to handle a boisterous teenage speculative recovery. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com7tag:blogger.com,1999:blog-8451517.post-68672329760959966582013-12-14T05:43:00.000-08:002013-12-14T05:43:31.679-08:00But They're Very EducatedThis is why a society without a certain number of nitpicking engineers is dysfunctional. Billions and billions and billions. A fourth grader should have been able to catch this.

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com21tag:blogger.com,1999:blog-8451517.post-87361424047823459162013-12-13T14:59:00.000-08:002013-12-13T14:59:30.623-08:00Welcome to Brooklyn! Every once in a while the journalistic Dasein of the NY Times produces a gem of comedy, generally unwittingly. H/T Ann Althouse. There will be many good comments over at Ann's.

In this case, the unforeseen tragedy of the creative elites being forced to queue with truck drivers from Brooklyn in order to get health insurance gets a sympathetic placebo treatment.

Cry for the children.

Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, thousands of writers, opera singers, music teachers, photographers, doctors, lawyers and others ... will be treated as individuals, responsible for their own insurance policies.

For many of them, that is likely to mean they will no longer have access to a wide network of doctors and a range of plans tailored to their needs. And many of them are finding that if they want to keep their premiums from rising, they will have to accept higher deductible and co-pay costs or inferior coverage. ...

“All these people had these customized plans which are better than most of the things out there, and most of them are saving only a small amount of money,” he said.
This is shocking and baffling, and the NYT staff is trying helpfully to explain it, because everyone knew that those in flyover country who were complaining about their ACA insurance options were too stupid to know what a great deal they were getting. All the WH press releases said so.

The last three paragraphs are work of Mel-Brooksian farce - there must be some mistake - they're not from Brooklyn or Kansas, they're Obama people! MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com13tag:blogger.com,1999:blog-8451517.post-81712577754697783592013-12-09T07:24:00.001-08:002013-12-09T07:24:34.189-08:00An Excellent BIS ArticleIt covers international credit market developments. Points to note:
1) Central banks are in control of the conditions through their efforts at monetary easing.
2) Low investment opportunities in emerging markets have led to a search for other opportunities.
3) The focus has shifted to corporate bond issuance, and in the Euro area this is a big change:

The credit environment has benefited large non-financial corporates more than banks domiciled in advanced economies. Struggling to regain markets' confidence during the past five years, these banks have consistently faced higher borrowing costs than non-financial corporates with a similar credit rating. While the cost gap narrowed more recently, especially in the United States, it continued to exert upward pressure on bank lending rates. This prompted large non-financial firms to resort directly to debt markets, thus spurring corporate bond issuance. As a result, markets eclipsed banks as a source of new credit to corporates in the euro area.
4) The growth in corporates this year is mostly on the riskier side:

In the syndicated loan market, "leveraged" loans - granted to low-rated, highly leveraged borrowers - accounted for roughly 40% of new signings from July to November (Graph 3, centre panel). Remarkably, throughout most of 2013, this share was higher than during the pre-crisis period from 2005 to mid-2007. This was the result of both higher volumes of riskier loans (blue bars) and lower volumes in the safer part of the spectrum (red bars). In parallel, investors' drive towards high-yield credit resulted in a gradually falling share of those syndicated loans that feature creditor protection in the form of covenants (Graph 3, right-hand panel).
5) BIS seemed a little startled by the sudden yen for rolling bonds (the company doesn't have to pay the interest - instead it can just issue new bonds), despite the 30% default rate experienced in recent history:

The trend towards riskier credit was fairly general. It spurred, for example, the market for payment-in-kind notes, which give the borrower an option to repay lenders by issuing additional debt. Investors' renewed interest in these instruments resulted in more than $9 billion of new issuance over the first three quarters of 2013, one third higher than the overall issuance volume in 2012.
6) A sucker is born every minute, and PT Barnum's spiritual sons are working as European bankers and PE credit brokers:

Similarly, industry reports underscored the growing share of debt in funding private equity takeovers. In the United States, this share increased steadily after 2009 to reach two thirds in October 2013, a level similar to that in 2006-07. For their part, European banks took advantage of the borrower's market by stepping up issuance of subordinated debt, thus increasing the cushion that insulates their senior creditors from the fallout of potential future distress.
This goes on and on, but the most important part comes at the end. The easy credit granted to large corporates in the markets is not extending to smaller businesses, who are paying a large comparative tariff. This does not bode well for expansion, and it indirectly explains why low growth persists in spite of historically extreme easy money policies.

It's hard to see why this would stop - both India and China have credit difficulties of their own. In China's case, the rolling loan policy toward large state-ish companies has produced an epic wave of repayment dates and amounts in 2014, and no one knows what will happen. Will the plugs start to be pulled? Or will local Chinese governments keep the life-support plugged in? Sooner or later it will end.

However, as soon as interest rates do rise, corporations with a lot of debt will face difficulties in controlling future cash flows. Letting this trend continue for too long will result in future investment losses. .

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com4tag:blogger.com,1999:blog-8451517.post-6819441995858392852013-12-07T10:05:00.000-08:002013-12-07T10:06:11.402-08:00Why You Think The Economy's So Bad

In a lot of ways, you're right. This is Fed series A229RXO, Real Disposable Personal Income Per Capita.

There are obvious constraints on growth and obvious constraints on saving, which makes it hard for the younger to accumulate savings, and even harder for the older. Getting much in the way of inflation with these income statistics is an impossibility - if prices rise, people are forced to consume less.

Only time can heal this - next year the YoY change will be better, and the five year change will rise to about the 5% level, which would be a big help.

Under such circumstances, the domestic consumption growth is aimed toward necessities and lower priced luxuries. The good news is that the US economy is producing more energy, always produces a lot of food, and gets a decent amount of income off the lower priced luxuries. The bad news is that increases in taxation have the capacity to knock the recovery off its rocker, as do mandates to consumers to purchase services they can't afford, which is just another name for "tax". MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com10tag:blogger.com,1999:blog-8451517.post-58918907203228054402013-12-04T06:28:00.000-08:002013-12-04T18:22:02.821-08:00 December Taper, If the Fed Is Still Sane. There is no justification really for not doing it - and if they don't, I am going to have fun reading the FOMC discussion as to why not. Also satirizing it, because really, folks. This has passed all plausibility limits.

Auto sales were very good yesterday - very good indeed:

Unemployment claims have been solidly out of the trouble zone for months. Manufacturing, business and credit surveys are very healthy. Theories about "shocks" and so forth don't stand up to the solid data showing that in fact, the economy is strong enough to weather negatives. Thus it is time to roll up the fire hoses and put them away.

All the economic data shows consolidation of trend and the forming of a new floor at a level above the current one. At this stage in the game, the economy the Fed has grown used to regarding as a failure-to-thrive toddler is now a somewhat porky pre-adolescent that needs to get its butt off the couch before it turns into an obese adolescent. Take away the potato chips, Fed Papa!

The rational question is not whether to taper, but whether to taper by 20 billion or 40 billion. I don't suppose the NY Fed could refrain from mass suicide over 40, though, so that's out.

There was a very good global harvest, and that's going to help the next six months. There is a good supply of oil, and that's going to help. Europe is sort of staggering onwards, and that's not going to hurt.

The Street is struggling to locate threatening-looking comets in the night sky to justify the fleets of Frito-Lay (brought to you by the Fed) trucks rolling through the streets of Manhattan, but even the comets are not cooperating.

I don't expect the Establishment jobs figure to be good this month, because Establishment showed a huge gap over Household last month, but with initial claims like this, no one can really claim that jobs are the scary monster under the bed:

Further, the reality is that Boomer retirements are going to continue. This is a very hard, hard reality, and it means that jobs will open up for the younger folks. That's a very hard, hard floor for Main Street expansion, and only Main Street expansion can possibly generate a solid, continuing recovery that rebuilds the jobs base. No amount of financial flummery ever does that.

At this stage, the Fed should be worrying about continuing expansion without distortion, and there they have a big problem - a problem that they evidently don't know how to address, given the last FOMC discussion. The theory about reserve fund interest rates was shot down aggressively by certain entities.

If the Fed doesn't take it off, the Fed is going to create a much larger problem toward the end of next year.

It's already almost too late. The Fed should have started the taper in September, and now it is running out of time to do it. They've already generated a bit of a problem, and the longer they wait the bigger it is going to get:
Top 100:
  Other banks:

If this goes too much further, the risks of a top-heavy credit load start growing astronomically. And I don't want to talk about all the crappy commercial paper out there, and the subprime loans on the autos.

Update:
This isn't a problem now, because rates are so low. But if rates must rise ever, then a wise Fed needs to fire a few warning shots to prevent loans from growing too much:

When rates do rise, there's going to be pressure on non-financials if the Fed lets a Greenspan moment develop a la 1998-1999. The ability to carry those loans and fund further expansions must be preserved. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com19tag:blogger.com,1999:blog-8451517.post-88018250444817439642013-12-02T08:40:00.000-08:002013-12-02T08:40:00.335-08:00December Fed - Grinch or Santa? I bet that the December Fed should be the Grinch but will opt to be the jolly old elf.

The reason I think the Fed should taper is that if it doesn't do it in December, there is no possible justification for doing it next March. Thus I think the Street wisdom on this matter is less than wise.

There are two things the Fed has to fear - the auto expansion slowing and the housing expansion slowing. Interest rates have a lot to do with both, and Q3 data has been iffy for both. So the one thing the Fed cannot have is interest rates spiking in March, right? No sane Fed would want that. Compared to 2013, the FHA annual premium has already been instituted, so low-downpayment home purchases are quite constrained.

Therefore, the Fed should begin to taper in December, so it can see how interest rates develop and adjust into the spring. They were clearly arguing over that matter very seriously recently.

But will they do that? The holiday retail season is going to be constrained, because the FICA increase means people just don't have the money to spend:

The rolling six-month expansion in cash in non-jumbo checkings/savings is, inflation-adjusted, very low and it means that holiday sales won't be that good. Some increase, but not huge.It's a short sales season, taxes have been raised on the upper income brackets, and there just isn't that much spare cash lying around.

Nor will credit purchases bail them out, because the only people who like to pay those credit card rates are very, very stupid or like to hang out in clubs with whips and chains:

People have been spending money, but mostly on cars. And auto inventories are filling up, because purchases have fallen off a bit:

Ward's projection is for a good increase in November sales, so that may even things up a bit, but inventories indicate a slight downshift in production soon unless it blows out. I don't think it will blow out.

Mind you, there is nothing wrong with this economy. It's currently solid, but just solid at lower levels. I don't think the Fed will want to take the chance of further suppressing the housing market, which is not going to be great next year. And construction gains are there, but slipping already, because home sales are a bit constrained:

The Fed doesn't want a significant interest increase in that. Investor sales carried it this year, but all things have their natural end. Rising prices plus a constraint in sales plus higher mortgage rates would not produce a good sales trend next year:

It seems to me that everything I have posted here indicates that a rational Fed would taper a bit in December, because they have to try the waters. They cannot try the waters again next March - they would not have time to save it if they needed to do so.

But if auto sales and retail data are not above expectations, I suspect they won't. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com16tag:blogger.com,1999:blog-8451517.post-6969372414585069802013-11-15T07:03:00.002-08:002013-11-15T07:03:33.545-08:00I'm Alive, But Too Busy To PostAnd ACA isn't survivable anyway. Fiscally it's an unsustainable disaster, and procedurally it is hopelessly flawed, and then the feds effed up the exchanges (how people are going to enroll and the insurance companies will get paid seems to be up in the air). So what's the use? It is tragic for the people whose lives are being devastated, but I am not going to waste my time. The Dems broke it, the Dems will have to own up and fix it.

What happened is that I have been working on the precursors to diabetes for a couple of years (medically). To some extent I was doing this with SuperDoc, to some extent with PNat. PNat just does the helpful analysis that hints at where to look.

Anyway, I had gotten to the point where I could consistently roll myself in and out of diabetes (I wasn't going to experiment on other people this way), but it had nothing to do with all the things you read about in the standard medical literature. Doc concluded at one point that I must have some weird sort of cancer, and I pointed out to him that I was doing this more than 20 years ago, and no way could I be living if that were true.

So we met at the pass and then doc was so fascinated about how I had diabetes but didn't that I think he concluded I must be a super genius at managing blood sugars (he should have known better, but I guess the truth was too weird). Anyway, I told him that I could do this with other people. I knew this because I HAVE been doing it with other people rather consistently.

So he started having me work with newly diagnosed severe diabetics, and sure enough, I can roll them back to an extent. They still have something wrong with them, but they are technically not diabetics. Also their bloodwork turns miraculously beautiful and their organ function jumps way up. Including pancreatic function.

So then I figured out how to all the way reverse my condition. So then doc had me work with this guy in heart failure, and lalala, it appears that he is abruptly coming out of cardiomyopathy. So now we are trying to do the full rollback with patients to see if we can.

This is extremely complicated both procedurally and medically. It appears to be an approach that hasn't been taken before, and according to PNat, this is also implicated in the development of several other odd diseases, especially auto-immune.

So SuperDoc is running in aphasic excited circles, both of us are staying up all night reading, and if we hadn't made an agreement on Wednesday that we needed to sleep I wouldn't even be posting this.

At the very minimum it appears we may have some protocols for metabolic disease that will be hugely helpful to many patients.

So to cut a long story rather short, SuperDoc says we are setting up a clinic just to do this and research, so we can develop the whole thing. I have agreed to be part of it, because the protocol is individual for each patient.

This has to do with the ATP cycle. But then, what doesn't in a living organism? MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com27tag:blogger.com,1999:blog-8451517.post-80915893748449210362013-10-13T07:15:00.000-07:002013-10-13T07:15:03.070-07:00Famously Horrific IT DecisionsBrought to you by the government which works dumber:

As late as the last week of September, officials were still changing features of the Web site, HealthCare.gov, and debating whether consumers should be required to register and create password-protected accounts before they could shop for health plans.
And so, of course they decided that you should be able to get no info before giving the government all your info.

This one decision is the source of many of their problems, because at 60-70 million people need info on these plans. About one-third of the states set up their own exchanges, but they were supposed to follow the government specs.

On the face of it, my guess is that this was a political decision, because they didn't want people to see the true cost of the coverage. Also it would have allowed journalists and other people to analyze the cost of the subsidies (horrific). If you want to generate massive traffic on a website that is not designed for it, turning a 15 minute inquiry with one database inquiry into a 14-hour struggle with over a hundred db transactions is going to be successful. Many would not define that as success, but hey, spinsters have different standards.

The specs were issued late - very late. Some of the functions even on the state exchanges require calls to government info.

The capacity does not apparently exist to get this done on time, and it is the government which created this mess. You can file the paper applications, but then the people who process the paper applications have to enter them in the site that is pitifully inadequate. So if you are going to have to do that, you should do it early and send it directly to the government by mail that's going to give you a delivery confirmation receipt, which you will need to keep.

I have spent the last few weeks digging in the ACA dirt burrowing past the government-imposed data blackout, and I will be posting a series of articles for people who are forced into this mess.

The only thing that is going to save this process at all is that the insurance companies have set up their own websites with calculators, and here's a multi-state site. You can use ValuePenguin to find the list of plans in your area for many states as well as the base premiums, and it does contain a basic calculator so that you can figure about what your premium cost will be.

In the annals of government FAILURES, this one will be legendary. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com16tag:blogger.com,1999:blog-8451517.post-86836049185925048662013-10-08T16:41:00.003-07:002013-10-08T17:00:20.565-07:00Take a Moment To Laugh About ItA few of my favorite DU threads on the shut-down follow. Even DUers are getting tired of the hysteria.

Weren't we all supposed to be distributing the pension cyanide pills to escape the 212 degree atmospheric armageddon of climate collapse? It's so hard to get people to pay attention to your own private world ending these days!

Genocide by another name.GOP Has Not Forgotten -----seniors, the poor, the disabled, the sick, the vulnerable, vets, et al. They just want to eliminate them altogether because they are useless eaters. They only want to fund people who deserve to live and have a life.

2. Tell me about it. Where I live, the streets are strewn with the dead. nt

It's racism. No, REALLY.

 Then there is the whole line of argument about whether dissident legislators should be rounded up for sedition and sent to camps or just executed for treason in the normal manner. Mind you, this furor is raging on DEMOCRATIC Underground.

Economic Treason: The definition of "treason" and could Republicans be guilty of this crimeI think DU comes off rather well in response to this one, but some are doubling down. Domestic Republican Terrorism is a good example of such a reply. Then there's my personal favorite - Class Action Lawsuit!

Sedition! This is classic, too classic to excerpt. A taste-test at this buffet of delights:

13. They are forcing government shut down. nt

 18 USC § 2384 - Seditious conspiracy

US Code
Notes
Updates

Current through Pub. L. 113-36. (See Public Laws for the current Congress.)
If two or more persons in any State or Territory, or in any place subject to the jurisdiction of the United States, conspire to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, or to oppose by force the authority thereof, or by force to prevent, hinder, or delay to the execution of any law of the United States, or by force to seize, take, or possess any property of the United States contrary to the authority thereof, they shall each be fined under this title or imprisoned not more than twenty years, or both.

Sedition and indefinite detention!

Try them for treason along with sedition:

It's not as if the voices of reason aren't trying to fight back, but passions are high.

Democracy is fragile, isn't it? In 1397, at the time of the Revenge Parliament, Thomas Haxey incurred the wrath of Richard II for suggesting in a bill of complaints that His Majesty's household expenses should be curtailed, for which offense King Richard II had him tried and condemned to death for treason. Haxey survived his temerity; Richard II did not. Some brilliant ideas never die, it seems.

 More than 600 years later, we are willing to sell our birthright for political pottage and, um, the executive is getting into a pissing match with Congress.
MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com18tag:blogger.com,1999:blog-8451517.post-69962137920950920222013-10-04T07:10:00.002-07:002013-10-04T07:10:26.294-07:00Cry For The Children!Federal employee union spokepersons are engaging in self-satire at an astonishing rate:

Karen Buondonno, a drone researcher at the Federal Aviation Administration for 23 years, used to view her job as secure. That sense of safety has eroded, she said, a casualty of three furloughs since 2011. ...

“It’s no job security,” said Lytle, who lives in Waukegan, Illinois, and took online classes and finished her bachelor’s of science degree in environmental management and policy earlier this year. She hasn’t been able to advance her career because of a dearth of openings, she said. “If you’re trying to do something, go into other fields, don’t go into a government agency, it’s not worth it.”
As opposed to the private sector, where everyone is guaranteed yearly raises, benefits, retirement, sick pay, and lifetime job security? But wait, there's more (H/T Small Dead Animals)

But lately, civil servants are more often castigated as overpaid bureaucrats. President Barack Obama sent a letter to federal workers on Tuesday lamenting that they have been treated as a "punching bag" and caught up in Congress's disagreements.

 Perhaps as a result, more and more dedicated civil servants are looking to leave government and find a job in the private sector.

 "Most people I know are looking for new jobs," said one Defense Department employee who requested anonymity to speak openly.
Won't they have a shock when they find out what wages and benefits have done in the private sector? Median real household incomes in the private sector are falling hard, and government pay is bucking the trend for the nation. Even nominal median household incomes have only rebounded to about the GR highs (2008) (Sentier data):

Nor does this info depend on ideology - here's Ezra Klein on the topic.

It is not that I am happy that these people are experiencing worries and cash flow difficulties, but I am awed at the complete idiocy of what they are claiming - that the federal government will be deprived of their brilliance due to a desperate escape into the private sector in search of rising wages and long-term security.

There is a problem in DC, and what we are seeing here exemplifies it. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com8tag:blogger.com,1999:blog-8451517.post-5425654279711882622013-09-26T08:44:00.000-07:002013-09-26T08:44:14.146-07:00Taper, No, No, NoOkay, here's the deal. I took His Royal Highness Chief No-Nag Metalheart to the heart hospital last week, and we both got the flu there. We are recovering, but you know how that goes - we have all the energy of some prehistoric sloth species at the moment. I'm bitter, because we were looking for the flu shots but they hadn't come in yet. And he has to go back next week. Ulp!

So I have not had the energy to blog the very interesting back-and-forth between the Fed Heads, but the summary I've come up with is that those who truly want to taper this year are now arguing for a formalistic move at the next meeting (in other words, conceding that they've lost the argument), and many are completely opposed. Therefore there will be no real taper this year.

The reason why is pretty clear. By any real standard, the conditions that the Fed was trying to address with QE3 have only gotten worse, and although they are still predicting some sort of pickup in the second half, those arguing for a taper will have to wait until that appears before their arguments gain any traction.
 It's hard indeed to look at this graph and argue that the economy is picking up speed. The green line, indexed to the right, is the best of the indicators - the YoY change in four-week moving average for initial claims. That is truly benign. However those aren't necessarily a good indicator until after a recession has begun, and that's what the Fed is trying to avert.

The quite-correlated blue and red series are YoY change in real final sales of domestic product and YoY change in full-time employment. Neither look optimistic at the moment, and since the change in full-time employment follows that blue line, the Fed wants to see the blue line at least stabilize for a few quarters before it tightens anything. The blue line is currently below the post-WWII recession line and it has been. Even if you argue for a new normal, they want to see that thing straighten out and stick for a bit before doing anything.

And then, it's obvious that housing is interest-rate sensitive, and there is little hope of that blue line straightening out if the housing recovery doesn't at least stay up to about current levels. Nothing about employment suggests that it is feeding a significant spending expansion into the economy at the moment that could overcome a rebound in mortgage rates.

Regarding the blue line, there's reason to worry. Here's another graph:

(Also see Table 11 in the current GDP release - note that -6.6% over the previous four quarters.)
I do watch these two indicators quite carefully for an upper-bound assessment of corporate spending inputs for the next year of economic projections. The top line (net cash flow with inventory valuation adjustment) measures the real flow of money rolling through corporate hands that could be reinvested. The bottom blue line is undistributed profits with both IVA and capital consumption adjustment.

Historically, sustained weakness in these measures tends to be highly predictive of domestic downturns, and even if everything else looks bad, if these two measures are still growing or cash flow is growing while undistributed profits are not, it generally flags a growth recession not a recession. If you look at the mid 90s growth recession period, you see these two growing and no recession emerged. But right now these two really don't look good.

You can often see recessions being born more than a year in advance using these two measures. Companies that are not making more money tend to start watching their bottom lines very carefully, and slow cuts in expenses have a ripple effect across the economy. The last two quarters have turned in some rough numbers, with the blue line now being about where it was in Q3 2009. You are not going to see a Fed tightening under these circs.

Tax policy has not helped. Raising capital gains rates is kind of suicidal in these conditions - you need to pump corporate investment, not restrain it.

Now, I do differ from most in believing that the natural trajectory this year was for consumer-side weakness to slowly increase through the year rather than decrease. I may be wrong of course, but nothing I know about how these things work tells me that we could hit the tax increase/sequester peak before late in the third quarter. Which is where we now are, and frankly when I browse around things look pretty slim. Not disastrous, but kind of grinding on the pavement.

The real question, therefore, is why we are not yet in a recession? I think it is not because of the Fed action, but because of the M_O_M fudge factor gained by much higher levels of personal current transfers (i.e. SS, Medicare, SSI, DI, SNAP, etc) feeding into a stability in consumer spending. One could also call this the Europeanization factor, because this is what the European economies have done. They can stay up at very low levels of growth for quite a while because there is much less sensitivity in consumer spending relating to employment. Small weaknesses in employment are smoothed out by the high proportion of consumer spending funded by the government.

There's a lot of stability to these payments, and so they fund a pretty steady stream of consumer spending:

As you can see, real personal incomes excluding personal current transfers have barely exceeded their pre-recession peak. If you adjusted for increased taxation, they would be about at their pre-recession peak. The very low interest rates currently are a detraction from personal incomes:

The downside of depending on the government welfare income stream to sustain PCE is that consumer spending becomes acutely sensitive to inflation.

There are significant arguments on the taper side, but the reality is that if the Fed ever agreed to QE3, which it did, it is clear that the QE arguments loom larger in their minds than the negative arguments, and it is not realistic to expect them to suddenly abandon this course.

In short, the Fed theme song for the next meeting is going to be this:

 MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com6tag:blogger.com,1999:blog-8451517.post-5334343975136081132013-09-18T12:59:00.001-07:002013-09-18T12:59:29.420-07:00Asset Purchases Are Not On A Preset CourseOr so the Fed says:

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. In judging when to moderate the pace of asset purchases, the Committee will, at its coming meetings, assess whether incoming information continues to support the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective. Asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's economic outlook as well as its assessment of the likely efficacy and costs of such purchases.
I read this as no taper this year at all. Unless the administration succeeds in starting a war (the actual opponent is irrelevant; the administration just needs a war), the FOMC will wait to see how federal fiscal policy develops before deciding whether to increase asset purchases.

I believe the Fed may be discussing ways and means of buying assets but lending them back to the banks to serve as a hard collateral base. There's no technical reason why they could not do this, and they may have to do it if they continue their asset purchase program much longer, or increase it.

Depending on what Congress does, the Fed may increase its asset purchases next year.

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com23tag:blogger.com,1999:blog-8451517.post-39193671497801792812013-09-17T17:03:00.003-07:002013-09-17T17:16:44.106-07:00Why There's Just About No InflationCensus released its broadest estimate of various income measures for 2012.The highlights:

Real median household income was 51,017 in 2012 vs. 51,100 in 2011. Not statistically significant.

Since the income peak real median household income is down 8.3%. Since the peak before the previous recession (1999), real median household income has declined 9%.

Real median household income is in fact very similar to the peak before the 1991 recession - just a tad under currently. More than two decades of declining real median household incomes spells "housing recovery", doesn't it? The future's so bright we have to wear rosy glasses. ...

But actually some signs of recovery do exist. The bottom two quintiles either lost or held steady, and the top quintile and the top 5% lost. The middle two gained. These changes are not really statistically significant, but probably they really are, considering the looming tax increase pulled-forward income shift from 2013 to 2012, which showed up the most for the wealthiest households.

Some graphs from the report:

 And of course real median incomes:

When interpreting these measures, it's important to remember that as new households form the median income should tend to shift downwards a bit. Also when looking at real median incomes by race, don't forget to factor in larger numbers of younger people among groups such as Hispanics and Blacks.

But regardless, income measures such as these do tend to accurately reflect the need for government welfare programs, although income from government welfare programs is not counted.

Now add to this the impact of this year's tax increases, and it's not hard to understand why we have low consumer inflation. We simply don't have the circulating money income to cover much in the way of cost increases.

We could, of course, take advantage of the Fed's optimistic largesse to simply borrow our asses off, but oh, wait, we already did that. We really can't do it again:

As a wild guess, more households still want to delever than otherwise. This chart shows nominal instead of "real" debt, but the dizzying rise in nominal debt since the 1990 real median household income point implies that we are still overloaded with debt. Those student loans aren't going to encourage the younger cohort to live large on a borrowed dime either.

