UPSB v3
Serious Discussion / The Economic fallout of USA and the Globe.
Have you been affected?
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Date: Thu, Oct 9 2008 06:57:42
This deathly drop in the economies brings a thought forward that perhaps a few spinners out there have been affected. . .
How exactly would you say your country is fairing through this Crisis?
How are you and your family affected?
Are you unaffected?
Why do you think your Unaffected?
Who do you think is to blame majorly?
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My Personal Affection:
I and my family are being faced with large drops in home sales, and the inability to request loans. Thank goodness we don't need any of those things. Unfortunately my Grandfather is an employed Real Estate Agent and i can't help but worry for him. And My Grandmother on my father's Side is still trying to sell her old house and Issues may rise from that. [Further Info if it becomes a more evident]
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Feel free to post links to news articles. -
Date: Thu, Oct 9 2008 09:18:01
My whole family has to start saving too...:X.
So far i think singapore is doing average.
unless you count the typical behaviour of SGians as they all rushed to forfeit their policies @ AIA -
Date: Thu, Oct 9 2008 12:12:59
The canadian dollar has started to drop very fast... prices will go up for imported goods like electronics... the gas price is fairly high too
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Date: Thu, Oct 9 2008 12:54:25
Japan didn't get affect too much.
This is because nonperforming loan isn't too serious here. in 1994, Japan had a huge bubble that exploded, and people suffered like serious shit, and that's what made them not to trust the loan too much. Japan, literally, cannot fail any further than this. That's why US dollar is like 103 yen here, and EURO is like 130 yen here. Some super-minor companies failed though.
I'm glad i live in Japan. I live normal right now.
though my family is worried about the bank in US for my brother who lives in USA for college. -
Date: Fri, Oct 10 2008 00:31:58
The US financial crisis is caused by greed, simply put. Just recently Congress passed the bailout that most citizens were probably against. The motion to pass the bill failed but of course they kept trying to pass it until it succeeded. So you spend $700 B to bail out the financial sector. AIG gets $85 B and proceeds to spend $500 k at a resort. "They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," thundered Rep. Elijah E. Cummings (D-Md). So how do you hold them responsible? You give them $38 B more the next day! I'm not sure how much of a democracy the United States is anymore, but you need to start holding the rich and corrupt responsible. As long as the rich remain rich, they couldn't care less about the state of the economy. Obama is pulling away in the polls, so don't be surprised if Republicans rig the election to maintain the interests of the rich.
Canada will feel the impact of this because (I personally feel that) Harper is kissing Bush's ass. Harper was quoted as saying "The fundamentals of Canada's economy are strong." Sound familiar? He's getting attacked by other parties by taking the economic crisis in the US too lightly, and rightfully so. It'll be interesting to see what he does when the Conservatives are re-elected later this month. US has a debt approaching $10 trillion and Canada had a surplus of ~$10 billion (until Harper spent it) yet our currencies remain roughly equivalent. I wish we could opt out of NAFTA so our currency isn't dragged down. -
Date: Fri, Oct 10 2008 00:36:33
scratch the gas price, it's been dropping a lot
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Date: Fri, Oct 10 2008 00:38:04QUOTE (Zombo @ Oct 9 2008, 08:36 PM) <{POST_SNAPBACK}>scratch the gas price, it's been dropping a lot
I wonder why this is o.o... the gas price here in NY is dropping too..
it doesn't make sense =\ -
Date: Fri, Oct 10 2008 00:57:30
The lowering of gas has something to do with the US oil reserves i believe...someone briefly explained it to me but i dont remember it all.
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Date: Fri, Oct 10 2008 01:07:35
*sigh* this makes me sad
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Date: Fri, Oct 10 2008 01:38:54QUOTE (Tialys @ Oct 10 2008, 02:31 AM) <{POST_SNAPBACK}>The US financial crisis is caused by greed, simply put.
