Recession Deniers?

[themusicteacher]

My father-in-law, who is a very intelligent, well-read lawyer with a degree in economics (though from the 70's), success in the market and owns and operates his own practice quite well. He does not believe we are in a recession at all or at least believes that the economic gloom-and-doom so oft reported is highly exaggerated. He laughs when the prez or anyone else claims that the economy is as bad as it's ever been since the Great Depression. Not surprisingly, he is a real Repub (not one of those social conservative whack-jobs but a dyed-in-the-wool big-R Republican) even leaning towards libertarian (though he would never admit that).

My questions are:

1. In light of the cold, hard numbers on job losses, collapsing banks, etc, how can someone so smart and usually economically savvy deny that we are in a recession?

2. Could he be right? If so, how?

I, personally don't know much about economics but I am worried that when I finish my master's degree this spring and go job-hunting, I will not be greeted by my FIL's version of reality. We do live in a state (New Mexico) that hasn't been hit particularly hard (yet) so that sould have a buffering effect. My FIL is notorious for smugly relegating what is happening in the wider world "irrelevant" to his life and writing it off as much ado about nothing, liberal nonsense, east-coast bias and whatnot.

Any thoughts about this would be helpful as would any additional conjecture about when you believe the economy may right itself (latest projections have been revised to early 2010). Thanks

[The Don]

I think it's all a matter of perspective. If there is a 3% fall in GDP, some people will experience a significant fall in income, some negligible, some significant.

In my case, the rate I can charge for my services has fallen by around 15% but the result of this is that instead of making a very comfortable surplus, my business is making a surplus. The impact on the Don household could be nil (though in fact we've chosen to take less money from the business, save more of what we take out and reduce consumption) so the recession doesn't exist for us - or most (if not all) of our friends who are all in paid employment.

There is a tendency towards exaggeration of the issue in the media and by politicians they need a story after all. Then again we could all be going to hell in a handcart and this is just the start

[Francesca R]

Either you think the national statistics are falsified or you need a definition of "not in recession" that would apply all the time.

In 2008 Q4 the annualised rates of contraction in overall economic output were -3.8% (US), -5.9% (UK), [dunno yet but bad] (Euro and Japan), and industrial production in December was down on the previous December by -7.8% (US), -6.9% (UK, Nov), -7.7% (Euro, Nov), -20.6% (Japan). Unemployment is sharply up in all these areas. And equity markets are between -35% and -50% lower than the end of 2007 (in local currency)

That doesn't mean everybody is doing badly. But then some businesses go broke in a boom too.

[drkitten]

I think it's all a matter of perspective. If there is a 3% fall in GDP, some people will experience a significant fall in income, some negligible, some significant.

I also think that a lot of people think "recession" means they suffer, for whatever reason.

There is a technical definition for recession (two successive quarters of negative GNP growth) which the USA has clearly met. Of course, this technical definition can only be identified in hindsight, and we may already be out of the recession right now (although I doubt that, but we will need to wait for the numbers for the next quarter to know).

And a lot of the economic "pain" for the general public continues after the recession has technically ended. Unemployment, for example, is a lagging indicator -- most companies are slow to fire and equally slow to fire, -- even if business picked up last month, you may not want to restaff yet just in case it turns out to be a dead-cat bounce -- so people will still be out of work and out of money for quite some time after the recession ends.

And some people actually do better in recessions. Recession is harvest time for the bankruptcy lawyers, payday lenders, and pawnbrokers.


But I think the following statement kind of misses the point:

The impact on the Don household could be nil (though in fact we've chosen to take less money from the business, save more of what we take out and reduce consumption) so the recession doesn't exist for us

Is there not an epidemic if you're not sick?

Is there not an unseasonable cold snap if you personally happen to like cold weather?

[themusicteacher]

Yeah, I think too many people, my FIL included, tend to have that Homer Simpson attitude of "It's funny 'cause it's not happening to me!" Overpersonalizing seems to be a hallmark of conservative thought.

[Free Thinkr]

I've been saying this recession is coming since summer of '07. At every stage along the way, there have been deniers. Back in August of '07, the DOW dropped something like 400 points in a day; I remember well the thread on another forum regarding that drop, and all the people who said what a great time it was to buy stocks due to the drop (the DOW as at 12,845 at the time). All through '08, as the evidence mounted, the deniers pointed to the fact that there hadn't yet been two consecutive quarters of contraction, as if it wasn't obvious that there would be, in retrospect.

As time has progressed, the ranks of the recession deniers have thinned considerably, but there's still a little room to pretend that it's all media hype, and this will just be a minor bump in the road. By fall of this year, the evidence should be clear to all, I think.

[theprestige]

Why not ask your father-in-law what his reasoning is? I mean, he's intelligent, successful, and has some education on the subject matter.

[Free Thinkr]

Why not ask your father-in-law what his reasoning is? I mean, he's intelligent, successful, and has some education on the subject matter.
I got $10 on "the liberal media" being mentioned.

[The Central Scrutinizer]

I've been saying this recession is coming since summer of '07.

Wow, if only we had listened to you. :rolleyes:

At every stage along the way, there have been deniers. Back in August of '07, the DOW dropped something like 400 points in a day;

The DOW <> The Economy

I remember well the thread on another forum regarding that drop, and all the people who said what a great time it was to buy stocks due to the drop (the DOW as at 12,845 at the time).

It's always a great time to buy stocks. The DOW has nothing to do with it.

[themusicteacher]

I got $10 on "the liberal media" being mentioned.

I can't take that bet since the odds are very much in your favor.

I don't really like talking to him about it because he can be very condescending. He assumes that everyone knows what he knows and if you don't you're a moron. He usually follows up his ideological statements with a snort and a laugh that says, "Wow, you're an idiot if you believe anything other than what I purport to be fact." I love the guy in general but he is NEVER wrong about stuff like this.

Don't get me wrong, he's lost about $100K (likely about 5-10% of his portfolio) in this mess but he just doesn't see it being as big a problem as it's being made out to be.

