The economy theme park thread... featuring the stock market rollercoaster

[Dr Mabuse]

Yes it is.

Except, as I stated, Krugman endorses and defends "Comparative Advantage". I got that term FROM Krugman's writings, I don't call it "Comparative Advantage", Krugman does. He espouses Ricardian models of trade. I also got that from Krugman's writings. So it was lucid and elegant and etc., but not exactly accurate.

And maybe one of you fellas will eventually answer a simple question.

How the largest trade deficit in the history of the world is a good thing for this economy, one that will be larger next year? EXACTLY how that is a good thing, try not to deflect away from a question you can't/won't answer, yet again, with elegant economic theories or something. And how is 10+ trillion dollars in debt, that will grow in the next year, creating a healthy economy and nation?

How do those thing spell good times ahead for the US economy and nation?

Because my simple point has been those two things alone spell bad times ahead for us, guaranteed. Not even including the other problems of greed, fraud, and corruption we are having domestically.

[Tracer Bullet]

This thread is making me feel stupid.

[Tommy Ceez]

This thread is making me feel stupid.

Or bad at Google

[DVD Polizei]

I feel like I'm in college again. :up:

But without the hot chicks. :sad:

[starman9000]

And maybe one of you fellas will eventually answer a simple question.

How the largest trade deficit in the history of the world is a good thing for this economy, one that will be larger next year? EXACTLY how that is a good thing, try not to deflect away from a question you can't/won't answer, yet again, with elegant economic theories or something. And how is 10+ trillion dollars in debt, that will grow in the next year, creating a healthy economy and nation?

How do those thing spell good times ahead for the US economy and nation?

Because my simple point has been those two things alone spell bad times ahead for us, guaranteed. Not even including the other problems of greed, fraud, and corruption we are having domestically.

I heard you have to spend money to make money. We've been spending money for a long time, so we have to start making money at some point right?

:)

[Venusian]

http://www.nytimes.com/2008/10/17/opinion/17buffett.html?ref=opinion

Buffet says buy stocks

[Dr Mabuse]

http://www.nytimes.com/2008/10/17/opinion/17buffett.html?ref=opinion

Buffet says buy stocks

He's buying personally, not with Berkshire Hathaway accounts.

That's kind of important don't you think?

This is more of a 'good will' gesture than actual investing advice I think.

[wabio]

Pharoh's talk of deflation in a nutshell.

http://money.cnn.com/2008/10/17/news/economy/deflation/index.htm?cnn=yes

[VinVega]

Pharoh's talk of deflation in a nutshell.

http://money.cnn.com/2008/10/17/news/economy/deflation/index.htm?cnn=yes
Prior to this, weren't we in a pretty bad inflation trend? Prices were rising so much, but wages were remaining stagnant. That's a trend that just can't continue for a sustained period of time.

[orangecrush]

He's buying personally, not with Berkshire Hathaway accounts.

That's kind of important don't you think?

This is more of a 'good will' gesture than actual investing advice I think.
Buffet has always been a fan on the long term health of the US economy and stock market.

[wabio]

I wish I could tell you, but I don't know. It's a Whirlpool so at least it is an American company.

You should've bought sooner! :eek:

http://money.cnn.com/2008/10/17/news/economy/whirlpool_layoffs/index.htm?postversion=2008101711

[wabio]

Mortgage fraud. The new and improved versions:

http://money.cnn.com/2008/10/17/real_estate/new_mortgage_fraud/index.htm?postversion=2008101711

[wabio]

Consumer sentiment went way WAY down this month. If you've ever followed the Michigan survey, you'd know that a 13 point drop is huge. HUGE. It just seemed like yesterday when it was in the high 90's. :(

http://news.yahoo.com/s/nm/20081017/bs_nm/us_usa_economy_sentiment

[taa455]

I expected as much. People are freaking out after the solid week of drastic market losses. This whole shitty situation feeds on itself.

[al_bundy]

Buffet has always been a fan on the long term health of the US economy and stock market.

i signed up for two newsletters this week mostly for short term trading signals, but they do some long term forecasting as well. i've followed these people for a year or so reading their free stuff that was always a few days to a week after the paid subscribers got it and less detail. they were always on target with their predictions.

for the long term they are predicting the final lows will be 3000 for the Dow, 400 for the SP500 and not sure for the Nasdaq. can't remember.

SP500 will go to 780 - 800 level sometime next week or early week after next and then a nice rally for a few months and next year will be brutal.

will be interesting to compare Buffet's results to these

[Ranger]

Did they explain why next year was going to be brutal?

[wabio]

for the long term they are predicting the final lows will be 3000 for the Dow



That's unbelievable! :eek: Heaven help us.....errrr....the retirees if that actually occurs.

[al_bundy]

most of their predictions are based on technical market readings, but they do some fundamental work as well.

deflation, lack of credit, low commodity prices, lack of financial earnings, deleveraging, mutual fund inflows dropping and even late last year being less than the 2000 peak, people not wanting to own stocks as fear sets in, hedge fund liquidations

[al_bundy]

That's unbelievable! :eek: Heaven help us.....errrr....the retirees if that actually occurs.


this is not scientific, but i think the market tanks every time a generation starts to retire.

around 1940 the Greatest Generation is around 20 so call it around 35 for their parents. fast forward around 30 years and they are around 65 and we get a 14 year bear market from 1968 - 1982.

these numbers are just pie in the sky predictions now. you can make a technical case for the SP500 to end anywhere 400 - 700 next year. these people are pretty bearish in their predictions and have been for years.

deflation will be interesting this time if it really happens. you can't compare now to the 1970's because back then the boomers were only entering the workforce and starting their spending. in the past deflation meant asset and commodity price drops. when the USA was 90% agriculutural that was pretty bad. now that we are 65% service based it's interesting to see what will happen.

[wabio]

John Stossel on 20/20 (ABC) right now talking about the bailout.

[wabio]

deflation will be interesting this time if it really happens. you can't compare now to the 1970's because back then the boomers were only entering the workforce and starting their spending. in the past deflation meant asset and commodity price drops. when the USA was 90% agriculutural that was pretty bad. now that we are 65% service based it's interesting to see what will happen.


Scary to think that the first baby boomer retired only this year. We've got a mountain of a problem coming at us full steam. -ohbfrank-

[Breakfast with Girls]

for the long term they are predicting the final lows will be 3000 for the Dow, 400 for the SP500 and not sure for the Nasdaq. can't remember.Probably 500, given the other predictions. Seems like they believe things will fall to '91-era levels.

[DVD Polizei]

this is not scientific, but i think the market tanks every time a generation starts to retire.

around 1940 the Greatest Generation is around 20 so call it around 35 for their parents. fast forward around 30 years and they are around 65 and we get a 14 year bear market from 1968 - 1982.

these numbers are just pie in the sky predictions now. you can make a technical case for the SP500 to end anywhere 400 - 700 next year. these people are pretty bearish in their predictions and have been for years.

deflation will be interesting this time if it really happens. you can't compare now to the 1970's because back then the boomers were only entering the workforce and starting their spending. in the past deflation meant asset and commodity price drops. when the USA was 90% agriculutural that was pretty bad. now that we are 65% service based it's interesting to see what will happen.

I have to wonder if spending so much money on foreign waste ever since 2003, instead of using the money for more regulation on KNOWN TROUBLED MARKETS would have been better spent.

It's really getting irritating how much our government is just seemingly oblivious to reality these days. Why the fuck even have a government if it can't stop the major problems before they happen. Examples? Oh, I dunno. 9/11. Economy 2008. Those two come to mind.

[Pharoh]

October 28th is the next date. Actually the 27th, but the following day will really be the tell.

[DVD Polizei]

I think the markets will fall, but not to 3000. I'm thinking maybe 6000. Like I've said before, consumers can pick up the economy by the straps, but we need the opportunity. Low gas prices are a good start--however I fear Q1 2009 is going to be up near 100's for oil again.

I wouldn't be surprised if we have a fairly good holiday season. Retailers won't be making shitgobs of money, but then again, consumers aren't making shitgobs of money, so there will be a compromise. But this is better than nothing at all.

[wabio]

I think the markets will fall, but not to 3000. I'm thinking maybe 6000. Like I've said before, consumers can pick up the economy by the straps, but we need the opportunity. Low gas prices are a good start--however I fear Q1 2009 is going to be up near 100's for oil again.

I wouldn't be surprised if we have a fairly good holiday season. Retailers won't be making shitgobs of money, but then again, consumers aren't making shitgobs of money, so there will be a compromise. But this is better than nothing at all.


I'm surprised too oil has actually gone down this far considering investors are all looking for places to stash money. It's not like oil is something that nobody wants. We'll see what OPEC does. As for retailers, have to wait and see. I don't think it's going to be rosy at all. Consumer sentiment, jobs, and housing all still big burdens.

[DVD Polizei]

And another point. We have the US Gov't stroking the lending firms until they ejaculate money, telling Americans this is all good and in the end, it means better terms for the homeowners.

Yeah, fuck that myth.

I just read today where interest rates jumped to 6.74%. Last week it was 6.4% and I think we're gonna see a trend where homeowners are going to be fucked yet once again.

Is it not a surprise we have corporate greed taking advantage of the consumer on one end, even while in the face if economic depression, while holding their hands out for cash from the US Gov't on the other.

[Superboy]

I think the failure of the government is still preferable over the failure of the markets.

[al_bundy]

did some reading today and looking back at the 1968 - 1982 time. from now on i'm ignoring all predictions past next week.

[Superboy]

Well you answered. But with an answer that dodges the question and ignores real worlds fact in deference to theories that are held in a vacuum of reality.

The concept of a trade deficit alone, held in some theoretical vacuum can be spoken of in the way you do. But that is not the question I asked. Out trade deficit is a precedent in the history of the world. And it is skyrocketing upwards. You say a trade surplus is not the goal, that's silly, it's always a goal but reasonable trade deficits happen over time and in various cycles. Lots of 'experts' do espouse that very idea on deficits, reasonable deficits are the thing they discuss, and that doesn't apply to our situation.

Well leave it up to academia to overgeneralize and not offer a holistic perspective that incorporates real-world factors. Free trade theories aren't always necessarily created within a theoretical bubble, rather that, like all models, are prey to outside factors that were taken into consideration.

Our current models of free trade are fundamentally flawed in many ways similar to mercantilism. First, that there is some sort of fundamental value in attaining a surplus when in fact the chief goal should be (as earlier stated) improving the standard of living of both countries and a stimulation and specialization of economies. The problem with mercantilism was that the lust for gold led to the pillaging of vulnerable nations, and didn't lead to a significant gain in wealth of nations.

However, there are an enormity of problems within our current model of free trade of a magnitude much greater than what plagued mercantilism. First is that while gold didn't add to the wealth of nations, it was something of intrinsic value which was not prone to manipulation by governments and markets. Our current trade dilemmas aren't being caused by an imbalance of the actual intrinsic value of the goods and services being traded across countries, but the manipulation of money.

The theories of Friedman for example, say a deficit is a sign of a strong currency, there's another theory on it, yet while our trade deficit is skyrocketing upwards our currency is in decline.

That is because there is the naive assumption that realizing the mutual benefits of free/fair trade that countries will do little if not nothing to protect their own economies from benefitting the most from a trade agreement. Game theory says otherwise. We are the prisoner that is cooperating, while the other player is happily laughing at his own freedom.

There are so many theories by so many widely recognized and respected experts on economies that simply fall apart when confronted with the reality of the US as to trade.

See Russia, our old friend, has grown their trade surplus over time, China's trade surplus is setting records and has been since 2006, the EU has significant trade surpluses with large nations and a trade surplus in whole, and they are VERY concerned about the growing deficit they have with China and have been for more than a year, the EU was threatening WTO complaints and protectionist measures over their deficit with China due to the nakedly protectionist trade practices of China last year, the EU seems to be concerned with trade surpluses, and their currency is taking the lead on the international stage. These are some of the the real world examples of trade surpluses and deficits.

Considering how disastrously these countries were bankrupted by communism you can't expect them to be able to buy first-world goods. Their own domestic economies are so weak as to be on the verge of near collapse, with commodities markets being at the utter whim of first world speculators.

I think the US has technically a trade surplus with like 100+ nations, but the deficits we are eagerly engaging in make those surpluses minuscule in comparison.

When you consider the actual value of what is being imported and exported, and the overall impact on the economy - the movement of employment from a manufacturing economy to a service economy - you can see why. There are very few countries that can afford what the US has to offer, and there are many countries selling what are necessities to the US. This has, as you've pointed out in earlier posts with regards to the fragility of the US as a superpower, become a major turning point in the balance of world powers.

But again it's not just the term 'deficit', which can be debated cleverly in theory, it's the overwhelmingly MASSIVE deficit, and it's trend of skyrocketing upwards in the last 10 years in ways that have never been seen before that are the issue. Our trade deficit if it continues on it current trend will be approaching 2 trillion dollars annually in only a few years. Some projections put that number arriving around 2012-2014 if the current trend continues. There is nothing on the horizon, or being proposed by either Presidential candidate that will change that projection.

Because trade models were so simplistic so as to assume that there wasn't a great deal of specialization, trade, and economic diversity such as there already is in the US. The rest of the world, in a less developed state, is more attuned towards a state of homogenization.

So it's not rattling off some regurgitated theory on deficits in some abstract general sense I was looking for, but an addressing of the actual fact of our trade deficit as a nation. With the idea of how can we possible sustain that over time in mind.

I'm not discussing the current crisis primarily caused by housing and the ensuing issues there, I'm talking about international trade here. Pretend the current international crisis wasn't happening, how can any nation sustain a trillion dollar trade surplus annually, while going into debt for trillions of dollars to the nations who generally do have trade surpluses while doing so.

How is that sustainable? How is that a net positive for an economy?

Be specific this time. Something like "the largest trade deficit in the history of the world is a good thing because of -" maybe "going into so much debt that we can never repay it is good because -"

It can't be sustained, period.

[wabio]

I just read today where interest rates jumped to 6.74%. Last week it was 6.4% and I think we're gonna see a trend where homeowners are going to be fucked yet once again.

I think housing was fucked no matter what the fov't would've done. People simply weren't buying (even at the old %) and foreclosures keep coming......and this was <i>before</i> the bank collapse. I also read somewhere that another round of resets are due in 2009. With evaporating jobs, virgin-tight credit markets, and now increasing % rates......you can forget about housing probably until the next election in 2012.

What concerns me about housing is the cause of the foreclosures. Up to now, it was mostly speculators and people who never should've gotten loans to begin with. If the economy keeps deteriorating we could see an increased percentage due to job losses. We could estimate this is by looking up foreclosure trends during previous recessions when there wasn't mad speculation.

[Dr Mabuse]

Good stuff Superboy.

[wabio]

When you consider the actual value of what is being imported and exported, and the overall impact on the economy - the movement of employment from a manufacturing economy to a service economy - you can see why. There are very few countries that can afford what the US has to offer, and there are many countries selling what are necessities to the US.


Interesting point, and something I've previously mentioned on numerous occasions. IMO "services" are much more difficult to export. To get an idea what I'm referring to, take a look at the list of "services" I pondered up:

Hospitality/Food
Tourism
Operations (CEO's, Midlevel managers, Cashiers, etc.)
Maintanence (Janitors, Plumbers, Gardeners, etc.)
Logistics (Truckers, Airlines, UPS, etc.)
Healthcare
Legal
Finance
Consulting (Business, Oil, Trade, etc.)
Sales
Engineering
Politics
Military
Public (Police, Fire, Teachers, etc.)
Sports
Entertainment
Media
Gambling
....and probably a bunch more I forgot

IMO the only ones I see as exportable are Consulting, Engineering, Finance, Operations, Entertainment, and possibly Military.....and some of these services have a very short client list. And demand may not necessarily be constant as compared to 99% of the imported products we buy at Target. Healthcare although exportable is probably too expensive (even to our own people).

