Would someone mind updating me on the economy?

[MidnightSensi]

I don't see why we would go to war with other countries during this though, doesn't war cost a lot of money?

Let me see if I follow: When it gets worse, countries will start protecting their own (by doing things like inacting tarrifs for stuff imported to help keep stuff local alive?), and if we do that it'll anger places like Japan and China? I guess that makes sense, but, how can we really do that? We don't have the factories and such they do, right?

I work in manufacturing and all the environmental checks, regulations, lawsuits, and whatever else make it impossible to compete with Asias costs, even shipped. We used 5 gallons of some glue they didn't like and got into a huge hassle over it, we are a very small plant and America has made it hugely expensive to build anything in the US, especially for small businesses. They will absolutely have to lax on some of that stuff to help small business/manufacturing recover. It kinda goes back to Asia... we buy all our plastics and whatever that the regulations are too tough to make here from over there, so if we didn't buy from them they'd have to lax some regulations and stuff.

One thing that really sent it home for me, is that when ever there is a bank holiday, the traffic is like null on the way to work. Shows you how many people work for a government or a bank, as most places don't give all these BS holidays off.

Is there anything in the stimulus plan for small manufacturing companies? Seems like the big ones have had a ton of help.

Interesting convo for me, and very helpful, again, I appreciate the help in understanding guys...

 

[MidnightSensi]

And yes, you are right, we do have to return to an era of production of goods of value. However protectionism is not an option, for the reasons stated above. The result is that wages and benefits have to be comparable around the globe. This financial crisis is very much to do with trying to escape that reality.

I read this before, but it took a minute to sink in. That's a big issue... because that means that countries like China and America and Europe will have to be farely equal in wealth per capita, right? Like, a Chinese guy will make the same as a American guy. Is that what that means? If so, we are really in trouble, because I don't think many could handle or wrap their head around that without a ton of turmoil and changes first....and lots of time.



...


Sorry for all the dumb questions. I'm actually pretty smart, but, this is taking me a while to grasp.

 

[TLS Guy]

I read this before, but it took a minute to sink in. That's a big issue... because that means that countries like China and America and Europe will have to be farely equal in wealth per capita, right? Like, a Chinese guy will make the same as a American guy. Is that what that means? If so, we are really in trouble, because I don't think many could handle or wrap their head around that without a ton of turmoil and changes first....and lots of time.



...


Sorry for all the dumb questions. I'm actually pretty smart, but, this is taking me a while to grasp.

You are correct on both counts. The daft regs will have to change. The damn has now ruptures. I believe it inevitable that the standards of living world wide will equalize. This is a reality the politicians are avoiding.

 

[lsiberian]

I'm not the economic expert in my family that would be my brother who had all his clients in Cash before the slide started. But every indication is that we are a in a 1929 like situation.

On Friday we broke the 2002 support point for the DJIA That means our next support point is in 1997 at around 6500. After that our support point is 5600 in 1996.

That means 10 years of wealth have been erased Since October 2007 when the market peaked.

We are in trouble, but we need to realize that we could all live off of far less. We still grow a lot of food which is very vital to our survival. China manufactures, but we ship them food so I don't see them starting a war with us. I think we will see most countries coming together to solve this crisis and help everyone through it. This problem isn't actually about debt or any of that IMO. I think it's an environmental issue. We have to be more efficient and cleaner in our consumption. While the market is bad. The climate situations are far more dangerous. They have already killed millions in 3rd world nations and we must change our ways to be more conservative. I think even in our hobby we should be conscious of power use. We over taxed our ability to fuel ourselves because we were being gluttons. Gluttony is the biggest problem we face in our country. Everyone has fattened up on excess instead of sharing with the neighbor in need. We have to change our ways for the world to improve. People shouldn't have to live in poverty nearly as much as they do.

A lot of people hate religion, but we can really learn a lot from the books if we care to read them.

Galatians 5:19-21a
19The acts of the sinful nature are obvious: sexual immorality, impurity and debauchery; 20idolatry and witchcraft; hatred, discord, jealousy, fits of rage, selfish ambition, dissensions, factions 21and envy; drunkenness, orgies, and the like.


Many of the things listed above are what drove us into this mess. There are millions or orphans yet a single mother uses fertility drugs to have 8 children. That my friends is a perfect example of excess and insanity.

