Posts by DJS

20

The High Cost Of War

by designs in

britain is refinancing some soverign war bonds dating from the crimean war, napoleonic war and wwi, 2 $billion worth.

2 century old debt.. our president has been reluctant to begin another war when the debt of the previous two wars hangs heavy.

those of the prowar persuasion have insisted on 'boots on the ground' a move that would require 100,000s of personnel in the middle east and allocating billions in debt to cover the cost.. "every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed" president eisenhower.

DJS

Like most of you, I believe the war machine can’t lead to anything positive long term, and the military/industrial complex is out of control. I also wish the US would spend more time making peace and less making war. If the only tool you have is a hammer, everything looks like a nail.

Otherwise, more dumbass ramblings about the amazing Russian economic strategy deserves pummeled. Western sanctions have had a dramatic effect on the Russian economy, as I said they would months ago. Putin’s ‘wonderful’ speech (Met, your desire to see the West annihilated colors your views - please try to avoid the keyboard in these matters) is empty impotent rhetoric (after spending time alone in the forest licking his wounds and knowing that there isn’t really a damn thing he can do about it, except whine. Do you think for one freaking minute Met that, if Vlad had the power to bring the West to their economic knees he wouldn’t use it?).

His 'wonderful' speech (sounds like you got yourself a bromance going on with Vlad) is nothing but whining because his peacockian show of saber rattling pretty tanks all in a row was met by a much stronger force – one that didn’t need to fire the first shot. The combined economic strength of the West, which dwarves Russian capabilities, may be used as a hegemon, but Vlad started it.

Met, dear god man, why can’t you stay away from topics you know nothing about other than your expertise in surfing confirmation biased articles and statements? And name dropping Alan Greenspan does not, I repeat does not, give your dumbass rants any more credibility. Let’s see, what could Vlad’s sta-ge-ty be??? What could it be?

Perhaps this one:

Portions of Russian savers’ pension funds have been appropriated by the state to prop up the country's companies.

Or this one:

The ruble is down 20 percent since the beginning of the year. Russia’s central bank has spent billions to slow the ruble’s decline. Investors pulled almost $75 billion out of the country in the first six months of the year alone.

Or this one:

The recent arrest of oligarch Yevtushenkov (likely based on his refusal to give up his stake in a profitable oil company, Bashneftt, which Putin is considering making state owned. And the word on the street is the Yev was one of the good guys), isn’t helping Russia’s business climate. Now ALL the oligarchs and oligarch wannabes are scared.

Or this one:

Over fifty percent of Russian government funding is from oil/gas revenues, and 70 percent of exports of same. The reliance on exports, and specifically one sector, places the Soviet economy squarely in a boom or bust cycle largely hostage to demand/price. Not exactly the type of economic sta-ge-ty which can make the ruble the world's dime of choice.

Or this one (vewwy scawwy):

Some of Putin’s hawkish security advisers (former KGB) have spoken of putting the needs of the state before the needs of businesses and individuals. This would help them marshal the resources necessary for a confrontation with the West. (Beware of the dark side, Luke). Back, back to the future! Lash me to the post, it's the siren's song (wasn't the Cold War and all of our glory juss wunnerful??).

Or this one:

"Although there has been an increase in Russian air activity over Europe during the past year, last week marked the first time Moscow had sent in larger formations of warplanes, General Philip Breedlove told reporters."

"My opinion is they're messaging us. They're messaging us that they are a great power," Breedlove said.

19

I've been stumbled.

by silent in

jw
friends

i just realized that all these dates that the borg have said the end would come on or by and then it didn't happen, have stumbled me.

why such a fascination and trying to divine the answer from scripture when scripture plainly says only the father knows the day and the hour?

by their predictions, they actually sent many christians on the path of date-based worship insted of faith-based worship.. if they have stumbled me, then who is reponsible for that?.

DJS

Sooner or later, how or why you stumbled is irrelevant. From Batman Begins: Alfred Pennyworth: Took quite a fall, didn't we, Master Bruce?

Thomas Wayne: And why do we fall, Bruce? . . . . . . .So we can learn to pick ourselves up.

Marinating in being stumbled is victim speak. There is a time for feeling like a victim and licking one's wounds. The shorter that period the better off you will be. Pick yourself up. Dust yourself off. Start all over again. Look in the mirror - take ownership of your part and tell yourself "Never Again."

