Jump to content

Recession


Recommended Posts

Too be honest downturns in the economy have never really affected me. I never had the money to buy bonds or any investments, just day to day living was enough. I listened to the complaints about high interest rates in the early 80's and again in 1987, too in 1990 but for ordinary people other than mortgages rates or food prices it has little affect. I wonder what percentage of the population is or was in the same position.

Link to comment
Share on other sites

  • Replies 593
  • Created
  • Last Reply

Top Posters In This Topic

Too be honest downturns in the economy have never really affected me. I never had the money to buy bonds or any investments, just day to day living was enough. I listened to the complaints about high interest rates in the early 80's and again in 1987, too in 1990 but for ordinary people other than mortgages rates or food prices it has little affect. I wonder what percentage of the population is or was in the same position.

All of us. High interest rates affect all of us either directly or indirectly. High interest rates will prevent a business owner form borrowing to expand and so he doesn't hire more workers....alternately with high rate on borrowing comes high rates for savings. A person might be disinclined to invest if there money is geting a high rate in the bank.

High rates will produce a slow down in car sales causing lay offs at the plants. High rates will produce a slow down in new home sales and the ripples there will see layoffs in construction and appliance and furiniture manufacturing.

And it goes on and on.....

Link to comment
Share on other sites

I wonder what percentage of the population is or was in the same position.
In this particular panic I think that so far most of the impact on the economy has been on relatively young "geniuses" thriving on parisitic "deals" with little or no economic substance. So far I see little "real world" effect.
Link to comment
Share on other sites

Too be honest downturns in the economy have never really affected me. I never had the money to buy bonds or any investments, just day to day living was enough. I listened to the complaints about high interest rates in the early 80's and again in 1987, too in 1990 but for ordinary people other than mortgages rates or food prices it has little affect. I wonder what percentage of the population is or was in the same position.

It is unemployment that can be devastating when you need every paycheck as part of your daily living.

Link to comment
Share on other sites

In this particular panic I think that so far most of the impact on the economy has been on relatively young "geniuses" thriving on parisitic "deals" with little or no economic substance. So far I see little "real world" effect.

There has been a huge impact in the form of hundreds of billions of dollars printed by central banks to keep the world banking system afloat...and the credit crunch is just getting started.

Don't worry. You will fee the effects before too long. There's no escaping this one.

Have a listen:

http://www.financialsense.com/fsn/main.html

http://www.europac.net/radioshow_archives.asp

Link to comment
Share on other sites

Don't worry. You will fee the effects before too long. There's no escaping this one.
Yes, in the form of inflation. Unless China implodes, which creates its own problems. I'm beginning to read of that being a major risk, one that I've seen coming for a long time.
Link to comment
Share on other sites

Yes, in the form of inflation. Unless China implodes, which creates its own problems. I'm beginning to read of that being a major risk, one that I've seen coming for a long time.

Not just inflation, but job losses and falling home prices too.

The global financial system is like a gambler at a crap table. As long as his bankroll keeps getting refilled, he can keep going. When the bankroll runs out (or is capitalized with slugs) then the party ends.

Link to comment
Share on other sites

  • 1 month later...

The NBER is now saying that the US is in a recession:

Harvard University economist Martin Feldstein, a member of the group that dates business cycles in the U.S., said the nation has entered a recession that could be the worst since World War II.

``I believe the U.S. economy is now in recession,'' Feldstein, president of the National Bureau of Economic Research, told the Futures Industry Association conference in Boca Raton, Florida. ``Could this become the worst recession we have seen in the postwar period? I think the answer is yes. I would emphasize the word `could.' ''

Feldstein's remarks represent the first time that a member of the NBER's business-cycle dating committee has publicly described the current downturn as a recession. The economy may not respond quickly to Federal Reserve interest-rate cuts, and a package of tax rebates and investment incentives will offer only a temporary boost, he said.

...

