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evilweasel posted:Feel free to start a new one of these threads in a week or so. Okay, time for a new one of these, lets catch you up to speed: 1) US banks spend decades repealing Depression era laws and capturing the regulatory apparatus. 2) As always happens, the banks start doing increasingly ridiculous poo poo, aided by sweet, sweet low interest fed money, creating bubble after bubble until they finally get big enough to gently caress up not only the US finance industry, but the world finance indsutry(which is hard to separate at this point). 3) Massive crash in 2008, followed by a global depression we're all still in, for the most part. This leads to various aftershocks based on things the banks were doing during the run-up to the crisis, including various debt problems in Europe which are totally not ginned up by the same people who caused the problem, and austerity programs basically everywhere because the best way to grow is to shrink. 4) Status of laws and regulations to prevent this from happening again: ahahahahahahahahahah  What this thread is for:
 Status of the US right now: Really, really bad. If you're rich you're OK, no but most of the "recovery" is amazingly low numbers, or outright cherry-picked. Let's roll that beautiful unemployment graph: 
Zeitgueist fucked around with this message at May 23, 2012 around 22:04 |
| # ? May 23, 2012 21:58 |
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| # ? May 21, 2013 17:57 |
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Reserved
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| # ? May 23, 2012 21:58 |
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Why not kick off with a Taibbi article?quote:A suit has been filed by Facebook shareholders against Mark Zuckerberg, Facebook, Morgan Stanley and others. It's based on a very simple concept: when internal analysts learned that Facebook’s numbers were going to be worse than expected, the company and its bankers didn’t tell everyone, but just "selectively disclosed" information to a small group of "preferred investors." This shouldn't be a surprise to anyone who isn't new to finance.
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| # ? May 23, 2012 22:10 |
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US sales of new homes rose 3.3 percent in AprilBloomberg Businessweek posted:Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover. And the blip they're so excited about, in context:  Hooray! New Home sales are now equal to what they were at the depths of the recession!
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| # ? May 23, 2012 22:13 |
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Be careful not to cut yourself on that sharp rise.
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| # ? May 23, 2012 22:14 |
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Saw Mark Watson present this paper PDF at the Minneapolis Fed a few weeks ago. Should be super controversial. Here's a highlight of the most interesting finding from the abstract:Mark Watson posted:Third, while the slow nature of the recovery is partly due to the shocks of this recession, most of the slow recovery in employment, and nearly all of the slow recovery in output, is due to a secular slowdown in trend labor force growth. An edgy way to interpret the authors' findings is that employment is actually growing faster than expected, i.e., we're above trend right now. The problem is that the long-run trend itself is pretty dismal. If he's right, the current employment situation is mostly due to long-run factors (that started before the crisis) rather than residual crisis-related malaise. Fake edit: Before I get called out for being the mainstream macroeconomist evildoer that I am, note that this paper is entirely empirical; there's no modeling whatsoever, just econometrics. This post contains no content that should stir up debate about theory. So save your Steve Keen, your MMT and your ABC for something else. Oakland Martini fucked around with this message at May 23, 2012 around 22:32 |
| # ? May 23, 2012 22:25 |
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In English, please? Is he really saying that we have high unemployment because the labor force isn't big enough?
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| # ? May 23, 2012 22:28 |
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Oakland Martini posted:Fake edit: Before I get called out for being the mainstream macroeconomist evildoer that I am, note that this paper is entirely empirical; there's no modeling whatsoever, just econometrics. Perhaps I'm reading the part about DFM wrong? Did they go into detail just to say they weren't using it?
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| # ? May 23, 2012 22:30 |
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Zeitgueist posted:Perhaps I'm reading the part about DFM wrong? Did they go into detail just to say they weren't using it? paper posted:
They use a DFM, but it's an econometric model, not an theoretical one. The key phrase is "linear time series model." I guess I should have said that there's no theoretical modeling in the paper. The term "model" is used in econometrics as well, but in that context OLS is a "model."
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| # ? May 23, 2012 22:35 |
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Radbot posted:In English, please? Is he really saying that we have high unemployment because the labor force isn't big enough? And if so, is that shrinking labor force caused by people being unemployed for so long that they've stopped looking for work? And would that mean that the "long run factors" are themselves caused or exacerbated by "residual crisis-related malaise"?
