OK, so, now what

Discussion in 'Politics, Religion, Social Issues' started by Sydde, Aug 25, 2010.

  1. Sydde macrumors 68020


    Aug 17, 2009
    A guy tells you he knows how to handle this car, on wet pavement, as the telephone poles are looking like a picket fence. And then you are wiping the blood off your forehead while pinecones fall onto the steaming, mangled radiator.

    So today he claims to have learned what he used to say he knew and is working as a driving instructor, pointing out every tree to his students.

    Former Merrill Lynch executive uses the deaded D-word
    Fine, we trust you. Really. We do have a pretty good idea how bad things are. Now go sit in a corner while people whose career is not about fleecing people figure our way out of this.

    I mean anyone have any original ideas how to fix things? The tried-and-true approach(es) cannot be expected to work, AFAICT.
  2. awmazz macrumors 65816

    Jul 4, 2007
    I've posted this image before because it's quite astonishing. There's no fix, we're on a pre-ordained path. Bust always follows boom. We just didn't have that initial 40% drop like 1929 to instill widespread panic, and all that US govt borrowing over the last ten years and even the stimulus money hasn't changed the overall pattern of history at all, just softened the impact so we didn't hit the lowest low like the last one. But regardless in 2008 the US stock market still reached exactly the same point as 1937. Some aspects like the crash of 2008 are eerily identical, just some months apart.

    What comes next is anyone's guess as there isn't a World War looming, at least that I can see. If it does follow the pattern, unfortunately for Obama it won't get better the next three years before the next upturn so if a Republican wins the next election they'll take the credit for it.

  3. Sydde thread starter macrumors 68020


    Aug 17, 2009
    Sorry, your trends, statistics and charts are of little usefulness and only slightly interesting. It is this kind of analysis that got us to where we are. You seem to be implying that the situation will eventually correct itself, though not without a fair amount of pain. Is that what we should do? Just let the cycle run its course and things will work themselves out?
  4. supercaliber macrumors regular

    Aug 9, 2007
    I love your graph. I looked at the crash of the great depression to gauge how far i thought the market would go down in 2008. I used the peak of Dec 2007 as the starting point not 2000 as your graph does. From 2007, the market dropped percent wise almost identically to the crash of the great depression.

    I do not see how this analysis got us to where we are today. Our current situation is horrendous, we have a dark cloud of fake assets hanging over with no end in site. Housing prices were historically overvalued in 2002, long before the bubble burst. Now we sit here today with overvalued properties that will not sell after 40% declines. To me this chart is simply the recovery time it takes to bring an economy back to reality after it goes through a phase of fiscal corruption.

    We grew the economy with inflated home assets and now we are all paying the price. No amount of government fiddling will return things to normal. Only bankruptcy and debt forgiveness over a decade will sort things out. Government fiddling at most has prevented a panic and will likely be necessary again in the next few years.
  5. Sydde thread starter macrumors 68020


    Aug 17, 2009
    Thing is, I only know the economy is bad because Jim Cramer tells me it is. Things go on as they had been around here. People still buy stuff. Traffic still sucks (perhaps even worse than it was). So often it just seems like a bit of a storm for the traders and for the rest of us, life goes on.

    How do we really know the economy is bad unless the experts tell us? And what does it mean? Growth and contraction cycles hit the airy, abstract realm of the financial sector, which percolates down to the street level, where the real economy is. Perhaps moreso lately, since more capital is tied up in their arcane instruments and less in the average person's wallets.

    It appears to be a pretty complicated system that no one really understands completely, that we have left in the hands of people whose main career goal is to extract as much out of the system as possible, which brings us to situations such as this. And we seem to be utterly powerless to do anything about it.
  6. supercaliber macrumors regular

    Aug 9, 2007
    Your post is a bit defeatist, but for some reason I loved it. I do think things can get so bad that you don't need someone to tell you: months/years of unemployment, hunger, decrepit water systems and public services, and the worst - chaotic wild west justice.

    However, children born into the worst situations don't really care how bad things are, they never justify their father's decision to leave the family because he cannot handle the guilt of starving mouths. They just want him around starving with him, he is their dad.

