The Economic Recovery Thread

Unfortunately that counter argument really does little to actually counter the fundamental argument that Roubini is warning about regarding a pending global debt crisis.

Just because many of the global governments, including here in the US, have managed to artificially prop up the financial markets this past year, with "stimulus" packages and trillions upon trillions of dollars of new capital, that we basically just pulled out of our asses, just flooding the financial system, does not mean that Roubini is wrong at all.

As a matter of fact all this intervention and manipulation is probably increasingly the odds of Roubini's crisis actually hitting us in the next few years.

Roubini isn't saying this debt crisis is going to take us down tomorrow, he is warning that this is a potential crisis that will be facing for many years, maybe even decades to come.
 
[quote name='BillyBob29']Unfortunately that counter argument really does little to actually counter the fundamental argument that Roubini is warning about regarding a pending global debt crisis.

Just because many of the global governments, including here in the US, have managed to artificially prop up the financial markets this past year, with "stimulus" packages and trillions upon trillions of dollars of new capital, that we basically just pulled out of our asses, just flooding the financial system, does not mean that Roubini is wrong at all.

As a matter of fact all this intervention and manipulation is probably increasingly the odds of Roubini's crisis actually hitting us in the next few years.

Roubini isn't saying this debt crisis is going to take us down tomorrow, he is warning that this is a potential crisis that will be facing for many years, maybe even decades to come.[/QUOTE]

But I want my dystopian future now!
 
Members of the EU are having a debt crisis. Because of the shadiness that certain American institutions exported and partly because of the way certain countries monetary policies are restrained by the adoption of the Euro.

I find there to be little worry in the US having a true debt crisis any time in the foreseeable future and until the very least while we remain the world's hyperpower.

What is abundantly clear however is that we fucked ourselves by going with too small a stimulus, which is something Krugman and others were harping on for months.
 
The Dow lost 565 points in less than 5 minutes today. Was down almost 1,000 before a gigantic rebound to end down 345 (over 3%).

If you weren't crapping your pants at 2:45pm eastern, you fucking should have been.
 
[quote name='speedracer']The Dow lost 565 points in less than 5 minutes today. Was down almost 1,000 before a gigantic rebound to end down 345 (over 3%).

If you weren't crapping your pants at 2:45pm eastern, you fucking should have been.[/QUOTE]

It was pretty interesting watching what appeared to be a pretty standard early afternoon breakdown of the morning range turn into an absolute bloodbath in a matter of minutes. When the futures broke 1150 there was a slight pick up in volume on the sell side but nothing really out of the ordinary on a breakdown, especially considering the poor technical condition of the markets going into trading today. Then right about 2pm eastern the selling came rushing in.

As it was happening it felt like a government had collapsed or a major fund had instantly liquidated but in the end it appears there were some system errors and a "fat fingered trade" to sell billions of dollars of futures contracts by a Citigroup trader that lead to the almost instant 600 point drop around 2:30.

Watching my trading platform freeze due to the volume was shocking, it had never done that before even during the washout days of the last March bottom, so I was a little nervous for a few minutes while trying to cover shorts I had in place from a few minutes after the market opened this morning. But after that it was really interesting to sit back and watch action and listen to CNBC go from "the market is dying" one minute to "look at this market rip higher......from the lows" the next minute.

Tomorrow is really going to be interesting. Who is going to want to be long going into the weekend with this kind of activity in the global markets?
 
[quote name='BillyBob29']As it was happening it felt like a government had collapsed or a major fund had instantly liquidated but in the end it appears there were some system errors and a "fat fingered trade" to sell billions of dollars of futures contracts by a Citigroup trader that lead to the almost instant 600 point drop around 2:30.[/quote]
I got an alert when it was down 750 and thought someone was trading on inside info and everyone else was stampeding along for the ride. A fat finger makes more sense.
Watching my trading platform freeze due to the volume was shocking, it had never done that before even during the washout days of the last March bottom, so I was a little nervous for a few minutes while trying to cover shorts I had in place from a few minutes after the market opened this morning. But after that it was really interesting to sit back and watch action and listen to CNBC go from "the market is dying" one minute to "look at this market rip higher......from the lows" the next minute.
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Thanks for the perspective. I was hoping you'd show up.
Tomorrow is really going to be interesting. Who is going to want to be long going into the weekend with this kind of activity in the global markets?
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It looks to me like the pretense of trusting the Euros even a little bit is over. I sit in shock every morning when I see the dollar euro spread.