The Cambridge, Massachusetts-based bureau defines a recession as a ``significant'' decrease in activity over a sustained period of time. The declines would be visible in gross domestic product, payrolls, production, sales and incomes.

The committee says it usually determines a recession six to 18 months after one begins. It last declared a contraction officially in November 2001 that started in March of that year.

The U.S. has had 10 recessions since 1945 that have averaged about 10 months each. The longest lasted 16 months in 1981 and 1982 when the Federal Reserve, under Chairman Paul Volcker, raised interest rates to as much as 20 percent to battle soaring inflation.

``Given the retrospective nature of our process, no determination of a peak in activity is likely in the next few months,'' Robert Hall, a Stanford University economist who leads the NBER's business-cycle dating committee, said March 7.

``There is a good chance that when all the data are in they will show that we entered a recession in the first months of 2008,'' Harvard University economics professor Jeffrey Frankel, another member of the committee, said in an interview on March 12.

Bloomberg

Frankel, Hall and Feldstein are all smart people.

Financial markets are exhibiting a pervasive ``unwillingness to trade'' and are suffering a ``loss of confidence'' about valuations of assets, said Feldstein, who is retiring as NBER president this year.
That's my impression too.

Something is going on. It's a liquidity trap of daunting proportions. Despite the injection of several hundred billion last week, and the possibility that the Fed will cut the Fed Fund target rate by a full percentage point to 2% this Tuesday, people are still sitting on the sidelines and don't want to lend or hold risky paper. The fall in the US dollar and the announced tax cuts don't seem to have had the right effect.

I guess a fall in the housing market spooks people in a way that the bursting dot com bubble didn't. Or maybe Bernanke doesn't have the same reassuring obfuscation that Greenspan could muster.

Link to comment
Share on other sites

I guess a fall in the housing market spooks people in a way that the bursting dot com bubble didn't. Or maybe Bernanke doesn't have the same reassuring obfuscation that Greenspan could muster.

Greenspan had the advantage of being able to create a bubble in the credit/debt market after allowing the bubble in the equity market rise to an absurd level.

Bernanke is left with the unwinding of Greenspan's mess also known as "Greenspan's put."

What else is there to inflate? Well, other than general prices which they have been doing for decades now anyway.

This is the funny thing:

The Soviet Union lied to its people about its economy and tried to set price ceilings with the result of not having much of anything in stock at the stores.

The US lies to its people about its economy (inflation statistics in particular) and will try not to allow certain asset prices to go below a certain price floor (aka the Greenspan put) which results in the stores and people having lots of stuff while the people are, surprising to some, poor.

I say surprising to some because it seems that there are too many people who only see the asset side of the ledger while ignoring the unsustainable debt bubble which created the illusory wealth in the first place.

Link to comment
Share on other sites

Well, this is unprecedented. The Fed cuts the discount rate on a Sunday, it opens the discount window to primary traders and then it guarantees the JP Morgan Chase purchase of Bear Sterns.

In an extraordinary weekend move, the Federal Reserve announced the most dramatic expansion yet of its lending, promising to lend for up to six months to securities dealers under terms normally reserved only for tightly regulated banks.

The Fed also cut the rate on such direct loans by a quarter of a percentage point, just two days before it is likely to slash interest rates more broadly. It cut the discount rate — ordinarily charged on direct loans to banks, and now also to securities dealers — to 3.25% from 3.5%.

That narrows the spread with the more economically important federal-funds rate, now 3%, to a quarter of a point. The Fed is also expected to cut the fed-funds rate target by at least half a point at its meeting Tuesday.

The moves were the latest in a series of steps that demonstrate how the Fed’s traditional tools aren’t suited to dealing with a crisis now sweeping the modern financial system. But, by also agreeing to lend up to $30 billion to J.P. Morgan Chase & Co. to finance illiquid assets inherited from its purchase of Bear Stearns Cos., the Fed is taking on new risks.

WSJ

If it cuts the Fed Funds target rate to 2% on Tuesday, then the real interest rate will be negative.

