FTSE 100 nearing the 5000 mark, recession coming to an end, did it change anything?

Discussion in 'Politics, Religion, Social Issues' started by edesignuk, Aug 26, 2009.

  1. edesignuk Moderator emeritus


    Mar 25, 2002
    London, England

    FTSE 100 is approaching the 5000 mark, the Dow Jones isn't too far off the 10000 mark. The UK is forecast to technically come out of rescission with a small amount of growth in about 1 months time. I think the same has been said of other economies around the world.

    So it's looking very much like the worst may be behind us. Now of course we all just have to pay back the money our Governments have spent trying to "fix" things, and find jobs for all those that have lost them.

    But...was the recession bad enough for those at fault to actually change their ways? Doesn't seem like it from where I'm sitting. It seems to have been a bit of an uncomfortable ride, and I am sure there are many that have been severely effected, over all though despite the mass media hype nothing really seems to have changed with any significance.

    Could it have been worse, should it have been worse, would it have changed anything?
  2. BoyBach macrumors 68040


    Feb 24, 2006
  3. Peterkro macrumors 68020


    Aug 17, 2004
    Communard de Londres
    Business as usual,huge transfer of money from the poor to the rich to pump up their mirage and away we go again,loverly.
  4. testcard macrumors 68040


    Apr 13, 2009
    Northumbria, UK
    Could have done with a few more bankers jumping off window ledges...
  5. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    Hey, I can make you one helluva deal on a bridge. Cash only, though. No checks. Hunt for "Bear Market Bounce".

    Yeah, the stock market is up, because people are buying stocks. But what dividends are the companies paying? What is the profit margin? Normal P/E ratios are in the range of 8:1 to 24:1 in the usual economic cycles. Right now, the NYSE average P/E ratio is around 127:1.

    Some snippets from this morning's "Rude Awakening", from the Agora folks:

    "Eric Fry, reporting from Laguna Beach, California…

    Everything is up. That is all we know and, apparently, all we need to know to be an enthusiastic buyer of U.S. stocks.

    Consumer confidence is up for the first time since May. National home prices are up for the first time since 2006. …And lest we forget to mention it, stock prices are up…a lot.

    Up is good, right?

    So, let’s see; what else is up? Well, the federal deficit is up. So is long-term unemployment. So are mortgage foreclosures. So are credit card delinquencies.

    Not everything is going up, of course. Some things are going down. But things that go down must also be good. Why else would the stock market have advanced more than 50% since March?

    So let’s take a look around and see what’s going down. Well, interest rates are going down. That’s good. Negative consumer sentiment is going down. And that’s also good.

    What else? Let’s see…consumer lending is going down. So is manufacturing activity. So are retail sales. So are worldwide exports. So is the value of the U.S. dollar. So are corporate profit margins. So are federal tax revenues."


    "Meanwhile, over in the commodity markets, prices are more “downy” than “uppy.” During a normal economic recovery you would expect to see rising prices for the things that make the economy go round. But that’s not happening. Weird. To be sure, some commodities, like copper, are rising in price. Sugar has also been a standout. But most other commodities are doing a whole lot of nothing…or worse."

    edesignuk, if this were a normal recession, we could expect a Vee-shaped decline and recovery. However, those who predicted this present mess are now predicting a W-shaped pattern. That is, we had the down turn and now we're upward bound. But it will peak and the next expected decline in the markets will likely be lower than last March.

    A recession is a normal economic event. What's happening now, however is a depression. We are in a time of systemic change. Businesses are disappearing; they won't be re-hiring. Monetary systems will change, with that change as yet unknown. World trade patterns are changing, and the end results are unknown. In the U.S., people's basic spending patterns have already begun significant change.

    And the energy specter is hanging over us all.

  6. UltraNEO* macrumors 601


    Jun 16, 2007
    Recession coming to an end?
    But the US debt (realtime) is still growing at an alarming rate!!! :eek: IF they keep borrowing, how will they ever repay them?

  7. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    The US national debt will never be repaid. The tax money does not exist and cannot be generated in any meaningful amount. What will be paid is the interest on that debt, and it will approach the same magnitude as the military budget--if not at some point exceed it.

    Our leadership? It's not the amount of money of "Cash for Clunkers" which is meaningful. It's the warped mindset which thinks such ideas are good. And if that were not bad enough, they are now continuing with "Cash for Toasters", $300 million worth.

    In the words of the Mogamo Guru, "We're all freaking doomed!"

  8. maflynn Moderator


    Staff Member

    May 3, 2009
    I don't see the connection between a market index's rise (or fall) determining whether the recession is ending.

    Personally while it appears that in the US the recession is ending (or has), the ravages of the recession are still being felt. For instance, my wife has been out of work since January. Foreclosures are still running rampart. Credit remains tight.

    So while technically speaking the GDP has increased as opposed to shrinking, any sort of recovery has yet to be felt.
  9. oscillatewildly macrumors 68000

    Jul 17, 2007
    23 Railway Cuttings
    I do like the two quarters for in, but only one quarter for out. Is Japan really out of the recession of the 1990s?

    Unemployment and business failures peak about one and a half years to three years after GDP starts to grow again.

    The banks are believed to have a big problem in the form of commercial property and have been trying to delay the day of reckoning.

    Some people will learn, but a new generation will make enough mistakes, a number being repeats of ours.

    Interest rates could come back to bite the residential property market in the bum. In the UK I'd like to see evidence that the property lesson has been learnt in the form of legislation - a minimum deposit of twenty per cent and a multiple around two and a half times to three times, all subject to affordability - remuneration verified by the Inland Revenue.

  10. Tomorrow macrumors 604


    Mar 2, 2008
    Always a day away
    I've said it before and I'll say it again here: we would have emerged from this recession had there been no stimulus at all, although the bottom may have been deeper and the effects more painful. The recovery may have even been faster with less government intervention, but what's done is done.

    Unfortunately, the last step in the recovery process is typically employment; firms want to make sure that growth is real and sustained before they start hiring people back. And for that to happen, the money really needs to start flowing again, and that means loosening of credit - and since the banks are still a little gunshy about lending, there's still a ways to go there.

    But yes, I think we should be rebounding shortly. I expect we'll be getting the official announcement within about 3 months or so that the recession has technically ended; although the recovery will by no means be complete.
  11. Zombie Acorn macrumors 65816

    Zombie Acorn

    Feb 2, 2009
    Toronto, Ontario
    With the money we spent it would be hard not to see some sort of recovery, I think its going to be short lived personally though. We will either enter a more harsh recession soon after the money runs out or keep borrowing to put it off for a while longer. I don't see 2010-2020 as being a prosperous time in the history of America.
  12. GfPQqmcRKUvP macrumors 68040


    Sep 29, 2005
    We're far better off than Japan as of now, though. Look at the debt/GDP ratio. Both are worrying, however.
  13. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    I will not consider the ressions over until lead indicators start climbing. Things like orders for raw material need to start going up and until then well it is just getting worse.

    Historically the Stock market leads the end of a recession by 3 months. so MAYBE christmas.

    I sure as hell do not feeling it. I have been out of work since February with not so much as a bit for everything I have applied for. I am amount that group of people who got out of school a little over a year ago so completely screwed. I am competing for the same job as people with 5+ years of experience. I am worried about my Father losing his job because he works in energy and they typically feel it at the end of a recession. It is still bad.

    US hell the world cross the typical definition of a depression with over a 10% drop in GDP.

    Either way it is bad. This recession/depression has made long term changes on people saving habits. Good changes. People are saving money. I plan to refill my savings when I get a job and add to it. It has been a huge life saver for me right now.
  14. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    Tomorrow, if you read about the depression of 1920--where the government did nothing--you find that the recovery was swift. The causes were the same as for 1929 and for 2007: Loose credit and expansion of the money supply. Hoover and FDR screwed up, and now Bush and Obama have repeated the errors.

    maflynn, we're not in a vee-shaped recovery. More like a W.

    Do a little critical thinking about this stock market rise. It's low-volume trading among a relatively few corporations, overall. Corporate profits are at an all time low, which does not support rising values of stocks.

    My regret is that the GDP is not indexed for inflation. If it were, we'd have been seeing declining GDP for many years. Yeah, lots of money in circulation, but it buys less and less. That's not a sign of a healthy economy.
  15. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    A question: Why would people believe the statements of those who have brought about this depression? Their monetary policies caused it, and the same policies are in place today. None of them foresaw what would happen.

    So why not heed those who did indeed predict this mess? There have been warnings for many years. This article lists some of those people. I have read the thoughts and ideas of most of them, some of them for over fifteen years. What they predicted has come to pass.


    Basically, anything from the White House, the banksters or CNBC is nothing more than a fresh, steaming meadow muffin. Total BS.

  16. Iscariot macrumors 68030


    Aug 16, 2007

    These are my chickens! As you can see, I have four (4) of them.
  17. BoyBach macrumors 68040


    Feb 24, 2006

    I know of a banker who'll buy all six of those eggs, keep seven for himself, sell twelve on to other bankers and return the original five eggs to you for a small fee. What could possibly go wrong?

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