Global Financial collapse
 

It's very hard to feel in any way confident about what is looming

The saying is "you get the politicians you deserve"............I want to vote in USA elections so I can choose the lesser of all evils. Past & current administrations have done little to avert this disaster...little wonder there are so many homegrown terrorists in the US

What was so pathetically obvious pre-sub prime collapse is now like a perpetual nightmare...you cannot keep borrowing to service debt. Finance 101 !!!!

Fingers crossed Australia survives reasonably well

It is ridiculous here in the states. The price of living is skyrocketing, home values are plummeting, jobs are disappearing, those with jobs are losing wages, public services are diminishing and our infrastructure is falling apart.
Im considering getting a place back in the woods, and changing to a minimalist lifestyle to make it easier to ride out the coming storm. The majority of the people in this country just want to earn a modest living and "get by". With the way current things are proceeding it won't be possible. When it gets to that point, things WILL change,

Hi ,in the UK we're linked to the rest of europe,which is falling apart quickly.The greeks have really fuggered things up.The Uk can't break away from 'em.We've had wars with the rest of europe within the last 200 years,we don't really get on (remember what the germans did 70 years back? ) & we have to support them. On another note,people have to spend to get the economy running again.Difficult when 1/2 the country's unemployed cause the banks /government cocked up :(

Southpark said it best "You either are voting for a Douche or a Turd Sandwich." Who else would spend millions upon millions to run for a job that pays 400K a year.

Jeff

or to service deficit. If I borrowed to service deficits in my spending I would never get out of debt.

Unfortunately I don't think many will be immune to these issues. While the US is the biggest piece of the pie it's not the only. People tend to lay blame on the US quite freely but EVERYONE has been a part of this.

The really interesting part to me is I believe that China is going to take the biggest hit themselves. No different than the banks financing bad debt except for the fact no one will be bailing China out.

The problem is in our country is the people need to stop paying attention to the partisan rhetoric on both sides and start using common sense. Finances are not anywhere near as complicated as people want to make them out to be. You also simply cannot have the government bigger than the private sector and it sustain itself. This goes for all spending types. Nothing should be off the table for spending cuts. Everything can be cut to some degree.

This will take sacrifice. However, a government cannot also talk taking more revenue (tax hikes) without first proving to it's customers (the citizens) that it can get it's spending under control. No business in the world can do this and keep it's customers and a government is no different.

Why will China take the biggest hit? I understand they are servicing a good portion of the world but they are a booming economy in themselves. Everyone has been watching and waiting for that bubble to pop but ......

They supply the world with the majority of its products.If the majority of the world doesnt have the money to buy said products, what will the Chinese sell?

You're right, the US can't take all the blame but with an economy 3 times larger than the next closest it plays a significant role in keeping things stable

China...yeah, once it's customers don't have any money to spend it's curtains for them

They could help a lot and start buying from themselves. China will prob come down one day, no idea when. I do know they are starting to experience some pretty severe inflation as a consequence of their currency manipulation schemes.There is an unnatural imbalance that can't last forever.
Also, the Chinese workers will only tolerate being the world's workshop for so long until they demand a fair share of the things they produce. Sounds like things are starting to happen, but prob a slower process than many would like. If they got some money and starting buying goods from abroad that would be great.

I don't like what is going on right now, and thankfully I took advtange to sell out most of my positions in the July rally here. Since 2009 I've been very heavy in stocks w/ good results, but now almost all cash trying to figure out what to do next.

I'm pretty disappointed in the leadership we have, such as it is. All the focus is on debt and everyone has forgotten about job creation. As if solving the former will somehow fix the ladder. No one has a coherent explanation of how that would work, and all historical examples and economic models which show how "expansionary austerity" falls flat on its face, but that seems the driving mentality now.

I'm trying to stay a bit more upbeat about the US. We have plenty of options to act, but simply political paralysis, mistrust and fear to do it. That can change.

Europe tho, esp the Eurozone, seems in for a world of hurt. Strangely, its a policy direction some on the hard right want us to follow, but I don't think they are really aware thats the implication they are making. Since our president doesn't ever actually take a firm position on anything, I have no idea what he is doing.

Correct
 

Its funny how our Gov can give financial advice to us and to other countries about how credit is not for us to abuse and yet it has survived using that very thing up to now, and there is no magic money ball that will pay for this idiocy.

China will not only lose huge revenues from the lack of sales, but the majority of the people already live below the poverty level and when those revenues fail a large part of its population will suffer deeply. 100million screaming hungry Chinamen.

