You DO know that recessions only happen because a critical mass of people panic because they believe

there's a recession happening, don't you?

And that every single time a recession ends in this country, it's because a critical mass of people decide that they're sick of having a recession, and start spending money again. You know that, right?

So why all the panicmongering in GS tonight? Is it some kind of mass hysteria?

Redstone

account? This could be a blessing in disguise. Imagine, people living within their means.

the would be a richer country? WHERE THE FUCK IS THE MONEY COMMING FROM??? Our outsourced, overworked, underpaid, uninsured, homeless, starving folks???

Your theory is normally apt, except for now. Americans can no longer tap into their home equity and credit card interest rates have gone through the roof. Add in gas being over $3 a gallon and just where do you think we're going to get this money to spend?

the cost of college education outpaces their cost of living increases, and the plummeting value of their homes cuts off their access to credit...., they tend to stop spending without giving a damn about "the masses."

to the Fed's move today which the markets in Asia perceive as a DRASTIC move. The jig is up.

been predicting this would happen for years - no one wanted to believe them. Read the article I just posted on what Greenspan thinks about it (even though I blame him pretty much for this whole sub prime mess). He's still the smartest guy out there and he is saying it's going to be the worst one since the end of WWII. He is usually the calm one.

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Our future as indentured servants to the Chinese.

Because if you are I am all for it.

Don

Recognizing a collapse isn't the same as creating it.

: )

it has more to do with how the stock market and all the other things that are spin offs of the stock market one day are called upon to prove they exist.

Sort of like at a casino where people are betting on the roulette wheel. And you an feel quite secure with your 413 trillion dollars in the derivative markets all sitting on the RED 17 until the ball drops and it hits Red 15 instead.

The stock market is just a gamble crossed with a Ponzi scheme, and when the ball drops moments after all the suckers have thrown their money on the board, well, good luck suckers.

We have a banking system where in a 13 trillion dollar economy, the bankers only had 285 billion on hand.

And the Federal Deposit Insurance corportion only had 64 billion on hand. Go figure.

You're a smart guy, you should bone up on your economic basics.

Reality is why we're talking the way we are.

THINKING HAPPY THOUGHTS, can only last so long, before REALITY comes into play.

Things ARE going to get much worse. Those controlling the economy will still be in control for the next 10 months, and I anticipate it taking months/years to fix the damage.

But if you feel like continuing to think happy thoughts, I'll continue taking a look at reality. That being my gold investments are Up 100%, and the Dollar is falling through the floor.

his department to India.

A loyal Republican, Mr. Truebloodedamerican saw lemonade where others saw lemons. So he got his resume together and started pounding pavements to look for a job. Not even the local Walmart would hire him. (He was overeducated and besides the wages were too low to allow for repayment of his student loans).

After exhausting his unemployment, he decided to start a business. AHe had years of experience and expertise, brains and faith in himself. There was one problem. Although he had saved a lot of money while he worked, he had spent virtually all of it trying to get a job, so he didn't have any capital.

He was about to give up and move into a trailer when he received a letter in the mail from a mortgage company offering him a credit line on his house. Mr. Truebloodedamerican, whose nickname was Truebelieverintheamericandream knew, of course, that anyone can become a millionaire if they just work hard enough.

So, to fund his business, Mr. Truebloodedamerican borrowed against his house. It was just a little at first, but as time passed, he needed more and more capital to continue conducting his business and feed his family and the gas tank of the SUV.

Suddenly last summer, Mr. and Mrs. Truebloodedamerican received a notice that the interest rate on his credit line on their house was going up a couple of points. They received a foreclosure notice, but nothing happened. Unbeknownst to them, a new family has bought their house. They will receive the eviction notice this coming Wednesday. Goodbye, American pie.

them. Bin Laden knew that and said that was how we would be brought down. Looks like Al Queda won.

We just have to wait for people to have confidence in the financial sector

The audience you're hoping to reach won't listen.

and figure out how to deal with it than live in Pleasantville and be superiorly indifferent.

At least I certainly hope so.

A) They read a stupid book like "The Secret".

B) Don't even ask.

because ordinary recessions don't take major investment banks with them. This could very well be the start of something serious as institutional investors start to realize they've been supported by thin air for the last several years.

I do agree that now isn't the time to panic. The time to panic and start getting things in order was last August, but people who aren't Economy regs probably missed it. Before that, it was time to be concerned enough to pay off all the debt you could in preparation for it, again something Economy regs knew 2 years ago.

This one isn't being caused by panic, although there's been panic in the rarefied air of investment banks since August. Ordinary folks barely have a clue about what's been going down, so they haven't had a chance to cause any sort of a panic-driven recession.

