[08rookie]

im already established in my career and i think im rather successful. i was never into math. i never aced an economics exam. im my worst critic but i appreciate education. im self diagnosing myself as a wall street dummy and i would love if somebody can explain this worst case scenario for me.

biggest news story last night, dow dropped 500 points? how? why? will i wake up one morning and there will be no food in the supermarket? will the ATM be dried up?

unemployment at 9%. i get it...people dont have jobs. is our unemployment connected to the cost of steel in china and then connected to the water resources in russia.

[nnnnnnnnnnnnnnnnnnnnnn]

we are so past fucked, we can't even hitchhike back to fucked. That is all you need to know.

[08rookie]

Originally Posted by ferrari355fi

we are so past fucked, we can't even hitchhike back to fucked. That is all you need to know.

this doesnt help lol...but thanks for the response

[BTM]

Originally Posted by 08rookie

im already established in my career and i think im rather successful. i was never into math. i never aced an economics exam. im my worst critic but i appreciate education. im self diagnosing myself as a wall street dummy and i would love if somebody can explain this worst case scenario for me.

biggest news story last night, dow dropped 500 points? how? why? will i wake up one morning and there will be no food in the supermarket? will the ATM be dried up?

unemployment at 9%. i get it...people dont have jobs. is our unemployment connected to the cost of steel in china and then connected to the water resources in russia.

im sorry. im dumb

In general: there is not one widely accepted answer to your questions. There are a few explanations, which are prohibitively complicated and convoluted, especially to someone who describes themselves as far less than great at math/econ. Everyone has their own versions, deviations, even agendas, and even if it were possible to ascertain 1 clear cut answer, it is likely we wouldn't even know it if had it. But I will give you something to look into and think about - economic uncertainty and the economic assumption that "people respond to incentives"

There will be food in your market, and cash in your ATM. You have a job, keep at it and keep doing what's best for your career, and be gracious that you're in a much better financial position than many people.

[M3Bahn]

Dow Bloodbath Could Herald “Great Depression”

Seven months after President Barack Obama gave a State of the Union speech in which he said the economy was in “recovery mode” and that “the stock market has come roaring back,” the New York Times today all but admits that America has entered a double dip recession following yesterday’s 512 point Dow plunge, while others go further, warning of a new Great Depression as markets continue to plummet today.
Why it takes a dramatic fall in the stock market for the establishment media to admit something that’s been painfully obvious in almost every other sector of the economy for the last 2 years goes right to the heart of the split between Wall Street and Main Street.
Rising unemployment, crumbling house prices, record food stamp usage, and the soaring price of gold as a barometer of dollar depreciation are three key reasons why contrarians have been warning all along that the economy was in fact getting worse and that talk of a “recovery” was deluded at best and crazy at worst.
For refusing to go along with the happy clappers by putting the blinkers on when it comes to the real measurements of economic health and not the phony, casino-style stock market, people like Gerald Celente and Max Keiser were accused of engaging in “pessimism porn” even as their forecasts played out.
Americans who believed the propaganda about the non-existent “recovery” and failed to move their assets into safe havens will feel stabbed in the back now that the Old Gray Lady finally admits the 2008 recession never really ended. But it really serves them right for placing trust in an establishment that has lost all credibility.
Under the headline, Time to Say It: Double Dip Recession May Be Happening, Floyd Norris highlights how the recession was significantly deeper than we were first told, and the so-called “recovery” was notably overestimated.
“Last week the government announced its annual revision to the numbers for the last several years. New government surveys indicated Americans had spent less than previously estimated in 2009 and 2010 on a wide range of things, including food, clothing and computers. Tax returns showed Americans even cut back on gambling. The recession now appears to have been deeper — a top-to-bottom fall of 5.1 percent — and the recovery even less impressive. The economy is still smaller than it was in 2007,” writes Norris.
Thursday’s market bloodbath also prompted John Lonski, chief economist at Moody’s Investors Service in New York, to predict a return to recession. “I now think the odds are uncomfortably high for a double dip,” he said.
But Peter Morici, a professor at the University of Maryland business school and former chief economist for the U.S. International Trade Commission, went further, warning of a crisis to rival the fallout of 1929.
“If we go down a second time, it will be the Great Depression,” he said. “Last time (during the long recession) you didn’t see armies of men roaming the country looking for work. Next time the (extended) unemployment benefits will be tapped out, public employees will be laid off; we will see some really bad things.”
Yesterday’s stock market plunge, which is being repeated in Asian and European markets so far today, will precipitate what the Federal Reserve and Ben Bernanke were planning all along – QE3 – which could represent a terminal blow for the already stricken U.S. dollar. Helicopter Ben will flood the money supply with more fake greenbacks, the artificially inflated stock market will briefly rally once more, and all the suckers will plough all their money back in only to get burned again later down the line.
Smart and sober realists who doggedly stuck to the unspectacular but reliable safe havens of gold, silver and other stores of wealth, will once again preserve the value of their assets.
As Marc Faber told Bloomberg yesterday, ” “Stocks will be dropping 30%, then rallying 20%, and dropping another 30% – that’s going to be the pattern. And whoever can’t live with that shouldn’t be buying equities at all.”
Faber warns “there is a case to be ultrabearish about everything, and markets are going to go lower,” adding that next week will give us a clearer picture of exactly how much enthusiasm Bernanke has for hammering the final nail in the dollar’s coffin with the launch of QE3.

