US recession ahead?

[danrok]

http://news.bbc.co.uk/1/hi/business/6402915.stm

Tuesday's falls were sparked by a near-9% slide in Shanghai and comments fuelling fears of a US recession.

Is this just a panic reaction or will there be a serious recession on the way?

[cloasters]

I think that China turned 10% of their dollar holdings into Euros. Maybe they wanted to see what would happen. Talk of "getting tough with China" is pure hot air, they own the US lock, stock and barrel. Thank you, massa -ush!

[keithwalton]

I think its one of those cases where if you focus on somthing it'll happen.

An example was when i did some advanced driver training, in the situation the instructer said if you are trying to avoid an accident with a tree! (in our case a cone) you have to focus on the gap in between the trees, if you do you'll mis the tree. If however you focus on the tree (cone) you will hit it square on with the car.

It was a good practical example as we were going along he'd throw cones into our path to avoid, he was correct in every time we locked onto the cone, bam we hit it.

If in this case you think you're going to have a recession then sure enough you'll have one. If you convince yourselves you'll boom then that might just happen also. I do remember a few years ago (dont know if its still the case) that the Japanese economy is only holding up because people spend, spend, spend. Which is great people have lots of stuff spend loads of money and earn loads of money. As soon as they decide to save for tomorrow, thats it the whole thing will collapse.

As they say you've got to spend money to make money

[Gizmo]

Originally Posted by cloasters

I think that China turned 10% of their dollar holdings into Euros. Maybe they wanted to see what would happen. Talk of "getting tough with China" is pure hot air, they own the US lock, stock and barrel. Thank you, massa -ush!

Be fair; they've owned the US since WELL before Bush. One could argue that they've owned the US since a couple years after Nixon went over there. In any case, Congress has been as complicit in the whole thing as any President, as Congress drafts the trade laws.

[aztec61]

Yes, one could say that gizmo, but the fact is this crap really began to hurt the US when Clinton and that Congress passed the NAFTA/GATT treaties. Since then, it's only gotten worse with Bu$hCo screwing the middle-class (and lower) in favor of corporations.

They've tried to make the term "globalization" sound like a good thing. Sort of like the term "downsizing" and "restructuring" used to be in the 90's. But we all know what happened when you got "downsized"...it was not so good.

Anyone who can't see the rampant corporatism (bordering on fascism) in the US gov't nowadays is either blind or fooling themselves. The vast majority of Dems are to be held complicit also, not just the GOP anymore.

Lou Dobbs the other night on CNN had much to say about this.

[Gizmo]

Originally Posted by aztec61

Anyone who can't see the rampant corporatism (bordering on fascism) in the US gov't nowadays is either blind or fooling themselves. The vast majority of Dems are to be held complicit also, not just the GOP anymore.

Oh, I'm not attempting to defend what's been happening recently. I'm just pointing out that it isn't all Bush's fault. He's such a convenient lightning-rod, I know, and if I were into conspiracy theories, I'd have to say that I suspect the real folks with the power put him there for the specific purpose of distracting us.

In any case, things aren't gonna get better until we stop blaming Bush, and start being seriously critical of ALL our elected officials.

[Wolf2000me]

US recession might be an overstatement. In the last 4 months many stocks just doubled in value. This was even more so with the Chinese. Now there appears to have been a lot of speculation in the last few days on the Chinese stock market. This also results in a significant amount of people choosing money over stocks.
I would state that we have just seen a correction of the stock values. There was too much optimism and euforia on as good as all the stockmarkets globally. An increasing amount of people were fearing a collapse, which has happened before when there was a lot of profit on the stockmarket.
I actually think this is a good thing, if it took a while longer it might have been worse. And I'd say now it's a good time to buy some stocks. Maybe wait for next week, but then make a move. I did lose some money but not all that much. Certainly not when compared to 2003 when I bought in. Compared to that I still have quite a large profit. Pretty small scale but it's all relative of course.
We were already moving towards recession before 9/11 and I think we were getting back up since late 2004. Having a recession now would be totally going against the timeframe in which these kind of things happen. Normally a cycle that completes a recession from the beginning, till the point where it is completely over occurs in 11 years. This has been the case dating back from before WW2.
Getting out of a recession always goes with ups and downs, which counts for every economic situation anyway. Till last week we hadn't seen one of those "downs" yet. So it was bound to happen.

Don't worry. I think we're okay for some years to come. Unless some global event would all of the sudden happen.

An important thing the US government and federal reserve need to worry about is the federal deficit. A lot of the deficit is being paid for with Chinese money to even the equation. It's just like a regular debt. And you need to pay for the debt. More debt is more expensive.

[Daniel ~]

Want to see what's coming? Look back over your shoulder for the best view. Whoa! here it comes again!!

[aztec61]

Wolf, measuring economic health mainly by the stock market and/or the deficit is myopic. People or companies that own significant stock are a small minority of the US population.

The real economic indicators for the average Joe-on-the-street are wage & employment levels vs. cost-of-living, as well as bankruptcy and housing foreclosures, lack of health care, etc. That's where the rubber meets the road for everyone I know.

Of course, I haven't hung out with Bill Gates or George Soros or Oprah or Alan Greenspan lately...

[Daniel ~]

Basically everything they stole from us is gaining in value due to the labor we continue to put in what we once owned, our country...

One day your children will take back what we were to weak to keep for them... can I get an Amen?

[Wolf2000me]

Originally Posted by aztec61

Wolf, measuring economic health mainly by the stock market and/or the deficit is myopic. People or companies that own significant stock are a small minority of the US population.

