The Economic Recovery Thread

fatherofcaitlyn

fatherofcaitlyn

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Just another thread reboot.

The DOW isn't going to hit 5000.

Is it because of a grand recovery issuing a new Golden Age for all classes or is the DOW some fake indicator like Zimbabwe's stock market?

Well, who cares? Post what you got whether it is good or bad.
 
[quote name='perdition(troy']blame bush![/QUOTE]
I think people on the Bad Trader list should be banned outright for being disgusting excuses for human beings. What are your thoughts on that troy?

All I'm seeing is banks feverishly shore up their balance sheets by stealing everything they possibly can from the poor and uninformed. They're about as predatory as I can imagine any industry being. Car manufacturers probably won't survive (and definitely shouldn't). Unemployment continues to rise, homes prices still seem high relative to incomes, and no one seems to think we're at the bottom except The Economist and Bernanke.

I don't understand why the Dow is so high. I think 6500-7500 is reasonable. This over 9000 (omglulz) stuff doesn't make sense.
 
"The market can stay irrational longer then you can stay solvent."

I believe Keynes said that? Anyways there can be just as much craziness to the upside as to the downside. Just part of the game etc etc.

Right now the next shoe to drop would probably be the commercial real estate market. We had the crash in the residential markets and now everyone is just waiting for the bottom to fall out of commercial properties. It sounds like that is the Fed's main concern too judging from some of the statements they've given. IMO the danger would come from another sudden withdraw of money and lending like what happened last Sept after Lehman declared bankruptcy. Can the Fed create another trillion dollars from thin air if that happens? I don't know and it is kind of a scary thought that they may have to.

The next danger after that would be another period of high inflation similar to the 70's. We have been printing money like there's no tomorrow and there will eventually be a reckoning. We will be going through a very difficult period sometime in the next 10 years. This is going to hurt. The question is, will Bernanke have the balls and political capital to raise the fed funds rate as high as Paul Volcker did? I don't know about that either because all we've seen him do is handle this crisis. He started not to long before everything fell apart. He's speciality (before he became Fed chairman) was the Great Depression so who knows if he is capable of handling runaway inflation.
 
The fed and treasury and in the process of blowing the mother of all bubbles (MOAB) now. The next rally is not going to be in tech stocks or real estate, but in EVERYTHING. We are in the early stages of the "everything" bubble where complacent euphoria takes hold for a few years.. Eventually however people are going to realize that the dollar has been immensely devalued over the past year and hellish inflation will ensue as people rush to exchange paper for hard assets. Interest rates will need to soar to prevent a Zimbabwe-type scenario, and that is when we finally face great depression #2. All we have done with the trillions in money printing and deficit spending is buy a temporary delay and guarantee that the real crash will be much worse when we finally face it.

http://www.youtube.com/watch?v=_ImRuVyprYE&fmt=18
 
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The fed and treasury and in the process of blowing the mother of all bubbles (MOAB) now. The next rally is not going to be in tech stocks or real estate, but in EVERYTHING. We are in the early stages of the "everything" bubble where complacent euphoria takes hold for a few years.. Eventually however people are going to realize that the dollar is being immensely devalued and hellish inflation will ensue as people rush to exchange paper for hard assets. Interest rates will need to soar to prevent a Zimbabwe-type scenario, and that is when we finally face great depression #2. All we have done with the trillions in money printing and deficit spending is buy a temporary delay and guarantee that the real crash will be much worse when we finally face it.

http://www.youtube.com/watch?v=_ImRuVyprYE&fmt=18
 
What is the timeframe on the inflation? Next year? 2014? 2100?

Of course, I'm still in the process of paying off debt.

If everybody chooses to be fiscally responsible , does that speed up, slow down or prevent the possible future crash?
 
The inflation will kick in once the economy bottoms out. We are still in the process of doing that. Unemployment is 10%+ and there is plenty of fear out there among people and businesses so everyone is conserving cash at the moment. If I had to guess at when the "bounce" will happen, I'd say within 12-18 months. The recession may technically end sooner but won't really get revved up until we have several quarters of growth. When the recovery begins in earnest, all those newly created dollars sloshing around will be put to work..investment will increase, businesses will expand, unemployment will drop, people will be buying houses and all sorts of crap again..and the CPI will start soaring at 8% annually for the next 10 years regardless of what the fed does.

That's my prediction at least. ;)
 
Inflation won't really kick in until things bottom out. We are still in the process of doing that. Unemployment is 10%+ and there is plenty of fear out there among people and businesses so everyone is conserving cash at the moment. If I had to guess at when the "bounce" will happen, I'd say within 18 months. The recession may technically end sooner but won't really get revved up until we have several quarters of growth and people get their confidence back. When the recovery begins in earnest, all those newly created dollars sloshing around will be put to work..investment will increase, businesses will expand, unemployment will drop, people will be buying houses and all sorts of crap again. Happy days will be here again, and inflation will start soaring at 8-10% annually regardless of what the fed does.

