You gotta believe the governments are out of ammo at this point.
Now, the long hard slog.
It was a fun ride though for a couple of days.
So now what?
October 15, 2008
Well, we had our 20% euphoric rise off the lows after the governments of the world gave it everything they had. Assuming that was it, now what?
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27 comments:
sh*t hits the fan
http://www.cnbc.com/id/27182581
Same shit Keith. You can lead a horse to water, but you cannot make it drink. The banks WILL NOT be lending the way they used too.....deep recession on the way.
All they did is save some banks, and guarantee deposits......no big deal.
The spending spree is well and truly over.
They say a drowning man will go down three times.... Let's watch and see.
1 step forward, 2 steps back. I like the analogy that someone else here used: a ball bouncing down a set of stairs.
There could be another big plunge or maybe it'll be a succession of declines and rallies. But the larger trend will be down. This economy is still facing enormous headwinds.
This was never just a liquidity crisis. Bad investments were made, real resources were devoted to non-productive assets: we spent our time and resources working on things that didn't real produce any substantive value. Overall, we have less stuff. And stuff is what standards of living are made of --> we can expect a lower standard of living.
Printing money or getting further in debt does not help matters. Stock prices will reflect this lowered productivity.
Europe rebuilt from two world wars. This is nothing compared to that.
The last step is when we go Pakistan and make it illegal for stocks to drop.
Market will flucuate between 8k and 9k for months, and then may drop even further since recession will get worse.
Pain. Massive Pain.
Systemic Financial Meltown.
Stay Tuned.
I think the market will trade in a narrow range of 9000-11000 for the next 2 years. But that will simply gloss over the big problems. The housing market will slowly fall 5% a year, coupled with 5% real inflation. Most will be losing 10% a year of what they 'think' their net worth is, without even realizing it.
The bottom line is the trend will be towards less and less wealth for the middle class for decades.
We spent the next 20 years worth of money already. Its gone.
How about some of this:
de·fla·tion (d-flshn)
n.
1. The act of deflating or the condition of being deflated.
2. A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit.
3. The erosion of soil by the wind.
I think #2 applies...New BMW for $10K anyone?
New loaded Chevy Silverado POC for $6500?
Gas will still be $3/Gallon though...The Sheik will see to that..
The media is talking now . Talking heads are telling the truth now ,the people are getting it now that it was a big Casino where it was rigged for the people to lose .
Do you go to a crooked casino and continue to play ? The people know that they were flakes going on a media and government supported spending spree .
Just don't play the game and than they lose because they don't have any suckers playing . Demand that the crooks be brought to Justice .
What's next? BREAD LINES! I don't know, but last I checked we were down 300 today, so depending on if it stays like this for a few weeks and we lose another big bank, like CITI...then I believe PANIC would set in.
The US government has been out of ammo for several years. All that is left is the printing press. At best we are in for 5 years of painful stagflation.
FDR tried everything. Didn't work. He needed the help of the Japanese.
About the Japs. After their 1989 economic collapse they tried everything too. No dice.
There may be massive unemployment, a rise in murders, and perhaps the wealthy might finally feel some obligation to help stock the soup kitchens. I hope there might be a return to mom and pop operations and entrepreneurship as the big boys go under. For those that manage to keep their jobs - the impact will be mostly psychological. The very poor, elderly on fixed incomes and the unemployed will suffer the most.
Down. Nobody knows where the debt is. It's like the Chinese putting melamine in milk. It could be anywhere. There's still no trust. Nobody really has a clue as to how to deal with this.
"Anonymous said...
3 PM approaching, disgusting PPT Zionists must be getting ready to fake a positive market today.
October 15, 2008 7:37 PM"
12:00 pst. Thank you. My thoughts and timing exactly.
Maybe if Bush would shave his head like Cash n Carry or Emporer Paulson he would gain a litle credibility?
They are not out of bullets yet:
Prime rate 1.5%
That's 6 25 BP cuts, or
3 half point cuts,
or 2 quarter points, and a full...
that can last us till next summer.
We also have 14 heading to 13 trillion dollar economy. 10% is 1.3 trillion, 5% is 650 billion...
They can mask a 5% correction with 4 $170 billion stimulus packages, one per quarter.
It's not like they were going to pay back the creditors anyway!
So the government is not done prolonging this thing...
Bwaaaaa ha ha ha ha ha ha ha! Come on morons, tell us how the Star Bucks is full, the malls are packed. The housing cash cow has died. With out all that cheap debt, the economy has nowhere to but down. Unless of course Obama wants to start sending stacks of cash to every man, woman, and child. It's comming back to the mean, and it's a hard road down. Bwaaaaaaa ha ha ha ha ha ha!
That's 6 25 BP cuts, or
3 half point cuts,
or 2 quarter points, and a full...
Only problem is they've done that already, and the effect is less effective after doing it so many times. When the Fed started last year, the 'goose' from the drop lasted a day or two. After the last announcement, it lasted maybe 1 hour!
What's amazing is how quickly we've transitioned from Bush's lack of oversight (in the name of laissez faire) to nationalism. We must've set some kind of world record!
Did Bush think a lack of enforcement was justified in the name of "laissez faire? Maybe he thought everyone was actually saying lazy faire", LOL!
The Die Off begins....
"Now what?" ....
They'll try pumping more money into the financial sector, shoring up as many banks as possible - the larger banks swallowing up the smaller ones.
However, people have now lost faith in the "fight each fire" approach Bernanke/Paulson are using with our $700bil+ line of credit - realizing that it won't make much of a difference, except for adding more debt for years to come onto the tax-payer's backs.
The fact is, the majority of US consumers are tapped out, have less credit and little to no savings. The relatively few out there with "gobs-and-gobs" of money aren't going to save this sinking ship.
We generally manufacture little to nothing in this country, exporting raw materials to buy back cheap products to fill our stores with, but with fewer people buying goods and services the economy comes to a grinding halt.
Our government authorities are in a really tough spot, because they now realize that even by trying to bail out wallstreet and the banks, they won't be resolving the problem.
We'll just have to see what these bozo's will try next, but my bet is that it will (once again) be an expensive tax-payer expense for a plan which will certainly fail.
Very well said.
In our continual quest for more "stuff", we're ending up with less.
Paul E. Math said...
1 step forward, 2 steps back. I like the analogy that someone else here used: a ball bouncing down a set of stairs.
There could be another big plunge or maybe it'll be a succession of declines and rallies. But the larger trend will be down. This economy is still facing enormous headwinds.
This was never just a liquidity crisis. Bad investments were made, real resources were devoted to non-productive assets: we spent our time and resources working on things that didn't real produce any substantive value. Overall, we have less stuff. And stuff is what standards of living are made of --> we can expect a lower standard of living.
Printing money or getting further in debt does not help matters. Stock prices will reflect this lowered productivity.
October 15, 2008 12:32 PM
Public service positions also go when their is no tax-payer money.
wc said...
There may be massive unemployment, a rise in murders, and perhaps the wealthy might finally feel some obligation to help stock the soup kitchens. I hope there might be a return to mom and pop operations and entrepreneurship as the big boys go under. For those that manage to keep their jobs - the impact will be mostly psychological. The very poor, elderly on fixed incomes and the unemployed will suffer the most.
http://en.wikipedia.org/wiki/RMS_Titanic
"As seawater filled the forward compartments, the watertight doors shut. However, while the ship could stay afloat with four flooded compartments, five were filling with water. The five water-filled compartments weighed down the ship so that the tops of the forward watertight bulkheads fell below the ship's waterline, allowing water to pour into additional compartments."
"Europe rebuilt from two world wars. This is nothing compared to that."
And don't forget the two Japanese cities and how they also had to rebuild.
Not an exact comparison on my part but those two cities were wiped off the face of the earth in mere seconds.
Today, we are all tied at the waist to the bloated bankers, execs, politicians, and swindlers who are so overweight that we are all swimming with all our effort just to keep these fat bastards from sinking. Why don't we all just cut the lines that tie us to them and swim to shore and start over with something better?
Come on, I have my bosun's knife, who wants to live and who wants to sink with the fat men?
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