Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

drz-400 said:

Government bonds are the standard by which all bonds are rated. Therefore, they strongly reflect the strength of a countries financial sector....

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Show how this proves the assertion.

Quit acting like a little girl! Asking for someone to prove their opinion of how an alternative reality would have played out proves you have no desire to have an intellectual discussion. If you do not agree, the burden of proof is on you to show error (like I often do to you in regards to this subject matter).

So either man up, or shut up. The choice is yours.

Goldenboy219 said:

Quit acting like a little girl!

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Um... you first.
Prove your assertion.
Your continued, predicted, avoidance of doing so at all costs only proves you have no desire to have an intellectual discussion.

Asking for someone to prove their opinion...

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Its not an opinion -- you claimed it as a fact.

So either man up, or shut up.

American said:

We have a one term president in the White House. Bwuahahahaha

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Unfortunately, far too many on your side find this more important than fixing things.

Goobieman said:

Um... you first.
Prove your assertion.

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You mean back up my opinion with facts and statements? I already did. You have not addressed them, and instead make tell me to "prove your opinion".

Your continued, predicted, avoidance of doing so at all costs only proves you have no desire to have an intellectual discussion.

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All of the foremost experts on finance and economics share the same opinion. I even provided you with commentary from the former secretary of the treasury (Bush's guy) in which he shared the same sentiment.

Its not an opinion -- you claimed it as a fact.

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:rofl Have you gotten your first visit from aunt flow? If i did claim it as fact, it is up to you to prove me wrong. All you have done the last few pages is bitch and moan. Not one bit of sound economic commentary.

So either man up, or shut up.

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:roll:

Do you have anything of substance to add to the discussion?

drz-400 said:

Government bonds are the standard by which all bonds are rated. Therefore, they strongly reflect the strength of a countries financial sector.

Lets look at a few graphs.

Compare this to the 30's

The 10 year treasury note

The 30 yr bond

Why did yields drop in all government bonds? The financial sector was running for shelter, putting money into the safest place possible, government bonds. Yields went negative on 1 month treasury bills. Banks were paying the government to use there money. This all happened because one investment bank, Lieman Brothers, collapsed. Do you think we could have allowed another large investment bank to collapse?

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Quality post and sound analysis.

Goobieman said:

Show how this proves the assertion.

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So, first we have the housing bubble:



As you can see, house prices were out of line with the market, and they eventaully fell.

This fall caused many non-conforming loans to default.



This caused banks to begin to lose money:



The ABX index basically what banks expect to get out of a dollar of each type of loan.

This caused banks to pull back from lending, to maintain enough capital:



LIBOR is basically were banks lend to each other in dollars.

The 3 month treasury is a government bond. Government bonds are considered risk free.

These two are usually seperated by 30-50 basis points (a basis point is 1/100th if a percent). You can see here it went to over 2%.

This basically shows there is an excessive amount of risk in the market. Banks do not want to lend to each other.



Commercial paper is a money market security (meaning it matures in under 270 days) that is sold by large banks and corporations to get money for short term obligations. The spread basically shows the concern for default. This means banks are not able to get money for their short term obligations.

So we have this vicious circle:

1. Housing prices fall
2. People defalt
3. Banks lose money
4. Banks stop lending.
5. House prices fall more.


This will continue until house prices stop falling and all of the bad loans have been purged from the market. So without any intervention, the market is stuck in this liquidity trap, leaving banks with a bunch of forclosure homes and no money to lend.

How much trouble are we in when China is dumping our T-Bills?


FT Alphaville Dumping US T-bills


Foreign demand for US Treasury securities fell by a record amount in December as China purged some of its holdings of government debt, the US Treasury department said on Tuesday.

China sold $34.2bn in US Treasury securities during the month… leaving Japan as the biggest holder of US government debt with $768.8bn. China overtook Japan as the largest holder in September 2008.

ptif219 said:

how much trouble are we in when china is dumping our t-bills?


ft alphaville dumping us t-bills


foreign demand for us treasury securities fell by a record amount in december as china purged some of its holdings of government debt, the us treasury department said on tuesday.