[Free Thinkr]

Wow, if only we had listened to you. :rolleyes:
Yep. People who listened to me sold when the DOW was in the high 13's. Those who didn't took a beating.

The DOW <> The EconomyNever said it does. The point was that the DOW dropped because, by that time, it was evident a crisis was on the horizon. But fools denied this fact, saying that the DOW was set to rally. Oh, and self-interested people who peddle stocks.

It's always a great time to buy stocks. The DOW has nothing to do with it.No, it's a bad time to buy stocks when they're losing value.

[dudalb]

There is an old joke that it is a recession when your neighbor loses his job, but a depression when you lose yours.

[macdoc]

Oh it's been a recession since the last quarter of 2007 - not sure what planet the OP relative is dwelling on. :rolleyes:

Run this by him

http://articles.moneycentral.msn.com/Investing/SuperModels/too-late-to-avoid-a-depression.aspx

The real question is technical depression.....

Do recall that a technical depression as Japan went through in the 90s is far different than the Great Depression of the 30s.

I'm firmly of the opinion that more value for less money is an inherent part of modern economies and anyone thinking otherwise is in for a major surprise as we have seen.

Dropping back to a mid 90s GDP is a huge contraction by classical economic standards but I maintain the post 2000 growth was never real in the first place. All shadow nonsense.

If the metrics are artificial so was the boom and the bust.

I suspect real economic activity tracked wages all through the last 8 years - basically no growth at all in real terms while the fake economy tracked the M3 money supply.

Contraction is very real but how much is the bubble ( perhaps $5-10 Trillion ) and how much the real economy is tough to sort out.

[ServiceSoon]

I think everybody who compares today’s unemployment environment to that of the great depression is out of touch with reality. Now we have unemployment benefits in place which should negate a lot of the negatives surrounding a depression.

[drkitten]

I've been saying this recession is coming since summer of '07.

Yes, yes, we're all very impressed.

Yet more proof that even a stopped clock can be right twice a day.

[The Central Scrutinizer]

Attack the arguement, not the arguer.

[drkitten]

No, it's a bad time to buy stocks when they're losing value.

If you can't distinguish between buying "stocks" and buying a specific stock, then you shouldn't be investing.

And if you think the Dow measures anything other than how well thirty specific stocks are doing, you shouldn't be following the Dow.

[macdoc]

Also a very different demographic - many in the 1930s were young withfew built up resources.

Now it's very different. Small families and there is enough housing to go around for a few years forward.

Not a lot of material wealth has destructed - just ephemeral dreams of fools. :eusa_boohoo:

[Free Thinkr]

Yes, yes, we're all very impressed.
I didn't say that to impress; the point is, there's a lot of people who simply deny the economy will ever go into recession. I know it, because I've been of the opinion it would for a long time, and dealt with such people.

Yet more proof that even a stopped clock can be right twice a day.
Rule 12 violation.

If you can't distinguish between buying "stocks" and buying a specific stock, then you shouldn't be investing.
Sigh.

And if you think the Dow measures anything other than how well thirty specific stocks are doing, you shouldn't be following the Dow.
Much like a survey only measures the opinions of 5,000 random people. :rolleyes:

Seriously, don't be daft. Anyone can look at the DOW chart and see how it's a loose indicator of the state of the economy through history.

[Free Thinkr]

Could you change your name to Clueless Clarence?
Could you come up with a more retarded thing to say? Out of all the forums I've ever posted on, you are the most shameless post-count whore I've come across. You know, if you don't have anything worthwhile to say, you don't actually have to post.

[drkitten]

I
Seriously, don't be daft. Anyone can look at the DOW chart and see how it's a loose indicator of the state of the economy through history.

"Seriously, don't be daft." Scrutinizer pointed out, quite correctly, that there are always good investments available in the stock market. It's always a great time to buy stocks; simply buy the stocks that are doing well and selling at reasonable prices.

And even buying a stock that's doing badly and losing money right now is often a brilliant investment if your time horizon is long enough. Caterpillar (CAT) is currently selling at about 30, nearly 2/3 off its two-year high. What better time to buy than at a buy-one-get-two-free sale? Are you seriously worried that people are going to stop needing construction equipment? Even if it goes down another 10%, use dollar cost averaging to ride through the trough and see what happens on the other side.

[The Central Scrutinizer]

"Seriously, don't be daft." Scrutinizer pointed out, quite correctly, that there are always good investments available in the stock market. It's always a great time to buy stocks; simply buy the stocks that are doing well and selling at reasonable prices.

And even buying a stock that's doing badly and losing money right now is often a brilliant investment if your time horizon is long enough. Caterpillar (CAT) is currently selling at about 30, nearly 2/3 off its two-year high. What better time to buy than at a buy-one-get-two-free sale? Are you seriously worried that people are going to stop needing construction equipment? Even if it goes down another 10%, use dollar cost averaging to ride through the trough and see what happens on the other side.

I get the feeling that Free "Thinker" is one of those people that pours money into stocks when the DJIA is at 12,000 and times are great, then sells it all when it drops to 7000, and times are bad. Then starts buying again when we recover, and the DJIA is back at 12,000.

[Free Thinkr]

"Seriously, don't be daft." Scrutinizer pointed out, quite correctly, that there are always good investments available in the stock market.
No, that's not what he said. You're reading into what he said things which weren't there. He said "It's always a great time to buy stocks." Generally, that's not true. You're being silly by saying "well, in some cases it is." Of course. But most investors aren't experts in such matter, and thus it's a bad time to get into the stock market (and much worse yet in the time period I was discussing).

It's always a great time to buy stocks; simply buy the stocks that are doing well and selling at reasonable prices.
LOL. Well, we'll just use that crystal ball to know which ones will be doing well in the future. You make it sound much easier than it is. The fact is, most people diversify, so general trends will determine whether they win or lose. When the general trend is downward, to people who aren't being daft, it's a bad time to buy stocks.

