IMF Top Economist: Worst is Yet to Come

[Zoomie1980]

and who manipulates them ?

No one.

 

[Ravi]

I think the market learns and progresses.

The markets exist to make money. As long as they can get away with making money, they will do whatever it takes without a care for what happens after they make their fortune.

 

[Care4all]

The markets exist to make money. As long as they can get away with making money, they will do whatever it takes without a care for what happens after they make their fortune.

morning!

that seems to be the reality of it....

 

[editec]

You are aware that one of the main reasons the south seceded was because of unfair tariffs that benefitted the north and hurt them, right? That is why tariffs were prohibited in the Confederate Constitution. Protectionism, as I've said before, helps a few to the detriment of the rest of us.

Yes, I am aware that the Soutern states objected to tariffs.

- Forces the consumer to pay higher prices.

Creates industry thus making our nation something other than a third world colony of farmers, miners, tree fellers, and folks crambling in the dirt

- Forces other industries to pay higher prices.

Gives industries hihger profits, too

- Lack of competition stifles innovation so consumers are paying higher prices for inferior products.

- Other nations will then impose retaliatory tariffs on our goods.

they already do and have always, but apparently I am the only person on this board who realizes that

Need I go on?

Yes, you do.

You need to study what has happened to our nation ever since we started this foolish policy and then you need to explain to me where the real benefits are, because they surely are NOT found in our standard of living.

Abe Lincoln was also a big proponent of suspending habeas corpus, ignoring the Constitution, waging war against civilians, removing all African-Americans from the United States, denying states' rights, etc...

Ah, did nasty old ABe take away slavers' right to own human beings?

What a bad man, eh?

 

[Kevin_Kennedy]

Ah, did nasty old ABe take away slavers' right to own human beings?

What a bad man, eh?

"I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so."

"I will say, then, that I am not, nor ever have been, in favor of bringing about in any way the social and political equality of the white and black races..."

"I am as much as any other man in favor of having the superior position assigned to the white race."

"If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that."

- Abraham Lincoln

The Emancipation Proclamation freed the slaves in the Confederate States, of which Lincoln had no authority over, but no states that were under Union control. He intended the Proclamation to incite Confederate slaves to rise up and kill their masters.

Lincoln committed war crimes against the south, and took away Constitutional rights of people in the north.

I would say that makes him a "bad man," yes.

 

[Paulie]

The markets exist to make money. As long as they can get away with making money, they will do whatever it takes without a care for what happens after they make their fortune.

I'm not just talking about the stock market, Rav. I'm talking about the entire market. Everything. When you go buy a vibrator, for instance, you are part of the market.

You've got the whole "greed" thing distorting your thought process. Many investors are greedy, but the market as a whole need not be pidgeon holed as being useless simply because some take advantage of it through greed.

 

[Ravi]

I'm not just talking about the stock market, Rav. I'm talking about the entire market. Everything. When you go buy a vibrator, for instance, you are part of the market.

You've got the whole "greed" thing distorting your thought process. Many investors are greedy, but the market as a whole need not be pidgeon holed as being useless simply because some take advantage of it through greed.

I was talking about the entire market. And notice, I didn't say useless.

 

[Zoomie1980]

The markets exist to make money. As long as they can get away with making money, they will do whatever it takes without a care for what happens after they make their fortune.

The markets don't "make" anything. They are the medium in which money is exchanged for goods and services. Businesses make the money by USING the "market". Consumption creates a market, business feeds it.

 

[Paulie]

The markets don't "make" anything. They are the medium in which money is exchanged for goods and services. Businesses make the money by USING the "market". Consumption creates a market, business feeds it.

Thanks for taking care of my light work.

And Rav I realize you didn't actually say worthless, but if someone thinks the markets only exist to make money through greed, then it doesn't seem far fetched to conclude that they probably view it as less than necessary. Maybe not WORTHLESS, per se, but you don't seem to have a very favorable opinion of it with such a cynical viewpoint.

 

[Ravi]

Thanks for taking care of my light work.