That's my prediction at least. ;)

As for you Q about people being "fiscally responsible"...Since the economy is driven by consumer spending, if everyone decided to do that at once, we'd have a really bad depression..however this would be a GOOD thing in the long run. We would start off from a lower level but our growth would be built on savings and investment rather than debt and credit expansion. Needless businesses would be liquidated and only sustainable projects would be undertaken. The procession of recession/depression is really a cleansing process. It cleans away the unnecessary and unsustainable projects that were undertaken in the "boom" phase and allows for healthy growth.
 
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[quote name='RAMSTORIA']OBAMACARE IS GONNA MAKE US BROKE!!!

damn socialists, they are rewriting the constitution in RED ink![/QUOTE]

That isn't what's gonna make us broke. Another implosion of the stock market will. And I think that will happen something in the relatively near future. It will have little to do with Obama directly and almost all to do with the idiocies of Wall Street and the Fed/Treasury.
 
[quote name='Capitalizt']Inflation won't really kick in until things bottom out. We are still in the process of doing that. Unemployment is 10%+ and there is plenty of fear out there among people and businesses so everyone is conserving cash at the moment. If I had to guess at when the "bounce" will happen, I'd say within 18 months. The recession may technically end sooner but won't really get revved up until we have several quarters of growth and people get their confidence back. When the recovery begins in earnest, all those newly created dollars sloshing around will be put to work..investment will increase, businesses will expand, unemployment will drop, people will be buying houses and all sorts of crap again. Happy days will be here again, and inflation will start soaring at 8-10% annually regardless of what the fed does. [/QUOTE]
I was kind of hoping the Fed would raise the rate last go round, just so they could pretend to give the appearance of caring about inflation. I don't give a shit about Japan in the 90's. Staunching inflation through sleights of hand is all they have left and no one seems to care over there.

I agree with you Cap. It sure looks like we're going to get a "W" economy instead of a "U" or "V". I hope that second down leg doesn't turn into stagflation from hell, but it looks like it could. I think the only think that can save us from a painful prolonged recession is a breakthrough energy technology that changes the entire game. It would be enough to transform the economy and divert attention from this mess.
 
[quote name='cletus']Alternative energy will be the next bubble. I'm calling it now.[/QUOTE]
I don't think there will be any more bubbles after the big one.
 
[quote name='cletus']Alternative energy will be the next bubble. I'm calling it now.[/QUOTE]
The day energy as a cost variable was removed from the cost of production.. well, you wouldn't recognize the economy 18 months later. Capital itself seems pretty useless when you have the power to create anything without an energy tax to dig it out of the ground, transport it, fabricate it, transport it, buy it, or use it.
 
[quote name='speedracer']I think people on the Bad Trader list should be banned outright for being disgusting excuses for human beings. What are your thoughts on that troy?[/QUOTE]

I have thought long and hard about this and have come up with the following: do not care.
 
Free energy like free food can't exist.

Even if an unlimited source of energy could be produced at Point A, it doesn't mean it can be produced at Point B.

Energy like food can be made cheaper, but not free.
 
[quote name='willardhaven']So what can we do aside from farming and buying solar panels? Should I be rioting?[/QUOTE]

I would start with wind turbines and learning hydroponics. Neither requires sunlight.
 
[quote name='fatherofcaitlyn']Free energy like free food can't exist.

Even if an unlimited source of energy could be produced at Point A, it doesn't mean it can be produced at Point B.

Energy like food can be made cheaper, but not free.[/QUOTE]
But some form of it can be produced everywhere. The coasts have a majority of the people (I think) and they have all that wave/wind power. Pair that with the wind in Kansas and the sun in Death Valley/Nevada/Arizona/New Mexico/West Texas, and you could probably bleed 20% in transmission and still have enough to let MoC and C leave the lights on all they want.
 
from the article:

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.
 
Things are getting better, but the state budget in my state is still a fucking night mare. $350 million cut to higher education--$34 million cut expected at my university.

Shouldn't effect tenure track faculty--aside from having to maybe take furlough days again next year (though they're trying to avoid that).

Will affect students though, they'll probably get a 10-20% tuition hike (been needed for a long time anyway, tuition is dirt cheap here, way below bordering states) a one time fee, and less class options as most part time instructors get the ax, fewer students are admitted next year etc. Some majors may go away if they collapse some colleges together or combine a department or two--to save money by having less Deans than chairs.

Which is something that was coming anyway as the new President wants to restructure. Again, I'm luckily fine as my department is a large one with a big enrollment--though we'll probably end up in a different college. But that will probably be a good thing as we're stuck in a college with completely unrelated disciplines currently anyway.

