Market crash: are we there yet ?

[PBzeer]

RealClearMarkets - Articles - One Pack of Losers Stimulating Another

[SeaWolf]

AMEN, SailAway21!!! If we survive this lunacy, it will be a miracle.

Loree
Aboard SeaWolf
CruisersLife.com

[SeaWolf]

PBzeer,
I just read Bill Frezza's article. Excellent and very timely for we who live on SeaWolf. Thanks.

Loree
Aboard SeaWolf
CruisersLife.com

[TropicCat]

Originally Posted by PBzeer

RealClearMarkets - Articles - One Pack of Losers Stimulating Another

Why am I not surprise you think a conservative website has a significant article on the economy? Allow me to point out:

"...So they’re printing up a trillion dollars to "invest" in everything from shovel-ready infrastructure programs to politically favored science projects...."

Well, I sort of agree with him, but this makes more sense to most people than Bush/Paulson handing failed banks $700 billion of our money.


"It's been many years since I've worked in the engineering profession to which I was trained...."

So our economic policy cost him a job too. No wonder he has an ax to grind.


"I have no magic plan to turn our slumping economy around....."

After writing his diatribe, he admits he has no clue why standard practices (read Regonomics) aren't reviving the economy. He just seems to 'know' that all these attempts at doing something are just wrong. He's just an obstructionist with no ideas on how to fix anything.

That sucking sound you hear is India transfering white collar jobs out of America. It's no longer a blue collar problem. Protectionism used to be a practice of protecting dinosaur industries. Today, we need some form of it to protect what's left of the high paying service sector.

Of all the bills in Congress, I'm shocked that none are addressing this as it's not an import/export issue. While we're at it stop Microsoft and IBM from lobbying to import more cheap Indian labor into the hi tech sector. They are still crying that they want more H-1 visas when American software engineers can't get a job.

[Dick Pluta]

When I went to college many years ago, in our first session my Economics 101 professor told us how he was going to teach us to know and love Lord Keynes. We spent the whole semester studying things like elasticity of supply and demand, the velocity of money and the way government spending could alter the course of the economy. At the end, he had laid out a delightful and coherent explanation of the mechanism of economic activity and how to manipulate it. Then, in the last class he said "You now know how to control the economy. Unfortunately, before you see the result of your action you will be required to take further action that obscures the result of your first action. You will, therefore, never know if what you did worked or not." Sound familiar? Let's spend a lot of money we don't have. Maybe it will do something...or not.

Dick Pluta
AEGEA
Nassau, Bahamas

[SeaWolf]

If we survive the House and Senate's 'Stimulus Padkages, it will be a miracle.

Tell me... did your Eco teacher have any business experience?

Loree
Aboard SeaWolf
CruisersLife.com

[sailaway21]

The "Bush/Paulson" TARP plan. I seem to remember the congress passing the legislation requested by the President and Treasury Secretary. I know I remember the current President requesting that President Bush release the second half of the TARP funds before 20 January 2009.

"Reaganomics"? The last Reaganomics paracticed in DC was when the bush tax cuts were passed. In 2001.

That the author has no idea how to fix the economy should come as no surprise; neither do the country's best economists and they'll tell you so.

RealClearMarkets isn't a conservative web-site; it's just that the articles there by conservatives make more sense than the one's written by the liberals. They're about as funny as blaming George Bush for practicing Reaganomics. The teller's either don't know what Reaganomics are or failed to observe the Bush presidency's spending habits. That's why Obama seems like more of the same; he is.

[TropicCat]

Well, my 7000 DOW prediction is about to become a reality. Actually, it's close enough to call it right now. So it's time for more predictions.

The heavy weights agree that we are in for a severe recession and will have negative growth throughout this year. They do expect us to technically come out of recession in the 1st quarter of next year but they expect just 1% growth throughout next year. We will continue to shed more and more jobs. As far as unemployment, 6 million jobs were expected to be lost this year. With the Obama stimulus package, we can cut that in half and only lose 3 million jobs. If you recall this is on top of the 3 million lost last year. Overall we will be less than 1/3 through expected job losses.

This is systematic contraction of our economy, not a business cycle. For the first time since the Great Depression every segment of our economy is contracting at the same time.

corporate spending
real estate
construction
mortgages
employment
exports
imports
industrial
manufacturing
service sector
consumer spending

As a matter of fact, consumer spending is forecast to fall more than the stimulus package stimulates.

The truth about banking losses is becoming clearer and is the reason the word "Nationalize" is creeping into bailout language. US banks will lose $1.8 trillion or more. Subtract what they've already been given through TARP and it's clear that an additional $1.4 trillion is needed to cover their losses. In case anyone is interested, all of these banks collectively have assetts worth $1.4 trillion. US banking is in fact insolvent. As is AIG. My bet is on all of them being Nationalized, as no one will want to commit to recapitalization with their management teams still intact. Even so there will obviously have to be another bank bailout bill passed by Congress this year with the Nationalization plan. I'll predict this happens by September.

Speaking of bailouts. First if we do nothing, what comes next will look more like Mad Max in the Thunder dome than the Great Depression. All experts agree there needs to be stimulus and bailouts. However, there is a terrible cost associated with them. Hyperinflation. This in fact will become official US government policy. It's will take a year or so to move from deflation to hyperinflation, but in the long run, it's the only way to fix this mess.

Lastly, notice the absence of the Federal Reserve Bank in new policy decisions. They shot their wad last year and ran out of ammunition. They didn't even slow this mess down one bit.

Our economy is screwed and because of this being a global recession, there's nowhere to hide, nowhere to invest safely. Which is obviously good news for Republicans. Apparently Obama picked the wrong cycle to run for president. There is no way Obama wins this game. He's a 1 term president for sure whether he deserves it or not.

If I'm wrong, then the guy really does walk on water.

[wind_magic]

Originally Posted by TropicCat

Hyperinflation. This in fact will become official US government policy. It's will take a year or so to move from deflation to hyperinflation, but in the long run, it's the only way to fix this mess.

They believe that. Using just the numbers without looking at the overall picture inflation really does help borrowers, it makes it possible for them to repay loans with cheaper money at the expense of savers, and who could possible be a saver in this economy except "rich people" ? If you don't have 100k$us to repay a loan, simple, make your 1k$us worth 100k$us, simple and easy. They are going to do this, intentionally, it's a stealth tax increase of monumental proportions. Who cares if milk costs 40$us/gallon when all debts have been erased ? Time to play who wants to be a millionaire.

[erps]

I've been reading a lot about hyperinflation lately. While I've read that cash savings will be wiped out, it appears that stocks can rebound when it's over. Is that right?