    As for what we might do, if we were at the bottom we would have nothing but hard work and ingenuity to pull us out, and I think we would all brim with optimism. When you are sitting on the bubble that is bursting knowing that it must collapse to build a more stable economy the next time around, well that is indeed scary, and I think there is very little we can do except try not to panic.
  7. awmazz macrumors 65816

    Jul 4, 2007
    Charts don't cause anything, they just measure what has already happened. Charts of daily rainfall patterns for example don't cause rainy or sunny days. What you mean I suppose is people use that data to try and guess/predict the future and so make decisons based on that. But rampant speculation is a symptom not a cause, because:

    I don't know squat for sure, just a Joe with a social observtion. Which is 'we' caused it. As in all of us voters in all the developed nations. We voted for it. Because we wanted it. All that rampant unregulation and speculation that led to all the banks collapsing was the end result of 60 years of successive govts picking away at all the safeguards and regulations put in place after the last economic collapse to ensure exactly the same thing would never happen again. Yet it did, because voters elected govts who removed those regulations one by one over decades until they are now nearly all gone, and so what happens, the same thing again. Australia actually made it through that disaster of '08 the best of all the western nations because we were still in the process of deregulating our banks and economy and hadn't finished yet so still had lots of regulation safeguards in place. So our banks weren't exposed to all the deregulated stupid risks and nonsense on anywhere near the scale of say Iceland so none of our banks even went into the red, and so while Bear Stearns was disappearing from existence and the entire nation of Iceland went into bankruptcy, we didn't even dip into a technical recession.

    The difference between now and back then is that absolutely nothing has been done to put the safeguards back in place in most countries, because 'we' didn't want that. My god, even in the midst of the deregulation collapse of '08 almost half of all American voters actually voted for even *more* deregulation which caused the problem in the first place by casting their ballot for McCain. This is how the social affects the fiscal. Even when forced to when not left with any other choice, like Greece's 'austerity measures', the voters revolt and get angry and upset. Riots in the streets. They don't want it. We don't actually want to fix the root cause because we just want the good times back asap and keep them rolling, don't want to lose our jobs/homes/retirements/etc and so acquiesced to trainloads of borrowed money to allow the deregulated economies to 'get through the bad patch' as if nothing is actually wrong with them. When we can't borrow and have to tighten our belts like Greece did, we don't like it. Won't vote for it. Like the 1930s or Greece today, it's an addict situation where 'we' as a group have to hit absolute rock bottom before we are forced to face fixing the problem and can begin the road to long-term recovery and self-repair. As I said, just my opinion.

    See my above paragraph about borrowing trainloads of money to get through the bad patch as if nothing happened. Try doing that with a credit card at the casino when you hit a bad gambling patch and keep playing because you enjoy the champagne and beautiful women hanging off you because you're a winner, most people will call you a fool for not cutting your losses and walking away from the table. Yet most of those same people will go and vote for it themselves to apply it to their nation...

    PS. I like the historical comparisons because I find it fascinating. If you find history-making epoch events repeating themselves as you actually live through them yourself to be only 'slightly interesting' then I feel for your lack of wonder and curiosity.
  8. OutThere macrumors 603


    Dec 19, 2002
    This has been my feeling for a while. There's a lot of hand wringing going on and the media keeps telling me that things are horrible, but if I didn't pay attention to the news I don't think I'd perceive there to be a real problem.

    Sure I just graduated college and don't have a job yet, but I'm still being picky and would like to find something suited to my skills and interests. If I needed a job right away I'm confident I could find something quickly...even if I were somewhat underemployed. Last year I found a summer job more quickly than ever before right after the crisis began. The restaurant I worked in was bustling and preparing for a $2m renovation. My credit card limit has been regularly and consistently increased since fall 2008, the parking lot at the mall is always full and a house next door recently sold for $1.8m. :confused:

    These days I don't know how I should feel...New York Times headlines alternate day to day, either the new numbers show signs of recovery, or some economist has decided that we're headed for collapse. Fuel for my suspicion that nobody really knows anything. I'm just gonna live my life, no regrets. :p
  9. Desertrat macrumors newbie

    Jul 4, 2003
    Terlingua, Texas
    Sorry, Ahmed, but the absence of information won't change things, just as charts don't cause things.

    Too much debt, and the only solutions are to pay them off or write them off. There is much more of the latter happening than of the former, and it's gonna get worse.