China sold $34.2bn in us treasury securities during the month… leaving japan as the biggest holder of us government debt with $768.8bn. China overtook japan as the largest holder in september 2008.

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2 Year Historic
Treasury Yields

The current yield on the two year is .85%

So while you use the word "dump", it is not an accurate reflection of the situation. To dump the Treasuries would mean to sell at a rapid fire rate thereby devaluing their own holdings simultaneously. It is commonly referred to as "capital flight", and as yields suggest, this is not happening.

drz-400 said:

This will continue until house prices stop falling and all of the bad loans have been purged from the market. So without any intervention, the market is stuck in this liquidity trap, leaving banks with a bunch of forclosure homes and no money to lend.

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Nifty. Nice charts, too.

How does all of this necessarily -- any by necessarily, I mean that it WILL happen becaue it MUST happen -- lead to an economic condition as bad as or worse than the great depression, and that there is no chance of any other outcome or condition.

BTW... Goldenboy thanks you for carrying his water for him -- its pretty clear you indeed have the grasp of the subject that he wants everyone to think he has.

Goldenboy219 said:

You mean back up my opinion with facts and statements....

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No... you claimed a fact, not an opinion.
You have done nothing to prove that your claim is, indeed a fact.

All of the foremost experts on finance and economics share the same opinion.

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Fallacy: Appeal to authority
Aside ftom that, this PROVES nothing.

If i did claim it as fact, it is up to you to prove me wrong.

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No, it is up to the person that makes the claim to support said claim.
At least it is when adults are talking.

Do you have anything of substance to add to the discussion?

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Asks the guy who makes a claim of fact and then supports it solely by crying "prove me wrong!"?
Irony so thick you need a chainsaw to cut it...

sorry wrong thread

Goobieman said:

No... you claimed a fact, not an opinion.
You have done nothing to prove that your claim is, indeed a fact.

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The argument in question is the result of an alternate reality. Since there is no way to prove what "might" have happened, i was not making a claim of fact. Do you know the difference between an opinion and a fact? Please provide a link that show's i was claiming my opinion to be a fact.... If you cannot provide one, be gone.:2wave:

Fallacy: Appeal to authority
Aside ftom that, this PROVES nothing.

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Never said that it proves anything, only that the so called experts share my sentiment.

No, it is up to the person that makes the claim to support said claim.
At least it is when adults are talking.

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But if you do not like my opinion, you are more than welcome to tell me why it is wrong. You have no desire to do so. Instead, this is a little game of antics to make yourself feel better because you cannot add to the discussion in a meaningful way.

Asks the guy who makes a claim of fact and then supports it solely by crying "prove me wrong!"?
Irony so thick you need a chainsaw to cut it...

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There is the problem.... You mistook my opinion as a fact. Actually.... you didn't. All you are trying to do is pigeon hole me into a corner and it will not work. Bitching and moaning is about all we can expect from you when it comes to discussions that pertain to economics or finance. If i am wrong, then why have your only replies to this thread in the last few days lack any attempt at making sound economic commentary?

You fail goob, for the nteenth time this month! :rofl

apdst said:

How 'bout not spending a trillion dollars on pork? Think that might help? Plus, the government can get thier dead asses out of the way and let the private sector do what it does best...make money. There's your tax increase.

Make too much sense, I'm sure.

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Pork? Spending a trillion dollars? No.... first, it was $800B. Of the $800B, $275B was in the form of tax cuts. Thus, of the paltry $525B stimulus bill, $50B was for unemployment (goes with every deep recession); $75B for medicad assistance and $80B for states to help there budgets (so they would not have to fire teachers/police, etc.).... so maximum available for 'pork' would be $320B... but this was generally for road construction (some pork...most not) and green projects (ok, that may be fair game)....

