World economy talk

[uls]

they will burn thru $34B in a few months and be back asking for more

[tidus1203]

WOW! The job loses for November in the US is a record 533,000. Most people were only expecting around 360,000. The most bearish forecasts was from Goldman Sachs for 400,000 but this is way beyond people expected. Unemployed people will never contribute to the economy. Bad times ahead for sure. People say I am too pessimistic, but the data just supports my pessimism.

[uls]

yep that's a huge loss... most in 34 years

which is in line with retail sales...

Retail Sales Are Weakest in 35 Years
http://www.nytimes.com/2008/12/05/bu...05shop.html?em

The International Council of Shopping Centers, an industry group, described November’s figures as the weakest in more than 35 years. Declines were recorded in every retail segment the group tracks, with the biggest coming from department stores, with sales down 13.3 percent compared with November a year ago, and specialty apparel retailers, down 10.4 percent.

[tidus1203]

I guess when you lose your job, its only natural that you spend less. The economy is just realizing the consequences of the terrible excesses of the years 2003-2006. From Joe the Burger Flipper buying his Chevy Tahoe where in reality he could probably only buy a scooter, to Maria the waitress using her low-interest credit card to buy goods she probably does not need with money she didn't have. Now Joe and Maria will have to pay for their sins so to speak... I am not a sadist, just an realist...

[uls]

that's why banks still arent lending

who the hell are banks gonna lend to?

unemployed people?

businesses that are losing money?

the only people or businesses that qualify for loans are those who don't need loans

[Monseratto]

Sa CNN, everyone gasped at the numbers when it came out.
In the worst case scenario, it could reach as high as 10% from the 6.7% this month. The AT&T jobs cut from the day before weren't even included in the 533,000 job losses.

The US Stock Market acted strangely to the news. Instead of going down, which it did initially, it closed on the upside. False optimism?

[tidus1203]

The stock market is just money flows so if you want to focus on the real economy we can focus on the data. The currency markets on the other hand followed the data, the USD fell against most currencies but not by a lot....

[uls]

The US Stock Market acted strangely to the news. Instead of going down, which it did initially, it closed on the upside. False optimism?

the stock market already priced in much the bad news

traders have already priced in the recession

maybe even a depression

but i'm not saying stocks have bottomed

meron pa downside yan

---

RACE TO ZERO



US Fed rate cut coming mid December 2008

from 1% to 0

[tidus1203]

The real worry is how the hell will the US economy replace all those job losses. I know it can be done, but how long? That is the question... The government can't just create jobs for all these people definitely it has to come from the private sector... But even if you are the most optimistic person in the world you just can't phatom how in the world will all those job losses be replaced swiftly to make the economy as robust as it was prior to the implosion? Or is this a turning point that says that Americans should now live beneath their means?

[uls]

the US has already lost total 2 million jobs

--
Tidus:

Or is this a turning point that says that Americans should now live beneath their means?

But the US govt is not allowing Americans to live beneath their means

they want Americans to borrow and spend like before... to re-inflate their economy

Look at what the US govt is doing...

They wana lower mortgage rates

http://www.marketwatch.com/news/stor...7D&dist=msr_27

WASHINGTON (MarketWatch) - The Treasury Department is contemplating a proposal that would cut mortgage rates for new loans for homes, according to the Wall Street Journal.

The plan would employ Fannie Mae and Freddie Mac to offer mortgages with rates as low as 4.5%, roughly 1 percentage point lower than current rates.

The govt wants to lower mortgage rates to stop the decline in home prices.

Lower rates would encourage people to buy homes

Lower rates would encourage people to take on bigger mortgages (buy more expensive homes) coz of the low monthly payments

that would increase home prices

Amazing huh?

[tidus1203]

Yep amazing in a bad taste. The free markets is saying that Americans should now cut their spending, start saving, and be free of debt. But the clowns at Washington want to make them continue to spend when in fact they were overdosed in spending. The markets are telling us that house prices should come down, but the government wants to make a fantasy world where housing prices should go up. Now people will have no choice but to borrow money again just to buy a house where supposedly falling housing prices might make them more affordable.

