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 The Great International Depression of 2008 & Beyond /

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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Thu Mar 05, 2009 4:04 pm

One dude on Bloomberg - James Nixon ? - totally smirking (jesus the music on Bloomberg this morning is very eerie) when asked about Ireland's fiscal problems ... " 'Growth and Stability Pact' what 'Growth and Stability Pact'?" says he. He's chuckling or nearly scoffing at our emergency budget too. I'm not patriotic but I hope the lad gets so sick of the Queen's Head by Christmas that he'll wish he was back in the Weimar Republic. Evil or Very Mad

It sounds like they are a bit chuffed with themselves but are they sure it'll work eh ? Remember this boys :


Funf hundert tausand millionen quadrillionen squillionen Weimar Mark fur ein paketen von shpaghettis..

Twisted Evil
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Thu Mar 05, 2009 4:30 pm

My favourite hyperinflation photographs have always been the ones of the guys with wheelbarrows full of cash.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Thu Mar 05, 2009 4:54 pm

I guess the other concern is... what if it works and the ECB doesn't follow suit. Presumably, so much funny money has been washed down the bad debt plughole that they might not actually be increasing the money supply back up to what it used to be pre Aug 07. I know they are going to start with government bonds (more cash in Brown's pocket), but presumably then either Brown and co have more money to bail out/recap the banks, which means the banks will have more money. Does this mean that the likes of Halifax/BoSI and Ulster will be ploughing some of these ill gotten gains into our economy?? What happens if a recovering UK (possibly on the way to hyperinflation but I now think this might take a good while) suddenly notices that all our property etc looks incredibly affordable

I also wonder if there's some sort of plan in the UK wrt to Ireland?? I have a horrible suspicion that both Gordon and Angela would just lurrve to see the rear end of our low corpo tax....come to think of it, perhaps Barack as well. Are there some people out there deliberately talking us down??

I'd expect to see a bunfight over Lisbon too. The eurozone wants us in, the UK and US would prefer us out....and that would be one sure way to devalue the Euro, if you were in the mood for a spot of currency manoeverings
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Thu Mar 05, 2009 6:12 pm

expat girl wrote:
I guess the other concern is... what if it works and the ECB doesn't follow suit. Presumably, so much funny money has been washed down the bad debt plughole that they might not actually be increasing the money supply back up to what it used to be pre Aug 07. I know they are going to start with government bonds (more cash in Brown's pocket), but presumably then either Brown and co have more money to bail out/recap the banks, which means the banks will have more money. Does this mean that the likes of Halifax/BoSI and Ulster will be ploughing some of these ill gotten gains into our economy?? What happens if a recovering UK (possibly on the way to hyperinflation but I now think this might take a good while) suddenly notices that all our property etc looks incredibly affordable

I also wonder if there's some sort of plan in the UK wrt to Ireland?? I have a horrible suspicion that both Gordon and Angela would just lurrve to see the rear end of our low corpo tax....come to think of it, perhaps Barack as well. Are there some people out there deliberately talking us down??

I'd expect to see a bunfight over Lisbon too. The eurozone wants us in, the UK and US would prefer us out....and that would be one sure way to devalue the Euro, if you were in the mood for a spot of currency manoeverings

I think they were sniggering a bit over this too - that the ECB was constantly "behind the curve" and always catching up with the rest of the place. They'll be laughing even more if the ECB start to do it too eventually which they're denying they'll do so far. They're convinced it's not the way to go. It'll be interesting to see how the ECB and BOE zones operate alongside each other now with this going on ...

£75 billion is a fair whack of cash. Two aircraft carriers alone will cost the UK 4bn so for 75bn they could get nearly 40 HMS Queens Elizabeth and Princes of Wales Shocked

Question is when they'll know when to stop printing though ....

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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Thu Mar 05, 2009 6:15 pm

D'yall remember when the HSS ferry banged into the side of the American's aircraft carrier when it came to Dun Laoghaire? That was gas.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 3:44 pm

Yesterday Karl Denninger posted a message on his blog which probably should go in the Tea Leaves thread as it's a broad prediction. It's a bit over-destructive a conclusion though and usually tea leaf predictions mean there is a cup left for the next prediction - in this one there's not Shocked

Apparently Denninger saw something nasty in the markets yesterday and now it's just a matter of time unless something radical gets done.

Economic Horror P0rn at its best. Video below by vlogger who created the vid using Great Depression I footage (great shots of NY back then) and Denninger's foreboding text.



