New Economic Update (loan, visa, banking, currency)

[user_id]

Originally Posted by Stac2007

This market is heading for a deeper recession and you can't see it. Tell me did you say the market would rebound? Well I'm waiting.

I'm not really sure what you are trying to say, what market are you talking about? You seem to be conflating "markets" with "the economy".

I've stated that its possible that the recession ends in the next 6 months or so from now. There are a number of indicators that suggest we are getting close to the end of the recession. This does not mean that all the markets will stop declining, or even that the unemployment situation etc gets better. Just that GDP stabilizes.

The stock, housing, etc markets are a different issue. I think currently the stock market is overvalued and will remain volatile for another year or so and then will stagnant for many years at around 20~30% from today's value. The housing market is still overvalued in many areas, the bubble areas are unlikely to bottom until around 2012 or so. Although, the national numbers may start to stabilize in 2010.

[user_id]

Originally Posted by Stac2007

15% unemployment by the end of 2010.

The rate of inflation will hover around 12%-13%

The Chinese will sell off our debt on the news of the value of the dollar goes down against foreign currencies.

The Republicans will regain both houses on Capital Hill with President Obama’s approval rating falling to 43%

GM will continue to post large losses despite the government bailout. Plant closing will continue to effect unemployment levels.

The price of oil will exceed $130 a barrel.

These are not really that consistent with each other.

An unemployment rate of 15% is not consistent with high inflation. High unemployment is deflationary, not inflationary. High unemployment would also reduce oil consumption. Considering most of the global is in a recession, oil at $130/barrel is extremely unlikely. Although, there could be another speculative bubble in oil. But like the previous one, it would not last that long.

I think its very unlikely that the Republican party wins anything, the party is collapsing.

GM is now bankrupt, nobody is under the impression they are going to be making a profit anytime soon (as is usually the case when a company goes....ahem...bankrupt).

Regarding China, the US dollar has already declined in value, the Chinese are still net purchases of US debt. The people that talk about the Chinese selling US debt don't seem to understand why the Chinese buy it in the first place. China can't stop buying US debt without strengthening their currency, but this would kill their export economy. China is in no position to make a big shift in its dollar policy and there is no evidence that they have made such a shift, despite people talking about it for the last 2-3 years.

[Stac2007]

Originally Posted by user_id

These are not really that consistent with each other.

An unemployment rate of 15% is not consistent with high inflation. High unemployment is deflationary, not inflationary. High unemployment would also reduce oil consumption. Considering most of the global is in a recession, oil at $130/barrel is extremely unlikely. Although, there could be another speculative bubble in oil. But like the previous one, it would not last that long.

I think its very unlikely that the Republican party wins anything, the party is collapsing.

GM is now bankrupt, nobody is under the impression they are going to be making a profit anytime soon (as is usually the case when a company goes....ahem...bankrupt).

Regarding China, the US dollar has already declined in value, the Chinese are still net purchases of US debt. The people that talk about the Chinese selling US debt don't seem to understand why the Chinese buy it in the first place. China can't stop buying US debt without strengthening their currency, but this would kill their export economy. China is in no position to make a big shift in its dollar policy and there is no evidence that they have made such a shift, despite people talking about it for the last 2-3 years.

Well since our little recession is unlike any in our history I hold to my predictions. You see the U.S. market makes as much sense as you do. It sounds like it has direction but opperates like a submarine without a periscope.

[user_id]

Originally Posted by Stac2007

Well since our little recession is unlike any in our history I hold to my predictions.

This is in fact false. This recession is not that different from a number of recession this country has faced. This recession was caused by the deleveraging process that follow the end of the credit bubble. You can find other examples of such things. In fact, every major recession in some fashion is caused by a credit expansion.

This is just "business as usual". Of course, some people for whatever reason like to continuously believe the world is coming to an end. If it was not this, it would be something else.

[Stac2007]

Originally Posted by user_id

This is in fact false. This recession is not that different from a number of recession this country has faced. This recession was caused by the deleveraging process that follow the end of the credit bubble. You can find other examples of such things. In fact, every major recession in some fashion is caused by a credit expansion.

This is just "business as usual". Of course, some people for whatever reason like to continuously believe the world is coming to an end. If it was not this, it would be something else.

You’re wrong again. Since when in our history did we have to bail out the banks, security markets, auto industry and God knows what else? Now we are going to invent to taxes to pay for healthcare which we can’t afford and a fuel tax to strangle the average citizen. You have no idea where we are going economically any more than the best economist do. We are now a socialist country and people are quickly getting tired of Obama. People know that if they get rid of democratic rule on Capital Hill, Obama's spending is cut off. Once in a while you really must come up for air. You will realize like most people that the rules have changed.

[user_id]

Originally Posted by Stac2007

You’re wrong again. Since when in our history did we have to bail out the banks, security markets, auto industry and God knows what else?

