Warren warns of ‘coming economic crash’

Discussion in 'Politics, Religion, Social Issues' started by jkcerda, Jul 22, 2019.

  1. jkcerda macrumors 6502a

    jkcerda

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    #1
    https://www.yahoo.com/finance/news/warren-warns-coming-economic-crash-120022724.html
    this from the party who does not understand that cutting wages is NOT paying a living wage and wants to tax the hell out of you to pay for their pie in the sky stupidity ..............
     
  2. Solver macrumors 6502a

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    #2
    It’s like, Democrats take over the house, and then there’s an economic crash coming.
     
  3. Chew Toy McCoy macrumors regular

    Chew Toy McCoy

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    #3
    Almost our entire economy is built on debt, speculation, and blowing things up just to employ people who make things that blow things up. How can anybody not find that sound?
     
  4. pshufd macrumors 65816

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    #4
    There are a lot of people that have warned of an economic crash for a long time. Eventually they will be right.

    But economic crashes are good as they clear away uneconomic businesses and allow the competitive businesses to grow. An economic crash that would drop the housing market 50% might be seen as a disaster to those that own homes but it might be seen as great for those looking to buy them.
     
  5. RichardMZhlubb Contributor

    RichardMZhlubb

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    #5
    Please identify one thing the Democratic house has done that could lead to an economic crash. Just one thing.
     
  6. jkcerda thread starter macrumors 6502a

    jkcerda

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    #6
    well it's nice of you to point out that they are worthless in that regard, that said the stupidity those running are proposing could indeed lead to the economy crashing if their plans are put in place.
     
  7. pshufd macrumors 65816

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    #7
    The rest of the world is in slowing down so much that a lot of countries are issuing debt paying negative interest. That is you pay them for them to borrow your money. The whole world is slowing outside of maybe Russia. The US still has growth but it's the cleanest shirt in the dirty laundry. We don't realize how things are around the world.

    Eventually the US will get dragged down so you have central bankers in easing mode or doing crazy things like negative interest rates. The question is: can monetary and fiscal policy avert a crash? Personally, I think that we should just crash. We're way overdue and it would make housing affordable for a lot of young adults.

    My wife was at the mall yesterday and she said that there were six retail clothing stores going out of business. We have too many stores selling the same things. That happens when there is too much debt - excessive speculation.
     
  8. ThisBougieLife macrumors 68000

    ThisBougieLife

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    #8
    Economic crashes seem to happen every 8-10 years so we are overdue for one. The boom/bust cycle is just a necessary part of capitalism.
     
  9. VulchR macrumors 68020

    VulchR

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    #9
    In the last recession 8.7 million people in the US alone lost their jobs and millions lost their homes, so it is hard to argue much good comes of economic downturns. What is clear is that they are inevitable emergent property of the capitalist system. The government can help mitigate the effects of individuals, but this time there's not much left in the bank to stimulate growth and mitigate unemployment. Also, the last economic downturn caused an upsurge of nationalist, isolationist and anti-trade sentiments. Sometimes I swear it's like we're replaying the 1930's.
     
  10. pshufd macrumors 65816

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    #10
    You have the argument backwards.

    The rubber band was stretched because no politician or central banker wants a recession on their watch. So we expand fiscal and monetary policy until we create ridiculous business models that aren't productive. In the last recession, we had banks giving out mortgages to anyone with a pulse. And maybe even to those without a pulse. We had liar loans, appraisers that lied on valuations, banks that wrote mortgages and sold them into the bond market, etc. If we had a recession earlier, we might not have had all of these excesses that resulted in so many lost jobs and failed businesses.

    The two major hammers for fiscal and monetary policy are the housing and stock markets. Right now, the price to earnings of the S&P 500 is about 22. That's either bubble territory or very close to it. Fair value is usually considered 15. Why is the Federal Reserve cutting rates when the stock market is close to bubble territory? Are there a lot of stocks that are overvalued? Will people be hurt if prices come back down to rational levels?

    I live about a mile from a strip mall. It has been empty for a dozen years. Last summer, construction started on it and it's 90% occupied right now. A bank is under construction and it should be full in another couple of months. The owners went before the Planning Board to request approval for a 40 unit apartment behind the mall. The place is typically packed when I go by it. I was there this past February and the ice cream place was mobbed. Who buys ice cream in February in NH? Well, they sell stuff besides ice cream. But business is booming there - I told my wife that this is the future of retail. All of the shops did not compete against online retail - and they're doing a great job with the retail that they have.

    But it was a chance to clear all of the old shops away to make room for the new and improved.

    So yes, economic downturns are bad. But we get them because the boom times create economic anomalies that are only sustainable with easy money policies and result in a misallocation of resources. The mistake is to assume that these will continue into perpetuity. So you save for a rainy day.
     
  11. BaldiMac macrumors 604

    BaldiMac

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    #11
    Or... it's an inevitable result of trickle down policy and deregulation. It's not a coincidence that the last two major recessions occurred at the end of Republican presidencies. 45 has simply exacerbated the same problem because he doesn't care what happens to the economy after he leaves office.
     
