World Recession

[tech_noir]

I can't wait for it.....It will be splendid. I look forward to anarchy...when our society becomes corrupt enough a cleansing is necessary and a collapse of world economy is a good start to the anarchy to come

Surprisingly I do agree. I find the way economy works pretty distyurbing. I can't name the stock and loan speculations "a clean business". Legally it could be of course, but morally it is disturbing so many people to benefit so much without producing or givin anything to do society (eventually making much more people poor)

[zeusbheld]

i suspect the alleged benefits of war on an economy are overrated. do let's keep in mind that America's "adventure" in Viet Nam most likely caused its recession in the 1970s.

http://www.colorado.edu/Economics/courses/econ2020/section9/section9.html

see under expansionary fiscal policy

"increase in government spending" = "organize another war"

i'm a bit of a literalist and somewhat simple-minded, but i couldn't find anywhere in the macroeconomics 101 notes you cite where "increase in government spending=organize another war," so i have to assume that this equation you claim i can find under "expansionary fiscal poiicy" is your own.

Beyond the basics' date=' we won't go much further into fiscal policy. Part of the reason is that [b']discretionary fiscal policy has only a minor role when dealing with the economy. This is a result of the tremendous federal budget deficits present during the 1980s and 1990s, and the rapid accumulation in the national debt.

yes, it's only for mba's, perhaps doesn't live up to the required sophistication here

your dumbing down of introductory macroeconomics is most likely too subtle for the TF stink tank. we literal-minded simpletons are likely to perceive it as manipulation since we are rather thick and didnt find what you said we would under "expansionary fiscal policy."

also, being rather simple and literal-minded, i wasn't aware that undergraduate macroeconomics courses were "only for MBAs."

apart from that, the crises since 1970+ are generally blamed on the OPEC

hmmmm if your theory is correct then note what has happened to oil prices since the US started its adventure in Iraq. it'd take Cassandra to see this one coming.

but it seems it's systemic for neoliberalist policies that have been proposed as remedies since then, it doesn't seem to hurt those that matter

i suspect a great many of "those that matter"--if you mean the rich and powerful--weren't hurt by the great depression either.

the only wars that are rather bad for an economy are wars that destroy/decimate your own basic infrastructure and/or population, and as to that the US have had near zero experience

former white house economist Lawrence B Lindsey for Fortune magazine:

There is a widely held but utterly false belief that wars are good for the economy. Taking resources that could be used to build homes, manufacture appliances, or invent and develop new technologies and using them instead to make things that get blown up is not good for an economy. It can foster inflation and erode a nation's capital base.

hmmmm..... maybe i should keep googling, i'm having a hard time finding economists that agree with you. please provide links. maybe they should have gone to engineering school....

[zeusbheld]

I can't wait for it.....It will be splendid. I look forward to anarchy...when our society becomes corrupt enough a cleansing is necessary and a collapse of world economy is a good start to the anarchy to come

Surprisingly I do agree. I find the way economy works pretty distyurbing. I can't name the stock and loan speculations "a clean business". Legally it could be of course, but morally it is disturbing so many people to benefit so much without producing or givin anything to do society (eventually making much more people poor)

i'm looking forward to it as well, mainly because i would be very surprised if you smug fucks who are so eager for it are anywhere near as well prepared you lot seem to *think* you are, and THAT will be fun to watch.

my personal aspirations are much humbler; rather than global economic collapse i'd be happy to just nuke the credit card companies.