The interesting thing is that there are two implications for the Fed. The first is that future guidance as to rates means little in terms of a houshold's propensity to borrow, except perhaps for home loans and auto loans (both of which are currently shifting to the less affordable). The second is that if they ever want to try to inflate out of this, they really need to do it pronto. Aging households imply that five and ten years down the line it will be impossible. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com0tag:blogger.com,1999:blog-8451517.post-31089646468218978062013-09-16T05:16:00.000-07:002013-09-16T05:17:04.338-07:00Feynmann Lectures on Physics Are OnlineHere, free, really. Caltech put 'em up.

And if you think you are not interested, I suggest you start with Chapter 3 - the relationship of physics to other sciences. Economics is not included as a science, and at this point I think that exclusion still stands. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com3tag:blogger.com,1999:blog-8451517.post-57697812430972418772013-09-13T07:08:00.002-07:002013-09-13T07:08:21.300-07:00And The Add-on To the YoY Decline in Production JobsA Bloomberg article discussing the slump in US manufacturing with continued outsourcing:

The U.S. industrial comeback, an idea embraced by President Barack Obama and some economists as 12 years of factory-job losses gave way to three annual gains, is now sputtering. Even with nonfarm payrolls up 1.1 percent in 2013 to 136.1 million, manufacturing has stagnated at less than 12 million. ...

Higher taxes and employee benefits boost U.S. manufacturing costs to 9 percent more than the average of the country’s nine-largest trading partners, according to a Sept. 3 report by a team of JPMorgan Chase & Co. analysts.
 Which leaves us with this:

It's true that the Europeans have begun to complain of the US fracking energy advantage, and one can see why, because European industrial production looks much worse than that of the US:

 It's not hard to see why European employment is so bad. I expect that the latest dip was partly due to Germany's floods, but obviously the trend is entirely unencouraging.

However given our problems, our own employment levels still have only recovered to 2006 levels. The best way to describe the current trend in the US is that it has shifted sharply toward that of Europe, and what you see in European IP trends is the likely result in the US.

It is true that manufacturing is becoming globalized, but much of the globalization is focused toward manufacturing more in the country where the goods will be sold. As the net surplus incomes and savings of the populations in the developed countries decline, production will also.

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com10tag:blogger.com,1999:blog-8451517.post-49176770941743114302013-09-10T05:56:00.003-07:002013-09-10T06:11:21.457-07:00Utterly Schizoid NFIB ReportI don't know what to make of this at all, but I am unwilling to dig a hole and pretend it doesn't mean anything. I have been reading this data for a very long time and I find it highly useful.

This is a strange report. On the one hand, there's a sudden collapse in three-month earning trends:

This is most unfortunate. Admittedly credit by historical standards is very easy to get and very cheap, but heading to the bank with your hand out with collapsing earnings is not a pleasant experience.

The reason for poor earnings is a sales collapse:

Remember when I posted that this all had a 2008 feel to it? This has made me twitchy, I can tell you. Note the high expectations for the future.

On the other hand, employment plans are soaring:

By far the best of the recovery. It may be that retirements are beginning to generate more hiring impetus. Inventories and sales don't support the hiring plans. There is a high retail/hospitality component to this report, and it may be that ACA changes are moving this indicator also.

Last month's report was one of the big samples, so the sudden change between last month's figures and this month's figures could partly be explained by that. But I have the wind up. Read the report for inventories - that indicator is not flamingly positive at this time.

NACM has been unnotable but decent with some improvement, but here I quote from the August report:

“ This bodes pretty well for the coming months , as long as nothing affects sales numbers drastically,” said Kuehl.
 Uh, yeah. I just went back and read NACM again to see if I had missed anything, and I hadn't. Consolidation was the name of the game, and that's positive.

I am stuck again on the horns of the dilemma with which I began the year. The actual on-the-ground change from the tax bill picks up strength through the year, and is accentuated by business and investment taxation changes which will tend to hit investment. The weakness in new home purchases I believed would show up at the end of the summer, and it apparently has.

So now we move into what is supposed to be the Fed taper sequence, yet I think it is very likely that they will find themselves either not tapering or beginning to taper and reaccelerating purchases. But what can they buy?

I did not expect to see this in NFIB. The next two months will be interesting indeed.

Update: One possibility for this somewhat confounding trend is that the student loan changes disrupted CC spending, and that this is therefore a temporary hit which will be somewhat redressed in the next few months. Student loans are being used to generate considerable consumer spending, but I don't know how much of a factor it is. Revolving credit hasn't been going much of anywhere:

The pace of student loans fell off this year because of the pending interest rate changes and perhaps declining enrollments. The eventual change in rates was actually highly favorable, so I expect that portion to turn around:

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com14tag:blogger.com,1999:blog-8451517.post-22552298402661585842013-09-08T20:16:00.002-07:002013-09-08T20:16:08.692-07:00Japan and AbenomicsJapan's problem is this, from Trading Economics

 Japan's ability to use monetary policy to reverse its long deflation is limited, because it is very hard to execute when you have to import the basics, esp. energy. The decisive turn for Japan really occurred on 3/11 with the earthquake/tsunami disaster followed by the Fukushima Daiichi meltdown.

The consequence - unavoidable - was that an economy dependent on nuclear energy was converted to an economy dependent on imported energy.

If 3/11 had not happened, it is possible that cheapening the yen could increase exports and perhaps buy Japan some time and space. But 3/11 did happen, and at least half of the nuclear plants will never reopen.

Earlier in this sequence I kept reading articles about how Japan's exports were rising and how this showed the brilliance of Abenomics. But it doesn't, because when you devalue your currency to boost exports, the trade-off is that necessary imports must drop in order to actually achieve something. The coverage is beginning to become more realistic now.

The chief domestic debate at this time seems to be about the scheduled sales tax increases (needed to cover interest expense). Well, if you read the link you'll note a lot of optimism, but look at wages:
 Not a lot of space there to increase real consumption, is there? Wages in manufacturing would be the first sign of a real renaissance:
 Of course that's nominal - CPI is already rising:
 But not by much, huh? Because there is not really a lot of money to go around, is there? The one very, very sure thing Abenomics does is this:
So the theory is that since exports are rising companies will make all this money and invest all this money and that will expand the real economy. Looking at new orders:
 Hmm. Lending is way up:
If the situation were not so tragic, I would cattily remark that half of that must be to TEPCO.

More seriously, this does support the idea that some reflation is going on, but it also begs the question of how long it can continue. Government debt is so high that lending like this must be repaid under difficult circumstances and there is a natural limit, which seems to be rapidly approaching due to this:
And its natural consequence, this:
Current account is the broadest measure of a nation's trade balance. It includes income received and income paid abroad. In order to carve a way forward, Japan would have to inflate its government debt substantially away without increasing interest costs enough to offset the gains. This is hard to do when you are in this situation:
And doing this:
Thus, the government feels impelled to raise revenues in a real sense, which implies domestic deflation.