Then set a course for the stars. Engage, Number One.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

FTS,

I referenced the Leslie Stahl 60 minutes piece on the uninhabited cites months ago in another Chinese miracle OP. This is real, vetted and reported by 60 minutes. You can view the video online if you wish. A transcript of Ms. Stahl's conversation with a Hong Kong based financial analyst is below. I watched the show in amazement. You should know by now that I don't post stuff I haven't vetted. This addresses everything I stated. No hyperbole at all. China IS doing many amazing things, and I am their biggest fan. Once again, I will state that a rational academic approach to all things China is necessary to truly understand that there are many issues looming. I hope they succeed wildly and avoid all of the landmines.

C hina's real estate bubble

China's economy has become the second largest in the world, but its rapid growth may have created the largest housing bubble in history

The following script is from "China's Real Estate Bubble" which originally aired on March 3, 2013, and was rebroadcast on August 3, 2014. Lesley Stahl is the correspondent. Shachar Bar-On, producer.

For three decades, China had been nothing short of a financial miracle: a state-controlled economy that managed to navigate its way out of the tatters of communism to become the world's second largest -- deftly managed by government policies and decrees. But now, many in the financial world are looking nervously at China.

That's because one sector Chinese authorities concentrated on was real estate and construction. And as we first reported in March last year, that may have created the largest housing bubble in human history. If you go to China, it's easy to see why there's all the talk of a bubble. We discovered that the most populated nation on Earth is building houses, districts and cities with no one in them.

"DOOMSDAY" SCENARIO FOR CHINA

Lesley Stahl: So this is Zhengzhou. And we are on the major highway, or the major road. And it's rush hour.

Gillem Tulloch: Yeah -

Lesley Stahl: And it's almost empty.

Gillem Tulloch is a Hong Kong based financial analyst who was one of the first to draw attention to the housing bubble in China. He's showing us around the new eastern district of Zhengzhou, in one of the most populated provinces in China - not that you'd know it. We found what they call a "ghost city" of new towers with no residents, desolate condos and vacant subdivisions uninhabited for miles, and miles, and miles, and miles of empty apartments.

Lesley Stahl: Why are they empty? I've heard that they have actually been sold.

Gillem Tulloch: They've all been sold. They've all been sold.

Lesley Stahl: They've all been sold? They're owned.

Gillem Tulloch: Absolutely.

Owned by people in China's emerging middle class, who now have enough money to invest but few ways to do it. They're not allowed to invest abroad, banks offer paltry returns, and the stock market is a rollercoaster. But 16 years ago, the government changed its policy and allowed people to buy their own homes and the flood gates opened.

Gillem Tulloch: So what they do is they invest in property because property prices have always gone up by more than inflation.

Lesley Stahl: And they believe it will always go up?

Gillem Tulloch: Yeah, just like they believed in the U.S.

Actually, property values have doubled and tripled and more -- so people in the middle class have sunk every last penny into buying five, even 10 apartments, fueling a building bonanza unprecedented in human history. No nation has ever built so much so fast.

CONTAINING CHINA'S REAL ESTATE BUBBLE

Lesley Stahl: How important is real estate to the Chinese economy? Is it central?

Gillem Tulloch: Yes. It's the main driver of growth and has been for the last few years. Some estimates have it as high as 20 or 30 percent of the whole economy.

Lesley Stahl: But they're not just building housing. They're building cities.

Gillem Tulloch: Yes. That's right.

Lesley Stahl: Giant cities being built with people not coming to live here.

Gillem Tulloch: Yes. I think they're building somewhere between 12 and 24 new cities every single year.

Unlike our market driven economy, in China it's the government that has spent some $2 trillion to get these cities built - as a way of keeping the economy growing. The assumption is "if you build it, they'll come." But no one's coming.

Lesley Stahl: Wow. This is really completely, totally empty and it goes up -

Gillem took us to this shopping mall that's been standing vacant for three years.

Lesley Stahl: Can I find this all over China?

Gillem Tulloch: Yes, you can. They've simply built too much infrastructure too quickly.

Lesley Stahl: But I see KFC behind you. I see Starbucks over there. I see some other very recognizable American franchises coming in here. At least they-- does that mean they have faith that this is going to ignite?

Gillem Tulloch: No, these are all fake signs. Just to get potential buyers the impression of what it might look like if they moved in.

Lesley Stahl: They're not real? So I see KFC didn't-

Gillem Tulloch: They haven't--

Lesley Stahl: Buy this space or rent this space?

