Rolling US Economy Into The Shitbin Thread

whatever BoA is getting out of this deal, it may be the start of a trend --> WaMu Has Discussed Merger With JP Morgan Chase.

i dunno what countrywide shareholders or BoA will get out of the acquisition, but mozilo may get over http://www.latimes.com/business/la-fi-mozilo11jan11,0,2459321.story?coll=la-home-center00M outta this. (keep in mind that countrywide is already being sued for his exercise of over $100M in countrywide stock options a year or so ago -- for his grandchildrens' "college education," mozilo said!)

oh, and because i can't resist any opportunity to bash jim cramer -- Countrywide Still Looks Like a Buy, February 6, 2007

The price of gold has risen 239% since 2001, while the price of oil has risen 267%. That means if the dollar had remained as 'good as gold' since 2001, oil today would be selling at about $30 a barrel, not $99.

should i be buying gold?

-- sunny successor, Friday, January 11, 2008 4:02 PM (

depends which of the following you think will happen

a) sound fiscal policy
b) bernanke revving his helicopter

it'll be one hilarious day when all the goldbugs retire and flood the market with their precious Au, devaluing their fortunes and fucking shit right up all over the place

ie I think it comes down to whether you think things are going to get deflationary or hyperinflationary. i think they will do anything to try prevent the former which means gold looks good as fiat currencies get devalued everywhere

there are arguments that gold>cash in a deflationary environment too, but i dont quite get why...if anyone wants to explain?

when people hoard copper, are they contributing to the dollar's fall or shoring it up?

Knew those pennies would come in handy.

ass pennies?

it'll be one hilarious day when all the goldbugs retire and flood the market with their precious Au

yes! though surely gold should just act as inflation hedge, so the better things are the less you need the gold to be doing its thing. can definitely see this being something of a speculative bubble (esp once it hits $1000 and goes front page of popular press) - but can anyone see proper financial management and order returning any time soon? (when is the bottom of all this mess? 2010? 2012? later?)

My dad has a gym sock full of silver dollars from the '70s. He won't let me touch it.

Sign of some sort -- both the LA Times and the NY Times have front-page 'um, this looks really really bad' stories today.

The bottom of the slump still looks 2-3 years away as far as i can tell..but how much longer after that before it turns around I dont know. 07-12 would normally seem about right, but the huge size of the bubbles this time, and their global nature makes me wonder if it could be a lot longer than 4-5 years (esp when peak oil and the other longer term clouds come into play). Then i guess it depends on the actions of central banks/govts (more intervention would cushion it on the way down but prolong it and makes worse in long run)

A shutdown of credit would suggest a 1929 situation (but that has only really ever happened once, unless you count japan 1990), and it looks like they'll do anything to flood more cash in, so somwhere between stagflation and hyperinflation for a few years looks maybe more likely

As bad as it will be here, it will be worse in Europe

lol

we gonna die

No we just gonna be correcting painfully.

A shutdown of credit would suggest a 1929 situation (but that has only really ever happened once, unless you count japan 1990), and it looks like they'll do anything to flood more cash in, so somwhere between stagflation and hyperinflation for a few years looks maybe more likely
Yea, the post-crash mismanagement of the 1930s economy was cookbook recession-to-Depression stuff and the economy surely won't be badly managed this time around, ha.

I just re-read Galbraith's book on the crash, and there's lots of interesting parallels, especially in how little understanding people had of exactly where all the money was, and how chain-reaction it would be when it finally broke.

Yea, the post-crash mismanagement of the 1930s economy was cookbook recession-to-Depression stuff and the economy surely won't be badly managed this time around, ha

not saying they wont mismanage it (they clearly already have been doing). more that it is more likely to be mismanaged via hyperinflation than via depression (retreat of prices). ie germany 1923 seems more likely than usa 1929 (i really dont know which way it will go, but i think they would do ANYTHING to avoid the latter scenario).

also the dollar was on gold standard during the depression which contributed to price falls. as the dollar isnt now there is nothing stopped more and more dollars being pumped out there, and leading to (hyper)inflation. this is surely why gold is rising (or more accurately fiat is falling), they cant magic gold out of thin air in the way they can magic money out of thin air.

