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Economic "Doom" Mega thread

Spanz

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The other thing is, if China stops purchasing all produce and foods, doesn't that hurt the Chinese people? Will they start going hungry? That surely won't help the political situation there.
China has a LONG and cherrished history of letting their own population starve. there was a long period of time under Mao that they themselves called "the Starving Time".

But...i see all this as step two in a very long American policy.

Step 1: Nixon, worried that China would start a nuclear WWIII, talked china into competing on the financial front, not the military front. Nixon encouraged china to become more capitalist, and they took to capitalism like a duck to water!

Step 2: With all their financial success...China appears to be reverting to their fiendish world dominating military plans. So it is now Trump's turn to do a slight course correction...to show China how to actually "play nice" with the rest of the world as a co-superpower. There is risk....but there is probably even BIGGER risk if Trump does nothing.



SHORT TERM there may be setbacks, and pain. But this is just part of a Republican 100 year plan on the pacific rim. You could even argue that this PLAN started at the signing of the treaty ending the war with Japan in 1946...and instead of us raping Japan, we helped to rebuild it....but with more acceptable world interactions.
 

ASHDUMP

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Hong Kong is a tinder box. If you want a real ticker on financial Armageddon, follow Realtime Bitcoin
Maybe I missed the boat short term.... Or long term too. Bitcoin just seems too risky and hackable. Waiting for the day someone corrupts the systems....

Until then, sounds like some people are making out OK with it.

My boss has like 10 bitcoin. Bought it when it was like sub 1000 bucks. He has so much money anyway he said he is holding on to it for life. Just to see what it does.
 

Spanz

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Hong Kong is a tinder box. If you want a real ticker on financial Armageddon, follow Realtime Bitcoin
All of china has bright energetic young people, and actually has many rich capitalist business owners, who want MORE freedom....and do not want to revert to a strict communist authoritarian society.

In the past China would just round all them up and send them to re-education farms, or just shoot them. But it is these bright young people that are China's future...if they got rid of them...no more economic power! So China is somewhat limited in what they can do to reign in places, like HK....they do not want to kill the golden goose
 

ASHDUMP

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ASHDUMP

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Americans say they can't afford a vacation - BNN Bloomberg

I guess Americans can't afford to go on vacation? Love to know the demographic on this.... I bet most who were surveyed are straight out of school.

Also, there has to be people like myself who value saving for other things over a week vacation somewhere. If that survey were to ask me if I could afford to go on vacation I would probably say no too.
 
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Still waiting for a week of -700 DJ daily losses or at least a day more than -1200 before I will believe there's a real recession.

We had some downward weeks a few years ago and nothing came of it. You need a bank liquidity scare to kick things into the spiral.
 

GM-GUY

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That’s why I’m being cautious on my bank balance. I could pay off the mortgage now and pretty much zero things out or wait till December and have some cash left - I’m holding till December.
 

Varmint

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Seems weird to buy something that will return less.... Of course I dont have millions of dollars like some of the investors buying bonds.

These are the same bonds I have in my 401k?

Headlines today are about recession because of the spread between to 10 and 2 year getting so close and negative.
There are a few reasons you'd buy negative rate bonds:
1. You're forced to by government regulations - this is the case for a lot of entities, that have to have a proportion of bonds in their portfolio.
2. You think rates will go lower so the value of your bond will go up.
3. You're trying to support the bubble in stocks and bonds - this is why central banks buy trillions in these bonds.

The bonds in your 401k are probably not negative - it's mostly overseas sovereign debt bonds which most people don't own in their 401k. But you're starting to see corporate junk bonds in Europe that are negative rate. That's truly crazy. It's all an effect of central bank easy money policy.
 

Varmint

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Americans say they can't afford a vacation - BNN Bloomberg

I guess Americans can't afford to go on vacation? Love to know the demographic on this.... I bet most who were surveyed are straight out of school.

Also, there has to be people like myself who value saving for other things over a week vacation somewhere. If that survey were to ask me if I could afford to go on vacation I would probably say no too.
A lot of surveys these days are only sampling a portion of the country.

Don't have a landline, only a cell phone? You probably won't get surveyed. that eliminates a lot of the upper income groups.
 

Varmint

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Well, it happened today, so I guess we have until late next year or early 2021 when it hits. Could be sooner or later depending on consumer spending (i.e. how good the holiday shopping goes this year and 2020), current events, China, Brexit, etc.

Whenever it comes, Dems will sweep into the Senate in 2022, the White House in 2024.
I would ignore the historical data on yield curve inversion. It's not inverting for typical reasons - fear of recession. It's inverting cause bond investors know (or think) the Fed will cut rates.