Gillem Tulloch: No, they haven't.

Lesley Stahl: Starbucks?

Gillem Tulloch: No.

Lesley Stahl: They just put the sign up?

Gillem Tulloch: That's right.

It's all make-believe -- non-existent supply for non existent demand.

Lesley Stahl: Look at that. Swarovski. Piaget. They're hoping for high end too.

Gillem Tulloch: H&M. Zara.

Lesley Stahl: And it's all Potemkin.

Gillem Tulloch: Yeah.

It's surreal and it's everywhere. Like the city of Ordos in Mongolia built for a million people who didn't show up. And no, you are not in England. You're in Thames town -- a development near Shanghai built like an English village.

Gillem Tulloch: And it was finished, I think, around five or six years. And it must have cost close to a billion U.S. dollars. And you'll see, it's still standing there empty.

Lesley Stahl: Well, I heard that there is some industry there or some business, one business there.

Gillem Tulloch: Marriage.

Lesley Stahl: Wedding pictures!

And what's more uplifting than a wedding -- or 10? You can see these empty developments on the edge of almost every city in China.

Lesley Stahl: What about the idea that China is urbanizing? People are flooding into cities by the hundreds of millions. And that this really is a smart move: build the housing to accommodate the urbanization process.

Gillem Tulloch: Well, so people are being moved into the cities. But that doesn't necessarily mean that they can afford these apartments which, you know, cost $100,000 U.S. or whatever. I mean, these are poor people moving into the cities, so they're building the wrong sort of apartments.

And what's worse, to build all these massive cities, they've had to tear down what was there before, clearing rice fields and displacing by some counts tens of millions of villagers. On the edge of Zhengzhou, Gillem and I came upon a strange sight.

Lesley Stahl: I'm just watching what they're doing, these-- do you have any idea?

Gillem Tulloch: I think they're trying to recycle the bricks.

These villagers were salvaging what's left of their homes, bulldozed to make room for more empty condos, already encroaching in the distance.

Lesley Stahl: There are all these empty apartments over here. Can they conceivably move into those up-scale places?

Gillem Tulloch: Most people in China live on about less than $2 a day. And these apartments probably cost upwards of $50,000 or $60,000 U.S. So it's very unlikely.

Lesley Stahl: What will happen to them, do you think?

Gillem Tulloch: I mean, they'll be forced to relocate somewhere. I have no idea where they'll go.

These are the immediate casualties of the building boom. And there's another problem: analysts warn that all this building has created a bubble that could burst.

Lesley Stahl: So if the bubble bursts, who's left holding the bag?

Gillem Tulloch: There are multiple classes of people that are going to get wiped out by this. People who have invested three generations worth of savings -- so grandparents, parents and children - into properties will see their savings evaporate. And then, of course, 50 million construction workers who are working on all these projects around China.

The prognosis of a bubble about to burst isn't only coming from financial gloom-and-doomers. We heard it from the most unlikely source.

Lesley Stahl: Are you the biggest home builder in the world?

Wang Shi: I think. Maybe.

Lesley Stahl: You may be?

Wang Shi: Yes. Only the quantity, not quality.

Wang Shi is modest, but his company, Vanke, is a multibillion dollar real estate empire, building more homes than anyone in China. He was born on the frontlines of communism, and joined the Red Army. But he secretly read forbidden books about capitalism, so that when China liberalized its economy, he rushed to the frontlines of the free market. Even he thinks today's situation is out of control.

Lesley Stahl: Are homes in China too expensive today?

Wang Shi: Yeah.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

FTS,

Thank you again for your contributions to this topic and to this site. You make it smarter. Economics is wildly interesting and complicated. I think sometimes a few think that those of us who try to bring a rational mindset to the topic are anti-China. Nothing could be further from the truth. I'm for the planet and everyone on it getting their acts together.

Ultimately China has been doing what nearly every other capitalistic government does - a combination of rational and irrational economic choices and decisions. The human toll caused by job loss, etc., their own poltical careers, egos, etc. sometimes get in the way of what would otherwise constitute sound economic policy. Keynes suggests government gettting out of the way (cutting taxes and spending) when the capitalistic juggernaut is rolling and when it isn't (recessions when capitalism is often impotent) governments should spend, spend, spend. China is following that model to some degree. The EU has recently followed the exact opposite strategy - cutting government investment and spending during a recession - in large part due to pressure from Germany and the other haves. How is that working out for them? The recession is lingering, even threatening to pull the Germans, who depend more on exports than do the Chinese - albeit higher end stuff - along with it.