This is how we should live

22But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, 23gentleness and self-control. Against such things there is no law.

We need to not go head hunting we need to move on and resolve this situation with peace and co-operation. Greed is a very easy thing for anyone to fall into and we have all benefited from it too. So we too are without excuse. The things that matter in life most isn't our stuff. It's our friends, family, people and faith. And remember many people in the world are happier than you and they live in mud huts, are malnourished, and have life expectancies 20 years or more lower.

And go ahead laugh at all the stuff you have that you don't use. You don't need it anyway.

 

[lsiberian]

You are correct on both counts. The daft regs will have to change. The damn has now ruptures. I believe it inevitable that the standards of living world wide will equalize. This is a reality the politicians are avoiding.

I wish they would equalize. I don't care if I have to eat less or live in a smaller dwelling. But sadly I think the poor will only get hurt even more.

 

[majorloser]

Another Sign of Economic Apocalypse

The Girl Scout cookie sales are down almost 20%

http://www.usatoday.com/news/nation/2009-02-19-girlscoutcookies_N.htm

But alcohol sales are up.

http://media.www.su-spectator.com/media/storage/paper948/news/2009/01/28/News/Alcohol.Sales.Survive.Despite.Economic.Drought-3601267.shtml

SCREW THE THIN MINTS. GIVE ME A BEER!

 

[Adam]

SCREW THE THIN MINTS. GIVE ME A BEER!

May I offer a compromise?

 

[majorloser]

I don't see why we would go to war with other countries during this though, doesn't war cost a lot of money?

"War Economy"
http://en.wikipedia.org/wiki/War_economy

Let's take World War II as an example.

This war was started by Germany due to their poor economic situation.
http://en.wikipedia.org/wiki/Causes_of_World_War_II

A situation that was rooted in the Treaty of Versailles, the end of World War I.
http://en.wikipedia.org/wiki/Treaty_of_Versailles

World War II caused a HUGE increase in manufacturing and economic upturn.
http://en.wikipedia.org/wiki/Military_production_during_World_War_II

After the war there was a huge increase in national prosperity. Leading to a huge increase in building and a vast improvement in our economy. The "Baby Boom" is attributed to these good economic conditions.
http://en.wikipedia.org/wiki/Post-World_War_II_baby_boom

(I had a longer response typed, but thanks to my cat it got deleted.)

 

[Tomorrow]

A CATastrophe!

 

[Davemcc]

"War Economy"
http://en.wikipedia.org/wiki/War_economy

Let's take World War II as an example.

This war was started by Germany due to their poor economic situation.
http://en.wikipedia.org/wiki/Causes_of_World_War_II

A situation that was rooted in the Treaty of Versailles, the end of World War I.
http://en.wikipedia.org/wiki/Treaty_of_Versailles

World War II caused a HUGE increase in manufacturing and economic upturn.
http://en.wikipedia.org/wiki/Military_production_during_World_War_II

After the war there was a huge increase in national prosperity. Leading to a huge increase in building and a vast improvement in our economy. The "Baby Boom" is attributed to these good economic conditions.
http://en.wikipedia.org/wiki/Post-World_War_II_baby_boom

(I had a longer response typed, but thanks to my cat it got deleted.)

The peace dividend that the U.S. experience following WWII was an aberration in the economics of war. In that case, America sat out the first years of the war and became a creditor nation to the warring parties. America supplied arms and goods to Europeans on credit that employed millions of Americans and generated local wealth. In fact, there was no economic boom for the nations in which the wars took place or the nations that financed the war with massive public debt. These nations were depressed and indebted for decades following the war.

In the present case, if America were to enter the war for it's own purposes, presumably it means that America is also entirely financing it's war with taxation. While nothing of consumer value is being created, millions of people may be employed building bombs and weapons systems whose only purpose is destruction. Once the war materiel is destroyed, the taxpayer has nothing of value left to show for his indebtedness, much like the debtor nations following WWII. The country is poorer for having entered the war. In the short term, it may reduce the unemployment rate during a time of recession but that gain is more than offset by the future indebtedness of the nation as a whole, the influx of manpower returning from the war re-establishing high unemployment and the rates of taxation required to cover the debt.

