"Class War over Financial Stability"

[Sope Creek]

Fortune: https://fortune.com/2023/03/21/economist-ann-pettifor-central-banks-class-war-financial-stability/

I apologize for the paywall. Basically, the article describes a former British central banker as (1) someone who predicted the 2008 downturn correctly (as if that gives the person credibility now) and (2) who says the world's central bankers are prioritizing controlling inflation over what the effects of their raising interest rates on the rest of us are. Re: (2), it's hard to argue with her on this point.

 

[Marvin the Martian]

Fortune: https://fortune.com/2023/03/21/economist-ann-pettifor-central-banks-class-war-financial-stability/

I apologize for the paywall. Basically, the article describes a former British central banker as (1) someone who predicted the 2008 downturn correctly (as if that gives the person credibility now) and (2) who says the world's central bankers are prioritizing controlling inflation over what the effects of their raising interest rates on the rest of us. Re: (2), it's hard to argue with her on this point.

It sure looks that way from the outside. In this country, savings are way down and credit is at record levels. Too much money chasing too few goods has to hit a wall at some point.

 

[Sope Creek]

It sure looks that way from the outside. In this country, savings are way down and credit is at record levels. Too much money chasing too few goods has to hit a wall at some point.

. . . yep. And so does the credit (both personal and governmental) hitting a wall of no lenders . . . .

 

[Cthulhu85]

Higher interest rates is good for savers which means it's good for me. If it discourages people from borrowing or borrowing more than they need then good. People spend too much on shit anyways.

 

[Sope Creek]

Higher interest rates is good for savers which means it's good for me. If it discourages people from borrowing or borrowing more than they need then good. People spend too much on shit anyways.

That's the spirit. "What's good for me . . . ."

 

[Marvin the Martian]

. . . yep. And so does the credit (both personal and governmental) hitting a wall of no lenders . . . .

And the Chinese economy is way down, Europe's is down, Russia is no longer part of the world economy.

 

[Cthulhu85]

That's the spirit. "What's good for me . . . ."

I'm being responsible and saving my money, living and buying within my means. Not my fault if others don't.

 

[Sope Creek]

And the Chinese economy is way down, Europe's is down, Russia is no longer part of the world economy.

Such is the stuff of unnecessary warfare.

Back in the 70s, we spent a lot of time talking about the tradeoffs between guns and butter. It was an inflation focused discussion. Now the tradeoff is past butter or current butter . . . and we've already committed ourselves regarding the past butter. Toss in some guns to that discussion . . . .

 

[Sope Creek]

I'm being responsible and saving my money, living and buying within my means. Not my fault if others don't.

Good for you.

Me too.

 

[i'vegotwinners]

Fortune: https://fortune.com/2023/03/21/economist-ann-pettifor-central-banks-class-war-financial-stability/

pay wall.

that said, the Wall St propaganda media told the citizenry that "inflation", (not the more accurate "price gouging"), was due to Fed policy, (which it wasn't), not effective monopolies, (which it absolutely is), and that raising interest rates will magically fix it, (which it won't), so it becomes an inflation higher interest rates double whammy BF for Joe Consumer.

who benefits from high interest rates?

the big banks who are connected at the hip with the Fed and Powell, and whatever party is currently out of power. (who by coincidence is also connected at the hip with the big banks and Powell).

who profits from bank failures other than failures of the mega banks? the mega banks.

who will receive tens of millions per yr from the mega banks in a few yrs?

those now running the Fed.

if we really wanted to curb inflation short term and fast, we'd just institute a 98% excess profits tax.

to curb it long term and lose the excess profits tax, end the monopolies driving everything up because they can, (due to their being effective monopolies and oligopolies), and if they can, they have a fiduciary duty to their shareholders and themselves to.

if you think the media is lying to you about covid, or race, or trans, or the other party, i assure you they are lying to you 100 times more about everything economic in general, and monopolistic price gouging/inflation in specific.

it's not personal. it's just business.

and anyone who thinks Comcast/NBC/Universal/Sky and AT&T/CNN/Directv/Warner Bros/Discovery and Fox/WSJ and Disney and Facebook/Instagram/WhatsApp and Musk/Twitter/Tesla/SpaceX and Bezos/WaPo/Amazon/AWS and CBS/Viacom are about journalism and truth and not business, just doesn't grasp how things work, and can only work, in a corporate setting totally controlled by mega hedge funds and billionaires.