Your OP suggests the Chinese are trying to follow sound economic policy more closely to compete mano a mano in the capitalistic econoimic global marketplace. Good for them. I hope they make it, but history - and their own social issues looming out in the not to distant future - suggests the Chinese miracle will take a bit longer than they - and many on this site - expect or desire.

But time wili tell. 1.6 billion doing anything halfway right are going to make a splash.

Again, thank you for your excellent educational OPs.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

Enlarged,

Good points. Since you are a newbie, you might wonder why the post. I've been an econ prof, and reading some of the posts about the Chinese phenomenon over the past year has led me to post an occasional econ primer. Basic stuff to try and help the members understand that economics is very complicated. You present other issues of concern which contribute in making economic planning and projections very, very challenging. Thanks. Looking forward to your input. You win the most creative screen name award, hands down!

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

Enlarged postate,

I love your name. Welcome to the site. Mine isn't a narrative; it's an explanation.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

Alright bicches, it’s time for the second class of Professor DJS’ economics class 101. We have so many OPs re: China’s economic miracle, and my ongoing frustration with dumbass responses to them (King of the North, overtaking the US, blah blah blah) demands a more proactive response. Full Time Student has eloquently posted data. Kudos to him/her. But some of you bicches haven’t a clue about economics. So listen up.

The 2008-2009 global financial crisis resulted in the % of China's GDP tied to exports plunging from 38% in 2007 to 24% (current) almost overnight. In layman's terms that is roughly a 1.3 TRILLION dolllar hit on the GDP. The recession decimated China's low-end (low tech/low margin) export sector. The crisis halted the decades long low-cost export boom that the Chinese government had kept alive.

Most economists believe the boom was kept alive well beyond its natural life span, through years of systematic wage repression (there is a wage/benefit level which will make Chinese low cost/low tech goods unattractive to spoiled western consumers (Walmart, Always the Low Price. Always. Oh, excuse me, new slogan "Save $. Live Better), which would have stopped the train in its tracks – I have referenced this in previous OPs) and wasteful subsidies (can you say Japan circa 1980 boys and girls), both direct and indirect, to manufacturers.

The Chinese government was propping up the engine that had gotten them firmly on the world economic stage, even though it was past time to retire that engine. Remember a few months ago when I briefly discussed letting aging industries die (and let someone else make the low cost/low profit margin stuff) and moving quickly to a new paradigm??? As painful as it may seem in the moment, letting it die (think the textile industry in the US) is the best long-term strategy to maintain an effective economy (Adam Smith says you are welcome).

If you are the Gang-of-Five (or whatever they are called the ruling body these days), what do you do, both to save face and to keep the engine churning and try to get as many of your 1.6 billion people engaged in the 21 st Century? Well, the leaders did what they could control to keep the economy going (some would say on life support). They enabled massive expansion of state-led investment into housing and infrastructure construction (all hail Full Time Student- now, as Paul Harvey would say -the REST of the story).

The infrastructure was likely a very good thing, as it should position China to play in a very large way on the world economic scene. But infrastructure improvements are typically a long-term strategy with long term payback. Good for them, though. It is also a copy/paste from the very Keynsian approach adopted by the US to get out of the Great Depression in the 1930s. Google it.

The housing boom is showing signs of having finally run its course. The boom was fueled by the 600,000 or so Chinese who had expendable income but with nothing to do with it (the Chinese stock market sucks the big one). Buying housing, and speculating that there would be buyers for it at a large profit, resulted in entire cities being built, many of which are not inhabited. Not houses or subdivisions. Entire freaking Cities. Got that? ENTIRE UNINHABITED CITIES. Got that????

Since nearly 1 billion. Let’s stop right there and say it together, class. A fucking .... BILLION. . . people are under/un-educated agrarian peasants who couldn’t afford the cheap consumer goods China is making, much less houses and condos, the impact on the GDP of the housing 'boom" (not really fair to call it that now is it) kinda sorta stops right there, at least for the time being. I also alluded to the inherent concerns with the ‘if you build it they will come’ philosophy months ago.

