Global Economy - Time to sound the alarm

[The Gardener]

Eastern Europe, the biggest "subprime" investment of all, is about to collapse... and with it goes the EU banking system:
http://www.counterpunch.org/whitney02172009.html

US is on the path to wage deflation and national debt slavery, i.e. becoming a banana republic:
http://www.counterpunch.org/hudson02172009.html

Tragically ironic that the banking establishment is now "doing" to the US what the US has "done" to its third world colonies for decades.... hollowing out domestically controlled capital, and making us vassals to international oligarchs... A final "coup de grace" after a two decade-long orgy of excess.

Additionally, Ireland is on the brink of default, the UK isn't far behind. Any and all of these events carry massive counterparty risk that will generate tens of trillions in lost market cap, and a tsunami of bankruptcies. Fasten your seat belts, folks... and keep your eyes OPEN. The dam has a LOT of cracks in it at this point, and the situation is about as dangerous right now as it was last summer when the money markets almost completely ground to a halt.

 

[ali777]

Tragically ironic that the banking establishment is now "doing" to the US what the US has "done" to its third world colonies for decades.... hollowing out domestically controlled capital, and making us vassals to international oligarchs... A final "coup de grace" after a two decade-long orgy of excess.

who are they???

 

[The Gardener]

They are the modern day inheritors of the Rothschilds, Rockefellers, etc. OLD money.

But its not only the old money big time playahs that have their snouts in our trough... the second tier wannabes are running amok as well, folks like Bernie Madoffs, the Angelo Mozillos, and, as recent as today, the Robert Allen Stanfords of the world:
http://www.nytimes.com/2009/02/18/busin ... .html?_r=2

Its what we often refer to as "looting". Of course, that word sounds SOOO unbecoming when its the folks with the white collars who are doing it. Fatten up the goose over the past few decades, and now its time to gorge. And these ilk have perfected the art of extraction.

Lords and serfs, patricians and plebians... feudalism never ended, it has just been marketed in a more acceptible way as to minimize the torches and pickforks incidents.

Oh, and on the topic of torches and pitchforks, testimony to Congress just this past Thursday from Admiral Dennis Blair, current US Director of National Intelligence:
http://www.truthdig.com/report/item/200 ... as_top_spy

Adm. Dennis Blair, testified before the Senate Intelligence Committee. He warned that the deepening economic crisis posed perhaps our gravest threat to stability and national security. It could trigger, he said, a return to the “violent extremismâ€￾ of the 1920s and 1930s.

I find this testimony to be somewhat alarming.

 

[Cassin]

How long until the US gets its ship righted G-Man? I have always kinda figured that I will start feeling better when gas hits 2.50'ish a gallon.

 

[ali777]

How long until the US gets its ship righted G-Man?

A British minister said the effects of this crisis will be felt for more than 10 years... The government denied that is would be that bad :dunno:

I keep saying, uncontrolled capitalism is not good for the humanity. I do support rewarding hard work, but not at the cost of other people's welfare.

On paper there are many control mechanisms protecting the system, but those greedy bastards know how to exploit the systems through lobbing and stuff uke:

On a personal note, I don't know why I care. It's not affecting me, if anything the prices are going down and I might actually benefit.

 

[Cassin]

How long until the US gets its ship righted G-Man?

A British minister said the effects of this crisis will be felt for more than 10 years...

Of course it will! I always just worry during these times when its going to bottom and finally start slowly climbing back up.

 

[The Gardener]

It'll TRULY end when the US addresses the structural problems with our economy that were at the fundamental roots that caused this. Namely, our twin deficits... our trade deficit, and our fiscal deficit.

Fact: the United States spends more wealth than it produces. Ergo, we need to borrow. We were relying on ever-increasing property values to be the collateral for this. This collateral became a bubble, and now its popped, and we're back to square one... back to spending more wealth than we consume.

We need to start producing more wealth than we consume. This could be achieved in a number of ways... most importantly is to REDUCE our addiction to foreign oil, which is a prime driver of our trade deficit. Less oil bought means that more money is accumulated here, and less money is consumed at the gas pump. OR, we can let our economy continue to deteriorate to the point where our wages are on par with workers in Asia... at which point, we could make up the trade deficit through a revitalization of manufacturing. Of course, the lousy aspect of this is that manufacturing requires petroleum... so, we'd have to figure out a way to manufacture goods with much less petroleum, or perhaps with some sort of alternative energy source. (I'm sure there are a few unicorns out there too...) Another possibility would be if there are global food shortages... the US is a net exporter of foodstuffs, so an explosion in food prices would be beneficial for the US trade deficit.

One way or another we need to produce more wealth, as a nation, than we consume.

