“It simply cannot pencil without a huge haircut in currency devaluation.”

As in my post earlier, that is one of way to discharge the debt, default by inflation. This should elicit no uh-ohs around here, as Rick has stated that he believes in a serious (if not nec. hyper-) inflation after the deflation.

As to healthy PEs:

see this chart at:
http://www.chartoftheday.com/20100716.htm?T

Look at the chart and comment there for how long, and how often the current $60+ EPS has existed historically.
Hardly the norm!

F.Beard writes:
“Because the population was driven into unserviceable debt by the government backed fractional reserve banking cartel.”

For that part of people’s expenditures that went higher and higher due to the long-term inflation you refer to AND that was NOT discretionary, you may be correct.
But a larg part of the horrific private debt you refer to was fully discretionary, buying more than necessary, or buying at all. That also INCLUDES overpriced homes, people did not have to buy at all, and certainly not everybody HAS to have granite countertops, one bathroom per bedroom (for the 6-year olds!), etc.

“…simply because of accounting entries then a reversal might easily be accomplished via accounting entries too.”

Those that are the beneficiaries of these “accouting” entries (and that is the redistributive (to the top) reason for having this system in the first place), will NEVER voluntarily give up these gains in order to make such entry-reversals, because they control this system. How would this be implemented against them?

Thus not so simple at all.
You seem to envision something like the reversal of a so-called mis-trade on an exchange.
Well, if you look at the history of how those mistrades are handled, they are (virtually) ALWAYS in favor of the financial industry actor and against the private party.
Try it yourself, put in a limit sales order at an “absurd” price and then claim a mistrade for all the typical reasons and see if you can get the whole thing reversed.

BUT, even if you would succeed, the transaction is fully reversible at that point, with a return to the “status-quo-ante”.

Thus is impossible, because real things (including services) have been performed and remunerated.
How do you reverse the installation of a 2ok outdoor kitchen if you have to place everyone back to where they were before they signed that contract?

Once a contractual debt has been incurred, it can only be discharged in two ways: meet the obligation or default.
This is also the major flaw behind the argument of those who poh-poh the BIS’ world total derivatives numbers of 500-600trillion as being just “notional”, and thus supposedly without meaning or consequence.

EVERY ONE of those notional dollars has a real consequence because it backs a contractual obligation, and thus needs to be gotten rid-off as above.

This is of course also true for public debt: If you un-account those, where will all those relying on the promised future income get it from (social security, public pensions, etc)?
Default is the inescapable conclusion, with the sea of tears that will bring.

I can surmise an approximate understanding of the term “does not pencil” but would someone tell me the exact meaning, maybe with a synonym.
Compute?
Balance?

I like to be precise in my wording, should I read or use this term in the future. (One of my pet peeves being the use of “beg the question” or “ironic” when not appropriate)

Thanks!

What amazes me is that the American people continue to support the fraud.
Housing price collapse, loss of real wealth, lack of any sort of honesty in the government and big business.
Yet , Americans still pay on houses that are worth less then what they were bought for.
Bank at B of A, Wells Fargo, Chase, even though the banks only survive because of accounting fraud and government support.
Allow the use of their taxpayer dollars to perpetuate the fraud by supporting banks and hedge funds through the PPIP program, unrealistic borrowing rates for the banks from the FED, allow deals for a brazen take over that is money in the bank for One West (The Indy Mac Bank “rescue” – that gives incentives to foreclose vs modify loans with the use of taxpayer dollars)
To think that American people have accepted a $40,000 debt for each man , woman and child due to government spending and fraud is mind boggling! But, reality is what it is.
New taxes and more government spending are on the horizon, and it looks like the citizenry are waiting to pay the note with happy faces – because this , after all is, is the greatest country in the world.
I will suggest , that the U S A was the greatest country – and is now on the road to being a third world debtor, about ready to default on their loans, run by a corrupt elite that is hell bent on robbing what is left of the wealth of the middle class.
Americans will accept it – they will make their house payments as their equity erodes, pay their increased taxes for government programs that they do not approve of, and go to the malls and buy things that they really do not need.
All like trained little mice in a Pavlovian monetary experiment that is doomed to failure.
The Tea Party or the Republicans are not going to change the tsunami that is heading our way – housing prices are going to continue to slide, taxes are going up. dollar will be worth less, big business will continue to ship jobs outside the U.S.A. , and unemployment will go up further and remain at high levels for years to come.
I cannot imagine how things are going to improve – and have not heard one argument that has changed my view over the last 3 years – it is all based on theory.
If you look at the facts – that every government that has done what we are doing now has either gone to dictatorship or fallen apart in mass chaos and revolt – it is inevitable that the same will eventually happen within the U.S.A.
It is a reflection on the “good old days” that perpetuates the idea that the U.S. is the greatest country in the world. Those days are over .
Any rationale response that shows how the government can alleviate $3 trillion in debt, continue to expand government agencies that do not enforce any rules , and raise taxes on their citizens who’s loss of wealth has continued over the last decade, will of course , be listened to and pondered. But, here is the key – base the argument on facts , not theory.

Ah huh. No fraud? GS just ordered to paid $550 million in ABACUS fraud case. Tip of the iceberg here.

Not such an easy thing to do when the villains you mention are backed by a brainwashed military readying themselves for (the potential) of martial law against (the potential) of “lawless” citizens. S. David

Well, a sufficient distribution of new legal tender fiat (United States Notes) to every US adult would fix the banks in nominal terms too. That would have to be combined with leverage restrictions on the banks to preclude hyper-inflation. As for the military, they need to be clued in to what has been going on.