[zeusbheld]

i suspect the alleged benefits of war on an economy are overrated. do let's keep in mind that America's "adventure" in Viet Nam most likely caused its recession in the 1970s.

http://www.colorado.edu/Economics/courses/econ2020/section9/section9.html

see under expansionary fiscal policy

"increase in government spending" = "organize another war"

i'm a bit of a literalist and somewhat simple-minded, but i couldn't find anywhere in the macroeconomics 101 notes you cite where "increase in government spending=organize another war," so i have to assume that this equation you claim i can find under "expansionary fiscal poiicy" is your own.

this proves two things:

- that you can read but you can't think it through

sorry but i'd have to say that if you think it "proves" ANYTHING your standards of proof are very, very low. my impression of your definition of proof is: "sushi says so and he's smarter than you."

but then i can't think it through, and you obviously can, because taking basic macroeconomics, described in the broadest strokes possible, and twisting it around to say exactly what you want to is called "thinking it through." got it.

you don't know anything about macroeconomics "101" whatever "source" you may have googled up in the meanwhile

whereas *you* obviously do. Ph.D. in economics in addition to your engineering credentials, no doubt. are you a bit of a maverick? i haven't been seeing your ideas elsewhere, although i might if i had some econ textbooks left over from the 1950s. what's your real name, i want to look you up on the list of Nobel laureates.

oops i'm sorry i forgot the Golden Rule:

"sushi says so and he's smarter than you."

this is often the trouble with people who read too much, their brains have developed into something like literary vacuum cleaners,

always looking for something they can tell someone else, something they've read, written by a guy they can agree with because it sounds like just what they were thinking already

hi pot, i'm kettle. glad to meet you. is hypocrisy fun? should i try it?

in general, on this topic i'd say you're so deeply entrenched you could pass for the Maginot line. except the Maginot line was entrenched in France... in your case i'd say it's more anatomical.

i wasn't expecting the guys who run the white house to confirm they're into this for economic reasons,

so you are expecting the white house economist to say "this war's hideously expensive, and will cost a lot more than you think it will"? cos if you bothered to click the link, that's what he said and what the administration fired him for.

so what are you really saying? that if the Bush administration had said "the war, in addition to ridding the world of Saddam and his massive stockpile of WMDs, will massively boost the American economy!" it would have hurt his popularity with the American people?

hmmmmm i would expect it would have helped rather than hurt his popularity, at least until now, when the economy starts to tank. but then, i guess i just can't "think things through"

of course not they're in this because they're shameless mass-murdering cowards hiding in bunkers if anything as nasty as a fart comes near them, they deserve to be executed, not quoted, even if they agreed with me.

well, i can't comment on this. as it has nothing to do with what i was saying.

for the record, however, i don't support, and have never supported, the war or the administration.

i don't support *your* claim that wars are good for economies, either. i will, however, note that Mr. Cheney's pals at Haliburton have made quite a bit of money as the only bidder on many Iraq contracts. although unlike you, i'd be inclined to believe that they profited at the expense of the American economy. but then, i don't think things through, i just read magazines.

ok, you know what, you don't have to agree

well, thank YOU your ******* highness! can i kiss your ring now?

you're only saying that because i'm not on your level, mr. polymath. you're just impatient that i'm so stupid i can't see it. i still have to read about things outside my own field in order to attempt to understand them, in contrast to your ability to just "think them through."

some day, somewhere, i hope to meet at least one person who is as smart as *you* seem to think you are. so far, i haven't even come close, and this includes Nobel laureates.

i realize you're dumbing it down for the great unwashed, and i, at least, thank you for that. however, i would humbly suggest that you *are* allowed to use all 64 crayons, oh great one.

[GoldMember]

I can't wait for it.....It will be splendid. I look forward to anarchy...when our society becomes corrupt enough a cleansing is necessary and a collapse of world economy is a good start to the anarchy to come

Which all coincides rather nicely with the Sex Pistols comeback tour.Coincidence or something more sinister.Probably best left to the unemployed conspiracy theorists at Citi and Merrills to work out .Pass the time n all that.poor mites

[biachung]

How do you think Osama will feel about a possible recession?

Will it work in his favor?

134 billion so far.

