Well, the October unemplyment numbers came out this morning.

Experts had been expecting a 0.1% increase from 9.8% to 9.9% for the month of October. The Obama Administration was going to argue that there was a slowdown in the rate at which people were losing jobs, and this was proof that the stimulus was working.

Well, reality has just come out and bit them on the butt.

Unemployment increased by 0.4%, or 4 times what they were expecting, to 10.2%.

Additionally, the number of average hours worked by employees in the USA has decreased as well, from 33.3 hours per week in February to 33.1 hours per week in August, to 33.0 in October. That means that those who still have jobs are working (and therefore earning) less than before. Just 1 year ago, that average had been 33.5 hours per week. (Please note that these numbers are seasonally adjusted.)

Of course Obama is going to claim that his stimulus "created or saved" hundreds of thousands, maybe even millions of jobs. Well which is it, created or saved? Because these numbers certainly don't show any job creation. And I don't see very many jobs being saved either.

Is there anyone who is still arguing that the stimulus bill has been effective in any way, shape or form? Is there anyone who believes that the economy is on the upswing due to anything that Obama or the Dems have done?

C'mon folks... are you awake yet?

Elliot

The stimulus package effectively inflated the price of gold.

Even libtard Paul Krugman thinks the economic policy has been a big zerO.
http://www.nytimes.com/2009/11/06/opinion/06krugman.html?_r=1&ref=opinion

Of course Krugman is an idiot who thinks the President should double down on an already failed policy.

Is there anyone who believes that the economy is on the upswing due to anything that Obama or the Dems have done?Hello Elliot:

That's the wrong question. The right question is, how far would the economy have tanked had they NOT done what they did?

But, in answer to the question you DID ask, my answer is, it's too soon to tell. I say that, knowing that any economic stimulous on the front end, takes about 18 months to show up in the back end numbers..

But, I agree with you in your overall disapproval of Obama in the economic arena... But, NOT for the reasons YOU are.. He didn't do anything with "too big to fail". He should have nationalized ANY institution deemed too big to fail, broken them up, and resold them. The Dems should pass laws that prevent ANY institution from every getting too big to fail again. They didn't do that.

Having said that, and in terms of our unemployed... Obama should have REQUIRED that the banks LEND the money they were bailed out with. IF they had LOANED that money, small business would have been the benefactor, and maybe, just maybe they'd be hiring again.

He didn't do that. The banks still are not loaning money. They're making money in the stock market. Obama and the Dems have done NOTHING about that.

The REAL underlying problem that caused this mess, is the huge unregulated derivatives market the huge backlog of toxic securities that haven't yet been shaken out of the economy. Obama and the Dems have done NOTHING about that.

Oh, and in terms of change you can believe in... The despised insurance lobby is SECOND only to the even more hated financial services lobby. Obama and the Dems have done NOTHING about that.

Yes, there's another shoe going to drop.

excon

Hello Elliot:

That's the wrong question. The right question is, how far would the economy have tanked had they NOT done what they did?

And in answer to that question, if Obama had not wasted $3 trillion of taxpayer money on this failed scheme, he could have used that same $3 trillion to prime the economic pump with a tax cut which has been successful at pulling the country out of recession EVERY SINGLE TIME IT HAS BEEN TRIED.

So the answer to your question is, if Obama had not created that stimulus bill, we'd be in FAR better shape than we are today.


But, in answer to the question you DID ask, my answer is, it's too soon to tell. I say that, knowing that any economic stimulous on the front end, takes about 18 months to show up in the back end numbers...

Uh huh... and when Bush cut taxes, which pulled us out of a recession in 2003, did you wait 18 months to see the results? Nope, because it was Bush. Back then you were one of the loudest complainers.

Fact is, though, as soon as Bush cut taxes, we saw the unemployment numbers flatten out immediately... within 3 months unemployment stopped increasing. Unemployment didn't DECREASE for another 12-15 months later. But they stopped increasing almost immdediately.

So... when is unemployment going to stop increasing as a result of this stimulus bill?

NEVER!! That's when. Because the stimulus bill can't create jobs.


But, I agree with you in your overall disapproval of Obama in the economic arena... But, NOT for the reasons YOU are.. He didn't do anything with "too big to fail". He should have nationalized ANY institution deemed too big to fail, broken them up, and resold them. The Dems should pass laws that prevent ANY institution from every getting too big to fail again. They didn't do that.