Part II soon to come.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

Oceans,

I have taught economics, including global, marco-economic theory and practical applicaion, at the collegiate level, and studied it at the undergrad and graduate levels. But thanks for the concern. Everything you say about the problems associated with Western economies is true, as we have attested to in the past. But the same things are true of the Chinese economy They have a lot of very serious barriers to cross before they establish a stable, iterative economy. With 1.6 billion people, they will without doubt pass up everyone else. Do the math.

But there wiil be bumps in the road along the way. That's all that any of us who know wtf we are talking have ever said. Economics is not simple; anyone reading an article or two and then thinks they understand the topic is a dumbass.

If you really want to discuss global, marco-economic theory and application with me, I suggest that you study the topic for a few years and then get back to me.

49

MY CONCLUSION IS: 'GOD' DOESN'T EXIST

by NAVYTOWN in

jw
friends

i have come to the conclusion that there is no god.

period!!!

if there was a loving, righteous, all-knowing, all powerful god up there somewhere, where is he and what good is he???

DJS

Alright DJS, if you ignore dumbasses they will go away. If you ignore dumbasses they will go away. If you ignore dumbasses they will go away. Where IS LisaRose when you need her?

Wow, Oceans11, that was a long piece of bullshit. Let me repeat back what I think you are saying so that I'm certain I understand. It sounded like blah, blah, blah, blah, i'm a narcissist, blah blah blah, i like typing a lot into my responses because it makes me seem smart and the sound of my own voice is the most pleasant sound, blah blah blah, I really don't know what I'm talking about and haven't done any real research about the topic but I love narcissistically ranting, blah blah blah.

At least you did use the word opinion a few times.

Oceans, your rant has been addressed so many times on this site. I know lots of atheists. None of them are angry at god or anyone else, and everyone of them has the same story; they spent years analyzing, evaluating, studying and meditating about god. Losing my relgion (that's me in the corner) was a decades long process. I have no atheist heroes. My atheism belongs to me and I never speak of it other than this site. Most of my friends are Xtians, Jews, Hindus, etc. A lof of them are atheists. Great people all.

Also, just a llittle tiny bit of good research on the www would have shown you that atheism has been increasing worldwide for many years, including the very religious US. If you include the number who identify as 'non-religious" (some are afraid to use the term atheist), lots of people are losing their religion (they gotta find their own corner. This is mine).

And as we have pointed out soooo many times, the empirical data shows that the more secular and atheistic a state, region or nation is, the more likely it is to be functional. Geesh, is there a "here's what you say to atheists" book that some of you theists use to type in canned responses??? We keep hearing the same dumbass arguments (I'm not as smart as Cofty - facile is too big of a word for me. And I've copyrighted the use of dumbass on this site. I've talked to my therapist (me) and we both agree that I simply have to use the word.

28

Chinese Progress in their Move from a Government Financed Economy to a Private Economy

by fulltimestudent in

the chinese government is said to be about half way in the progress from a centralised command economy to a market driven, private enterprise economy.. .

link: http://www.canberratimes.com.au/business/china/private-capital-gets-more-bang-in-china-as-economic-reforms-step-up-20141023-11ah6z.html.

canberra times.

DJS

FTS, thanks for the Chinese economic update, and I'm sorry about the end-of-time conspiracy theorists amongst us who can't avoid the keyboard. This OP directly addresses a comment I made months ago in another Chinese economic OP:

"The Invisible Hand will reach out and touch all nations, just as it did with the Japanese miracle 2 decades ago. The Chinese have a Field of Dreams goal, "If you build it they will come." It is admirable, but sooner or later the Chinese economy will have to compete directly with the world. Absent serious government support, can it thrive? Do they really have a free market capitalisitic economy? Or is the government propping up currencies, spending on infrastructure and enabling 'capatilistic' endeavors to such a degree that, once it is required to compete mano a mano, it will suffer?? Those are 64 dollar questions. There are others."

The Chinese leaders are aware that, for their economy to thrive in the future they will need to compete with the global economic powers on equal footing. Having said that, Oceans is right about one thing (if you can find something rational in that end of time rant) in that economies are a public/private entity. And they should be. Darwinian survival of the fittest capitalism may be ruthlessly efficient, but it is ruthlessly indifferent to the have-nots, the strivers and those simply incapable of thriving otherwise.

China is doing some amazing things; they have some enormous barriers in front of them. And they know it. Governments can prop up economies for only so long until the world demands equanimity. They can build protective walls around certain industries or capabilities for a while (all governments do it), but The Invisible Hand will have its say.

I'm pulling for the Chinese. And the Russians. And the Liberians . . .