http://www.infowars.com/dow-bloodbat...at-depression/

[08rookie]

Originally Posted by M3Bahn

Dow Bloodbath Could Herald “Great Depression”



http://www.infowars.com/dow-bloodbat...at-depression/

so ur saying i should take all my cash thats in my freezer and buy gold? lol

[BTM]

Originally Posted by M3Bahn

Dow Bloodbath Could Herald “Great Depression”



http://www.infowars.com/dow-bloodbat...at-depression/

While not disagreeing with everything said here, I would suggest going to a more credible source than a paraphrased article from the NYT, who's economic analysis trends between painfully rudimentary to about as off base as one can get...most recently evidenced by the silver lining "economic stimulus" tornados in the midwest provided...apparently no one could remember the parable of the broken window from their Econ 101 gen eds...

Here is nobel laureate Gary Becker's commentary

Immediate and Medium Term Debt and Deficit Problems-Becker


As Posner indicates, the US is facing an immediate debt problem, a medium term deficit problem, and long-term debt and deficit problems. We have discussed several times the long-term fiscal problems (see, for example, my discussions on 11/07/10 and 7/17/11), so I will concentrate here on the shorter-term deficit-debt issues.

With the sole exception of the mid-1990s, the federal debt ceiling has always been raised on time during the past 60 years to accommodate the growing level of the debt. Although little time remains to raise the ceiling I do not believe either party will risk the political fallout from not adjusting the ceiling before the government effectively defaults on its obligations. Certainly Republicans remember the political cost to them after the Gingrich-inspired shutdown of the federal government in 1995. So I would be quite surprised if a deal is not reached this time before the US government is forced to delay payment on some of its implicit obligations, such as Medicaid and Medicare payments.

Of course, an absolute ceiling on the debt that is just raised continually makes little economic sense. Clearly, the relevant size of government is not measured by the absolute level of its debt since large economies tend to have much more debt than do small economies. Better metrics of the debt burden would be the ratio of debt to GDP, or the ratio of interest payments on the debt to GDP, or perhaps the share of interest payments in total government spending.

Even the ratio of government debt to GDP does not measure the size of the government’s impact on the economy. The present and future impact is better measured by the ratio of government spending to GDP, including any trend in this ratio, plus various harder to calculate measures of the magnitude and scope of government regulations in product, labor, and capital markets.

The major legitimate concern over the growing federal government impact on the economy comes from the rapid growth in the share of government spending to GDP during the past several years. Moreover, this share is projected to continue to grow in the future unless GDP grows by at least 3% per annum over the next 20 years and effective controls are introduced over entitlements for the elderly.

The share of federal government spending to GDP hovered between 18% and 21% from 1995 to 2007, when it was 19.5%. During the next three years, government spending took off and grew rapidly, GDP stagnated, and the ratio of federal spending to GDP reached 25% in 2009. This share is projected at about 25% in 2011. Some of the growth in federal spending was needed to fight the financial crisis, but much of the increase also reflected the desire of many in control of the federal government to increase its role in the economy.

