DUers with econ smarts, tell me why this is wrong

[roseBudd]

"The amount of excess debt in the United States is about $20 trillion. That’s the difference between the usual level debt – about 150% of GDP – and today’s level – about 350%. That $20 trillion in surplus debt probably has to disappear before a true growth cycle can begin again. The best way is simply to let nature take her course. Much of it would be written off in a few months."

http://www.tigersharktrading.com/articles/14991/1/Where-The-Bailout-Money-Is-Really-Going/Page1.html

[sam sarrha]

1. a lot was insurance on risky insane speculation, to collect the insurance.. this is best yet.. >Link...

http://video.google.com/videoplay?docid=4490541725797746038

this is what Cramer on MSNBC was "ALLEGEDLY". HE ADMITTED IT..!! was doing, it was financial Terrorism

there are other good articles listed beside it

[Suich]

7. What happened with the oak tree?

Did it finally fall or were you able to get it cut down?

:shrug:

[sam sarrha]

9. they are removing it tomorrow morning.. i put a protractor on it with a plumb bob.. it wasn't moving...

since the first lean, the tree people said it would most likely be ok till it rained again..

they are cutting it back and removing the one that crushed the fence..2 days earlier

[FreakinDJ]

2. TigerShark Trading may be a "Questionable Source"

Anyone can submit articles for "Fun and Profit" to them

Submitting Articles
TigerSharkTrading.com is always looking for new and exciting authors. Are you a professional trader? Do you trade profitably? Can you share your knowledge and experience with others in a clear and entertaining writing style? If you would like to be considered for a position as a regular contributor, please contact Dave Mecklenburg, Editor-in-Chief, at dave -at- traderinsight.com or davemeck -at- gmail.com.

http://www.tigersharktrading.com/pages/Submitting-Articles.html

So why not spread as many "Doom and Gloom" rumors as you can to attempt to force down the market as to allow you to "Buy Back in on the Cheap"

"Buy Low / Sell High" - thats their motto

[Turbineguy]

3. Bill Bonner is the high priest

of fear and greed newsletters.

Therefore it has to be considered opinion masqueraded as fact.

[hfojvt]

4. I don't see how writing it off helps

Right now my credit union owes me something like $40,000. If I write that off, then I am screwed. That's three years worth of wages that would just vanish. Some of that is savings that I use to pay my bills instead of living day to day. Not to mention counting on it for my retirement. I don't see how huge amounts of debt can be written off without taking down large segments of the economy. The people who are owed that debt need that money to pay their own obligations.


I also do not see how that debt could have built up so fast. That is, if the excess debt is $20 trillion, then the excess debt must have been $18 trillion six months ago and $15 trillion three years ago. Or something like that. If the economy was functioning and growing with $15 trillion is excess debt, then why not with $20 trillion?

But I cannot say I have been paying attention to this.

[FreakinDJ]

6. Gimme a Break - you'll be paid off by FDIC

and if $40K represents 3 years worth of wages how the heck are you going to write it off when you can apply for an EIC (Earned Income Credit)

[tammywammy]

8. One minor correction it's the NCUA not the FDIC over credit unions n/t

[sixmile]

5. I'd like to know their definition of debt

I've a feeling that much of this 'debt' is in actuality options-designed to expire worthless if no action is taken by the holder.
That is what Credit Default Swaps are at the core-sidebets

[Igel]

10. I'm with #5, in principle.

The OP doesn't define "debt". IIRC, traditionally recessions have been seen as accomplishing a few different things--one is reducing the amount of non-producing debt, it's a chance to dispose of bad debt and to have marginal enterprises die a fairly quick death. This makes clear where everybody stands and eliminates a certain amount of uncertainty, as well as clearing the way for innovative enterprises.

But since "debt" isn't defined, we don't know if these are largely self-cancelling credit-swaps or mortgages. Mortgages aren't the kind of thing that recessions have traditionally disposed of. This is one of the problems with recent characterizations of saving levels and debt levels in the US: They looked at debt even while ignoring the fact that stock ownership was at a near all-time high and baby boomers had a lot of dough in savings.

How could that be? It could "be" because of mortgages--let's take a hypothetical household that was technically broke with $200k in mortgages and $200k in savings. Toting up just the debt showed they were $200k in the hole, which was obviously false--the house was worth something and they had stocks and savings. Even now, with their stocks at $80k, their mortgage at $190k and their house worth $150k they still have a net worth, even though they're "upside down" and more than broke, unless we count their assets.

Does the OP makes sense? I have no way of knowing--assuming his numbers are accurate for some definition of 'debt', are they true for a *reasonable* definition of debt? Dunno. Can't know. And my pizza's getting cold.