Isn't it fascinating to watch a the death of (another) speculative financial bubble playing out in real time, now that you're fully and painfully aware of how speculative financial bubbles form and burst?
Doesn't it feel like having a crystal ball, or being psychic?
But of course, it's not. It's all been done before, and we're just following the really predictable script.
September 08, 2006
HousingPanic Stupid Question of the Day
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Economic bubbles are generally considered to have a negative impact on the economy because they cause misallocation of resources into non-optimal uses. In addition, the crash which usually follows an economic bubble can destroy a large amount of wealth and cause continuing economic malaise as was the case of the Great Depression in the 1930s for much of the world and the 1990s for Japan. Not only can the aftermath of a crash devastate the economy of a nation, but its effects can also reverberate beyond its borders.
Another important aspect of economic bubbles is their impact on spending habits. Market participants with overvalued assets tend to spend more because they "feel" richer (the Wealth Effect). Many observers quote the housing market in the United Kingdom, Spain and parts of the United States in recent times, as an example of this effect. When the bubble inevitably bursts, those who hold on to these overvalued assets usually experience a feeling of poorness and tend to cut discretionary spending at the same time, hindering economic growth or, worse, exacerbating the economic slowdown. Therefore, it is imperative for the central bank to keep its eyes on asset price appreciation and promptly tame high level of speculative activity in financial assets.
I love that cartoon!
All I want to know is how do I get in on the next one?
Anon,
who sad that economic growth is always good?
We'd better return to cyclical nature of market, giving possibility to correct itself and get rid of obsolete and non-effective enterprises and get slim and competitive again.
Take for example a nature. Everything is cyclical. Even USA empire is going to die soon too.
Not really a script, as we are in uncharted waters, with all the Squash Mortgages.
I say Squashed cause when next year rolls around, people are going to get squashed.
Unless we have another 9-11 then one can be sure the fed will drop and the press will print.
Bork said:"Unless we have another 9-11 then one can be sure the fed will drop and the press will print".
exactly-this is what got us into this mess in the first place. Now, it's time to pay dearly for that cheap interest rate.
hmmm... interesting.. by the transitive property then, Osama bin Laden caused the housing bubble (and upcoming economic collapse)
planes hit towers, rates hit 1%, lenders hit the gas, housing hits the wall, now the american financial system collapses
checkmate, osama
amazing
I guess one could say! Hmm, what is that old saying!
THE JIG IS UP!
http://tinyurl.com/q7pzf
planes hit towers, rates hit 1%, lenders hit the gas, housing hits the wall, now the american financial system collapses
Checkmate, osama
Keith, dont you remember the great vidoe tape with osama on it saying he is going to take the United States down Finacially..hmm
Keith said...
hmmm... interesting.. by the transitive property then, Osama bin Laden caused the housing bubble (and upcoming economic collapse)
planes hit towers, rates hit 1%, lenders hit the gas, housing hits the wall, now the american financial system collapses
checkmate, osama
amazing
___________________________________
Actually he stated several times in his 'press conferences' that that was his goal, to bankrupt the US. Of course it was never mentioned in the media, all the media covered was that he was a terrorist a nut, but if you read the transcripts he stated that explicitly.
borka - thanks for the link - I just posted it as its own well-deserved thread
Homebuilder Lennar Corp. reduced its third-quarter earnings outlook on Friday, citing increased sales incentives driven by a soft housing market, as well as certain land adjustments.
- note the use of incentives, which will not impact the reported price numbers we all see
The U.S. housing market has continued to deteriorate. Given difficult market conditions, we have limited our land purchases while we have remained focused on even flow production and minimizing completed inventory. As a result of this strategy, we experienced only a slight decline of 5 percent in preliminary net new orders for the quarter. However, increased sales incentives along with certain land adjustments were the primary factors in lowering our earnings per share estimate," Miller said
It's too easy to blame Osama - if the WTC towers hadn't fallen, do you think that the the consumer attitude prevalent today would have been any different?
I think when people switch from a "spend" mentality to a "save" mentality and understand that being in debt can be a bad thing, the true depression will start. Does having a riding mower, a big house, a plasma TV, and other toys really make a person happier? Maybe, but maybe not. Owing that money surely can't lead to a good nights sleep though.
Does having a riding mower, a big house, a plasma TV, and other toys really make a person happier? Maybe, but maybe not. Owing that money surely can't lead to a good nights sleep though.
Bingo!..And if you notice, I am 39, I see a lot more folks my age getting grayer (hair that is) by the day!
Where did you get that image from? Is it a poster (or a postcard), how can I get a copy to frame and post in my house?
Keith et al:
Osama Bin Laden = Tom Osman, CIA operative.
To add a little context to your overall views.
Let's update that cartoon:
the only people doing real work are Chinese
fat cat Mister Bubble is padlocking the white people's factories
"It's too easy to blame Osama - if the WTC towers hadn't fallen, do you think that the the consumer attitude prevalent today would have been any different? "
No, but their leverage would have been way different because of more sane Fed policies, and most importantly, less spurious non-productive government deficit spending.
bin Laden is no idiot. He knew that you combine a willfully ignorant Texan with right wing republican economics and jingoism, attack them and make them go into hock spending against all sorts of phantom, and occasionally, real threats. He knows that Bush et al will never actually ask honest sacrifice (except of lives) from people, and that he will be too culturally ignorant to actually stop the advance of radical Islamism.
Osama spews some BS, and we go to Orange Alert, another $100 million down the drain.
"Even USA empire is going to die soon too.
~
People have been saying that for a very long time."
How long is a very long time for you?
Let's hear it. For your reference, 50 years is NOT a very long time in human history.
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