I covered this in more detail here earlier. I will search that post but here's a link in the meantime that also deals with the subject.

http://economics.about.com/od/warandtheeconomy/a/warsandeconomy.htm

Found them:
http://forums.audioholics.com/forums/showpost.php?p=448362&postcount=64
http://forums.audioholics.com/forums/showpost.php?p=448657&postcount=76
http://forums.audioholics.com/forums/showpost.php?p=448657&postcount=76
http://forums.audioholics.com/forums/showpost.php?p=448768&postcount=81

 

[lsiberian]

The peace dividend that the U.S. experience following WWII was an aberration in the economics of war. In that case, America sat out the first years of the war and became a creditor nation to the warring parties. America supplied arms and goods to Europeans on credit that employed millions of Americans and generated local wealth. In fact, there was no economic boom for the nations in which the wars took place or the nations that financed the war with massive public debt. These nations were depressed and indebted for decades following the war.

In the present case, if America were to enter the war for it's own purposes, presumably it means that America is also entirely financing it's war with taxation. While nothing of consumer value is being created, millions of people may be employed building bombs and weapons systems whose only purpose is destruction. Once the war materiel is destroyed, the taxpayer has nothing of value left to show for his indebtedness, much like the debtor nations following WWII. The country is poorer for having entered the war. In the short term, it may reduce the unemployment rate during a time of recession but that gain is more than offset by the future indebtedness of the nation as a whole, the influx of manpower returning from the war re-establishing high unemployment and the rates of taxation required to cover the debt.

I covered this in more detail here earlier. I will search that post but here's a link in the meantime that also deals with the subject.

http://economics.about.com/od/warandtheeconomy/a/warsandeconomy.htm

Found them:
http://forums.audioholics.com/forums/showpost.php?p=448362&postcount=64
http://forums.audioholics.com/forums/showpost.php?p=448657&postcount=76
http://forums.audioholics.com/forums/showpost.php?p=448657&postcount=76
http://forums.audioholics.com/forums/showpost.php?p=448768&postcount=81

IOTW war sucks. Let them play chess instead.

 

[Nemo128]

I wish they would equalize. I don't care if I have to eat less or live in a smaller dwelling. But sadly I think the poor will only get hurt even more.

Admirable, friend, but unfortunately most people do not share your (mine as well) beliefs... many people would sooner stomp on the poor to get to a dollar on the floor than let the poor grasp it.

 

[TLS Guy]

Admirable, friend, but unfortunately most people do not share your (mine as well) beliefs... many people would sooner stomp on the poor to get to a dollar on the floor than let the poor grasp it.

I fear there is truth in what you say. However that road will likely lead to war, and sooner rather than later.

Since my last posts I have to say the news is worse.

AIG say they need at least $60 billion more, on top of 150 billion already received. They are the banks insurers, so that is a sign the banks really are in bad shape.

No one is stepping up to buy T- Bills. In fact there was flight from them Friday, so there is no responsible way of financing the bail out bill. That bill needs calling back fast!

We really need to get these daft talking heads off the air. They want a plan now. We have only just started to look at the banks in a careful way, and we should have been doing this months ago. Some talking heads are daft enough to say we don't want, or need to know how bad the financial shape of the banks really really is. They just think Obama should go back to speeches about hope!

The fact is we can't poor money into jello. We have to know the cold hard facts.

I'm more convinced than ever, that these banks and AIG are not too large to fail. I think more likely than not, they have to be allowed to go through guided bankruptcy.

This process will cause things to be unbelievably unpleasant for a long period of time. However that will allow for recovery eventually. I fear if we continue to poor money into jello, there will be no recovery, at least not for generations.

Even the most optimistic talking heads were talking about recovery at the earliest starting in five years this morning. I really have no idea when recovery would start after our biggest financial institutions emerge from bankruptcy, but it could easily be a generation or more.

Everyone needs to be aware that this is extremely serious and there IS no painless quick fix now. I'm certain we are passed that point.

 

[Tomorrow]

I fear there is truth in what you say. However that road will likely lead to war, and sooner rather than later.

Since my last posts I have to say the news is worse.

AIG say they need at least $60 billion more, on top of 150 billion already received. They are the banks insurers, so that is a sign the banks really are in bad shape.

No one is stepping up to buy T- Bills. In fact there was flight from them Friday, so there is no responsible way of financing the bail out bill. That bill needs calling back fast!

