Where is the economy going 2 (to)?

Who would have thought, ci, that a thread on economics would be locked down?

Indeed! We can understand why politics and religion has the potential for lock-downs, but economics? LOL

I'm just gonna pull up a chair and watch, if that's ok :-D

Montana, You're welcome 24/7.

Very turbulent stock markets around the world. And with the different time zones, it is difficult to tell which one is responding to which other one.
A few thoughts:
* The .75% "emergency" cut in the discount rate indicates to me that things were closer to a meltdown of the banking system than was contemplated.
* There will probably be a further cut of .25% next week at the regularly scheduled Fed meeting.
* Fear of inflation is temporarily off the table in the U.S. Fear of recession trumps.
* Note that the U.S. seems to be the only one to reduce interest rates. This will cause money to flow out of the U.S. to be redeployed in other areas where interest rates are higher (e.g. Europe).
* This will cause the dollar to fall even more than it has already fallen.
* That is "good" for Americans producing goods in the U.S. for export to other countries, or for the same folks who produce goods for domestic sale, versus countries whose currencies are not tied to the dollar.
* But the Chinese yaun is tied to the dollar, so trade seems to be a wash there.
and, finally, for the moment...
* Oil is priced in dollars. If that changes, we could be in a world of hurt.

rjb, Good analysis of current economic events; but we're already paying higher prices for fuel based on the loss of value in our currency. Even if oil is traded on the US dollar, all other countries are paying the exchange rate to the dollar which get cheaper for them and more expensive for us.

They're getting more oil for the buck than we are; for them, the dollar is "cheap." It's going to get worse for us, and better for them as our currency continues to lose value.

Where we gain is that products and services produced in the US becomes much cheaper in the world marketplace. It helps us here in Silicon Valley where high tech products continue to grow worldwide, and demand continues. The unemployment in our area is lower than the state average, and also the nation as a whole. People are still buying million dollar homes in our area, and prices in our ZIP code continues to climb while some ZIP codes in our city and county are suffering 30 percent drops in prices, and over 50 percent increase in defaults on loans compared to last year.

rjb, Good analysis of current economic events; but we're already paying higher prices for fuel based on the loss of value in our currency. Even if oil is traded on the US dollar, all other countries are paying the exchange rate to the dollar which get cheaper for them and more expensive for us.

They're getting more oil for the buck than we are; for them, the dollar is "cheap." It's going to get worse for us, and better for them as our currency continues to lose value.

Where we gain is that products and services produced in the US becomes much cheaper in the world marketplace. It helps us here in Silicon Valley where high tech products continue to grow worldwide, and demand continues. The unemployment in our area is lower than the state average, and also the nation as a whole. People are still buying million dollar homes in our area, and prices in our ZIP code continues to climb while some ZIP codes in our city and county are suffering 30 percent drops in prices, and over 50 percent increase in defaults on loans compared to last year.

President Bush talks as though he knows what he's talking about, but he has never been successful in any business, so why should we believe him now?


Bush: Stimulus provides 'insurance policy'
Updated 2h 17m ago

President Bush talks to USA TODAY reporters in an interview in the Oval Office on Thursday.

Susan Page and Richard Wolf, USA TODAY
WASHINGTON — President Bush told USA TODAY Thursday that a stimulus package of individual refunds and business tax cuts, hastily negotiated between the White House and Congress, should provide "an insurance policy" to keep an uneasy economy from tipping into recession.
"I do have confidence in the economy now … and I think a lot of the people who analyze the economy have confidence that this economy is going to continue to grow," Bush said. "Now, the issue is the uncertainty of the moment. One thing is for certain — that the (Federal Reserve), independent of the administration, and the administration and the Congress have both reacted very quickly and (in) substantial ways."

"That should help us through this period of uncertainty," he said.

The "stimulus package" is in no way insurance policy for our economy. You don't stimulate a eleven trillion dollar economy with 150 billion dollars. That won't even make a ripple. That's like trying to stop a forest fire with a bucket of water.

This should buy an iPod or two.


Tax rebate deal could mean checks by May

By ANDREW TAYLOR and JULIE HIRSCHFELD DAVIS, Associated Press Writers
21 minutes ago



WASHINGTON - With unprecedented speed and cooperation, Congress and the White House forged a deal Thursday to begin rushing tax rebates of $600 to $1,200 to most tax filers by spring, hoping they will spend the money just as quickly and jolt the ailing economy to life.


