Economic `Armageddon' predicted

[shawmut]

By Brett Arends/ On State Street
Tuesday, November 23, 2004


Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish.

But you should hear what he's saying in private.

Roach met select groups of fund managers downtown last week, including a group at Fidelity.

His prediction: America has no better than a 10 percent chance of avoiding economic ``armageddon.''



http://business.bostonherald.com/businessNews/view.bg?articleid=55356

[Bullshot]

1. What gave him the hint?

The massive outsourcing of our manufacturing base? The increasing control of foreign investors of our companies, including the Saudi Royal Family, which owns 6-8% of this nation's assets?

A few years ago, if you brought these facts up, you were branded an isolationist. Now that the chickens are coming home to roost, people are squawking like it's just becoming obvious.

And these are the people who are supposedly the movers and shakers of our economy. Scary. If a common dufus like me could have seen this 10-15 years ago, why couldn't anyone else?

[Florida_Geek]

6. You forgot the amount of US debt owned by the Chinese

Got to be nice to your mortgage holder.

[papau]

17. Inflation of 7 percent a year halves ``real'' values in a decade. - -:)

Seems a fixed rate mortgage is a good thing.

[DebJ]

18. Japanese own even more, according to a recent post in DU

[sniffa]

2. bring it on!

[indepat]

43. Did we the people choose an almost certain economic Armageddon for a

a perceived belief of being made safe?

[Cooley Hurd]

3. Who would want to invest in this crazy-ass country, anyway?

This is bin Laden's wet dream...

[NewJeffCT]

38. There are some that want to

The reason being that it is better for the US to limp along economically for several years than to have our country suffer through a Depression or hyper-inflation or deflation. If the US economy tanks, the rest of the world will be dragged into at least a recession. While it will be ugly here, it won't be pretty in Japan, China, India or Europe, either.

Right now, China's yuan is tied to the dollar at around $1 per 8.125 yuan. So, if our dollar suddenly drops off a cliff (as opposed to just the slow descent it's in now) - it will have a huge effect on China as well, and in turn, the rest of the world.

[gpandas]

42. security...

if the u.s. went down, debt would be meaningless. they are betting u.s. not falling apart, for now. "who can make war on them?"

[UNIXcock]

4. Balance your portfolio accordingly

... many colleagues of mine lost their asses because of their own greed in the 90's

... instead of investing to get rich, I always advise to invest to hedge inflation and if you do well, parlay profits into more risky adventures as opposed to spending wildly - even though it's my belief real estate is low risk

... it's all about fiscal responsibility

[DebJ]

19. on $8 an hour, I don't have to worry about investments! Whew!

[theHandpuppet]

21. Of course...

... there are WAYYYYYYY too many people in this country who believe that buying these huge mini-mansions and taking on monstrous mortgage payments is "investing in real estate". When the economy tanks they're going to lose the roof over their heads, too, and there won't be any buyers for their gated community estates. People don't buy according to what they can actually afford anymore. IMHO, if you can afford to liqudate some assets in your portfolio to pay off the mortage, this is the time to do it. This economy is about to go belly-up, just like any other economy has done with Dubya at the helm.

[The Backlash Cometh]

22. This is true. And sometimes the decision is made for them to buy

the mini-mansions. Like the northerners who come to Florida MUST spend every penny they got from the sale of their home up north to avoid the capital gains tax. At least, that's the excuse they tell me.

[alfredo]

44. I did that when dumbya became emperor. I knew the country would

tank. I was right. for once.

[htuttle]

26. Balancing my portfolio nowdays...

...usually involves putting the cans of beans on one side of the cupboard and the cans of soup on the other.

Hasn't been much of a problem lately.

[susu369]

28. Guffaw - thanks

funny AND true....

[ebayfool]

45. A post that I can relate to - my savings are tied up in my pantry! n/t

[Flammable Materials]

5. Couldn't have said it better myself. BRING IT ON.

Sometimes the dog has to have its nose rubbed in its own shit to be reminded of what it has done. Similarly, Bush voters (and anyone else in this country even remotely sympathetic to him) must be confronted with what they have done. They need to be reminded that there are bad consequences for bad decisions. They need to weep and gnash their teeth and beat their heads against the wall repeatedly and ask themselves over and over and over again how they could have possibly been so stupid?! They need to know what the rest of the third-world feels like, since they voted in favor of third-world-style corrupt government.