[Dr Mabuse]

The last time I looked at the thorough trade figures for a month was August of this year.

The only service exports showing a growth towards surplus was tourism, and transportation associated with tourism.

But the gains in service exports in the way of tourism were offset by the imports of new services that month.

The census.gov site has the trade numbers as reported by the government.

[orangecrush]

i signed up for two newsletters this week mostly for short term trading signals, but they do some long term forecasting as well. i've followed these people for a year or so reading their free stuff that was always a few days to a week after the paid subscribers got it and less detail. they were always on target with their predictions.

for the long term they are predicting the final lows will be 3000 for the Dow, 400 for the SP500 and not sure for the Nasdaq. can't remember.

SP500 will go to 780 - 800 level sometime next week or early week after next and then a nice rally for a few months and next year will be brutal.

will be interesting to compare Buffet's results to these
It will be. I suspect that Berkshire will do much better than the dow and S&P.

[Superboy]

Something that should also be said on the topic is that indeed, Thomas Jefferson was well aware of the enormity of the complexity and conflict regarding free trade.

First, you have the enormity of conflict of interest with Great Britain and France regarding trade negotiations during the Revolutionary War. The signing of a treaty with Great Britain was not at all a necessity, but was done to facilitate trade.

Part of, if not all, of the motivation for the rush to sweep away the Articles of Confederation and hold another Constitutional Convention was that there was no Federally-backed monetary standard, and States were prone to bullying each other with manipulation of their own currencies. This caused deep divides in a struggling nation, one that was immediately addressed in the constitution. When you consider the sheer diversity in culture, environment, resources, and commerce of the first 13 States over 2 centuries ago, you can begin to comprehend how complex the issue would be now.

Historically, it doesn't end there though. There was a great deal of conflict during the Reconstruction in the post-Civil War days due to the failing currency of the Confederacy and efforts to re-integrate their currency with the Federal dollar. In its wake left a mountain of speculators who cheated banks, businesses, and people's personal savings.

So if you think that conflict over free trade and the manipulation of monetary policy is something new, you are indeed naive, or simply misinformed.

[Doctor Gonzo]

Interesting article on European take on possible U.S. govt. default in Summer 2009:

http://www.leap2020.eu/GEAB-N-28-is-available!-Global-systemic-crisis-Alert-Summer-2009-The-US-government-defaults-on-its-debt_a2250.html

[Dr Mabuse]

Interesting article on European take on possible U.S. govt. default in Summer 2009:

http://www.leap2020.eu/GEAB-N-28-is-available!-Global-systemic-crisis-Alert-Summer-2009-The-US-government-defaults-on-its-debt_a2250.html

I read an article written by one of the Sr. Managers at the British investing house Tyche Group. The fella's name was Martin Hennecke and it was a few months back. They were telling all their clients to get out of US holdings as they expected the government to default due to bailouts and insane deficit spending. He thought the bailouts would greatly accelerate that. The article was written before the BIG bailout was even on the horizon.

I posted it here but that was like a thread or two back. CNBC ran that article on their home page and covered it on the TV broadcast. Hennecke, at least the way I saw him presented, is not some reactionist or extremist doomsayer. It was unsettling stuff.

Our previous Comptroller has some ideas on this also. As he was the highest auditor in the US Government his ideas are more relevant I think. This is from 10-8-2008.

5LS44CxUJSg

We didn't get more in that last debate. Neither Presidential candidate cares about nor is either addressing the actual economy, they are both doing nothing more than playing the same old game of pandering oto the base with 'credit card' spending by the government. Largesse for YOU form the treasury!!! said both candidates.

The media is complicit to get 'their' candidate elected. The disastrous state of our economy is getting almost no coverage. Hence even fairly sophisticated financial people seem to be oblivious to or outright ignorant of reality.

10c-9bsIdR8

[al_bundy]

It will be. I suspect that Berkshire will do much better than the dow and S&P.


they have a lot of exposure to businesses that will be crushed if the economy gets real bad

[orangecrush]

they have a lot of exposure to businesses that will be crushed if the economy gets real bad
True, but they also have a boat load of cash.

[al_bundy]

but share prices go up on growth prospects, not survivability

what kind of growth are they priced for now compared to what they will probably grow at? Buffett invested in railroads in the last few years and they are getting crushed as well because they are labeled with commodities

[Shazam]

Why you Americans keep thinking that your economy is going to collapse is beyond me.

Domestic demand is still excellent. Just forget about the trade deficit right now. Fact is, if manufacturing needs to insourced again, it'll be insourced. China has shown that their system of oversight is failing. Out of the first world countries, you're still first.

I see a HUGE, MASSIVE buying opportunity right now. Rationality has gone out the window. Even a dunce that spends one minute to buy some index ETF right now will make a lot of money eventually.

[DarkestPhoenix]

GM, Chrysler in merger talks: source

http://www.reuters.com/article/newsOne/idUSTRE49A0X420081011?sp=true

I don't see this working. Seems like way to much overlap.

That's the point, as far as I know. To eliminate cross-competition, eliminate overlapping vehicle lines, streamline both companies to improve profit.

The reason the union guys are against it is because they know a shitload of people will be 'downsized'. However, the unions themselves have driven up costs by such a degree that it is no longer viable much less profitable to be so 'fatty' in business, and because of them these cuts are necessary, in some capacity.

Not only this, but GM has also tried to merge with Ford...somehow, they're going to merge with someONE. One of the reasons why I bought about a thousand shares when they hit bottom. That, and if they DO merge with Chrysler, it will finally be the only way to own a slice of that now-private company, and I should see a good bump...even more so when the minimum-estimated 18 billion dollar of profits by a merger starts cashing in.

[mbs]

That's the point, as far as I know.

GM wants the extra share of the $25BN cash that was loaned to the Big-3 from the G'ovt. They have made no mention about consolidation of product lines that I have seen.

If you do see a bump in GM's stock price (even to $8), I would get out ASAP. Personally, I expect the stock to drop slightly or remain at ~$6.50 once the merger goes through. The ship is sinking. They would have been FAR better served declaring Chapter 11. GM needs massive re-organization, not the acquisition of Chrysler. This, too, will fail.

Not only this, but GM has also tried to merge with Ford...somehow, they're going to merge with someONE.

Which was another attempt to get 2/3rds of the $25BN. The problem is that GM isn't merging because they want to consolidate and they think it makes sense... they are merging as a cash grab because they need more than their share of the $25BN to continue to operate.

And if we consider history... have ANY auto industry mergers ever turned out good?

[wendersfan]

And if we consider history... have ANY auto industry mergers ever turned out good?It worked out pretty well for a while when Buick merged with Oldsmobile and Cadillac. ;)

[DVD Polizei]

I basically agree with Shazam. The consumer sector for spending is still ripe and thirsty. Don't give them any credit, and the economy will indeed collapse.

[orangecrush]

but share prices go up on growth prospects, not survivability

what kind of growth are they priced for now compared to what they will probably grow at? Buffett invested in railroads in the last few years and they are getting crushed as well because they are labeled with commodities
Price Oct, 2008 - 123550
Price Oct, 2006 - 100000

How many companies are up 23% since October 2006? The massive amounts of cash will allow them to pick up some bargains that weren’t attractive before. I will throw out the caveat that if Buffet dies the stock will probably plummet.

The biggest problem with my prediction is their market cap. They have to gain many billions to achive significant growth.

[wabio]

This stock market reminds me of being an undergraduate. Drunk one day, sober the next.

[mbs]

This stock market reminds me of being an undergraduate. Drunk one day, sober the next.

And it makes for a great time for easy short-term gains. I've never had an easier time making money than the past couple weeks of this market.

[al_bundy]

Price Oct, 2008 - 123550
Price Oct, 2006 - 100000

How many companies are up 23% since October 2006? The massive amounts of cash will allow them to pick up some bargains that weren’t attractive before. I will throw out the caveat that if Buffet dies the stock will probably plummet.

The biggest problem with my prediction is their market cap. They have to gain many billions to achive significant growth.

it's just a bit more than what it was trading for in 2003, about the same for a lot of other companies today. you would have made more money with commodity companies over the same time frame even after their losses over the last few months. even Exxon would have given you much better returns

[orangecrush]

it's just a bit more than what it was trading for in 2003, about the same for a lot of other companies today. you would have made more money with commodity companies over the same time frame even after their losses over the last few months. even Exxon would have given you much better returns
Oh sure, look at a time horizen that proves your point ;)

[Lateralus]

Looks like we are at a critical juncture where we either break up or break down.

http://bespokeinvest.typepad.com/.a/6a00d8349edae969e2010535aeea93970c-popup

I'm hoping for a move to the upside but with all this bad news I just don't see it happening.

[VinVega]

Asian stocks went south overnight. Down 7%. :down:

[The Bus]

Of your list, these are partly or wholly exportable:

Hospitality/Food
Tourism
<b>Operations</b> (CEO's, Midlevel managers, Cashiers, etc.)
Maintanence (Janitors, Plumbers, Gardeners, etc.)
<b>Logistics</b> (Truckers, Airlines, UPS, etc.)
<b>Healthcare
Legal
Finance
Consulting</b> (Business, Oil, Trade, etc.)
Sales
<b>Engineering
Politics
Military</b>
Public (Police, Fire, Teachers, etc.)
<b>Sports
Entertainment
Media</b>
Gambling

[Pharoh]

Some old news first.

Lehman settlement comes and goes without a hiccup. No defaults.

Very worried about the issuances and the under the radar behind the scenes monetising going on.

Spreads aren't getting much better.

Iceland still sucks.

[Pharoh]

Hedge bloodbath continues.

Thank god we aren't on the continent.

Possible bad news out of Taiwan.

[Shazam]

Hedge bloodbath continues.

Thank god we aren't on the continent.

Possible bad news out of Taiwan.Zombies? Please tell me it's zombies.

[Pharoh]

:lol:

Unfortunately, no.

[Lateralus]

Ugh! Looks like financial Armageddon is here!

Futures down 500+, Asian and European markets down 7%

Gold down to $690.00

Somebody hold me!



Edit--- DOW and S+P futures HALTED!!!!!!!!!!!

[Pharoh]

Many forced redemptions. More hedge fallout.

Wait until next week. For some good news, that is.

[Pharoh]

OPEC cuts essentially counterproductive.

I know they wanted to defend ~$75 barrel, but that is a pipe dream. I thought $60 was defensible, but I am probably wrong there as well. If it goes below $50, look out.

[Venusian]

Look out for what?


Was there any bad news to trigger this last selloff or just people getting scared?

[classicman2]

I hope Saudi Oil goes to $15.00 - U.S. oil to $30.00.

[Dr Mabuse]

Wow 4 minutes in and down over 300, think they'll halt trading today?

[Lateralus]

Wow 4 minutes in and down over 300, think they'll halt trading today?


Futures were down 550, so a 300 point drop is no big deal right now. ;) According to the news this morning the Dow would have to drop 1100 points for them to halt trading.

[Dr Mabuse]

Futures were down 550, so a 300 point drop is no big deal right now. ;) According to the news this morning the Dow would have to drop 1100 points for them to halt trading.

Futures trading was halted on both the Dow and the S&P last night.

They would have been lower.

[al_bundy]

on cnbc they said the best indicator was the spdr's on what the open would be

spy, qqqq and dia

[wabio]

All this crazy talk is making me hungry. Maybe I'll go get a sandwich. :eek:

[Dr Mabuse]

on cnbc they said the best indicator was the spdr's on what the open would be

spy, qqqq and dia

But those indicators don't mean a whole lot if you don't consider the XQLY.

[VinVega]

All this crazy talk is making me hungry. Maybe I'll go get a sandwich. :eek:
You should be able to afford a few with all your investment money in cash. ;)

[Pharoh]

Look out for what?


$57 dollar per barrel, (or $55), seems to be the buy price. If we get below that, and really $50, I believe systematic aversion to oil will take place. And who know where the price may end up if that happens. Above $50 will be defensible, but below that point all bets are off.



there any bad news to trigger this last selloff or just people getting scared?

Aside from the worse than expected news out of London, Tokyo, and Seoul forced selling was a big component.


At least 30 year swaps are not negative today.
(Thanks again for letting Lehman fail! :up:)

[spainlinx0]

But those indicators don't mean a whole lot if you don't consider the XQLY.

Don't forget the importance of WTFBBQS.

[Venusian]

(Thanks again for letting Lehman fail! :up:)

Saw this today:

http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12484798
In early September, just before Lehman Brothers’ bankruptcy plunged the world into financial turmoil,

Do people think the LB bankruptcy caused this problem or did it only accelerate it? Obviously there were underlying problems already there. Maybe the LB bankruptcy brought them to the surface or accelerated the turmoil, but I don't think it cna be marked as the single cause

[Pharoh]

Saw this today:

http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12484798


Do people think the LB bankruptcy caused this problem or did it only accelerate it? Obviously there were underlying problems already there. Maybe the LB bankruptcy brought them to the surface or accelerated the turmoil, but I don't think it cna be marked as the single cause

It worsened the problem, particularly the liquidity/lending issue. If Lehman had not been allowed to fail you never would have seen some the interbank rates we have experienced, nor the wildness in the bond market.

[orangecrush]

It worsened the problem, particularly the liquidity/lending issue. If Lehman had not been allowed to fail you never would have seen some the interbank rates we have experienced, nor the wildness in the bond market.
You can't know that with certainty. Who’s to say that another large bank wouldn’t have failed in their place?

[Pharoh]

You can't know that with certainty. Who’s to say that another large bank wouldn’t have failed in their place?

Except that no other large bank, particularly with Lehman's profile, was allowed to fail. They all were aided, around the globe.

And I do know what has happened as direct result of Lehman's failure. It was a bad call.

[orangecrush]

Except that no other large bank, particularly with Lehman's profile, was allowed to fail. They all were aided, around the globe.

And I do know what has happened as direct result of Lehman's failure. It was a bad call.
Their failure is surely not the sole reason for the latest happenings, is it?

[Venusian]

i think he's saying that propping up other banks was a result of LB failure and the fallout. the govt realized they couldn't let that happen again

[al_bundy]

Their failure is surely not the sole reason for the latest happenings, is it?

pretty much everything since early september

[DVD Polizei]

Sorry, I'm not buying the Lehman Black Hole bullshit theory. Fact is, banks have NOT been lending. Period. They're hoarding the cash the US Gov't has loaned them. If the US Gov't would FORCE them to lend, we'd be in a better situation. But as it stands, we have lending firms and institutions just sitting on their cash, not lending, and in the meantime INCREASING interest rates on homeowners.

Basically put, your Capitalistic Corporations are sucking the American Public dry. They are trying to get the best of both worlds. A profit off the increasing interest rates, and easy cash from Uncle Sam.

Personally, I would have let not only Lehman fail but every Goddamn motherfucking institution. Including AIG, of course.

If the US Gov't would have invested more money overseas, we'd probably be in a better situation. But in any case, let's not be entirely stupid and retarded and think Lehman's failure was the catalyst for all this mess. Far from.

Who's to blame? Well, I can think of one person. Greenspan. He was lowering interest rates as of two years ago like an autistic kid buying 10,000 copies of Rainman. He was a dumbass. We even said as much on this forum before all this mess. He lowered interest rates so much, lending firms were in a frenzy and living it up. He assumed these firms were going to put the stockholders and investors first.

Yeah, right.

How many times do I have to fucking hit you over the fucking head, people. Core Capitalism is not about helping out one another. It's about fucking your grandmother in the ass as long as she pays for it. It's about selling out your country. It's about taking a big fat shit in your mother's Apple Pie. It's about evicting your father because he can't pay rent. That's Capitalism. Money means everything. You mean nothing.

In a truly respectful market, reciprocal obligation is what I and others call it. But I certainly haven't seen it. And when you loan billions of dollars and bail out banks and institutions, you won't see it either. Why? Because there is no incentive to do good for your fellow stockholder, investor, or consumer. If you don't have to fight for your company's life, why worry?

