Rolling US Economy Into The Shitbin Thread

true, but just because the administration cried wolf a bunch of times doesn't mean that this time they aren't on point. it's to their detriment (and ours) that they did that and now no-one believes them, and I'm no financial expert, so I'd have to defer to economists. the parallels to the iraq war runup are obvious, but that's not proof that there isn't something legitimately wrong going on; we've had three massive financial failures in two weeks.

Also, as pointed out, now or soon from now is time to SELL gold, not buy it

Are you in the deflation camp? What do you think of Mises?

I'm still fence-sitting on this issue (but surely running the printing presses devalues cash?) which is why I only hold 25% of savings in gold. I want it to go down because I'm more in cash than in gold

Do you see any other currencies as safer havens than the dollar? What is your opinion on yen right now (given implications of unwound carry trade)

It's kind of interesting to read this NY Times article from December 2005 that talks about parallels of US housing market at that time to the Japanese bubble of the late '80s, and the long, painful aftermath of that bubble:

Weren't Japan a creditor nation at the time whereas the US is a debtor nation? And did Japan have a larger savings cushion (well having one at all would be an improvement)

I'm just saying I think the worst is over. The vast majority of bankers and bank shareholders would rather stay solvent by more conventional means, hence the mergers. Now if citi and jp morgan are able to spread the risk thin enough over their business that they can deal with the next year and a half of continued write-downs, I think we should be ok. The best thing about old institutions being eaten is that it can make room for new ones to breathe; I don't buy for one second that there's nobody out there who wouldn't love to step in if something like mastercard were to give up the ghost.

Weren't Japan a creditor nation at the time whereas the US is a debtor nation? And did Japan have a larger savings cushion (well having one at all would be an improvement)

I think there were some important differences, as you mentioned, though I haven't found hard figures on it yet. I think Japan generally had a better savings rate, even during the bubble years, though it seems that many people still took on more debt than they could afford to buy inflated properties. I think after the bubble popped, Japanese investors increasingly sent their money overseas, where they could expect better returns, which would probably have a similar effect if foreign investors increasingly direct their money outside the US.

kondratieff, you sound far more interested in those types of instruments than I will ever be. I tend to view currency and commodities investing as a ludicrous thing for the individual to engage in, since it's hard enough to play the markets (what is it, 80% of investors underperform the s+p index?) and once you're in currency and commodities you're swimming in a pool of institutional capital driven by black boxes, basically getting carried along by the tide. Gold and Currency trading are also right up there with penny stock schemes in "% of people invested in them that are total marks" imo

Ah ok - I think we're maybe a third of the way in. I think 2010 will be the worst. Feel that the recovery for the US likely to be swifter than for most of Europe though

I agree that currency markets seem to be rather counter-intuitive and probably not well suited for the average investor. At a gut level I feel bearish on the dollar, but I'd probably try to play that by investing in some quality foreign stocks or US companies that have a lot of revenue from overseas.

xp

in other news, I checked my Wachovia bank balance. It's still there!

i have bank accounts

Meanwhile, the FTSE is off 5% today.

Agreed re:currency trading (though interesting to compare CHF vs $ since 71). Find it interesting all the same (esp the yen currently - and why is the won tanking so bad?)

gold to me seems to be an insurance policy against a rapid decline of a currency (argentina 2001, japan 1946ish, yugoslavia).

I think after the bubble popped, Japanese investors increasingly sent their money overseas, where they could expect better returns, which would probably have a similar effect if foreign investors increasingly direct their money outside the US.

― o. nate, Monday, 29 September 2008 17:01

The new Dollar Carry Trade!

The other thing about the dollar is that so long as it is worlds reserve currency that gives the US a lot more leeway than other countries have (be interesting to see to what extent the UK try follow the US on recent form)

swimming in a pool of institutional capital driven by black boxes

kinda sounds like equities trading, too.

in other news, I checked my Wachovia bank balance. It's still there!

Mine too. But what's really exciting, or something, is that some of my retirement savings are in a bank stock mutual fund. AAAAAAAAH-HAHA-HAHAHA-HAHA!

*is dragged off to St. Elizabeth's*

I have to say that I am already pretty sick of hearing about "Main Street"

Main St will be kept alive by underground meth labs as it has been since 1994.

I'm receiving spam e-mails today encouraging me to open high-interest savings account with credit card companies. How sound are the various credit card companies?

stop opening your spam.

Will the size of your m4nh00d keep up with inflation?

Yeah I don't usually open spam. I'm not going to act on it, but it does seem telling. They're usually trying to get us to spend, now they want us to save.

no, they want you to inject your hard-earned capital into a murky pool which will be used to shore up stupid risks they've been taking. it's only "high interest" if other people pay off their credit cards. How's that bet sound to you?

Do you see any other currencies as safer havens than the dollar? What is your opinion on yen right now (given implications of unwound carry trade)

What are you investing in once you convert to other currencies? Otherwise the question is meaningless.

In any case there has been a massive contraction in the money supply which ought to deflationary, bailout notwithstanding.

me:also i like imaginingg the sound effect of this graph
me:http://www.google.com/pfetch/dchart?s=DJI
me:PEEEEEEEEEEEEEEEEEEEoooooooooowwwwwwwwwwwblonkaboonkachoooooonkablinkeeblinkblinkblinkblinkbbloooongeee

vote is apparently out of time with 189 aye and 214 no, but counts are still going up. I know nowt about Congress's voting system, btw.

The jury is still out on how much money has been destroyed by asset devaluation (both houses and mortgage-backed bonds), but, yes, this does equate to a big contraction in the money supply.

However, there are trillions of dollars held outside the USA, and only a moderate amount of them are invested in USA real estate or mortgage-backed bonds. No matter whether there is deflation or inflation, I expect to see a big mass of those offshore dollars repatriated in the form of overseas corporations buying US corporations.

My own company was recently bought by a UK/Canadian company. It is the next wave.

Dow tanking

http://i34.tinypic.com/atueco.png

weeeeeeeeeeeeeeeeee

http://images.bloomberg.com/r06/homepage/HP_INDU.png

it was down 670 about 2 minutes ago

Small rally from traders brings Dow up a bit

which is better buy GOOG or APPL

206 Aye to 207 nay

690 a few minutes ago and now around 490

sorry 227 nay

Thanks to the economic downturn that happened earlier this year, I have little in the bank anyways, so a collapse of banking systems would be less of a personal crisis for me.

I like how after years of being lied to by our government, we're in this position where we are like "Oh yeah, give them $700B dollars!" cos we somehow believe them. I don't.

Burn baby burn!

I also like saying that, "seven hundred billion dollars". It's like some ridiculous number you would make up in middle school.

http://i36.tinypic.com/117te80.jpg

reps are trying to convince the nays to change their vote.

One must always say 'billion' in a richly fruity Carl Sagan voice.

The big bailout package is going down in the House, eh? I had better tune in CSPAN and get my share of gooseflesh over this.

Convenient if it does go down for Obama and McCain -- then they don't have to vote on it.

The jury is still out on how much money has been destroyed by asset devaluation (both houses and mortgage-backed bonds), but, yes, this does equate to a big contraction in the money supply.

at least a trillion

I am sitting in the green room at CNN's DC bureau and shit is pretty crazy right now

http://freespeech.vo.llnwd.net/o25/pub/pp/images/september2008/290908criminals.jpg

205-228

The finagling for more Ayes meant they lost one???

http://www.cnn.com/US/9707/12/blackout/daily.news.lg.jpg

LOL at Dow down 12

CONGRESS WILL NOT EAT IT