In a Wall Street Journal op-ed piece by George Shultz, John Taylor, and myself on April 4th (Time for a Budget Game-Changer”) we lay out a general strategy to gradually lower this share once again to 19.5% by 2021. This strategy reduces government spending by a mere $19 billion in 2011, or only by about 0.1 percentage point of total federal spending. It also allows nominal federal spending to grow on average by 2.7% per year from 2010 until 2021.

Our approach also assumes that nominal GDP will grow by 4.6% during this eleven-year period. Since GDP is assumed to grow considerably faster than government spending, the share of government in the economy is reduced by over 4 percentage points by 2021. If we assume (optimistically) an average inflation rate of 1.7% per year during the next decade, our analysis allows government spending in real terms to grow from its already high level in 2010 by 1% per year until 2021.

The assumed growth in real GDP (after adjusting for the assumed 1.7% annual inflation rate) is a little less than 3% per annum over this period, with about 1% growth per year due to increases in the American population. Three percent per year in real GDP is the long-term growth rate of the American economy since 1880. This is considerably below the usual growth rate of GDP in a decade after a major recession. This is why I believe three percent growth is achievable with tax reform (that would include some tax increases), and with major controls over the growth of spending.

Keeping real federal spending growth to 1% per year will be a huge challenge since entitlements, like Medicare, will grow much faster than that over the next decade without sizable entitlement reforms that greatly cut their cost to the government. Still, the spending growth rate is doable. A major start would be to cut back some of the sizable expansion of federal spending since 2007. That combined with serious reforms that cut government spending on Medicare, especially for the elderly with decent financial means, would go a long way toward keeping the real growth of federal spending in the range of 1% per year for a decade.

Added Monday: first reactions after news surfaced of the possible budget compromise.

The details of the compromise are not yet clear, but apparently Medicare and other entitlements will not be affected, with one exception. Payments to hospitals and insurance companies for the services they provide or finance will be cut, which will either lower the quality of services offered or induce greater waiting times for medical services.

The compromise seems at this point better than doing nothing. But much more will have to be done, rather than simply promised for the future, in order to limit the growth in real federal spending to not much more than 1% per year.

http://www.becker-posner-blog.com/20...ms-becker.html

[AngelinIsRich08]

Did you hear that the Bank of New York is charging people who hold a certain amount of cash in their bank to have to pay to keep it there? That's ridiculous, first of all you're not earning any interest whatsoever and then you have to pay to have them hold your money. But food prices could go up even more, ATM's will still have cash and hopefully you can keep your job. The unemployment numbers are so falsified right now because they aren't taking into account the people that have quit looking for work and those that are underemployed.

[BTM]

Originally Posted by AngelinIsRich08

The unemployment numbers are so falsified right now because they aren't taking into account the people that have quit looking for work and those that are underemployed.

This is true of all unemployment rates, not just the ones currently reported. It is an inherent characteristic of the metric, not an attempt to falsify anything.

[Echo M3]

Originally Posted by AngelinIsRich08

Did you hear that the Bank of New York is charging people who hold a certain amount of cash in their bank to have to pay to keep it there? That's ridiculous, first of all you're not earning any interest whatsoever and then you have to pay to have them hold your money. But food prices could go up even more, ATM's will still have cash and hopefully you can keep your job. The unemployment numbers are so falsified right now because they aren't taking into account the people that have quit looking for work and those that are underemployed.

That's what happens when interest rates are held at historically low levels. People are so afraid to invest their money that they are literally willing to pay to put their money somewhere safe.

[mact3333]

Originally Posted by BTM

This is true of all unemployment rates, not just the ones currently reported. It is an inherent characteristic of the metric, not an attempt to falsify anything.

Now that is so funny and wrong.... Look up the difference U3 and U6 rates... We used to release the U6 rate in the past but when it's almost 20% the way we used to measure it you can see why the govt would release the false rate ... Same goes for CPI and GDP!... Wake the fark up people

[M3Bahn]

Originally Posted by BTM

While not disagreeing with everything said here, I would suggest going to a more credible source than a paraphrased article from the NYT, who's economic analysis trends between painfully rudimentary to about as off base as one can get...most recently evidenced by the silver lining "economic stimulus" tornados in the midwest provided...apparently no one could remember the parable of the broken window from their Econ 101 gen eds...

