US Economy

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juriev

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I would like to hear different opinions on the current state of the economy. It is looking bad one day, great the next, and back and forth. I personally think that we will eventually pull through, but until then it will be a long haul. I also think that Obama is the man to pull us through.
 

Fire2box

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I think its fine considering people are still buying Ipods, Video games, Going to the movies, Shopping etc. How much money has High school Musical 3 made or Saw 5??
 

MysteriousVisitor

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Where have you been? The economy hasn't looked good for 6 months. Job losses are up, productivity increase down. All indicators point towards a recession, if we aren't already in one.

Of course we shall pull through. Despite what the media and politicians tell you, this is not that bad. Everyone keeps comparing this to the Great Depression. It is not. Not even close.

The economy will improve with time. A few months, probably. Don't expect in to be all honey and flowers when Obama takes office. Nothing he does is going to speed recovery. It takes time.
 

ade

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The economy will improve with time. A few months, probably.
usually, any setbacks or mishaps in the economy take years to overcome.
the latest mishap was just part of general downward trend which has been in the making for quite a few years.
while there's been much speculation about the nature of the current events and the spouted wisdom that such things are inevitable, i'd like to propose the possibility that the 'crunch' may have been an orchestrated event intended to speed up the economic downturn........why? well, think about it: if western economies slacken, so do all the 'developing' and third-world economies (and to a much greater extent) from which we source goods and the knock-on effect is that they and their associates are put in a much weaker economic and political posistion; i'm talking about countries like china and russia.....and their associates are iran (to whom they supply weapons and nuclear technologies) and al-qaeda and the taliban (weapons).
western economies are much better placed to weather global recessions (mainly because they are the hub and generator of the global economy) than those economies that serve them and, if one was wishing to put one's servants in their place, an economic slap would be a good idea (it being that any slap hurts the slapper as much as the slapped - it's just a matter of who can take the most pain), and that's my reasoning behind this proposal.
 

MysteriousVisitor

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I agree. This recession will hit China, Russia, and other developing nations harder then it will the US or Europe. Take Oil. When the economy was better, oil was above $140 a barrel. Now it's less then half that. It certainly hurts when your primary export is halved in value in a few months. Percisely for this reason, I believe that the West will weather this storm in a much shorter timeframe then before. The US hasn't faced a recession like this since the end of the Cold War. With the globalized economy the way it is, it will work out very well for the west as raw material prices fall from previous all time highs.

Again, I agree with your analysis that less developed countries dependant on exports will be hit much harder then the developed west will be. I worry that much of the work the US and Europe has done in Africa will be destroyed by civil unrest in the worsening economic climate of Africa.
 

starshine

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Of course the economy is going to pull through, only an idiot would think otherwise.

What I find funny, is all the people who are pulling their money out of the stock markets for half of what they paid in the first place, or less.

It's the time to buy people, not sell. Duhhhhh.
 

chevre

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Well, thing is -- it would appear we haven't hit bottom yet. Job loss rates the last few months just came out, and they're not good. Now with 6.5% unemployment in the US we've surpassed the slowdown in 2003 and are back to where we were in 1994. And, we very well could drop further.

Also, re: buying now; if you think it's going down further, you could still sell now and buy back in at a lower price, saving you at least a little cash. Of course, that's sort of a self-fulfilling prophecy.

I personally think things will get worse before they get better. Look at the crisis now happening in the auto industry. Big auto is now seeking $50 billion in federal loans ( Bloomberg.com: Worldwide ) and now GM doesn't even know if it will have enough money to finish this year ( Bloomberg.com: Worldwide ).

What's really killing GM is they had excellent benefits for a long time. But now, they have so many retirees that it's crippling them when you combine it with the bad market at large.

If you ask me, a big sign of where we're going will be the Christmas season and the shopping that goes along with it. A lot of stores depend on Christmas to turn a good annual profit. If things don't improve by then, people very well may decide that they have to hold on to what money they have, fearing what the economy is doing. This could be a major blow to the economy on top of what's happening now.