So, once again, let's drop the Lehman Theory. It's much broader than this.

The big picture? Our economic system is failing. No SURGE on money injections is going to help if you have an innately flawed system. We have to fix this system first before we throw money at it. Otherwise, we're going to bankrupt the American taxpayer and crush any form of economic stability we have left.

[Pharoh]

You are right. Well, except where you are not.


Bank lending in total during this crisis has actually increased, even before the rescue efforts, for just one example.


There is no failure of our economic system. We had a financial, (not economic), system derailment caused by a housing bubble, and unfortunately coinciding with an economic slowdown. The issues will be fixed, (likely with too much regulation), though some time and pain will have to be suffered. Things are already working. Well, if you believe things like data. That is up to each person though I suppose to accept or not.


And on a somewhat related topic, if you think what America is going through is bad, just wait until the real bubble in the world is burst. Good times.








Or, you can continue to believe and peddle the same end of the wold doom and gloom America is the evil of all evils you have been for the last five years.

[parrotheads4]

I just saw three patients in their 60's. All three told me they've lost everything. They said they lost everything because they trusted that our government was looking out for the people. They don't know what they are going to do. "I don't know what kind of work I can still do, but I'm going to have to work to survive." said one of them. Another advised me to put my money in a garbage can. I thought he was joking, but he clarified that thieves always look in the freezer - so hide it in a garbage can.

These are the real world situations out there. I'd imagine there are many people in thier 50's, and later who will never trust any form of investment again.

[sracer]

Sorry, I'm not buying the Lehman Black Hole bullshit theory. Fact is, banks have NOT been lending. Period. They're hoarding the cash the US Gov't has loaned them. If the US Gov't would FORCE them to lend, we'd be in a better situation. But as it stands, we have lending firms and institutions just sitting on their cash, not lending, and in the meantime INCREASING interest rates on homeowners.

Basically put, your Capitalistic Corporations are sucking the American Public dry. They are trying to get the best of both worlds. A profit off the increasing interest rates, and easy cash from Uncle Sam.

Personally, I would have let not only Lehman fail but every Goddamn motherfucking institution. Including AIG, of course.

[ rhetorical flourish omitted ]

So, once again, let's drop the Lehman Theory. It's much broader than this.

The big picture? Our economic system is failing. No SURGE on money injections is going to help if you have an innately flawed system. We have to fix this system first before we throw money at it. Otherwise, we're going to bankrupt the American taxpayer and crush any form of economic stability we have left.
Although I would've chosen a less graphic description of the situation, I agree with what I've quoted.

One defense of the bailout rests on the claim that the system is broken because the govt tinkered with it and messed it up. But the govt has always tinkered with things, always tried to modify the markets by the laws, taxes, and deductions that they pass.

I find it beyond belief that the worldwide financial crisis is caused because ACORN supposedly strongarmed some lending institutions to make risky loans or caused by subprime lending in the USA.

Why do these so-called free market capitalists that are now crying out that these companies are "too big to fail", firmly object to regulatory oversight even though the same "they're too big" claim was used? That the private sector can do better than the government? The truth is that NEITHER can do the job better than the other. Wherever people are involved, greed and corruption finds its way in.

The day that these free-wheelers claimed that the govt bailout is needed is the day that they lost all credibility. They claimed that regulation was unnecessary and a bad thing. They were wrong. How they think that anyone should believe them now is pretty surprising.

Scaring people by saying that doing nothing will hurt everybody might be technically true. But the reality is that those who got us into this mess will hurt a heckuva lot more than those who didn't. Joe the Plumber would've been hurt. Sure. But the culprits aren't worried about JtP's $40K salary and $125K home. They're worried about their own situation where because of their investments stand to lose proportionally a far greater amount.

Let's keep it real. No matter what is done or isn't done, "innocent" people will be affected. The "innocent" guy who makes $100K but only has a $150K fixed rate mortgage is going to get hurt. If these bailouts had the guarantee that the innocent guy would remain unaffected, then I might go along with it.

Better yet, I'll take a page out of the free-market capitalist playbook. Rather than give money to those who failed, those who demonstrated an inability to manage money correctly, why not give the bailout to those who ARE successful?! Why not spread that $1 Trillion to those who have made prudent financial decisions, kept their mortgages in line with their income and have savings and investments? With the bailout money, they would do a better job with it than those who made the poor decision to cause the mess.

[Superboy]

I just saw three patients in their 60's. All three told me they've lost everything. They said they lost everything because they trusted that our government was looking out for the people. They don't know what they are going to do. "I don't know what kind of work I can still do, but I'm going to have to work to survive." said one of them. Another advised me to put my money in a garbage can. I thought he was joking, but he clarified that thieves always look in the freezer - so hide it in a garbage can.

These are the real world situations out there. I'd imagine there are many people in thier 50's, and later who will never trust any form of investment again.

It's so easy to lose the human side of this story because we cling to ideology.

I remember similar stories being thrown around when Enron and AA went belly up. It's sad to see this generation get fucked over continually. Vietnam. Massive social upheavals. The end of the manufacturing industry in the US. And now this bullshit.

[wabio]

The big picture? Our economic system is failing. No SURGE on money injections is going to help if you have an innately flawed system. We have to fix this system first before we throw money at it. Otherwise, we're going to bankrupt the American taxpayer and crush any form of economic stability we have left.

Indeed. Unless the gov't chooses to continually give regular everyday Americans stimulus check after stimulus check......we may have to redefine our expectations of our capitalistic model. The last two events which have significantly fueled consumer spending (~66% of our economic engine) were the dot.com boom and the housing bubble. Both were fake and disasterous. What's next?

[Breakfast with Girls]

I just saw three patients in their 60's. All three told me they've lost everything. They said they lost everything because they trusted that our government was looking out for the people. They don't know what they are going to do. "I don't know what kind of work I can still do, but I'm going to have to work to survive." said one of them. Another advised me to put my money in a garbage can. I thought he was joking, but he clarified that thieves always look in the freezer - so hide it in a garbage can.

These are the real world situations out there. I'd imagine there are many people in thier 50's, and later who will never trust any form of investment again.Should've diversified.

[Breakfast with Girls]

Indeed. Unless the gov't chooses to continually give regular everyday Americans stimulus check after stimulus check......we may have to redefine our expectations of our capitalistic model. The last two events which have significantly fueled consumer spending (~66% of our economic engine) were the dot.com boom and the housing bubble. Both were fake and disasterous. What's next?The dot-com boom was "fake and disasterous"? The advent of the Web dramatically increased the economy and generated wealth and jobs. Sorry if you invested in Pets.com. That was your mistake. The subsequent bust was a result of bad investments because people got greedy and failed to do their research; it did not reveal some sort of fundamental flaw in capitalism, except for the fact that human beings are of course involved in the process.

These emotion-fueled posts by you and <b>DVD Polizei</b> may make you both feel better, but they don't have much basis in reality. Capitalism isn't going anywhere. If you want to talk about a real crisis, talk about the fact that politicians, complicit with the American public, are mortgaging our children's future in order to get re-elected.

[X]

Should've diversified.For sure. People in their 60's should only have 50-60% of their investments in stock if they plan on retiring soon. The rest should be in safe investments such as high-quality bonds.

Didn't they learn anything from the dot-com bust just 8 years ago when they saw their investments dramatically decrease in value?

[DVD Polizei]

These emotion-fueled posts by you and <b>DVD Polizei</b> may make you both feel better, but they don't have much basis in reality. Capitalism isn't going anywhere. If you want to talk about a real crisis, talk about the fact that politicians, complicit with the American public, are mortgaging our children's future in order to get re-elected.

Thanks for bolding me.

This is something more than being a loser if you invested in Pets.com. :)

What wabio and I are saying is being echoed by many respected and long-standing economists. While wabio and I would like to take credit for all our enlightening posts, our observations are nothing new and have been discussed by many an economist and Wall Street analyst for years.

Of course Capitalism isn't going anywhere. Socialism isn't going anywhere, either. In fact, a form of Socialism and Nationalism is currently being used to SAVE our strong and mighty Capitalistic country.

I'm not sure exactly what wabio's POV is, but I'm not saying Capitalism is going to leave. Of course it isn't. But it's effectiveness is severely being questioned by many professionals in the economic and government sector.

Capitalism 2.0 is going to be different than what we're used to. You, the consumer, may not see it immediately.

wabio says Capitalism is on its way of being re-defined. You don't think so? Well, you might pay more attention to the latest events by the Fed and governments worldwide.

I'm not sure what newspaper you read or television program you watch, but it's common opinion we haven't had such government intervention since the Depression. Even Greenspan realizes this. Maybe read what he had to say about a week ago.

Also, your take on the dotcom bubble fails to mention something. While it created jobs, it also created a jump in consumer debt. The dotcom bubble has considerably ramped up consumer debt much more quickly than what the economies of the world can keep up with. The easier it is to spend, the easier it is for wealth to be taken away, and left worthless. This is a persistent problem our country and other modern countries face. We're going into debt in order to sustain a standard of living. The net overall is certainly a good thing--a great thing, but we have a trailing debt problem which is getting worse, fueled by the convenience of online shopping.

We'll see in the coming months, how many online businesses remain in business. I'm not saying all of them are going to fail, I'm just saying it will be interesting how many will fail in the near and not-so-near future.

[Superboy]

Sorry, I'm not buying the Lehman Black Hole bullshit theory. Fact is, banks have NOT been lending. Period. They're hoarding the cash the US Gov't has loaned them. If the US Gov't would FORCE them to lend, we'd be in a better situation. But as it stands, we have lending firms and institutions just sitting on their cash, not lending, and in the meantime INCREASING interest rates on homeowners.

You should read what happened to Japan in the 1980s. This is more or less exactly what happened. However, in our hyper-competitive global market, where the rules aren't as simple anymore and the competition is so fierce people are willing to lose limbs again... well... you can't expect the US not to bite the bullet and go with the lesser of two evils.

The government forcing these banks to do what they want with the money still stinks of socialism in the same destructive vein that could still potentially bankrupt this country.

Basically put, your Capitalistic Corporations are sucking the American Public dry. They are trying to get the best of both worlds. A profit off the increasing interest rates, and easy cash from Uncle Sam.

That's the way it's been since the beginning of the total abandonment of strict monetary policy and a fiat money system. That was only 50 years ago - a fairly short time for a government to realize the errors of its ways, at least economically speaking.

Doesn't mean it should continue, rather, that they should get their act together. The government needs more control over the situation. Not less, as many people have been espousing for the past 25 years.

Personally, I would have let not only Lehman fail but every Goddamn motherfucking institution. Including AIG, of course.

Well, then i'm glad I live in a republic and not a democracy.

If the US Gov't would have invested more money overseas, we'd probably be in a better situation. But in any case, let's not be entirely stupid and retarded and think Lehman's failure was the catalyst for all this mess. Far from.

How/why? we're one of the major pillars of the world economy, and the other governments shun us like mad. Especially considering the history of our complexity of trade disputes with Japan, Canada, and Europe.

Who's to blame? Well, I can think of one person. Greenspan. He was lowering interest rates as of two years ago like an autistic kid buying 10,000 copies of Rainman. He was a dumbass. We even said as much on this forum before all this mess. He lowered interest rates so much, lending firms were in a frenzy and living it up. He assumed these firms were going to put the stockholders and investors first.

Yeah, right.

Actually, they were putting the stockholder first. You see, if they don't lend money out no money from interest payments comes in, if no money comes in then they can't sell off the mortgages as securities to maintain liquidity, and if they can't do that the bank will simply cease to function as a lending institution. They saw a profit motive and the "herd mentality" of the investment and securities market pretty much made this sort of predatory lending the lesser of two evils.

Also, you're basically saying two things: the government should force the banks to lend money, and the banks should be forced to keep their money in reserve regardless of market conditions.

How many times do I have to fucking hit you over the fucking head, people. Core Capitalism is not about helping out one another. It's about fucking your grandmother in the ass as long as she pays for it. It's about selling out your country. It's about taking a big fat shit in your mother's Apple Pie. It's about evicting your father because he can't pay rent. That's Capitalism. Money means everything. You mean nothing.

Actually the most important thing in capitalism is human capitalism. It always has and always will be, because the moment we cease to exist so does the concept.

That's not to say that transitions in the market are any easier to live with.

In a truly respectful market, reciprocal obligation is what I and others call it. But I certainly haven't seen it. And when you loan billions of dollars and bail out banks and institutions, you won't see it either. Why? Because there is no incentive to do good for your fellow stockholder, investor, or consumer. If you don't have to fight for your company's life, why worry?

See above.

So, once again, let's drop the Lehman Theory. It's much broader than this.

The big picture? Our economic system is failing. No SURGE on money injections is going to help if you have an innately flawed system. We have to fix this system first before we throw money at it. Otherwise, we're going to bankrupt the American taxpayer and crush any form of economic stability we have left.

I agree. The big picture is important in the respect as, as you've been saying here, that ethics is a very important consideration. Something that really has a long way to go in our society.

[wabio]

The dot-com boom was "fake and disasterous"? The advent of the Web dramatically increased the economy and generated wealth and jobs. Sorry if you invested in Pets.com. That was your mistake. The subsequent bust was a result of bad investments because people got greedy and failed to do their research; it did not reveal some sort of fundamental flaw in capitalism, except for the fact that human beings are of course involved in the process.

These emotion-fueled posts by you and <b>DVD Polizei</b> may make you both feel better, but they don't have much basis in reality. Capitalism isn't going anywhere. If you want to talk about a real crisis, talk about the fact that politicians, complicit with the American public, are mortgaging our children's future in order to get re-elected.

The problem is.......it takes these maddening bouts of runaway speculation to give consumers the courage to spend and drive the economy at the expected pace (AKA the perceived wealth effect). People spending money (they don't have) today based on the false assumption that more money will be right around the corner tomorrow. I'm not saying growth isn't occuring. I'm just saying I don't believe it's as rigorous as being reported. I'm not the one who discovered the problem.....just commenting on them. Blame the economists like Peter Schiff.

People are buying on credit because they otherwise couldn't afford to do so. First they used credit cards to supplement their income. Next it was home equities. For instance, federal minimum wage in 1983 was $3.85/hr. Fast forward 25 years to 2008. Minimum wage still hasn't doubled.

What we're seeing now (after the meltdown) is more consumers paring back spending to bare necessities. Guess what. The retail sector is taking it in the ass.

All these products and services the corporations are expecting us to purchase from them come at a price, and for many, that price is "too expensive". Unfortunately, it's only going to get worse if wages stagnate, unemployment increases, and/or inflation occurs. That's a simplified scope of the problem I see affecting growth in our current capitalistic model.

[Dr Mabuse]

"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." - Louis D. Brandeis

[Sean O'Hara]

The problem is.......it takes these maddening bouts of runaway speculation to give consumers the courage to spend and drive the economy at the expected pace (AKA the perceived wealth effect). People spending money (they don't have) today based on the false assumption that more money will be right around the corner tomorrow.

And you know what -- the system worked. People who've been spending unwisely are being punished for their mistakes.

Or they will be if the government stopped bailing people out.

[DVD Polizei]

People who spent unwisely will be punished for their mistakes, but you forget the other angle. Corporations and lending institutions are now going to pass-on that mistake THEY MADE in accepting the bad debts...onto the consumer as a whole. And that's where we are now. This isn't just a specific economic problem and only those who fucked up are getting punished. Far from. It's turning into a Medusa. People are being cut from jobs who have worked hard and spent wisely.

[al_bundy]

Sorry, I'm not buying the Lehman Black Hole bullshit theory. Fact is, banks have NOT been lending. Period. They're hoarding the cash the US Gov't has loaned them. If the US Gov't would FORCE them to lend, we'd be in a better situation. But as it stands, we have lending firms and institutions just sitting on their cash, not lending, and in the meantime INCREASING interest rates on homeowners.

