We have reached Defconomy 2. Defconomy 1 = Greater Depression...

[Jaskalas]

Originally posted by: loki8481
can you really compare anything that's going on in the US today to, like, the dust bowl?

Ask again by 2012.

 

[jmanny]

Originally posted by: Midnight Rambler
Having experienced "stagflation" once before, all I can say is there are a whole lot of people around here that are in for some major "surprises" ahead.

As for GWB seemingly unaware that gas is quickly headed for $4/gallon, I think that's just an act. I'm sure he and Pres. Cheney keep a close eye on their financial windfalls, esp. from oil. Sure woulda been interesting to have been a "fly on the wall" in those "secret" meetings with the oil companies leading up to the war in Iraq.
Too bad Congress is busy "policing" more important stuff like baseball players using steroids ...

What a bunch of tired, oft repeated crap.

I think that this should be the new thread ending quote in P&N

 

[Mavtek3100]

How about that stock market today? Wooo hoo!

 

[blackangst1]

Originally posted by: Atreus21
It's sad to see that people are so gullible these days.

People should stop trying to scare themselves. Anyone who's taken economics knows that, first of all, we're not yet technically in a recession, and second, that recessions happen cyclicly, with just this sort of sky-is-falling reaction, and followed by growth. It's ridiculous that we don't learn from our previous foolishness.

Yeah but the is teh big one! We're literally going to fall apart at the seams, and will probably get invaded by Switzerland. WAKE UP MAN!!!11

 

[StageLeft]

The Journal editorial concluded that the moving trends are a warning to governors and legislators who think residents will pay more for good government services. Migration figures seem to indicate that's true only of poor people, who are willing for someone else to be taxed to provide better government services.

"The people who tend to be the most mobile in American society are the educated and motivated ? in other words, the tax-paying class," it said. "Tax them too much, and you'll soon find they aren't there to tax at all."

This is happening in NY State right now. Its population is stagnant with some areas losing population. People who pay the most taxes are also the most likely to be mobile, with some exceptions here and there. They also are least likely to benefit from their money being taken and divied up by the fat-bellied government.

People should stop trying to scare themselves. Anyone who's taken economics knows that, first of all, we're not yet technically in a recession, and second, that recessions happen cyclicly, with just this sort of sky-is-falling reaction, and followed by growth. It's ridiculous that we don't learn from our previous foolishness.

Nobody is denying this, but recessions are not always predictable (or ever) in length or severity.

 

[Genx87]

Originally posted by: Rainsford
Jesus Christ on a speedboat, what is with the economic doom and gloom? Every time the economy slows down a little, you have all sorts of people ready to predict the end of civilization itself. Probably because economic speculation is the world's silliest business, so every little bump in the road starts the herd stampeding all over the place. But for most of us, as long as WE don't do anything economically stupid, we're probably going to be fine. The "end of the world" indicators just aren't there.

I mean, am I the only person who thinks the fact that there is less than a year between "things have never been better" and "OMG, we're all going to be living in cardboard boxes"? The fundamental foundations of economic health don't change that quickly, so chances are pretty good that people simply don't know what we're talking about. Case in point, the comparisons to the great depression. Scary stuff, but the problems that lead up to the great depression simply don't exist today. Upswings in the market don't last forever, if the world ended every time a period of growth did, our economy would have collapsed long ago.

Well slap my silly. I agree 110%!

:thumbsup:

 

[Midnight Rambler]

There could be a bright side to this ...

Perhaps a lot of the illegal aliens will go back home to get jobs !

 

[GrGr]

Originally posted by: Midnight Rambler
There could be a bright side to this ...

Perhaps a lot of the illegal aliens will go back home to get jobs !

Nah, their relatives will start sending mighty pesos their way so they can buy up the country!

 

[Fern]

Originally posted by: Rainsford
Jesus Christ on a speedboat,........

-snip-

Good post. Funny too.

 

[Vic]

Yes, we are in an economic slowdown.
Yes, it is probably going to be a recession.
Yeah, it might be like this for a while.