Read it here.
http://market-ticker.denninger.net/archives/852-Whats-Dead-Short-Answer-All-Of-It.html



Watch it here

http://www.youtube.com/watch?v=eL_45FbBpPE
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 5:27 pm

I read the post.... he seems to be wilfully ignoring two things: 1) the Fed's ability to print them out of trouble, 2) the inability of the Chinese to stop buying T bills.... they've got to "maintain the value of the ones they've already got" you see.

The US won't go bust. It will hyperinflate... unless they stop printing in time (once they've filled in all the debt black holes). If they and the UK do it right, it might bring us back roughly to the amounts we may have thought were in the bank back in June 2007. If they get it wrong.... Weimar republic.

The CDS market seems to be doing incredible damage...doesn't look like anyone can insure any debt at all.

On the other hand, this should undoubtedly work to deleverage everyone; people and businesses will either do without borrowing or will declare bankruptcy. As usual, the little guys will be trusted less than the big guys with whatever lending is available.... well, that one seems to work at a country level as well. Countries seem currently to divide into those too big to fail and those the markets can play cat and mouse with. Sadly, we are in group two.

On the plus side, I am of the opinion that the only way to survive peak oil is to be as debt free as possible; rising oil prices will cause consumable inflation and asset deflation (higher food/fuel prices mean lower ability to service mortgage debt/rent and to travel). Overleverage seems to cause the sort of downward spiral markets are sooo good at, can we perhaps redesign markets and systems to be more borrowing independent?? One can only borrow confidently if one is reasonably sure that one can pay back the debt later. Given the dire state of energy reserves and the fact that New Scientist seems to think nowhere south of latitudes of 40N, or north of 40S will be habitable after 2050, that confidence now seems lacking

Add that to the current meltdown and one has an explanation for the soaring price of insuring debt......
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 5:33 pm

Ah well, Dublin is 53 Degrees North so we'll all be dead anyway, may as well crack out the champagne.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 7:14 pm

Over to the climate change thread....
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 9:58 pm

expat girl wrote:
I read the post.... he seems to be wilfully ignoring two things: 1) the Fed's ability to print them out of trouble, 2) the inability of the Chinese to stop buying T bills.... they've got to "maintain the value of the ones they've already got" you see.

The US won't go bust. It will hyperinflate... unless they stop printing in time (once they've filled in all the debt black holes). If they and the UK do it right, it might bring us back roughly to the amounts we may have thought were in the bank back in June 2007. If they get it wrong.... Weimar republic.

The CDS market seems to be doing incredible damage...doesn't look like anyone can insure any debt at all.

On the other hand, this should undoubtedly work to deleverage everyone; people and businesses will either do without borrowing or will declare bankruptcy. As usual, the little guys will be trusted less than the big guys with whatever lending is available.... well, that one seems to work at a country level as well. Countries seem currently to divide into those too big to fail and those the markets can play cat and mouse with. Sadly, we are in group two.

On the plus side, I am of the opinion that the only way to survive peak oil is to be as debt free as possible; rising oil prices will cause consumable inflation and asset deflation (higher food/fuel prices mean lower ability to service mortgage debt/rent and to travel). Overleverage seems to cause the sort of downward spiral markets are sooo good at, can we perhaps redesign markets and systems to be more borrowing independent?? One can only borrow confidently if one is reasonably sure that one can pay back the debt later. Given the dire state of energy reserves and the fact that New Scientist seems to think nowhere south of latitudes of 40N, or north of 40S will be habitable after 2050, that confidence now seems lacking

Add that to the current meltdown and one has an explanation for the soaring price of insuring debt......

Yes Denninger is ignoring your points in blue above. The Americans could well print their way out of this and the Chinese said they don't see an alternative to buying the Treasuries didn't they?

You jumped quite suddenly onto oil there towards the end but it is the thing that haunts behind the back of the whole lot. Under all the paper going back and forth it's one of the resources if not the main resource in this staying curiously quiet at present. The price of gas at the pumps in the US is slowly rising again - before too long they'll be paying the same as the rest of us and about time.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Fri Mar 06, 2009 11:34 pm

expat girl wrote:
I read the post.... he seems to be wilfully ignoring two things: 1) the Fed's ability to print them out of trouble, 2) the inability of the Chinese to stop buying T bills.... they've got to "maintain the value of the ones they've already got" you see.