It would perhaps be useful if you actually read history? During the panic of 1907 the treasury heavily supported the banking system along with J.P. Morgan. The panic 1907 almost took down the system and was seen as evidence for the need for a central bank, the FED was created soon after. During the depression the FED supported the markets in a number of ways and a number of problems were created to "bailout" home owners, framers, etc. Some of these programs still exist today (e.g., FHA). During the savings and loan crisis in the 1980's the banking system was bailed out by the FED and treasury. As a result of the economic events in the 70's and 80's the Continental bank/trust company, New York City, Chrysler, Lockheed, Franklin National bank were bailed out. The price tag for the savings and loan crisis was $300 billion, or $520 billion in today's dollars.

Perhaps you should do some reading on US financial history? Although, dry this book is excellent:

Wiley::Manias, Panics, and Crashes: A History of Financial Crises, 5th Edition

Anyhow, what is going on today is not much different than what has occurred in other financial crises.

Originally Posted by Stac2007

We are now a socialist country and people are quickly getting tired of Obama.

The US is not even close to a socialist country, suggesting that Obama in a matter of a few months has made the US a socialist nation is just inane. Obama is not a socialist, his plans far health care are rather far from a socialized system of medicine. What people are stick of is getting ripped off by insurance companies and not having health care.

Originally Posted by Stac2007

People know that if they get rid of democratic rule on Capital Hill, Obama's spending is cut off.

Not only do you not know history, you don't even remember events 6 months ago! It was Bush and friends that created TARP, not Obama.

In terms of fiscal conservativism, the Republican party has no leg to stand on. They funded a war with deficits.... But this is not the political forum, so I'll stop there.

[RedNC]

Originally Posted by user_id

Not at all. The real estate and finance related jobs that have largely been lost during this recession did not "leave", they vanished. That is Labor was misallocated during the credit bubble, it will take awhile for the employment market to realign.

I presume you are talking about "outsourcing", but those jobs have largely already been replaced. Sorry, you did not get the notice.



Really? So you think the people in real estate, finance, etc were previously working in factories and grunt IT workers? C'mon. People went into these fields because they were hot and were making a lot of money.


The health sector is under supplied with labor because the labor market ahem....misallocated its resources! Bubbles are not caused by movements in the labor market, rather misallocations of the labor market are often a side effect of a bubble.

People moving into under supplied fields will not cause a bubble, rather its the economy realigning itself. But it takes time, people need to retrain, etc.

In the recession in the late 80's many aerospace workers in CA went into IT. I know that because I met many of them in my Novell classes. They got into IT because their good paying jobs no longer existed. They did get the notice.

When the IT jobs vanished, many people that I know went into real estate and selling loans. They went into these fields because their jobs no longer existed. They also got the notice.

Just because these things didn't happen in your little world, or wasn't taught in one of your college classes, doesn't mean it didn't happen.

Most people don't need to get a notice to understand what is happening all around them. Apparently you do.

[HappyTexan]

Originally Posted by user_id

I
Perhaps you should do some reading on US financial history?

And perhaps you should as well:

Amazon.com: The Creature from Jekyll Island: A Second Look at the Federal Reserve: G. Edward Griffin: Books

[user_id]

Originally Posted by HappyTexan

Amazon.com: The Creature from Jekyll Island: A Second Look at the Federal Reserve: G. Edward Griffin: Books

I was talking about financial history, that book is not about financial history its a book (putting it kindly) about the fed.

I've read it though and its pretty much just political propaganda. There are so many inaccurate statements about the FED, banking etc in the book. But, what else would you expect from an author that is not educated in banking, economists etc?

If you can't smell the stench coming from the book, I don't know what to say. Good luck?

[user_id]

Originally Posted by RedNC

In the recession in the late 80's many aerospace workers in CA went into IT. I know that because I met many of them in my Novell classes. They got into IT because their good paying jobs no longer existed. They did get the notice.

When the IT jobs vanished, many people that I know went into real estate and selling loans. They went into these fields because their jobs no longer existed. They also got the notice.

"Many people that I know", you actually take this as a serious data point? The people that you know make up a rather small percentage of the population, not to mention "the people that I know" is not a random sample to began with.

Regardless, jobs vanish, industries contract, etc this is all part of a normal economy. But its a rather easy matter to show that the people leaving the computer/IT industry after the bubble were not forced into real estate, finance etc. In 1999 there were 2.6 million workers in computer/IT, etc now there are 3.3 million. Even in 2003 a bit after the tech-bubble completely collapsed, there were 2.8 million. Employment in the industry did not collapse, it merely slowed its growth. Interestingly even the wages went up! In 1999 the median wage was $54k, in 2008 it was $72k. What you are stating is just a common myth, the data tells a much different story.

What is amazing about some of you guys is that what you believe is so inconsistent with the actual facts. You don't even bother yourself with them, you just talk about "the guy I know", etc.