And even buying a stock that's doing badly and losing money right now is often a brilliant investment if your time horizon is long enough. Caterpillar (CAT) is currently selling at about 30, nearly 2/3 off its two-year high. What better time to buy than at a buy-one-get-two-free sale? Are you seriously worried that people are going to stop needing construction equipment? Even if it goes down another 10%, use dollar cost averaging to ride through the trough and see what happens on the other side.
But if Caterpillar continues to go down, buying at the low would still be better. If Caterpillar ends up going bankrupt, it's a bad time to buy Caterpillar stock.

[Free Thinkr]

I get the feeling that Free "Thinker" is one of those people that pours money into stocks when the DJIA is at 12,000 and times are great, then sells it all when it drops to 7000, and times are bad. Then starts buying again when we recover, and the DJIA is back at 12,000.
Why would you think that, when I explicitly said I was telling people to sell after the initial large drop?

I get the feeling you were one of those people who, when the DOW was at 13,800, was telling everyone what a great time it was to buy.

[fuelair]

My father-in-law, who is a very intelligent, well-read lawyer with a degree in economics (though from the 70's), success in the market and owns and operates his own practice quite well. He does not believe we are in a recession at all or at least believes that the economic gloom-and-doom so oft reported is highly exaggerated. He laughs when the prez or anyone else claims that the economy is as bad as it's ever been since the Great Depression. Not surprisingly, he is a real Repub (not one of those social conservative whack-jobs but a dyed-in-the-wool big-R Republican) even leaning towards libertarian (though he would never admit that).

My questions are:

1. In light of the cold, hard numbers on job losses, collapsing banks, etc, how can someone so smart and usually economically savvy deny that we are in a recession?

2. Could he be right? If so, how?

I, personally don't know much about economics but I am worried that when I finish my master's degree this spring and go job-hunting, I will not be greeted by my FIL's version of reality. We do live in a state (New Mexico) that hasn't been hit particularly hard (yet) so that sould have a buffering effect. My FIL is notorious for smugly relegating what is happening in the wider world "irrelevant" to his life and writing it off as much ado about nothing, liberal nonsense, east-coast bias and whatnot.

Any thoughts about this would be helpful as would any additional conjecture about when you believe the economy may right itself (latest projections have been revised to early 2010). Thanks
At the very least, YOU LIVE IN NEW MEXICO!!!! Love the place, love the food, love the scenery - and, in June '07 even loved the wee ice/snowstorm coming down the mountain (Colorado to Santa Fe) though very surprised even locals were pulling off the road.

[dudalb]

Hate to point it out, but a number of economists were predictating a slow down and possible recession in the Summer of 2007.

[The Central Scrutinizer]

No, that's not what he said. You're reading into what he said things which weren't there. He said "It's always a great time to buy stocks." Generally, that's not true. You're being silly by saying "well, in some cases it is." Of course. But most investors aren't experts in such matter, and thus it's a bad time to get into the stock market (and much worse yet in the time period I was discussing).


LOL. Well, we'll just use that crystal ball to know which ones will be doing well in the future. You make it sound much easier than it is. The fact is, most people diversify, so general trends will determine whether they win or lose. When the general trend is downward, to people who aren't being daft, it's a bad time to buy stocks.


But if Caterpillar continues to go down, buying at the low would still be better. If Caterpillar ends up going bankrupt, it's a bad time to buy Caterpillar stock.

You really, truly don't know what you are talking about, do you?

[Free Thinkr]

You really, truly don't know what you are talking about, do you?
You really, truly, are incapable of making any point whatever, aren't you?

If you have a point, out with it. Following me around from thread to thread and telling me I don't know what I'm talking about is not only unproductive: it's against forum rules (you see, someone reported one of my posts, and I was thus reminded of rule 12; it was a nice reminder, as it's easy to get so caught up in these discussions that you tend to forget the rules).

So, that in mind, be a gentleman, and please attempt some sort of argument.

[Francesca R]

there's a lot of people who simply deny the economy will ever go into recession. I know it, because I've been of the opinion it would for a long time.Have you been forecasting a recession since 1992? Or earlier?

(You know--one of those "growth deniers")

[a_unique_person]

Even if it goes down another 10%, use dollar cost averaging to ride through the trough and see what happens on the other side.

You believe in dollar cost averaging? :eek:

[Old Bob]

Nothing happens by accident, here in Australia our big mines are slowing and closing because China has lost its markets and doesn't want our raw product. Our housing market is nearly stopped, The building industry is a major employer as we have run on expansion. Now the knock on effect is just starting and some are preparing for total break down. Some are hording gold, silver and fuel,I'm tipping the next strife will come from insurance firms going broke. Who would trade with out cover? That problem is bigger than Ben Hur.

[Smackety]

Why would you think that, when I explicitly said I was telling people to sell after the initial large drop?

I get the feeling you were one of those people who, when the DOW was at 13,800, was telling everyone what a great time it was to buy.

Is it a great time to buy now?

[KoihimeNakamura]

I dunno. If you have money you don't really need and want to take a chance, you could always invest now and wait 10 years...

[Smackety]

I dunno. If you have money you don't really need and want to take a chance, you could always invest now and wait 10 years...

Maybe in the auto industry?

[Francesca R]

You believe in dollar cost averaging? :eek:You don't? So if something you value goes down in price what do you do? Panic-sell it? If so you must have a terrible time of it in the sales.

[Free Thinkr]

Have you been forecasting a recession since 1992? Or earlier?
No. Summer '07. I read Fred Harrison's Boom Bust and felt his analysis of the situation was more or less correct, and that his prediction of a major recession starting in 2008 and running through 2010 would likely come to pass. So far, it's played out exactly as he said it would.

(You know--one of those "growth deniers")
No, I'm all for growth. The sad fact is, however, that much of the "growth" we've experienced over the last decade in change has been nothing more than an asset bubble. Now we're stuck with the massive debts accrued during that run-up, but we don't have the ability to pay for them.

