I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Thu Oct 09, 2008 11:20 am Post subject: Re: Is the Financial Crisis Ending?
Much of the discussion here has been based around proximate causes (Libor rates, TED spreads, frozen credit, etc.) and forces that can be quantified. While acknowledging the utility of such discussion, I prefer to take a teleological tack and look at where we're ultimately headed.
Falconoffury wrote:
The Financial Crisis will only end in a sense that it will transform into a crisis of currency and global trade. It is like Peter Schiff has said. The Fed will solve the banking crisis, but create an even bigger crisis in the process.
The little fish keep getting eaten by the bigger fish. A crisis results in a merger or buyout (many of which don't make sense, like BofA buying Countrywide), the crisis possibly abates but ultimately intensifies, and then there's a new round of consolidation. Thus we see the US Gov talking about taking ownership stakes in banks, talking about controlling bank lending, and so on. They come out with a new proposal every day, each of which advances in scope - and I'm sure there will be some whoppers when the G7 meets this weekend.
When the US Gov itself finally falters, some new entity will emerge and sweep everything up in one tidy bundle.
The current crisis was brewed to facilitate the transition toward a fascist economy. In this sense we might say that it's still really about Peak Oil after all - it's about the State (or global elite) taking the requisite steps to consolidate control over the use and allocation of resources.
Therefore this crisis won't be over until the transition is complete. And in order to justify a takeover, conditions most likely will have to take a steep turn for the worse.
Joined: Jun 30, 2005 Posts: 744 Location: northern California
Posted: Thu Oct 09, 2008 11:30 am Post subject: Re: Is the Financial Crisis Ending?
oswald622 wrote:
I prefer to take a teleological tack
Nice! In fact, your entire post is impressively, doomerishly, depressing. _________________ "When men yield up the privilege of thinking, the last shadow of liberty quits the horizon."
Thomas Paine
Joined: May 20, 2008 Posts: 950 Location: I have a whole ward
Posted: Thu Oct 09, 2008 12:07 pm Post subject: Re: Is the Financial Crisis Ending?
They Fed and Treasury may avert an immediate collapse. That is what the bailout was suppose to do.
We are going to witness events similar to the 1929 crash. The crash of October 29 was just a date. An event historians chose to say this is when the great depression began. Many say it started a little earlier and the worse years were 33 and 34.
We will continue to slowly slide into a recession. It will not happen overnight or be mass riots in the streets. This October's earnings season will force the market lower and at Christmas the dismal sales figures will push it lower still. In 2009, the Alt. A mortgages will start to default in greater numbers leading to more drags on the economy.
We are just at the beginning. The question is how deep the recesson will be and how long it will last. Any major event such as another terrorist attack, hurricane etc could push us into a depression.
Time will tell. _________________ Viddy well, little brother. Viddy well.
Posted: Thu Oct 09, 2008 1:04 pm Post subject: Re: Is the Financial Crisis Ending?
charliebrownout wrote:
I have no idea. I'm inclined to doubt it, but I'm not the person to ask. I wasn't a business major, I was a psychology major. Ask me if the current world is crazy or not. I can answer that one.
heh, i'll ask. the current world is bat crap crazy, isn't it? it seems to me that it is.
Joined: Jun 29, 2008 Posts: 88 Location: Great Britan
Posted: Thu Oct 09, 2008 1:06 pm Post subject: Re: Is the Financial Crisis Ending?
skeptik wrote:
Is the Financial Crisis Ending?
No
I remember that nasty chart. Bit of a respite next year perhaps, but 2010-2011 could be ugly, around the time oil production goes into decline too. Nasty.
Joined: May 07, 2008 Posts: 424 Location: Chaska, MN
Posted: Thu Oct 09, 2008 1:19 pm Post subject: Re: Is the Financial Crisis Ending?
Dow drops to 8898. Yep I's say the crisis is pretty much over. LOL _________________ "With man gone will there be hope for gorilla? With gorilla gone will there be hope for man?" --Ishmael by D. Quinn
Posted: Thu Oct 09, 2008 1:20 pm Post subject: Re: Is the Financial Crisis Ending?
While the term CDO has been heard quite a bit I would contend that very little of the general population knows what they are or the implications of their being declared worthless.
More importantly though, they are secret in a way, in that they are off-book, over the counter paper, meaning that the banks have not had to declare their value and thus been able to hide the fact that they are worthless. With Lehman's cdo redemptions, this will no longer be the case.
shady28 wrote:
Spanktron9 wrote:
RdSnt wrote:
As Rocc alluded to, Lehman's CDO redemptions are triggered tomorrow (Friday). Unless the PTB have rigged it somehow to hide that there there is a significant re-valuation of cdo derivatives tomorrow that will give a clear signal of how much this heavily leveraged paper is worth (zero).