I wonder whether Bernanke had a chat on the phone with Greenspan and I wonder what they said to one another. Oh, to be a fly on the wall.

----

Two points: 1. I don't like seeing the Administration or Treasury Secretary getting involved in these monetary policy changes. The independence of the Fed should be sacrosanct.

2. A central bank should never, under any circumstances, appear to be panicking. Bold moves are OK. But not panicky bold moves.

The US lies to its people about its economy (inflation statistics in particular) and will try not to allow certain asset prices to go below a certain price floor (aka the Greenspan put) which results in the stores and people having lots of stuff while the people are, surprising to some, poor.
You're not going to get on your CPI hobbly horse are you?

The US economy has been generating real goods & services at an increasing rate for the past 7 years or so and more generally for the past 15 years or so. This isn't an illusion. The real benefits are there to see. I wish Canada had known real growth at such a rate over the same period.

Bernanke is left with the unwinding of Greenspan's mess also known as "Greenspan's put."
Here, I tend to agree with you. It's the job of a central bank to keep inflation low. It also has the job of making sure that good deals occur in financial markets and don't fall through simply because animal spirits spook people and make them afraid to deal.

The US Fed is apparently still learning how to do this.

Edited by August1991
Link to comment
Share on other sites

The US economy has been generating real goods & services at an increasing rate for the past 7 years or so and more generally for the past 15 years or so. This isn't an illusion. The real benefits are there to see. I wish Canada had known real growth at such a rate over the same period.

The US economy has been hiding their problems for well over a decade.

It is called MEWs - Mortgage Equity Withdrawals and it is one of the many reasons why so many people in the US feel wealthy when, in fact, they are not.

Generating real goods and services is one thing - paying for them with unsustainable growth in debt and/or the printing press is something else entirely.

Link to comment
Share on other sites

Well, this is unprecedented. The Fed cuts the discount rate on a Sunday, it opens the discount window to primary traders and then it guarantees the JP Morgan Chase purchase of Bear Sterns.

If it cuts the Fed Funds target rate to 2% on Tuesday, then the real interest rate will be negative.

I wonder whether Bernanke had a chat on the phone with Greenspan and I wonder what they said to one another. Oh, to be a fly on the wall.

----

Two points: 1. I don't like seeing the Administration or Treasury Secretary getting involved in these monetary policy changes. The independence of the Fed should be sacrosanct.

2. A central bank should never, under any circumstances, appear to be panicking. Bold moves are OK. But not panicky bold moves.

I think the Fed knows that there are certain big investment companies out there as bad as Bear Sterns. The market is very shaky this morning and all the news shows are about the economy today. I think there is a growing fear and pessimism about the prospects in the next months.

Can it be stopped? Sure. But how much is the government going to bail out companies like Bear Stearns?

Edited by jdobbin
Link to comment
Share on other sites

The US economy has been hiding their problems for well over a decade.

It is called MEWs - Mortgage Equity Withdrawals and it is one of the many reasons why so many people in the US feel wealthy when, in fact, they are not.

Generating real goods and services is one thing - paying for them with unsustainable growth in debt and/or the printing press is something else entirely.

There's that stern Calvinist voice again. "People are living in debt! It's all a fraud! Easy living now with no thought for the future! What we need is sound money!"

msj, thank God that you (or someone with your opinion) is nowhere near a central banking chair right now. Your mindset is what lead to the Great Depression.

An individual can be in debt (have net wealth less than zero) but that's impossible for a large country. The US has formidable real assets and has added to them over the past 10 years. The real incomes that Americans have earned are real. They are not imaginary.

The problem now is that many Americans are afraid to lend and borrow. They are retreating into cash because they are afraid. This is what the Fed is trying to overcome.

Here's Krugman's take. (I love the way he manages to be partisan and blame Greenspan. Financial bubbles existed long before Alan Greenspan. The meltdown of 1987 was far worse than this and yet it had no real consequences.)

