Posted: Fri Apr 04, 2008 2:23 pm Post subject: Re: Housing & Economic Collapse - In Progress
Falconoffury wrote:
I have always been a big supporter of Ron Paul and his ideas about deregulation, but we can now see that this derivative crash was caused by deregulation. This proves that we need some sort of regulation to keep these investment banks and funds from hiding things and lying to investors. If all of these banks and funds were required to have complete disclosure at all times, we probably wouldn't be having the problem.
On the other hand, you can say that deregulation may allow us to learn hard lessons. If the Fed never made its billions of dollars in loans, then we would see many more banks and funds going bankrupt. It would force investors to learn more about their investments and how it works. Perhaps another depression is the wakeup call that we need to prevent this from happening again. Whether deregulation is the best thing is still highly debatable.
Nothing in the recent fed overtures about regulating derivatives market. The financials are the first to bitch and moan about regulation at the same time they fleece the population through deregulation of financial industry.
Meanwhile, wait for the average Joe to be taxed and regulated to death, as a consequence of all of this. In the future one won't be able to fart without having to pay a carbon tax, too, and that just stinks.
Posted: Fri Apr 04, 2008 2:24 pm Post subject: Re: Housing & Economic Collapse - In Progress
SPG,
My layman's view: "Wall Street" is weathering this crisis, with the stock market holding, bc the Fed is pumping money into Wall Street as fast as it can. It is a reflection of the inflationary policy of the Fed in Wall Street itself but not a a reflection of the state of the US economy overall.
As we all know, there has been a big debate about inflation vs deflation, but it seems quit possible its not always one or the other (stagflation for example). However, I think that stagflation may prove to include not only food and energy prices, but stock prices as well.
For example, the Federal Reserve is clearly going to try to bail out the big boys like Bear Sterns, and for the first time is allowing securities firms to borrow from the Federal Reserve, not just banks.
The infamous "Plunge Protection Team" formally called "the President's Working Group on Financial Markets" met with Bush on Monday morning, the day after the Fed Reserve bailed out Bear Sterns at taxpayer expense. So, they are trying their best to protect the interest of the financial markets.
It just seems to me that the stock market is benefitting from all the credit being put out by the Federal Reserve. I remember hearing Marc Faber saying the stock market could go to 20k if the Fed was inflationary enough. Its very easy to confuse a rising stock market with "prosperity" in the overall economy, but they are not one and the same. One only needs to look at Zimbabwe to understand that a stock market can rise even though the overall economy, actual GDP, is declining.
Last edited by seahorse2 on Fri Apr 04, 2008 3:12 pm; edited 1 time in total
Joined: Jun 18, 2005 Posts: 3909 Location: In a van down by the river
Posted: Fri Apr 04, 2008 2:57 pm Post subject: Re: Housing & Economic Collapse - In Progress
Seahorse, I agree with a lot of what you have said.
The markets are going up because of what the Fed has been doing, but this is all just the process we go through when markets crash.
The Fed is bailing out Wall St. as fast as they can but that is not going to be able to reverse this collapse. We are a consumer society built on debt that only functioned because of a credit supply to the consumer. That system has broken down, they are attempting to save those at the top but the whole thing still comes down when the consumer is cut off and that is in the process of happening now.
These irrational rallies in the face of obvious horrible news only force more people out of the market who are short, when they are all gone the market collapses and no one is their to catch it.
Posted: Fri Apr 04, 2008 3:14 pm Post subject: Re: Housing & Economic Collapse - In Progress
With M2 up 24% in the week of March 24, and M3 up to 17.2% in March over 16.9% in February,( according to John William's SGS) it is no wonder that inflation is rising fast. The reckless use of money supply to prop up a worthless market that is growing if the face of a recession raises risks twice what they should be. Remember that Paul Volcker raised rates to 20% in 81 and we did not have a depression. These clowns are mere servants of the administration and Wall Street. They are the modern "Let them eat cake" rulers. November is approaching. Guess which candidate Paul Volcker supports?
The economy shed 80,000 jobs in March, the third consecutive month of rising unemployment, presenting a stark sign that the country may already be in a recession.
Sharp downturns in the manufacturing and construction sectors led the decline, the biggest in five years. The Labor Department also said employers cut far more jobs in January and February than originally estimated.
The unemployment rate ticked up to 5.1 percent from 4.8 percent, its highest level since the aftermath of Hurricane Katrina in September 2005. More Americans looked for work than in February, when many simply took themselves out of the job market. But employment opportunities remained sparse.
“Three months in a row of payroll job losses and a sizable negative revision: these are clear signs that the job market is in recession,” said Jared Bernstein, an economist at the Economics Policy Institute. “I’m hard-pressed to imagine anyone who would raise doubt to that at this point.”
In the last 50 years, whenever there has been an employment downturn like the one of the last few months, a recession has followed.
_________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Posted: Fri Apr 04, 2008 3:50 pm Post subject: Re: Housing & Economic Collapse - In Progress
newman1979 wrote:
Remember that Paul Volcker raised rates to 20% in 81 and we did not have a depression.
I very much doubt a Vockler is possible today.
The derivative market was almost non-existent in 81 (today its 15X global GDP)
There was no Global housing bubble
USs Budget was balanced
US was a net Creditor.
the US gov is currently paying 25% of its take revenue to pay interest rates between 3% and 5%. A 20% interest rate would kill them.
Deflation saves the lender and screws the debtor
Inflation saves the debtor and screws the lender
When your the worlds largest debtor nation (by more than a factor of 5 to the next runner up, Spain) you do not invoke deflation. _________________ Angry yet?
Posted: Fri Apr 04, 2008 4:41 pm Post subject: Re: Housing & Economic Collapse - In Progress
As I said, we did not have a depression in 1981 when interest rates were for a short time 20%. Many countries control their inflation without depressions, Iceland 15%, Australia, 7.75%, China 6.5% etc. What the problem is here is that FEAR MONGERS rule the roost. With inflation at 4-10% depending on methodologies that are used, real interest should be 3% over the inflation rate., or 7% at a minimum.
Last edited by newman1979 on Fri Apr 04, 2008 5:06 pm; edited 1 time in total
Joined: Apr 27, 2007 Posts: 4353 Location: The Great Sonoran Desert
Posted: Fri Apr 04, 2008 4:43 pm Post subject: Re: Housing & Economic Collapse - In Progress
FoxV wrote:
newman1979 wrote:
Remember that Paul Volcker raised rates to 20% in 81 and we did not have a depression.
I very much doubt a Vockler is possible today.
The derivative market was almost non-existent in 81 (today its 15X global GDP)
There was no Global housing bubble
USs Budget was balanced
US was a net Creditor.
the US gov is currently paying 25% of its take revenue to pay interest rates between 3% and 5%. A 20% interest rate would kill them.
Deflation saves the lender and screws the debtor
Inflation saves the debtor and screws the lender
When your the worlds largest debtor nation (by more than a factor of 5 to the next runner up, Spain) you do not invoke deflation.
Exactly!! _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
MBIA last month asked Fitch to stop rating the company because it disagreed with the ratings company's requirement that MBIA hold more capital. _________________ -Dac
Winners never quit and quiters never win, but those that never win and never quit are idiots.
Joined: Jul 17, 2004 Posts: 490 Location: Amerika (most of the time)
Posted: Fri Apr 04, 2008 6:21 pm Post subject: Re: Housing & Economic Collapse - In Progress
More from the law of unintended consequences. This whole thing is just so interesting (albeit terrifying) and is causing so much weirdness to go on. I guess it is cheaper to keep her these days.
Indeed, all the attorneys I spoke to bemoan the complexity that the new housing market has brought to new divorces.
In economic terms, divorces are a dividing of the couples' jointly held assets. Now, many divorces are finalized before the couple sell their home. That triggers a host of other potential points of contention: Who gets to live there in the meantime? Who pays the mortgage? Does paying the mortgage increase the payer's equity? Who gets the mortgage interest deduction? Who is responsible for a major repair that comes up in the meantime?
In the long run, judges seem to be assuming that the market will rebound. But what if it doesn't? For all the divorced couples who have put their lives on hold, continuing to share real estate based on predictions that just don't pan out, the phrase "a house divided" may assume a new meaning.
This prospect has left some lawyers wondering how much more complicated, stressful and time-consuming divorces will become. "It's going to be very interesting" said Weinstein. "I don't know what's going to happen."
_________________ Simon's Law: Everything put together falls apart sooner or later.
I don't think of all the misery, but of all the beauty that still remains.--Anne Frank
Joined: Apr 27, 2007 Posts: 4353 Location: The Great Sonoran Desert
Posted: Fri Apr 04, 2008 7:29 pm Post subject: Re: Housing & Economic Collapse - In Progress
big_rc wrote:
More from the law of unintended consequences. This whole thing is just so interesting (albeit terrifying) and is causing so much weirdness to go on. I guess it is cheaper to keep her these days.
Indeed, all the attorneys I spoke to bemoan the complexity that the new housing market has brought to new divorces.
In economic terms, divorces are a dividing of the couples' jointly held assets. Now, many divorces are finalized before the couple sell their home. That triggers a host of other potential points of contention: Who gets to live there in the meantime? Who pays the mortgage? Does paying the mortgage increase the payer's equity? Who gets the mortgage interest deduction? Who is responsible for a major repair that comes up in the meantime?
In the long run, judges seem to be assuming that the market will rebound. But what if it doesn't? For all the divorced couples who have put their lives on hold, continuing to share real estate based on predictions that just don't pan out, the phrase "a house divided" may assume a new meaning.
This prospect has left some lawyers wondering how much more complicated, stressful and time-consuming divorces will become. "It's going to be very interesting" said Weinstein. "I don't know what's going to happen."
The 30K a year millionaires are officially extinct... _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Joined: Apr 27, 2007 Posts: 4353 Location: The Great Sonoran Desert
Posted: Fri Apr 04, 2008 9:22 pm Post subject: Re: Housing & Economic Collapse - In Progress
Daculling wrote:
roccman wrote:
The 30K a year millionaires are officially extinct...
You are missing the point here roc. There is something more to this. Something much more.
One $500 silk shirt to wear at ladies night at the local bar...a leased lexus...heloc'd out the ass...and a cocaine habit...
Nope - that is about as complexed as it gets. _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Posted: Fri Apr 04, 2008 11:53 pm Post subject: Re: Housing & Economic Collapse - In Progress
Quote:
As I said, we did not have a depression in 1981 when interest rates were for a short time 20%. Many countries control their inflation without depressions, Iceland 15%, Australia, 7.75%, China 6.5% etc. What the problem is here is that FEAR MONGERS rule the roost. With inflation at 4-10% depending on methodologies that are used, real interest should be 3% over the inflation rate., or 7% at a minimum.
The monetary problems are only a symptom of our real problems. Our real problems are the overshoot of our population and the fact that we are reaching the limits of growth in a system that depends on growth. _________________ "If humans don't control their numbers, nature will." -Pimentel
"There is not enough trash to go around for everyone," said Banrel, one of the participants in the cattle massacre.
"George W. Bush loves poor people. He keeps making more of them." -unkn
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