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Tesla Motors Inc. is eliminating one-quarter of its workforce.

 

As many as 87 of the San Carlos electric car company's employees will be gone, mostly from California and an engineering site in Rochester Hills, Mich.

 

Tesla, which began delivering $109,000 Roadsters to customers this year, said last week it would trim jobs and delay production of a second model, a $60,000 electric sedan, until 2011 because of the financial crisis.

 

http://www.sfgate.com/cgi-bin/blogs/bottomline/index?

 

post-1339-1224900373.jpg

703629[/snapback]

 

Inflation coming.

 

[Money Supply]

------------------ == <in|de>flation

[GDP]

 

 

edit: To amplify my point, If GDP goes down, then all things being equal, there will be more dollars per unit good. It is true that right now we're deleveraging but if this causes business to dry up, production will slow and unemployment will rise, which will lower GDP.

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Inflation coming.

 

 

This is the concept that very few can actually comprehend. Sure the CBs are dumping a few trillion into the pipeline to try to save the system temporarily, it means NOTHING when 100s of trillions of derivatives are melting down. "Hyperdeflation" is my call personally and Cash becomes not King anymore but Slave Master of the Universe.

 

Those that have cash will survive and those that only have "things" will likely perish. The oversupply of "things" such as homes, cars, PMs, stocks, bonds, boats, collectibles, etc. become sources of liquidation when people need to survive, when you and I need to feed the family, then nothing else matters. This will occur on a global scale and is happening right here and now...

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Tonight I was wondering whether there were more people than the available productive capacity from available resources as currently structured.

 

I looked on google, but when I got down to quotes to dive down from more than 8 million responses, I got zero results.

 

If that's true, general returns are going to be down (like now: sort of the opposite of the Ford view of having people build cars with a salary where they can afford to buy them themselves and build sales). It also might explain things like terrorism (unproductive/unemployed/hopeless individuals) and anti-terrorism (findings jobs for other unproductive/unemployed/hopeless individuals to "fight" the above equally hopeless) and thus engaged in a spiraling down negative feedback cycle where people are not making or doing things that are helpful (in an environmentally green way of course).

 

I imagine that it is human nature to aspire to normal endeavors: wanting to be productive, have a family and friends, etc.

 

Things are off-kilter here. On the one hand you have enormous amounts of struggling have-nots (people), and on the other hand you have an enormous amount of phantom derivative traders within banks and hedge funds who don't seem to have an idea about how things should work, versus focusing on one candlestick and a bonus, who think leverage is a great idea and plan to exit in a few years.

 

Congress has woke up recently (and acts pretty fiesty), but they are pretty late to the collapse of the party publicized here that has gone on for years. So the gatekeepers were a snooze. I'm still not sure that joining forces with evil-doers was the right idea. But I'm definitely for new regulations and having some smart people think about good statistics and transparency.

 

In terms of technology, we could have invented most of the things we need to know, and be low on common sense at the same time. In a "no new great idea" world, how does that work out? You have the basics, and you love the generics or store brand. But its boring and slow. (I suspect.) Sort of like the investment banks going to regular banks and deleveraging. Could that be the next 10-20 years? If so that's the subscription model. Not much growth, but hopefully a percentage return by way of dividend or bond yield.

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Inflation coming.

 

[Money Supply]

------------------ == <in|de>flation

      [GDP]

703638[/snapback]

That looks like velocity of money.

 

I don't see money supply changing much. Maybe someone can explain it different. I do see demand for money changing big time. Bank deposits look to be up $0.5 trillion y/y, and another $0.5 trillion has been sucked into the U.S. Treasury supplementary financing account, so there's $1 trillion in demand that wasn't there last year. On the other side, maybe the currency swap is "printing" but it's temporary and might only be mitigating additional demand from abroad that everyone's talking about.

 

I'm not so sure how to define the money supply, so just taking M2 at $7.8 trillion, that's a lot of extra demand. Call it 15%. By your equation, gdp would have to fall 15% to keep the balance between inflation & deflation. More if the foreign demand is right. I could see that, but it's a surprising number. Puts things in some serious perspective, especially if you believe in the foreign demand story and think this demand sticks. GDP down how much?

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That looks like velocity of money.

 

I don't see money supply changing much. Maybe someone can explain it different. I do see demand for money changing big time. Bank deposits look to be up $0.5 trillion y/y, and another $0.5 trillion has been sucked into the U.S. Treasury supplementary financing account, so there's $1 trillion in demand that wasn't there last year. On the other side, maybe the currency swap is "printing" but it's temporary and might only be mitigating additional demand from abroad that everyone's talking about.