And I assume that there's a constitutional basis for such a law...

Nah, of course not. The Constitution doesn't really count. Private property law doesn't count. The right to increase personal or company wealth doesn't count. You believe that the government should have the power to take people's wealth away from them and break it up as they see fit, regardless of what the Constitution says about SEIZURE OF PROPERTY.

You complain about RICO all the time, but what you are proposing is no different from RICO... the seizure of personal assets by the government at whim.

You are such a hypocrite.


Having said that, and in terms of our unemployed... Obama should have REQUIRED that the banks LEND the money they were bailed out with. IF they had LOANED that money, small business would have been the benefactor, and maybe, just maybe they'd be hiring again.

The government REQUIRING banks to make loans is what got us into this mess, excon. The government has spent the past 40 years since Carter created the Community Reinvestment Act forcing banks to make bad loans to customers who can't pay for those loans. They're STILL requiring it. And so your solution to the problem caused by requiring banks to lend money is to make the banks have a requirement to lend more money.

What a brilliant solution.

No, the real solution was to let the banks fail, let them declaire bankruptcy, and then let them come out of bankruptcy with stronger balance sheets and no bad assets on their books. Deposits would have been protected by the government, the banks would have been managed in the interim period by a receivorship, and customers would have had access to their monies. And in the end, the banks that came out on the other side of bankruptcy would have been stronger, leaner and more capable of making loans. Instead, Obama wasted another trillion dollars or so on taking over these banks. Money that could also have been used for tax cuts that would help the economy.


The REAL underlying problem that caused this mess, is the huge unregulated derivatives market the huge backlog of toxic securities that haven't yet been shaken out of the economy. Obama and the Dems have done NOTHING about that.

No, the REAL underlying problem is the bad loans themselves... which only occurred because the government FORCED banks to make the loans in the first place. Without those loans existing, there would be no derivatives market for those loans, there would be no secondary market for packaging and selling those loans, and there would have been no requirement for banks to buy bad assets to satisfy the requirements of CRA, and none of these problems would have occurred. You look at the secondary market as the problem, when in fact the problem began in the PRIMARY market due to over-regulation and bad government policy.


Oh, and in terms of change you can believe in... The despised insurance lobby is SECOND only to the even more hated financial services lobby. Obama and the Dems have done NOTHING about that.

Yes, there's another shoe going to drop.

Excon

You mean the same financial services lobby that has been warning congress for decades about the problems that would be caused by CRA, but that were completely ignored by the likes of Barney Franks and Chucky Schumer? You mean that lobby? Sorry to tell you this, excon, but the financial services industry lobby is probably the weakest lobby in existence, and has been for 40 years.

Perhaps you should place the blame for this fiasco where it belongs... right at Congress' doorstep. Stop blaming those "evil" corporations for doing what the government forced them to do in the first place.

Nah... that would require admitting that corporations aren't the bad guys, and you just can't do that, can you.

Elliot

He shoulda nationalized ANY institution deemed too big to fail, broken them up, and resold them. The Dems should pass laws that prevent ANY institution from every getting too big to fail again. They didn't do that.

And I assume that there's a constitutional basis for such a law...

Nah, of course not. The Constitution doesn't really count. Private property law doesn't count. You are such a hypocrit.Hello again, Elliot:

Sooo, you, a fellow who believes that the Constitution isn't a suicide pact, is FOR allowing this nuclear bomb, otherwise known as an institution that's too big to fail, to grow in our midst unchecked, because the Constitution says so?? Dude!

And, I'm the hypocrite?? Dude, again!

excon

Great point ex!

Of course looking at the just one country doesn't provide the answers you need

Nearly every western country is in exactly the same situation, and it will not be till next year that everybody will start to see things improving

This is of course market influence, and demonstrates the tangled web of finance the world has

There will no longer be just a single country recession that is part of this web, purely one giant market moving on the same tides

Hello again, Elliot:

Sooo, you, a fellow who believes that the Constitution isn't a suicide pact, is FOR allowing this nuclear bomb, otherwise known as an institution that's too big to fail, to grow in our midst unchecked, because the Constitution says so???? Dude!

And, I'm the hypocrite??? Dude, again!

excon

GM was called "too big to fail".

Chrysler was called "too big to fail".

Both were given bailout money and nationalized.

Both failed anyway.

And we survived.

Ergo, there is no such thing as "too big to fail". That's just an argument used by those who want to nationalize big companies.

There was no "nuclear bomb" of companies too big to fail. Never was, never will be. ANY COMPANY CAN FAIL and we will still survive. Any GROUP of companies can fail, and we'll still survive.

Stop using "too big to fail" as an excuse to nationalize and regulate companies. The Constitution doesn't allow for it, and there is no danger in letting them fail.

End of lesson.

Elliot

Great point ex!

Yes, it was... but it was also wrong.

Of course looking at the just one country doesnt provide the answers you need

Nearly every western country is in exactly the same situation, and it will not be till next year that everybody will start to see things inproving

This is of course market influence, and demonstrates the tangled web of finance the world has

There will no longer be just a single country recession that is part of this web, purely one giant market moving on the same tides

Are you arguing that the monetary, fiscal and economic policies of individual countries no longer have an effect on how a recession is handled?

Sorry but I disagree with that. Yes, the recession of one country will effect another country. But the economic, monetary and fiscal policies of those countries will determine how each of them weathers that recession, and how each of them is insulated from the effects of the recession. Different policies by different countries will produce different effects.

While I believe that there is a global economy, I do not believe that what happens to one will happen to all equally. There is strong evidence to the contrary. Policy really does matter.

Elliot

Where did I say anything of the sort

Have you ever heard of export?

Have you ever heard of international companies?

Recessions have to take a path as we both know, how that path is does depend on individual countries tackling what they see as the important issue

However, the market is so interwoven around the world that where you have major markets also in recession, it will take the combined effort from all to pull the markets out of it

As every countries markets are set up slightly different from each, the policies as you say effect the countries individual market

The EU exports some where around £250bn ($350bn approx) every year

So if your markets are in recession, they will drop our exports down, and the depending on how bad your deflation is working will depend on the value of the dollar which will depend on the value of gold

And way too much to go into, the web of finance is so that each market in the world is connected - or do you want to deny that individual polices create a market we can all trade in?

C'mon folks... are you awake yet?

Elliot

Seems not Elliot. Stimulus in these times isn't wrong but it has to be directed and it would seem that in the case of the US it might have been misdirected.

Billions were spent bailing out the banks but that didn't help much with unemployment just some big salaries. Billions were spent bailing out the auto industry and where has it got you, not very far. Billions have been spent bailing out the insurance industry and your mortgage protection organisations and they still have their hand out. Is insanity endemic to the USA?

It is ironic to view what is happening from where I live. Here we are talking of cutting back stimulus because it is overheating the economy and is inflationary but it is also interesting that we didn't have to put any money into banks and the auto industry only got money to produce green vehicles.
Why the difference, because we believe that a certain part of the market has to be restrained for the good of the nation.

Despite the gloomy unemployment figures, the Dow is hovering near 10000 from a low around 6500. What gives?


G&P

Despite the gloomy unemployment figures, the Dow is hovering near 10000 from a low around 6500. What gives?


G&P

Be pleased it is. The DOW has a lot of ground to make up for value to be restored in the market. Unemployment is only one indicator for the market to send price signals to investors. Right now the signal it sent is positive particularly as it is not as high as expected. Unemployment is what is called a trailing indicator. You can have growth in jobs and still have poor unemployment figures. Other indicators will signal improvement long before employment so you need to watch the other indicators, Currency Prices, Gold Prices, Oil Prices, Interest Rates, Reported Profits; These are some of the major indicators which send price signals to investors. Gold is high now saying that investors are jittery

Despite the gloomy unemployment figures, the Dow is hovering near 10000 from a low around 6500. What gives?Hello again, in:

I don't know what's so surprising. The rich are getting richer.

excon

Jan through Mar the Dow, admittedly a small an arbitrary measure, dropped to abut 6500 and plenty were blaming this administration's economic policies, yet since then the market has risen. Has Obama's economic policy changed? Or contributed to this gain? Or what are investors seeing in the future?

