Are you worried about the economy?

[Unspeaked]

Are you worried about the economy?

Do you think it's healthy? Are you a little worried that your bills will increase slightly? Are you really worried about severe inflation? Do you think things are really bad, and your job and/or home is at risk?

Also, have you started acting any differently in recent months - as far as spending and savings - as you had a year or two ago?

This question is open to anyone, in any country. In fact, it will be interesting to see how different people in different places view their own countries economies.

[NT1440]

Going off to college (god willing i find the money for it) yes the economy's situation scares the hell out of me. Will i be able to pay off my debts after college? Will there be jobs even available (as a hopeful coder/software designer id say im in a better position than say, a factory worker, but i care about my fellow man so thats more of a general question). At what point will our national debt become a big player in our day to day lives?

yes, im scared as hell, but hopefully we can find a way to better our position through a change in our politics. And by that i mean a real change. Yes Obama will help, but an overhaul of how washington continues to work is in order if this country is going to be truly great again.

just my two sense tho, according to many here im just a hippy wackadoo :rolleyes:

[Queso]

Not worried no. This downturn has been coming for years. Anyone with any sense has been preparing for it.

And the good thing about economic cycles is that downturns don't last forever :)

[iShater]

My current contract is up in November, so I am concerned of course about the job market. However, I am debt-free, and have a good savings cushion. Another big concern is inflation, the enemy of savers! :eek: :cool:

[redwarrior]

No, can't say that I'm worried at all, but then I'm not a worrier. I plan, invest, save, and live my life. My life and everyone's around me that I see is getting continually better. I don't let the media tell me I have to live in a recession. If I did, I would quit spending, quit hiring, hold on to what I have, and thereby do further damage to the economy. I refuse to be a part of the problem.:)

[leekohler]

Scared s***less. I'm in the ad biz, so the state of the economy is extremely creepy for me. We need to start paying attention to ourselves here at home a lot more, and less about Iraq. I already moved to a cheaper apartment where I don't have to pay heat, but that just makes up for the raises my company refuses to give anyone because of the "economy", while they give everyone who makes more than $100,000 big fat ones. I know that because someone who recently quit posted the expenditure spreadsheet on a public server.

I'm looking for a new job, and have been for quite some time. But the jobs just aren't out there.

[rasmasyean]

I think it ultimately depends on the stability of Iraq. Afghanistan is on it's way to becoming self-sufficient with just a few pockets of rebellion. Their army and government has been gaining a foothold and GDP is rising a lot. And they are a small fry anyway.

However, if Iraq bursts into full scale civil war, or whatever, then I think the economy of the US is in question. And US won't leave and just let things be.

What would happen is that a lot of the advanced defense research over the years will be trickled out of secrecy and embargo and appear in the industry. Stuff like nano-technology, robotics, advanced computerized networking of "stuff"...even biotech and whatever. If histeory is any indication, there is stuff out there that is not imaginable. This would give the US some intelectual capital to work with and create jobs and incomming money for the deficit, etc. Of course software will be even helped more in a high tech economy. Maybe manufacturing too because I don't think they will let everything be made in China like how they restrict advance semiconductors from Intel and such to be domestic for "security reasons".

[BoyBach]

This article nicely sums up how I feel about the soon to be upon us recession: Apocalypse, wow! I can’t wait for the economic meltdown. (http://www.timesonline.co.uk/tol/comment/columnists/caitlin_moran/article3054541.ece)

I need to preface this column by stating something that many of you may believe has been apparent for some time. To wit: by and large, I write from a position of great ignorance. So when I say that, in the event of the “catastrophic economic meltdown” that we are all being told is “imminent”, I’m generally “up for it”, it’s not a particularly informed attitude.

...

...Here’s why I think the forthcoming economic crash is going to be ace!

People won’t be able to spend £3 on lattes, and will go back to drinking 60p cups of tea instead. Maybe, in extremis, they’ll even revert to Thermos flasks, full of stewed orange tea so strong that you could also use it to stain decking. In some indefinable way, this will make us a great nation once again.

There will be a general improvement in the “atmos”. Like most British people, I think that the Blitz sounded pretty cool – everyone pulling together, telling “edgy” jokes about STDs, shagging American airmen in alleyways in Soho – apart from the bit where we were at war with Germany, and people had their legs blown off. A recession is, surely, like a kind of non-fatal Blitz – people taking portions of hotpot round to the little old lady next door, saying “Cor love a duck, I ain’t gonna let this economic constriction get me dahn”; wearing lots of bright red lipstick to “stay cheerful”; getting really excited about eating a single, freshly boiled egg, and so on.

People would stop listing “shopping” as a “hobby”. We need to get this “shopping” thing straight as soon as possible. Shopping isn’t a hobby. A hobby is making or doing something – not paying someone to make or do something for you. In our lives, we all need only a certain amount of stuff – three wooden spoons, five dresses, two handbags (one black, one BRIGHT RED, for when you’re out to get sex), six kitchen chairs and some face cream. And that’s it. Beyond that, you’re actually just buying more mess for your house. And anyone who actually enjoys shopping – taking all of the family to a shopping mall, on a Saturday, to press into a seething mass of humanity, just to buy a chocolate fondue fountain – is, almost certainly, deranged. Come the recession, I would hope to see a gigantic upswing in the number of people reading/dancing/making boats out of used matchsticks, and 98 per cent less of this “having a great family day out in Debenhams” oddness.

Pants would get bigger. With no one able to afford round-the-clock central heating, underwear would have to be scaled up again, for the first time since the end of the war. Pants would cover everything from the mid-thigh to the belly-button, vests would double up as tunics and proper petticoats – the ones with boning, and rendered waterproof with goosefat – would make a comeback. Having a “big arse” would become relative, given that even the smallest pants would have no less capacity than a laundry sack. This would eradicate 80 per cent of female insecurity and neuroticism in a stroke. And as a further bonus, instances of sexual assault would plummet – the sheer logistics would make it impossible for any but the most experienced ladies’ maid to undress a woman even partially in less than an hour.

It will get it “out of the way”. Let’s face it, there’s going to be an economic meltdown at some point, so we might as well do it now, while we’re young. I wouldn’t much fancy having an economic meltdown when I’m 90; and those people who are 90 now will want one even less when they’re 148. Who wants an economic apocalypse hanging over them indefinitely? That’s what I say.

It might hit Sharon Osbourne harder than anyone else. Someone, somewhere, has to be the most extremely disadvantaged by earth-wide depression, and with any luck, it will be the hatefully self-titled “Mrs O”. With her finances precariously balanced, Sharon could buy one small, incontinent, pedigree rat-dog too many, be declared bankrupt and actually have to live in a fire, or at the bottom of an ocean. Or inside a nodule of rock, like those dried-up, hibernating toads you read about. Anywhere awful, really – I’m not picky. Just determined that she suffer.

So yes, as you can see, the recession is going to be both a tonic and a blessing. Indeed, it’s more than likely that, halfway through it, we’ll all be standing around in our lard petticoats, drinking stewed tea and exclaiming: “We should have run the economy into the ground years ago. It’s a hoot! It actually suits us, godammit!”

Join me next week, when I’ll be listing all the good points about a potential 35ft rise in sea levels by 2050.



A house should be to live in, not live off

Obviously the main benefit of a recession is that houses will become affordable again – rather than being, as they are at the moment, a commodity only slightly less luxurious than mink kitchen roll. Even now, I know people who are excited by escalating house prices. Why? Why do these people enjoy the “fact” that their house is now worth £300,000 more than they paid forit?“Because if we wanted to down-scale to the countryside, we could live like kings,” they chortle. Yeah, but that’s a terrible rationale for a ruinous housing market. We shouldn’t be financially strangling a whole generation on the off-chance that a few people might want to leave Clapham to open a kiln in Leicestershire. Or, indeed, that someone operating a kiln in Leicestershire might want to down-scale to a bucket in a ditch on the Isle of Man.

Most people want to find a nice enough house, put up some shelves and then stay there until they rot. All this “down-scaling” and “trading up” and “buy to let” and “doing it up and selling it on” is both exhausting, and culturally divisive. A house shouldn’t be a pension, or an investment – it should just be a home. However much my house has gone up in value is wholly irrelevant to me, given that a) they’ll carry my cold, dead body out of here in a coffin, now that I’ve finally got the kitchen done up, and b) the nearest that my sister – just four years later than us in trying to buy a house – can afford to live to me is Wolverhampton. Wolverhampton! Oh, what are we coming to?


Visions to cling to

The other good thing about a recession is the environmental benefits that will follow. Ain’t nobody in the soup kitchen going to be buying those gigantic, electricity-hogging plasma-screen TVs. Likewise, Asda will probably stop doing bizarre things such as wrapping a coconut in clingfilm when the impoverished nation needs that clingfilm to make contact lenses, or windows.

[Desertrat]

The direct cost of the Iraq war is roughly $150 billion per year. That's over and above what the military would spend without it.

The expected budget deficit for the current fiscal year is somewhere around $400 billion or more. We send some $60 billion per month overseas to pay for imports. Around $40 billion of that is for oil.

The housing bust is nowehre near over, and the commercial-property crunch is just getting started. Even prime loans for residential housing are facing problems for delinquency or even foreclosure.

Some $500 billion have been written off in the credit crunch; it is expected that another $500 billion or even more are at risk.

"Bottom Line": A deflation of asset prices and a great reduction in available credit.

The unemployment rate is slowly rising, and it would look even worse if all those who've given up were included in the official numbers.

So, yeah, we're in deep doo-doo. A major problem is that in the past, non-mortgage debt was much lower, and savings reserves were much greater.

Next problem, obviously, is inflation of consumer prices. Bread, milk, grains--these are well publicized. I saw, Monday, that my synthetic motor oil is up by some 40% in less than a year. Car batteries are up. Motel and restaurant prices are up--and by much more than the official government numbers.

Summary: Stagflation.

How long will it last? I've no idea. How bad will it get? Again, no idea. I do believe that we're just at the beginning.

'Rat

[Aea]

I'm not concerned at all, the current economic downtown can't last forever. It hasn't affected me or my family at all except for the occasional "Hey guess how much it just cost me to fill up" talks.

Really hoping that another "fiscal" conservative doesn't get elected in November though, a powerful economy serves us all.

[Rodimus Prime]

I think we are in for some rough times. It is no where as bad as the media is making it seem. But yes rough times. It is part of the natural cycle.

I do hope that this time around it gives people a wake up call and they learn they NEED to build a savings up. Saving rate should not be near zero or negative.

I am still working on building my my saving and getting that nice healthy emergency funds built up but I have only been out of school for 7 months so I feel like I am doing pretty good for myself.

Just to many people I read about and I know the numbers do not lie when people have such a poor savings rate. More often than not just having a good chunk of changed in the bank keeps one from falling flat on their face.


As for the economy and me being worried. Not so much. I know I am fine with my job. I know things will get better in the next year or so as it is the natural cycle. We tend to have a down turn every 5-10 years. It was about time it finally bottom out. Things will turn around they always do.

I do worry for my brother as he gets out of school in Dec and he does not have a high demand degree so it will be tighter for him. It might mean that I will be working with my parents to help support him and by that I mean he will live with me while my parents give me money to cover the cost. It more because they know it will make him strike out on his own faster as he would not be getting as much support as if he was at home. Plus he still would be safe.

[Desertrat]

Aea, there are two problems with your comment, "Really hoping that another "fiscal" conservative doesn't get elected in November though, a powerful economy serves us all."

#1 is that we haven't had a fiscal conservative elected, other than maybe Ron Paul. There has been much talk-the-talk, but little walk-the-walk.

#2 is that we no longer have a powerful economy. It's in serous decline.

From this morning's Rude Awakening of Agora Publishing:

"It does not take any prophecy or forecasting to see the second Industrial Revolution unfolding at light speed in places such as China and India. Fareed Zakaria, a Newsweek editor, calls it "the rise of the rest." He notes an extraordinary string of facts - some important, some silly, but all showing that America is no longer a lone heavyweight without challenges. Here are some of them:

The world's tallest building is in Dubai
India is building the world's biggest refinery
The largest passenger airplane is in Europe
The largest investment fund on the planet is in Abu Dhabi
The biggest movie industry is Bollywood, not Hollywood
The largest Ferris wheel is in Singapore, the biggest casino in Macao - which overtook Las Vegas in gambling revenues last year
The biggest mall in America, once the biggest in the world, no longer cracks the top 10
Only 2 out of top 10 richest people in the world are American."

The money of Abu Dhabi means we're losing our economic clout as to worldwide influence. The reference to "biggest mall" means there is even more competition than in the past for world resources--which will continue the ongoing increase in consumer prices as demands continue to increase around the world.

None of it means we're gonna crash, burn and die, but it all adds up to some serious hard times which are unavoidable--and it's to be hoped that some lessons will be learned.

'Rat

[rasmasyean]

You know what I always thought was one of the root causes of this is?
See, it’s mostly Allan Greenspan and his old mentality ways. Before this guy retires WAY PAST his days, this guy decides to collapse the booming high-tech economy. So instead of all these advance companies and concepts maintaining its course to revolutionizing the world, etc. they suddenly have to shut down and cut back on spending. Meanwhile, he has the bright idea of making “real-estate” sky rocket so people become “richer” by the rocks that they own. So what does this do? Foster spending mostly where??? Real-estate investments… So all the money basically goes into more and more rocks instead of into the companies that make something that drives real business (at least where some silicon rocks are ;) ). All the while the rest of the world seizes this opportunity to take over those business sectors in the high-tech arena leaving USA with what? A bunch of people with rocks that are dropping “like a rock” after they realize how worthless it actually is compared to what everyone else is doing.

Why am I not video conferencing on a daily basis instead of picking up my phone? Why is Japan’s internet like 10 times that of mine even though I pay more than the average Japanese person to my ISP? Now that Asia, Europe, probably more had been handed what once was America’s technological strength by Greenspan, America doesn’t have much value anymore that can they call their own in the global pool. Perhaps our only hope is that the nano-tech sector can bring us back into the game soon, since we will obviously be behind everyone else in our “legacy” technology. And we even borrow money to buy goods from this sector from overseas! Greenspan will likely depart from this world before this happens and have to live out laughing that he had collapse the USA!:mad:

[NT1440]

thought this might tie in a little:

apparantly Dell is now selling off any factory operations in the US in favor of outsourcing.

This is great news though! That means Dell will be doing better, and therefore helping the economy and eventually us little guys right? :rolleyes:

[Desertrat]

ras, I'm in accord about Greenspan's flawed views about monetary policy, but several other factors enter in. The dot-com bubble came about from several causes. Fed rate was but a part. Tax structure, hype-psychology, other aspects as well. Always remember that investors look for best returns, and CNBC isn't the wisest group of advisors.

The dot-com bubble popped, so to stave off any sort of serious recession, the Fed rate got lowered. That made it easy for people to buy more house than they could really afford, particularly with nonsense like ARMs and IO loans. And, of course, the speculators. The big problem has come from packaging all those bad loans and selling the paper as Grade AAA bonds. Once the foreclosures began, the house of cards began to tumble.

Contemporaneously, China's & India's demands for commodities of all sorts raised those prices. Our energy bill, with the ethanol portion, led to problems in the grain markets. Drouth and rising demands for feed grains contributed to the rise in consumer prices. Oil prices rose too high, but the rise is still justified from the standpoint of what the user will pay, what it's worth to the world to have an assured supply.

So, now, Helicopter Ben Bernanke is between the grindstones. Lower the Fed rate, and the dollar plunges. Raise it, and the economy contracts even further. At the moment, central banks are buying dollars, which is causing this present little rise in value against other currencies. IMO, they're like the little Dutch boy and fingers in the dike.

In the meantime, the Treasury is buying worthless paper with public money. Sooner or later, that's gonna bite, big time. Depending on which analyst one listens to, there is between a half-trillion and a trillion more in losses and write-downs before this financial crisis hits bottom. Not good.

[rasmasyean]

thought this might tie in a little:

apparantly Dell is now selling off any factory operations in the US in favor of outsourcing.

This is great news though! That means Dell will be doing better, and therefore helping the economy and eventually us little guys right? :rolleyes:

Funny. How's this one...


Did you know? One quarter of Googlers work outside the United States.

Did you know? Google's 2008 international revenues are on track to exceed domestic sales for the first time.
http://money.cnn.com/galleries/2008/fortune/0809/gallery.google_anniversary.fortune/11.html

[NT1440]

Funny. How's this one...

Did you know? Google's 2008 international revenues are on track to exceed domestic sales for the first time.
http://money.cnn.com/galleries/2008/fortune/0809/gallery.google_anniversary.fortune/11.html

im not really sure what thats supposed to mean....(honest, can someone explain this for me?)

[rasmasyean]

im not really sure what thats supposed to mean....(honest, can someone explain this for me?)

Sorry, I had edited it to include another factoid that may have made it clearer.

Google is a world recognized brand that is synonymous with the leading-edge economy today.
After all...
Did you know? Google is added as a verb in the Oxford English and Merriam-Webster Dictionary.
http://money.cnn.com/galleries/2008/fortune/0809/gallery.google_anniversary.fortune/9.html ;)

As you can see, much it is happening outside of the USA, now.

[Desertrat]

Yeah, there is a lot going on outside the U.S.

For instance, from the folks at Agora:

"Over 100 Russian children now stand to inherit $1 billion or more. That’s never happened before.

According to the Russian business magazine Finans, heirs of billion-dollar fortunes have risen 60% in the last year alone, from 70 to 112 lucky youngsters. At the top of the pile are Marina and Pyotr Deripaska, heirs to their father Oleg’s humble aluminum business. They’re worth $20 billion -- each.


“Asia now churns out millionaires at a world-besting pace,” adds Chris Mayer, citing a study by Merrill Lynch and Capgemini. “Last year, the number of millionaires rose 22% in India and 20% in China. In terms of private wealth creation, Asia is home to five of the 10 fastest-growing markets.

