The recession, pt. 2

[Jerome Scuggs]

A year after the stockmarket crash of 1929, unemployment in America was roughly 8.5%. A year after the present crash, even with the "swift action", unemployment has hit 9.8%.

And those derivatives that are supposedly at the root of all this? If you believe that they, and not irresponsible policymaking, led to the crisis - you'll be pleased to know that on the whole, the amount of derivatives have increased 16%.

The good news is, the New Orleans Saints are 4-0. The bad news is, I believe there will be another stock market crash, and then confidence in public policy will be gone. Anyone care to make their predictions?

It's very weird when all four of the investment firms' newsbriefs I read daily agree on something of this magnitude.

[Galleleo]

A year after the stock market crash in 1929 there where most likely a shitload more women who did not work or where looking for a job, but instead where just the stay at home moms. In other words, all those women were left out of the equation when calculating the unemployment rate. There days a lot more people are looking for a job. So until you actually calculate the numbers taking all that in mind, the comparison is absolutely useless.

[Xog]

jeromidome
jerodizzy

andrew
SANDSHREW














zomgpokemon


anyone know if pokemon industries are going bankrupts?


-)(og

[Eric is God]

For what little it's worth, all my degree in economics and finance taught me was how screwed up things are. When it comes to the stock market I don't believe there is any need for derivatives, options, futures, or any kind of leveraged buying. The only business reason for these to exist are when large companies need to lock in a future price for a specific commodity or currency. The explosion of leveraged positions has created hundreds of thousands of day trader jobs in the financial sector or in home offices around the world.

There is very little difference between a day trader and an online poker. Both gamble for a living, both create zero value for society (as both are zero-sum games), but at least the poker player's skill and knowledge has a significant impact on their success.

Getting rid of leveraged positions would drastically cut down on the number of speculators, which would add much needed stability to the market. Most of us would be perfectly happy with a guaranteed 7% return over 30-40 years which is impossible when fixed income assets will be paying 2-4% for the next 10+ years.

[Ilya]

definitely my favorite young jeezy album

[Xog]

Do you think that this would work?

How would you fix the economy?

This is from an article in the St. Petersburg Times Newspaper on Sunday. The
Business Section asked readers for ideas on "How Would You Fix the
Economy?" I think this guy nailed it!

Dear Mr. President:

Please find below my suggestion for fixing America 's economy. Instead of
giving billions of dollars to companies that will squander the
money on lavish parties and unearned bonuses, use the following plan. You
can call it the Patriotic Retirement Plan:

There are about 40 million people over 50 in the work force.

Pay them $1 million apiece severance for early retirement with the
following stipulations:

1) They MUST retire. Forty million job openings - Unemployment fixed.

2) They MUST buy a new American CAR. Forty million cars ordered - Auto
Industry fixed.

3) They MUST either buy a house or pay off their mortgage - Housing Crisis
fixed.

It can't get any easier than that!

If more money is needed, have all members of Congress and their
constituents pay their taxes...

If you think this would work, please forward to everyone you know.

If not, please disregard.

[Jerome Scuggs]

It's not that there isn't enough money, it's that there is too much.

Eric: speculation in of itself is not a bad thing. It plays a vital role in the pricing function. But having so many things tied to the stock market - such as retirement plans - was a poorly thought out idea based on the assumption that the stock market would never crash.

[paradise!]

It was poorly thought out youre right, but the primary goal was that no one could see past the bundles of cash they were making right then and there.

The root cause of the crash itself were investors on Wal-street. I mean think about it. By pure human ingenuity they figured out a way to make money in a way no one else had ever done. By bundling the securities they allowing investors to get returns on people's continued payment to their banks.

The idea was a quick way to get money and now. No one had ever done anything like this before, it wasn't regulated at all. There were so many middlemen making money in the entire process, from the homeowner to the investor on wal-street, that each had very little influence. But they failed to realize the influence they were collecting and creating.

When you get a shit ton of people making money in a legal but unregulated way...shit's gonna hit the fan.

But once again, it's hard to see ahead when you have simple and immediate success in an unregulated market.

EDIT: derivatives STILL aren't being effictively regulated; as well as hedge funds who utilize derivatives. It's an industry that has been growing ridiculously in recent years.

[Summa]

http://www.msnbc.msn.com/id/33312701...n_the_economy/

article is mostly worthless, but the raw statistics on that map and site are quite interesting to look at. didn't know where else to put it, so i put it here. i am sure jerome will be at least a little interested in it.

[Indirect-1]

A year after the stockmarket crash of 1929, unemployment in America was roughly 8.5%. A year after the present crash, even with the "swift action", unemployment has hit 9.8%.

And those derivatives that are supposedly at the root of all this? If you believe that they, and not irresponsible policymaking, led to the crisis - you'll be pleased to know that on the whole, the amount of derivatives have increased 16%.

The good news is, the New Orleans Saints are 4-0. The bad news is, I believe there will be another stock market crash, and then confidence in public policy will be gone. Anyone care to make their predictions?

It's very weird when all four of the investment firms' newsbriefs I read daily agree on something of this magnitude.

Also,note where it says "A year after the stockmarket crash of 1929, unemployment in America was roughly 8.5%. A year after the present crash, even with the "swift action", unemployment has hit 9.8%".

There are a lot more people in the United States now, so the number will def. be bigger anyways. The fact that there is a better chance of people being effected by the money mystery...increases the percentage...

[Galleleo]

More people doesn't automatically make a percentage higher, the difference is in the number of people looking for work. Unemployment is calculated over the population that wants to be working (those who have a job + those looking for a job), so people who are retired, stay at home moms/dads, all of those are not taken into account, and the number of stay at home moms was way higher back in 29, so that makes these statistics skewed. And you can't compare the two periods until you take this into account.

[Epinephrine]

More people doesn't automatically make a percentage higher, the difference is in the number of people looking for work. Unemployment is calculated over the population that wants to be working (those who have a job + those looking for a job), so people who are retired, stay at home moms/dads, all of those are not taken into account, and the number of stay at home moms was way higher back in 29, so that makes these statistics skewed. And you can't compare the two periods until you take this into account.

To add to Gall's post, it's sort of like how an unemployment rate of 5% in Japan is devastating. Because over there, few women over the age of 30 actually work, so when the only breadwinner of the family loses his job, it's a much bigger deal than if another person in the family is still working.

[paradise!]

Also,note where it says "A year after the stockmarket crash of 1929, unemployment in America was roughly 8.5%. A year after the present crash, even with the "swift action", unemployment has hit 9.8%".

There are a lot more people in the United States now, so the number will def. be bigger anyways. The fact that there is a better chance of people being effected by the money mystery...increases the percentage...

Not true. More people means more small businesses and big businesses being started. Meaning more employment oppurtunities to match the rising population. So, it should remain proportionally close.

Not all day traders are bad, they can easily be the difference in a stock climbing. But they can easily be the difference to make a day's loss into a day's catastrophe.

question to those in-the-know:

aren't all speculators day-traders? Why do we hate speculators? Isn't the entire stock market built around speculation?

[Jerome Scuggs]

Why do we hate speculators? Isn't the entire stock market built around speculation?

I'm about to cry... because this, right here, the absolute fucking truth. Mises stated that the true hallmark of a free society is the existence of a stock market.

[Xog]

1. The
2. The
3. Nice edit jeromidome :-( made my post useless.