Don't forget that Japan is still struggling with the aftermath of the devastating 3/11 disaster. Less than a month ago the last of the areas without power were reconnected. Japan had a structural governmental deficit before then, but since it has accelerated.

If it were not for the demographic situation, perhaps Japan could inflate its currency sufficiently to deflate away a lot of its government debt in real terms. But it is not clear how this can happen when pension funds will have to shift investments to compensate! BoJ will have to keep buying, but this has never ended well for any country.

The logic is that it will inflate stocks, and perhaps it will. But as nominal money value diminishes, the relative influence of shifting private savings from bonds to stocks will naturally dwindle, indicating that there is an upper limit. Business investment is rising, but not hugely, and there is a natural limit there as well. The natural strategy for Japanese investors is now to outsource capital - to buy overseas bonds and equities - so as to profit from the currency changes. This is not a recipe for long-term optimism.

Japanese disposable personal income will naturally drop as a result of the tax increase, and retail sales and consumer confidence will as well. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com6tag:blogger.com,1999:blog-8451517.post-87579476729934289712013-09-06T08:39:00.000-07:002013-09-06T15:26:35.945-07:00Employment, August 2013The report is here. The notable factors are not the headline numbers (7.3% unemployment rate, Establishment Survey jobs +169K) but the underlying detail.

There were substantial downward revisions for the past two months in Establishment Survey jobs, with July's total nonfarm down to 104K. The unemployment rate is down, but that's due entirely to a drop in participation rate, which had been at 58.7 for the last two months, but fell to 58.6 this month.

It is entirely possible for SA employment numbers to move in two opposite directions in the two surveys (Household vs. Establishment), and this is one of the months in which they do. The Household number of total employed fell 115K whereas the Establishment count rose 169K.

The unemployment rate keeps falling, and it's not hard to see why with the not-in-labor-force number rising 516K this month. The civilian noninstitutional population rose 203K, so a net loss of over 300K from those who could be working or looking for work really moves the numbers.

The downward revision for Establishment in July probably was significantly related to the car shutdown, so I don't view either the Establishment survey or the Household survey as indicating a change in direction. However both seem to show a pretty weak economy job-wise. The YoY jobs gain for the Household survey is almost exactly 2 million. The YoY for Establishment total nonfarm (you have to get this from the historical table) is slightly better at close to 2.2 million (I'm doing this from memory because the table is currently unavailable). The two-month total for Household is 112K, which is not good, but which should increase next month as all of the education jobs are picked up.

One very large factor driving the unemployment rate down are retirements. The increase in the labor force (those working or actively looking for work) over the year was 864K, although the overall increase in civilian non-institutional population was more like 2.4 million.. Jobs are growing at a slower rate than would be historically expected, but that rate is significantly lower than the rate of exits from the labor force, therefore the improvement in official unemployment rates has legs as a trend. The 25-and-older unemployment rate for those with at least a college degree has dropped to 3.5%, indicating a much-improved environment. Discouraged workers grew slightly over the year, but marginally attached to the labor force did not, so it really is retirements.

This is still a very difficult environment for young people looking for their first "real" job. The younger average age among black workers probably accounts for the excruciatingly high unemployment rate of 13%, but it still burns. Hispanic unemployment rates are 9.3%, Asian unemployment rate is at 5.1%, and white unemployment rate is at 6.4%. And ages do account for some of this, but not all.

It is an even worse environment for older workers who lose a job (the 60-and-older crew). They probably account for the monthly increase in the 27-week and over unemployment. This has dropped over the year, and it's probably because many of these older workers have reached retirement age.

The end of the auto plant July shutdown probably accounts for the big monthly drop in part-time workers due to slack work. Over the year the part-time for economic reasons number has only dropped about 130K, but part of that is due to the retail/restaurant jobs ACA effect.

Turning again to the Establishment survey, service jobs were weak at 134K, saved by the big increase in health/education jobs (38K, versus July's 15K). Private jobs, when adjusted for the auto shutdown don't seem to have changed from July to August, although the headline numbers did (127K/152K). Government jobs dropped 23K in July and increased 17K in August, which is not surprising given education calenders and doesn't reveal much of a trend.

To get a sense of just how weak the underlying job creation trend is, perhaps table A-13 is the best quick overview. This table gives a YoY non-seasonally adjusted comparison for various fields, so all error is survey error. Note the YoY drop in production occupations! This table gives the YoY employment gain at about 1.95 million. Construction helped.

Since we have growing employment stability, as evidenced by the very favorable trend in unemployment apps, there is a somewhat more favorable impact on spending than one would expect from raw job gains. After all, consumuer spending trends depend not just on jobs but on the certainty of income from those jobs. Retirement incomes are mostly stable also, so there is a growing strength to the spending "floor" compared to the economy of even ten years ago.

However, the correlated axiom to the above M_O_M fudge factor effect is that this economy is extremely sensitive to inflation trends. Exceptionally so when compared against the economy of a decade ago, or even the entire range of post WWII experience. And this trend too has legs. This sensitivity will probably slowly increase over the next twenty years.

Thus, theories that increasing inflation will materially help the US economy are slightly off the mark. This economy cannot probably achieve a 2% inflation rate. It's literally not in the cards. The retraction of consumer spending is too front-loaded. Also the official CPI is very ineffective at gauging real household spending tendencies - much of household expenditures fall in the range of "forced" spending for fuel & energy, food, medicine and taxes. Any increases in these blocks will force an immediate hard retraction in spending in other, more discretionary blocs.

For China and such countries, the implications are rather dramatic. Europe is in the same boat. These two huge consumer blocs have driven much of the Asian expansion over the last twenty years, and now that's wearing to a natural end.

Update: The most problematic feature of the employment reports was of course seized upon by Mark. Go to the link for the lovely graphs and music.

To augment Mark's eternal optimism:

That's the graph of production jobs. It's sure a relief that there's no correlation with recessions, isn't it? Oh, wait....

Industrial production:

So maybe it's not just mechanization, huh?

Hmm, hmm, this looks familiar somehow. Where/when have I seen this before????????

History is not the Fed's housecat.

I do disagree with Mark's musical selection, though:
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On the brighter side, time cures all ills, and it will eventually cure ours. My favorite O Fortuna version. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com12tag:blogger.com,1999:blog-8451517.post-53050379927186428112013-08-30T08:50:00.000-07:002013-08-30T08:51:00.882-07:00The Obvious Goes PostalMaybe the alternate title for this one is "The Fed Is Hoist By Its Own Petard".

The problem the Fed has is that both real and price-adjusted consumption are at or below their post WWII recession lines. Thus, withdrawing QE, if it does anything, would be expected to push the economy into a recession.

But the second problem the Fed has is that if it doesn't withdraw QE and the economy continues to recover, that all-essential green line (real consumption) is going to be hamstrung by inflation and the result will be to push the economy into a recession. Also business investment is doomed to be low because of the sharp rise in tax rates, especially on capital gains taxes.