Here is nobel laureate Gary Becker's commentary



http://www.becker-posner-blog.com/20...ms-becker.html

Could you please post any nobel laureates who predicted/warned about the 2008 market crash?

Only one I follow is Joe Stiglitz.

[ES_TRADER]

ZERO.....there's your worst case scenario buddy!

[BTM]

Originally Posted by mact3333

Now that is so funny and wrong.... Look up the difference U3 and U6 rates... We used to release the U6 rate in the past but when it's almost 20% the way we used to measure it you can see why the govt would release the false rate ... Same goes for CPI and GDP!... Wake the fark up people

I know the difference between U3 and U6. The ILO uses U3 for the official rate because U4-6 are impossible to estimate with an acceptable error without overt expenditure of resources. U3 is accurate and consistent. They don't bother to estimate U6 because it is irrelevant to the official unemployment rate, estimating it is extremely difficult and rarely accurate, and thus an inefficient allocation of resources. It's simple cost/benefit.

Even so, the labor force is not defined to include people no longer looking for work, and no unemployment rate should include those not looking for work, whether or not they were once trying to. Those individuals have become discouraged and taken themselves out of the labor force, no one is stopping them from entering again but themselves (and there is a lot of psychological factors to consider here, and I'm not trying to be unsympathetic, but the fact remains.)

Under employment is an area of ambiguity, under employed according to who? Everyone thinks that they deserve a raise, in good times or bad. There are obvious examples of people being overqualified for positions, but again, this is not what the unemployment rate reports or something labor force delineates. You are either employed or unemployed.

While it is easy to misinterpret the meaning of "employment rate," this is due to an ignorance of what it includes and what it doesn't. As with any metric, better accuracy and consistency are preferable to an attempt to be "more encompassing" or to "paint a better picture," when such attempts result to a less accurate measure. If people knew what the unemployment rate measures, that being the ratio of those in the labor force without jobs to the labor force as a whole, and knew who is counted in the labor force and why, it wouldn't be an issue. Whenever someone would mention that it doesn't include "under employed" and "discouraged workers no longer looking for work" the reaction would be "...well, duh"

[BTM]

Originally Posted by M3Bahn

Could you please post any nobel laureates who predicted/warned about the 2008 market crash?

Only one I follow is Joe Stiglitz.

I don't have to go to a nobel laureate for that. I had 2 professors predict it, Thomas Dalton and Alexandre Sugiyama. I posted that because given the option, I would prefer to read someone recognized for economic achievement over someone writing for a publication notorious for publishing misconstrued, misapplied, and flat out incorrect "economic analysis/commentary," even if their overall point is similar.

[ES_TRADER]

forget all these numbers UE, ISM, GDP, blah blah blah...keep life simple and just trade the tape...thats all u need...watch the tape, anticipate, react, cut your losses...that about sums it up.

[mact3333]

Originally Posted by M3Bahn

Could you please post any nobel laureates who predicted/warned about the 2008 market crash?

Only one I follow is Joe Stiglitz.

No nobel laureates, but a fukktard named mact3333 tried to warn in early 08'.....



Msg 185238 of 407554 at 3/3/2008 11:08:28 PM by

mact3333


Since Were Talking Economy Here:
First of all, I have no long positions except the gold etf GLD. I have been short housing, financials, nasdaq, sp500, china for the past 4 months and my previous posts will reflect this...I have no hidden agenda so I really dont care if you buy or sell this mkt.

What I am commenting on is this...I totally disagree with anyone that thinks this is your run of the mill mild recession...ultimately this might turn out to be the case since I dont have a crystal ball(a reliable one anyway) but odds are favoring something that we wont recover from in a quarter or two...here is my reasoning....ok, if youre looking beyond 2 yrs Im sure we will recover at some point but I think the mkt will be in general be very choppy but down for rest of the yr

Why has the mkt gone up the past 5-10 yrs???...to me the overwhelming evidence points to the american consumer taking on debt and removing money from a grossly inflated housing mkt...money they didnt have...the numbers show credit card debt at historic highs...people took billions of dollars out of their homes with refi's, helocs and etc...this is a fact that cannot be denied...are we really making any more money?...dont think so...so where is all the money coming from?...think about it.