Enough of this "God Bless America" bullshit. It's time for "God Chasten America". "God Humble America". "God Rub America's Nose In The Shit".

[acmavm]

7. Really, that's a pretty cold hearted attitude. A lot of us who knew

better, who knew what bush* is really up to and what a greedy coward bastard he is will suffer too. My kid's future is screwed, and I have to worry now exactly what kind of life he's going to have.

This 'good' shit really pisses me off.

[Flammable Materials]

10. Now moving out of the country doesn't sound so harsh, does it? n/t

[acmavm]

14. Don't understand exactly what you mean, but if I think it's a suggestion,

are you willing to pay so I can move? I can't do it. And you know what, I was born here so I don't think I should have to move out. I AM AN AMERICAN CITIZEN. Why should I have to leave my own country because of some lying bastard and the criminals he surrounds himself with?

It's time to fight back. We're past the point where we can just raise hell with our democratic representatives and senators, we need to rattle the cages of the moderate republicans as well. Appeal to any and all of them to stand up for what this country is supposed to be, not what a shit hole it's been turned into.

It's also time to go back thirty years and re-use some of the tactics that were used to put the squelch to the Nixon/Agnew crap. There are people with the resources out there who could fund what we used to call 'underground' news outlets and radio stations. Air America, while being a blessing, is just not enough.

I suspect that when the children of the bush*bots start packing up to go to war, things may start to change. When the draft that they said isn't going to happen happens, maybe a few eyes will open up. And if any MSM outlet had the balls to print the pictures of the atrocities that are being committed in Iraq, it just might make a few people stop and wonder how they can square those barbaric murders with their so called Christianity. But that takes guts, work, and committment.

[luaneryder]

27. That's what it's going to take

bush voters kids going off and dying in his wars. That's if the parents aren't wealthy enough to buy them out of it somehow. It has to get personal. Maybe some MSM will have the guts to break the lockdown and start showing the body counts/coffins/body bags on both sides along with gruesome photos and details as they did during Vietnmam. Remember the outrage when MSM showed photos of the soldiers being dragged thru the streets in Mogadishu, the mercenaries dismembered and strung up on bridges in Iraq? It's gotta be personal and graphic.

[ladjf]

9. Unfortunately, all they will do is blame it on the "libruls" .

The biggest mistake the rest of us makes is that we forget that the rank and file that voted for Bush is suffering from brain damage, and I don't mean that figuratively. Their cognitive processes
have been damaged, possibly irreparably.

[Flammable Materials]

12. Start getting the meme out there now: "It's All Bush's Now." n/t

[ladjf]

16. Your logic is impeccable. But, we somehow have to figure

out how to deal with people who have abandoned normal survival
processes. In other words, they are "bug nuts" and it's scary.
Our lives are being controlled by sociopaths. How did this happen?

[NewJeffCT]

41. Well, not just libruls will get the blame

My picks for the blame in the coming Great Depression 2:

1) George Soros and other leftists from Europe are determined to do in the US economy.

2) Libruls in the Senate for blocking the Bush Energy Bill.

3) if we get hit by bin Laden again, it will be blamed on Clinton for not taking Osama's head on a platter when the Sudan offered it to him three times and for John Kerry & John Edwards voting against the $87 billion, which encouraged the terrorists.

4) gay marriage in Massachusetts has made the country lose the protection of God.

Remember, they control the media and will be able to get their message out - and, they are good at getting their message out in a consistent manner that is good for soundbites.

[Cat Atomic]

50. I agree with your fourth group. Gays will be blamed.

The others are a bit too... reality-based to carry much weight in Republican circles, if you know what I mean.

I expect they'll blame a group that's easily attacked, as usual. They'll blame gays, Arabs, blacks... the poor, of course. It doesn't have to make sense.

[donkeyotay]

51. Yes, it's a permanent condition

In fact, there was a great article here a couple days ago that made the point that contrary evidence only makes the right cling ever tighter to their convictions.

Nothing will wake America up now.

