enigmaman

Robert Shiller wonders if the recovery is just an optimist's self-fulfilling prophecy: "After all these months, people start to think it's time for the recession to end. The very thought begins to renew confidence, and some people start spending again - in turn, generating visible signs of recovery."

The GD lasted ten years with the worst of it starting 3 years after the initial market collapse, the fire side chats did little to stimulate anything but optimism for FDR re election which it did, its natural for people to feel less angst over time but that doesn't change reality, it didnt during the GD and it wont now, only proactive economic legislation will help turn this economy around which this president seems to have very little interest or knowledge of, Obama only concern is his legacy which he started to work on his first day on the job, he didn't want to leave anything to chance or interpretation after he left office no matter what the cost will be to America

Goldman Sachs (GS) spokesman Lucas van Praag responds to the New York Times' questions about its exposure to AIG (AIG), pre bailout. While admitting that "a collapse of AIG would have had a very disruptive effect on the financial system, and that everyone benefited from the rescue of AIG," he maintains - despite evidence to the contrary - that Goldman's exposure "was close to zero."

Said the Spider to the fly, what about the 18 billion GS received from AIG making then whole, risk free investment why this back door payoff if their exposure was close to 0

25 Reasons We Will Not Have a Depression

IMO the world views the America economy as a chain around it neck, no matter how well other nations have done since Oct 08 they know that if the US economy appears it will stall, fall or at worse possibly retest previous lows the resulting sell off will be swift and deep, investors are edgy, they have less faith in Obama abilities to turn our economy around, we are at a critical juncture, do we sink or do we swim, this is not something you wait for confirmation and that is what will make everything more volatile


On Nov 21 07:24 PM aarc wrote:

> We are still gropping in the dark.
>
> Not too badly hurt, but somehow, the market seems to know where it
> is headed despite massive opposition by many who either do not believe
> a recovery is underway or had simply been left behind holding empty
> bags.
>
> Baby steps. We are retracing where we had come from. Somewhere
> along the way we will face the old demons that plunged us into this
> darkness and face them head-on.
>
> That will require the participation of the majority to win this war
> against the Great Recession and possibly avoid another Great Depression.
>
>
> The emerging markets are clearly in the recovery mode having retraced
> 2/3-rd or more of their loses incurred during 2007 to 2008/9 including
> the BRIC. Some of them suffered worse than the US such as China's
> Shanghai and Szenshen indeces going down 72% as compared to 58% by
> SnP500. But they forged ahead and recovered more than 62% of their
> massive loses.
>
> US who is the one responsible for this "Made in America" financial
> crisis of the century is still in self flagelation mode unable to
> recover even half it's loses and help the whole world recover faster.
> Much less lead the world as it used to be.
>
> A faster recovery in the US will give more hope to others around
> the world who look to the brighter side of life and the re-establishment
> of co-operative lifelines despite each other's shortcomings in the
> past.
>
> Another major drawback in the US stock markets and the whole world
> will suffer again but hopefully not as bad as before as they have
> already recognized that the american-made crisis need not be their
> own - and the severance further of what had been achieved during
> the last 2 to 3 decades before the current crisis reared it's ugly
> head.
>
> Hopefully, more americans will see through the dark side of the equation
> and treat it as it is, a bad side not worth forging ahead.

25 Reasons We Will Not Have a Depression

The information you list as to reasons why there will not be a depression or double dip is not re assuring because you have to consider the source of your information, it all comes down to "trust" many do not and for good reason.

Remember back in the fifties and sixties when the government instructed children to " Duck and cover" in the event of a nuclear attach, looking back how reliable was that critical information.

As President Reagan said " trust but verify"

Former CBO director Douglas Holtz-Eakin says the U.S. is headed toward a deficit iceberg. Obama's lukewarm reception in China may be a sign foreigners are interpreting the suicidal rush to increase healthcare spending as "a dramatic statement to financial markets that the federal government does not understand that it must get its fiscal house in order."

No No the stock market climbs a wall of worry so this is a positive for the market, it will climb hire so the experts want us to believe. Lets not forget "The hire a monkey climbs the more of its as we see"

U.S. Debt Hysteria Is Getting Ridiculous

there wouldn't be so much screaming about government spending and the resulting debt if the spending was targeted as we were told it would be, to save the financial sector form doom, revive the economy and create jobs rather then reimburse political party favors. Yes the financial industry was pulled back from the brink, but there abuse of the TARP funds had less to do with helping the economy recover and more to do with using it to line there own pockets and all with the blessing of the Admin. The stimulus was more about paying back political favors to unions and states, created wasteful overly expensive clash for clunker cars, cash for clunker appliances, 1st time home buyer credit, funds to increase the social safety nets, saving jobs that were not needed, and to add insult to injury only 10% was employed during the time it was needed the most with the rest to kick in just around the next political election cycle. As it stands right now the Admin saddled us with debt that has done very little if anything to stimulate the economy though the resulting financial burden will be ours to carry for the foreseeable future. Yes the large debt is worrisome because it all has to be paid back, that it was used for political gain is very disturbing, that its been politicized is DC business as usual, that it appears the administration doesn't have a clue how to fix what ails us and is adding unnecessary additional debt on to our shoulders at the worst possible time is unconscionable, so in the end if screaming about the debt burden results in American paying attention, then more power to these demagogues.