 

[UncleMark]

I'm being responsible and saving my money, living and buying within my means. Not my fault if others don't.

I guess it all depends on the degree. No one is able to buy a home for cash, or a new car. By the same token, financing a 5-star vacation on a credit card and making minimum payments isn't a pathway to success.

That said, our economy runs on credit. Some easy, some not so easy. More people need to be able to say No and be satisfied with less.

On the macro side, I'm inclined to think that as long as anyone who wants a job can get one, then the economy can't be all bad no matter how much inflation we're dealing with. If you sacrifice jobs in the fight against inflation, you'd better be willing to deal with the fallout. I've dealt with high inflation and joblessness both. I'll take high inflation every time.

 

[JamieDimonsBalls]

Fortune: https://fortune.com/2023/03/21/economist-ann-pettifor-central-banks-class-war-financial-stability/

I apologize for the paywall. Basically, the article describes a former British central banker as (1) someone who predicted the 2008 downturn correctly (as if that gives the person credibility now) and (2) who says the world's central bankers are prioritizing controlling inflation over what the effects of their raising interest rates on the rest of us are. Re: (2), it's hard to argue with her on this point.

Here's a paywall-free link:

Welcome to nginx

 

[JamieDimonsBalls]

It sure looks that way from the outside. In this country, savings are way down and credit is at record levels. Too much money chasing too few goods has to hit a wall at some point.

Hang on though - why do you think that is (savings down, credit up)? Inflation and real wage loss are a real issue.

Gotta make up for that difference somehow (credit) in order to maintain lifestyle.

 

[Marvin the Martian]

Hang on though - why do you think that is (savings down, credit up)? Inflation and real wage loss are a real issue.

Gotta make up for that difference somehow (credit) in order to maintain lifestyle.

Right, but eventually the credit card is full. We as a nation are reaching that point. Once it fills, just catalytic converter theft is left as an option.

 

[Cortez88]

Hang on though - why do you think that is (savings down, credit up)? Inflation and real wage loss are a real issue.

Gotta make up for that difference somehow (credit) in order to maintain lifestyle.

Isn’t this the real trick with inflation and wages? How do you raise wages enough and avoid the wage spiral? Way above my head, but I understand the complexity of the issue.

Anecdotally, I’m in an industry that does not see large wage growth. Inflation has absolutely affected our savings rate and purchasing power.

 

[larsIU]

Hang on though - why do you think that is (savings down, credit up)? I

Credit was too easy and too cheap to obtain for many? Especially in the housing and auto markets. Housing maybe not as much as the mid aughts but the auto market, laughable.

 

[Cortez88]

Credit was too easy and too cheap to obtain for many? Especially in the housing and auto markets. Housing maybe not as much as the mid aughts but the auto market, laughable.

Four figure monthly car payments are now very normal. When the average new car costs $50k, it’s easy to see how that happened. Regardless, I still find it ludicrous.

 

[JamieDimonsBalls]

Right, but eventually the credit card is full. We as a nation are reaching that point. Once it fills, just catalytic converter theft is left as an option.

That's quite a jump. People are stealing those because they can't afford bread Marv, regardless of the MSNBC talking points.

If the credit card is maxed out, people buy less stuff. If consumer spending declines, which makes up 70%+ of the economy, you can bet that GDP growth will be near zero, at best, and more likely negative. That causes deflation, job loss, etc.

 

[Marvin the Martian]

That's quite a jump. People are stealing those because they can't afford bread Marv, regardless of the MSNBC talking points.