 

I'm not so sure how to define the money supply, so just taking M2 at $7.8 trillion, that's a lot of extra demand. Call it 15%. By your equation, gdp would have to fall 15% to keep the balance between inflation & deflation. More if the foreign demand is right. I could see that, but it's a surprising number. Puts things in some serious perspective, especially if you believe in the foreign demand story and think this demand sticks. GDP down how much?

703641[/snapback]

 

Good point. One thing I never could figure out was if any of the measured GDP counted stuff from the financial industry. If so, that would complicate things a bit.

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Tonight I was wondering whether there were more people than the available productive capacity from available resources as currently structured.

 

I looked on google, but when I got down to quotes to dive down from more than 8 million responses, I got zero results.

 

If that's true, general returns are going to be down (like now:  sort of the opposite of the Ford view of having people build cars with a salary where they can afford to buy them themselves and build sales).  It also might explain things like terrorism (unproductive/unemployed/hopeless individuals) and anti-terrorism (findings jobs for other unproductive/unemployed/hopeless individuals to "fight" the above equally hopeless) and thus engaged in a spiraling down negative feedback cycle where people are not making or doing things that are helpful (in an environmentally green way of course).

 

I imagine that it is human nature to aspire to normal endeavors:  wanting to be productive, have a family and friends, etc.

 

Things are off-kilter here.  On the one hand you have enormous amounts of struggling have-nots (people), and on the other hand you have an enormous amount of phantom derivative traders within banks and hedge funds who don't seem to have an idea about how things should work, versus focusing on one candlestick and a bonus, who think leverage is a great idea and plan to exit in a few years.

 

Congress has woke up recently (and acts pretty fiesty), but they are pretty late to the collapse of the party publicized here that has gone on for years.  So the gatekeepers were a snooze.  I'm still not sure that joining forces with evil-doers was the right idea.  But I'm definitely for new regulations and having some smart people think about good statistics and transparency.

 

In terms of technology, we could have invented most of the things we need to know, and be low on common sense at the same time.  In a "no new great idea" world, how does that work out?  You have the basics, and you love the generics or store brand.  But its boring and slow.  (I suspect.)  Sort of like the investment banks going to regular banks and deleveraging.  Could that be the next 10-20 years?  If so that's the subscription model.  Not much growth, but hopefully a percentage return by way of dividend or bond yield.

703640[/snapback]

 

 

Great post - I haven't read anything that nihlistic in ... well, ever.

 

There are still people to house, kids to educate, toys to buy. We'll muddle through, the way we always have. It's not like we're fighting global fascism (except the Saudi Wahabi kind that really isn't an alternative). Eventually, people will get used to the idea of battery-powered 40 horse-power pickup trucks and having solar arrays on every roof-top and $5/bbl crude oil. There may be some disruption in global security in the mean time (and I wouldn't want to be a Pakastani) but by 2035, every thing will be coming up roses.

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The only question the average guy with losses of half a million is wondering right now is -

 

how long will it take to recover?

 

"It took 7 1/2 years for stocks to regain their losses from the bear market that accompanied the 1973-74 recession."? and the 1930's?

 

Yes, you heard it right, my boss said today he has $500,000 in paper losses.

703621[/snapback]

 

"Bottom" pickers beware. Interesting article by Hulbert on current stock valuations:

 

To be comparable with Shiller's database, I focused on as-reported earnings per share over the trailing 12 months. On this basis, the current PE ratio for the S&P 500 index (SPX:SPX) is 18:1. Only 21% of the months since 1871 have had higher PE ratios than this, it turns out.

 

You read that right: Even after a year-long bear market, and especially even after the market's rout over the last month, the stock market's current valuation is still more expensive than 79% of the months over the last 138 years.

 

http://www.marketwatch.com/news/story/valu...dist=TNMostRead

 

Longest. URL. Ever.

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Tonight I was wondering whether there were more people than the available productive capacity from available resources as currently structured.

 

I looked on google, but when I got down to quotes to dive down from more than 8 million responses, I got zero results.

 

If that's true, general returns are going to be down (like now:  sort of the opposite of the Ford view of having people build cars with a salary where they can afford to buy them themselves and build sales).  It also might explain things like terrorism (unproductive/unemployed/hopeless individuals) and anti-terrorism (findings jobs for other unproductive/unemployed/hopeless individuals to "fight" the above equally hopeless) and thus engaged in a spiraling down negative feedback cycle where people are not making or doing things that are helpful (in an environmentally green way of course).