We really need to get these daft talking heads off the air. They want a plan now. We have only just started to look at the banks in a careful way, and we should have been doing this months ago. Some talking heads are daft enough to say we don't want, or need to know how bad the financial shape of the banks really really is. They just think Obama should go back to speeches about hope!

The fact is we can't poor money into jello. We have to know the cold hard facts.

I'm more convinced than ever, that these banks and AIG are not too large to fail. I think more likely than not, they have to be allowed to go through guided bankruptcy.

This process will cause things to be unbelievably unpleasant for a long period of time. However that will allow for recovery eventually. I fear if we continue to poor money into jello, there will be no recovery, at least not for generations.

Even the most optimistic talking heads were talking about recovery at the earliest starting in five years this morning. I really have no idea when recovery would start after our biggest financial institutions emerge from bankruptcy, but it could easily be a generation or more.

Everyone needs to be aware that this is extremely serious and there IS no painless quick fix now. I'm certain we are passed that point.

Welcome to the Dark Side, Mark. Kind of unpleasant over here...yes?!

What to do? What to do?

 

[lsiberian]

I fear there is truth in what you say. However that road will likely lead to war, and sooner rather than later.

Since my last posts I have to say the news is worse.

AIG say they need at least $60 billion more, on top of 150 billion already received. They are the banks insurers, so that is a sign the banks really are in bad shape.

No one is stepping up to buy T- Bills. In fact there was flight from them Friday, so there is no responsible way of financing the bail out bill. That bill needs calling back fast!

We really need to get these daft talking heads off the air. They want a plan now. We have only just started to look at the banks in a careful way, and we should have been doing this months ago. Some talking heads are daft enough to say we don't want, or need to know how bad the financial shape of the banks really really is. They just think Obama should go back to speeches about hope!

The fact is we can't poor money into jello. We have to know the cold hard facts.

I'm more convinced than ever, that these banks and AIG are not too large to fail. I think more likely than not, they have to be allowed to go through guided bankruptcy.

This process will cause things to be unbelievably unpleasant for a long period of time. However that will allow for recovery eventually. I fear if we continue to poor money into jello, there will be no recovery, at least not for generations.

Even the most optimistic talking heads were talking about recovery at the earliest starting in five years this morning. I really have no idea when recovery would start after our biggest financial institutions emerge from bankruptcy, but it could easily be a generation or more.

Everyone needs to be aware that this is extremely serious and there IS no painless quick fix now. I'm certain we are passed that point.

I think sometimes pain can be a helpful thing. Sadly the poor don't have enough people making sure they are still helped. And not by going and handing out food, but by giving them jobs where they do something that is needed to help the world.

I agree some things will go under, but I think we can't have a plan until all the facts are laid out. Patience as you have so well stated is very important. Patience makes good speakers and great systems. The same principle works for other things too. If we really figure out what happened we can fix it. People will have to set aside their greed to make it work though. Debts will have to be forgiven. If people can forgive debts we will survive and turn this around faster. If not we are in for a long painful depression. I don't think it's as bad as the 30s were but it will still be tough.

 

[TLS Guy]

I think sometimes pain can be a helpful thing. Sadly the poor don't have enough people making sure they are still helped. And not by going and handing out food, but by giving them jobs where they do something that is needed to help the world.

I agree some things will go under, but I think we can't have a plan until all the facts are laid out. Patience as you have so well stated is very important. Patience makes good speakers and great systems. The same principle works for other things too. If we really figure out what happened we can fix it. People will have to set aside their greed to make it work though. Debts will have to be forgiven. If people can forgive debts we will survive and turn this around faster. If not we are in for a long painful depression. I don't think it's as bad as the 30s were but it will still be tough.

I could not agree with you more. I do think the stakes are higher than in 1929 though, and the potential for a reel disaster greater.

I think if we can get cooperation there is great reason to hope. We are going to have a nasty bump though, before all the world's boats start to rise.

The big problem is whether greed and selfishness can really be put at bay. That is what will derail things.

I could not agree more that we need patience to understand the issues and therefore the solutions. So far we have been doing rash things on sketchy or no data. That can not be an acceptable plan.

Someone needs to go down to the stock exchange and get that across to the morons who call themselves traders.