It'll be years before we've really recovered, I think.
 

ade

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It's the time to buy people, not sell. Duhhhhh.
me's a chuckling. i think it's a fundamental flaw that everything is 'up for grabs' in our economies and it shows in situations like now. it's far too easy to end up in a catch-22 situation which can drag down healthy areas of the economy. and so, yes, people should be making a more positive approach to city-dealing, under this system.
but, i've had the thought for a long time that certain services and products should not be open to the free-market and their costs to the buyers should be capped. this would hopefully have an attitudinal knock-on effect throughout the rest of the economy in that goods and services have intrinsic worths and ought not be under nor over valued, thus avoiding much of the speculating and marketeering to which we have become accustomed.
dampening down the over-valuing of goods and services would also go someway to pulling the reins on the stupidly, giddy filly of inflation. 'course, that doesn't deal with the consistant antagoniser of that horse: the taxman.
 
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I would like to hear different opinions on the current state of the economy. It is looking bad one day, great the next, and back and forth. I personally think that we will eventually pull through, but until then it will be a long haul. I also think that Obama is the man to pull us through.
Let's take a look at Obama's tax plans:

Raise taxes, I don't see how that will help the economy. (Yeah he said he was going to lower taxes for 95% of something, but the amount that people earn has steadily decreased since his $250,000, all the way down to $150,000 as Biden said, or $120,000 as Richardson said. How long before the $100,000 barrier is broken, or $75,000, or even lower. Also those numbers are for families, so for single people that number is already lower.)
Raise taxes on businesses, driving either prices up or businesses to close.
Raise taxes on Capital Gains, making people pull their money out of the stock market before they have to pay the higher taxes.

I don't think that this is the time to raise taxes on anyone.
 

Fire2box

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Where have you been? The economy hasn't looked good for 6 months. Job losses are up, productivity increase down. All indicators point towards a recession, if we aren't already in one.
Uhh I been right here. But as far as I seen everyone is still shopping and buying crap they don't even need to live. Anyways if I had a job which I never looked for yet so don't say see you don't even have a job, its that horrible!

Anyways back to the point if I had a job I would be buying stock left and right. I wouldn't put all my money into it but the current situation would not make me stay away from buying stock. Right now I would invest money into AMD and Intel and Nvidia. Three of the top brands in the computing world that have recently take a pretty good plunge in value. Its possible they can go out but I don't think its likely due to their size, popularity and stature. When was the last time you seen a store bought PC come with a CPU that wasn't AMD or Intel?
 

IncompleteDude

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Anyways back to the point if I had a job I would be buying stock left and right. I wouldn't put all my money into it but the current situation would not make me stay away from buying stock. Right now I would invest money into AMD and Intel and Nvidia. Three of the top brands in the computing world that have recently take a pretty good plunge in value. Its possible they can go out but I don't think its likely due to their size, popularity and stature. When was the last time you seen a store bought PC come with a CPU that wasn't AMD or Intel?
Being someone that follows the computer industry fairly closely, I would advise against that. Intel is a solid company to be sure, but both AMD and Nvidia have serious problems right now. AMD's current and coming CPUs simply do not compete with Intel in the consumer market without AMD cutting almost all their profit margin. Nvidia's issues are arguably worse, and will not improve until they can release a GPU more competitive with AMD's offerings. But by then, Intel may have Labarre out and AMD isn't slowing down either, so it may not even matter. If I was to bet on any major tech company getting bought out, I'd probably go for Nvidia. Sun is next on my list, but they are much more diversified than Nvidia, so they'll hang around.
 
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I think it will get worse before it gets better. Bush basically let the super-rich steal and steal and steal until there was nothing left. Then he gave them an extra trillion dollars as a going-away present.

So it's going to take a while or the economy to recover. Obama has no magic wand, but as president he can call or reorm that would prevent a repeat of the Bush kleptocratic theocracy.
 
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Interesting little Q&A with Obama yesterday.

Q Mr. President-elect, do you still intend to seek income tax increases for upper-income Americans? And if so, should these Americans expect to pay higher taxes in 2009?