Rebates would be even higher for families with children.

failing dollar, credit crunch, housing bubble, george bush in office, failing asian stocks, our stocks seem lame, iraq war,global warming, bees dyin off.

america is going to disintergrate after economic collapse due to ineffecient use of her war resources.

GG!

we will be split between mexico and canada. britain might intervene and reclaim the continental US.

t3h l0s3?

Decreasig interest rates is the wrong thing to do when there's a credit crunch; it only makes things worse - not better. People have already run up credit up to their eyeballs, and providing more incentives for them to borrow more only exacerbates what's already bad about our ecoomy; buy on future earnings.

When banks and financial institutions are suffering from the lack of cash, they're not going to be lending more money to consumers already high in debt. That's like committing suicide.

And this one-time "tax rebates" is too foolish to even contemplate in an economy where thousands of people are losing their homes and cars from lack of cash to pay their loans. The goverment we have in Washington DC is our enemy, because they're too stupid to manage fiscal responsibility.

Does this logic end with Mr. Bush, or can we also extend it to Senators Clinton and Obama?

It extends to most in our federal, state, and local governments, but Bush is the one notorious for having increased the federal deficit to new levels from the actions he has taken during the past seven years.

If Bush doesn't wish to tax the wealthy, he shouldn't have started his war in Iraq (or any war). The future generations will be paying on Bush's fiscal mismanagement for many decades to come that takes away from needed programs in the US and Americans with higher interest payments - as revenue continues its downward spiral.

I couldn't agree more with this posting.

If we absolutely must have some sort of a stimulus package, then how about something similar to the WPA from the depression? In the town where I went to college there was a Post Office built by the WPA with a beautiful WPA mural on the inside wall. At least 70 years later (I assume the Post Office is still there - haven't been back in about ten years) we still have a functional building to show for it.

What I suppose is going to happen is we're all going to get a check from the government of debased dollars borrowed from China. Then most people will turn around and buy Chinese made consumer goods at Walmart with the money, and somehow this will benefit the economy (or more likely buy votes in November).

Instead, we could build windmills and solar power plants with the borrowed money. At least then we would have non-polluting kilowatts to show for it, and a few permanent jobs created.

Jim, That's right: the government has to increase jobs, not handouts.

we had a TAX REBATE of $200 in ontario about 5 years ago - courtesy of a provincial CONSERVATIVE government that promised a COMMON SENSE REVOLUTION .
ontarions fell all over themselves about the windfall they were receiving .
what the government did NOT tell was that they would be downloading costs onto municipalties , cut university and hospital funding ... ...
and leave the next (liberal) government with a big , fat DEFICIT !

now people are asking why their municipal taxes are increasing , why tuition is increasing ... well , we all wanted a TAX REBATE - we got it - and now we are paying for it !
hbg

Good evening. So the U.S. stock markets did pretty good today despite some dreary news on housing sales. I guess that this is in anticipation of the Fed Reserve Bank meeting on Wed.. There seems to be consensus speculation that there is a 0% chance of the Fed leaving the discount rate unchanged; a 25% chance of it going down by 1/4%; a 50% chance of it going down by a 1/2%; and a 25% chance of it going down by 3/4%.
I am thinking 1/4%.
Foreighn markets didn't fare so well for reasons we have talked about before, including that if cuts in the U.S. are not matched by other countries, the dollar will continue to be weak. See yall here on Wed at 2:15 pm (ET) when the announcement is made.

I agree with the 1/4% reduction; they've already moved faster than superman on this, and the federal reserve is known more for conservative moves over big ones. They still have to stick their finger up in the air to see how our economy fares based on employment/unemployment, housing, and reatail sales. Doesn't look too promising from where I stand.

Feel free to skip this post. It is long and, perhaps, unrelated to much of anything here. But, perhaps not.

My little brother is career military. Air Force. He and his family are based now in Germany. I don't know Air Force ranks, but I think the Army equivalent would be Sgt (E5) or Staff Sgt (E6). He is a percussionist in one of the many military bands. I don't know how many military bands there are, but I do know that he has been based in Alabama, Texas, Korea, and at two different bases in Germany.

He called today for our weekly long chat and I wished him a belated happy birthday. I asked if they had done anything special and he replied "No. The dollar is so bad." I should note that he is a notorious tightwad.

Anyway, I had heard a story about military pay on NPR and I had some notes. I am a notorious note-taker.

In the next post are some numbers regarding your tax dollars at work in the military. I am not talking about the combat soldiers serving at great peril to themselves, with 15 month deployments followed by only 6 months at home. I am talking about what we used to call REMFS.