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  • #16
    Re: Are we headed for a depression?

    Thanks for continuing, Craig. We clearly see this differently and nuttin wrong with this.

    Will you please give me your thoughts on this question of mine?

    "What is the Fed so concerned about that is making it use tools for the first time since the Great depression?"

    Thanks~
    Stop being lost in thought where our problems thrive.~

    Comment


    • #17
      Re: Are we headed for a depression?

      Originally posted by Karen View Post
      Thanks for continuing, Craig. We clearly see this differently and nuttin wrong with this.

      Will you please give me your thoughts on this question of mine?

      "What is the Fed so concerned about that is making it use tools for the first time since the Great depression?"

      Thanks~

      I believe it's whomever decides to be in charge of the Federal Reserve will determine if any tools were to be used. In the Great Depression we probably never had these creative tools to work with in the first place. Thru time and experiences we've learned to make course adjustments by becoming "creative" and thinking outside the box.

      Anyway I really am trying to keep this light but I keep forgetting to put those icons to keep it that way, sorry. So I'm sorry too if I'm sounding too harsh, I really am being light hearted about this. I do feel however we aren't heading into another depression simply because of the way the dollar is reacting to foreign currencies. But if you do want to hedge your investments against the possibility of one, precious metals are the best way to do so.

      Oh yeah and before I forget...
      Life is what you make of it...so please read the instructions carefully.

      Comment


      • #18
        Re: Are we headed for a depression?

        Craig, yes, we did have the tools available I am speaking about. Report after report that I found yesterday stated that the fed last used certain tools in the Great Depression, in other words.....this is the first time SINCE...then.

        Uh oh....this is huge...how many more reports like this shall we be learning about??

        "NYTimes.com
        CIT Group Draws on Its Credit Line
        Thursday March 20, 11:38 pm ET
        By REUTERS


        CIT Group, the commercial finance company, said Thursday that it was drawing on $7.3 billion of bank lines to help conduct daily operations, a move that highlights the commercial finance company’s difficulty in raising cash to pay off debt."


        (PS, no you are not sounding "too harsh." I know that the written word can be the blogger's own worst enemy and this goes for forum posters, also. It is sooo dang easily misinterpreted that it's a wonder we don't have wars of words here regularly. You sound fine to me. This subject is what is so harsh.)

        PS...one more....dang and this does speak of something, I think, that was not done in the Great Depression.

        Investment Firms Tap Fed for Billions
        Thursday March 20, 5:03 pm ET
        By Jeannine Aversa, AP Economics Writer
        Investment Houses Borrow Billions From Fed's Emergency Lending Program


        WASHINGTON (AP) -- Big Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday.
        The lending is part of a major effort by the Fed to help a financial system in danger of freezing.


        Those large firms averaged $13.4 billion in daily borrowing over the past week from the new lending facility. The report does not identify the borrowers.

        The Fed, in a bold move Sunday, agreed for the first time to let big investment houses get emergency loans directly from the central bank."

        "
        Last edited by Karen; March 20, 2008, 03:02 PM.
        Stop being lost in thought where our problems thrive.~

        Comment


        • #19
          Re: Are we headed for a depression?

          Now, a newspaper giant reports in...last year made a lot of money, right now...in the red in a huge way!

          AP
          Tribune Co. Posts $78M 4Q Loss

          Thursday March 20, 10:34 pm ET
          By Dave Carpenter, AP Business Writer
          Tribune Co. Reports 4Q Loss; Zell Still Sees 'Significant Opportunity'

          CHICAGO (AP) -- Media conglomerate Tribune Co. reported a $78 million fourth-quarter loss from continuing operations Thursday as it copes with the historic downturn in the newspaper industry.
          Chairman and CEO Sam Zell also confirmed that the company has begun a strategic review of assets, as a report surfaced that News Corp. chairman Rupert Murdoch has made a bid for Tribune's Long Island-based Newsday

          The fourth-quarter loss was a reversal from the $233 million gain from continuing operations a year earlier.
          Stop being lost in thought where our problems thrive.~

          Comment


          • #20
            Re: Are we headed for a depression?

            Originally posted by craigwatanabe View Post
            I believe it's whomever decides to be in charge of the Federal Reserve will determine if any tools were to be used. In the Great Depression we probably never had these creative tools to work with in the first place. Thru time and experiences we've learned to make course adjustments by becoming "creative" and thinking outside the box.

