US Financial Crisis

Finances are always a roller coaster.

Have you been reading one of those "How To Profit from the Coming Collapse" books? 

Originally posted by Suren 1. Investment in the market has been halted.

The market was getting saturated with too many investors. They should go and invest in more capital starved areas.

Originally posted by Suren 2. Unemployment rate is going up very fast.

People are finally enjoying their free time, like in Europe.

Originally posted by Suren 3. Gas price is going up.

About time! Now is the coming age of the electric car which should have been around the last 100 years anyway. Crop based biodiesel ftw!

P.S. my pet pidgeon will be very happy to hear about the prices going up.

Originally posted by Suren 4. Food prices are going up.

And soon waistlines will be going down and people hopefully will become more picky about their food and start growing herbs and veggies in their yards and kitchens.

Originally posted by Suren 5. Big companies has started to close down part of their business due to inactivity.

This is one good characteristics of big companies, they can expand or shrink to meet demand while still keeping the core of their structure intact.

Originally posted by Suren 6. Many houses became Foreclosure.

So now the price of houses will become even more affordable as their over-inflated value becomes closer to their true worth and the artifical real estate bubble finally bursts.

Originally posted by Suren 7. Banks have faced loss of billions of dollars (Loan).

Yeah its too bad the ones being bailed out are bailed out by other banks who steal them for pennies on the dollar. The taxpayer should become a shareholder in the biggest failures.

Originally posted by Suren 8. Value of US dollar has decreased. ... US is officially bankrupt. Hold tight and tie your belts, we are on the roller- coaster.

On the other hand if you are heavily in debt you should be happy because the value of your debt just decreased, and you did nothing for it!

Originally posted by Suren Originally posted by pikeshot1600 Finances are always a roller coaster. Have you been reading one of those "How To Profit from the Coming Collapse" books?  No, I didn't. My cousin is an econimic analyst and a business adviser for a big company in California. He told me about our future in US and what is really going on now. He is packing for Australia in near future. He has sold his business in US and advised me to be prepared for the biggest recession after the great depression of 1929, so be aware. The roller-coaster is only going down this time.

Originally posted by Suren He is packing for Australia in near future.

Honestly, alot of people here are expecting the next big wave of immigrants to be American economic refugees. Especially tradesmen and professionals that can address Australias skills shortage.
Soon the Americans will feel the harsh blade of Australia's immigration policy.

Originally posted by Pike I don't know what your cousin's situation is, but if he thinks he will be sheltered from economic catastrophe in Australia, I would like to know how he thinks that is possible.

The only thing stopping the Australian economy is lack of manpower. When it comes to the economy, Australia and the US is on completely different pages.
Our economic problems are being caused by too much wealth - inflation, high housing prices etc.

The future looks very rosy here. China is booming, Australia is holding tight to her tails. Asia is booming, and the whole region is on the up.

The rise of China, while Americas detriment, is Australias blessing.

Edited by Omar al Hashim - 03-Jul-2008 at 01:00

Originally posted by Suren Originally posted by pikeshot1600 Finances are always a roller coaster. Have you been reading one of those "How To Profit from the Coming Collapse" books? No, I didn't. My cousin is an econimic analyst and a business adviser for a big company in California. He told me about our future in US and what is really going on now. He is packing for Australia in near future. He has sold his business in US and advised me to be prepared for the biggest recession after the great depression of 1929, so be aware. The roller-coaster is only going down this time.

Unfortunately I must agree with your cousin. More unfortunately, I can't move to Australia or the EU right away.

I was freaking out yesterday because I heard on the radio an economist talking about how we must pass a huge financial package where taxes are slashed for the middle class and the government spends a lot in infrastructure for the next few years.

This is Kaynes. And what should worry us about this is that Kaynes ideas was the solution for the Great Depression.

In other words, this economist, who rights books about how great the market and capitalism is, feels that what we are looking at is a Great Depression situation.

To me the best part about this is that most of those who lived through the Depression in the U.S. are either dead, dying, or ignored. Most Americans have no freaking idea what a massive economic crisis is like. Many offer the 70s as a counter example, but the 70s were just a hard period in the U.S. Not a society changing economic crisis.

And I see many of the same things that happened in Mexico during the 1980s starting to happen in the U.S., and I don't like it at all.

i ran out time for this thread tonight. tomorrow i want to post some stuff on the US.  The US has had the mother of all credit bubbles burst all over their balance sheets  along with the related asset bubble bursting across many home values. It was a slow train wreck witnessed over the last 12 months,  the reality only just sinking in for the wider audience.

The amount of leverage is staggering, and not just loans but derivatives*. The write downs will continue, some banks wont survive in their current form

*so far we may have heard of CDO's in the press, it was CDO squares that did the damage.. but we havent yet seen what CDS Credit default swaps will do.  est 1 trillion on the market somewhere. BTW I only understand the concept behind these things.

I welcome all the refugees to the fine shores of Austalia, when we can build more houses...

Great article, Zagros. That economist is my kind of economist.

The fairy tale of the free market must die again, as it once did after the Great Depression. Unfortunately it is like a zombie.

Hi, Zagros,

Yes, my kind of economist is practical and honest and can see what is really going on. He is not a fundamentalist of any kind. Unfortunately most economist now have market religion and won't change their mind even when the evidence is clearly telling them that it doesn't work.

I do want to stress that I have no problem with competitive markets. Competitive markets have a role as a way of solving different kinds of problems. And a well regulated competitive market can actually do a lot of good. In the U.S., the regulated competition in the communication and air travel sectors brought cheaper prices to consumers, although we may have to wait and see how it plays out.

But let me stress that: well regulated competitive markets. Just as "Real Communism" has little in common with the picture that Marxists paint, "Real Free Market" doesn't match with what is taught. (Bey, this is your queue to enter into the discussion )

Real-life free markets often mean that there is little regulation and that business gets to make the rules by which they will act. And if I get to make the rules, I will make them in such a way that they will always benefit me.

As a securities broker and consultant, I have many, many clients who are a hell of a lot better off now than they were 10 years ago.  Not all...some of them won't listen to the advice they pay for.

Edited by pikeshot1600 - 04-Jul-2008 at 00:51

Leo: Most of what you say about the Aus economy I agree with, but don't think there is anything special in our situation. Skills shortages have nothing to do with the mining buisness. Everything from Pharmacy to Plumbing to Engineering has shortages, and there aren't that many people going to work on mines. I think it is really caused by a lack of manpower, combined with an aversion to hard work in popular culture. School leavers just aren't moving into these fields, and the existing workers are ageing quickly. Honestly I have no idea what everyone does in this country. On top of that if we actually wanted to solve the problem it could easily be done with better immigration and resettlement programs (like fast tracking skills recognition for migrants)

If people with huge amounts of personal debt go bankrupt, honestly, I'm cheering. The biggest problem I think is overpricing, and that should solve that.
This may be exactly the same in the US, I don't know. But if the only people suffering from the economic downturn are those who have borrowed ridiculous amounts, inflated prices, and made commodities (eg Houses) unaffordable for those of us who don't like being in debt I'm looking forward to it.

Originally posted by Panther the way the economic news is reported & presented will automatically turn around to the positive, as if by magic!

Highly likely. If he pulls out of the Iraq war too then the biggest drain on the US economy will disappear too. (Billions of $ to spend on fixing your economy & infrastructure)