“Asia has 2.8 million millionaires, third after North America, with 3.3 million millionaires, and Europe, with 3.1 million millionaires. In terms of the combined wealth of these millionaires, the study puts Asia third, at $9.5 trillion, behind North America and Europe again, at $11.7 trillion and 10.6 trillion, respectively. But Asia's group is the fastest growing and is really not far behind.”

[rasmasyean]

Yeah, there is a lot going on outside the U.S.

For instance, from the folks at Agora:

"Over 100 Russian children now stand to inherit $1 billion or more. That’s never happened before.

According to the Russian business magazine Finans, heirs of billion-dollar fortunes have risen 60% in the last year alone, from 70 to 112 lucky youngsters. At the top of the pile are Marina and Pyotr Deripaska, heirs to their father Oleg’s humble aluminum business. They’re worth $20 billion -- each.


“Asia now churns out millionaires at a world-besting pace,” adds Chris Mayer, citing a study by Merrill Lynch and Capgemini. “Last year, the number of millionaires rose 22% in India and 20% in China. In terms of private wealth creation, Asia is home to five of the 10 fastest-growing markets.

“Asia has 2.8 million millionaires, third after North America, with 3.3 million millionaires, and Europe, with 3.1 million millionaires. In terms of the combined wealth of these millionaires, the study puts Asia third, at $9.5 trillion, behind North America and Europe again, at $11.7 trillion and 10.6 trillion, respectively. But Asia's group is the fastest growing and is really not far behind.”

Is this after the purchasing power calculations in relation to $1 million USD in USA? Because if it's not, then they are actually richer by a long shot in their own countries.

[63dot]

Are you worried about the economy?

Do you think it's healthy? Are you a little worried that your bills will increase slightly? Are you really worried about severe inflation? Do you think things are really bad, and your job and/or home is at risk?

Also, have you started acting any differently in recent months - as far as spending and savings - as you had a year or two ago?

This question is open to anyone, in any country. In fact, it will be interesting to see how different people in different places view their own countries economies.

I spend way less, especially on clothes and eating out. Times are sluggish for most.

Whoever wins, will be far better than the lowest rated president in US history, George W. Bush. OK, for you history buffs, James K. Polk was rated slightly lower.

McCain will be far better, and imho, Obama will be better yet.

I am so glad to know that W won't be our President come late January 2009. I am going to vote for Obama, but even McCain is nowhere near as off the charts stupid as Bush.

To tell the absolute truth, George HW Bush was a "Prince" in comparison to George W Bush.

Can anyone refute that cliam?

I can almost say W is as bad as Nixon was in his second term. Thoughts?

[Aea]

The number of millionaires has nothing to do with the economic power of a nation.

Mexico has the world's richest man, and look how the rest of that nation is doing.

[sushi]

The number of millionaires has nothing to do with the economic power of a nation.
Good point.

Personally, I am not too worried about the economy. Some folks and companies have over extended themselves in credit, mortgages, etc. and we are hearing about that now and seeing the effect.

Also, we are getting closer to a world economy. No one nation controls the world markets. The G7 are still the most powerful, but there are dramatic changes elsewhere.

'Rat, I like your signature block:
The problem with Socialism is that it eventually runs out of other people's money.

[Desertrat]

63dot, everything I read, and everything I've learned about cause-and-effect of taxation and public spending, tells me that the stated intentions of Obama will be more detrimental to the economy than would McCain's stated intentions. I've detailed the reasons for my views in other threads on this forum.

Omitting for the moment the issue of the approximately $150 billion per year of the cost of the Iraq war: Bush's monetary problems stem in large part from the growth of Medicare and Medicaid spending, plus the "Free Pills for Olde Pharts" and such programs as No Child Left Behind. These are not conservative programs; they're socialistic in nature. I've said many times that Bush is fiscally conservative only in his mouth-music, not in his politics.

Be that as it may, no matter who wins the election: The next president will be stuck with presiding over one of the worst financial debacles since the 1930s. My opinion, anyway. I'm swayed by parallel beliefs and prognostications of a bunch of cold-blooded investor types who have no national loyalties nor any real political philosophies. E.g., Doug Casey, Bill Bonnor and numerous others.

I hope that they're wrong and that I'm wrong...

'Rat

[63dot]

63dot, everything I read, and everything I've learned about cause-and-effect of taxation and public spending, tells me that the stated intentions of Obama will be more detrimental to the economy than would McCain's stated intentions. I've detailed the reasons for my views in other threads on this forum.

Omitting for the moment the issue of the approximately $150 billion per year of the cost of the Iraq war: Bush's monetary problems stem in large part from the growth of Medicare and Medicaid spending, plus the "Free Pills for Olde Pharts" and such programs as No Child Left Behind. These are not conservative programs; they're socialistic in nature. I've said many times that Bush is fiscally conservative only in his mouth-music, not in his politics.

Be that as it may, no matter who wins the election: The next president will be stuck with presiding over one of the worst financial debacles since the 1930s. My opinion, anyway. I'm swayed by parallel beliefs and prognostications of a bunch of cold-blooded investor types who have no national loyalties nor any real political philosophies. E.g., Doug Casey, Bill Bonnor and numerous others.

I hope that they're wrong and that I'm wrong...

'Rat

Over this much time, it can be fairly said that Bush was not a fiscal conservative and I agree with you on that. There are two times I can think of that we faced a budget crisis on this level in my lifetime. First was after the huge crash in 1989 of which George HW Bush was blamed for unfairly and Perot got a lot of mileage from.

And today, is in some way, as bad off as 1989. The stock market and investor confidence is better but the housing market is worse. But it is a form of a recession we are in.

Neither Obama nor McCain can get us out of Iraq, high oil prices, and the deficit in just one term.

[leekohler]

Over this much time, it can be fairly said that Bush was not a fiscal conservative and I agree with you on that. There are two times I can think of that we faced a budget crisis on this level in my lifetime. First was after the huge crash in 1989 of which George HW Bush was blamed for unfairly and Perot got a lot of mileage from.

And today, is in some way, as bad off as 1989. The stock market and investor confidence is better but the housing market is worse. But it is a form of a recession we are in.

Neither Obama nor McCain can get us out of Iraq, high oil prices, and the deficit in just one term.

You should have been an adult during Carter and then Reagan- talk about scary, and then Bush I came along. Good God, it seemed like the world was going to end quite honestly. The only time I ever got laid off was Bush I.

[rasmasyean]

The US ain't gonna "get out of Iraq" just like that no matter what these politicians say. If the war situation stabilizes then "maybe" there will be a reduced presence IF it meets the national interest determined by the big wigs. NOT the people.

Iraq owes the US oil for "reconstruction" and "war efforts" to pay back some of the cost for this whole thing...probably more. The "pro-western government" would have struck deals like this in order to gain power and initially to oust Sadam and subsequently maintain power. They need the help of the US and even UK and other small regiments of troops from whatever nations that want in on the pie. Maybe some of these nations for whatever reason "owe the US something" and "have to stay" despite public outcry. In general the "people" are in the dark and are sheep that don't really know anything and are scared of blood. But the leaders always have a hidden agenda no matter what they say to satisfy the public. And the fact is that "life is cheap" and it's a given that you must sacrifice some to achieve a greater goal (whether good or evil depends on who's side you're on ;) )

The only way Coalition forces will "get out of Iraq" is if there is some major energy breakthrough that surfaces and oil is near worthless because the cost of extraction outweighs what you can get for it. Even then, the situation might change to a fight for "idealism" and would take a different course. But often "idealism" is just a mask for "economics" so...:o

[sushi]

The US ain't gonna "get out of Iraq" just like that no matter what these politicians say.
A little levity...

www.peteyandpetunia.com/VoteHere/VoteHere.htm

[leekohler]

The US ain't gonna "get out of Iraq" just like that no matter what these politicians say. If the war situation stabilizes then "maybe" there will be a reduced presence IF it meets the national interest determined by the big wigs. NOT the people.

Iraq owes the US oil for "reconstruction" and "war efforts" to pay back some of the cost for this whole thing...probably more. The "pro-western government" would have struck deals like this in order to gain power and initially to oust Sadam and subsequently maintain power. They need the help of the US and even UK and other small regiments of troops from whatever nations that want in on the pie. Maybe some of these nations for whatever reason "owe the US something" and "have to stay" despite public outcry. In general the "people" are in the dark and are sheep that don't really know anything and are scared of blood. But the leaders always have a hidden agenda no matter what they say to satisfy the public. And the fact is that "life is cheap" and it's a given that you must sacrifice some to achieve a greater goal (whether good or evil depends on who's side you're on ;) )

The only way Coalition forces will "get out of Iraq" is if there is some major energy breakthrough that surfaces and oil is near worthless because the cost of extraction outweighs what you can get for it. Even then, the situation might change to a fight for "idealism" and would take a different course. But often "idealism" is just a mask for "economics" so...:o

Excuse me, but Iraq owes us NOTHING. We invaded their country. We owe them.

[Queso]

The US ain't gonna "get out of Iraq" just like that no matter what these politicians say. If the war situation stabilizes then "maybe" there will be a reduced presence IF it meets the national interest determined by the big wigs. NOT the people.

Iraq owes the US oil for "reconstruction" and "war efforts" to pay back some of the cost for this whole thing...probably more. The "pro-western government" would have struck deals like this in order to gain power and initially to oust Sadam and subsequently maintain power. They need the help of the US and even UK and other small regiments of troops from whatever nations that want in on the pie. Maybe some of these nations for whatever reason "owe the US something" and "have to stay" despite public outcry. In general the "people" are in the dark and are sheep that don't really know anything and are scared of blood. But the leaders always have a hidden agenda no matter what they say to satisfy the public. And the fact is that "life is cheap" and it's a given that you must sacrifice some to achieve a greater goal (whether good or evil depends on who's side you're on ;) )

The only way Coalition forces will "get out of Iraq" is if there is some major energy breakthrough that surfaces and oil is near worthless because the cost of extraction outweighs what you can get for it. Even then, the situation might change to a fight for "idealism" and would take a different course. But often "idealism" is just a mask for "economics" so...:o
Do you think it's right that we go in, destroy their infrastructure, destabilise their entire society resulting in hundreds of thousands of deaths, and murder even more of their citizens because of the view that everyone who dares defend themselves must be a terr'ist, and then they have to recompense us for this?

[rasmasyean]

Do you think it's right that we go in, destroy their infrastructure, destabilise their entire society resulting in hundreds of thousands of deaths, and murder even more of their citizens because of the view that everyone who dares defend themselves must be a terr'ist, and then they have to recompense us for this?

You are thinking too much in terms of "principles". Read my passage again...especially the part about the "pro-western government". It's not that simple as you think. It's more about making deals and trading with "friendly factions". Don't forget that Iraqis aren't all "united". And whatever government is in power wouldn't have too many problems with killing other of "their own people" to remain there and restore order (which ideally should be for the benefit of their country). Happens all the time. Even in the USA. That's how it formed. Like I said, life is cheap.

[BoyBach]

Excuse me, but Iraq owes us NOTHING. We invaded their country. We owe them.

Do you think it's right that we go in, destroy their infrastructure, destabilise their entire society resulting in hundreds of thousands of deaths, and murder even more of their citizens because of the view that everyone who dares defend themselves must be a terr'ist, and then they have to recompense us for this?


The US have reneged on paying war reparations to both the Vietnamese and Koreans, so I don't expect any difference with Iraq and Afghanistan.

Arguing, as some US politicians are, that Iraq owes us money, would make Orwell proud.

[rasmasyean]

The US have reneged on paying war reparations to both the Vietnamese and Koreans, so I don't expect any difference with Iraq and Afghanistan.

Arguing, as some US politicians are, that Iraq owes us money, would make Orwell proud.

Present Afghanistan appears to be stabilizing toward Karzia's government and they have like 75,000 troops and an equal police I think. And commerce is increasing. Maybe that's why the US has been going into Pakistan now for the first time to "finish them". Not that this predicts the future, but if the Taliban does become history, then Karzia's government will owe the US something rather than the other way around. Probably some bases would do, but knowing the Afghans, I think they would prolly try to kick the US out as soon as they don't need help anymore. :D

Iraq is still up in the air. If stability is achieved soon then I think it will wind up that Iraq too will owe the US rather than the other way around. There was this thing about bases in the news recently, but it's not settle yet I think. But if it extends much longer, who knows. Whoever is in power then might reverse that debt like some of you believe.

Here is an example:
The provisional government began training the New Iraqi Security forces intended to defend the country, and the United States promised over $20 billion in reconstruction money in the form of credit against Iraq's future oil revenues.
http://en.wikipedia.org/wiki/Iraq_War

[skunk]

The US have reneged on paying war reparations to both the Vietnamese and Koreans, so I don't expect any difference with Iraq and Afghanistan.

Arguing, as some US politicians are, that Iraq owes us money, would make Orwell proud.Orwell was indeed astute in his predictions, and I fully expect the US to argue that they are owed for the immense favour they did both countries by flattening them and massacring their citizens. Mass murder is an expensive business.

[BoyBach]

Present Afghanistan appears to be stabilizing ... Maybe that's why the US has been going into Pakistan now for the first time to "finish them"... [T]hen Karzia's government will owe the US something rather than the other way around... [B]ut knowing the Afghans, I think they would prolly try to kick the US out as soon as they don't need help anymore... If stability is achieved soon then I think it will wind up that Iraq too will owe the US rather than the other way around...


It must be lovely living in your head.

[rasmasyean]

It must be lovely living in your head.

It's just like Kuwait was "liberated" and Saudi Arabia was "potentially liberated in the future" during the First Gulf War. The only difference in Afghanistan and Iraq is that the "pro-western government" (whatever that really means) is "liberated"...but within their own country. Same pattern...different setting.

Even happened after WWII too when "UK" was "liberated" and had to pay back some money to USA (though it was a real steal for the UK actually). But I suppose it was made up by US bases within the UK aiming missiles at USSR.

When you help someone who is "friendly", they owe you. If you loose to someone who is "hostile", you owe them. Whether anyone pays up? That's up in the air! :D

[calculus]

Even happened after WWII too when "UK" was "liberated"

Do you mean when you lot went home? I don't remember us being occupied by anyone else...:confused:

[skunk]

Present Afghanistan appears to be stabilizing toward Karzia's government and they have like 75,000 troops and an equal police I think. And commerce is increasing. Maybe that's why the US has been going into Pakistan now for the first time to "finish them".Your assessment of the situation in Afghanistan is very far from reality.
http://news.bbc.co.uk/2/hi/south_asia/7602655.stm
http://news.bbc.co.uk/2/hi/south_asia/7570856.stm
http://news.bbc.co.uk/2/hi/south_asia/6957238.stm
http://news.bbc.co.uk/2/hi/south_asia/6755799.stm
Commerce is certainly icreasing, if the sales of opium are anything to go by. Any increase in cross-border activity by the US is more than likely in order to try to come up with an Al-Qaeda related boost for McCain before the election.

[rasmasyean]

Do you mean when you lot went home? I don't remember us being occupied by anyone else...:confused:

Well not "occupied"...yet anyway. But USA saved your country's a$$...
http://en.wikipedia.org/wiki/Lend-Lease

[skunk]

Even happened after WWII too when "UK" was "liberated" and had to pay back some money to USA (though it was a real steal for the UK actually).You should try occasionally getting your facts right. The UK agreed to buy the materielle which was already in Britain or en route when the Lend-Lease arrangement was suddenly cancelled without notice, at a knockdown price. There was zero quid pro quo.

[skunk]

Well not "occupied"...yet anyway. But USA saved your country's a$$...Don't start this one again. You made enough of a fool of yourself last time.

[BoyBach]

Even happened after WWII too when "UK" was "liberated" and had to pay back some money to USA (though it was a real steal for the UK actually). But I suppose it was made up by US bases within the UK aiming missiles at USSR.


Please, you've already shown us your total ignorance of world history in another thread, so let us not go down that road again.

[rasmasyean]

Your assessment of the situation in Afghanistan is very far from reality.
http://news.bbc.co.uk/2/hi/south_asia/7602655.stm
http://news.bbc.co.uk/2/hi/south_asia/7570856.stm
http://news.bbc.co.uk/2/hi/south_asia/6957238.stm
http://news.bbc.co.uk/2/hi/south_asia/6755799.stm
Commerce is certainly icreasing, if the sales of opium are anything to go by. Any increase in cross-border activity by the US is more than likely in order to try to come up with an Al-Qaeda related boost for McCain before the election.

I don't think anyone would think that it's all over and there are no problems, but it has been getting better for the present government is what I'm saying.
http://news.xinhuanet.com/english/2008-05/11/content_8146907.htm

LOL Nice conspiracy theory. Unfortunately, we would prolly never know... :p

[skunk]

I don't think anyone would think that it's all over and there are no problems, but it has been getting better for the present government is what I'm saying.What you are saying has little credibility in view of the reports cited.

[rasmasyean]

Don't start this one again. You made enough of a fool of yourself last time.

Last time I checked that thread I gave proofs and all you UK fanatics just had to deny it and closed the thread because you couldn't take it anymore. What the heck is wrong with admitting that USA helped UK? Is this like a "national pride" thing of total independence or something? You likely weren't even alive then. :eek:

[skunk]

Last time I checked that thread I gave proofs and all you UK fanatics just had to deny it and closed the thread because you couldn't take it anymore. What the heck is wrong with admitting that USA helped UK? Is this like a "national pride" thing of total independence or something? You likely weren't even alive then. :eek:Last time I checked, you had to admit that your comprehensive knowledge of WW2 came from your postgraduate spell at Google University. I have no difficulty recognising that the USA provided assistance to the UK during the latter part of the war.

If the thread was closed, it was not the doing of a participant, but of a moderator.

[rasmasyean]

What you are saying has little credibility in view of the reports cited.

Here's another...
http://www.pajhwok.com/viewstory.asp?lng=eng&id=55634

I personally prefer "reports" of big picture scenarios myself.

[skunk]

Here's another...
http://www.pajhwok.com/viewstory.asp?lng=eng&id=55634

I personally prefer "reports" of big picture scenarios myself.I do not understand how a report of one deal with the Chinese government is evidence of a "big picture". Have you been attending Google University again?