Do you think he will loose his home because of this?

sorry, jus rambling =)

[zeusbheld]

I can't wait for it.....It will be splendid. I look forward to anarchy...when our society becomes corrupt enough a cleansing is necessary and a collapse of world economy is a good start to the anarchy to come

Which all coincides rather nicely with the Sex Pistols comeback tour.Coincidence or something more sinister.Probably best left to the unemployed conspiracy theorists at Citi and Merrills to work out .Pass the time n all that.poor mites

personally i won't start to worry until until it coincides with the Sid Vicious comeback tour...

[luckyphil247]

I tend to think and believe that a recession benefits the very rich and powerful . The difference between the rich and poor becomes even greater during a recession .

My very over-simplified theory ;

Middle class man working very hard to pay mortgage . Loses job due to recession and becomes unemployed . With so many unemployed ; fat rich boss pays less .

Middle class man can't afford mortgage anymore and is forced to sell home . Fat rich boss goes to the auction and buys the home at a bargain price because not many people have money . Middle class man has sold at a loss .

Fat rich boss tells middle class man that he can stay in the house as a renter . The rent is very expensive because many people renting now .

Fat rich boss has a grand plan ;

He wants middle class man to work hard over the next 5-10 years while getting paid very little . When the economy gets better again and middle class man saves a deposit ; rich fat boss will sell the home back to him but at a premium .

Fat rich boss makes a great profit from middle class man after 7 years . He is now eagerly planning for the next recession .

Middle class man is stuck in a vicious circle , always a slave to the fat rich boss .

[Simmo_V2.0]

Middle class man is stuck in a vicious circle , always a slave to the fat rich boss .

Karl Marx is back!!

[zeusbheld]

Middle class man is stuck in a vicious circle , always a slave to the fat rich boss .

Karl Marx is back!!

which one was he, the blond curly one of the guy with the bushy eyebrows and cigar?

[Dave40]

always a slave to the fat rich boss .

Meet the new boss same as the old boss!!!!

[zeusbheld]

i suspect the alleged benefits of war on an economy are overrated. do let's keep in mind that America's "adventure" in Viet Nam most likely caused its recession in the 1970s.

http://www.colorado.edu/Economics/courses/econ2020/section9/section9.html

see under expansionary fiscal policy

"increase in government spending" = "organize another war"

i'm a bit of a literalist and somewhat simple-minded, but i couldn't find anywhere in the macroeconomics 101 notes you cite where "increase in government spending=organize another war," so i have to assume that this equation you claim i can find under "expansionary fiscal poiicy" is your own.

this proves two things:

- that you can read but you can't think it through

sorry but i'd have to say that if you think it "proves" ANYTHING your standards of proof are very, very low. my impression of your definition of proof is: "sushi says so and he's smarter than you."

but then i can't think it through, and you obviously can, because taking basic macroeconomics, described in the broadest strokes possible, and twisting it around to say exactly what you want to is called "thinking it through." got it.

you don't know anything about macroeconomics "101" whatever "source" you may have googled up in the meanwhile

whereas *you* obviously do. Ph.D. in economics in addition to your engineering credentials, no doubt.

you don't need a PhD to know the difference between a mammal and a fish

i notice you just pick out these little bits, the easy parts.

you *claim* to know what you're talking about each time you glibly oversimplify sometihing yet you can't be bothered to back it up.

are you gonna back up your claims and make an actual argument for why things really are as dirt-simple as *you* say they are, in spite of there being a great many economists who say otherwise, or are you just going to sit back, pout, and insist you're right just because you're sooooo much smarter than everyone else?

what's the matter, afraid if you actually SAY something instead sitting back smugly and insisting your'e brilliant, it'll be easy to see through you? are you afraid you'll look as silly and clueless as you did with your pompous, ignorant dumbed-down proclamations about twentieth century art? afraid it'll be obvious even to the TF stink tank you're basically full of ****?

in other words, why not answer any questions? feeling a bit naked today, mr. emperor?

hmmmm i thought fish were vertebrates. where's YOUR spine?