            Anyway I really am trying to keep this light but I keep forgetting to put those icons to keep it that way, sorry. So I'm sorry too if I'm sounding too harsh, I really am being light hearted about this. I do feel however we aren't heading into another depression simply because of the way the dollar is reacting to foreign currencies. But if you do want to hedge your investments against the possibility of one, precious metals are the best way to do so.

            Oh yeah and before I forget...
            I think when the President and Congress clearly agree on a tax relief package to be implemented immediately, something's up. There are obvious concerns that go beyond partisan politics. There are red flags everywhere. You must also note that the media is very cautious about publishing the truth, especially about the economy. When they do, it's too late, and our fat's already in the fire.

            You're right about the precious metals thing. Gold is out of my league right now, but what do you think about silver? And how does that compare with gold?

            Comment


            • #21
              Re: Are we headed for a depression?

              Silver? Hmmm let's look at it this way, the Federal Government went off silver as a way of backing the good name of the US Dollar a long time ago.

              There is a place called Fort Knox and they hold gold reserves. They don't have silver there so that should tell you something about the reserve value of that metal.

              Platinum is another good precious metal that has hedging power but is very expensive.

              You can try silver as it's value has slowly crept up over the years but to me it's too unstable and at it's current value it seems like it peaked out already and we missed that boat. It spiked last year or the year before that but with the onslaught of a recession in the near future, I think that spike has gone and passed.

              The trend in silver seems to be upward however so I'd wait a short while and see how silver is reacting to our current economic situation. If it hovers around where it is now with some upward trend then maybe I'd buy.

              The good thing about silver is that although more volatile than gold (historically) it seems to shadow gold's trend and right now gold is getting close to a thousand bucks an ounce making that precious metal really nice compared to the 90's when it was almost half to two-thirds that value.
              Last edited by craigwatanabe; March 24, 2008, 11:50 AM.
              Life is what you make of it...so please read the instructions carefully.

              Comment


              • #22
                Re: Are we headed for a depression?

                But still, wouldn't it be a decent commodity for bartering? I would imagine that even things like quarters or silver dollars have intrinsic value based on its precious metal content, as little as it is. Still, it's better than paper money.

                A roll of quarters for that roll of toilet paper, please. Or, maybe I'll just use this hundred dollar bill...

                Comment


                • #23
                  Re: Are we headed for a depression?

                  Originally posted by WindwardOahuRN View Post
                  We just filled out mandatory info sheets at work where we provided info regarding the number of people in our household and whether or not those people were allergic to any medications, specifically antibiotics.
                  The reason? Oh, just in case there is a pandemic or some such disaster. It seems we'll get first dibs on meds. I guess they want the health care professionals up and running in such an event.
                  This is the very first time I've been asked to provide such info. Makes you wonder if someone knows something and isn't sharing.

                  so did you enjoy your chocolate covered, nutty anthrax "pill"?
                  superbia (pride), avaritia (greed), luxuria (lust), invidia (envy), gula (gluttony), ira (wrath) & acedia (sloth)--the seven deadly sins.

                  "when you wake up in the morning, tell yourself: the people i deal with today will be meddling, ungrateful, arrogant, dishonest, jealous, and surly..."--meditations, marcus aurelius (make sure you read the rest of the passage, ya lazy wankers!)

                  nothing humiliates like the truth.--me, in conversation w/mixedplatebroker re 3rd party, 2009-11-11, 1213

                  Comment


                  • #24
                    Re: Are we headed for a depression?

                    Originally posted by cynsaligia View Post
                    so did you enjoy your chocolate covered, nutty anthrax "pill"?
                    I opted for the caramel coated version.

                    Comment


                    • #25
                      Re: Are we headed for a depression?

                      Depression? Absolutely not. The Great Depression of the 1930s cannot happen again.

                      Insurance on bank deposits will prevent a run on banks that turned a recession into a depression.

                      Brakes on the stock market will prevent it from free-falling, like it did in 1929. We've created many other structures (like unemployment insurance and Social Security) to keep our economy from imploding again.

                      The question really is: will this downturn become a recession?

                      The answer is: maybe. We won't know for awhile, but we've faced recessions before and will face them again.

