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U.S. Economic Crisis - All Things Related


lockmat

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Found this on market-ticker.org...

spx-long.png

...the voo-doo chart doctors call this a double top, looks like an "M" ... and some claim that the right part of the M will mirror the left. Which would translate into S&P 400.... which would also translate to DOW 2000 (go ahead and reduce your 401K balance by another 50%)? Something like that. I can see DOW 7000, I've been rooting for that, but... hopefully not much lower than that. If we can stay around DOW 7000, and dig up from there... maybe then the chart/technical/voo-doo mouth breathers will finally shut their pie holes.

Chart does show two areas of irrational exuberance. 2000-ish with the .dot mania. And then a little after 2005 with housing mania. And America's retirement system is tied to that kind of craziness. What a shame, for our country.

EDIT: Look at the build up to, and the correction, in 1987. Peanuts compared to what was going to happen 10 years later, in terms of build up... and then collapse.

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Found this on market-ticker.org...

spx-long.png

...the voo-doo chart doctors call this a double top, looks like an "M" ... and some claim that the right part of the M will mirror the left. Which would translate into S&P 400.... which would also translate to DOW 2000 (go ahead and reduce your 401K balance by another 50%)? Something like that. I can see DOW 7000, I've been rooting for that, but... hopefully not much lower than that. If we can stay around DOW 7000, and dig up from there... maybe then the chart/technical/voo-doo mouth breathers will finally shut their pie holes.

Chart does show two areas of irrational exuberance. 2000-ish with the .dot mania. And then a little after 2005 with housing mania. And America's retirement system is tied to that kind of craziness. What a shame, for our country.

EDIT: Look at the build up to, and the correction, in 1987. Peanuts compared to what was going to happen 10 years later, in terms of build up... and then collapse.

Good God, man. Why would anyone root for the Dow to fall another 1000 points? Aren't things grim enough as it is?

I do agree though that the "technical analysts" looking for magic patterns are a bit much to take.

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I've seen a couple of takes on the chart and the search for the magic new pattern. People are really reaching, man.

Wouldn't say I'm rooting for the Dow to drop more, but like Bryan, I do not think it's seen bottom. I envision 7200-7300. Likewise, I don't think housing is even close to bottoming out yet. All that with unemployment being a lagging indicator (and insufficiently reported to boot), I think it means steady or increasing financial pain for pretty much all sectors this year.

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We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

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We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

It will only take a quick search for your anwers--but the short version is, Europe and Britain have been bailing out their own financial institutions like we have. Some feel Britain is near the verge of fully nationalizing its banks. They've also dropped interest rates to nearly zero like we have (the EU has not, incidentally). There is quite a bit of ill will in the world that now everyone suffers because of Wall Street (look up Putin speaking at Davos, and recent French riots).

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It will only take a quick search for your anwers--but the short version is, Europe and Britain have been bailing out their own financial institutions like we have. Some feel Britain is near the verge of fully nationalizing its banks. They've also dropped interest rates to nearly zero like we have (the EU has not, incidentally). There is quite a bit of ill will in the world that now everyone suffers because of Wall Street (look up Putin speaking at Davos, and recent French riots).

Thanks for the info, but isn't news that they're doing a financial bailout pretty old news? I guess I'm wondering if anyone else is creating a stimulus package like us, as opposed to a "bailout."

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We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

This was a headline today. "Moscow abandons bail-outs for bank aid" I didn't read the article though.

http://www.ft.com/cms/s/0/5b3cf80a-f2ac-11...00779fd2ac.html

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Ireland and Iceland have been nationalizing banks. I think Britain has been either threatening to do so, or doing so on a limited basis. We have some EuroHAIFers on here who might be able to shed some light on the situation.

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You think the riots could happen here? I wonder if we'd ever really march in the streets over our economic situation. We seem too self-absorbed in my opinion.

Close.....too repressed, in my opinion. I see rioting as as more emotional than political. An angry american may talk about his guns or taking back his country, but to join crowds of strangers in the streets would bring shame. (I think.) We are the nation of rugged individualism, after all. When you join the mob, you admit you can't fix your problems on your own.