So yeah, we're on the path to recovery for sure, but some states will lag behind. Especially stupid southern states were raising taxes isn't even on the table.
 
alsears-bio-pic.jpg


moustache!

Also, dmaul: http://www.tallahassee.com/article/...5/FSU-layoffs-of-tenured-faculty-cause-a-stir
 
[quote name='mykevermin']Also, dmaul: http://www.tallahassee.com/article/...5/FSU-layoffs-of-tenured-faculty-cause-a-stir[/QUOTE]


Yep, scary times.

There seems to be little chance of that happening here fortunately. There will be a big push to get some older full professors to take early retirement offers though.

But that was again something already on the table. The new president is really pushing to to improve our rep as research university, so he wants to clear out some faculty that aren't productive in research--and consolidate/get rid of some small programs that aren't research active etc. Luckily our department is large and is research active so we're in a pretty safe position, and in good shape during the restructuring as a couple other colleges will be fighting over getting us in their college, so we have little worry of getting absorbed etc.

So the budget is just being used as another tool by him to push his agenda forward quicker. Has a lot of associate professors stressed out as the expectations for tenure are higher now in terms publications and grant money than they were when they first got tenure etc.

In any case, stressful times--and being an Assistant Prof is stressful enough. But I'm not going to complain since I'm just glad to have this job in this economic climate. Most people from my grad school have landed jobs, but many have had to settle for crappy teaching schools etc., so I'm very happy to have a good job at a research university so I'll deal with stress/uncertainty.
 
Well my gf and I are at about -$10,000 right now. Maybe -$7,000 if you count our cars. We're getting up there! A few months ago we were -$20,000.

And it's all from hard, hard work. Like how I'm working right now.
 
[quote name='mykevermin']We have our own states to worry about, thankyouverymuch.[/QUOTE]

Not if the Feds have anything to say about it. You can be assured any collapse in CA will be cushioned by the rest of the states except for Michigan.
 
[quote name='fatherofcaitlyn']http://money.cnn.com/2010/03/30/real_estate/January_Case_Shiller/

Sustained housing recovery is over. I guess I won't be selling my home next month.[/QUOTE]
Sorry you're stuck in it dude.

I'm happy Houston has largely been bypassed by the housing bubble angel of death (and the unemployment one), but I still wish we'd see a bigger dip. Even flat is cool with us. We're going to be in the market in 18 months. 60% down payment? Unpossible!

We waited for the market to fall back to earth and we want our reward for hoarding cash god damn it. They need to cut that damn buyer subsidy to drag it down. That shit is punishing those of us that waited it out and now get to put up with an unnatural uptick in demand.
 
[quote name='speedracer']Sorry you're stuck in it dude.[/quote]

http://elblogdemanu.com/wordpress/wp-content/uploads/2007/11/darth_vader_nooo1.jpg

darth_vader_nooo1.jpg


Actually, the house we want to get rid of is being rented. So, we're losing about $50 a month on it. Their lease is about up. If the property management company would pull its head out of its ass, they could easily sell the house. After calling them a few dozen times and getting nowhere, I'll just take the rent check each month and hope the renters can keep their jobs and won't destroy my house.

[quote name='speedracer'] I'm happy Houston has largely been bypassed by the housing bubble angel of death (and the unemployment one), but I still wish we'd see a bigger dip. Even flat is cool with us. We're going to be in the market in 18 months. 60% down payment? Unpossible!

We waited for the market to fall back to earth and we want our reward for hoarding cash god damn it. They need to cut that damn buyer subsidy to drag it down. That shit is punishing those of us that waited it out and now get to put up with an unnatural uptick in demand.[/QUOTE]

The nice thing about our current house is that it is $85K in a $100K neighborhood. So, we probably won't end up underwater on this house. I'm looking forward to the end of subsidized house buying, too. A fresh batch of defaults should keep the government and banks busy while I quietly pay off my houses.
 
Yeah we're going to be looking for a first condo/house in the next several months. Looking to put down a big down payment while also keeping a large emergency fund for a 15 year mortgage. Our target price is $150k, though we'll go higher for the perfect house. This is less than we can afford but we also don't want anything that large, 2-3 bedroom 2 bathroom at most. We don't plan on having kids anytime soon.

Last night for lulz, we went on a homebuilder's website and took their quiz for "How much home can you afford?" They ask for salary, down payment, that type of shit. They calculated that we could afford a ~$430k home with a ~$2700/month mortgage payment with a 30 year mortgage. I currently net a bit over the monthly payment at my job. Now I know exactly how we got into this mess; gullible people fell for this shit. Meanwhile I just laughed my ass off when I saw this number.
 
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