[Free Thinkr]

Is it a great time to buy now?
I don't think so. The market seems to have settled somewhat around a temporary bottom awaiting government action, but once it becomes clear that the stimulus won't work, that will get priced in, and the general level will probably fall. Even if it doesn't, it's doubtful you'll see any considerable rise for a while, so you might as well wait it out.

[Z]

I think now's a great time to buy - conditionally.

First, you have to be able to go at least 5 years to see a return of any significance, in certain industries. I don't think it's hit bottom yet, but by five years, we should see new growth.

Second, you have to be able to predict the companies that aren't going to wash out in the next two years. Normally, I'd say stick with big names and old companies; but the fact is, that's no guarantee right now. Now is a good time to examine the companies' business plans, and see who is leaning toward stable market necessities and limited risk spending, and who is banking it all on innovative but chancy strategies that, if they fail, could shut them down.

Caterpiller, for example, IIRC, is sticking to product lines and quantities that they KNOW will sell. GM, on the other hand, is in a small crisis, and is torn between sticking to their usual gas-guzzling monsters and retooling to produce more economy-friendly machines. In their case, either way, they could be in trouble. AM General, I think, has decided to stick to their usual products, but in more limited quantities - so they're not trying a risky new product, but they are still hoping that the fuel situation levels off or improves.

The point is, learn your facts, and invest with your eyes open; just popping open a newspaper and pointing is never a good idea.

--------------------

As to the recession, I'm down in the bottom edges of the thing. I work at a convenience store in a very small community, so I see and hear, every day, the unemployed and recently homeless, and hear their many complaints. Jobs have dried up and vanished, taxes have risen sharply, there is no new construction (most of our remaining local industry, after all the plants have moved away or closed, was in new home construction)... it's a real enough recession.

Yet here they are, every day, throngs of people in Wal-Mart, in Ingles, at the convenience stores... It's not basic necessities they're after, either. Krispy Kremes, cigarettes, Mountain Dew (No, really, it's not a basic necessity), lottery tickets, consumer electronics, new movies, designer clothes, cheap Korean-assembled plastic children's toys...

Where does all this income come from to be disposed of so lightly, if we're in such a recession?

Then there's the fast food franchises. Oh, they claim to have slowed down a bit since '07, but every time I think to stop in at McD's and get a fish sandwich, the line is backed up to the road. There's never enough open seating at Taco Bell, either. Now, Sonic, BK, Subway, and KFC are usually pretty clear - though the KFC ought to be shut down, as often as people get food poisoning there. Sonic and BK are off the beaten path a bit, and the Subway is one of those convenience store kiosks with, like, four tables open.

Still...

It's kind of like the gas crisis a few weeks ago. Everyone was sweating things when gas almost hit $5 a gallon, but the traffic didn't thin out that much, and we still serviced plenty of SUVs and large vehicles.

So while I'm positive it's a recession - maybe even a depression - things are a lot different now, and I think we can survive even an Average Depression (maybe not another Great Depression) a lot more comfortably these days.

Whether our government survives it is another story....

[Merko]

I find the psychological aspect of this curious as well. You find lots of people who claim that 'nobody' could see this coming. That's not the way I remember it. I'm pretty sure that anybody with the slightest clue knew that there was a huge housing bubble and that it was just a matter of time before it would implode. Same thing about the IT bubble; afterwards everybody claimed that they couldn't see it coming.

Are these people lying, or do they honestly believe that they could not see it coming and that they had not read all those articles that explained why, for very fundamental reasons, a crash was inevitable?

The thing with these bubbles is of course that even if most people know it's a bubble, they can still gain personally, in the short run at least, from pretending that there is no bubble. After all, nobody can predict exactly when the bubble will burst (if that was possible, there'd be no bubble). So it becomes a chicken race, everybody keeps on doing investments that most of them know are insane, but which still seem likely to be profitable for the next couple of months. Probably it's necessary to keep expanding the pool of investors with people who truly don't understand that it's a bubble, and when that inflow is exhausted, the bubble finally bursts.

These 'truly unknowing' people would be your retired grandmothers being convinced to invest their pensions by some desperate and unscrupulous agent, or, in the housing bubble, the uneducated people with little or no income who were given huge loans with no security.

But in my mind, there is no doubt that the vast majority knew very well. They are just denying it because it is socially convenient to deny that you were willingly partaking in a scheme to enrich yourself by engaging in economic transactions that you knew were going to be ruinous to the overall economy.

[a_unique_person]

You don't? So if something you value goes down in price what do you do? Panic-sell it? If so you must have a terrible time of it in the sales.

If you buy something and it goes down, it goes down. Buying more at a lower price doesn't make that loss less than it already is. You buy or sell shares because you think they are worth it, not because you bought some and they went down in value.

[Smackety]

I don't think so. The market seems to have settled somewhat around a temporary bottom awaiting government action, but once it becomes clear that the stimulus won't work, that will get priced in, and the general level will probably fall. Even if it doesn't, it's doubtful you'll see any considerable rise for a while, so you might as well wait it out.

Shouldn't I pump money in while it is cheap? Where else should I be keeping money while I wait?

[Free Thinkr]

Shouldn't I pump money in while it is cheap?
Cheap's a relative term.

Where else should I be keeping money while I wait?
Good question. Where not to invest is an easier answer than where to invest.

[macdoc]

http://www.logoblog.org/images/apple-logo-aqua.png
http://ezinearticles.com/?Buy-Apple-Right-Now&id=1881867

or

Canadian Chartered banks in 4 different currencies as a hedge. :thumbsup:

Our banks stayed out the nonsense by and large and the structure is considered the soundest in the world.

http://www.financialpost.com/news/story.html?id=870688

[CORed]

I saying I heard somewhere: When other people lose their jobs, it's a recesssion. When you lose your'e job, it's a depression.

[drkitten]

You believe in dollar cost averaging? :eek:

Absolutely. It makes for a nightmare at tax time, but it also saves me the trouble of trying to catch the falling knife at the very bottom.

