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Kicking and screaming toward a recession
Wednesday, January 23, 2008
It's a good thing that the stock market made a miraculous recovery today from another near-death experience - it sure looked as though life as we knew it was about to be over.
The above photo comes from The Rites of Recession in the current issue of Time Magazine where Justin Fox discusses the "economy wide mood swing" that is now underway.
Apparently, the recession that is either near or already here is but a "temporary, cyclical phenomenon", just "a passing phenomenon" on the road back to life as we know it.
Whew!
For a few days there it looked like overconsumption and the lack of domestic savings in a bubble-economy that had run out of bubbles was about to meet its inevitable end.
11 comments:
She must be picking out the TV she wants when that rebate check arrives.
Heck, why wait - charge it and she can watch the Superbowl on a new Chinese made TV.
Recession? What recession?
I was thinking along the lines that the US government simply cannot back the housing bubble bust(through FNM, FRE, FED bank bailouts), accept the monoline insurers losses, and continue to spend money at a rate that can never be paid back. Then it hit me! The US economy has been leveraged all over the world in so many ways that a realistic pricing of the situation is no longer wanted, and is in fact opposed, by every financial player in the game. The US owes more money than could reasonably ever be paid back right now, yet foreign countries gobble up our debt offerings like the food rewards on the show "Survivor". The US is a nonperforming asset right now, and it is in every one's best interest to keep pretending otherwise. So why not just have all the losses dissapear down the rabbit hole and start over?
Let's pretend all is fine and maybe it will go away. Foreigners stopped buying our debt, hence the 'crisis'. The US isn't so much a nonperforming asset as an overpriced one, imo. Drop the USD by 30%-50% vs a basket of hard assets and that would be about right. Things could clean up and rebuild. But we aren't going to do that and it will be more like an 80%-90% drop when all is done.
You're right, our government is insolvent and will always be, BUT it can create the thing that enables it to pay its debts.
Funny that the earth values the fiat money so highly. One day some President might just demonetise it all.
Or, more likely, create "Dollar Two"- print enough cash to pay everything off, then start again with a new currency.
They buy our paper because we have the navy, the army, the banks, and the satellites.
If there's only one man with a rifle, he's the one to bet on and will likely be the last one to starve.
And we are STILL the big economy.
That looks like the Costco by my house
Let it all bounce then, and re-short. Charts for the Big Bounce bounce that's developing: (http://benbittrolff.blogspot.com/2008/01/charts-for-big-bounce.html)
TheFinancialNinja
one nice thing about buying your 65-incher at costco is the stand is included. i think thats a big money-maker for places like bestbuy.
- sd
Well, actually the Feds can't create what they need to pay the debts. They can only try to continue swindling creditors. BUT, it won't last too much longer because even a lot of the creditors aren't looking so good.
Well, I guess in the overall scheme of things, the Great Depression was also just a "temporary, cyclical phenomenon."
It just kinda sucked for those who had to live through it; a lot like the one we're now entering...
This again proves that everything has to be bigger in the US. OMG these monsters would not fit into 90% of European homes.
Typical Euroaggeration. You aren't thinking about putting them on the ceilings, are you?
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