Are we in a Correction, a Recession, or What?

[native]

Obama added three trillion dollars to US debt in the last two years, and still we are mired in recession with real unemployment above 10%. In two more years the debt will be 100% of GDP. If we include debts explicitly or implicitly guaranteed by Obama's cabal (Bernanke, Summers, Geithner, et al) such as for Fannie Mae and for state and local debt implicitly backed by the feds – we're already at 150% of GDP.

Worse than Greece.

Robert Rich anfd other leftie mouthpieces want to raise taxes and soak the rich to solve the problem. But if taking money away from the rich could make a society more prosperous, why are Cuba and Venezuela broke?

Where in the hell are we now? Recession? Correction? Recovery?

Where the hell are we going in the next couple of years? Recovery? More recession? Depression?

[native]

If economic conservatives take over the Congress in 2010, we will be in a recovery by the summer of 2012.

If not, we will either be in a lingering recession or a depression.

[CitadelGrad]

The call for higher taxes on the wealthy is just the usual left-wing populist blathering. Even if you raised the marginal tax rate to 90% for those earning over $500K/yr., it wouldn't put a dent in a federal deficit that appears to be heading north of $1.5T.

[BDKJMU]

The govt should see a big jump in income tax revenue 2010 as many wealthy people will try to take as much 2011 income in 2010 as possible before the huge tax increase. Then tax revenue will fall in 2011 even as the rates go up....

[Pwns]

A recovery that has been slower than it should be.

[native]

Anyone else reading "Lords of Finance: The Bankers Who Broke the World," by Liaquat Ahamed?

It's about the events leading up to and precipitating the Great Depression. I am about half way through and its scary stuff.

Has anyone else found relevant economic material to read?

Anyone in the finance industry want to weigh in?

[native]

A recovery that has been slower than it should be.

Do you see a chance that Obama will turn a recovery into another recession? I certainly do!

[kalm]

Correction, with the possibility of a double dip.

It doesn't seem like the fundamentals of the economy or the banking sector have been corrected. We appear to be seriously over-built in many industries and working class wages, spending, and savings which represents the majority of GDP are still in question.

Without something similar to the tech boom where we have distinct intellectual and structural manufacturing advantages I'm afraid we might still be in the early middle stages of a depression.

Native, does the book your reading draw any similarities to the 1920's and the recent crisis?

You obviously enjoy history, so I would strongly recommend The Fourth Turning by Straus and Howe:

Just after the millennium, America will enter a new era that will culminate with a crisis comparable to the American Revolution, the Civil War, the Great Depression, and World War II. The survival of the nation will almost certainly be at stake.

Strauss and Howe base this vision on a provocative theory of American history as a series of recurring 80- to 100-year cycles. Each cycle has four "turnings"-a High, an Awakening, an Unraveling, and a Crisis. The authors locate today's America as midway through an Unraveling, roughly a decade away from the next Crisis (or Fourth Turning). And they recommend ways Americans can prepare for what's ahead, as a nation and as individuals.

As Future Shock did in the 1970s and Megatrends did in the 1980s, this groundbreaking book will have a profound effect on every reader's perception of America's past, present, and future.

One of the authors is an economist and the other is a historian. They retrace the history of western democracy back to the War of the Roses to support their thesis of how cyclical our history has been. It's spooky accurate, and consider that the book was published in 1997 and predicted the current crisis in great detail.

[Ivytalk]

Correction, with the possibility of a double dip.

It doesn't seem like the fundamentals of the economy or the banking sector have been corrected. We appear to be seriously over-built in many industries and working class wages, spending, and savings which represents the majority of GDP are still in question.

Without something similar to the tech boom where we have distinct intellectual and structural manufacturing advantages I'm afraid we might still be in the early middle stages of a depression.

Native, does the book your reading draw any similarities to the 1920's and the recent crisis?

You obviously enjoy history, so I would strongly recommend The Fourth Turning by Straus and Howe:

Just after the millennium, America will enter a new era that will culminate with a crisis comparable to the American Revolution, the Civil War, the Great Depression, and World War II. The survival of the nation will almost certainly be at stake.

Strauss and Howe base this vision on a provocative theory of American history as a series of recurring 80- to 100-year cycles. Each cycle has four "turnings"-a High, an Awakening, an Unraveling, and a Crisis. The authors locate today's America as midway through an Unraveling, roughly a decade away from the next Crisis (or Fourth Turning). And they recommend ways Americans can prepare for what's ahead, as a nation and as individuals.

As Future Shock did in the 1970s and Megatrends did in the 1980s, this groundbreaking book will have a profound effect on every reader's perception of America's past, present, and future.

One of the authors is an economist and the other is a historian. They retrace the history of western democracy back to the War of the Roses to support their thesis of how cyclical our history has been. It's spooky accurate, and consider that the book was published in 1997 and predicted the current crisis in great detail.

kalm, I'll take a look at your book, although Future Shock now strikes me as a relic!

[kalm]

Correction, with the possibility of a double dip.

It doesn't seem like the fundamentals of the economy or the banking sector have been corrected. We appear to be seriously over-built in many industries and working class wages, spending, and savings which represents the majority of GDP are still in question.

Without something similar to the tech boom where we have distinct intellectual and structural manufacturing advantages I'm afraid we might still be in the early middle stages of a depression.

Native, does the book your reading draw any similarities to the 1920's and the recent crisis?

You obviously enjoy history, so I would strongly recommend The Fourth Turning by Straus and Howe:



One of the authors is an economist and the other is a historian. They retrace the history of western democracy back to the War of the Roses to support their thesis of how cyclical our history has been. It's spooky accurate, and consider that the book was published in 1997 and predicted the current crisis in great detail.

kalm, I'll take a look at your book, although Future Shock now strikes me as a relic!

I haven't read Future Shock, but I understand how books that focus on prediction can become a relic. This book is far more science driven that mystic.

What I enjoyed about The Fourth Turning is the majority of the book focuses on what has happened and they only describe what they think might happen at end. Also, the comparisons they provide for generational archetypes are really interesting and describe why you are, who you are. It leaves you with the sense that much more of our experiences are pre-destined than we think.

[Ivytalk]

If we're in the middle of an Unraveling, and we're roughly 10 years away from a Crisis, will there even be another High in my lifetime?

[kalm]

If we're in the middle of an Unraveling, and we're roughly 10 years away from a Crisis, will there even be another High in my lifetime?

The book was written in 1997, and was predicting the crisis in 10 years. Pretty damn good estimate.

[native]

...Native, does the book your reading draw any similarities to the 1920's and the recent crisis?

You obviously enjoy history, so I would strongly recommend The Fourth Turning by Straus and Howe...

Liaquat's book covers 1914 to 1933, focusing on the role of Central Bankers and the Gold Standard. He draws all sorts of parallels with several events over the entire period and more recent events, including the brief depression and quick recovery of 1920 and the extended depression and recovery of 1929 through the late 1930's.

The author is both critical and complimentary of your hero, FDR, and is obviously enamored of John Maynard Keynes.

[CitadelGrad]

If we're in the middle of an Unraveling, and we're roughly 10 years away from a Crisis, will there even be another High in my lifetime?

The book was written in 1997, and was predicting the crisis in 10 years. Pretty damn good estimate.

For fuck's sake, several gloom and doom books hit the bookstores every year, most of them predicting a panic or meltdown within ten years. Eventually, at least one of the books will be at least partially correct. Broken clocks and blind squirrels.

[native]

The book was written in 1997, and was predicting the crisis in 10 years. Pretty damn good estimate.

For ****'s sake, several gloom and doom books hit the bookstores every year, most of them predicting a panic or meltdown within ten years. Eventually, at least one of the books will be at least partially correct. Broken clocks and blind squirrels.

True dat!

"Lords of Finance" is different. His well researched and well written book provides cause for concern, but does not try to make the case that the sky is falling.

I expected it to be yet another shallow liberal screed extolling the virtues of the New Deal and making excuses for left wing failures, a al kalm's earnest posts. Instead, Liaquat provides plenty of balanced historical information and gives credit (and blame) where due, without overly politicizing the issue one way or the other.

[native]

June 13, 2010
Great Depression Ghosts Haunt Dem Prospects
By David Paul Kuhn

The ghost of the Great Depression has become eerily (more) relevant in recent months. The Depression was the confluence of two catastrophes: an economic bubble burst domestically while Europe faced a debt crisis. The September 2008 market crash brought us the former but not the latter. We now have the latter.

Greece's debt crisis has spread to the more-vulnerable European economies. This debt crisis remains still an echo of what overtook Europe following the Great War. But it's a loud echo at that. Markets closed May with their worst monthly declines since early 2009.

Amid lax jobs growth, May's decline in retail sales, the American economic recovery is now itself in jeopardy. That's bad for the nation. But it's also bad for a Democratic Party that has invested its electoral prospects in economic recovery. ...

http://www.realclearpolitics.com/articl ... 05931.html" onclick="window.open(this.href);return false;

[native]

Tax hikes expected to hit after the expiration of the Bush tax cuts will cause today's corporate profits to tumble next year — probably right after a stock market collapse, says economist Arthur Laffer, chairman of Laffer Associates and inventor of the Laffer Curve.

“My best guess is that the train goes off the tracks and we get our worst nightmare of a severe 'double dip' recession,” says Laffer in an article on the Newsmax web site:

http://www.moneynews.com/StreetTalk/Laf ... ode=A061-1" onclick="window.open(this.href);return false;

Laffer warns of these coming tax hikes:

• the highest federal personal income tax rate will go to 39.6 percent from 35 percent;

• the highest federal dividend tax rate pops up to 39.6 percent from 15 percent;

• the capital gains tax rate will hit 20 percent from 15 percent;

• the estate tax rate soars to 55 percent from zero.

...

[kalm]

The book was written in 1997, and was predicting the crisis in 10 years. Pretty damn good estimate.

For ****'s sake, several gloom and doom books hit the bookstores every year, most of them predicting a panic or meltdown within ten years. Eventually, at least one of the books will be at least partially correct. Broken clocks and blind squirrels.

Seemingly everyone saw this crisis coming...after the fact. But there a few like Nouriel Rabini who spoke of it a couple of years before it happened.

The guys who wrote the Fourth Turning were prescient over a decade before.

The book is completely apolitical and actually quite optimistic.

Of course you know all of this because you're obviously smart enough to not comment on something before you've actually read it.

[kalm]

Tax hikes expected to hit after the expiration of the Bush tax cuts will cause today's corporate profits to tumble next year — probably right after a stock market collapse, says economist Arthur Laffer, chairman of Laffer Associates and inventor of the Laffer Curve.

“My best guess is that the train goes off the tracks and we get our worst nightmare of a severe 'double dip' recession,” says Laffer in an article on the Newsmax web site:

http://www.moneynews.com/StreetTalk/Laf ... ode=A061-1" onclick="window.open(this.href);return false;

Laffer warns of these coming tax hikes:

• the highest federal personal income tax rate will go to 39.6 percent from 35 percent;

• the highest federal dividend tax rate pops up to 39.6 percent from 15 percent;

• the capital gains tax rate will hit 20 percent from 15 percent;

• the estate tax rate soars to 55 percent from zero.

...

Arthur Laffer warning against the dangers of increased taxes? Get the...

Next you're going to tell me that Grover Norquist believes we should cut spending.

[native]

...seemingly everyone saw this crisis coming...after the fact. But there a few like Nouriel Rabini who spoke of it a couple of years before it happened...

Roubini is NOT optimistic. He thinks home prices will continue to drop, unemployment will continue unabated, the Greek debt crisis is just the tip of the iceberg, and nothing will change in the U.S. until yet another crisis forces change.

http://vodpod.com/watch/3603544-youtube ... he-iceberg" onclick="window.open(this.href);return false;

http://www.roubini.com/roubini-monitor" onclick="window.open(this.href);return false;

http://www.huffingtonpost.com/2010/05/1 ... 71344.html" onclick="window.open(this.href);return false;

http://www.nytimes.com/2008/08/17/magaz ... ist-t.html" onclick="window.open(this.href);return false;

[kalm]

...seemingly everyone saw this crisis coming...after the fact. But there a few like Nouriel Rabini who spoke of it a couple of years before it happened...

Roubini is NOT optimistic. He thinks home prices will continue to drop, unemployment will continue unabated, the Greek debt crisis is just the tip of the iceberg, and nothing will change in the U.S. until yet another crisis forces change.

http://vodpod.com/watch/3603544-youtube ... he-iceberg" onclick="window.open(this.href);return false;

http://www.roubini.com/roubini-monitor" onclick="window.open(this.href);return false;

http://www.huffingtonpost.com/2010/05/1 ... 71344.html" onclick="window.open(this.href);return false;

http://www.nytimes.com/2008/08/17/magaz ... ist-t.html" onclick="window.open(this.href);return false;

Follow along closely now Nate.

The book I spoke of was optimistic in the long term, not neccessarily the short (the cycles that it identifies have repeated without exception since the War of the Roses last about 20 years).

I cited Roubini as an example of someone who also anticipated the fall, but only recently. I did not cite him as an optimist.

[native]

... I cited Roubini as an example of someone who also anticipated the fall, but only recently. I did not cite him as an optimist.

It is odd that in your first post on this thread, you predict "correction, with the possibility of a double dip," an optimistic point of view, yet cite the pessimist Roubini?!??

Roubini warned of many of our current and recent troubles before they happened, along with a host of respected economists such as Robert Schiller, Raghuram Rajan, James Grant, William White, Naseem Taleb, Maurice Obstfeld, Kenneth Rogoff Stephen Roach David Rosenberg, et al ... all to the scorn of the political class and the ridicule of fraudsters still intent on milking the cow or, like Obama and FDR, cynically using the crisis to seize power and implement "change."

Hubris and deception, whether stodgily conservative or naively progressive, seem to be the common components of these massive economic disruptions described by Roubini.

[kalm]

... I cited Roubini as an example of someone who also anticipated the fall, but only recently. I did not cite him as an optimist.

It is odd that in your first post on this thread, you predict "correction, with the possibility of a double dip," an optimistic point of view, yet cite the pessimist Roubini?!??

Roubini warned of many of our current and recent troubles before they happened, along with a host of respected economists such as Robert Schiller, Raghuram Rajan, James Grant, William White, Naseem Taleb, Maurice Obstfeld, Kenneth Rogoff Stephen Roach David Rosenberg, et al ... all to the scorn of the political class and the ridicule of fraudsters still intent on milking the cow or, like Obama and FDR, cynically using the crisis to seize power and implement "change."

Hubris and deception, whether stodgily conservative or naively progressive, seem to be the common components of these massive economic disruptions described by Roubini.

Correction with a double dip is pessimistic you knucklehead. We haven't worked the crap out of our system and I think things will get worse before they get better.

[CitadelGrad]

For ****'s sake, several gloom and doom books hit the bookstores every year, most of them predicting a panic or meltdown within ten years. Eventually, at least one of the books will be at least partially correct. Broken clocks and blind squirrels.

Seemingly everyone saw this crisis coming...after the fact. But there a few like Nouriel Rabini who spoke of it a couple of years before it happened.

The guys who wrote the Fourth Turning were prescient over a decade before.

The book is completely apolitical and actually quite optimistic.

Of course you know all of this because you're obviously smart enough to not comment on something before you've actually read it.

I didn't comment on the book. I commented on the fact that economic gloom and doom books are published all the time. Taken all together, they have accurately predicted 50 of the last 3 recessions.

[native]

Seemingly everyone saw this crisis coming...after the fact. But there a few like Nouriel Rabini who spoke of it a couple of years before it happened.

The guys who wrote the Fourth Turning were prescient over a decade before.

The book is completely apolitical and actually quite optimistic.

Of course you know all of this because you're obviously smart enough to not comment on something before you've actually read it.

I didn't comment on the book. I commented on the fact that economic gloom and doom books are published all the time. Taken all together, they have accurately predicted 50 of the last 3 recessions.