Market Down, Again

[RabidMongoose]

That's what you get when you teabaggers ram an austerity bill through in the middle of a recession. Guaranteed double dip. The markets are just pricing it in.

Yup. Conservatives are generally from poor and unproductive places. They have nothing to lose, so they can pursue their ridiculous policies because the areas that they're from can't get much worse. It's not like Mississippi is all of a sudden going to be the least productive state in the country - it already is.

 

[PokerGuy]

Remember everyone, you need to memorise the mantra.

Clinton was successful BECAUSE of the Republicans.

Bush failed BECAUSE of the Democrats.

Obama is failing DESPITE the Republicans.

The republicans had control of both houses during much of Clinton's presidency. Hence, the republicans should get credit for some of the economic success during that time. Bush did not fail because of the democrats, Bush failed because he is fail. Obummer is failing and will fail regardless of who's in congress because he is major league fail.

 

[Red Dawn]

Getting all your fillings re-done?

Yeah he has to replace the lead fillings he's been sporting most of his life.

 

[Bitek]

Lower priced energy and goods?
Oh no! Who would want that!

Increase prices please!

The Swiss Franc has increased dramatically against the dollar in the past year, yet they have 4-5% employment, how can this be?

Good thing I'm holding on to my guns and gold, they get more valuable every day.

Because everyone is fleeing to the hills, same reason US bond rates are low,& gold is high. Where else does money have to flow? Flow into the Euro? Looks cancerous to me. Even the Yen is rising, as well as a # of currencies.

Notice that their Central Banks are responding and trying to stop the drive of values upward?
If your economy is export based, it does not help to have a strong currency and make your goods more expensive.

Everyone likes cheap stuff, but the question is at the expense of what? If we are massively over-leveraged as a country and unemployed, policies that raise the real value of our debts and make our exports uncompetitive make the headwinds that much stronger.

 

[mizzou]

The world economy needs to start acting like one

 

[theeedude]

The world economy needs to start acting like one

It is acting like one. We have austerity on both sides of Atlantic. Markets are just reflecting the decisions of policy makers.

 

[TheSlamma]

Man the markets are getting trashed today

 

[BansheeX]

Tell me, what was gold like for the rest of the 1980s and 1990s? Anyone that bought in 1980 lost their shirts many times over-and that bubble is going to burst again, it's just a matter of time.

It's not a matter of time like some magical cycle, it's a matter of policy. 1980 saw Volcker push interest rates to 20% to attract foreign investment, stimulate savings from which capital comes, and shore up inflation. The fed can't do that again so easily due to the now massive size of short term debt, including ARM mortgages held by banks. They're effectively on an unavoidable crash course for hyperinflationary default. Enjoy the ride.

 

[Ausm]

If it weren't for those tea party terrorists holding him back since he's been elected...

This X 10

 

[BansheeX]

So if a devalued currency is so bad, why do we complain about China doing it? Oh, because it makes their exports more competitive and all the jobs and money flow from us to them.

At first it benefited them, but no longer. They are currently trading away their products for our paper. We can't afford to pay them in exports of our own, so we borrow from them to buy their goods. It's a rather foolish thing to do if you're Chinese as trading goods for goods internally is better than trading goods for our paper. But that will end someday.

Consumers/everybody are awash in debt and trying to deleverage. No spending, no buying, only saving. Ergo no business growth, no jobs, no wage growth.

If everyone just consumed what they produced, where would the capital come from to replace shovels with bulldozers? Savings are necessary to make people more productive and we aren't doing it. We instead allow our federal government to spend far in excess of revenue, accumulating crushing interest along the way. Whatever capital there is to be loaned out is being sucked up by the public sector and used for net destruction luxuries like militaristic adventurism and health care entitlements. In simple terms, you're binging in the short term at the expense of the future. Nobody who's old gives a shit what they're charging to the future because they'll be dead, and nobody young gives a shit because they're lazy and naive.

 

[Fern]

Originally Posted by a777pilot View Post
The world stock markets are down again.

