The Panic of 10/24/08

Discussion in 'Current Events' started by DavidS, Oct 24, 2008.

  1. DavidS
    Offline

    DavidS Anti-Tea Party Member

    Joined:
    Sep 7, 2008
    Messages:
    9,811
    Thanks Received:
    766
    Trophy Points:
    48
    Location:
    New York, NY
    Ratings:
    +767
    On the 79th anniversary of Black Monday, the beginning of the Great Depression, DOW Futures have been halted for negative trading at -550. This is going to a doozy. Stocks only need to fall 869 points for trading to be halted once the NYSE opens.

    With fears of a global recession, OPEC cut oil prices by 1.5 million bpd.

    Watch out... today's gonna be a doozy.
     
  2. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,618
    I need to read Bernake's take on the root causes of the depression.

    I haven't been able to find his famous thesis on the subject, but I managed to find this:

    You gold bugs who think that a return to the gold standard is what the Austrian school and Ben Bernake believes might find this interesting reading:


    My conclusion?

    the gold standard works WELL, until conditions change such that the need for capital DEMANDS and EXPANION of specie that the GOLD STANDARD will NOT allow.

    World War I, destroyed the economy of Europe.

    It deperately needed CASH in the economy to rebuild.

    But it could not do that because why?

    Because if those nations which needed money put more currency into their system the GOLD BUGS would attack their banking system by DEMANDING GOLD for their money.

    So, in exactly time that nations needed to get currency into their system so they could begin increasing production, they were preented from doing so by those gold bugs.

    Now I do NOT blame the gold bugs for being rational.

    This is why Keynesian economics was the solution to the depression that america had.

    that does not mean that Keynesian economic fixes will solve every economy every times.

    Economies get scik for different reasons and the central banks need to apply diffferent solutions to DIFFERENT problems.

    Hey, it's not called the dismal science for nothing.
     
    Last edited: Oct 24, 2008
  3. DavidS
    Offline

    DavidS Anti-Tea Party Member

    Joined:
    Sep 7, 2008
    Messages:
    9,811
    Thanks Received:
    766
    Trophy Points:
    48
    Location:
    New York, NY
    Ratings:
    +767
    There were three causes of the Great Depression.

    Credit, credit and credit.

    People got loans for buying food at restaraunts. They bought vacuum cleaners and refrigerators with loans. No credit cards. They actually bought everything getting a loan. When their bank failed due to the panic of the stock market collapse, they had no money. No FDIC back then. So they had no money to pay anything back, all of the bussinsses collapsed, all of the banks collapsed. If people had bought things without credit, and actually had the money, you wouldn't have seen the Roaring 20s... you would've seen slow, steady growth.

    We saw the same thing in the 1990s but there are too many safeguards in place to allow another Great Depression... or at least we think there are.

    We could be delaying the inevitable.
     
  4. KMAN
    Offline

    KMAN Senior Member

    Joined:
    Jul 9, 2008
    Messages:
    2,683
    Thanks Received:
    268
    Trophy Points:
    48
    Ratings:
    +269
    What a coincidence... Maybe we will stop loaning money to people who can't afford to pay it back and maybe the government will stop spending... :badgrin: Yeah right!
     
  5. WillowTree
    Offline

    WillowTree Diamond Member

    Joined:
    Sep 15, 2008
    Messages:
    68,197
    Thanks Received:
    10,175
    Trophy Points:
    2,030
    Ratings:
    +14,779



    I'll tell you what Neal Boortz had to say on the subject yesterday on Cavuto. "The stock market is tanking cause all the rich people are pulling their money out and moving it to hide away in case Obama gets in the WH."
     
    • Thank You! Thank You! x 1
  6. Navy1960
    Offline

    Navy1960 Senior Member

    Joined:
    Sep 4, 2008
    Messages:
    5,821
    Thanks Received:
    1,188
    Trophy Points:
    48
    Location:
    Arizona
    Ratings:
    +1,189
    Not that this has much bearing on the conversation , but why do I get the feeling that the Obama campaign is cheering the downfall of the stock market each and everytime it goes down. While today's trading will no doubt not be good given world markets and OPEC's little fit over oil prices all the more reason to quickly seek our own domestic supply. This cheering and doom and gloom though does have an influence on trading on the market and it really does seem that there has been this giddyness over this collapse, why because it helps get someone elected, I sure hope thats not the case.
     
  7. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,618
    I'll give you a pass because I think you might have responded to my post before I finished it.

    I am sorry for this propensity of mine to post before I finish posting.

    I know how forking annoying it must be. I do this because for some reason I cannot fully explain, I cannot really edit my work in this stupid little box where I craft my posts.

    For some reason I need to see it as it will go online to really edit it.

    But no, credit is not the WHOLE source of the problem according to the Austrain School of Econ, nor does the Kensian school think that was the root source of the problem, either.

    Mostly the problem is that the amount of avaialble currency was not up to the task of rebuilding EUROPE, and the gold standard make getting liquidity into the market impossible.

    Great Britian went BROKE trying to honor the GOLD STANDARD and their economy never really recovered.

    So if nothing else, this tells us WHY Bernake saved the banks.

    What it doesn't tell us is WHY Bernake ex=pected the banks to respond to the new liquidity it gave them by lending it out when it is in their interests NOT to lend it out.
     
  8. Care4all
    Offline

    Care4all Warrior Princess Supporting Member

    Joined:
    Mar 24, 2007
    Messages:
    32,812
    Thanks Received:
    6,634
    Trophy Points:
    1,170
    Location:
    Maine
    Ratings:
    +11,128
    just opened and down 260 in the first 3 minutes
     
  9. Care4all
    Offline

    Care4all Warrior Princess Supporting Member

    Joined:
    Mar 24, 2007
    Messages:
    32,812
    Thanks Received:
    6,634
    Trophy Points:
    1,170
    Location:
    Maine
    Ratings:
    +11,128
    down 340 now


    SHIT....HOLY MARY, mother of God

    down 400 first 4 minutes
     
  10. Care4all
    Offline

    Care4all Warrior Princess Supporting Member

    Joined:
    Mar 24, 2007
    Messages:
    32,812
    Thanks Received:
    6,634
    Trophy Points:
    1,170
    Location:
    Maine
    Ratings:
    +11,128
    now down 450 4.5 minutes
     

Share This Page