Which I can't do. That would bother me more if you could do it, either.

[themusicteacher]

He may believe that we're, technically, in a recession but he thinks it's just hype when it's referred to as "As bad as we've seen since the 30's." I don't think those claims are exactly wrong since, numbers-wise, there hasn't really been anything near as bad as the Depression but this tops the other recessions. Personally, I think there is so much underreporting of unemployment and underemployment that this recession looks better than it actually is. I could be wrong but it seems like it's easier to hide the suffering than it was in the 1930's.

[zaphod2016]

Could you come up with a more retarded thing to say? Out of all the forums I've ever posted on, you are the most shameless post-count whore I've come across. You know, if you don't have anything worthwhile to say, you don't actually have to post.

QFT!

[Old Bob]

The western way of life doesn't brake even, we all live off the sweat of the third world. Now a extra problem is on us in the form of drought? Point reached where the world has to be thinned and I'm about to say (might be stupid) that chem trails are weather control and the coming shortage of food is planed. Oil prices are played with, with a plan in mind to cripple China and Russia and control the middle east. Israel will be the fall guy and they are blinded with ego and religion. We, the cattle of the controllers will be severely shocked and reduced to slaves, so you have a choice, buck the system to delay your dimise or roll over and be chipped. Easy to tame hungary animals with food. ( No wonder I drink with thoughts like that)

[The Central Scrutinizer]

The western way of life doesn't brake even, we all live off the sweat of the third world. Now a extra problem is on us in the form of drought? Point reached where the world has to be thinned and I'm about to say (might be stupid) that chem trails are weather control and the coming shortage of food is planed. Oil prices are played with, with a plan in mind to cripple China and Russia and control the middle east. Israel will be the fall guy and they are blinded with ego and religion. We, the cattle of the controllers will be severely shocked and reduced to slaves, so you have a choice, buck the system to delay your dimise or roll over and be chipped. Easy to tame hungary animals with food. ( No wonder I drink with thoughts like that)

Just out of curiosity, who do you think killed JFK?

[Old Bob]

Just out of curiosity, who do you think killed JFK?

Er. two good shooters. Remember that on the early radio news in Australia.

[UnrepentantSinner]

The western way of life doesn't brake even, we all live off the sweat of the third world. {snip stuff that belongs on the C2C blogs}

Mercantilism! If it was good enough for the 17th Century, it's good enough for today!

[The Central Scrutinizer]

Er. two good shooters. Remember that on the early radio news in Australia.

Yep, just as I thought. :crazy:

[Old Bob]

themusicteacher said "My father-in-law,who is a very intelligent,---" Oximoran?? How can anyone think it ok except C. Scrutinizer? Yes this whole tread borders on CT. It's time to buy a tent because thats where many will be before long and the stock market will be a cow in a paddock. Wonder if all the "Your mad" bits will be replaced with "Gee you were correct, sorry"

[The Central Scrutinizer]

Wonder if all the "Your mad" bits will be replaced with "Gee you were correct, sorry"

No

[Free Thinkr]

Er. two good shooters. Remember that on the early radio news in Australia.
Off topic, but see Dale K. Myers' Secrets of a Homocide (http://www.jfkfiles.com/jfk/html/intro.htm), where he clearly and pretty indisputably shows that all 3 shots came from the Texas School Book Depository. They got the right guy.

[Old Bob]

I've seen a clip years ago where JFK slumps from a bullet in the back, then he is hit from the front and brains blood spray out the back of the poor guys head.?? Two shooters at different spots.? Perhaps the states never showed that violent bit. Anyway back to the father in law he would have to admit things are getting worse, has anyone asked him?

[The Central Scrutinizer]

I've seen a clip years ago where JFK slumps from a bullet in the back, then he is hit from the front and brains blood spray out the back of the poor guys head.?? Two shooters at different spots.? Perhaps the states never showed that violent bit.

Yeah, we've never seen that "bit" over here. :rolleyes:

[Free Thinkr]

I've seen a clip years ago where JFK slumps from a bullet in the back, then he is hit from the front and brains blood spray out the back of the poor guys head.?? Two shooters at different spots.? Perhaps the states never showed that violent bit. Anyway back to the father in law he would have to admit things are getting worse, has anyone asked him?
The brains clearly spray out of the top, right side of the head. The head tilts very slightly forward at the moment of impact. I had constructed several animated gifs that show this on another forum, but checking the thread now, I see stupid imageshack has dropped the crucial one which demonstrates the actions I mention during the headshot.

[LightinDarkness]

My problem is with the reality deniers - those who think that for some reason a cyclical economic recession is reason to act hysterical and tell everyone that the end of the US Empire is nigh and that we should all buy gold and flee for the hills.

There is no doubt we are in a recession - the data are clear. But this does NOT mean the great depression II is coming and the financial apocalypse is nigh. It means a temporary slowdown in the economy.

A lot of people refuse to accept that. They deny reality - they WANT things to be worse, so they act like they are.

[timhau]

Off topic, but see Dale K. Myers' Secrets of a Homocide (http://www.jfkfiles.com/jfk/html/intro.htm),

JFK was gay? Maybe Garrison was right -- it was a homosexual thrill kill!

(Sorry. I just had to.)

[timhau]

My problem is with the reality deniers - those who think that for some reason a cyclical economic recession is reason to act hysterical and tell everyone that the end of the US Empire is nigh and that we should all buy gold and flee for the hills.

Yup. They're every bit as irritating as the dolts who believed in the "DOW will hit 36000 soon (http://en.wikipedia.org/wiki/Dow_36,000)" predictions 10 years ago.

Identify the trend and go interview someone who goes wildly overboard, that's how you get the headlines that sell papers.

[macdoc]

those who think that for some reason a cyclical economic recession is reason to act hysterical and tell everyone that the end of the US Empire is nigh .

you mean like Bill Gross :rolleyes:

What we are witnessing is essentially the breakdown of our modern-day banking system,

http://money.cnn.com/2007/11/27/news/newsmakers/gross_banking.fortune/


If you think this is a cyclical recession you are in for a rude surprise.

