The Economy Part II

[Charlie]

Looking back on our economic history I'd say we can weather this market just like any other.

Maybe. The current generation of 20-30something "economists", day traders & speculators have proven to be pretty fucking stupid, as evidenced by the massive bubble markets and truly foolish market decisions in the past 10 years. Looking at businesses like Worldcom, Enron, Tyco and the like with their massive book-cooking & failures, and the massive failures in banks as of late, it makes a lot of the "growth" in this economy since the mid 90's look very suspect at best.

-Charlie

[nando]

bank failures are certainly not healthy but to think that it hasn't happened before would be silly. I still don't think we are even close to the early 80's, or early 90's where the fed had to take over 900+ financial institutions within a span of a couple years.

[Charlie]

I still don't think we are even close to the early 80's, or early 90's where the fed had to take over 900+ financial institutions within a span of a couple years.

I actually do, if you look at the numbers & current climate, this is looking a lot like 1990-1991.

-Charlie

[Charlie]

http://money.cnn.com/2008/09/07/news/companies/fannie_freddie/index.htm?postversion=2008090711

Mmhmm.

-Charlie

[rwh11385]

Maybe. The current generation of 20-30something "economists", day traders & speculators have proven to be pretty fucking stupid, as evidenced by the massive bubble markets and truly foolish market decisions in the past 10 years. Looking at businesses like Worldcom, Enron, Tyco and the like with their massive book-cooking & failures, and the massive failures in banks as of late, it makes a lot of the "growth" in this economy since the mid 90's look very suspect at best.

-Charlie

Well, the investment bankers are working 100 hours a week, cracked out on some stimulant and trying to make the most money to get that fat bonus at the end of the year to make it worthwhile.

Bubbles are the result of the rising price of commodities and other items and then the speculation of where it will end. More players trying to eat the same profit pie, all trying to predict where the prices go, but this era increase global demand has accelerated price growth and therefore more gains to be had. Hopefully we will know how China will affect prices vs. running around with our heads chopped off. When the dynamics of the market change, we don't know what is going to happen as well as before, hence the confusion and speculation. The world today is different than 20 years ago.

Look at how gas prices jumped in the last 12 months and then calmed down. It probably wasn't speculators work as much as the industry trying to figure out where it would end up. That's just economics.

[Money$hit]

Id love to get into an Inv't Bank or being an analyst. Rough work.

[BMWLA]

"Prepare for Armageddon in the New 3rd World"

[rwh11385]

Id love to get into an Inv't Bank or being an analyst. Rough work.

Who in the world would still want to be an investment banker?

It seems they were betting on borrowed money at a lot of firms... oops.

[2Big4a3Series]

I voted that the economy is worse (assuming that we are comparing it to this time last year and the last 3 to 4 preceeding years) but overall I gotta say that it's not really that bad. Or at least not as bad as the news anchors would have us believe.

Whenever I am having a hard time finding a parking space at the malls around here on weekends, I know that our economy is doing OK. They even pack out the parking lots at costco and sam's club 7 days a week so if the economy is doing REALLY bad, I don't see it.

[Money$hit]

Who in the world would still want to be an investment banker?

It seems they were betting on borrowed money at a lot of firms... oops.

And...?

Im not very risk adverse if you can tell. In fact, I bought some financial stocks on margin this morning, probably totalling about half of my net worth.

[Funkmasta]

And...?

Im not very risk adverse if you can tell. In fact, I bought some financial stocks on margin this morning, probably totalling about half of my net worth.

bold move.

[Hallen]

I voted that the economy is worse (assuming that we are comparing it to this time last year and the last 3 to 4 preceeding years) but overall I gotta say that it's not really that bad. Or at least not as bad as the news anchors would have us believe.

Whenever I am having a hard time finding a parking space at the malls around here on weekends, I know that our economy is doing OK. They even pack out the parking lots at costco and sam's club 7 days a week so if the economy is doing REALLY bad, I don't see it.