NO, it is not going to be a depression, much less the Great-er Depression. FFS that's just silly. Tighten your belt and move on, but don't kid yourselves that you've got it worse than your grandparents.

 

[Vic]

Originally posted by: SoundTheSurrender
Don't worry about the dollar going to shit. Once the NAU and NAFTA highway are in place we'll be using the Amero.

No, because a weak dollar strengthens domestic production and exports while making foreign goods/imports more expensive/less desirable.

 

[SoundTheSurrender]

Originally posted by: Vic

Originally posted by: SoundTheSurrender
Don't worry about the dollar going to shit. Once the NAU and NAFTA highway are in place we'll be using the Amero.

No, because a weak dollar strengthens domestic production and exports while making foreign goods/imports more expensive/less desirable.

Last time I checked almost everything is made outside of America. At least most of the goods that Americans buy consistently.

 

[Jmman]

Let's put this in perspective. During the great depression my grandmother told me stories about how they literally had no food. They would take rotten bologna that was literally blue, fry it up, and give it to the children. During the peak of the great depression unemployment was at 25%.

Now compare that to today. Even if you are at the very bottom of the barrel, you most likely have a television, a car, and an apartment. We will never again see 25% unemployment no matter what. In fact, our employment rate is so out of control, we have the ability and in fact the need to hire 20 million illegal aliens just to take up the slack.

The sky is definitely not falling.........

 

[GrGr]

Originally posted by: SoundTheSurrender

Originally posted by: Vic

Originally posted by: SoundTheSurrender
Don't worry about the dollar going to shit. Once the NAU and NAFTA highway are in place we'll be using the Amero.

No, because a weak dollar strengthens domestic production and exports while making foreign goods/imports more expensive/less desirable.

Last time I checked almost everything is made outside of America. At least most of the goods that Americans buy consistently.

And the weakening dollar combined with inflation will ensure that the workers will not have the wherewithal to buy such goods anyway. Remember the Fed sees wage increase as inflation and the manufacturers are busy dismantling the Unions to bring in low wage workers. The manufacturers of course don't want to pay good wages since that eats into profits and they hate that. But without a working class on decent wages there can be no real revival of the US economy. So the domestic economy stagnates and you have a depression. And as the dollar dies billions if not trillions will make their way back into the US to buy up companies and shares while the dollar still has value, while adding to dollar inflation as more dollars chase fewer goods. This means Americans will increasingly be working for foreigners. The US will be a third world banana republic in giant format. The rich will rake in the profits while the poor and lower middle class will be cut off, their benefits and pensions slashed as the government no longer can support both benefits and the military.

 

[GrGr]

Originally posted by: Jmman
Let's put this in perspective. During the great depression my grandmother told me stories about how they literally had no food. They would take rotten bologna that was literally blue, fry it up, and give it to the children. During the peak of the great depression unemployment was at 25%.

Now compare that to today. Even if you are at the very bottom of the barrel, you most likely have a television, a car, and an apartment. We will never again see 25% unemployment no matter what. In fact, our employment rate is so out of control, we have the ability and in fact the need to hire 20 million illegal aliens just to take up the slack.

The sky is definitely not falling.........

Gee, are you saying that 25 % unemployment is an impossibility? Dude, that's like saying the Titanic cannot sink.

 

[XMan]

Originally posted by: Jmman
Let's put this in perspective. During the great depression my grandmother told me stories about how they literally had no food. They would take rotten bologna that was literally blue, fry it up, and give it to the children. During the peak of the great depression unemployment was at 25%.

My great grandfather brought home roof rabbit for his family to eat. What's roof rabbit, you ask? Stray cats.

 

[LegendKiller]

Originally posted by: GrGr

Originally posted by: Jmman
Let's put this in perspective. During the great depression my grandmother told me stories about how they literally had no food. They would take rotten bologna that was literally blue, fry it up, and give it to the children. During the peak of the great depression unemployment was at 25%.