If the credit card is maxed out, people buy less stuff. If consumer spending declines, which makes up 70%+ of the economy, you can bet that GDP growth will be near zero, at best, and more likely negative. That causes deflation, job loss, etc.

I need to make the attempts at levity more clear. Though I suspect buying drugs is a large part of the demographic.

I did see yesterday LA was going to have a $1000 fine or 6 months for catalytic converter theft. I doubt that is high enough to put a dent in it.

Does MSNBC have that as a talking point? I have seen it when Steve Karnacki does his polling stuff, other than that no MSNBC.

 

[larsIU]

Four figure monthly car payments are now very normal. When the average new car costs $50k, it’s easy to see how that happened. Regardless, I still find it ludicrous.

Saw one the other day for a Mercedes SUV at $1700/month. At least it was only a 60 month deal.

 

[Crayfish57]

I guess it all depends on the degree. No one is able to buy a home for cash, or a new car. By the same token, financing a 5-star vacation on a credit card and making minimum payments isn't a pathway to success.

That said, our economy runs on credit. Some easy, some not so easy. More people need to be able to say No and be satisfied with less.

On the macro side, I'm inclined to think that as long as anyone who wants a job can get one, then the economy can't be all bad no matter how much inflation we're dealing with. If you sacrifice jobs in the fight against inflation, you'd better be willing to deal with the fallout. I've dealt with high inflation and joblessness both. I'll take high inflation every time.

I pd cash for my first house and still live there. pd cash for last two cars/trucks I bought.

 

[Cortez88]

Saw one the other day for a Mercedes SUV at $1700/month. At least it was only a 60 month deal.

I even have trouble squaring financing a car for anything more than 48 months. You can get a 72 month now!

 

[larsIU]

I even have trouble squaring financing a car for anything more than 48 months. You can get a 72 month now!

Bro, do you even 96 months bro (it's real).

 

[Sope Creek]

I even have trouble squaring financing a car for anything more than 48 months. You can get a 72 month now!

Used to be that a new car was obsolescenced at 48 months . . . or before.

Then Honda and Toyota came to town . . . .

 

[Sope Creek]

Credit was too easy and too cheap to obtain for many? Especially in the housing and auto markets. Housing maybe not as much as the mid aughts but the auto market, laughable.

Yep. Those folks that bought houses in the late 20-teens; their best asset is their (nontransferable) mortgage rate . . . and the depreciating value of the home makes it a prison . . . .

 

[UncleMark]

Saw one the other day for a Mercedes SUV at $1700/month. At least it was only a 60 month deal.

So just $100K. Nice deal.

 

[UncleMark]

I even have trouble squaring financing a car for anything more than 48 months. You can get a 72 month now!

Back in the 70s they pushed it out to 48 months to keep the payments under $100.

 

[mcmurtry66]

Back in the 70s they pushed it out to 48 months to keep the payments under $100.

Maybe 50 year mortgages will become qualified mortgages. Ramp up bitches. 96 month rover and a 50 year mortgage

 

[NPT]

If it discourages people from borrowing or borrowing more than they need then good. People spend too much on shit anyways.

I think that is the key point in what you said.

 

[NPT]

It sure looks that way from the outside. In this country, savings are way down and credit is at record levels. Too much money chasing too few goods has to hit a wall at some point.

This guy has no love for the feds and think they should all be fired.

Fed is 'pouring more gasoline' on the economic fire: Ken Langone | Fox Business Video

Home Depot co-founder Ken Langone makes a 'draconian' suggestion for the entire Federal Reserve board to resign.

video.foxbusiness.com

 

[JamieDimonsBalls]

I need to make the attempts at levity more clear. Though I suspect buying drugs is a large part of the demographic.

I did see yesterday LA was going to have a $1000 fine or 6 months for catalytic converter theft. I doubt that is high enough to put a dent in it.

Does MSNBC have that as a talking point? I have seen it when Steve Karnacki does his polling stuff, other than that no MSNBC.

I don't know, but hopefully they picked it up.

Good for LA. Let's see if they enforce the law as they are supposed to. The issue isn't always the laws themselves, but the weak or no-backbone D.A.s that let criminals get away with it.

