Isgrimnur wrote:Leaving out petroleum distillates, deflation is hard to do these days. Prices are sticky in most non-commodity items.
Food is sensitive to energy costs, and should fall in price a little bit. Otherwise expect some "soft deflation." Nominal prices for most goods and services will remain the same, but you'll notice more discounting, rebates, bundling, etc., and consumers will substitute cheaper alternatives for whatever they might have bought during prosperity. In the past couple of weeks my store's transaction count has stayed constant, but the average sale is smaller.
This kind of "deflation" does not appear in government statistics. The incentives gradually go away as normality returns, and people go back to their regular spending habits. As far as economists are concerned, nothing happened to prices in between.
The problem is, after this mornings announcement to those who missed it. ECB and others will provide UNLIMITED money. Jee. Here is link for announcement. http://www.bloomberg.com/apps/news?pid= ... refer=home" target="_blank which pretty much is mirrored by all other banks. WE GUARANTEE, how the fuck they guarantee? oh yes, printing press. a great invention.
So we actualy might skip deflation to go straight to inflation. here is another article on bond market and whats in store.
You realize that that doom and gloom is from someone who wants everyone to buy gold, right? Probably because they sell or trade it?
Clarity will come when the metals reach new highs and at that point a child of six will be able to say where to invest. Of course, that is the greatest incentive for the Gold cartel to prevent new highs being achieved! But new highs are already being achieved in the retail market and on e-bay. The silly manipulation on the COMEX will soon end. You can help it end if you buy a contract and stand for delivery or buy gold and silver through goldmoney.com.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
Please dont miss over all point. the gold seek guys is that but he makes good point aside from last part of gloom and doom, and look at CNBS guys who is financial manager or the other post from bllomberg.
Matrix wrote:Please dont miss over all point. the gold seek guys is that but he makes good point aside from last part of gloom and doom, and look at CNBS guys who is financial manager or the other post from bllomberg.
I'm not missing the point. I'm saying that they have vastly overstated the case for total collapse because they want to sell gold. They start at point B (something that will " blow the precious metals to unimaginable levels") and use current market issues and conditions to come up with a point A from which to draw a line.
A year ago it was the historical gold/oil ratio that was going to drive gold to $3000.
Also, that chart is a joke.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
Gold isn't worth much in a total economic collapse anyway. You can't eat it, you can't build anything with it, you can't make it into tools. A thing's value is what someone will give you for it. A complete economic collapse is much more likely to bypass metal commodities and head straight to a barter economy.
Lol, you did miss the point. Point was inflation infact that was the point of all 3 articles, and not some gold or any other commodity, point is that government giving close to blank check to make sure things dont collapse and market is not stupid.
Matrix wrote:Lol, you did miss the point. Point was inflation infact that was the point of all 3 articles, and not some gold or any other commodity, point is that government giving close to blank check to make sure things dont collapse and market is not stupid.
"The point" of the Bloomberg article was to report on actions by the ECB and Fed. There was no mention of impending runaway inflation but if you extrapolate it based on the Goldseek doom and gloom, so be it.
I didn't watch the CNBC video because I don't have audio here. According to the article, he said:
"Never before in world history were people able to buy houses with no money down, many people bought four or five houses with no money down and no job and then they did it with cars and student loans and credit card loans, you just think we say well that's too bad we're gonna start over nobody loses his job, be realistic," said Rogers.
Rogers said that the G7 leaders, who are meeting this weekend, should "go down to the bar, have a beer and leave the rest of us alone, let the people who are sound succeed and let the other people fail."
"What I'm afraid of is they're gonna keep doing what they've been doing - which the market hates, you can see the market hates it - because this is going to unleash rampant inflation around the world, rampant confusion in the currency markets and you're gonna have currencies gyrating all over the world," said Rogers, repeating that the central bankers were unleashing an "inflationary holocaust"."
How come they didn't highlight the 100 other interviews on CNBC today that range from "this is a bottom" to "stagflation for 10 years"?
They don't have the same point but were brought together to try and show that gold is going to explode.
Last edited by LawBeefaroni on Mon Oct 13, 2008 2:58 pm, edited 1 time in total.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
Matrix wrote:Lol, you did miss the point. Point was inflation infact that was the point of all 3 articles, and not some gold or any other commodity, point is that government giving close to blank check to make sure things dont collapse and market is not stupid.
I looked at the article; Lawbeef has it right. The article is trying to scare people into believing they need to put their savings/investments/etc into gold, as if that would somehow insulate them, or better protect them from the down turn.
Truly an amazing day but it gets the market back to what, a week ago? Less?
What is crazy is seeing the % moves in stocks like MS, NYX, GOOG, PG, well just about everything. I know MS and NYX are battered. But any other day a 6% move in PG or 18% (!!!) in Microsoft would be headline news in their own right.
RIMM, 15%. AAPL, 13%.
Anytime anyone ever mentions a tide that floats all boats, today is the golden standard. I think it was something like 90% of stocks were green. And a lot of the red was short or ultra short ETFs.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
LaBeferoni, i dont own any goold, so if you think its going to explode that's great, go and buy it, i for one is fine without it. But arguing with you is , pointless. If you dont think there will be inflation, then you should wake up, if you do think there is inflation, then great, i dont see why you had to butt in a first place, since i thought those articles were interesting, your contribution on the other hand was ziltch.
PS: On the topic of market, Fed has used the magic wand and now its all solved ! stock market is up 1000 points. We all going to be rich! ...... or did they just trying to stop the inevitable bad news that will start rolling in. Employment is down, housing prices still dropping, people are not spending. Before the September crash, we were in pretty bad spot, after the crash..... all solved!
Its like underpants gnomes. Steal underpants ...... Profit!
Matrix wrote:LaBeferoni, i dont own any goold, so if you think its going to explode that's great, go and buy it, i for one is fine without it. But arguing with you is , pointless. If you dont think there will be inflation, then you should wake up, if you do think there is inflation, then great, i dont see why you had to butt in a first place, since i thought those articles were interesting, your contribution on the other hand was ziltch.
Sorry to "butt in" on your private inner monologue with my ziltch. I was under the mistaken impression that posting fear-mongering articles invited discussion at the very least, and probably merited rebuttal.
For the record, I never said you owned gold and I never said it was going to explode.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
The collapse of civilization has been postponed. Sorry for you guys with survivalist fantasies, but right now it looks like we're bracing for a good old-fashioned recession. Bill Gates says unemployment may go "north of 9" percent, which I'd translate to 12% for our Michigan friends.
The apocalypse does seem to have been put on hold, but volatility obviously remains. An hour ago, the DOW was up over 400 points. Now it's down over 50.
I can't understand how markets would fall, though, given the simply insane amount of money every government in the world is pumping into the system. The Fed has announced unlimited borrowing. Europe is passing bailouts that make our look tiny. And there's even rumors that the government may soon explicitly back all inter-bank loans, which would basically mean the taxpayer pays for anything a bank doesn't feel like picking up. I can't imagine how the international finance system could possibly get any more perks. It's gobs and gobs of free money for EVERYONE. (well, all the big players, anyway)
The market should be on fire right now.
/. "She climbed backwards out her
\/ window into Outside Over There."
Little raven, the problem with Unlimited financing that goverment announced yesterday, is market is not stupid, and they know that money will come out of some where. Look at the last links of 3 links i posted, in the video one, there is veteran privet investor who is being asked question along those lines.
Here is news from Paul Volker, Economist and Former Fed chairman. Here is an excerpt from him:
"
U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.
"I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one," Volcker said.
"This crisis is an exception. I don't think we can escape damage to the real economy. "
Matrix wrote:Little raven, the problem with Unlimited financing that goverment announced yesterday, is market is not stupid, and they know that money will come out of some where. Look at the last links of 3 links i posted, in the video one, there is veteran privet investor who is being asked question along those lines.
Here is news from Paul Volker, Economist and Former Fed chairman. Here is an excerpt from him:
"
U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.
"I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one," Volcker said.
"This crisis is an exception. I don't think we can escape damage to the real economy. "
I'm not sure which "unlimited financing" you are referring to, but the $250B announced today is part of the $700B rescue bill recently passed.
I think the equity stakes in the Banks and the rules that go with them are a far more interesting topic. When I was leaving, a guy on CNBC was going through them...no special dividends for junior preferred shares, CEO salary caps, no golden parachutes, and warrants based on the last 20 days.
And on topic, this turmoil has affected me in that my wife is willingly watching CNBC in the mornings now. She used to turn it to Today as soon as I turned around, but now it stays put.
This from bloomers article i posted yesterday about unlimited funding. They are is US.
`By providing unlimited dollar funds they are acting on the back of the G-7 plan to ensure the system is fully liquidized,'' said Lena Komileva, an economist at Tullet Prebon Plc in London. ``We're going to see even more liquidity provided and more aggressive rate cuts are coming.''
I'm hoping mortgage rates fall back into the 5's. I'll refinance my 5.00% to eliminate my PMI payment and save a bunch of money. (And yes, I've checked with my lender. They absolutely won't remove the PMI until I've paid off 20% of the principle - even if my house appraises for 20% more than I owe). Plus, a refi will get my mortgage back on my credit report (long story).
“I prefer dangerous freedom over peaceful slavery.” -Thomas Jefferson
Finding Red Riding Hood well-armed, the wolf calls for more gun control.
Bakhtosh wrote:I'm hoping mortgage rates fall back into the 5's. I'll refinance my 5.00% to eliminate my PMI payment and save a bunch of money. (And yes, I've checked with my lender. They absolutely won't remove the PMI until I've paid off 20% of the principle - even if my house appraises for 20% more than I owe). Plus, a refi will get my mortgage back on my credit report (long story).
If you get 5% on a 30 year fixed, please let me know. I'd refinance down to 80% for a 5% rate. (I think I have enough in the bank to do that)
I doubt I'll see 5.00% again (I got in at the bottom of the mortgage market last time). My CU's rate right now for 30 year fixed refi is 6.00%. If they hit 5.5%, I'll probably start the refi process and watch rates for the right time to lock in.
“I prefer dangerous freedom over peaceful slavery.” -Thomas Jefferson
Finding Red Riding Hood well-armed, the wolf calls for more gun control.
Matrix wrote:Little raven, the problem with Unlimited financing that government announced yesterday, is market is not stupid, and they know that money will come out of some where.
It may not be stupid but it can be greedy and short sighted. That money has to come out of some where - but when? Is that far enough away for a company to have some great looking profits and for the CEO to move on to another place?
Unless the attitude of more profit now no matter what changes I don't see the market caring about how this will all have to be paid for someday.
Never, under any circumstances, take a sleeping pill and a laxative the same night
Well if the upward trend continues for awhile and I can get my stocks back in the green (RIM is already back up to purchase price when it was close to bottoming out); I am going to start selling off and holding my cash for the time being.
If nothing else this has put a lot in perspective on liquidity in my household; there's a lot to be said for a chunk of just cash sitting in a savings account versus having everything tied up in the markets.
I really believe that we are in a for a long recession period, I'm just hoping I can get some cash back from the market at par or marginal increase before that sinks in.. Otherwise I will have to look at alternative methods of income, and I don't think there's a big demand for early 30's manwhore in my little town.
I agree farley, i think the effects on stock market will be up and down, with mostly down. The problem for those CEOs right now, no ones buying, people finaly started to realized just how critical situation is. Me included, i didnt realized how bad it was until mid september, only then i started digging in deeper and discovered thats much worse then i thought, and i still think most people it is going to be ok, we will recover soon. Once again, i dont think it will post apocalyptic, i think at first i kinda went into panic mode, but i do think that what we have right now is very good, and it will get much worse. Affects of this collapse just starting to affect main street.
