Some Economic Red Flags that Worry Me.

[Mike 03]

There are some situations brewing that concern me that a second "economic crisis" may be around the corner:

Financial situations of certain countries:

Portugal
Italy
Ireland
Greece
Spain

The confusion in he EU over who is to handle the meltdown in Greece: Germany, the ECB, or the IMF.

Increasingly, it appears like China is inflating its GDP by senseless building of entire cities that no one of their citizens can afford to live in, so they sit there empty.

Our commercial real estate situation.

The recent downward adjustments in US markets.

The bizarre fact that the global economy is so weak that the US dollar looks comparatively strong--this makes no sense if you think about it.

Greater percentages of mortgage payment delinquencies in previously safe markets like Tennessee and the Carolinas.

Some of our major banks still carry enormous sums of opaque financial instruments on their balance sheets--or, more dangerously, off their balance sheets in the form of Structured Investment Vehicles (SIVs). These have yet to be reckoned with.

There has been no substantial progress made in Financial Regulatory Reform, and so many financial institutions are going back to their old ways of rewarding short-term risk, even if it means failure for the investors. Huge bonuses, not contingent upon performance.

Something doesn't feel right.

[Mr Rabble]

1. It is all going to plan.

Bringing the third world home to America.

I think that you feel this way, because you are paying attention. :)

[cutlassmama]

2. Great Depression II

[whattheidonot]

3. interest rate up?

interest going up while debt at all time high? either way prices go up in price of goods in a bubble or financing. go figure. someone will take the hit and it will be the masses. standby for further action.

[lib2DaBone]

4. Our Congress and Senate do not represent Tax Payers....

We no longer have a Democracy.. we have a CORPOCRACY.....

From the sweat and labor of the people... to the pockets of the ruling class.

Any financial relief for the middle class is immediately cut-off and absorbed by the Bankers.

There are no "Boot Straps".. they have been stolen.

As Mr. Bob Dylan once said, "The pump don't work 'cause the vandals took the handle".

For the young ones who have never heard of Bob Dylan... better walk on tip toes.. go here.. learn to dance...http://www.youtube.com/watch?v=srgi2DkDbPU

[dem mba]

5. we're in uncharted territory, that's for sure

seems weird that the stock market is doing relatively well, considering. cash accumulation is at an all-time high since the 1960s.

I think there is massive paralysis in the financing world just because no one knows which way Washington is going to go. Everyone is taking a wait and see approach. Once healthcare and the jobs bill get finalized, we'll start to see signs of life in the economy. I hope.

[Greyhound]

10. "Seems weird", huh?

Think about what you could do, if you had the means, in this situation to make a killing.

The globe is literally drowning in liquidity while little is working...

[dem mba]

13. what are you getting at?

I don't know how anyone can make a killing right now. The big boys will probably gobble up or invest heavily in healthy, profit-generating companies that are currently undervalued. I expect to see a busy M&A season throughout 2010-11 in various sectors.

Other than that, I'm not sure where the easy money is for corporations. On a personal finance level, I certainly don't either. Throw me a bone if you got that one figured out.

[Greyhound]

15. What would you do in their position?

You're sitting on an ocean of unstable currency as the very foundations of the system shift.

Are you saying you cannot imagine how to turn a huge profit from this?

[JackRiddler]

6. I think you forgot the biggest single factor, however: The Beast still breathes.

The most criminal of the banks, the ones who perpetrated the worldwide complex of housing, ratings, leverage and derivatives frauds that directly caused the 2008 crash and set off the economic catastrophe, were assisted to survive and take over an even larger segment of the financial sector.

Not only were the public assets that could have ended the depression (rescued the states, for starters) devoted instead to saving these criminal entities, and not only did the responsible personnel go unpunished (and continue to receive awe-inspiring compensation), but, most key for the moment is that the criminal organizations have once again been left completely unregulated.

What do you think they're doing right now? Responsible lending to revive the world economy? Ha ha. Of course they're engaging in casino behaviors, just as before - why not, it pays off for the people actually making the decisions, even if more and more of the institutional covers are declared defunct. Long as less and less people hold more and more chips, the power elite think it's just great.

In your example of Greece, the big scare of the moment, we once again see a role for Goldman Sachs in the commission of multi-billion-dollar frauds.

The next full financial crash is systemically preprogrammed, and likely to arrive on much shorter notice. That will be the real moment of truth: will we finally decapitate the banks and subordinate the corporations, or will we embark on decades of even more dire crises and, inevitably, war?

Then again, that decision is unlikely to lie with Americans, who are the likeliest of all peoples to buy whatever bullshit is sold to them when the moment arrives. (Meaning, they'll blame whoever happens to be in the White House at that moment and vote for the Republicans, who to put the most grotesque point on it will be posing as the anti-banking party!)

[dixiegrrrrl]

7. Don't worry, Obama will fix everything real soon.

Just ask anyone in the other forum.

[AlienGirl]

8. You are quite right--we're about to get hit with another "bubble pop" on an international level

Incidentally, watch what's going on around Turkey and the 'stans, as China, India, and Russia make some manoeuvres regarding a fairly big oil field and pre-existing local conflicts, and the "sunset empire" US is very much not invited to the party.

Tucker

[Festivito]

9. 600T$ of CDSs bother me most.

Greece sold themselves into it. Selling future lottery profits, et. al. into CDSs in order to hide the size of their debt. On goes the ruse.

600T$. That's more than the planet's entire wealth by some sources.

Those CDSs should be hidden (in plain sight) in retirement funds and the good stocks are REPLACED is my guess.

The banks are trying to hold onto whatever they can -- they'll fail, and countries will go down with them.

The REPLACERs can then swoop in.

That's my guesses so far.

[DemReadingDU]

12. CDS and derivatives more than $600T

10/16/08
The Size of Derivatives Bubble = $190K Per Person on Planet

More must read financial analysis from DK Matai, Chairman of the ACTA Open.

The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk

According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:

1. Listed credit derivatives stood at USD 548 trillion;

2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;

b. Credit Default Swaps at about USD 58+ trillion;

c. Foreign Exchange Derivatives at about USD 56+ trillion;

d. Commodity Derivatives at about USD 9 trillion;

e. Equity Linked Derivatives at about USD 8.5 trillion; and

f. Unallocated Derivatives at about USD 71+ trillion.


more...
http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php


Since this was written 10/16/08, I have read elsewhere that the bubble has grown to $1.5 quadrillion, perhaps up to $2 quadrillion. It's a global financial Ponzi, and someday it's going to implode.

[Festivito]

14. At 600, it's almost four times world total wealth and that's scary enough.

That would mean they can cash in on us (That's the US or the US and the whole rest of the world) at any time they want to create havoc.

[DisgustedInMN]

11. I've seen a few "red flags" myself...

.. such as:

No job. No Unemployment Benefits left. No prospects for work. No income. No help from the very government I paid taxes to my entire life.

From my perspective, it's pretty fucking apparent that before you can have "a second economic crisis," the first one would have to end. It didn't.

But that's just me.



:shrug: