After all, the thing that holds the US together is transfer payments; there are states that always pay more to the Federal government than they get back, there are states that always get back more than they pay, and this is an accepted situation - it's not a matter of Mississippi building up an ever-growing debt payable to New Jersey.

That seems the most hopeful and the most likely resolution to the current slightly sub-optimal EU situation.

[url=http://dealbook.nytimes.com/2012/10/09/wall-street-pay-remains-high-even-as-jobs-shrink/?ref=business]Wall Street Pay Remains High Even as Jobs Shrink[/url]: [i]Total compensation on Wall Street rose 4 percent last year to more than $60 billion — an amount surpassed only by total pay in 2007 and 2008, according to a report.[/i]

[Related: Tale of the Tape for just-surprise-retired [url=http://www.zerohedge.com/news/2012-10-16/vikram-pandit-bottom-line-over-200-million-90-stock-drop]Citi CEO Vikram "The Bandit" Pandit[/url]. Here are Chris Whalen's [url=http://www.zerohedge.com/contributed/2012-10-16/couple-thoughts-citigroup-post-pandit]thoughts on the change[/url].]

By way of accompaniment, former Reagan budget director David Stockman has some pointed notes on Mttt Romney's self-proclaimed success as a "job creator" - the title appears to a play on "the great reformer", one of the appellations his supporters applied to Reagan. The full piece is quite long, but eminently worthwhile - truly outstanding analysis and detective work (h/t Mish):

[url=www.thedailybeast.com/newsweek/2012/10/14/david-stockman-mitt-romney-and-the-bain-drain.html]Mitt Romney: The Great Deformer[/url]
[quote] Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.

The fact that Bain’s returns reputedly averaged more than 50 percent annually during this period is purportedly proof of the case—real-world validation that Romney not only was a striking business success but also has been uniquely trained and seasoned for the task of restarting the nation’s sputtering engines of capitalism.

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.

That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.[/quote]
Stockman goes on to note that w.r.to the LBO business model, he speaks from a great deal of personal experience, namely that of his post-White-House career.


[b]Odds and Ends:[/b]

Postscript to my recent parody of the "think like a genius" self-help genre, which included Thomas Jefferson's 10-point plan for self-improvement. A recent [url=http://www.zerohedge.com/news/2012-10-07/guest-post-america%E2%80%99s-hijackers-%E2%80%93-where-are-they-now]ZeroHedge piece[/url] commemorating the 4th anniversary of the passage of TARP reminds me that Jefferson was both a master wordsmith - precisely the reason his colleagues asked him to write the U.S. Declaration of Independence (interestingly, Jefferson died exactly on the fiftieth anniversary of the Declaration) - and a loather of bankers and moneylenders in a vein akin to the man who would be president a generation later (and Jefferson's temperamental opposite in just about every other way), Andrew Jackson:

Wikipedia [url=http://en.wikipedia.org/wiki/Thomas_Jefferson]explains[/url]:
[quote]Jefferson expressed a dislike and distrust for banks and bankers; he opposed borrowing from banks because he believed it created long-term debt as well as monopolies, and inclined the people to dangerous speculation, as opposed to productive labor on the farm.[138] He once argued that each generation should pay back its debt within 19 years, and not impose a long-term debt on subsequent generations. Jefferson fought against [Alexander] Hamilton's proposed Bank of the United States in 1790, but lost. Jefferson also opposed the bank loans that financed the War of 1812 fearing it would compromise the war effort and plunge the nation into serious long term debt[/quote]

Forgot to post this when it first appeared a couple weeks ago:

[url=http://www.zerohedge.com/news/2012-10-03/chart-day-americas-debt-crisis-who-really-responsible]Chart Of The Day: America's Debt Crisis - Who Really Is Responsible?[/url]
[quote]Yesterday [url=http://www.zerohedge.com/news/2012-10-02/usa-kicks-fiscal-2013-bang-and-93-billion-jump-debt-1615948701330035]we brought you the news[/url] that US debt quietly soared by $90 billion overnight to celebrate the new fiscal year end, reaching $16.2 trillion and sending [b]total US debt to GDP to 103%[/b]. Needless to say, this comes at an exciting time, with the first [strike]Wall Street muppet[/strike] presidential debate in about 12 hours, where the US debt crisis will be a front and center topic because in about 2 months, the US debt ceiling will again be breached adding to the Fiscal Cliff fiasco, resulting in a flashback to August 2011 when the market had to tumble by nearly 20% for Congress to get the hint that first and foremost its job is to make sure the money on Wall Street keeps flowing, all else secondary. And while it has become fashionable to say that US debt rose by this much under that president, the truth is that the Presidency is merely one of three institutions that are responsible for the shape of the US debt-to-GDP line (which is now going from the lower left to the upper right by default). The other two are, of course, Congress and the Senate. Luckily, to simply things substantially, we have a handy graphic from today's Bloomberg Brief which conveniently plots not only the political affiliation of the presidency, but of the House and Senate, in the chronology of the US debt crisis.[/quote]


ZH`s Bruce Krasting has an interesting whodunit out of Europe:

[url=www.zerohedge.com/contributed/2012-10-18/how-launder-money-swiss-style]How to Launder Money - Swiss Style[/url]: [i]An interesting crime story has come out in France and Switzerland. It may prove to be the nail in the coffin for bank secrecy in Switzerland.[/i]


[b]Friday Humor:[/b]

o Latest proposals by France`s government are unintentionally hilarious - Mr. Hollande appears to believe the French motto should be a 4-word one: "liberté, égalité, fraternité, stupidité":

[url=http://www.zerohedge.com/news/2012-10-19/french-great-socialist-revolution-will-be-homework-free-and-very-very-cold]The French Great Socialist Revolution Will Be Homework-Free, And Very, Very Cold | ZeroHedge[/url]


o XKCD has a problem with pre-election punditry citing [url=http://xkcd.com/1122/]electoral precedent[/url].

(E.g. "No candidate over 6' tall with wooden false teeth has ever won without winning the votes of a majority of Virginia landowners who wear wigs.")

Friday was the 25th anniversary of the market crash of '87. That crash happened on a Monday, and the wheels which set in in motion were already churning behind the scenes preceding weekend. Bruce Krasting, who was working at WS iBank powerhouse Drexel Burnham Lambert at the time, recalls the events, by way of a confession:

[url=www.zerohedge.com/contributed/2012-10-20/how-i-caused-1987-crash]How I Caused the 1987 Crash[/url]

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

Looks like Australia [url=http://www.smh.com.au/business/farmer-finds-facts-lost-in-transmission-20121021-27zeg.html]has its own Enron-style scandal[/url] ... LOL@ the retort to the comment by "boof" about the "Spanish windmills".

[QUOTE=ewmayer;315430]Friday was the 25th anniversary of the market crash of '87.[/QUOTE]

And on Sunday the Pope named 7 new saints.

Please forgive me for this, but is there the possibility there's a disconnect?

[QUOTE=ewmayer;315430]Friday was the 25th anniversary of the market crash of '87. That crash happened on a Monday, and the wheels which set in in motion were already churning behind the scenes preceding weekend. Bruce Krasting, who was working at WS iBank powerhouse Drexel Burnham Lambert at the time, recalls the events, by way of a confession:
[/QUOTE]There was a simpler and more visible trigger:

On the Friday before Black Monday, the Wall Street Journal had a front-page article comparing the then-current market situation to that of just before the crash in October 1929. It included a graph plotting the market index (DJI, IIRC) climb for a few years before October 1929 along with the same index's climb for the same number of years before October 1987 -- the parallelism of the two curves was quite striking!

I bought a WSJ copy that afternoon, after having heard some rumor about that article.

After congratulating myself for having transferred my company retirement account funds from stocks to annuities (I'd already mused upon the October 1929/1987 parallels) the previous month, I decided to transfer all my non-retirement mutual fund assets from stock funds to money market as soon as I could call the fund's transfer number Monday morning. That number was busy for a while, but I finally got through and placed my order (which, of course, didn't take effect until after the NAV calculation following market close).

One exception: I left my gold stocks fund alone, on the theory that they wouldn't crash like the rest. Well, they held up on Monday, but on Tuesday they crashed like everything else. Doh!

It seems to me that millions of other small (and big) investors must've also seen that same WSJ article and graph, on Friday financial news shows if not directly, and that our collective rush to sell on Monday surely was responsible for an appreciable part of the drop.