[bobrayner]

My problem is with the reality deniers - those who think that for some reason a cyclical economic recession is reason to act hysterical and tell everyone that the end of the US Empire is nigh and that we should all buy gold and flee for the hills.
A pessimistic bias is one of the four cornerstones of economic illiteracy, according to Caplan (http://econlog.econlib.org/archives/2004/09/economic_illite.html).
I've seen all four of them today. Maybe we need a checklist.

[Old Bob]

Who's lost money on blue chip investment? Where has 40% of Europe wealth gone? I had a relation who would say " Nothing can go wrong" No we are not in recession it's depression, next WW3. Only minor nothing to worry about.? Reality denyer's can't face the truth, and in most cases are in sheltered gov. jobs.

[bobrayner]

Where has 40% of Europe wealth gone?
It's still there (http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1194,47773485,1194_47782287:1194_6672 4556&_dad=portal&_schema=PORTAL). Did you think it had gone? Where?

No we are not in recession it's depression, next WW3. Only minor nothing to worry about.? Reality denyer's can't face the truth, and in most cases are in sheltered gov. jobs.
Do you expect us to take any part of that seriously?

[Old Bob]

It's still there (http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1194,47773485,1194_47782287:1194_6672 4556&_dad=portal&_schema=PORTAL). Did you think it had gone? Where?


Do you expect us to take any part of that seriously?

Please yourself, did you see the stock market today? Have you noticed the price of oil? Industry has almost stopped and you wonder where the wealth has gone? Whole towns in China shutting down, invest any money there?

[bobrayner]

Please yourself, did you see the stock market today?
Yes. Have you? (http://uk.finance.yahoo.com/q?s=^AEUR) Are you thinking of any particular stock or index? And how does this support the silly claim about 40% of Europe's wealth disappearing?

Have you noticed the price of oil?
Yes. Have you? (http://futures.tradingcharts.com/chart/CO/M) It's just one commodity; how does this support the silly claim about 40% of Europe's wealth disappearing? Perhaps you think "oil" is the same as "European wealth"?

Industry has almost stopped and you wonder where the wealth has gone?
Wrong again. (http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1194,47773485,1194_47782287:1194_6672 4556&_dad=portal&_schema=PORTAL) Industry is still running.

Whole towns in China shutting down, invest any money there?
China is not in Europe (http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=&ie=UTF8&ll=22.593726,55.195313&spn=133.024172,358.59375&z=2). Even if it were, it still wouldn't help your point; Chinese output is growing, not falling (https://customers.reuters.com/d/graphics/CN_GDP0109.gif). How does this support the silly claim about 40% of Europe's wealth disappearing?

Do you have any more non-sequiteurs or nonsensical scaremongering for us? Or could you, perhaps, defend some of your claims? If you have any more info about WW3, I'd love to hear it. :D

[drkitten]

Yes. Have you? (http://uk.finance.yahoo.com/q?s=^AEUR) Are you thinking of any particular stock or index? And how does this support the silly claim about 40% of Europe's wealth disappearing?

Oh, be reasonable here.

All the major European indices are down substantially.

DJ Euro Stoxx was at 450, is now at 200. DAX was at 8,000 and is now at 4,500. FTSE 100 was at 7000 and is now at 4000. S&P Euro was at something like 1500-2000 (my feed is flaking) and is now at 850.


What major European index is down less than 30% from its 2006-2008 high?

[bobrayner]

Oh, be reasonable here.

All the major European indices are down substantially.

DJ Euro Stoxx was at 450, is now at 200. DAX was at 8,000 and is now at 4,500. FTSE 100 was at 7000 and is now at 4000. S&P Euro was at something like 1500-2000 (my feed is flaking) and is now at 850.


What major European index is down less than 30% from its 2006-2008 high?
Well, yes, but these indices are not the same thing as "wealth". :D

[macdoc]

Well, yes, but these indices are not the same thing as "wealth".

Somebody gets it....:thumbsup:

Bubble money is NOT wealth.

I concur that the nominal GDP for the G8 will drop 30-40% bringing monetary values closer into line with real wealth.

Not gonna be pretty.

[Old Bob]

bobrayner if wealth is not governed on what one owns or produces to sell= $ what is it? I will look forward to hear from you as your high IQ indicates you must know. China doing well?? ask the sacked 26000000 from the agriculture sector alone. Did you really think I would believe you and not realise you were bull s------g

[macdoc]

Money is a construct - it is not wealth.

Money is a form of exchange.

If you take Zimbabwe as an extreme example.

Real wealth.....a productive farm as one classic example....has been destroyed by mismanagement while their currency...money...has devalued beyond belief to the point where the paper has more real value than the denomination printed on it.

That's always the problem with bubbles - they never reflect the real value.

http://upload.wikimedia.org/wikipedia/commons/thumb/d/d8/Tulipomania.jpg/180px-Tulipomania.jpg
A tulip, known as "the Viceroy", displayed in a 1637 Dutch catalog. Its bulb cost between 3000 and 4200 florins (http://en.wikipedia.org/wiki/Dutch_guilder) depending on size. A skilled craftsman at the time earned about 300 florins a year, working around 260 days a year and in Summer twelve hours a day.[1] (http://en.wikipedia.org/wiki/Tulip_mania#cite_note-0)http://en.wikipedia.org/wiki/Tulip_mania

http://www.businessweek.com/2000/00_17/b3678084.htm

You are in the midst of the busting of the greatest bubble in history.

Economist Calls Housing Boom 'Biggest Bubble in History'Jim Myers, NewsMax.com
Friday, June 24, 2005 The current worldwide boom in residential real estate prices is "the biggest bubble in history," according to a disturbing new report in the Economist magazine.http://archive.newsmax.com/archives/articles/2005/6/24/115349.shtml

From that article

The total value of residential property in developed countries rose by more than $30 trillion, to $70 trillion, over the past five years – an increase equal to the combined GDPs of those nations.
Now did the real wealth of those houses increase?????....nope not one jot or tittle.

