The Economy
- This topic has 80 replies, 31 voices, and was last updated Mar 21, 2009 at 4:13 pm by
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I’m so reminded of the adage.
“Put two economist in a room, ask them to answer a question and you’ll get 4 different opinions” 🙂Like what you said Bob, but it’s number 5 that raises alot of questions. It will likely be 20 or 40 years before people can really weigh in on it.
5.
John
The disturbing part of the bailouts is the governments desire to take a controlling interest in various industries under the guise of public oversite. This is a fundamental change in the economic system that has served us well for 200 years.
Great statement.
New release from today.
BoC= Bank of Canada…..basically our “Fed”.
*******Thu, December 11, 2008
BoC warns of possible mass home foreclosures
By THE CANADIAN PRESS
OTTAWA – The Bank of Canada is warning of severe economic turmoil, including the risk of many Canadians losing their homes, if the financial-market crisis worsens.The central bank’s December financial systems review says the “most likely outcome” is for markets and credit conditions in Canada to gradually improve as extraordinary measures by central banks and governments take hold.
But that outcome is by no means certain, it warns, saying uncertainties remain about how long it will take for credit markets to return to normal.
And if global financial conditions deteriorate, the bank warns the repercussions for Canada could be serious, including a deep and prolonged recession, slow income growth and severe trouble for Canadians already carrying heavy debt loads.
“With household balance sheets under pressure from weak equity markets, softening house prices, slowing income growth, and record-high debt-to-income ratios, a severe economic downturn could result in a substantial increase in default rates on household debt,” the review states.
Canadian banks are among the best-capitalized in the world but would not emerge unscathed, the central bank’s analysis concludes.
Much as has happened in the United States, the document says household debt woes could be a channel of contagion spreading through the banking system and cause even greater tightening in the availability of credit.
Banks are somewhat insulated by mortgage insurance, but the Bank of Canada says a severe economic downturn would nonetheless put pressure on their capital ratios.
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should have kept mouth mouth shut ( or in this case my fingers) and not voiced my thoughts 🙂Tim, while mutual funds and MF managers do without a doubt impact the markets as does Johnny Q public. I don’t think they have the same kind of impact as “Hedge Funds” who are highly leveraged, where MFs arent. A few bucks in capital, controls alot of interest in the markets. (see above statement about Reg Cap). On any given day back when my books were in full swing I could buy/sell/short hundreds of millions of dollars worth of equity or futures. Leverage at its best (or worst depending on how you look at it ). really at the end of the day, were just a small player. meaning compared to other institutions our daily volumes are nothing, a drop in the ocean.
On the other hand in normal times that “fickleness” as people move in/out, buy/sell, long/short adds liquidity…a very good thing.
thats what credit markets worded another way are lacking right now. Theres little liquidty, atleast compared to yesterday.
John
The disturbing part of the bailouts is the governments desire to take a controlling interest in various industries under the guise of public oversite. This is a fundamental change in the economic system that has served us well for 200 years.What you call disturbing others refer to as security for a loan. Taking preferred stock is an attempt to insure that the taxpayer’s money will be recovered. Or would you be happier if the White House and Congress just gave the money away with no strings attached.
Zach- sorry I’m not sure – though if he was eaten I would remember the press- that was shot in my home Province. That one looks like a youngun – pretty small compared to the full grown big fellas.
Will
The disturbing part of the bailouts is the governments desire to take a controlling interest in various industries under the guise of public oversite.
Not neccessarily only that as a solution
I’m one of those “30’s who are pissed” and ….scared for the future of my kids.
3 kids, one income, good job, great education, wife who is a solid economist.This is a hard topic to discuss without throwing in a political twist. I personally have been working most of my waking hours because I know that one of the first budgets in many businesses to cut is marketing, advertising, and design. I do not know if my next job will be my last.
That being said. I am paid in full. No house payment, No car payment, No credit cards or school lones… With a years worth of backup in the bank to pay the bills we do have. Cut backs have only been with my time. No time for me because I am saving for the turn because I am scared to death if it gets worse.