Capitalism is caused by greed. Everything around you is there because of greed. It is not greed there is the problem, greed is good. It is the oversight with the greed there has been lacking. And if you just let capitalism run on it is own, it will get it self in to some very bad situations for everybody.QUOTEJust recently Congress passed the bailout that most citizens were probably against. The motion to pass the bill failed but of course they kept trying to pass it until it succeeded. So you spend $700 B to bail out the financial sector. AIG gets $85 B and proceeds to spend $500 k at a resort. "They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," thundered Rep. Elijah E. Cummings (D-Md). So how do you hold them responsible? You give them $38 B more the next day! I'm not sure how much of a democracy the United States is anymore, but you need to start holding the rich and corrupt responsible. As long as the rich remain rich, they couldn't care less about the state of the economy. Obama is pulling away in the polls, so don't be surprised if Republicans rig the election to maintain the interests of the rich.
You have to remember that the money used for bailing out the financial sector is not spend, it is money invested. For those 700 B dollars the treasury is going to get assets which at the moment is illiquid and cheap, then they are going to keep them for a couple of years before they sell them, almost certainly with profit. Plus the nation and the world gets saved from the even worse crisis a long time frozen credits market would give.
And the same goes for AIG. The money given to AIG is a loan, which are going to pay a great interest(think it was like 15%), and for giving that loan the treasury also got 80% of the company. And AIG is almost 100% sure to be able to pay the loan back, because they are the world's biggest insurance company and insurance companies always got enourmous amount dollars worth assest they can easily sell. And the customers in AIG doesn't lose their insurance like they would if AIG had failed.
And exactly the same goes for Fannie Mae and Freddie Mac. They also only got loans. The government owns them now. And we have all got saved from the catastrophe it would have caused if they went under. They handle about 70% of all American home morgages.
These are all win/win situations. They should all give profit for the government in the end, when ever the government in the past has done stuff like this it has also given profit. And in that the economy gets saved from major recession, when in the past we have had major recession, like the great depression and the lost decade in Asia, it has exactly been because there wasn't taken action by the government soon enough. It is the most economists opinion that the great depression could have been avoided if the government just acted right. I would say it is actually not unthinkable that this crisis could have evovled into something like the great depression, if non of these now about 1 trillion dollars had been in invested in trying to avoid it.
There might have been a majority of the people against these actions, but I actually think that the public should try and stay out of these matters. They are too complicated for many people, and most people get the stuff about it wrong. We have to let experts and economist deal with this. Sure it might be the taxpayer's money they are spending. But they are also spending taxpayer's money at NASA, and I don't think the public should try vote on how to steer the space shuttles back into the atmosphere. We just have to trust the people who handles it knows what they are doing. And I have a great deal of trust in a guy like Federal Reserve chairman Ben Bernanke. -
Date: Fri, Oct 10 2008 07:02:33
I agree with everything TheOnion said. For the greed thing, how about I put things into perspective: High class restaurants often overcharge diners for dinners, including sometimes 1000% markup on beverages. Is that greed? Most people think of it as just paying for the atmosphere, although it is technically "greed". Prices will always be proportionate to demand in a capitalistic society, the US is no exception. The US credit crisis has shown the major flaw in capitalism, which is the lack of proper regulation and checks and balances.
IMO the average American hardly understands what is going on, he thinks that his tax money is going to "go into some CEO's pocket", which is the common sentiment and the reason why the 700b bailout package wasnt passed the first time. The bailout will nationalize some financial institutions, and most importantly clear banks of toxic debts that are the root of the problem. IMO the bailout package will do more good then harm in the long run, banks will get more transparent, more strict regulations, everyone benefits, even the man on the street. Frankly, I think it is about time that more scrutiny should be placed on investment banks. The AIG holiday is an example of this. They are shockingly shady in a democratic, free and transparent society. -
Date: Fri, Oct 10 2008 07:34:18
The stupid fucking Aussie dollar went down to 68c american. Thats like What the Fuck, Its your crisis.
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Date: Fri, Oct 10 2008 07:42:08
Sorry this might be a stupid question to alot of you.. But. what actually happens in the bailout plan? All i see on the new is US bailout plan with some hundreds of billion dollar used. What exactly happens to that money? and how does that help the economy?
