yank

10 Reasons Why We Still Haven't Hit Bottom

czar:
your description of Obamanomics was perfect. Just like a beginner chef preparing a meal; good intentions, no experience, lack of competence and plenty of hubris. What do you get? A burned meal that tastes like shit.

newby


On Mar 22 11:05 AM petyaczar wrote:

> 1)When the tide is going out, it lowers ALL boats that are still
> afloat.
> 2)Wait till the tide turns before betting on which boats will rise
> with the incoming tide.
>
> To Artful Dodger, from another "old cat" who bought his first stock
> in the late 60's. just in time to gain enough investing experience
> - already had the hubris - to position myself for the fiasco of the
> mid 70's.
>
> IMO we are not staring into the abyss of the Great Depression, No,
> IMO we are staring into the abyss of the GREATER DEPRESSION. and
> this will be the legacy of the Obamanation = good intentions, no
> experience, and lack of competence coupled with plenty of hubris.
>
>

The Economy, And Why It's Taking So Long to Fix It

Hexan:
Outstanding post. You nailed it right on the head. I would just add one more point to you list from my own personal experience. I live in a fairly affluent area of South Florida. Recently several retail stores went "bankrupt". The foreclosed property now has a sign on the window saying " A new Goodwill Store will be built here soon". That is the ultimate signal that the retail consumer is now officially DOA. Kaput.
Very sad state of affairs indeed.

Yank


On Feb 28 11:54 AM Hexan wrote:

> I disagree. Recovery will take a lot longer than expected for these
> reasons:
>
> 1. Planned marginal tax increases on businesses and wealthy individuals
> discourages spending and investment.
>
> 2. Preventing foreclosures halts the downward slide of prices to
> affordable levels - forcing potential buyers to save longer and earn
> more to make a home purchase.
>
> 3. Significant stock market drops (and other asset classes) pushes
> retirement age out and increases the desire in younger workers to
> save more aggressively.
>
> 4. Deterioration of the wealth effect subtracts 1-1.5% of GDP for
> the foreseeable future, which further reduces consumer spending.
>
>
> 5. Business bankruptcies / commercial loan defaults have not peaked.
> The market will not grow until it is cleared of inefficient producers.
>
>
> 6. The impending carnage in commercial real estate has not even started.
> This will destroy wealth in places that appear stable right now.
> Notably conservative insurance companies, regional lenders, and high
> net worth individuals.
>
> 7. Tax increases on venture capital, hedge funds, and private equity
> will discourage risk taking and entrepreneurship, further postponing
> any recovery.
>
> 8. The banking crisis has not been fully resolved.
>
> 9. Bank lending, especially to consumers, will never again replace
> the previous levels associated with collateralized instruments. Layaway
> is back.
>
> 10. Bond investors are demanding much higher rates of return, even
> for highly rated companies. This makes it harder to fund expansionary
> projects.
>
> Each of these factors are non-trivial. One can debate the exact effect
> of each, but the combined impact on future growth cannot be understated.
>
>

Misunderstanding the Great Recession

Chris:
Bingo! You hit the jackpot. Repealing Glass-Steagall AND eliminating the uptick rule have been two of the most colossal blunders made in the name of financial "reform". If this is what reform looks like, I don't want any.

Yank


On Jan 26 09:12 AM Chris B wrote:

> The "proximate cause" of the crisis was the 1999 repeal of the Glass-Steagal
> Act of 1933 which had legally separated the retail banking business
> from investment banking. This, along with a justice department that
> thought a massive bank oligopoly was a good thing, allowed for the
> formation of goliath investment/retail banks like Citigroup, Bank
> of America, etc. Financial industry lobbyists spent $600M lobbying
> for the repeal of this important depression-era reform, which had
> until then provided over 60 years of banking stability.
>
> Just a few years later, we again have a deflationary bank crisis
> / credit crunch occurring because investment losses had crippled
> retail lending. This is exactly what set off the great depression
> and it is exactly why Glass-Steagal was passed in the first place.
>
>
> Had Glass-Steagal not been repealed, there never would have been
> a mortgage crisis (b/c retail banks that hold their loans would have
> higher standards), the insurance companies would not have been involved
> in derivitives, there never would have been trillion dollar bailouts,
> and the phrase TARP would still mean a canvas or plastic sheet to
> cover boats and firewood. If you're looking for a proximate cause,
> that's it.