OT: world heading towards economic recession ?

jarski

jarski

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hi. posting more OT here cant hardly be imagined, but because international nature of this forum, I would like hear opinions. mod this away if its out of line.

past weeks and especially days there has been alarming news about home loan market problems in US. Asian and European banks injecting billions into monetary system, as if they are fighting against something. Dollar vs Euro value as been steadily declining, like many have noticed from cameras priced in Dollars. whats going on ?

I dont have loans myself, just a little stock options that have been declining - just as they did little over a year ago. then I paniced a bit, withrew from risky ones (with loss). now I'm wondering should I repeat the same mistake again, or fleet the sinking boat and put my money into Leica's 😛
 
I ask the same question here a few weeks back. This is my opinion: The trade between Europe and USA is very important for the World Economy. If the Dollar falls it will hit growth & prosperity in Europe and there is no real substitute for this trade (with all respect to you chinese). Still I feel that the fall on the world stock exchanges now is a correction and that liquidity in the financial market is generally good and will stay good untill the European 'babyboomers' starts to draw on their pension funds. Money are still flowing in to these funds, they be governmentally run or privateized. But just a few years down the road this flow will turn. Then we will see a reccession and serious 'turn of events'.

But then I haven't followed the financial scandal that is now emerging regarding all the flawed loans in the US. - Everything is so big in USA, even the tomatoes....

A friend of mine armed enough to make a trip to USA every now and then says that all the lower middle class sits deep in homes- and credit card dept; 'up to their ears' over there. Which is likely, since they havn't seen purchasing power growth in 15 years or so. - What he describes is a social distaster that has to be solved politically... Yet a New Deal perhaps?

What I see are politicians up for vote over there that are far beond the caliber of any Roosvelt be it Obama or Clinton, - or Guiliani - who I hope for, since things has to become even worse before we will se any real improvements. - A major political reform, - like we have seen in ex. Sovjet Union.

An impoverished USA will impoverish even us, but we will hopefully see a more peacefull world, - so I am an optimist.
 
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I think it is dollar economy that is declining. There is boom in asia that will continue they are buying all steel they buy oilwells in africa.now all the chinese are buying cars.thats where the strong economy will be in the future
 
China might be booming, but far from the point where it could replace the USA in world economy. For instance trade balance of Germany alone is bigger than that of China.
 
Much has to do with the Bush administration "stewardship" of the US economy. Taking us from a relatively clean balance sheet when the baton was handed to these idiots from Clinton, to historic debts...

And then there's 12 billion dollars a month added to the deficit in the most absurd and tragic fiasco - the war in Iraq. (Good for defense contractors though, and their stocks)

And then there's one of the first things Bush did (might have been the first bill he signed back in 2001) - caving to the bank lobby, to make personal bankruptcy laws stricter, which had the effect of enticing more adjustable rate mortgage and "garbage" mortgaging practices... since what was behind this was reducing risk for the bank...

If we're headed toward a recession, we have this corrupt and inept administration to thank. Which has been a disaster for the US and the world.
 
assorted random comments that only loosly ties into the discussion... discuss:

china has completely destroyed its environment during its recent period of "phenomenal" growth, i mean, to the point where they will have millions of environmental refugees in just a few years. but thats what you get when you only worry about gdp and keep no account of the natural resources exploited. china can threaten the us all it wants by saying it will liquidate its dollar assets if there are any trade sanctions imposed, but it cant do that; that would almost be an act of war... anyway, the financial markets are so tied up these days that any kind of economic hardship in one of the major world markets will be disastarous to all.

are we heading for a recession? maybe. looking at history, they are unavoidable, i think. anyway, economic markets are getting better and better at bouncing back from them. i have faith in my internation banking overlords, god forbid they don't get a multi million dollar bonus come christmas ;-).
 
jarski said:
..........I dont have loans myself, just a little stock options that have been declining - just as they did little over a year ago. then I paniced a bit, withrew from risky ones (with loss). now I'm wondering should I repeat the same mistake again, or fleet the sinking boat and put my money into Leica's 😛
Click to expand...

What you are telling is that for you there are only two possibilities. A steady world market in which you buy stock OPTIONS, and some of them RISKY ones, or a declining world economy in which you get out.

I hope to have been of some help.
Cheers,
Ruben
 
The TSX in Toronto, Canada hit a 3 month low yesterday... despite Canadian banks injecting $$$ into the system here. There are only so many steps in place to keep this from happening.

And I hate that the Canadian dollar is almost on par with the US dollar. For that reason, I now have more EU, and UK clients... so that I can cash in on the exchange, and make a few more dollars.

To be honest, I fully expect a "Great Depression" of sorts any time now.
 
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somecanuckchick said:
To be honest, I fully expect a "Great Depression" of sorts any time now.
Click to expand...

So sayeth the Queen Of Doom (and Gloom)


A correction will be happening - yep that's a given.
It's all due to the U.S. sub prime mortgage market. A good buddy of mine (Nancy also knows him) had mentioned this back about a year or so ago when he was house hunting here in Toronto.

It just didn't look sustainable (the U.S. market) based on what was going on with respect to rates of interest combined with the amount of credit that existed out there.