 

I imagine that it is human nature to aspire to normal endeavors:  wanting to be productive, have a family and friends, etc.

 

Things are off-kilter here.  On the one hand you have enormous amounts of struggling have-nots (people), and on the other hand you have an enormous amount of phantom derivative traders within banks and hedge funds who don't seem to have an idea about how things should work, versus focusing on one candlestick and a bonus, who think leverage is a great idea and plan to exit in a few years.

 

Congress has woke up recently (and acts pretty fiesty), but they are pretty late to the collapse of the party publicized here that has gone on for years.  So the gatekeepers were a snooze.  I'm still not sure that joining forces with evil-doers was the right idea.  But I'm definitely for new regulations and having some smart people think about good statistics and transparency.

 

In terms of technology, we could have invented most of the things we need to know, and be low on common sense at the same time.  In a "no new great idea" world, how does that work out?  You have the basics, and you love the generics or store brand.  But its boring and slow.  (I suspect.)  Sort of like the investment banks going to regular banks and deleveraging.  Could that be the next 10-20 years?  If so that's the subscription model.  Not much growth, but hopefully a percentage return by way of dividend or bond yield.

703640[/snapback]

A little too right brain for me to get all you're saying, so maybe this doesn't apply, but about "general returns are going to be down" and "unproductive/unemployed/hopeless individuals" ...

 

I think real meaningful returns could be a lot better if we can get past the current waste and have people and things adjust, although not necessarily in dollar terms, and maybe not at all in the USA. Having 50,000,000 Indians and Chinese building lead painted toys and game consoles is hard to define as progress or wealth creation... at least not in the sense I think you're referring to.

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Tonight I was wondering whether there were more people than the available productive capacity from available resources as currently structured.

 

I looked on google, but when I got down to quotes to dive down from more than 8 million responses, I got zero results.

 

If that's true, general returns are going to be down (like now:  sort of the opposite of the Ford view of having people build cars with a salary where they can afford to buy them themselves and build sales).  It also might explain things like terrorism (unproductive/unemployed/hopeless individuals) and anti-terrorism (findings jobs for other unproductive/unemployed/hopeless individuals to "fight" the above equally hopeless) and thus engaged in a spiraling down negative feedback cycle where people are not making or doing things that are helpful (in an environmentally green way of course).

 

I imagine that it is human nature to aspire to normal endeavors:  wanting to be productive, have a family and friends, etc.

 

Things are off-kilter here.  On the one hand you have enormous amounts of struggling have-nots (people), and on the other hand you have an enormous amount of phantom derivative traders within banks and hedge funds who don't seem to have an idea about how things should work, versus focusing on one candlestick and a bonus, who think leverage is a great idea and plan to exit in a few years.

 

Congress has woke up recently (and acts pretty fiesty), but they are pretty late to the collapse of the party publicized here that has gone on for years.  So the gatekeepers were a snooze.  I'm still not sure that joining forces with evil-doers was the right idea.  But I'm definitely for new regulations and having some smart people think about good statistics and transparency.

 

In terms of technology, we could have invented most of the things we need to know, and be low on common sense at the same time.  In a "no new great idea" world, how does that work out?  You have the basics, and you love the generics or store brand.  But its boring and slow.  (I suspect.)  Sort of like the investment banks going to regular banks and deleveraging.  Could that be the next 10-20 years?  If so that's the subscription model.  Not much growth, but hopefully a percentage return by way of dividend or bond yield.

703640[/snapback]

 

There are lots of things we need to make that could employ all levels of workers.

 

We need to build an energy infrastructure so that we can share and play fair with the up and coming BRICs. Nuclear, Solar, Wind.

We need to rebuild our industry that we let go offshore. We can build newer factories that are more efficient, and use cool stuff like robots.

We could build spaceships to go to mars.

We could fix all the breaking bridges and crumbling roads. We could re-do all the crap work that the roads guys do around where I live.

There's got to be tons more.

 

Right now there is a growing number of able bodied, able minded people that cannot get work because of a money shortage. There are companies that want to produce, and workers that want to work, but a freeze up of money. The money is just a tool to trade/store work. It is not supposed to be THE point. Every willing person working is the point, preferably working to the highest level of training they have, not at wally world.

 

Banks suck.

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where is it going???

703647[/snapback]

Webhosting switchover. Same web address, upgrade of the forum software, so in theory users will not see a difference. You know what they say though:

 

In theory, there's no difference between theory and practice, but in practice there is.