                      It's like the tide, going in and out. It's a natural ebb and flow.

                      I was a boy scout. I'm mentally prepared for a recession at least every ten years. It's going to happen. It's the economic facts of life.

                      Comment


                      • #26
                        Re: Are we headed for a depression?

                        I can't agree that a depression can't or won't happen again. Insurance on bank deposits may alay some fears, but it won't prevent it. Having $ in the bank means squat if you can't take it out and use it. Banks are only required to have like 10% cash reserves. Most of the money is only of record. Can't buy a loaf of bread with an I.O.U. Besides, the government's help is limited. Cash is essential, cuz if and when people panic, the banks have to shut down or severely limit their operations. This may also mean no debit or credit card transactions either.

                        We're not just talking about a run on the banks here, but a mass of job losses, foreclosures, our national debt, the falling dollar. since the American dollar isn't backed by gold, its based purely on reputation, which isn't doing to well and is pretty vunerable. It's like a stock value based on empty promises. If there's a frenzy at the banks, are you going to sit tight while everyone else gets their cash? Maybe, but you won't have any when you need it. A run on the banks is not a thing of the past. It happens in modern times. I recall it happening in Russia a few years ago, or some foreign country I can't recall which.

                        We may have installed prepared some safety features, but putting a hold on the stock market is only a speed bump. It doesn't stop anything. And when you stop trading, guess what happens to the the economy? Nothing.

                        I don't want to sound like an alarmist, but we can't turn a blind eye and think the government is going to take care of everything.

                        Comment


                        • #27
                          Re: Are we headed for a depression?

                          You don't sound like an alarmist and I hope you won't feel you almost have to "apologize" for telling it as you see it, here. Just in today's news....good grief for plenty of negative, economic reports.


                          "Reuters
                          WaMu gets $7 billion infusion, cuts jobs, sees loss
                          Tuesday April 8, 1:24 pm ET
                          By Jonathan Stempel


                          NEW YORK (Reuters) - Washington Mutual Inc (NYSE:WM - News), battered by mortgage delinquencies and defaults, said Tuesday it obtained a $7 billion capital injection from private equity firm TPG Inc and other investors, but projected a $1.1 billion quarterly loss and set plans to eliminate 3,000 jobs.
                          ADVERTISEMENT


                          The largest U.S. savings-and-loan also said it will close its 186 stand-alone home lending offices and stop offering loans through mortgage brokers by the end of June. It will instead offer mortgages in its roughly 2,300 retail branches, where some of the affected workers will be offered jobs."

                          *******************

                          "Citigroup, Wells Fargo May Loan Less After Downgrades (Update3)

                          By Mark Pittman, Alan Katz and David Mildenberg

                          April 8 (Bloomberg) -- Bank holding companies including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. have the thinnest safety cushion against losses in seven years."

                          *******************

                          " Fed Auctions Another $50 Billion
                          Tuesday April 8, 11:04 am ET
                          By Martin Crutsinger, AP Economics Writer
                          Fed Auctions Another $50 Billion to Cash-Strapped Banks in Battle Against Credit Squeeze


                          WASHINGTON (AP) -- The Federal Reserve, still working to combat the effects of a severe credit squeeze, said Tuesday it had auctioned another $50 billion to cash-strapped banks. Meanwhile, the International Monetary Fund warned that further actions are needed globally to prevent more wrenching problems.

                          The Fed auction marked the ninth in a series that began in December that so far have pumped $310 billion in short-term loans into the nation's banking system. Meanwhile, the 185-nation IMF delivered its most detailed review yet of the global credit crisis that hit last August. It said Tuesday that governments must be prepared to do more to support the global financial system if conditions worsen."

                          *****************

                          "Pending Home Sales Hit Low in February

                          Apr 8 01:22 PM US/Eastern
                          By ALAN ZIBEL
                          AP Business Writer


                          WASHINGTON (AP) - An industry group said Tuesday that pending U.S. home sales fell in February to the lowest reading since the index began, signaling the housing market distress is not yet over.
                          The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. The index stood at 107.6 in February 2007."

                          ***************

                          Oil and rice are at record prices, the dollar still very low, a record today? I haven't looked, meanwhile corn prices have tripled because of the STUPID ethanol that isn't saving the earth while it's harming the economy horribly, and putting many ranchers and farmers out of business, reportedly because they can't afford to feed their critters and make a living. So...let's starve our food supply as if WE won't ever have famine, cuz of the tree huggers screaming that we're harming the planet, all the while....the economy is in serious danger.

