Bean-counting

[Skybird]

Goldman-Sachs has told it's customers that the Euro-Zone (=the economical core of the EU) has taken over from the US as the world's biggest economic area, due to the sick dollar (according to information of theirs, given after the Euro's value raised beyond the mark of 1.56 Dollars end of last week).

The American GDP for 2007 was calculated to be 13.844 trillion Dollars, the 15 nations of the euro-Zone (not to be mistaken with the EU) produced a GDP of 8.848 trillion Euros in the same time (that is 13.880 trillion Dollars at the exchange rate from last Friday's climax so far).

The estimated GDP of all the EU with 28 nations for 2007 was estimated to be beyond 16.600 trillion Dollars, which made the EU with 31% of global production the largest economy in the world before, so the notification by Goldman-Sachs seem to be somewhat pointless. The euro-Zone has not overtalen the US, but the larger EU, if anything.

Damn the unhealthy dollar. For this top ranking nobody can buy anything. In fact, it costs us dearly. Many billions and billions, to be precise. I think the speculations that it is not a question of "if" but only "when" the Euro will take over from the dollar as the global reserve currency, will never fall asleep again, and become solid fact sooner or later. Euros and Gold are the things to buy. Dollars become interesting for paper-recycling companies. meanwhile, after one of the major American investement banks - Bear Stearns - had to be saved from the brink of extinction in last minute and caused european stockmarket indices to steeply fall, also raising doubts about the credibility of other major US banks, we finally had to hear demands to nationalize (? to put under state control?) other major banks in doubt and question (talking not about Venezuela, but America!), while the Fed has given signal to help inflation speeding up even more by cutting another 100 points. - Fasten your seatbelts everybody, its getting rough... I think, at this pace the Fed soon will reach the point when what is left of its ability to act and means to cast any influence at all, will have completely disappeared. The time after will become highly interesting.

[Onkel Neal]

I'm not an alarmist but the latest moves by Wall Street and the Fed have caught my attention. I do not agree with the point about gold, but certainly the dollar is in jeapordy.

Two weeks ago, it was a $200 billion cash-for-bond swap for the banks.

This past week, it was a $200 billion bond-for-bond swap for the big investment houses.

Now JPMorgan Chase & Co said it would buy stricken rival Bear Stearns for just $2 a share in an all-stock deal valuing the fifth largest investment bank at about $236 million. Under the deal, the Federal Reserve will provide special financing and has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

You know... I smell smoke... these are some pretty extraordinary events.

[NEON DEON]

"Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! For in one hour is thy judgment come."

:dead:

Is it time to bite the bullet and let interest rates rise?

I believe the harder you try and prolong the cycle by artifitial deflation of interest rates the worst its going to be.

Looking at gold now it is up 24 to $1,027 US an ounce yet the the 10 year bond is at 3.42%. I dont think that is natural.

If you have bonds, I would make sure they are rock solid and then be prepared to hold them for a long time. That or sell them now.

[PeriscopeDepth]

Smells smokey indeed: http://www.reuters.com/article/newsOne/idUSN1650564120080317

PD

[Wolfehunter]

Do you think the major banks are at it again to start another great depression?:hmm:

[Skybird]

Do you think the major banks are at it again to start another great depression?:hmm:
It already IS in a depression. But nobody wants to admit. What the Fed is doing I do not see as the cure, but as preventing the necessary painful healing process, which necessarly will claim many victims especially amongst banks. So much for the often propagated self-regulation of the market. America accepted totally unhealthy finance policies for too long, and since very very long time lived beyond what it could afford. the mortage crisis is the most obvious symptom of this. The lousy stnadards for accepting credits. and now, slowly but surely winning in pace, the creditcard crisis. All this is a different name for one and the same desease: spending more than what one earns, living beyond what one can afford, living on tick.

almost all western nations live on tick and have significant debts, incrasing them from year to yar, they all spend more than what they produce in income. But nobody drove this behavior to such extremes, like america.

I am wondering, really, the lack of strategic awareness fascinates me. For those holding huge dollar reserves, like China, this policies and the situation today means they have losses countin in dozens if not hundreds of billions. how comes that America takes it just for granted that other nations have nothing better to desire to bleed for America this way, and will accept to bleed on in the future? Sooner or later the others will decide that they have enough of this kind of game that costs them billions and billions to their own disadvantage - and then they will get rid of their dollars, drown the market with them, and switch to euros or whatever. and when that happens and several actors do it within a significantly short period of time - it is day one for America. no, that is no wishful thinking by me (of which I often get accused), it is a reasonable conclusion. gulf states think liud about leaving the dollar. OPEC does not hide that it thinks about it. China already seems to have gone into the launching process for this operation, some economic and financial observes say. but America acts as if all these signals are either not there, or mean nothing. Instead one accepts the luxuary of waging two wars costing trillions of dollars (independant calculation that also take into account following costs for the national amerifan community come to numbers of 3-5 trillion dollars).