    And our Idiots In Charge are still adding to the debt, as though they can spend their way to prosperity--with your tax dollars. And your kids' and grand-kids' tax dollars.
  10. Peace macrumors Core


    Apr 1, 2005
    Space--The ONLY Frontier
    What followed the market crash in the 30's ?

    Roosevelt then WAR.

    Those two things would do it.

    Too bad WAR is risky this time around. With everybody and their brother having nukes and all.

    Do what the Jews did back in the old days.

    Forgive all debt every 20 years.
  11. PerfSeeker macrumors 6502a

    Jul 10, 2010
    What depression? Have we hit 20% unemployment yet? Even Obama and the Democrats haven't gone as far as Herbert Hoover and the GOP Congress of 1930 with trade wars.
  12. SactoGuy18 macrumors 68030


    Sep 11, 2006
    Sacramento, CA USA
    In my humble opinion, this current deep recession points out some very serious structural problems that needs addressing. I cite the following:

    1) The need to totally revamp the entire structure of taxation in the USA. The current income tax system as defined by Title 26, the Internal Revenue Code, is so complex that:

    a) It costs over US$300 BILLION per year in compliance costs.
    b) It drives American businesses to offshore jobs and even corporate headquarters outside the USA for income tax avoidance reasons.
    c) It drove somewhere north of US$10 TRILLION in American-owned liquid assets to financial institutions outside the USA to keep them out of the hands of the IRS.
    d) The IRS itself can't figure out what's in the code much of the time. As a result, taxpayers often end unintentionally become scofflaws for all the wrong reasons.
    e) It favors debt financing over cash financing, and we know how well that went in the last five years!

    Why do you think we need to drastically prune down the tax code to some much simpler (I'd use Steve Forbes' flat tax plan he originally proposed 14 years ago as a basis for such drastic simplification) with very few deductions and no more taxes on bank account interest, capital gains, stock dividend payments and even payroll taxes. Such a change means maybe 60-70% less tax compliance costs and encourages Americans to keep their savings and investments in the USA, something real necessary for economic recovery and growth.

    2) The recently-signed financial reform bill doesn't go anywhere far enough to clean up the excesses of Wall Street. Why doesn't it address the following issues:

    a) Too many investments such as hedge funds, derivatives, credit default swaps, etc. that operate with essentially NO liquidity backing.
    b) Too low minimum margin requirements to do futures and index trades, as such too many speculators drive up and down stock and commodity prices quite severely over a short period of time (remember the crude oil and rice futures "bubble" that crashed hard by the end of 2008?).
    c) Too much bank assets involved in the stock market, so when the stock market crashed in 2008 it took down way too many banks along with it--the same problem that occurred after the 1929 stock market crash.

    3) The reluctance to use the Sherman and Clayton Antitrust Acts to improve competition between companies. The corporate world is increasingly dominated by a very small group of companies. I cite the examples in the retailing industry (note the tremendous clout wielded by retailers such as Walmart, Best Buy and even Amazon.com online), in the tech industry with several cases of too much clout (Microsoft nearly wiping out everyone else in the late 1990's, Intel nearly wiping out AMD, Samsung involved with DRAM and LCD panel price fixing, Google's dominance in web searches and Apple's arrogant behavior currently), and in the financial sector (the excessive clout of Goldman Sachs now).

    4) The ballooning size of government in general. Everyone wants more and more from the government, and as a result we have WAY too many government agencies at the Federal, state and local level that have overlapping bureaucratic oversight and just bloated to excessive size in general.

    5) An increasingly unstable US dollar because its value is based on "faith in government." Historically, such a currency end up losing value with disastrous results, as noted by the infamous hyperinflation of the German Reichsmark in the early 1920's and the collapse of currencies in South America in much of the latter half of the 20th Century.

    These issues need to be addressed over the next 10 years if we want to bring sanity back to the US economy and prevent a repeat of the 1930's--a period with ripple effects worldwide that ended in a World War that killed nearly 50,000,000 military personnel and civilians. Today a general World War could end up killing billions because even with the ending of the Cold War, there are still several thousand nuclear warheads that could rain down anywhere on Earth within 30 minutes.
  13. supercaliber macrumors regular

    Aug 9, 2007
    Like your thinking. We are buried by the system and everyone that remembers true freedom (Pre-IRS) is dead or near death.

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