On Apr 23, 5:05=A0pm, solon fox <solon...@[EMAIL PROTECTED]
> wrote:
> On Apr 23, 2:34=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
>
>
>
>
> > On Apr 23, 4:16=A0pm, solon fox <solon...@[EMAIL PROTECTED]
> wrote:
>
> > > On Apr 22, 12:07=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
> > > You believe that the DJI would have to more than double in order to
> > > signify an upcoming recovery? Nonsense! Stocks were moderately
> > > overvalued prior to the subprime mortgage crisis. The dollar has
been
> > > extraordinarily devalued. All the is required for a slow recovery
(we
> > > don't want a fast inflationary recovery) is for the dollar to
> > > strengthen and for the DJI to trend upwards from 12,200 where it was
> > > trading in spring of '07. The DJI is already trending upward from a
> > > low of 11,508 in March '08 to > 12,700 today.
>
> > > Long term bonds are holding flat at the moment indicating that
> > > investors are beginning to predict the end of interest rate cuts.
The
> > > bond yield curve points smoothly upwards with 20 yr and 30 yr bonds
> > > trading even. This indicates a slow desired recovery.
>
> > > > There is no massive housing crisis in Europe. =A0Just in some
areas =
too
> > > > closely tied to the U.S. market, like Switzerland, Ireland, Spain.
> > > > Not Britain, France or Germany. =A0Their economic growth will be
slo=
wed
> > > > by the problems in the U.S., but their currency will remain
stable.
> > > > Because socialism works better than capitalism. =A0As you are
curren=
tly
> > > > observing.- Hide quoted text -
>
> > > > - Show quoted text -
>
> > > You are correct about the uneven housing market in the EU (and I am
> > > glad that you recognized the declines which I referenced). The ECB
is
> > > in a tough spot wanting to lower interest rates in order to relieve
> > > the credit crunch. The Bank of England announced a bailout program
> > > yesterday due to the tightened credit market. But, the ECB faces
> > > stagflation with wage inflation in Germany and France also suffering
> > > from consumer product inflation. It's a bit touch and go. The ECB
> > > would like to lower interest rates, freeing up credit (and weakening
> > > the Euro, which they believe to be too strong) and at the same time
> > > they are worried about inflation the same as the Fed.
>
> > > Nonetheless, credit is tight and depreciation in real estate will
> > > spread if the ECB doesn't act to lower rates. Pressure is mounting
as
> > > most european analysts are looking for lower rates.
>
> > > Things were simpler before globalization. It isn't just the ties to
> > > the US, it is the banking problem that has created a EU credit
crunch.=
> > > Ultimately, the ECB will act to protect their economy, which means
> > > lowering interest rates, releasing credit, stimulating economic
growth=
> > > (and suffering inflation). All of which will help to strengthen the
US=
> > > dollar, enable the Fed to begin raising rates to fight inflation and
> > > so on.
>
> > > Lather, rinse, repeat.
>
> > > I see nothing remarkable or distingui****ng about the current
economic
> > > crisis and past recessions. Hence, the pattern will be replayed.
>
> > > One of the primary reasons that recessions aren't endless downward
> > > spirals is because people are simply motivated to work and improve
> > > their own standing. People are always trying to do better and more
> > > often than not, their efforts give results.
>
> > > Bears are always bearish in a bear market and bulls are always
bullish=
> > > in a bull market.
>
> > > -solon fox
>
> > > BTW My dreams never become nightmares. Dreams are just dreams.
> > > Nightmares are what happens in real life.- Hide quoted text -
>
> > > - Show quoted text -
>
> > If by "recovery" you mean some slight growth -- 1% or so -- in the
> > current massively depressed economy, where the fall in the dollar
> > means that our GDP is effectively down as much as it was in the
> > Depression -- about 50% -- sure, that's a possibility.
>
> > If you want to say everything's is wonderful, there is no depression,
> > it doesn't matter that 10 trillion dollars in debt is going unpaid,
> > ever, it doesn't matter that truck drivers can't afford to put gas in
> > their trucks, it doesn't matter that 20% of the population will lose
> > their homes, it doesn't matter that it is currently impossible to hang
> > onto wealth in any form -- well, enjoy your fantasy world.
>
> > I'd like to see some changes, myself. =A0And not your desired "slow
> > recovery". =A0This sucks.- Hide quoted text -
>
> > - Show quoted text -
>
> Yeah, I understand your points. It isn't that I want a slow recovery,
> it is that a slow recovery _is_ what we will get. Inflation is going
> to hurt us and is already hurting us. A fast recovery isn't possible
> because inflation would prevent it. If the economy began a fast
> recovery, then inflation would move even faster forcing the Fed to
> raise rates faster than the economy can grow and sending us right back
> to the dumper.
>
> A slow recovery is desired because we can't have a fast recovery and
> 'slow' is better than 'none.'
>
> I take issue with terming the current situation a "depression," not
> because I think you aren't correct in your *****sment, "this sucks;"
> but, because I know how much worse a real depressiion can be.
>
> I would be happier with a 2 to 4% growth in GDP, but a 1% GDP growth
> is more probable for third and fourth quarter 2008 with 2 to 4% in
> 2009 (if we're lucky and don't get hit by another crisis.
>
> Foreclosure statistics have been notoriously skewed with double and
> triple re****ting of the same property --- so, I'm not sure of the
> actual number of people who have or will lose their homes. I'm seeing
> numbers between 2% and 4% (while alarming, it is much less than 20%).
> If you know of a reliable source, let me know. I'll check to see if I
> can find one later when I get the chance....
>
> While I'm not unsympathetic to the plight of people forced out of
> homes that they cannot afford, a higher priority must be jobs.
>
> -solon fox- Hide quoted text -
>
> - Show quoted text -
4% of people are being forced out of their homes annually. There is
every reason to think this pattern will continue for years.
Therefore, 20% of the population will be forced out of their homes
within a few years.
There is no reason to predict a substantial recovery in 2009. That is
pure fantasy, based on nothing. Nothing has changed, except fewer
people have good jobs, more people have lost their homes, more banks
are going bankrupt or downsizing, more companies are losing money.
That pattern isn't one of recovery. The pattern is one of consistent,
escalating economic problems. Which economists are predicting 4%
growth in 2009? Economic cycles are not automatic. They are based on
human behavior, available technologies, new and existing markets. New
technologies and new markets cause growth, their abscence causes
recession or depression. If people change enough, they may develop
new technologies and new markets. Otherwise, no growth.
Jobs are the key. But, government may have to get involved. The
private sector has suffered a massive decapitalization due to the
collapse of the dollar. The dollar is what has "crashed" in this
current Depression. A mix of inflation, little money available, bank
interest rates lower than inflation, few good jobs, collapsing real
estate values, a weak stock market, a weak retail market -- no way to
make or keep money. Depression.
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