So begins the double dip
Saviour Obama bucks about to run out and China + EU slowing down. New taxes will push Aggregate demand further left. Cancellation of Ghost Whisperer More lil banks about to implode. North Koreas lil kim saying SOUTH KOREA IF YOU PUNISH US WE BLOW UP YOUR BASES YOU DON'T KNOW THE POWER OF THE DARK SIDE OF KOREA( lol literally because they have no power @ night :O ) Unemployment rising Debt rising USA economy slowing
Rebuttal go!
Flamethrower!
I'm not an economist, so feel free to correct me, but I'm not seeing any inflation in the short run. America is in rough shape, but the dollar will remain strong because the rest of the world (read: EU) is much worse off.
True, my little orange friend. However, my fiery tailed friend, if deflation happens because of the strengthening of the USD will little banks get rocked? This just screams S&L problems of the 90s. Even though I doubt deflation will happen long term.
it'll be a double dip if dow drops to near 7000, that is VERY unlikely
I'm a bit concerned about all the pokemon invading WSO....
i feel like i am talking to a bunch of middle schoolers
grow the fuck up kids.
I considered making a squirtle account just to reply to this topic.
lol says the guy who thinks the recession is determined by the stock market
Well, shit, don't you think we're tired of all you high school-type kids?
No, I'm not being serious.
I'm more than a little concerned that everyone on this thread knew those things were pokemon
bulb and I are discussing economics. You're making an ad hominem attack. This is brilliant.
To get back on topic, what do you guys think of Peter Schiff?
http://en.wikipedia.org/wiki/Peter_SchiffHe seems to have had a reasonable career, but I just don't buy his macro views. $10,000 gold? Hyperinflation? Obama = socialism? A lot of very intelligent (Austrian inspired) conservatives share his beliefs. Certainly, there are a lot of politicians clamoring to cut spending. How much of this is just theatre?
A liquidity trap ala the S&L crisis seems far more likely a scenario than hyperinflation or a Bolshevik coup. Stocks are up, the investment banks are killing it, M&A dealfow has resumed, but unemployment is rampant and people still can't pay off their mortgages. What happens if the government stops pumping money into the system before the "real" economy recovers?
Need to shift aggregate supply. Aggregate demand can only shift to the right so far eventually it will hit the classical range. Yes, the M&A might have picked up, but you have to realize the factors of production are the following: land, labor, capital and entrepreneurship. Acquisitions increase what? You need people to create new shit or else you won't have economic growth.
On $10,000 Gold, hell no. By the time gold hits 10g's America won't even be around.
M&A is doing well for large cap companies, but the middle market is still reeling. Large caps have been running high and tight for the last year stock pilling cash or liquidity options & cutting payroll and capital expenditures. So of course the minute there was a positive swing in the equities market they where/are looking to start rolling up again. This isn't because ann easement on credit availability (in most cases) but all the extra cash laying around.
The MM doesn't have that type of dough, almost by definition. Smaller business owners are also a little reluctant to cash out right now in anticipation of the potential hike in cap gains from our buddy Obama next. The whole sector isn't really active right now even though most pipelines for reputable shops are full. I think we'll get much clearer picture by the end of the year. From senior m&a guys, they think Obama could really shit the bed for everyone.
They've made it clear that they won't stop pumping money in, which is why hyperinflation (currency devaluation) is a very possible outcome. The amount of government intervention in the markets is just amazing... $1T in the EU, more intervention in currency markets today, and it's still not having anywhere near the desired effect anymore.
Turning off the printing presses at this point isn't politically feasible. Either the debt gets monetized or we actually go into austerity mode and world GDP goes down the drain for years. Neither answer is good news.
