molson_golden2002 Posted March 14, 2008 Share Posted March 14, 2008 The dollar has steadily eroded in value against the euro and other currencies since 2002 as U.S. budget and trade deficits ballooned, but fears of an American recession and credit crisis have sent the dollar to stunning lows amid predictions the slump will continue for a long time. Hit by a free fall with no end in sight, the once mighty U.S. dollar is no longer just crashing on currency markets and making life more expensive for American tourists and business people abroad; its clout is evaporating worldwide as foreign businesses and individuals turn to other currencies. Experts say the bleak U.S. economic forecast means it will take years for the greenback to recover its value and prestige. Negative dollar sentiment is growing in nations where the dollar was historically accepted as equal or better than local currency — and dollar aversion is even extending to some quarters in the United States. http://news.yahoo.com/s/ap/20080313/ap_on_...e/diving_dollar Wow, American prestige has been taking hits in nearly every area in the last seven years or so. Link to comment Share on other sites More sharing options...
John Adams Posted March 14, 2008 Share Posted March 14, 2008 The trade deficit is actually shrinking and the bright side of this is that US manufacturing (which was never nearly as bad as most armchair pundits believe) is looking more attractive. I don't mind this current bloodletting (hell, I'm 30 years from retirement!) as long as it starts to clot soon. If I pick up the WSJ and read "credit fears shake markets" one more time, I'm gonna puke. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 14, 2008 Share Posted March 14, 2008 The trade deficit is actually shrinking and the bright side of this is that US manufacturing (which was never nearly as bad as most armchair pundits believe) is looking more attractive. Due to the weak dollar. Link to comment Share on other sites More sharing options...
John Adams Posted March 14, 2008 Share Posted March 14, 2008 Due to the weak dollar. Of course due to the weak dollar. The point is that the weak dollar has some upside although clearly a strong dollar is better! Link to comment Share on other sites More sharing options...
ofiba Posted March 14, 2008 Share Posted March 14, 2008 I don't know, Wendy's has some pretty good stuff on the dollar menu. Link to comment Share on other sites More sharing options...
Peter Posted March 14, 2008 Share Posted March 14, 2008 "Mission Accomplished" W never thought much of the rest of the world and reportedly never ventured outside the US (other than Mexico) before he became president. He has succeeded in making it difficult for many of us to travel outside the country. As a Republican, I am counting the days until W leaves office. I just hope that McCain can bring the party back to what it was under Reagan. The Bush presidency has been horrible on so many different levels. The best part of the Bush presidency was the tax cuts. Because of his other policies, W has made it very difficult politically for them to be made permanent. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 14, 2008 Share Posted March 14, 2008 Of course due to the weak dollar. The point is that the weak dollar has some upside although clearly a strong dollar is better! That wasn't directed to you. Link to comment Share on other sites More sharing options...
GG Posted March 16, 2008 Share Posted March 16, 2008 I don't mind this current bloodletting (hell, I'm 30 years from retirement!) as long as it starts to clot soon. If I pick up the WSJ and read "credit fears shake markets" one more time, I'm gonna puke. Better bring a big bucket. Link to comment Share on other sites More sharing options...
John Adams Posted March 17, 2008 Share Posted March 17, 2008 Better bring a big bucket. Tomorrow it will be all about the JP Morgan Bear Stearns deal. Link to comment Share on other sites More sharing options...
GG Posted March 17, 2008 Share Posted March 17, 2008 Tomorrow it will be all about the JP Morgan Bear Stearns deal. Tomorrow? The deal is done today and the Fed just announced a rate cut. Link to comment Share on other sites More sharing options...
Live&DieBillsFootball Posted March 17, 2008 Share Posted March 17, 2008 Tomorrow it will be all about the JP Morgan Bear Stearns deal. Wow! From $70/share last week to $2/share in the sale. Damn scary stuff! Link to comment Share on other sites More sharing options...
DC Tom Posted March 17, 2008 Share Posted March 17, 2008 Wow! From $70/share last week to $2/share in the sale. Damn scary stuff! How in the !@#$ing hell did that happen? What is that, 97% since the close Thursday? Link to comment Share on other sites More sharing options...
John Adams Posted March 17, 2008 Share Posted March 17, 2008 Tomorrow? The deal is done today and the Fed just announced a rate cut. Tomorrow because the WSJ doesn't come out on Sundays. It will be co-headlined with the rate cut. Panic in the air but good that a private company came to the rescue of Bear Stearns. That's going to give JP Morgan some serious political clout. Link to comment Share on other sites More sharing options...
Dwight Drane Posted March 17, 2008 Share Posted March 17, 2008 Tomorrow because the WSJ doesn't come out on Sundays. It will be co-headlined with the rate cut. Panic in the air but good that a private company came to the rescue of Bear Stearns. That's going to give JP Morgan some serious political clout. A private company didn't come to the rescue. The Fed is taking all of Bear's bad debt. JP Morgan gets to pick at the carcas for all the goodies. The only thing risky that JP Morgan is taking on is a bigger credit swaps portfolio, but it doesn't matter, because JP Morgan will go under 10x over on it's own swaps if forced to keep marking down. I've been trying to warn people for months. Everything behind the scenes is a disaster. Nobody will buy from anyone anymore. In reality, it should be game over for the whole financial system. The game is 56-7 in the 4th quarter, and the Fed is stepping in and changing the rules, now saying touchdowns are worth 40 points, but only for the team that currently has 7 points. I have been a lifelong Republican, but if we even have an election in November, I'll have to vote Democrat. At least they are open about the fact they want a Socialist/Communist country. Link to comment Share on other sites More sharing options...
Alaska Darin Posted March 17, 2008 Share Posted March 17, 2008 I have been a lifelong Republican, but if we even have an election in November, I'll have to vote Democrat. At least they are open about the fact they want a Socialist/Communist country. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted March 17, 2008 Author Share Posted March 17, 2008 A private company didn't come to the rescue. The Fed is taking all of Bear's bad debt. JP Morgan gets to pick at the carcas for all the goodies. The only thing risky that JP Morgan is taking on is a bigger credit swaps portfolio, but it doesn't matter, because JP Morgan will go under 10x over on it's own swaps if forced to keep marking down. I've been trying to warn people for months. Everything behind the scenes is a disaster. Nobody will buy from anyone anymore. In reality, it should be game over for the whole financial system. The game is 56-7 in the 4th quarter, and the Fed is stepping in and changing the rules, now saying touchdowns are worth 40 points, but only for the team that currently has 7 points. I have been a lifelong Republican, but if we even have an election in November, I'll have to vote Democrat. At least they are open about the fact they want a Socialist/Communist country. The Asian markets are already falling today. If the Feds had not stepped in we would be in a world of hurt right now. Hopefully they can get all this turned around. Because if they don't.... Link to comment Share on other sites More sharing options...
Gavin in Va Beach Posted March 17, 2008 Share Posted March 17, 2008 A private company didn't come to the rescue. The Fed is taking all of Bear's bad debt. JP Morgan gets to pick at the carcas for all the goodies. The only thing risky that JP Morgan is taking on is a bigger credit swaps portfolio, but it doesn't matter, because JP Morgan will go under 10x over on it's own swaps if forced to keep marking down. I've been trying to warn people for months. Everything behind the scenes is a disaster. Nobody will buy from anyone anymore. In reality, it should be game over for the whole financial system. The game is 56-7 in the 4th quarter, and the Fed is stepping in and changing the rules, now saying touchdowns are worth 40 points, but only for the team that currently has 7 points. I have been a lifelong Republican, but if we even have an election in November, I'll have to vote Democrat. At least they are open about the fact they want a Socialist/Communist country. Stagflation/Hyperinflation or Just The End of Your Way of Life? So there is a loss of confidence roughly equal to people's confidence in the government and the banking system. This decreased confidence is fueled by the fact that they are creating too much money. The idea with fiat money is that you only grow the amount of it as the total output of the economy increases otherwise you are diluting it. The thought experiment for that goes like this. You have one giant pile of stuff, and one giant pile of money. Right now there is enough money so that one-dollar gets one pound of stuff. Now, if you double the amount of that money, then it takes two dollars to equal one pound of that stuff. Unless the pound of stuff doubles in size, you have just caused 100% price inflation. So, operations like just zapping a half a trillion or so into existence out of thin air means just a bigger pile of money going after the same amount of stuff. So that's what we have going on now. These are financial engineering acts of desperation to save a system by giving it more of what got it to this point in the first place... debt. So when regular people like me think about that, they think, that doesn't make any sense, and they lose confidence. That's in the real world. On TV things are still good though. So if you don't like what you're reading here, then go turn on the TV. You'll feel better. I hate to simplify things too much, but this is the reason Mr. Greenspan called gold the conscience of the central bankers back in the 60's before he lost his mind or whatever happened. Maybe he couldn't resist the power of the ring or something... I don't know. Anyway, it's their conscience because they can't just zap gold into existence with the stroke of a pen. Guess what? They can zap money into existence now. Poof - you've got money. Any amount you want. That's why this is fundamentally different from the great depression. This time, they can just increase the giant pile of money. they can just drop it out of helicopters if they have to. They even said so... and it isn't going to buy as much stuff. It doesn't already. So you still have the same basic problem from a human standpoint. That's the really interesting thing. In other words, whether you have a deflation like in the 30's or an inflation like now, the people suffer similar effects. It's hard to find a job, you can't make ends meet, city and government functions and services are understaffed and underfunded, and you are hungry. They are both a state of decay. Both usually end in war too. The last one did. This one is different however in a lot of ways... and it's much more serious. It is fundamentally different because it is the end of the world's first experiment in government by the people and it has been replaced by something new. So if you're into labels, then maybe you can find a label for what to call this. I like to quote Lenin on that: "Fascism is capitalism in decay." -Vladimir Lenin So I really don't want to get into all that implies in a short essay, but I will condense it all and say the US is in a state of decay. Political, socioeconomic, leadership, influence, status, any label you can think of. The US is losing power and influence in the world, and it only has 5% of the world's populationand they're all bankrupt. I like to think of it like a continuum from the US coming out on top after WWII to a banana republic run by El Presidente. That's what I call them now, whoever he or she is, El Presidente because that's what they are. A corporate spokesman who is put there, bought and paid for by Acme corp. The country has lost its way and is increasingly operating at the whim of the corporate lobbyists and special interests that own the politicians as the stench of it all starts to smell so foul that even the corporate media disinformation campaign can't convince your lying eyes. It is not what it appears to be. It is Rome circa 400's. It has already bankrupted itself policing an unsustainably large global empire. You have to live through the decline. So that all gets into people living in the real world versus those who are not. Again, it's safe to say that the world is voting with its dollars... and the 5% of the world's population are going down hard on 95% leverage. They aren't going to like it either. Tune in next time to hear which states secede first. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted March 17, 2008 Share Posted March 17, 2008 The Asian markets are already falling today. If the Feds had not stepped in we would be in a world of hurt right now. Hopefully they can get all this turned around. Because if they don't.... No matter what the consequences, I just cannot agree with the Fed stepping in to save an enterprise such as Bears Stearn. Supporting a failing enterprise is juking the free market and capitalist system which works just fine the way it is. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted March 17, 2008 Author Share Posted March 17, 2008 No matter what the consequences, I just cannot agree with the Fed stepping in to save an enterprise such as Bears Stearn. Supporting a failing enterprise is juking the free market and capitalist system which works just fine the way it is. If it were working just fine the Fed wouldn't need to step in with this "Socialism for the rich" approach. This is only the beginning. The huge bailout will follow, and its going to be huge! And oil just hit another record high. Link to comment Share on other sites More sharing options...
Chef Jim Posted March 17, 2008 Share Posted March 17, 2008 Because if they don't.... What if they don't? Link to comment Share on other sites More sharing options...
Recommended Posts