How Will the Economic Future Unfold?

[BaldEagle]

In a nutshell.....the future!

From earning six figures to hoping for $7 an hour - CNN.com

In her best year as a mortgage broker, Laura Glick says she made "six figures." This week she was one of more than 1,200 people attending a job fair and applying for one of 150 jobs paying between $7 and $12 an hour at a new Kohl's department store in a Denver, Colorado, suburb.

1200 people for 150 minimum wage jobs.

[Sailer]

In a nutshell.....the future!

From earning six figures to hoping for $7 an hour - CNN.com



1200 people for 150 minimum wage jobs.

To put this a bit differently, the mortgage broker will go from $100,000+ to about $14,560, provided she is lucky and gets the job.

[BaldEagle]

The Bail-out bucks are baaack

Senate OKs use of second half of bailout funds - CNN.com

[Sailer]

The Bail-out bucks are baaack

Senate OKs use of second half of bailout funds - CNN.com

And so, the overpaid idiots led their various companies into ruin will get more fat payoffs while the average person on the street starves some more. I like the response of Senator McCaskill, "People are shouting out their cars at me ... 'When are you going to write me a check?' " Yep, when am I going to get my share? Oh, never.

[logain]

Bank of America loses $2.39 billion; gets more aid - Yahoo! News

I hate BoA and this pisses me off even more. Given more money because of their greed. WTF? If it were up to me I would let them go under.

[BaldEagle]

Bank of America loses $2.39 billion; gets more aid - Yahoo! News

I hate BoA and this pisses me off even more. Given more money because of their greed. WTF? If it were up to me I would let them go under.

Actually they should have let Merrill and Countrywide go under BOA was in decent shape until they started buying Countrywide. The recent aquisition of Merrill is where most of the losses are from.

Citi is in such bad shape they are splitting it up into Citicorp (good bank) and Citi Holdings (bad bank) so Citi Holdings can just go BK.
Citi splitting up, freeing bank from toxic assets - MarketWatch

Citigroup Inc said Friday that it will realign into two businesses, Citicorp and Citi Holdings, in effect reverting back to running a banking business similar to its operations before Sandy Weill and his team turned the firm into a financial supermarket over the last decade.

The new structure will have the bank operating without the burden of billions of dollars of toxic assets accumulated during the mortgage bubble and made up of bad home loans and various derivatives.

[djgandy]

I'm buying BAC and C. Very small amounts then averaging down and trading in and out. Very likely both will rally back some.

[Sailer]

Here's the specter that many have feared possible deflation:

Inflation slows to half-century low in 2008 - Yahoo! News

"Inflation slowed to a half-century low last year and industrial output dropped for the first time since 2002 as the recession deepened toward year-end, raising the specter of deflation.

The Labor Department said on Friday the Consumer Price Index dropped a sharp 0.7 percent in December, a third straight decline that capped a year in which prices advanced only 0.1 percent, the weakest 12-month reading since December 1954."

I know I got a 5.8% COLA in my VA pension this year, but I've always been aware that what the government gives, the government can take back. Probably not this year, but next. I suppose that this is where enough money printed might fight back the deflation, but Japan tried something similar and that had little overall effect. Hard to guess, though, because if Japan hadn't responded as it did, things could have been worse.

An idea that occurred to me. I wonder what effect it would have if the government moved some people who were willing out of their old, inefficient houses and into new, efficient ones that are otherwise sitting empty and unsold, then bulldozed the old ones flat? Perhaps this idea could be applied mainly to people who have their houses paid off, or nearly so. That would get rid of some of the excess housing, while at the same time reducing costs for heating, lighting, air conditioning, etc. Sure it costs money from the government, but heck, the government is spending money by the hundred billion anyway. OK, maybe a nutty idea, but don't figure its any worse than some of the other schemes that's coming out of Washington.

[logain]

Actually they should have let Merrill and Countrywide go under BOA was in decent shape until they started buying Countrywide. The recent aquisition of Merrill is where most of the losses are from.

Citi is in such bad shape they are splitting it up into Citicorp (good bank) and Citi Holdings (bad bank) so Citi Holdings can just go BK.
Citi splitting up, freeing bank from toxic assets - MarketWatch

My problem is that all this money that the government has thrown at the bank that was supposed to help homeowners with keeping their homes is instead being used to buy other banks.

[BaldEagle]

My problem is that all this money that the government has thrown at the bank that was supposed to help homeowners with keeping their homes is instead being used to buy other banks.

And you've just hit the problem the objective should not be to help homeowners keep their homes it should be to stabilize real estate values. Many current "homeowners" have no business owning a home.


Now back a while ago we discussed short sales...
http://www.marketwatch.com/news/stor...7D7365F0DEA%7D

U.K. stocks closed with mild gains Friday as world equity markets advanced on the back of moves to help Bank of America, though the British banking sector was crushed in the final hours as the 119-day short-sale ban was lifted.

Barclays shares tumbled close to 25%, with the losses weighted toward the afternoon to cap a miserable week at that lender.

There wasn't concrete news in the final hours to explain the drop, though Barclays is at the forefront of U.K. banks with exposure to asset-backed securities, noted James Hughes, a trader at CMC Markets.

Just plain crushed by the shorties...

[djgandy]

RBS downgraded Barclays saying they are in negative equity. I already posted earlier. The large British banks were down over 60% while the short ban was in effect. So who is to blame for that?

[BaldEagle]

RBS downgraded Barclays saying they are in negative equity. I already posted earlier. The large British banks were down over 60% while the short ban was in effect. So who is to blame for that?