The problem is, the fundamentals such as financial system, credit, liquidity, housing, its all has been impaired. For economy to start to recover housing have to bottom out, yet with this kind of collapse and media exposure, you can be assured that it wont happen any time soon, which incidentally takes us for another loop. Since as housing prices drop lower, more people will into foreclosure, since they dont want to hold mortgage and make payments on house with half its value. As thats happens, people will buy less as they can no longer afford luxuries, in turn, business will close. since they ready dealing with problem of securing loans (banks just dont give them at the moment), and hence will go out of business or fire. Now there are less people making money to buy those cheap houses. So its a loop, and the problem is,it was artificially fueled by unreal housing prices. I think, i emphasize, i think, thats why paul Valker said thats worst he has seen it, because it all came at once and it will be slow to correct.
Fish pants, i do think there will be recovery temporary, stock always rebounds after drop. The problem in even short run, right now bunch of companies will be coming out with their earning reports, and majority will be off their projected growth or even decline. I think good analogy is Damb cracking and water to start sipping in. Last week it almost flooded the plains, but due to the weekend decision of Unlimited money, it has held off. I am observing and listening to economists more then ever, especialy those who got this crisis right. Paul Vaulker and Warren Buffet both predicted it, so i think their insight is most valuable. Althought, buffet seemed to be less honest then Vaulker, i guess cause for him its Billions of dollars riding, while Vaulker is pure economist.
For me personally, good economy is vital since coaching is luxury good. So i will need to buckle down for a while. Surprisingly business wasn't doing too bad so far, but that's mostly due to getting more people to come in for consultation, and sign up ratio drooped hugely, but i still convert a few.
I am ready to cry for the first time since my divorce. I just had to lock counterpart out of everything. She was just let go. Scalebacks finally hit our office directly. I'll be seeing less of you guys and none of her and none of several other people in my office. Today sucks.
I'm laid off, starting at the end of the month. Sounds like a combination of usual startup risk, some problems collecting accounts receivable and the credit freeze.
Here is a scary video i found, Argentina in financial colapse 2001, watch at least first 5 minutes to get an idea of what they went trough. Pretty scary. thankfully US has the printing press , so we should be fine.
here is how CEOs were told they are taking 250$ billion bailout.
The New York Times provides a dramatic account of the meeting in which Paulson told the nine bank CEOs they were taking the government's dough. It reads like Mafia strong-arming. And the telling bit is this:
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.
A feel good news on how this might be time to buy stocks
http://www.nytimes.com/2008/10/12/busin ... ox.html?em" target="_blank - I am not great in economy, but when government forces banks to take money because those might be insolvent or in danger of it, and lack of liquidity in the system at emergency level, some how i have hard time believing this articles advice. Maybe in 6 month or a year, this could be true, but i have hard time believing that over all we going to hear a lot of good news from companies in upcoming month, considering that practically every sector of economy was hit (global economy and US as well) and the after effects are just begining to take hold.
Indian call centers at work again. Now about collecting debt.
Matrix wrote:here is how CEOs were told they are taking 250$ billion bailout.
The New York Times provides a dramatic account of the meeting in which Paulson told the nine bank CEOs they were taking the government's dough. It reads like Mafia strong-arming. And the telling bit is this:
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.
I read that whole article and it was interesting. I don't get the mafia reference though. At the end, all the bankers were surprised at the size of the deal and admitted the deal was good for them.
LordMortis wrote:I am ready to cry for the first time since my divorce. I just had to lock counterpart out of everything. She was just let go. Scalebacks finally hit our office directly. I'll be seeing less of you guys and none of her and none of several other people in my office. Today sucks.
Matrix wrote:A feel good news on how this might be time to buy stocks
Don't.
Until the TED spread (the difference between LIBOR and short term US treasuries) narrows, there will be no improvement. The bond market always preceeds a true bull equity market.
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