[zeusbheld]

question 1

in the unlikely event you stop pouting and hiding behind your alleged genius, you can start by explaining why this:

Beyond the basics' date=' we won't go much further into fiscal policy. Part of the reason is that discretionary fiscal policy has only a minor role when dealing with the economy. This is a result of the tremendous federal budget deficits present during the 1980s and 1990s, and the rapid accumulation in the national debt. [/quote']

is wrong. that's from the source *you* cited. they say it has only a minor role, you say.. hmmm... do explain please.

question 2

please explain how sending money overseas is an apples-to-apples comparison with domestic spending as an economic stimulus. specifically, explain why they're equally effective, and why every economist *i* seem to be able to google is wrong.

an open challenge: you gonna explain fully for me and any other feebs that might need it? or just offer more of your sulky misunderstood-genius bullshit?

here's your big chance, sushi. you keep insisting your'e smarter than everyone else. make a first of it and actually back it up by answering a few questions, and show how you've thought it through, for those of us who, like me, obviously can't.

from where i sit, it sure looks like you're saying a fish is a mammal. but then, as you say, i can't think it through. so show me. i'll have a few more questions after you explain these, as i really would like to understand.

or alternatively, you can do a runner and go sulk the way you 'misunderstood geniuses' usually do, leaving me to assume all of this is just one more example of you bullshitting, and you' really haven't "thought through" JACK ****.

[robbie36]

I think the idea that because we have seen big falls across all markets that signals a worldwide recession is somewhat erroneous. There needs to be a distinction between capital markets and economy. Economies like Vietnam India and China are still booming but there was a limit to how far their capital markets could continue going up - they had done so well that valuations were, in general, crazy.

As an example, consider this. Of the top ten companies in the world by market capitalization - 5 are Chinese....

http://www.redcatjournal.com/china-content/china-stocks/half-world-039-s-top-10-largest-companies-market-capitalization-are-chine

I bet you havent even heard of them. While economies can decouple from one another, capital markets cannot.

Far from a recession I believe that what is troubling capital markets is inflation - which is running at levels not seen for 20 years. It is especially evident in commodities and has caused riots in Burma and unrest in China - the underprivileged are particularly affected.

Noone has quite worked out how all economies grow at once with limited resources...

[Loburt]

No one has quite worked out how the world will survive with limited resources.

[Loburt]

Well, George Soros doesn't think there is much of a firewall between capital markets and economies:

However, backing the major US Federal Reserve interest rate cut, Soros said: "You have to rescue markets otherwise you would go into a depression, as you did in the 1930s."

He's done pretty well with his analysis over the years.

[robbie36]

Well, George Soros doesn't think there is much of a firewall between capital markets and economies:

However, backing the major US Federal Reserve interest rate cut, Soros said: "You have to rescue markets otherwise you would go into a depression, as you did in the 1930s."

He's done pretty well with his analysis over the years.

Well George Soros is one of the world's biggest punters so I am sure he likes the idea of the Fed bailing out markets when they go down. (Incidentally the Dow is within 20% of its all time high reached in October 2007 so we are a long way from the need to rescue capital markets to avoid a depression.)

But I will readily admit that the recent weakness in the US markets is over concerns about a US recession and the effects on US company earnings.

My point was mainly that profit taking - and 15-20% falls - in Chinese and Indian markets after rises of 200% over the last three years were rather inevitable given relative valuations and have little to do with economic fundamentals which remain very strong.

I dont know of any serious economist calling for a global recession. There is a general consensus of a recession in the US and several economists also looking for a recession in Japan and Europe. But part of the problem is that strong growth in India and China is squeezing out growth elsewhere in the world.

[robbie36]

Perhaps my point is better illustrated by this. The largest economy in the world in terms of people is still growing very strongly...

http://news.bbc.co.uk/2/hi/asia-pacific/7206174.stm

perhaps too fast...

