Economic "Doom" Mega thread

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Are you shocked? Things are so damn sideways right now, I doubt ANYTHING is trading at its real value.
I don't get it myself, China is threatening a trade war (and they would lose since they need someone to buy their cheap crap in order for their house of cards to not to collapse), home values won't increase any meaningful amount till at least around 2020, unemployment is still near 10% and the dollar is getting it's arse kicked.

It really doesn't make sense...
 
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I don't get it myself, China is threatening a trade war (and they would lose since they need someone to buy their cheap crap in order for their house of cards to not to collapse), home values won't increase any meaningful amount till at least around 2020, unemployment is still near 10% and the dollar is getting it's arse kicked.

It really doesn't make sense...
Welcome to Bizzaro world. I have stopped trying to make sense of it, it is just driving me nuts.
 
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I don't get it myself, China is threatening a trade war (and they would lose since they need someone to buy their cheap crap in order for their house of cards to not to collapse), home values won't increase any meaningful amount till at least around 2020, unemployment is still near 10% and the dollar is getting it's arse kicked.

It really doesn't make sense...
"Those who do not learn from history are doomed to repeat it." George Santayana

And this about as close as I can imagine that we could get to Smoot Hawley.

http://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act
 

Bob J

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DJIA Sinks to New 52-Week Low

It will be interesting to see what the post 2PM market does......[thinking]

djia+sinks+to+new+52-week+low

U.S. stocks are mixed at midday, as traders weigh ongoing Greek debt drama against cautious commentary from Federal Reserve Chairman Ben Bernanke. Remarkable weakness in European financials sparked early jitters, with Germany's Deutsche Bank yanking its 2011 profit target and Belgium's Dexia requiring the emergency attention of government officials. Meanwhile, on the home front, Bernanke's testimony before the Joint Economic Committee didn't do much to inspire optimism. "The economy is close, the recovery is close to faltering," said the central banker. "Consumer behavior has both reflected and contributed to the slow pace of recovery... Probably the most significant factor depressing consumer confidence, however, has been the poor performance of the job market." Following Monday's steep decline, a few brave bargain-hunters have tiptoed into the equities market -- but with three straight days' worth of U.S. jobs data on the horizon, the bulls are hardly back in control.
 

yogi

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Welcome to Bizzaro world. I have stopped trying to make sense of it, it is just driving me nuts.
Agreed....the talking heads are killing me....so many contradictions......so much crap posing as analysis.....I have given up and simply taken defensive positions to protect against a SHTF scenerio as best as I can. However, I did order another "Hope & Change" T-shirt as the one I have is three years old and starting to rip....they were making fun of me at the wall St.protest rallies...they woudn't share their unicorns either
 
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Italy downgrade deepens contagion fears over euro debt crisis

Italy's prime minsiter Silvio Berlusconi criticised Moody's rival Standard & Poor's when it cut Italy's credit rating last month, saying the ratings agency's action was "dictated more by newspaper stories than by reality".
Hate the game, not the player. They are always quick to criticize when it is them. They never say a peep when they rate companies, or credit card companies rate us.
 

GM-GUY

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This is a fools rally - nothing more. I looked at the last 5 years on the DowInd - if the pattern holds (look at Oct 2007 and May 2011 as the 'starts') we will be below 10K by Christmas and below 8K by Feb 2012. That extrapolates to a 'bottom of 4K' - but the last bottom was with all kinds of printed money dumped in.

If we don't have all the intervention this time all bets are off. Not saying we should or even should have intervened, all it got us was a couple years probably double the debt and a much deeper bottom to hit this time.

I hope I'm wrong - but my new favorite store is BJ's, stack it high and deep.
 

Bob J

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No way, everything must be fixed and ok now...... Nothing to worry about...... Invest with confidence! [laugh]

This is a fools rally - nothing more. I looked at the last 5 years on the DowInd - if the pattern holds (look at Oct 2007 and May 2011 as the 'starts') we will be below 10K by Christmas and below 8K by Feb 2012. That extrapolates to a 'bottom of 4K' - but the last bottom was with all kinds of printed money dumped in.

If we don't have all the intervention this time all bets are off. Not saying we should or even should have intervened, all it got us was a couple years probably double the debt and a much deeper bottom to hit this time.

I hope I'm wrong - but my new favorite store is BJ's, stack it high and deep.
 

Bob J

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More fear mongering for the banks to maintain their protected/bailout status..... Chapter 11 would deal with this pretty handily and would not be the TEOTWAWKI as it is being portrayed... Break up the TBTF and salvage any bits that are worth saving.... The rest gets a fire sale/haircut....[thinking]

It's coming up on bonus season for the big guys..... Expect all stops to be pulled to try and arrange another bailout...... They will do everything they can so they can make the payments on the big house and the Mercedes.....[thinking]
 
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GM-GUY

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I think the upcoming 'Financial Collapse' as being described in the articles is not TEOTWAWKI, merely an exit along the highway of life. We could get off, take our medicine, and turn around; but I fear with the bunch in power it will be hammer lane to the cliff.