[rasmasyean]

I do not understand how a report of one deal with the Chinese government is evidence of a "big picture". Have you been attending Google University again?

Bigger than your little picture ones. :D

[skunk]

Bigger than your little picture ones. :DYou might be well-advised to cut down on your redundant use of smileys and increase the breadth of your reading. Afghanistan is gradually and inexorably going down the tubes, by all informed accounts.

This is supposed to be a thread about the US economy, not another jingoistic playground for you to strut your uninformed stuff in.

[rasmasyean]

You might be well-advised to cut down on your redundant use of smileys and increase the breadth of your reading. Afghanistan is gradually and inexorably going down the tubes, by all informed accounts.

This is supposed to be a thread about the US economy, not another jingoistic playground for you to strut your uninformed stuff in.

No, Afghanistan is gradually increasing over the years. I just don't look at a few people dieing here and there and think it's the end of the world. There are ups and downs, but if you look at the overall trend, it's going up for that country. But like I admit, we can't predict the future just from that.

It's more like YOU just hate the USA or something and just had to put your biased opinions about some things here and there.

And here's one in relation to US and Afghanistan thought it's a little old...
http://www.pajhwok.com/viewstory.asp?lng=eng&id=45514

Notice that I'm not giving you any US News articles. Because I know you would just say it's some form of propaganda. LOL

[BoyBach]

If you'll excuse me taking this off topic; a headline at Pajhwok News declares that a suicide bomber died in an attack. Well, no **** Sherlock!

[Desertrat]

To makle a feeble attempt to get back to the subject of the thread, or at least somewhere near it:

The 1990/91 recession was in large part due to "reinventing management". It was the first-ever recession which mostly affected white-collar jobs, and primarily in the middle managment levels. A contributory factor was the discovery of email by the top echelons, which allowed more direct communication with the lower-echelon staff. Unfortunately, they went overboard. At any rate, the news was full of stories about people who had lost jobs in the $75K to $90K range and could find no better than $40K. Recovery had begun by late 1991, in spite of Clinton's successful use of "It's the economy..."

The trend of loss of high-pay jobs, to be replaced by lesser-pay jobs, has continued. ("They're sending our jobs out of the country!") This contributed to the psychology of these last two bubbles--if you can't get the salary, try the stock market and the dot-coms. Then, "Houses will keep rising in value, so we'll be a lot better off in our billfolds!"

[hulugu]

To makle a feeble attempt to get back to the subject of the thread, or at least somewhere near it:

The 1990/91 recession was in large part due to "reinventing management". It was the first-ever recession which mostly affected white-collar jobs, and primarily in the middle managment levels. A contributory factor was the discovery of email by the top echelons, which allowed more direct communication with the lower-echelon staff. Unfortunately, they went overboard. At any rate, the news was full of stories about people who had lost jobs in the $75K to $90K range and could find no better than $40K. Recovery had begun by late 1991, in spite of Clinton's successful use of "It's the economy..."

The trend of loss of high-pay jobs, to be replaced by lesser-pay jobs, has continued. ("They're sending our jobs out of the country!") This contributed to the psychology of these last two bubbles--if you can't get the salary, try the stock market and the dot-coms. Then, "Houses will keep rising in value, so we'll be a lot better off in our billfolds!"

This is an interesting reading of the last decade or so.

[Desertrat]

Lemme call it, "Reasonably contributory." :) Certainly, no sort of "the" cause of anything. I'm not given to seeing uber-simple causal relationships in either economic or environmental issues. IMO, a problem with something like the Internet boards and posts is that it's difficult to do more than hit the highlights--given that entire books are written about mere pieces of these puzzles.

[iTwitch]

This is supposed to be a thread about the US economy, not another jingoistic playground for you to strut your uninformed stuff in.

So that's what happened. :confused::eek::mad:

[iTwitch]

To makle a feeble attempt to get back to the subject of the thread, or at least somewhere near it:


All Hail the Rat.

[rasmasyean]

To makle a feeble attempt to get back to the subject of the thread, or at least somewhere near it:

The 1990/91 recession was in large part due to "reinventing management". It was the first-ever recession which mostly affected white-collar jobs, and primarily in the middle managment levels. A contributory factor was the discovery of email by the top echelons, which allowed more direct communication with the lower-echelon staff. Unfortunately, they went overboard. At any rate, the news was full of stories about people who had lost jobs in the $75K to $90K range and could find no better than $40K. Recovery had begun by late 1991, in spite of Clinton's successful use of "It's the economy..."

The trend of loss of high-pay jobs, to be replaced by lesser-pay jobs, has continued. ("They're sending our jobs out of the country!") This contributed to the psychology of these last two bubbles--if you can't get the salary, try the stock market and the dot-coms. Then, "Houses will keep rising in value, so we'll be a lot better off in our billfolds!"

I guess today's world is sort of like your email effect in a way. A lot of technology jobs are going over because of cheap real-estate an labor, etc. Even if they aren't as "good" or can't communicate as well with English and "Culture" always, you can get multiply employees for the price of one. And chances are that you don't need that many. As the tools advance and make work more efficient and abstract the complexity from the worker, it becomes easier to do the work itself. IT Support, programming, engineering, even some R&D is contracted out to the developing world. I mean look at manufacturing, which has been outsourced for years. All you need is a few knowledgeable people to set up things and the machines do everything themselves with only need for periodic "technician" maintenance. It has been suspected that soon China will be making much of the world's automobiles.

Intel...
http://www.nytimes.com/2007/03/27/technology/27chip.html

[Desertrat]

Corporations and countries: They compete. Governments supposedly have an obligation to the people, although they rarely operaate that way. Corporations have an obligation to the stockholders, and they generally try to operate that way.

Corporations stay profitable or they go away, which harms both employees and stockholders. If a labor force has priced itself out of the market, jobs go away as corporations seek ways to remain profitable. There is no alternative.

Nowhere was it ever written that only the U.S. could be the industrial leader of the world forever and ever. Same-o, same-o for IT.

As for the world of IT: During the 1970s, my now-ex-wife was "den mother" to a bunch of foreign students from India. Grad students, working on PhDs in computer science. (She was the secretary for the head of the Computer Science department.) Until the late 1980s or thereabouts, none of those fresly-minted PhDs went back to India. They stayed here, and a few became millionaires. Now? Quite a few have gone home and started IT businesses there.

The enabling began with TelSat, and the IT ideas came from the U.S.--but ideas are the most portable asset known to man.

Ideas can be profitable or they can be costly. The idea of buying what you can't afford with money you don't have is costly. The idea that a monopoly on industry and trade is a forever deal is also costly.

As a society, the U.S. has seriously gotten itself into a bunch of costly ideas.

[solvs]

Unemployment climbs past 6 percent for 1st time in 5 years, raising odds of economic tailspin (http://hosted.ap.org/dynamic/stories/E/ECONOMY?SITE=AZTUC&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-09-05-17-47-07)
U.S. Jobless Rate Rises Past 6%, Highest Since ’03 (http://www.nytimes.com/2008/09/06/business/economy/06econ.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1220771009-SwyOfkg3VAO2D9O6tit6dw)
Economists may not call it recession, but job stats say it is (http://www.mcclatchydc.com/226/story/51912.html)

If you aren't a little worried, then you aren't paying attention.

McCain Nomination Greeted By Economic Collapse (http://wonkette.com/402575/mccain-nomination-greeted-by-economic-collapse)

[Desertrat]

solvs, that link, "McCain nomination..." has got to be one of the funniest things I've seen in quite a while. I guess that for some, waking up in the morning is to greet a brand new world in which nothing ever happened before; all causal relationships began during the night.

The seeds were sown long ago; the peak of folly was in mid-2005. The downhill slide for the economy started getting up to speed in 2006. We're beginning to see the results of past societal foolishness.

I've had no notion of timing or specific causes, back in my first years here on this board, but I certainly commented from time to time that we were headed toward serious economic problems in this country. It is only now that I realize that my pessimism, then, now looks to have been optimistic. The problems are and will be much worse than I envisioned.

Glad I've long been prepared for it...

'Rat

[solvs]

K, how about this one:

McCain’s Economic Agenda (http://www.washingtonindependent.com/3680/maverick-mccain-redefines-himself)

[rasmasyean]

I suppose you can say that there are fewer and fewer jobs involved with something like this:

http://www.cadillacmachinery.com/pics/gears3a.jpg


And the future of potential US jobs will more be involved with something like this:

http://lh3.ggpht.com/abramsv/R-lNyPXRf2I/AAAAAAAAMjs/86OVdVfbB7Y/Sandia_MEMS_bug_1b.jpg


And then this:

http://www.scifun.ed.ac.uk/card/images/flakes/nasananogear.jpg


Unfortunately, I think too many Americans are spoiled by the long period of prosperity and don't want to put in the effort to learn new skills to adapt to the new industry. Too many workers complain that things are changing and they just want to do the same thing over and over again until they retire. That's where everyone else picks up the slack and takes all the jobs from right under them.

[Unspeaked]

Unfortunately, I think too many Americans are spoiled by the long period of prosperity and don't want to put in the effort to learn new skills to adapt to the new industry. Too many workers complain that things are changing and they just want to do the same thing over and over again until they retire. That's where everyone else picks up the slack and takes all the jobs from right under them.

This wouldn't be the first (or last) time there was a major shift in the typical American industries; I don't see why it's any harder this cycle than it was in the past...

Have the kids just gotten lazy?

[rasmasyean]

Any increase in cross-border activity by the US is more than likely in order to try to come up with an Al-Qaeda related boost for McCain before the election.

Perhaps McCain got his wish...lol
Guard: Al Qaeda chief in Pakistan killed (http://www.cnn.com/2008/WORLD/asiapcf/09/09/pakistan.alqaeda.killed/index.html)

[és:]

http://www.youtube.com/watch?v=DDJJJyEUyrw&feature=related

I would be if this guy gets voted in.

[Desertrat]

solvs, looking through that brief on McCain's plan, I figure some of it's good, but his big problem is getting any of it through the Dems in Congress. That's a mess, whether one thinks McC's ideas are good or bad.

We have projected federal deficits of some $410 billion this year, and some $439 billion for next year. An immediate shut-down in Irag--which won't happen, no matter who's El Prez--and repudiation of the Bush tax cuts won't really help. And many think the projected deficits are optimistic as to guesstimated size.

So: We're broke. Forget anything about any medical program that's more than PR stuff. If we print paper money to pay for it, the dollar's buying power goes down even more, and consumer price inflation accelerates.

If we raise taxes, we pull investment money out of a stagnant economy. Bummer. Big mistake. Makes the recession worse.

Regardless, this housing and commercial real estate debacle is the Big Kahuna. It has yet to finish playing out. This F&F "rescue" is an effort to maintain some sort of stability in the mortgage markets, etc., but it is still a ton of money that must be repaid--and likely, much of it by the taxpayers.

So as near as I can tell, McC's ideas aren't particularly harmful. His energy notions are at least helpful. Bless him for his discovery of the problems created by our ethanol policy; that'll do more to reduce world hunger than a lot of do-good programs.

Obama's ideas are all backwards, from any sort of rational economic analysis. You don't get more or cheaper gasoline by taxing oil companies. You don't boost an economy by pulling investment capital out of it. You don't reduce consumer price inflation by printing more money to try to deal with deficits.

[BoyBach]

More bad news?

The UK, Germany and Spain will fall into recession in 2008, the European Commission has predicted.

Brussels said the three countries would see two negative quarters of economic growth in a row, which is the technical definition of a recession.

In its latest economic forecast, the commission also downgraded its outlook for eurozone growth again.

It said the 15-nation euro bloc would now grow by 1.3% this year, against previous projections of 1.7%.

Earlier this month, data showed the region's economy shrank by 0.2% between April and June - the bloc's first decline since its creation in 1999.

The contraction was driven by a slowdown in exports and consumer spending.

But high inflation in the region led policy makers at the European Central Bank to keep interest rates at 4.25% at its latest meeting, allowing no relief for the eurozone's slowing economies.

In its latest report, the commission believed that inflation was now likely to creep up to 3.6% in the eurozone - above its previous predictions of 3.2% and way above the government's target of 2%.

...

A Treasury spokesman told the BBC:

"Along with every other country in the world, the UK is facing the twin shocks of high food and fuel prices and the global credit crunch.

"As a result of these global shocks, the UK economy is slowing, as we are seeing around the world. Growth in the second quarter was zero in the UK and it was negative in Germany, France, Italy and Japan.

"But with employment levels near record highs, interest rates that are historically low and the past decade of rising incomes and job creation, the UK is well placed to deal with these challenges."

http://news.bbc.co.uk/1/hi/business/7607920.stm

[iShater]

More bad news?



http://news.bbc.co.uk/1/hi/business/7607920.stm

Welcome, thanks for joining us :D

[Desertrat]

Of the EC, Italy and Spain seem to be in a worse condition than, say Germany--which does have some problems. Those woes are the reason for this short-term rise in the dollar's strength. As near as I can tell, though, our fundamentals are worse than their fundamentals.

Even China is seeing a decline in their economy, but a decline from a growth rate of ten to twelve percent, down to maybe eight or nine percent, still whips the poo out of onesies and twosies.

[Peterkro]

For those with a interest in economics you can watch the arse drop out of Lehman brothers in real time here:

http://finance.google.com/finance?q=leh

[Queso]

Ouch. I notice it appears to be dragging Merrill Lynch down with it. Nasty.

[Desertrat]

John Mauldin speaks of "Dead Men Walking". They include: Zions Bancorp, KeyCorp, Fifth Third Bank, Washington Mutual, National City, Regions Financial, GMAC, FoMoCredit Co, and Wachovia.

"In addition to the "dead men" I've identified above, a few other financial firms might serve long prison terms, but will probably manage to stay off of death row. These companies would include those that may be "too big to fail," have enough quality assets to sell, a franchise that is worth something to an acquirer or could just be broken up into pieces.

. Citi
· Merrill Lynch
· Morgan Stanley
· Suntrust
· Legg Mason
· Capital One
· AIG
· MetLife
· Prudential

I am certain that I have missed a bunch of names on the "Dead man Walking List," but the pattern is rather easy to discern. When we have only one or two firms in trouble, the financial system can deal with it. But when you add rising unemployment, explosive debt growth in recent years and $1 trillion of non-performing assets into the mix, the situation becomes a little dicier."

[solvs]

solvs, looking through that brief on McCain's plan, I figure some of it's good, but his big problem is getting any of it through the Dems in Congress.
If that's what you think the biggest problem with McCain's plan is, you haven't been paying attention.

Greenspan Says McCain Tax Plan Needs Corresponding Budget Cuts (http://www.bloomberg.com/apps/news?pid=20601070&sid=aKZG._gG2NVI&refer=politics)
The McCain Tax Increases--Continued (http://www.time-blog.com/swampland/2008/09/the_mccain_tax_increasescontin.html)
What McCain Economic Policy? (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/16/AR2008071602434.html)
Republican economics is not the solution to our problem; Republican economics is the problem -- for our nation, surely, and also for candidate McCain.

I will give you that Obama's plan is not great, I've said as much many times, but it certainly isn't worse than Obama's, and in many ways is a little less bad.

You don't get more or cheaper gasoline by taxing oil companies. You don't boost an economy by pulling investment capital out of it. You don't reduce consumer price inflation by printing more money to try to deal with deficits.
We aren't getting more or cheaper gas now. We aren't boosting the economy now. We aren't reducing inflation now. Nor dealing with our ever increasing deficits.

'Rat, we've done the neocon thing now for almost 8 years, 6 of which included GOP rule, the last 2 with only a slight Dem lead, most of whom are more than happy to capitulate to the Bush administration. They aren't helping. I dare say, it's blatantly obvious they've made things worse. I'm hoping the alternative won't be even worse, and judging by what happened during Clinton's reign, many of the ideas of which Obama is also wanting to use, I don't think it will be. We know what McCain's going to bring us, and it is just more (http://www.huffingtonpost.com/2008/07/13/mark-sanford-draws-a-blan_n_112391.html) of (http://www.cnn.com/2008/POLITICS/08/20/campaign.wrap/) the (http://www.nytimes.com/2008/06/10/us/politics/09cnd-obama.html?hp) same (http://firedoglake.com/2008/05/12/mccains-economic-policies-like-a-third-bush-term-blunt-says-yes/) that we already know isn't working.

[solvs]

Sorry, but I'm going to post more links:

Estimates say fed budget deficit nearing $407B (http://ap.google.com/article/ALeqM5gMSVWqL3tikhx7L_ompt0hDXO-5AD9338A6G0)
Downturn Starts to Hit Emerging Economies (http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091203631.html?hpid=topnews)
No, Actually, It's that the Economy is Falling Apart (http://www.time-blog.com/swampland/2008/09/no_actually_its_that_the_econo.html)

And if anyone is still wondering:

Yes, Bush's Economic Policies Are a Failure (http://delong.typepad.com/sdj/2008/09/yes-bushs-econo.html)

[Unspeaked]

All the bad news in the US today isn't doing much for my financial confidence.

When three giant financial services companies are all having trouble, and some 30,000 plus job seekers just flooded the same industry, it doesn't make for good times.

[Unspeaked]

And now this:

HP to Cut 24,600 (http://forums.macrumors.com/showthread.php?p=6242474#post6242474)

[leekohler]

We just had an employee escorted out of the office by the police. He was drunk and brought guns with him. :( I guess I could have died today.

[hulugu]

We just had an employee escorted out of the office by the police. He was drunk and brought guns with him. :( I guess I could have died today.

Holy hell. :eek:

Glad everything is okay.

[Scepticalscribe]

We just had an employee escorted out of the office by the police. He was drunk and brought guns with him. :( I guess I could have died today.

Good God, that sounds an exceedingly grim day on top of everything else. Hope you're not too shocked and upset after such a day; pour a stiff drink, put on some nice music, take some time out, and salute life. Good luck and glad to hear you are still with us, dude.
Cheers

[DakotaGuy]

Well it can't be that bad for the average US citizen. McCain promises to bring us another 4 years of Bush policy and he is ahead in the polls right now.