And Rav I realize you didn't actually say worthless, but if someone thinks the markets only exist to make money through greed, then it doesn't seem far fetched to conclude that they probably view it as less than necessary. Maybe not WORTHLESS, per se, but you don't seem to have a very favorable opinion of it with such a cynical viewpoint.

heh, you are being silly. The markets exist to make money. And that isn't a bad thing because money makes the world go around. BUT, to pretend that what motivates the market isn't greed shows a deep misunderstanding of human nature.

 

[Paulie]

heh, you are being silly. The markets exist to make money. And that isn't a bad thing because money makes the world go around. BUT, to pretend that what motivates the market isn't greed shows a deep misunderstanding of human nature.

Do you realize that you're speaking for the entire market right now?

I'm a contributor to the overall market when I buy or sell something.

I am not motivated by greed.

Maybe you want to restate that without being so absolute?

 

[indago]

CNN — LOU DOBBS TONIGHT — Aired December 1, 2008 - 19:00 ET

LOU DOBBS, CNN ANCHOR: The National Bureau of Economic Research today confirming that the country is officially in recession. Joining me now, three of the brightest economic minds around. In Rochester, Pulitzer Prize winning journalist David Cay Johnston, David, good to have you was. Also the author of "The Free Lunch, how the Wealthiest Americans Enrich Themselves at Government Expense."

In our DC bureau, Professor Peter Morici of the Robert A. Smith School of Business at the University of Maryland, Peter, good to have you.

And in Philadelphia, Susan Wachter of the Wharton School of Business, University of Pennsylvania. Good to have you with us, Susan.

PROF. SUSAN WACHTER, UPENN: Pleasure.

DOBBS: Let me ask you all. Let's get down and wonky right away. What happened to the two consecutive quarters of negative growth that is the normal definition of recession? I mean, they didn't — the folks at the National Economic Research Bureau bailed out on that. Why? Peter?

PROF. PETER MORICI, U OF MD: Well the last recession we didn't have two consecutive quarters. We had three individual quarters of negative growth followed by three quarters of positive growth. The last negative growth was followed by three quarters of very tepid growth.

DOBBS: I knew I was going to be sorry I asked the question.

MORICI: It's the truth. The last one didn't have it. Where have the economists been for Pete's sake. Housing prices have been tanking for 18 months, employment has been down month after month for the last 12 months and the banks have required $8 trillion to fix a $2 trillion mortgage-backed security problem. The real question is, is this not a recession or is it something worse? The Great Depression principal hallmark was the fact that it was not self correcting. It required out of the box thinking that I don't think Summers and Geithner can give us.

DOBBS: Well, I don't think you're going to get — I'll put it this way, I won't argue much with you about that, professor. Susan, if you would, listen to what the treasury secretary Hank Paulson, one of my very favorite people as you already know, this is his reaction today to the official word that we've been in recession for a year.

(BEGIN VIDEO CLIP)

HENRY PAULSON, U.S. TREASURY SECRETARY: The thing that we've known and I've known is that we are in an economy that has slowed down significantly. The American people know that. And I think the American people have known that for some time.

(END VIDEO CLIP)

DOBBS: What's interesting about that, Susan, is this is the same fellow who said this whole thing has been contained through the spring. The summer was saying fundamentals are strong and didn't acknowledge there was much of a problem at all until he goes screaming like a frightened child into Capitol Hill, suggesting that the world will collapse if someone doesn't give him $700 billion. That's sort of breathtaking, isn't it?

WACHTER: Sure is. Well, look, he cannot — you can't yell "fire" until he needs to yell fire and then he did but — it's not contained. This is a recession. We've known it for a long time.

DOBBS: And what are we going to do? We've got — the "Los Angeles Times" has come up with a new estimate, Susan, as you know, raising the ante to $8.5 trillion. Bloomberg News has done a calculation just a week ago and they had it at $7.4 trillion. But $8.5 trillion pledged to fight this economic crisis and they want on Capitol Hill, all those Detroit executives come back, those CEOs with a business plan, they've asked for two and a half pages to be filled out by financial institutions. Have people lost their minds in Washington, DC?