G&P

Has Obama's economic policy changed? or contributed to this gain? or what are investors seeing in the future? Hello again, in:

That's just it. Obama's policies haven't changed. He has no intention of going after Wall Street and never did. So they resumed the party.

excon

Jan through Mar the Dow, admittedly a small an arbitrary measure, dropped to abut 6500 and plenty were blaming this administration's economic policies, yet since then the market has risen. Has Obama's economic policy changed? or contributed to this gain? or what are investors seeing in the future?

G&P

What you are seeing is the return of confidence. When there was little confidence investors took their losses and fled to other investments, Gold, cash Once they decided that the value of stocks wouldn't stay on the bottom for years as in the 30's they took the opportunities low prices offered, confidence returned and values rose. A great deal of value has been lost particularly in some major stocks so the market will take a long time to get back to the high index numbers we saw before but a 50% rise isn't bad, it's a good performance.

Obviously the stimulus has contributed to the return of confidence there is a lot of money and a lot of profit to be had for those companies able to take advantage of the opportunities. Much of the risk has now been assumed by the government and the market is really about valuing risk. Lower risk = higher market

Clete is correct .The Wall Street bubble is because the Treasury is printing money like crazy and there is no other place to invest it except the market and in inflated gold values. . If you have any money in the market ,ride the wave ,but be prepared to bail out. This will not last it more resembles a dead cat bounce.

As for the unemployment figures... here is the President justifying the stimulus bucket list .



And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/04/AR2009020403174.html



QUESTION: -- how can the American people gauge whether or not your programs are working?

Can they -- should they be looking at the metric of the stock market, home foreclosures, unemployment? What metric should they use? When? And how will they know if it's working or whether or not we need to go to a Plan B?

MR. OBAMA: I think my initial measure of success is creating or saving 4 million jobs. That's bottom line number one, because if people are working, then they've got enough confidence to make purchases, to make investments. Businesses start seeing that consumers are out there with a little more confidence. And they start making investments, which means they start hiring workers.
So step number one, job creation.



http://www.nytimes.com/2009/02/09/us/politics/09text-obama.html

The NY Slimes also recongnizes that the real unemployment rate is 17.5%
The New York Times > Log In (http://www.nytimes.com/2009/11/07/business/economy/07econ.html?_r=3&hp)

As Elliot has pointed out ;the tried and true way to stimulate the economy is tax cuts . It worked for Reagan as it worked for JFK before him.

Jan through Mar the Dow, admittedly a small an arbitrary measure, dropped to abut 6500 and plenty were blaming this administration's economic policies, yet since then the market has risen. Has Obama's economic policy changed? or contributed to this gain? or what are investors seeing in the future?

G&P

Obama could not be blamed for a drop in the Dow Jan to March since his policies couldn't have taken effect in that time. The GFC had actually been experienced in the previous year and s I explained in an earlier answer the Dow has risen because investor confidence has returned after the government has assumed much of the risk

investor confidence has returned after the government has assumed much of the risk

And as I stated above it has nothing to do with investor confidence.There in no confidence displayed when you get daily triple digit swings. That is quick in and quick out profit taking.

Yesterday the House Democrats passed another trillion in spending . Even better if it does become law they will collect tremedous increases in taxes where the spending won't kick in until 2012. I don't believe the markets will react kindly to that and it certainly will not make the employment futures rosier.

and as I stated above it has nothing to do with investor confidence.There in no confidence displayed when you get daily triple digit swings. That is quick in and quick out profit taking.

Yesterday the House Democrats passed another trillion in spending . Even better if it does become law they will collect tremedous increases in taxes where the spending won't kick in until 2012. I don't believe the markets will react kindly to that and it certainly will not make the employment futures rosier.

I think you don't understand volatility Tom. Some of the big steadying influences on the index have removed, or neutralised, so the more volatile stocks have greater influence on the index. We are no longer in a era of steady growth. I can't get too excited about short term movements, take a look at the index month by month, or quarter by quarter. If you are a day trader your business has been disrupted otherwise take a longer term view

Where did I say anything of the sort

Well, that seemed to be what you were saying when you wrote:


There will no longer be just a single country recession that is part of this web, purely one giant market moving on the same tides


Have you ever heard of export?

Have you ever heard of international companies?

Sure have. Neither of which change my question... do you think that the policies of individuals countries will have no individual effects on those countries because they are all interconnected... part of that "one giant market moving on the same tides"?

I disagree with that premise.


Recessions have to take a path as we both know, how that path is does depend on individual countries tackling what they see as the important issue

Agreed.


However, the market is so interwoven around the world that where you have major markets also in recession, it will take the combined effort from all to pull the markets out of it

Here is where I disagree. I believe that there is a reason that some countries suffer from recessions when others do not. I believe that there is a reason that some countries suffer more from a recession than others. And I believe that there is a reason that some countries break out of recessions quicker than others. The policies of individual countries are the important factor, much more so than the "global economy" model than many wish to use today.


As every countries markets are set up slightly different from each, the policies as you say effect the countries individual market

The EU exports some where around £250bn ($350bn approx) every year

So if your markets are in recession, they will drop our exports down, and the depending on how bad your deflation is working will depend on the value of the dollar which will depend on the value of gold

And way too much to go into, the web of finance is so that each market in the world is connected - or do you want to deny that individual polices create a market we can all trade in?

Not at all. I don't deny any such thing.

However, I also do not believe that our countries are so tied together that what happens to one automatlically effects all others.

Yes, if we are going through a recession, it is going to effect your exports to us. However, how your country reacts to the slowdown in exports is going to determine how you weather that slowdown much more so than what WE do about the recession. For instance if your country decides to react by raising interest rates (a stupid thing to do in that situation), it will make the situation harder for all the companies that are sitting on all that inventory that hasn't been exported... and will likely cause increased unemployment. However, if your country DROPS interest rates, it will have a better chance of weathering the export slowdown. AND NOTHING WE DO IN THE USA WILL EFFECT YOU TO THE SAME DEGREE AS WHAT YOU DO TO YOURSELVES. Your policies as an individual country will be the factor that gets you through the recession, even if we act stupidly (as Obama has been acting).

So I still argue that despite the global economy, individual country policy is much more important than a "global policy" than will never find agreement anyway.

Elliot

Seems not Elliot. Stimulus in these times isn't wrong but it has to be directed and it would seem that in the case of the US it might have been misdirected.

Billions were spent bailing out the banks but that didn't help much with unemployment just some big salaries. Billions were spent bailing out the auto industry and where has it got you, not very far. Billions have been spent bailing out the insurance industry and your mortgage protection organisations and they still have their hand out. Is insanity endemic to the USA?

It is ironic to view what is happening from where I live. Here we are talking of cutting back stimulus because it is overheating the economy and is inflationary but it is also interesting that we didn't have to put any money into banks and the auto industry only got money to produce green vehicles.
Why the difference, because we believe that a certain part of the market has to be restrained for the good of the nation.

Well said...

Although I would change your last sentence as follows:

"A certain part of the GOVERNMENT has to be restrained for the good of the nation."

It is the government bailouts and the government policies that preceded them that created the mess in the first place. Restraining government spending and government policy would go a long way toward fixing it.

Elliot

Despite the gloomy unemployment figures, the Dow is hovering near 10000 from a low around 6500. What gives?


G&P

First of all, there has been increased investment over the past several months. Lots of people who had gotten out of the market in October 2008 are getting back in because they believe the worst of the bleeding has been stopped and they see opportunity in the market. But that is only an indicator that people have less fear of losing money in the market, not an indicator of the state of the rest of the economy.

Second of all, with savings interest rates as low as they are, and banks continuing to fail, where else are people going to put their money? The rating agencies are looking at the possibility of lowering the credit rating of the US government, so bonds don't look so good. Gold is at an all-time high, and people can't afford it, and worse, they don't want to buy at the top of the market. Securities is the only real viable option. And the vast majority of that money is going into mutual funds or ETFs, not individual stocks, which means that people still see heavy market risk and are trying to diversify as much as possible.

So I don't really see the market as an indicator of anything other than the market. It does not serve as a good indicator of the economy as a whole.

Elliot

Hello again, in:

I dunno what's so surprising. The rich are getting richer.

excon

That's a pretty stupid comment, considering that 65% of Americans have investment accounts of one sort or another... including IRAs, Roth IRAs, 401Ks and private investment accounts. Something like 80% of investors are people earning less than 6 figures per year. Most of the money in the market today is invested via mutual funds and Exchange Traded Funds that cater to smaller accounts. Which means that "regular folks" are getting richer too.

