Rolling US Economy Into The Shitbin Thread

There's a fortune to be made in the dung alone!

it's time to consider all the options

Whale oil is a fuel from another age

the future!!!

i've been reading nothing but economics books lately (the soros book on the credit crisis isn't bad, amateur philosophizing aside), and this firedoglake piece feels so otm to me it's scary: http://firedoglake.com/2008/06/24/a-bright-shining-depression/

that article is fairly interesting until you get to

But what really needs to be done, which is to bring insolvent firms under government stewardship and either wind them down or reinflate them, goes against everything the past thirty years has stood for. It's just not the sort of thing neoliberals and neoconservatives, with their touchingly childlike faith in "free" markets, believe in, understand or can even seriously consider.

and then you just go "oh right, firedoglake"

I mean they go from seemingly being critical of bernanke for eating bear stearns because in their world that somehow lets everybody else off the hook to saying in their conclusion that what really needs to be done is to do more or less exactly that with every company that isn't doing well. That's some sneaky communist bullshit.

link is fucked?

just google "shining depression"

I'm also kind of thinking a lot of the stuff about the Japanese economy since the bust is straight pulled out of his ass

you'll eat rats and you'll like it
ROFL.

All needed lubrication to operate at peak efficiency...these potions were often found lacking in keeping these delicate instruments humming
Jokes write themselves.

americans tend to not begrudge the rich
http://bp2.blogger.com/_gze8GjcR_fY/RkfSJ2LKyII/AAAAAAAABeo/J8PyHXXDNx0/s400/homeless2.jpg

Jeez, Stirling Newberry. Haven't seen that name in ages.

This gave me the vertigo:

http://homepage.mac.com/ttsmyf/RealDow.gif

Clinton was more Reagan than Reagan ... which makes you think, how is anything going to get better? Even my grandfather, a life long Republican, thinks things have gotten out of hand and there needs to be a progressive party, though in his opinion one that doesn't belong to the traditional socialist-liberal tradition.

Long & occasionally dry but fascinating interview with the co-heads of equity strategy at Societe Generale:

http://bigpicture.typepad.com/comments/files/053008_Welling_Edwards-Montier_REPRINT.pdf

(hat tip to Big Picture)

Brief summary is that they basically think we are at the start of a multi-year recession & equity bear market. The chart of the slow-motion post-1929 crash with attendant pollyanna optimisim at each technical bounce on the way down is worth the price of admission.

WE GONNA DIE

The depression will be liveblogged

Well Hurting, hopefully the economy is OK by the time we graduate law school :{

wow, those societe generale dudes are challops kings. they must be making a killing by being so right about everything.

the challops kings play songs of slump

I read that SG interview and yeah those dudes are mean
I'm pretty sure we are all going to die though

though I was glad to hear their version on why there's like 17 supertankers full of crude just sitting in the gulf. I speculated (lol) they might be just waiting for the right price on contract, because of institutional investors taking wacky long positions on oil waiting for the $200 barrel, and nobody's coughing that up yet

I read on another website that the reason for those tankers sitting in the Gulf was that they are carrying a type of heavy crude which is not usable in most US refineries, so there's less demand for it.

i kind of want to see the wsj article they mentioned, but i haven't been able to find it on their site

well why would that be news? that would seem to imply there's usually 17 supertankers full of nasty tar sitting in the gulf.

http://www.bloomberg.com/apps/news?pid=20601207&sid=avZ1WowlgKck&refer=energy

The "heavy crude" theory:

http://answers.yahoo.com/question/index?qid=20080523203326AAGQJh8

This is saying it's Saudi Arabia's oil though - whereas the Bloomberg story is about Iraqi oil which is being temporarily stored in tankers while they do some refinery maintenance.

Sorry, it's Iranian oil not Iraqi.

Another Bloomberg story which supports the heavy Iranian oil explanation:

http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=akLt5fJKQNr8

okay I'll buy that, actually. Refineries being the bottleneck seems like the simplest explanation

WE GONNA DIE

link?

http://www.mortuaryservices.com/

so, worst month since the great depression

I knew this thread would pop back up today.

Not worst month, worst June. June has a tendency to be a strong month.

right yeah i missed that

BTW China's benchmark index apparently had its worst month ever.

singa bouta dooma inna juna

Think how bad off we'd be if it weren't fer all them there stimulatin' checks DC's been dropping on us! We're all such lucky bums.

I've heard vague rumors for a while about a potential coming credit crisis II involving credit cards. Anyone have an opinion on this?

Right now credit card issuers are riding high, because so many USA people use credit or debit cards at the gas station and their cut is a fixed percentage of the sale (iirc it's 2%). This has been jacking up their profits.

However, since a lot of USA people (apparently) were living high by borrowing against rising home equity spending the loan proceeds in the belief that they'd settle their debt when they sold. And since that equity has dropped considerably, while their debts have not, the presumption is that these same folks have been turning to credit cards to reinflate their finances. This, of course, won't do more than postpone things, while also transposing their debt to a higher rate of interest.

This is still in the whispering stage because there aren't any numbers out there to make it real. It's just the markets waiting for another shoe to drop.

I heard an interesting NPR piece on gas station economics recently. High prices are actually hurting gas stations -- 1) station's profit margin per gallon apparently doesn't change a lot, 2) high priced reduce demand, and 3) as you say, credit card companies take a fixed percent of the transaction. So lets say a gallon goes from $3.00 to $4.00. The gas station owner makes the same 20 cents on the gallon (I completely made this number up and don't know the real numbers) either way, but the credit card fee goes from taking 6 cents to taking 8 cents out of the owner's profit. And to make things worse, more people, as you say, are using credit cards to pay.

Visa actually recently reduced its transaction fees in response to this problem, btw. I guess ultimately it's not in their interest to force stations out of business but rather to keep them alive and squeeze as much as they can.

http://www.templetons.com/brad/smalldarth.jpg

I feel like this could go in the real estate thread too:

http://www.marketwatch.com/news/story/starbucks-pulling-plug-600-us/story.aspx?guid=%7b874B1409-ABC3-432E-85AA-4201C052948C%7d&dist=msr_1&print=true&dist=printMidSection

Remember when a coming-soon Starbucks was considered a sure sign that you should buy a condo in the neighborhood?

The coffee-shop chain said both full-time and part-time positions will be eliminated but wants to transfer some of those employees affected to nearby stores.
Starbucks shares jumped 6% in late trading.

Gotta love capitalism.

I wish they would cut some horrid AAA singer songwriters from the HearMusic roster instead.

yeah, just trash their contract with antigone rising and save a few baristas' jobs.

For . . . the Dow Jones industrial average, which dropped 14.4 percent in the six months through June 30, it was the poorest start to a year in nearly four decades.

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN3041264220080630?feedType=RSS&feedName=rbssFinancialServicesAndRealEstateNews&rpc=22&sp=e

Gotta love capitalism.

-- Ned Trifle II, Tuesday, 1 July 2008 21:44 (Yesterday) Link
I know right?
Lol at tiger economies.
Is anyone at all considering the word 'sustainability'?!

Anyone? Oh, yes. Many millions are considering this idea.

Several billions are not, especially those who control big financial investments. They only want to be richer at the end of the quarter. By year's end at the latest.