Global Economy Bursting?

[Randolph Kinney]

Fed Gave Banks Crisis Gains on $80 Billion Secretive Loans as Low as 0.01%

http://www.bloomberg.com/news/2011-...gains-on-secretive-loans-as-low-as-0-01-.html

 

[Austin]

Does anyone else have this problem with this forum? When someone post a link to a news article and I hit the link the forum takes me to a page saying I am not logged in. When I log in it takes me back to the forum home page. The routine just repeats itself and goes in a circle. The only way I can read the link is to copy it and post it on another tab and take out the appraisal forum line in the link.

 

[Couch Potato]

No, I don't have that problem. Sounds like you may need to toss your cookies.

 

[Couch Potato]

What browser do you use Austin? Which ever one it is try a different one.

 

[prasercat]

.........................The countries running trade surpluses have to go with hard assets. More governments will adopt China's policy of using its dollars to buy impaired European sovereign debt to get rid of them. And, buy gold with them, buy oil, buy etc.

China is stockpiling gold, although in the near term this is to give legitimacy and backing to its currency over the US currency. The transition to the Yuen (not Yen, which is Japanese) in Asia is underway.

 

[prasercat]

Here's something for you to consider; the Dow has managed to rally sharply over the past two years and currently trades 12.5% below its 2007 non-inflation-adjusted, all-time record high.

So what's changed to cause or create such value in the stock market? We still have a weak recovery, high unemployment, ongoing foreclosures, commodity price spikes, debt crises, geopolitical issues, etc.

Looks like the market has thoroughly discounted all the good news possible going forward for 2 years. I wonder if disappointment will show up along the way?

Ever hear of a black swan event?

Yes, but wouldn't the "black swan event" here be that we proceed in short order to an overwhelmingly strengthening economy with at least moderate steady gains in employment? It seems the stock market is expecting a "black swan event".

Could it be that contrarians are now dominating the market in terms of money, so it's turning logic on its head? Of course not, a contrarian could not become mainstream or be the dominant force in the market by the very nature of what it is to be contrarian; however, reason would indicate that logic is not dictating stock market behavior during this last rise (as it was absent during the several years preceeding the financial crisis).

It would seem to me, the driving force in this rally is due mostly to rather short term manipulations by large institutions, hedge funds, and mutual funds to put money to work. Big money is chasing a chart rather than chasing an economy moving ahead. Low interest rates on assets are also driving people to throw money into the market (which is exactly what the fed wants).

Looks like we are forming a double top? hmmmm.....

 

[Terrel L. Shields]

1936 all over again? this chart suggests we may see a major downturn in 2012 if so...how bad can it get?

 

[prasercat]

IMF announces $20B, and G8 announces another $20B to the "Arab Spring" countries. This is to support "political party building" etc. And guess who pays the great majority of this $40B? Hint: It ain't China!

Russia now seems to be turning to a supportive role with Libya, which is a break from China's (do not meddle) policy. Naturally, they do meddle for economic gains or deals with other countries, but they have an idealogical view that prevents them from meddling politically (directly); however, they will give countries advice on how to handle their economies.

My view is that China will change it's role in the world and will join the west and be more supportive to other countries; however, one person doesn't make the decisions in China - They have a sort of congress of their own, made up of party elders (they don't all share the same views). This creates inertia, which is good for the country, just like our two party system creates inertia and promotes stability in policy. Stability attracts investment and growth.

China has a massive amount of poor people in its interior, even though it has made great strides and improvements overall in its economy and people's wealth. I understand they are trying to create a model where one doesn't have to move to a big city in China to find a good living. The idealogical struggle is: "why should we as a nation invest in other countries when we have so many of our own people doing so poorly" However, they will invest in other countries if it in turn leads to beneficial trade agreements that supply needed goods and services to it's own country.

I personally don't think there is a right answer. Sometimes I believe our own country could be more US centric and focus more on its own problems - we are fast to point out problems with other countries and slow to point out our own problems (a natural inertia that all countries face to some degree). However, I also see the merits of making peace with the other half of the world's population - the Muslims. The placement of Israel in the midst of the Muslim world and the US's past short sighted policies are much to blame for terrorism. We have to make peace and amends for the past. We have to develop good will, and in so doing, good will should come back to us non-Muslims and the US and the "West".

 

[Couch Potato]

1936 all over again? this chart suggests we may see a major downturn in 2012 if so...how bad can it get?

I suggest looking at the chart again. They had to work hard to find a way to get part of it to line up. The natural years to align with 1929 would be 2006 or 2008. My read of the graph is we successfully avoided a deep crisis like the one from the 1930s. The does not mean things won't get bad in 2012, just that I don't think much of that chart.

 

[prasercat]

If the economy takes a roller coaster ride downward to oblivion in 2012, together with dire Mayan predictions and even some christian quacks (as opposed to sane christians) indicating 2012 they year the world ends, some good may come of it all:

Wall street bankers jumping out of high rise roof tops. The final collapse of the Wall Street Mega-Bank Cartels. The collapse of every large corporation. Although, the pharma companies will find it hard to supply enough ******, and be one of the only companies with a positive earnings outlook until the world ends.

People will buy gold and put it in their mattresses and backpacks! Utility distribution will collapse. Throngs will hold onto magnifying glasses and solar cells and put them in their pockets. Camping gear, solar ovens and lots of blankets will be in backpacks of people walking to mountain tops.

2012 will pass without the end of the world and the quacks will have to lift up their arms and do what Forest Gump did after running all those years, proclaim the conclusion of all his reflections in his long soul searching journey "I think I'll go home now", as the followers wonder "that's it?!.

The birds will come out, the days will pass, and yes perhaps then, it will be a new world.

"Sheesh, I forgot about Beans & Amo. I knew I should of made a list! Too late now! The end of the world, and I forgot Beans & Amo, what was I thinking!?"

Naturally, that would be a "black swan event".