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I'm starting to gather some info/data: (not quite as easy as crunch said, or maybe i'm just really bad at researching)

nice job.

It's just a matter of knowing where to start looking. For a good all-over euro source, start reading The Economist. They have their own political/philosophical bent, but the reporting is first class and they largely keep their editorial separate from it.

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Close.....too repressed, in my opinion. I see rioting as as more emotional than political. An angry american may talk about his guns or taking back his country, but to join crowds of strangers in the streets would bring shame. (I think.) We are the nation of rugged individualism, after all. When you join the mob, you admit you can't fix your problems on your own.

I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

There were probably up to a couple hundred different riots in various cities back when we were still colonies. Remember the drawing in every American History textbook of a British tax collector that had been tarred and feathered, then forced to drink tea while the Boston Tea Party took place in the background? Throughout the west--from the time when the west included most of Massachusetts to when Mormons settled Utah--there have been rural riots. George Washington had to raise an army to put down Shay's Rebellion, an issue created from economic hardship. The Texas Revolution was sparked from rabble rousing in Anahuac. A riot against Mormons in Missouri prompted many to migrate to Utah, where rumors of a Federal army marching on a rumored Mormon rebellion prompted Mormons to massacre a party of travelers on their way to California. 'Bleeding Kansas' is also worthy of note as an example of when conflicting political views created conflict. Riots were endemic during Reconstruction. The labor movement gave rise to several instances that I can recall off-hand of armed conflict on a reasonably large scale; Blair Mountain is the only one I can name, though. During World War One there were riots against Germans. After World War One, there was a riot by veterans (calling themselves the Bonus Army) on Washington D.C.; they demanded money from the government but were instead attacked by the real U.S. Army. Non-violent and peace-loving though thought to be, hippies were actually quite disruptive; certainly the 1968 Democratic Convention in Chicago should ring some bells in light of the concern over the safety last year's convention. More recently, we've witnessed riots in Seattle against the WTO. ...and I haven't even hit on race riots yet, carried out by persons of all varying degrees of skin pigmentation, often with disorderly and violent ends.

It is true that our riots are tamer and typically much more structured than they used to be, and open violence is less common. But then again, it isn't like we've been subjected to a whole lot of civil strife, to a breakdown in law and order, to speculation and distrust of neighbors, or to a major economic disaster (until recently) for a couple of generations now. The folks who last had any kind of meaningful experience with this kind of thing are too old to really give a damn, and most of them (hippies in a former life) now just want to preserve the mechanisms that will allow them to retire as a burden to their children.

As near as I can tell, rugged individualists are and always have been a rare breed in American society. IMO the mob is the prevailing condition of western civilization. Even those that would seek to undermine the mob operate as a mob. It is frustratingly inescapable.

The difference between a protest and a riot is structure. Introduce an element that shakes the established order--such as young adults who were brought up pampered suddenly finding themselves unable to afford internet, cable television, or cell phone service, perhaps even resorting to staple foods of their 'rugged' parents' generation...then see what happens. They thought they were entitled to Pei Wei but are eating Ramen noodles instead. That won't go over well. ...then somebody assassinates Obama.

...that's all it'll take is a bunch of pissed-off youth with no concept of how much they actually have that they might lose.

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I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

As near as I can tell, rugged individualists are and always have been a rare breed in American society. IMO the mob is the prevailing condition of western civilization. Even those that would seek to undermine the mob operate as a mob. It is frustratingly inescapable.

The mob-ish western civilization part has a lot of merit, but you cite mostly pre-20th century history. Compare postwar Europe with postwar America, I think it's more relevant. This is the postmodern pyschology I'm getting at; the myth of the rugged individualist as exploited by the modern politican and media. I could be wrong, but I still think we're too much the believers of our own collective national identity/fantasy to riot like the Euros. Or maybe we just don't have enough immigrants to fully take to the streets yet. Violent xenophobia is an increasing occurence in central Europe. How bad would the economy have to get for it to spread here, in earnest? I don't see it, but then I probably underestimate how crappy ramen noodles are after one is used to PF Changs.