Whoever becomes the next american president - Americans better pray that he is aware of the link between economy, finances and the war. This administration is not, or it is unscrupellous enough to ignore it. McCain is quoted with having made statements saying something like that he cannot see what Iraq has to do with the american economy. If he was serious, then god may be merciful with you. If such a mind becomes president, then Prost Mahlzeit. But in the end, the world pays more for these wars, than America itself. Because america finances these wars with borrowed money, and selling more and more worthless treasury bonds.

It escapes my understanding how a power seeing itself as a superpower, can accept such lifethreatening strategic vulnerabilities, and even starts a competition with it'S own military by outsourcing srvrices to mercenary companies where the serviceman can earn ten times and more as much money than what his poendant in the armed forces earns. It makes no sense, and even increases the load of costs the ameircan tax payer has to come up for. and that means more cuts in other areas of civil society: health, traffic, education, etc, making more debts, borrowing more money - and again, in the end the international community pays the major load of the mess.

Some political, economic and financial decision makers seem to be completely disconnected from reality.

I do not even touch the issue of rotten morals to destroy the future perspectives of the young ones this way.

[Onkel Neal]

A New Depression might be a good thing for this country. Would clear out all those *&%&^$ Starbucks cafes and send the illegals home.

I wonder how much they pay in Mexico for oil analysts? :hmm:

[Ducimus]

Ok, i think ill be scared now.

[Tchocky]

Would clear out all those *&%&^$ Starbucks cafes

Brilliant :D

[XabbaRus]

Time for a big war, methinks...

[Skybird]

Time for a big war, methinks...
the current one did not help, but even contributed it'S share to the detoriation of things in the past two years, especially the oil price. Before the invasion of Iraq, the oil price was calcuated to be stable around 23-30 $ for the next ten years AT LEAST- and the costs of risen Chinese and Indian demand already were included. the price we see today and that is obviously beyond 30$ is caused by one half by speculators and investors using oil business as an investment fortune - a relatively new phenomenon, since investors usually gamble with other kinds of enterprises - and the other half is caused by the Iraq war.

So if a new war should help in any way, this time it would need to be a worldwar against all creditor nations to destroy there demands by overturning these nations. While the US has waged many wars against small opponents that in the beginning were perceived as inferior since WWII, it always evaded bigger enemies that could strike back. So I would say the chances we see this scenario in action are relatively thin. It also would be beyond the capacity of the US military which is already stretched, and I assume the American people also would not play ball.

And China with it'S life-threatening dollar-reserves - China is not weak enough anymore to play it against the wall this way, or in any other way. The average American cannot afford to buy goods "made in America" anymore, and many therefore buy "made in China" for that reason - that tells us something.

[SmokinTep]

The US will bounce back eventually.

[Konovalov]

It already IS in a depression.
How do you come to that? You have to be in a recession first before you reach a depression. Technically the US is not in recession though I do believe that there will be a recession soon. Secondly it has to be a prolonged recession for a depression to exist. There does not exist massive unemployment. Half of all US banks have not closed as happened in the actual depression of the last century. In sort very few conditions currently exist that did back ten in the depression. There is NO depression currently.

[Tchocky]

It already IS in a depression. How do you come to that? You have to be in a recession first before you reach a depression. Technically the US is not in recession though I do believe that there will be a recession soon.

Ploink! Recession conditions are not present. Potential recession conditions are very much present. Recession can be avoided, but there are two factors mitigating against corrective action, and a fairly strong moral argument.
A - Current US budget/borrowing cannot support a proper solution. The political will is not there either.
B - The lax attitudes and wishful thinking that has created this mess needs a counter. The system can be bailed out, but those responsible must not benefit from their own failures.

[August]

So if a new war should help in any way, this time it would need to be a worldwar against all creditor nations to destroy there demands by overturning these nations. While the US has waged many wars against small opponents that in the beginning were perceived as inferior since WWII, it always evaded bigger enemies that could strike back. So I would say the chances we see this scenario in action are relatively thin. It also would be beyond the capacity of the US military which is already stretched, and I assume the American people also would not play ball.