Basically put, your Capitalistic Corporations are sucking the American Public dry. They are trying to get the best of both worlds. A profit off the increasing interest rates, and easy cash from Uncle Sam.

Personally, I would have let not only Lehman fail but every Goddamn motherfucking institution. Including AIG, of course.

If the US Gov't would have invested more money overseas, we'd probably be in a better situation. But in any case, let's not be entirely stupid and retarded and think Lehman's failure was the catalyst for all this mess. Far from.

Who's to blame? Well, I can think of one person. Greenspan. He was lowering interest rates as of two years ago like an autistic kid buying 10,000 copies of Rainman. He was a dumbass. We even said as much on this forum before all this mess. He lowered interest rates so much, lending firms were in a frenzy and living it up. He assumed these firms were going to put the stockholders and investors first.

Yeah, right.

How many times do I have to fucking hit you over the fucking head, people. Core Capitalism is not about helping out one another. It's about fucking your grandmother in the ass as long as she pays for it. It's about selling out your country. It's about taking a big fat shit in your mother's Apple Pie. It's about evicting your father because he can't pay rent. That's Capitalism. Money means everything. You mean nothing.

In a truly respectful market, reciprocal obligation is what I and others call it. But I certainly haven't seen it. And when you loan billions of dollars and bail out banks and institutions, you won't see it either. Why? Because there is no incentive to do good for your fellow stockholder, investor, or consumer. If you don't have to fight for your company's life, why worry?

So, once again, let's drop the Lehman Theory. It's much broader than this.

The big picture? Our economic system is failing. No SURGE on money injections is going to help if you have an innately flawed system. We have to fix this system first before we throw money at it. Otherwise, we're going to bankrupt the American taxpayer and crush any form of economic stability we have left.

after Bear everyone thought that the US government is going via the orderly disposition strategy. letting Lehman fail everyone got scared and stopped lending to everyone else due to the fear of losing money. at this point the weak banks fail like in Iceland and other places in Europe and the crisis feeds on itself.

reason stock markets keep falling is not recession fears but because people are reducing risk and meeting margin calls and have to sell anything. good or bad. this is why GE and Verizon are at 7% or more dividend yields.

but it's almost over, after we hit 7200 or so on the Dow and 800 on the SP500 it will reverse for pretty much no reason at all

in the end i think the only winners are the governments and i won't be surprised if this was all done on purpose. US Government debt is a safehaven letting Uncle Sam borrow at very low rates and lend at much higher rates to banks, AIG and Fannie/Freddie. After this is all over the US Government will probably book a nice profit on all these bailouts

[Dr Mabuse]

7200 may be aiming quite a bit too high.

Not even taking in to account the upcoming holiday retail season and the possible ramifications of that.

[al_bundy]

i've been reading a possiblity of much lower next year, but we are due for a rally now and these are the lows before a rally starts this or next week

tech and some other sectors are already below the October 10th lows. just have to wait on a few others and the rally will start

at the current downward channel the hypothetical lows are around 2000 - 3000 for the Dow and 155 for the SP 500. Nasdaq not so bad since it's already in a bear market.

[Lateralus]

Ugh, the holiday retail season is going to be dismal! However with everybody removing their money from funds maybe they will purchase something more "physical".

[atlantamoi]

Ugh, the holiday retail season is going to be dismal! However with everybody removing their money from funds maybe they will purchase something more "physical". Everyone is removing money from their funds?

[VinVega]

Everyone is removing money from their funds?
A lot of 401K people have panicked and moved money from stock based mutual funds to cash based ones. They're also going to miss out on the recovery when it starts, but they think they can time the market.

[al_bundy]

it is pretty funny that people are pulling out and we're supposed to get a rally start this week or next

[VinVega]

it is pretty funny that people are pulling out and we're supposed to get a rally start this week or next
Buy high, sell low. That's what human emotions will get you.

[rw2516]

it is pretty funny that people are pulling out and we're supposed to get a rally start this week or next

I got out three weeks ago. I could miss a 1000 point rally, getting in the next day, and still come out ahead of not getting out at all.

[classicman2]

Well - at least the price of gasoline is dropping like a rock. Things aren't not all bad. :)

[orangecrush]

Well - at least the price of gasoline is dropping like a rock. Things aren't not all bad. :)
And even that is a slight kick to the nuts in my mind. The price of a gallon doesn't seem to match what the futures prices, historically, say it should be.

[wendersfan]

Well - at least the price of gasoline is dropping like a rock. Things aren't not all bad. :)I long for the days of $4/gallon gasoline.

[VinVega]

I long for the days of $4/gallon gasoline.
:lol:

But to answer c-man's point that things are not so bad...Prosperity is just around the corner my friend. :sarcasm::up:

[wishbone]

Well - at least the price of gasoline is dropping like a rock. Things aren't not all bad. :)There was a news item about the drop of gas prices being one of the few good things in our bad economy. It was likened to losing weight when you have the flu. :lol:

[classicman2]

Are you another one of those 'The Great Depression is going to be repeated' folks? :lol:

[wishbone]

Bindles 'R' Us will be huge! :)

[Lateralus]

There was a news item about the drop of gas prices being one of the few good things in our bad economy. It was likened to losing weight when you have the flu. :lol:

Falling gas prices is like a good economic stimulus package, I did the math yesterday and these lower prices will save me over $1200.00 a year; that is 4x as much as I got from GWB.

[VinVega]

Are you another one of those 'The Great Depression is going to be repeated' folks? :lol:
According to this poll, those are the "18 percenters."

[TruGator]

Stock market up 889 points for the day.

[kvrdave]

Fortunately, my stocks were not lured by this false rally and stayed even. :|

[al_bundy]

i'll probably short tomorrow

[VinVega]

i'll probably short tomorrow
Oh hell yeah. Bring a parachute, it's going to be a long drop. :lol:

[DVD Polizei]

Yeah, I have to wonder about these quick shots into the atmosphere. I'll bring the popcorn.

[Pharoh]

Many forced redemptions. More hedge fallout.

Wait until next week. For some good news, that is.


And the news has come.

In particular on CP and the yen, (which is another huge bubble waiting to burst.)

The only negative, from a market perspective, today was the relatively low volume.

[DVD Polizei]

We're more than likely going to lose today's gain and more by the end of the week.

[Pharoh]

We're more than likely going to lose today's gain and more by the end of the week.

Or not.

Unless you choose to ignore the fundamental reasons for today's gains.



We won't.

[Pharoh]

And the Porsche fiasco continued today.

How effed up is Germany, their laws and regulations, and Europe as a whole.

I am just so glad the I am in the US, who are far better positioned that just about anybody sans Japan.

[X]

I am just so glad the I am in the US, who are far better positioned that just about anybody sans Japan.Yeah, I'm getting suspicious about the Japanese. They already lived through what we're getting into and we've seen what they can recover from. The strength of the yen is also impressive so it appears many people are banking on them right now.

[kvrdave]

We're more than likely going to lose today's gain and more by the end of the week.

I've said that before, but don't believe it this time. I certainly don't think it is over, but we went up today based on a belief of a drop of 50 points by the fed. I think we will get that, and rise a bit more. We may drop, but won't end up red for the week. We'll end up back around 8200 or so in a month after the Black Friday sales aren't fantastic (though they won't be awful), and then we will start a slow move up next year for no real reason other than the fact that we have a new president.

[al_bundy]

Oh hell yeah. Bring a parachute, it's going to be a long drop. :lol:

one of the trading newsletters i subscribe to had a possible scenario for the last week where the market makes a triangle pattern. on monday they pretty much discounted it but said it's still a possibility and even gave a 940 price target on the SP500 where it would end even if it goes a bit above it.

i was reading The Elliott Wave Principle last night and found the part where it says a triangle in a bear market is almost always consolidation for the last leg down. they even go into details about what the last leg will look like but i have to look it up again

[Dr Mabuse]

Large single day upshoots in the market are signs of bad/troubled economic times.

Three of the largest single day market gains in US history were between 1929 and 1933. Did the one this week set a new record?

I don't think a single days gain is representative of anything substantial at all. All the rationalizing of the 'expert' analysts or no 'expert' insights.

I think it will be 2009 when things really start to 'settle in' and get as bad as they are going to here in the US. When the job losses, retail problems, consumer spending and confidence stuff, etc. comes home to roost.

I think yesterday or Friday?, we had the lowest consumer confidence numbers in the entire history of tracking such things.

In an economy that is 3/4ths consumer spending that should be considered, particularly going into a holiday shopping season that will be literally mean life or death for some of the largest retail outlets in the US.

[al_bundy]

one more strike against the rally

going back decades there is a trend where the DJIA confirms the price movements of the DJ Transportation Average and the other way around. The Transports went below October 10th, but not the industrials.

[Pharoh]

Large single day upshoots in the market are signs of bad/troubled economic times.

Three of the largest single day market gains in US history were between 1929 and 1933. Did the one this week set a new record?

I don't think a single days gain is representative of anything substantial at all. All the rationalizing of the 'expert' analysts or no 'expert' insights.

I think it will be 2009 when things really start to 'settle in' and get as bad as they are going to here in the US. When the job losses, retail problems, consumer spending and confidence stuff, etc. comes home to roost.

I think yesterday or Friday?, we had the lowest consumer confidence numbers in the entire history of tracking such things.

In an economy that is 3/4ths consumer spending that should be considered, particularly going into a holiday shopping season that will be literally mean life or death for some of the largest retail outlets in the US.



First of all, nobody said, I know I did not, that yesterday was an indicative sign of anything 'substantial'. The point was there were fundamental reasons for yesterday's gains, primarily CP. There was good news along those lines, and amongst other areas, and that good news was the motive behind the advancements, news that is not going to change today or tomorrow.

The larger issue is that the market has been trading far more on external issues, things like CP, LOC, carries, shorts, hedge funds/redemptions, CDS, et. al. The sort of things that did not entirely exist in 1929 or 1933. So while it is important to look at the past, one does need to evolve and acknowledge the evolution that has taken place. Eventually the markets will return to more stable and core issue, and we will likely go down again, even soon. But that does not change what we experienced yesterday over the globe and the reasons for it.

[Pharoh]

I long for the days of $4/gallon gasoline.

Forgive me for taking some time to catch up, but why?


It is not high enough of a price to make profound changes in habits, but high enough to have negative economic implications. Seems to me it is about the worst price it could be.

[classicman2]

Speaking of not catching up - how much reduction in production did OPEC say?

[Pharoh]

Yeah, I'm getting suspicious about the Japanese. They already lived through what we're getting into and we've seen what they can recover from. The strength of the yen is also impressive so it appears many people are banking on them right now.

I believe the sole reason for the expected rate cut by the BoJ is to curb the yen. It has worked a bit already. Luckily for me, I stopped banking on the yen a week ago.

The impetus behind its rise recently has been the unwinding of the carry trade. That bubble could stand a little deflating, but nobody wants it to burst.




Lastly, I agree about Japan's ability to weather this storm, if for nothing else due to their savings. In fact, some within the government have already voiced their desire to see Japan take advantage of this situation because of that.

[Pharoh]

Speaking of not catching up - how much reduction in production did OPEC say?

1.5 mb/d.

[al_bundy]

First of all, nobody said, I know I did not, that yesterday was an indicative sign of anything 'substantial'. The point was there were fundamental reasons for yesterday's gains, primarily CP. There was good news along those lines, and amongst other areas, and that good news was the motive behind the advancements, news that is not going to change today or tomorrow.

The larger issue is that the market has been trading far more on external issues, things like CP, LOC, carries, shorts, hedge funds/redemptions, CDS, et. al. The sort of things that did not entirely exist in 1929 or 1933. So while it is important to look at the past, one does need to evolve and acknowledge the evolution that has taken place. Eventually the markets will return to more stable and core issue, and we will likely go down again, even soon. But that does not change what we experienced yesterday over the globe and the reasons for it.

back in the 1920's hedge funds were known as Trust Companies because stockholders could get sued for what the company did. with trust companies there was a shield. they would leverage 10 to 1 to buy stock until it came crashing down in 1929

[Pharoh]

back in the 1920's hedge funds were known as Trust Companies because stockholders could get sued for what the company did. with trust companies there was a shield. they would leverage 10 to 1 to buy stock until it came crashing down in 1929

They aren't the same things.

So once again, while some similarities exist, so do a great many differences.

[nemein]

Speaking of not catching up - how much reduction in production did OPEC say?

The real question is whether or not they'll carry through w/ it. I heard on NPR the other day that it seems they have made these sorts of statements in the past but haven't always followed up on the "threat".

[kvrdave]

Several OPEC countries (especially Iran) did the American thing and worked their budget based on the recent price of oil. Then it fell a bunch and they could no longer keep their budget, so they wanted the production cut to drive up the price.

[Pharoh]

Several OPEC countries (especially Iran) did the American thing and worked their budget based on the recent price of oil. Then it fell a bunch and they could no longer keep their budget, so they wanted the production cut to drive up the price.

While a few nations, (Venezuela, Iran, and Nigeria), may need oil to be priced at $80 to $90, none of them have budgets with prices this high. Iran's revised budget for 2009, as an example, has oil at $55 to $60.

[classicman2]

The real question is whether or not they'll carry through w/ it. I heard on NPR the other day that it seems they have made these sorts of statements in the past but haven't always followed up on the "threat".


OPEC doesn't have the 'juice' that it once had.

And, Saudia Arabia doesn't call the shots for OPEC as they once did.

[kvrdave]

While a few nations, (Venezuela, Iran, and Nigeria), may need oil to be priced at $80 to $90, none of them have budgets with prices this high. Iran's revised budget for 2009, as an example, has oil at $55 to $60.

Are you suggesting that Iran is lying? Good day to you, sir!

[Dr Mabuse]

First of all, nobody said, I know I did not, that yesterday was an indicative sign of anything 'substantial'. The point was there were fundamental reasons for yesterday's gains, primarily CP. There was good news along those lines, and amongst other areas, and that good news was the motive behind the advancements, news that is not going to change today or tomorrow.

The larger issue is that the market has been trading far more on external issues, things like CP, LOC, carries, shorts, hedge funds/redemptions, CDS, et. al. The sort of things that did not entirely exist in 1929 or 1933. So while it is important to look at the past, one does need to evolve and acknowledge the evolution that has taken place. Eventually the markets will return to more stable and core issue, and we will likely go down again, even soon. But that does not change what we experienced yesterday over the globe and the reasons for it.

So you assumed you were the 'expert'?

That's some ego you're sporting there chief. ;)

There's been a lot of big talk by financial people, 'experts', on TV and elsewhere.

[Pharoh]

So you assumed you were the 'expert'?

That's some ego you're sporting there chief. ;)

There's been a lot of big talk by financial people, 'experts', on TV and elsewhere.


You haven't seen my numerous posts concerning my "expertise" on the stock market, have you?
:)

Suffice to say, I made no such assumption.

[arminius]

You haven't seen my numerous posts concerning my "expertise" on the stock market, have you?
:)

Suffice to say, I made no such assumption.

Ha, when you assump you make an ass of u and ?an mp?:scratch2:

[Venusian]

there was a report of the SEC investigating huge volume spikes at the end of the trading day over the past week to see if there is any manipulation going on.

anyone know the average volume at the end of the day. the past week has huge spikes, even today, is that normal?

[Dr Mabuse]

The late day spikes have been a concern for over a month, at least.

There have been serious inquiries about that as manipulation.

[Superboy]

The late day spikes have been a concern for over a month, at least.

There have been serious inquiries about that as manipulation.

You mean hedge funds taking advantage of a volatile market at the expense of the average investor/consumer? say it ain't so!!!

[Dr Mabuse]

You mean hedge funds taking advantage of a volatile market at the expense of the average investor/consumer? say it ain't so!!!

Well something like that sort of thing, as some of the late day stuff recently has been very good to select stocks.