Not much into european banks but this RBS that allegedly put the whammy on them is the same RBS that sold off it's China Holdings to prop up it's own balance sheet yes?

Banning shorts isn't going to prevent stocks from declining but it will for the most part keep them from dropping 25% in hours.

Barclays sees full-year profit topping analyst forecasts - MarketWatch

So with analysist estimates in line with latest guidance, other than shorties how would it be they lost 25% today?

[Sailer]

RBS downgraded Barclays saying they are in negative equity. I already posted earlier. The large British banks were down over 60% while the short ban was in effect. So who is to blame for that?

People who sell stocks that they own can cause a drop in a stock, which I have no problem at all with. Of course, such large drops are usually the effect of large mutual companies unloading, often times assisted by computer programs that can be very dumb in their trades.

I still don't like short selling, selling what a person doesn't own, but I admit that there are two sides to the issue.

[djgandy]

Not much into european banks but this RBS that allegedly put the whammy on them is the same RBS that sold off it's China Holdings to prop up it's own balance sheet yes?

Banning shorts isn't going to prevent stocks from declining but it will for the most part keep them from dropping 25% in hours.

Barclays sees full-year profit topping analyst forecasts - MarketWatch

So with analysist estimates in line with latest guidance, other than shorties how would it be they lost 25% today?

People selling? People blame shorts when a stock opens lower on no selling volume too. How can shorts be to blame for the order book having no buyers?

Negative equity is a pretty good reason to sell if you ask me.

Look at it like the cold frog into hot water.
Boiling frog - Wikipedia, the free encyclopedia

Okay a bank drops 25% in a couple of hours. So what? Is that not the same as it dropping 25% in a couple of days or months. 25% is 25%.

Shorts are a scapegoat. There really isn't that many shorts on blue chips. Where are the shorts in the other markets though? The stock markets are collapsing as an effect of everything else. Moaning on about shorts is stupid. Even if they are killing stocks they are just trying to make money out of a bad situation. They are not the ones that caused it.

[halbhh]

At this rate, with the recent news of many kinds, I'm sure more than a few of us are beginning to wonder if there will be any economy to have a (xcpus) "financial-chat" about.

[Sailer]

At this rate, with the recent news of many kinds, I'm sure more than a few of us are beginning to wonder if there will be any economy to have a (xcpus) "financial-chat" about.

Sure there will. But instead of discussing the stock market, we might be discussing which street corner is best for panhandling, or which brand is the best jug of wine. Economies and finances have always, and will always exist. The only real change is what form the wealth takes on.

I do wonder sometimes if the best thing to do would be to let all the companies go bankrupt, to let the governments fail, to let a bit of anarchy run wild. Then when everything is torn down, we could rebuild and try not to repeat the mistakes that got us into the present mess. Sometimes the only path to peace is to cry havoc, and turn loose the dogs of war, economic war in this case.

[MagicLess]

"Don't be a fool, stay in school."

Ha! Looks like the good idea it was to drop out.

[beerandcandy]

i better stock up on beer and wine
hmm maybe i should learn to make them?

[Sailer]

For those that may wonder what massive inflation is like:

Zimbabwe unveils $100 trillion banknote - Yahoo! News

"The Reserve Bank announced in the government mouthpiece Herald newspaper a series of trillion-dollar denominations to keep pace with hyperinflation that has left the once-dynamic economy in tatters.

The new 100,000,000,000,000 Zim-dollar bill would have been worth about 300 US dollars (225 euros) at Thursday's exchange rate on the informal market, where most currency trading now takes place, but the value of the local currency erodes dramatically every day.

The move came just one week after the bank released a series of billion-dollar notes, which already are not worth enough for workers to withdraw their monthly salaries.

Inflation was last reported at 231 million percent in July, but the Washington think-tank Cato Institute has estimated it now at 89.7 sextillion percent -- a figure expressed with 21 zeroes."

Hopefully we will never get to this point, but with out own printing presses running as fast as they are, I could see a return to them printing larger notes. Either that, or I'll have to buy a bigger wallet.

B&C- Learning to make beer and wine isn't that hard and often your own brew tastes far better than most of what's for sale at the market. The hardest thing for me was letting the wine age long enough.

[Gneisenau]

For those that may wonder what massive inflation is like:

Zimbabwe unveils $100 trillion banknote - Yahoo! News

"The Reserve Bank announced in the government mouthpiece Herald newspaper a series of trillion-dollar denominations to keep pace with hyperinflation that has left the once-dynamic economy in tatters.

The new 100,000,000,000,000 Zim-dollar bill would have been worth about 300 US dollars (225 euros) at Thursday's exchange rate on the informal market, where most currency trading now takes place, but the value of the local currency erodes dramatically every day.

The move came just one week after the bank released a series of billion-dollar notes, which already are not worth enough for workers to withdraw their monthly salaries.

Inflation was last reported at 231 million percent in July, but the Washington think-tank Cato Institute has estimated it now at 89.7 sextillion percent -- a figure expressed with 21 zeroes."

Hopefully we will never get to this point, but with out own printing presses running as fast as they are, I could see a return to them printing larger notes. Either that, or I'll have to buy a bigger wallet.

B&C- Learning to make beer and wine isn't that hard and often your own brew tastes far better than most of what's for sale at the market. The hardest thing for me was letting the wine age long enough.

They are going to have to do a lot of back up to get me to believe the inflation in any country is that high. That's alot of zeros... I mean that's a LOT of zeros....