PRESIDENT-ELECT OBAMA: The -- my tax plan represented a net tax cut. It provided for substantial middle-class tax cuts. Ninety-five percent of working Americans would receive them. It also provided for cuts in capital gains for small businesses, additional tax credits. All of it is designed for job growth.

My priority is going to be, how do we grow the economy? How do we create more jobs?

I think that the plan that we've put forward is the right one. But obviously over the next several weeks and months, we are going to be continuing to take a look at the data and see what's taking place in the economy as a whole. But understand the goal of my plan is to provide tax relief to families that are struggling, but also to boost the capacity of the economy to grow from the bottom up.


President-elect Obama first press conference. Transcript. - Lynn Sweet
It was the last question he answered.

A couple of interesting points there;
First he mentions his tax plan in the past tense, "represented" not "represents."
Second he thinks he has the right plan, but he may have change his mind.
Third now he wants to provide tax relief for families that are struggling. What does he mean by struggling? $250,000, $200,000, $150,000, $100,000, $50,000, $25,000? Which number is it now?
 

IncompleteDude

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First he mentions his tax plan in the past tense, "represented" not "represents."
Second he thinks he has the right plan, but he may have change his mind.
Third now he wants to provide tax relief for families that are struggling. What does he mean by struggling? $250,000, $200,000, $150,000, $100,000, $50,000, $25,000? Which number is it now?
Keep in mind, he is doing an interview, not drafting legislation or legal documents. Why don't you wait to see what he actually puts into law? Then you'll have all the exact figures you want.
 

MysteriousVisitor

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I think it will get worse before it gets better. Bush basically let the super-rich steal and steal and steal until there was nothing left. Then he gave them an extra trillion dollars as a going-away present.

So it's going to take a while or the economy to recover. Obama has no magic wand, but as president he can call or reorm that would prevent a repeat of the Bush kleptocratic theocracy.
No, for the love of god no. Bush did not cause the recession, the sub prime crash, the housing bubble, hurricane Katrina, or the holocaust. This was caused by the cycle of the economy, the desire to see home ownership increase, and the illusion that the value of property will continue to increase to infinity.
 

IncompleteDude

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No, for the love of god no. Bush did not cause the recession, the sub prime crash, the housing bubble, hurricane Katrina, or the holocaust. This was caused by the cycle of the economy, the desire to see home ownership increase, and the illusion that the value of property will continue to increase to infinity.
Then how come Canada, which has tighter regulations over mortgages, has none of the American economic problems? Our property values are still steady, we have minimal defaults (like 0.01% or something), and our banks are rock solid. I think government oversight, and the lack thereof, has played a major role in the American catastrophe. I mean, when banks are giving huge sub-prime loans to people with no money, no income and no assets, you've got an oversight problem.
 

MysteriousVisitor

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Then how come Canada, which has tighter regulations over mortgages, has none of the American economic problems? Our property values are still steady, we have minimal defaults (like 0.01% or something), and our banks are rock solid. I think government oversight, and the lack thereof, has played a major role in the American catastrophe. I mean, when banks are giving huge sub-prime loans to people with no money, no income and no assets, you've got an oversight problem.
Partially, yes, the lack of regulation over the pyramid scheme mortgage market did influence the difficulty that the US economy is facing. But, the primary difference between Canada and the US is that Canada was not sitting on a massive housing bubble. If the bubble kept up, we would have never heard of sub prime mortgages.

It's also important to remember that this lack of oversight was a total lack of interest by both the Executive and the Legislature. It was brought up on both sides of the aisle, but quickly quashed. But, this recession would have happened anyway, even if the Democrats controlled the white house. Capitalist systems cannot always grow.
 
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Then how come Canada, which has tighter regulations over mortgages, has none of the American economic problems? Our property values are still steady, we have minimal defaults (like 0.01% or something), and our banks are rock solid. I think government oversight, and the lack thereof, has played a major role in the American catastrophe. I mean, when banks are giving huge sub-prime loans to people with no money, no income and no assets, you've got an oversight problem.
Because your liberals didn't push your banks into giving loans to people with no way of paying for them.
 
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