But this is more of a manipulation of the computer system according to some reports I've seen, even on the major news networks.

I've seen mention of actual attacks or 'hacks' on the computers by outside entities.

[Superboy]

Well something like that sort of thing, as some of the late day stuff recently has been very good to select stocks.

But this is more of a manipulation of the computer system according to some reports I've seen, even on the major news networks.

I've seen mention of actual attacks or 'hacks' on the computers by outside entities.

That's even scarier. Reminds me of your comments about computerized voting...

[al_bundy]

The late day spikes have been a concern for over a month, at least.

There have been serious inquiries about that as manipulation.


a few years ago as a joke i sold one share of Symantec for 1 penny or some other ridiculous amount after hours. it was funny to see it plummet for a few minutes

[al_bundy]

there was a report of the SEC investigating huge volume spikes at the end of the trading day over the past week to see if there is any manipulation going on.

anyone know the average volume at the end of the day. the past week has huge spikes, even today, is that normal?


a lot of funds are trying to sell a lot of stock to meet margin. shocking that they would wait until the price is run up to sell

[Dr Mabuse]

So now the credit card industry is having record defaults and is in danger.

How much do think the bailout for the credit card companies will be?

[JasonF]

Apparently, yesterday was a day of prayer for the World's Economies:

For these and other reasons Cindy is calling for a Day of Prayer for the World’s Economies on Wednesday, October 29, 2008. They are calling for prayer for the stock markets, banks, and financial institutions of the world on the date the stock market crashed in 1929. They are meeting at the New York Stock Exchange, the Federal Reserve Bank, and its 12 principal branches around the US that day.

“We are going to intercede at the site of the statue of the bull on Wall Street to ask God to begin a shift from the bull and bear markets to what we feel will be the 'Lion’s Market,' or God’s control over the economic systems,” she said. “While we do not have the full revelation of all this will entail, we do know that without intercession, economies will crumble.”

http://www.cbn.com/700club/guests/bios/cindy_jacobs102008.aspx

http://www.balloon-juice.com/wp-content/uploads/2008/10/bullprayer2-300x289.jpg

Praying before a giant golden statue of cattle always works out for the best.

[Dr Mabuse]

:lol:

People wound up dead the last time they were putting their hands on a golden bull and praying and stuff.

[wabio]

http://www.signonsandiego.com/news/business/20081030-1353-financialmeltdown.html

Bad recession seen
By Jeannine Aversa
ASSOCIATED PRESS

1:53 p.m. October 30, 2008

WASHINGTON – Scared and out of money, Americans stopped buying everything from cars to corn flakes in the July-September quarter, ratcheting back spending by the largest amount in 28 years and jolting the national economy into what could be the most painful recession in decades.
With retailers bracing for a grim holiday buying season, the economy isn't just slowing; it's actually shrinking, the government confirmed Thursday. It reported that the nation's gross domestic product declined at an annual rate of 0.3 percent in the year's third quarter and consumers' disposable income took its biggest drop on record.

Stocks up on GDP report in relatively calm session
White House defends money for banks
Banks borrow record amount from Fed


In simpler words, “The train went off the tracks,” said Brian Bethune, economist at IHS global Insight.

Wall Street took comfort in the fact that it wasn't even worse. The Dow Jones industrials rose 190 points.

But economists say tougher times are still ahead. Believing consumers are cutting back even more right now, they predict a much larger economic decline – anywhere from a 1 to 2 percent rate – during the current October-December period. That would meet a classic definition of a recession – two straight quarters of shrinking GDP.

Not that there's any real doubt now.

Clobbered by pink slips, shrinking nest eggs and falling home values – consumers are holding ever tighter to their wallets. The new report said Americans' disposable income fell at an annual rate of 8.7 percent in the quarter, the largest in records dating back to 1947

The dismal news came just days before the nation picks the next president. Whether Democrat Barack Obama or Republican John McCain wins the White House, he will inherit a deeply troubled economy and a record-high budget deficit that could cramp his spending plans.

Each side said the new figures supported its political case.

“The decline in GDP didn't happen by accident – it is a direct result of the Bush administration's trickle down, Wall Street first, Main Street last policies that John McCain has embraced for the last eight years,” Obama said. He pledged to provide tax relief to middle class families and help people facing foreclosure.

Pointing to the economy's sad state, Doug Holtz-Eakin, senior policy adviser for the McCain campaign, shot back that “Barack Obama would accelerate this dangerous course.” McCain said his tax cuts, free-trade policies and help to struggling homeowners would help turn things around.

More than in recent recessions, consumers – the lifeblood of the economy – are bearing the brunt of the country's housing, banking and other ailments. The third-quarter decline in their spending was the first in 17 years, and the 3.1 percent annualized cutback was staggering – the most since the spring of 1980 when the country was in the grip of what some call the worst downturn since the Great Depression.

Walloped by such a huge pullback, the economy toppled into negative territory.

The latest reading on GDP, which measures the value of all goods produced within the United States, showed a rapid turn from the 2.8 percent growth rate logged in the second quarter. The new figure was the worst since the 1.4 percent rate of decline in the third quarter of 2001, when the nation was suffering through its most recent recession.

Democrats on Capitol Hill are pushing for another economic stimulus package and are weighing whether to hold a lame duck session before the new president takes office.

Under attack from Democrats and Republicans alike, the White House defended giving billions of bailout dollars to banks that now are rewarding shareholders and executives – or even buying other banks – rather than making loans to consumers and businesses.

Ed Lazear, chairman of the Council of Economic Advisers, said the government is keeping close tabs on banks' use of the money, but he also said normal activities such as paying performance-related salaries or distributing dividends are allowed under the law Congress passed.

White House press secretary Dana Perino said that “not only rich people get dividend payments,” which can form a significant portion of income for retirees and mutual funds.

A collapse of the housing market and locked-up lending have produced the worst financial crisis to hit the country in more than 70 years.

To cushion the fallout, the Fed slashed interest rates on Wednesday by half a percentage point to 1 percent, a level seen only once before in the last half century.

Fed Chairman Ben Bernanke has warned that the country's economic weakness could last for some time – even if the government's unprecedented $700 billion financial bailout package and other steps do succeed in getting financial and credit markets to operate more normally.

“As of now, most forecasts indicate that we will experience a serious recession, perhaps comparable to the recession of the early 1980s, but nothing like the Great Depression,” said Simon Johnson, former chief economist to the International Monetary Fund and senior fellow at the Peterson Institute for International Economics. During the 1980-1982 recession, unemployment topped 10 percent.

Other analysts, including Mark Zandi, chief economist at Moody's Economy.com, predicts the downturn will be much more severe than the 2001 and 1990-1991 recessions but not as bad – in terms of unemployment or lost growth – as the 1980s one.

The unemployment rate, now at 6.1 percent, could hit 8 percent or higher next year.

The Labor Department said Thursday that new claims for unemployment benefits last week held steady at 479,000, an elevated figure that continued to point to troubles in the jobs market.

In the third quarter, consumers cut back on purchases of cars, furniture, household appliances, clothes and almost everything else.

Businesses cut back, too, trimming spending on equipment and software at a 5.5 percent pace, the most since the first quarter of 2002. And home builders slashed spending at a 19.1 percent pace, marking the 11th straight quarterly cutback.

Slower growth for U.S. exports – reflecting less demand from overseas buyers who are coping with their own economic problems – also factored into the weak GDP report. Exports grew at a 5.9 percent pace in the third quarter, less than half the second quarter's 12.3 percent rate.

------------------------------------------------------------------------

From a local paper. No bolding......sorry.

[orangecrush]

http://www.signonsandiego.com/news/business/20081030-1353-financialmeltdown.html

Bad recession seen
By Jeannine Aversa
ASSOCIATED PRESS

1:53 p.m. October 30, 2008

WASHINGTON – Scared and out of money, Americans stopped buying everything from cars to corn flakes in the July-September quarter, ratcheting back spending by the largest amount in 28 years and jolting the national economy into what could be the most painful recession in decades.
With retailers bracing for a grim holiday buying season, the economy isn't just slowing; it's actually shrinking, the government confirmed Thursday. It reported that the nation's gross domestic product declined at an annual rate of 0.3 percent in the year's third quarter and consumers' disposable income took its biggest drop on record.

One down, one to go :banana:

Oh, wait :(

[orangecrush]

So now the credit card industry is having record defaults and is in danger.

How much do think the bailout for the credit card companies will be?
I really, really hope they don't bailout those companies. They are some of the most despicable corporations ever known to man (golden cattle statue manufactures not withstanding).

[Pharoh]

http://4.bp.blogspot.com/_djgssszshgM/SQr0qamqm_I/AAAAAAAAAo0/uXXBQbfh-YE/s1600/halloween%2Bcartoon.jpg

[Pharoh]

280 for the job number next week.


My estimate.

[Baron Of Hell]

I really, really hope they don't bailout those companies. They are some of the most despicable corporations ever known to man (golden cattle statue manufactures not withstanding).

They brought this on themselves. Sending out credit card offers left and right. Trying to trick people in to spending more and more. Tacking on secret fees. Screw them. Save up your money and buy stuff when you have the money.

[DVD Polizei]

Or not.

Unless you choose to ignore the fundamental reasons for today's gains.

We won't.

Well, you were right. For this week, anyway. :D

[Gcomeau]

Jorg Haider - Anyone know what he said in Sept about all this BS:

http://www.youtube.com/watch?v=OYtor_MPJ3E

Search his name and see what happened to him in October. If you dare speak about how "they" are f*cking you well you can guess the rest.

RIP Mr. Haider 1950 – 2008

[Dr Mabuse]

:wtf:

-screwy-

[wabio]

280 for the job number next week.


My estimate.

280 lost or......? :hscratch:

[wabio]

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Entertaining debate between economists Art Laffer and Peter Schiff on CNBC from August, 2006. There's another video on YouTube somewhere with Laffer being hounded about his "bet" by Bill Maher on national TV.

[al_bundy]

after the market started crashing Art Laffer went over to the bear camp pretty quick. i used to watch him on Kudlow and back in late 2007 he proudly said his hedge fund was 100% invested

[wabio]

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Schiff back on the air in a recent interview - Oct. 28th 2008. 2 part video. He's predicting the dollar "will drop like a stone" and interest rates will go double digit, resulting in possible hyperinflation down the road. He also tears into Obama quite a bit, especially in part II. He speaks a lot of truth, especially about housing valuations and capital investment. Below is part II.

http://www.youtube.com/watch?v=coaI3d89kuA&feature=related

[DVD Polizei]

The dollar might drop next Spring, but I doubt it will anytime before then. Of course, what the hell do I know. I need my special graph I made in another post to explain things.

[gmanca]

Supposedly GM is not getting a 10 billion dollar loan from the Treasury (http://www.iht.com/articles/2008/11/03/business/03gm.php) to merge with Chrysler but that the White House wants to quickly roll-out that quietly passed 25 billion dollar "fuel efficiency" subsidy/loan.

What is to prevent this from being a shell game that allows for the merger to occur while less progress is made on what the loan was purposed for? The Volt is going to be a loss for GM even at it's higher-than-expected pricetag of 40k; the funds should support projects to make these companies competitive with the new products from Japan.

[sracer]

Supposedly GM is not getting a 10 billion dollar loan from the Treasury (http://www.iht.com/articles/2008/11/03/business/03gm.php) to merge with Chrysler but that the White House wants to quickly roll-out that quietly passed 25 billion dollar "fuel efficiency" subsidy/loan.

What is to prevent this from being a shell game that allows for the merger to occur while less progress is made on what the loan was purposed for? The Volt is going to be a loss for GM even at it's higher-than-expected pricetag of 40k; the funds should support projects to make these companies competitive with the new products from Japan.
Answer: Nothing.

I find it sickening. But many will find it acceptable because after all they create jobs. And the ability to create jobs gives one a license to do whatever they choose to do.

[Dr Mabuse]

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Entertaining debate between economists Art Laffer and Peter Schiff on CNBC from August, 2006. There's another video on YouTube somewhere with Laffer being hounded about his "bet" by Bill Maher on national TV.

That's funny.

Reminds me of me and some others posting the same sorts of things here and on other forums and being met with the 'nonsense' and 'gloom and doom' monikers from most others.

I saw this coming way back, posted it was coming. And got a lot of 'you don't know what you're talking about' type of responses on several forums.

I figured out a ways back this 'everything will be fine' stuff is mostly based in/on human psychology and not on an actual understanding of economics anyway.

I had a hell of time explaining right here in this thread like 2 versions back how this economy not producing/manufacturing things, and being a consumer economy was a huge problem. I got the 'everything will be fine' and 'we're better than ever!' stuff in response to that also.

[orangecrush]

That's funny.

Reminds me of me and some others posting the same sorts of things here and on other forums and being met with the 'nonsense' and 'gloom and doom' monikers from most others.

I saw this coming way back, posted it was coming. And got a lot of 'you don't know what you're talking about' type of responses on several forums.

I figured out a ways back this 'everything will be fine' stuff is mostly based in/on human psychology and not on an actual understanding of economics anyway.

I had a hell of time explaining right here in this thread like 2 versions back how this economy not producing/manufacturing things, and being a consumer economy was a huge problem. I got the 'everything will be fine' and 'we're better than ever!' stuff in response to that also.
:bow:

[Dr Mabuse]

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Schiff back on the air in a recent interview - Oct. 28th 2008. 2 part video. He's predicting the dollar "will drop like a stone" and interest rates will go double digit, resulting in possible hyperinflation down the road. He also tears into Obama quite a bit, especially in part II. He speaks a lot of truth, especially about housing valuations and capital investment. Below is part II.

http://www.youtube.com/watch?v=coaI3d89kuA&feature=related

That's awesome.

Though I didn't know who this guy was before seeing these, he says basically the same things that I've been thinking and posting for a while now, including in this thread.

I think it's painfully obvious that all of this madness the US is engaging in could easily result in hyperinflation.

Somehow people think a government can live off credit cards, and somehow get away with it, can print valueless money by the trillion, and get away with it, can borrow money from lenders who know they will never pay it back, and get away with it. Even though history teaches us clearly the results of these activities. The very same people who decry individuals for doing the same thing with credit cards and debt, and can easily see how that spells doom for an individual, say the US government can do it and because of 'complicated sounding' bullshit can get away with it.

Like that woman in this video somehow people have some mythological idea that 'because we're the US and we're #1!' we'll somehow be able to pay off 10 or 20 trillion dollars in debt in some magical way just down the road. I honestly can't grasp how people believe or think that.

The stuff is rooted in psychology and not in a real grasp of economics or even just history.

[wabio]

I had a hell of time explaining right here in this thread like 2 versions back how this economy not producing/manufacturing things, and being a consumer economy was a huge problem. I got the 'everything will be fine' and 'we're better than ever!' stuff in response to that also.


I think the biggest transition (i.e. warning light) that has occurred recently is the "method" of purchasing. It's pretty much what Schiff is trying to tell everyone but doesn't go into detail. It's kind of tough to explain but I'll try my best.

In the good old days, we started by producing our own products and selling it to ourselves. Corporations got smart and tried to increase profits by producing products overseas at lower cost to sell to us. At first, this was fine as we could afford to make these purchases based on our incomes, assets, savings, etc. But over time, Americans weren't able to keep up with these high powered consumer expectations and had to use financing. This financing was reinforced and enabled by the Fed who continually creates and dumps treasuries at market to buyers like Japan. So in the end, we are not only buying products made by foreigners......we are also borrowing money from foreigners to finance those very purchases.

Not good. It's like borrowing money from a drug dealer to buy his drugs.

[Dr Mabuse]

I think the biggest transition (i.e. warning light) that has occurred recently is the "method" of purchasing. It's pretty much what Schiff is trying to tell everyone but doesn't go into detail. It's kind of tough to explain but I'll try my best.

