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Will the U.S. economy collapse? ptII

Old 02-22-08, 03:51 PM
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Will the U.S. economy collapse? ptII

Part I HERE

Continue recession/collapse talk here.

Bonus poll added for your pleasure.
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Old 02-22-08, 04:10 PM
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yes...

yes it will...
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Old 02-22-08, 04:11 PM
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Regarding the rate, two days to look out for - March 18 and April 30. Possible bold half-point cuts on both days. But I don't think Bernanke wants to go that far down yet.
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Old 02-22-08, 11:03 PM
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Thanks, can the only decide to lower the rate certain days( for example, only during times they meet.) or can they lower the rate when they feel like it.
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Old 02-23-08, 12:15 AM
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Usually when they meet, but they had a special meeting on Jan 22, 2008.

This is the calendar of meeting times.
http://www.federalreserve.gov/monetarypolicy/fomc.htm

This is the wiki summary with a chart.
http://en.wikipedia.org/wiki/Fed_rate#Historical_rates
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Old 02-23-08, 07:05 PM
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Nah, too many entities all over the world power stand to lose too much if it did, so it won't be allowed to.
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Old 02-24-08, 06:42 AM
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I still think the US economy will take a dive but I am encouraged that a lot of countries are starting to "decouple" from the downward trend in the stock market.
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Old 02-24-08, 07:36 AM
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I personally favor the Herbert Hoover approach to the ills of the economy.
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Old 02-24-08, 01:25 PM
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Originally Posted by classicman2
I personally favor the Herbert Hoover approach to the ills of the economy.
I'm assuming you're talking about domestic investment and economic self sufficiency. If so, I agree. I think the media greatly overplays the economic damage caused by walmart-like consumer purchases of foreign made products. I'm more concerned with the investment capital that are being siphoned offshore instead of invested domestically. I think this will have a much greater impact 10 years down the road.
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Old 02-24-08, 06:01 PM
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Hoover's approach: Prosperity is just around the corner.
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Old 02-24-08, 06:46 PM
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Originally Posted by wabio
I'm assuming you're talking about domestic investment and economic self sufficiency. If so, I agree. I think the media greatly overplays the economic damage caused by walmart-like consumer purchases of foreign made products. I'm more concerned with the investment capital that are being siphoned offshore instead of invested domestically. I think this will have a much greater impact 10 years down the road.
I thought he was just talking about Hoover's response to the Bonus Expeditionary Force.
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Old 02-24-08, 07:51 PM
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2 rather noted generals were involved in the BEF.

One of them was a Republican.
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Old 02-26-08, 09:30 AM
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Inflation at the wholesale level soared in January, pushed higher by rising costs for food, energy and medicine. The monthly increase carried the annual inflation rate to its fastest jump in a quarter century.

The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.

http://news.yahoo.com/s/ap/20080226/ap_on_go_ot/economy
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Old 02-26-08, 11:54 AM
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No good news today on the economic front. Consumer confidence plunged, the wholesale inflation rate soared, the number of homes being foreclosed jumped, home prices fell sharply and a report predicts big increases in health care costs.
Maybe Tracer Bullet was right in starting this thread 5 months ago

Women and children first! Actually.....screw the women and children!!!!

Last edited by wabio; 02-26-08 at 11:57 AM.
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Old 02-26-08, 12:25 PM
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and the market is up, but 3pm isthe moment of truth

or could it be that usually inflation peaks at the start of a recession and this is what everyone is expecting?
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Old 02-26-08, 02:44 PM
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there are systemic problems in the core functioning of our economy...

Walmart has been devastating to the US economy... and investment capital being taken off shore is very bad also...

citing today's stock market is rather meaningless...

the MBIA just posted it's largest quarterly loss ever... that's the largest bond insurer on earth... the monoline insurer troubles are massive... they are all being downgraded...

detailed data show that MBIA, Ambac may each lose $11.6bn ("Open Source Model"); $15bn bail-out envisaged by regulators insufficient.

insurers probably need more than $200 billion to keep their "AAA" ratings in the face of the $80bn expected losses in the industry, not $15bn.

JPMorgan: insurers are sitting on $41bn of losses

Banks and securities firms posted cumulative $133 billion of writedowns and credit losses tied to mortgage securities in Q4, may need $143bn additional capital if monoline downgrades worsen (Barclay's).
Recession is here - economists
A weak report about the services sector has caused some experts to declare that the economy has already entered downturn.

By Chris Isidore, CNNMoney.com senior writer
February 5 2008: 12:47 PM EST

NEW YORK (CNNMoney.com) -- A growing number of top economists believe that the U.S. economy has now toppled into recession.

Alarm bells were set off Tuesday by a grim report on service businesses, which make up the majority of the U.S. economy.

The Institute of Supply Management said that activity in the service sector declined for the first time in nearly five years. This report also indicated that employers are cutting staff.

The survey covers the retail, transportation and health care industries as well as hard hit areas such as finance, real estate and construction.

Some economists argued that the normally low-profile ISM services reading, coupled with the government's report Friday showing the first monthly net loss in jobs in more than four years, is proof that recession is now a reality.

"My forecast had been that the recession would begin this quarter, but the hard data wasn't there yet," said Keith Hembre, chief economist of First American Funds. "But now we're seeing that. The service sector is a much larger component of the economy [than manufacturing] and this is very much a recession reading."

The National Bureau of Economic Research is the official arbiter of whether the economy has entered recession. But the NBER typically does not declare a recession until well after one has begun.