The real economic indicators for the average Joe-on-the-street are wage & employment levels vs. cost-of-living, as well as bankruptcy and housing foreclosures, lack of health care, etc. That's where the rubber meets the road for everyone I know.

Of course, I haven't hung out with Bill Gates or George Soros or Oprah or Alan Greenspan lately...

That depends. You cannot measure the stock influence by the people who own it. Because indeed that's a very small minority. However the companies on the stock markets generate cash flow, provide work, pay taxes, contribute to the National Product, etc.
When a large company you work for is not doing very good you can immediately see that on the stockmarket. Far earlier in fact than the possibility of you losing your job because of the companies bad results. Recession or better, getting out of it, influences the people a lot later than a company. It's only after a company signals an increased quarter profit and/or it is anticipated by speculators that its stock value increases. A company can only get significantly better profits through the sales of the products, of which other companies and ultimately the consumers are responsible for.
During a recession, every company has a harder time getting their revenue and the weaker ones go bankrupt. A lot more companies disappear during a recession. Those companies over time and somewhat combined create an empty space in the market. Those empty spaces are quite rapidly taken by other companies. Which are new ones or the ones that remained because they were stronger. When this situation has largely taken place the economy does better. More people are getting jobs and less people lose theirs. But this takes time.
When the regular citizen notices a worse climate and fears a recession, then that recession has already been going on for a while. And evidently, when a recession is coming at an end that doesn't mean that the majority of the people already feels that. However, it has already been quite clearly noticable by the stockmarket.

Your government has also been spending a collosal amount of resources on the defense budget. This money could be spent differently. You cannot spend that much on defense and expect the average American not to feel it.

[aztec61]

I agree on the "time lag" and on the defense spending, but my point is that for these idyuts on the tube to get up and say the economy is doing "well" doesn't translate for the average working guy who may be watching, scratching his head and saying, "huh?".

Many state programs and services have been severely rolled back or abandoned because of the lack of federal funding these last several years. As well, state taxes like property/school tax and sales tax, licencing fees and the like have all increased. This puts the burden on the local pols while it makes the Presnit and GOP Congresses look good - that they've "cut taxes for working Merkuns".

Not to mention how ridiculously expensive it is to get health ins. coverage now, even through your employer. Most peeps simply cannot afford real good coverage, and end up stuck with something where they have to spend out quite a lot for "co-pays", prescriptions, etc.

And pensions? Ha! As dead as the nearest do-do bird. Now if you don't sock away 15-18% of your income in an IRA, you might as well forget about "retirement". 6%, 7%, 8%, 10% ain't gonna make it anymore. Of course, corps knew this years ago when they made their move to nix pensions and went to IRA's - to save more of their profit margins for themselves and screw the employees.



The end result is that it doesn't help the bottom line of most people, because we're spending the same amount if not more and getting much less in return than in years previous. Just robbing Peter to pay for Dick n' Bush's war fiascos, AND to fund various corporate welfare schemes.

This is Grover Norquist's "drowning the gov't in the bathtub" notion coming home to roost.

[Wolf2000me]

I agree. But that doesn't make it recession.

I also heard, around the time of the state of the union, that spending on the elderly and disabled has again been cut. You're sacrificing a lot for a war that isn't going very well. It doesn't mean that the economy is doing worse. It will sure have an impact on it, but sadly the military machine has a large economical influence in your country too. Increased income from an increased economy being badly spent doesn't imply recession. It could work in the advantage of a recession, but since we've already had one not so long ago I don't think that's going to happen. But I could of course be wrong too

[cloasters]

I'm more and more comfortable in blaming Congress for many of our woes. We sent a clear message to the Dems in November: Get us the hell out of Iraq ASAP. But the bahstages are dithering while our kids are being slaughtered. All they hear in their own "minds" is meeeeeeee. Heads should roll!

[aztec61]

Originally Posted by Wolf2000me

It could work in the advantage of a recession, but since we've already had one not so long ago I don't think that's going to happen.

I just heard on the tube tonight that former Fed chair Greenspan has said there would most likely be a recession in 2008.

Should we enjoy the "good times" while we got 'em now?

[Wolf2000me]

Originally Posted by aztec61

I just heard on the tube tonight that former Fed chair Greenspan has said there would most likely be a recession in 2008.

Should we enjoy the "good times" while we got 'em now?

He doesn't take into account the stock market crash of 9/11. Many companies couldn't take the hit that it caused. Same situation here. We've seen many companies go bankrupt because of it.
He sais the economy has been expanding from 2001. I don't share that opinion. Far from it. The attacks of 9/11 caused the global Western economy to lose 10 years of economical progress. At the end of 2006 the Dow Jones got back to the value of before 9/11. That's 5 years of recovery from it.
I think Greenspan is just trying to warn the US policy makers about the federal deficit. And rightly so. That deficit is a grave waste of money for the US taxpayer.


Here in Belgium we have had a significant rise in the economy. While I type this I just heard that the amount of failing companies has lowered since last year. In 2004 we had a serious unemployment problem. Our newly elected governement made a promise of finding 200 000 new jobs in a period of three years. So far we're at 140 000 new jobs.
I can also tell you that the IT boom pretty much ended in 2001, throwing the whole sector here in serious problems. I should know as that's the sector i'm in. It's only been the last few years that the sector is back on its feet.

It's time for a government change in your country. It really is. Bushes admin has endangered your economy long enough. Making the majority of the people getting less buying power is one of the most dangerous things to do for the economy.

Also note that the Chinese stock fall has caused a fallback globally on the stocks. However the US stock exchange has recovered the very next day. Today the same is happening here. If a recession is pending this would certainly not have happened this fast. There still is a lot of optimism in the stock climate.