In the good old days, we started by producing our own products and selling it to ourselves. Corporations got smart and tried to increase profits by producing products overseas at lower cost to sell to us. At first, this was fine as we could afford to make these purchases based on our incomes, assets, savings, etc. But over time, Americans weren't able to keep up with these high powered consumer expectations and had to use financing. This financing was reinforced and enabled by the Fed who continually creates and dumps treasuries at market to buyers like Japan. So in the end, we are not only buying products made by foreigners......we are also borrowing money from foreigners to finance those very purchases.

Not good. It's like borrowing money from a drug dealer to buy his drugs.

Like 2 or 3 economy threads back I did an epic/long post on that very idea.

I hadn't forced myself to stop with the ellipsis back then IIRC.

I was informed that I didn't understand 'evolved' economic ideas.

[wabio]

http://biz.yahoo.com/cnnm/081103/110308_nabe_survey.html

A survey of top economists released Monday shows that the vast majority of them believe the economy has fallen into a recession that will continue throughout all of 2009.

According to the National Association of Business Economists, 90% of the 102 members responding were more pessimistic about the economy than they had been in July.

The economists indicated that a recession is likely to continue at least through the end of next year, with 79% saying the economy will grow less than 1% and 38% saying the economy will shrink next year.....

I wonder how long this recession will actually last? Didn't the one in the early 80's last ~20 months?

[wabio]

Another interesting CNN Money article: Measuring key components of our current economy.

http://finance.yahoo.com/banking-budgeting/article/106066/The-Economy-Why-It-Feels-So-Bad

[al_bundy]

http://biz.yahoo.com/cnnm/081103/110308_nabe_survey.html



I wonder how long this recession will actually last? Didn't the one in the early 80's last ~20 months?


this time last year the same economists were predicting an endless economic expansion

[Pharoh]

280 lost or......? :hscratch:


Yes, 280 lost when the report comes out on Friday. However, I may be a month early, as I may be overestimating a bit. It isn't going to be good though regardless.

[Pharoh]

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Schiff back on the air in a recent interview - Oct. 28th 2008. 2 part video. He's predicting the dollar "will drop like a stone" and interest rates will go double digit, resulting in possible hyperinflation down the road. He also tears into Obama quite a bit, especially in part II. He speaks a lot of truth, especially about housing valuations and capital investment. Below is part II.

http://www.youtube.com/watch?v=coaI3d89kuA&feature=related



I haven't watched, nor likely will I, so I have a question. Does he speak to the "re-coupling" the world has experienced? Or the sorrowful state of UK and European bond/currency markets? Or the dismal outlook for emerging and developing economies?

Now keep in mind, I agree with a couple of things he believes in, such as the problematic nature of the American savings rate, but he is often wrong, such as his proclamations over the last five years regarding the US dollar.


I wanted to add one word on inflation as well. When I spoke earlier of the deflation, I never ruled out a return of inflation. When I post about the behind the scenes monetising, I am talking about inflation. I just don't worry about hyperinflation, or any such similar term.

And a final thought, though this is not directed at you specifically. I don't recall anybody, on this forum or out in the 'real world', claiming everything is great. However, there is a middle road, we are not standing on the edge of the abyss. The rest of the world, again sans Japan, is as bad off or worse than we are. China is facing some enormously huge and painful problems, as is Europe. Developing markets are set back five years or more. The US just may come out of this stronger than before, though taking some serious lumps in the process.

[wabio]

Does he speak to the "re-coupling" the world has experienced?

Is "re-coupling" the same thing as "de-leveraging"? Because he does mention that.

[kvrdave]

And a final thought, though this is not directed at you specifically. I don't recall anybody, on this forum or out in the 'real world', claiming everything is great. However, there is a middle road, we are not standing on the edge of the abyss. The rest of the world, again sans Japan, is as bad off or worse than we are. China is facing some enormously huge and painful problems, as is Europe. Developing markets are set back five years or more. The US just may come out of this stronger than before, though taking some serious lumps in the process.

That is the most amazing thing to me. Before I looked a few months ago, I assumed it was just us. But we are well off compared to most.

The one thing I do think is that China can emerge from this quite well. I don't know that they will, but they still have huge potential for growth. Europe has incredible obstacles to get to a place that doesn't suck.

[Dr Mabuse]

Good point kvr.

China is poised to come out of this like gangbusters.

[Dr Mabuse]

And a final thought, though this is not directed at you specifically. I don't recall anybody, on this forum or out in the 'real world', claiming everything is great. However, there is a middle road, we are not standing on the edge of the abyss. The rest of the world, again sans Japan, is as bad off or worse than we are. China is facing some enormously huge and painful problems, as is Europe. Developing markets are set back five years or more. The US just may come out of this stronger than before, though taking some serious lumps in the process.

You have to ignore our debt situation, and the inevitable currency situation that will follow it, and our consumption/consumer based economy to arrive at this conclusion.

That said, I hope you are somehow correct in your assertion here.

[Venusian]

http://biz.yahoo.com/cnnm/081104/110408_credit_market.html

Lending rates fall to pre-Lehman levels


That should be good news

[Pharoh]

http://biz.yahoo.com/cnnm/081104/110408_credit_market.html

Lending rates fall to pre-Lehman levels


That should be good news

It is good, but there is still much room to improve. Both the TED spread and the Libor-OIS are still way too high.

[Pharoh]

There is only one number to look for in regards to tomorrow's markets. 60.

[DVD Polizei]

http://biz.yahoo.com/cnnm/081104/110408_credit_market.html

Lending rates fall to pre-Lehman levels


That should be good news

Assuming they LEND.

[Ranger]

OK, so does the recession start tomorrow or in January?

[Pharoh]

Google Yahoo 'deal' off.

[DVD Polizei]

OK, so does the recession start tomorrow or in January?

January.

[Pharoh]

Fed raising the interests it pays on bank's reserves.

[kvrdave]

Dow is down 300 now. A reaction to the election? I tend to doubt it because I don't think it was in doubt. But I expected a "change" bounce of some kind.

[al_bundy]

we just had a nice rally and need to retrace 1/3 to 2/3 of it before we can go higher.

the retracement levels are around 9075, 8900, 8700. not exact levels but close. some people also think we need to go below the October 10th lows before we can move higher

[Pharoh]

Dow is down 300 now. A reaction to the election? I tend to doubt it because I don't think it was in doubt. But I expected a "change" bounce of some kind.

Much uncertainty still exists, in the economy and regarding the policies of Mr. Obama.

[VinVega]

Market down 5%. I blame Obama.

[shifrbv]

Dow is down 300 now. A reaction to the election? I tend to doubt it because I don't think it was in doubt. But I expected a "change" bounce of some kind.

Just because Obama was elected does not mean we've suddenly changed the course we're on. As Voltaire said: "optimism is the passion for maintaining that all is right when all goes wrong with us".

We are in for very bad times indeed and 2009 will be a terrible year. The financial mess of Wall Street will finally become a reality in people's everyday lives. I know there is some bad stuff on the horizon, especially for young people. Alot of young people are going to be in really bad shape, economically as the all the safety nets are mostly for the elderly.

[wabio]

Yes, 280 lost when the report comes out on Friday. However, I may be a month early, as I may be overestimating a bit. It isn't going to be good though regardless.

Yeah this article is full of job misery

http://www.signonsandiego.com/news/business/20081105-1357-meltdown-unemployment.html

"Steven Ridenhour knows how to build a car. But after the Chrysler plant where he worked for 15 years shut down last week, Ridenhour has little else to show on his resume.
With four kids, a wife and a mortgage, Ridenhour is scrambling to replace his $28-an-hour pay. He isn't optimistic. He knows thousands of others are being thrown out of work every month, making his job hunt a worsening struggle.

“I don't have any proof I have skills in any other area,” he said. “So I'm competing with a lot of other people, and there aren't a lot of jobs around.”
Workers across the country are stuck in similar straits. Even before the financial crisis hit the economy hard in late summer, companies had shed tens of thousands of jobs every month this year. Then the credit crisis aggravated the misery.

Many job seekers and employers had been awaiting the presidential election, hoping it would lend some certainty to the economy. But few expect Barack Obama's victory to produce any immediate gains.

On Friday, the government will report the unemployment rate for October, and economists surveyed by Thomson/IFR on average expect a drop of 200,000 jobs.

The current wave of layoffs is unusual because it seems to be coming fairly early in the downturn, noted David Card, an economics professor at the University of California-Berkeley. No one is quite sure why, Card said. A possible reason is companies now are more adept at monitoring inventory and projecting sales.

“Firms are more aware of how sales are going and cutting employees right away,” he said.

In October, several major companies announced a flurry of layoffs. PepsiCo. Inc. cut 3,300 jobs. Goldman Sachs Group Inc. slashed 3,260. Xerox Corp. laid off 3,000. Chrysler LLC announced it would cut 18,500 white-collar management jobs. Time Inc. shed 600. This week, Circuit City said it will cut about 17 percent of its domestic work force, or about 7,300 people.

Economists say the surge in layoffs is just starting, with some saying the unemployment rate could reach 8 percent or higher, nearing the highest level since the deep downturn of 1982 left 10.8 percent of workers unable to find jobs.

The collapse of the housing and credit markets has led thousands of companies to rein in spending and lay off workers. The cuts have dealt a spiraling blow that threatens to produce more job losses: As families have lost income, they've cut back on spending and hurt companies that depend on their consumption.

“It's like you're down and getting a kick in the pants,” said Lawrence Mishel, president of the Economic Policy Institute think tank in Washington.

Job losses were already dragging down family incomes and spending, Mishel said. The latest cuts could delay any recovery by at least a year, he said.

Mishel expects the jobless rate to rise from the current 6.1 percent to 8 percent or more. Before the credit meltdown, he thought the rate would peak at about 7 percent.

Job losses tend to deliver an outsized blow to the economy, under a theory known as Okun's Law. Each 1 percentage point rise in unemployment triggers a 2 percent to 3 percent drop in economic activity as gauged by the gross domestic product.

For laid off workers such as Ridenhour, it's easy to see why. Even with his layoff benefits from Chrysler and state unemployment checks, Ridenhour's income is down 20 percent to 25 percent. The Chrysler benefits last 48 weeks, he said. He and his wife are seeking ways to cut the family budget. Dining out was the first to go. Other nonessentials are next.

“It'll be a pretty slim Christmas,” he said.

Ridenhour's union sponsored a job fair at the Chrysler plant last month, and he heard from friends that local utility Ameren Corp. is hiring line workers. But he's been drawn instead to the local Vatterot College, which specializes in trade-related degrees such as court reporting and culinary work. He decided to sign up for night classes, in hopes a degree can enhance his resume.

Ridenhour plans to take classes in building maintenance because he had done some landscaping work before joining Chrysler. Still, he thinks he'll eventually earn only about half as much as he did building cars. Yet he sees little alternative.

“I've got mouths to feed,” he said. “Thinking about going to a four year college – those days are over. It's not like I can pack up and go away to college for four years and get a good job making good money.”

For the unemployed, it's getting harder to feel optimism. Job cuts have grown steadily each month this year, culminating with the loss of 159,000 in September. When the government reports the October unemployment rate Friday, it will give the fullest glimpse of the job market since the global credit crisis roiled world economies and sent stock markets plunging.

If the rate eventually exceeds 8 percent, it would surpass the jobless rates for the most recent slowdowns. During the downturn of 2003, the unemployment rate never sank below 6.1 percent. During the downturn in 1992, it reached 7.8 percent.

The jobless rate still would be far below the peaks reached during the Great Depression. Labor Department figures record the rate in 1933 as being 24.9 percent, though the government didn't track unemployment in a way that can be compared directly to data kept since 1948.

Still, the rising layoffs so far this year have been spreading pain. Sheri Griffiths has seen the consequences as manager of a job recruitment office in Santa Barbara, Calif.

More job seekers have been calling the AppleOne Inc. employment agency, she said. It's taking longer to find jobs, and workers are settling for those they would have spurned a year or two ago. In recent years, employers often had to dangle concessions to hire the best workers, she said.

Now, “employers have time to be picky,” Griffiths said. “They have time to screen the candidates. They can interview 10 candidates or 15 candidates and get away with it.”

Griffiths tells job seekers to be flexible, to consider pay that's lower and commutes that are longer than they prefer.

AppleOne, with branches nationwide, is so concerned about layoffs that it launched a drive to urge employers not to panic and cut jobs heedlessly. On its Web site, it posted a calculator to estimate the long-term cost of laying off a worker.

“We're doing our best to let people know ... that cutting people right now is not going to be a solution. It's a Band-Aid,” said spokeswoman Christine Duque.

The job market tends to correct itself once rising unemployment pushes down wages and creates a big pool of job seekers. That makes workers something like an undervalued stock, and companies eventually snap up the bargains, said Daniel Mitchell, an economist at the Cato Institute in Washington, D.C.

“Nobody likes to see resources go to waste,” Mitchell said. Still, as with the stock market, no one knows where the bottom is or when the downturn might start to reverse, he said.

But the accelerating job cuts mean it likely won't be soon, said Mishel of the Economic Policy Institute.

“We're going to be seeing job losses and rising unemployment over the next year, and it will probably be a number of years before we even get back to a 5 percent unemployment rate,” he said."

[shifrbv]

Meredith Whitney, analyst from Oppenheimer, who has been calling this thing down the pike (even though she was getting death threats for it) just said on a CNBC interview that she sees the situation with the banks getting much worse and stocks for many of the big names going into the single digits. She also said as a result she believe up to 2 trillion in consumer credit will be removed from the market which has never happened in the US before.

It's going to be terrible for people who use credit cards to supplement their income or lack of income. Just when they need the extra help the most, it will be gone for many.

Had trouble finding a correlating article, but found this site: http://74.125.95.104/search?q=cache:PRVTobHN8xcJ:jessescrossroadscafe.blogspot.com/2008/05/worst-is-still-ahead-says-meredith.html+meredith+whitney+2+trillion+consumer+credit&hl=en&ct=clnk&cd=7&gl=us

Whitney estimates about $2 trillion of credit card lines will be removed by 2010, cutting the credit available to U.S. consumers by almost half.

[Ranger]

Google Yahoo 'deal' off.
Yeah, I saw on Digg that Yahoo wants Microsoft to make another offer now. But wasn't the problem that the feds would sue? How would a deal with MS be less likely to end up being sued by the feds than one with Google?

[al_bundy]

Meredith Whitney, analyst from Oppenheimer, who has been calling this thing down the pike (even though she was getting death threats for it) just said on a CNBC interview that she sees the situation with the banks getting much worse and stocks for many of the big names going into the single digits. She also said as a result she believe up to 2 trillion in consumer credit will be removed from the market which has never happened in the US before.

It's going to be terrible for people who use credit cards to supplement their income or lack of income. Just when they need the extra help the most, it will be gone for many.

Had trouble finding a correlating article, but found this site: http://74.125.95.104/search?q=cache:PRVTobHN8xcJ:jessescrossroadscafe.blogspot.com/2008/05/worst-is-still-ahead-says-meredith.html+meredith+whitney+2+trillion+consumer+credit&hl=en&ct=clnk&cd=7&gl=us

Whitney estimates about $2 trillion of credit card lines will be removed by 2010, cutting the credit available to U.S. consumers by almost half.

quick check of the 3 year charts for C, BAC and JPM makes it seem like they are close to hitting a bottom or have already done so

[wabio]

Bingo. Just as I was suspecting all along. There's a new culprit in town in the housing meltdown.

http://money.cnn.com/2008/11/04/real_estate/job_losses_fuel_foreclosure/index.htm?cnn=yes


This might actually be worse than the subprime fiasco if it lingers. I'd rather be making $X salary and paying more in mortgage after ARM readjustment, then going from making $X salary to no salary with a fixed mortgage.