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Date: Fri, Oct 10 2008 07:54:57
Korea's economy is at its possible worst as of now
korean money to usd ratio is about 1:1.38 right now and may get worse
obviously very bad.
Iceland or iceland's economy(?) just went bankrupt if im not mistaken
and asked Russia for money
man. the world's economies are in decline
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Date: Fri, Oct 10 2008 09:42:52
We rely on Asia for most of our stuff, but still everything is dropping, import good are going to go up. My English teacher loss $50000 in the stock market. I don't like her much so i almost laughed in her face, but i held it in.
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Date: Fri, Oct 10 2008 14:48:05QUOTE (Sidewinder @ Oct 10 2008, 03:34 PM) <{POST_SNAPBACK}>The stupid fucking Aussie dollar went down to 68c american. Thats like What the Fuck, Its your crisis.
Traders worldwide get hit by margin calls, they have no choice but to sell massive amount of stocks because they cant get anymore credit, thats why currencies are falling worldwide. -
Date: Fri, Oct 10 2008 15:23:36QUOTE (Sidewinder @ Oct 10 2008, 09:34 AM) <{POST_SNAPBACK}>The stupid fucking Aussie dollar went down to 68c american. Thats like What the Fuck, Its your crisis.
Most people actually find a falling currency a good thing, it means that stuff produced in your country gets more competetive and easier to sell. The US has actually had an advantage the last couple of years with their low priced currency. -
Date: Fri, Oct 10 2008 15:32:27QUOTE (TheOnion @ Oct 10 2008, 08:53 PM) <{POST_SNAPBACK}>Most people actually find a falling currency a good thing, it means that stuff produced in your country gets more competetive and easier to sell. The US has actually had an advantage the last couple of years with their low priced currency.
By "currency falling", do you mean they are going up cuz over here its risen from like Rs38 to Rs50 -
Date: Fri, Oct 10 2008 16:15:05QUOTE (Outsmash @ Oct 10 2008, 05:32 PM) <{POST_SNAPBACK}>By "currency falling", do you mean they are going up cuz over here its risen from like Rs38 to Rs50
The price of the dollar is going up. The price of other currencies is falling. That has been the trend lately. And again, that is good, not a bad thing for business in countries outside USA, becuase that makes goods produced outside US cheaper and more competetive. That means more people will buy it, and more jobs (compared with USA) goes to countries outside USA. That is probably not enough to upset the fact that the global economy is in general declining , because of fall in US demand caused by the crisis, but atleast it gives an advantage. -
Date: Fri, Oct 10 2008 16:29:07
Damn US dollar dropped like 100 Yen for $1.00
1 Euro is in the early 130's yen.
I'm glad i live in Japan. Gas prices are going down too. -
Date: Fri, Oct 10 2008 17:55:02QUOTE (TheOnion @ Oct 10 2008, 11:23 AM) <{POST_SNAPBACK}>Most people actually find a falling currency a good thing, it means that stuff produced in your country gets more competetive and easier to sell. The US has actually had an advantage the last couple of years with their low priced currency.
for the consumer its not good because products price go up -
Date: Fri, Oct 10 2008 18:54:06QUOTE (Zombo @ Oct 10 2008, 07:55 PM) <{POST_SNAPBACK}>for the consumer its not good because products price go up
Well that only goes for products produced, in the this situation, inside USA. Which means you are more likely to switch to domestic competitors which again is good for you countries economy. -
Date: Fri, Oct 10 2008 20:46:56QUOTE (TheOnion @ Oct 10 2008, 02:54 PM) <{POST_SNAPBACK}>Well that only goes for products produced, in the this situation, inside USA. Which means you are more likely to switch to domestic competitors which again is good for you countries economy.
thats only for products with domestic competitors... -
Date: Fri, Oct 10 2008 21:10:51QUOTE (Zombo @ Oct 10 2008, 10:46 PM) <{POST_SNAPBACK}>thats only for products with domestic competitors...