The governments around the world would never 'let them fail', they have already dumped so much money into 'saving them' that they would have some explaining to do and probably would be out of the job on the next election cycle if they did that. We all know that today's politicians primary job is to keep his.

So more printing, QE3 or is it QE4?, and the world keeps stumbling - all bets are off if a major player decides NO MORE. Then we have a hyperinflationary spike that will make the 70's look like the good times.
 

Bob J

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So more printing, QE3 or is it QE4?, and the world keeps stumbling - all bets are off if a major player decides NO MORE. Then we have a hyperinflationary spike that will make the 70's look like the good times.
I think Germany is getting real close to refuse bailing out the PIIGS..... As long as the PIIGS spend more than their revenue they are a black hole looking for a bailout..... Only solution to my mind is what Iceland did..... Balance the budget and everyone gets a haircut on the debt.... Anything short of that just kicks the can down the road.....[thinking]

BTW, there is a good article in Der Speigel...... Why Europe is right and Obama is wrong

US President Barack Obama has recently suggested that Europe must take on more debt to stimulate the economy. Such reliance on cheap money, though, is what got us into the current crisis in the first place -- both in Europe and in the US. America's problem isn't too little money. It's a lack of competitive products.
[Cheap money created the fertilizer for the excesses of the US financial industry. Low interest rates seduced mortgage providers into talking even the homeless into taking out mortgages. And the same low rates made it easier for investment banks and hedge funds, using increasingly risky loan structures, to transform the once-leisurely insurance and bond markets into casinos.
I think that they are also right that any long term growth has to be tied to manufacturing..... Without manufacturing all you have is a service economy and that model is effectively static..... If you look at history the growth of america after WWII is linked directly to the growth of american manufacturing in a world were much of that capability was destroyed..... Same for the growth of the asian tigers (Hong Kong/Singapore/South Korea/Taiwan)..... All keyed to industrialization..... With most of our manufacturing base decimated or overseas I think a static economy is about the best we can hope for.....[thinking]
 
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JuergenG

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I think Germany is getting real close to refuse bailing out the PIIGS.....
Not yet, but there will likely be strong wording (and hopefully appropriate action) by the
German .gov at the point Greece fails to deliver on it's promises again.
IIRC it was Finance Minister Schaeuble who said last week, that there will be an end to the
bailouts if there is an even slim chance that Germany's credit rating will be questioned.

Just today the ratings for a dozen British and some Italian banks went down......
 
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Sounds to me like a bunch of people hanging out and explaining why the banks need to be injected with another series of bailout money. Has that worked to cure all the problems of the system? Have the bailouts that are QE, QE2, TARP and Twist worked to make sure that the banks are all honky-dory and life is fine?

Doesn't seem to me that this has occurred. So why should we listen to this people cry wolf and tell the world to support another bailout?

The system cannot continue as it is, it is going to crash, the question is only when.

The only way out is to write down the bad debt and reorganize. The banks that put money into Greece, they need to write down the value of it. Creditors of Italy, Ireland, Portugal, Spain, France, and any number of other nations, INCLUDING the U.S. of A., are going to get less than 100 cents on the dollar. And any 100 cents they get will be worth a lot less than the 100 cents they invested. Bankruptcy, reorganization, and the creation of real capital, not newly created currency made up of digits and thin air, these are the cures, and it will be painful.

Another bailout is like a hugely obese person thinking that another shovel of ice cream will help them get back in shape. It won't. What will help is less ice cream and real exercise, and it will make them sore and tired.
 
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More fear mongering for the banks to maintain their protected/bailout status..... Chapter 11 would deal with this pretty handily and would not be the TEOTWAWKI as it is being portrayed... Break up the TBTF and salvage any bits that are worth saving.... The rest gets a fire sale/haircut....[thinking]

It's coming up on bonus season for the big guys..... Expect all stops to be pulled to try and arrange another bailout...... They will do everything they can so they can make the payments on the big house and the Mercedes.....[thinking]
Fear mongering? You don't think the default of a country like Italy would have widespread impact?
 

cekim

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Fear mongering? You don't think the default of a country like Italy would have widespread impact?
Sure, but it won't be the end of the world. That's the problem with the "fear mongering," they are telling the sheeple that this is "unthinkable" and "you should let us do anything we want to stop it, because its just that horrible."

The reality is that it is already in default, so all actually defaulting does is stop avoiding the issue of nations all over the world spending not only more than they can tax, but more than they can tax in multiple years to pay for this year...
 

xtry51

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I found this chart interesting. No wonder the banking industry is in trouble: 4 giant banks own pretty much everyone else!

Rome

The problem isn't that there's only four. Hell there could be one and it would be ok if it was responsibly run. The problem is none of the four are running a business that can stand on its own. They all rely upon the gov't to exist.
 
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Sure, but it won't be the end of the world. That's the problem with the "fear mongering," they are telling the sheeple that this is "unthinkable" and "you should let us do anything we want to stop it, because its just that horrible."
What do you see as the end costs of an Italian or Spanish default?
 
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