[Superboy]

Bingo. Just as I was suspecting all along. There's a new culprit in town in the housing meltdown.

http://money.cnn.com/2008/11/04/real_estate/job_losses_fuel_foreclosure/index.htm?cnn=yes


This might actually be worse than the subprime fiasco if it lingers. I'd rather be making $X salary and paying more in mortgage after ARM readjustment, then going from making $X salary to no salary with a fixed mortgage.

Welcome to a deflationary economy.

[Pharoh]

Yes, 280 lost when the report comes out on Friday. However, I may be a month early, as I may be overestimating a bit. It isn't going to be good though regardless.

The consensus was for 200, I was at 280, and the actual number:

A numbingly 240k.


I suspect I was a bit closer. But bad news either way.



Unemployment now at 6.5%

[classicman2]

That's the highest number in years & years, isn't it?

[wabio]

That's the highest number in years & years, isn't it?

Since March 1994. I think the current number is worse when you consider we are heading into the holidays when most companies usually hire extra help.

[Dr Mabuse]

Since March 1994. I think the current number is worse when you consider we are heading into the holidays when most companies usually hire extra help.

Yep, that's the key to really 'getting' it.

BTW October was the worst October for retail sales since 1971.

http://i260.photobucket.com/albums/ii18/drmabuse06/Forum%20comments/link.gif (http://www.latimes.com/business/la-fi-econ7-2008nov07,0,153887.story)

[darkflounder]

I'm so proud of our new leader. He's only been leader for a few days, and he's already lowering the prices of stocks so that the disadvantaged could afford them. :bow:

[spainlinx0]

I'm so proud of our new leader. He's only been leader for a few days, and he's already lowering the prices of stocks so that the disadvantaged could afford them. :bow:

Well, he isn't our leader yet. So you can still keep blaming Bush.

[wabio]

Yup. This current downturn will extend for "at least" 1 year into the next presidency. It wouldn't have mattered who won. Lots of articles are saying unemployment could hit 8-9% by next summer (but watch Obama get all the blame).

[wabio]

http://farm1.static.flickr.com/27/57624462_b69b8f4f40.jpg?v=0

Santa? :eek:

[mbs]

Not only this, but GM has also tried to merge with Ford...somehow, they're going to merge with someONE. One of the reasons why I bought about a thousand shares when they hit bottom.

I hope you got out when I originally suggested. GM will be bankrupt by the end of the year. They burned through $6.9BN in cash this past quarter and recently plead their case to the government for an infusion. Selling now will take a loss, but you'll lose it all when they file bankruptcy next year (at this point, I think it's obvious this will happen).

[al_bundy]

speaking of GM

http://biz.yahoo.com/ap/081107/earns_gm.html

GM reports $2.5B 3Q loss, says running out of cash
Friday November 7, 3:22 pm ET
By Tom Krisher and Jeff Karoub, AP Business Writers
GM reports $2.5B 3Q loss, says it's running out of money, cuts jobs, suspends Chrysler talks

DETROIT, Mich. (AP) -- General Motors Corp. reported a $2.5 billion loss in the third quarter and warned Friday that it could run out of cash in 2009 if the U.S. economic slump continues and it doesn't get government aid.
GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was setting aside considerations for a "strategic acquisition."

"While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges and, accordingly, considerations of such a transaction as a near-term priority have been set aside," the company said in a statement.

Privately held Chrysler said it won't comment on GM's statement, but added it remains focused on returning to profitability.

GM said its cash burn for the quarter accelerated to $6.9 billion, and government aid will be "essential" because of the slow economy and credit crisis.

If companies run out of cash, generally they can sell assets, cut costs or file for bankruptcy protection to keep creditors at bay while they develop a financial reorganization plan.

But in a conference call with reporters and analysts, GM Chairman and CEO Rick Wagoner said the company will "take every action we possibly can" to avoid bankruptcy.

"We're convinced that the consequences of bankruptcy would be dire," he said, adding that the company will use every source of funding it can.

"We need to find a way to get through this, and that's really our focus."

The company also said it will indefinitely lay off about 3,600 workers beginning early next year as it slows production at 10 of its assembly plants.

The news came hours after Ford Motor Co. said it lost $129 million for its third quarter and will cut about 2,260 more white-collar workers in North America as the industry tries to weather the worst economic downturn in decades. As U.S. and global economies have rapidly deteriorated, auto sales have nearly shut down.

Wagoner had said in a statement earlier that the third quarter "was especially challenging for the auto industry."

"Consumer spending, which represents close to 70 percent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales," he said.

The nation's biggest domestic automaker reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago. Its adjusted loss was $4.2 billion, or $7.35 a share, with an adjusted loss of $2.8 billion for its automotive operations.

Revenue fell to $37.9 billion from $43.7 billion, due largely to credit freezing across the globe.

The loss exceeded Wall Street estimates. Analysts surveyed by Thomson Reuters predicted a loss of $3.70 per share on sales of $39.4 billion.

The struggling company announced it would improve liquidity by $5 billion by the end of next year by cutting capital spending, reducing sales promotions, and further cutting production in the first quarter.

The company also suspended its matching contribution for employee 401K plans, and suspended tuition reimbursement. In addition, salaried employees will not get incentive pay next year for their work in 2008, GM said.

It said it will slow down assembly line rates at North American factories beginning next year, but it gave no details. It also said several vehicle new vehicle programs would be delayed, but it would spend more on its Chevrolet Volt electric car and other fuel-efficiency programs.

But the cuts and delays may not be enough.

"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," the company said in a news release.

"Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve" or it receives government funding, the news release said.

Ray Young, chief financial officer, said GM expects significantly lower cash burn in the fourth quarter.

GM said it had $16.2 billion in cash, marketable securities and readily available assets at the end of September, down $4.8 billion from the $21 billion it reported on June 30.

GM has said in the past it needs a minimum of $11 billion to $14 billion to run the company.

GM officials said in the conference call that it intended to cut a total of 7,000 white-collar jobs this year, up from 5,100 announced in July. GM had 32,000 U.S. salaried workers at the end of last year, down from 44,000 in 2000.

The automaker had a net gain of $1.7 billion in the quarter, including a $4.9 billion gain due to the shift in its retiree health care expenses to a union-administered trust starting in 2010.

But the health care gain was offset by a $1.7 billion noncash charge due to elimination of salaried retiree health care benefits, $652 million for Delphi's bankruptcy proceedings, $251 million for write-downs at its financial arm, GMAC LLC, and $641 million in restructuring related and other charges.

GM owns 49 percent of the money-losing GMAC, with the remainder owned by Cerberus Capital Management LP.

Cerberus also owns a majority stake in Chrysler, and has reportedly been in talks about selling the Chrysler auto operations to GM possibly in exchange for a part of GM's stake in the GMAC business.

In an e-mailed statement, Chrysler LLC Chairman and Chief Executive Bob Nardelli said the company doesn't comment on its private business meetings, but will continue to explore potential strategic alliances and partnerships.

Cerberus said in its own statement, "As a matter of policy, we do not comment on market rumor or speculation. We are consistently evaluating potential alliances and investment opportunities."

GM shares fell 46 cents, or 9.8 percent, to $4.34 in late afternoon trading.

Ford said in its earnings report earlier in the day that it burned through $7.7 billion in cash in the third quarter.

Its global automotive operations had a pretax loss of $2.9 billion for the quarter, compared with a pretax loss of $362 million a year earlier.

Sales fell 22 percent to $32.1 billion from $41.1 billion due to lower volume and the sale of Jaguar and Land Rover.

"While Ford has been dramatically affected by the difficult business environment, we remain absolutely convinced that we have the right plan and are taking the right actions to weather this difficult period and emerge as a lean, globally integrated company poised for long-term profitable growth," Alan Mulally, president and chief executive, told industry analysts during a teleconference.

Ford shares rose 2 cents to $2 in afternoon trading.

[gmanca]

The bankruptcy of GM is really not an option; they are going to roll-out the only American electric-based car, have GMAC with it's roots in everything, and would cripple Michigan even further.

What I'd like to see is some real consequences and budget cutting enforced by the Government in conjunction with a bailout.

[Dr Mabuse]

What I'd like to see is some real consequences and budget cutting enforced by the Government in conjunction with a bailout.

You mean like them daring to mention Wagoner's 5 million a year for life compensation package for when he retires? Maybe he shoudln't get that? Don't hold your breath.

The man who oversaw the fall of GM personally, who championed them making even larger SUV's and trucks back when the gas prices started rising, the fella who took on a company with 750,000 employees and his 'leadership' dwindled it to what is today?

HE shouldn't get 5 million a year for life when he retires?

Not to mention the many, many millions paid out this year by GM to former execs who haven't worked there for more than a decade.

We've just bailed our the banks who have debts this year alone to the tune of 8 billion, 10 billion , 11 billion, to former execs who no longer work there.

No one took that issue on, why would the deal with the big 3 be any different?

[Sean O'Hara]

The bankruptcy of GM is really not an option; they are going to roll-out the only American electric-based car, have GMAC with it's roots in everything, and would cripple Michigan even further.

What I'd like to see is some real consequences and budget cutting enforced by the Government in conjunction with a bailout.

Let them fail, or have the government dictate how they'll run the company -- tough choice.

[gmanca]

I totally agree with you Dr. Mabuse, but with that 25 billion dollar loan they passed for all three companies, Congress could skirt the issue of compensation, but they were also lied to about GM's finances. They had just sold stocks to raise 16 billion which would "hold them" which is evidently not the case.

Let's face the facts that the Government can't stand as a just a loan agency and get token equity which would happen in either case; the shape of the auto industry will have to be massaged and shaped because of ignorance from Bob Lutz and Wagoner.

[wabio]

The consensus was for 200, I was at 280, and the actual number:

A numbingly 240k.


I suspect I was a bit closer. But bad news either way.



Unemployment now at 6.5%


Looks like we actually lost 280 in September after revision. Makes me wonder what Octobers numbers will be after revision. :eek:

http://money.cnn.com/2008/11/07/news/economy/karydakis_jobs.fortune/index.htm

[wabio]

They are already watching November's job loss numbers. :(

http://money.cnn.com/2008/11/07/news/economy/november_layoffs/index.htm?postversion=2008110717

[Rival11]

What are you true thoughts on this? For me, it's VERY alarming. My company sent an email stating how we are doing alright but I have been noticing people are getting laid off left and right everywhere.

It's just never really hit home like this for me before. Am I over-reacting? I hope I am.

What makes it worse is that I don't really know jack shit about the stock market or how the economy works overall. I just know that I haven't seen worry like this (by everyone) in quite some time.

How long before news (if any) of things improving?

Is there a separate bail out in the works for certain automotive companies?

It sickens me to see people on tv standing in "work lines" & to see people with families struggling so much. I know it's all part of hard times but it seems like (right now anyway) there is no end in sight.

Anyone care to post about their own personal thoughts on this issue?

[wabio]

Circuit City files chapter 11:
http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/circuit_city_bankruptcy;_ylt=AmhML4Tn1pj5a1NoNFaBacOs0NUE

Analysts predict GM's stock will be worthless even with a gov't bailout:
http://news.yahoo.com/s/afp/20081110/bs_afp/stocksusautocompanygm;_ylt=Ah.s5Z5TJV4CF7nHFuxGDF2yBhIF

Carrier DHL to halt all U.S. operations and layoff 9,500:
http://money.cnn.com/2008/11/10/news/companies/dhl/index.htm?postversion=2008111015

Wow. Just wow. I may have to change the Threat-o-Meter sig to Econo-Con Level 4 soon. :eek:

[ernestrp]

Starbucks 4Q profit drops 97 pct on closure costs

http://biz.yahoo.com/ap/081110/earns_starbucks.html

[wabio]

What are you true thoughts on this? For me, it's VERY alarming. My company sent an email stating how we are doing alright but I have been noticing people are getting laid off left and right everywhere.

It's just never really hit home like this for me before. Am I over-reacting? I hope I am.

What makes it worse is that I don't really know jack shit about the stock market or how the economy works overall. I just know that I haven't seen worry like this (by everyone) in quite some time.

How long before news (if any) of things improving?

Is there a separate bail out in the works for certain automotive companies?

It sickens me to see people on tv standing in "work lines" & to see people with families struggling so much. I know it's all part of hard times but it seems like (right now anyway) there is no end in sight.

Anyone care to post about their own personal thoughts on this issue?

The one thing most economists and the media never touch upon is the fallout or ripple-effect layoffs have. One person getting laid-off affects much more than just that one person. If they're the breadwinner, it will affect the spouse and the entire household. When they stop purchasing and spending on entertainment, it will affect their community. If they lose their house or car, it will affect local business by increasing supply. Even a single laid-off individual with no dependents may require support from friends for family until they can regain a foothold, thus increasing the financial strain all around. Unemployment benefits will also affect taxpayers and corporations.

The sad thing is.....when it happens to families with children or a mortgage, it can leave a long-lasting scar. If homes get repossessed, it may prevent many from purchasing another within 10 years if ever at all. Their children's futures could be affected since college savings will likely be stopped, ditto for retirement as well. If people choose to re-train or go back to school, that's another 2-3 years of limited income with possibly more debt. Dangerous indeed.

I wonder if any scholars have actually done a study to determine the "multiplier" effect of a layoff?

[DVD Polizei]

What the FUCK is up with AIG. This entire company is WORTHLESS. Cut it loose. Instead? The US Gov't is giving it ANOTHER $40 Billion.

[DVD Polizei]

I wonder if any scholars have actually done a study to determine the "multiplier" effect of a layoff?

I have. We're fucked. 2009 is going to be a fucking nightmare. I'm considering the Dow being at 4,000 or so by next Spring. Hope I'm wrong, but when DHL packs up shop and waves good-bye to the US, it's not good.

And on the side, is it just me or do we see CEO's running companies into the ground with bloated debt. This isn't in reference to DHL, but Circuit City and other companies.

[Baron Of Hell]

Circuit City files chapter 11:
http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/circuit_city_bankruptcy;_ylt=AmhML4Tn1pj5a1NoNFaBacOs0NUE

Analysts predict GM's stock will be worthless even with a gov't bailout:
http://news.yahoo.com/s/afp/20081110/bs_afp/stocksusautocompanygm;_ylt=Ah.s5Z5TJV4CF7nHFuxGDF2yBhIF

Carrier DHL to halt all U.S. operations and layoff 9,500:
http://money.cnn.com/2008/11/10/news/companies/dhl/index.htm?postversion=2008111015

Wow. Just wow. I may have to change the Threat-o-Meter sig to Econo-Con Level 4 soon. :eek:


Wow DHL handles a lot of freight to stores across the country. That is going to have a major effect to a lot of businesses. Can you imagine a company relying on DHL and then to have them stop shipping without notice. They are going to have to work out deals with other shippers that might not be able to handle the extra volume. What a major fuck up this is going to be. Might not be so bad if a few other the other big carriers can absorb DHL workload.

[Ranger]

What happened to the story about USPS laying off 40k? just a false rumor?

I'm just stunned about the DHL layoffs. They've always delivered my stuff very quickly. A shame.

[wabio]

What the FUCK is up with AIG. This entire company is WORTHLESS. Cut it loose. Instead? The US Gov't is giving it ANOTHER $40 Billion.

Seriously.....they're up to $150B now. That's ~$600 per taxpayer. Sheesh. Wasn't GM only asking for $50B? I'll bet they're gonna be pissed if they don't get it.

[Ranger]

Yeah, I don't get why AIG needs so much. What's the problem? It's not like everyone is cashing their life insurance.

If Bush doesn't help GM, then Obama will. GM has 2x more workers than AIG.

AIG says their 1-yr target est is 8.39, it's 2.28 now. I doubt they'll recover that well.

[Ronnie Dobbs]

Fed Defies Transparency Aim in Refusal to Disclose (Update2)
By Mark Pittman, Bob Ivry and Alison Fitzgerald



Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.

``It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''

Treasury, Fed, Obama

Federal Reserve spokeswoman Michelle Smith declined to comment on the loans or the Bloomberg lawsuit. Treasury spokeswoman Michele Davis didn't respond to a phone call and an e-mail seeking comment.