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I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

If the current administration were doing nothing, or doing things completely contrary to the popular will, I'd tend to agree with you. In this case, whether we agree that the stimulus is correct or effective or good, the populace sees it as generally necessary and sees it as action by the government. That will probably forestall riots in the near term. If the administration took the GOP tack of letting the recession burn itself out, and unemployment numbers shot up with no safety nets, the feeling of government letting it happen would probably cause riots.

To emphasize, this is not to comment on whether the stimulus package will work, only that to the populace it appears that they are trying. Riots occur when government is not trying.

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Ireland and Iceland have been nationalizing banks. I think Britain has been either threatening to do so, or doing so on a limited basis. We have some EuroHAIFers on here who might be able to shed some light on the situation.

The Icelandic banks all effectively collapsed, along with the economy. One smallish Irish bank has been nationalized, along with a couple large UK ones, including RBS, one of the biggest. Overall the British economy is the worst in Europe (measured by GDP growth).

The mob-ish western civilization part has a lot of merit, but you cite mostly pre-20th century history. Compare postwar Europe with postwar America, I think it's more relevant. This is the postmodern pyschology I'm getting at; the myth of the rugged individualist as exploited by the modern politican and media. I could be wrong, but I still think we're too much the believers of our own collective national identity/fantasy to riot like the Euros.

Britain has had protests but not riots. Correction said, I simply can't see Americans taking to the streets. I wouldn't go so far as to chalk it up to "rugged individualism" whatever that is (Americans don't strike me as particularly rugged individualists). It's a cultural thing - we aren't public protesters. Europeans on the other hand don't see much wrong with it.

It's just a matter of knowing where to start looking. For a good all-over euro source, start reading The Economist. They have their own political/philosophical bent, but the reporting is first class and they largely keep their editorial separate from it.

I would say they bring their editorial values in at just about every turn, which makes it a good read.

For daily financial news, it's Financial Times of course. There's nothing else remotely comparable.

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If the current administration were doing nothing, or doing things completely contrary to the popular will, I'd tend to agree with you. In this case, whether we agree that the stimulus is correct or effective or good, the populace sees it as generally necessary and sees it as action by the government. That will probably forestall riots in the near term. If the administration took the GOP tack of letting the recession burn itself out, and unemployment numbers shot up with no safety nets, the feeling of government letting it happen would probably cause riots.

To emphasize, this is not to comment on whether the stimulus package will work, only that to the populace it appears that they are trying. Riots occur when government is not trying.

What you're saying does have a lot of parallels with the Bonus Army that Hoover faced during the Great Depression and the circumstances encountered by FDR when he took office.

But what happens when the pork doesn't cure everything or (more likely) causes unforseen problems of its own? FDR had a much more controllable media with fewer and less sophisticated channels. The American public didn't even know that their president was a cripple. Obama does not have any such luxury. Yet, instead of projecting a comforting image of someone who is in control like FDR did with his calm 'fireside chats', he seems to be anything but in control. The speech he gave earlier this evening was a departure from what we saw of his campaign speeches. It had some well-scripted zingers, but he slipped up a couple times nervously and came across as really quite pissed off with the opposition party and cable news media--and people that get pissed off obviously aren't in control.

If Obama is frustrated, so will be his ardent followers. And certainly there are enough of his frustrated opponents and centrists to keep him frustrated. Everybody's pissed off and it seems to everybody as though nobody is really in control. That's when the tinder has been lit. I don't know what will be the kindling; it could be one of many things. Who'd have guessed that a riot would erupt at the WTO meetings? Who'd have guessed that LA would've burned in 1992? Or that Woodstock 99' would degenerate into the very antithesis of its predecessor event? Neo-nazis marched in Toledo in 2005 and caused a riot of 600 people; the flash point was merely verbal insult.