Sooner or later the gap would close and people would be having a tough time making mortgage payments on homes they really shouldn't or couldn't afford in the first place.

We just happen to be at the "later" part of the equation - correction yes - great depression - pffffft hardly.

Dave
 
The great depression, though you are probably refering to the stock market crash more than the depression, was caused by unimaginable stupidity. There are a bunch of stupid things going on right now, mostly because people don't understand that borrowing money also means that at some point it needs to be payed back, but the financial markets are much more stable than they have ever been in the past. There is a lot of debt and stocks are overvalued, but I don't think that anything drastic will happen.
 
einolu said:
....... There are a bunch of stupid things going on right now, mostly because people don't understand that borrowing money also means that at some point it needs to be payed back..........
Click to expand...

😀 😀 😀 😀

Enjoyed it,
Ruben


Although to be honest, this sin is not the exclusivity of stupid people, but governments too.
 
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Come on. . . .

Come on. . . .

NickTrop said:
Much has to do with the Bush administration "stewardship" of the US economy. Taking us from a relatively clean balance sheet when the baton was handed to these idiots from Clinton, to historic debts....
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Nick,

I like a lot you have to say about cameras, but blaming the Bush adminitration for this? Come on! First of, I am not a Bush backer nor am I a Republican supporter (I love the idea of Universal health care too much). But to blame this on Bush is like saying the reason we have strange world weather is his fault, or he's the reason we have stupid daylight savings time. He's a bad president, not the "anti-christ". I think it is time to point the finger squarely at the problem of American debt: the average American.

We are led to believe, day in and day out, that we deserve a higher quality of life than other countries, that we need luxuries, that our value is found in how much we own. And we Americans buy into it! We want to make more money and quick money: hence the housing bubble. I rode it. I bought a house for 105k and sold it two years later for 145k. The current house I bought is in the innercity (for $60K), and I am content with it.

But most of the time we Americans are not content. We need to buy, and buying is what fuels the economy, so we are incouraged to buy. Why do you think Citi Cards slogan is "live richly"? Why do you think Visa, after tallying the cost of everything in a commerical says the experience was priceless?

We are to blame, and unless we individual Americans learn to live within our means and take financial responsibility, we will fall like the Roman Empire.

I have $5k of creditcard debt I am trying to pull myself out of (my household income is $36K a year, so $5k is a lot.). But what I find staggering is that this huge credit card debt is actually far less than the average American holds: over $12k is the average! This is a lot of money, and that does not include car payments (thankfully mine are all paid off) and house payments!

Bush is not the problem and neither was Clinton (for all the pro-Bush people who might want to blame Clinton). WE are the problem. And WE are also the solution to the problem, if we choose to follow that path instead of blaming our leaders for our personal debts.
 
Good time to pick up some DITM calls on equities showing good relative strength. 😀 (If you think the bottom is near, that is...)
 
NickTrop said:
Much has to do with the Bush administration "stewardship" of the US economy. Taking us from a relatively clean balance sheet when the baton was handed to these idiots from Clinton, to historic debts...

And then there's 12 billion dollars a month added to the deficit in the most absurd and tragic fiasco - the war in Iraq. (Good for defense contractors though, and their stocks)

And then there's one of the first things Bush did (might have been the first bill he signed back in 2001) - caving to the bank lobby, to make personal bankruptcy laws stricter, which had the effect of enticing more adjustable rate mortgage and "garbage" mortgaging practices... since what was behind this was reducing risk for the bank...

If we're headed toward a recession, we have this corrupt and inept administration to thank. Which has been a disaster for the US and the world.
Click to expand...
Here in Norway we have gone the other way regarding personal bankrupcy. Through a court order (after a thorough investigation of your financial status) you can have your debt removed under certain conditions and start afresh, like a company. This means that the banks can't push loans down the throats of ordinary people that they are likely to fault on. Credit card companies are restricted to operate at regulated interest rates for flawed loans etc.

Such a reform will not materialize in USA with today's corrupt politicians. In the end you will have litterally millions of loan defaulters while the nation, both the government and the private banks borrow more and more money from overseas.

Imagine this big party were the bill is passed between 280 million participants. Who can pay? Who will be asked to pay? The lower middle class? USA is now going to face some social hardships not unlike those of Argentina and Israel, so, I say to all young americans I meet; get out there! Emigrate to Europe.
 
Finder said:
Maybe we should buy more film.
Click to expand...


Hmmm, perhaps we could combine the apocalyptic prophecies about the end of film with this new apocalyptic one about world economy crush. And make some profit too.

For example, given a world economy recession, film extinction may be acelerated. Therefore, instead of buying options or leicas we could buy a new big freezer and fill it with film to be reselled later at higher prices. Tri-x or Fujicolor ?

Cheers,
Ruben
 
somecanuckchick said:
The latter most assuredly would equal the other, I think. 😱
Click to expand...

Agreed. Just worded it that way because the crash caused the depression. A crash is really bad. The crash of 1929 was so bad that the depression that followed was called The Great Depression. A depression by itself is just a few quarters of recession, which isn't nearly as bad.

🙂
 
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