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| # ? May 23, 2012 22:35 |
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Radbot posted:In English, please? Is he really saying that we have high unemployment because the labor force isn't big enough? "Big enough" is a normative statement. The paper is entirely positive, there's no normative analysis anywhere. He's saying that the long-run trend in employment is much slower growth than we've seen in the past, and that slow trend growth explains the bulk of the current employment situation. In other words, if you buy his econometrics our employment situation would be similar even if the crisis hadn't happened (to the extent that you can make statements like that, anyway).
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| # ? May 23, 2012 22:38 |
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tastethehappy posted:And if so, is that shrinking labor force caused by people being unemployed for so long that they've stopped looking for work? And would that mean that the "long run factors" are themselves caused or exacerbated by "residual crisis-related malaise"? And what of the research showing that, contrary to declines in EPOP being caused by retiring Boomers, that Boomers are instead staying in jobs longer because their retirement funds were wiped out from the tech bubble/GFC? Oakland Martini posted:"Big enough" is a normative statement. The paper is entirely positive, there's no normative analysis anywhere. He's saying that the long-run trend in employment is much slower growth than we've seen in the past, and that slow trend growth explains the bulk of the current employment situation. In other words, if you buy his econometrics our employment situation would be similar even if the crisis hadn't happened (to the extent that you can make statements like that, anyway). So what purpose does this paper serve, other than to absolve the patrons of the Federal Reserve of any blame? Does anyone really think that the collapse of Lehman Brothers is the *one true reason* that people are unemployed? Radbot fucked around with this message at May 23, 2012 around 22:41 |
| # ? May 23, 2012 22:38 |
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Oakland Martini posted:They use a DFM, but it's an econometric model, not an theoretical one. The key phrase is "linear time series model." I guess I should have said that there's no theoretical modeling in the paper. The term "model" is used in econometrics as well, but in that context OLS is a "model." I guess what I took was that the DFM they were using was based on the techniques developed by other macroeconomics, and reads as if they're saying "well based on these particular metrics, we're doing better than we should be" which in my experience, is something that's really easy to cherry pick so you can get the positive outcome you want. Having said that, the paper appears to make the argument that jobless recoveries like we've been having are because the jobs are gone, which isn't exactly a new idea. Maybe I'm simplifying too much? I'm not good with the jargon. Does labor force refer to the prospective hires? If so, that's just silly.
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| # ? May 23, 2012 22:40 |
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Zeitgueist posted:I guess what I took was that the DFM they were using was based on the techniques developed by other macroeconomics, and reads as if they're saying "well based on these particular metrics, we're doing better than we should be" which in my experience, is something that's really easy to cherry pick so you can get the positive outcome you want. DFM is a time series economics methodology. It's based on some of the stuff Chris Sims won the Nobel for (along with Tom Sargent) last time around. You're not wrong that it's easy to rig empirical work to get the results that you're looking for, although I think this paper does a pretty good job of trying to remain neutral by using (and showing explanatory power even for the recent recession of) the same underlying factors for all post-war recessions. I mostly just posted the paper as it provides some new evidence for the "structural vs. cyclical" debate, and because it's one of the few papers that uses modern time series econometrics techniques to try to inform that debate. At various times in the past few years there's been a lot of bluster from people on both sides of the debate but relatively little rigorous work like this. Edit: If you want to try and simplify the paper a bit further, they're just decomposing time series data into high and low frequency components in a more-rigorous-than-usual way. In this context, the result I quoted above just says that the low-frequency components are driving most of the movement in output and employment. Oakland Martini fucked around with this message at May 23, 2012 around 22:53 |
| # ? May 23, 2012 22:49 |
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Structural unemployment usually implies some fault with labor itself, though, doesn't it?
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| # ? May 23, 2012 22:51 |
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Radbot posted:Structural unemployment usually implies some fault with labor itself, though, doesn't it? No. The trend might well be driven by the increase in the relative size of the finance sector, for example (I personally think it's got to play at least some role). I don't see how that would lay blame at workers' feet.
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| # ? May 23, 2012 22:56 |
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Radbot posted:Structural unemployment usually implies some fault with labor itself, though, doesn't it? "Fault" with labor isn't quite the right idea. It is skill mismatch. The state workforce center is trying to teach 50 year old construction workers basic word and excel skills. It isn't the construction workers "fault" that they are not proficient in office software. It just isn't a skill that they ever needed to use it in their professional lives.
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| # ? May 23, 2012 23:03 |
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edit: nevermind what I just said, I was thinking about a different term
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| # ? May 23, 2012 23:16 |
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karthun posted:"Fault" with labor isn't quite the right idea. It is skill mismatch. The state workforce center is trying to teach 50 year old construction workers basic word and excel skills. It isn't the construction workers "fault" that they are not proficient in office software. It just isn't a skill that they ever needed to use it in their professional lives. Of course there's not really a ton of indication that this type of thing is the cause of unemployment right now. I mean if those kind of jobs were having trouble finding people they'd be paying for training, but the issue is there isn't enough business for the hires and shitloads of people who already have those kills. Hell, my grandma is 84 and knows excel and word really well and nobody is going to hire her.
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| # ? May 23, 2012 23:22 |
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Zeitgueist posted:Of course there's not really a ton of indication that this type of thing is the cause of unemployment right now. I mean if those kind of jobs were having trouble finding people they'd be paying for training, but the issue is there isn't enough business for the hires and shitloads of people who already have those kills. I think you're mostly right. Skill mismatch probably plays some role, but I think there are other factors involved. Two facts strike me as particularly important that don't seem to have anything to do with skill mismatch: i) increasing share of multinational output to total US GDP: and ii) decreasing American share of multinational employment.
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| # ? May 23, 2012 23:33 |
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Zeitgueist posted:Of course there's not really a ton of indication that this type of thing is the cause of unemployment right now. I mean if those kind of jobs were having trouble finding people they'd be paying for training, but the issue is there isn't enough business for the hires and shitloads of people who already have those kills. Aren't the people right out of college being murdered right now by the economy? What does that mean in this context? They got the wrong degree?
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| # ? May 24, 2012 00:05 |
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Torpor posted:Aren't the people right out of college being murdered right now by the economy? I don't think it has to do much with what kind of degree you have. http://www.youtube.com/watch?v=qOP2V_np2c0 I believe this has already been posted a million times, but I think the assessment in this video is valid in a sense that it boils down to companies not being able to afford labor that is above minimum wage anymore.
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| # ? May 24, 2012 00:29 |
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reggintaf posted:I don't think it has to do much with what kind of degree you have. There is no reason to include "being able to afford". If a company can be more profitable by hiring less, why wouldn't they? If companies in general can reduce costs by reducing employment, and in the process increase unemployment and reduce the price of labour, why wouldn't they?
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| # ? May 24, 2012 00:35 |
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reggintaf posted:it boils down to companies not being able to afford labor that is above minimum wage anymore. It has nothing to do with companies 'not being able to afford labor' when it has more to do with companies wanting to pay less for labor.
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| # ? May 24, 2012 00:38 |
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Oakland Martini posted:They use a DFM, but it's an econometric model, not an theoretical one. The key phrase is "linear time series model." I guess I should have said that there's no theoretical modeling in the paper. The term "model" is used in econometrics as well, but in that context OLS is a "model." Isn't a model based on a linear time series/iid error assumption a poor choice for stuff like this?
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| # ? May 24, 2012 01:35 |
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6 Billion dollar bet Must watch Frontline covering the MF Global crime committed by Jon Corzine. The system is rotten to the core. My favorite quote from the film is from a guy that manages the money of some farmers (they bought futures through MF Global and their money was stolen and used to bet on European bonds): quote:"MF Global is just a microcosm, the tip of the iceberg, the cockroach theory, if you will. There’s never one cockroach. And it represents the start of systematic failure. The system has failed us, and it’ll only continue to grow." Steve R. Meyers, MF Global: The Six Billion Dollar Bet Oh and if things would be hosed up even if the crisis didn't happen, let's see when the next crisis hits how much we can study how that won't have anything to do with anything either.
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| # ? May 24, 2012 02:18 |
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What I love about the MF Global thing is how they're financial geniuses and the best and brightest whenever they talk about pay, but they're suddenly forgetful and clueless when you ask where other people's money went. Just like "nobody could have seen" the 2008 crisis coming.
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| # ? May 24, 2012 02:33 |
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Zeitgueist posted:What I love about the MF Global thing is how they're financial geniuses and the best and brightest whenever they talk about pay, but they're suddenly forgetful and clueless when you ask where other people's money went. Just like "nobody could have seen" the 2008 crisis coming. Gee whiz, we just completely misplaced all that investor money! We're so klutzy and befuddled that way, WHERE is that mason jar we put it in?!
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| # ? May 24, 2012 02:35 |
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I'm on my lunch break and don't have time to read a long article or watch a video. Can anyone explain briefly what the MF GLobal thing is and what they did with other people's money?