Weakness spreading

Economists took the latest report as a sign that problems are no longer restricted to just housing and manufacturing.

"We're definitely seeing conditions spread to more parts of the economy. The big drop in business activity, that's a huge red flag," said Gus Faucher, director of macroeconomics for Moody's Economy.com.

Faucher said his firm now believes the economy is in a recession but he believes it's possible that growth will resume in the second half of this year.

However, Faucher noted this will depend upon additional rate cuts from the Federal Reserve, coupled with Congress quickly passing a proposed $150 billion stimulus package. That package includes $600 tax rebates for most U.S. taxpayers and some temporary tax cuts for businesses.

Economist Bob Brusca of FAO Economics said he doubted that the U.S. was in recession a week ago, but now he believes there's about a 75% chance that a recession began in January.

"That's what recessions do. They come upon you all of a sudden," he said. "When you look back at history, you're struck by how even-keel it is until the bottom just falls out."
this could be worse than a recession... not likely... but we have not been in a position where things could go farther south than a recession since the last depression...

there are many respected economists that have strong opinions on the now popular 'Fed rate cuts'... their opinions are that is the exact opposite of what needs to happen... and it will worsen the situation and stimulate inflation...

for all the Fed rate cuts... the big banks aren't even willing to lend money to EACH OTHER... the libor rates haven't changed, or have gotten 'worse' really after the last fed rate cut... the largest banks don't even have confidence in each other... this is a very bad sign... doesn't make headlines... but the changes in the Fed rates haven't affected the willingness of banks to even lend money to each other...

we have core problems in the economy that just aren't being discussed on the financial talk shows...

Last edited by Dr Mabuse; 02-26-08 at 02:54 PM.
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Old 02-26-08, 03:22 PM
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Originally Posted by classicman2
Hoover's approach: Prosperity is just around the corner.
If only that was his approach.
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Old 02-26-08, 03:25 PM
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Originally Posted by Red Dog
If only that was his approach.
I guess that's what you get with only a "cursory reading of history."

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Old 02-26-08, 03:38 PM
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Originally Posted by Dr Mabuse
Walmart has been devastating to the US economy...
Is that due to them saving consumers billions of dollars every year or by leading the way in efficiency for 15+ years?
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Old 02-26-08, 03:45 PM
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Originally Posted by orangecrush18
Is that due to them saving consumers billions of dollars every year or by leading the way in efficiency for 15+ years?
all of that... devastating...

and the cost to the local, state, and federal government for special programs to support the low wages... as the largest employer in the US this is an astronomical sum...

A report commissioned by the House Committee on Education and Welfare estimates that a two hundred person Wal-Mart store costs federal taxpayers approximately $420,750 a year, or $2,103 per employee. (this was several years ago it's worse now)

A study commissioned by the Los Angeles City Council in 2003 found that Wal-Mart is a net loss for the communities it moves into. An influx of “big box retailers” such as Wal-Mart was estimated to cost an additional $9 million in state health care costs and a loss in pensions and retirement benefits so large that the increase in public assistance necessary to make up the shortfall could not even be covered by increased sales and property taxes.
all of that and more...

btw the 'savings' you mention... is money that used to support companies and jobs in the US... actual living wage jobs and companies with long histories like Rubbermaid and etc...
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Old 02-26-08, 04:03 PM
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Originally Posted by Dr Mabuse
all of that... devastating...

and the cost to the local, state, and federal government for special programs to support the low wages... as the largest employer in the US this is an astronomical sum...

I can see how it could add to health care costs if Wal Mart doesn't provide inusrance and their current entry level positions do (which seems ... unlikely to me) but how could working at Wal Mart cost the state money for pensions and retirement benefits? That study reads to me like people are quitting well paying jobs with good benefits to work at Wal Mart.
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Old 02-26-08, 05:49 PM
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Originally Posted by Dr Mabuse
Walmart has been devastating to the US economy...
If you can alert me to a better/cheaper way to buy cereal, I will gladly do that. I like Wal-Mart as much as the next person, but when I ask every Wal-Mart hater to give me $10 a week to cover the difference in my cereal expenses, they stop arguing with me.

<hr>

I'm not entirely sure I want Bernake to continue cutting rates, even if it does make my job slightly easier. The CPI and Core CPI numbers are high, and we'll see how the chain deflator and the Chicago PMI do on Friday. Still, inflation numbers are lowe than they were in 1990.
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Old 02-26-08, 05:52 PM
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How much would it cost the government if those 200 employees were unemployed?
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Old 02-26-08, 05:56 PM
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Originally Posted by Jeremy517
How much would it cost the government if those 200 employees were unemployed?
They wouldn't. They would go back to their various jobs of aerospace engineering, maritime law, neuroscience, and international investment banking. Remember: they were making millions before, but hated their job because it paid too much and didn't let them wear a blue vest.
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Old 02-26-08, 06:14 PM
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Originally Posted by The Bus
They wouldn't. They would go back to their various jobs of aerospace engineering, maritime law, neuroscience, and international investment banking. Remember: they were making millions before, but hated their job because it paid too much and didn't let them wear a blue vest.
the average salary of a Walmart associate is below the 'minimum living standards' set forth by the government...

so the largest employer in America pays full time workers salaries that in some cases is below the poverty standard...

yeah the only other option is an aeronautical engineer...

it's not that difficult to understand...

Last edited by Dr Mabuse; 02-26-08 at 08:05 PM.
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