I had a friend, who sells cars, tell me today that you can buy a 2008 Dodge truck and get a Dodge Neon instead of rebates. How unheard of is that.
Thought I would offer a different perspective on this topic. I know a lot of people my age, college kids, which are freaking out. It sucks right now for finding a job. Heck, I thought I was all set for when I graduate in May, but I just found out my contract may be revoked. The job I took was awesome and it looks like I may be out of luck. Nature of the beast I guess, but sucks when you bust your ass for so many years to put yourself in a position to get a great job and get your legs kicked out from under you. I personally am ticked off at the unions right now. Lot of people doesn’t realize what a big role they are playing in this, especially with the Big 3. This is what is affected my job right now. I personally thing that the bailouts are ridiculous from the point that almost all of these industries put themselves into the place that they are in, and it wasn’t something that was all of a sudden. This stuff starting happening over a decade ago for some, but it didn’t matter because they were making money and only cared about the short term.
-Mike
Its getting bad and I think it could get worse before it gets better. I went from July 4th to mid September working 4 day a week but at least I was working.
The Unions are going to take a hit and it will probably severely weaken them going forward. There is plenty of blame to go around though. My Senator and the former Mayor of Chattanooga Bob Corker is out front putting pressure the UAW. There needs to be pressure on all fronts to find a solution because the auto industry drives a huge segment of our economy.
We have a VW plant going in about 2 miles from my home and a Saturn plant in Springhill and Nissan Plant outside of Nashvlle. I think the only plant that is Union is Saturn and from what I hear it may be shut down. The pain needs to start at the top and trickle down but I doubt it will.If you have the opportunity, pick up a copy of the book, Atlas Shrugged, and force yourself to read it.
Enlightening.
If you have the opportunity, pick up a copy of the book, Atlas Shrugged, and force yourself to read it.
Enlightening.
Or you can wait until next year when the movie is due out.
This could possibly be the most depressing topic ever posted on this board. I think we need to have a smily face that is holding a gun to it’s head.
I blame the media for making this situation out to be more than it really is. They have caused fear in the minds of the people and fear causes people to think in an irrational manner and so what could have been only a scratch turns into a gaping wound.
Joel
John
This is a fundamental change in the economic system that has served us well for 200 years.
Well maybe that’s one good thing that could come out of all this.
Granted I’m really pretty worthless when you get me away from water so take this for what it’s worth, but it seems to me that this whole system is beyond screwed up. Some dudes get rich while others bust their ass for little to no reward, while at the same time a great deal of tax money is pissed away keeping convicted criminals comfortable in prisons where they basically lead the same worthless lives that they did on the streets. All the while adding to an absolutely unimaginable national debt.
Don’t question our national morals, however, since we provide aid (that must be financed in most cases cause we really don’t have any actual money anymore) to anyone from a struggling country to a third generation welfare family without even the slightest intention of ever working.
We don’t need to sit here and argue whether or not this system has worked over the past 200 years- I mean a bunch of lumber barons got rich by raping the nation’s original stands of timber, and more got rich by digging, drilling and dredging any mineral or fossil fuel they deemed useful, and most recently the trend has been to bulldoze whatever is in the way and put up more houses! All in the name of progress mind you- we’ve managed to elevate ourselves to a ridiculous standard of living. So great standard of living we have that many countries around the world despise us for it. And rightly so- if all the so politely named ‘developing’ countries were to achieve ‘progress’ as we have, and begin living as we do there would be a global colapse.
The way I see it the basis for the entire model is GREED, and if we keep expanding our society, eventually there won’t be enough sh*t for all the pigs. Politicians want to talk about returning to ‘normal growth,’ but we can’t go on growing at a steady rate forever- we live in a very finite world. Believe it or not I’m a pretty optimistic dude, but I do think that this economic stuff might be the beginning of something much more serious. We’ll see I guess.
Sorry for the rant, but this seemed like as good a place as any to blow off a little steam. I’ll stop before I get too much farther out there ;D
John none of us like or want to pay taxes! How would you fund things? National Sales Tax. Flat rate etc.
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