[MadHound]

15. Rather cold hearted, and short sighted, and foolish my friend

First off, this economic disaster will drastically effect all of us, Dem or 'Pug. Just to see it happen so that you can go "neener neener" is cutting off your nose to spite your face. And even if we Dems make wise investment decisions with this scenario in mind, it still doesn't mean that we won't suffer hardship and want(think Great Depression, massive unemployment), or that our families and loved ones won't suffer the same. Yes, many of us have 'Pug family members, who we would be obligated to take care if our situation is better than theirs, after all, they are family.

I agree with your sentiment, but this kind of broad based lesson we do not need. Sad to say though, I think we're going to get it anyway. Prepare accordingly.

[fugue]

23. That's a terrible analogy

Anyone who actually knows about dog training will tell you that is not the way to housebreak a dog.

The canine attention span is very limited. To steal an example from a dog obedience book, if the dog poops on the floor, he walks a few steps, and sighs and then you punish him, from the dog's point of view, he's been punished for sighing. So when you rub a dog's nose in his own excrement, all he learns is not to rub his nose in his excrement, which the vast majority of dogs know already.

If you want to argue that Americans should be abused, go ahead, but please do not encourage the abuse of dogs. They've got enough trouble trying to figure out the confusing, alien human world they live in, especially when the humans keep insisting that the poor things know all kinds of things they don't.

[Ganja Ninja]

8. The American people are going to get what they voted for.

Try not to think of it as economic Armageddon. It's the nasty medicine we need to destroy the cancer of republican control over government.

[ladjf]

11. You may be correct. However, the big rub is that

international competition, could exploit our weakness in some very nasty ways.

[Swamp Rat]

13. Not "could" but WILL.

As soon as we are weak enough, the rest of the world WILL gang up on us. :(

[ladjf]

40. Yes. Just because our current military is stronger than any other

country, doesn't mean that we are stronger than a coalition.

China is progressing economically and militarily. They are planning to put space based weaponry in place. (My opinion). However, as long as they can profit by doing business with us, they wouldn't want to bring us down. But, if the profit aspect were to change, they would have the ability to hurt us. I don't see any reason why they would do it. We aren't hurting them.

Another item worth considering about global competition is that no country that is suffering from religious delusions concerning reality nor who is spending 10 to 20% of their resources on religious activities could possible be able to compete. Life is harder than that.

[izzie]

20. Two things

My retirement was all moved to bonds just before Bush came in. Bank said things would get bad. I lost little money but income really drops in bonds. Second, Bush I think is using the US power for help on the dollar. It, I think, is payback to Ger.. and Fr. and I bet he hopes with imports costing more we will buy more US. Down the dollar goes. And the GOP just keeps spending.Put this all into your own family way of living and it seems bad to me. I can only understand this stuff if I put it into a family plan, so to speak.I got rid of all but two cards and they are for 500 each. I heard you needed two to rent a car and I thought I may have to do that. It is nice to have one for the Pc also or mail stuff.I have lived in very good times in the US and I get a funny feeling about all this. Something is going on and it feels bad.

[no_hypocrisy]

24. Reality check: it's gonna get real bad, soon, & not going to get better

for quite a while.

Think in concrete terms. It's more than folks won't be able to afford that new plasma TV or Hummer.

Folks won't have work. They will lose their homes as mortgages are foreclosed, i.e., homeless with middle class faces. They will be hungry in real terms (forget about not being able to go to Starbucks twice a day - I'm talking affording meat more than once a week, if that). They will see there is no future for their children. They will have impoverished years as an unwanted elderly and a drag on the society. They will live without hope. And then they will follow whomever promises them bread and jobs.

Enter a demagogue to make * look like an amateur.

And this economy is not in a bubble. What happens to us will affect economies in other countries. There's no place to protect yourself.

While I sit and wait for the inevitable (like bracing yourself for a collision with the car in front of you), what I really dread is being witness to the prospective mass panic in waves and watching it have a destructive affect on our so-called democracy.

Bring it on indeed.

[DemonFighterLives]

25. I'm no market guru

But this "perfect storm" that B*shco has created comes at no surprise. You can't throw money around like a drunken ____ and expect things to be honkey dory.
I see "kids" buying bigger and bigger houses everyday. It is unsustainable. Eventually you poop out.
Time to hunker down. My house is paid for. Insurance is up and energy costs have gone through the roof since * took over.