I think the biggest hurdle is going to be the write down of world debt, how to do it equitably and make sure there is equal opportunity on the other side.

That may prove difficult as a lot of the countries financing the debt do not have stable representative government. That fact may prove very awkward.

I would not characterize all this as the dark side yet. It all depends on how events play out.

 

[Tomorrow]

I could not agree with you more. I do think the stakes are higher than in 1929 though, and the potential for a reel disaster greater.

I think if we can get cooperation there is great reason to hope. We are going to have a nasty bump though, before all the world's boats start to rise.

The big problem is whether greed and selfishness can really be put at bay. That is what will derail things.

I could not agree more that we need patience to understand the issues and therefore the solutions. So far we have been doing rash things on sketchy or no data. That can not be an acceptable plan.

Someone needs to go down to the stock exchange and get that across to the morons who call themselves traders.

I think the biggest hurdle is going to be the write down of world debt, how to do it equitably and make sure there is equal opportunity on the other side.

That may prove difficult as a lot of the countries financing the debt do not have stable representative government. That fact may prove very awkward.

I would not characterize all this as the dark side yet. It all depends on how events play out.

I didn't mean dark side of the economic situation. I meant welcome to the dark side of realistic expectations of what will become of the worldwide economic situation. I thought you had indicated that you believe we may have stepped too far into the abyss, that chaos looms. And that is what I believe is already a cemented future.

The hope for patience of the people and wisdom of the political power mongers...as well as good fortune in resurrecting some kind of stable world trade and economy is....just that...hope. And with good reason, I believe it's unfounded. You note that AIG is back for more....billions more. CitiCorp is out of options. Many substantial stocks are now penny stocks. I fear it's well beyond hope, guys. The "experts" have no idea what to do or what will work. You're betting a lot on the come.

Sorry. At the risk once again of seeming alarmist, people who do not prepare NOW, in whatever way they think is prudent, for the approaching sour (the kindest work I can think to apply) economic and political times, are foolish.

 

[MidnightSensi]

Anyone who wasn't aware Obama is speaking on the economy tonight.

Right now they are doing all this bullshit "MADAM OF THE COURT BLAH BLAH BLAH" stuff...so, you haven't missed anything. Just a bunch of old people in funny robes not doing anything.

They have spent like minutes clapping now.

 

[Tomorrow]

Obama really can whip up the positive juices. He's quite an eloquent speaker and has excellent speech writers. If anyone can turn this pile of economic poo into a gold mine, or the greedy mindset of our culture into givers rather than takers...perhaps he IS the guy.

Unfortunately, I'm an old man who has seen this before. And while it all sounds really good....'tain't gonna change a thing, I fear. Nevertheless, I'll keep an open mind. But you can't take nearly insurmountable problems caused by an uncontrolled governmental and personal spending spree and improve them by spending way more in a 'stimulus' package. If governmental spending was all that was required, we'd be stimulated out of our pants already. Even we dumb old pharts know that.

We'll get through this, yes, assuming no WW3 comes along. The rotten world economy, U.S. protectionism, denial of Post WWI German economic rehabilitation, led us down a bad path 60 years ago to WWII. But the stakes are a lot higher now. I hope that common sense and wisdom will prevail and we'll just be forced to muddle through some heavy weight jello that TLSGuy refers to....and not face an internal or external arms inferno. And hopefully dire consequences can be averted.

Man o' man. It sure didn't take long to get to this precipice, did it? I really DO hope you're right, Mark.

 

[Nemo128]

Just as an aside to people (not here specifically, I mean in general) who think the poor and impoverished are a problem...

Ask the janitors at your job how much they make. Ask the register employees at your local grocery store how much they make. Ask the gas station attendent who's giving you a fill up how much he or she makes. Then ask yourself...

Would you do that job for that amount of money?

Many people swear they are self-made, a success of their own struggles, but the simple fact is, no one gets by in this world alone. Even the person manning the fields for your next fruit harvest (9 times out of 10 it's a migrant worker who works for less than any American would agree to) deserves respect.

And to the cynic that would say "He's stealing a job from a hardworking American!", no, he's not. It's that American farm worker who would rather save 50% on his labor costs than employee his own countrymen who is costing a hardworking American a job. You can also thank that migrant worker for being the reason the average person can afford their apple a day.