I thought we ultimately weren't going to see massive movement due to even a Greece default. I know the financials are wrapped in it like always, but do you really think Greece could produce a wave like we saw yesterday? I think of Argentina and Russia and it just didn't crush anyone.

Maybe if Greece hurt Portugal or Italy.
 
Citi says it wasn't them.
It has been widely suggested that a "fat finger trade" was responsible for triggering the panic. According to CNBC, "sources" have told that network that a trader (possibly at Citigroup) entered a "b" for billion instead of an "m" for million in a trade involving Procter & Gamble.

However, Citigroup has already announced that it has found "no evidence" that it was involved in any erroneous trades. In fact, a statement was released in which Citigroup spokesman Stephen Cohen said this....

"At this point, we have no evidence that Citi was involved in any erroneous transaction."
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You think maybe stop loss orders could be responsible?

Another theory is that it was an honest to god free fall and the big boys stepped in (which is what FoC said (which is scary to me that FoC could be right)):
There is also the possibility that this was a real financial panic. There are huge concerns about what is going on in Europe and the currency markets are fluctuating wildly. The Dow was already down several hundred points even before the massive plunge took place. The reality is that there is a lot of fear in the financial markets right now.

But if it was a real panic, then why did the Dow bounce back so quickly? Well, it is the job of the "plunge protection team" to keep the stock market from declining too rapidly. So did the "plunge protection team" swing into action today? Well, the truth is that we will probably never know because the general public is not supposed to know when they intervene.
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Also, Japan injected $20b last night. Will be interesting how the market sees this play. Looks like they're trying to soften the yen to me.
 
If the debt issues were just Greece itself, I don't think anyone outside of that country would care about these debt issues. The real fear is that today it is Greece, tomorrow it will be Spain, Portugal, Italy and then the collapse of the Euro which could have quite a tremendous ripple effect throughout the global financial markets.

Greece is really just the warning shot in this potential global debt crisis.

As for the fat fingered trade......it is sounding more and more like we will never know exactly what caused the sudden drop. If the government did have to step in due to some massive failure or liquidation, I really don't think they would step forward and tell us because that just screams manipulation.
 
Portugal seems shaky to me but it seems like business as usual in Spain and Italy, neither of whom have been particularly prudent at any point, but their basic fundamentals don't seem so out of whack that a major event seems likely outside of straight up stampede. It just feels to me like the market is projecting.

The ECB seems pretty unwilling to step in here and it seems Greece is headed for default no matter how it goes. I'm kind of stuck wondering why we (the royal we I guess) aren't just pricing it and moving on.
 
It is kind of hard to price in a default because we really don't know how that one default will affect everyone else in the region, how it will affect consumer confidence (not just in that region either).

It really isn't as easy as saying, Greece has xxx amount of debt that is bad.

One thing you have to remember is that the financial markets are not just a measure of economic growth or corporate profits, they are a measure of human emotion, fear and greed. It is quite difficult to predict the emotional outcome of a default like Greece, even though Greece is relatively small. The fear is that Greece is just the small snowball that has just started rolling down the hill and if people jump on that idea and pull in their spending again, banks without capital again, then what happens? The global governments can not afford to step in again with huge stimulus plans.

We do have a huge global debt problem, that the US has a large share of reponsibility for.

Anyway, the markets are extremely shaky today. You can see in the spreads. I'm done trading for the day, 10 points on the Eminis, $3.50 short on DNDN and $2 short on CAT. We may very well end the day flat or higher but IMO the risk outweighs the reward trading in this kind of environment. I'm going to sit back, play some Halo and watch the action from the sidelines.
 
I bet there's going to be a broad based sell off before a vulture tip up at the end of the day because everyone going to want to stay out of the weekend.

I hate predicting, but I can't imagine many wanting in right now.

edit: damn. Dropped 38 points while I typed that. Make me right market! :D
 
Spam is actually pretty good with eggs or kimchi and you probably will probably get less diseases than from eating long pig.
 
I never had a problem with spam (or canned corned beef). Good fried on a sandwich with mustard (and maybe cheese) too. I don't eat it anymore, but only because I don't eat meat it general, not because of its taste.
 
[quote name='mykevermin']Why Vegas? I know why Detroit - Detroit's been like that for a variety of reasons starting with the 1967 riots. But why Vegas?[/QUOTE]

Vegas is a good indicator of disposable income. Everybody likes Vegas and Vegas is more than happy to relieve people of their money.

If things are too tight to gamble, you have some big problems overall.

That or everybody took a statistics class and are too smart to gamble for profit.
 
I was reading some conspiracy post about the Rothschild League causing all of humanity's problems and controlling our world.