The US won't go bust. It will hyperinflate... unless they stop printing in time (once they've filled in all the debt black holes). If they and the UK do it right, it might bring us back roughly to the amounts we may have thought were in the bank back in June 2007. If they get it wrong.... Weimar republic.

The CDS market seems to be doing incredible damage...doesn't look like anyone can insure any debt at all.

On the other hand, this should undoubtedly work to deleverage everyone; people and businesses will either do without borrowing or will declare bankruptcy. As usual, the little guys will be trusted less than the big guys with whatever lending is available.... well, that one seems to work at a country level as well. Countries seem currently to divide into those too big to fail and those the markets can play cat and mouse with. Sadly, we are in group two.

On the plus side, I am of the opinion that the only way to survive peak oil is to be as debt free as possible; rising oil prices will cause consumable inflation and asset deflation (higher food/fuel prices mean lower ability to service mortgage debt/rent and to travel). Overleverage seems to cause the sort of downward spiral markets are sooo good at, can we perhaps redesign markets and systems to be more borrowing independent?? One can only borrow confidently if one is reasonably sure that one can pay back the debt later. Given the dire state of energy reserves and the fact that New Scientist seems to think nowhere south of latitudes of 40N, or north of 40S will be habitable after 2050, that confidence now seems lacking

Add that to the current meltdown and one has an explanation for the soaring price of insuring debt......

At this stage then, should we not look at the Chinese and American economies as a single body with two heads? They are conjoined twins, and one is not able to live without the other.

In the 1970s and 80s there was a strategy originating from that other hydra, Thatcher-Friedman, aimed at all costs at breaking the organised working class and Trade Unions, by deporting heavy industry and mining to the former colonies as far as possible from the banking houses where they kept their wealth - aka "Globalism". The children of the skilled working class became the chavs working in fast food restaurants. The British used to be the workshop of the world. We were making stuff, but only for wages from US companies who repatriate the profits.

International economies are inextricably mixed up with each other and the difference across national boundaries, markets and currencies seem to be hampering exchange/distribution and causing horrible dysfunctions.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Sat Mar 07, 2009 1:42 pm

Food stamps in the U.S. are about €20 a week for individuals, about €40 a week for a household and there are 31.8 million on them now. That's going to be raised by $80 a month for families by the end of the year. It's unknown as to what will happen with this once more people are on them and then the dollar collapses (if it does). No wonder Americans who still have money are hoarding food and beginning to grow their own.

Quote :
WASHINGTON (Reuters) - A record 31.8 million Americans received food stamps at the latest count, an increase of 700,000 people in one month with the United States in recession, government figures showed on Thursday.

Food stamps, which help poor people buy groceries, are the major U.S. anti-hunger program, forecast to cost at least $51 billion in this fiscal year ending September 30, up $10 billion from fiscal 2008.

"A weakened economy means that many more individuals are turning to SNAP/food stamps," said the Food Research and Action Center. Last summer food stamps were renamed the Supplemental Nutrition Assistance Program, or SNAP.

The average food stamp benefit is $115 a month for individuals and $255 a month per household.

http://www.reuters.com/article/domesticNews/idUSTRE52478R20090305

There's a little fearmongering rumour going around the net now that a House Resolution aimed at regulating farm produce will also cover how the food is produced in a person's own garden and could end up coming down hard on organic farmers. A bit of paranoia about this from this vlogger or has he a point and it's the wrong this

Have a look at this: http://www.youtube.com/watch?v=epXNJNjYBvw

The resolution:
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.875:
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Sun Mar 08, 2009 9:01 am

Audi

Here is a link to an interview. The last few minutes make a lot of valid points.

http://www.youtube.com/user/MarkMolaro

It is an arguement for a rules based approach rather than a deals based approach. Proper agreed regulation and restoring confidence. The problem is confidence and knowing that investments made will not be wiped out by government intervention or because of inaccurate and fraudulent accounting. Address those problems and you will see trillions return to the market. Intervention of the current variety spooks markets. Public works projects like sewerage and water treatment or energy production openly tendered do not. However you need to consider how they are financed as money raised in tax has to come from somewhere. If you print it then you have inflation. Personally that does not phase me in any way as I know how to deal with inflation.

The interview also touches on innovation and the need to encourage innovation.