[leekohler]

Holy hell. :eek:

Glad everything is okay.

Yeah- it was creepy as hell. I saw the police taking him out of the office. Man! You just never know who's going to do something like that!

[skunk]

I shall do my best to resist commenting on what that says about the "average US citizen", but I may not be able to.

[hulugu]

Well it can't be that bad for the average US citizen. McCain promises to bring us another 4 years of Bush policy and he is ahead in the polls right now.

All the polls or just the ones that subscribe to your particular viewpoint?

Is the "average" US citizen counted in these polls? Or, is the "average" US citizen voting for McCain because, like Desertrat, they believe that McCain's economic policies are still better than Obama's, but with the understanding that the economy is still going to hell in a hand-basket.

I'd say that the logical connection between polls of the election and the state of the economy are just slightly less tenuous than your logic.

[.Andy]

http://www.youtube.com/watch?v=VVp8UGjECt4

[rdowns]

I'll see that video and raise you this one.

http://www.youtube.com/watch?v=HcdLO3jKkPo&feature=related

[.Andy]

I'll see that video and raise you this one.

http://www.youtube.com/watch?v=HcdLO3jKkPo&feature=related
That makes me worry about the US economy :o.

[PlaceofDis]

http://caffertyfile.blogs.cnn.com/2008/09/15/which-candidate-is-better-equipped-to-handle-the-financial-crisis/


the responses there are pretty one sided, which from what i've read in the past, usually isn't the case. i guess thats a good sign?

hope.. maybe..

[solvs]

Worst Crisis Since '30s, With No End Yet in Sight (http://online.wsj.com/article/SB122169431617549947.html)
Congressional Leaders Stunned by Warnings (http://www.nytimes.com/2008/09/20/washington/19cnd-cong.html?_r=1&hp=&pagewanted=print&oref=slogin)
Crisis Endgame (http://www.nytimes.com/2008/09/19/opinion/19krugman.html?_r=1&oref=slogin)

[rasmasyean]

Well, it does look like a lot of big firms...at least tech firms are doing pretty good and are positive about the future.

Microsoft...
Microsoft to buy back $40B stock (http://www.msnbc.msn.com/id/26835742/)

I don't know that much about this, but that looks like A LOT of money.

In addition, I think I saw Apple and Cisco with like $20B buybacks and a whole bunch of other tech companies are planning on it as well, including RIM. Looks like a lot of tech companies at least have a lot of cash.

[hulugu]

Well, it does look like a lot of big firms...at least tech firms are doing pretty good and are positive about the future.

Microsoft...
Microsoft to buy back $40B stock (http://www.msnbc.msn.com/id/26835742/)

I don't know that much about this, but that looks like A LOT of money.

In addition, I think I saw Apple and Cisco with like $20B buybacks and a whole bunch of other tech companies are planning on it as well, including RIM. Looks like a lot of tech companies at least have a lot of cash.

Where did you see the Apple and Cisco buybacks. AFAIK, neither has announced this. Cisco, however, just bought (http://www.marketwatch.com/news/story/cisco-announces-definitive-agreement-acquire/story.aspx?guid=%7BF89D3524-96F1-45D8-B728-7B64FE3091E1%7D&dist=hppr) Jabber.

[toaster_oven]

well... considering that I've just been laid off and my career is essentially tied to the amount of investment in all sectors of the building industry - i'd say we haven't seen the worst of it yet.

anyone who lived through the S&L crisis of the late 80s in my field (before my time, though I do know many who did) - will tell you that this is much worse. I think the bail-outs then were somewhere around $100 billion - this could top $1 trillion.

Whoever is elected this fall must invest more in public infrastructure and in real capital than in our current mode of "more debt." I'm scared to death of Phil Gramm (McCain's chief economic and campaign advisor) getting into the white-house because he's responsible for the legislation that got us into this mess in the first place.

[rasmasyean]

Where did you see the Apple and Cisco buybacks. AFAIK, neither has announced this. Cisco, however, just bought (http://www.marketwatch.com/news/story/cisco-announces-definitive-agreement-acquire/story.aspx?guid=%7BF89D3524-96F1-45D8-B728-7B64FE3091E1%7D&dist=hppr) Jabber.

http://www.msnbc.msn.com/id/21134540/vp/26838315#26838315

[rasmasyean]

well... considering that I've just been laid off and my career is essentially tied to the amount of investment in all sectors of the building industry - i'd say we haven't seen the worst of it yet.

anyone who lived through the S&L crisis of the late 80s in my field (before my time, though I do know many who did) - will tell you that this is much worse. I think the bail-outs then were somewhere around $100 billion - this could top $1 trillion.

Whoever is elected this fall must invest more in public infrastructure and in real capital than in our current mode of "more debt." I'm scared to death of Phil Gramm (McCain's chief economic and campaign advisor) getting into the white-house because he's responsible for the legislation that got us into this mess in the first place.

Good. I hope the building industry slows down even more. It never should have bubbled that much to begin with. We don't need anymore places to dwell. We should be investing in sectors that increase our competitive lead over others in the world economy. Before long China will surpass everyone if we don't shape up.

[rasmasyean]

http://www.msnbc.msn.com/id/21134540/vp/26838315#26838315

Looks like HP joined in on the party too...with $8B.
http://money.cnn.com/2008/09/22/news/companies/microsoft/index.htm?postversion=2008092211

[Rodimus Prime]

Good. I hope the building industry slows down even more. It never should have bubbled that much to begin with. We don't need anymore places to dwell. We should be investing in sectors that increase our competitive lead over others in the world economy. Before long China will surpass everyone if we don't shape up.

you know there is a lot more to the constuction industry than just home building.

That is the only part people seem to understand and over all it is a very small part and lowest paid of the industry as a whole.

I am with OP as my career is in constuction as well. I work on commercial side so it can and will be effected by a huge down turn.

[Unspeaked]

So the bailout plan is a mess from both sides of the political floor, Washington Mutual fails becoming the largest bank in US history to do so, and the latest Washington Post/ABC poll says 79 percent of Americans are worried about the economy in general, and 60 percent are worried about their own financial future.

Looking grimmer and grimmer...

[iGary]

My significant other (and family breadwinner) is a now a refugee of the mortgage industry disaster and my employer is advertising driven by companies that are sensitive to fuel pricing.

He's having a hell of a time finding another job making what he was making in the mortgage field.

Yeah, I'm worried. I'm really surprised people aren't pulling their money out of the market faster than they are.

*eats peanut butter and jelly lunch*

[SMM]

No, can't say that I'm worried at all, but then I'm not a worrier. I plan, invest, save, and live my life. My life and everyone's around me that I see is getting continually better. I don't let the media tell me I have to live in a recession. If I did, I would quit spending, quit hiring, hold on to what I have, and thereby do further damage to the economy. I refuse to be a part of the problem.:)

It is nice you can take such a Pollyanna view of the current economic collapse. However, your refusal to acknowledge something this grave, will be severely tested over the next 5-10 years. I understand it is almost impossible for republicans, especially bush supporters, to say to "D" word, or even the "R" one. It would be admitting that the republican economic plan has been a disaster, even when it is so abundantly clear it has. I think the greatest obstacle to recovery will be the denial and obstructionism of the few, and the greedy who have flourished. Please note, I am not including you in this last group (the greedy).

[rasmasyean]

My significant other (and family breadwinner) is a now a refugee of the mortgage industry disaster and my employer is advertising driven by companies that are sensitive to fuel pricing.

He's having a hell of a time finding another job making what he was making in the mortgage field.

Yeah, I'm worried. I'm really surprised people aren't pulling their money out of the market faster than they are.

*eats peanut butter and jelly lunch*

We'll perhaps that's part of the natural restructuring. Maybe he made "too much" money because of the fierce competition to retain "good employees" in that particular rosey market.

I remember the dot-com boom / information revolution / whatever you want to call it where I knew drop-outs who got a GED (secondary school equivalent certificate) and picked up like "Windows for Dummies" before heading to an interview and making more than most college grads. After the bust and slowdown, they were the first out the door. I suppose their over-market worth didn't last forever and wasn't justifiable any more.

That's the problem with these events is that some people over extend their life-style thinking that the "great times" are forever and when it turns around to correct itself, they are in trouble. I'm not saying you should be a penny-pincher. By all means you should live a full life and consume what you can afford (and even what you can borrow to afford)...but not go too extravagant just because you think you "just hit the lotto" and get yourself in trouble.

It's unfortunate that people get into trouble...and personally, I believe it's more unfortunate that everyone else has to bail them out. But I suppose that's the way this government works and some of them have some belief that it will be better for the nation as a whole by whatever logic at the moment.

[mactastic]

My significant other (and family breadwinner) is a now a refugee of the mortgage industry disaster and my employer is advertising driven by companies that are sensitive to fuel pricing.

He's having a hell of a time finding another job making what he was making in the mortgage field.

Yeah, I'm worried. I'm really surprised people aren't pulling their money out of the market faster than they are.

*eats peanut butter and jelly lunch*
So you're looking for a government handout for your SO?

[kfordham281]

No doubt the economy is in the crapper right now. If you have money to invest, now is (almost) the time. I still think we haven't hit rock bottom yet. When congress passes the crisis bill, the economy will take a jump up. I'm just not sure how long that will last and if it will truly lead to banks lending again.

I find it scary that all this was essentially based on one single point of failure; that home prices wouldn't fall. I work in IT, and having a single fail point is a sure way to get your butt in a bind. I hope Wall Street learned that not EVERYONE should own a home. There is a reason the credit history industry exists.

[rasmasyean]

No doubt the economy is in the crapper right now. If you have money to invest, now is (almost) the time. I still think we haven't hit rock bottom yet. When congress passes the crisis bill, the economy will take a jump up. I'm just not sure how long that will last and if it will truly lead to banks lending again.

I find it scary that all this was essentially based on one single point of failure; that home prices wouldn't fall. I work in IT, and having a single fail point is a sure way to get your butt in a bind. I hope Wall Street learned that not EVERYONE should own a home. There is a reason the credit history industry exists.

It's also people gaming the system. In simple form...they helped people over-extend themselves in hopes to profit dearly from them. This creating some "loop" until it was just ridiculous as you indicated for it to last forever.

I mean, it could have...if people got to the point that they just kept upgrading their homes and have multiple rooms per person...but that's not very likely and would take many decades and some form of social revolution. It's not like a corporation or something that can grow really large...and even that has a cap. And on that note, like you said, maybe it's time to invest...if you have any money left! :p

[Unspeaked]

Ok, I think this afternoon was the final straw... the rejection of the bailout plan is the official beginning of the end on our way to depression.

It's going to be a cold, cold winter...

[BigHungry04]

Ok, I think this afternoon was the final straw... the rejection of the bailout plan is the official beginning of the end on our way to depression.

It's going to be a cold, cold winter...

It can't be a cold winter! What happened to Global Warming? It's supposed to be warm all year! :)

[MacNut]

Ok, I think this afternoon was the final straw... the rejection of the bailout plan is the official beginning of the end on our way to depression.

It's going to be a cold, cold winter...You mean an overvalued market coming to it's senses.

[heehee]

Buy gold. :)

[Unspeaked]

You mean an overvalued market coming to it's senses.

I think it came to its senses weeks ago during the initial financial services crisis.

Today to me is the first time during this whole episode that its felt like panic selling.

The only thing panic selling is good for is causing more panic selling.

It's a road I was hoping we wouldn't go down, but now it looks like we're well on our way.

[Unspeaked]

Buy gold. :)

Looks like a lot of people feel the same way:

GOLD 09/29/2008 15:12 910.90 912.60 +33.10 +3.77%

[heehee]

Looks like a lot of people feel the same way:

GOLD 09/29/2008 15:12 910.90 912.60 +33.10 +3.77%
I'm going to revive this thread when gold hits $2000. :)

[Unspeaked]

I'm going to revive this thread when gold hits $2000. :)

If gold climbs to 2000, I don't think this thread is going anywhere...

[doug in albq]

Most of you people just do not get it.

What is happening (and will happen) has no parallel in American History.

If you are less than an idiot, you would be out buying food provisions right now.

[rasmasyean]

It's funny how you see all these wall streeters crying for the bill to protect themselves. While some other financial leaders are expecting it to restructure to be better for the consumer. ha.

Good, I never wanted my tax dollars to save their sorry a$$es anyway. I say, let them engulf eachother, turn into a "new era in banking", maybe some arrests later, whatever... :eek:

[heehee]

If gold climbs to 2000, I don't think this thread is going anywhere...

Economy down = Gold up. ;)

[Peterkro]

Economy down = Gold up. ;)

The thing about that is that Russia has been sitting on large stocks of gold since the sixties and has been judiciously manipulating it ever since.It's interesting what's happening now with investors shorting the market in the full knowledge that the US deal will go through,they are loading pressure on the House and making money at the same time.Interesting times indeed I hope the whole thing goes titts up maybe we can change things,whilst in the west some fret about property prices people in the rest of the world die in huge numbers because of Capitalism

[kainjow]

To be honest, I don't really know. I'm trying to educate myself but still a lot of this is over my head.

My bank did increase my credit line by 20% today though. Not sure if that's good or not ;)

[Rodimus Prime]

To be honest, I don't really know. I'm trying to educate myself but still a lot of this is over my head.

My bank did increase my credit line by 20% today though. Not sure if that's good or not ;)

it is a good thing as long as you remember more credit does not = more money to spend.

The extra credit is nice when you know you have a large purchase coming it just makes it easier to pay. Instead of writing a check (or finding other forums of payment) you can just put it on the card and then pay it off at the end of them month. It was helpful when my card double my credit limit. As coudl easily max out the cards limited credit every month. Mind you I do route everything I can though my card so it make it appear to be a lot worse than it really is.

[MacNoobie]

Am I worried? not at all I say let the economy die down, things become slower thus the price of oil goes down and the price of goods and services. Between corporate greed, CEO's making more money then they should with all sorts of kick backs and golden parachutes, between taking stupid risks on 6% of loans (no doubt to minorities and illegals) who obviously cant pay them back, between taking in loans from people with NO assets and NO income I say let the banks fall honestly. Its almost funny no one in the business world wants government involvement in a free market but when it comes time for a big institution to fail they come crying home to momma government for a bailout and its sick.

The 700B package to rescue the failed banks are just another waste its another band aid over a gushing wound and I hope they dont pass it because it wont solve the problems. It wont change a boat that's already sinking so why spend so much on saving something that in another 5-10-15 years will fail again another bail out after another?

Remove self priming mortgages, make people pay the closing costs on a new home and a down payment, make obtaining credit absurdly hard so that only the people that can truly pay off their debt in lets say a months time can truly have credit and use it rather then sinking 94% of the people with 6% of the bad debts out there because people obviously cant pay they know it the bank knows it.

If you have money to spend then spend it otherwise dont constantly look to credit to come save your ass, you got a big purchase coming up that spiffy new plasma TV that just came out that you've been craving then save up for it wait till you've got money in the bank to buy it rather then have an ohh I'll just charge it attitude.

[rasmasyean]

To be honest, I don't really know. I'm trying to educate myself but still a lot of this is over my head.

My bank did increase my credit line by 20% today though. Not sure if that's good or not ;)

Normally there is a "formula" that will calculate whether you can pay it off or not before they give you the extra credit. But it's not always "correct" because theoretically, you can have a really long credit history that says you are a "good accountant", or banks try to compete with each other by giving you a reason to "carry around that one card for all your needs".

Most people who get "screwed" have a lot of debt, no money and loose their jobs without getting another equivalent paying job soon. But even then, you still don't have to pay it yet because they will just add penalties and increase the interest (which they want be able to do anyway). Because they expect you to get another job and be able to pay it off anyway later...but more. You will just scar your credit report and make it harder to get more credit/loans later.

The way to use credit is to know how you are going to pay the bills without "getting screwed" like above. Give yourself at least 6 month "cushion" in case you lose a job or can't work. You can do less or more cushion depending on how confident you feel. But of course it can never be "risk free". Like if you get into an accident and can't work for 2 years, etc.

Ultimately credit is there to help you afford things you can't shell out in full for at the moment. And if you use it correctly, you will actually increase your rating and be able to get more credit later on. It can be as simple as paying your card bill in full every month...or paying the minimum for years on end.

[Anuba]

Not really worried, no... then again I live in Sweden. We did the big bailout thing in the early 90's ($11 billion, or $1222 per capita). It did everything it was supposed to do. The economy got back on its feet, unemployment dropped and eventually the goverment gained back every last cent on behalf of the tax payers (took about a decade, though). As an added bonus, the Swedish banks who had been badly burned once learned to never make those mistakes again, so they have been extremely careful and conservative over the last 15 years, and haven't allowed themselves to get tangled up in the housing bubble. They're solid as rocks while the rest of the banking world is in shambles.

This is by no means a guarantee that a bailout would have the same effect in the US, but Sweden would've been a third world country without the '92 bailout.

[rasmasyean]

Not really worried, no... then again I live in Sweden. We did the big bailout thing in the early 90's ($11 billion, or $1222 per capita). It did everything it was supposed to do. The economy got back on its feet, unemployment dropped and eventually the goverment gained back every last cent on behalf of the tax payers (took about a decade, though). As an added bonus, the Swedish banks who had been badly burned once learned to never make those mistakes again, so they have been extremely careful and conservative over the last 15 years, and haven't allowed themselves to get tangled up in the housing bubble. They're solid as rocks while the rest of the banking world is in shambles.

This is by no means a guarantee that a bailout would have the same effect in the US, but Sweden would've been a third world country without the '92 bailout.

I think the US is a larger industrial powerhouse. So although some banks demise would affect things, eventually it wouldn't make as much of a difference. There are also a lot of other banks internationally as well that will rise to take the dead ones' places. I think perhaps without a bailout, there would be more distribution of banking power worldwide rather than just US. And the US always borrow foreign money anyway to do other things.

[Unspeaked]

I think the US is a larger industrial powerhouse. So although some banks demise would affect things, eventually it wouldn't make as much of a difference. There are also a lot of other banks internationally as well that will rise to take the dead ones' places. I think perhaps without a bailout, there would be more distribution of banking power worldwide rather than just US. And the US always borrow foreign money anyway to do other things.

