Max Keiser On the Edge with Steve Keen - (brilliant economic breakdown)

[stockholmer]

Run time: 23:20 https://www.youtube.com/watch?v=3qo3t8EBNSg   Posted on YouTube: July 09, 2011 By YouTube Member: PressTVGlobalNews Views on YouTube: 306   Posted on DU: July 09, 2011 By DU Member: stockholmer Views on DU: 3356

 
In this edition of On the Edge, Max Keiser interviews Steve Keen, economist and author of the book Debunking Economics.

He says that debts have spiraled out of control and the reason is shadow banking system. The program touches on the correlation between the US-EU debt crisis and the worsening Greek economy.



http://www.debtdeflation.com/blogs/2009/01/03/neoclassical-wage-restraint-madness/

Neoclassical Wage Restraint Madness


It had to happen: neoclassical economists are now advising that the anticipated recession will be much milder if only workers would accept wage cuts.

When I saw this crisis was imminent in December 2005, one major factor that motivated me to go public with my analysis was the certainty that, when the crisis hit, neoclassical economists would either blame it on wages being too high (”the abolition of Work Choices caused the Depression!”), or would suggest that wages should be cut to reduce the imbalance between the supply of and demand for labour. The crisis hit too early, and was far too global, for the abolition of Work Choices to “cop it sweet”. But yesterday, in an OpEd in the Sydney Morning Herald, Mark Davis reported that “Economic modellers” had concluded that 1% cut in the rate of growth of wages will boost employment growth by half a percent:

Economic modellers reckon cutting aggregate wages growth by a percentage point boosts employment growth by half a percentage point. Some think it boosts employment more. In the current environment that could save more than 50,000 jobs.

Let’s extrapolate a bit here: given the standard increases in productivity and population, employment growth of about 2.5 percent is needed to keep the unemployment rate constant. So “economic modellers” (i.e. neoclassical economists) reckon that a 5 percent cut in the rate of wages growth would translate into a 2.5 percent boost to the rate of growth of employment. Since those same modellers are also anticipating growth slowing to about zero (but not negative of course–that would mean a recession, and as we all know, Australia is special and won’t suffer one), all we need to do to make sure Australia lucks out with both no recession AND no rise in unemployment is to … cut wages by one percent (since the current rate of growth of wages is close to 4 percent).

Nonsense. This is standard neoclassical economic thinking that if one lowers the price for a product (in this case, labour), more of it will be demanded. This thinking has some relevance when the market in question is that for, say, apples (though the basic “supply and demand” mathematics is false). But when the market you are talking about is Labour, even in the absence of debt, the thinking is only half baked.....................

snip

[lib2DaBone]

1. Jim Rogers said EXACTLY the same thing on Dylan Ratigan the other day...

http://www.youtube.com/watch?v=Wgfcl5arHPQ&playnext=1&list=PL7C81A67267EADD85

Jim Rogers On The Ratigan Show, Tells Viewers To Get Ready To Protect Themselves

K/R

[stockholmer]

5. thanks for the video

:hi:

[sulphurdunn]

7. How?

[dixiegrrrrl]

8. How to protect yourself, is that your question?

[sulphurdunn]

12. Actually,

my mother lives in an assisted living facility. The investment of her assets pays for her care there. Her portfolio took a huge hit in 2008. It can't take another one like that. I need to know where to put her money so that it pays enough of a return to let her live out what remains of her life in relative comfort. Right now it's in a mixed portfolio invested with Edward Jones.

[dixiegrrrrl]

14. Energy or health care fields.

I used Vanguard Mutual funds for years for my retirement funds, spent a lot of time tracking their various funds.

Since we now know the stock market and bond market is not reliable ( to put it very very mildly)
you might consider a mutual fund that invests in energy, or health care, because those fields are pretty much controlled by sharks and will continue to do well.

I used to use this page to look at the returns of various funds.
I liked being able to invest myself with out depending on a "financial adviser" and those fees.

https://personal.vanguard.com/us/funds/vanguard/all?sort=type&sortorder=asc

BUT
having said that..

my now departed mother in law did quite well by investing with American funds and using a manager.
Caution: this was before 2008.

[sulphurdunn]

21. Thanks

[dixiegrrrrl]

22. Warning: I no longer invest in mutual funds

since they passed a rule that funds can go lower than the initial dollar a share limit, in other words, mutual funds, which used to be trustworthy to have a dollar a share "bottom" now have NO guarantees at all.