Looking at the current situation in the USA and considering the options for recovering from the nearly 4 trillion $ in debt the country has to fail, before it can even begin to recover. Shrinking our military will be one of the biggest savings, and it will surely leave our country volnerable. Clinton already cut the military in half during his administration leaving us open for disaster. Now Obama will likely do the same and leave our boarders wide open for an invasion. That is exactly what Bin Ladin was trying to do through his terroism tactics. If you think about it, it is working just the way he planned by getting us involved in too many wars spending more money than the country could afford, and that is exactly what he was counting on.

The weakened laws of the USA have also allowed too many people to file for bankruptsy and suffer little consiquences for their sorry handling of their own finances. The Gov can not simply file for the same and survive. The people are no longer the deciding factor in all of this. We are prisoners of this Gov and its rediculous handling of the entire situation. These idiots in charge are only going to make things worse and steal all they can from the people to make sure they have a good foothold to weather the storm when the economy comes crashing down, so they think. This is going to get a whole lot worse, before there are any real signs of recovery. The people will not give up. Its just not our way, but the Gov will drive us into oblivian if something does not change soon.

Obama is not the driving force behind any of this. It is the greedy fat cats in the Congress & the Senate that are controlling all of this. Our populations around the world have grown to a point of self destruction through greed, and the need for more resources. We simply can not keep growing in large numbers while our planet stays the same size. In the next 50-100 years soucial security in the USA will become the least of our worries. Food is going to become so scarces and unafordable for the average person that we will all have to fight for what it will take for survival. Yes our Gov leaders are out of control, and we will all suffer for this.

You could do worse than speculating on the Australian dollar

This is the part that confuses me. The Chinese 'people' have never had it so good. Most of them wouldn't understand our perspective of a poverty line. I don't dissagree China will take a hit but I don't thinik they will take the biggest hit, I think they will be very resiliant.

It's all relative isn't it. Though the booming Chinese middle class will be the hardest hit & that's hundreds of millions of people

Standard and Poor's for the first time revised the US credit rating downwards to a AA+...that's a bigger issue than it first might seem

Nice. 90 times since 1939 have we raised the debt ceiling (which no other sensible country has) and the current bunch of yahoos just lost our AAA credit rating from S&P.

Britney Spears is a model for sanity and responsibility compared to some of the nutters we have in Congress.

I'm hoping to hell its not. Doesn't make me feel good about it, but one glimmer of hope was Japan in 2000. They had their credit rating downgraded, but borrowing rates actually fell slightly.

Little solace to the self-inflicted gunshot wound. Jesus...

yeah nice im in new zealand

must say its great value buying rc parts from hong kong at the moment with the nzd being at all time high to usd

our economy is still sucking it at the moment with the global and our earthquakes and our stupid government that sucks up to china

australia seemed to barely take a hit on the last global downturn and recovered really fast

Prolly right, but I don't play that game.

Kicking myself for not taking more out when I knew I should have. Frak. Hate to sell after such a downtrend, hoping for a glimmer of a bottom, but man... its looking dark right now.

Let's see what stupid stuff the Europeans come up with wrt Italy and Spain this weekend.

So......Who bought A123's stock when it was at $20 something lol.

Global Financial Collapse happened a long time ago, but lets play the "Now Moment" as a lot of people think this is something new. Let me explain the now moment as it's only for the people who likes the now and I personally know a few of them. They like to keep themselves occupied with the now BS that they call politics, banks, media, gadgets and so forth. They forget what happened a while back, because they are in the now moment. They think paper money and the folks printing it will last forever. They forgot the Gov. works for the people and not the other way around.

Crap, I like being called old school since in the eyes of the now moment folks, if I don't have one of those fancy new cell phones, they immediately think I don't know jack. The one thing they can't put their little fried brains on is how I can tell them what's going to happen before it does. I remember telling everyone that I know who owns or owned a home to sell almost a year before the mortgage crisis came and all of them said I didn't know what I was talking about, so guess who's laughing now. I also told them and a few here to buy gold and/or silver, but they didn't and when they saw prices go up I just had a smile on my face lol. That Ben guy who runs the Fed. Reserve thinks gold isn't money, I just hope they give the Germans their gold reserve when they ask for it.

But all I wanted to say is, I'll be following this thread :lol:.

Kinda surprised that didn't happen last time when they bundled up some of the lowdoc loans and sold them as securities to somewhere Europe.

I here fresh water is going to be the new gold :oh::yes:

Things tend to never be as bad as the doomsday and naysayer types make out. Life will change however and adjustments will be made. Humans have adapted for thousands of years, no reason that should change now.

