Rolling US Economy Into The Shitbin Thread

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.

So wait, what's the new bailout thing? I only caught a brief bit on the news today. After they said the Dow was down 400 again, that car companies wanted money now, and then I swear to god someone said oil companies also. It was the NPR news hour..

Steve Forbes says "The worst of it is over" and "Emotions are your enemy"

Or and any problems are nothing to do with him...

He should be ok though, wiki says Forbes himself is quite wealthy, with a net worth upwards of $430 million.

"Quite".

where does this break down as an analogy for naked short selling? okay: hey you hapless rube, how ya doin der der der how's the wife? hey! buy a georgia peach off of me. no, it's not ripe yet but eventually it will become near perfect in its propitious ripeness, athough of course its impossible to say when precisely the fleeting moment of optimal ripeness will occur. but when you think its getting there, you can have it to sell to the next person (the fool nudge nudge). but hey pay for it now while people aren't in a peach state of mind, friend, and whenever you decide you want it, i will personally go pick it and deliver it to you on a bed of cooled banyon leaves. except what you don't know is that i have limited knowledge about the unique challenges of finding and quickly picking this fruit when the time comes. also i live in Hartford, and do not personally know the peachfarmer, who haha LOL isn't expecting me. also, Georgia might secede from the union and burn all their trees for heat. but whatevs, this is 7000th peach i've placed an order for today because i'm motherfucking SHINTAR LORD OF THE FUTURE. what you don't know is that if all goes according to plan, these peaches will actually depreciate in value at which point i will swoop in like the harbinger of death's sweet respite to buy back your "peach" at 1/2 price and you'll never know that there wasn't ever any actual peach first or last. so i'll put you down for ten peaches then k thx bye click *unloads shotgun round into foot*

I can't wait until this fucking massive failure is declared all Bush's fault.

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/12/AR2008111202846.html?hpid=topnews

Good luck, Barry.

I propose E PLURIBUS UNUM be replaced on our currency w/ FUCK DEFICITS

According to the one McCain supporter I know, it's the democrats in congress's fault. I bet by the time Obama is in office they will be personally blaming him.

Bush on TV defending capitalism at the moment...

Capitalist at work:

http://www.secondtimearoundminifarm.com/images/shearing3.jpg

citigroup trading under 8 bucks??

http://www.forbes.com/opinions/2008/11/12/recession-global-economy-oped-cx_nr_1113roubini.html

uh, well, damn.

http://www.suntimes.com/news/politics/1275442,CEO-daley-layoffs-chicago-economy-budget-111208.article

that roubini photo makes him look like some kind of kgb interrogator.

"your capitalist system, it is doomed"

Roubini: "Deflation also implies a debt deflation where the real value of nominal debts is rising, thus increasing the real burden of such debts."

Deflation would be bad, bad news. I say this, even though I would be a nominal 'winner' in a deflation scenario. I say this, even though I am certain that a policy of infinite economic growth will eventually kill the planet and deflation would first shrink the economy and then slow down growth to a crawl for as long as it prevails.

The problem with deflation is that is stifles innovation and promotes economic stagnation at a time when dynamism and innovaton are needed very much. It punishes the young and will give more power to the old and the ossified (like me) who hold assets.

Thats only kind of true. It is inflation - a flat tax wealth transfer - that punishes the young and rewards asset holders. Deflation punishes the leveraged (most middle class asset holders) and rewards...well, anyone that manages to stay in employment. Depends whether you are a true asset holder or are leveraged to the hilt for it

My feeling is that this is not a true deflationary episode - well thats not entirely true, the dollars reserve currency means that for the US anything is possible and could make a deflationary episode in a debtor nation an option (however for the UK, Ireland, Austria and the others I would be much more suspicious about expecting deflation)

BTW anyone here Canadian? How are things bearing up there? I read that comparatively Canada steered clear of the worst excesses of Europe, Australia and the US? Any truth in this?

canadians avoiding excess? gtfo!

http://www.mercuras.com/1008/bailout_economic_crisis_336x280.jpg

My feeling is that this is not a true deflationary episode - well thats not entirely true, the dollars reserve currency means that for the US anything is possible and could make a deflationary episode in a debtor nation an option (however for the UK, Ireland, Austria and the others I would be much more suspicious about expecting deflation)

We are going to get deflation because we will import it. however take a look at this logic: Government lets loose monetary and fiscal policy, people end up with more money, rather than spend they pay down large accrued debts, either on shore or to foreign creditors, then surely the money supply decreases and you get deflation. Your fiscal stimulus has allowed people to destroy money or at least destroy it as fast as it is created, which is surely deflationary. The credit crunch has forced a repayment situation on the economy so money supply is contracting so deflation is a possible result.

Fancy a pint this evening?

http://research.stlouisfed.org/fred2/data/BASENS_Max_630_378.png

This shows base money supply increasing even as deflation occurs (for the US). Haven't seen stats for UK

But the UK is not comparable to the US, the global flight to 'safety' is the flight to the dollar (however temporary this may prove - different question). There is no flight to sterling, but precisely the opposite. The UK is surely closer to Iceland than it is to the US

pay down large accrued debts, either on shore or to foreign creditors

And heres the rub. And why sterling is suffering. No one wants it

The UK is surely closer to Iceland than it is to the US

A topic of conversation on the Today programme today about how close to Iceland the UK and Switzerland are.

and Austria and Ireland i presume

probably.

So how does deflation occur if there is capital flight and a potential run on the currency. The US is acting as temporary high ground for many countries. The UK is not

I think because a lot of the capital was use as collateral to raise debt so although capital may be leaving the leveraged positions are being wound up leading to deflation. I'm not necessarily suggesting that the UK gets Japan style deflation just a deflationary episode.

Does Iceland face deflation? Deflation is surely marked by a strengthening currency yet GBP is heading towards halving in value against the yen (and is falling against most everything else). Not a good look for a country reliant on imports

Is it inflation if people aren't buying?