I was merely pointing out that by looking at the Vanguard page, one could easily see the sectors which are paying a decent return on investment TO DATE....there is NO promise that tomorrow the whole system won't drop into the basement,
and indeed, much news that there are tons of derivative bets shorting the market.

[dixiegrrrrl]

2. Rec.....

with pleasure.

[DeSwiss]

3. K&R n/t

[Saxon]

4. Bush the "moran" did get one thing right.

"This sucker's going down."

[enough]

6. Possibly the only eloquent thing that man ever said.

Welcome to DU.

[pam4water]

9. Efffin Brillant!!!!!!!!!!!!!! K&R Steve Keen is great! There was a part 1 to this some where

it's work a watch too.

[banned from Kos]

10. Keen's numbers are suspect. He says financial industry debt

is now 120% of GDP which would put it around $18 trillion. But personal net worth is north of $60 trillion and business net worth is huge. So the US has a 5-1 asset to financial debt ratio - which is excellent. Then he goes on to say taxpayers are buying this financial debt. How? And how much? Did he mean TARP where we actually bought preferred stock - an asset? Then he credits the Tea Party for their financial acumen. Not impressed.

[stockholmer]

13. you are mixing apples and oranges, & if you think you think the bailouts gained assets,you are just

delusional. Furthermore, he stated that there was ONE thing that one Tea Party person happened to say that was correct. He never gave a blanket endorsement of them. Stop the sophistry.

You also missed the entire point of his talk, which was to say that the PUBLIC debt, in the rush to give trillions to the banksters to keep a bubble going, is exploding. Again, I use the world delusional if you think that the USA public/private/financial combined sectors are in the black when it comes to total debt vs asset/wealth ratios.

[banned from Kos]

15. No, TARP became a program to buy PREFERRED stock in the banks

which is an asset. Equity = asset (in any world). Look how quickly Bank of America and others repaid TARP to escape their "government owners" - a black eye for any private firm.

He is obviously sympathetic to the Tea Party which does not equate to a "blanket endorsement" at all.

And the USA is well into the black on its balance sheet - but certainly the US Government is NOT. We are a wealthy country! The idea is to tax the wealthiest to support the social safety net!

And if there were "zombie banks" they would have gotten the WaMu treatment - total stock/bond annihilation from Sheila Bair (who has no fear). The fact is that Citi, BoA, and Morgan have excellent balance sheets and will pass Basel III easily.

[stockholmer]

17. JPM, et al and 'excellent balance sheets' are the dreams of madmen, I suggest you go look at what

'mark to model accounting' (versus a true 'mark to market' methodology) has done to fundamentally dislocate their books from all measures of reality. This type of purely fraudulent bookkeeping would have landed one in prison just 20 or 30 years ago, today it is standard operating procedure, and is rewarded with hundreds of billions in bonuses paid out by the banksters to themselves in just the short period of time since the $23.7 trillion dollar+ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aY0tX8UysIaM total bailout was rammed through congress by the Fed, the Treasury, and the robber barons.

The $700 billion TARP so talked about was chump change compared to true extent of the fiduciary transfers that actually occurred. The Congress had to sue the Fed and take it all the way to the Supreme Court http://www.supremecourt.gov/orders/courtorders/032111zor.pdf just to get ONE section ($3.3 trillion) of the hidden bailouts exposed to the light of day.

http://www.bloomberg.com/news/2010-03-19/fed-loses-bid-for-review-of-disclosure-ruling-on-u-s-bank-bailout-records.html

http://theeconomiccollapseblog.com/archives/trillions-in-secret-fed-bailouts-for-global-corporations-and-foreign-banks-has-the-federal-reserve-become-a-completely-unaccountable-global-bailout-machine

http://www.unelected.org/the-federal-reserves-3-3-trillion-dollar-bailout-of-foreign-banks-and-corporations


---------------------------------------------------

As for the hubris that they are healthy, viable institutions, remember that the same was said of Bear Stearns, Lehman, and Merrill Lynch right before they collapsed (actually assassinated in a derivative overhang pissing match).

