The Argentinian meltdown is infecting Brazil and Uruguay: http://cbs.marketwatch.com/tools/qu...30EA-FEDC-42D9-8A97-47A825481D6E}&siteid=mktw On top of everything, O'Neil is heading over there (after saying on TV that if the IMF does help them [Brazil], the funds would end up in Switzerland).
Don't want to be a chicken little... but things aren't all that rosy in other countries in LA either. Snipers opened fire at police, in Caracas, a few days ago when the public protest against a Supreme Court ruling turned ugly. Also the state-owned oil company hasn't shipped oil to Cuba as ordered by the President (who is a friend of Fidel). And finally for the really bizarre, it has been decreed illegal for businesses or the government to lay off anyone!! This is a desperate attempt at cutting the spiralling unemployment in the country. A pathetic and silly move by the wobbly Chavez regime.
We are at a critical point. It is essential that the market begins to recover soon. I have stopped selling the market even tho I know its a futile gesture.
didnt' I just see a story in the Journal about a US commitment to bail out Argentinia, or at least to back up the lenders? Deja Vu all over again.
freakin useless LA bums... (joking only ) that's what happens when a countries don't provide the rule of law..
My feeling is that we have not seen anything close to a bottom yet. Call me a permabear or whatever but I can't see a post bubble period ending this quickly. I see the markets giving back all of its gain from 1994, which in my opinion is where the feds went wrong. They pumped too much liquidity into the markets which inevitably caused the market bubble, much like what happen in the late 1920's. I can't say what will take us down that low just that it probably will. There are tons of reasons why we may get there but what sticks out most in my mind is the fact that the average consumer has been using up their credit like there is no tomorrow and sooner or later is will catch up to them. Add in the fact that unemployment is bound to go higher and you have the elements for disaster. Other posters have been mentioning the oversees markets which, imo only adds to the troubles. We have gone through the longest economic expansion period ever and all we have to show for it is record debt, and record deficit. Can anyone tell me what's going to happen through an economic contraction cycle? That's what I thought. Just some of my thoughts on the matter. T4M
The only thing holding this economy up is spending due to mortgage credit IMO. When the stock and job markets went to hell people scurried to find a source of credit to support the lifestyles they had become accustomed to. Those loans have to be repaid and now the economy is starting to stall for the second time, no new jobs, techs and telecoms have been gapping down left and right. I think we're in for it. As for South America, I think they're in the same boat but they just don't have the reserves to fall back on that we do. My understanding(may be wrong) is that they operate a lot thinner down there (are less capitalized and have more debt) and spend a lot on social programs, government employees and entitlement programs (jobs, welfare, programs cut, hence the riots) so their foundation is not as durable as ours, so the effects of the economic downturn are manifesting themselves sooner. They can't "hold through the wiggles". When things get tough the high debt, high margined, high expense (read "weak") economies are the first to tumble. The same goes for individuals. The best way to weather an economic storm is is to have no debt, no margin(risk), and low expenses. Just thought of something in regards to the "have no debt" part. If it's good to have no debt it makes sense that it would be even better to be a lender at this time if your loans were HEAVILY secured by real property. When the defaults started pouring in you would end up owning all the real stuff. Maybe that's why the banks have been so agressivly pushing home refinancing.
Lots of young couples are way over their heads with debt secured because of the new housing boom. Lenders ahev made it easy to do so. There is no problem with heavy debt if you can pay it. The quesion is, how high will unemployment go? As markets do, will unemploment overshoot the historical average as it has 'undershot' it in the decade? Could we see 10-12% unemployment. Will there be virtually no buyers for the sellers? Will the housing bubble burst when continuing layoffs force people to firesale their homes, thus creating a market glut, again with no buyers, driving real estate prices down. Personal BK is big and getting bigger. Will banks carrying their own paper be crushed in the wake of massive defaults?
My girlfriend has started to refer to me as Mr. Doomsday. I tell all my friends to wait a few years before they buy a house; they ignore me. I warn everyone the economy is on very shaky ground, but no one listens. I know most of my posts here are negative, but I can't help it. I feel like the whole world is blind but me (does anyone else feel like this?). Rarely have I felt as sure about anything as I am of the future. We have a lot of problems, hell that's an understatement, we have a lot of catastrophes, and they aren't going to be fixed with a few happy words from Greenspan, W or anyone else. I fear the day the public sees the future like I do (it's going to be ugly).