Your elitism and class-warfare attitude is shocking from one who claims to be so anti-elitist and so anti-class-warfare.

You throw out these one-liners about the rich getting richer as if these statements actually mean something and should be causing a reaction. But upon closer examination, we find that your are just clueless and have no idea what you are talking about. Which is just par for the course where your comments are concerned.

Elliot

Hello again, in:

I dunno what's so surprising. The rich are getting richer.
That's a pretty stupid comment.

Your elitism and class-warfare attitude is shocking from one who claims to be so anti-elitist and so anti-class-warfare. Hello again, Elliot:

I don't know how you misread so much stuff, and make the assumptions you do. Nothing constrains you, it appears. But, that's why I'm here...

I described a phenomenon above - an ACCURATE phenomenon by the way, that I, as a capitalist rather enjoy. Then you go all bonkers on me...

excon

Here is where I disagree. I believe that there is a reason that some countries suffer from recessions when others do not. I believe that there is a reason that some countries suffer more from a recession than others. And I believe that there is a reason that some countries break out of recessions quicker than others. The policies of individual countries are the important factor, much more so than the "global economy" model than many wish to use today.

Ok Elliot lets examine what you said here because you seem to be contradicting yourself. Some countries fair much better because they don't allow the market to totally dictate what is happening. Some countries stimulate specific key industries such as construction and some regulate banking so that the market cannot pull the sort of deals that got the US into this problem. Some countries like your own subsidise agriculture whilst preaching free trade

However, I also do not believe that our countries are so tied together that what happens to one automatlically effects all others.

Yes It used to be said the when the US caught cold Australia got the flu. That was back in the days when our manufacturing industries were controlled by US multinationals and you could export your unemployment to us, but we took a vaccine for the flu and now when the US catches cold we ask you how much cold medicine you would like. But there are countries, such as Mexico, still caught in the fly trap


So I still argue that despite the global economy, individual country policy is much more important than a "global policy" than will never find agreement anyway.



Yes individual policy is important this is why we don't slavishly follow you in applying the market economy. We have come to learn that markets are imperfect, there is always someone trying to manipulate the market, to get and edge or corner a commodity.

Ok Elliot lets examine what you said here because you seem to be contradicting yourself. Some countries fair much better because they don't allow the market to totally dictate what is happening. Some countries stimulate specific key industries such as construction and some regulate banking so that the market cannot pull the sort of deals that got the US into this problem. Some countries like your own subsidise agriculture whilst preaching free trade

You think that the USA is preaching free trade? Our government isn't even paying lip service to the concept of free trade anymore. In actuality, we haven't engaged in free trade since the early 1940s with the Supreme Court's Willard decision. The USA long ago gave up free trade. What I am proposing is going BACK to free trade... something which hasn't existed in the USA in almost 7 decades. Trying to use the USA's actions as a proof for or against free trade policies is silly since they don't practice free trade.



Yes It used to be said the when the US caught cold Australia got the flu. That was back in the days when our manufacturing industries were controlled by US multinationals and you could export your unemployment to us, but we took a vaccine for the flu and now when the US catches cold we ask you how much cold medicine you would like. But there are countries, such as Mexico, still caught in the fly trap

What you just said essentially proves my point... your individual national policies are what insulates you from what is happening here. Thanks for proving my point.


Yes individual policy is important this is why we don't slavishly follow you in applying the market economy.

As I said, the USA isn't "slavishly" following the free market system themselves. If they had, none of the issues caused by government-mandated CRA lending would have happened in the first place... there would have been no sub-prime mortgages.


We have come to learn that markets are imperfect, there is always someone trying to manipulate the market, to get and edge or corner a commodity.

I'm curious... where have you learned that from? Because it wasn't from us. We're making the same centralized-government-control mistakes you are... only BIGGER.

Elliot

We're making the same centralized-government-control mistakes you are... only BIGGER.

Elliot

You would like to think you are but the evidence belies this. If you were doing what we do your economy would have turned around and you would be raising interest rates and expressing concern about inflation. You would have begun to turn your stimulus off. Further, your government would not own, have large equity stakes in the banks, insurance companies, auto makers.
You guys don't have a clue how we operate because you think you are the seat of all wisdom, instead you are the seat of all B*****t.

