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Thread: Stocks pile on losses amid worries on economy

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    NEW YORK (CNNMoney) -- U.S. stocks plunged on Tuesday as fears about a weak U.S. economy were enflamed after investors got another disappointing economic report - this time on consumer spending.

    So for those who say that we have taken the correct route to righting the economy, how has creating inflation improved consumer spending?

    Why did we create inflation? To make sure that Wall Street was profitable and to negate some of our massive debt. How is that working out? How is creating even more debt going to solve any of this?

    Inflation was created due to high debt levels in the US. Both private and public. The debt levels are at such a level that paying them back will be difficult, if not impossible. So instead of a default, possibly leading to a deflationary spiral, of default after default. The fed made the decision to create inflation or at least prevent deflation. The inflation, provided incomes do not decrease, will tend to make paying back debt that is generally of a fixed rate easier to pay back. Deflation is something Bernanke is quite afraid of
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by Helix View Post
    perhaps we should consider making more things in the states and hiring people to make them.

    or hire people to rebuild roads and bridges.

    or both. and soon.
    Making more things in the states would require a commitment from thousands of corporations to do something that is individually against their best interest, so I don't think that's realistic right now.

    Hiring people to rebuild roads and bridges, great idea, thats EXACTLY what we should be doing, but keynesian economics is currently out of style, so it's unlikely that we will do that as long as the republicans remain in charge of anything and as long as they remain delusional.

    My best hope is that in 5.5 years, we will elect a new group of non-partison leaders, or at least reasonable leaders, and undergo a WWII level of government spending - but on infrastructure this time, not bombs.

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    Re: Stocks pile on losses amid worries on economy

    The FEDERAL Treasury is a damn joke. But I dont see that changing soon. Anyone that is against it..... and is DEAD serious about getting rid of it and CAN..... is dead meat. If you stand against the Federal Reserve AND have power to end it.... youre cat meat. That person would be found dead for SOME reason.

    We are stuck with it.
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    Re: Stocks pile on losses amid worries on economy

    from Iamgep


    Making more things in the states would require a commitment from thousands of corporations to do something that is individually against their best interest, so I don't think that's realistic right now.
    Changing what would constitute their best interest perhaps would motivate them?
    Last edited by haymarket; 08-04-11 at 09:33 PM.
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by Red Crow View Post
    TWO FACED NoBAMA WENT TO CHICAGO FOR A FUND RAISER MINGLING WITH THE RICH CORPORATE JET OWNERS, THE SAME PEOPLE WHO HE PUT DOWN AND COMPLAINED ABOUT, WHILE ALL THESE BAD NEWS IS GOING ON. WHAT A LEADER!!!!

    In other words


    Obama save me

    Intervene in the markerts to make everything ok


    Then should Obama intervene

    Obama is a socialist for intervening in the markets
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by nijato View Post
    The problem is not politics. The problem is not even fiscal or monetary, at least not in the traditional sense. The problem is growth.

    Infinite growth on a finite planet is not only impossible, it is a logical absurdity. This is an important point: think about it until you understand that it is incontrovertible.
    I'm jumping in here before I read the rest of your post. I agree with this but I'm interested to note this now and then see where you are going.

    The problem is resource scarcity, or more to the point peak oil. For the last 250 years, civilization has had ever increasing amounts of energy available to grow, diversify, and increase in complexity. Since debt is predicated on the belief in the ability to be repaid in the future, it is the most forward-leaning aspect of a money economy. Therefore, when reasonable, rational people wonder if they will ever be repaid (with money that has any meaningful value), debt instruments are the first to not perform according to expectations.
    Just to note, we can succeed without oil.

    Since the economy is based on the lending of money at interest, that means this is it. In the words of Fred Sanford, "I'm coming Elizabeth, this is the big one!"

    This is not a correction, recession, or depression which will be muddled through before the "normal" of 3% YoY GDP growth returns.

    This is the end of growth. Plan accordingly.
    The end? I think after a pretty painful correction we can grow again. I believe some of the expectations of the past should be scaled back. One does not have to grow yearly at 13% to be successful, damned with how you get there.

    One other thing I noticed in this thread: I am a fan of conspiracy theories... even more I enjoy actual conspiracies. The fact that commodities, stocks, and treasury bond yields were all down on the same day is not the result of one however.
    Not as in some one manipulating things, I agree. I do believe it is in part a hissy fit on the part of the markets because they haven't been fed more of the taxpayers money.

    This is what happens during fast falls when traders need to cover margin calls and raise cash by selling assets that have appreciated recently. Not a rat... finance.
    Margins need to be far higher than what they currently are.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by The Giant Noodle View Post
    No more borrowing man. That ship has left..... and sunk. Like Ive said before many times.... this Country needs heros. And those heros are the wealthy. I dont want to sqeeze them like a tube of toothpaste but now its the only way to save what we have. It wont go on for 10 years, but until these fools in congress get their head on properly, the only way is to cut back and the wealthy to give back. Orrrrr..... we destroy automation and make things by hard thus reviving our manufacturing. Oh..... also kick the Illegals out OR not give them a DIME of funded help.
    In a way, when the treasury borrows from the fed, it's the same as redistributing wealth. The poor and middle class don't have much cash, wealthy people and corporations and foriegn countries hold the cash (and cash like investments). We can essentially redistribute their cash to the poor and middle class by borrowing from the fed (printing up money) and inflating away their cash. Of course so far that hasn't worked to well because we haven't redistributed the printed up money to the poor and middle class, we've been redistributing it to the rich.

    At some point, maybe after QE36, we will wise up, make that one time redistribution to the poor and middle class, and jump start our economy.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by Lord Tammerlain View Post
    Inflation was created due to high debt levels in the US. Both private and public. The debt levels are at such a level that paying them back will be difficult, if not impossible. So instead of a default, possibly leading to a deflationary spiral, of default after default. The fed made the decision to create inflation or at least prevent deflation. The inflation, provided incomes do not decrease, will tend to make paying back debt that is generally of a fixed rate easier to pay back. Deflation is something Bernanke is quite afraid of

    Bernie is afraid of his own shadow. So the arguement goes, we must create inflation because we are so far in debt and then we need to add to this debt?

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by AdamT View Post
    Absolutely, I agree that top rates have to move up. Hell, ALL rates have to move up. But the top rates go up first. ASAP. But the economy can't wait for the Bush cuts to expire. We need a liquidity injection quick.
    If rates that tax the consumer class go up, it will harm demand and create more unemployment.

    We actually need to move the top income tax bracket up to around $400k-$500k and increase the hell out of the rate to make up for 10+ years of the top tax rate being way to low. We will probably also need to eleminate all taxes for the consumer class, at least temporarally, to allow them to keep enough revenue to increase consumption.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by haymarket View Post
    from Iamgep




    Changing what would constitute their best interest perhaps would motivate them?
    It would be in their best interest as a group, but not as individuals. Individuals don't do what is best for the group, they do what's best for themselves.

    Currently I am farming out intelectual work to India. I HAVE to do that for my business to remain economically viable.

    What would make me stop doing that and hire an American to do the job? Nothing, unless it benefitted me. Now my employees rarely make purchases from me, so there is no advantage to me paying an American more than I have to pay the guy in India.

    I would love for someone else to stop outsourcing jobs oversease and to hire more people, because THEIR employees would be my customers and their doing that would benefit me.

    Businesses are always going to be about operating as profitably as possible as individual companies, they don't give a rats arse about you or your company.

    I'm not trying to be ugly about it, but that's the way things work, and the way things work is exactly what people who have never owned a business don't understand. They don't understand individual business behavior.

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