Rolling US Economy Into The Shitbin Thread

Even though I live in the UK I'm glad that I work for an org that's funded by a flat universal tax fee rather than anything dependent on profits

Nothing to fear but the Daily Mail.

Even though I live in the UK

This part of that sentence is probably superfluous

Maybe, but this comment on a Larry Elliot article the other day made me wonder:

Please note that the dooomsters are missing one thing, reality. The reality is that in the new global economy the US growth engine is something of a side show. Globalisation has done one good thing, it has reduced the world's reliance on US growth. Anyone doubting it should look up the latest Chinese growth stats and tell the rest of us on this blog just how small the US export component of China GDP actually is....they will realise that China growth is not reliant on rising US growth. Neither is Russia's, India's, Brazil's, etc etc. Decoupling is not a wonky idea, it is a fact in a global economy that we have now, and for the next 15-years, wherein the primary driver is not US demand but internal infrastructural demand from the emerging markets (Brazil, China, India, Russia, and others). A US GDP slowdown from 4% real growth to 1-1.5% in 2008 does nothing to stop this process. As the UK is the epi-centre for all the financial, legal, insurance service provision for the new global economy, we too are surprisingly unreliant on US growth. These facts are rarely appreciated outside of capital markets... but facts are facts, the trends in the past few months have become clear. The UK will grow only slighlty under trend in 2008 before growth goes back to trend or above in 2009. This is not the year to fret about marginal debt, it is the year to avoid USD assets.

This may be true for Russia India Brazil (Mexico?)

But the situation for UK Spain Ireland Holland is bad not just because of exposure to US but because of own problems.

The way i read it might be more like

This is not the year to fret about marginal debt, it is the year to avoid USD assets and GBP assets

So, gold then, do you prefer a safety deposit box or a sock under the floorboards?

Allocated physical Zurich or London

Greenspan:

“The essential problem is that our models — both risk models and econometric models — as complex as they have become, are still too simple to capture the full array of governing variables that drive global economic reality,” Greenspan writes.

He goes on to say that bubble discontinuities, by their nature, can’t be predicted, and must pop on their own. “If, as I strongly suspect, periods of euphoria are very difficult to suppress as they build, they will not collapse until the speculative fever breaks on its own,” he writes. “Paradoxically, to the extent risk management succeeds in identifying such episodes, it can prolong and enlarge the period of euphoria. But risk management can never reach perfection. It will eventually fail and a disturbing reality will be laid bare, prompting an unexpected and sharp discontinuous response.’

i.e. Economists talk a lot of shit and don't really know what they're doing.

Weimar America, wahoo

periods of euphoria are very difficult to suppress as they build

easy, duke

lol jim kramer 1 week ago "bear stearns is fine! do not take your money out of bear! thats just silly!"

http://www.redlasso.com/ClipPlayer.aspx?id=ae47b67d-2523-4946-a2ad-aadc68176f67

I don't get why people listen to that guy. Do they really think he's going to let them in on good investment tips at the top of his lungs over national cable television?

Greenspan is worried his name is going to be all over this for the rest of time

i fucking hope so all the irrationally exuberant greenspan worship is so gross

I think everybody realizes that now. It's funny, the number of things that the experts realize now.

Globalisation has done one good thing, it has reduced the world's reliance on US growth. Anyone doubting it should look up the latest Chinese growth stats and tell the rest of us on this blog just how small the US export component of China GDP actually is....they will realise that China growth is not reliant on rising US growth. Neither is Russia's, India's, Brazil's, etc etc.

This is pretty much true for China, Russia (they are basically propped up by oil revenues anyway??), India, and Brazil. Not so much for Japan (although Japan is certainly LESS reliant than it was 10-20 years ago), Canada...

China will definitely come out of this okay purely because of the size of its domestic market and a reduction in insanely high growth rates isn't really all that awful.

got big inflation problems though, i think?

also china is full of MAGIC

and LUCK

888

where can i buy futures in PIXIE DUST

buy palladium instead

i'm turning to theft of catalytic converters of large offensive s.u.v.s

palladium is the new gold, bitch

they're also artificially keeping their manufacturing costs down, which should bite them in the ass but PIXIE DUST etc. etc. xxp

what is the ADAMANTIUM market like nowadays

it's cutthroat

buy kryptonite -- it's a hedge against the falling dollar AND superman

well, some of us here may take what this article says to heart ...

and then there's this interesting detail from the proposed bear stearns acquisition

Michael Hecht, at Banc of America Securities, in a note today wrote that J.P. Morgan should be paying as much as $40 a share for Bear, even factoring in the $6 billion for litigation reserves, the cost of deleveraging Bear and integration costs including tech and facilities.

someone's gonna get paid.

but seriously guys.

what is a shitbin? is it like a euphemism for toilet? aren't euphemisms supposed to be less crass? or are there actually bins that people shit in? is it a british thing?

Thread Started by TOMBRIT

Fuck you.

Bear had what, a $20B cap last year. Wowzers.

I'd be surprised if Lehman went tits up but the thing those fucking quants and Greenspan never seem to want to account for is the emotion involved in securities. They can't do it so they avoid it, and if Lehman goes down in the short term, it's gonna be for emotional reasons and model driven. This whole fucking thing reeks of LTCM all over again.

is it a british thing?

No.

I always thought it was like 'sin bin' but, you know, worse?

I never heard of it before this thread

So people are expecting a full 1% cut today? Is that priced in? Does this mean if they pull a surprise and cut by only 0.5% (only!) that it could arrest the dollars fall, momentarily? 1% seems like full panic but that seems to be what is on the cards

interesting that the pound is just about the only currency not rising against the dollar

although not surprising

It is rising, it's up a whole cent since this morning!

why the charts so rosy?

free money on its way? lot of volatility, seems everytime there is a big drop theres a rally later till the next dose of bad news and subsequent drop

all short term noise surely

there was a pretty good article about the state of the dollar in the NYTimes this weekend. Interest rate cuts logically won't stop the fall of the dollar because it'll just encourage investors to buy other currencies to get a better return on their investment.

well sure rate cuts will increase fall of dollar, but i mean if 1% is priced in and then it ended up only being 0.5% it could have a 'less negative impact' on the dollar, but a worse effect on markets as they want their crack hit of free money?

75 basis point cut to 2 1/4

limbo limbo limbo

Things are getting very weird very fast -- and will probably get even weirder, faster, as the train wreck of bad debt meets the Saint Paddy's Day Parade of bacchanalian excess at the grade-crossing of destiny. The train is carrying America's financial system, but the engine driving it is peak oil, because declining energy resources necessarily means declining capital wealth -- and declining value of all the institutions, instruments, and markers that denote that wealth or hope to profit by trading in it. The fiasco leads straight to the necessary reinvention of American life on other terms and by other means.

Yes looks like they are trying to walk the tightrope here...(shows how crazy things are that a 0.75% cut can be considered that way)

let's all hope China keeps buying dollars.

are we in negative interest rate territory yet?

we should all be keeping our savings under our mattresses.

mattresses generate back pay! should I submit this to Readers Digest y/n?