The thing is, many of the same people pissing and moaning about the US right now are the same who pushed and assisted us getting into this mess in the first place. You can't be part of the cheer squad then act like you don't know what happened when things go bad then summarily attempt to wash your hands of the deal.

EVERYONE has to take responsibility.

Each individual does carry some amount of responsibility, and they will be put in jail under the right circumstance. Not so with big business and Govt.

Water is one the most precious life giving source that nature provides along with other things needed to support life. Money is the ruler of all evil (Some say religion is too, but lets stick with money) and has been that way since humans stopped trading goods. Could us so called intelligent nature destroying humans go back to the simple ways?

bottled water is already more expensive than petrol milk or coke where i am

Are you talking about China? lol

I'm actually thinking the bottom may be about near. Things suck, but this is not 2008.

What funny is this year has practically been a repeat of 2010. Big run up in spring, peak in April. Doldrums in the summer, late summer panic, and Sept 1 marked off a huge bull run thru Q1 of the next year. Honestly, quite a bit of my retirement investment strategy is going off of last year and so far the timing has been brilliant. I wish my short-term investments were going so good, but I think the limitations on selling (must hold 30 days) has worked but better for me, as I've been to early to buy and sell, so I keep missing most of the swings... anyway..

10 yr US treasuries also tanked in last Aug. I refi'ed my house then and the 10yr was 2.6% IIRC and everyone was freaking out about the double dip. As said, turned out to be the coming of a big bull.

The dow has come off a historically bad run. If we're breaking records now, I'm guessing the end is close. Who knows how the yr will play, depends on a lot of idiots with too much power, but looking for a reversal soon coming into Sept.

Our market is one of the first to open tomorrow, so it will be very interesting to see what happens. Predictions are fairly gloomy here...

That may well be coming but not yet. We need to wait for more population growth and for the desalination plants to kill off some oceans.

Them among others.

It's like the parent constantly feeding the spoiled teenager, then when all hell breaks lose, trying to act tough and wash their hands the whole deal.

China has many issues most of the world is unaware of. Labor rates being probably one of the biggest factors. They have a compounding labor rate issue and their attempts at controls of many market factors are backfiring. You simply can't control a capitalist economy with communist governance.

I think more bad news will come, although I don't quite see the doom and gloom some are predicting.

The problem now is that we have to fix the issues and quit pointing fingers. It's irrelevant at this point for the most part.

I think in the US we need to have a constitutional convention and we as the public address these issues which our elected officials can't get hold of.

First off I believe we need to impose term limits along with making some solid rules and definitions of job responsibilities and powers. For people from isolated communities to hold the amount of power they do in congress is insane. We also have to push more responsibility and power back to the state level. No one can fully understand a communities needs better than that community. Being centralized is causing many of our issues today.

One major issue I would like addressed would be to restrict people from running for office while holding an elected office. No company would allow an employee to publicly seek other/better employment all the while giving them a full paycheck and allowing the to work less. All that while using company money and equipment to do it. I think one 6 year term is plenty for a Senator or Representative. If you want to run for another office you either resign or wait until your term is over. No pension other than what you put to your 401k or similar and you pay your own healthcare. They get a base allowance for travel, staff, and expenses and that is it. No government jets period. These costs will automatically be raised by 3% per year and anything over and beyond has to go to a public vote. I would allow the president to run for a second term only with a 2/3rds vote from Congress then it goes to the public vote. This means the Congressional vote only allows him/her to run again, it doesn't elect them.

I would also force a balanced budget amendment. It would hold a provisional clause for borrowing under emergency circumstances only with limits as to percentage of the annual budget and terms of interest and payments. I would also propose that all Foreign aid be the last part of any annual budget and that it not exceed 1% of the total annual budget. I would limit jobless benefits to 6 months and welfare to 1 year. All recipients of government moneys would be required to submit to prescreening random drug screening. I would also cut defense spending as to eliminate the many redundancies and add a reserve provision were a certain percentage of the annual budget is put in case of extra spending for military operations outside the general protection of the US and it's interests. This fund could be accessed under the direction of the President but any operations over a certain amount and scope would require Congressional approval.

Obviously much more is needed but those are my starting points.

Expectations
 

My expectations would be that we finally vote in a president that has some serious business sense who can show a track record for increased profits, and low over head expenses. If we as a nation took a couple of years off from trying to save the rest of the world we would probably see a balanced budget, and "0" debt problems. Most of that $4trillion debt is due to providing aide and military might to other countries. Our foreign agendas used to be for improving benefits from helping these nations. These days I just do not see it. Sure we are helping to calm things down, but to what end? We are losing lives, money and face helping people who want us out of their territories. Will any of this happen? I doubt if we will see any changes that will make a difference before our economy crashes and we are no longer a number one or even a top five economy.