President-elect Barack Obama's economic adviser, Jason Furman, also didn't respond to an e-mail and a phone call seeking comment from Obama. In a Sept. 22 campaign speech, Obama promised to ``make our government open and transparent so that anyone can ensure that our business is the people's business.''

The Fed's lending is significant because the central bank has stepped into a rescue role that was also the purpose of the $700 billion Troubled Asset Relief Program, or TARP, bailout plan -- without safeguards put into the TARP legislation by Congress.

Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank's purchase of Fannie Mae and Freddie Mac bonds.

Sept. 14 Decision

Before Sept. 14, the Fed accepted mostly top-rated government and asset-backed securities as collateral. After that date, the central bank widened standards to accept other kinds of securities, some with lower ratings. The Fed collects interest on all its loans.

The plan to purchase distressed securities through TARP called for buying at the ``lowest price that the secretary (of the Treasury) determines to be consistent with the purposes of this Act,'' according to the Emergency Economic Stabilization Act of 2008, the law that covers TARP.

The legislation didn't require any specific method for the purchases beyond saying mechanisms such as auctions or reverse auctions should be used ``when appropriate.'' In a reverse auction, bidders offer to sell securities at successively lower prices, helping to ensure that the Fed would pay less. The measure also included a five-member oversight board that includes Paulson and Bernanke.

At a Sept. 23 Senate Banking Committee hearing in Washington, Paulson called for transparency in the purchase of distressed assets under the TARP program.

`We Need Transparency'

``We need oversight,'' Paulson told lawmakers. ``We need protection. We need transparency. I want it. We all want it.''

At a joint House-Senate hearing the next day, Bernanke also stressed the importance of openness in the program. ``Transparency is a big issue,'' he said.

The Fed lent cash and government bonds to banks, which gave the Fed collateral in the form of equities and debt, including subprime and structured securities such as collateralized debt obligations, according to the Fed Web site. The borrowers have included the now-bankrupt Lehman Brothers Holdings Inc., Citigroup Inc. and JPMorgan Chase & Co.

Banks oppose any release of information because it might signal weakness and spur short-selling or a run by depositors, said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group.

Frank Backs Fed

``You have to balance the need for transparency with protecting the public interest,'' Talbott said. ``Taxpayers have a right to know where their tax dollars are going, but one piece of information standing alone could undermine public confidence in the system.''

The nation's biggest banks, Citigroup, Bank of America Corp., JPMorgan Chase, Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, declined to comment on whether they have borrowed money from the Fed. They received $120 billion in capital from the TARP, which was signed into law Oct. 3.

In an interview Nov. 6, House Financial Services Committee Chairman Barney Frank said the Fed's disclosure is sufficient and that the risk the central bank is taking on is appropriate in the current economic climate. Frank said he has discussed the program with Timothy F. Geithner, president and chief executive officer of the Federal Reserve Bank of New York and a possible candidate to succeed Paulson as Treasury secretary.

``I talk to Geithner and he was pretty sure that they're OK,'' said Frank, a Massachusetts Democrat. ``If the risk is that the Fed takes a little bit of a haircut, well that's regrettable.'' Such losses would be acceptable, he said, if the program helps revive the economy.

`Unclog the Market'

Frank said the Fed shouldn't reveal the assets it holds or how it values them because of ``delicacy with respect to pricing.'' He said such disclosure would ``give people clues to what your pricing is and what they might be able to sell us and what your estimates are.'' He wouldn't say why he thought that information would be problematic.

Revealing how the Fed values collateral could help thaw frozen credit markets, said Ron D'Vari, chief executive officer of NewOak Capital LLC in New York and the former head of structured finance at BlackRock Inc.

``I'd love to hear the methodology, how the Fed priced the assets,'' D'Vari said. ``That would unclog the market very quickly.''

TARP's $700 billion so far is being used to buy preferred shares in banks to shore up their capital. The program was originally intended to hold banks' troubled assets while markets were frozen.

AIG Lending

The Bloomberg lawsuit argues that the collateral lists ``are central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression.''

The Fed has lent at least $81 billion to American International Group Inc., the world's largest insurer, so that it can pay obligations to banks. AIG today said it received an expanded government rescue package valued at more than $150 billion.

The central bank is also responsible for losses on a $26.8 billion portfolio guaranteed after Bear Stearns Cos. was bought by JPMorgan.

``As a taxpayer, it is absolutely important that we know how they're lending money and who they're lending it to,'' said Lucy Dalglish, executive director of the Arlington, Virginia- based Reporters Committee for Freedom of the Press.

Ratings Cuts

Ultimately, the Fed will have to remove some securities held as collateral from some programs because the central bank's rules call for instruments rated below investment grade to be taken back by the borrower and marked down in value. Losses on those assets could then be written off, partly through the capital recently injected into those banks by the Treasury.

Moody's Investors Service alone has cut its ratings on 926 mortgage-backed securities worth $42 billion to junk from investment grade since Sept. 14, making them ineligible for collateral on some Fed loans.

The Fed's collateral ``absolutely should be made public,'' said Mark Cuban, an activist investor, the owner of the Dallas Mavericks professional basketball team and the creator of the Web site BailoutSleuth.com, which focuses on the secrecy shrouding the Fed's moves.

[al_bundy]

Yeah, I don't get why AIG needs so much. What's the problem? It's not like everyone is cashing their life insurance.

If Bush doesn't help GM, then Obama will. GM has 2x more workers than AIG.

AIG says their 1-yr target est is 8.39, it's 2.28 now. I doubt they'll recover that well.

the way CDS's are written is that when the value falls you have to put up more collateral. most of the money is for AIG to pay other banks as collateral in case of default

[al_bundy]

Fed Defies Transparency Aim in Refusal to Disclose (Update2)
By Mark Pittman, Bob Ivry and Alison Fitzgerald



Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.

``It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''

Treasury, Fed, Obama

Federal Reserve spokeswoman Michelle Smith declined to comment on the loans or the Bloomberg lawsuit. Treasury spokeswoman Michele Davis didn't respond to a phone call and an e-mail seeking comment.

President-elect Barack Obama's economic adviser, Jason Furman, also didn't respond to an e-mail and a phone call seeking comment from Obama. In a Sept. 22 campaign speech, Obama promised to ``make our government open and transparent so that anyone can ensure that our business is the people's business.''

The Fed's lending is significant because the central bank has stepped into a rescue role that was also the purpose of the $700 billion Troubled Asset Relief Program, or TARP, bailout plan -- without safeguards put into the TARP legislation by Congress.

Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank's purchase of Fannie Mae and Freddie Mac bonds.

Sept. 14 Decision

Before Sept. 14, the Fed accepted mostly top-rated government and asset-backed securities as collateral. After that date, the central bank widened standards to accept other kinds of securities, some with lower ratings. The Fed collects interest on all its loans.

The plan to purchase distressed securities through TARP called for buying at the ``lowest price that the secretary (of the Treasury) determines to be consistent with the purposes of this Act,'' according to the Emergency Economic Stabilization Act of 2008, the law that covers TARP.

The legislation didn't require any specific method for the purchases beyond saying mechanisms such as auctions or reverse auctions should be used ``when appropriate.'' In a reverse auction, bidders offer to sell securities at successively lower prices, helping to ensure that the Fed would pay less. The measure also included a five-member oversight board that includes Paulson and Bernanke.

At a Sept. 23 Senate Banking Committee hearing in Washington, Paulson called for transparency in the purchase of distressed assets under the TARP program.

`We Need Transparency'

``We need oversight,'' Paulson told lawmakers. ``We need protection. We need transparency. I want it. We all want it.''

At a joint House-Senate hearing the next day, Bernanke also stressed the importance of openness in the program. ``Transparency is a big issue,'' he said.

The Fed lent cash and government bonds to banks, which gave the Fed collateral in the form of equities and debt, including subprime and structured securities such as collateralized debt obligations, according to the Fed Web site. The borrowers have included the now-bankrupt Lehman Brothers Holdings Inc., Citigroup Inc. and JPMorgan Chase & Co.

Banks oppose any release of information because it might signal weakness and spur short-selling or a run by depositors, said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group.

Frank Backs Fed

``You have to balance the need for transparency with protecting the public interest,'' Talbott said. ``Taxpayers have a right to know where their tax dollars are going, but one piece of information standing alone could undermine public confidence in the system.''

The nation's biggest banks, Citigroup, Bank of America Corp., JPMorgan Chase, Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, declined to comment on whether they have borrowed money from the Fed. They received $120 billion in capital from the TARP, which was signed into law Oct. 3.

In an interview Nov. 6, House Financial Services Committee Chairman Barney Frank said the Fed's disclosure is sufficient and that the risk the central bank is taking on is appropriate in the current economic climate. Frank said he has discussed the program with Timothy F. Geithner, president and chief executive officer of the Federal Reserve Bank of New York and a possible candidate to succeed Paulson as Treasury secretary.

``I talk to Geithner and he was pretty sure that they're OK,'' said Frank, a Massachusetts Democrat. ``If the risk is that the Fed takes a little bit of a haircut, well that's regrettable.'' Such losses would be acceptable, he said, if the program helps revive the economy.

`Unclog the Market'

Frank said the Fed shouldn't reveal the assets it holds or how it values them because of ``delicacy with respect to pricing.'' He said such disclosure would ``give people clues to what your pricing is and what they might be able to sell us and what your estimates are.'' He wouldn't say why he thought that information would be problematic.

Revealing how the Fed values collateral could help thaw frozen credit markets, said Ron D'Vari, chief executive officer of NewOak Capital LLC in New York and the former head of structured finance at BlackRock Inc.

``I'd love to hear the methodology, how the Fed priced the assets,'' D'Vari said. ``That would unclog the market very quickly.''

TARP's $700 billion so far is being used to buy preferred shares in banks to shore up their capital. The program was originally intended to hold banks' troubled assets while markets were frozen.

AIG Lending

The Bloomberg lawsuit argues that the collateral lists ``are central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression.''

The Fed has lent at least $81 billion to American International Group Inc., the world's largest insurer, so that it can pay obligations to banks. AIG today said it received an expanded government rescue package valued at more than $150 billion.

The central bank is also responsible for losses on a $26.8 billion portfolio guaranteed after Bear Stearns Cos. was bought by JPMorgan.

``As a taxpayer, it is absolutely important that we know how they're lending money and who they're lending it to,'' said Lucy Dalglish, executive director of the Arlington, Virginia- based Reporters Committee for Freedom of the Press.

Ratings Cuts

Ultimately, the Fed will have to remove some securities held as collateral from some programs because the central bank's rules call for instruments rated below investment grade to be taken back by the borrower and marked down in value. Losses on those assets could then be written off, partly through the capital recently injected into those banks by the Treasury.

Moody's Investors Service alone has cut its ratings on 926 mortgage-backed securities worth $42 billion to junk from investment grade since Sept. 14, making them ineligible for collateral on some Fed loans.

The Fed's collateral ``absolutely should be made public,'' said Mark Cuban, an activist investor, the owner of the Dallas Mavericks professional basketball team and the creator of the Web site BailoutSleuth.com, which focuses on the secrecy shrouding the Fed's moves.

the people calling for transparency aren't doing it for our well being, they are trying to look at the other guy's poker hand

[orangecrush]

the people calling for transparency aren't doing it for our well being, they are trying to look at the other guy's poker hand
Agreed. I still want to know though.

[kvrdave]

I have. We're fucked. 2009 is going to be a fucking nightmare. I'm considering the Dow being at 4,000 or so by next Spring. Hope I'm wrong, but when DHL packs up shop and waves good-bye to the US, it's not good.

And on the side, is it just me or do we see CEO's running companies into the ground with bloated debt. This isn't in reference to DHL, but Circuit City and other companies.


I have not seen you be positive since the first half of 2001. :lol:

Admittedly, I expected a presidential bounce in the market, and it is down well over 1,000 since election day, so what the hell do I know.

[orangecrush]

I have not seen you be positive since the first half of 2001. :lol:

Admittedly, I expected a presidential bounce in the market, and it is down well over 1,000 since election day, so what the hell do I know.
You know enough to be where the money is: horses!

[al_bundy]

i get a newsletter from a permabear that predicts an almost 100% wipe out in the Dow and the SP500 by 2012 at the latest. don't really believe it so far because most of these predictions are based on 1929-1932 when the economy was levered to commodities

[CRM114]

What the FUCK is up with AIG. This entire company is WORTHLESS. Cut it loose. Instead? The US Gov't is giving it ANOTHER $40 Billion.

If AIG goes under, does that mean my life insurance goes with it? I don't care to piss in a bottle again.

[CRM114]

Yeah, I don't get why AIG needs so much. What's the problem? It's not like everyone is cashing their life insurance.


No, everyone is cashing in on their credit default swaps.

[CRM114]

I have not seen you be positive since the first half of 2001. :lol:

Admittedly, I expected a presidential bounce in the market, and it is down well over 1,000 since election day, so what the hell do I know.

Doesn't the market always go down when a Democrat is elected?

[CRM114]

This whole thing is a ruse by the US government to make the dollar worthless and implement the "Amero" after it's done creating the North American Union. Or so a conspiracy video that was forwarded to me told me.

[Ranger]

When the Dems asked Bush to bail out GM, Bush said he'd only if the Dems dropped opposition to free trade agreement with Columbia.

Seems like an asinine counter-offer considering how unemployment keeps going up here.

[kvrdave]

Doesn't the market always go down when a Democrat is elected?

I haven't really looked at the history of it. I just figured that the idea that any change would be good in the current environment. Of course I figured that because I believe it. :lol:

[orangecrush]

This whole thing is a ruse by the US government to make the dollar worthless and implement the "Amero" after it's done creating the North American Union. Or so a conspiracy video that was forwarded to me told me.
They are way off base. We won't even produce paper money any more. All electronic. Oh, and it will be based on carbon credits.

[spainlinx0]

How many carbon credits do I need to buy a video game?

[panchor]

When the Dems asked Bush to bail out GM, Bush said he'd only if the Dems dropped opposition to free trade agreement with Columbia.

Seems like an asinine counter-offer considering how unemployment keeps going up here.

What is it with all the people spelling Colombia as Columbia?

[orangecrush]

How many carbon credits do I need to buy a video game?
You don't pirate video games? I'll bet you buy used. I will blame you when they go digital distribution only.

[spainlinx0]

I usually buy when they are on sale or after they have been out a while. I don't think I have ever bought a game used. I'm not a huge fan of Gamestop. Does this affect my carbon footprint?

[Ranger]

What is it with all the people spelling Colombia as Columbia?
Whoops. My mistake.

An update to that story is that Bush denies the "linkage."

[wabio]

Apparently, the move by American Express changing it to "commercial" bank now allows it to tap into gov't assistance. :down:

[DVD Polizei]

I'm applying for the new Amex card. The <i>Bail Me Out</i> Platinum. Charge over $25,000 on your card, and Amex automatically pays for it. :up:

[Venusian]

http://news.yahoo.com/s/ap/financial_meltdown

So the bailout money won't be used as originally planned. Hmm...how general did Congress write this bill

[kvrdave]

That's crap. If they were just holding "bad" loans they still had an asset that could bring back money and significantly reduce the real size of the bailout. But by just buying positions in banks, they will screw up the banks (it's just a reality), and when they still go bankrupt, they will either throw more bad money at them, or lose the entire amount invested. And obviously there is the problem with government getting into the ownership of private industry.

[kvrdave]

The more I think about this the more I hate it. It really paves the way for special favors and legislation down the road for the banks that have some fed ownership. It screws the private banks.

I still maintain that a far better plan would have been to take the money and use it completely into building nukes, oil pipelines (or any hippie option), which would help our energy position, and provide an amazing amount of jobs now and in the future, and at the end of it we would still have a tangible asset which would be able to pay back the bailout amount.