Market crash: are we there yet ?

[camaraderie]

Thanks Windy and Rick for your take on inflation and precious metals. I think I am going to stand pat...not make any longer term $$ denominated investments and stay liquid and ready to move while watching the indicators as you suggest.

We'll never agree on politics Rick but if you are right about the economy and the timing...the Republicans just have to sit back and wait for the mob to turn on the Dems....and all incumbents in 2010. As Dan says...all the rebublicans will have to worry about is not Dems...but independent challenges from the conservative/libertarian front. THAT they should be concerned about. While there's never been room for a three party system here...we HAVE eliminated some second parties in favor of a new one in our history. In times where NOTHING is normal...new political arrangements may flourish.

[TropicCat]

Cam

What the Dems have to fear is screwing up big time. I can't believe Chris Dodd is still running Banking and Finance.


If you read the papers today you'll agree that the media is trumpeting the end to the recession. Little do they know that our economic quagmire is far from over. Instead of ending, it's spread to much of the developed world.

Consider that an astounding one in nine American homes, that's 14 million houses, sit empty. The December median price of a home sold in Detroit was $7,500. What's more is that 8.3 million homeowners were upside down on their mortgage in the fourth quarter.

Freddie Mac's CEO resigned after six months on the job, the CFO hung himself. What does that tell you?

The projected US $1.75 trillion federal budget deficit is almost four times the nation's previous record-high budget deficit.

The Fed is now buying government debt (no one else will). Essentially ending deflation and fueling inflation.

Where are the newspaper editors? What happened to honesty in reporting? Is this what happens when you let one guy control what we read?

[danjarch]

Rick, I not sure what you think can be done about it. Plenty of people wrote there representitives trying to get them to stop the tarp program. Same for the stimulus. Thousands protested while congress was discussing passing the huge budget that is going to make sure we have to keep the presses runing.

Just a few months ago you were railing about how they weren't spending enough money, so have you jumped back across the political line. The give aways in TARP 2 should be enough to convince any one that this congress isn't any better disaplined then the last, nor is this president any more willing to look beyond today then the last one either.

[TropicCat]

Sure they need to spend money, but they need to spend it where it helps out Main St. , not Banking and Wall St.

The real problem is the situation is so complicated, no one in congress is qualified to make recommendations. They depend on the Treasury Sec to write the bills and don't bother to read them. Both Paulson and Geither look out for their buddies at our expense.

You are correct that there is nothing we can do that will have an immediate impact, however I never met a Congressman who didn't want to get reelected.

[PBzeer]

I can remember when it seemed like the Dems were down for the count. Everybody was saying they had to change, pay more attention to values, etc. Well, they didn't, and now they're back in power, more liberal than they were before. Politics has it's own boom and bust cycle.

[danjarch]

Rick, what new idea do you have to get the money out in a useful and uncorrupted way. If they just shove it out the door, it's going to go to who ever has the most pull. Which would be wall street and the big corporations. They could give out across the board tax cuts but there is little support for that right now. The only other thing is months to years of studies, designs, and bids. All open to the public with time for comments and questions.

But all those involve spending money that we don't have and the few who have that kind of cash are already heavily invested in the US. There is no easy fix this time. We've been dodging and weaving this problem for years. Times up. Unless you've got some truly new plan or idea, I fail to see why you'd expect anything other then what we're seeing now.

[TropicCat]

Originally Posted by wind_magic

Short term treasuries are at about 0.2% (2 tenths of 1 percent), you have to go out to about 7 year notes to get over 2% (2 percent), which is better described as intermediate term debt.

Windy, I just had to revisit this.

From the NT Times:


"Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.



While that is still low by historical standards — it averaged about 5.7 percent in the late 1990s"

I knew my math is correct. The 10 year is what all mortgages are written on. Where are you getting 2% numbers?????

On a related front:

The Fed has purchased $73.742 billion of Treasury securities between March 23, 2009 and April 27, 2009

This should scare us all:

"The Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year"

Oops...

[capecodphyllis]

Originally Posted by danjarch

You can't explain inflation to the masses in any real way. The public won't start to get really going about it until every trip to the grocery store forces them to. You can see this by watching the tea bag comments. The government can't spend money it doesn't have, any more then you can. This is common since. Every dollar you spend today that is borrowed, cuts into your future money. But plenty of people are willing to ignore this and keep the insanity going.

