Fantastic Article Showing Why We're Heading For A Giant 'L' (If we're lucky)

Discussion in 'Economics' started by ByLoSellHi, May 9, 2009.

  1. Fantastic article that points to an incredible tank in the U.S. economy, even from these levels.

    Save your money. Stay liquid and defensive. A shit storm will intensify the pain for a long, long time.

    The stimulus money is a cruel joke; it will hardly created jobs, and has simple led to to false hopes (85% of it went to unemployment insurance, health extension payments for those laid off, and other state and local programs of limited duration):

    In the first weeks of Mr. Obama’s tenure, he persuaded Congress to approve $787 billion worth of federal spending to stimulate the economy — $288 billion in tax cuts plus $499 billion to aid states and local governments.

    In crucial ways, this spending has already had an effect, say economists. It extended unemployment benefits and food stamps, while cutting by nearly two-thirds the amount that laid-off workers must pay to retain their health insurance.

    But whether it revives economic activity remains unknown. The tax cuts are only now being distributed. Only about $75 billion has been dedicated, mostly to public works projects like road-building.

    “The moment of truth is coming soon,” says Mr. Zandi. “If we don’t see something real in the data by June, then I get very nervous.”

    Be prepared to get very nervous, Mr. Zandi.
  2. ehsmama


    But Stock Market is Telling us that worst is OVER. Now A VERY Bright future awaits us All.
    Jesus has already been reborned in some maternity hospital in idoho. He will redeem your soul too.
  3. Jesus has already been reborned in some maternity hospital in idoho. He will redeem your soul too.

    Is this a joke. You do have to check on this forum a lot of people here are religious people who think it is the tribulation. Do you really believe this or are you joking.
  4. I hope he's kidding, because if he's serious he's ape crap crazy. Hell if he believes in Jesus to begin with he's crazy.
  5. Eric215


    I did a search on Google of "why Obama's stimulus plan will work" and I didn't get one page that had an opinion that stated Obama's plan would work. There was, however, page after page of people stating that Obama's plan will not work. These "experts" seem to imply that it would not just fail, but fail miserably. This seems a little strange to me. From what I understand Obama's plan is a classic liberal, "use government spending to jolt the economy back to life", economic plan. The other question I ask is, is Obama really that clueless that all these other people see his plan's inevitable failure except him? On most other topics he seems well thought out and he seems to way all sides for an answer before coming up with a solution. So no, I don't believe Obama is just that unaware to be the only one missing it. So since everyone now seems to believe the economy is going to get worse and Obama's plan is horrible, I am going to look at it like a trader, and take the contrarion view. Usually when everyone believes something is certain to happen, it doesn't happen. So that plus the fact that, no matter if you agree with his political views, Obama seems to be a reasonably intelligent guy. So take this prediction with a grain of salt since I am not an economics major, but I think his actions will work, maybe not perfectly, but work and help the economy and the US in the long run. I realize that this is a very simplistic analysis and that there are many who will disagree with me, but either way that's my two cents.
  6. your buy and hold strategy should work just fine, because even if the economic plan doesn't do sh*t to help the economy, inflation will push the markets higher
  7. I'm not sold on the inflation argument yet, as much of the money the fed gov't is 'printing' is being assigned as backstops and guarantees for bad loan debt, CDS guarantees and other backstops - and a lot of what's been labeled as 'stimulus' is not pouring into the real economy in a manner that is likely to inflate wages or increase consumption.

    However, if we do see inflation, history tells us that inflationary pressures crush equity markets, as inflation crushes corporate profits/margins, as businesses struggle to pass on their input costs to consumers, even when consumers are raging mad about what they perceive to be gouging. In other words, businesses struggle to pass on all inflationary input costs to their customers, and margins are compressed.
  8. Inflation is HERE:
    Stamp prices go from 42 cents to 44 on Monday
  9. that is true in regards to the initial stages of inflation, passed that, equity markets are one of the first to inflate
  10. that's only a 5% hike, check university tuitions, utility bills

    oh and I wonder what's going to happen when the minimum wage increase hits at the end of July, how's that going to be passed on to the consumer, or is that already priced in? ya right!
    #10     May 10, 2009