Do we have rogues here? Sure we do, HIH and NAB prove that, we also have "gifted" americans try to run our corporations, but because our B******t meters are strong they don't stay long. But when one of ours gets into trouble it doesn't bring the nation down. The reason, regulation. It is very difficult to create a sub prime mortgage here without lying through your teeth. Did we inject capital into banks to save them, no, we just guaranteed deposits, a different way of assuming risk. Did we inject capital into auto makers, No we helped with redundacy and restructuring. In other words a carrot and stick approach. If an auto maker wants to shut shop we let them go. Our way of housing the disadvantaged is for government to build the housing, takes longer but we know who to blame

Well, that seemed to be what you were saying when you wrote:


There will no longer be just a single country recession that is part of this web, purely one giant market moving on the same tides



Sure have. Neither of which change my question... do you think that the policies of individuals countries will have no individual effects on those countries because they are all interconnected... part of that "one giant market moving on the same tides"?

I disagree with that premise.



Agreed.



Here is where I disagree. I believe that there is a reason that some countries suffer from recessions when others do not. I believe that there is a reason that some countries suffer more from a recession than others. And I believe that there is a reason that some countries break out of recessions quicker than others. The policies of individual countries are the important factor, much more so than the "global economy" model than many wish to use today.



Not at all. I don't deny any such thing.

However, I also do not believe that our countries are so tied together that what happens to one automatlically effects all others.

Yes, if we are going through a recession, it is going to effect your exports to us. However, how your country reacts to the slowdown in exports is going to determine how you weather that slowdown much moreso than what WE do about the recession. For instance if your country decides to react by raising interest rates (a stupid thing to do in that situation), it will make the situation harder for all the companies that are sitting on all that inventory that hasn't been exported... and will likely cause increased unemployment. However, if your country DROPS interest rates, it will have a better chance of weathering the export slowdown. AND NOTHING WE DO IN THE USA WILL EFFECT YOU TO THE SAME DEGREE AS WHAT YOU DO TO YOURSELVES. Your policies as an individual country will be the factor that gets you through the recession, even if we act stupidly (as Obama has been acting).

So I still argue that despite the global economy, individual country policy is much more important than a "global policy" than will never find agreement anyway.

Elliot

Sony is a Japenese Company and I am using her as a single example from a very complicated web of trade

Sony makes redunacies, closes factories and cancels contractual agreements

Sony to cut 8,000 jobs | Business | guardian.co.uk (http://www.guardian.co.uk/business/2008/dec/09/sony-job-cuts)

This decision is based on a multinational company trading in a market that follows the same tide

The stock markets around the world follow this tide, not a single shares market was unaffected by its recent dips, and now that companies are stabilising the markets tide is all rising

I have read your thoughts about going back to 1940s free trade idea, this reminds me of my grandad, who would always moan the sausages of today were not like th ones of yesturday year, and as such were not better

The two arguments are both based on nostalgia, something that has no place in business and you would know that if you earned a living by buying and selling

You would like to think you are but the evidence belies this. If you were doing what we do your economy would have turned around and you would be raising interest rates and expressing concern about inflation. You would have begun to turn your stimulus off. Further, your government would not own, have large equity stakes in the banks, insurance companies, auto makers.
You guys don't have a clue how we operate because you think you are the seat of all wisdom, instead you are the seat of all B*****t.

Actually, we are doing what you do... centralized government control. And the result is money wasted on trying to bail out companies "too big to fail" that end up going bankrupt anyway, takeovers of the largest banks, brokerage houses, and insurance companies, increased government spending, increased borrowing, etc. And the result is exactly what you have predicted... concerns about inflation and the value of the dollar.

So, thanks for that. Ourt government copied you, and we're getting screwed for it.


Do we have rogues here? Sure we do, HIH and NAB prove that, we also have "gifted" americans try to run our corporations, but because our B******t meters are strong they don't stay long. But when one of ours gets into trouble it doesn't bring the nation down.

Wouldn't have brought us down either... but sombody in the government decided that they needed to Take Action anyway... and that resulted in it bringing all of us down instead of just the companies involved.


The reason, regulation.

Yes, that is the reason it happened.