Between 2002 and 2007, false beliefs in the private sector — the belief that home prices only go up, that financial innovation had made risk go away, that a triple-A rating really meant that an investment was safe — led to an epidemic of bad lending. Meanwhile, false beliefs in the political arena — the belief of Alan Greenspan and his friends in the Bush administration that the market is always right and regulation always a bad thing — led Washington to ignore the warning signs.

By the way, Mr. Greenspan is still at it: accepting no blame, he continues to insist that “market flexibility and open competition” are the “most reliable safeguards against cumulative economic failure.”

The result of all that bad lending was an unholy financial mess that will cause trillions of dollars in losses. A large chunk of these losses will fall on financial institutions: commercial banks, investment banks, hedge funds and so on.

Krugman

As to digs about the free market system, Krugman knows better. He should stop patronizing the peanut gallery.

Can it be stopped? Sure. But how much is the government going to bail out companies like Bear Sterns?
It wasn't so much Bear Stearns as JP Morgan Chase. It got to buy in at a bargain basement price.

The Fed is the lender of last resort.

Edited by August1991
Link to comment
Share on other sites

It does seem that the US is likely entering a period of serious economic downturn. It appears that a severe recession of long duration is in the offing. Its magnitude would likely affect Canada, in particular in the residential property field, as well as the general economy.

One bright spot for Canada is that our natural resources will probably give us some protection, as much of what we have to export will still be in demand, although to a lesser extent.

I make no comment on whether or not this could have been avoided, or on any particular action or theory.

Link to comment
Share on other sites

It wasn't so much Bear Stearns as JP Morgan Chase. It got to buy in at a bargain basement price.

The Fed is the lender of last resort.

Can they buy Lehmen Bros as well? That is the next company tottering.

The Feds took on $30 billion of Bear Strearns debt.

Edited by jdobbin
Link to comment
Share on other sites

There's that stern Calvinist voice again. "People are living in debt! It's all a fraud! Easy living now with no thought for the future! What we need is sound money!"

msj, thank God that you (or someone with your opinion) is nowhere near a central banking chair right now. Your mindset is what lead to the Great Depression.

An individual can be in debt (have net wealth less than zero) but that's impossible for a large country. The US has formidable real assets and has added to them over the past 10 years. The real incomes that Americans have earned are real. They are not imaginary.

This is nonsense - I never said to stop lending.

How dishonest of you (for which I'm not surprised).

If Volcker was in charge during Greenspan's final 8 years then we would never have had interest rates of 1% which would not have led to the extent of MEW and such a large debt bubble.

We are talking about degrees here - not absolutes.

And, yes, the US has real assets - its too bad that people continue to borrow against their real assets to buy the latest LCD TV and granite counter top - the assets depreciate quickly while the loan balance accrues at compound interest.

It's also too bad that people like Greenspan were spending their time marveling at the "efficiency" of the system as it "created" wealth while house prices were going up. Sure would have been nice for them to think about what would happen when house prices stopped going up - it's amazing how efficient and effective something will look when prices are going up.

The problem with the Fed is that Greenspan and Bernanke would rather throw money out of helicopters than have the economy actually suffer a business cycle recession.

Business cycle recessions are a normal part of doing business but that's what Greenspan's "put" has done - created a moral hazard of epic proportions.

When everyone in the market believes that the Fed will bail them out then they take on more risk and create a larger bubble. When the Fed does nothing to mitigate the bubble then it just gets worse - it gets to the point where the Fed has no choice but to act - which is clearly a failure of the Fed in the first place.

This would have been prevented from ever reaching this level had Greenspan not been such a patsy in the first place. Instead, he, like Bernanke, has shown himself to be Wall Street's b!tch and now it's going to be a real b!tch for the rest of us.

The problem now is that many Americans are afraid to lend and borrow. They are retreating into cash because they are afraid. This is what the Fed is trying to overcome.

Here's Krugman's take. (I love the way he manages to be partisan and blame Greenspan. Financial bubbles existed long before Alan Greenspan. The meltdown of 1987 was far worse than this and yet it had no real consequences.)