Looking at the same graph, but with YoY changes in currency:

The economy is still compensating and not slumping, but it's scraping along with abysmally low expansion rates. The implication is that even minor inflation is too much for the market to bear, because it will push real consumption down too low to avoid a downturn.

So why is real consumption so low? Well, let's look at nominal employee compensation:

Despite financial-press talk about employment driving consumption, it's rather obvious that in fact it cannot. YoY changes in nominal employee compensation can only drive nominal consumption changes at about the same rate. Because most SS recipients are losing real income, it is only new disability and retirement awards that can add spendable income, and even at the current accelerated pace, it's not enough to push growth. It sustains it where ordinarily we would already have fallen through the thinning ice, but it can't do much more than that.

It's almost as if this thing is correlated or something. Take heart - this means most Americans are honest and don't steal for a living.

One of the results of the Fed's current QE binge has been the destruction of the housing market for most people. The price increases on property have exceeded what many first-time borrowers can pay, so the housing recovery is narrowing now to investor-dominated. This is not encouraging, because it implies for the Fed that either it must go Abe NOW - announcing QE this fall to continue for several more years at close to the current levels - or it must begin to taper and let the Black Rocks rock on down to their losses so individuals can participate.

Autos are exhausted (judging by used-car interest rates), and only the housing market is left. But you have to print a JACKWAD of money to keep an investor-led housing recovery going. If they choose that option, they need to go big time. We'll know by November. All bets are off.

My guess is that the Fed may go Abe now. They probably don't have the guts to take their medicine. I would in fact be sure, except for a minor technical problem.

If the Fed does go Abe (which is not going to work there, btw), the Fed should actually increase the monthly buy-in. A few small holes have developed in the business plans of the larger housing investors, and it takes a lot of monetary muscle to patch such holes. Here there's a problem. What do they buy? They're pretty well maxed out on Treasuries already. Mortgages don't offer them a solution either:

The problem with an investor-based housing recovery is that it doesn't generate the increase in mortgage bonds you need. Too much of it is cash-based, or direct borrowing from banks:

Maybe the Fed should just double down and directly buy the houses!!!! I'd recommend starting in Richmond, CA. They've got a very good stimulative plan in place - seize the property. Alternatively the Fed could just buy stocks.

If this weren't our economy, this would all be terribly funny. But it is our economy, so it is not.

The global economy has very much of an early 2008 feel to it. This next few months are going to be interesting.

Syria is of course a wild card, but if the president bombs Syria, he pretty much bombs the US economy. So don't expect the Fed to taper in September. I don't think it can. It must wait to find out what will be done on the debt limit, so it knows what the supply of Treasuries will be. And it must wait to find out whether oil is going to go to impossible levels.

I think the Fed has already lost control of the money supply, so they might as well taper ASAP. The duration of the adjustment matters as much as the adjustment itself. It's possible a sharp taper could trigger a massive expansion in the US money supply and a big upward move in oil rates (way to speculate on the USD if you don't want to be in stocks), but that would be self-healing. Also mortgage rates will be self-healing too. Because mortgage rates are already constraining sales, there is a natural shift down in mortgage rates. The cost would be a short downturn, but it would be short.

But I don't think the Fed is realistic at all. I think they are now afraid of everything - as well they should be. By any realistic standard, the US economy is at its weakest point since the end of the recession. MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com12tag:blogger.com,1999:blog-8451517.post-65254521132428946272013-08-23T08:31:00.001-07:002013-08-23T08:31:52.299-07:00Tapering for RednecksI'm feeling better, so I thought I'd share the humor with you all.

Despite the many fascinating analyses of the FedStrat one can read, the reality is that the Fed has a minor technical problem with its asset buying program.

To understand this problem, you do not need a degree in advanced financial matters. You need a brain, and possibly a little banking or business experience.

The reality is that banking stability is entirely dependent on stable collateral value and stable storage of necessary banking reserves. The reason there are all those empty buildings all over China, including some almost-empty cities, is that the Chinese financial system does not produce stable collateral value. Thus they have to build it. No collateral = extreme financial instability when the music stops.

The banking system in the developed world is also dependent on stable collateral and stable reserves, which is the reason that government-issued securities (sovereigns) are so important. They will become ever more important, as this Bloomberg article gracefully hints:

Banks are facing a growing list of demands from regulators to seek out highly liquid assets as authorities move to bolster the resilience of the financial system. Re-use of collateral is one way that lenders can satisfy the tougher rules, amid warnings from banks that there may not be enough highly liquid securities available to satisfy accumulating requirements from supervisors.
If the world literally runs out of collateral, the rush into hard assets is inevitable. It's a pretty good guess that warehouses in China stacked full of commodities are also used in the collateral rush. It's also a pretty good guess that the same piles of commodities are instantaneously quantam-tunneled from one warehouse to another on financial statements. Advanced lending physics, that.

Okay, so if the basic rule is that STABLE credit expansions are limited by collateral, and if a central bank starts buying all the collateral used for banking reserves, then doesn't the basic rule imply that commodity costs must rise? And when commodity costs do rise, doesn't that mean that demand for collateral on bottom-level lending must escalate?

Think of it this way. A bank lends and knows that some of its lending will produce losses. Thus it reserves a certain portion of its profits to cover those future losses. It has to put that money somewhere. In the developed world, a big piece of those reserves have normally been stored in sovereign and sovereign-guaranteed bonds. Alternatively, it must put its reserves on deposit at the Fed.

Now the amount of reserves (which reduce profits) that a bank stores this way are related to lending risks, and lending risks are related to collateral. Collateral relating to commercial loans goes from the dicey to the PDG, in this ascending order:
1) Future profits (future cash flow surpluses).
2) Current operating reserves of the company plus cash. This means that the lender could hold or take an interest in cash deposits or have the company pledge its working accounts. In practice, you can't take money that the company needs to fund its future cash flow without ditching your own loan, so it's really excess operating reserves of the company.
3) Stock (if the company is public).
4) Hard assets. These are not generally very liquid, but they run from warehouses full of quantam-tunneled zinc and copper in China to things like office buildings, trucks, and manufacturing inventory. Except for things like office buildings, which if owned can be sold with a lease-back option, most manufacturing-type assets are needed for company operation, and thus can only be liberated in a liquidation, which may force future additional losses on your loan. However if a company owns ships or a truck fleet, you may be able to liberate value by transferring ownership with leases without putting the company out of business and ditching your own loan.
5) Securities, such as government bonds or government-insured bonds or commercial securities insured by a reputable insurer which are owned and pledged by the borrower as collateral for your loans.

So in the end, when things go bad the entire chain is still acutely dependent on cash and government bonds. If things really go bad, the liberation value of trucks or ships or office buildings may become minimal. Four years later you may recover your losses that way, but in the current period, you have to recognize losses on the loan. Stock value is highly variable over the short term. In widespread downturns, the relative values of government bonds or government-insured bonds go up, so that is your best real liquid collateral option other than cash. The longer term the better, because the yields on the short bonds will drop, so having a nice juicy 10 year government bond with a relatively high yield compared to short-term interest rates in a downturn is better than gold.