A lot of the recent success of banks is due to government policy. Interest rates alone are raping savers to pay off bad debt, and that's just a drop in the bucket of what the Fed has been doing - just mentioning this aspect now since I thought this was an interesting read that's still on my mind from today.
http://finance.yahoo.com/banking-budgeting/article/109603/starving-for-… "If you tried to raise $140 billion in taxes there would be massive outrage and protests but they've taken the equivalent of that out of the pockets of depositors by keeping rates below inflation," Barrington says. "Depositors are really getting the shaft in this environment and it's something that's not really talked about. There's sympathy for borrowers who are overextended, but they contributed to the financial problem. The sympathy should be with people who did the right thing and saved their money, and are getting teeny tiny interest rates."
If Obama's a socialist...what does that make all of the English Parliament?
We'd have to invent a new word for that.
It's called Communist sweetheart.
I only post here once in a while. Look up my last post from the day we had the flash crash a couple weeks ago (to confirm some credibility). And now, I'm going to tell you that risk reversals are nearing the levels of when Long Term Capital Management crashed. Get ready.
A lot of money has been pumped into the economy and there are lags associated with fiscal policy. So even though Obama dollars may be running out, we may be able to continue to feel the positive effects for some time. Also, I'm sure Obama will have more stimulus if the economy turns south again.
Also, there is a lot more optimism as animal spirits pick up, shifting AD right.
Euro is going to get fucking raped in the long run.
Fuck my ass. So time to sell my long positions and short everything?
Not if you think Romney will win in 2012.
Not to turn this into a political debate or discussion. I'm actually a huge fan of Romney and all he's done and accomplished in his life. But the more I see, it doesn't really matter who the F*ck is elected. It's all the same shyt. One lone man cannot change the huge tide of shytstorm that has been built throughout the years.
I am greedy as the next person and keep wanting my salary to increase. But how in the world can US stay competitive and rest of rich world as well with our high salaries when almost every job is being commoditized? Manufacturing has gone from a special knowledge and highly technical feat to being able to move it to any Third-World country from Japan in the 50's to Taiwan, to S. Korea, and now to China. Even people service jobs are springing up all over the place in these countries, though not with the amount of sophistication as the US. But it's growing. Yet, everyone keeps feeling entitlement. No ONE person can change this.
In the US we are essentially not producing much of anything people want in portion to the labor costs. Done with my rant. All I see these days are traps that we keep falling into. It's like damn if we do damn if we don't. As brilliant and hard-working one person can be. He/she and their administration cannot alter all this.
somehow i think "balbasur" and "charmander" are the same person.
All we need is good news and Voila! Dow is at 11,000 pts again
agree
Seriously, watching the market is like watching a heart monitor.. up and down, up and down. Unfortunately, I think it will not end well.
Alright first off, we are def not near the "classical" aggregate supply portion of the AS so AD policies are perfectly fine. Since we are talking all in the short run, AD policies should be decently effective. Since his government spending will ultimately be financed by the alleged future tax cuts of Mr. Obama, we actually wont have net AD curve shift left. Lest we forget, AD and AS analysis is good for intermediate macro economics undergraduate but not for the real world.
I respectfully disagree about the double dip. Hiring has picked up, albeit slowly. Personally, I hate terms like "v-shaped recovery" or whatever letter that you prefer, and I think they are more media terms than anything else. I have never read a legit economic textbook using the terms "v-shaped" "U-shaped" or whatever shaped. You're either in a recession or you are not.
I see growth ahead, although slow. Debt will keep growth from being as robust as we'd like, but there will be growth.
I don't intend my post to be pro-Obama or anti-Obama as some of the other posts here; it's just supposed to be how I see things. Kids, believe it or not, but politics actually isn't the only thing that affects the economy and markets. Get your news from something other than soundbites.
While I agree with you, this is the type of news culture we live in. Such is life.
Bulbasaur* not balbasur
Y'all gotta step your attention to detail game up...
Always amazed at the stupidity of some macro opinions here, especially when contrasted with the very good ones. By the way, gold should it $10,000 in something like 40-80 years.
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