tag:blogger.com,1999:blog-11719208.post2909377758496314838..comments2023-11-05T04:36:14.223-08:00Comments on The Mess That Greenspan Made: Jim Grant, Raging BullTimhttp://www.blogger.com/profile/16530974968126497397noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-11719208.post-46868133029378199722009-09-21T17:04:42.195-07:002009-09-21T17:04:42.195-07:00Joe, you are a case in point. People like you and...Joe, you are a case in point. People like you and Grant talk about GDP calculations, stimulus spending, etc,etc., as if those numbers are the end all, be all. The biggest point "analysts" are missing is that there is NO more road on which to kick the can. Yes, government manipulation was "successful" in keeping those numbers up and the country running. But, by doing so, it slowly eroded the last vestiges of the production that makes this country/economy great. The definition of insanity is doing the same thing over and over, yet expecting a different result. "Black pit of insanity" I believe is apt.Lisahttps://www.blogger.com/profile/15843387874275045700noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-29893242388336601082009-09-21T12:16:53.985-07:002009-09-21T12:16:53.985-07:00Lisa: "This Grant guy" as you put it, is...Lisa: "This Grant guy" as you put it, is one of the most thoughtful analysts anywhere. I've been reading his stuff for twenty years now and he is not to be dismissed lightly. In short, he is scary smart.<br /><br />Tim: Grant doesn't directly address debt levels in this piece but he has addressed it ad nauseum in his newsletter over the last decade. He isn't a pollyanna. In the article he also mentions that at the low of the cycle in 1933, consumption was 80% of GDP and the savings rate was negative. And yet we still got a large recovery from 33-37. <br /><br />Another point; while government spending was not as high as a percent of GDP back then, I would argue that the intervention in the economy by the FDR administration was in many ways much worse. It was accomplished through command and control rather than direct spending, but the level to which they micromanaged was simply astonishing. Remember the brain trusters were true believers in the planned economy. The big problem with the interventions was that business never knew what FDR would do next and were therefore reluctant to invest. Higgs calls that regime uncertainty and it was rampant in the 30s. <br /><br />As for Grant's thesis, I happen to lean in his direction for the relatively short term. Over the next year or maybe even a little longer, I expect GDP growth to be better than the consensus. That is based on the idea that the Fed will be slow to reverse their money creation and that the "stimulus" bill was written so most of the spending happens in 2010, an election year. And remember that government spending is part of the GDP calculation. <br /><br />That doesn't mean that this will be good growth and it doesn't mean it will be sustainable, but could it be better than expected? Absolutely.Joe Calhounhttp://alhambrainvestments.com/the-consumer-spending-myth/noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-79782106464026060552009-09-21T10:46:58.446-07:002009-09-21T10:46:58.446-07:00This Grant guy is using the same kind of thinking ...This Grant guy is using the same kind of thinking that produces such idiot assumptions as "war is good for the economy." It's interesting that, now that the wheels have come off the Fed-led economy, otherwise fairly rational people are jumping off the cliffs, one after another, into the black pit of insanity.Lisahttps://www.blogger.com/profile/15843387874275045700noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-56529918513707922222009-09-21T03:19:02.216-07:002009-09-21T03:19:02.216-07:00Actually, the scary debt levels may be the very re...Actually, the scary debt levels may be the very reason that asset classes in bubbles a few years ago will rise strongly. The banks are terrified that their loans won't be repaid if they don't use the printing press to at least partially re-inflate the asset bubbles.<br /><br />This will lead to a greater disaster in a few years, but a short term asset bubble bounce is quite possible.Anonymousnoreply@blogger.com