Interesting

[Kathianne]

I found this fascinating:

http://legalinsurrection.blogspot.com/2011/02/known-unknowns.html


Wednesday, February 9, 2011
Known Unknowns
Watching Sean Hannity's interview with Donald Rumsfeld last night reminded me of Rumsfeld's "known- knowns, known-unknowns, and unknown-unknowns" statement during a press conference in 2002. I use this construct in class to describe how to build a legal case (you build it around the known-knowns, just saved you about 50k in tuition):


"[T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know."

The known-knowns are the things we usually argue over -- we know them. The unknown-unknowns are more fun, but amount to speculation and often devolve into conspiracy theories.

Much more interesting to me are present day known-unknowns, things we know we do not know. Focusing on policy issues, what are some known unknowns?

Let me start:

* When we will reach the tipping point in national debt.
* The number of years it will take us to recover from the increasing restrictions on offshore drilling.
* Whether and on what conditions the Obama administration will resupply Israel in the event of a full-scale Mideast war.
* Whether it will be too late to reverse Obamacare if it takes two years until the U.S. Supreme Court rules the mandate to be unconstitutional.
* The number of jobs which will not be created because of the sweeping scope of pending regulations.

Others?

There's video and links at site.

[Palin Rider]

A blogger who enjoys intellectual masturbation. Who'da thought? :laugh2:

[avatar4321]

A blogger who enjoys intellectual masturbation. Who'da thought? :laugh2:

Alot of people use their minds. You should try it sometime:)

[fj1200]

Alot of people use their minds. You should try it sometime:)

This seems fitting for PR


It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.

[logroller]

How many Americans could support themselves if the American money market defaulted; ie dollar no longer backed?

[logroller]

A blogger who enjoys intellectual masturbation. Who'da thought? :laugh2:

Here on DP we have partners :ssex:

Hope it's as good for you as it is for me :smoke:

:laugh2::laugh2::laugh2:

[fj1200]

How many Americans could support themselves if the American money market defaulted; ie dollar no longer backed?

Are you talking about the Fed or "breaking the buck"? The former can guarantee the latter however.

[Kathianne]

How many Americans could support themselves if the American money market defaulted; ie dollar no longer backed?

Considering the problems they are having selling treasuries on the market, we may find out sooner than later.

http://online.wsj.com/article/BT-CO-20110209-715960.html

Lots of links:
http://directorblue.blogspot.com/2011/02/sweet-fancy-soros-us-government-may.html

[fj1200]

Considering the problems they are having selling treasuries on the market, we may find out sooner than later.

http://online.wsj.com/article/BT-CO-20110209-715960.html


What problems?

sale of 10-year Treasury notes that was met with the strongest demand on record from foreign buyers.

And treasury rates are still stupid cheap.

[Kathianne]

What problems?


And treasury rates are still stupid cheap.

That's the only way they can get the money, stupid cheap.

[fj1200]

That's the only way they can get the money, stupid cheap.

???

We're NOT having trouble selling treasuries and we're NOT having trouble selling treasuries at historically low rates.

[namvet]

A blogger who enjoys intellectual masturbation. Who'da thought? :laugh2:

you seem to be an expert on intellectual masturbation. show us how you do it

[fj1200]

you seem to be an expert on intellectual masturbation. show us how you do it

Intellectual vomit would be more apt to his contributions here.

[Kathianne]

???

We're NOT having trouble selling treasuries and we're NOT having trouble selling treasuries at historically low rates.

the problem is that we are forced to those historically low rates. When the rates required were higher, no takers. It's only a matter of time before the new rates will not suffice, if something isn't done about the debt, which is what the 'cheap money' is being used for, in insufficient amounts.

[fj1200]

the problem is that we are forced to those historically low rates. When the rates required were higher, no takers. It's only a matter of time before the new rates will not suffice, if something isn't done about the debt, which is what the 'cheap money' is being used for, in insufficient amounts.

Forced? Who is "forcing" foreign buyers to buy our debt? Interest rates are not directly tied to the amount of debt; it's the likelihood of investors' getting their money back and inflation expectations. Right now it seems that the market thinks that we will have no problem paying off debt/refinancing and are not worried about future inflation, wrongly on that last part IMO.

[Kathianne]

Forced? Who is "forcing" foreign buyers to buy our debt? Interest rates are not directly tied to the amount of debt; it's the likelihood of investors' getting their money back and inflation expectations. Right now it seems that the market thinks that we will have no problem paying off debt/refinancing and are not worried about future inflation, wrongly on that last part IMO.

I've been reading about this for months. Fed keeps putting them out there on the market, no takers. When price suppressed, they have to be pulled off market. Flying out? No, even at bottom prices. Truth is, it's not just Moody's, WHO, and G8 that have problems with our debt.

[fj1200]

I've been reading about this for months. Fed keeps putting them out there on the market, no takers. When price suppressed, they have to be pulled off market. Flying out? No, even at bottom prices. Truth is, it's not just Moody's, WHO, and G8 that have problems with our debt.

Months eh? Have we had any trouble financing our deficits? Do the bond investors end up buying up the treasury offerings?

The World Health Organization has a problem with our debt? I have problems with our debt too but let's complain about the right stuff.

[Kathianne]

Months eh? Have we had any trouble financing our deficits? Do the bond investors end up buying up the treasury offerings?

The World Health Organization has a problem with our debt? I have problems with our debt too but let's complain about the right stuff.