Now compare that to today. Even if you are at the very bottom of the barrel, you most likely have a television, a car, and an apartment. We will never again see 25% unemployment no matter what. In fact, our employment rate is so out of control, we have the ability and in fact the need to hire 20 million illegal aliens just to take up the slack.

The sky is definitely not falling.........

Gee, are you saying that 25 % unemployment is an impossibility? Dude, that's like saying the Titanic cannot sink.

It'd be a lot more difficult and perhaps even impossible for that to happen again. The US economy is far more diverse than it was back in the 20s.

 

[GrGr]

Originally posted by: Fern

Originally posted by: Rainsford
Jesus Christ on a speedboat,........

-snip-

Good post. Funny too.

There was no financial health a year ago.... so much of it was debt, fake money, and air castles leveraged and spun into uberness.

The dynamic of the situation is simply that the record levels of debt have to be flushed out of the system. And since so much of the 'Uber' economy was built on debt it will be a bad ride along the toilet rim and a lot of the economy will be flushed out of existence.

Hedge funds are collapsing, Banks are collapsing, the $ is collapsing...

The interest rate is collapsing. Bernanke believes the US can crawl it's way out of the debt mess by creating more debt when excessive debt is the root cause of the problem to begin with. Doh.

And the crummy economy is an international problem. There is serious inflation everywhere due to the flood of liquidity released by the US and Japan since the early 2000's and inflation in base commodities like food and oil. In China, Russia, the ME, Europe and the US is finally starting to feel the bite too for real.

The reason people are worried is that they realize this is not a normal cycle of downturn. This is a matter of another scale. Real limits have been reached. The goldilocks economy is no more, it never really was, and now systemic financial disaster will have it's course. As one company folds it will bring the next one along with it... fold will beget fold.

 

[LegendKiller]

Originally posted by: GrGr

Originally posted by: Fern

Originally posted by: Rainsford
Jesus Christ on a speedboat,........

-snip-

Good post. Funny too.

There was no financial health a year ago.... so much of it was debt, fake money, and air castles leveraged and spun into uberness.

The dynamic of the situation is simply that the record levels of debt have to be flushed out of the system. And since so much of the 'Uber' economy was built on debt it will be a bad ride along the toilet rim and a lot of the economy will be flushed out of existence.

Hedge funds are collapsing, Banks are collapsing, the $ is collapsing...

The reason people are worried is that they realize this is not a normal cycle of downturn. This is a matter of another scale. Real limits have been reached. The goldilocks economy is no more, it never really was, and now systemic financial disaster will have it's course. As one company folds it will bring the next one along with it... fold will beget fold.

Listen to emo music much?


Hedge funds are collapsing? Really? Is that why I have been reading the Asset Backed Alert and Asset Backed Report over the last month and a half and more than $10bn in new hedge funds have started up?

Banks are collapsing? Really?

$ is collapsing?

I bet you wake up every day thinking you're going to kill yourself.

 

[XMan]

Originally posted by: GrGr

Originally posted by: Fern

Originally posted by: Rainsford
Jesus Christ on a speedboat,........

-snip-

Good post. Funny too.

There was no financial health a year ago.... so much of it was debt, fake money, and air castles leveraged and spun into uberness.

The dynamic of the situation is simply that the record levels of debt have to be flushed out of the system. And since so much of the 'Uber' economy was built on debt it will be a bad ride along the toilet rim and a lot of the economy will be flushed out of existence.

Hedge funds are collapsing, Banks are collapsing, the $ is collapsing...

The interest rate is collapsing. Bernanke believes the US can crawl it's way out of the debt mess by creating more debt when excessive debt is the root cause of the problem to begin with. Doh.

And the crummy economy is an international problem. There is serious inflation everywhere due to the flood of liquidity released by the US and Japan since the early 2000's and inflation in base commodities like food and oil. In China, Russia, the ME, Europe and the US is finally starting to feel the bite too for real.