I don't think it would work out as cleanly as your theorize.

[Unspeaked]

Today's signs of the impending apocalypse:

Dow 10,610.05 -221.02

Factory orders drop by 4 percent in August (http://biz.yahoo.com/ap/081002/factory_orders.html)

Weak economy pushes jobless claims to 7-year high (http://biz.yahoo.com/ap/081002/economy.html)

Warren Buffet on The Charlie Rose Show: ""In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now."

[SactoGuy18]

I can say this right now: if you're in a strong cash position you're going to be a winner after it blows over. That's how Joseph P. Kennedy made his money--he bought a lot of stocks during the Great Depression at very low prices and made a killing later.

[solvs]

If you aren't worried about the economy, you should be:

600,000 jobs lost - and counting (http://money.cnn.com/2008/10/01/news/economy/jobs_forecast/index.htm)
Dollar Gets Biggest Hit In Seven Years From Treasury Plan (http://www.cnbc.com//id/26841323)
O'Neill: Bush Doesn't Get Financial Crisis, 'It Shows' (http://abcnews.go.com/Business/Economy/story?id=5887486&page=1)

[Rodimus Prime]

If you aren't worried about the economy, you should be:

600,000 jobs lost - and counting (http://money.cnn.com/2008/10/01/news/economy/jobs_forecast/index.htm)
Dollar Gets Biggest Hit In Seven Years From Treasury Plan (http://www.cnbc.com//id/26841323)
O'Neill: Bush Doesn't Get Financial Crisis, 'It Shows' (http://abcnews.go.com/Business/Economy/story?id=5887486&page=1)


I might like to add while the new seems to be focusing on the US only. This will and has already starting to hit the entire world. Every major country in the world is going to be hurt by this.

Mind you solvs doom and gloom post are getting old and it seems always takes a chance to get a shot off at Bush........

[solvs]

Mind you solvs doom and gloom post are getting old and it seems always takes a chance to get a shot off at Bush........

If there was good news, I wouldn't be posting all the bad, and you can't honestly say he doesn't deserve a lot of what he gets.

Much like any other failure during his administration being blamed on everything else, he doesn't get this at all, do you deny that?

[BoyBach]

Glut of retailers could go bust in new year

A glut of retailers face going bust in the New Year when banks pull the plug on finance, an insolvency specialist warned today.

Begbies Traynor has 323 UK retailers on its "critical watch list", the Financial Times said, which the firm defines as having a 70 per cent chance or more of failing.

Begbies said it expected banks to grant debt-reliant retailers a "banking honeymoon" until the end of the year when they will call in the loans as trading woes deepen. Retailers borrow the most in September and October in the run-up to Christmas because of payments to suppliers.

Begbies partner Mark Fry told the FT: "There is every chance we will see a rash of retail failures at the start of 2009."

He added: "Banks will be very reluctant to pull down any more retailers than they absolutely have to.

"No matter how poor a festive season they have, the bank's position will be better in early January because at least some of that stock will have been turned to cash, which will have reduced the amount owed to the banks to what is normally the low point in the annual cycle."

No retailers on the critical list were identified, but Mr Fry said he expected businesses that were not very diversified and those with weak on-line businesses to face the greatest challenge.

Begbies fears come amid evidence that credit insurance issuers are withdrawing cover to some suppliers, suggesting increased fears in the market that some high street operators will go bust.

In the past two weeks fashion chain Miss Sixty and soft furnishings group Rosebys have gone into administration. Discount retailer Ethel Austin and wedding present supplier Wrapit have also succumbed this year.

There were some signs last week that the downturn was tightening its grip on the retail sector.

High street bellwether John Lewis said sales declined by 8.3 per cent year-on-year to £48.7m in the week to last Saturday.

And Marks & Spencer said UK like-for-like sales fell 6.1 per cent in the 13 weeks to 27 September.

The results prompted retail analyst Nick Bubb at Pali International to warn that retailers were facing their worst Christmas for at least 30 years.

http://www.independent.co.uk/news/business/news/glut-of-retailers-could-go-bust-in-new-year-952816.html

More potential bad news for UK unemployment figures.

[Teh Don Ditty]

Thought this would be relevant here...

The Dow Jones is currently down 538.97 at 9786.41.

And it only seems to be falling further. It appears that Bailout won't be enough for some people. Also fueling the decline is the global credit crunch.

[P-Worm]

Crazy. AAPL is currently at 89.17 and falling. If you had asked me 3 months ago, I would have never guessed AAPL would fall below 100 again. :eek:

P-Worm

[Unspeaked]

Crazy. AAPL is currently at 89.17 and falling. If you had asked me 3 months ago, I would have never guessed AAPL would fall below 100 again. :eek:

Unfortunately, if last week's thread about AAPL's downgrade was any indication, a lot of folks agreed with you.

They were buying hand over fist in the 110's, and are now down 20%.

As I said in that thread, I think Apple will hit 50 before this is all said and done.

(What an awful time to have savings in the stock market!)

[takao]

Thought this would be relevant here...

The Dow Jones is currently down 538.97 at 9786.41.

And it only seems to be falling further. It appears that Bailout won't be enough for some people. Also fueling the decline is the global credit crunch.

he it could be worse .. the austrian ATX is currently down between 8-10% for today ... in may/ june the index was around 4500-4800 .. now it's around 2500.. that fall sure did hurt

[Unspeaked]

It's was a veritable United Nations of job cuts this past weekend!!


United Kingdom: iTV (http://www.ft.com/cms/s/0/b75a6704-8f50-11dd-946c-0000779fd18c.html)


Germany: HP (http://canadianpress.google.com/article/ALeqM5i9NGUIOGpqoutG1dTvzn_6lq8HuQ)


United States: eBay (http://www.thestandard.com.hk/breaking_news_detail.asp?id=7334&icid=1&d_str=20081006)


Spain: Volkswagon (http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSL330771220081003)

[Anuba]

London down -7.9%
Paris down -7.5%
Frankfurt down -7.2%
Stockholm down -7.1%

Iceland on the brink of financial meltdown after the Icelandic currency lost 25% of its value.

And in other news, McCain says the financial crisis is over, let's move on to more pressing matters like what books Obama read when he was 6 years old.

[skunk]

Just to cheer everyone up:
October 6

A Futile Bailout as Darkness Falls on America

By PAUL CRAIG ROBERTS

America has become a pretty discouraging place. Americans, for the most part, will never know what happened to them, because they no longer have a free and responsible press. They have Big Brother’s press. For example, on September 28, 2008, a New York Times editorial blamed the current financial crisis on “antiregulation disciples of the Reagan Revolution.”

What utter nonsense. Every example of deregulation that the New York Times editorial provides is located in the Clinton Administration and the George W. Bush administration. I was a member of the Reagan administration. We most certainly did not deregulate the financial system.

The repeal of the Glass-Steagall Act, which separated commercial from investment banking, was the achievement of the Democratic Clinton Administration. It happened in 1999, over a decade after Reagan left office.

It was in 2000 that derivatives and credit default swaps were excluded from regulation.

The greatest mistake was made in 2004, the year that Reagan died. That year the current Secretary of the Treasury, Henry M. Paulson Jr, was head of the investment bank Goldman Sachs. In the spring of 2004, the investment banks, led by Paulson, met with the Securities and Exchange Commission. At this meeting with the New Deal regulatory agency tasked with regulating the US financial system, Paulson convinced the SEC Commissioners to exempt the investment banks from maintaining reserves to cover losses on investments. The exemption granted by the SEC allowed the investment banks to leverage financial instruments beyond any bounds of prudence.

In place of time-proven standards of prudence, computer models engineered by hot shots determined acceptable risk. As one result Bear Stearns, for example, pushed its leverage ratio to 33 to 1. For every one dollar in equity, the investment bank had $33 of debt!

It was computer models that led to the failure of Long-Term Capital Management in 1998, the first systemic threat to the financial system. Why the SEC went along with Paulson and set aside capital requirements after the scare of Long-Term Capital Management is inexplicable.

The blame is headed toward SEC chairman Christopher Cox. This is more of Big Brother’s disinformation. Cox, like so many others, was a victim of a free market ideology, itself a reaction to over-regulation, that was boosted by academic economic opinion, rewarded with Nobel prizes, that the market “always knows best.”

The 20th century proves that the market is likely to know better than a central planning bureau. It was Soviet Communism that collapsed, not American capitalism. However, the market has to be protected from greed. It was greed, not the market, that was unleashed by deregulation during the Clinton and George W. Bush regimes.

I remember when the deregulation of the financial sector began. One of the first inroads was the legislation, written by bankers, to permit national branch banking. George Champion, former chairman of Chase Manhattan Bank, testified against it. In columns I argued that national branch banking would focus banks away from local business needs.

The deregulation of the financial sector was achieved by the Democratic Clinton Administration and by the current Secretary of the Treasury, Henry Paulson, with the acquiescence of the Securities and Exchange Commission.

The Paulson bailout saves his firm, Goldman Sachs. The Paulson bailout transfers the troubled financial instruments that the financial sector created from the books of the financial sector to the books of the taxpayers at the US Treasury.

This is all the bailout does. It rescues the guilty.

The Paulson bailout does not address the problem, which is the defaulting home mortgages.

The defaults will continue, because the economy is sinking into recession. Homeowners are losing their jobs, and homeowners are being hit with rising mortgage payments resulting from adjustable rate mortgages and escalator interest rate clauses in their mortgages that make homeowners unable to service their debt.

Shifting the troubled assets from the financial sectors’ books to the taxpayers’ books absolves the people who caused the problem from responsibility. As the economy declines and mortgage default rates rise, the US Treasury and the American taxpayers could end up with a $700 billion loss.

Initially, the House, but not the Senate, resisted the bailout of the financial institutions,whose executives had received millions of dollars in bonuses for wrecking the US financial system. However, the people’s representatives could not withstand the specter of martial law and Great Depression with which Paulson and the Bush administration threatened them. The people’s representatives succumbed as they did during the New Deal.

The impotence of Congress traces to the Great Depression. As Theodore Lowi in his classic book, The End of Liberalism, makes clear, the New Deal stripped Congress of its law-making power and gave it to the executive agencies. Prior to the New Deal, Congress wrote the laws. After the New Deal a bill is merely an authorization for executive agencies to create the law through regulations. The Paulson bailout has further diminished the legislative branch’s power.

Since Paulson’s bailout of his firm and his financial friends does nothing to lessen the default rate on mortgages, how will the bailout play out?

If the $700 billion bailout is based on an estimate of the current amount of bad mortgages, as the recession deepens and Americans lose their jobs, the default rate will rise. The $700 billion might not suffice. The Treasury will have to go hat in hand to its foreign creditors for more loans.

As the US Treasury has not got $7, much less $700 billion, it must borrow the bailout money from foreign creditors, already overloaded with US paper. At what point do America’s foreign bankers decide that the additions to US debt exceed what can be repaid?

This question was ignored by the bailout. There were no hearings. No one consulted China, America’s principal banker, or the Japanese, or the OPEC sovereign wealth funds, or Europe.

Does the world have a blank check for America’s mistakes?

This is the same world that is faced with American demands that countries support with money and lives America’s quest for world hegemony. Europeans are dying in Afghanistan for American hegemony. Do Europeans want their banks, which hold US dollars as their reserves, to fail so that Paulson can bail out his company and his friends?

The US dollar is the world’s reserve currency. It comprises the reserves of foreign central banks. Bush’s wars and economic policies are destroying the basis of the US dollar as reserve currency. The day the dollar loses its reserve currency role, the US government cannot pay its bills in its own currency. The result will be a dramatic reduction in US living standards.

Currently Treasuries are boosted by the habitual “flight to quality,” but as Treasury debt deepens, will investors still see quality? At what point do America’s foreign creditors cease to lend? That is the point at which American power ends. It might be close at hand.

The Paulson bailout is predicated on cleaning up financial institutions’ balance sheets and restoring the flow of credit. The assumption is that once lending resumes, the economy will pick up.

This assumption is problematic. The expansion of consumer debt, which kept the economy going in the 21st century, has reached its limit. There are no more credit cards to max out, and no more home equity to refinance and spend. The Paulson bailout might restore trust among financial institutions and enable them to lend to one another, but it doesn’t provide a jolt to consumer demand.

Moreover, there may be more shoes to drop. Credit card debt could be the next to threaten balance sheets of financial institutions. Apparently, credit card debt has been securitized and sold as well, and not all of the debt is good. In addition, the leasing programs of the car manufacturers have turned sour. As a result of high gasoline prices and absence of growth in take-home pay, the residual values of big trucks and SUVs are less than the leasing programs estimated them to be, thus creating more financial problems. Car manufacturers are canceling their leasing programs, and this will further cut into sales.

According to statistician John Williams [ http://www.shadowstats.com/section/commentaries ] who measures inflation, unemployment, and GDP according to the methodology used prior to the Clinton regime’s corruption of these measures, the US unemployment rate is currently at 14.7 per cent and the inflation rate is 13.2 per cent. Consequently, real US GDP growth in the 21st century has been negative.

This is not a picture of an economy that a bailout of financial institution balance sheets will revive. As the Paulson bailout does not address the mortgage problem per se, defaults and foreclosures are likely to rise, thus undermining the Treasury’s estimate that 90 per cent of the mortgages backing the troubled instruments are good.

Moreover, one consequence of the ongoing financial crisis is financial concentration. It is not inconceivable that the US will end up with four giant banks: J.P. Morgan Chase, Citicorp, Bank of America, and Wachovia Wells Fargo. If defaulting credit card debt then assaults these banks’ balance sheets, who is there to take them over? Would the Treasury be able to borrow the money for another Paulson bailout?

During the Great Depression of the 1930s, the Home Owners’ Loan Corporation refinanced one million home mortgages in order to prevent foreclosures. The refinancing apparently succeeded, and HOLC returned a profit. The problem then, as now, was not “deadbeats” who wouldn’t pay their mortgages, and the HOLC refinancing did not discourage others from paying their mortgages. Market purists who claim the only solution is for housing prices to fall to prior levels overlook that rising inventories can push prices below prior levels, thus causing more distress. They also overlook the role of interest rates. If a worsening credit crisis dries up mortgage lending and pushes mortgage interest rates higher, the rise in interest rates could offset the fall in home prices, and mortgages would remain unaffordable even in a falling housing market.

Some commentators are blaming the current mortgage problem on the pressure that the US government put on banks to lend to unqualified borrowers. However, whatever breaches of prudence there may have been only affected the earnings of individual institutions. They did not threaten the financial system. The current crisis required more than bad loans. It required securitization and its leverage. It required Fed chairman Alan Greenspan’s inappropriate low interest rates, which created a real estate boom. Rapidly rising real estate prices quickly created home equity to justify 100 percent mortgages. Wall Street analysts pushed financial companies to improve their bottom lines, which they did by extreme leveraging.

An alternative to refinancing troubled mortgages would be to attempt to separate the bad mortgages from the good ones and revalue the mortgage-backed securities accordingly. If there are no further defaults, this approach would not require massive write-offs that threaten the solvency of financial institutions. However, if defaults continue, write-downs would be an ongoing enterprise.

Clearly, all Secretary Paulson thought about was getting troubled assets off the books of financial institutions.

The same reckless leadership that gave us expensive wars based on false premises has now concocted an expensive bailout that does not address the problem, which will fester and become worse.

http://www.counterpunch.org/

We may well be doomed.

[MacNut]

The markets are going to need to tank almost to the bottom without any stimulus packages to inflate the numbers. Bailouts are not going to solve anything just delay the inevitable.

[Unspeaked]

The markets are going to need to tank almost to the bottom without any stimulus packages to inflate the numbers. Bailouts are not going to solve anything just delay the inevitable.

I totally agree.

I'm with Ron Paul on this one: we need to get to the point where we're standing in line for bread and soup, and maybe then we can have a meaningful resurgence in the economy.

Otherwise, it all feels like grasping at straws and delaying the inevitable.

[skunk]

The inevitable may well not even be delayed. Will our economies survive the week?

[Unspeaked]

The inevitable may well not even be delayed. Will our economies survive the week?

Today is pretty frightening, because for all practical purposes, the bailout plan was already "priced in" to the market over the past two weeks.

There was really no reason the general market should have tanked like it has. It seems to be more due to what was already happening in Asia and Europe than any single domestic issue, but it's all a giant circle of despair at this point.

This also gets me thinking to the upcoming election and how regardless of who wins, in terms of the economy, they'll pretty much inherit a sinking ship. Maybe even a sunk ship. Which means that whoever's in office will have to deal with a lot of finger pointing and "I told you so's" from the other party over the course of their four years.

What amazes me most, though, is the general apathy from the average American. I don't know what it's like in other countries, but it's like we're living in two worlds here: on the one side are the financial markets which are totally in shambles. On the other is John and Jane Doe who - while not completely oblivious to what's going on - are still watching their sitcoms, shopping the sales at Walmart and Target and picking up Chinese takeout.

I'm wondering how long before everyday life starts feeling this significantly (instead of routine things like gas prices, inflation, a friend of a friend losing a job, etc)?

[Ugg]

The inevitable may well not even be delayed. Will our economies survive the week?

That my good man is the 64 trillion dollar question...

[skunk]

I'm wondering how long before everyday life starts feeling this significantly?Since most businesses are run on borrowed money, there is a good chance that a significant number of employees are going to be waiting for their wages before very long.

[Rodimus Prime]

The inevitable may well not even be delayed. Will our economies survive the week?

wow some one believes to much into the media. I was reading an artical on CNN money today stating 60% of the public believes it is likely that we will hit the great depression again.

While most economist believe worse case the US will get to may 12% unemployment and 1 year of negative growth and even then it will be less than 5- 6%.

To me this screams how bad the media is really playing out to be... It is not as bad as the media is making it.