The specific cause that takes frustration to the next level could be more or less random. Maybe a natural disaster. Maybe an assassination. Probably something else entirely. But it doesn't even necessarily matter; once there's rioting during times that people feel desperate and helpless, prospective rioters no longer really need a cause to join in. Mob mentality sets in and so people riot for its own sake. They can so they do. And I'm reasonably confident in saying this because I know my generation and we're mostly just a bunch of weak-minded followers. It only takes a few people setting the example and we follow it. We don't bother to think on our own. We've been taught not to.

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In each of the situations you describe, a trigger during a period of high tension set off the riots. The LA riots started spontaneously. The others were triggered during protests. I would not expect a Rodney King style explosion, but if the efforts of the government fail miserably, plunging the country into even deeper recession, it is certainly possible that certain groups may feel the need to express their frustration through protest. Once a protest begins, a simple mistake by authorities can cause it to explode into riot, especially in a protest like these might be, where no central group is trying to show that they can protest peacefully, as evidenced by the civil rights marches, or more recently, the marches by hispanics in support of rights for illegal aliens.

Predicting riots is certainly a crapshoot at best. For one, conditions would have to deteriorate rapidly and drastically to a point that many people are destitute. Even the massive 3 million jobs lost so far is only 1% of the population and 2% of the workforce. But, it certainly could happen if the right conditions form, followed by the trigger.

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In each of the situations you describe, a trigger during a period of high tension set off the riots. The LA riots started spontaneously. The others were triggered during protests. I would not expect a Rodney King style explosion, but if the efforts of the government fail miserably, plunging the country into even deeper recession, it is certainly possible that certain groups may feel the need to express their frustration through protest. Once a protest begins, a simple mistake by authorities can cause it to explode into riot, especially in a protest like these might be, where no central group is trying to show that they can protest peacefully, as evidenced by the civil rights marches, or more recently, the marches by hispanics in support of rights for illegal aliens.

Yep, that's pretty much what I just said.

Predicting riots is certainly a crapshoot at best. For one, conditions would have to deteriorate rapidly and drastically to a point that many people are destitute. Even the massive 3 million jobs lost so far is only 1% of the population and 2% of the workforce. But, it certainly could happen if the right conditions form, followed by the trigger.

Americans don't have a clue what real poverty is anymore. We're working from an entirely different set of expectations from that of our grandparents. I concur that things will have to continue getting worse in real terms, and I think that that is entirely plausible; I do not think that conditions need to get as bad as they were in the 1930's to set the condition for civil unrest.

Also, I doubt that we're looking at copycat riots in every major American city, all occurring at once. Certain parts of the country are more primed for riots than others.

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Americans don't have a clue what real poverty is anymore. We're working from an entirely different set of expectations from that of our grandparents.

I agree. Our standard of living is so high, it's insane. Food, shelter and clothing. Anything above that is a blessing above and beyond.

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Can't find the Stimulus debate thread, so I'll post here. I was watching the debate today. Wow. Are Republicans politicians the stupidest people in the world, or are they just being obstructionist? One guy said the stimulus package is just big government spending...umm...yeah, that's what you do when the country has been in recession over a year, we lose 600,000 jobs last month, 1.8 million in the last 3 months, and 3.6 million since December 2007. You use your big government for what it does best...spending.

And the tax cut argument is just GOP pandering. Studies show that every dollar in tax cuts produces just $1.02 in increased spending. Every dollar spent on infrastructure produces $1.59 in spending. So what are the Republicans pushing? You guessed it.

I'm not a big fan of single party rule. The 8 year reign of terror that just ended is exhibit #1. But, if the GOP is going to sct like their policies did not contribute to the worst economic and financial meltdown this country has seen in 70 years...and worse, suggest more of the same as a solution to our problems...then we'll be looking at Democratic one party rule for a LONG time. And that's not good, either. I think some of these politicians haven't quite decided that this is a real economic crisis yet. Or, maybe they want to drive it deeper, then claim the Dems did it. Either way, I do not see them acting with our best interests in mind.