It is very difficult to create a sub prime mortgage here without lying through your teeth.

That's because your government was smart enough NOT to mandate them into existence in the first place in order to perform social engineering through financial policy. That is certainly one area where your government has been smarter than ours.


Did we inject capital into banks to save them, no, we just guaranteed deposits, a different way of assuming risk. Did we inject capital into auto makers, No we helped with redundacy and restructuring. In other words a carrot and stick approach. If an auto maker wants to shut shop we let them go. Our way of housing the disadvantaged is for government to build the housing, takes longer but we know who to blame

These are all things that I have argued in favor of... let the failures fail, no government bailouts. KEEP THE GOVERNMENT OUT OF RUNNING THE ECONOMY.

Its too bad your government doesn't follow that advice across the board, though.

Elliot

Actually, we are doing what you do... centralized government control. And the result is money wasted on trying to bail out companies "too big to fail" that end up going bankrupt anyway, takeovers of the largest banks, brokerage houses, and insurance companies, increased government spending, increased borrowing, etc. And the result is exactly what you have predicted... concerns about inflation and the value of the dollar.




Actually you don't do what we do and you spelled it out elsewhere. We are for free trade, we have removed our tariff barriers and other barriers to free trade. It was an expensive step but it is one of the reasons we survive the GFC much better than you did. You don't understand when you say centralised government control. Under our constitution we have what is described as the corporations power this gives our government the ability to proscribe how corporations will behave in the market place. Just one of the many differences between the way we are organised and yourselves. If you were doing what we do the value of your dollar would be appreciating, not depreciating

Actually you don't do what we do and you spelled it out elsewhere. We are for free trade, we have removed our tariff barriers and other barriers to free trade. It was an expensive step but it is one of the reasons we survive the GFC much better than you did. You don't understand when you say centralised government control. Under our constitution we have what is described as the corporations power this gives our government the ability to proscribe how corporations will behave in the market place. Just one of the many differences between the way we are organised and yourselves. If you were doing what we do the value of your dollar would be appreciating, not depreciating

Actually, if we stopped the government borrowing/spending/printing spree, our dollar would be appreciating. Just one more example of government interference in the economy.

Actually, if we stopped the government borrowing/spending/printing spree, our dollar would be appreciating. Just one more example of government interferance in the economy.

All you are proving by all of this Elliot is that the system doesn't work. You have consistently elected people who are not governing with the interests of the country at heart. Now from my observation this is a function of the system not any particular political ideology and it has nothing to do with market economics since the market will operate whether there are brakes on it or not. When I look at your system just as I look at my own I can see how it was designed not to work. The only time it can truly function is in crisis when you gain consensus otherwise it is designed to maintain the status quo and avoid any radical change.

As far as your dollar is concerned it was not appreciating even before the current mêlée, the present government has only maintained the direction of the trend

As far as your dollar is concerned it was not appreciating even before the current mêlée, the present government has only maintained the direction of the trend

True enough ;one of the policies that the Bush administration got wrong was it's refusal to defend the dollar value. Not surprising ;with guys like Geithner and Bernanke still at the wheel these policies have been given an injection of steroids... full steam ahead towards the cliff.

True enough ;one of the policies that the Bush administration got wrong was it's refusal to defend the dollar value. Not suprising ;with guys like Geithner and Bernanke still at the wheel these policies have been given an injection of steroids ...full steam ahead towards the cliff.

Don't confuse refusal with inability, Tom. When you get to the point of zero interest rates you have a real problem any move you make to raise the rates will depreciate your currency so if you start buying your currency while you are reducing the price you are on a hiding to nothing

I'd settle for some jaw jaw and see what happens. Seems to me they made policies to weaken the dollar on the silly assumption that it was good for the export market.

If the government just indicated it wanted a support the dollar and then let it float ;I think the value would rise on it's own.

I'd settle for some jaw jaw and see what happens. Seems to me they made policies to weaken the dollar on the silly assumption that it was good for the export market.

If the government just indicated it wanted a support the dollar and then let it float ;I think the value would rise on it's own.

Tom the US dollar will "rise" when market conditions recover, when that happens interest rates can be adjusted. The weak dollar currently supports US industries by protecting from cheap imports so I'm betting no one is in a hurry to raise the value