Well if that's the way you think then go ahead and attack us and we'll see who wants to play ball and who doesn't.... :yep:

[Skybird]

It already IS in a depression.
How do you come to that? You have to be in a recession first before you reach a depression. Technically the US is not in recession though I do believe that there will be a recession soon. Secondly it has to be a prolonged recession for a depression to exist. There does not exist massive unemployment. Half of all US banks have not closed as happened in the actual depression of the last century. In sort very few conditions currently exist that did back ten in the depression. There is NO depression currently.
Yes, I mixed the words up. I see a recession at work, and several economic indices and consumer behavior as well as developement on the job market and business climate support this. However, I wonder how anyone being realistic could still hope to avoid the recession turning into a depression. This is the third major crisis of financial markets in less than one decade. As economists point out: no system can afford three major crisis in ten years, plus the framing conditions, consumer indices, state deficits, international market conditions, and the deeply unhealthy if not to saY: rotten finances of the internal american market do not give any hope that a depression can be avoided this time. Unemployement oin the US already is rising, consumers spend less (latest news update: news from yesterday). Neal identified the opening key signal very correctly. The Fed already is on codntion red, and it does nto ahve the unlimited reserves to always intervene in the way it did with Bear Stearns - but B.S: is not the only bank falling - analysts agree that this crisis will see a major tree-cutting in the forst of bank trees. Plus the Fed dramatically supports inflation by it'S course and measures.

The US bounce back eventually, SmokinTEmp said. Well - the hope dies last, doesn't it. but I am realistic, and when I see all signal lights flashing red, I do not expect any good in the imminent future.

And the Chinese Damokles sword always on my mind. If they act mercyfully, they will act with selfrestraint. If they are serious about wanting to become number one in the world, stabbing America to death with their reserves while America already is in a depression would be the worst case scenario America needs to fear - and the best chances-opportunity for China to end the poker match not with an unclear bluff, but an open Royal Flush. At their mercy we are, especially America, like it or not. This is what they were aiming it patiently, since years and decades. Soft power (economy, finances) beats hard power (military).

Yesterday there was a long docu on brokers and stockmarkets on TV, and they interviewed and documented the way brokers think of their work. It again became clear what I already think I know since long: that many of these people are handling sums and numbers so huge that they do not have any relation to them,. no mental representation of what they are doing, no ground under their feet. they are no workers - they are gamblers, addicts, like people ruining nthemselves in the casino - only that brokers do not risk their own money, but that of others. And once you smashed your first unimaginable number, you tend to think: well, that's not bad, if I lopszt this, it doesn't matter if I risk more. In the past 6 months, 800 billion euros had been burned this way - value that simple was tranformed from a state of at least abstract existence to a state of non-existence, as if it never had been there.

Anyone wanting to tell me this way of running an economy is not anything but perverse? If so, take a pill and see a psychotherapist to get ground back under your feet.

[Ducimus]

The average American cannot afford to buy goods "made in America" anymore, and many therefore buy "made in China" for that reason - that tells us something


It tells how badly the American people, have been f**ked by the upper 1%. Sadder still, most don't even realize it.

[SUBMAN1]

The average American cannot afford to buy goods "made in America" anymore, and many therefore buy "made in China" for that reason - that tells us something
I disagree. Most people can afford made in America, but are trying to save a buck, so they don't. I still buy American when I find it, but opt for European when I can't. I never buy Chinese product - and it is possible not to buy Chinese product if you look around a bit.

What is funny is in the end, if you don't buy Chinese, your product is of superior build and ends up lasting 3x as long, so ultimately you save money. Problem is, most people are too short sighted to see this and only see the initial outlay of cash.

-S

[Ducimus]

Hmm kay, now enter Walmart, and their ushering out of smaller stores everywhere. 90% of the **** sold at walmart is made in china. Walmart is coast to coast, is a MAJOR retailor wherever they reside, and in some places, are the ONLY place to go.

Im still impressed how in Hot springs arkansas there are THREE super walmarts.

Most of our blue collar jobs were outsourced overseas for cheaper labor so the upper 1% (IE, CEO's) could keep their grossly obscene salaries. The majority of our manufuacturing and industry jobs are GONE. Their in china and other places. China quite literally has us by the balls i think. I point my finger at those who screwed America over by exporting our jobs. If they hadn't have done that, we'd be ALOT better off as a nation i think.

[SUBMAN1]

Hmm kay, now enter Walmart, and their ushering out of smaller stores everywhere. 90% of the **** sold at walmart is made in china. Walmart is coast to coast, is a MAJOR retailor wherever they reside, and in some places, are the ONLY place to go.

Im still impressed how in Hot springs arkansas there are THREE super walmarts.