Yes, or from another country with a falling value of their currency. Not many products are only produced in USA, maybe big movie would be one. But even then you could just stop watching them and go do something else, that is actually the basic principle of marginal utility. As the price goes up with some products, the demand goes down.
But anyways, the foreign exchange market is about the least interresting of all markets right now, it will work out on its own and if the national banks think the price of their currency has gotten too low, they can just cut the interest rate some more. The stock market and especially the credits market are much more interresting right now, and what happens there is of extreme importance for everybody. They might not affect a whole lot the average consumer right now, but they will soon. -
Date: Sat, Oct 11 2008 01:24:59
someone answer my questin
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Date: Sat, Oct 11 2008 01:25:22
Oil prices went down due to decrease in demand for manufacturing goods worldwide, as companies cut production as they are unable to secure credit to buy raw materials etc.
Currencies to watch out for are mostly Asian currencies, because there is where the bulk of manufacturing takes place, and maybe some high value industries. -
Date: Sat, Oct 11 2008 01:51:55QUOTE (WhiteFang @ Oct 10 2008, 09:42 AM) <{POST_SNAPBACK}>Sorry this might be a stupid question to alot of you.. But. what actually happens in the bailout plan? All i see on the new is US bailout plan with some hundreds of billion dollar used. What exactly happens to that money? and how does that help the economy?
Because of falling house prices in US banks have ended up with some bad mortgage backed securities, which has sucked up their capital and made Lehman Brothers go bankrupt. As a result of the fear of other banks might do the same, banks have stopped lending to each other, so they don't risk ending up lending money to a bank going bankrupt. That has also lead to a stop in lending to many small businesses, which eventually may result in those businesses closing down, and giving great increases in unemployment.
The way The Paulson Plan tries to stop this from evolving futher, is basicly that the treasury buys those bad assest (with money from issued government bonds), and the risk involved and stash them away for some years before they sell them back to the market. That should remove some of the risk of banks going backrupt and make banks lend to eachother and businesses again. -
Date: Sat, Oct 11 2008 04:01:18
If you have difficulty understanding the current world situation, the following should help:
Once upon a time in a village, a man announced to the villagers that he would buy monkeys for $10.
The villagers seeing there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50."
The villagers squeezed together their savings and bought all the monkeys.
Then they never saw the man or his assistant again, only monkeys everywhere!
Welcome to the Stock Market! -
Date: Sat, Oct 11 2008 07:40:28QUOTE (Gunblakes @ Oct 10 2008, 09:01 PM) <{POST_SNAPBACK}>If you have difficulty understanding the current world situation, the following should help:
Once upon a time in a village, a man announced to the villagers that he would buy monkeys for $10.
The villagers seeing there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50."
The villagers squeezed together their savings and bought all the monkeys.
Then they never saw the man or his assistant again, only monkeys everywhere!
Welcome to the Stock Market!
Quite an Allegory you got there . . . Copy Paste? . . . Cause I'd like to have a look at the website if you did. -
Date: Sat, Oct 11 2008 12:00:33QUOTE (TheOnion @ Oct 11 2008, 12:51 PM) <{POST_SNAPBACK}>Because of falling house prices in US banks have ended up with some bad mortgage backed securities, which has sucked up their capital and made Lehman Brothers go bankrupt. As a result of the fear of other banks might do the same, banks have stopped lending to each other, so they don't risk ending up lending money to a bank going bankrupt. That has also lead to a stop in lending to many small businesses, which eventually may result in those businesses closing down, and giving great increases in unemployment.
The way The Paulson Plan tries to stop this from evolving futher, is basicly that the treasury buys those bad assest (with money from issued government bonds), and the risk involved and stash them away for some years before they sell them back to the market. That should remove some of the risk of banks going backrupt and make banks lend to eachother and businesses again.
So.. the governement spends like 700?billion USD to buy all the bad mortgages to give the bank confidence? When the government buys the bad mortgage, does the government still let the people live there? and also, didn't Tialys say the governement gave AIG like 75 billion? why is that?
