Rolling US Economy Into The Shitbin Thread

I agree that the idea that the financial system or the economy have been stabilized or can be made stable in the next six months is a pipe dream. I just expect that the big stories in the next three months will be unemployment spreading like a bad stain and Christmas retail business dropping off the table. Once we get those facts established, stocks will not stay where they are today; they'll drop some more. Banks will also take more hits.

The gov's going to be burning through money like jet fuel trying to patch things up. This should at least slow down the collapse, which is a worthwhile goal. A slower collapse will cause less wreckage. Poor Obama, stuck trying to deal with this megamess.

naw he's in the perfect position - got job security and will be hailed a savior when things turn around

btw anyone disagreeing w/krugman and reich as far as what needs doing

http://www.nytimes.com/2008/11/10/opinion/10krugman.html

http://tpmcafe.talkingpointsmemo.com/2008/11/09/the_mini_depression_and_the_ma

I perfectly agree that we need a huge public-works stimulus.

One of the problems of the recent housing bubble was the misallocation of trillions of dollars to build enormous houses that no one can really afford to live in. That misallocation cannot be undone, sadly. We're stuck with that shit for decades.

If we rebuild our roads and bridges and energy infrastructure, we'll create real wealth, not the image of wealth. I suppose we can carve up some of the McMansions into weird multi-dwelling makeshifts, but really that's a piss poor answer to a problem that has no good answers.

Krugman forgets to mention that a lot of people in the WPA were building stuff like railroads and making a pittance. Will millions of Wii-swilling riding mower addicts have the stones to do that kind of work?

FIND OUT NEXT WEEK

btw anyone disagreeing w/krugman and reich as far as what needs doing

i disagree with reich only in that i do think tax cuts are necessary for lower-income workers but yeah i def agree with the basic premise that the initial amounts being talked around are way, way too low. compared to the stimulus package the chinese have just put through it's obvious we're going to have to increase the size of gov't spending dramatically.

still kinda worried about what that means lol macro outlook tho

Will millions of Wii-swilling riding mower addicts have the stones to do that kind of work?

lol I dunno if millions of soon-to-be unemployed retail workers are really all that into riding mowers and nintendo

certainly not when you consider that riding mowers require gasoline and Wii requires a living room

have played outdoor wii fwiw

How do you swill Wii?

Oh wait EW!

drinkability

michael lewis knows how to tell a story http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?tid=true

we gonna be repeatedly knocked unconscious and subsequently revived

Has anyone read Michael Lewis' "The Real Price of Everything"? I'm looking for an introduction to economics as a present to a student, and I need something as readable as possible

OMG the handout line is going to grow long after GM sucks at the teet (again.)

IK, I haven't read that, but Michael Lewis is basically awesome

AIG is already coming back for second helpings.

don't get me started on the fuckers at AIG. Or the fuckers in DC who are going to fucking keep the gravy train alive. Or the fucking jive talk coming out of the White House.

I didn't know you spoke jive, Don.

man I wish I knew how to short the fuck out of some CDOs or whatever back in 05/06

all these fucking assholes

anther annoying thing: it wouldnt have helped to know how to fuck w/derivatives cause they kept that shit all for themselves - common man not allowed to play - the greedy fucks

come on im fully capable of insuring yr investment risks big bank - check me out im at least as trustworthy as the next guy!

yeah apparently you have to go to a conference in vegas by invitation only and then go over to the table of the guy who invited you and say "I want to short the guy I'm sitting with." very technical stuff

irl loz!

lolz

yeah apparently you have to go to a conference in vegas by invitation only stanford and then go over to the table of the guy who invited you and say "I want to short the guy I'm sitting with." very technical stuff

lol like any incompetent fuck couldn't have been fuckin w/derivatives in 05/06

anyways all you really need is some rich suckers and a "probablistic model" predicting that you will never lose money ever and a russian dude with a math ph.d and youve got a successful hedge fund

cool! i have none of those things but can i still be down ???

i mean im totally willing to create my own probabilistic model but it might not look like other people since i have only the foggiest idea of what that is

btw will this involve going back in time

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btw will this involve going back in time

this is fine but will require an extra SEC filing so warn your admin

also also also compliance dept. will consist of one of those birds that teeter back and forth, my 90-something great-aunt and my roommate from prep school. this is a MUST

oh man i feel like i might survive this economic crisis after all!

no GM bailout.

that's the way I'm starting to think on this.

It looks as though prior to the hyperinflationary episode of the Weimar Republic of the 20s the German Mark appreciated fairly strongly after WW1 during a deflationary period of 1920-1921. While there seem to be a variety of reasons for the dollars recent comparative strength, there still seems something counterintuitive about a deflationary period for a debtor nation so the above period is interesting. Presumably the Germans were printing during this period yet deflation still occured for a time. Parallels?

Need to read more about this period

News in the UK is talking about deflation.

i read through that bailout bill and the one thing that stood out was:CHANGES CAN BE MADE AT ANYTIME WITHOUT COLSULTATITON O_o

i think that was the 1st one - the one that didnt pass

this one?
http://banking.senate.gov/public/index.cfm?Fuseaction=Articles.Detail&Article_id=76b1aea4-39b8-404f-b3cd-f8b6c46e3b14&Month=10&Year=2008

In re: Weimar. It is my understanding that the hyperinflationary period was the result of a deliberate decision on the part of the government, which faced very steep reparation payments after WWI.

Given that the reparations in the Versailles Treaty were a fixed amount in marks, by destroying the value of the mark, the Weimar government could clear its war debt and allow the country to start afresh. It was a backdoor method of meeting the letter of the treaty, while subverting its intent.

I don't think this decision to hyperinflate was taken immediately, but only after it became clear how crippling the debt would be. This may account for the period of a strengthening mark in 1920-1921.

some big heads could roll at ubs http://www.nytimes.com/2008/11/13/business/worldbusiness/13ubs.html

i mean like roll into jail

rollin rollin rollin

I'm trying to square how a deflationary episode can occur at the same time as the base money supply continues to increase. Obviously credit is massively contracted at this time, and it is credit that acts as kind of multiplier of the base - meaning the inflationary aspects would always be delayed? Curious if anything similar happened pre-Weimar hyperinflation.

As for the UK I think it is much less likely - part of the deflationary scenario for the US is current comparative dollar strength and flight to 'safety'. Sterling does not possess this and if they continue down the current path the BOE may have to sharply reverse direction (again) to protect the currency to prevent a Krona like episode next year

I have nothing to add but I read this thread religiously and would like to bump it up to the top

I'm trying to square how a deflationary episode can occur at the same time as the base money supply continues to increase. Obviously credit is massively contracted at this time, and it is credit that acts as kind of multiplier of the base - meaning the inflationary aspects would always be delayed?

Because fiscal and monetary expansion aren't 'working', people aren't spending so prices are falling coupled with imported deflation due to commodity price falls.