[Anuba]

To me this screams how bad the media is really playing out to be... It is not as bad as the media is making it.
And therein lies the problem. The entire economy is built on expectations. Nothing sells newspapers like shock value, and the worse they make the situation appear, the more newspapers will they sell. They're the ones who turned this thing into a self-fulfilling prophecy. Headlines like "ECONOMIC 9/11" makes everyone crap their pants, they panic, and only then do they have an actual reason for soiling their underwear.

[.Andy]

wow some one believes to much into the media. I was reading an artical on CNN money today stating 60% of the public believes it is likely that we will hit the great depression again.
haha did you just quote figures from the media as evidence that people who get their information from the media are misinformed :D?

[Rodimus Prime]

haha did you just quote figures from the media as evidence that people who get their information from the media are misinformed :D?

yep. Shows you how stupid the public is. They believe what ever the media tells them. The media is crap these days and stop caring about the truth long ago. They only show doom and gloom because that is what sells. You find the little piece of information they do release that complete destroy the entire thing. Like what I pointed out later. 2 -3 paragraphs on how the public thinks it is bad and then that 1 small paragraph on what the experts predict worse case will be.

[Anuba]

I bet that the situation will get progressively worse until the election, Obama wins, and the markets go up sharply.

Enter the mad tin foil hatters with the latest conspiracy theory: It was the "liberal media elite" that created a "fear bubble" by exaggerating the financial crisis in order to get Obama elected.

[P-Worm]

I bet that the situation will get progressively worse until the election, Obama wins, and the markets go up sharply.

Enter the mad tin foil hatters with the latest conspiracy theory: It was the "liberal media elite" that created a "fear bubble" by exaggerating the financial crisis in order to get Obama elected.

As much as I support Obama and as much as I would like the crisis to go away, I can't believe that Obama winning will fix this in the slightest.

P-Worm

[Anuba]

As much as I support Obama and as much as I would like the crisis to go away, I can't believe that Obama winning will fix this in the slightest.

P-Worm
It won't fix it entirely, not by a long shot, but it will have a tremendous impact on confidence and that's a key factor in the economy. Confidence is expectations, expectations is money. The stock markets are almost as sensitive to the butterfly effect as the weather is, and an Obama victory would be a welcome breath of fresh air. If he wins, not only is it the dawn of a new era in US politics, but better yet, it marks the definitive end of the Bush era. The rest of the world will be ecstatic, moreso than the U.S. Markets will go up in Europe and when trading starts in NY a few hours later, the positive news from Europe will spark tentative euphoria on Wall Street, which will spark an upswing in Asia, and so forth.

If McCain wins, the international markets will crap their pants, and Wall Street will wake up to bad news from around the world and act accordingly (sell, sell, sell!).

[Anuba]

Wow, Iceland (whose currency lost 25% of its value overnight) just negotiated a $5.4 billion loan from Russia.
Iceland has a population of 320,000, so this would be comparable to the US borrowing $5 trillion.

[Peterkro]

Wow, Iceland (whose currency lost 25% of its value overnight) just negotiated a $5.4 billion loan from Russia.
Iceland has a population of 320,000, so this would be comparable to the US borrowing $5 trillion.

An ideal North Atlantic base don't ya know.

[.Andy]

Wow, Iceland (whose currency lost 25% of its value overnight) just negotiated a $5.4 billion loan from Russia.
Iceland has a population of 320,000, so this would be comparable to the US borrowing $5 trillion.
Poor Iceland. It's such a nice place. If it's not the Danish it's the economy.

[skunk]

An ideal North Atlantic base don't ya know.And a member of NATO. Interesting times.

[.Andy]

An ideal North Atlantic base don't ya know.
In recent times didn't the icelanders finally rid themselves of a US base there?

[Peterkro]

And a member of NATO. Interesting times.

Hmm a slight glitch I never thought of but but not insurmountable.

[kainjow]

Second story I've read of suicide caused by financial problems:
http://www.latimes.com/news/printedition/california/la-me-porterranch7-2008oct07,0,7721919.story

[P-Worm]

Second story I've read of suicide caused by financial problems:
http://www.latimes.com/news/printedition/california/la-me-porterranch7-2008oct07,0,7721919.story

Wow, that is so sad. Suicide will always be something that I just don't understand, but why did he have to take his family with him? :(

P-Worm

[BoyBach]

IMF in 'severe downturn' warning

The economic downturn in many countries is likely to worsen as the financial crisis continues, the International Monetary Fund (IMF) has warned.

The global economy is now showing signs of a marked slowdown in growth, said the IMF in its latest world economic outlook report.

In its study it said coherent and decisive policy measures were now needed to restore financial confidence.
The IMF report comes before this week's IMF-World Bank meeting in the US.

In the report the IMF also warned that the turmoil so far largely confined to the financial sector was likely to spread.

...

It said problems in the money markets were now more likely to be associated with "severe and protracted economic downturns" in the rest of the economy.

http://news.bbc.co.uk/1/hi/business/7656741.stm


Which leads nicely to:

UK economy 'already in recession'

Britain is already in a recession, which is worsening and could see unemployment rise by 350,000 by next year, a business group has warned.

A quarterly survey of 5,000 businesses by the British Chambers of Commerce (BCC) says confidence has collapsed in both manufacturing and service sectors.

The firms call for urgent action from the government and the Bank of England.

The survey came as figures showed UK manufacturing output in August had fallen for a sixth consecutive month.
Figures from the Office for National Statistics (ONS) showed that manufacturing output had shrunk by 0.4% in August, and had dropped 1.9% from the same point last year. The manufacturing sector has not declined for six months in a row since late 1980.

The wider measure of industrial production had fallen by 0.6% in August, the ONS said, taking the annual rate of decline to 2.3%.

...

Technically the UK is not yet in recession - defined as two consecutive quarters of negative economic growth.
But the BCC described its survey results as "exceptionally bad" and said the economy was under "immense pressure" for the second quarter in a row.

http://news.bbc.co.uk/1/hi/business/7656741.stm

[Unspeaked]

Dow 9,447.11 -508.39 -5.11%

[iShater]

Dow 9,447.11 -508.39 -5.11%

sux.

I actually bought some stuff last week after the DOW plummeted ... I guess it can easily go lower! :eek:

[Unspeaked]

sux.

I actually bought some stuff last week after the DOW plummeted ... I guess it can easily go lower! :eek:

Yeah - poor Apple's under 90!

[Anuba]

Yeah - poor Apple's under 90!
Combined with the fact that a lot of people were a little underwhelmed with the new iPods, and the fact that a lot of people won't be able to afford expensive Christmas gifts this year (not just in America, but all over the world), Apple's "big year" 2008 isn't going to end quite the way Steve had hoped for.

[solvs]

If you aren't worried now, you should be:

Global Fears of a Recession Grow Stronger (http://www.nytimes.com/2008/10/07/business/worldbusiness/07global.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223353339-cCiTZnDJkeQZwkutX5sr7Q)
Global Stocks Sink as Crisis Spirals; Fed Moves to Thaw Credit Markets (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/06/AR2008100603255.html?hpid=topnews)
A Look At Wall Street's Shadow Market (http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml)

And for anyone who still thinks things aren't as bad as they're saying, look around you. Gas prices are still high, raising the price of everything else. Meanwhile people are still hurting, if they even have a job still wages aren't really going up while the cost of living is. Let alone if they still have a place to live. Wall Street is only the beginning of how bad it is. It will get worse, and who knows when it'll get any better (especially if they keep going the way they have).

[Rodimus Prime]

If you aren't worried now, you should be:

Global Fears of a Recession Grow Stronger (http://www.nytimes.com/2008/10/07/business/worldbusiness/07global.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223353339-cCiTZnDJkeQZwkutX5sr7Q)
Global Stocks Sink as Crisis Spirals; Fed Moves to Thaw Credit Markets (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/06/AR2008100603255.html?hpid=topnews)
A Look At Wall Street's Shadow Market (http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml)

And for anyone who still thinks things aren't as bad as they're saying, look around you. Gas prices are still high, raising the price of everything else. Meanwhile people are still hurting, if they even have a job still wages aren't really going up while the cost of living is. Let alone if they still have a place to live. Wall Street is only the beginning of how bad it is. It will get worse, and who knows when it'll get any better (especially if they keep going the way they have).

Read below..... Pretty much shows it is not as bad as they say and shows you how much the media is over hyping the problem. Is it bad yes. But if you believe the media we are heading into a great depression....

Now it is sad it has taken Europe this long to insure the deposits of its banks.
wow some one believes to much into the media. I was reading an artical on CNN money today stating 60% of the public believes it is likely that we will hit the great depression again.

While most economist believe worse case the US will get to may 12% unemployment and 1 year of negative growth and even then it will be less than 5- 6%.

To me this screams how bad the media is really playing out to be... It is not as bad as the media is making it.

[solvs]

But if you believe the media we are heading into a great depression....

We aren't?

[MacNut]

Gas prices are still highThey are? They have been dropping steadily the past few weeks. I paid $3.18 tonight.

A barrel has dropped to under $90

[Ugg]

They are? They have been dropping steadily the past few weeks. I paid $3.18 tonight.

A barrel has dropped to under $90

What was the price of gas two years ago? I'll bet it was higher than the rate of inflation overall. Although it was probably in line with price increase of prescription drugs since Medicare Part D kicked in...

[NT1440]

I do have to admit, I do get a little annoyed when people complain about gas prices here in the US. I personally think we should stop wondering what we can do lower them and instead put our plans to get off of fossil fuels for cars on overdrive. The quicker we can switch to something more environmental the better.

Also, prices are way higher all over the world. That being said it doesnt bring comfort to those who have to decide between getting all their groceries or paying for fuel to get to their jobs.

[takao]

Now it is sad it has taken Europe this long to insure the deposits of its banks.

huh ... they were insured before ... they only increased the limit ...( which i think is making everything worse .. since it will lead to banks taking even less risks .. and the wanted feel good factor for consumers is pointless/minimal since 95% of all bank consumers have less than 20.000 euro on their saving accounts anyway around here)

[solvs]

They are? They have been dropping steadily the past few weeks. I paid $3.18 tonight.
I'm making about the same amount of money (ok, a little more) than I was a few years ago, but gas is still over twice as much, which is also still raising the prices of everything else.

[takao]

this is going to get ugly .. the japanese nikkei went -9.4 today (after dipping more than 10% close before finish) .. the biggest drop since the 1987 crash (-14.something)

in the last two weeks it dropped 25% ... yikes this means further hurting.. is there actually some good news on the horizon before the US election ?

[solvs]

AIG Congressional Hearing: "They Were Getting Manicures... While American People Were Footing The Bill" (http://www.huffingtonpost.com/2008/10/07/aig-congressional-hearing_n_132614.html)
Lehman sought millions for execs while seeking aid (http://news.yahoo.com/s/ap/20081006/ap_on_go_co/meltdown_lehman)

Well, good thing we bailed them out and saved Wall Street from... oh, right.

[Music_Producer]

US just cut interest rates by 50 bps - so did UK, Canada, EU - crazy move.

[Anuba]

US just cut interest rates by 50 bps - so did UK, Canada, EU - crazy move.
Well, the European central bank (and ergo, most EU countries) cut it from 4.25 to 3.75.

Bank of England and the Fed cut it from 2.00 to 1.50, which is more on the crazy side IMO.

Anyway, it's a coordinated move so it's not that risky.

[BoyBach]

Bank of England and the Fed cut it from 2.00 to 1.50, which is more on the crazy side IMO.


The Bank of England cut rates from 5% to 4.5%.

A Hedge Fund manager on the radio wanted a 3% cut. He's living in Cloud Cuckoo Land!

[Rodimus Prime]

huh ... they were insured before ... they only increased the limit ...( which i think is making everything worse .. since it will lead to banks taking even less risks .. and the wanted feel good factor for consumers is pointless/minimal since 95% of all bank consumers have less than 20.000 euro on their saving accounts anyway around here)

oh then that article makes a little more since but it should not cause the banks to want to hold on to even more since it is the government that backs the deposits. What screwed up is they are not doing it as a whole instead it is everyone from themselves. So what happens is people will pull money out of one countries banks and move them to the other. Making the problem even worse.

Now if the EU has a whole did that move it would of been fine.

[Music_Producer]

The Bank of England cut rates from 5% to 4.5%.

A Hedge Fund manager on the radio wanted a 3% cut. He's living in Cloud Cuckoo Land!

Hedge fund managers who are running into huge losses will always want massive cuts to get their collective a$$e$ out of trouble - people be damned.

I was never a fan of rate cuts - hopefully this doesn't fan inflation in the short term. Yeah, let's all cut rates to 0% so people can start borrowing again without ever having the ability to pay in the first place.

[Anuba]

The Bank of England cut rates from 5% to 4.5%.
Oh... I guess my local newspaper is confused then, or it confused me. They said...

"Den europeiska centralbanken (ECB) sänker med 0,50 procent till 3,75 procent och amerikanska Fed sänker med lika mycket till 1,50 procent liksom Bank of England".

Literal translation:

"The European Central Bank (ECB) cuts by .5 percent to 3.75 percent, and American Fed cuts by the same amount to 1.50 percent like the Bank of England."

A Hedge Fund manager on the radio wanted a 3% cut. He's living in Cloud Cuckoo Land!
3%? Yeah. When the patient is on life support, let's pour acid on him and see if that helps. :rolleyes:

[takao]

oh then that article makes a little more since but it should not cause the banks to want to hold on to even more since it is the government that backs the deposits. What screwed up is they are not doing it as a whole instead it is everyone from themselves. So what happens is people will pull money out of one countries banks and move them to the other. Making the problem even worse.

actually chances of that happening are rather low in the EU
first it's still more convenient if you can withdraw from your account etc. around the corner

2nd in austria (one of the more saving happy countries just like germany) the former limit was 20k ... and 95% (as said before) of all accounts fell under that limit... will those switch to another country/bank with higher safety net ? switching the moeny around working with another bank account is quite a hassle .. don't forget that most people in euro have giro bank accounts for normal monthly bills where everything is done automatically through their bank ... switching all those orders or transfering money bank and forth from a local giro account and an international saving account ? waste of time and money for many people

3. germany just made a "politische absichtserklärung" .. (translated to "letter of intent") and have currently no plans to actually implement a law ... that's what makes all this just "feel good politics" ... it's meant to prevent bank runs not to actually do something
the only thing which actually will be implemented in germany is the new EU required increase to a 50.000 security

4. in many cases the switch to another bank in another country might be pointless anyway since many banks have cooperations/organizations done with each other across borders (that's why the good result from austrian bank austria doesn't matter much if the mother company unicredit in italy is struggeling)

[SactoGuy18]

(getting on soapbox)

I'm actually saddened that nobody seems to offer an "out of the box" solution to our current economic problems. :(

In my humble opinion, the problem demonstrates why our current income tax system is a terrible idea--it warps essentially ALL your economic decisions, sometimes with dire consequences as the sub-prime lending crisis shows. I especially dislike the fact that all the haggling over various aspects of the income tax code by politicians and "fat cat" lobbyists inside the Beltway ends up wasting everyone's time when all that energy could be put to better use.

I personally think it's time to kibosh the current tax code and start all over again with a true consumption-based tax system such as the FairTax system that has been bandied about for the last three years. By eliminating taxes on your payroll, income, savings account interest, dividend payments, and even on your estate when the taxpayer dies, it would offer these advantages:

1) It makes US-based goods production immediately competitive in the world market. Democrats would love this because it would send all those blue-collar manufacturing jobs back to the USA, making cities like Detroit and Cleveland very desirable again.
2) It would actually encourage taxpayers and companies to keep their financial assets in the USA, instead of "hiding" those assets out of the country just to avoid US income taxes. Some people estimate American citizens and financial companies are holding at least US$14 trillion in assets outside the USA; bringing a large fraction of that back to the USA would go a long way towards curing our current economic crisis and we could use some of it to retire part of the national debt! :D
3) A true consumption-based tax would eliminate the totally ridiculous compliance costs per year of our current tax system (some estimate the cost of complying with the tax code at US$265 billion per year plus wasting US$300 billion per year in pre-compliance economic decisions).
4) It "democratizes" our tax system because all that haggling over deductions and credits are gone for good, which means no lobbying group can use the tax code to their own selfish advantages.

#4, in my opinion, is the biggest reason we need to ditch our current tax system. Like I said earlier, all that haggling over the current tax code provisions often causes serious economic consequences, and eliminating this would allow Americans to focus on solving our real problems in the country instead.

I've heard a saying that goes, "Without economic freedom, everything else is an academic exercise." Ditching our current tax code would go a long way towards true economic freedom, in my humble opinion. :)

(getting off soapbox)

[Unspeaked]

US just cut interest rates by 50 bps - so did UK, Canada, EU - crazy move.

Great! Now even our savings accounts can earn jack!

[cantthinkofone]

Gas isn't that bad here in missouri right now. This morning gas was at 2.87 at the gas stations i drove by on the way to work.

It was $4 a month ago. That was rough.

I have noticed the increase in the cost of food. A 24 pack of mountain dew is 6 something at wally world. Used to be $5 even. But i stopped drinking it when i had mono in september.

I think things will continue to get worse. But it will turn around eventually.

[Clive At Five]

I'm more worried about the economy since the bail-out passed. If the bail-out had failed, we would've experienced a cold, hard, fast recession. The giant corrupt banks would've died and healthy new ones would've risen up in their ashes. Now we've delayed the inevitable, blowing up the balloon even bigger. The longer we wait, the larger the crash.

We could've ripped off the band-aid and dealt with this problem NOW. Instead, our self-serving legislators pass a bill to protect their own Wall Street investments. What a scam!

-Clive

[Unspeaked]

Dow 9,258.10 -189.01 -2.00%

Six down days in a row, in which the Dow has lost over 1,500 points...

[MacNut]

Dow 9,258.10 -189.01 -2.00%

Six down days in a row, in which the Dow has lost over 1,500 points...How much of that was over valued to begin with.

[Unspeaked]

How much of that was over valued to begin with.

I actually don't think the Dow was that over-valued before this started.