  12. pshufd macrumors 65816

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    #12
    Economic crashes are endemic to our species:

    AD 33 The result of the mass issuance of unsecured loans by main Roman banking houses.

    The Crisis of the Third Century, also known as Military Anarchy or the Imperial Crisis (AD 235–284), was a period in which the Roman Empire nearly collapsed under the combined pressures of barbarian invasions and migrations into the Roman territory, civil wars, peasant rebellions, political instability (with multiple usurpers competing for power), Roman reliance on (and growing influence of) barbarian mercenaries known as foederati and commanders nominally working for Rome (but increasingly independent), plague, debasement of currency, and economic depression.

    14th century banking crisis (the crash of the Peruzzi and the Bardi family Compagnia dei Bardi in 1345).

    • Panic of 1901, a U.S. economic recession that started a fight for financial control of the Northern Pacific Railway
    • Panic of 1907, a U.S. economic recession with bank failures
    -- Wikipedia
     
  13. BaldiMac macrumors 604

    BaldiMac

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    #13
    Just want to point out that nothing that you posted actually refutes what I said.
     
  14. RichardMZhlubb Contributor

    RichardMZhlubb

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    #14
    Well, the last time the Democrats controlled the White House and both branches of Congress, GDP growth improved by around seven percentage points, so I’m not concerned about them adding control of the Senate and White House. That said, blaming the Democratic house for alleged impending economic problems is just dumb, when the Republicans have the senate and White House.
     
  15. Chew Toy McCoy macrumors regular

    Chew Toy McCoy

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    #15
    No it’s not. It’s speculation driven Wall St. under-regulated and extremely rarely punished where the middle class barely recovers before the next bomb and the rich have to put off buying that new private jet for 6 months while their bailout gets finalized.
     
  16. BaldiMac macrumors 604

    BaldiMac

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    #16
    Just as the Republicans blamed Obama for Bush's recession, the will blame whoever replaces 45 for the recession that he is creating.
     
  17. pshufd macrumors 65816

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    #17
    Actually it does.
    --- Post Merged, Jul 22, 2019 ---
    Monetary policy is a bigger hammer than Fiscal policy.
     
  18. NT1440, Jul 22, 2019
    Last edited: Jul 22, 2019

    NT1440 macrumors G5

    NT1440

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    #18
    Why do we accept a system that devastates millions of lives every generation? Not only that, recessions are great for the ultra wealthy and mega-corporations because they ALWAYS swoop in and buy up assists for pennies in the dollar.

    Unless you’re a wealthy human being how can anyone claim that the boom/bust cycle is a good thing?
     
  19. pshufd macrumors 65816

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    #19
    The global economic picture is a lot more complicated than just US politics.
     
  20. BaldiMac macrumors 604

    BaldiMac

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    #20
    B: "Captain, the last two times we crashed it was because you steered us right into an iceberg."
    P: "Here a list of a bunch of unrelated crashes."

    That's not a rebuttal.
     
  21. ThisBougieLife macrumors 68000

    ThisBougieLife

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    #21
    Just to be clear, I wasn't saying it was a good thing.

    But it's all I've known in my lifetime, so it seems inevitable. It also just seems intuitive: what goes up must come down.

    I'm open to being proven wrong.
     
  22. BaldiMac macrumors 604

    BaldiMac

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    #22
    Another true statement that doesn't refute what I said.
     
  23. pshufd macrumors 65816

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    #23
    Creative destruction is a natural byproduct of technological change.

    Take a look at the modern smartphone. It's decimated industries that produced players, feature phones, cameras, stopwatches, metronomes, video players, books, phonographs, cassette-tape players, stereos, standalone GPS devices. If you're in the working world, you keep an eye on what's affecting your industry, and, if it is vulnerable to technological or economic change, you look for opportunities in a new area that will benefit from technological or economic change.

    Or you wait for layoffs and economic dislocation in your industry.

    The ultra-wealthy and mega-corporations are also subject to the same, ruthless nature of markets and technological change. Just look at the history of companies that go bankrupt. Large numbers of companies go bankrupt every year. And a few big ones too.
     
  24. BaldiMac macrumors 604

    BaldiMac

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    #24
    Well, the fact that it keeps going up despite a few dips would seem to prove you wrong on the "what goes up must come down" part of the argument.

    :D
     
  25. pshufd macrumors 65816

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    #25
    I'd think that anyone that can read could refute your premise.

    I hope that you can figure it out as well without any help.

    Hint: Predicate Calculus.
    --- Post Merged, Jul 22, 2019 ---
    You should be able to produce the rebuttal yourself.

    It's that obvious.
    --- Post Merged, Jul 22, 2019 ---
    The stock market is a function of supply and demand. We have massive amounts of stock buybacks reducing the supply of shares. So, share prices go up. Independent of the fundamentals of individual companies. Easy money policies contribute to this as it makes it easier for companies to borrow money to buy their own stock. That economies in the rest of the world are so anemic also results in foreigners buying our stocks.
     

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61 July 22, 2019