[Loburt]

Perhaps my point is better illustrated by this. The largest economy in the world in terms of people is still growing very strongly...

http://news.bbc.co.uk/2/hi/asia-pacific/7206174.stm

perhaps too fast...

I'm not pretending to be an expert on matters such as this, but my understanding is that in places like China or Thailand, where the equities markets are either relatively small or not yet mature, the link between the economy and the market isn't as strong in places such as Europe, America, Japan, etc., where people's pension funds, etc., are all invested.

Nonetheless, I think one shouldn't underestimate the linkages, or Rube Goldberg-type domino effects, of something like the subprime crisis.

If you're a rice farmer in Shaanxi province then it would seem that if the Dow melts down it shouldn't make a difference to you at all.

But it might, depending upon why the Dow is melting down. What if Chinese banks are overexposed to companies or investment vehicles that are getting hammered. What if those banks aren't all that well-managed in the first place and now have liquidity problems. What if the rice millier in Shaanxi can't get credit now and cuts back on operations or shuts down. Now the rice farmer has a problem.

It's a lot of what ifs, but disasters usually happen when a bunch of what ifs line up and actually happen. And as we've seen in the past, they certainly can, despite assurances from economic planners and financial experts and analysts that they can't. I mean, almost a decade after Nick Leeson, who would have thought what happened at Societe General could happen.

The baht crisis was essentially a financial crisis stemming from mismanagement at the central bank. And yet a lot of rice farmers suffered.

It's unlikely China would suddenly slip from double digit growth to negative numbers, but that doesn't necessarily mean a lot of people in China wouldn't get hurt if growth suddenly slowed by several percentage points. And I think when the US market crashed in 1929, the effects on the real economy weren't truly felt for a year or two.

I'm not saying we're heading for disaster. But I think those who are calling for vigilance and pro-active moves by all involved, are probably doing the right thing.

[Cosmo]

It is now clear the US economy has gone into a slow down.

Last night, the US labor report showed job losses for February increasing dramatically - by a whopping 63,000 - the worst in 5 years.

As a consequence, the Dow, the Nasdaq and S&P 500 all fell below critical levels.

Even President Bush admitted as much:

http://money.cnn.com/2008/03/07/news/economy/bush_econ/index.htm?cnn=yes

Damn, this has come about so quickly and so dramatically.

Lets hope the rest of the world is not going to catch a severe cold as well.

[hbkbkk]

I think thailand's probably can deal with it better than other asian country. considering that thailand is not oversold like other countries.

But do expect the baht to test the 30 support line.

[Bruce551]

On managing through the economic downturn-Steve Jobs

"We've had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren't going to lay off people, that we'd taken a tremendous amount of effort to get them into Apple in the first place -- the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that's exactly what we did. And it worked. And that's exactly what we'll do this time."

Sounds good to me.

[Loburt]

I think thailand's probably can deal with it better than other asian country. considering that thailand is not oversold like other countries.

But do expect the baht to test the 30 support line.

what do you mean by thailand is not oversold?

[hbkbkk]

I think thailand's probably can deal with it better than other asian country. considering that thailand is not oversold like other countries.

But do expect the baht to test the 30 support line.

what do you mean by thailand is not oversold?

Real estate and stock market in thailand sell for a third of the price of those in Hong Kong, and less than half the price of those in Singapore, making them relatively cheap. Of course that is just my 2 cents.

[Loburt]

That may be true, but I doubt those factors are enough to save Thailand from the knock on effects of a recession hitting the US and Europe (and Japan).

The Thai economy depends on exports far more than investment in the stock market or real estate.

The stronger the baht gets, the less competitive those exports become.

Also, the Thai stock market has a reputation for being a casino and being manipulated. Yes, there are some blue chip companies that are a good bet. But considering all the other factors, I don't see institutional investors going heavy on the Thai market or equities.

Just my two baht.