This isn't the dot com burn of '01. A lot of the selling at this point is due to fear more than any fundamental reason. Sure, some of the financial stocks that dipped their toes in the whole sub prime mortgage fiasco should be hurting, but there's no reason some of the industries that are being hit by this should be getting it this hard other than the self-fulling prophesy of media fear mongering that was mentioned earlier...

[mactastic]

So am I correct in noting that the Dow has now dropped more AFTER the bailout than in the two-week period before?

And didn't we rush this $700,000,000,000 bailout through because we needed to stabilize the markets? If that dollar amount isn't doing what it was supposed to do, can we have it back then?

[MacNut]

November 2, 1998 the market was at 8595.70 Today it closed at 9258.10 It's lowest close was on September 10, 2002 at 7533.95 in that 10 year period.

[iShater]

So am I correct in noting that the Dow has now dropped more AFTER the bailout than in the two-week period before?

And didn't we rush this $700,000,000,000 bailout through because we needed to stabilize the markets? If that dollar amount isn't doing what it was supposed to do, can we have it back then?

Yes and Yes.

I bought some more stuff right after the initial drop when the bail out was voted down, and I still lost quite a lot. Thinking long term here, but boy if I only waited one more week. :p

[obeygiant]

And didn't we rush this $700,000,000,000 bailout through because we needed to stabilize the markets?

No. As I understand the bailout was to inject liquidity into the credit markets, which are practically frozen. The stock market is volatile right now mostly because people are scared.

[Music_Producer]

Great! Now even our savings accounts can earn jack!

Tell me about it - funny how 30 year mortgage rates stay the same - but savings account rates go down with every cut. Banks sure need to make a lot of money!

Btw, the fundamental reason for the stock market collapse has been there since June 2007, it just took this long for it to actually trigger - the stock market is usually a very optimistic bunch (trust me, every time I saw the economy go to hell, and the stock markets jump up on hopes of a rate cut, I always scratched my head)

Now they've finally realized.. that.. 'oops, we are in trouble'. Denial of common sense and reality for a long time eventually leads to fear. In this case, the fear is not irrational.

[MacNut]

The more the fed cuts rates the worse it will get in the long term.

[atszyman]

Tell me about it - funny how 30 year mortgage rates stay the same - but savings account rates go down with every cut. Banks sure need to make a lot of money!

The fixed rate of mortgages can be a really good thing. Unless you have a really crappy loan, you are usually free to refinance at any point to lock in a lower interest rate and extend or reduce the term of your mortgage. You can keep refinancing at the lower rates and then once mortgage rates go up you are nicely locked in at your low rate. Of course if no bank wants to loan money then the lower rate is meaningless if you can't refinance.

We've refinanced twice to get lower rates we're currently a couple years into our 15 year mortgage, and we'd be paid off 3 years earlier had we not refinanced the last time, but the reduction in payment at the time was nice since we weren't sure if my wife was going back to work after the birth of our second child. Now we're on the same debate with the upcoming third...:D

[iShater]

The more the fed cuts rates the worse it will get in the long term.

Cause they have done that in the past and look where we are today.

[3rdpath]

How much of that was over valued to begin with.


besides the financially related companies that had lots of hidden losses in their books, stocks weren't overvalued any more or less than usual...what you're seeing is a market correction based on future values of companies. our economy is toast for the next several years and the vast majority of companies are going to suffer some serious declines in profit...

i'm prepared for the DOW to drop below 8000( maybe even 7000) and unemployment to hit 12-15%. everyone is going to feel the wrath of this correction and it's going to be a tough few years...though i don't think it will reach depression era proportions. maybe...

[rasmasyean]

The fixed rate of mortgages can be a really good thing. Unless you have a really crappy loan, you are usually free to refinance at any point to lock in a lower interest rate and extend or reduce the term of your mortgage. You can keep refinancing at the lower rates and then once mortgage rates go up you are nicely locked in at your low rate. Of course if no bank wants to loan money then the lower rate is meaningless if you can't refinance.


I'm sure all those foreclosure people were thinking on these lines! :D

[rasmasyean]

besides the financially related companies that had lots of hidden losses in their books, stocks weren't overvalued any more or less than usual...what you're seeing is a market correction based on future values of companies. our economy is toast for the next several years and the vast majority of companies are going to suffer some serious declines in profit...

i'm prepared for the DOW to drop below 8000( maybe even 7000) and unemployment to hit 12-15%. everyone is going to feel the wrath of this correction and it's going to be a tough few years...though i don't think it will reach depression era proportions. maybe...

I think we live in different times than during the Great Depression anyway...besides that fact that we don't have a massive drought. :p One thing being that in this evolving tech world there is more and more "telecommuting" types of jobs and related/enabled work emerging today and this gives many people more access to jobs to suit their skills and situations. One problem with "back then" was that it was harder to connect employers with employees. But now resources are available to find better matches. For example, because of technology, many companies can reduce costs by outsourcing and establishing offices to lower rate areas. At the same time, those people who would never have found those jobs "locally" have these extra opportunities.

Hence there are more and more ways for employers to find "affordable" work, and more and more ways for employees to find "acceptable" work. This all comes at less effort to both parties (translated to cost). It might just cause a shift in job markets here and there and rebalanced the economics of itself but given a little time, I'm sure people will discover (and invent) new ways of "reducing unemployment". :)

[3rdpath]

I think we live in different times than during the Great Depression anyway...SNIPPITY SNIP... I'm sure people will discover (and invent) new ways of "reducing unemployment". :)

i agree with you. modern technologies give me hope that we'll not only weather the storm better than the 30's...but also make some radical work shifts that might have taken much longer to implement without the 'benefit' of having no other choices.

shorter work days, 4 day work weeks, more telecommuting...and modern versions of the WPA, TVA etc that are geared towards lessening our oil dependence.

[Peterkro]

I think we live in different times than during the Great Depression anyway...besides that fact that we don't have a massive drought. :p One thing being that in this evolving tech world there is more and more "telecommuting" types of jobs and related/enabled work emerging today and this gives many people more access to jobs to suit their skills and situations. One problem with "back then" was that it was harder to connect employers with employees. But now resources are available to find better matches. For example, because of technology, many companies can reduce costs by outsourcing and establishing offices to lower rate areas. At the same time, those people who would never have found those jobs "locally" have these extra opportunities.

Hence there are more and more ways for employers to find "affordable" work, and more and more ways for employees to find "acceptable" work. This all comes at less effort to both parties (translated to cost). It might just cause a shift in job markets here and there and rebalanced the economics of itself but given a little time, I'm sure people will discover (and invent) new ways of "reducing unemployment". :)

Dream on.

[hexonxonx]

I am not worried about the economy. I am only worried about the bank that my home is mortgaed through, Wachovia.

If all goes well, I will have a refinanced loan that will have the lowest interest rate ever possible. I'm just not sure what bank will eventually end up purchasing Wachovia.

[atszyman]

I'm sure all those foreclosure people were thinking on these lines! :D

I'm just sayin' a fixed rate long term mortgage can be a good thing when interest rates are low. I'm not saying anything about people who got in over their heads either through their own fault or convinced by an unscrupulous banker.

[rasmasyean]

You know what I don't understand about these jobless claims?

Wasn't there an "emergency extension" of unemployment insurance across the board a few months ago? Wouldn't that up the numbers temporarily compared to traditional values as more long time-without-job ppl can claim? They never mention this though.

[BoyBach]

The IMF is making an emergency fund available to any countries that require help:

An emergency funding scheme for countries plunged into economic and financial distress by the worsening global credit crisis was activated today by the International Monetary Fund.

The activation of the emergency facility, for the first time since it was last used in the 1990s Asian crisis, was ordered by Dominique Strauss-Kahn, the managing director of the IMF and was the latest indication of the mounting fallout from the financial convulsions sweeping the world.

The IMF chief said that the facility could make "hundreds of millions of dollars" available, if needed, to try to contain damage from the crisis. Since the Washington-based lender of last resort for governments had made few loans during the past five years, it had a large stock of financial ammunition that it could deploy to help nations cope with the present upheavals.

The scheme, mainly aimed at emerging market nations and poor, developing countries was created in 1995 as a way for the IMF to more swiftly provide financial aid to countries in distress, rather than go through more usual, bureaucratic and time-consuming procedures to secure international agreement for it to deliver assistance.

In the Asian crisis the emergency mechanism was used as countries from Thailand to Indonesia were battered by falling currencies and stock markets and a flight of capital into save havens in the developed industrial nations.

"Yesterday I activated emergency procedures so the IMF can respond quickly ... to be able to answer problems that may happen in some of the emerging countries," Mr Strauss-Kahn told a news conference in Washington today. "We are ready to answer any demand by countries facing problems," he added.

The move came as Mr Strauss-Kahn sounded a warning that "no country is immune" from the shockwaves of the crisis rippling across the world's markets and economies.

In emerging market economies, the credit crunch already being suffered in the developed West was now being felt and consumers and businesses were now struggling to secure needed loans, he said. While two years ago only a few countries were affected by the crisis, it had now infected nations worldwide, with only parts of Africa, notably West Africa, now untouched.

http://business.timesonline.co.uk/tol/business/economics/article4915465.ece

[Peterkro]

I guess we're about to find out if under Strauss-Kahn the IMF,hamstrung though it is, will approach lending differently than the straight out attack on the working classes practiced by the Chicago school mob.If the US government allows it to sell gold to raise funds is pretty central to how effective it can be and won't be decided till at least 2009.By the way Strauss-Kahn claims to be a Socialist but is not one of any type I'm familiar with,unless of course you think those State Capitalists in charge of the Eastern European Authoritarian countries were Socialists.

[Unspeaked]

Dow 8,914.03 -344.07 -3.72%

Dow's under 9,000 - and unless there's a small miracle, we're looking at seven losing days in a row (and a 2,000 point decline in that span)...

[iShater]

Dow 8,914.03 -344.07 -3.72%

Dow's under 9,000 - and unless there's a small miracle, we're looking at seven losing days in a row (and a 2,000 point decline in that span)...

I hate roller coasters ... especially when the are just going down ... :eek:

[BoyBach]

Iceland is all but officially bankrupt

People go bankrupt all the time. Companies do, too. But countries?

Iceland was on the verge of doing exactly that on Thursday as the government shut down the stock market and seized control of its last major independent bank. That brought trading in the country's currency to a halt, with foreign banks no longer willing to take Icelandic krona, even at fire-sale rates.

As the meltdown in the Icelandic financial system quickened, with the government seemingly powerless to do anything about it, analysts said there was probably only one realistic option left: for Iceland to be bailed out by the International Monetary Fund.

"Iceland is bankrupt," said Arsaell Valfells, a professor at the University of Iceland. "The Icelandic krona is history. The IMF has to come and rescue us."

Prime Minister Geir Haarde, who had warned this week of the threat of "national bankruptcy," said Thursday that Iceland's finance minister, Arni Mathiesen, would be in Washington this weekend for the autumn IMF/World Bank meetings. He declined to say whether Iceland was seeking a rescue package from the international lender.

"We will certainly keep this option open, but we have not yet made a decision," Haarde said Thursday at a news conference.

The IMF managing director, Dominique Strauss-Kahn, said in Washington that he had activated an emergency funding system, last used during the Asian financial crisis of the late 1990's, to help countries in crisis. Though not mentioning Iceland by name, he said: "We are ready to answer any demand by countries facing problems."

Iceland has approached Russia about a loan of €4 billion, or $5.5 billion, to help see it through the crisis, but Haarde said no agreement had been reached.

An IMF intervention in Iceland, which would necessarily involve accepting a series of harsh measures to restore fiscal and monetary stability, would underline the extraordinary reversal in the country's fortunes after a decade-long, debt-fueled binge by the country's banks, businesses and some private citizens. The banks, while avoiding the toxic mortgage securities that have humbled Wall Street, expanded aggressively at home and abroad. When credit tightened and the krona fell this year, they were unable to finance their debts.

In these circumstances, going to the IMF "is probably the only thing Iceland can do," said Richard Portes, an economist at the London Business School.

Events have moved so fast that the full import of national bankruptcy has yet to sink in here. It's happened before, of course, but in places like Argentina and Thailand, not a country that likes to think of itself as close to Europe.

...

On Thursday, the government seized Kaupthing Bank, the country's largest lender, effectively completing the nationalization of the banking system after the previous takeover of Glitnir and the No.2 lender, Landsbanki.

Meanwhile trading in the currency froze up Thursday, according to Bloomberg News, citing dealers at Nordea, a big Scandinavian bank. The last trade was made at 340 krona to the euro, Nordea said - less than half what the Icelandic currency was worth at the start of the week.

Haarde said the Central Bank of Iceland had set up a special system to handle currency transactions, so that Icelandic companies could conduct international business.

"We are gradually moving through this crisis," he said, sounding surprisingly unworried for the leader of a country facing economic and financial disaster. "There are still a few issues to resolve but that is the nature of these kinds of things."

Problems with the krona have been at the core of the government's inability to control the crisis. Without a viable currency, there is no way to support the banks, which have done the bulk of their business in foreign markets. There is also no way to bring down inflation or interest rates, both already in double digits before the crisis intensified in recent days.

Valfells and Portes said that once the situation is stabilized, the best way forward would be for Iceland is to give up on the krona and adopt the euro instead.

How could Iceland, which is not even a member of the European Union, adopt the currency?

One option would be to simply "peg" its currency to the euro. In that case, Iceland would also hand over control of monetary policy, including the setting of interest rates, to the European Central Bank in Frankfurt.

But fixing the currency to the euro could be difficult for Iceland, given that its central bank probably lacks the necessary reserve to defend such a level if the currency were to come under renewed attack, Portes said.

That leaves another option: applying to join the European Union and adding Iceland to the euro zone. Because Iceland is already part of the European Economic Area, a looser trading bloc, it already abides by many EU rules.

Still, such a move would be politically challenging. The conservative Independence Party, headed by the prime minister, has been dead set against it. Another member of that party, which is governing in a coalition with the pro-EU Social Democrats, is the central bank chairman, David Oddsson, a former prime minister.

They are supported by the powerful fishing industry, which mostly wants to stay out of the euro and to keep Europe at a comfortable distance. Fishing has been the focus of many clashes between Iceland and its European neighbors - most heatedly with Britain, in what became known as the Cod Wars of the 1950s to the 70s. The two countries clashed repeatedly over Iceland's move to extend exclusive fishing rights into waters that had long been trawled by British vessels, too.

Tension with Britain has flared anew during the current crisis. It centers on hundreds of thousands of accounts that Britons hold in online branches of the Icelandic banks; now they fear they will lose their money, and the British government wants Iceland to pay up. The government of Prime Minister Gordon Brown of Britain has used powers granted under anti-terrorism laws to freeze British assets of Landsbanki until the standoff is resolved.

"We do not consider this to be a particularly friendly act," Haarde said, adding that he had tried to defuse the situation in a telephone call with Brown on Thursday.

...

Some ordinary Icelanders face a similar problem to the one that brought down the banks. In recent months, many mortgages were taken out in foreign currencies - marketed by the banks as a way to benefit from lower interest rates abroad, as rates in Iceland rose into the double digits.

Now, with the Icelandic krona plunging, homeowners suddenly have to pay back far more expensive euro or dollar values of their mortgages. At the same time, house prices are falling.

...

http://www.iht.com/articles/2008/10/09/business/icebank.php?page=2

[iGary]

Heavy down.

Most experts believe 7,000 - 7,800 will be the bottom.

[Unspeaked]

Dow 8,914.03 -344.07 -3.72%.

And look at that - it only took 30 minutes for the day's loss to double at nearly -700.

Goooo economy!

[Unspeaked]

Most experts believe 7,000 - 7,800 will be the bottom.

Great - so now that at least narrows it down to the bottom being anything but 7,000 to 7,800...

[iGary]

Great - so now that at least narrows it down to the bottom being anything but 7,000 to 7,800...

What were you hoping to accomplish by posting that?

[iShater]

What were you hoping to accomplish by posting that?

He means that they keep defining the bottom and we keep falling below it ...

[Unspeaked]

He means that they keep defining the bottom and we keep falling below it ...

Exactly.

The bottom was being called before the bailout talk was even introduced. I think at this point, nobody - including any of the experts - has a real grasp on what's going on.

And from the world of auto makers:

J.D. Power: Global auto market may 'collapse' in '09

DETROIT, Oct 9 (Reuters) - The global auto market may experience an "outright collapse" in 2009 amid growing concerns around availability of credit and general economic stress, an influential industry tracking firm said on Thursday.

J.D. Power and Associates said in a closely-watched report that credit market restructuring, fewer leasing options and declining vehicle equity are all putting added pressure on the U.S. auto market in 2009.

The agency also said auto sales in Europe, China and India are expected to slow "dramatically" next year.

The outlook represents the most dire warning yet on the auto industry in the wake of the financial turmoil that has rocked consumer confidence and virtually shut the door for many consumers to finance vehicle purchases.

"While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Jeff Schuster, executive director of automotive forecasting for J.D. Power.

"While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil," Schuster said...

LINK (http://www.reuters.com/article/marketsNews/idUSN0930515220081009)

[iShater]

Welcome to the global economy. :eek:

I'm still waiting to see what will happen to Iceland.

[Unspeaked]

I'm still waiting to see what will happen to Iceland.

It's strange, but if you poke around online and go to some Icelandic discussion boards, it seems the locals there don't really feel much has changed.

You'd think the way the media is spinning this, they'd be in turmoil. But instead, it's life as usual.

(Of course, I'm sure any of them that had plans to go abroad have probably cancelled, as their currency can only be exchanged for string and twigs in most civilized countries, but that's just one teeny, tiny problem.)

[3rdpath]

wow! down 40% from last year...

i've been bearish for quite a while but this drop is more of a free-fall than i imagined it would be.

suddenly my worst case scenario of 7000 looks optimistic...

[iShater]

wow! down 40% from last year...

i've been bearish for quite a while but this drop is more of a free-fall than i imagined it would be.

suddenly my worst case scenario of 7000 looks optimistic...