[QUOTE=ewmayer;315228]Forgot to post this when it first appeared a couple weeks ago:

[URL="http://www.zerohedge.com/news/2012-10-03/chart-day-americas-debt-crisis-who-really-responsible"]Chart Of The Day: America's Debt Crisis - Who Really Is Responsible?[/URL]

[/QUOTE]More instructive would have been (a) to start the chart's horizontal axis before 1980 instead of at 1995, and (b) to make the vertical axis logarithmic, so that the steepest percentage increases would be evident on the chart.

When Reagan's term started, the national debt was a little over $1 trillion, but Reagan and Bush the Elder managed to pump it up to $4 trillion when they handed it off to Clinton -- about a 300% increase in 12 years (averaging 3^(1/12) = 9.5% increase, compounded annually).

From the article's chart: in 1995 the debt was $5 trillion. So, in the 14 years from 1981 to 1995, the debt multiplied by about 4 (averaging 4^(1/14) = 10.4% increase annually).

In the 17 years from 1995 to 2012, the debt rose from $5 trillion to $16.4 trillion ((averaging 3.3^(1/17) = 7.2% increase annually).

Would the average person realize that the average annual percentage increase in the national debt for the past 17 years has been significantly lower than the corresponding average increase for the preceding 14 years? Probably not, unless shown a logarithmic graph covering 1981-2012.

But by using a linear vertical scale instead of a logarithmic one, the graph conveys the impression that the steepest increases occurred in 2007-2011 when Democrats controlled both House and Senate. Perhaps that's what the author intended, rather than making a fairer comparison of the rate of increases since the 1980 start of abandonment of fiscal responsibility by the GOP.

[QUOTE=cheesehead;315469]More instructive would have been ... to make the vertical axis logarithmic, so that the steepest percentage increases would be evident on the chart.[/QUOTE]

I disagree. A logarithmic chart would make a President/Congress that took the debt from $1 to $100 worse than one that took it from one trillion to two trillion. IMO, a better chart would use the widely-accepted standard benchmark of debt as a percentage of GDP.

[QUOTE]IMO, a better chart would use the widely-accepted standard benchmark of debt as a percentage of GDP[/QUOTE]

We are in debt approaching $200,000 per man woman and child already. I don't need to see much of a graph to understand that we have permitted politicians to put our children in a cesspool of debt.

DarJones

[QUOTE=Fusion_power;315542]We are in debt approaching $200,000 per man woman and child already. I don't need to see much of a graph to understand that we have permitted politicians to put our children in a cesspool of debt.

DarJones[/QUOTE]

This is always thrown about, but is just as misleading as anything. We are barely above the all time low (since 1929 when these stats started being kept track) of the ratio between average income and the debt. In 2010 it was below 1 for the first time in 60 years. in May of 2011 it was still .92 (if you took all income based on May 2011 annualized it would pay off 92% of the debt.) This is way down from the 70's and 80's when this ratio was below .3

Additionally this doesn't even begin to cover the other sources of income.

Debt, the deficit, and throwing around numbers in the trillions, claiming that 'printing money will lead to an economic catastrophe,' the stupid gold standard, is always politics of distraction. (people like to talk about it as if it has meaning, but most of the time it doesn't) The US could easily handle a Federal Deficit much higher (think two to three times higher) with very little impact. Remember that the only thing that big-finance was worried enough to (stupidly) lower the credit rating for was ham-stringing the ability to borrow more money--they are not concerned in the least that it won't be paid back.

Seriously if the US greenback isn't good, then every other currency is already worthless. (I'm not being Jingoistic here--it is the simple economic truth of our time. The same was true in the past of the British Pound, and the dollar could be replaced by the Euro, the Yen, or the Yuan, but it hasn't happened yet.)

[QUOTE=Fusion_power;315542]We are in debt approaching $200,000 per man woman and child already. I don't need to see much of a graph to understand that we have permitted politicians to put our children in a cesspool of debt.[/QUOTE]

Check your math. ~16 trillion debt / ~350 million people ~= $50K. Perhaps you remembered the debt-per-family-of-4 value.

Either way it is a cesspool.