This only shows how little you know about the 1987 crisis and the current one - in 1987 the fundamentals were sound.

In 2008 we are looking at fundamental problems in the economy - trade deficits that send most countries into depressions (but thanks to being a reserve currency will only be recessionary for the US), lending standards that created "liar" loans and an appraisal system that will now need rigorous standards, lending standards that are non-existent so that when people were stupid enough to lie about their income the lender was equally stupid enough to look the other way.

As to digs about the free market system, Krugman knows better. He should stop patronizing the peanut gallery.

It wasn't so much Bear Stearns as JP Morgan Chase. It got to buy in at a bargain basement price.

The Fed is the lender of last resort.

Yeah, JP got to buy with the taxpayers backstopping any losses.

Probably necessary for this kind of socialism (or is it crony capitalism?) to assert itself to "save" us from something far worse.

Doesn't change the fact that we never had to reach this point had the Fed done its job years ago - you know, like keeping its eye on the ball (inflation - including asset and debt bubbles).

Edited by msj
Link to comment
Share on other sites

If Volcker was in charge during Greenspan's final 8 years then we would never have had interest rates of 1% which would not have led to the extent of MEW and such a large debt bubble.

We are talking about degrees here - not absolutes.

And, yes, the US has real assets - its too bad that people continue to borrow against their real assets to buy the latest LCD TV and granite counter top - the assets depreciate quickly while the loan balance accrues at compound interest.

I happen to admire Volcker and consider him arguably the best Fed Chairman in its (short) history. I don't know what he would have done if he had been chairman in the past 8 years or so. I tend to agree that the Fed under Greenspan was too wiggle-the-knobs interventionist. I read Greenspan's autobiography and he's no interventionist at heart. He's at most a pragmatist.

Maybe it's in the nature of the job that it's tough to walk away and do nothing.

It's also too bad that people like Greenspan were spending their time marveling at the "efficiency" of the system as it "created" wealth while house prices were going up. Sure would have been nice for them to think about what would happen when house prices stopped going up - it's amazing how efficient and effective something will look when prices are going up.
The market system is a marvel and it has lifted billions around the world out of back-breaking poverty. Because of it, you and I can have this comfortable chat now despite the blowing snow outside. (And msj, I know that you know that.)
The problem with the Fed is that Greenspan and Bernanke would rather throw money out of helicopters than have the economy actually suffer a business cycle recession.

Business cycle recessions are a normal part of doing business but that's what Greenspan's "put" has done - created a moral hazard of epic proportions.

When everyone in the market believes that the Fed will bail them out then they take on more risk and create a larger bubble. When the Fed does nothing to mitigate the bubble then it just gets worse.

Epic proportions? Even you msj are succombing to the mantra of fear.

The crux of the issue is how the Fed deals with fear. How far should the Fed take its role of lender of last resort?

The players on Wall Street don't really suffer; it's ordinary people in Peoria who will lose their houses. And for what? The extra money is not going to be inflationary. This is another liquidity problem based on fear. The Fed has it within its power to reassure people. Should it not do this? (Admittedly, it sounds easy to reassure people but it's hard to do in fact.)

If the Fed had responded in 1929 this way, the Great Depression could have been avoided. This is the fact hanging over Bernanke (and Greenspan before him).

I happen to think that the potential for disaster was much greater in 1987 than now. When the stock market loses about 1/3 of its value in a day or so, people panic. Housing prices in the US were down about 10% year-on-year in 2007.

----

IMV, the Fed's primary role is not to keep inflation low but rather to ensure that it follows a monetary policy that optimizes trading. We use currency for trades and the Fed's job should encourage this. Too much currency confuses price signals and makes trading difficult. Then again, sometimes people become fearful and then they seek to hold too much currency. They need reassurance and extra currency achieves this.

