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You are here: MacNN Forums > Community > MacNN Lounge > Political/War Lounge > Are we on the brink of something worse?

Are we on the brink of something worse?
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Kerrigan
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Jun 1, 2009, 02:43 AM
 
Federal Reserve puzzled by yield curve steepening | Reuters

Basically, the Feds don't understand something that is taking place in the bond market, and several possibilities are being considered:

"Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.

Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities."

My intuitive sense is that the second two explanations are the correct ones. The yield curve is rotating/steepening because China wants more short-term bonds, and the reason for this is that they are sensing a long-term collapse in the fiscal outlook. I personally think that the Fed should have, like the European Central Bank, maintained strict low-inflation goals, instead of the so-called "quantitative easing"/"money infusions"/"injections", which is really just journalese for printing billions of dollars. That way the dollar would have maintained a greater comparative value and US bonds would have kept a more attractive long-term outlook.
     
Doofy
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Jun 1, 2009, 09:12 AM
 
May 2010 onwards is going to make the recent events look relaxed. You have been warned.
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That's where there's thunder... and the wind shouts back.
     
turtle777
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Jun 1, 2009, 09:54 AM
 
Basically, the Feds don't understand anything.

That's the problem right there.

The USD is going to get clobbered more in the weeks to come.
My Gold and Silver holdings are doing really good

-t
     
ort888
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Jun 1, 2009, 10:16 AM
 
PWL here we come!

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besson3c
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Jun 1, 2009, 11:59 AM
 
How many "we are so screwed" threads have we seen lately?
     
turtle777
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Jun 1, 2009, 12:10 PM
 
Originally Posted by besson3c View Post
How many "we are so screwed" threads have we seen lately?
No, the real question is: have we seen *enough* to reflect the dire outlook where the economy is headed ?

-t
     
besson3c
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Jun 1, 2009, 12:25 PM
 
Of course, we simply disagree on what needs to be done to fix it.
     
Doofy
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Jun 1, 2009, 12:32 PM
 
You can't fix it Bess. You're going down.
The only thing to do now is to prepare.

Yes, it's that bad.
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besson3c
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Jun 1, 2009, 12:50 PM
 
Maybe "fix" wasn't the best choice of words, "improve" might be better...
     
turtle777
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Jun 1, 2009, 12:52 PM
 
Originally Posted by besson3c View Post
Of course, we simply disagree on what needs to be done to fix it.
NOTHING needs to be done except to let the markets play out and purge the system from companies and investments that are not viable.

Government "fixes" make the problems worse and worse, and cause unintended consequences that are worse than the original problem.

-t
     
besson3c
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Jun 1, 2009, 01:20 PM
 
Originally Posted by turtle777 View Post
NOTHING needs to be done except to let the markets play out and purge the system from companies and investments that are not viable.

Government "fixes" make the problems worse and worse, and cause unintended consequences that are worse than the original problem.

-t

This is a complete non solution.

My former employer contacted me to inform me that I can keep my health insurance package for $950/month. Is paying nearly $13,000/year (including the $900 deductible) for comprehensive health insurance for a family of two (when we'd be lucky to need a couple hundred dollars of health care a year, let alone the $900 deductible) an economically healthy gamble for families to have to make? Do you think my employer liked paying $12,000/year for my health insurance? Do you think new businesses are going to want to set themselves up in this country with these sorts of overheads?

Should we not do a single thing to help prevent the problems with home loans that helped this spin out of control in the first place?

Should we not do a thing to deal with the possibility of $4+/gallon gas again?

Should we not do a single thing to change our education system?

You are only looking at the immediate problems that are unfolding now and not their origins and the contributors to our debt both now and prior to the collapse of the banks. We cannot continue to just hope that these problems will fix themselves.

- health care: the whole system of coverage is a complete joke, a complete mess, and an economic disaster. Employer based health care has been an epic fail, and a complete embarrassment for a country with the resources we have

- energy: we need some sort of plan to either ensure cheap gas for many many more years to come, or plan to move to something else. Infrastructure for something new doesn't just create itself without a proper legislative/legal framework

- education: our economy doesn't thrive long term if there are no students that are capable in competing with the rest of the world


This is *all* connected Turtle. You have to fix this stuff.
     
turtle777
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Jun 1, 2009, 02:30 PM
 
*I* have to fix this stuff

Bullsh!t.