[uls]

they are fighting the deflation monster with everything they got

Zero rates, quantitative ease, kitchen sink

[Monseratto]

I wonder what the world economy will look like in 2010... Sana puwede na lang i-skip lahat ito kagaya sa "Click".

“Almost all businesses are in survival mode, and they’re slashing payrolls and investments just to conserve cash,” Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview yesterday. “We’re in store for some big job losses.”

Also preventing the unemployment rate from climbing even more last month was a surge in part-time workers. The number of Americans saying they worked part-time last month due to economic reasons -- either because their hours were cut or they couldn’t find full-time jobs -- surged to 7.32 million, the most since records began in 1955.

John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said the report suggests that the economy shrank at annual rate of 5 percent in the final three months of the year. That would be the biggest contraction since the first quarter of 1982.

“Consumer confidence is going to be bad,” Silvia said. “It is going to be a difficult winter for a lot of people.”

Yelena Grinberg of San Francisco is already feeling the effects of a sluggish labor market. The 26 year old has sent out more than 100 resumes since she lost her job as an administrative assistant, and has only landed one position: doing clerical work for $12 an hour over two days.

“It’s really tough,” she said, standing outside an Employment Development Department office in San Francisco. “I was so sure it wasn’t going to be hard. But no one wants to look at me,” she said, starting to cry. “I’m running out of money and I’m freaking out.”

At 12 months, the recession is already the longest since the 16-month slump that ended in November 1982.

To fight the downturn, Fed Chairman Ben S. Bernanke this week outlined unorthodox policy action that officials can take beyond lowering interest rates. One option would be to purchase longer-term Treasuries on the open market to inject more cash into the financial system.

The central bank may also cut its benchmark rate from 1 percent at its meeting Dec. 15-16 in Washington. HSBC Holdings Inc. economists yesterday forecast the Fed will reduce it to zero, emulating the Bank of Japan’s efforts to defeat deflation earlier this decade.

“We don’t get the job losses stopping until 2010,” Kurt Karl, chief U.S. economist at Swiss Re in New York, said in a Bloomberg Television interview.

http://www.bloomberg.com/apps/news?p...KlE&refer=home

[Monseratto]

Very sad plight... will even see more of this next year.

http://edition.cnn.com/video/#/video...loyed.sign.cnn

[tidus1203]

Over the weekend (siguro due to boredom na din) while I was lying down I was thinking of what bubbles the economy still has. I was thinking that another bubble that is still existing that will look like be too hard to pop is COLLEGE TUITION FEE in the US. Most Americans borrow money just to get to college. Imagine that something as important as education you need to go into debt. Buying a car seems more acceptable, but education can get you into debt is to me a sure sign of a bubble. WIll it pop? Probably not. But tuition fees in the US are not in lockstep with actual income growth and rising wealth...

[uls]

Pag graduate nila, they are already tens of thousands of dollars in debt (student loans)

i came across a report tumataas ang default sa student loans...

[uls]

[ame="http://www.youtube.com/watch?v=JNIQ1-ghsPs"]YouTube - Angry Laid-off Workers Occupy Factory in Chicago[/ame]

[tidus1203]

Pag graduate nila, they are already tens of thousands of dollars in debt (student loans)

i came across a report tumataas ang default sa student loans...

But here is the good news, while cars and houses can be re-possessed. Knowledge can't so tough luck for the student loan creditors. I am sure these companies are a reason why college tuitions are high they always want it to be high so people need to borrow just to study.

[uls]

parang health care

the reason why healthcare is so expensive in the States is coz there's Medicare and Medicaid and private HMOs

[tidus1203]

Tribune Co. files for bankruptcy with $13B in debt They are the owners of the LA Times, Chicago Tribune, Baltimore Sun. They also own the Chicago Cubs baseball team. Hey, bail them out will 'ya?

http://biz.yahoo.com/ap/081208/tribune.html