I know this is portrayed in terms of moral hazard or what you call "Greenspan's Put", but to me the question is more fundamental. Financial markets are prone to bubbles and bubbles eventually burst. Moral hazard is rational behaviour. A bubble is different from moral hazard: it's the result of irrational exuberance.

I dunno. Maybe this is a boomer thing. Boomers are retiring and they're afraid of dying. When house prices go down, they're reminded of their retirement and death.

Edited by August1991
Link to comment
Share on other sites

I dunno. Maybe this is a boomer thing. Boomers are retiring and they're afraid of dying. When house prices go down, they're reminded of their retirement and death.

Perhaps they fear they will lose their houses like so many in the States are. Or that their retirement which is tied to their houses is disappearing.

At any rate, if the right wing dismisses it, they will pay a price.

Link to comment
Share on other sites

I happen to admire Volcker and consider him arguably the best Fed Chairman in its (short) history. I don't know what he would have done if he had been chairman in the past 8 years or so. I tend to agree that the Fed under Greenspan was too wiggle-the-knobs interventionist. I read Greenspan's autobiography and he's no interventionist at heart. He's at most a pragmatist.

Maybe it's in the nature of the job that it's tough to walk away and do nothing.

The market system is a marvel and it has lifted billions around the world out of back-breaking poverty. Because of it, you and I can have this comfortable chat now despite the blowing snow outside. (And msj, I know that you know that.)

Epic proportions? Even you msj are succombing to the mantra of fear.

Where is the fear in that statement?

The moral hazard is a huge problem in the US in that the Fed has let it get to the point where the Fed is having a hard time dealing with the very problem that it has created.

It is the entire crux of the current problem: the Fed has always been there to hold our hands and now it is shown to not only have created the problem in the first place but has to resort to using the very same medicine to solve the problem.

I'm not the only one who thinks that the markets have failed to properly assess risk - that's what happens when daddy is standing by reducing the risks to virtually nothing (well, until people misprice risks thanks to that "put" option).

The distortion is huge.

After all, when lenders aren't adequately regulated (thanks to Congress/Greenspan) and lenders create models even they don't fully understand, and people are encouraged to lend/borrow like there will be no consequences - well, frankly, you see shareholders lose billions of dollars and homeowners see trillions of their phantom gains vaporized. All of which has an impact on the real economy.

The crux of the issue is how the Fed deals with fear. How far should the Fed take its role of lender of last resort?

The players on Wall Street don't really suffer; it's ordinary people in Peoria who will lose their houses. And for what? The extra money is not going to be inflationary. This is another liquidity problem based on fear. The Fed has it within its power to reassure people. Should it not do this? (Admittedly, it sounds easy to reassure people but it's hard to do in fact.)

If the Fed had responded in 1929 this way, the Great Depression could have been avoided. This is the fact hanging over Bernanke (and Greenspan before him).

I happen to think that the potential for disaster was much greater in 1987 than now. When the stock market loses about 1/3 of its value in a day or so, people panic. Housing prices in the US were down about 10% year-on-year in 2007.

1987 was nothing. It had more to do with faulty trading systems creating paper losses.

2007/2008 is something because we are dealing with what most people think is their real wealth - their homes.

Look up the wealth effect for homes versus the stock market - people always react more strongly when their perceived house value rises or falls as compared to their stock portfolios (which makes sense since most peoples "wealth" consists almost entirely of the value of their house).

When we are looking at 20 million Americans being upside down on their homes later this year that is something.

Which is why the central banks have been pumping hundreds of billions of dollars into the financial system for over 6 months now.

----

IMV, the Fed's primary role is not to keep inflation low but rather to ensure that it follows a monetary policy that optimizes trading. We use currency for trades and the Fed's job should encourage this. Too much currency confuses price signals and makes trading difficult. Then again, sometimes people become fearful and then they seek to hold too much currency. They need reassurance and extra currency achieves this.

I know this is portrayed in terms of moral hazard or what you call "Greenspan's Put", but to me the question is more fundamental. Financial markets are prone to bubbles and bubbles eventually burst. Moral hazard is rational behaviour. A bubble is different from moral hazard: it's the result of irrational exuberance.

