On the economy and the future

[nadinbrzezinski]

Ok, first off, let me say it first, I sure hope that I can and shall gladly eat humble pie...

Why?

A crash ain't healthy and those at the bottom and the middle will suffer, but the rich, they will be fine. So they will be able to buy one yacht instead of two...

Now many say why pay attention to the Stock Exchange?

First off, I'll make the case that today more people are invested in it than in 1929, 401K, individual investments, pensions, you mention it. Thankfully your Social Security is not in this circus.

Second off... the Stock Exchange is not what is crashing. What is crashing around us is the economy and the last place where confidence fitters IS the Stock Exchange

Just like 1929 the signs of an economy under stress are all around you

Real inflation rates of core goods (which incidentally are not tracked by the feds) are all around you. Things like oh Eggs, and milk, you know non essentials :sarcasm: One paper has a good comprehensive article on this two days ago... and I said, FINALLY somebody noticed, beyond us.

Oh and debt, both national and personal are at an all time hight, except 1929. The liquidity crisis was one of the causes of the '29 crash... and will be one of the major causes of this one. Yep, something about those who refuse to learn from history. Ok, let me put this liquidity in terms most can understand. Businesses rely on loans to run in the modern age. No loans for next quarter, no money to operate... no money... see where this is going? This is why this liquidity crunch has the talking heads spooked.

We don't have tariffs, granted, but our "free trade" has led to a similarly toxic situation.

Now speaking of talking heads... only yesterday we had an article talking of the first driven consumer recession in 17 years... doncha love the spin? Bush Senior was in charge and the right wing economic politics couldn't have a thing to do with THAT one.

They are also starting to tippy toe around terms such as ... crash ... panic ... recession ... bear market. All you need to know is... this ain't good...

On a personal note... I told my hubby, no more discretionary spending until we know where this is going... so they have a minor point, but I would gladly spend that money if we were not here, now wouldn't I?

Now as I said above, I hope I can eat the humble pie, a large slice in fact... but on the bright side, yes there is one... this is happening under Bush's watch... and believe it or not it is a good thing that this happens in the midst of his policies. After all a lot of birds are coming home to roost and metaphorically they are pooping on the Presnit... not the kind of poop he wants

So when your neighbor complaints that his life savings, worst case, went poof... remember blame it on the right person... Junior.

I wonder if that is why Turd Blossom left... after all a lot of turds are hitting the fan...

[nadinbrzezinski]

1. kick

[Warpy]

2. Want to know where depressions come from? Follow the DEBT

When wealth collects at the top and people at the bottom are encouraged to go into debt, watch out! The whole economy becomes unstable and prone to crash suddenly.

In the 20s, people were actively encouraged to buy up stocks on margin, often borrowing 96% of the stock's face value. The market started to slide months before the crash, and people took on more debt trying to preserve their stocks. When the crash came, they lost everything but the debt. Overnight, they stopped spending on anything but the bare minimum of food it took to keep them alive, the 2/3 of the economy that was the consumer economy just stopped, and that was the Depression.

This debt buildup has been going on a lot longer, and hasn't just been mortgaging oneself to the hilt, it's been credit card debt to keep up with the fictional Joneses. The problem is the same: wealth concentrated and hoarded at the top, uncollectable debt flooding through the bottom.

We are very close to a crisis right now as creditors are starting to get more nervous about how they're going to collect all that debt. The answer is that they can't, but they'll take everything trying to.

All we have to wait for now is the panic to start and the consumer market to shut down.

[nadinbrzezinski]

3. As I posted above

its coming...

And that is why I hope I can enjoy a large slice of humble pie

But I fear I won't enjoy that slice

And as you know it was encouraged by the same type of right wing policies

[Hidden Stillness]

4. Media is Not Even Telling This Story Correctly

I have no hope that the media will ever report things correctly, no matter how bad it all gets, since they are now strictly the mouthpiece of the privileged rich, unlike all previous eras. They do not gather facts and tell them; they are only there to advance the interests of an extremely small number of non-National, anti-social global investment associations, that can pack up and move, and change their alliances, any old time they want to, with no loyalty to whatever they left behind.

The media is not even telling the most basic facts of the current crisis correctly, and have no interest to. With all the news about bankruptcies, home foreclosures, and credit debt, with now even the credit industry threatened with record levels of non-repayment, the media is telling this as if it were "the housing market" that is "shaky," the "banking or credit industry" that is "shaky," etc. The problem is not the isolated "lull" of this or that "industry"--the problem is that the entire economy is collapsing and people--the National population itself--cannot pay their bills! The point is that this is what is happening to the people of the entire country--unable to live at any standard they had previous--a spreading recession at the least, and the meida is (deliberately) focused on the wrong thing! It is not "this or that market" that is suffering; it is the whole country that is sinking, in unpayable debt!

[nadinbrzezinski]

5. One correction

the media has been this bad before

And busines pages AFTER Black Monday started telling the truth

The same will happen here... once they realize they have nothing more to loose

That is why they starting to tippy toe around it

And this time, just like then, I fear it will be global

The consequences will be major as well

[nadinbrzezinski]

6. kick

[Help me help Earth]

7. This same thing happend on a lesser scale a few months ago.

The economy will be fine in the long term, and in the short term we can all buy cheap stocks and bankrupt real estate.

[nadinbrzezinski]

8. Reaching for the damn historian hat

I hate to disagree with you but what is going on is far more fundamental than what happened a
few months ago

We have a LIQUIDITY crisis... a few months ago we didn't

That is the first critical difference

I hate to point this out, but this is not what happened a few months ago

Oh and both indicess have either lost all their earnings for the year, or are very close

Perhaps by tomorrow

[Neshanic]

11. No, it will not. Housing will not recover fora LONG time. The correction cycle is approximately 20

years. Last time 1988.
Check it out.

[hfojvt]

9. well my 401K is in credit union CDs

but my KPers is in some sort of managed fund. Worse yet, the State of Kansas borrowed some money to invest in KPers, banking that the higher return from KPers would make it pay off.

Yeah, I retired last October, went to part time work. Didn't feel confident in saving money under this regime. But really with this big dive we are only at the same place where we started the year, the market has not lost significant ground, just given up its recent gains.

[nadinbrzezinski]

10. Agreed, so far no loss

10% is a correction

But, a lot more than this, like another 300 points, and we are in negative territory for the year

And S&P is already in negative territory

As I said, these are reflections of the real economy... and I am not too happy