I think you are right for the most part. In this day of instant news and huge competition for your attention from all kinds of different sources, the big news organizations will do just about anything to catch your attention. Doom, gloom, disaster and mayhem is what they will hype. Next week it will be off to canvas more of Britney showing more of her poorly shaved snatch.

Not to say that this whole mortgage scam isn't bad... it is. Greed and stupidity overwhelm common sense, practicality and long term stability every time. It is the nature of the beast and it has only gotten worse.

My opinion is that with instant access to just about any market, be it stocks, commodities or the lotto, it makes everybody a investment banker. People and organizations play the markets like a roller coaster with all kinds of nifty systems with cool sounding nomenclature. It doesn't matter that it is just a game where you can win or lose big and the actual stability of the company behind the stock you are buying doesn't matter. It is all in where it will go in the next 24 hours. Most investors today who own stock couldn't tell you what most of the companies do let alone whether the stock is actually under or over valued. It is simply the ups and downs and timing that counts. Now, that is as it has been for a long time, but with computer trading and massive numbers of individuals messaging their 401k's, common sense just simply can't survive.

This mortgage thing was just the latest cool gizmo to make money. We average folks can't even understand how and what was being traded. It was all funny money and not based on reality. Thanks a lot guys. Thanks for making a hash out of everything.

However, when it comes to the economy, we vote with our dollars. That means that even though most of us really have no idea what went wrong, we still are responsible in a very real way. We all want those super high rates of return on our investments and we all want those super low rates on our loans. People go in with eyes closed and simply pick the thing that gives them the highest return in the shortest time without a thought that it is probably super high risk. House flippers and real estate investors happily jumped on that band waggon when they should have known better. Many of them made big profits, but it was all a shell game or a pyramid scam. Sooner or later, it was going to fall apart.

That's why I laugh when people complain that China (or Taiwan or not so long ago, Japan) makes everything. If you stop and think you will understand that it is because we are not willing to pay $10 for a pair of socks so we all go to Wallmart and buy nearly the same thing for $1. You just voted to move sock manufacturing to China. It is simple as that.

But, we will recover. The basics of the economy are sound. We still consume. We still make lots of stuff. It will be painful for a while, but things will bounce back. And then we will forget and something else stupid will happen in the financial sector even if the government closes this particular door, another one will be found.

[rwh11385]

And...?

Im not very risk adverse if you can tell. In fact, I bought some financial stocks on margin this morning, probably totalling about half of my net worth.

You'd fit in fine at these I banks.

Some investors probably saw them as advisors who tell other people what they should do with their money, not necessarily people who gamble the shareholders equity. Oh well.

I bought some as well. Seemed too cheap not to.

[netcsk]

You two are going to have a good day. With all the dumping into the banks yesterday, its going to recover a bit today. I'd just pull out at the end of the day :)

[2Big4a3Series]

That's why I laugh when people complain that China (or Taiwan or not so long ago, Japan) makes everything. If you stop and think you will understand that it is because we are not willing to pay $10 for a pair of socks so we all go to Wallmart and buy nearly the same thing for $1. You just voted to move sock manufacturing to China. It is simple as that.

+1

And to think that we get mad at THEM for taking our jobs from us. They didn't take our jobs, but we actually gave them away. It's terrible when a factory worker loses his job at the plant because the company decided to outsource the labor overseas but isn't America the LAND of OPPORTUNITY?

We break our arms patting ourselves on the back about how great it is to be an American and how we are the best nation in the world and how the US is strong, mighty, and powerful but we cry foul when we lose a job to someone overseas. I mean why is it that we aren't inventing and manufacturing NEW products that the rest of the world could buy from us? We certainly have the ability to do it.

If the state of our economy is going to change, we can't do it by encouraging people to buy Amercian goods when they can only afford Asian goods. We need to be the next world leader in things other than military might.