Actually, many argued the stimulus was not big enough.... but, in the end it seems to be working...much better than the non-plan from the other side of the aisle.

.... to work our way out of the deficit, both sides (those that can't deal with tax increases and those that can't deal with spending cuts) have to suck it up and do the right thing. Anyone that thinks that one approach solves the problem is nothing short of being a fool....

Goobieman said:

Nifty. Nice charts, too.

How does all of this necessarily -- any by necessarily, I mean that it WILL happen becaue it MUST happen -- lead to an economic condition as bad as or worse than the great depression, and that there is no chance of any other outcome or condition.

BTW... Goldenboy thanks you for carrying his water for him -- its pretty clear you indeed have the grasp of the subject that he wants everyone to think he has.

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Well, falling house prices and non-conforming loans that were made during the housing bubble defaulting were basically necessary for the economy.

House prices had to return to historical levels. People realized that houses were not worth the price, or there was an excessive amount of houses on the market. Either way, prices for houses were too high.

Loans that were made to underqualified (for lack of better term) buyers in the bubble were going to defualt, they had negative equity after home prices had declined. Basically meaning there morgage was now worth more than their house.

This compounded the problem because as people defaulted credit became harder to get, and demand for houses would drop more, and prices would drop more. Also foreclosed homes sell for less, and when a lot of foreclosures are happening it creates an excess of built homes in the market. This sort of thing feeds off of each other.

The rest of the financial market got pulled into the crisis because people began realizing that large players in the financial industry actually owned these loans. This caused a fear within the market. No one knew who had these bad assets so they were afraid to lend money to each other. When Lehman Bros. collapsed it turned into a full fledged panic. Banks were investing in only t-bills and bottled water, so the joke went.

Now the difference between this crisis and others is that this panic was not just a panic. Usually the fed can extend a line of credit to banks, and people will realize the money is still there, and the panic will subside. This time we were dealing with an actual solvency crisis. Thats why we had all the bailouts.

Now, how bad did this get? As it has already been said, yields on government bonds went lower than they did during the great depression.


That tells me the financial market was in worse shape. Luckily we have smart people at the fed that were able to save us this time around and keep the crisis more on wall street than main street when compared to the great depression.

Here is a cool graph comparing the worlds industrial production during the great depression and now:



Of course there is no way to prove what would have happened had we acted differently, so I cannot really tell you based on fact that what happened now, under the same conditions as 1929 would have played out for better or worse than the great depression. But I think you can see now that the actions taken by the fed and the federal government have been appropriate (in there aims, maybe not size) and useful in adressing our current economic recession.

drz-400 said:

Well, falling house prices and non-conforming loans that were made during the housing bubble defaulting were basically necessary for the economy.....

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All of this is indeed true.

Of course there is no way to prove what would have happened had we acted differently, so I cannot really tell you based on fact that what happened now, under the same conditions as 1929 would have played out for better or worse than the great depression.

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And this is exactly MY point -- you may have some idea what might have happened, but you cannot say that it is a FACT that it would be worse.
Thank you.

Psst.... Golden Boy... You see this?

Goldenboy219 said:

The argument in question is the result of an alternate reality. Since there is no way to prove what "might" have happened, i was not making a claim of fact.

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This is a lie. Read what you wrote:

The bottom line: a perfect storm arose and guess what. We are all still here, and the parking lot @ Applebee's is always full on a Friday night (unless you are in Detroit). So say what you want about macro stabilizers, the fact of the matter remains.....
Doing nothing would have been worse. How much worse? Think 1930's worse.

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You claimed a fact, not posted an opinion.

Never said that it proves anything, only that the so called experts share my sentiment.

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Then you wasted your time posting meaningless dreck.
Of course, dreck is your forte, so...

But if you do not like my opinion, you are more than welcome to tell me why it is wrong.

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Again: You claimed a fact. It is up to you to prove it.
And since then, you have done exactly what I said you would do and spend pages and pages and pages doing all you could to avoid having to do so -- because this is what you always do.

