Financial topics

[aedens]

Western society has given itself the organization best suited to its purposes, based, I would say, on the letter of the law.

This is a indictment as we know from Alexander, a formal accusation initiating a criminal case to the entire world.

[Higgenbotham]

" Life organized legalistically has thus shown its inability to defend itself against the corrosion of evil. "

Excessive use of law and inappropriate use of the law. Rights versus obligations.

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret.

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

http://www.bloomberg.com/news/2011-11-2 ... ncome.html

http://4closurefraud.org/2011/12/07/ber ... t-article/

They had a legal right to do the above (technically speaking), but a moral obligation not to.

Some of us would like to take them all behind the building and shoot them but of course Solzhenitsyn and anybody who has read Gulag know that's not the solution.

Occupy and their ilk are hardly capable of taking the reins, as Tuchman's comparison to the 14th Century implies.

"The oppressed were no longer enduring but rebelling, although, like the bourgeois who tried to compel reform, they were inadequate, unready, and unequipped for the task."

I see no solution. We know what needs to be done but collectively there is no will to do it.

[Higgenbotham]

http://futures.tradingcharts.com/chart/ ... 1326335860

Natural gas prices are down over 80% since their 2006 high.

[Higgenbotham]

By Braden Reddall | Reuters – 3 hrs ago

(Reuters) - Chevron Corp warned that fourth-quarter profit would be significantly below the previous quarter, with production still falling short of prior expectations and its refining operations about breaking even.

http://news.yahoo.com/chevron-warns-q4- ... 50666.html

Gasoline sales have been falling. Vehicle miles travelled continued to fall in the fourth quarter. I'll dig up the latest stats on VMT.

Travel on all roads and streets changed by -2.3%
(-6.0 billion vehicle miles) for October 2011 as
compared with October 2010. Travel for the month
is estimated to be 254.0 billion vehicle miles.

Year/October/Year-to-Date/12 Month Moving Average

2004 254,359 2,477,416 2,950,791
2005 251,414 2,498,597 2,985,970
2006 257,965 2,518,790 3,009,623
2007 261,532 2,542,869 3,038,451
2008 256,415 2,495,301 2,983,555
2009 254,540 2,495,329 2,976,556
2010 260,004 2,512,323 2,994,589
2011 253,964 2,476,350 2,962,555

Travel volume has taken out the 2009 "recession" levels.

This is one set of stats that I consider not to be manipulated.

http://www.fhwa.dot.gov/policyinformati ... ng/tvt.cfm

John, it may be time for you to start tracking those Thompson-Reuters earnings estimates again to see if they start making the big downward revisions. I'm not familiar with that.

[Trevor]

I'm not surprised that it's fallen. If the economy is bad, people aren't going to travel when they don't have to. They have to do some driving, like to their job, assuming they still have one, but trips for fun are going to be quite limited.

[aedens]

http://futures.tradingcharts.com/chart/ ... 1326335860

Natural gas prices are down over 80% since their 2006 high.

More evidence of false signalling.

Note the 32,591 and 32,326 numbers. As incomes fell 0.8%, savings rates fell 1.3%. EIther these numbers are screwed up or people spent more as their incomes fell. Note the 32,473 and 32,350 numbers. Those nearly identical incomes correspond to savings rates of 5.6% and 3.9% respectively.

I find it as a sticky note thought to follow in addition to your VMT signals.

I find it a direct reflection of the stealth tax of monetary policy. The repression tax on demographic basis is typical targeting also.

[Higgenbotham]

I don't use them, but they have the nice mapping and navigation systems that may save people some miles because they no longer get lost or make a wrong turn. Work at home may be ramping up a bit, I don't know. And there is more and more online banking and so on that requires less driving to do the same thing.

However, if all of that were the cause I would expect the rate of increase of VMT to have slowed over the past decade rather than the large fluctuations on the chart near the end of the report.

Awhile back I posted that GDP used to be about 99% correlated with VMT and now it's about 95%, which makes sense. It may be that 4th quarter GDP will suprise to the downside. Obviously, if I'm short up to my eyeballs I'm expecting something like that but it remains to be seen whether Chevron will be representative of decreased driving.

Anecdotally, though, I had to drive on Christmas and was surprised to see every gas station far from any major freeway open. I stopped at one and went in and talked to the guy. He said 3 or 4 years ago most of them were closed but they are hurting so bad for business they have to stay open to make any $$$ they can.

[Higgenbotham]

I find it a direct reflection of the stealth tax of monetary policy. The repression tax on demographic basis is typical targeting also.

My thoughts exactly as I combed through that data.

[Trevor]

Since we're only in the beginning of our current economic crisis, the attitudes haven't fully changed. Remember, in the Great Depression, the debt continued to skyrocket until 1933.

[OLD1953]

I'm not sure it is possible with the public data to determine with any accuracy the difference between debt written off, debt paid off and debt refinanced with a haircut for the lien holder. I THINK a good deal of spending is now going to accelerated debt service, but I can't prove it with what I've got for data. This may be a delibrate limitation in the reporting, or it may just be that I lose patience trying to cut through the political noise with the bandwidth limitations I'm living under. Too many bloggers with a "mission" out there. Plus, some of these definitions seem to creep over time.

With that, there are also the issues of "what's a rational decision", given changed circumstances. Credit cards are now secured debt, (secured vs future earnings, given personal bankruptcy does not affect these debts save on interest earnings) so their interest rates SHOULD be low. Given most are far too high for secured debt, one might think the total of credit card debt would drop, which it did, but then we have to look at who is buying food with the cards because of lack of work. Or travelling to seek work, and putting fuel on the cards. There is a huge difference between use of credit for necessity and use of credit for luxury, and we aren't seeing that increase in lower end luxury items. High end yes, low end, not so much. (I call low end luxury goods things that people like to replace or get new, such as costume jewelry, cheaper liquors, brand cigarettes, electronics, etc., while high end is things like 500$ ^ shoes or purses, etc.) Meat consumption, especially red meats, is way down, about 12% down from 2007. Cigarette consumption has been dropping since 1980, and the drop is accelerating. Low end luxury goods are dying on the vine. The recent reports on increasing 'binge' drinking are interesting, since I sense an implication that some can't afford to drink save at free bars and parties where they aren't paying or are paying reduced prices, and therefore drink excessively when they get the chance.

And we've got to keep population increases in mind as well, consumption of "X" may be up overall, but might have dropped per capita as prices went up.

Given the above, I THINK we are seeing personal debt being paid off at an accelerated rate by both decreasing luxury purchases and a tendency to shift debts to a single payment (anyone know where to get data on consolidation loans?) rather than have a number of payments going out. But I don't see an easy way to prove it.

And now, a question!

Looking at this GAO analysis of the FED document, am I missing something in the numbers on page 130 thru 132? Or did the banks really cut into the funding programs for this kind of money? That's a good bit more than has been admitted in public.

http://www.gao.gov/assets/330/321506.pdf