                          I am not worried about sounding alarmist since I'm not making any of this up, and me saying this is not a "dig" at the previous poster.
                          Stop being lost in thought where our problems thrive.~

                          Comment


                          • #28
                            Re: Are we headed for a depression?

                            More like the laws of physics...what goes up...

                            But like you said it's how you prepare for it.

                            Karen remember one thing about the media they love to print the bad stuff and in order to sell it they have to sensationalize it.

                            Yes it's bad but no one's throwing themselves off the Empire state building (yet). Is it gonna get worse? Probably. But no bank wants to be a homeowner of forclosed homes so there will definately be an effort to help beleagered home owners strapped with sub prime loans to recover.

                            If we haven't learned from Japan's stock market crash of the 90's when bad lending led to a major disruption of Japan's banking institutions and left large tracts of lands here in Hawaii undeveloped (like the site of WalMart in Kakaako), then we really haven't learned anything. But I do believe we will come out of this before any kind of depression will occur. A recession? Well of course well head into one, but that's pretty much cyclical and to be expected after a Bull market situation. Analysts like to call it a correction.

                            What makes this year's financial situation worse is that the wave of foreclosures happened too early in the cycle. I've been tracking this real estate cycle since the mid 70's and the downward cycle should have started early next year, not early this year as happened.

                            I believe our bean counters relied on the Consumer Spending Index as an indicator of economic times. I tend to look at the Consumer Credit Index as a more accurate way of gauging the resiliancy of the economy. If you have bad credit, the index is lower because of the ineligibility of gaining good credit. If you look at consumer spending, that doesn't look at qualifications based on credit scores. So if you get a credit card from a bad lender and spend your credit line on consumer goods or services, the Consumer Spending index looks good but doesn't take into consideration of the bad debt incurred as a result.

                            A good way of checking to see if your financial situation is good or marginal is to apply for a credit card from either Bank of Hawaii or FHB. Their acceptance of your application means you have decent credit and is an acceptable risk. But if denied, forget it, your credit rating stinks. and they know it.
                            Last edited by craigwatanabe; April 8, 2008, 11:44 AM.
                            Life is what you make of it...so please read the instructions carefully.

                            Comment


                            • #29
                              Re: Are we headed for a depression?

                              Craig, indeed they often do sensationalize things. I almost wish these reports sound sensationalized so I could trivialize them a tad in my mind or something, but.....they're pretty bland reporting of facts. Yeah, it's "that bad" and probably going to worsen.

                              My/our credit rating is stellar and I know it has been a long time. My credit concerns are how the companies I do business with are rated.

                              I also wonder how companies are that people have their retirements heavily vested with. That's the type of company that will avoid public exposure till they are being bailed out hugely.
                              Stop being lost in thought where our problems thrive.~

                              Comment


                              • #30
                                Re: Are we headed for a depression?

                                Originally posted by Karen View Post
                                Craig, indeed they often do sensationalize things. I almost wish these reports sound sensationalized so I could trivialize them a tad in my mind or something, but.....they're pretty bland reporting of facts. Yeah, it's "that bad" and probably going to worsen.

                                My/our credit rating is stellar and I know it has been a long time. My credit concerns are how the companies I do business with are rated.

                                I also wonder how companies are that people have their retirements heavily vested with. That's the type of company that will avoid public exposure till they are being bailed out hugely.
                                Oh yeah pension plans. That is the one biggie the US Govenment MUST keep a stern eye on.

                                When dealing with credit companies, just like investing you must look at their fiancial stature before signing up. WaMu is advertising a lot lately but as we all know they're getting out of certain lending practices to save themselves.

                                And the venerable GMAC is also advertising but not doing so well.

                                If you have an IRA or a 401k with a company that isn't doing well, you may want to roll that over to something more reliable or choose an investment vehicle within that investment company that can weather out recessions.

                                In investing dollar cost averaging is a wise method of gaining assests however during times of an impending recession, you may want to move it around and be a bit more aggressive than to look at market trends as dollar cost averaging does.
                                Life is what you make of it...so please read the instructions carefully.

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