Most of our blue collar jobs were outsourced overseas for cheaper labor so the upper 1% (IE, CEO's) could keep their grossly obscene salaries. The majority of our manufuacturing and industry jobs are GONE. Their in china and other places. China quite literally has us by the balls i think. I point my finger at those c**Ksuckers who screwed America over by exporting our jobs. If they hadn't have done that, we'd be ALOT better off as a nation i think.I hear ya, but I also haven't stepped foot in a Walmart in probably 7 to 10 years.

[Yahoshua]

In short, buy some gold. If we hit a depression, the gold will save your life when you translate it into euros. If we hit a recession, it's a great investment for when we get out of the recession. If nothing happens, it's still a better investment than a piece of green cotton-paper.

[Ducimus]

I got a laugh out of this. Pretty much sums up what i think of Bush's "Rebate checks".

http://www.cagle.com/news/Recession08/images/sack.jpg


I mean seriously, is that all he can come up with? Other day on another forum i saw a gem of a post.

No one could have predicted that letting a semi-retarded dry drunk with a history of abject business failure run the country for 8 years might end up having negative economic consequences.

Granted its not all Bush's fault, but he did speed the process up, and his solution is laughable. Not to mention his.....

http://www.cagle.com/news/Recession08/images/sack5.jpg

[Skybird]

No one could have predicted that letting a semi-retarded dry drunk with a history of abject business failure run the country for 8 years might end up having negative economic consequences.
:lol: That could have been written by me! :lol:

[NEON DEON]

Wait untill Steve sees this.

You guys are gonna get it!:ping:

[Ducimus]

No one could have predicted that letting a semi-retarded dry drunk with a history of abject business failure run the country for 8 years might end up having negative economic consequences.
:lol: That could have been written by me! :lol:

I dunno, do you post at Fark.com? LOL You want to talk about all sorts of opinions, thats the place to look, the people there are brutal. :rotfl:

[Wolfehunter]

:rotfl: Amazing. Great pics:up:

[Onkel Neal]

In short, buy some gold. If we hit a depression, the gold will save your life when you translate it into euros. If we hit a recession, it's a great investment for when we get out of the recession. If nothing happens, it's still a better investment than a piece of green cotton-paper.

I hope you didn't buy gold today. (http://money.cnn.com/2008/03/19/markets/gold/index.htm?postversion=2008031918)

[Skybird]

http://www.spiegel.de/international/0,1518,druck-542644,00.html


The shocking and reckless practices of banks behind the recent plunge in global markets illustrates just how far they have veered from reality. Stricter, more effective supervision is necessary, and the banks' perverse bonus systems must be comprehensively reformed.

Frenchman Jérôme Kerviel offered a particularly enlightening commentary on the steadily worsening crisis in the financial markets. Just as a reminder, Kerviel is one of the young traders whose unauthorized trades resulted in the stunning loss of €4.9 billion ($7.66 billion) for his employer, French bank Société Générale. When questioned by prosecutors, Kerviel offered this logical explanation for his actions: "Working in this profession, you lose your sense for sums." Then he added: "You get a little carried away."

[SUBMAN1]

Raise your hand if you have already figured out that the president of the United States has absolutely 'NOTHING' to do with the economy.

<...Subman1 raises hand...>

-S

[August]

Raise your hand if you have already figured out that the president of the United States has absolutely 'NOTHING' to do with the economy.

<...Subman1 raises hand...>

-S

Shhh, Subman. you might harsh their anti-Bush buzz. Bush is responsible for EVERYTHING that happens, don't you know that?

[SUBMAN1]

Shhh, Subman. you might harsh their anti-Bush buzz. Bush is responsible for EVERYTHING that happens, don't you know that?Oops! My bad! :oops:

-S

[Sailor Steve]

Wait untill Steve sees this.

You guys are gonna get it!:ping:
What, you mean me? I don't get it. But then, I'm a total failure when it comes to economics, both in my own life and in understanding the big picture.

As far as President Bush goes, I'm not that fond of the guy myself. On the other hand, when it comes to combining the two, I fall pretty much into the same opinion as Subman1.

[NEON DEON]

Wait untill Steve sees this.

You guys are gonna get it!:ping:
What, you mean me? I don't get it. But then, I'm a total failure when it comes to economics, both in my own life and in understanding the big picture.

As far as President Bush goes, I'm not that fond of the guy myself. On the other hand, when it comes to combining the two, I fall pretty much into the same opinion as Subman1.

Yes I did mean you.


Past reactions you have had when someone has made fun of our President led me to believe (I guess wrongly:yep: ) that you would be upset at lampooning the President.

No worries! :sunny: