Is The Worlds Economy teetering on the brink

Discussion in 'Politics, Religion, Social Issues' started by LiveForever, Apr 29, 2008.

  1. LiveForever macrumors 6502

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    #1
    It seems strange at the moment. Food shortages, high petrol, food and mortgage costs, sub prime credit crises, banks crashing and to top it all the spectre of serious Global recession, some say a new Great depression....

    Anyone else feeling a bit edgey?? I think we'll be OK but it's a strange time right now. It seems as if lots of factors have alligned at once.
     
  2. gwuMACaddict macrumors 68040

    gwuMACaddict

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    #2
    No.

    No. And I'm counting down the seconds 'till we manage to get this moved to the Politics forum... ;):D
     
  3. needthephone macrumors 6502a

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    #3
    Its not really a political issue per se. Its something which is effecting the average man and women in the street. Its got nothing to do with voting Democrat or Republican or Labour or Conservative.

    Giving away credit cards and huge loans to people who couldn't afford them started a bubble which had to burst. Everyone's being living on other peoples money and the trouble is the other people who you have borrowed the money off don't have the money either. They borrowed it off someone else...

    The food shortage is partly due to corn being used for ethanol production, not food.

    The oil price is either being cynically controlled by OPEC or we are running out.

    We should pull through.
     
  4. brad.c macrumors 68020

    brad.c

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    #4
    As ghoulish as it is to say, have we ever gone this long with unfettered growth, WITHOUT a massive population reversal?
     
  5. Abstract macrumors Penryn

    Abstract

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    #5
    Don't worry. The rich are still getting richer.
     
  6. Eric Piercey macrumors 6502

    Eric Piercey

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    #6
    Amen. Our CEO's are sitting around with chutes packed as we speak.
     
  7. glocke12 macrumors 6502a

    glocke12

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    #7
    I wouldnt say the worlds economy is on the brink of collapse, but I do think things are probably going to get much worse before they get better.
     
  8. LizKat macrumors 68030

    LizKat

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    #8
    They're not packing their chutes. They're going to keep using the alleged recession as a handy excuse to cut extra costs by laying off more workers during seasonal lulls, to delay R&D investment another quarter, to chop a dividend, whatever they think they can get to fly uncriticized for "during the recession." Not to mention all the "conservative guidance" for the next quarter being thrown out there along with their earnings announcements.

    And they're definitely enjoying the sinking interest rates compliantly produced by the Feds even though the latter do know that inflation is a brewing issue. We will not see those lowering rates sink into the bottom line on our credit cards, though, so it's only the banks that are thrilled. By time we all realize what's happened and who went for the ride, the rates will be rising again, just in time for the politicians to claim they're looking out for elderly voters and their savings account rates...

    Also it's been a swell time lately for manufacturers to ditch unsuccessful product lines by convincing retailers to buy them at "reduced" wholesale prices. The retailers then run loss leader sales with this stuff and hope they can get you to buy a rotisserie chicken (marked up a buck) from their deli department while you're ostensibly in the store only to get some slow moving "special" at a great sale price.

    Sure there is a slowdown in the economy. Ask the news media. They have to run stuff like "Rice panic!!!" to get enough people to turn on a TV set to make the advertisers happy. And btw if you go to your local grocery store, there's plenty of rice in the quantities that individuals usually buy it -- five or ten pound bags. My local supermarket was actually running a 10 for $10 sale on some processed rice products as well.

    Bottom line for the movers and shakers and their media lapdogs: they are having to work harder and harder to get this thing to sound like a recession so they can keep banking on the temporary but stellar benefits of interest rate cuts.

    Ordinary Americans are not making out so well, but we are resourceful and it seems to me we are finding ways to snip instead of rip at our budgets to cope with the gas hikes and the rising price of grains. Overall for the economy, that is a bit of good news because it lessens the impact of the downturn on any one sector.

    It's up in the air how the tax rebates will figure into the economy. It's irritating to see the big box stores angling for those checks. And of course the debt collection agencies are probably hiring like crazy. The unintended consequences of any government gig are always interesting to see unfold, but especially when you get a myopic crew like the Bush administration.

    Me, of course I am going to spend half my rebate on something Apple flavored and (in a nod to the real consequences of an unevenly regulated global economy) give the rest to a local food pantry.
     
  9. ham_man macrumors 68020

    ham_man

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    #9
    The funny thing about the economy is that whenever things are going well, people act like the good times are never going to end, and whenever things are going poorly, people act like we are falling into a never ending abyss.

    I'll say this. The economy is heading for a slow down. But we are not looking at another Great Depression. We will weather this storm just like we have weathered every other business downturn in the last fifty years.
     
  10. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #10
    Heaven forbid they lay off extra workers and cut unnecessary costs in the face of a recession! How dare they!
     
  11. LizKat macrumors 68030

    LizKat

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    #11
    Extra cost cutting is not the same thing as cutting unnecessary costs.

    In a downturn, a company can turn the screws on employees who are not laid off simply by making more layoffs than are usually done in a seasonal or cyclical industry. The employees or workers who remain are clearly cued to keep their nose to the grindstone. The company makes out even better since it has not only cut direct employee costs past the usual mark but also gained more productivity --at least temporarily--- from those who keep their jobs.
     
  12. Desertrat macrumors newbie

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    #12
    Overall, it looks like the world's "financial center of gravity" is moving toward the mid-east and China. Away from the U.S. and Europe.