More financial trickery, TARPs, TALPs, bailouts, etc... they are putting band aids on a leaking jugular. They buy time, ease some of the pain, but they aren't the final solution. Financial trickery caused this situation, and the situation won't be solved with even MORE financial shell games. and trickery. We might get lucky, and some of this trickery might very well SEEM to be working, and it might work for another several years or so... but inevitably, this is only kicking the can down the road, and not solving the inherent problem.

 

[Bryan]

I keep saying, uncontrolled capitalism is not good for the humanity. I do support rewarding hard work, but not at the cost of other people's welfare.

YES!!!! I couldn't agree more!

On paper there are many control mechanisms protecting the system, but those greedy bastards know how to exploit the systems through lobbing and stuff uke:

Indeed.

 

[The Gardener]

Tragically ironic that the banking establishment is now "doing" to the US what the US has "done" to its third world colonies for decades.... hollowing out domestically controlled capital, and making us vassals to international oligarchs... A final "coup de grace" after a two decade-long orgy of excess.

who are they???

Ali777... read this piece. Should answer your question:
http://www.marketoracle.co.uk/Article8944.html

 

[Old Baldy]

Day one of the economy saving stimulus package - Dow plunges 297 points??!!

 

[Cassin]

Day one of the economy saving stimulus package - Dow plunges 297 points??!!

This seems to happen every time "on doubts stimulus will work"

 

[The Gardener]

As much as I am a skeptic about the stimulus package... and I am, I thought this stimulus was supposed to be for infrastructure investment to foster weaning us off foreign oil, and it is sounding more like it has a bunch of Reid/Pelosi pork in it... yesterday's selloff was more driven by international issues. Namely, the banking system in Europe is on the edge of an abyss, in SERIOUS crisis, and a large Korean bank declined to pay on a callable bond, which is VERY alarming. You can't just look at the US indexes in isolation, there has been a VISCIOUS selloff going on all around the globe.

I hate "stimulus" packages. There is NO case in modern economics where a "stimulus package" ever did ANY good. What we should be spending money on is an "INVESTMENT" package... where the government takes advantage of low commodity prices and low labor unit prices to build infrastructure that will yield a return in the out years. Good examples would be alternative energy, rail networks, etc. It drives me crazy when I hear pundits laugh off the importance of a good rail network. They could not be MORE wrong... rail transportation is the most energy efficient way of transporting bulk goods. When oil prices rise again, and we all know they will, an investment here would yield IMMENSE returns in the decades ahead IMHO.

Think of the Hoover Dam, or the Tennessee Valley Authority under FDR... LOTS of very valuable infrastructure built on the cheap, because in a depression, labor and materials costs are really low. And, as a result, infrastructure was built that is still reaping returns to this day... and in the process, it kept a lot of unemployed people busy doing work and earning a basic wage. THAT's what I call a GOOD and timely government INVESTMENT. And that is what I believe Obama wanted to do... he needs to remind Reid/Pelosi that HE is the President, and not them.

 

[Old Baldy]

Well of course that's what is Gardener (i.e., Pelosi/Reid porkulus)!

 

[The Gardener]

I hate Harry Reid. He is an evil, evil, evil man.

 

[Old Baldy]

I don't like Reid Gardener but why do you say he is so evil?

To me he is just a typical politician who believes in "the ends justify the means" philosophy.

Well....... the more I think about what I just said.........he is arguably evil!! unk:

As to Pelosi....that idiot is no smarter than I am for Pete's sake.

You'd hope the Speaker of the House would be smarter than Old Baldy for goodness sake. But I'm sorry to say she isn't IMHO.

 

[The Gardener]

I sometimes wonder where Reid got his degree.... the Havana School of Economics?

I just think he panders, and has lost touch with reality. Frankly I think that most congresspeople are in this boat.

But, then again, when it comes to economics I, generally, lean towards the Ron Paul philosophy.

 

[casperz]

I believe that no one really knows how to resolve this crisis or
even can solve this crisis and the Obama team has basically chosen to
sit and wait why it plays out and choose to fight each new battle as
they come up. I think the fact that Geitner's big announcement was
there was no announcement is an indication that is what the plan is. I
don't see that as a bad thing but I think they maybe should have done
the same thing with the stimulus which I don't see as very stimulating
at all and at the very best is a very short term effect.

 

[Old Baldy]

Casperz - if they wanted to do nothing why did they sign a $1 trillion stimulus package?

 

[Cassin]

I believe that no one really knows how to resolve this crisis or
even can solve this crisis and the Obama team has basically chosen to
sit and wait why it plays out and choose to fight each new battle as
they come up..

Um....what?

 

[Eureka]

There isn't really any definitive proof that the package will work though.

There are no clinical trials for economics.