if we were on gold standard then the deflation argument makes more sense to me because then you cant magic money out of thin air and therefore prices drop and depression occurs. they'll do the opposite and we'll be swimming in every more worthless dollars and pounds and euros and krones and whatever else before the decade is out

my guess all along is that we will get stagflation for the next few years -- we've already got the inflation, and now the rises in the unemployment rate are coming. it will get ugly IMHO -- probably worse than any recession we've had since the early 1980s -- but not 1930s bad. in any event, i don't envy whoever will be in the White House in january 2009.

it's the obvious question, but THE question is: where WILL all of the "cheap credit" go? commodities are already bubbling (will the next cheap-ass cable TV show sensation be "flip those gold bars"?).

will the next cheap-ass cable TV show sensation be "flip those gold bars"?

I'm still predicting a flood of "Living Simply" shows and pop-psych books.

Commodities are an excellent guess as to what sort of sponge might absorb the cheap credit, assuming the Fed cuts interest rates.

A word to the wise: if you try to hoard toilet paper, the acids in the paper will slowly render it into fluff. Save your mail order catalogs instead. If you hoard tobacco, then hoard loose, cut tobacco in hermetically sealed tins; cartons of cigarettes will go stale and dry out. (insert old-fashioned emoticon here)

http://www.waxidermy.com/bbs/images/smiles/old.gif

"fiat currency"

i.e. currency

im scared

as barry bigpicture points out, the most bullish thing going on right now is how much of a bear everybody is being! the psychology of the mainstream press espousing the idea of a recession either ongoing right now or about to come down hard is actually GOOD NEWS for the economy overall because it means the big players are more risk aware and will most likely contribute to softening the blow

e.g. the same way big magazine cover stories on booms typically signal approximate peak points, when they're about busts, they can signal troughs

kind of a bit late to be risk-aware though?

i'd also say the trough is when it ceases to be news. still seems to be very early in the curve to me

I think busts/recessions are stickier and slower than booms, for sure, but all this talk to the negative seems encouraging, especially compared to the rose-colored spin of the past two years or more. Large firms calling a recession and saying we're already in it bodes well for the short term because it means an end to not admitting things are fucked. Bernanke should now stick to his guns and keep a tight grip on the money supply IMO.

I'm leaning towards deflation at this point

it seems inevitable for a number of commodities already (labor, shipping costs, overhead/housing)

Not sure if this is the right place to post this, but this was pretty interesting:

http://nplusonemag.com/hedge-fund-interview.html

Btw, I'm pretty sure that interview should be dated January 2008, not 2007 as they have there.

ever notice how the stock market "plunges" on Friday, then "rallies" the next Monday?

The stock market is like one of those delicate upper crust women from the melodramas of the 1890s, always fainting and reviving.

how else will you afford coke

xp

friday sell-off for brokers weekend yayo fund is #1 theory

Citibank goes 'oops'

citygroup's been around (in some form) for 195 years?!?!

i am so happy citi is putting my credit card finance charges to good use. way to go guys.

us ilxors are all in the wrong lines of work!

"i made you a pension but i losed it"

the connection between car part thefts and the commodity bubble

from the linked article:

Handfield says a tightening economy may be spurring the spike in metal thefts. He says Irvine police recently arrested a man stealing metals from construction sites. He was a mortgage banker using his luxury Lexus SUV to haul the loot, Handfield says.

!!!

Where does a thief even go to sell their ill-gotten scraps of metal?

Recycling yards. No questions asked, for the most part.

http://calculatedrisk.blogspot.com/2008/01/ny-times-education-of-ben-bernanke.html

we gonna die

we gonna die

-- Jimmy The Mod Awaits The Return Of His Beloved, Sunday, 13 January 2008 17:19 (4 days ago)

At least you are consistent in your approach.

http://img2.timeinc.net/ew/dynamic/imgs/040713/165732__robocop_l.jpg

BLAMMO

Well, tomorrow I sell my mutual fund. It made me 80% last year and is now tanking like a barrel full of tanked monkeys.

ILX follow my lead!

i'm too wet behind the ear in that dept - i have to ride this bitch out.