In regards to the USA and wealth, sure it is a wealthy nation on paper in terms of assets (which are far outweighed by the total public/private debts), but that wealth is now concentrated in the hands of a few uber rich to a level unseen in modern history. At end of the day, the systemic controllers have consolidated this wealth utterly vertically, hollowing out the country, These schema have exploded under puppet Obama even faster than under puppet Bush. The top 1 percent in the USA now have over 50 percent all the wealth (in 1965, the top 5 percent (or 5 times as many) had only a 19 percent share) so the richest 1 percent have increased their share 13 times, and the top .1 percent (just 300,000 people) have increased their share over 100 times all in just 45 years.

The bottom 20 percent of Americans had 5 percent of the wealth in 1965 now, the BOTTOM 40 percent (over 130 million people) have only 0.3 percent of the wealth. The bottom 40 percent of the USA have had their share DECREASED more than 30-fold in last 45 years.

Also, you cannot separate the government's sovereign debts from the private sphere, as all massive losses in the private sector are simply dumped onto the backs of the citizens, whilst private profits are kept private. This is the quintessential definition of corporatist fascism.



JP Morgan alone has a total notional value of $90 TRILLION in potential derivative debt on their books, and over 35% of that is BBB rated or less.

http://maxkeiser.com/2011/06/29/total-net-derivative-exposure-jpm/

Total net derivative exposure rated below BBB on JP Morgan’s $90,000,000,000,000 ($90 trillion) books currently stands at 35.4% – MUCH WORSE than Bear Stearns and Lehman‘s derivative portfolio just prior to their CRASH. JPM’s IMPLOSION will be 1000 X’s bigger than Enron!



What about JPM’s garden variety claim exposure to various lawsuits?

Whalen – $200 Billion in Claims Against JP Morgan & Banks http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/29_Whalen_-_%24200_Billion_in_Claims_Against_JP_Morgan_%26_Banks.html

What’s JPM’s current market capitalization? About $160 billion




An Independent Look into JP Morgan

http://boombustblog.com/BoomBustBlog/An-Independent-Look-into-JP-Morgan.html

The JP Morgan forensic preview is now available. Remember, this is not subscription material, but a "public preview" of the material to come. I thought non-subscribers would be interested in knowing what my opinion of the country's most respected bank was. There is some interesting stuff here, and the subscription analysis will have even more (in terms of data, analysis and valuation). As we have all been aware, the markets have been totally ignoring valuation for about two quarters now. It remains to be seen how long that continues.


Cute graphic above, eh? There is plenty of this in the public preview. When considering the staggering level of derivatives employed by JPM, it is frightening to even consider the fact that the quality of JPM's derivative exposure is even worse than Bear Stearns and Lehman‘s derivative portfolio just prior to their fall. Total net derivative exposure rated below BBB and below for JP Morgan currently stands at 35.4% while the same stood at 17.0% for Bear Stearns (February 2008) and 9.2% for Lehman (May 2008).

We all know what happened to Bear Stearns and Lehman Brothers, don't we??? I warned all about Bear Stearns (Is this the Breaking of the Bear?: http://boombustblog.com/index.php/20080127142/Is-this-the-Breaking-of-the-Bear.html On Sunday, 27 January 2008) and Lehman ("Is Lehman really a lemming in disguise?": http://boombustblog.com/index.php/20080221162/Is-Lehman-really-a-lemming-in-disguise.html

On February 20th, 2008) months before their collapse by taking a close, unbiased look at their balance sheet. Both of these companies were rated investment grade at the time, just like "you know who". Now, I am not saying JPM is about to collapse, since it is one of the anointed ones chosen by the government and guaranteed not to fail - unlike Bear Stearns and Lehman Brothers, and it is (after all) investment grade rated. Who would you put your faith in, the big ratings agencies or your favorite blogger? Then again, if it acts like a duck, walks like a duck, and quacks like a duck, is it a chicken??? I'll leave the rest up for my readers to decide.

snip


---------------------------------------------------------------------------------------
systemically healthy my arse

[girl gone mad]

19. You're wasting your time.

He will be repeating the same pro-bank spin next week as if this discussion never happened.

[liberation]

16. He did not praise the Tea Baggers "financial acumen"

He simply pointed out a single example in which the opinion of a tea bagger could be construed as being correct.

Big difference.

[girl gone mad]

11. Thanks for posting.

Michael Hudson, Steve Keen.. Max is on a roll lately. :)

[Duct Tape]

18. Big K&R!!

This video is great from start to finish.

[democracy1st]

20. K & R