I wonder. If somebody knows who the problem is, why doesn't somebody pay to have the problem fixed?
 
I love how the rich assholes are already prepared to jump ship. Someone tie them down and make them drown with the rest of us.
 
[quote name='Clak']I love how the rich assholes are already prepared to jump ship. Someone tie them down and make them drown with the rest of us.[/QUOTE]

Good idea. You might want to start the ball rolling by promoting to all you know the voting out politicians that bail everyone/everything out that's "too big to fail".
 
Believe me thrust, i wish I could see the alternate future where we didn't bail out the banks and everything is super.
 
[quote name='Clak']Believe me thrust, i wish I could see the alternate future where we didn't bail out the banks and everything is super.[/QUOTE]

Everyone does. Well almost everyone.

There's no one other than the bankers who had their careers saved who likes the bailouts. It's just hard to see the recession/depression not having been MUCH worse if we hadn't had the bailouts and stimulus spending. Though of course we'll never know for sure what happened.

But most of the things I've read from respected economists say it would have been much worse, and I'll take their word over that of the skeptics who are mostly anti-big government types who are just opposed to the spending on ideological grounds rather than on statistical models showing things wouldn't have been worse if we'd let the banks fail etc.
 
They do disagree with it on ideological grounds and little else for the most part. You could show them any number of models and the opinions of any number of experts on the matter, they'd still disagree with it. We're going right bank to that thread about evidence not changing opinions.
 
Evidence isn't the same as theoretics and models.

It was a gamble. A gamble we don't know the result of not taking, nor will we.

But my personal opinion is that it set a very dangerous precedent regardless; financial institutions know more than ever that they can continue to be risky because there is little consequence. On a long enough time line, I think that alone will cost us much more pain than had we stood our ground and let them take their licks. IMO of course.

Financial reform all you want, there will always be loopholes. This latest financial reform bill made Congress totally irrelevant the next time a president wants to bail out or take over companies. And that's a good thing?
 
The financial reform bill replaces bailouts of too big to fails with takeovers and systematic dismantling/selling off of assets etc. to minimize damage done by the company failing...

At least to my understanding. I think the takeover can only happen to dismantle the company.
 
Evidence is something than helps you come to a conclusion or judgment, as in whether or not to bail out the banks.
 
[quote name='dmaul1114']The financial reform bill replaces bailouts of too big to fails with takeovers and systematic dismantling/selling off of assets etc. to minimize damage done by the company failing...

At least to my understanding. I think the takeover can only happen to dismantle the company.[/QUOTE]

Which, to my understanding, can all now happen with just a Presidential signature and nothing more.

The identification, takeover, dismantling, selling off assets etc. of any company can now all happen with just one person's decision and one person's signature.

That's frightening when you think about it.


I could be wrong, but that's my read of it so far.
 
Well I think it can only be done when the company is bankrupt. So there's not really an identification phase.

The company is failed, filing for bankruptcy etc. With the new reform the only option is the dismantling etc., so there's not really a need for some big bureaucracy, congressional involvement etc. to get the process going.

But again, that's just my understanding of the process and I freely admit I could be wrong as I haven't read a lot about that part of the bill.
 
[quote name='dmaul1114']Figured this thread could use resurrected....

http://money.cnn.com/2012/02/03/markets/markets_newyork/index.htm?hpt=hp_t1

DOW closed today on a 4 year high, NASDAQ on an 11 year high.

http://www.washingtonpost.com/busin...to-83percent/2012/02/03/gIQAhV3mmQ_story.html

US added 243K jobs in Janurary, unemployment rate is at 8.3%, lowest in 3 years.[/QUOTE]

I blame Obama.

How do you ressurect threads?

I'm going to play the evil guy and say that one month of job gains does not a recovery make. Continuous growth for a few months and UE rate
 
Unemployment rate in 1/09 was 7.6%, and 1/12 was 8.3% - that 0.6% difference is probably accounting for some of that.

One thing that's not measured - and hasn't been tracked, which is unfortunate because it can and does vary over time - is the disgruntled unemployed. People not actively seeking a job are not included in the unemployment rate. Since the economy has remained fairly unfriendly to job seekers, I'm certain that portion of the population is higher than would be under normal conditions.
 
Yeah I think you mean discouraged rather than digruntled, but I get your point. It's definitely encouraging news though, to see more jobs being created.
 
Another thing to consider, we're an aging population so we've got people hitting retirement and those jobs aren't being filled on a 1:1 ratio.

Then again, that's a difference of 462,000 and considering how flat the jobs market has been, that's not too bad.
 
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