You are now seeing around the world the results of when monetary values get enormously out of step with real value.

Look for a "notational" contraction on a similar scale. :eusa_doh::popcorn1

party is over....

an increase equal to the combined GDPs of those nations.

Did the GDP really increase - no.....wages were stagnant and some costs went up yet govs and banks and consumers acted AS IF that GDP - PRODUCT do recall what the P stands for......actually increased the national wealth the way in the past a developer building a house with a loan from the bank did.

A new house with sane values = new wealth and new money in the system.
That's what fractional lending is supposed to achieve.

The monetary valuation got way way out of step with the real value....a shelter worth 25% of the net income of the owner to carry.

[LightinDarkness]

you mean like Bill Gross :rolleyes:



http://money.cnn.com/2007/11/27/news/newsmakers/gross_banking.fortune/


If you think this is a cyclical recession you are in for a rude surprise.

Doom mongering is fashionable. That you want to buy into it is not my problem. I find idiots predicting the End of the System As We Know It for every year. They will be right eventually, but not because they have any idea what they are doing.

If you think we are in for a great depression every time the economy hits its normal cyclical recessions, you are going to be in a rude surprise.

You are a prime example of a reality denier. Your nickname should be "chicken little" - OH NOES, THE SKY IS FALLING! EVERYONE RUN AROUND IN CIRCLES AND PANIC!

[macdoc]

You don't even know who Bill Gross is do you???

Usually a guarantee of BAU head in the sand unaware of the wider world.

Let's see.... a Republican who manages 1 Trillion of client's money OR

a wonk on the internet who doesn't know who said money manager is.....:garfield:

next.........:rolleyes:

[LightinDarkness]

You don't even know who Bill Gross is do you???

Usually a guarantee of BAU head in the sand unaware of the wider world.

Let's see.... a Republican who manages 1 Trillion of client's money OR

a wonk on the internet who doesn't know who said money manager is.....:garfield:

next.........:rolleyes:

Lets see - thousands of PhD economists - let's just take the opinion of 1 of thousands who agree:

"President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics."
http://online.wsj.com/article/SB123457303244386495.html

Oh gee this is a hard one. People who study economics for a living, or a kid who is way out of his league and knows nothing but hysterical doom mongering based on nothing. This is what happens when you don't stay in school.

Dismissed, troll.

[bobrayner]

Edited to remove duplicate post. Sorry.

[bobrayner]

Somebody gets it....:thumbsup:

Bubble money is NOT wealth.

I concur that the nominal GDP for the G8 will drop 30-40% bringing monetary values closer into line with real wealth.

Not gonna be pretty.
Ooh, a testable prediction - thanks! I wish we had more of those! :D

I just have a couple of questions for you:
1. How long do you expect it will take to drop? A year or two? Or what?
2. How much would you like to bet?

bobrayner if wealth is not governed on what one owns or produces to sell= $ what is it?
I just pointed you to evidence that production is still going - value is still being created - in both Europe and China. It hasn't collapsed. Did you misunderstand, or are you trying to misrepresent me? Whatever, it doesn't matter. Your claim about 40% of europe's wealth disappearing was wrong. Plenty of your other claims were wrong too, of course.

China doing well?
China's output is still growing rapidly (https://customers.reuters.com/d/graphics/CN_GDP0109.gif), if that's what you mean; china's output is increasing at a rate that would make most other countries jealous. However, countries are big and complex, so it's always possible to find some number that looks really bad:

ask the sacked 26000000 from the agriculture sector alone.
See? In this case, presumably you're referring to this story (http://www.telegraph.co.uk/news/worldnews/asia/china/4438965/Economic-downturn-leaves-26-million-unemployed-in-China.html). It's not actually about "the agriculture sector alone" but we can hardly expect you to be accurate. Anyway. It's bad news, for sure, but I should remind you that it's less than 2% of the population of China (http://www.google.co.uk/search?hl=en&q=population+of+china&meta=). 2% unemployment? Global disaster!

Did you really think I would believe you and not realise you were bull s------g
You don't have to believe me. I'm just another faceless person on the internet. I only ask that you look at the evidence. Please, look at the evidence. (http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1194,47773485,1194_47782287:1194_6672 4556&_dad=portal&_schema=PORTAL)

Do you have any more non-sequiteurs or nonsensical scaremongering for us? Or could you, perhaps, defend some of your claims? If you have any more info about WW3, I'd love to hear it.

[macdoc]

I answered this earlier and the damn site crashed - grrrrr

Ooh, a testable prediction - thanks! I wish we had more of those!

I just have a couple of questions for you:
1. How long do you expect it will take to drop? A year or two? Or what?
2. How much would you like to bet?


For the US pretty solid drops for the next 18 months at least which will get pretty close given that much of the damage is still hidden by gov woo numbers. I think 24-30 months before anything significant slows the contraction if inflation is contained.

Britain gonna be a horror show.

I bet with my business positioning - go to Vegas :rolleyes:

This assessment is based on a current baseline in the US - there are some signs that hyperinflation may loom... then ALL bets are off. :popcorn1

Wholesale Inflation Takes Biggest Jump in 6 Months

By MARTIN CRUTSINGER
The Associated Press
Thursday, February 19, 2009; 8:53 AM

WASHINGTON -- Inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products.

The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.
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Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising by 0.4 percent. Economists had expected a slight 0.1 percent rise in so-called core inflation.

If oil prices go back over $100 - which I expect .....gonna be even nastier.

[macdoc]

You still interested in that bet......:garfield:

Failure to save East Europe will lead to worldwide meltdown

The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.

By Ambrose Evans-Pritchard
Last Updated: 2:05AM GMT 15 Feb 2009

If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung.

Austria's finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria's GDP.
"A failure rate of 10pc would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen.