Jerry, the debt is not 4 trillion, it's 14.5 trillion and counting.

http://www.usdebtclock.org/

This time in 2008 it was around 10 trillion so we have seen a 4.5 trillion increase in three years. In 2000 the debt was almost 6 trillion.

It's estimated by the CBO that the debt will be almost 19 trillion by 2015 but if the current trends sustain it will be closer to 23 trillion.

The ASX (Aussie Stock Exchange) has dropped just over 2% in the first 90mins of trade this morning

I moved most of my riskier stocks a couple weeks ago - hopefully I did "OK" with it - I didn't go into "cash" investments, which I had though about.

Regarding our govt:
I'd like to see us completely get rid of an campaign financing and contributions. Every candidate gets XXX amount of travel money and advertising time (all media - including internet). We (tax payers) will provide that funding. Term limits - maybe. I'm not so certain that we'll really get better representation by forcing someone out - good or bad. In reality, elections are a form of limiting their terms - we just dont have enough candidates. Maybe even consider eliminating the parties. I dont know how much longer I can listen to their party line rhetoric - both sides are equally guility of this, and have been for ages.

For fixing finances - figure out how much is needed funding wise, then take an equal amount out of EVERY item that is funded by the govt, with an equivelent amount of tax increase to everyone (include in this tax breaks).

I thought we had elected someone with a better business sense than it has turned out. I'm no dem supporter by any means, but I had hope.

The U.S.A. wouldn't be in the mess it is now if the U.S. followed what the founding fathers laid out. If the U.S. really forgot its past or can't remember that far back all the U.S.A. needed to do is listen to Robert Henry Winborne Welch Jr. founder of the John Birch Society. Do a search in Youtube for Robert Welch's video and one might call him a prophet :lol:.

Talking investments, did any of you who followed the stock game thread buy gold or silver back then?

Edit: I hope later today when the stock market opens, it won't go down much more.

What I think we have here is a number of different but overlapping issues, and panic and confusion is setting in to how these play out. I think it will be important to regard easch of these as their own seperate issue with their own solutions and focus on those rather than to lump them all together and become subsumed with fear.

Biggest issues as I see them, and all coming into confluence right now:

1.) Short-term US deficits

2.) Medium to Long Term US debt
-Easy confused with the budget deficit, but they are not the same thing and shouldn't automatically be treated as such

3.) Eurozone structural problems and debt

4.) US economic growth and umemployment

5.) China, Trade balances, manufacturing base, etc IE "Other"


As far as relevance to the current crisis, I'd put them in the following order in terms of importance: 3, 4, 2, 1 and 5(somewhere in there)

The headline for the downgrade is catching, and the dysfunction of our govt is astounding, but the fact remains the US is the largest, most dynamic and most productive economy in the world. Even China's rise is not going to change that anytime soon.

We are still growing (albeit slowly) as of Q2'11. Contrast this with Q4'08 where GDP was -10%. In that time, businesses and individuals have been deleveraging and bringing down debt. Household debt is still high, and a major drag on growth (likely #1) and businesses are literally sitting on trillions in cash. They are far more lean and productive than they were 3 yrs ago.

The current deficit is large and needs to be properly managed, but I have not seen any credible economists who say this must be balanced right now. Econ theory, backed by many historical examples, shows this would be a terrible idea and likely exercise in futility. However, there needs to be some serious reconning to our priorities what debt is important to have, how it contributes to the growth of the econ, and what we are really willing to pay for. More debt will be needed to get us out of this fix, but th usefullness of it should be carefully weighed. Leads to issue #2.

The debt is large in $$, but its still not unmanageable and actually not that bad compared to the rest of the world. For reference, Japan's debt is 228% GDP, and Libya is the lowest at ~3% GDP. Also to note, the yeild on a 10 yr Japanese bond is 1% or less. Japan is also rated AA+.
This is not a call to massively increase the debt, but its important to keep some perspective about it before we start introducing suicidal financial policies (like we nearly did in almost defaulting on our debt.) How many times your yearly salary do you owe on your house?