I am absolutely up to mu eyes in work and am employing extra people. The intention is consolidation and preparing for expansion, yes expansion. To me the current situation is a tremendous opportunity to substantially increase my position. Generally most people are better off, mortgages are down, prices are falling. Many are paying off personal debt. We are returning to a period when property values and returns start to make economic sense.

House sales in many countries are stagnant and prices are dropping. It is because there is no market and is not because there is no demand or wish to purchase. Many simply cannot meet the new financial requirements to get a mortgage. With time that will change. A house that last year cost £150,000 now costs £120,000. Within a year it may well cost £100,000. Now if at the start of 2008 you had a 10% deposit say £15,000 just before the whole mess ceased up and are saving say £5000 a year you will be in at 25% at the start of 2010. You will own 75% and not 10% of that same house.

With cars and goods if we do not buy new then the price od second hand increases, but eventually you will get demand because there are not enough road worthy vehicles in circulation.

If my optimism is wrong what harm? People will still need to eat and will need somewhere to live. The basic needs will always be there.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Sun Mar 08, 2009 1:42 pm

Squire wrote:
Audi

Here is a link to an interview. The last few minutes make a lot of valid points.

http://www.youtube.com/user/MarkMolaro

It is an arguement for a rules based approach rather than a deals based approach. Proper agreed regulation and restoring confidence. The problem is confidence and knowing that investments made will not be wiped out by government intervention or because of inaccurate and fraudulent accounting. Address those problems and you will see trillions return to the market. Intervention of the current variety spooks markets. Public works projects like sewerage and water treatment or energy production openly tendered do not. However you need to consider how they are financed as money raised in tax has to come from somewhere. If you print it then you have inflation. Personally that does not phase me in any way as I know how to deal with inflation.

The interview also touches on innovation and the need to encourage innovation.

I am absolutely up to mu eyes in work and am employing extra people. The intention is consolidation and preparing for expansion, yes expansion. To me the current situation is a tremendous opportunity to substantially increase my position. Generally most people are better off, mortgages are down, prices are falling. Many are paying off personal debt. We are returning to a period when property values and returns start to make economic sense.

House sales in many countries are stagnant and prices are dropping. It is because there is no market and is not because there is no demand or wish to purchase. Many simply cannot meet the new financial requirements to get a mortgage. With time that will change. A house that last year cost £150,000 now costs £120,000. Within a year it may well cost £100,000. Now if at the start of 2008 you had a 10% deposit say £15,000 just before the whole mess ceased up and are saving say £5000 a year you will be in at 25% at the start of 2010. You will own 75% and not 10% of that same house.

With cars and goods if we do not buy new then the price od second hand increases, but eventually you will get demand because there are not enough road worthy vehicles in circulation.

If my optimism is wrong what harm? People will still need to eat and will need somewhere to live. The basic needs will always be there.

She says that this 'Depression' is to the Great Depression what a rainstorm is to Hurrican Katrina - says we're much better off now and that both Great Deflations came on the backs of technological booms. Then as now shes saying people havent a clue what to do about it and are arguing that they need to take a double dose of power because the problem is doubly bad.

A sober analysis of it overall - she sees 2011 as the timeframe for recovery as I think does Bernanke while other scaremongers are thinking long term and in terms of a decade. What will happen in that decade no one really knows but it tends to be hysteria over food crises, perhaps international war and dramatic climate change thrown on top for a bit of garnish .... Some are arguing that it is best to leave the thing alone and stop poking it with money and it'll get better by itself..... She elucidates Keynesianism in terms of an engine funnily - which says you must keep the engine running or it'll cease up or freeze up. False analogy ? We should be putting money into the system now is the orthodoxy ..

She takes a very practical and sensible approach with the rules at the end as you say. What exactly does she mean by deals ? Is this for example to do with the American Auto Workers and the GM bosses and dealing them out bailouts ? By rules I think she's talking about regulatory structures but she could mean a broader range of things - energy regulation in terms of trading reliability or self-sufficiency .. I can't really think now.

But you're right - the basics will always be there and that means food shelter clean water fuel and other creature comforts. Are you getting a boost in the construction area or other? I'd say the clever bears are the ones who will be kingly after this - you need to be adaptable too and see that people ARE NOT as depressed as they were during the Great Depression or other .... they have developed tastes far outside of their need for the basics and they will strive to keep the standards they've become accustomed to.