Now what happens when a central bank acquires a lot of the stable securities? Hmmm? The Fed currently has about 2 Trillion in US Treasuries. It's currently buying 40 billion a month, so at the current pace it will have about 2.25 trillion in another six months. The Fed wanted to shift this mix to long bonds to suppress mortgage interest rates. Here we might wonder what is available, and according to the Treasury:
The Fed is exhausting the supply of longer yield bonds and bills. Therefore a lot of its holdings are in shorter durations still. The Fed cannot afford to become the market here, and it looks like it may end up with 20% of the total supply if it sticks to the May schedule. If you want to be a little less redneck about it, the Chicago Fed has a presentation by Win Analytics up.

The Fed started buying the 40 billion NEW a month of Treasuries in December. As of the end of November, 2012, total federal debt held by the public was 11.55 trillion. As of August, it is just under 11.95 trillion. Thus over 10 months the new Treasuries buying by the Fed corresponds to almost all Treasury new issuance. The Fed did not in fact expect the supply of Treasuries to be constrained to this degree, and, and there is "hidden" issuance that hasn't emerged yet due to debt ceiling constraints. Yet still the Fed is an awkward position here. No doubt the Fed is waiting to see what is going to happen with the debt limit negotiations and future budget negotiations, and it will really make its decision on Treasury buying once it catches a political clue.

Still the quandary remains. In an expanding economy, the need for working capital and stable collateral values must expand. If stable collateral values cannot expand to the private market, then one would expect net market interest rates to rise to compensate, which would constrain economic growth and load more risk into the financial system. Companies would then be constrained in expansion by the need to store cash and fund new operating expenditures more from profit, or the need to buy hard assets to create collateral reserves, which has a natural limit.

In this respect, understanding why oil prices are rising as they are is no mystery.

All the tch-tching about the Fed removing stimulus too early is technically accurate,

because by all historical standards, the US has hardly escaped from the last downturn, but has since accumulated rising debt levels, and now faces higher federal taxes which must drag on growth, plus the accumulated drag from old-age funding and the collateral degeneration of state and local finances across a wide range of US territory. There are significant drags and the drags are probably accumulative.

In particular, the flat utility production curve over seven years says something rather dire about the real state of the US economy and real GDP growth. Nonetheless, the business rebound indicates that we have a growing need for strong collateral to fund a genuine, if slow, expansion, and that implies that the natural result of Fed actions is already coming close to slowing economic growth.

The Fed may have to dump Treasuries out there again through reverse repos. Velocities are still dropping, and I can't understand the Fed's current policy in any other way but as a velocity drag:
<img src="http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=M2V,M1V,MZMV&scale=Left,Left,Left&range=Max,Max,Max&cosd=1959-01-01,1959-01-01,1959-01-01&coed=2013-04-01,2013-04-01,2013-04-01&line_color=%230000ff,%23ff0000,%23006600&link_values=false,false,false&line_style=Solid,Solid,Solid&mark_type=NONE,NONE,NONE&mw=4,4,4&lw=1,1,1&ost=-99999,-99999,-99999&oet=99999,99999,99999&mma=0,0,0&fml=a,a,a&fq=Quarterly,Quarterly,Quarterly&fam=avg,avg,avg&fgst=lin,lin,lin&transformation=lin,lin,lin&vintage_date=2013-08-23,2013-08-23,2013-08-23&revision_date=2013-08-23,2013-08-23,2013-08-23" />

In the short term, the shortage is being met by stripping Treasuries from bank holdings, but this can't continue for too much longer. The very high percentage of cash-funded home sales shows that we are shifting to the China model, and the Fed cannot continue its current strategy for too much longer.

Home affordability is now falling dramatically, and there is nothing the Fed can do to stop the process. The strongest lending gains we now have are car and student loans, and this doesn't bode well.

The solution is clearly not to create an Italian-type situation, in which theoretical bank reserves are stored in theoretical sovereign bonds. The eventual detonation there is going to be most impressive.

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com8tag:blogger.com,1999:blog-8451517.post-81337898456377518322013-08-15T09:33:00.002-07:002013-08-15T09:33:48.439-07:00Nicely Summed Up
The government does want all your health records in shareable databases, and that includes your imaging.

MaxedOutMamahttp://www.blogger.com/profile/08011469804162511617noreply@blogger.com3

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![ Hãy Quên Anh Như Em Từng Quên - Long Hải](http://image.mp3.zdn.vn/thumb/240_240/covers/a/f/af1342d2d11f6cc2990854177f7d81ee_1375861753.jpg)
# Hãy Quên Anh Như Em Từng Quên -
[Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
Lượt nghe:
Năm phát hành: 2013
Số bài hát: 10
Album đầu tay của ca sỹ Long Hải được biên tập với các ca khúc nhạc trẻ, hy vọng các bạn sẽ đón nhận
[Xem toàn bộ]
- 2
[Trái Tim Anh Vẫn Cần Em Remix](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=1)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 3
[Quá Khứ Cần Kết Thúc](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=2)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 4
[Duyên Số Ta Chỉ Thế Thôi Remix](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=3)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 5
[Anh Có Lỗi Gì](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=4)- [Long Hải ft. Kevin Rogers](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i+%2C+Kevin+Rogers)
- 6
[Không Thể Không Khóc Remix](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=5)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 7
[Đến Với Tình Yêu](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=6)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 8
[Từng Đêm Em Nhớ Anh Remix](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=7)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 9
[Nếu Em Không Hạnh Phúc](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=8)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
- 10
[Yêu Mình Em Remix](/album/Hay-Quen-Anh-Nhu-Em-Tung-Quen-Long-Hai/ZWZADA9W.html?st=9)- [Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i)
[Long Hải](/tim-kiem/bai-hat.html?q=Long+H%E1%BA%A3i) ![ Long Hải](http://image.mp3.zdn.vn/thumb/165_165/avatars/5/d/5d7d1f8fddb667b6be37edec7be5e7a8_1375861675.jpg)
![ Long Hải](http://image.mp3.zdn.vn/thumb/165_165/avatars/5/d/5d7d1f8fddb667b6be37edec7be5e7a8_1375861675.jpg)
[Long Hải](/nghe-si/Long-Hai)
Tên thật: Đào Đức Vương
Ngày sinh: 28/02 - Quốc gia: Việt Nam
Cty Đại Diện: Sóng Nhạc Entertainment
Sinh ra: Hưng Yên Lớn lên: Thái Nguyên
Năm lớp 11 đạt giải nhất đơn ca nam "Giai điệu tuổi hồng" tỉnh Thái Nguyên Tốt nghiệp thanh nhạc tại trường CĐ VHNT Việt Bắc Sở thích: Nuôi chó mèo tây và đặc biệt là rất quý mèo
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