And even the government doesn't have to fix most of these issues. Unless you want to live in a completely Socialist country.

Do you really think we're gonna be better of if the government keeps writing checks that will bounce in the end ?

-t
     
Doofy
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Jun 1, 2009, 03:08 PM
 
Bess, you need to forget about the "we".
Your country (along with a whole bunch of others) is going down in 12 months' time. You should be thinking about the "I" and prepping you and yours.
Really. I ain't kidding. You ain't seen nothin' yet.
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ort888
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Jun 1, 2009, 03:34 PM
 
Doofy: music producer and global economic prognosticator extraordinaire

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Shaddim
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Jun 1, 2009, 03:47 PM
 
Originally Posted by turtle777 View Post
Unless you want to live in a completely Socialist country.
Too late!

Well, we're ready (my house), but it's going to be difficult watching almost everyone else suffer.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
ort888
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Jun 1, 2009, 03:50 PM
 
I've already got my gang of armed survivalist thugs ready to go... and the first place we're hitting is Shaddim's house.

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Kerrigan  (op)
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Jun 1, 2009, 04:04 PM
 
Maybe there will be a general election around May '10. We can but hope.
     
turtle777
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Jun 1, 2009, 04:11 PM
 
My prediction: an assassination (attempt) on Barry.

If successful (and probably even if not), the US will see riots like nothing ever seen in the history of this country. Public life will come to a standstill, the economy is going to take an immediate plunge.

And Biden (or possibly Pelosi) as the new president will make matters only worse.

-t
     
Chuckit
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Jun 1, 2009, 04:16 PM
 
Of all you folk with the doom and gloom fixations: Would you be as pessimistic if McCain had won?
Chuck
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Dakar V
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Jun 1, 2009, 04:20 PM
 
No, he has the second coming of Christ stored in his abdomen like Kuato.
     
turtle777
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Jun 1, 2009, 04:24 PM
 
Originally Posted by Chuckit View Post
Of all you folk with the doom and gloom fixations: Would you be as pessimistic if McCain had won?
Depends.

Economy - probably yes, because I don't think the Republicans would have had the guts to do the right thing and let things play out. They probably would not have gone as hardcore Socialist on us, but still made some stupid choices.

Riots - I doubt we would have seen riots if McCain got shot.

-t
     
Doofy
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Jun 1, 2009, 04:30 PM
 
Originally Posted by ort888 View Post
Doofy: music producer and global economic prognosticator extraordinaire
Yup.
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besson3c
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Jun 1, 2009, 04:31 PM
 
Maybe I should leave this thread before it's too late...

Obviously I didn't mean "you" literally, turtle... sheesh!

We can leave the question of whether the government or private sector should fix the problems I listed completely out of the equation and what I wrote still remains true: these things have to be fixed, one way or another. I've yet to hear coherent and complete solutions as to how the private sector can solve each of these problems. So, our choices are: private sector solves them, government solves them, or they aren't solved at all.

It has been years and years and years and many different administrations of all kinds spent waiting for the private sector to solve these problems or for them to miraculously solve themselves on their own, and this hasn't happened, so how is it illogical to think that these shouldn't be government issues?

Again, this is a tired old game of drown the baby in the bathtub. We get it, we really do, you feel that the government's role should be minimal and we should lean very strongly towards private sector solutions overall, but this doesn't mean that the government should be completely crippled so that it never has any hope of success in any area. We need a strong and capable government.

If you have alternative solutions that could work, voice them, but I'm tired of "no government, just because".
     
Doofy
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Jun 1, 2009, 04:35 PM
 
Originally Posted by Chuckit View Post
Of all you folk with the doom and gloom fixations: Would you be as pessimistic if McCain had won?
Yup.

Doof ain't US-centric. Doof is a world-citizen.
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
turtle777
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Jun 1, 2009, 04:37 PM
 
Originally Posted by besson3c View Post
If you have alternative solutions that could work, voice them, but I'm tired of "no government, just because".
There's a very simple long-term solution: it's called PERSONAL RESPONSIBILITY

People need to make choices that would enable them to survive w/o any government help / personal bailouts / wealth distribution.

Your "fixes" make things worse - people get co-dependent on the government, and in the end, everyone's gonna be broke.

The road you and the Democrats travel creates massive dis-incentives to do the right thing. Everybody who lives frugally and saves is being a$$-raped by taxes and / or money-confiscation (a.k.a. inflation).

-t
     
besson3c
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Jun 1, 2009, 04:58 PM
 
Originally Posted by turtle777 View Post
There's a very simple long-term solution: it's called PERSONAL RESPONSIBILITY

People need to make choices that would enable them to survive w/o any government help / personal bailouts / wealth distribution.

Your "fixes" make things worse - people get co-dependent on the government, and in the end, everyone's gonna be broke.

The road you and the Democrats travel creates massive dis-incentives to do the right thing. Everybody who lives frugally and saves is being a$$-raped by taxes and / or money-confiscation (a.k.a. inflation).

-t

Too idealistic.

It would be great if everybody were responsible. It would be great if unhealthy people didn't eat unhealthy foods, it would be great if people with no money didn't spend beyond their means, it would be great if people weren't morons, and if the moon were made out of cheese, but this isn't reality, and the people that don't take responsiblility penalize those of us that do. We are already being ass-raped by these people, this is a part of living among people that collectively are not very bright.

Sorry, I refuse to believe that paying $13,000/year for our health care is the best we can do as a country. Before you get trigger happy and reply suggesting that I'm advocating for government control, again, take that out of the equation... I don't care how my health insurance is made cheaper, I simply think that there is a more logical chance of my costs going down with some form of intervention rather than just sitting around and waiting for the health insurance companies to get tired of making assloads of money. If "sucking it up" and forking out $13,000/year is something you think that I ought to do in order to be "responsible", call me irresponsible then I guess...
     
turtle777
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Jun 1, 2009, 05:04 PM
 
Originally Posted by besson3c View Post
Too idealistic.


You gotta be fscking kidding me.

You suggest that "printing away" our issues is a viable option, but think that personal responsibility is "too idealistic".

You know what, those who think personal responsibility is something idealistic will be thrown under the truck, once the sh!tstorm comes rolling in.

Ask yourself: do you count on the government making it happen for you and your wife ?

I don't count on it myself. I make sure that I will be able to survive, even if the government's sh!t backfires and actually works against me.

-t
     
besson3c
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Jun 1, 2009, 05:09 PM
 
Am I talking with Abe? Care to respond to what I actually wrote, rather than just take a fragment, take it out of context and happily go on your own misdirected lecture?
     
ort888
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Jun 1, 2009, 05:30 PM
 
The key to your post-apocalyptic wasteland warrior look is feathers. You don't want too many and you don't want too few. I think a good rule of thumb is 2 feathers for every piece of spray painted improvised sports padding you are wearing. And always use an odd number of nails in your baseball bats. An even number throws the eye off and makes it look way to uniform.

Your goal is to make someone just give you their can of Hormel Beef Stew. If you have to actually use your bat you are doing it wrong.

Practice your menacing glares now.

Also, now is the time to buy your crossbow. Signs point to a big spike in crossbow values around September/October. Beat the rush!

My sig is 1 pixel too big.
     
Shaddim
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Jun 1, 2009, 05:41 PM
 
Originally Posted by ort888 View Post
I've already got my gang of armed survivalist thugs ready to go... and the first place we're hitting is Shaddim's house.
Take your flowers and go elsewhere, we got lots.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
besson3c
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Jun 1, 2009, 06:24 PM
 
I just bought all of the duct tape I could find and intend to sell it for a markup.
     
ShortcutToMoncton
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Jun 1, 2009, 06:48 PM
 
Originally Posted by ort888 View Post
The key to your post-apocalyptic wasteland warrior look is feathers. You don't want too many and you don't want too few. I think a good rule of thumb is 2 feathers for every piece of spray painted improvised sports padding you are wearing. And always use an odd number of nails in your baseball bats. An even number throws the eye off and makes it look way to uniform.

Your goal is to make someone just give you their can of Hormel Beef Stew. If you have to actually use your bat you are doing it wrong.

Practice your menacing glares now.

Also, now is the time to buy your crossbow. Signs point to a big spike in crossbow values around September/October. Beat the rush!
Mankind's only chance is to harness the power of stupid.
     
Dork.
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Jun 1, 2009, 07:16 PM
 
Originally Posted by Doofy View Post
May 2010 onwards is going to make the recent events look relaxed. You have been warned.
I hate it when I'm not in the loop on the latest conspiracy theory. What did I miss?
I asked the Internet and all it could find was this. Since we're already redistributing wealth from the rich to give to the poor socialist bastards, I don't think that's it....
     
Doofy
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Jun 1, 2009, 07:23 PM
 
Originally Posted by Dork. View Post
What did I miss?
Your membership fee for the exclusive little club which showed me the data, probably.
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
besson3c
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Jun 1, 2009, 07:27 PM
 
I'm really freaked out now! I had a dream last night that Russell Crowe would be playing Robin Hood while the U.S. was on the brink of anarchy.
     
besson3c
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Jun 1, 2009, 07:34 PM
 
Doofy was also in my dream playing the flute while wearing pink tights.
     
ort888
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Jun 1, 2009, 08:11 PM
 
I dream of Doofy every night. Only in my dream he gives me advice through a radio transmitter in my ear and after 2 weeks of Doofy coaching I'm the CEO of a multibillion dollar company and have a harem of supermodels waiting for me on my 140 foot yacht.

My sig is 1 pixel too big.
     
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Jun 1, 2009, 08:24 PM
 
Time to buy a double barreled shotgun, lots of ammo, some denim overalls, and start yelling at people to get off my porch.
     
OldManMac
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Jun 1, 2009, 08:57 PM
 
Originally Posted by turtle777 View Post
There's a very simple long-term solution: it's called PERSONAL RESPONSIBILITY

People need to make choices that would enable them to survive w/o any government help / personal bailouts / wealth distribution.

Your "fixes" make things worse - people get co-dependent on the government, and in the end, everyone's gonna be broke.

The road you and the Democrats travel creates massive dis-incentives to do the right thing. Everybody who lives frugally and saves is being a$$-raped by taxes and / or money-confiscation (a.k.a. inflation).

-t
Does that include the Personal Responsibility of credit card companies' executives, who decide to charge usurious interest rates to their consumers, and the Personal Responsibility of those who crafted those wonderful instruments called collateralized debt obligations, which turned out to be nothing more than the old "guess which shell the pea is under" game, or the Personal Responsibility of executives who reap enormous fortunes for laying off their workers, or any of a number of other Personal Responsibility moves that are basically "**** You" statements to everyone who isn't part of the elite club of rich old white men?
     
Doofy
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Jun 2, 2009, 03:22 AM
 
Originally Posted by ort888 View Post
I dream of Doofy every night. Only in my dream he gives me advice through a radio transmitter in my ear and after 2 weeks of Doofy coaching I'm the CEO of a multibillion dollar company and have a harem of supermodels waiting for me on my 140 foot yacht.
Perhaps if you'd stayed for the full month you'd have something a little larger than that pathetic little dingy.
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
turtle777
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Jun 2, 2009, 09:06 AM
 
Originally Posted by OldManMac View Post
Does that include the Personal Responsibility of credit card companies' executives, who decide to charge usurious interest rates to their consumers, and the Personal Responsibility of those who crafted those wonderful instruments called collateralized debt obligations, which turned out to be nothing more than the old "guess which shell the pea is under" game, or the Personal Responsibility of executives who reap enormous fortunes for laying off their workers, or any of a number of other Personal Responsibility moves that are basically "**** You" statements to everyone who isn't part of the elite club of rich old white men?
Was this *one* sentence ? Dude.

At any rate, to answer your question, yes and no.

Charging high interest rates is nothing more than selling dog sh!t on eBay for $ 1,000 / pound.
It's your choice to bid and buy. Similarly, nobody is forced to use credit cards.

If you chose to do so, RTFM, and know what you're getting into.

-t
     
   
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