I would expect a bad reaction, particularly since the G7 don't meet till Saturday. US markets are opening very soft today and I would expect that same sort of pattern as yesterday with a late day collapse.
Do you honestly have any doubt at this point that they will or already have?
Spank has it right. The CDO situation is not a big secret.
When the news is bad stocks typically sell off on the rumor and rise on the news. When the news is good, stocks usually rise on the rumor and sell off on the news. People who don't know this wind up scratching their head when their favorite stock declines on great earnings or announcements of wonderful new products, or vice versa.
Given the CDO news is bad, and the rumor mill is running, along with some technical factors (downside momentum is draining) I tend to expect a rally very soon - possibly starting tomorrow. I wouldn't touch the stock market though. It is just interesting to watch.
_________________ Gravity is not a force, it is a boundary layer.
Everything is coincident.
Love: the state of suspended anticipation.
To get any appreciable distance from the Earth in
a sensible amount of time, you must lie.
Posted: Thu Oct 09, 2008 1:38 pm Post subject: Re: Is the Financial Crisis Ending?
oswald622 wrote:
Much of the discussion here has been based around proximate causes (Libor rates, TED spreads, frozen credit, etc.) and forces that can be quantified. While acknowledging the utility of such discussion, I prefer to take a teleological tack and look at where we're ultimately headed.
Falconoffury wrote:
The Financial Crisis will only end in a sense that it will transform into a crisis of currency and global trade. It is like Peter Schiff has said. The Fed will solve the banking crisis, but create an even bigger crisis in the process.
The little fish keep getting eaten by the bigger fish. A crisis results in a merger or buyout (many of which don't make sense, like BofA buying Countrywide), the crisis possibly abates but ultimately intensifies, and then there's a new round of consolidation. Thus we see the US Gov talking about taking ownership stakes in banks, talking about controlling bank lending, and so on. They come out with a new proposal every day, each of which advances in scope - and I'm sure there will be some whoppers when the G7 meets this weekend.
When the US Gov itself finally falters, some new entity will emerge and sweep everything up in one tidy bundle.
The current crisis was brewed to facilitate the transition toward a fascist economy. In this sense we might say that it's still really about Peak Oil after all - it's about the State (or global elite) taking the requisite steps to consolidate control over the use and allocation of resources. Therefore this crisis won't be over until the transition is complete. And in order to justify a takeover, conditions most likely will have to take a steep turn for the worse.
nice post. however, when a power the size of the US falters, historically speaking the tendency points to a collapse to a lower energy state of smaller regional powers, e.g., roman empire into smaller european kingdoms; (also see soviet collapse).
given that, is your position that this is instead more akin to the collapse of the roman republic into the roman empire rather than my previous example?
Joined: Sep 14, 2004 Posts: 6547 Location: Rural Virginia
Posted: Thu Oct 09, 2008 1:39 pm Post subject: Re: Is the Financial Crisis Ending?
Jeezel peezel. I sure picked the wrong day to start this thread! Dow down almost 400 points at this moment. And as the base on which these devastating drops declines, a 400 point drop today becomes like a 600 point drop a month ago.
I wonder when we get---what do they call it---"capitulation"? Scary. We should all be scared at the intimate personal level. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Jun 29, 2008 Posts: 88 Location: Great Britan
Posted: Thu Oct 09, 2008 1:41 pm Post subject: Re: Is the Financial Crisis Ending?
DOW down 570+ and plunging, into the 8600's now. GM is on the brink. Banks in Europe got hammered towards the end of the day, TED hitting new highs. Yup, crisis over, BAU soon.
Last edited by Gebari on Thu Oct 09, 2008 1:43 pm; edited 1 time in total
Posted: Thu Oct 09, 2008 1:42 pm Post subject: Re: Is the Financial Crisis Ending?
Heineken wrote:
Jeezel peezel. I sure picked the wrong day to start this thread! Dow down almost 400 points at this moment. And as the base on which these devastating drops declines, a 400 point drop today becomes like a 600 point drop a month ago.
I wonder when we get---what do they call it---"capitulation"? Scary. We should all be scared at the intimate personal level.
when asia opens ltr tonight, well it's going to be scary indeed.
Joined: May 26, 2008 Posts: 1157 Location: Chicago, IL
Posted: Thu Oct 09, 2008 1:48 pm Post subject: Re: Is the Financial Crisis Ending?
Heineken wrote:
My gut feeling is that we've seen the worst of it.
Don't know, Heiny. Our beloved Dow is down 500 pts on its journey to 8,000 or perhaps lower. The economic plans and bailouts won't take effect for 6-9 months. There's a heated presidential election in 3 1/2 weeks. I don't think this is the proverbial "just the beginning" or "just the tip of the iceberg", but we're ways from being out of the woods. My 2 cents. _________________ 9/29/08, cube, The Dow will drop to 4,000 within 2 years
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