WACHTER: Look, we're going to have to fight it and we're going to have to put more money into it. There's going to have to be another economic stimulus bill. We can get back some of that $8 trillion if we prevent something worse than a severe recession.

DOBBS: David, do you think this is a good investment, this $8.5 trillion? Susan seems to think it's a pretty good investment?

DAVID CAY JOHNSTON, JOURNALIST: We have to stimulate the economy. We have to do something, Lou. We have almost 2.5 million Americans have been out of work for more than six months. And when you look at the broadest measure of unemployment it's not the 6.5 percent the politicians talk about, it's almost 12 percent and rising. So much as I think it's distasteful and troubling and we're basically taking our children's prosperity and our grandchildren's prosperity away from them, if this doesn't work out right, yes, I think we have to do something. Look what happened over the weekend with the Christmas shopping. Sales were up less than the rate of inflation. That means that even though there are a lot more people shopping the stores didn't make any money. They sold lots of things at losses and that's why I think you'll see unemployment get worse until the government starts putting people to work.

DOBBS: The government putting people to work. Peter Morici, I talked to ...

JOHNSTON: I know it's troubling. But you can do that, Lou.

DOBBS: ... (inaudible), the head of Shop Tracker today and tracking sales through Black Friday and Saturday. And it was tepid at best. What is your outlook?

MORICI: Well, my feeling is that holiday sales are not going to be very encouraging. It is going to be pretty poor and we'll have retail bankruptcies come January. The holiday season is five days shorter than last year. Last year we had a good Black Friday just like this year but this year everybody was buying on discounts. It sounds like a one and out day. Everybody did their whole Christmas list at half price and now they're done. We're going to need a lot more than a stimulus package to get out of this mess.

DOBBS: Well, I hear "stimulus package" and David I take your point and Susan, I take your point. But here's my question. We're talking about $8.5 trillion and put this up against labor and households you're talking about $60,000 a household at least. Why not just put that money into the system instead of play these institutional games where bad people, bad — good people, ostensibly, but terrible managers are being rewarded and good people are — who have been the victims of the downturn, that is homeowners being foreclosed upon are just being absolutely victimized?

Why can't we come to some consensus about an approach that makes sense to relieve the pain of the American people?

WACHTER: And we have to do that. We have to help the homeowner not just because of fairness but we won't get out of this until we help the homeowner. That's the number one job which hasn't been addressed.

DOBBS: So why aren't we doing that?

WACHTER: That's a good question, Lou. I'm not sure. There are some good ideas on the table but I haven't seen them discussed and some of the good ideas have seemed to be thrown off the table. I don't know. Sheila Bair has some good ideas.

DOBBS: She has indeed. I agree with you 100 percent on that. David?

JOHNSTON: Agree, we have to deal with the housing situation and the falling housing prices. Fundamentally we've lived in this economy a long time where the incomes at the top have been exploding and the incomes at the bottom 90 percent have been flat to falling. That's a fundamental aspect of this. We've run through people's capacity to borrow money and at the same time, we have all these inflated assets that have to fall back. Like it or not, and there's no getting out of the pain from that.

DOBBS: And David Cay Johnston's been talking about this issue for some weeks now here and Peter Morici, there's one word that's been left out of this conversation. I'm surprised that no economist I've been either reading to or listening to has used the word is "structural" here. We've got lots of structural stuff, don't we?

MORICI: The view is that in Japan they had one stimulus package after another in the '90s and it didn't solve the problem. So we deal with the structural problems. The trade deficit with China, importing too much oil. And we don't need to give them $8 trillion, we need to give them $2 trillion but put strings on them. Require those nine banks that got the equity infusions to rework the mortgages on their books that are backed up by their bonds. We just haven't required them to do what we should do with the money we've given them so they are putting it in their pocket and they are off on their merry way.

Those are the structural problems that need to be fixed. I really question whether Summers and Geithner have got the stomach to face up to the fact that free trade has failed America.

 

[indago]

During the Crash of '29, it was said that some titans of finance, in desperation for the loss of their finances and their concern for their clients, jumped out of their office windows to their death, to the dismay of many in the country who felt sorrow for their plight.

In these times, we have a different scenario...