The Fed's primary role is to "maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."

A moral hazard is "the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk."

The Fed has distorted/insulated risk by continuously bailing out the market with liquidity even when the market should have been left alone to allow "creative destruction" take place (which is just a fancy way of saying "let the business cycle clean itself up every once in a while with a good recession).

Granted, now is not the time to allow this to take place.

But that is only because the Fed allowed things to get this bad in the first place.

At least moving forward we will see the government implement some regulations to deal with "liar" loans and the originators of such folly.

Link to comment
Share on other sites

1987 was nothing. It had more to do with faulty trading systems creating paper losses.

2007/2008 is something because we are dealing with what most people think is their real wealth - their homes.

In either case, we are talking of a perception of real wealth. Real wealth exists but its common valuation is something else.

If you learn your house is worth less, or that your stock portfolio is worth less, how do you change your behaviour? (Does it matter? You still live in your house. You still hold your portfolio.)

If your neighbour sells her house for less than you thought your house worth, how do you feel? When Google Finance shows red arrows and that your portfolio is worth less, how do you feel?

Seeing these numbers fall, what does a 60 year old boomer think? How about a boomer thinking of retirement? Now, imagine a market/world of several million boomers all thinking the same thing at the same time.

North American Boomers drive World stock markets but mostly American stock markets. Underneath it all, they're afraid, and mostly of death.

Edited by August1991
Link to comment
Share on other sites

....Seeing these numbers fall, what does a 60 year old boomer think? How about a boomer thinking of retirement? Now, imagine a market/world of several million boomers all thinking the same thing at the same time.

North American Boomers drive World stock markets but mostly American stock markets. Underneath it all, they're afraid, and mostly of death.

I think that's true for the most part. Rational thinkers with portfolios should temper their fears with the identical exuberance they displayed over inflated real estate and stock valuations. I often wondered if Enron stockholders were as alarmed on the way up as they were on the way down.

Your comment about 1987 was true as well...it precipitated real behaviors by people and changes by policy makers. I raced to the bank and "demanded" $10,000 in cash from my account (just to prove I could)....the teller calmly asked if I wanted that in $20 or $100 bills.

Anyone not willing to take a haircut now and then should never go into the barber shop...err....hair salon.

Link to comment
Share on other sites

Today on the radio I heard that Holland isn't taking US dollars because it believes the money is going to be worthless soon and doesn't want it. The US dollars is losing against the Euro and if the US $ is replaced by the Euro, I guess Canada could be in trouble too.

You heard wrong.

Link to comment
Share on other sites

North American Boomers drive World stock markets but mostly American stock markets. Underneath it all, they're afraid, and mostly of death.

Ummm maybe....if you are talking about retail investors, then no. If you mean the people who work and trade for the large institutionals, then yes.

Link to comment
Share on other sites

Ummm maybe....if you are talking about retail investors, then no. If you mean the people who work and trade for the large institutionals, then yes.
My claim was late night exuberance or exaggeration but nevertheless, the Boomers are in their high earning years now and many have stock portfolios. The boomers are about to start withdrawing pensions and they eye their savings with trepidation.

In that sense, boomers are driving most financial markets now.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Unfortunately, your content contains terms that we do not allow. Please edit your content to remove the highlighted words below.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Tell a friend

    Love Repolitics.com - Political Discussion Forums? Tell a friend!
  • Member Statistics

    • Total Members
      10,712
    • Most Online
      1,403

    Newest Member
    nyralucas
    Joined
  • Recent Achievements

    • Jeary earned a badge
      One Month Later
    • Venandi went up a rank
      Apprentice
    • Gaétan earned a badge
      Very Popular
    • Dictatords earned a badge
      First Post
    • babetteteets earned a badge
      One Year In
  • Recently Browsing

    • No registered users viewing this page.
×
×
  • Create New...