@Gunblakes, thanks for that explanation. can you retell the story with what actually happened? I understand the concept now. It really helps
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Date: Sat, Oct 11 2008 13:17:20
ok the quick explanation:
we built too many houses/buildings in the past. -
Date: Sat, Oct 11 2008 15:38:20QUOTE (WhiteFang @ Oct 11 2008, 02:00 PM) <{POST_SNAPBACK}>So.. the governement spends like 700?billion USD to buy all the bad mortgages to give the bank confidence? When the government buys the bad mortgage, does the government still let the people live there? and also, didn't Tialys say the governement gave AIG like 75 billion? why is that?
The government will probably manage those mortgage backed securities like anyone else on the market does. That means if you can't pay you will have to foreclose. The government is working on some other stuff called Hope Now, which will try to help people in those kinds of situations.
AIG had done a lot of some credit default swaps, where they for a payment would pay money back if mortgage defaulted, kinda like a car insurance for mortgages, plus they had some mortgage backed securities them self. But now they had to pay on all those default swaps, which drained them of capital. The government had to come and give them a two year 85 billion dollar loan to make sure they didn't go bankrupt. In return the government gets around 15% in interest and get 80% of the company. -
Date: Wed, Dec 31 2008 02:57:02
ok.. sorry to bump an old topic, but i need this for a project of mine
can anyone tell me How it started, the domino effect, how people are affected, the government’s efforts, how people are coping etc. -
Date: Wed, Dec 31 2008 05:20:24QUOTE (XternalメDGN @ Dec 31 2008, 03:57 AM) <{POST_SNAPBACK}>ok.. sorry to bump an old topic, but i need this for a project of mine
can anyone tell me How it started, the domino effect, how people are affected, the government’s efforts, how people are coping etc.
I don't know how much you know about economics already, but it would be easiest if you just read about it on wikipedia. http://en.wikipedia.org/wiki/Financial_crisis_of_2007-2008 They got it summed up quite well there.
To real quick repeat what it is about, then it started with home prices falling due to a over supply of new houses. That send a lot of people in foreclosure because they had bought their house thinking the prices would keep rising forever, and the banks had let them get those morgages. Those foreclosures drove the prices even futher down and created a vicious cicle of falling home prices that has not stopped yet. All those foreclosures then gave the banks trouble because they would not get all their money back on the morgage-backed securities they owned. That forced the government to bailout Bear Stern, AIG, Fannie Mae and Freddie Mac. But when they let Lehman Brothers fail, the disaster was there. All banks stopped lending to each other out of fear that more banks would end up like Lehman Brothers and therefore not get their money back. That then meant among other things that, the banks stopped giving out as many car loans. Which then put all the car-manufacturers in to trouble, and send all ready badly hurt Ford, GM and Chrysler near bankrupcy, begging the government for a bailout.
And that is kinda where we are now. The economy that already was in recession is now in a deeper one, and we are waiting for Barrack Obama to take office and decide on what kind of help he wants to give to the big three and what kind of fiscal stimulas he will put in to place.
As for what it means to people in general, well. Some people have lost their home to foreclosure. A lot of people have seen there home's value go down. The economical slowdown has caused a rise in unemployment, so some people must have lost their and other people will in the future. And as for the rest it has meant we have had to hear about it every day on the news.
But that will all go away with time. Some longer term results of this crisis will probably, that people have learned (again) that home price does not rise forever. Banks have learned that they should not give loans out to anyone. Politicians have learned that there needs to be better oversight with that banks do not do stupid things, because they are too important to just let fail. The financial sector all over the world but especially on Wall Street and in London will be smaller. Americans will probably start to save more money. And less cars will be made in Detroit. -
Date: Wed, Dec 31 2008 06:00:55QUOTE (TheOnion @ Dec 31 2008, 01:20 PM) <{POST_SNAPBACK}>I don't know how much you know about economics already, but it would be easiest if you just read about it on wikipedia. http://en.wikipedia.org/wiki/Financial_crisis_of_2007-2008 They got it summed up quite well there.