When do I buy thought? :p

Oh hold on, I already did last week ... and down 20% since then ;)

[Unspeaked]

From CBS Marketwatch:

Ten Things to Love About the Credit Crunch
by Tom Bemis

1. The U.S. election is no longer leading the news.

2. Whatever your brother-in-law's brilliant financial move was last year probably looks pretty boneheaded now.

3. Wall Street bigwigs are exposed as blubbering hypocrites in congressional hearings.

4. You probably didn't do anything as embarrassing as the head of Iceland's central bank, who issued a statement announcing a 4 billion euro loan from Russia when Moscow hadn't actually agreed to it.

5. The world will no longer have to spend trillions of dollars to cut carbon emissions since the crisis will do more to reduce greenhouse gases than all the government initiatives, wind farms and cap-and-trade schemes combined.

6. Capitol Hill bigwigs are exposed as blubbering hypocrites in congressional press conferences.

7. You probably didn't do anything as embarrassing as Germany's KfW Bankengrouppe, which transferred 300 million euros to Lehman Bros. just before the investment bank filed for bankruptcy.

8. Instead of foreign aid programs or the United Nations, your tax dollars will now go to fund assistance where it's really needed -- Wall Street.

9. Gasoline's back down to merely extortionate prices from obscenely extortionate prices.

10. It's as good a distraction as any from the Chicago Cubs' abject playoff failure.

[Anuba]

It's strange, but if you poke around online and go to some Icelandic discussion boards, it seems the locals there don't really feel much has changed.

You'd think the way the media is spinning this, they'd be in turmoil. But instead, it's life as usual.
Well, the locals shouldn't be panicking yet, they're still munching away on the groceries they stockpiled over the weekend. It'll be weeks before the shockwave really hits.

Iceland is a weird place, all they have is fish and geysers. They've been using the banking industry as some kind of giant iron lung to keep them on the island. If the banks go, so does the country...

[Unspeaked]

Well, the locals shouldn't be panicking yet, they're still munching away on the groceries they stockpiled over the weekend. It'll be weeks before the shockwave really hits.

Iceland is a weird place, all they have is fish and geysers. They've been using the banking industry as some kind of giant iron lung to keep them on the island. If the banks go, so does the country...

I have to admit, I had no idea how small the population was (only about 330,000 people) until last week when I started reading up on it due to the economic problems.

I was really amazed by that...

[Galley]

With the Dow Jones dropping 20% in 8 days, I'm finally beginning to worry. :(

[iShater]

I have to admit, I had no idea how small the population was (only about 330,000 people) until last week when I started reading up on it due to the economic problems.

I was really amazed by that...

I think their financial holdings in Europe is the big concern ...

[Anuba]

I have to admit, I had no idea how small the population was (only about 330,000 people) until last week when I started reading up on it due to the economic problems.

I was really amazed by that...
Yeah, Iceland is obscure even to us Scandinavians (we can see Iceland from our house!). They have this rule to never import words from other languages, instead they have some sort of council of elders who look at new stuff that comes along and gives it an Icelandic name. When the computer became commonplace, they gave it an Icelandic name that roughly translates to "magic box".

I can understand Swedish, Danish and Norwegian but Icelandic is pretty much impossible to understand. I think it's very close to how vikings spoke 1,000 years ago.

With the Dow Jones dropping 20% in 8 days, I'm finally beginning to worry. :(
I'm a little disappointed with Wall Street today. European and Asian markets were up slightly this morning, but Wall Street refused to come along, so by the end of the day all markets were down again.
I think their financial holdings in Europe is the big concern ...
They're in a big fight with the UK right now... Iceland vs. Gordon Brown, gloves are off. Apparently a lot of Britons have money in some Icelandic bank called IceSave, and Brown wants Iceland to guarantee that their money is safe, but Iceland can't...

[iJohnHenry]

Well, they do have geo-thermal resources, but other than that, what do they produce??

Please, no Bjork. :p

[iShater]

Well, they do have geo-thermal resources, but other than that, what do they produce??

Please, no Bjork. :p

They got Ice too no? :p

I have to admit that I heard about this from my mom, and I was like "who?" :o

[atszyman]

Well, they do have geo-thermal resources, but other than that, what do they produce??

Please, no Bjork. :p

Hot women?

When my cousin and I were there on a layover on a trip to Sweden about 13 years ago, we tooled around a shopping mall one afternoon and spent about 95% of the time completely slack-jawed at the number of really good looking women we saw.

Of course we were 18 at the time so that probably had more than a little to do with it.

[iJohnHenry]

Well then Son, get your ass to Quebec.

For all the trouble they cause the rest of Canada, they have the most amazing women. :cool:

[rdowns]

Y

I'm a little disappointed with Wall Street today. European and Asian markets were up slightly this morning, but Wall Street refused to come along, so by the end of the day all markets were down again.


What did you expect? The ban on certain short selling expired yesterday. The sharks were in a feeding frenzy today. And with the news that AIG needed another $32B to stay afloat (this is after they got $85B only 3 weeks ago), it certainly seems like we're nowhere near bottom yet.

[atszyman]

Well then Son, get your ass to Quebec.

For all the trouble they cause the rest of Canada, they have the most amazing women. :cool:

I've found me an amazing woman, who actually manages to put up with me, so I don't need to be getting to Quebec anytime soon.

Although if McCain wins I may want to be getting there (if I can convince the wife).:D

[Anuba]

Well, they do have geo-thermal resources, but other than that, what do they produce??
Fishing, whaling and... what's the third thing again...

Please, no Bjork. :p
Ah yes, that's it. Fishing, whaling and wailing. That's all they do.

No, but seriously:

Last year, Iceland was ranked as the most developed country in the world by the UN's Human Development Index. It's the 4th most productive country per capita. Unemployment is below 1%.

They export fish, aluminium and ferrosilicon. But apparently they make most of their money on software, biotech and banking.

The only native land mammal is the arctic fox. They only have 1,300 species of insects, and no reptiles. 3/4 of the land area has no vegetation, it's just red sharp rocks with smoldering geysers here and there. Basically, it's hell. Genetic analysis shows that the majority of the men are of Nordic origin, and the women of Celtic origin.

There's something very disturbing about it all. I say nuke'em, nuke'em now!

[takao]

gonna get interesting if any swiss banks gonna be in trouble .. because when that happens it's gonna get real ugly

edit: you mean nuke them before the russians own them ?

edit: i'm all for austria to buy it ... then we finally can have a navy again

[iShater]

gonna get interesting if any swiss banks gonna be in trouble .. because when that happens it's gonna get real ugly

edit: you mean nuke them before the russians own them ?

edit: i'm all for austria to buy it ... then we finally can have a navy again

Are you saying that all my secret accounts are in jeopardy?! :eek:

I wonder if all crooks that have secret accounts would start booking trips to Zurich for "vacation" soon. :p

[iJohnHenry]

edit: i'm all for austria to buy it ... then we finally can have a navy again

HEY, you're land-locked.

Get over it. :p

[skunk]

Only since the Italians stole Trieste.

[Agathon]

Exactly.

The bottom was being called before the bailout talk was even introduced. I think at this point, nobody - including any of the experts - has a real grasp on what's going on.

Pssst... they never did!

We've been living under a faith based economic system. This crash is what happens when your economic system is based on people trying to get something for nothing.

Right, I'm off to ask the North Koreans if they have anything to eat. ;)

[Unspeaked]

With the Dow Jones dropping 20% in 8 days, I'm finally beginning to worry. :(

Yeah, that makes it kind of hard to ignore...


Last year, Iceland was ranked as the most developed country in the world by the UN's Human Development Index. It's the 4th most productive country per capita. Unemployment is below 1%.

And look where that got them!

;)


Pssst... they never did!

Well, that goes without saying...

[Anuba]

Yay... Asian markets tanked, European markets will do the same when they open in the next couple of hours, and the Dow will take it from there...

What a mess.

Apparently the UK has huge amounts in these Icelandic banks, not just private savers the London Police and the London Underground have £30M and $50M respectively in Icelandic banks...

[Unspeaked]

Yay... Asian markets tanked, European markets will do the same when they open in the next couple of hours, and the Dow will take it from there...

What a mess.

Apparently the UK has huge amounts in these Icelandic banks, not just private savers the London Police and the London Underground have £30M and $50M respectively in Icelandic banks...

Tanked is an understatment!

LINK (http://biz.yahoo.com/ap/081010/world_markets.html)

Asian markets plunge; Nikkei sinks nearly 10 pct.
By Tomoko A. Hosaka, Associated Press Writer

TOKYO (AP) -- A massive sell-off on Wall Street and escalating fears of a global recession sent Asian stocks plunging Friday, with Japan's key index shedding nearly 10 percent to close out its worst week in history.

[Anuba]

Tanked is an understatment!

LINK (http://biz.yahoo.com/ap/081010/world_markets.html)
Yeah...

London, Paris and Frankfurt were down 10% for a while, they've recovered a teeny bit now. Stockholm was down 8% pretty much immediately after opening, and the imposed some sort of emergency 'fast market' rules...

[Unspeaked]

Any predictions on whether or not the Dow closes the week out over 8,000?

It's been flirting with that level all day. I saw we mirror the past few days and sink in the closing half hour to below 8,000.

There's too much uncertainty for many investors to stay long over the weekend, I think.

[n8236]

I am definitely worried (not so for me because I am young). But much more so for my parents who are approaching their retirement age, quick. Their entire savings fund (401k, etc) have lost nearly over 30% and it's a real concern with the way prices are rising.

There really isn't much they can do since they're on such huge losses. The financial sector (world-wide) needs to clean up and get their ***** together. The economy is no longer a separate entity for the rich countries, but also many other developing ones and they all need to work together.

[Unspeaked]

It's been flirting with that level all day. I saw we mirror the past few days and sink in the closing half hour to below 8,000.

I couldn't have been more wrong.*

Instead of tanking, the market rallied the last half hour and we closed down just 128 points!

Victory!!

Dow 8,451.19 -128.00 -1.49%


* Ok, maybe I could have been a little more wrong. Like, if the market actually went up for once. I'm forgetting what the color green looks like...

[Anuba]

I couldn't have been more wrong.*

Instead of tanking, the market rallied the last half hour and we closed down just 128 points!

Victory!!

Dow 8,451.19 -128.00 -1.49%


* Ok, maybe I could have been a little more wrong. Like, if the market actually went up for once. I'm forgetting what the color green looks like...
Are they playing some kind of game with other markets? Wall St tanked during the day, dragging everything else down with it, then when the European market closes -- wohoo, bull time!

[Unspeaked]

Are they playing some kind of game with other markets? Wall St tanked during the day, dragging everything else down with it, then when the European market closes -- wohoo, bull time!

The media keeps spinning this as some giant catastrophe (which it is for regular folks with 401k and pensions) but you can't begin to imagine how much money insiders are making off these 500 point swings in the Dow, and 15-20% swings in individual components.

Day traders with even a minimum amount of luck timing their sales are making out like bandits.

[rasmasyean]

I couldn't have been more wrong.*

Instead of tanking, the market rallied the last half hour and we closed down just 128 points!

Victory!!

Dow 8,451.19 -128.00 -1.49%


* Ok, maybe I could have been a little more wrong. Like, if the market actually went up for once. I'm forgetting what the color green looks like...

LOL. I always thought it goes like this...

Victory!!

Dow 184,510.19 +12800.00 +14.90% :p

[Unspeaked]

LOL. I always thought it goes like this...

Victory!!

Dow 184,510.19 +12800.00 +14.90% :p

No, you're thinking 1999...

[Teh Don Ditty]

No, you're thinking 1999...

Party like it's 1999!

[BoyBach]

Apologies for the length of the post, but big events are afoot in the UK:

Gordon Brown called an end to the days of overblown City salaries today as he pumped £37 billion of taxpayer money into the partial nationalisation of three of the country's biggest banks.

Under the emergency refinancing, the three banks participating in the scheme – Royal Bank of Scotland (RBS), HBOS and Lloyds TSB – have agreed to scrap boardroom bonuses for the current year and tie future rewards to performance. Nor will they pay out any dividends until the Government's interest in preference shares has been fully repaid.

"Our action is driven by our values," the Prime Minister said today. "For this Government, and I believe the whole country, the guiding idea is fair reward for hard work, effort and enterprise, not incentives for irresponsibility or excessive risk-taking for which the rest of us have paid."

This morning's operation came just five days after the Chancellor, Alistair Darling, announced that up to £50 billion of public money would be spent shoring up stricken banks, with £450 billion more spent on liquidity funding and loan guarantees.

European leaders agreed to adopt a similar approach at a weekend summit and Chancellor Angela Merkel is due later today to confirm a €470 billion package to save German banks from collapse.

Mr Brown said today: "This is perhaps the first government to do what I believe a large number of governments are going to do over the next few days."

He insisted that the injection of government cash into the banks did not amount to nationalisation of the kind seen in other industries in the post-War period.

"This is not standard public ownership," he said. "This is the Government buying shares, allowing the banks to be run commercially, making sure that we can encourage other investors into the banking system, then – because our holdings are temporary – being ready to sell them when the banks are strengthened.

"I think you will find over the rest of Europe over the next few days exactly the same thing will happen."

But although Mr Brown dismissed the comparison with postwar nationalisations, he is clearly conscious of history. He called today for a "new Bretton Woods" to forge "a new financial architecture for the years ahead" - referring to the 1944 conference which created the multilateral trading and banking systems that have helped maintain economic stability for the past six decades.

The Treasury is injecting £20 billion into RBS, giving it a 63-per cent stake in the bank, and pumping a combined £17 billion into Lloyds TSB and HBOS, which have agreed to revise their merger terms.

HBOS is raising £11.5 billion from the Government, and Lloyds TSB an additional £5.5 billion at 173.3p. As a result of the recapitalisation, the Treasury is likely to hold a 43.5 per cent stake in the enlarged bank on the completion of the merger.

Barclays is raising an additional £6.5 billion to bolster its reserves and scrapping its dividend.

The bank said it hopes to raise the money through its investors, not via the Government, although the deal is underwritten by the State, so the Treasury could take a stake if existing investors do not cough up.

In total, including money saved from not paying its dividend and other cost cutting measures, Barclays hopes to pull together £10 billion to boost its funding.

Shares in London rebounded sharply this morning, with the FTSE 100 index of leading companies soaring by 230.2 points to 4,162.34, following last week's catastrophic trading.

But shares in RBS plunged 27 per cent to just 55p by 0942 GMT and HBOS fell 28 per cent to 89p as investors digested the terms of the bailout.

"There is potentially very substantial dilution there," said James Hamilton, banks analyst at Numis Securities. "This is the end of chapter 2 of the horror story, but unfortunately chapter 3 – the recession – is on the way."

Today’s bailout has claimed the scalps of some of the most senior chiefs in the banking sector.

RBS’s chief executive, Sir Fred Goodwin, and its chairman, Sir Tom McKillop, are set to leave the bank. HBOS’s chief executive, Andy Hornby and its chairman, Dennis Stevenson, are also stepping down.

Mr Brown said that he understood Sir Fred would be turning down any severance payment. It had been reported that he was due to receive at least £1.2 million.

It also emerged today that the Financial Services Authority (FSA), the City watchdog, is intervening directly for the first time in how much banks are allowed to pay their staff, in an attempt to crack down on "inappropriate remuneration schemes".

A hard-hitting letter has gone out to the chief executives of all British banks and building societies whose capital requirements are governed by the FSA telling them they will all be visited and asked to explain their pay and bonus structure.

Mr Brown declined to say how the Government would pay for the rescue but said this morning that details on national debt would be revealed in the pre-Budget report.

The deal also obliges the banks to maintain the availability of mortgage lending and loans to small businesses at 2007 levels at least.

Sir Fred, who had led RBS for eight years, will be replaced by British Land's Stephen Hester while Sir Tom will step down as chairman at the bank's AGM next year. RBS said today it will scrap its 2008 bonuses for all board members and pay any future bonuses in shares.

The Government will have the right to agree the appointment of new independent non-executives on the boards of banks who are borrowing money.

The Treasury also announced that banks must commit to helping people struggling with mortgage payments to stay in their homes.

In a statement, the Government said: "The recapitalisations are designed to enable participating banks to achieve prudent but efficient capital structures.

"The Government intends to create a new arms length body to manage the Government's shareholdings in recapitalised institutions on a professional and wholly commercial basis, and seek to effectively realise value to the taxpayer."

As part of the cash injection, RBS has agreed to maintain its mortgage lending and lending to small businesses "at least" at 2007 levels – a condition stipulated by the Government to all banks taking part in the scheme. In addition, Johnny Cameron, the chairman of RBS’s global markets division, will step down from the board.

Sir Tom said: "The steps we have announced today, taken in conjunction with the Government, secure a stronger future for the RBS Group. We regret having to raise new capital but believe that decisive action is necessary in this unprecedented market environment".

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4933657.ece?token=null&offset=0&page=1

[rdowns]

Let's hope the action around the world this weekend and today is enough to calm the panic selling going on so these plans have a chance to work and credit becomes available. Markets outside the US responded well today and the US market is looking way up for today.

[iGary]

Let's hope the action around the world this weekend and today is enough to calm the panic selling going on so these plans have a chance to work and credit becomes available. Markets outside the US responded well today and the US market is looking way up for today.

I think we're getting close to bottom. My guess is these wildly fluctuating days we've been having is the market feeling around for bottom. Doesn't mean we're done, just close (I hope).

[rdowns]

I think we're getting close to bottom. My guess is these wildly fluctuating days we've been having is the market feeling around for bottom. Doesn't mean we're done, just close (I hope).

I think so too.

I was at a party Saturday and a bunch of us were talking about our 401Ks and other financial stuff. Now, I've lost a TON of money in my 401K and other investments but am remaining calm as this is money for my retirement. I'll admit I've called my financial advisor several times in the past 3 weeks to have him talk me off the ledge.

I was shocked that 4 of the 8 people have panicked and sold their 401K holdings and converted it all to cash. Stupid move IMO as you can't recoup those "losses" if you're not in the game. According to my financial advisor, about 40% of his clients are panicking and doing the same thing.

I'm looking forward to a seminar he is having on Thursday to calm people. Misery loves company. :D