The rest of 09 will be spent aurguing about cap and trade, heathcare, rising violence in Iraq, and every other thing. Then there's Europe which might implode. The whole gay marriage thing which will keep plenty distacrted. The same things that kept the average man on the street from relising that the housing market had gone crazy. As well as allowed the crash of the housing market to go on for over a year before they tuned in.

Again I could be wrong, but there are to many people high on the notion that more massive spending by the government is a good thing. They're not going to be willing to look at other aurguments at this time.

Price inflation, which clearly is running well over 10% per year is a monetary symptom, not an independent phenomenon. It happens because the foxes, whom we put in charge of our henhouse, are busy gorging themselves on our chickens. They simply print money, whether on paper or electrons. Debit cash, credit debt. Our debt. Their cash.

When they started to get really out of control with their money creation scheme, which is a crime called counterfeiting if you or I do it, they simply stopped telling us about how much money they were creating but you can get a private assessment of this key figure, which is running 18% today, at Some key statistics

Today, they claim that inflation is running only 2-3%. Who you gonna believe - them or your own lying eyes?

Inflation, housing, jobs, debt trade deficit - they all are much worse than they tell you. So, naturally, what is the government about to do about it? Stop telling us, of course! The national debt keeps growing, fueled by the insane war in the Middle East. What's going to cut it? We don't have any manufacturing base left in America.

Those interest rate cuts you keep hearing about? They help the bankers, not us. You won't see them. They keep the banks from going under, where they belong.

Market manipulation saves them, not us.

They keep crowing about how they are fixing things. What they are doing is making them worse, of course. Guaranteeing that Depression II will make Depression I look like a walk in the park.

Oh, the bailouts. Talk about throwing gasoline on a fire! We have a problem caused by the creation of money far in excess of the production of goods and services to support it. And we hope to solve it by doing what? Creating even more money, of course. And not just a little bit, either. So much more new money that the word trillion now has gone into our lexicon, just as the word billion went in a few years ago after being an inconceivable concept. How long before we start talking about quadrillions of dollars, do you suppose?

President Obama's popularity is dropping like a rock and already is below George W. Bush's rating at this stage of his "presidency." The honeymoon is over and people are beginning to wake up to the dawning horror of just what crept into our bed during the night.

Though he has announced an intent to close it, the Guantanamo Bay prison camp (Gitmo) still is open for business. Of course, during his campaign Obama promised to get us out of Iraq, don't forget.

We still are in Iraq, full force, with only a troop reduction (to 60,000) now promised, still months off in the future. This withdrawal-cum-reduction is irrelevant in the face of Obama's announced intention to step up our presence in Afghanistan well beyond the now-promised Iraqi troop reduction. Besides, now Obama is bombing the hell out of northern Pakistan in a clear widening of the Middle-Eastern American War-Crimes-in-Progress.

Meanwhile, America's aging infrastructure weakens ever more under the groaning increased demands of out-of-control population fueled by illegal immigration and its literal offspring. Roads, bridges, New Orleans sea levees and thousands of other public works become obsolete, unsafe and generally inadequate. America's money goes to war, but not to America's basic needs.

[PBzeer]

There's no votes in fixing stuff, as opposed to giving away new stuff. It's no more complicated than that. To a Congress Critter, money = votes = re-election.

[TropicCat]

Originally Posted by capecodphyllis

Price inflation, which clearly is running well over 10% per year is a monetary symptom, not an independent phenomenon.

Nice Post Phyllis.

Speaking for myself... you're preaching to the choir on some of what you wrote, as I've been saying the same thing in this thread, over and over again. However, we have to spend the money Phyllis. There is no choice. The housing bubble nearly crippled the country and you have no idea how close we almost came to Depression. Stimulus is the only answer, however how they are doing it is horrible. Banks get bailed out instead of people. I read somewhere that the bailout money would have paid the mortgage off on 97% of outstanding mortgages.

Instead NY banks get it all.


I guess I owe you an apology. Since Sailaway21 has opted out of this thread, I see that he found you.

sorry.