Due to Europe.

Europe is but one of several reasons.

Here's an article discussing at least 5 reasons:

http://www.msnbc.msn.com/id/44006076/ns/business-eye_on_the_economy/#.TjrvyWPGAoM

Business-type news channels have been reporting basically the same for a week now.

Fern

 

[Fern]

-snip-

Perhaps the partisans and DC should start taking a hard look at what the problem is and how to fix it rather than just overly blame the other side and fk'em over one step greater. Maybe discard the ideology for a minute and take a objective view of what works, what hasn't and what really needs to happen. I put the chance of this at <1&#37; right now.

I think it's informative that many countries are experiencing similar problems simultaneously.

IMO, the citizens of developed countries are demanding govt services they cannot afford. And I do not mean that they are just unwilling to pay, they flat-out cannot afford them.

The borrowing has so far allowed the illusion that we can afford these services, but it may be that such borrowing is coming to a stop.

IMO, the post below is informative to this issue. I've been researching what level of debt do economist consider unsustainable, the info I saw was quite similar to what he posts.

Fern

-snip-
The USA's 2011 deficit as a percentage of GDP is about as high as or higher than that of Portugal, Ireland, Italy, Belgium, Greece, and Spain. Our debt as a percentage of GDP is already higher than Spain's or Belgium's, and we're quickly catching up to the others. Our debt is massively larger in absolute magnitude than all the others combined, and per capita is almost twice as large. And we have no healthy economies such as France and Germany to bail us out. We ARE Ireland and Portugal, we're worse than Spain, and we're rapidly gaining on Greece. In short, the USA represents everything fiscally bad in the EU without the fiscally good things in the EU. Europe is adopting actual austerity measures; America is operating business as usual and calling it austerity.

 

[Doppel]

That's what you get when you teabaggers ram an austerity bill through in the middle of a recession. Guaranteed double dip. The markets are just pricing it in.

LOL, by austerity I assume you are referring to the largest debt ceiling increase in history.

But all you can do is parrot spend spend spend. This country's economy is critically ill from debt and you want to increase it.

There never was a real recovery. The end of the recession was bought entirely upon deficit spending and since that cannot continue forever the *real* recession is coming above water again. All the deficit spending has done is prolong it and make it more painful to deal with because the government is almost out of ammunition.

Now we'll have a technical recession (negative GDP) as icing on the cake of the real one that never ended. It's neither party's fault and it's both.

No party has a solution to this, though. We're all damned if we do, damned if we don't. The party is over. There is no painless way out of this for the US (or Europe).

 

[Engineer]

Maybe it's time to start planning to throw SS into the market via privatization? :hmm:

Not going to take a look at the 401k plan right now. Might be ugly.

Anyone feel like we are becoming Japan of the 90's?

 

[manly]

Maybe it's time to start planning to throw SS into the market via privatization? :hmm:

Not going to take a look at the 401k plan right now. Might be ugly.

Anyone feel like we are becoming Japan of the 90's?

If you look just at the stock market, 2000-2009 was indeed a lost decade.

 

[HendrixFan]

Not going to take a look at the 401k plan right now. Might be ugly.

I'm still pretty young (long time horizon on my 401k) but I reallocated to conservative holdings when the market made it up to near 13000. I knew there was no way stocks should have doubled since the dip back in '08/09, especially with the 2 QE programs, with a likely third on the way. I figured we were in for the long haul and I put my money where my mouth was.

One month T bills went to negative interest rates today:

http://247wallst.com/2011/08/04/how-to-explain-negative-interest-rates-bk-stt/

 

[Doppel]

Maybe it's time to start planning to throw SS into the market via privatization? :hmm:

Not going to take a look at the 401k plan right now. Might be ugly.

Anyone feel like we are becoming Japan of the 90's?

Japan was always the best, and most likely case. The US is doing what Japan did so it's natural to assume the same thing will happen; slow economy with zombie institutions. There was never a shake-up in the US. From Bernanke to the same people leading organizations involved in the leveraging nothing changed. None of the moral hazard was removed. This is Obama's greatest failing, that he in fact didn't force changes.

 

[sportage]

The world stock markets are down again. Anyone want to bet on what the US jobs report has to say tomorrow? Didn't think so.

I hope the President made tons of campaign money on his birthday. He will need it. I hope he is still skimming off 5% for his personal account as is the nature of Chicago politicians. He'll need it in his retirement.

Yep! Go ahead. Blame the president for republican trickle down economics and the nose dive of the American economy.
Republicans got 95% of their way on the debt deal. Markets crash. Imagine if they got 100%?
A 10 year old child wouldn't bet on the American economy, as long as we keep following failed (and proven failed) republican policies.
Until we get all republicans out of office, we shall see more and more disaster.

 

[dmcowen674]

Man the markets are getting trashed today

Negative Ghost Rider, the rich are just hoarding even more

8-4-2011

Dow average plunges 513, worst drop since 2008

Large investors have moved so much money into cash accounts at Bank of New York that on Thursday the bank said it would begin charging some clients a 0.13 percent fee to hold their cash.

The sell-off comes at a time when corporate profits are growing. The forward price to earnings ratio of the S&P 500 has fallen to about 12, well below its long-term average of 16. That means that investors who buy now are paying less for each dollar in profits.

 

[the DRIZZLE]

Japan was always the best, and most likely case. The US is doing what Japan did so it's natural to assume the same thing will happen; slow economy with zombie institutions. There was never a shake-up in the US. From Bernanke to the same people leading organizations involved in the leveraging nothing changed. None of the moral hazard was removed. This is Obama's greatest failing, that he in fact didn't force changes.

I fear the Japan scenario as well, but there are some differences both positive and negative. We don't have the demographic issue that Japan had. We also don't save like they did. I agree though that we are using the same playbook that they used and that failed completely.

 

[Craig234]

BTW, who cares about Obama and 2012? This is bad for everyone, everyone goes down with the ship. This is happening in Boehner's/TP's watch too.

Perhaps the partisans and DC should start taking a hard look at what the problem is and how to fix it rather than just overly blame the other side and fk'em over one step greater. Maybe discard the ideology for a minute and take a objective view of what works, what hasn't and what really needs to happen. I put the chance of this at <1% right now.

There's a basic question about gridlock. Many ideologues say 'gridlock is good', that having Democrats and Republicans unable to get anything done is good for the country.

But as ideologues, they don't care about facts. The country has done FAR better when Democrats are in total control by pretty much any measure, than when there's gridlock.

Ironic that the poster demands 'discard ideology and look at what works', but doesn't do it.

 

[the DRIZZLE]

There's a basic question about gridlock. Many ideologues say 'gridlock is good', that having Democrats and Republicans unable to get anything done is good for the country.

But as ideologues, they don't care about facts. The country has done FAR better when Democrats are in total control by pretty much any measure, than when there's gridlock.

Ironic that the poster demands 'discard ideology and look at what works', but doesn't do it.

Gridlock works when the status quo is tenable. For example, in the 1990's America had huge competitive advantages so all the government had to do was not do anything too stupid.

Unfortunately, now the status quo is not tenable. We need significant reforms to keep us competitive and there is very little leadership to do so.

 

[Infohawk]

Gridlock works when the status quo is tenable. For example, in the 1990's America had huge competitive advantages so all the government had to do was not do anything too stupid.

Unfortunately, now the status quo is not tenable. We need significant reforms to keep us competitive and there is very little leadership to do so.

Good point. I don't think Craig understands what an ideologue is.

 

[Bitek]

Gridlock works when the status quo is tenable. For example, in the 1990's America had huge competitive advantages so all the government had to do was not do anything too stupid.

Unfortunately, now the status quo is not tenable. We need significant reforms to keep us competitive and there is very little leadership to do so.

^^^
This

 

[theeedude]

The House needs to start working on third round of fiscal stimulus for Obama to sign.