However, they're just starting to get a whiff of something rotten on Wall Street. That's why they're not shopping until they drop, paying with plastic, and expecting rising wages to make it all go away later.

Lots of us have been paying close attention for the past few years. Last August was when I moved most of my money out of stocks. I remember talking to other DUers about this move at the time.

More people have been paying attention the last few days, but this does not yet resemble panic, by any means.

I was called a chicken little when I advised someone against going through with a condo deal a year or so ago, too. Some people are eternal optimists, facts and figures be damned.

unless you'd found something else that would produce equivalent income.

the mutual funds I sold are down 10 to 15 percent since January. I might start buying back in soon, but for right now I'm happy to be earning 3% rather than losing 15% (on top of the 12% inflation). I held foreign stocks, though. They're down and average of 5%.

but you are correct that at the core of every recession is a failure of confidence.

Confidence is already low on Wall Street. VIX is over 30. Another couple of down days could mean capitulation. It seems like it's taken forever to arrive, but all of a sudden almost everyone is bearish. That's actually a great sign.

And of course, the economic experts on DU are at the very tail end of the curve. All it takes is for a Republican to do something and everyone believes the opposite, even if it means becoming more conservative than Milton Friedman and more of a panicmonger than our beloved president.

It is just a figment of our collective imagination because we read negative news, and have accepted we are in a recession.

There are too many factors influencing this recession like loss of jobs, stagnant or dropping wages, gas and grocery prices, banks going under, the drop of the dollar, etc, to be construed as just the reluctance of consumers to purchase goods and services because they are nervous.

I wish it were as simple as you stated.

To some extent the problem is helped along (a lot in this case, which is why people are so worried) by significant structural weaknesses in the economy, bad policy, etc.

Structurally, things started looking a little shaky back in the late 90's and haven't really looked significantly better at any point since. Policy-wise, things went from pretty good to horribly bad in that period. This was all pretty predictable, I know people were talking about getting their money out of the dollar and into euros, and about selling off their housing, renting for a year or two and buying again after the market crash here on DU back in '05 or so.

Thinking the economy is purely or even primarily psychological and herd-based isn't really true, so positive thinking (or at least avoiding negative thinking won't do much.) A lot of day-to-day trading stuff is explainable by a herd mentality model, and some larger phenomenon are (the dutch tulip boom, the american stucco tract house boom) but larger economic cycles are definitely more complex than that.

Unlike, say, manufactured goods, as a whole the prices of stocks, fund, currency, and commodoties are perception-based.

And since we've generously stopped adding value to actual, physical materials like steel and aluminum and let the Chinese do it for us, that means that virtually all of our economy is based on perception. The value of vouchers and other pieces of paper.

Of course, stock prices don't really effect the performance of the companies that issue the shares. The only money the company makes is in the initial public offering. But the trading price affects net worths of people and investment corporations, and the credit decisions they make.

Unfortunately, it feeds on itself.


Frankly, I think that all those unscrupulous morgage-lending companies and bundled-morgage-traders should be allowed to collapse. Other, more efficient banks will take things over and put the bad corporate managers out to pasture.

i'm not buying gold, anyone imo that buys now is a fool, people who want gold should have bought when it was way lower. We live within our means and hopefully we'll stay enmployed and if not we'll figure it out.

It will be economic. One day we will wake up and find out that China owns everything in the US of A. No bloodshed is necessary.

I bet all the people who bought then certainly feel foolish now!

Oh, wait...

that our paper money will continue to be of value, our economy continues. But heaven help us if we start to question the smoke and mirrors.

aren't you only adding to the panic?

It is ridiculous. In the 80's, people didn't panic, there was mass INFLATION/stagflation. They didn't all decide not to buy, they couldn't buy with prices increases while salaries lagged. Same thing today.

You know that recessions end when there are jobs and people have incomes that keep up with inflation don't you?

has really helped to calm all the little people :sarcasm:

Let's all be bullish about Wall Street! What is good for corporations is good for America! If we all think positive, prosperity is just around the corner. We just need to help the fat cats out now, and I am sure they will repay us.

It'll trickle down to us, don't worry.

Won't it?

Why the fuck do I care if a bunch of fat, balding rich people smack the pavement from their penthouses when they lose a few bucks?

I'm good to go.:thumbsup:

recession happening.

Thanks for the info.

Part of th reasons that the Great Depression happened is a whole lot of people panicked and took their money out of banks which started a chain reaction..So..Please people don't start a run on banks. Your money is safe in the banks, thanks to the FDIC.

We just perceive the stock prices of Bear Stearns dropped to $2/share from $30 at close on Friday and $60 a week ago and $150 a year ago.

We're just imagining that homes are in foreclosure, jobs are lost or at risk and food prices are soaring.

Silly "hysterical" us.