What could emerge out of this though is some new lurches towards a different social order.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Sun Mar 08, 2009 2:28 pm

I think she mentioned Transparency and clarity of information a lot too. It's not as rare as Rhodium, it's not going to Peak like oil but golly gosh it's in short supply around this planet.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 12:49 am

Audi

With construction you have to remember that larger projects take years to complete. It is smaller contractors and developers that often feel the cold wind first. There is ongoing work that I am involved in that will not end until well into next year.

I am busy because I am preparing for any sign of an upturn. I need projects ready to roll. There will be a period when asset will be cheap to purchase, and tendering will be very competitive. However to take full advantage you need your schemes worked up, approvals obtained and agreements to purchase land all in place. Just as with exiting the bubble you need to be ahead of the pack. The worst that can happen is that I end up sitting with a lot of paper work in place or a few pieces of land for longer than I would like. What harm in that? I can sit it out.

I also have a lot of work from a financial inst. regarding advice on property assets. Started as a complete bluff but now employs over a dozen people. All busy.

By good fortune farm land, that was important, came to market and I now own. So more work and I do not know the first thing about farming. When I was a child I thought the place magical as I spent a lot of time one year riding around on Angelino. That horse had attitude, but that is the extent of my involvement in farming other than ensuring it does not lose money. I have set up a nursery in preparation for some serious tree planting, (needed for wind breaks), need to look at the viability of pork (bit bleak I think), and on another piece of land further north increasing rice production. If ever there was a sign of changing times that is it. I don't really like livestock, it sits uneasy with me, but other than forestry much of the land isn't really suitable for other usage. Energy production is a possibility as the wind never stops, but once you go beyond production for one's own needs the size of the investment would be colossal.

So very busy and want to get to India before it starts to really heat up.

This link may be of interest. About fraud.

http://market-ticker.denninger.net/
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 1:44 am

"The Bezzle" ..... ah ..

Jim Rogers was just on Bloomberg and still is - he sounds like you Squire - long on Agriculture, let the system work - the the mistakes made be cleared away; let those who failed get on with it but instead the Govt. is stepping in and taking money from the competent and giving it to the incompetent when the competent people should be allowed to take over assets. He foresees a long lost decade like they had in Japan in the nineties which was caused by the same thing - deals not rules (?)



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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 2:53 am

The problem I see with the Japanese graph is that that high point was a crazy unreal inflated bubble, but the commentator is treating it as though it should and could have been sustained.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 3:25 am

Audi

Exactly, why should I pay for a bank or financial inst that has basically existed on an ever increasing pile of bets? Why should those with sound finance bail out those that lied and cheated? Who decides who gets a bail out and who does not? If GM gets one why not the local window cleaner? Unfortunately it has more to do with bailing out buddies and political considerations than any strategic plan.

We already see these institutions running around trying to bully and threaten, "give us money or we will close our factories". Let them sink. At a very basic level why put money into a business unless you can see a clear long term return for that investment?

These interventions are stupid because you are subsidising one business which has failed against its competition which have not. This piecemeal approach is not sound economics.

With increasing populations food has to be sound long term and we need to increasingly consider China rather than the USA and Europe as the growth market. (hence pork and rice!) The Yuan will become increasingly important.

The West really needs to wake up. What many fail to realise is just how quickly an economy can implode if poorly managed. Wealth is not the West's by right. it could easily decline into a financial backwater that exports its most able. A place where unemployment is 30%. When all the frills are removed what is the difference between the USA and Europe and say Africa? Africa has raw materials, what has Europe?

Anyway best to be more optimistic and plan for recovery in 2011. Europe will muddle on for another decade or two.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 3:47 am

So Squire you feel that Europe will stumble around for a decade then? I imagine you're referring to China when you say 'recovery in 2011'. At the moment the Asian nations are feelign it too because of a fall in exports while the West is trying to regroup somewhat. We'll make harder work of it here though than they will over there - South Korea rebounded smartly after the 2000 currency crisis as did Malaysia...

I'd say you can still see the balloon of so called wealth here when you arrive back after a spell in Asia. For them the basics are more important for them there than our bling is for us here. I think we've lost that and that was a mistake.

Quote :
Exactly, why should I pay for a bank or financial inst that has basically existed on an ever increasing pile of bets? Why should those with sound finance bail out those that lied and cheated? Who decides who gets a bail out and who does not? If GM gets one why not the local window cleaner? Unfortunately it has more to do with bailing out buddies and political considerations than any strategic plan.