Velocity of U.S. Money Supply Is Finally Edging Up

if the fed waits for unemployment to be in the 5-7% range they will be waiting a decade, we need about 7 million from right now to get back there, then you have 1.25 million news jobs needed every years to supply grads, oh and then we have to stop losing jobs, IMO if Bernanke is serious about holding down inflation he will act as soon as he feels the velocity of money we are starting to see is for real, he needs to be ahead of it so small adjustments will work if he starts to late then he will have to get aggressive and that will stall the economy and the politics of that will not sit will with DC, personally I dont believe he will get the timing right even if they let him


On Nov 20 07:24 PM LilBob wrote:

> And my point about the fed...I'd like to think the Fed is in line
> with the thinking that significant inflation as reflected in the
> CPI won't become a major issue until we see unemployment fall back
> down to the "normal" range of 5 to 7%.

Chinese officials said on Friday that moves to cautiously tighten the country's loose-money policy would begin at year-end, but added that changes would be small. Separately, Sen. Charles Schumer asked the Commerce Department to launch an investigation on whether the yuan's dollar peg constitutes currency manipulation.

To what end and to whose favor? be careful what you ask for

Velocity of U.S. Money Supply Is Finally Edging Up

So if velocity is starting to pick up that means money is flowing away from safety back into the economy, not so risk adverse which is good for the economy and should alert the Fed that we are approaching decision time concerning tightening, as more money makes its way into the system then the Fed has to consider when to start to reduce liquidity so that inflation can be controlled, start to early and we fall into a double dip recession, to late and we face the problems of higher inflation for the foreseeable future, It seems like we are approaching the economic tipping point and all eyes will be on the Fed.

The Twenty Year Stock Bubble Is Still Inflated

John Templeton was correct concerning a bona fide "Bull market" is that what this is or is it a rally in a long term bear market?

On Nov 20 09:01 AM bbro wrote:

> Dont you think you are operating in a bubble by not accounting for
> the
> interest rate environment....1973 to 1990 had a much higher inflation
>
> induced environment....as well 1996 to 2001 was tech crazed....<br/>If
> you want to look at valuations look at NIPA corporate profits to
> S&amp;P 500
> in a low Inflation environment ( under 4% year over year) you will
>
> see a drastically different picture. On the same token I am glad
> to see
> articles like this because it porvides the wall of worry which most
> markets need to go up. Sir John Templeton says bull markets end in
> extreme optimism.....

Economy Watch: Is There a (Second) Downturn on the Horizon?

What would you recommendation be if you looked at the US economy as just another listed security, after doing a complete fundamental & technical analysis, Buy, Sell or Hold? Or would you just day trade it? What would you expect from it in the near and distant future? Would you see light or the train?

On Nov 20 02:11 AM Moon Kil Woong wrote:

> If there is a second downturn like in the Great Depression it will
> be a doosey. The government and the Fed can do no more than they
> already have, if not less. You can't go lower than 0 fed funds rate,
> QE is already in place, the Federal Reserve is backstopping bonds
> which is just a form of unreported redivatives, and the government
> is already bushing the barrier on US Treasury bonds they can float.

The Twenty Year Stock Bubble Is Still Inflated

Yes and "If the cat were a chicken, she'd lay eggs"


On Nov 20 07:54 AM cyclingscholar wrote:

> Mr. Lounsbury, 'market capitalization' is a function of how many
> shares are publicly traded, as well as the $ Level of those shares.
> As more companies went public in the 1980s and 1990s, i think this
> biases your data upward. A bubble is more likely to be detected
> using valuation measures like P/E, P/Cash flow, P/Sales, etc. If
> the NYSE and NasDaq tightened listing restrictions (heavens!) your
> plotted line would collapse.

Former Fed Chairman Alan Greenspan and Paul Volcker say they're opposed to auditing the Fed, noting the measure would destroy the central bank's independence (.pdf). Fed chief Ben Bernanke told Congress in June that Sen. Ron Paul's provision "would effectively be a takeover of policy by the Congress and would be highly destructive to the stability of the financial system, the dollar and our national economic situation."

When it comes to helicopter Ben its " do as I say no as a do" he thinks more control and take over of other industries is OK, especially when it benefits him but when he is the target he sounds the alarms "the death of free enterprise as we know it" How does it feel to be on the receiving end?

The Twenty Year Stock Bubble Is Still Inflated

Or worse!


On Nov 20 07:27 AM OstrichHater wrote:

> This is a very interesting analysis, but the author's calculations
> seem to miss the impact of inflation on nominal GDP growth. I believe
> the authors forecasts are likely for real GDP growth, which isnt
> the whole picture.
>
> With the massive amount of money printing that the Fed has done and
> will likely continue to do, we are more than likely going to get
> inflation for the next 5-6 years. I suspect that inflation will
> ramp up to 4% over the next couple of years, possibly even higher.
> That combined with GDP rebounding immediately in late 2009 and early
> 2010 (~5%), and then tapering off to a 2-3% range, its not unlikely
> that we will have nominal GDP growth of greater than 6%, even while
> real GDP growth lags historical trend rates.
>
> This could bring the relationship back much faster (5-6 years) with
> no or very limited stock market appreciation.

The Twenty Year Stock Bubble Is Still Inflated

If you look back at the charts for DJ & S&P& NDQ since 1990 like it was a mutual fund or a stock that was available to buy, would you buy it? Its that simple, there should be no difference at all, just like you would consider buying Berkshire Hathaway shares. What you would use to do fundamental analysis is the US economy, so would you buy it? If so Why? The current economic path we find our selves on is counter everything that would be needed to justify buying based on fundamental analysis, so why are people still buying? Is it that they see a long bright future for America, are they buying for short term gain without concern for the future or do they just close there eyes to reality because they dont like what they see and buy hoping it will be better tomorrow. In any case none bode well for our future and the future of the security in question, that being America!