The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a "monetary Stalingrad" in the East.

Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany's Peer Steinbrück. Not our problem, he said. We'll see about that.
Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut.

Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble.
"This is the largest run on a currency in history," said Mr Jen.

more dire news here

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4623525/Failure-to-save-East-Europe-will-lead-to-worldwide-meltdown.html

[kevinquinnyo]

Hey guys, I predicted this current economic crisis back in 1940. Way to jump on the bandwagon everyone.

[timhau]

Hey guys, I predicted this current economic crisis back in 1940. Way to jump on the bandwagon everyone.

I don't believe you.

I was born in 1966, and because of the economic 43-year forecast I devised right then, I spent my first hours crying and wailing.

[bobrayner]

You still interested in that bet......:garfield:
Bring it on :D

How much would you like to bet? (If you're really worried about hyperinflation eroding your winnings, I'm happy to accommodate you; perhaps you'd prefer XAU or something like that.)
By what date do you expect "nominal GDP for the G8" will drop 35%? Shall we say 18 months?
(I took the halfway point of your 30-40%, hope you don't mind).

[macdoc]

I don't recall saying the G8 but given that Japan is half way there and the US and Britain well on their way.

Is this aggregate of individual drops??

Let's say it will get 30% down from recession started Q1 2007 and sometime before first quarter 2011 -

[drkitten]

I don't recall saying the G8 but given that Japan is half way there and the US and Britain well on their way.

Is this aggregate of individual drops??

Aggregate of individual drops? So if every economy drops 5%, you get to sum all eight up to make 40%?

Or did you possible mean "average"?

[bobrayner]

I don't recall saying the G8
Your post of 18th February 2009 09:39 PM. You should be able to see it if you scroll back up the page a bit.

Is this aggregate of individual drops??
The GDP of the G8 is the sum of the GDPs of the constituent countries of the G8, yes? So, if the sum of the GDPs in future is 30% less than the sum now, then it's reasonable to say that the G8's GDP has dropped 30% over that period. It doesn't have to be difficult.

If you meant something else when you said "the nominal GDP for the G8 will drop 30-40%", then please let us know.

Let's say it will get 30% down from recession started Q1 2007 and sometime before first quarter 2011

You originally claimed 30-40%, so I'll hold you to the 35% midpoint, since you have the luxury of choosing the timescale (I'm surprised that you want to move the starting point back to 2007Q1, as I doubt it helps your case, but hey... I'm happy to accommodate) :D

So, from 2007Q1 to 2009Q1. Got a preferred source for quarterly numbers? If not, we'll have to settle for 2007-2011.

Now, how much would you like to bet?

[BazBear]

Er. two good shooters. Remember that on the early radio news in Australia.
And radio shows playing shortly after the assassination trump all the evidence it was one man, Lee Harvey Oswald? But that's off topic, sorry, back to your regularly scheduled discussion.

[macdoc]

Recall we are working from a peak GDP number to the lowest point in the 4 year run ( which might be 12 months from now ).

Yeah the metric source is tricky as in my view it's flawed already - if the Economist has a summary that's perhaps my comfort zone and clearly outside the bribery zone.:garfield:

I do think I have the trend correct....:D

http://www.epi.org/page/-/img/20090218snapshot.jpg?TB_iframe=true


Scale is the issue

If you want 35%, August 2008 as a benchmark when the financial crisis blossomed to Aug 2011 and settle on a holiday bottle when the numbers come out in December.
We are talking real GDP - is that number published for G8??

[bobrayner]

If you want 35%, August 2008 as a benchmark when the financial crisis blossomed
Not 2007 Q1? Have you changed your mind?
to Aug 2011 and settle on a holiday bottle when the numbers come out in December.
Not 2011Q1? Have you changed your mind?
We are talking real GDP - is that number published for G8??
Weren't you talking about nominal GDP before? There's a difference. Nominal GDPs are, of course, widely published for the G8 member states. We just have to add them up.

It must be tiring moving those goalposts around. As soon as you're happy with a new position for the goalposts, we can bet. How much? You still haven't answered that.

I'm happy to go with annual GDPs in the back of the august Economist. Come on, it's a pretty straightforward bet; let's just pin the terms down and we can move forward to tedious back-and-forth debates on other subjects. :D

[macdoc]

YOU moved the goal post to 35% :biggrin: and I decided to shorten the period - since 2008 was rather flat it really won't impact much.

Real GDP takes care of any strange inflation anomalies.

Do we have a trusted source???
How to get the G8 overall performance?

[bobrayner]

Real GDP takes care of any strange inflation anomalies.
Are you going to stand by your original claim that "the nominal GDP for the G8 will drop 30-40%", or are you dropping it?

Whatever. If you're changing to "real gdp" then just tell us what you consider acceptable (are you thinking in terms of current dollars, or what?) and I'll go along with it.

Do we have a trusted source???
Didn't you suggest the Economist? I agreed to that. If you're changing your mind then please specify another source; otherwise we're both happy with the Economist.

How to get the G8 overall performance?
Aaarrrgh! The G8 is a set of countries. We can calculate the GDP of the G8 by summing the GDPs of the member countries (which are widely available). Consequently, we assess how the G8's GDP has changed over time by comparing sums of member-state GDPs at different times. It really doesn't have to be difficult. If you were thinking of something different, please let us know what your alternative is.

And could you please say how much you're willing to bet? Anything up to an ounce of gold is fine by me. ;-)

Come on, let's not try the patience of the other readers. Are you going to put your money where your mouth is, or aren't you?

[bobrayner]

Are you going to put your money where your mouth is, or aren't you?
Reposted, just in case macdoc forgot to respond over the last month.

I have cash waiting. Are you going to stand behind your claim? Or shall we abandon the claim and move on?

[mhaze]

Wait! I just noticed this, 'n I want in on the action too. We are betting aginst the proposition that "GDP blah blah blah with drop 30-40%".

Yup. Want in on that action.