naked capitalism Mon 2010-09-20 19:10 EDT

American Businesses and Consumers are NOT Deleveraging ... They Are Going On One Last Binge

Everyone knows that the American consumer is deleveraging ... living more frugally, and paying down debt. Right?...Karl Denninger notes: ``From a peak in 2005 of $13.1 trillion in equity in residential real estate, that value has now diminished by approximately half to $6.67 trillion!Yet outstanding household debt has in fact increased from $11.7 trillion to $13.5 trillion today. Folks, those who claim that we have ``de-levered'' are lying. Not only has the consumer not de-levered but business is actually gearing up -- putting the lie to any claim that they have ``record cash.'' Well, yes, but they also have record debt, and instead of decreasing leverage levels they're adding to them'' ...the government has done everything it can to prevent deleveraging by the financial companies, and to re-lever up the economy to dizzying levels.

American businesses; Binge; consumer; deleveraging; Go; naked capitalism.

naked capitalism Mon 2010-07-19 16:57 EDT

58% of Real Income Growth Since 1976 Went to Top 1% (and Why That Matters)

...the new program was to reduce workers' bargaining power, both by combating unions, and by tolerating un and underemployment. Rising worker wages had been seen as crucial to greater prosperity; it was quietly abandoned as a policy goal. But this has profound implications. As rising income inequality demonstrates, the benefits of growth accrued substantially to those at the very top...much of America seems blithely unaware of our diminished role in the world. Likewise, financiers, having wrested massive concessions from national governments (bailouts with almost no concessions demanded of them) if anything view themselves as even more influential than before the crisis. In other words, both the distorted self image of key players and a reluctance to admit the deep seated nature of the problems make a happy resolution unlikely.

1976 Went; 58; matter; naked capitalism; real income growth; Top 1.

Debtor's prison Sun 2010-01-03 10:37 EST

Would a Single World Currency be GOOD for the world?

MAAA

...One Single World Currency (SWC) is a topic that we have discussed many times from the very early days of this blog. For months, our discussions have focused on the causes behind the eventual collapse of the current USD-backed financial system, the apparent INEVITABILITY of this collapse and the very high LIKELIHOOD that the proposed solution to this will be a global monetary system backed by a single currency unit -- perhaps a modified version of an IMF SDR as Jesse suggests, or something new altogether. While most of our energy has been spent demonstrating the high likelihood (in our opinion, inevitability) of a SWC, we have been cowards when it comes to taking a stance on a SWC either way. Our apparent neutrality thus far has been largely motivated by a desire to remain unbiased while we explored some of the Numbers/definitions first. Having set these foundations and thought about the matter for some time, the gloves finally come off and we declare ourselves to be VEHEMENTLY OPPOSED to a SWC, both technically and in principle and spirit...we argue that the significantly increased trade granularity of the past few decades diminishes the need for a SWC, and in fact, creates ideal situations for the establishment of more localized currencies, which would be infinitely more stable than a SWC...increased trade granularity (which is a fact) increases the pheasibility and stability of local, floating currencies, to the point that they might be a preferable alternative to a SWC.

Debtor s Prison; good; Single World Currency; world.

Rick Bookstaber Sun 2009-08-30 12:07 EDT

Not with a Bang but a Whimper -- The Risk from High Frequency and Algorithmic Trading

Rick Bookstaber

``There is a general view that one way or another the end result of all the high frequency and algorithmic trading will be a blowup. But I don't think the risk is as big as many are making it out to be...the risk of a cataclysm is constrained by the lack of feedback and lack of tight coupling...As the field gets increasingly crowded, market impact will rise and opportunities will diminish'' First, let me point out the difference between high frequency trading and algorithmic trading. Both execute using computers, and since computers work really fast, both can be accused of whatever sins are embodied in millisecond trading. High frequency trading is a type of proprietary trading. The trader (or his computer) sees a profit opportunity and trades accordingly. This profit opportunity...

algorithmic trading; bang; High Frequency; Rick Bookstaber; Risk; Whimper.