When the Fed dumps trillions of stimulus on the markets, we should avoid recession. This is why Trump is riding the Fed like a mule before the election.
 

Varmint

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This is one result of the great Fed interest rate experiment. Trillions in stimulative money creation all went into assets like housing, stocks and bonds, and not into salaries or prices. It created a massive wealth gap, as anyone with a 401k or stock portfolio made out like a bandit, and the rest gained little.

And it's not over, the Fed is about to double down on the policy to keep the stock market from imploding. You may see a stock pullback or crash, but when the Fed opens the floodgates you probably want to own assets, not cash.
 

GM-GUY

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That 30yr Treasury Chart seems to show a trend, I wonder why that would be?

It almost looks like the inverse of



The amount of Debt we have is not serviceable at traditional rates.
 
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If this is true, which I wouldn't doubt for a second given GEs publically knoen debt load, the feds will bail them out. Zero chance in hell the Feds let GE fail, they'll get a blank check bailout.
 

richc

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There are parts of GE that are critical for military aircraft and more. You are spot on...

Having said that, isn't this how the mess of 2007-2009 started. Bailing out one big bank. Then another. Then another. And then Lehman collapsed and the SHTF...

If this is true, which I wouldn't doubt for a second given GEs publically knoen debt load, the feds will bail them out. Zero chance in hell the Feds let GE fail, they'll get a blank check bailout.
 

Varmint

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There are parts of GE that are critical for military aircraft and more. You are spot on...

Having said that, isn't this how the mess of 2007-2009 started. Bailing out one big bank. Then another. Then another. And then Lehman collapsed and the SHTF...
If GE or Sprint go bankrupt you'll also have to bail out all the state pension funds that have been gobbling up their corporate bonds. That'll get real interesting, when people in a recession see the government bailing out its own pensions.
 

Woodsy

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If GE or Sprint go bankrupt you'll also have to bail out all the state pension funds that have been gobbling up their corporate bonds. That'll get real interesting, when people in a recession see the government bailing out its own pensions.
GE is basically bankrupt now. They cannot produce enough revenue to cover their debt payments, thank Jack W for that
 

Varmint

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GE is basically bankrupt now. They cannot produce enough revenue to cover their debt payments, thank Jack W for that
Think they call those zombie corporations, and there are many now. But negative rate bonds like they have in Europe may keep the deck of cards intact for a while.
 

Woodsy

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That 30yr Treasury Chart seems to show a trend, I wonder why that would be?

It almost looks like the inverse of



The amount of Debt we have is not serviceable at traditional rates.
The fact household is back up to where it was pre crash just confirms that most people are irresponsible and havent learned a lesson
 

Varmint

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The fact household is back up to where it was pre crash just confirms that most people are irresponsible and havent learned a lesson
Could also be that stagnant wages and a steadily devalued dollar have made daily living unaffordable for many.

But no worries, the government created this problem with its massive deficit spending, and it'll come to the rescue with . . . You guessed it, more deficit spending.
 

Woodsy

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Dol
Could also be that stagnant wages and a steadily devalued dollar have made daily living unaffordable for many.

But no worries, the government created this problem with its massive deficit spending, and it'll come to the rescue with . . . You guessed it, more deficit spending.
dollar is strong and wages are up to the end user to manage and increase
 

Varmint

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Dol

dollar is strong and wages are up to the end user to manage and increase
Dollar is strong relative to currencies of countries with even greater debt problems. But its purchasing power erodes at 5%/year while wages go up 1-2%/year. Only those who own assets benefit from the money printing, and much of the country owns no stocks, bonds or real estate so they get poorer every year. Their problem is they support the very government that is strangling them with its debt spending.
 

Woodsy

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Dollar is strong relative to currencies of countries with even greater debt problems. But its purchasing power erodes at 5%/year while wages go up 1-2%/year. Only those who own assets benefit from the money printing, and much of the country owns no stocks, bonds or real estate so they get poorer every year. Their problem is they support the very government that is strangling them with its debt spending.
If you do not own stock/bonds or real estate a d regularly invest buy and sell them, i would hope then you have cash or retirement will just be justifying how to a few pennies from uncle sam to survive

Most of the country participates in a retirement fund, many choose not to and thats a mistake. Whether its a pension or 401k or IRA that choice is yours to make. Ive had discussions with several people who make excuses like its not affordable, i dont have the cash to start one or participate. Then i point to their iPhone or New cell phone, their Cable Bill, their new car, etc. its choices. My choice is not to be dependent on Uncle Sam
 
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