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If that's true, general returns are going to be down (like now:? sort of the opposite of the Ford view of having people build cars with a salary where they can afford to buy them themselves and build sales).? It also might explain things like terrorism (unproductive/unemployed/hopeless individuals) and anti-terrorism (findings jobs for other unproductive/unemployed/hopeless individuals to "fight" the above equally hopeless) and thus engaged in a spiraling down negative feedback cycle where people are not making or doing things that are helpful (in an environmentally green way of course).

703640[/snapback]

 

So if I follow the logic here:

 

1) We fight terrorism to give "unproductive/unemployed/hopeless individuals" something to do? Gee, and here I thought it was because terrorists kill people. I must not have had enough schooling.

 

2) Making or doing "helpful" things only consist of those things which are "environmentally green." Huh. (No wonder you feel so hopeless!) Strangely, I always thought I had to consume less than I produce, which would make me (what I naively refer to as) "productive" -- which means that on balance I give more than I take, and that giving makes me "helpful" to the world at large. Once again, I probably didn't have enough schooling to know better.

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Great post - I haven't read anything that nihlistic in ... well, ever.

 

There are still people to house, kids to educate, toys to buy. We'll muddle through, the way we always have. It's not like we're fighting global fascism (except the Saudi Wahabi kind that really isn't an alternative). Eventually, people will get used to the idea of battery-powered 40 horse-power pickup trucks and having solar arrays on every roof-top and $5/bbl crude oil. There may be some disruption in global security in the mean time (and I wouldn't want to be a Pakastani) but by 2035, every thing will be coming up roses.

703643[/snapback]

 

I can't respond to your points tonight, but I didn't mean to sound nihilistic, especially the "most" in that regard. I meant to sound realistic and express some hope that ordinary human beings will wish to do things that permit them to express love and connection.

 

These are enormous complex issues; and in fact, are so complex because the phantom economy has overtaken the real economy. Imagine that people got wigged out about 65T or so (unknown) in CDS, and then woke up to find that 600T or so was in "other and CDS" deriviatives.

 

What will happen with that? My impression is that a whole bunch is going to get cancelled out. People will be instructed not to do that again. There will be a percentage that goes to litigation (and it will be about as exciting as the events that lead to Resolution Trust, which was pretty interesting). What's at issue is "unintended consequences" should phantom paper get cancelled or reduced globally because regulators realize that having 10 to 30 or 100 or more times

gambling debts" on the the total productive capacity of the world is unacceptable or void as against public policy unless specifically tied to sacred cows, versus other gambling debts.

 

Lest anyone think that (not you, but a perhaps a later poster), we'll invest in something huge and wonderful that will solve this problem, or "way cool", forget it. You are in a period of digesting prior excesses, globally. As appropriate for capital stool, its in the digestive tract.

 

Our laser attention should be focused on resolution of derivatives issues.

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Inflation coming.

 

[Money Supply]

------------------ == <in|de>flation

? ? ? [GDP]

edit: To amplify my point, If GDP goes down, then all things being equal, there will be more dollars per unit good. It is true that right now we're deleveraging but if this causes business to dry up, production will slow and unemployment will rise, which will lower GDP.

703638[/snapback]

Can't agree that it causes price increases. The only dollars that matter for your equation are those that are not in demand (as much as the goods). I think demand for dollars will be high (for savings) and a lot of income is going to be diverted to paying back debt. GDP's going down alright, but demand for goods might go down even more.

 

There's a difference in a collapse caused by the typical overinvestment business cycle and a credit bubble. Not saying that we weren't in a credit bubble in 1999, but only as a matter of degree and where the money went.

 

In the classic overproduction cycle, lending goes primarily to businesses, and on the down side of the cycle, prices and wages fall until producers can again make a profit. The main takeaway here is that the investment went largely into productive assets, and all that's needed to get the unwasted part going again is for prices to fall. We had something like that 8 years ago in the telecom/internet boom.

 

This time around, the money went first and primarily to the lenders, and much of it went into non productive assets--land. It's true that there was tremendous investment in China, particularly from the USA, Japan, and a few other Asian countries, all of which outsourced to China. (That's where some of the USA's trade deficit with Japan went when Japan outsourced.) Because of that, they might have the luxury of a typical recession. The problem for the US particularly, and somewhat of Europe, is that all we have to show for our debt is debt, and maybe a swimming pool. It's not enough to wait for prices to fall. We also have to pay off that debt, and we have to rebuild capital with which to start producing again.

 

If someone doesn't come up with another scam soon, we're deep in the stool.

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