Article below from Bloomberg on Toyota suppliers beginning to find they might die off without a bailout. Perhaps GM are getting the money which Toyota should be, in a roundabout way. Although there is also the competition coming out of India and the plug-in electric vehicles now being made in China. This is how a wave of technology can destroy industries ...

Instead of bailing out your friends, do you think the Good Asset / Bad Asset set of banks is a potential solution to the mountain of bad bets that was created or was everything so inflated that the market would see it as appreciably less (not that that would be any harm). Perhaps the little local business needs to be protected before the bigger ones .. ?

Toyota Shock May Spur Supplier Failures Without Aid

Quote :
“Suppliers are suffering badly,” said Atsushi Ishii, a supply-chain analyst in Tokyo at auto consulting company CSM Worldwide. “Failures would create big problems for the carmakers,” who may have to support the suppliers to ensure production.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 3:51 am

Most people can delay buying a replacement car for three or four years at least. When they buy again they dont want to buy one that has been sitting in a field for years.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 4:41 am

Audi

I am planning for start of recovery generally 2011. It may be slow and patchy but you have to prepare now. If you find we are still limping along you can always delay plans, but it is important to be ahead of the herd!

I just do not like the bad assets / good assets scenario. If someone is sitting on a pile of bad assets I would let them sink and if it brings down others fine, we flush the lot out. What we have now is the likes of AIG being bailed out because the parties to their various transactions would collapse if they did. It is these people who are being bailed out. Why should a government absorb any companies bad assets? Why not use the money and invest in the successful? Let the assets sink to a value that finds a market. Here is an article about how prudent banks feel.

http://www.bloomberg.com/apps/news?pid=20601109&sid=anmrn4H8hXfw&refer=exclusive


Cactus

Cost of second hand cars will increase and you are going to get one hell of a spike in demand when the wheels fall off the old bangers. Cars are not a good example because of the high depreciation in the first year, but I would plan to buy when demand is still weak. The trick is to be just ahead and out of sync with others. More generally we need to watch for an upturn in inflation when that happens you need to be out of cash and be in no doubt inflation is going to come. I wish I knew when.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 4:53 am

Now is a very good time to buy a good second hand car then as people are selling who can't afford repayments What a Face

Perhaps bicycles are the way to go.


There is a nice new road being finished off not too far from here. The journey to the airport used to be 3 hours a few years back and I reckon it will be an hour by car when finished but if we took the cars off the road could be three hours by bike Very Happy
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 5:02 am

If you took the cars off the road, the horse could be an interesting option. Stables at airports, bliss. Mind you a plane load of people who had just got off sweaty horses, there is always a down side.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   Mon Mar 09, 2009 12:12 pm

Squire wrote:
Audi

I am planning for start of recovery generally 2011. It may be slow and patchy but you have to prepare now. If you find we are still limping along you can always delay plans, but it is important to be ahead of the herd!

I just do not like the bad assets / good assets scenario. If someone is sitting on a pile of bad assets I would let them sink and if it brings down others fine, we flush the lot out. What we have now is the likes of AIG being bailed out because the parties to their various transactions would collapse if they did. It is these people who are being bailed out. Why should a government absorb any companies bad assets? Why not use the money and invest in the successful? Let the assets sink to a value that finds a market. Here is an article about how prudent banks feel.

http://www.bloomberg.com/apps/news?pid=20601109&sid=anmrn4H8hXfw&refer=exclusive


The FDIC insures deposits isn't that right? Each bank pays into this insurance fund in order to protect against potential losses. This insurance is rising in cost because of the failure of big institutions through "incompetence and greed" and banks that are healthy - often small and medium-sized local ones - feel aggrieved that they have to pay the higher cost because of the excess of larger institutions.

We are now being made to feel like it is necessary that we all pull together and take a bit of the pain for the excesses of those who now can't afford to pay it back. We should now be happy that we had a major BOOM and that we are left in a much better state than we were before the excesses of the celtic tiger kicked in. Now we are starting to see ghost estates, vacant commercial property and soon there will be ghost shopping centres rotting away on the margins of our towns - weeds, cobwebs, damp, rot.

We are being asked to pay for this because it is in the National Interest. Soon we'll be told we are lucky to be able to pay for it, if we are in that position at all. I think you're right Squire - failures should be allowed to go to the wall. We all have them, most of us pick ourselves up afterwards and before too long, everyone feels better off after it.
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PostSubject: Re: The Great International Depression of 2008 & Beyond /   

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