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| # ? May 24, 2012 04:30 |
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Arglebargle III posted:I'm on my lunch break and don't have time to read a long article or watch a video. Can anyone explain briefly what the MF GLobal thing is and what they did with other people's money? Based on some quick googling, MF Global lost a lot of money on various bets and "borrowed" customer funds to meet collateral calls.
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| # ? May 24, 2012 04:40 |
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My honest question is, how much farther would this mess have to go before we break up the TBtF banks in the same way we broke up Ma Bell?Commander Hen posted:It has nothing to do with companies 'not being able to afford labor' when it has more to do with companies wanting to pay less for labor. And expecting more work out of those lucky enough to not get canned, unpaid or hardly paid interns, and the complete gutting of overtime pay called salary. Why hire fifty people to work a production line or billing division, when you can just buy a machine to do it all and hire one guy to maintain a dozen of them?
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| # ? May 24, 2012 04:41 |
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Radbot posted:US sales of new homes rose 3.3 percent in April Do you have a chart that goes a bit further back, say 10 years? Those last few years before the crash were really ridiculous.
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| # ? May 24, 2012 04:43 |
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Vilerat posted:Do you have a chart that goes a bit further back, say 10 years? Those last few years before the crash were really ridiculous. FRED is your friend. 10 years:  and 20 years:  edit: wtf i uploaded the same graph twice baw fucked around with this message at May 24, 2012 around 07:07 |
| # ? May 24, 2012 04:52 |
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I like this one. Wow, that is nuts.
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| # ? May 24, 2012 05:21 |
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Commander Hen posted:It has nothing to do with companies 'not being able to afford labor' when it has more to do with companies wanting to pay less for labor. Arglebargle III posted:I'm on my lunch break and don't have time to read a long article or watch a video. Can anyone explain briefly what the MF GLobal thing is and what they did with other people's money? Basically Corzine gambled with approximately 6 billion dollars by betting on European defaults, while claiming that the same amount of money from the investors magically disappeared. The real worry about this is that basically everyone is doing it, hence the CME isn't backing the loss of any of these assets. Nobody wants to notice the 800 lb gorilla in the room known as OTC derivatives.
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| # ? May 24, 2012 05:23 |
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Arglebargle III posted:I'm on my lunch break and don't have time to read a long article or watch a video. Can anyone explain briefly what the MF GLobal thing is and what they did with other people's money? Reggintaf covered it pretty well, but if you get a chance later, the Taibbi fanboy in me has two links.
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| # ? May 24, 2012 05:30 |
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jet sanchEz posted:I like this one. Wow, that is nuts.
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| # ? May 24, 2012 05:48 |
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reggintaf posted:I apologize and stand corrected. Yes, reggintaf covered it pretty well, the only thing i would correct is that Corzine did not bet on European defaults, he bet on a European bailout.
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| # ? May 24, 2012 05:49 |
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Thanks for the new thread, Z. While the one-week ban on a new thread was on (and what's up with that?), Pro Publica reported that the states are using funds from the 50-state settlement to close their budget gaps: quote:States have diverted $974 million from this year’s landmark mortgage settlement to pay down budget deficits or fund programs unrelated to the foreclosure crisis, according to a ProPublica analysis. That’s nearly forty percent of the $2.5 billion in penalties paid to the states under the agreement. Who could have ever predicted that the settlement, absent stipulation, wouldn't go to homeowners? And Alan Simpson is still making an rear end of himself while making the rounds to encourage Grandson of Grand Bargain; here's the letter he sent to the California Alliance of Retired Americans a few weeks ago: quote:To Whom It May Concern: I'm far less worried about the recs from Simpson-Bowles seeing the light of Congress knowing that Simpson's gonna be out there yapping his jaw in favor of them. Willa Rogers fucked around with this message at May 24, 2012 around 06:23 |
| # ? May 24, 2012 06:19 |
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Willa Rogers posted:While the one-week ban on a new thread was on (and what's up with that?), Pro Publica reported that the states are using funds from the 50-state settlement to close their budget gaps: Remember that this is in exchange for some form of immunity against future prosecution over all of the insane foreclosure stuff still going on with the banks. I'm not sure if it was ever publicly disclosed how much immunity the banks were getting in this deal, but I would imagine a lot. On top of all of this, I believe it came out that some of the settlement money was actually coming via the federal government, so it was partially a stealth bailout.
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| # ? May 24, 2012 06:47 |
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