WHO was a mistake, sorry you are correct.

http://www.reuters.com/article/2011/02/10/markets-treasuries-asia-idUSTOE71901O20110210

Problem with treasuries and bonds began under Bush and have steadily gotten worse.

One note today:

http://www.reuters.com/article/2011/02/10/markets-treasuries-asia-idUSTOE71901O20110210

[Kathianne]

When I wrote WHO, I was so wrong and what I meant was IMF:

http://www.reuters.com/article/2011/01/28/us-usa-ratings-moodys-idUSTRE70Q8JI20110128

[fj1200]

WHO was a mistake, sorry you are correct.

http://www.reuters.com/article/2011/02/10/markets-treasuries-asia-idUSTOE71901O20110210

Problem with treasuries and bonds began under Bush and have steadily gotten worse.

One note today:

http://www.reuters.com/article/2011/02/10/markets-treasuries-asia-idUSTOE71901O20110210

That's the same link. I'm not sure what you see as the problem other than the debt issue, which I agree is a problem but not because of debt itself.

And of course any "problem" will begin under Bush since that is when we had to renew deficit financing.

[Kathianne]

That's the same link. I'm not sure what you see as the problem other than the debt issue, which I agree is a problem but not because of debt itself.

And of course any "problem" will begin under Bush since that is when we had to renew deficit financing.

You're right about the double link, sorry. That's what I get for working on personal budget and posting concurrently. :laugh2:

[Kathianne]

From last month, US approaching debt at 100% of GDP:

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/27/AR2011012707593_pf.html


U.S. must reduce deficit, IMF warns

By Howard Schneider
Washington Post Staff Writer
Friday, January 28, 2011; A16

U.S. officials must act quickly to control government deficits or face slower growth and even more difficult choices in the future, the International Monetary Fund said Thursday in a report criticizing the tepid U.S. response to its rising public debt.

The IMF warning comes as federal officials grapple with a congressional projection this week that the annual deficit will reach a historic $1.5 trillion this year. This was the latest report to raise concerns about how massive government debts in developed countries could undermine the global economic recovery.

"The U.S. has a lot of credibility. This does not imply their credibility can last forever," IMF fiscal affairs director Carlo Cottarelli said as he released the IMF study. It concluded that the United States is falling behind on a promise it made to other top economic countries to halve its budget deficit by 2013.

"This is a problem many years in the making and will take a concerted effort by Democrats and Republicans working together to find a solution," White House press secretary Robert Gibbs said in answer to a question about the IMF report.

He noted that President Obama called for a freeze on discretionary spending during this week's State of the Union address. IMF officials have welcomed the step but said that spending cuts in pension and health entitlement programs are also needed. ...

...But new, less-optimistic forecasts put the country in danger of missing that goal. According to data released this week by the Congressional Budget Office, recent tax cuts and expected spending will keep the annual deficit this year at about 10 percent of GDP.

That is similar to deficits in European countries, such as Spain and Britain, that have come under pressure from international bond markets to curb their spending, raise taxes and restructure their economies. The total amount of outstanding U.S. debt, meanwhile, is expected to equal about 70 percent of the nation's economy by next year. If combined with the amounts owed by states, public debt will top 100 percent of GDP. ...

[fj1200]

You're right about the double link, sorry. That's what I get for working on personal budget and posting concurrently. :laugh2:

OMG don't get those two confused. :eek:

:laugh:

[Kathianne]

OMG don't get those two confused. :eek:

:laugh:

Indeed. Right now, hard to tell the difference. ;)

[Palin Rider]

Here on DP we have partners :ssex:

Hope it's as good for you as it is for me :smoke:

:laugh2::laugh2::laugh2:

The problem with DP is that people brag about their prowess much more than they actually deliver. :laugh:

[logroller]

Forced? Who is "forcing" foreign buyers to buy our debt? Interest rates are not directly tied to the amount of debt; it's the likelihood of investors' getting their money back and inflation expectations. Right now it seems that the market thinks that we will have no problem paying off debt/refinancing and are not worried about future inflation, wrongly on that last part IMO.

Sounds to me like a Hedge bet, short term vs long term. Problem is, IMO, the market couldn't function without these hedging strategies in place, and yet they devalue the dollar in the process-- textbook eg of a vicious cycle. It's like borrowing a dollar today, then paying you back plus interest with the $1.02 I borrow in 6 months.




The problem with DP is that people brag about their prowess much more than they actually deliver. :laugh:

I had a friend who'd promise 3inches for 3min; then when he delivered 6 and 6, she'd be dually impressed:2up::laugh:

[Kathianne]

Payoff of irresponsibility:

http://money.cnn.com/2011/02/10/markets/dollar/index.htm


IMF calls for dollar alternative

By Ben Rooney, staff reporterFebruary 10, 2011: 4:37 PM ET


NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.


SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs

While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar...

[logroller]

Payoff of irresponsibility:

http://money.cnn.com/2011/02/10/markets/dollar/index.htm

Ida know. Seems to me the problem is fiat currency. The US dollar has the backing of the US govt and its economy, not physical collateral. Understanding there may be some question as to the $'s solvency, how would replacing it with something without collateral be deemed a soultion, an alternative perhaps, but no more solvent. sdr's sound like an extension of the same weakness: faith backed currency.

[fj1200]

A quest for relevance over the US by the IMF. Pointless.