Let's not be blinded by huge numbers and panic. Today's debt and deficits are a result of policy choices that have been in the making for decades. They are just now starting to finally blow up in our faces due to the downturn. We can try to just blame Obama and/or Bush all we want, but that keeps us from seeing the deeper and longer term problems. There is a pretty clear trendline we need to address, and just changing Presidents from a D to and R isn't going to change that.

http://www.economicshelp.org/blog/wp...USDebt-gdp.png

Partisans just want to point to the last few clicks of the graph and say the trouble is all just in there, or just a few points in further. I think the truth is the Great Recession was merely the tide finally moving out and exposing the raging shoals that we've ignored for too long. For thirty years we've been on a consistant mission to both massively increase military spending and big entitlement programs, meanwhile slashing taxes. I can't think anyone can be surprized by the results of this. SS, Medicare, the Pentagon and interest on debt are 70% of gov't spending. Tax revenues are at their lowest share of GDP since just after WW2. No one has said no to anything for far too long.
Everyone knows this cannot continue.

R's have to give in on tax increases and military spending. D's have to give in entitlement reforms. There is plenty of debate to what that should look like, but D's and R's cannot even admit all that must happen.

As far as the other stuff: Europe is really really important to the global econ right now, even tho I gave it the least amt of space. More so than the US. Our problems are mostly a lack of will imo, but the Eurozone has some deep seated problems that won't be easy to fix, and have even less of a will to do.

Badness all around, but this too shall pass.
I'm not a seller here, but I'm not buying either.

More bad news
 

Well it looks like the stock market world wide dropped in large amounts. The US stock market dropped another 400+ points after falling 500 points on Friday, and from what they shared on the world news this evening markets in Asia and Europe fell quite a bit as well. Kind of makes you wonder just how far things are going to fall before we see better days. The national debt is growing and speeding up, the gross national product is losing value, and we are about to see some serious layoffs in our Federal Gov as it tries to shrink its overall footprint to coninside with projected budget cuts and national down sizing. It seems to me that the only resolve to all of these problems is a historic depression. Kind of like re-booting your PC when it becomes overwhelmed with too much data transfer, too many processes, and fragmented data. I mean really are there still people out there who still think this is no big deal? I am sure that we will see state and federal employees cut to 4 days a week for a while to reduce payroll. Plus pay cuts accross the board for anyone receiving federal money of any kind. All of this along with increased taxes to increase revenues that will repay our debts. This is about to get pretty ugly.

The monthly number of people walking out on mortgages and leaving the bank holding the bag are astonding. I had a friend tell me that the new trend is for home owners upside down on their mortgages was to purchase a new larger home already reduced in value, along with acquring enough bank money to purchase a new car (paying cash), and then file bankruptcy on the upside down home or just walk away.

Carnage!
 

Dow down 5.6%, -634 pts on the close.

Markets are expressing thier fear of our S&P downgrade by... having 10 yr Treasuries drop to 2.33%!

The only time they were lower in modern history was in the very depths of Dec 08 when they fell to 2.0%. Gold shot to 1720/oz. Everyone is fleeing to safety.

If the sell-off continues, maybe we can get our debt funding down to free. :yes: How many more margin calls and fund redemptions are out there?

Some may say we should take advantage of those historically low rates, at very little yearly cost, to fund a real jobs program to put people to work, improve our old and crumbling infrastructure, get some money in worker's hands so they have something to spend and have something for businesses to sell and bother to have workers to produce. Let alone provide better transportation so workers can get to jobs faster and businesses can move goods to markets more quickly and cheaper and become more competitive.

Then again that's crazy talk. The Responsible People say its better to turtle up and hide until the bad stuff goes away. Not like we have any old bridges or anything else collapsing and in need of repair. Oh wait..

http://news.thomasnet.com/IMT/Minnea...Pressphoto.jpg

Or blown up by Mean Momma Nature:
http://www.connectmidmissouri.com/up...pect=nostretch
http://newshour.s3.amazonaws.com/pho...ge_feature.jpg

Else we could just sit on our hands, keep cutting and firing and laying off people in a continuous death spiral until everyone is so freaked out, pissed off, crazy and in despair that WW3 breaks out and we can start putting all that stockplied ammo to good use. Then we can borrow a ton of money from ourselves, put a bunch of the surviving people to work in factories and watch GDP skyrocket as we obliterate our enemies and enjoy our new found wealth after the nuclear ashes settle and peace breaks out in the blackened hellscape that would surely come.
I mean that's the more expensive and painful way out of it. I'd rather just build bridges, but kinda wonder if its not going to go one way or the other.

Damn, Asian markets are down 4% again on Tues. Blood is pouring in the streets

Hoping for stability today in prep for reversal. See what Ben says today

Everyone enjoying the fragile calm!?