It is all part of some great scheme to push the middle class down. If you are rich, none of this matters much. To succeed with this regime you need to be in oil, weapons or banking/insurance.
Thieves!

[K-W]

29. This is much bigger than the Bush administration,

although they certainly did thier part to speed it along.

[wicket]

30. this is getting very scary...

So glad I am nearly out of credit card debt, next week is my last payment! Then all the debt I have is student loan debt.

[Mr.Green93]

33. good for you

Getting out of the credit trap is hard to do.

[wicket]

35. very hard to do!

I was young and stupid college student when I racked up this debt, it's so easy to do and so hard to undue. I worry for my fellow Americans who are in so much debt :( :scared:

[Willy Lee]

31. You all have me freaked out

OK, I have been freakin' for the past 4 years, but every day it gets worse. If any of you have a good investment background I'd really like to talk about the best place to have a 401k right now.

[Mr.Green93]

36. bloat

[brokensymmetry]

48. About that 401K

Vanguard Precious Metals fund. No load. $10,000 minimum to start.

Seriously, I urge you to get the prospectus and look at the numbers.

[LauraT28]

49. Gold, Silver, Gold Stocks, Oil and petroleum, Alt. Energy.

GET OUT OF THE STOCK MARKET.

[ProfessorGAC]

32. Fellow Economist Here. Don't Share His Doom Scenario

It will get worse before it gets better, as all the levers that can be pulled to get the economy sound (fiscal and monetary) are in the hands of people who BELIEVE that the opposite is true.

Tax cuts won't help, but increases will. That won't happen.

Regulation to prevent further erosion of the manufacturing base will help stabilize the buying power of the middle class would help. That won't happen.

Tax incentives to increase hiring and provide health benefits that are sufficient to prevent erosion of buying power of the middle class will help. That won't happen.

Abandoning the privatization of Social Security scheme (which reduces consumer confidence in the promises the gov't has made) would help. That won't happen.

So, it will get worse before it gets better, for sure. But, i don't see any economic armageddon on the horizon. And, i will bet a paycheck that Roach doesn't have the data or the models to back up this prediction. Not that i don't respect him. I just don't believe he can make this assertion with any strong scientific merit. My guess tells me this is his instinct.
The Professor

[sangh0]

46. Professor, I have a question

If bush* isn't going to do the things that we need to do to get us back ont he right track, then what is your complaint about Roach's assertion? Is it the "armeggedon" adjective? Is your criticism about the extent of the damage, and if so, how bad do you see it becoming if things don't change in the next four years?

[natrat]

47. this would make sense BUT democracy may be dead here

and there may be no mechanism to put responsible leaders back in office. These idiots are headed so far toward extremism that rational policy may be a distant memory.

[soleft]

34. Why can't I think of the guys name, From the Wilderness, CopvCIA

He says one of the keys to survival in the near future is getting out of debt.

[Beam Me Up]

39. Michael Ruppert n/t

[robertpaulsen]

53. Here's the article I think you're referring to.

http://www.fromthewilderness.com/free/ww3/110504_snap_out.shtml

[alexisfree]

37. as they said on this article...

The avalanche is coming
William Rees-Mogg
It happened before; it might happen again. The dollar could pitch the world into financial catastrophe

ARE WE going to be drowned in an avalanche of cheap dollars? On Friday the dollar closed at €1.303, almost exactly the lowest level in the lifetime of the euro. Gold closed at $4.47 an ounce, the highest level in 16 years. How worried ought we to be about this exceptional weakness of the dollar? The reason for the weakness has been the continuing rise in the external deficit of the United States, now nearly 6 per cent of the US gross domestic product......more...

http://www.timesonline.co.uk/article/0,,1052-1369393,00.html

[knight_of_the_star]

52. Makes currency and commodities predictable

Going bearish on the dollar could never hurt, only help at this point. That and investing in gold while the dollar is still worth SOMETHING and can buy gold wouldn't be a bad idea, silver fluctuates too much to be safe in that regard.

If he things its bad now, wait until you factor in the possibility of OPEC ceasing to trade oil on the dollar because of the dollar dropping like a stone. It won't drop, it will do a free-fall face-first into the pavement.