To real quick repeat what it is about, then it started with home prices falling due to a over supply of new houses. That send a lot of people in foreclosure because they had bought their house thinking the prices would keep rising forever, and the banks had let them get those morgages. Those foreclosures drove the prices even futher down and created a vicious cicle of falling home prices that has not stopped yet. All those foreclosures then gave the banks trouble because they would not get all their money back on the morgage-backed securities they owned. That forced the government to bailout Bear Stern, AIG, Fannie Mae and Freddie Mac. But when they let Lehman Brothers fail, the disaster was there. All banks stopped lending to each other out of fear that more banks would end up like Lehman Brothers and therefore not get their money back. That then meant among other things that, the banks stopped giving out as many car loans. Which then put all the car-manufacturers in to trouble, and send all ready badly hurt Ford, GM and Chrysler near bankrupcy, begging the government for a bailout.
And that is kinda where we are now. The economy that already was in recession is now in a deeper one, and we are waiting for Barrack Obama to take office and decide on what kind of help he wants to give to the big three and what kind of fiscal stimulas he will put in to place.
As for what it means to people in general, well. Some people have lost their home to foreclosure. A lot of people have seen there home's value go down. The economical slowdown has caused a rise in unemployment, so some people must have lost their and other people will in the future. And as for the rest it has meant we have had to hear about it every day on the news.
But that will all go away with time. Some longer term results of this crisis will probably, that people have learned (again) that home price does not rise forever. Banks have learned that they should not give loans out to anyone. Politicians have learned that there needs to be better oversight with that banks do not do stupid things, because they are too important to just let fail. The financial sector all over the world but especially on Wall Street and in London will be smaller. Americans will probably start to save more money. And less cars will be made in Detroit.
I see. thanks alot!:] -
Date: Wed, Dec 31 2008 16:53:13
the only i dont understand is that in economy
if some people get poorer, others get richer
so who is actually benefitting from the current crisis? -
Date: Thu, Jan 1 2009 02:35:18QUOTE (Zombo @ Jan 1 2009, 12:53 AM) <{POST_SNAPBACK}>the only i dont understand is that in economy
if some people get poorer, others get richer
so who is actually benefitting from the current crisis?
Pros of depression : Deflation , lower energy/ food prices
Cons of depression : Job cuts, economic slowdown
Looking at it this way, an average consumer who has not lost his job has more bang for his buck. -
Date: Thu, Jan 1 2009 05:55:12
yeah but people have a constant fear that they might lose their job and spend more conservatively.
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Date: Thu, Jan 1 2009 06:57:37QUOTE (Gunblakes @ Dec 31 2008, 09:35 PM) <{POST_SNAPBACK}>Pros of depression : Deflation , lower energy/ food prices
Cons of depression : Job cuts, economic slowdown
Looking at it this way, an average consumer who has not lost his job has more bang for his buck.QUOTE (Toast @ Jan 1 2009, 12:55 AM) <{POST_SNAPBACK}>yeah but people have a constant fear that they might lose their job and spend more conservatively.
so basically the depression is reinforced by the hype...
so stupid, ppl should be spending more, not less, but media makes them think they're getting poorer.
it's all in people's heads. -
Date: Thu, Jan 1 2009 10:18:04
Is this the recession which is going on??
If so, i would like to know: If the whole world is currently going through recession, who benefits? Generally, when one man becomes richer the other gets poorer (similar to Zombo's question).
I've been hearing stuff that Dubai has regreted Recession and so they're not going through it (since they're rich) but how can someone "regret" recession?? Isn't it something that just happens? not like people come and ask th Dubai governmetn "Do you want recession?' etc.. -
Date: Thu, Jan 1 2009 14:30:28QUOTE (Zombo @ Jan 1 2009, 02:57 PM) <{POST_SNAPBACK}>so basically the depression is reinforced by the hype...
so stupid, ppl should be spending more, not less, but media makes them think they're getting poorer.
it's all in people's heads.