The reason people are worried is that they realize this is not a normal cycle of downturn. This is a matter of another scale. Real limits have been reached. The goldilocks economy is no more, it never really was, and now systemic financial disaster will have it's course. As one company folds it will bring the next one along with it... fold will beget fold.

So here's the big question, of which I've seen no answer whatsoever in all of the wailing and moaning.

If this is going to be a "Greater Depression", what does it mean to the average person? My wife and I carry zero credit card debt. The only debt we have is in low (fixed-rate, less than 5K total) student loans, a 0% car loan, and our mortgage. Our assets are in federally-insured banks, IRA and 401(k). Worst case scenario we have an acre and a half we could grow food on, not counting the farmland my wife's family owns. Should I be stocking up on canned food, shotgun shells, and gas masks?

Those people who were already relatively self sufficient (IE: rural) made it out of the Great Depression just fine. If we have another one, I feel for the folks in major metro areas cause it could be dicey.

 

[GrGr]

Bloomberg

Peloton Lays Blame on Wall Street Lending Crackdown (Update5)

By Pierre Paulden and Caroline Salas
Enlarge Image/Details

Feb. 29 (Bloomberg) -- Peloton Partners LLP, the London- based hedge-fund manager being forced to liquidate a $1.8 billion asset-backed fund, said it's a victim of the lending drought on Wall Street.

``Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls,'' Peloton co-founders Ron Beller and Geoff Grant said in a letter yesterday to clients.

Peloton joins Thornburg Mortgage Inc. and Sailfish Capital Partners LLC on the list of funds and companies that have had to sell securities or shut down after banks restricted how much they could borrow, or demanded more collateral as values of securities backed by mortgages slumped. The world's biggest financial institutions are cutting off lines of credit to hedge funds after at least $163 billion of asset writedowns and market losses.

``More hedge funds will blow up this year than ever before,'' said Michael Hennessy, who helps oversee $10 billion of hedge fund investments at Morgan Creek Capital Management in Chapel Hill, North Carolina. ``Financing is much harder to get. The bubble has burst.''

...

In response to LK above

 

[LegendKiller]

Originally posted by: GrGr
In response to LK above

OMG, Hedge fund dies.

Move along people, nothing new here. LTCM? What was the one that died in late 06?

Too bad the last 5 years they have been returning 20-30% to investors.

 

[Jhhnn]

I suspect that this may end up worse than most of us would like it to be, simply because of the scope of the problem, which has been an over extension of credit and inflated asset valuation.

Much of the recovery from the dot-com collapse has been achieved on the basis of expanded debt, public and private- and it's on a truly huge scale, particularly wrt real estate. Cash-out Refi, anybody? lots of that going around the last few years, transforming assets of low liquidity into spendable cash... Now that the cash is gone and remaining equity disappears in lower valuations... where does the money (liquidity) come from to finance the next recovery? Borrow against what?

How does the .gov prime the pump effectively when every borrowed dollar has an increasing debt maintenance pricetag and the corresponding need to increase revenues profound?

As LK points out, there are a lot of new hedge funds... except that they're hedged the other way, gambling against a quick recovery, rather than for it...

Tough times ahead, guys- maybe not a depression, but likely an extended and rather deep recession, simply because the wells of governmental and private indebtedness are largely sucked dry...

I don't really have any answers, other than to say that those who've been prudent and those who have low overhead and cash reserves will be alright, even if the value of those reserves is eroded considerably by a period of deliberate inflation and dollar devaluation...

Which is really what the Fed is doing by slashing interest rates. All the punditry to the contrary is just pumpin' sunshine up your ol' skirt...

 

[LegendKiller]

Originally posted by: Jhhnn


As LK points out, there are a lot of new hedge funds... except that they're hedged the other way, gambling against a quick recovery, rather than for it...

That 10bn is in hedge funds started up to take advantage of cheap CDO and mortgage bonds on the market.

Nice job at coming to the wrong conclusions.

 

[wirelessenabled]

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