So where is credit right now???...credit is tighter than ever!..while the Feds bring down rates it isnt being translated to the avg american...the banks are keeping the spread...banks are lowering credit card limits and raising rates even for people who pay on time and have excellent credit scores.

I hear pretty much everyday now how professional traders and finance people saying "in the past 30 yrs I have never seen anything like it"...ARS auctions are failing...ARS's have been sold as money mkts...many people cant get their money out of ARS's because the investment banks wont support them...this is very significant....did you know muni's are paying 5.5%??...since there isnt tax implications with munis its like handing out 8-9%!...why would anyone invest in the stock mkt when safe munis are paying this much...even Bill Gross of PIMCO buying up munis right now...cities and states paying huge rates to get money right now..

And I dont have to go into the bond insurers because everyone should know this story...yes if they get downgraded all the munis they have underwritten in the past get downgraded too...what does this do to the cities and states that have to pay more to refinance?...and you really think with the exposure ambac and mbia has with CDO's that they are deserving of a AAA rating that S/P and Moodys just handed out???...that is a joke...what other company whose stock price goes down by 90% in 6 months can you keep a AAA rating?...the govt and financial institutions are artifically elevating these ratings because if they dont, they will take another 50-100B in more writedowns.

And what about the FED...since they dropped .75 and .5 in Jan the mkt is down...the FED is printing fictitious money for wall street and not for you and me...they will do anything to maintain the charade(ie-false growth)...printing more money WILL bring on inflation as we have seen...CPI and PPI are rising very quickly...even Larry Kudlow the Bush cronie is concerned and thats saying something!...how can wheat be up 170% and oil 65% in the past yr without inflation?...((roughly)) in the past 4 yrs, copper up 400%, gold, 300%, corn 300%, soy 300%,,...get the picture???...only thing thats down is products from China ...the govt is printing money and weakening the dollar so fortune 500 and global co's can make more profits due to the weakening dollar from overseas sales...I dont think lowering interest rates will help the avg person...why is it that big successful co's are sitting on billions is cash right now???..they are only buying back their stock, thats saying something...are they developing plants in the US???...nope, they are pouring money into foreign mkts...they are taking jobs out of the US...we are eliminating the middle class in the US and this will ultimately hurt us because imho in order to have sustainable growth in the US we need more and better paying jobs...our fortune 500 co's are taking mid paying jobs away from us...the ones making 150K plus and 30K and less not affected as much...its the 40-80K people getting hurt...why pay a US steel worker 20-30 dollars/hr when someone in china or mexico will do it for 2.00???...look at Ohio as an example...thats why Hillary and Obama want to take another look at NAFTA.

Anyone see the equity of top financial institutions in relation to their exposure to complex derivitives and etc??...they tried to hedge but when the co's that they hedged with have imploded their hedge no longer exists...why else would they sell out to foreigners at such a furious pace?...they are desperate...we are coupled to a housing mkt way beyond we can imagine imho...and people saying that prices havent gone down in my neighborhood are kidding themselves...I live in an area that is 1 of only 4 cities where prices have supposedly have not gone down yet...but there are houses(20 in my neighborhood) that havent sold in 1-2 yrs ..they are marked down 20-25% from the high now...thats reality....the NAR numbers put out by realtors.

But bottom line is this, over past decade, where did the money come from to fuel our economy?..and does this money still exist?...I say no...I think we will have new standards with respect to lending/borrowing, how we handle accounting and risk...I dont think the fincial system will ever be the same imho.

Its funny because from what I remember, fordwill and I were the only ones touting "doom and gloom" 4-5 months ago...we were laughed at at the time...btw, back to DNDN...I was golfing this weekend oh I mean at a prostate meeting .......spoke to DNDN reps for an hr...entertaining...spoke to Petrylak(spelling???) for abit too...more to come when I have time....urologists are funny people thats for sure....