Why is that? Because you know you -cannot- prove it and aren't man enough to admit it.

As per the norm.

Kandahar said:

And this is exactly why we have a perpetual deficit. Because people freak out ZOMG TAX INCREASE over any suggestion that we cut the deficit. And other people shriek ZOMG ENTITLEMENT CUTS over the same.

If we're ever going to balance the budget, we're going to need to rein in entitlement spending and increase taxes.

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Okay, fine. But while the idea of tax cuts/hikes gets lots of heated attention, what has anyone got to say about spending cuts?!!? Usually, not much.

Telecaster said:

Okay, fine. But while the idea of tax cuts/hikes gets lots of heated attention, what has anyone got to say about spending cuts?!!? Usually, not much.

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We need to reform our entitlements, and the only politically feasible way I know of to do that is to have independent commissions determine what cuts to make and have Congress give the whole package an up-or-down vote, much like we do with military base closures.

Goobieman said:

This is a lie. Read what you wrote:

You claimed a fact, not posted an opinion.

Then you wasted your time posting meaningless dreck.
Of course, dreck is your forte, so...

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I did claim a fact.... That it would have been much worse. How much worse is, of course, my opinion. But you already knew that, and instead of having a legit discussion, you go off on a tangent. Of course we know why.... You are here to be a partisan hack and nothing else. Nobody (outside club rush-o) takes anything you say seriously because it is agenda driven and lacks substance.

Again: You claimed a fact. It is up to you to prove it.

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Nope. You are just playing a childish game because you lack the ability to accurately and objectively discuss the subject matter.

And since then, you have done exactly what I said you would do and spend pages and pages and pages doing all you could to avoid having to do so -- because this is what you always do.

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For the record: I am always able to discuss and argue these particular topics in an effective and intelligent manner. I have yet to see one.... That's right. One post you have made in which sound economic understanding is displayed. It's always the same 'ol rabid partisanship!

Why is that? Because you know you -cannot- prove it and aren't man enough to admit it.

As per the norm.

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I am not going to attempt to prove my opinion to anyone. I will discuss why it is more sound than yours (although you do that for me).

Done arguing with a child.

Goldenboy219 said:

I did claim a fact.... That it would have been much worse. How much worse is, of course, my opinion.

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Nice try at equivocation. Nothing changes. You've still done exactly what I said you would do for exactly the reason I said you would.

Now run away with that tail tucked tight.

Goobieman said:

Nice try at equivocation. Nothing changes. You've still done exactly what I said you would do for exactly the reason I said you would.

Now run away with that tail tucked tight.

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Is this yet another attempt to avoid sound economic discussion?.?.? When you feel up to the challenge (instead of hiding behind a game of antics), we can have a debate on the subject.

Unless of course you aspire to get your ass handed to you in a true debate involving the macro economy?

Goldenboy219 said:

Is this yet another attempt to avoid sound economic discussion

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Ironic that you whine about avoiding 'sound economic discussion' when yours is based on 'facts' that you you know cannot prove -- as you have illustrated for everyone, quite plainly.

Goobieman said:

Ironic that you whine about avoiding 'sound economic discussion' when yours is based on 'facts' that you you know cannot prove -- as you have illustrated for everyone, quite plainly.

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It is common knowledge that without government intervention, the macro economy would have been worse than it is now. How much worse? Think 1930's.

red = fact

blue = opinion

You can stop trying to discuss my words unless you have nothing else to bring to the discussion. Are you afraid of a debate on the macro economy?

Goldenboy219 said:

It is common knowledge that...

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As I said before... Nice equivocation. Nothing changes.

Your continued equivocations and attempts to get out of having to prove your claims -- just as I predicted -- serve only illustrate your eagerness to self-sodomoze your credibility as a sentient being.

Oh, and regarding this little bit of petulance:

Done arguing with a child.

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One of two things is true:
-This is a lie
-I'm not a child
Your call.