    From the folks at Agora Publishing: "Sovereign wealth funds are growing 24% every year , reported Global Insight yesterday. According to the research firm’s latest study, SWFs swelled to $3.5 trillion in assets in 2007.

    For perspective, if all SWFs were to form one nation, that country would have the third largest GDP on Earth, just behind Japan and the U.S. At their current rate of growth, SWFs will surpass the U.S.’ $13 trillion annual economic output by 2015.

    The three largest funds were little surprise… China, Russia and Kuwait top the list."

    How much impact elsewhere will occur from our ongoing malaise, nobody knows. House prices are still in serious decline and will remain that way for another year or two. Commercial properties are in the beginning stages of a decline of demand. Nobody knows how many more writedowns of billions of dollars will occur among the giant financial firms, nor how much more taxpayer money will be used to save them.

    "Great Depression"? I don't have a clue. I do have faith in Congress to try and turn the recession into one, though, from some equivalent to the old Smoot/Hawley Tariff or other such idiocy.

    'Rat
     
  13. Eraserhead macrumors G4

    Eraserhead

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    #13
    I generally buy rice in 1 pound bags :eek:. Seriously a 5 pound bag would last me for like a year or so.
     
  14. skunk macrumors G4

    skunk

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    #14
    LizKat is talking about US pounds, which are only half the weight of Imperial pounds. As any fule no.
     
  15. Eraserhead macrumors G4

    Eraserhead

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    #15
    EDIT: Really? According to both calculator.app and Wikipedia, one US Pound is 454 grams.
     
  16. SactoGuy18 macrumors 68020

    SactoGuy18

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    #16
    At worst, we'll have something like the recession of 1979-1982.

    There's good reason for this: the lessons of the 1929 stock market crash will mean that in the end, governments worldwide will have to coordinate to prevent a potential run on banks and to prevent the type of unnecessary trade controls that made the Great Depression worse than necessary (does anyone remember the the Smoot-Hawley Tariff?).

    As for China become the next economic power, it may not happen because their internal problems could prevent them from becoming one. The next financial center could be either Abu Dhabi or Dubai, but while they may be flush with cash now what happens when the oil in the Middle East starts getting low or the oil price is too high, which could cause the rise of alternatives to crude oil?
     
  17. skunk macrumors G4

    skunk

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    #17
    'Twas but a joke. Which I notice you initially fell for... :)
     
  18. solvs macrumors 603

    solvs

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    #18
    The problem is when they aren't cutting unnecessary costs, just cutting costs on the lower rings. We have a hiring freeze and are even laying people off despite needing more people with our increased workflow. It's not too bad for me, but I can see it elsewhere. Meanwhile, while there are some hard working people at the top, there are also a few who don't seem able to do even the little we give them, all the while making 10x what we do. You get mad when we rail against the disconnect, but there is a disconnect. Plenty of other things they could do to cut costs that they don't or won't.

    Anyway, it seems bad now, plenty of blame to go around, but we'll recover slightly before things get too bad, or collapse under our own petards while we wait.
     
  19. skunk macrumors G4

    skunk

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    #19
    Can you collapse under a pétard? :confused: A pétard is either a demolition charge or a fart, depending on context.
     
  20. solvs macrumors 603

    solvs

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    #20
    I think I was trying to say something else, but it's late, and to be honest I don't even remember what I originally meant. It started with something about being hoisted up on (or is it by) our own petards. Though my spellchecker seemed to think I meant something else too. I'm sure that won't be the last time.

    So, do you also think we'll collapse under our own crapulent weight (I think that's what I meant)?

    Edit: Here's a video dissecting Bush's speech on the economy:

    http://www.msnbc.msn.com/id/22425001/vp/24376897#24376897
     
  21. skunk macrumors G4

    skunk

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    #21
    It's "hoist by" for the record, as in blowing yourself up.

    Thanks for the link. And no, I don't think we will collapse, but Bush's playground economics certainly won't help.
     
  22. atszyman macrumors 68020

    atszyman

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    #22
    That also neglects the bonuses and stock options they'll receive for not losing as much during the recession because of their workforce cuts...:rolleyes:
     
  23. LizKat macrumors 68030

    LizKat

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    #23
    yeah but I'm paying for my macbook air by eating rice and beans for a year.
     
  24. MacNut macrumors Core

    MacNut

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    #24
    The CEO's that get $30 million salaries plus stock options plus severance pay and retirement packages that drain the common mans pay check is where the real problem lies.
     
  25. solvs macrumors 603

    solvs

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    #25
    Ah. Not what I thought it was at all. Well, learn something new everyday. At least my English is improving.

    Ramen is still fairly cheap, even if it tastes like styrofoam and provides almost no nutrition.

    That's the free market. Prices dictate themselves. I'm not happy they won't hire one new tech but instead pay a years worth of one's salary for efficiency experts to tell us we need more people. :rolleyes: Or to have 1 person making 3 times as much as we do playing video games and surfing the net all day. (what, I'm on lunch) But I don't run the company, and they're going to have to wait for their new computer if they don't find someone to do the job.

    They did actually just fire one of our higher ups who wasn't doing anything a screwed a bunch of stuff up, but there are far worse even higher making much more than remain untouched.

    BTW:

    Layoffs rise 68 percent from March to April
     

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