Economic Doomsday Scenarios

[eagleseven]

5-doomsday-scenarios-for-the-us-economy: Personal Finance News from Yahoo! Finance

1. Housing's Mini-Bubble Pops

2. Consumers Break the Economy

3. Toxic Assets Return

4. Europe Falls Apart

5. Debt Finally Catches Up to Us

Your thoughts?

 

[Toro]

1. There is no housing mini-bubble. Housing is bouncing along the bottom. But housing could continue to fall, which would mean more losses from the banks.

2. Consumer spending is rising. Unemployment has stabilized.

3. Maybe. Much of that is being dealt with extend-and-pretend.

4. Spreads for Greek, Irish and Spanish bonds are now higher than they were when the IMF bailout was announced. Do the PIIGS matter anymore? I don't know, but the problem is now known. Doesn't mean it is merely being delayed sometime in the future.

5. Private sector debt relative to all sorts of metrics is falling. Much of that has been transferred to the federal government. So the private sector is better off while the public sector is worse. The risks now are more so those related to currencies, interest rates, etc., than what we had a few years back. Japan is a disaster waiting to happen.

 

[loosecannon]

toxic assets return?

dour assessment

 

[william the wie]

The birth dearth of the 70s has been the predicted cause of an economic collapse in this decade for a very long time because expenditure maximizes when teenaged children are on the rise and their 40 something parents spring for the bills. Not enough 40 something parents in the pipeline to keep the economy growing through consumption nor enough savings to grow the economy through investment. Since the birth dearth ended around 1980 we should recover around 2020 but encouraging savings to have a better shot at avoiding such a mess in the future would be an extremely good idea.

 

[marryroy02]

World is now much more interconnected, and because the banking sector is so large. We are facing a synchronized slowdown in almost all countries, a weakening of trust between individuals and businesses, and major problems for public finances.

 

[Madeline]

A very unscientific observation, guys:

In my neighborhood, two fast food businesses have closed in the past month (Arby's and KFC). However, two new fortune tellers have opened for business and all three are now engaged in a hearty price war.

My conclusion?

People are scared. Won't take much more to panic them.

 

[antagon]

there's a mini-bubble?

i think because economics is relative, there wont be a doomsday in any given large economy or group of economies which wouldn't be tempered by other economy's woes. this is not to say that there wont be winners and losers, or hard times all around, but doomsday seems a bit overboard for the US economy or the EU over-all. doomsday sounds like political instability, hyperinflation/deflation or persistent/multi-faceted stagflation.

 

[JBeukema]

1. There is no housing mini-bubble. Housing is bouncing along the bottom. But housing could continue to fall, which would mean more losses from the banks.

It also means housing prices go down, which can be a plus for wise first-time buys and speculators. In this crisis, there could prove to be opportunity.

2. Consumer spending is rising. Unemployment has stabilized.

At ~10%?

3. Maybe. Much of that is being dealt with extend-and-pretend.

The way to deal with it is to let citi and the rest fail, not to drive the taxpayer into further debt to keep preventing the CEOs from seeing any effects from their stupidity.

4. Spreads for Greek, Irish and Spanish bonds are now higher than they were when the IMF bailout was announced. Do the PIIGS matter anymore? I don't know, but the problem is now known. Doesn't mean it is merely being delayed sometime in the future.

Greece Caught Lying AGAIN As Debt And Deficit Figures To "Shoot Up" Post Audit | zero hedge

5. Private sector debt relative to all sorts of metrics is falling. Much of that has been transferred to the federal government

The taxpayer is the federal government when it comes to the debt.

 

[CrusaderFrank]

Democrats come out of 2010 still controlling the house and Senate,

pass cap & trade,

gas goes up to $10/gallon, home heating oil is outlawed,

unemployment rises to 14%,

Obama wins reelection on "More hope and Better change" platform

post election analysis show that more people voted in Democrat controlled cities than lived in the entire state

Jake Starkey still fails to identify a single Republican candidate he'd vote for.