That's my understanding anyway.

 

[JamieDimonsBalls]

This guy has no love for the feds and think they should all be fired.

Fed is 'pouring more gasoline' on the economic fire: Ken Langone | Fox Business Video

Home Depot co-founder Ken Langone makes a 'draconian' suggestion for the entire Federal Reserve board to resign.

video.foxbusiness.com

He's a bit of a kook though. Look at some of his historical statements.

 

[JamieDimonsBalls]

Credit was too easy and too cheap to obtain for many? Especially in the housing and auto markets. Housing maybe not as much as the mid aughts but the auto market, laughable.

How dare you use math to challenge the idea of EQUITY! Identical outcomes are the only fair way!

 

[i'vegotwinners]

when Wall St and their media, which is all corporate media, won't allow the real sources of the covid/war profiteering price gouging feeding frenzy, (effective monopolies in the industries driving it and putting China in charge of our economy and supply chains), to be revealed, they had to come up with a patsy to take the blame, (low interests rates), which led to a disastrous reaction, (raising them), in a let's make the problem twice as bad response to a false diagnosis.

idiocracy.

 

[i'vegotwinners]

i never know if most of the posters here have absolutely zero economic chops, or are just dishonest, or both.

that said, Joe Voter has absolutely zero economic chops.

and absolutely zero analytical reasoning ability combined with a beyond naive slavery to party.

he knows he's been f'd over for the last 40 yrs, but just never figures it out.

and still hasn't.

 

[anon_6hv78pr714xta]

Yep. Those folks that bought houses in the late 20-teens; their best asset is their (nontransferable) mortgage rate . . . and the depreciating value of the home makes it a prison . . . .

That's me.

 

[Marvin the Martian]

Yep. Those folks that bought houses in the late 20-teens; their best asset is their (nontransferable) mortgage rate . . . and the depreciating value of the home makes it a prison . . . .

IU had a retirement plan for Administrators, and I think full faculty. It was 18/20, 20 years at IU and 18 in that plan. One could retire very well. But the catch was one had to retire. The plan basically could start at 64, but it ended at 70. So if you retired at 68, you only got 2 years. IIRC it was full pay. Of course one would have their main retirement for afterwards.

The slang was "golden handcuffs".

That term seems to apply to your description.

 

[Cthulhu85]

Four figure monthly car payments are now very normal. When the average new car costs $50k, it’s easy to see how that happened. Regardless, I still find it ludicrous.

Pretty simple solution. Don't buy new, and don't worry about the bells and whistles. I'm 38 and have owned 2 trucks and 2 cars. First truck paid cash in high school, first car came with the wife. The other 2 I paid 50% down. Granted, I do my own mechanical work so I get more out of mine. I've maybe had 5 total years worth of car payments and $250 was the most per month.

I don't think it's unreasonable for most people to change their own oil and fluids and keep their car washed. That alone can get you a lot of extra maintenance free miles.

 

[DANC]

Maybe 50 year mortgages will become qualified mortgages. Ramp up bitches. 96 month rover and a 50 year mortgage

In Europe, they have multi-generational mortgages.

Regarding vehicles, I never buy a new one. There are plenty of great used vehicles much cheaper.

EDIT: I wrote this before reading Cthulhu85's post above.

 

[DANC]

This guy has no love for the feds and think they should all be fired.

Fed is 'pouring more gasoline' on the economic fire: Ken Langone | Fox Business Video

Home Depot co-founder Ken Langone makes a 'draconian' suggestion for the entire Federal Reserve board to resign.

video.foxbusiness.com

The FED will have to crash the economy to wring out inflation unless Biden cooperates with an accompanying fiscal policy.

Beating inflation is simple: encourage the Supply side. Demand is out of control due to being awash in money, which the government hands out. Biden exacerbated inflation when he cut any growth in internal energy.

Encourage the supply side by cutting taxes and regulations and inflation will come down without crashing the economy and we can handle current interest rates.