| marktheshark275 said:
So what do you think the percentage of unemployment will be when the economy hits the bottom if it hasn't done so already? |
I have no clue. 2 million more lost in 2009. Not sure when it will end.
The market will fix itself. I think a lot of the government involvement is so unnecessary because it is debt being piled up for temporary relief. We're acting like the recession will never end when in fact, if we wait, we'll experience good economic times with patience. The market is so large and so worldwide that the government of one or two countries are not going to fix it on their own.
| MontanaHatchet said: The market will fix itself. |
Nothing fixes itself. Do cars fix themselves? Do light bulbs fix themselves?
The markets are broken because the US went on a once-in-a-lifetime debt spree. Sure, people speculated on houses and stuff, but mostly it was a small group of Wall Street bankers who went wild in the casino: financial firm debt went from 21% of GDP in 1980 to 211% of GDP in 2008 (http://www.federalreserve.gov/releases/Z1/). The debt didn't go into investment or real wages, it went into giant yachts and CDOs and investment banker bonuses. Which is Just. Plain. Crazy.
The problem is, if we let the banks fail, which they surely deserve, the whole financial system goes kaboom, wiping out honest citizens and businesses instead of the scam artists.
So we'll have to nationalize the banks. Take them over, fire all the managers, wipe out the bondholders, sort out the good assets from bad, then sell the healthy assets back to pension funds, institutional investors, etc. We're also going to have to regulate the financial system, to ensure honest, fair competition, to make sure Wall Street's gigantic, thirty-year monopoly scam never happens again.
The good news -- there is good news, believe it or not -- is that the rest of the world wasn't doing what we did. Russia, China, the EU, and Japan all have fundamentally sound economies, and the BRIC nations are growing huge middle classes. So the world will get through this mess. But we should never again allow the maniacs on Wall Street to run anything larger than a flea market.
Yeah, that was a great analogy. Cars and light bulbs are a lot like the world economy. Thanks for showing me just how wrong I was.
We've already hit the bottom in terms of where the DOW is going to go. I'll break this down into three of the most important factors that reflect the health of the economy, the DOW, GDP, and the unemployment rate.
1) DOW - I think we have already hit the bottom. I don't see any facts that suggest to me we will dip back below 6,600. We do need to work on addressing the national debt very soon. But letting the economy stagnant could have potentially caused the debt to sore even higher if we had sunk into another depression. Sometimes you have to spend money to make money.
And frankly deflationary pressures on the dollar recently have been a much bigger threat than inflationary pressures. And I find it extremely disingenuous that many of the same people who are now complaining about the national debt were the ones who were just fine with the Republicans spending like drunken sailors in Congress since 2000.
2) GDP growth. We saw a pretty sharp drop in the 4th quarter, sharper than even a lot of the grim predictions. You are going to see negative GDP growth in Q1 too, but it is hard to say whether it will be as bad as the Q4 numbers. My guess is that in relative terms they will not be. Q2 remains to be seen, but I don't think the market as a whole is as jittery as it was. I don't think they will be as grim as the Q4 numbers even if they are in the negative. My reasoning is that consumer spending has risen slightly, which is a good indicator.
3) Employment. Employment we will probably see drop some more. Its hard to say when it will stop, as employment is kind of a different animal altogether. Its the first to go down and sometimes the last to go up. We may see 10% unemployment, or maybe even 12%. But then again we might not break 9 or 9.5%. This is probably the hardest to predict. Note: We are currently at 8.5% and lost 600,000 jobs last month.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
It is really, really bad. I would let free-market capitalism work for a change and let companies succeed or fail.
| akuma587 said: We've already hit the bottom in terms of where the DOW is going to go. I'll break this down into three of the most important factors that reflect the health of the economy, the DOW, GDP, and the unemployment rate. 1) DOW - I think we have already hit the bottom. I don't see any facts that suggest to me we will dip back below 6,600. We do need to work on addressing the national debt very soon. But letting the economy stagnant could have potentially caused the debt to sore even higher if we had sunk into another depression. Sometimes you have to spend money to make money. And frankly deflationary pressures on the dollar recently have been a much bigger threat than inflationary pressures. And I find it extremely disingenuous that many of the same people who are now complaining about the national debt were the ones who were just fine with the Republicans spending like drunken sailors in Congress since 2000. 2) GDP growth. We saw a pretty sharp drop in the 4th quarter, sharper than even a lot of the grim predictions. You are going to see negative GDP growth in Q1 too, but it is hard to say whether it will be as bad as the Q4 numbers. My guess is that in relative terms they will not be. Q2 remains to be seen, but I don't think the market as a whole is as jittery as it was. I don't think they will be as grim as the Q4 numbers even if they are in the negative. My reasoning is that consumer spending has risen slightly, which is a good indicator. 3) Employment. Employment we will probably see drop some more. Its hard to say when it will stop, as employment is kind of a different animal altogether. Its the first to go down and sometimes the last to go up. We may see 10% unemployment, or maybe even 12%. But then again we might not break 9 or 9.5%. This is probably the hardest to predict. Note: We are currently at 8.5% and lost 600,000 jobs last month. |
So, two of the three factors you claim are the most important are getting worse (and no reason the 3rd won't as well), and there is no real reason at the moment to think they are going to get better.
What's your conclusion about the economy again? You forgot to give it.
TheRealMafoo said:
|
1)
The banking system is in a significantly better position than it was a few months ago. Many of the most problematic banks (Citigroup and Bank of America among others) are now posting in the green rather than in the red. That's an extremely good sign. The plan to deal with the trouble assets will prevent the bad blood in the market from sending us back down into the doldrums we were in a few months ago.
European countries look like they will implement some stimulus efforts as well. This will have a spillover effect on the U.S. and help out our economy in many ways.
There are plenty of good reasons for confidence to be up compared to a few months ago. All the above reasons and the fact that consumer spending has grown some.
2)
Yes, GDP shrinking at a slower year-to-year rate is a good indicator. Would it be better if the drop in GDP was accelerating? Its not realistic to expect GDP growth right now.
3)
I agree with you that this is the hardest to predict. I think that the injection of stimulus funds and the less dire economic news will help these numbers slow down. Job losses are going to continue for several months, possibly the rest of the year, but in relative terms I think that you will see them start to slow down significantly.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
| akuma587 said: 1) The banking system is in a significantly better position than it was a few months ago. Many of the most problematic banks (Citigroup and Bank of America among others) are now posting in the green rather than in the red. That's an extremely good sign. The plan to deal with the trouble assets will prevent the bad blood in the market from sending us back down into the doldrums we were in a few months ago. European countries look like they will implement some stimulus efforts as well. This will have a spillover effect on the U.S. and help out our economy in many ways. There are plenty of good reasons for confidence to be up compared to a few months ago. All the above reasons and the fact that consumer spending has grown some. 2) Yes, GDP shrinking at a slower year-to-year rate is a good indicator. Would it be better if the drop in GDP was accelerating? Its not realistic to expect GDP growth right now. 3) I agree with you that this is the hardest to predict. I think that the injection of stimulus funds and the less dire economic news will help these numbers slow down. Job losses are going to continue for several months, possibly the rest of the year, but in relative terms I think that you will see them start to slow down significantly. |
So the economy next month will be better then this month? How about the month after that?
And being in the green and not the red is playing with numbers. Oh, and who has offloaded any toxic assets?
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