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Can't find the Stimulus debate thread, so I'll post here. I was watching the debate today. Wow. Are Republicans politicians the stupidest people in the world, or are they just being obstructionist? One guy said the stimulus package is just big government spending...umm...yeah, that's what you do when the country has been in recession over a year, we lose 600,000 jobs last month, 1.8 million in the last 3 months, and 3.6 million since December 2007. You use your big government for what it does best...spending.

. . .

Republicans are neither stupid nor just run of the mill obstructionists . . . well, no more than the Dems were between 2000-2008. After all this huge load of crap stimulus plan began with President Bush and his cabinet, Obama and the Dems just want to expand it more.

It's a simple political move that the GOPers are looking like they'll win. Public opinion is moving away from the Dems on this issue every day, and the Dems desperately want some GOP support in the event this huge stimulus pile of crap fails as it very well may.

If the GOP rides along and it fails, then the Dems can claim bipartisanship - equal failure. If the GOP goes along and the stimulus succeeds, the Dems will claim credit and ride into the next election with more wind behind their sails. Opposing it and pointing out the obvious flaws of governement waste, inflation and pork are enough to align their position with the majority of Americans who despise waste and want lower taxes. It's the only angle where the GOP comes out ahead.

That's how it works, it's just business as usual. You see there's no real Change or Hope as advertised, there's just a typical power grab and the upcoming abuse of power to follow (which has already kick started with all those unpatriotic Dems that haven't paid their taxes). Hope and Change haven't worked in here in Obama's Illinois since 2002 when it made it's debut, and it's only gotten worse.

Besides, if anyone's actually depending on any of those dolts in suits that reside in DC to be smart enough to fix anything as large as the US economy, that's pretty naive. Neither the Dems nor the GOPers care about anything more than power.

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Republicans are neither stupid nor just run of the mill obstructionists . . .

That's how it works, it's just business as usual.

If you wanted me to believe your first statement, you probably should not have debunked it with your second statement. I agree with you that the GOP is just being obstructionist. I also just got off the BLS website, where the U-6 report shows 13.9% of the US workforce is either unemployed or underemployed. That is 1 out of every 7 workers that cannot find a full-time job.

By the way, government waste and pork spending during a recession is not a bad thing. Read your economics book. But, I really did not post in hopes of a "Did so! Did not!" debate. I was looking to see if there was a logical and well grounded reason for the GOP's actions. Your statement that it is business as usual makes clear that your answer would be "No."

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If you wanted me to believe your first statement, you probably should not have debunked it with your second statement. I agree with you that the GOP is just being obstructionist. I also just got off the BLS website, where the U-6 report shows 13.9% of the US workforce is either unemployed or underemployed. That is 1 out of every 7 workers that cannot find a full-time job.

Thanks for putting those numbers up--I had intended to link to the report today and got distracted. The U-6 number is IMO where the story is and a lot of people have been pissed a long time that it doesn't get more play. I read in a blog I follow that the WSJ actually reported U6 today, a rather big move for them, tantamount to acknowledging that stat does, in fact, matter.

1 in 7 people don't work full time. Ironically, the Dow does well on the news that WalMart sales increase 2% (was it month over month?). The market continues to reward business models that are based on low wages and part timers, despite the overall deflationary effect on the economy. Crazy.

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I first found the U-6 several years ago while reading someone post how much better the US economy was than France. It turns out the the standard US definition for employment is if one works one hour per week for the previous 4 weeks. One hour! That is beyond comical, and is just one example of the US obsession with looking good over actually being good. France, by way of comparison, considers a person unemployed if they work less than 80 hours in 4 weeks.

I'm reading that the market was not so much concerned about Walmart making a killing off of the recession as optimism that a stimulus bill agreement would be reached today. Watching CNBC, there seems to be a growing disconnect between the market and GOP voters. Used to be the GOP took care of business, and GOP voters applauded it. These days, it appears the GOP politicians are playing to the base with proposals that screw business. Interesting watching it play out, especially watching the "free markets uber alles" CNBC pundits cheering for more government help.

EDIT: Oh, and the 2% is year over year same store sales.

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