Consumer fear and irrationality is one of the major factors in any recession.QUOTE (Outsmash @ Jan 1 2009, 06:18 PM) <{POST_SNAPBACK}>If so, i would like to know: If the whole world is currently going through recession, who benefits? Generally, when one man becomes richer the other gets poorer (similar to Zombo's question).
I've been hearing stuff that Dubai has regreted Recession and so they're not going through it (since they're rich) but how can someone "regret" recession?? Isn't it something that just happens? not like people come and ask th Dubai governmetn "Do you want recession?' etc..
Er recession doesn't just happen, there are many clear cut factors that led to it, and no country would like to experience a recession as a whole, the cons outweigh the pros. -
Date: Thu, Jan 1 2009 16:49:40QUOTE (Gunblakes @ Jan 1 2009, 08:00 PM) <{POST_SNAPBACK}>Er recession doesn't just happen, there are many clear cut factors that led to it,
like what? -
Date: Thu, Jan 1 2009 16:55:22
kinda stupid
i hate it when ppl bandwagon -
Date: Thu, Jan 1 2009 17:11:37
You are wrong about the assumption that when someone gets poorer other must get richer. When home prices start falling, nobody gets any money from that, but a lot of homeowners in effect lose money. Some might not have spend those money, but others have, by taking a second morgage against the increased value of their home. Those people have lost money, and nobody has gained on the other side.
As it is said "A rising tide lifts all boats", and that goes the other way too. Nobody is really benefitting from a slowing economy. -
Date: Thu, Jan 1 2009 17:19:08QUOTE (TheOnion @ Jan 1 2009, 12:11 PM) <{POST_SNAPBACK}>You are wrong about the assumption that when someone gets poorer other must get richer. When home prices start falling, nobody gets any money from that, but a lot of homeowners in effect lose money. Some might not have spend those money, but others have, by taking a second morgage against the increased value of their home. Those people have lost money, and nobody has gained on the other side.
As it is said "A rising tide lifts all boats", and that goes the other way too. Nobody is really benefitting from a slowing economy.
if everybody is losing money, then it's very simple to readjust all the wealth since economy is artificial. -
Date: Thu, Jan 1 2009 17:39:19QUOTE (Zombo @ Jan 1 2009, 06:19 PM) <{POST_SNAPBACK}>if everybody is losing money, then it's very simple to readjust all the wealth since economy is artificial.
I am not sure I really know where you are getting at. But yes, economics is not a zero-sum game, the total amount of wealth goes up and down. -
Date: Thu, Jan 1 2009 17:41:56
if it's hard to understand, realize that one of the factors of the depression was that there was a great drought at the time. how could that possibly benefit anybody?
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Date: Thu, Jan 1 2009 18:02:44QUOTE (TheOnion @ Jan 1 2009, 12:39 PM) <{POST_SNAPBACK}>I am not sure I really know where you are getting at. But yes, economics is not a zero-sum game, the total amount of wealth goes up and down.
if it was zero-sum, then the solution is for the rich give the money back to the poor to stabilize the economy
if it's not zero-sum, then the solution is to readjust all the currencies and prices. This is because economy is artificial, it's a human concept, if it doesn't serve its purpose well, we can reinvent it. It's not controlled by nature, it's controlled by human. -
Date: Thu, Jan 1 2009 19:03:06QUOTE (Zombo @ Jan 1 2009, 07:02 PM) <{POST_SNAPBACK}>if it was zero-sum, then the solution is for the rich give the money back to the poor to stabilize the economy
if it's not zero-sum, then the solution is to readjust all the currencies and prices. This is because economy is artificial, it's a human concept, if it doesn't serve its purpose well, we can reinvent it. It's not controlled by nature, it's controlled by human.
Economy can't really be controlled by anybody, not with a free market. It is made by interactions between people, but it is not controlled anybody. We can not force the home prices back up. The price is controlled by supply and demand, and with a oversupply the price has to come down at some point. We can not change that, all we can do is notch it in the direction we want, by for example offering cheap loans to try and make demand catch up faster. And then maybe in future we could have government and monetary institutions be more on the look-out for new bubbles like the one we just had. -
Date: Thu, Jan 1 2009 21:03:04
i didnt say by someone, i said by human in general, if it is controlled by interactions between people, then we need cooperation with people. since this situation cleraly doesn't benefit anybody like you said, there is no reason why anybody would refuse not to cooperate.