[M3Bahn]

Originally Posted by BTM

I don't have to go to a nobel laureate for that. I had 2 professors predict it, Thomas Dalton and Alexandre Sugiyama. I posted that because given the option, I would prefer to read someone recognized for economic achievement over someone writing for a publication notorious for publishing misconstrued, misapplied, and flat out incorrect "economic analysis/commentary," even if their overall point is similar.

I'm curious what you think about Steglitz?

[M3Bahn]

Originally Posted by ferrari355fi

we are so past fucked, we can't even hitchhike back to fucked. That is all you need to know.

This ^^^

[mact3333]

Originally Posted by 08rookie

im already established in my career and i think im rather successful. i was never into math. i never aced an economics exam. im my worst critic but i appreciate education. im self diagnosing myself as a wall street dummy and i would love if somebody can explain this worst case scenario for me.

biggest news story last night, dow dropped 500 points? how? why? will i wake up one morning and there will be no food in the supermarket? will the ATM be dried up?

unemployment at 9%. i get it...people dont have jobs. is our unemployment connected to the cost of steel in china and then connected to the water resources in russia.

Here is a post I made on another thread trying to explain our economy using fiction....use your imagination.




Basic math you say???

I am 25 years old and make 50K a yr...I drive a BMW 335, live in a 400K home now worth 200K...my food and gas bill going up and up...my credit card tab is 40K and I am making interest payments only...I really want to preserve my credit rating so I can keep the 10% interest(god forbid that 30% balloon interest kick in if I miss payments)....I kinda support my relatives(since they dont work) at 1000 a month as they arent doing well...I promised my relatives who think Im doing well 3000.00 a month as support over the next 10 yrs, as they have huge medical bills from the gastric bypass surgery gone wrong.....what am i going to do?...people around me think I am happy and doing well due to my exterior appearance but they dont understand my true dire situation...I have already tapped my 401K(SS) but nobody knows about this...shhh...my friends(media) all think I am quite stable and admire me.

My credit card company(china,japan) says I should consolidate all my debt into one card....they gave me until this Tuesday to do this...they told me to stop spending so much but they did increase my credit limit...hmm...I think I will as I think this will open up more credit which is good cause I really need a new fridge and HRE wheels for my 335i...why do people tell me to quit spending yet increase my spending limit when they know I have a spending prob?...guess I could at least "slow down" my rate of spending but in the end, its all good cause my credit limit went up.

My former husband was a hard core repub and wanted me to quit spending so much on shoes but he did promote the vacations to many many foreign lands....we used his friends travel agencies cause he owes it to them and we get great deals...airfare to Kabul was only 10K.

My current husband, hardcore democrat, wants me to cont to give abit more to my relatives as they are in a sad state and it isnt their fault they havent worked in 3 yrs due to bunions...he wants me to refi our mortgage and my credit cards so we can save 2% on interest payments and maybe we can get our credit limit raised again by another 30K...but he did say people with platinum cards should pay higher rates, cause afterall, they can afford the 100 yr annual membership fees...but they do spend alot at Nordstroms where i work and we did have to hire a few part timers due to this but at least we dont have to offer them benefits.


One of my firends, who happens to be crazy and on prozac, actually told me to just stop spending and start selling some stuff...this is what I literally did.......followed by.......I quickly kicked him in the nuts and told everyone I know this guy really is crazy and needs a full colonoscopy at the airport...heard TSA doing this for free.

Ok, I am done ranting...thx for listening...two things I know though, I did get an A once in 8th grade in math class and I also stayed in a Holiday Inn last week.

[ghosthi32]

Originally Posted by mact3333

No nobel laureates, but a fukktard named mact3333 tried to warn in early 08'.....

get over yourself

[BTM]

Originally Posted by M3Bahn

I'm curious what you think about Steglitz?

While certainly respected and popular, much due to his involvement in the Clinton Administration, I find him too Keynesian (as is the case with many gov't economists, as the gov'ts incentives, and to an extent a lot of its justification, are aligned with the Keynesian theory). I also find he likes to blame on "free market" mechanisms (in quotes as we are not a true free market) as his defacto defense, despite much empirical, mathematical, and experimental research suggesting that gov't intervention increases uncertainty and thus magnifies corrections.

I have looked lightly into his research on information asymmetry, as I am intrigued by the subject, and do think he has some relevant contributions there. I haven't been able to look too far into it though.