Guest lazyphil Posted September 16, 2008 Report Share Posted September 16, 2008 elef, was the 70's a depression?....recession although what exactly is the difference? Link to comment Share on other sites More sharing options...
Al Posted September 16, 2008 Report Share Posted September 16, 2008 elef, was the 70's a depression?....recession although what exactly is the difference? A recession is when your neighbor loses his job. A depression is when you lose your job. Here is a site that might be helpful. Link to comment Share on other sites More sharing options...
gobbledonk Posted September 16, 2008 Author Report Share Posted September 16, 2008 A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe. Thanks Al - this is the definition your man came up with: A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe. He claims that both Finland and Indonesia have suffered depressions in 'recent memory' according to that definition : my question is 'who measured real GDP in Thailand in the years following the currency crisis ?'. Surely countries such as the Phillipines have had 10 percent plus ripped off their bottom lines when disasters like Pinatubo drove the US Air Force from the islands ? The 1930s saw men walking from town to town looking for work (or a meal). Similar conditions now would see people going from house to house with a pry-bar. Link to comment Share on other sites More sharing options...
junglesoup Posted September 16, 2008 Report Share Posted September 16, 2008 OK, commentators have been talking up the subprime crisis for at least 12 months, but some of the stuff they are coming out with now are truly scary. As one pointed out tonight, the 5 biggest investment banks on Wall St all survived the dot bomb crash, 9/11, 1987's crash etc : 3 of those 5 have been taken out by subprime. Add a government bailout for Fannie Mae, the imminent collapse of AIG (in an industry where everyone is in bed with everyone else) and dire predictions of more pain to come - the question I would ask is "what will it take for them to start using the dreaded 'D' word ?". I doubt that too many board members experienced the 1930s Depression era (thankfully) but it definitely left its mark on my mother's generation. Its difficult to imagine that it could ever get that bad again, but history has a nasty habit of repeating itself. Hopefully, this thing will run its course within the coming 6-9 months. I write on economic forums quite alot and stay spend a subordinate amount of time staying up with this stuff. I have been saying for quite a while now, this is one of the worse periods in economic history and is being made all the worse by the FED. They are pumping liquidity into the market like crazy, yet LIBOR us sky high...they are ineffective now. They dont realise that it is not a liquidity crisis, but an insolvency crisis. All they can do is postpone the inevitable. I have been listening to them on Bloomberg and other channels saying that AIG have over 1 trillion of assets, Lehman had 600 billion is assets, as if suggesting how can they fail... The problem is those assets and what are they. I would say the credit risk marked on those assets has been totally mispriced...and I keep hearing that they have good collateral...if thats the case, then they know something that the credit, and stock markets dont know. If their book is of good quality then their share should be up at 30 USD again tomorrow, crisis over...AIG have a market cap of about 12 billion USD now, and have assets of over 1 trillion...,and I looked at their balance sheet and they have nearly a trillion in liabilties...so a few percent decline in their assets wipes them out...they are leveraged to the moon... Basically something like this...Imagine that every USD you earn each week, you then go out and put 30 USD of debt onto a credit card...so you earn 100 USD this week, and then you borrow 3000 USD on a credit card. They can't mark to market these assets they have, and they are worth less than they valued them at. And no one wants to buy them... We are at the end of the beginning of a systematic banking crisis, which will linger for years. I would put US government bonds at junk bond status now...and the rating agencies, how can they still keep lehman and AIG at A rating when they are on the point of insolvency. Crazy. Link to comment Share on other sites More sharing options...
chuckwoww Posted September 16, 2008 Report Share Posted September 16, 2008 Over 1000 million shares of AIG traded today. The people buying that paper are gamblers not investors. The stock market is a casino. Link to comment Share on other sites More sharing options...
spirit_of_town_hall Posted September 16, 2008 Report Share Posted September 16, 2008 Interesting post JS. I posted last year " are we heading for econimic crisis, or something to that effect" Looks like we are, I browse www.housepricecrash.co.uk a lot, some interesting threads there. Which economic forums do you recommend? STH Link to comment Share on other sites More sharing options...
Bangkoktraveler Posted September 16, 2008 Report Share Posted September 16, 2008 The way I see it, if the USA hits the toilet face down on a run, it will take a lot of the rest of the world with it. What is even scarier is nobody is proposing any solutions. If a person is way over their head in debt, they wake up someday and try to deal with the problem. Why can't the governments and big businesses smell the burnt coffee? Link to comment Share on other sites More sharing options...
cavanami Posted September 17, 2008 Report Share Posted September 17, 2008 What incentive is there for the politicians to fix anything? only if it involves their reelection, maybe. The CEOs all have there multimillion dollar parachutes, they are covered. It's the middle class that continue to get farked. The "poor" they get all the gov benefits, for free, so no worries for them. Until all the people hold these slimy politicians accountable, put a a bunch in prison for failure to carry out their sworn duties, execute a few for being traitors to the US citizens, etc...nothing will change...IMO Link to comment Share on other sites More sharing options...
loner w/a boner Posted September 17, 2008 Report Share Posted September 17, 2008 IMO it would require 2 things: Honesty & justice. Honesty: admit to the American people that productive people can't "carry" unproductive parasites--welfare mamas, old people, sick people (bye bye Obama health care plan), foreign governments, unnecessary weapons programs, corporate bail-outs, you name it. Justice: Make people suffer for their own mistakes. One of the main features of the "corporate model" is there is no personal liability. If a CEO or the board fucks everything up--"oh well". They lose the assets of the corp, but NO personal assets are at risk. Hey fuck slut! No more food stamps or welfare. Go find the daddies (if you know who they are) and get file criminal charges for failure to pay child support. Then, take the kids and go to the street corner and start begging. I ain't paying for your rent, electric, or food anymore! We all gotta live below our means and FUND future expenses such as retirement or R & D FIRST, before we spend discretionary income. Individuals, corporations, and governments. Working class people spending $5 for a fucking cup of coffee so they feel rich and spoiled. We deserve to be bankrupt. No one did it to us. We did it to ourselves. $5 coffee indeed! Link to comment Share on other sites More sharing options...
gobbledonk Posted September 17, 2008 Author Report Share Posted September 17, 2008 Imagine that every USD you earn each week, you then go out and put 30 USD of debt onto a credit card...so you earn 100 USD this week, and then you borrow 3000 USD on a credit card Yeah, er, imagine anyone that silly, teehee. Erm, if you'll excuse me, I have to take a phone call from that nice man from Citibank Credit ..... Seriously, governments and individuals alike have been riding the credit train bigtime for more years than I care to count, and now we are going to have to pay the price. I remember a guy telling me in the late 90s that being massively in debt was 'the only way to get ahead, man !'. The scary part was that he had missionary-like zeal in his eyes, and it was all just numbers on a computer screen. Sooner or later, someone is left holding a very nasty pit bull by his tail. Link to comment Share on other sites More sharing options...
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