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Date: Thu, Jan 1 2009 22:10:33QUOTE (Zombo @ Jan 1 2009, 10:03 PM) <{POST_SNAPBACK}>i didnt say by someone, i said by human in general, if it is controlled by interactions between people, then we need cooperation with people. since this situation cleraly doesn't benefit anybody like you said, there is no reason why anybody would refuse not to cooperate.
Yes if everyone tomorrow agreed that houses are cheap, and started buying them, then we would be on our way out. But that is not human nature, human nature is to say "nah, prices fell last week and the week before that, they are probably going keep fall next week. I'll wait". And that is to a large extend how economics works, it does not have consciousness, it does not behave with logic. It's just everyone looking out for ones own interest, and somehow, that in the end takes us all where we wanna go. Although it sometimes does take us on some irrational detours, like creating a bubble, which we then will have to live with. -
Date: Fri, Jan 2 2009 07:47:26QUOTE (Zombo @ Jan 2 2009, 12:55 AM) <{POST_SNAPBACK}>kinda stupid
i hate it when ppl bandwagon
Zombo you just answered your own question. -
Date: Wed, Jan 7 2009 19:59:33
one thing I want to say is that it seems that ppl are justifying/blaming their decision, poor performance, problems, hardship etc. on the economical crisis when it might only have little impact. e.g. I have read that the divorce has increased this year due to the crisis. it seems that people give themselves hope that their problems are ONLY because of the crisis and therefore if they wait for it to pass, their problems will be solved. seems really cowardly.
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Date: Wed, Jan 7 2009 21:53:14
well gas has been going down for a while greedy companies like exxon mobile were cheating US at the gas pump so now the us auto industry is falling so they have no choice but to drop gas prices
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Date: Thu, Jan 8 2009 01:29:51QUOTE (RagnarokメAM @ Jan 8 2009, 05:53 AM) <{POST_SNAPBACK}>well gas has been going down for a while greedy companies like exxon mobile were cheating US at the gas pump so now the us auto industry is falling so they have no choice but to drop gas prices
AHahaha so much fail. Reason gas prices are dropping are pretty obvious. Ever read the papers? Its been all over it, oil prices were at an all time low of nearly $50 a barrel, compared with the high of $150 a barrel, its nearly a 66% decrease in prices.
Many people think that companies are "greedy", Wall Street has a "culture of greed", but one must remember that in a free market, products reflect consumer demand for them. -
Date: Fri, Jan 9 2009 01:08:22QUOTE (Zombo @ Jan 1 2009, 04:03 PM) <{POST_SNAPBACK}>i didnt say by someone, i said by human in general, if it is controlled by interactions between people, then we need cooperation with people. since this situation cleraly doesn't benefit anybody like you said, there is no reason why anybody would refuse not to cooperate.
You just touched upon why no-limit capitalism is a failed system. It condones greed and corruption by letting these things go unchecked. The only difference is that this time people went too far and they weren't able to cover up the effects. Capitalism, whether wittingly or unwittingly, causes people to value money as the be all and end all of their existence. While it seems intuitive that cooperation will benefit everyone in the long run, the irrationality that the free market system (especially one devoid of regulations) engenders prevents this cooperation from occurring. Even though the richest 400 Americans own more than the bottom 150 million Americans combined (half the country), they won't part with any of their money because they derive their identity from their wealth. This is also why ordinary people also blame their non-financial problems on the financial crisis.
Economics is not zero-sum, as mentioned. The rich get richer but the poor remain more or less the same. The extra money comes from the government printing more and more currency. This causes the value of the dollar to decrease, and it still could collapse within a few years. When it comes time to prop up a failed system or abandon it, irrationality calls for it to be revived. People have put themselves in a position where bailouts and stimulus packages are the only solution. To turn to a different economic model was apparently unthinkable.